MOHAMED EZAK v. MARIKAR

091-NLR-NLR-V-21-MOHAMED-EZAK-v.-MARIKAR.pdf


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Present: Bertram C.J. and Loos A.J.
MOHAMED EZAK v. MABIKAB.
275—D. C. Colombo, 51,991.
Contract for sale of goods^-Enforcement of the contract—Memorandum—
Essentials of the contract—Part payment by cheque—Sale of
Goods Ordinance, s. 4 (1).
A letter written- subsequent to the conclusion of a contract of -sale by aparty issufficienttoenforce the ■ contractagainst him
if all theingredientsof thebargainagreed uponbythe parties
are embodied therein.
Where the letter did not specify the place of delivery, thoughit' was one of the actual terms of the contract, it was held that therewas not a memorandum to satisfy the requirements of section 4 ofthe Sale of Goods Ordinance.
It is notopen toa partytorelyon letters asconstituting the
memorandum and to perudiate one of the terms which the memo-randum so constituted contains.
Where acheque istenderedinpart payment and isaccepted in
part payment, it is a part payment within the meaning of section4 (1) of Sale of Goods Ordinance, though it be dishonoured later.
rJ~’HE facts appear from the judgment.
Hayley, for the defendant, appellant.—There is no contractbetween the plaintiff and the defendant, as none of the provisionsof section 4 (1) of the Sale of Goods Ordinance, No. 11 of 1896, hasbeen complied with. There has not been an acceptance of any partof the goods or any note or memorandum signed by the defendant,or payment of any part of the price. A cheque was given, on aSunday, but the payment of it was stopped on Monday. Thus,, it isnot part payment as contemplated by the section. Davis v. Phillips,Mills & Co.1 A cheque whichisdishonoured later isnotpayment.
Pape v. Westacoth.3 “ Paymentof a cheque is onlyaconditional
payment, and when the cheque is honoured, that operates as apayment from the date of the giving of the cheque.” MeyappaCketty v. Weerasoriya,3 Hadley v. Hadley.* In this case thecheque was not honoured, and cannot therefore be considered aspart payment.
E. W. Perera, for the plaintiff, respondent.—There is a memo-randum in this case sufficient to satisfy the requirements of section4 (1). All the essential terms of the contract are fully set out inthe letter sent by the defendant’s proctor. Such a memorandum 1
1 [1907) 24 T. L. R. 4.3 (1916) 19 N. L. R. 79.
1 (1894) 1 Q. B. 272.* (1898) L. R. 2 Oh. 680.
IMS.
( 290 )
1919.
Mohamed
Ezakv.
Marikar
would be sufficient. Hoyle v. Hoyle; 1 25 Hals. 135. The memo-randum need not be made at the time the contract is entered into.It may be at a subsequent date.
In this case the parties did not consider the place of deliveryessential. It was not mentioned at the time of entering into thecontract. Thus, section 28 of the Ordinance would apply, and theplace of delivery would be the seller’s place of business.
“ The object of the statute is that where there was no contractin writing, there must be some overt act to render the bargainbinding.” Kibbe v. Gough.2 In this case the giving of the chequewould be an overt act contemplated by the statute.When a
cheque is tendered as part payment and is accepted as such, itwould satisfy the requisites of the section. Parker v. Crisp & Co.;5Davis v. Phillips, Mills & Co.*
Hayley, in reply.—Every essential of the contract must appearin the memorandum. Benjamin on Sales, 5th ed., p. 247; McLean v.Nicoll; 5 Ancher v. Baynes.6 In this case place of delivery is essen-tial, as it affects the price where there had been an actual agreementas to the price, the paper which did not contain that part of thebargain was held insufficient. Acebel v. Levy;1 Benjamin on Sales,5th ed., p. 263. If the parties considered a term material and decideon it, it must be stated in the memorandum.
[Bertram C.J.—Where a cheque is tendered as payment and isaccepted as payment, it would satisfy the requirements of thesection.]
Only if it is honoured on presentment. A cheque dishonoured,is not- payment.
The words in the English Act are: “ Gives something in earnestor in part payment, ” while under the Ceylon Ordinance he must" pay the price or part thereof. A cheque may be consideredearnest, but it is not part payment unless honoured.
