Velji v Takim and Company (Civil Appeal No. 40 of 1952) [1952] EACA 180 (1 January 1952)

## COURT OF APPEAL FOR EASTERN AFRICA

Before SIR BARCLAY NIHILL (President), SIR NEWNHAM WORLEY (Vice-President) and PELLY MURPHY, Ag. C. J. (Zanzibar)

## FAZAL KASSAM VELJI, Appellant

## M. TAKIM & COMPANY, Respondent

## Civil Appeal No. 40 of 1952

(Appeal from decision of H. B. M.'s High Court for Zanzibar at Zanzibar-Grav. $C. J.$ )

Broker's note-Unstamped at time of broker's signature-Parties' signatures added—Admissibility.

The plaintiff respondent sued the appellant for damages for breach of contract and pleaded a document as evidence of the contract. The appellant pleaded that it was inadmissible in evidence and was not stamped at the time when it was signed by the broker. The document was called a "Local Contract Note" and above the signature of the broker sets out the terms and conditions of a sale of goods. Below the broker's signature there were the signatures of the seller and buyer and above the broker's signature was written in Gujarati, "The seller and the buyer have made bargain with signature." The trial Judge distinguished the decision of the E. A. C. A. in Vagani & Co. v. Lakhani, Ltd. (16 E. A. C. A. 5) and held that the document did not constitute a broker's sale note within Article 41 of the First Schedule to the Zanzibar Stamp Decree.

Held (1-11-52).—The document was a broker's note and was prepared and signed by the<br>broker but not stamped until the following day. The broker was purporting to act<br>for both parties and the document should have been stampe ingly it was inadmissible.

Appeal allowed.

Cases cited Vagani & Co. v. Lakhani Ltd., 16 E. A. C. A. 5; Hunoomanprasad Panday v. Munraj Koonwen, 19 E. R. 154.

O'Brien Kelly for appellant.

Talati for respondent.

JUDGMENT (delivered by SIR BARCLAY NIHILL (President)).—This is an appeal from a judgment of H. B. M.'s High Court of Zanzibar. The short point for decision is whether the learned trial Judge was right in his finding that the document (exhibit 1) was not a broker's note or memorandum of the nature to attract stamp duty under Article 21 of the First Schedule to the Zanzibar Stamp Decree (No. 5 of 1940). The plaintiff-respondent sued the appellant for damages for failure to deliver to him 20,000 lb. of cloves at Sh. 95 per 100 lb. and pleaded exhibit 1 as evidence of the contract. In reply the defendant-appellant pleaded. that exhibit 1 was inadmissible in evidence. Although the document now bears a one shilling stamp, it is admitted that this was affixed, not by the broker, but by the plaintiff-respondent, and it is not now seriously disputed that this stamp was not affixed "at or before the time of execution" as required by section 19 of the Stamp Decree on instruments chargeable with duty of ten cents or twenty cents. If in fact then the document exhibit 1 is a broker's note within the meaning of Article 41 of the First Schedule, it was inadmissible in evidence by reason

of section 39 of the Stamp Decree. Again, if this is the case, the plaintiffrespondent's claim for damages must fail, since he has no other evidence by which to prove the contract.

The learned trial Judge had before him and considered most carefully the decision of this Court in Vagani & Co. v. Lakhani, (16 E. A. C. A. 5), but he felt able by reason of certain words which appear on the document exhibit 1 to distinguish it from the document held to be a broker's note in Vagani's case. It may be as well to recall that in Vagani's case the majority decision of the Court was that the document there in question being at least ab initio a note or memorandum sent by a broker or agent to his principals intimating a purchase or sale on account (Article 40 of the First Schedule to the Kenya Stamp Ordinance) it attracted a stamp of 20 cents, notwithstanding that the buyer and seller by affixing thereafter their signatures in confirmation of the sale may have added something to the document which made it also an agreement or memorandum of agreement relating to the sale of goods. The then learned Chief Justice of Uganda (Edwards, C. J.) who took the majority view, pointed out that to come within the exemption from duty allowed for by Article 5 the document had to relate "exclusively" to a sale of goods or merchandise "not being a note or memorandum chargeable under Article 40" (which Article corresponds to Article 41 of the Zanzibar Stamp Decree). The then learned Chief Justice of Tanganyika (Graham Paul, C. J.) dissented from the majority view on the ground that the subsequent signature of the principals had changed the character of the document and that since at the time of its production in Court it was an agreement or memorandum of agreement relating to a sale of goods which was tendered for the purpose of proving the contract of sale, it was admissible<br>unstamped. The learned Chief Justice of Zanzibar was of course bound by the decision in Vagani, and there is every indication in his judgment that he would have followed it had he not thought that the document exhibit 1 was distinguished in form from the document in Vagani. Since I was one of the majority in Vagani's case, perhaps I should say that I am still of the opinion that the decision in that case was a correct one.

All that remains therefore for me to do in the instant case is to examine whether the learned trial Judge was justified in drawing the distinction which he did. The document in Vagani's case was not quoted in extenso in any of the judgments of this Court. The learned Judge had a copy of the document before him, however, so that I consider that we are justified in looking at it also. The two documents have this in common, that they both purported to come from brokers: in Vagani the document was called a "Sale Note"; in this case a "Local Contract Note". Both documents set out above the signature of the broker the terms and conditions of a sale of goods. In Vagani's case, below the signature of the broker, are the signatures of the seller and the buyer beneath the words "confirmed by sellers" and confirmed by buyers. In the instant case, at the bottom of the document, beneath a note printed in Gujarati, which is clearly a part of the broker's form, appear the signatures of the seller and buyer. Up to this point I consider that the two documents can be fairly described as almost precisely similar. Now comes what may be a distinction. Immediately above the signature of the broker are words written in Gujarati, which, according to the agreed translation, mean this in English: "The seller and the buyer have made bargain with signature". It is clear from the judgment of the learned trial Judge that it was these words which caused him to conclude that the document above the broker's signature did not record an effectual purchase and sale or an effectual contract for purchase and sale of goods. It is a nice point of construction and admittedly it is difficult to assess the exact meaning in English