Account-Account suued-Deience to an action upon-Draft il) the flilture of
an 1.0.U. document

ASsignment-Open account for price of goods

Contract-Consideration-Whether required between acceptor and drawer of II
draft-Adequacy

Contract-Parol evidence rule-Novation agreement on assignment of debt
Negotiable 1nstru~t-CoUecting agent-When to be considered an assignee-
Consideration for assignment

ReceptiOn-Consideration--English law

The plaintiff sold a quantity of gum to a finn, Grivas Bros., balance
of price due being iE.462.020 m/ms. Grivas Bros., by draft on their
finn at Alexandria payable 15 days after sight for iE.SOO, arranged with
the plaintiff that he should get payment for the amount due to him
through the defendant, Henry Geid. The draft was actually executed the
day after agreement was reached. Henry Geid gave the following document
to the plaintiff on October 31, 1910:

"Due by Henry Geid to Sheikh Hassan Osman of Omdunnan, being
value of a draft on Messrs. Grivas Bros. only forty six thousand and

                two hundred and two piastres."                                     

• Court: Wasey Sterry, Acting J.C., H. Morgan J.Payments totalling :£E.72.590 minis were made to the plaintiff on
November 3rd and 5th, 1911. No more payments having been made, the
plaintiff brought the present action alleging that the above document
created a binding contract and that the defendant was bound to pay to
him the sum mentioned therein.

The civil judge found that there was no consideration between plaintiff
and defendant and that therefore plaintiff could not sue defendant on the
draft. That the two advance payments were made for the convenience of
the plaintiff, but not as a matter of, right, and that the defendant was
entitled to a return of the monies advanced by him to the plaintiff.

Held: (i) That the document referred to' was in the form of an
account stated, and that even accepting the requirements of English law
in that respect, there was good consideration to support the document,
namely, that the plaintiff assigned his claim against Grivas to the defendant
in consideration of his giving up his claim against Griva~ and of defendant
undertaking to pay him.

( ii) That the admission of liability by the defendant was not con-
ditional upon the Grivas draft, being honoured because: ( a) The words
"value of draft on Messrs Grivas" did not necessarily imply that payment
depended upon the draft being honoured; they only set forth the con-
sideration. ( b) If the parties intended to make the honouring of the
draft a condition they would have put it down in writing. ( c) The pay-
ment of advances before the draft was honoured goes to prove that
honouring the draft was nota condition. ( d) Since the evidence of the
parties is conflicting on this point, then a condition to the effect that
payment was conditional on honouring the draft has to be extracted from
the terms of the document; no parol evidence can be admitted to 'show
any such condition.

Appeal

Advocate: Mr. Francoudi ... for respondent.

January 6: 1912.' H. Morgan, J.: The facts of this case are
as follows: On October 10, 1911, Hassan Osman sold certain gum
to Grivas Bros. taking earnest money: on October 14 the gam
was delivered to Grivas' warehouse, but as the remainder of the
purchase "price was not paid Hassan Os-man retained the weighing
docunjents which showed payment of royalty .

. Hassan Osman then began pressing Grivas for' payment. He
)vas offered bills on other persons and refused them. Finally Hassan
Osman, Yanni Constantinopoulos, agent of Grivas, and Bushra Mitias,
agent, of Henry Geid, met together in Henry Geid's place of business,
and the following document was signed on behalf of Henry Geid
and handed to Hassan Osman."Amount due from Henry Geid to El Sheikh Hassan
Osman of Omdurman being' vJIue of a draft on Messrs, Grivas
Brothers only forty six thousand and two hundred and two piastres

             31.10.1911   P. T; 46202."

At that moment there was no draft in existence, but on the "next
day, November 1, 1911, a bill of exchange for iE.500 was, drawn
by Grivas Bros., Khartoum on the firm of Grivas Bros., Alexandria,
payable to the order of Henry Geid fifteen days after sight; value
received iii account. Hassan Osman says that the arrangement was
that Henry Geid should pay him 3 days after October 31. On
November 3 £E3f.050 m/ms was paid by Geid, on November
5 £E41.540 m/ms, and the amounts were entered on the document.

Defendant's clerk, who signed the document, alleges that at the
time it was verbally agreed that the payment was to be made after
the draft had been met, and' that the peri~ of 15 days was men-
tioned, and the words in the document "Value of draft 'on Messrs.

