Mbugwa v Mugwe (Civil Appeal No. 16 of 1948) [1949] EACA 1 (1 January 1949)

## COURT OF APPEAL FOR EASTERN AFRICA

## Before Sir Barclay Nihill, C. J. (Kenya), Sir G. Graham Paul, C. J. (Tanganyika), and EDWARDS, C. J. (Uganda)

## JOHANA MBUGWA s/o GAKAU, Appellant (Original Defendant) $v$ .

REUEL E. MWANGI MUGWE, Respondent (Original Plaintiff) Civil Appeal No. 16 of 1948

(Appeal from decision of H. M. Supreme Court of Kenya)

Agreement to sell motor vehicle to respondent on 10th March, 1947—Respondent taking immediate possession-Vehicle subject of attachment order at later date—Attachment not executed—Sale of Goods Ordinance, 1930, sections 19, 20 and 27—Interpretation of section 20, rule III—Vehicle subject to control -Permit obtained and price paid on 31st December, 1947-Whether transfer of 10th March lawful—Defence (Sale and Purchase of Motor Vehicles) Regulations, 1945, reg. 4 (a)—Second attachment order—Objection proceedings by respondent—Civil Procedure Rules, 1927, O.19 R.60—Whether respondent's right to vehicle affected by attachment.

On the 10th March, 1947, the respondent purchased a fuel business from one Amos Gitonga who further agreed to sell to the respondent his lorry, No. 2667, at the controlled price. The relevant words of the written agreement were: "I have also agreed to sell to him my V8 lorry, No. H 2667, at the price to be fixed by the Controller". On the same day the vehicle was delivered to the respondent who took possession of it and each party signed application forms to the Motor Vehicle Controller for the purpose of effecting the transfer of the vehicle according to Jaw.

On some date after the 10th March the appellant instituted proceedings in the Resident Magistrate's Court against Amos Gitonga and that Court issued a conditional order before judgment for the attachment of the lorry in question, but the attachment was not executed. The case was finally heard on the 5th December, 1947, judgment being pronounced in favour of the appellant, and on the 11th December, 1947, the Court issued an order for attachment and sale of the same lorry in execution of the decree. The respondent then instituted proceedings in the Supreme Court under Order 19 Rule 60 of the Civil Procedure Rules, 1927, objecting to the attachment proceedings and cited the appellant as sole defendant.

The second attachment order was not executed until the 12th February, 1948, but in the Supreme Court the appellant (defendant) argued that this attachment was a continuation of the earlier attachment, that the sale of the lorry to the respondent took place on the 31st December, 1947 (the day when respondent paid the controlled price to Amos Gitonga) and that prior to that the respondent had notice of the attachment.

The appellant relied upon section 27 of the Sale of Goods Ordinance, 1930, which reads:-

"Effect of Writs of Execution—

27. (1) A writ of *fieri facias* or other writ of execution against goods shall bind the property in the goods of the execution debtor as from the time when the writ is delivered to the sheriff to be executed; and, for the better manifestation of such time, it shall be the duty of the sheriff, without fee, upon the receipt of any such writ to endorse upon the back thereof the hour, day, month, and year when he received the same:

Provided that no such writ shall prejudice the title to such goods acquired by any person in good faith and for valuable consideration, unless such person had at the time when he acquired his title notice that such writ or any other writ by virtue of which the goods of the execution debtor might be seized or attached had been delivered to and remained unexecuted in the hands of the sheriff.

(2) in this section the 'sheriff' includes any officer charged with the enforcement of a writ of execution."

The trial Judge found that the property in the lorry passed to the respondent on the 10th March, 1947, when Amos Gitonga agreed to sell it and in fact delivered it to him, and that as this transaction took place before the attachments were issued they could not affect the respondent's right to the lorry. The trial Judge also held that there was no connexion between the first and second attachment, and that if the sale of the lorry took place on the later date, namely the 31st December, 1947, on the evidence the respondent had no notice of the attachment when he purchased the vehicle. The respondent was therefore declared the lawful owner of the lorry.

The original defendant then appealed to the Court of Appeal where among other grounds it was submitted on his behalf that (a) bearing in mind the last words of the agreement to sell the lorry, namely "at a price to be fixed by the Controller" the learned Judge overlooked the significance of section 20, rule III, of the Sale of Goods Ordinance which reads: -

"Rules for Ascertaining Intention as to Time When Property Passes—

20. Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer-

Rule III.—Where there is a contract for the sale of specific goods in a deliverable state, but the seller is bound to weigh, measure, test, or do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing be done, and the buyer has notice thereof."

and (b) that under the Defence (Sale and Purchase of Motor Vehicles) Regulations, 1945, a sale could not be lawful without the permit of the Controller and that there was no evidence that a permit was issued before the 31st December, 1947.

