Shah and Others v Patel (Civil Appeal No. 47 of 1956) [1950] EACA 329 (1 January 1950)

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## H. M. COURT OF APPEAL FOR EASTERN AFRICA

Before SIR NEWNHAM WORLEY (President), BRIGGS and BACON, Justices of Appeal

(1) H. B. SHAH, (2) A. B. SHAH, (3) L. A. SHAH, (4) L. T. SHAH, all trading as SHAH HEMRAJ BHARMAL AND BROS., Appellants (Original Plaintiffs) ν.

RAMBHAI KASHIBHAI PATEL trading as "ORIENTAL EMPORIUM" Respondent (Original Defendant)

Civil Appeal No. 47 of 1956

(Appeal from the decision of H. M. High Court of Tanganyika, Abernethy, J.) Sale of goods—Construction of contract—Sale by sample and description.

The appellants had contracted to sell to the respondent a quantity of sunglasses and the material terms of the contract were as follows:—

- Description.-Sun-glasses, made in Hong Kong as per sample shown to and approved by you. - Time and Mode of Delivery.—Delivery to be effected after the arrival in Dar es Salaam of s.s. Tjibadak.

The respondent paid Sh. 4,880/47 on account but never took delivery of any of the goods and ultimately sued in the District Court for the return of his deposit. The appellants pleaded that they had offered delivery but as the respondent failed to pay the balance, they treated the contract as repudiated, sold the goods and incurred a loss of Sh. 7,880/75 of which they counterclaimed for the balance of Sh. 3,000/28. The Resident Magistrate gave judgment for the appellants on the claim and counterclaim, but on appeal the High Court reversed this decision. On second appeal the appellants contended that the judgment of the High Court was based on a fundamental misapprehension of the effect of the evidence and a consequent finding of fact which there was no evidence to support.

The Court agreed with the finding of the High Court that the contract was a sale by sample and description.

Held $(2-10-56)$ .—(1) The finding by the High Court that it was a term of the contract that the goods should be part of a consignment at sea in the s.s. Tjibadak at the date of the contract could not be supported.

(2) As there was no admissible evidence as to where the goods tendered were made, the finding by the High Court that the goods tendered were not sun-glasses made in Hong Kong and shipped in the Tjibadak but were sun-glasses made in Japan and probably not shipped in the Tjibadak resulted from a misdirection and must be set aside.

-- Appeal allowed. Judgment and decree of the District Court restored and affirmed. Case referred to: Hale v. Rawson, (1858) 4 C. B. (N. S.) 85.

O'Donovan and $N$ : M. Patel for appellants.

Master and Jhaveri for respondent.

BRIGGS, J. A.—This is an appeal by leave from an appellate decree of the High Court of Tanganyika which reversed a decree of the Resident Magistrate, Dar es Salaam. By a contract in writing dated 18th November, 1950, the respondent agreed to buy and the appellants to sell certain sun-glasses. The material terms are as follows: —

"Description.—Sun-glasses, made in Hong Kong as per sample shown to and approved by you.

Quantity.—Three hundred dozen (300 dozen).

Price.—At Sh. 45 per dozen.

Place of Delivery.—Dar es Salaam.

- Time and Mode of Delivery.—Delivery to be effected after the arrival in Dar es Salaam of s.s. Tjibadak—as to 150 dozen against payment of cash and as to the remaining 150 dozen on the buyer honouring the promissory note for the price thereof to be executed and delivered by the buyer to the seller and payable ninety days after date. - Payment.—In cash for 150 dozen against delivery and by promissory note dated payable ninety days after date."

The buyer paid Sh. 4.880/47 on account, but never took delivery of any of the goods. In April, 1951, he sued for return of his money, and added a claim for damages which was later abandoned. The sellers pleaded that they had offered delivery, but the buyer had failed to pay the balance of the price for the first 150 dozen or to honour his promissory notes for the second 150 dozen, in consequence whereof they treated the contract as repudiated, sold the goods and incurred a total loss of Sh. 7,880/75, of which they counterclaimed the balance of Sh. 3,000/28. The District Court gave judgment for the seller on both claim and counterclaim, with interest and costs, on 30th November, 1954. The delay of three and a half years is not explained. On first appeal the High Court set aside this decree, ordered that judgment be entered for the buyers for Sh. 4,880/47 with interest and costs as claimed, and gave costs of the appeal. On appeal to us it was contended that the judgment of the learned appellate Judge proceeded on a fundamental misapprehension of the effect of the evidence and a consequent finding of fact which there was literally no evidence to support.

