Judgment :- 1. This second appeal arises out of a suit by vendee under a contract of sale of goods against his vendor for damages for non-delivery and also far return of the advance paid by him in connection with the contract. The vendor had approached the court earlier with his own suit against the vendee for damages for non-acceptance as measured by the price fetched at a re-sale and left unsatisfied after set off, of the advance. The two suits were disposed of jointly by the Principal District Munsiff of Kozhikode before whom they came on for trial with the result that the vendee's claim succeeded in full while the cross claim of the vendor failed altogether. In separate but connected appeals taken by the vendor, the Subordinate Judge of South Malabar, Kozhikode threw out both the suits. The vendor has acquiesced but the vendee being dissatisfied has come by the appeal herein. 2. Mr. D. A. Krishnan Warrier, learned counsel for the appellant raised two questions before me firstly that the court below was wrong in reversing the finding of fact entered by the trial court that the vendor-defendant was responsible for the breach and was consequently liable in respect of both limbs of the plaint claim, viz., damages for the breach and refund of advance. Secondly and assuming the court below was correct in its finding that the vendee was the defaulting party still he was entitled to get the refund. Having heard learned Counsel elaborately and gone through the records I may say at once that the appellant is bound to fail on the first of his contentions but to succeed on the second. 3. Taking up the first point as to who was responsible for the breach, we have first to notice that both the parties are merchants at Kozhikode and the contract was in respect of 200 bags of sugar which the vendor had himself purchased from another and was expecting a delivery of, very soon through Rail at Kozhikode. The contract was not reduced to writing but was merely oral. The parties had not also met each other in connection with the formation of the contract on 9-5-1951; it had been arranged through an illiterate broker examined in the case as Pw.1. The contract was not reduced to writing but was merely oral. The parties had not also met each other in connection with the formation of the contract on 9-5-1951; it had been arranged through an illiterate broker examined in the case as Pw.1. In consequence and naturally, there was a controversy between the parties as to the sale price per bag, the vendor saying it was Rs. 195-8-0 while the vendee said it was only Rs. 185. The goods admittedly became available at Kozhikode on 14-5-1951 when the admitted price was Rs. 190 per bag but delivery was not either given or taken because according to the vendor, the vendee was not prepared to pay the agreed price in the falling market while the vendee's complaint in return was that the vendor was seeking to profit out of the rising market. According to the vendor he had to resell the goods on and after 16-5-1951 at prices fluctuating between Rs. 189 and 187 per bag and incurred a deficit of Rs. 1544-3-0 and he laid his claim accordingly for a sum of Rs. 544-3-0 after set off of the sum of Rs. 1000 paid by the vendee under cheque, as advance, on 9-5-1951 when the contract was made. The vendee on his part measured his damages on the basis of the ruling price of Rs. 190 on 14-5-1951, the date of arrival of the goods and the alleged breach by the vendor and claimed Rs. 1000/- on that account and also refund of the advance of Rs. 1000. The question of responsibility for the breach as between vendor and vendee therefore turned on the answer as to who stated correctly before court the sale price agreed on. For if the vendor was right, the buyer would admittedly have tendered as balance sale price only less than due and vice versa, if the vendee was right, the vendor would have been wrongly insisting on tender of a higher amount. Both parties let in oral and documentary evidence in support of their respective cases on this point. There was for instance, on the plaintiff-vendee's side, Ext. Al letter said to be sent by Pw.1 broker on 9-5-1951 to the plaintiff referring to Rs. 185 as the price while the defendant-vendor produced his ledger and cash books Ext. Both parties let in oral and documentary evidence in support of their respective cases on this point. There was for instance, on the plaintiff-vendee's side, Ext. Al letter said to be sent by Pw.1 broker on 9-5-1951 to the plaintiff referring to Rs. 185 as the price while the defendant-vendor produced his ledger and cash books Ext. B4 and B5 showing his own purchase price at Rs 185-6-6 which would have made it unlikely that he himself sold at Rs. 185. The defendant also examined himself as Dw.1. The plaintiff neither produced his accounts nor examined himself. On all the facts and circumstances the learned Munsiff found that the plaintiff's version as to the sale price was true but the learned Subordinate Judge found just the other way in favour of the defendant. After careful consideration I am inclined to accept the conclusion of the judge and hold that the sale price agreed on was Rs. 195-8-0 and the plaintiff-vendee was the party in breach. Learned counsel for the plaintiff stressed in support of his client firstly that Ext. Al as a contemporaneous record was entitled to weight, secondly that the defendant should not have been satisfied with filing his accounts in proof of his purchase price but should have either examined his vendors or at least produced his invoice and finally that the defendant should not have been listened to in the light of the extreme stand he originally took that the plaintiff had not sent anybody at all to claim delivery. But these aspects have all been considered by the court below and found, in my opinion correctly, to be of no assistance to the plaintiff. The plaintiffs avoidance of the box along with his account books, was anyhow enough to give away his case It follows that the first part of plaintiffs claim in appeal, for damages for alleged breach by the defendant, cannot stand. 