Held (3-2-49) (1) (a) That if there was a sale of the lorry to the respondent on the 10th March, 1947, within the meaning of section 19 of the Sale of Goods Ordinance, 1930, the lorry would be free from attachment as attachment proceedings were only instituted after that date.

(b) That whether the property in the lorry was transferred to the respondent must depend on ascertaining the intention of the parties following section 19 (2) of the Ordinance.

(c) That the words "or do some other act or thing with reference to the goods for the purpose of ascertaining the price" in section 20, rule III, must be read ejusdem generis with the words "but the seller is bound to weigh, measure, test" and in the present case the seller had to do nothing to the lorry in order to ascertain the price and the purchaser knew the price would be that fixed by the Controller.

(2) That under reg. 4 (a) of the Defence (Sale and Purchase of Motor Vehicles)<br>Regulations, 1945 (which applied to the lorry at the relevant time), there could have been no lawful transfer of the property in the lorry to the respondent as no permit had been obtained form the Controller and therefore the 31st December, 1947, must be taken as the date on which the property was lawfully transferred.

(3) (a) That on the evidence it could not be safely inferred that on the 31st December, 1947, the respondent had notice that on that date there remained unexecuted in the hands of the sheriff a writ under which the lorry might have been seized and attached.

(b) That there was no evidence that the earlier writ was in the hands of the sheriff on the 31st December, 1947.

(4) That where an "illegality" is exposed, which may affect the enforcement of a contract, it is the right and duty of the Court to consider it at any stage.

Cases referred to: Connolly and another v. Consumers' Cardage Co., 89 L. T. R. 347;<br>Lipton v. Powell (1924) 2 K. B. 51; Issa and Suleman v. Micheol and Co. (1948) K. L. R. p. 12.

Appeal dismissed with costs.

Slade and Bhandari for the Appellant.

D. V. Kapila for the Respondent.

SIR BARCLAY NIHILL, C. J.—A point which the learned Judge had to determine in the Court below was whether the property on a motor vehicle passed to the

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plaintiff respondent on 10th March, 1947, or on 31st December, 1947. The learned Judge found that the property on the vehicle did pass to the plaintiff respondent on the earlier date and on this basis gave judgment in his favour as he was bound to do. The matter before the Court arose on an originating summons taken out under Order XIX Rule 60 by which the plaintiff respondent objected to attachment proceedings against the motor lorry H 2667 which had been instituted by the present appellant as the judgment creditor in Civil Case No. 526 of 1947. The judgment debtor was a man named Amos Gitonga. Affidavits were filed by the plaintiff respondent and the defendant appellant and by the judgment debtor Amos, and the learned Judge also heard evidence. The plaintiff respondent began his evidence by stating that he purchased the lorry on 31st December, 1947, and paid Sh. 1.900 for it. He then produced a letter (Ex. 1) dated 10th March, 1947. signed by Amos Gitonga, which purported to be a receipt for Sh. 750 on account of profit and goodwill "as well as for all tools such as pangas and axes". The letter concluded with these words, "I have also agreed to sell to him my V8 lorry No. H 2667 at the price to be fixed by the Controller".

As no attachment proceedings were instituted until a date later than 10th March, 1947, if there was a sale of the lorry on that date to the plaintiff respondent within the meaning of section 19 of the Sale of Goods Ordinance (No. 33 of 1930), the lorry is clearly free from attachment, on the other hand if the property in the lorry did not pass to him until he paid for it in December, then a different question arises whether in December the plaintiff had or had not notice that a writ had been delivered to and remained unexecuted in the hands of the sheriff by virtue of which the lorry might be seized or attached (proviso to section 27 (1) of the Sale of Goods Ordinance). It was not in dispute that on 10th March the plaintiff respondent took over physical possession of the lorry and thereafter converted it to his own use. Whether in fact the property in the lorry was transferred to the plaintiff respondent in March, 1947, must depend on ascertaining the intention of the parties having regard "to the terms of the contract, the conduct of the parties, and the circumstances of the case" (section 19 (2) of the Sale of Goods Ordinance). Mr. Slade for the appellant has argued that bearing in mind the wording of the last sentence of Ex. 1 the learned Judge overlooked the significance of section 20, rule III, of the Sale of Goods Ordinance. I cannot accept this submission. In my view the words "or do some other act or thing with reference to the goods for the purpose of ascertaining the price" must be read eiusdem generis with the words "but the seller is bound to weigh, measure, test". Here the seller had to do nothing to the lorry in order to ascertain the price and the purchaser knew that the price would be the price fixed by the Controller. It was in evidence that after the transaction of 10th March both the plaintiff respondent and Amos signed application forms to the Motor Vehicle Controller for the purpose of effecting the transfer of the vehicle according to law. By the provisions of the Defence (Sale and Purchase of Motor Vehicles) Regulations, 1945, a sale of a motor vehicle to which the regulations applied could not be sold lawfully without a permit issued by the Motor Vehicle Controller and the permit when issued had to state the maximum price at which the vehicle could be sold. This brings me to the point which has been very fully argued by Mr. Slade and which there can be no doubt the learned Judge overlooked, namely the effect of the Defence (Sale and Purchase of Motor Vehicles) Regulations, 1945, on the transaction of 10th March, 1947. Since this date the regulations have been amended from time to time restricting the scope of their application but on 10th March. 1947, there can be no doubt, and no evidence is needed to establish it, that they did apply to the lorry which is the subject-matter in this case since by the definition of "motor vehicle" in reg. 2 $(a)$ that term included every description of vehicle propelled by mechanical means other than a motor cycle; or tractor used solely for agricultural haulage purposes unless the vehicle ran on a specially prepared way such as a railway or tramway. Again then, by the terms of reg. 4 (a) there can be no doubt that on 10th March, 1947, there could be no lawful