The learned Judge held as a matter of law that the contract was a sale by sample and description, and not only by sample. I respectfully agree, and I do not think the learned Magistrate proceeded on any other basis, although he may not have made this wholly clear. The learned Judge then held that it was a term of the contract that the goods should be part of a consignment at sea in the s.s. Tjibadak at the date of the contract. The s.s. Tjibadak was then sailing to Mombasa from the Far East and was scheduled to call at Dar es Salaam after Mombasa. I find myself unable to agree with this construction of the contract. A commercial contract may be construed with some liberality according to circumstances, but I think the golden rule remains paramount. Where clear words are used and their effect in the ordinary sense is not contrary to reason in the circumstances, they should be given that effect. The normal way of expressing the term which the learned Judge held to apply is to add to the "description" the words "ex s.s. Tjibadak" and to state the "time and mode of delivery" as "on arrival". It is reasonable for a seller to say: "I will sell you goods of a certain type now in the *Tjibadak*", but it is no less reasonable for him to say: "I will sell you goods of this type. Where I get them from is my business, but I know that some such goods are in the Tjibadak and, since I may wish to draw from those, I will not offer delivery till after her arrival". I think the words used in this contract have the second meaning. It is quite irrelevant that both parties may have expected the contract goods to come from the *Tjibadak*. It was not expressly agreed that they must, and there is no necessity to imply a term, either to make the contract workable or to comply with any general commercial usage.

I am aware that on this point the other members of the Court have inclined to the opposite view, and I am indebted to the learned President for drawing my attention to the authorities collected in *Benjamin on Sale*, 8th ed., at pp. 585, seqq., of which Hale v. Rawson, (1858) 4 C. B. (N. S.) 85 is perhaps the most

closely relevant. But that case seems to me very different from this. First, the only question there was whether non-arrival of the tallow in the ship indicated could justify non-delivery of any tallow. The answer being in the negative, the defendants were in breach. The question whether they would have been in breach if they had tendered other tallow was never in issue. Secondly, the wording of the contract was stronger than in this case, since it referred to "landing" of the tallow from the ship indicated. Yet in spite of this, the plaintiffs' counsel in reply submitted that the contract would have been duly performed by delivery of tallow from another source. Thirdly, the contract was not in the modern commercial form by which the "description" of the goods is clearly separated from such other terms as "time and mode of delivery". Where, as in this case, that is done, the Court should in my view give effect to it, and should not treat part of the terms regarding delivery as if they were part of the description, unless the context and circumstances make it necessary to do so. It cannot be said to be necessary here.

The learned appellate Judge then found as a fact that the goods tendered were not sun-glasses made in Hong Kong and shipped in the Tjibadak, but were sun-glasses made in Japan and probably not shipped in the Tjibadak, since they were bought by the sellers in Mombasa. On the view which I take of the contract it was immaterial whether they were shipped in the Tjibadak or not; but the facts proved were as follows. The goods tendered came to Dar es Salaam by air freight from Mombasa on 14th December, 1950. The sellers bought them in Mombasa from Kanji and Co. (or Kanti and Co.), and believed that they had bought from Smith, Smith and Co. Ltd. of Mombasa, who were the actual importers. This company has gone out of business, so no definite information could be obtained from it, and the documents in the hands of the ship's agents were outside the jurisdiction. The sellers had been informed and believed that they would be supplied from the Tjibadak, and believed later that they had been so supplied, but could adduce no admissible evidence to that effect. They could have been so supplied, for the *Tiibadak* arrived at Mombasa on 21st November. They had asked their suppliers to forward the goods to Dar es Salaam by the Tjibadak herself, but her programme was changed and it was thought she would not come to Dar es Salaam at all, so the sellers arranged for forwarding by air. She did ultimately call at Dar es Salaam on 28th December. On any view of the contract the carriage by air from Mombasa to Dar es Salaam was not in breach of it, having regard to the dates of arrival. On these facts it seems to me by no means improbable that the contract goods were in fact ex Tjibadak though that was never proved. In any event, if the buyer claimed the right to reject the goods on the ground that they were not ex *Tjibadak*, the onus was on him and he certainly did not discharge it.

The question where the goods tendered were manufactured arose in this way. The buyer pleaded and gave evidence that no goods were offered to him in accordance with the contract until 13th March, 1951, which would admittedly have been too late, and also that the goods tendered were not according to sample. He made no allegation in pleading or in evidence about the place of manufacture of the goods tendered. It was common ground that the goods tendered were those later sold at auction by the sellers. The buyer alleged that the sample sun-glasses given to him by the sellers were exhibit 2. He produced also another pair of sun-glasses, exhibit 3, which he said was obtained by him from the goods auctioned. The two pairs were obviously different. The sellers swore that exhibit 2 was not the sample given by them, but that exhibit 3, or a pair indistinguishable from exhibit 3, was the sample. They produced a third pair, exhibit 10, which they said was the duplicate sample retained by them. Exhibits 3 and 10 show very minor differences which are probably mere variations of fitting and size such as one would expect to find in a large consignment. It