4. The next question is as to whether the plaintiff is entitled to the return of the advance payment of Rs. 1000 in spite of the finding of the court below, which I have just affirmed, that the plaintiff it was that committed the breach of contract. This aspect of the case was not considered by the court below because apparently it was not stressed at the argument stage. 1000 in spite of the finding of the court below, which I have just affirmed, that the plaintiff it was that committed the breach of contract. This aspect of the case was not considered by the court below because apparently it was not stressed at the argument stage. Now in all these cases of preliminary payments by the vendee to the vendor, the distinction is well established between a deposit, in the nature of an earnest and an advance in part payment for the goods. For while the vendor as victim of the breach is bound in either case to give credit to the payments and claim only the balance of the damages incurred, Gallagher v. Shillcock (1949) 1 All. E. R.921, so far as the party in breach is concerned, he is entitled, notwithstanding his default, to claim back the amount if it is made as advance, subject of course to the right of the vendor to set off damages against that claim, but not ordinarily if it is made as 'deposit'. Where the contract contains a clause as to what is to be done with the deposit if the contract is not performed the court must no doubt be guided by the terms of the contract Where there is no such clause the principle, is as stated by Cotton L. J. in Howe v. Smith (1884) 27 Ch. D. 89, 95. "There is a variance, no doubt, in the expressions of opinion, if not in the decisions, with reference to the return of the deposit, but I think that the judgment of Lord Justice James gives us the principle on which we should deal with the case. What is the deposit? The deposit, as I understand it, and using the words of Lord Justice James, is a guarantee that the contract shall be performed. If the sale goes on, of course, not only in accordance with the words of the contract, but in accordance with the intention of the parties making the contract, it goes in part payment of the purchase-money for which it is deposited; but if on the default of the purchaser the contract goes off, that is to say, if he repudiates the contract, then according to James L. J. he can have no right to recover the deposit. "I do not say that in all cases where this court would refuse specific performance, the vendor ought to be entitled to retain, the deposit. It may well be that there may be circumstances which would justify this court in declining, and which would require the court, according to its ordinary rules, to refuse to order specific performance, in which it could not be said that the purchaser had repudiated the contract, or that he had entirely put an end to it so as to enable the vendor to retain the deposit. In order to enable the vendor to act, in my opinion, there must be acts on the part of the purchaser which not only amount to delay sufficient to deprive him of the equitable remedy of specific performance, but which would make his conduct amount to a repudiation on his part of the contract." See the passage extracted at page 781 of Pollock and Mulla's Indian Contract Act, 8th Edn. On the other hand as observed by the same authors in their Sale of Goods and Partnership Acts, 2nd Edn. at page 37: "Where a part payment for the goods is made by the buyer, on the contract falling through by reason of the buyer's default, the buyer is entitled to recover the purchase price that he has paid, subject to the right of the seller to set off damages against that claim". and reliance is placed on Satyanarayanamurthi v. Erikalappa, A.1. R.1926 Madras 410; Desu Rattana v. Kakaraparthi Krishna Murthi, A. I. R.1928 Mad. 326; Muralidhar Chatterji v. International Film Co. Ltd. A. I. R.1943 P. C. 34; and also Dies v. British & International Mining and Finance Corporation (1939) I K. B. 724. Learned counsel for the defendant vendor urged that the absence of the expression 'deposit' in this case should not make a difference and the real question is always whether the primary purpose of the payment was a guarantee that the purchaser means business. That is no doubt true. The question depends on a consideration of all the circumstances; neither the non-user of the word 'deposit' nor the adoption of the word 'advance' would by themselves be allowed to affect the matter. In this case while Ext. B5 entry in the defendant's cash book dated 10 51951 and also Ext. That is no doubt true. The question depends on a consideration of all the circumstances; neither the non-user of the word 'deposit' nor the adoption of the word 'advance' would by themselves be allowed to affect the matter. In this case while Ext. B5 entry in the defendant's cash book dated 10 51951 and also Ext. BI the earliest telegram sent by the defendant on 15 51951 referred to the amount as 'advance received' and 'advance paid' without more, it was only when the defendant's counsel sent his reply notice Ext. A7 on 26 51951, that the word 'advance deposit' was adopted. Even so, when the defendant was examined as Dw.1 he was content with the expression 'advance'. It would appear therefore that the question of securing a due performance by preliminary deposit was not in the contemplation of the parties when the instant contract was put through on their behalf. And in this connection it is worth while to note that the broker Pw.l who acted on both their behalf, swore only to an advance payment. And as there is now no question as to the defendant's right to set off any amount as damages as against the claim for refund, the plaintiff must be held entitled to a refund in entirety. I hold therefore that the plaintiff is entitled to a refund of the advance payment made by him of Rs. 1000. 5. The decree of the court below is therefore modified and the suit is decreed to the extent of Rs. 1000 only with interest at 6 per cent from this date. The plaintiff will get one-half of his costs of this court from the defendant. The parties will suffer the rest of their costs incurred so far. Decree modified.