December 19, 1919. Bertram C.J.—
This case raises two interesting points under the Sale of GoodsOrdinance. It is the case of a copra contract. The sale was agreedupon by the parties on a Sunday, and a cheque for Rs. 1,000 wasgiven and received in part payment. On the following day,whether in good faith or in bad faith it is not necessary to determine,the purchasers stopped payment of the cheque and repudiated thecontract, on the ground that no delivery- had been tendered at hisown stores. According to the seller, delivery was to be made atthe seller’s store. An action for damages was brought by theseller, who obtained judgment.
i (1893) 1 Ch. Div. 84.* (1907) 24 T. L. B. 19.
» (1878) 38 L. J. 206.6 (1861) 7 Jur. N. S. 999.
> (1919) 1 K. B. 481.• (1850) 20 L. J. Ex. 54.
*’ (1834) 10 Bing. 376.
1910.
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Mr. Hayley, for the appellant, in this Court relied entirely uponsection 4 (1) of the Sale of Goods Ordinance, No. 11 of 1896. Mr.E. W. Perera, for the respondent, claims that he does not comewithin that sub-section. He alleges, first of all, that there is, infact, a sufficient note or memorandum in writing of the contractmade and signed by the agent of the party, and he points to a letterwritten subsequent to the conclusion of the contract by the proctorsof the purchaser which refers to the terms of the contract, and hesays that this memorandum is sufficient. In the second place, hecontends that part payment by cheque is a good part payment.
Bmwuv
C.J.
Mahomed
Bzakv.
Marikar
With regard to the first point, there is no doubt that, as far asform goes, a subsequent letter written by the party or his proctorwould be sufficient. The subject is explained in the judgment ofA. L. Smith L.J. in Hoyle v. Hoyle:1 “ The statute enacts thatno action shall be brought upon a promise of a certain description,unless there is a note or memorandum thereof signed by the partyto be charged. A letter to a third party has been held to be enough;an affidavit made in a different matter has been held to suffice, andI should say that an entry in a man’s own diary, if it were signedby him and the contents were sufficient, would do- The questionis not- what is the intention of the person signing the memorandum,but it is of fact, viz., is there a note or memorandum of the promisesigned by the party to be charged?
There are two difficulties, however, in the way of the respondentat this point. In the first place, the memorandum on which herelies does not specify the place of delivery. The place of deliveryseems to me clearly an essential part of this contract. It affectsthe price, inasmuch as the cost of cartage is involved. Moreover,it does appear that the place of delivery was one of the actualterms of the contract. This is pleaded by the plaintiff in his plaint,and he himself in his evidence expressly says so. There is no room,therefore, for the presumption under section 28 that, where no placeis expressed or implied, the place of delivery is assumed to be theseller’s place of business. The place of delivery was, in fact, one ofthe terms of the contract. Under this section or the correspondingsection in English law it has been held that, the price need notnecessarily be mentioned if no fixed price' is agreed upon. But ifthe price is one of the ingredients of the bargain, then it must bespecified Hoadly v. M’haine.2 See also Noorbhai & Co. v. Janbo.*The same principle must be applied to the place of delivery, where,as in this case, the place of delivery is one of the ingredients of thebargain.
In the second place, the memorandum contains certain inaccu-racies, and in order to correct these, it is necessary to refer to sub-sequent letters from the same proctors. Those subsequent letters,
1 (1893) 1 Ch. Dio. 84.* (1834) 10 Bing. 482.
* (1919) 21N. L. B. 186.
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1H9.
'Bbhxbam
C.J.
Mohamed
Ezakv.
Marikat
however, embody the very term whieh is in dispute, that is to say,they assert that delivery was to be made at the buyer’s stores.
If these letters are to be admitted as constituting the memorandum, 'that term would also have to be accepted. It is not open to therespondent to pray in aid the letters as showing the memorandum,and to repudiate one of the terms whieh the memorandum so con-stituted contains. Mr. Perera’s first point, 'therefore, fails.
