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ESSAKU SENGENA
V.
YAO POKU
WEST AFRICAN COURT OF APPEAL HOLDEN AT ACCRA, GOLD COAST
15TH DAY OF JUNE, 1943
2PLR/1943/24 (WACA)
OTHER CITATION(S)
2PLR/1943/24 (WACA)
(1943) IX WACA PP. 143 – 147
LEX (143 – 147) – WACA PP. 143 – 147
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BEFORE THEIR LORDSHIPS:
DONALD KINGDON, C.J., NIGERIA
PETRIDES, C.J., GOLD COAST
GRAHAM PAUL, C.J., SIERRA LEONE
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BETWEEN:
ESSAKU SENGENA – Plaintiff-Appellant-Respondent
AND
YAO POKU – Defendant-Respondent-Appellant
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ISSUE(S) FROM THE CAUSE(S) OF ACTION
COMMERCIAL LAW — CONTRACT:- Hire purchase — Vendor’s right of seizure — Sale — Purchaser’s right to terminate agreement — Novation — promissory note — Conditional document — Time of payment neither fixed nor determinable
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CASE SUMMARY
Plaintiff hired a lorry from defendant under a hire-purchase agreement. Defendant subsequently took permission of the lorry, purporting to act under the agreement, and plaintiff sued him for unlawful seizure.
The agreement, dated 18th January, 1940, was one for sale of the lorry “under hiring purchase system” for £200. £40 was deposited and the balance was payable by £20 monthly instalments before the end of August 1940. Plaintiff was to be responsible for repairs. Defendant reserved right to arise the lorry if plaintiff made default, and upon a second default to sell or use it as his own, on notice to plaintiff, for the purpose of making good the balance then due. On 13th December, 1940, plaintiff 1iped a document promising to pay £31 costs of repairs and £50 balance of purchase price then due by monthly instalments of £20. No date was fixed for payment of the first instalment.
In the Divisional Court judgment was given for the plaintiff on the grounds, first, that the absence of a defeasance clause whereby plaintiff could terminate the agreement made it a sale under which the lorry became the absolute property of plaintiff and could not be seized notwithstanding the clause allowing seizure in case of default, and secondly, that defendant’s right under the agreement of 18th January had been extinguished or suspended by the document of 13th December, which was a new agreement and left defendant no remedy but to sue thereon.
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DECISION OF THE WEST AFRICAN COURT OF APPEAL
Held:
1. That by the agreement of 18th January, plaintiff was not to acquire the property in the lorry until the instalments had been paid in full.
2. further, that the document of 13th December was neither a new agreement nor a promissory note. It was a unilateral document made by plaintiff alone, and there had been no allegation of any oral variation of the original agreement of which it might have been taken as evidence; nor was it a promissory note, because it was conditional on the repairs having been effected in accordance with the contract to repair, and because the times of payment were neither fixed nor determined.
Cases cited:-
McEntire v. Crossley Brothers Ltd. [(1895) A.C. 457] followed.
(Gold Coast Divisional Court Reports 1926-29 p. 207) distinguished.
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MAIN JUDGMENT
The following joint judgment was delivered:- per KINGDON, C.J., NIGERIA, PETRIDES, C.J., GOLD COAST AND GRAHAM PAUL, C.J., SIERRA LEONE.
GRAHAM PAUL, C.J., SIERRA LEONE (DELIVERING THE JUDGMENT OF THE COURT)
The plaintiff claimed in the Magistrate’s Court, Koforidua, £150 damages for unlawful seizure of the plaintiff’s lorry by the defendant at Lorry Station at Koforidua which seizure was grounded upon alleged Hire-Purchase Agreement were filed which appeared to base the claim on the grounds that the Agreement in question was bad in law as it was not signed by the plaintiff as a party but as a witness, and that there had been collusive fraud on the part of the defendant and the writer of the Agreement.
At the trial no attempt was made by the plaintiff to establish any of these grounds set out in his particulars of claim. On the contrary the plaintiff’s solicitor called upon the defendant to produce the agreement in question and when it was produced plaintiff’t1 solicitor tendered it and rested his whole case upon its terms. The defendant, who was unrepresented by a solicitor at the trial, took no exception to this somewhat extraordinary and quite irregular procedure, and the trial was allowed to proceed on the basis that the Agreement was good in law and that there had been no collusive fraud.
The Agreement in question was in the following terms:-
“Memorandum of an agreement entered at Koforidua this 18th day of January, 1940, by and between Yao Poku of Koforidua (hereinafter called the Owner) of one part and Emaku of Koforidua (hereinafter called the hiring purchaser) of the other part whereby it is witnesseth follows:-
“1. That the owner agrees to sell and the purchaser agrees to purchase under hiring purchase system one Dodge Lorry No. E.P.4193 for the value of £200 (two hundred pounds).
2. That it is agreed by both parties that before signing of this agreement, the purchaser shall pay to the owner a deposit of £40 thus leaving a balance of £160.
3. That it is mutually agreed by both parties that the sum of £160 shall be paid by monthly instalments of £20 and that is the expiration of August, 1940 when all the balance must be liquidated.
4. That the hiring purchaser shall be personally responsible for all repairs, maintenance of the lorry and licences fees.