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was not contended that the variations were greater than would be permissible. The sellers thought that exhibit 2 was of Japanese manufacture. It would have helped them to prove this, for it would not be likely that they would give a Japanese sample for Hong Kong goods. They found and produced a box of sun-glasses marked as "made in Japan" (exhibit 11) which are remarkably like, if not identical with, exhibit 2. They said quite frankly that they could not prove that exhibits 3 and 10 and the goods tendered were of Hong Kong manufacture, but they believed them to be, and had bought them as such. At least they were unlike exhibits 2 and 11, which were almost certainly Japanese. It was never contended before the District Court, even in final speeches, that exhibits 3 or 10 or the goods tendered were Japanese. The learned Magistrate clearly found that exhibit 3 was the sample and he rightly assumed, in the absence of any evidence to the contrary, that the goods tendered were of Hong Kong make. There was in fact no admissible evidence where the goods tendered were made. They were admittedly like exhibits 3 and 10, which were never alleged to be Japanese, and were quite unlike exhibits 2 and 11, which probably were Japanese. I think the learned appellate Judge misdirected himself gravely on this matter. There was no evidence to support his finding and it must be set aside. In my view the whole of his judgment must fall with it. There was clearly evidence to support the findings of the learned Magistrate. In particular, I entirely agree with his finding that delivery was offered on 14th December, 1950, when the goods arrived in Dar es Salaam, and that the buyer was then unable or unwilling to make payment in terms of the contract. I would allow the appeal, set aside the judgment and decree of the High Court, restore and affirm the judgment and decree of the District Court and order that the buyer do pay the costs of the two appeals.

, WORLEY, President.—I have had the advantage of reading the judgment prepared by my brother Briggs. I agree with his conclusions and an order will be made in the terms proposed in his judgment.

The only difficulty I have felt is over the construction of the contract. I was at first disposed to agree with the learned trial Judge that it was a term of the contract that the goods should be "ex Tjibadak", i.e. that they should be part of a consignment at sea in the s.s. Tjibadak at the date of the contract. I think it is quite clear that both parties expected the sun-glasses to come from the *Tjibadak* and it is very probable that the goods actually tendered did in fact come from that ship, though offloaded at Mombasa instead of at Dar es Salaam. Mr. Jhaveri for the respondent conceded before us that offloading at Mombasa and sending on by air to Dar es Salaam would not in the circumstances constitute default on the part of the seller. I was at first disposed to think that in this case, as in Hale v. Rawson, (1858) 4 C. B. (N. S.) 85: 140 E. R. 1013, the proper view was that "the language of the contract plainly imported an assurance or warranty" that the contract goods were on board the ship: see Benjamin on Sale, 8th ed., 588. However, having further considered the report of *Hale v. Rawson* I accept the distinctions drawn by my brother Briggs as valid.

I also agree that if the buyer claimed to recover his advance on the ground that he had rejected the goods as not being "ex Tjibadak", the onus was on him to prove that case and he certainly did not do so. It is true that, in the Magistrate's judgment (at p. 77 of the record) there occurs the following sentence: "At the time the contract was made the sun-glasses were on board the Tjibadak and the time of delivery was fixed with reference to the arrival of the ship". But as I read the judgment this is not intended to be a finding of fact but is merely a part of the statement of the plaintiff's case: see paragraph 3 of the plaint. There was in truth no admissible factual evidence to support such a finding.

The two most material paragraphs of the judgment of the High Court are as follows: $-$

"In the contract it is clearly laid down that the sun-glasses are to be sun-glasses manufactured in Hong Kong and from the contract it can be clearly inferred that the goods offered to appellant are a consignment or part of a consignment on board the s.s. Tiibadak.

Yet the evidence leaves no reasonable doubt that the sun-glasses which the respondents were ready to supply were of Japanese manufacture bought locally in Mombasa. There is no real evidence at all to show they were ever on the s.s. Tjibadak. In fact the evidence produced suggests they were not."

Whatever construction be put upon the contract, it is clear that the learned Judge has misunderstood the evidence relating to the provenance of the goods which were tendered in performance of the contract. Before us, Mr. Jhaveri admitted that this finding was incorrect and did not attempt to support it. He attempted only to support the learned Judge's finding that the sun-glasses tendered were not ex Tjibadak. This misdirection was most material and must have been a potent factor in leading the High Court to reverse the Magistrate's decision. Without it there were, in my opinion, no sufficient grounds for the reversal.

BACON, J. A.—I also have felt considerable difficulty as to the construction of the contract, that is to say as to whether it contained a warranty that the goods were to be delivered ex s.s. Tjibadak. But, leaving that question aside, I agree that this was a sale by sample and description and that there was no evidence to support the finding on the first appeal that the goods tendered were of Japanese origin. Accordingly I concur in the conclusion arrived at by the learned President and Briggs, J. A., and in the proposed order.