There is, however, another mode of escape from the effect of thesection. Mr. Perera maintains that a good part payment was madeon the day of the contract by means of a cheque. Mr; Hayleycontends in reply that in the nature of the case the tender andacceptance of a cheque is not a “ part payment.” On this pointthere is express authority, which seems to me to conclude thequestion. In the case of Parker v. Crisp & Co.1 it was held that,where a cheque was sent in payment of goods that had been ordered,the payment of that cheque was a good payment within the meaningof the Sale of Goods Act, 1893, section 4, in spite of the fact thatthe cheque was subsequently returned. There is also the case ofDavies v. Phillips, Mills & Co.,2 on which Mr. Hayley himself relied.But it does not seem to me that that ■ case really supports him.In that case Channel J. appears to have said.:‘‘ That a payment
to satisfy the statute meant a payment made to and accepted bythe vendor. ” Channel J. is there speaking of payment by cheque.He is. clearly, therefore, of opinion that payment by cheque satisfiedthe statute. In Parker v. Crisp & Co.,1 Avery J. goes furtherthan Channel J.: “ Then was it part payment? It has been rightlyadmitted that a mere tender of payment is not sufficient; but ithas been contended by Mr. Gandy that there can be no paymentwithin the section without an unqualified acceptance by the personto whom the cheque is sent. I doubt whether that is right. A manmight receive a cheque and might write to the sender:‘ I have
received your cheque, but I have changed my mind, and I am notv going to fulfil my contract.’ That would not be an unqualifiedacceptance of the cheque, but it cannot be disputed that therewould have been a part payment to satisfy the section. ” This casegoes further, as here there was an unqualified acceptance of thecheque. I doubt whether it is”necessary to go so far as Avery J.I think it is sufficient to say that where a cheque is tendered in partpayment and is accepted in part -payment, it is part paymentwithin the meaning of the section.
Mr. Hayley has, ' however, drawn two ingenious distinctions.In the first place, he points to a difference in the wording of ourown Ordinance as compared with the English Act. The EnglishAct uses the words “ unless the buyer gives something in earnestto bind the contract or in part payment. ” Our own Ordinancesays “ unless the buyer pays the price or a part thereof. ’ He
1 11919) 1 K. B. 481.* (1907) 24 T. L. R. 4.
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suggest that, though under the English -Act a cheque might be“ something given in part payment, ” it is not in fact part pay-ment. This seems to me to be too fine a distinction. I cannotthink that there was any intention in the mind of the draftsman orof the Legislature, when this verbal difference was made, to drawa distinction between payment in money and payment by securityor in kind. The term “ something ” was used broadly, becausethe English Act dealt' with two things: firstly, earnest; andsecondly, “ part payment. ” In its application to part paymentwhat was referred to by ‘ ‘ something ” was either money or theequivalent of money.
The other distinction is this. Both cases which I have referredto, namely, Davis v. Phillips, Mills A Co.1 and Parker v. CrispA Co.,2 are cases in which the cheques were returned. This is acase in which the cheque was not returned, but. dishonoured, orrather a case in which payment was stopped. Mr. Hayley suggeststhat, inasmuch as a cheque is in the nature of the case only a con-ditional payment, if anything is done to prevent payment takingeffect, then it is no payment at all. This is no. doubt the casefrom some points of view. But what we have to do here is tointerpret the Ordinance in accordance with its intention. Thereason I take it for stipulating that if a man made a part payment,he was to be bound, was an equitable ope. It would not be fair,.when a man had .done an overt and unmistakable act in acceptanceof the contract, to allow him to go back on his bargain. It would beequally inequitable, where he has tendered a cheque in part payment,and that has been accepted as part payment, to-say that he isentitled to go back- oh the bargain by taking steps to make thatpayment ineffective. I think this ingenious distinction also fails.
Another point was raised as to whether the learned District Judgewas right in giving damages for storage. I think the learnedDistrict Judge acted rightly.- The effect of the evidence was that,owing to the copra being in the purchaser’s own store, he had tospend money for the storage of other copra at the stores of otherpersons. I am, therefore, of opinion that the appeal should bedismissed, with costs.
Loos J.—I agree.
Appeal' dismissed.
1 {1907) 24 T. L. J*. 4.2 (1919) 1 K. B. 481.
1919.
Bertram
C.J.
MoAamedStale v.Marikar