transfer of the property in the lorry to the plaintiff respondent. Mr. Slade has argued that the letter $(Ex. 1)$ shows that the parties had a lawful intention but this submission loses force when it is remembered that in transferring the physical possession of the lorry to the plaintiff respondent Amos committed an offence against regulation 6 as did the plaintiff respondent in obtaining possession. The point however which this Court has I think to determine is whether this illegality is a circumstance in the case which the learned Judge should have considered and if he had whether he could have found that the property on the lorry in law passed to the plaintiff respondent on 10th March, 1947. This point was not argued before the learned Judge and appeared for the first time in the Memorandum of Appeal. Whilst in general an appellate Court will not allow the introduction of new matter not raised in the Court below there is authority for the view that where an "illegality" is exposed, which may affect the enforcement of a contract, it is the right and duty of the Court to consider it at any stage—see the Privy Council Case of Connolly and another v. Consumers' Cardage Co., 89 L. T. R. 347, 349 and Lipton v. Powell (1924) 2 K. B. 51 as cited by Bourke J. in the recent Kenya case of *Issa and Suleman v. Micheol and Co.*, Civil Appeal 17/1948, and to which Mr. Slade referred us. If then as we know there was no lawful transfer of the vehicle on 10th March, 1947, I find it impossible for this Court to say that the learned Judge was right in finding that there was. I think further that the date which must be taken as the date on which the property was lawfully transferred is 31st December, 1947, for on that date the evidence reveals that the price has been fixed by the Controller at Sh. 1,900 from which it is safe to assume, bearing in mind the provisions of regulation $4(c)$ that a permit had been issued.

Having arrived at this conclusion I have next to consider whether it entitles the appellant to succeed in this appeal, under the terms of section 27 of the Sale of Goods Ordinance. In my opinion it does not because I am far from satisfied that there is any evidence on the record from which it can be safely inferred that on the material date, i.e. 31st December, 1947, the plaintiff respondent had notice that on that date (and I emphasize these words) there remained unexecuted in the hands of the Sheriff (again these words are all important) a writ under which the lorry might have been seized or attached. There is evidence which the learned Judge felt inclined to accept that between 26th March and 5th December, 1947, the respondent did know that the appellant wished to attach Amos' motor vehicle and to quote the words used by the learned Judge in his judgment "but plaintiff dissuaded him". The learned Judge also found as a fact which was not in dispute between the parties that the respondent knew nothing about the writ of attachment issued on 11th December, 1947, which reached the hands of the Sheriff for execution on 16th December, 1947. That being so all that is left is what has been called the conditional order of attachment issued by the Court on 26th March, 1947. As to what became of that document, except that it was not executed, the evidence does not disclose. Even assuming that the respondent had notice that this writ had issued it would be quite unsafe to assume that it remained in the hands of the Sheriff on 31st December, 1947. Such evidence as there is suggests the contrary and it is certainly not the function of this Court to delve behind the evidence in an attempt to find out the fate of the document. The fact that the judgment creditor took out a new writ on 11th December, 1947, suggests that the first had become unexecutable and there is also the Judge's finding that the plaintiff had dissuaded the judgment creditor from taking any extreme course. If then, as is the case, there is no evidence that the earlier writ was in the hands of the Sheriff on 31st December, 1947, or that the respondent had notice of the second writ, it follows that the learned Judge arrived at a right conclusion although by a wrong route. I would therefore dismiss the appeal with costs.

SIR G. GRAHAM PAUL, C. J.—The judgment of the learned President expresses exactly my views of this case and accordingly I concur in that judgment and have nothing to add.

EDWARDS, C. J.—I agree.