Patel v Jamesens Limited (Civil Appeal No. 14 of 1952) [1952] EACA 121 (1 January 1952)

## $121:$

## COURT OF APPEAL FOR EASTERN AFRICA

Before SIR BARCLAY NIHILL (President), SIR NEWNHAM WORLEY (Vice-President) and MAYERS, J. (Kenya)

## V. R. PATEL, Appellant (Original Defendant No. 2)

## JAMESENS, LIMITED, Respondent (Original Plaintiff) Civil Appeal No. 14 of 1952

(Appeal from decision of H. M. Supreme Court of Kenya—Connell, J.)

Sale of goods—Guarantee or joint liability—Pleading.

A builder contracted to build a house for the appellant. During its construction the appellant accompanied his builder to the respondents' showroom to select bathroom fittings. The builder had no account with the respondents who were not prepared to supply him with goods save for cash. The trial Judge accepted that the appellant said: "You can rely on that being all right" and agreed to see that the account was settled. The respondents applied to the builder and later sued him alone. On his filing a defence denying liability and alleging the goods were ordered by the appellant the respondents joined the appellant alleging joint and several liability against both defendants. The learned Judge found both builder and appellant liable.

Held (25-7-52).—(1) The findings of fact by the trial Judge were inconsistent with joint liability and had the appellant been sued as a guarantor and not as a co-defendant he might well have been liable. But he cou

(2) It was too late to amend the pleadings.

Cases cited: Birkmyr v. Darnell, 1 Salk, 27; Watt v. Thomas, 1 A. E. R. (1947) 584. Appeal allowed.

Nazareth for appellant.

Goodbody for respondent.

JUDGMENT (delivered by HENRY MAYERS, J. (Kenya)).—This is an appeal from a judgment of Her Majesty's Supreme Court of Kenya whereby the first defendant and the second defendant (now the appellant) were ordered to pay to the plaintiff company the sum of Sh. 4,558/79, being the purchase price of certain bathroom fittings which the plaintiffs claim to have supplied to the defendants jointly. In or about the month of July, 1950, the first defendant and the second defendant entered into a written contract under which the first defendant agreed to build, in accordance with a written specification, a house for the second defendant and to provide all necessary labour and materials therefor for an agreed sum. On the 6th day of December, 1950, the defendants attended at the plaintiffs' showroom for the purpose of selecting certain bathroom fittings. Although there is some dispute as to whether this was or was not the first occasion upon which the present appellant had visited the plaintiffs' showroom. in connexion with this matter, it is common ground that upon the occasion of this visit a written order was placed with the plaintiffs. According to the sole witness called for the respondent, when this order was filled up he inquired as to the person to whom the order should be booked, because the first defendant had no account with the plaintiff firm and they were not prepared to supply him. with goods, except for cash, whereupon the appellant said, "You can rely upon" that being all right", and agreed to see that the account was settled. According to the appellant, however, no question as to payment was raised at this interview and on it being asked to whose account the order was to be placed he had replied "to that of the first defendant".

In the course of his judgment the learned trial Judge referred to the classic case of Birkmyr v. Darnell 1 Salk. 27 in which it is said: $-$

"If two come to a shop and one buys and the other, to gain him credit, promises the seller: 'If he does not pay you, I will', this is a collateral undertaking and void without writing by the Statute of Frauds. But if he says: 'let him have the goods I will be your paymaster, or I will see you paid', this is an undertaking as for himself and he shall be intended to be the very buyer and the other to act as but his servant."

and goes on to say that he is satisfied that in fact, although not in words, what the appellant said was: "You may deliver the goods to Birdee, I will be your paymaster".

As was pointed out by Viscount Simon in Watt v. Thomas 1 All E. R. 1947 at page $584:$ —

"A Court of Appeal should 'attach the greatest weight to the opinion of the Judge who saw the witnesses and heard their evidence', and, consequently, should not disturb a judgment of fact unless they are satisfied that it is unsound. It not infrequently happens that a preference for A's evidence over the contrasted evidence of B is due to inferences from other conclusions reached in the Judge's mind rather than from an unfavourable view of B's veracity as such. In such cases it is legitimate for an appellate tribunal to examine the grounds of these other conclusions and the inferences drawn from them, if the materials admit of this, and, if the appellate tribunal is convinced that these inferences are erroneous and that their ejection of B's evidence was due to the error, it will be justified in taking a different view of the value of B's evidence. I would only add that the decision of an appellate court whether or not to reverse conclusions of fact reached by the Judge at the trial must naturally be affected by the nature and circumstances of the case under consideration."

The learned trial Judge was clearly misled by his consideration of the principle laid down in Birkmyr v. Darnell, as his finding that in effect what the appellant said was: "You may deliver the goods to Birdee and I will be your paymaster" is, in accordance with that principle, clearly inconsistent with there being any liability upon Birdee, the first defendant, against whom judgment has also been given. Furthermore, not only are there passages in the evidence of Mr. Hobson which are at least equally consistent with the view that any liability undertaken by the appellant was undertaken as a guarantor rather than as a principal contractor, but also had the learned trial Judge directed his attention to the correspondence and to the form in which the proceedings were initially commenced, he could not have arrived at the conclusion that the appellant was liable as a principal debtor.

