Case No.:

(AC-Revision-286-1959)

Court:

Court of Appeal

Issue No.:

1960

Principles

·  Sale of goods—Delivery of negotiable instruments for purchase price—Passing of property

In a sale of a used motor vehicle the written agreement provided that the purchase price was to be paid by post-dated cheques and that the registration of the vehicle in the name of the vendee was to be effected only after his honoring the cheques.
Held: that the passing of the property in the vehicle to the vendee was conditional on the cheques being honoured.
Contomichalos v. Mahmoud Hussein and Another (AC-App-21-29) distinguished.

Judgment

(COURTS OF APPEAL)

ELIASA  HANNA EL TAWIL v. ALFI ABADU GIDDIS AND Others

(AC-Revision-286-1959)

Summary revision

Advocate: Abdulla Nagib for applicant

March 23, 1960. Babikir Awadalla I.: —This application—having been referred to me for final disposal under section 176, Civil Justice Ordinance— is hereby summarily dismissed.

The three cases are at one in that the one and only point for determina tion by the court was the time when the property in the goods passed to the purchaser. In all the three cases, the sale was one of specific goods and so the determining factor is in each one “the intention of the parties” In the motor-car sales the agreemehts were written but in the other case there was no writing and the court had to arrive at a decision by consider ing all the circumstances of the case including the evidence of the parties. Judgment debtor gave viva voce evidence that the sale in the third case was conditional upon the cheque being honoured.

As regards the motorcar cases, the learned District Judge answered the same question in favour of the vendors by interpreting the words “registra tiOn to be made in vendee’s name after cashing of cheques” as importing

a condition that no property in the cars is to pass until those cheques were honoured.

The “registration” contemplated in the agreement is registration under the Road Traffic Ordinance. Subsection (3) of section 12 of that Ordinance requires notifications in the change of ownership to be made not later than fourteen days after such change, and to assume that the property was to pass to the vendee immediately when notification was to be made more than a month later (i.e., after honouring the cheques) would be to construe the agreement in a manner contravening the provisions of the Road Traffic Ordinance which the parties had in mind. Such interpretation would, in my view, have been unreasonable.

I do not agree with the learned advocate for applicant that this case is governed by the ratio decidendi in Contomichalos v. Mahmoud Hussein and Another (AC/APP/21/29) In fact the two cases are at variance in the very material point arising for the consideration of the court at present, viz., whether the written agreement contains any provision pre venting the giving of negotiable instruments from extinguishing the original cause of action by way of accord and satisfaction. In (AC/APP/21/29) there was no such provision; in the present one the provision is couched in such terms as not only to prevent accord and satisfaction but to make the contract of sale itself conditional upon the cashing of the cheques.

I am not at all aware how the court could have ordered a sale of these cars with registration thereof in the names of the prospective successful bidders without disregarding the vital condition in the contracts under consideration, which prevents registration before complete payment to the respondents, the original vendors.

Though I agree with the dismissal of the application to him, by the honourable the judge of the High Court, I regret I find myself unable to agree with the reasons for that dismissal. The honourable the judge of the High Court says that the difference between AC/APP/21/29 and the present one lies in the fact that the previous appeal was dealing with a hire- purchase agreethent. I think the basis of the distinction is the existence or otherwise of a provision in the contract preventing the negotiablt instrument operating by way of accord and satisfaction. In this case there is such a provision, in the earlier case there was not.

(Application dismissed)

* Court: B. Awadalla J.