006-NLR-NLR-V-16-KEKULAWELA-v.-THE-ATTONEY—GENERAL.pdf
/ TO
Present: Lascelles C.J. and Middleton J.KEKULAWELA v. THE ATTORNEY-GENERAL.
340—D. C. Colombo, 31,856.
Contract—Condition precedent—Agreement to supply bricks—Paymentto be made on production of receipts—Right to payment withoutproduction of receipts.
Plaintiff sued the defendant for the value of bricks supplied tothe General Manager of the Ceylon Government Railway under acontract. One of the clauses of the contract between the plaintiffand the General Manager was to the effect that payment was tobe made upon the plaintiff producing receipts duly signed by theRailway Storekeeper or his representative.
The District Judge held that the plaintiff did in fact deliverthe bricks, and gave judgment for the plaintiff, though he producedno receipt from the storekeeper or his representative.
Held, reversing the judgment of the District Judge, that theproduction of the receipt was a condition precedent to the plaintiff’sright to payment, and that it was not open to the plaintiff to provedelivery by any other means.
Lascelles C.J.—No technical words are required to make astipulation a condition precedent; that is, a stipulation on whichthe right to receive payment depends. The question must dependupon the nature of the contract and the acts to be performed bythe contracting parties
In a transaction where the opportunity for error and fraud withregard to the quantity and quality of bricks delivered were sonumerous, it was natural that the parties should agree upon someperson whose receipt should be the only evidence of delivery ofbricks equal to sample.
T
HE facts are fully set out in the judgment of the Chief Justice(Lascelles C.J.) as follows:—
This is an appeal by the Attorney-General from a judgment ofthe District Court of Colombo condemning him, as representing theCrown to pay to the plaintiff Rs. 950 and interest, being the price of
1012.
( 20 )
1912. bricks claimed to have been supplied by the plaintiff in pursuance
„of certain contracts with the General Manager of the Ceylon Govern-
Kekulawela, _ ..
D. Attorney-ment Railway. .
GeneralBy the contract marked P 1 dated December 22,1908, the plaintiff
undertook to supply the bricks mentioned in the schedule in suchquantities a& might from time to time be required for the generalservice of the Ceylon Government Railway from January 1 toDecember 1, 1909, of the quality described in the schedule and equalto a sample deposited wit-h the General Manager.
Clause II. of the agreement provided that delivery should bemade at the places and at the price specified in the schedule uponorders signed by the General Manager or his Assistant or by theRailway Storekeeper.
Clause III., on the construction of which this appeal principallydepends, is in the following terms:—“ That the General Manageragrees with the aforesaid contractor that payment- shall be made tothe contractor for the bricks supplied under the contract by meansof crossed cheques at the General Office of the Railway on the 15thday of the month following that in which the bricks have beensupplied upon his producing receipts duly signed by the RailwayStorekeeper or his representative, and on production of claim vouchersproperly prepared in accordance with forms to be supplied on appli-cation at the Office of the Railway Storekeeper and duly certifiedby the said Railway Storekeeper; and it is further agreed that noclaim shall be entertained unless preferred in proper time and on orbefore the 15th day of January of the year following that in whichthe charge was incurred/'
By the contract P 2 dated December 16, 1909, the terms of whichare identical with those of P 1, the plaintiff undertook to supplybricks from January 1 to December 1, 1910f
The case for the plaintiff shortly stated is that he was requiredto supply 50,000 bricks by order P 8 dated October 4, 1909, and thathe began deliveries of the bricks at the lakeside stores on Novem-ber 25; thaC the deliveries were evidenced by a series of receipts orcart notes (marked P 5 to P 14) given to his boatmen and carters byHarridge, who was in charge of the lakeside stores; that the plain-tiff on January 26, 1910, when be had completed the order, tookthese cart notes or receipts to Mr. Speldewinde, the Railway Exten-sion Storekeeper, for the purpose of obtaining the receipts requiredby the contracts; that. Mr. Speldewinde declined to grant thereceipts; and that the General Manager, in the absence of a receiptfrom Mr. Speldewinde, has declined to pay for the bricks delivered.
