Supreme Court
Action No. 321 of 1982
28th February, 1983
Moe, J.

Mr. A. Pitts, for the Plaintiff.
Mr. Denys Barrow, for the Defendant.

Contract for the sale of goods - Defendant alleging agreement was for sale or return of goods - Plaintiff charging Defendant interest - Whether Plaintiff was entitled to charge Defendant interest - Effect of agreement for sale or return of goods - Defendant entitled to be credited with value of goods delivered to him but which he later returned to Plaintiff - Plaintiff sending circular to Defendant informing Defendant that interest was chargeable on outstanding invoices over 30 days old - Plaintiff entitled to charge Defendant interest on outstanding invoices over 30 days old.

J U D G M E N T

The Plaintiff claims from the Defendant $4,928.56 the balance of the price due for goods sold and delivered to the Defendant. The amount includes sums representing 2% in interest added to monthly balances. The Defendant denies there was a sale of the goods to him, but alleges that the goods were delivered to him on sale or return, (that is, the Defendant was at liberty to return to the Plaintiff such of the goods as he did not sell and pay only for those not returned). Further, that there was no agreement between the parties for the payment of interest.

The first question which arises to be determined is whether there were transactions for sale or return. The Plaintiff's evidence was that in December, 1981 he went to the Defendant in Corozal to sell him goods. He sold him goods for $1,484.30, and delivered them the said day. The Defendant did not pay on that day. There was an agreement between them for the Defendant to have 30 days credit. He said he again sold the Defendant goods on the 8th January, 1982 for $16,309.32. These were also sold on thirty days credit. In February, on his collection round, he went to Mr. Marin who issued a cheque for the full amount then due. Cheque for $17,343.62 was produced. The Defendant stopped payment of the cheque. The Plaintiff said when he asked the Defendant why, he said because of the drop in pesos on the Mexican side. He would have to straighten up business and then he would send the cheque.

The Defendant's evidence with regard to the transactions concerned was skimpy and emerged mainly during cross-examination. He said he agreed to buy the particular goods. On the occasions there was no discussion about return of the goods and he had no thought of returning the goods. He was buying the goods to do business. He presented the cheque to pay for the goods and to cover the entire amount due. It was suggested that the Plaintiff's agents used to accept the Defendant's order for goods on a sale or return basis and that the delivery of goods under the transactions of December, 1981 and 8th January, 1982 with the Plaintiff were on the same basis. I rejected this.

The Plaintiff's account that he sold the goods to the Defendant for a price amounting to $17,793.62 which is supported by the Defendant's own evidence that he bought the goods without any thought about returning the goods; his tender of payment of the price of the goods concerned, i.e. he was paying what he owed, further, by evidence about negotiations between the parties sometime in April, 1982. Both the parties gave evidence that in that month they discussed the return of certain goods by the Defendant to the Plaintiff because of the drop in Defendant's business due to the devaluation of the Mexican peso. Evidently, the question of return of goods arose because of the Defendant's financial difficulties, not as a matter of entitlement.

I accepted the Plaintiff's account and found that he sold and delivered to the Defendant goods for a price of $17,793.62. The Defendant was credited with $450 on 10th January, 1982 thus leaving a balance of $17,343.63 owing for the goods as at that date.

I turn now to the question whether the Defendant is liable to pay interest on any balance found due. There is no evidence that the parties entered into any specific agreement with respect to the payment of interest on any balance due for the goods sold under the transactions of December, 1981 or 8th January, 1982. The Plaintiff said that when bank rates went up, a circular went to Mr. Marin that 2% would be added to all outstanding amounts to cover interest charges and Mr. Marin accepted that position. It was never challenged or denied that such circular went to the Defendant, thus giving him notice. Nor, was there any evidence that having such notice the Defendant objected to or refused to do business on such a basis. There were also invoices from the Plaintiff to the Defendant containing reference to the addition of 2% on all bills over 30 days. I concluded that the addition of 2% interest per month on outstanding balances was in accord with the basis on which the parties had been dealing.

The Plaintiff claimed such interest on the balance for months ending 10th March and 10th April. That is allowed and at that date the Defendant was owing $18,044.30. On 20th April, 1982 the Defendant paid $3,500 leaving $14,544.30.

On the 26th April, 1982, the Defendant returned goods in accordance with an agreement reached on account of the fall in Defendant's business. Some of the goods the Plaintiff did not take and he maintains he was not obliged to receive them. I shall determine first what the agreement was. The Plaintiff said he agreed to take back the goods sold on the last transaction and as put to him specifically in cross-examination, he agreed to take back goods delivered on 3 invoices which related to the transactions of December, 1981 and 8th January, 1982. The Defendant in his evidence denied that there was agreement as to the items which may be returned which went counter to the specific suggestion made to the Plaintiff in cross-examination. I accepted the Plaintiff's version of the agreement. He was bound by that agreement. I apply the principle stated by Greer L.J. in British Russian Gazette etc. Ltd v. Associated, Newspaper Ltd. [1933] 2 K.B. 654 "an agreement for good consideration, whether it be an agreement to settle an existing claim or any other kind of agreement, is enforceable at law by action if it be an agreement for valuable consideration and such valuable consideration may consist of the promise of the other party."

In accordance with that agreement, the Defendant returned goods valued $8,258.20 and was credited with that amount. The evidence shows he also returned other goods in keeping with the agreement, i.e. he returned items of the transaction of 8th January, 1982 and ought to have been credited with those amounts as follows: 12 dozen flashlights - $840, 72 pairs slippers - $362.88 and 47 pairs slippers - $221.84. With a total credit of $9,682.72, he was then owing $4,861.58. There was an agreed adjustment of $62.50 to the Plaintiff, bringing it to $4,924.08 as at April 1982. With 2% interest per month added the amount was as follows:-

$4,924.08
                     98.48 10th May
$5,022.56
                    100.44 10th June
$5,123.00
                   102.46 10th July
$5,225.46

There was a payment
in August

$2,000.00
$3,225.46
                $64.10 August
$3,289.56
                       65.79 September
$3,355.35

I find the balance due up to September, 1982 as claimed to be $3,355.35. Judgment will be entered for that sum and to carry interest thereon at 6% per annum from today's date until payment. Plaintiff to have his costs.

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