On the 16th March, 1951, the respondents forwarded to the first defendant a statement of account under cover of a letter in which they said that Dr. Patel (the appellant) informed them that the first defendant was responsible for payment of this amount. There is no indication either in the correspondence or in Mr. Hobson's oral evidence that any attempt was made by the respondents to challenge this alleged statement by Dr. Patel. On the 7th April, 1951, the respondent firm again forwarded to the first defendant their statement of account and on the 27th day of April they instituted proceedings against the first defendant alone. On the 9th day of June, 1951, the first defendant filed a defence denying

any liability and alleging that any goods supplied by the respondents to him were supplied on account of the appellant. On the 9th of July the respondents' advocates wrote to the appellant stating that they had filed a suit against the first defendant, as their clients had been informed by him, i.e. present appellant that that defendant was responsible for payment for the goods supplied and asking to be afforded access to the appellant's contract with the first defendant.

For these reasons I would allow this appeal and dismiss the suit against this appellant with costs both here and below.

SIR NEWNHAM WORLEY (Vice-President).—In my opinion this appeal must succeed for the reason that the learned trial Judge arrived at conclusions as to the appellant's liability at law which are mutually inconsistent.

I do not propose to recite the relevant facts: they are set out in the judgment prepared by my brother, Mayers, J. The crucial dispute in the evidence was whether, as Mr. Hobson swore on 6th December, 1950, when he expressed unwillingness to give credit to Birdee (first defendant), the appellant had said: "That'll be all right. I'll see to it"; or, as the witness put it in examination-in-chief, "You can rely on that being all right"; or whether Dr. Patel swore, there was no discussion as to who would pay but "when it was asked as to whose account it was to be ordered, I said in Birdee's account". The learned trial Judge preferred Mr. Hobson's evidence on this point, as he was fully entitled to do, and no good reason has been shown for disturbing that finding.

The question still remains however what effect is to be given in law to the undertaking given by the appellant. The learned trial Judge construed Dr. Patel's words as meaning, in effect, "You may deliver the goods to Birdee, I will be your paymaster." With respect, it appears to me that the words, standing by themselves, are equally capable of bearing the meaning, "I will see that he pays you" or "If he does not pay you, I will" and it is necessary to look at the whole of the evidence and the subsequent conduct of the parties to see the sense in which they were understood and acted upon.

Mr. Hobson in cross-examination further said, "I queried Birdee as recipient of the goods and was assured by Patel they'd be paid for. I said I can't make it out for Birdee without bringing in Patel." It is true that Hobson said he wasn't giving credit to Birdee but he also said, "as far as I was concerned I didn't expect to give Birdee credit except so far as it was guaranteed by Patel". His evidence on this point was at least equivocal. Examination of the documentary evidence suggests very strongly that the respondents did not consider the appellant as the purchaser nor treat him as a principal debtor: Dr. Patel's name appears only on the order form: the account was entered in Birdee's name only and the invoices were sent to him only. Moreover, as Mayers, J., has pointed out, the correspondence shows that the respondents were at first only claiming to be paid by Birdee; they instituted their action against him alone and it was only at a late stage that they joined the appellant as a second defendant, alleging joint and several liability against both defendants. All this evidence appears to me inconsistent with the interpretation which the learned trial Judge put upon the appellant's words.

Further, if the appellant did say in effect that he would pay or would see the respondents paid, that, as was said in Birkmyer v. Darnell, was "an undertaking as for himself and he shall be intended to be the very buyer and the other to act as but his servant". Such an undertaking is inconsistent with a joint liability; there would be no liability for the debt on the part of Birdee and the finding is inconsistent with the judgment passed against the latter by default in the judgment appealed from.

But there is another and perhaps more fundamental inconsistency. The learned Judge starts by saving that in his view this was not a case of guarantee at all; but after stating his finding as to the effect of the appellant's words, he continues: —

"Looked at in another way the conversations and acts show a plain" request by Dr. Patel to the plaintiffs to deliver the goods he requires for his house: arising from such request and such delivery he must be held impliedly and as a matter of law to have undertaken to pay for them if they are not in fact paid for by the contractor."

But, with respect, what is this but a guarantee? "If he does not pay you, I will." Such a guarantee, though not enforceable by English law because not in writing, would be enforceable in Kenya under the Indian Contract Act, section 126; and, if the appellant had been implied as a guarantor, and judgment passed upon that footing. I think it most unlikely that this appeal could have succeeded.

But this was not done: the plaintiffs pleaded joint and several liability of. both the defendants and, for the reasons given above, I think the judgment upon that plaint cannot stand. This Court has no doubt wide powers to amend pleadings. even at this stage. Mr. Nazareth has urged that had guarantee been pleaded other defences would have been available to the appellant which were not relevant to the plaint as framed: whether they would have succeeded may be problematical. Mr. Goodbody has not asked for any amendment but sought to uphold the judgment as it stands. I will however state my view that it would not be right for us in the instant case to make any amendment of the plaint which would in effect set up a new case or cause of action, which the appellant has had no opportunity to meet.

For these reasons, I also would allow this appeal and set aside the decree of the Supreme Court so far as it affects the appellant with costs to the appellant both here and in the Court below.

SIR BARCLAY NIHILL (President).—I agree with my learned brothers that this appeal should be allowed. I also think that had the respondent proceeded against the appellant on the footing that he was co-guarantor the action, on the evidence as accepted by the learned Judge, might well have succeeded. However, that was not done and it is now too late for it to be done.

The appeal will be allowed with costs to the appellant both here and in the Court below.

The decree of the Supreme Court of Kenya, so far as it affects the appellant, is set aside.

$\overline{a}$