Mr. Speldewinde deposed that when the plaintiff brought thecart notes to him on January, 26 he, Mr. Speldewinde, went to thelakeside stores and found that no bricks had in fact been deliveredby the plaintiff under the order, and that he therefore declined togrant a receipt for them.
( 21 )
The District Judge has found that the 50,000 bricks were iniact delivered by the plaintiff, and has given judgment for himaccordingly.
The Attorney-General appealed.
Walter Pereira K.C., S.-G. (with him Akbar, C.C.), for theappellant.
Sampayo, K.C. (with him Schneider), for the respondent.
The following author-ties were cited at the argument:—Benjaminon Sale, 5 ed., p. i7b; Brogdon v. Marriott; 1 Milner v. Field; -Clarke v. Watson; 3 Thursel v. Balbime; 4 Morgan v. Bimic; r'Worsley v. Wood; 6 Ranger v. Great Western Raihvay Company; 7Hatham v. East India Company.*
Cur. adv. vult.
January 12, 1912. Lascelles C.J.—
His Lordship set out the facts and continued: —
1012.
Kckulawelav. Attorney*General
From this judgment the Attorney-General now appeals, contend-ing in the first place, that under clause III. of the contract theproduction of a receipt duly signed by the Railway Storekeeper orhis representative is a condition precedent to the plaintiff's right topayment; and in the second place, that the District Judge's findingwith regard to the delivery of the bricks is erroneous.
The first ground of appeal was in issue at the trial, but I gatherfrom the way in which the District Judge disposed of this issue thatthe point was not very strenuously pressed. “ I do not think,"the District Judge says, " it will be seriously contended for thedefence that the plaintiff will not be entitled to payment in theabsence of the receipts referred to, if it is established that he has infact delivered the bricks to the Government; the position taken upfor the defence is that the non-production of such receipts provesthe non-delivery of the bricks."
The Solicitor-General referred us to a series of decisions mostlyrelating to building contracts, in which it was held that, where theproduction of a certificate is made a condition precedent to payment,this condition cannot be dispensed with, except where there is fraudor collusion or in certain special circumstances which are not to befound in relation to this contract. In Milner v. Field 2 Pollock C.B.held that where by the contract itself the certificate of a surveyoris made a; condition precedent, even if it be withheld by fraud, thatis only the subject of a cross action. Clarke v. Watson,3 Robertsv. Brett* Thursel v. Balbime,4 Morgan v. Bimie,5 Hatham v. East
2 Bingham N. S. 473 and 3 Bingham 88.5 9 Bingham 672.
{1850) 5 Ex. 829.6 6 Term. Rep. 720.
(1865) 34 L. J. N. S. C. P. 148.7 {1854-56) 5 H. L. R. 73.
(1838) 2 M. & W. 786.8 1 Term. Rep. 639, 645'.
9 (1865) 34 L. J. N. S. 241.
m2.
IiASOELLBB
C.J.
Kekulawelav. Attorney-General
( 22 )
India Company,1 Banger v.. Great Western Railway Company,*Worsley v. Wood,9 and other authorities were also relied on by the,Solicitor-General.
Mr. Sampayo contended that in the contracts in question thereceipt of the storekeeper was not a condition precedent to payment,but merely a direction as to the mode of payment given for depart-mental convenience, and that there was no analogy between thecertificate of a builder or architect and the receipt contemplated byclause HI. of the contracts. A builder or architect, it was argued,was an expert who performed duties similar to those of an arbitratorwith reference to the agreement; whilst a Government storekeeperoccupied a different position.
I confess that for the purpose now in hand I am unable to differen-tiate the two cases. In a building agreement, where paymentdepends upon the quantity and quality of work done, it is necessaryfor the protection of the employer, and to avoid disputes, to agree onsome practical method of ascertaining these matters. The parties,therefore, agree to accept the certificate of a builder or an architect.In contracts like these now sued on for the delivery of goods up toa certain standard at different places within an extensive area, thesame considerations may apply. The present case is an illustra-tion of the disputes and almost inevitable difficulties which arisewhen the delivery of goods, in a transaction of this nature, is soughtto be proved by receipts and cart notes given by minor officials and.by the oral evidence of boatmen and carters. The object of pro-viding that payment should depend on the storekeeper's receipt isto avoid these difficulties and the confusion which is inseparablefrom them, and to provide a method by which the right of thecontractor to receive payment shall be finally determined.