        Grivas" may be taken in aid of this contention.                                        

The payments in advance were, made for the convenience of the
plaintiff at his request and' out 'of consideration to him, but not
as a matter of right. It appears to me that the defendant in fact
was for' a small commission undertaking the duty of collecting a draft
for Griva~ Brothers, that the defendant was much in the position of
a bank undertaking. Such being his duties, there was no necessity
for his undertaking any greater ,Ii,ability and there is no consideration
between himself and the plaintiff for doing so. The document as
given and signed by his clerk, if its somewhat dubious wording must
be taken. as being dependent upon the draft referred to therein and
the sum advanced, does not amount to any ,admission of any greater

        liability.                                                                                                             

The plaintiff does not suggest, and I do not think could support,
any suggestion that owing to the conduct of the defendant he had
jOrgone any right which was open' to him and in such manner acted
upon the supposed undertaking' to pay the amount under· any'

        circumstances.                                  

The fact that Messrs. Grivas Bros.' bankruptcy was imminent

         was not present to the minds of either party.                                                     

, I have come to the conclusion accordingly that the plaintiff
cannot succeed in this action and his claim must be dismissed. I
would add that if the conclusion I have arrived at is correct, it appears to me that the defendant is I entitled to a return of the monies advanced
by him to the plaintiff. \

Action dismissed

March 25, 1912. Wasey Sterry, Acting J.C.: The plaintiff
sues upon a written note signed by the defendant .which was given
to the plaintiff under the following circumstances. (His Honour
then stated the facts, read out the draft and proceeded.)

The question for decision is as to whether this document created
a contract binding upon the defendant to pay the sum mentioned
therein to the plaintiff.

Payments as endorsed in fact were made to the plaintiff by
the defendant on the dates specified. And it was admitted that the
defendants have received a small sum by way of commission or the
like. There is further the form of the receipt "Due by Henry Geid
to Sheikh Hassan Osman."

Henry Geid says that he merely undertook to collect the amount
of .£E.462.020m/ms from Grivas; that he did not undertake to pay
until he had collected the money from Grivas; and that the advances
he made were out of friendship and good feeling. The money had
never been collected because before the expiration of 15 days the'
firm of Grivas had suspended payment.

The question therefore is which of the two innocent parties
is to bear the loss. The civil judge has decided that Hassan Osman
cannot recover the difference between the advances and the total
amount of the receipt and must repay the advances; and Hassan

        Osman is now appealing.                              

Now in form this document is in the nature of an I.O;U., or in
other words of an account stated, and if Henry ,Geid is sued on it
there appears to me' under English Law to be only two defences open
to him on the action: (1) that no money is due by reason of absence
of consideration, or (2) that the words "value of draft on Messrs
Grivas" import a condition that the account was only stated subject
to the draft being honoured.

Now as regards the first defence I am not prepared to admit that
the courts of this country are bound to push the doctrine of consid-
eration to the lengths to which it has been pushed .in English Law,
but in this case it seems to me that there is consideration sufficient
to satisfy English law on the view which I take of the facts ..The consideration as expressed on' the face of the document is
a draft on Grivas-that was a perfectly good consideration. As a
fact the transaction did not quite take that form because we have
it in evidence that the draft was not written till next day, and then
it was made direct from Grivas to Henry Geid and to include com-
mission and a cash advance to Grivas. But it the substance of the
transaction was, as I-take it to have been shown by the evidence,' that
Hassan Osman assigned his claim against Grivas to Henry Geid in
consideration of his giving up his claim against Grivas and of Geid's
undertaking to pay him, there was perfectly good consideration.
Were it not so it is difficult to see how there could ever be a substi-
tution of one debtor for another. The adequacy of the' consideration
is a question for the parties and not for the court.

Apart from the oral evidence the reasons that h~ve brought me
to this conclusion of fact are: ( I) that if it had been desired that
failing payment by Grivas Hassan, Osman should be liable as a surety
to Henry Geid, or that Henry Geid should merely collect the money
for Hassan Osman, the obvious and simple way of carrying out the
transaction was for a bill to have been made to the order of Hassan
Osman and endorsed to Henry Geid for collection or generally; (2)
that not a word is said in the document of receipt about any condition
of payment by Grivas of the draft or that it should not be payable
for 15 days; (3) that advances were made to Hassan, Osman on the
3rd and 5th day after the date of the document; (4) that there was
no draft for iE.462.020 m/rns, but when the draft was made out
on the next day it was for iE.500, which included commission to,
Geid from Grivas and an advance in cash to Grivas; (5) that it is
admitted that Geid did business in purchasing drafts from Grivas in
Khartoum or Grivas in Alexandria and on the very same day took
another draft for iE.300, as his books show; and (6) that the name
of Hassan Osman appears nowhere in Henry Geid's books and that
in Grivas' books his account is shown as closed.

As regards the second possible defence which was urged vigor-
ously by Mr. Francoudi, viz., that the admission of liability was
subject to the draft being honoured, firstly I would say that the words
"value of draft on Messrs. Grivas", have to my mi d no such natural
implication. They seem to me only to set forth the consideration

,just as they might have said cotton on bills of lading foi- gum.
Secondly, if the parties intended to make this condition nothing was