The position of a storekeeper on whose receipt payment for goodsdelivered is to be made seems to me, in a transaction such as thatnow under consideration, to be the same as that of the architect orsurveyor in a building contract.
He is presumably a person who possesses the necessary qualifica-tions to check deliveries and to decide whether the goods are upto standard.
No technical words are required, as was pointed out in Hatham v.Bast India Company,1 to make a stipulation a condition precedent;that is, a stipulation on which the right to receive payment depends.The question must depend upon the nature of the contract* and theacts to be performed by the contracting parties.
The natural construction of the language of clause III. of thecontracts appears to me to be that payment is dependent upon thestorekeeper's certificate, and this conclusion is confirmed by a'consideration of the nature of the service contracted for. The
11 Term. Rep. 639, 645.2 (1854-56) 5 H. L. R. 73.
3 6 Term. Rep. 720.
( 28 )
contract was for the supply of bricks to a large GovernmentDepartment, the quantity of bricks to be supplied was undefined,and they were to be delivered at any place within the gravets ofColombo upon the orders of the General Manager or of his Assistant,by whom payment was to be made, or on the orders of the BailwavStorekeeper. In a transaction where the opportunity for error andfraud with regard to the quantity and quality of bricks deliveredwere so numerous, it was natural that the parties should agreeupon some person whose receipt should be the only evidence ofdelivery of bricks equal to sample.
This, I hold, is what they did. I think it is clear that theplaintiff agreed that the right to payment depended'upon productionof the Bailway Storekeeper's receipt, and that he cannot now beallowed to prove delivery by any other means.
It was suggested in argument that Harridge might be consideredto be the Bailway Storekeeper’s representative, and that the pro-duction of the cart notes signed by him was a sufficient compliancewith clause III. But it is quite clear from the plaintiff’s ownevidence that he regarded Mr. Speldewinde as the person on whosereceipt he was to receive payment.
For the above reasons, I think it is clear that under clause III. ofthe contracts P 1 and P 2 the production of receipts signed by theBailway Storekeeper was a condition precedent to the plaintiff’sright to recover payment, and that on. the authorities cited by theSolicitor-General no other evidence is admissible in support of hisclaim.
The appeal, in my opinion, must be allowed, and the actiondismissed with costs here and in the District Court.
Middleton J.—
This is an action by a contractor against the Government for thevalue of 50,000 bricks alleged by him to have been delivered inthe Government Stores, but of which those responsible on the partof the Government deny his delivery.
The issues were as follows:—
Upon what terms of contract did the plaintiff supply
bricks ?
Did the plaintiff supply the bricks referred to in paragraphs
3 and 5 of the plaint or any bricks at all from November
25, 1909, to January, 1910?
Did the plaintiff fail to produce receipts in terms of the
contract?
Is the plaintiff entitled to such receipts?
Is the plaintiff entitled to payment without producing such
receipts?
The District Judge in a long and careful judgment has found thatthe bricks were in fact delivered and gave judgment accordingly.
1912.
liASOELLES
C.J.
Kekulatoelaif. Attorney-General
1912.
Middleton
J.
Kekttiau'elav. Attorney-(ieneral
( 24 )
I
The Attorney-General appealed, and it was contended by the'learned Solicitor-General on his behalf that ;ii the terms of thecontract P 1 sued upon the Government were not liable to pay forthe bricks in question until receipts duly signed by the RailwayStorekeeper or his representative had been produced by the plain-tiff; that the plaintiff had in fact admitted and the District Judgehad found that such receipts had not been produced, and upon theauthority of Benjamin on Sale, p. 578, 5th cd.. citing Brogdon v.Marriott,1 Milner v. Field,2 Clarke v. Watson.:i Tlnmscl v. Balbirnc*Morgan v. Bivnieta Worsley v. Wood,* Hanger v. Great WesternRailway Company,7 sought a reverse of the judgment, contendingthat under section 146 of the Civil Procedure Code the learnedDistrict Judge ought to have dealt with and decided the case onthe 6th issue before going into the facts.
On the facts also the Solicitor-General contended that the judg-ment was wrong, and argued that on two points not touched on bythp learned District Judge he was entitled to judgment. The pointswere that the evidence of Mr. Hancocks and of his notes taken atthe time of an interview with the plaintiff, coupled with the evid-ence of his clerk and interpreter (De Mel), proved that the evidenceof the plaintiff’s witness Rupesinghe was false, nrd that theplaintiff had bolstered up his case of delivery on the false evidenceof Rupesinghe in the absence of a clerk named Carolis, who haddied on January 10. 1910,
It was further contended that a book (P 4) of counterfoils pro-duced by Rupesinghe might very well have been concocted by thatwitness partly from true sources.
It was also argued that receipts P 5 to P 14 produced by Harridgewere not to be relied on, as the evidence of Human and Speldewindeproved that Harridge could not have been in attendance at thelakeside stores at the date when they purported to have been signed^by Harridge.
For the respondent the judgment of the District Judge wasstrongly supported, and it was sought, on the authority of Hathamv. East India Company,8 to distinguish the contract there fromthose to which the cases relied on for the Crown applied.
It was argued that Mr. Hancocks and his witness De Mel might-have been mistaken in the impression they arrived at from what wassaid by plaintiff to him; that Mr. Human could not swear thatHarridge was entirely absent from his office on the dates referred to;that the plaintiff had been acting as contractor with Governmentfor many years, and that it was most improbable that for thispaltry sum of Rs. 960 he would have supported this claim by fraudand perjury such as alleged.
2 Bingham N. S. 473 andinerrur 3 Bingham 88. 5 9 Bingham 672.
(1850) 5 Ex. 829.* 6 Term. Rep. 720.
(2855) 34 h. J. N. S. C.P. 148.7 5 H. L. Rep; 72.
(1838) 2 M. & W. 786.8 1 Term. Rep. 639, 645.
( 25 )
The covenant relied on for the defendant was in the followingterms:.—" And the General Manager agrees with the aforesaid con-tractor that payment shall be made to the contractor for the brickssupplied under this contract by means of crossed cheques at theGeneral Office of the Railway on the 15th day of the month follow-ing that in which the bricks have been supplied upon his producingreceipts duly signed by the Railway Storekeeper or his represen-tativeM
It was practically admitted in the argument that the documentsproduced by the plaintiff could not properly be said to have beenreceipts signed by the Railway Storekeeper or his representative inthe sense as regards the Railway Storekeeper understood by bothparties.
No issue was agreed upon, which raised the question whether theplaintiff having taken all possible steps to obtain the receipts itwas impossible for him to do so owing to the neglect and default ofthe Government’s agents which might, according to* the judgmentof Ashburst J. in Haiham v. East India Company, ubi supra, havebeen equal to performance of a condition precedent.
The question whether it was a condition precedent has to bedetermined, according to the same learned Judge, by the natureof the contract the acts to be performed by the contracting partiesand the subsequent facts disclosed in the record which havehappened in consequence of the contract.
The instrument was for the delivery of a large number of bricks,to be of a standard agreed upon in quantities as required at placesto be named, and uncertainty might well arise, as it has arisen here,whether the bricks have been duly delivered.
It is not unreasonable to suppose that such a contingency wascontemplated, and that the intention of the Government was toprotect itself against possible fraud or gross negligence by making itspayment for the bricks contingent on the production of the receiptsof its own agents as specified in the contract. It gave its own agent,with the consent of the plaintiff, the power of refusing to pay forthe bricks unless the receipts stipulated for were, produced by theplaintiff. This was the principle upheld by the Lord Chancellor inHanger v. Great Western Railway Company, ubi supra. The evidenceand the decision of the learned District Judge, which I consider tobe in accordance with the facts disclosed on the record, considerablyinfluenced my mind in favour of the plaintiff; but I, feel bound tohold, in accordance with the authorities relied on for the appellant,that the stipulation in the contract was a condition precedent to thepayment by the Government of the price of bricks delivered.
In my opinion, therefore, the appeal must be allowed with costs,and judgment entered for the defendant in the District Court alsowith costs.
1912.
Middleton
J.
Kekulatceiav. Attorney-General
Appeal allowed.