5. That in default on the part of the purchaser herein to comply with the provisions of the foregoing terms, the owner shall reserve the full right to seize the lorry and second default after a notice by the owner to the purchaser to make good any balance of instalment then accruing, the owner shall reserve the full right to sell or use the lorry as his own in payment of the balance remaining.
“Dated at Koforidua this 18th day of January, 1940.
“(Sgd.) YAO POKU,
“Owner.
“(Sgd.) ESAKU,
“Hiring Purchaser.”
The defendant tendered another document in the following terms:-
“I the undersigned received from Yao Poku the £31 (thirty-one pounds) being repairs made on the Lorry No. E.P.4193, which I faithfully promise to pay to the said Yao Poku under instalment bases, and that plus £50 fifty pounds being balance due on the said Lorry making the grand total of £81, eighty-one pounds which I further promise to pay under installment of £20 per a month.
“Dated at Koforidua this 13th day of December, 1940.
“(Sgd.) ESAKU,
“Principal Debtor.”
The defendant gave evidence in the course of which he said “I did not sell the lorry outright to the plaintiff “. The plaintiff’s solicitor then called an expert witness as to the value of the lorry at the time of seizure.
The Magistrate’s Court held that the defendant was entitled under the Agreement to seize the lorry and entered judgment for the defendant with costs. From that judgment the plaintiff appealed to the Divisional Court which allowed the appeal, setting aside the judgment of the Magistrate’s Court entering judgment for the plaintiff for the sum of £110 by way of damages that being the value of the lorry as stated in evidence and uncontradicted, and awarding the plaintiff costs in the Magistrate’s Court and in the Divisional Court. From that judgment the defendant has appealed to this Court.
The grounds upon which the learned Judge in the Divisional Court based his judgment were broadly speaking two in number and they sufficiently appear from the following quotations from his judgment:-
“(1) Notwithstanding the clause allowing seizure in case of default, the retaking in my view was wrongful. The absence of a defeasance clause whereby the hirer could terminate the agreement rendered the contract one of sale and purchase and under such a contract there could be no power of retaking the lorry, the lorry being the absolute property of the plaintiff-appellant.”
and
“(2) Furthermore, any rights that the defendant-respondent might have had under Exhibit ”A” were extinguished by the new agreement entered into subsequently (Exhibit “B”), whereby the plaintiff-appellant promised to pay to the defendant-respondent the sum of £81 by instalments of £20 per month, the sum of £81 being made up of repair charges (£31) and £50, the balance due upon the purchase price of the lorry. Upon the execution of this promissory note the defendant-respondent’s only remedy was to sue upon it in case of non-performance.”
As regards the first point it seems to us that the parties made it quite clear in the terms of Exhibit “A”, particularly in clause 5, that the purchaser was not to acquire the property in the lorry unless and until the agreed instalments of the price were paid in full. Until then the purchaser had only the right to the possession, use, and control of the lorry so long as the agreed instalments of the price were punctually paid. It was made quite clear in clause 5 that upon any default in payment the owner could seize the lorry and upon notice being given could “sell or use the lorry as his own in payment of the balance remaining “. There was nothing whatever either unlawful or even unreasonable in that clearly expressed agreement between the parties and upon the authority of McEntire v. Crossley Brother, Ltd. (1895 A.C. 457) it is clear that as between the parties effect must be given to that express agreement.
The matter is very lucidly expressed by Lord Watson in the course of his judgment in McEntire’s case upon when he says (at page 467)-
“The duty of a Court is to examine every part of the agreement, every stipulation which it contains, and to consider their mutual bearing upon each other; but it is entirely beyond the function of a Court to discard the plain meaning of any term in the agreement unless there can be found within its four corners other language and other stipulations which necessarily deprive such term of its primary significance.”
It is impossible to find within the four corners of Exhibit “A” in this case any “other language and other stipulations which necessarily deprive” clause 5 of the Agreement of its primary significance.
It is also necessary to point out that the case of Helby v. Matthew, (1895 A.O. 471) upon which the learned Judge relied in regard to his first ground was decided under section 9 of the Factors Act 1889 and it has in our opinion no direct bearing on the present case.
The learned Judge also referred upon this ground to the case of Akoshia v. Miller (Gold Coast Divisional Court Reports 1926-1929 p. 207). That was a case involving special circumstances and questions that do not arise in the present case, and in our view it does not assist in the decision of the question upon which this case depends.
The second ground of the learned Judge’s judgment depends on Exhibit “B” and that raises at once the question what in law is Exhibit “B”. The learned Judge in his judgment has referred to Exhibit “B” as “the new agreement” and “this promissory note”. In our view Exhibit “B” is neither a “new agreement” nor a “promissory note”.
It is on the face of it not an agreement between the parties at all; it is only a unilateral document to which only the plaintiff was a party. If the plaintiff had given any evidence of an oral agreement amounting to a modification of the contract contained in Exhibit “A”, he might have prayed in aid Exhibit “B” as a matter of evidence in support of the oral agreement but the plaintiff gave no such evidence at the trial nor did he or his solicitor found in any way on Exhibit “B” at the trial.
As to the suggestion that Exhibit “B” is a “promissory note” the acceptance of which operated as payment or at any rate as a suspension during its currency of the defendant’s rights under Exhibit “A”, we must refer to the definition of a “promissory note” contained in section 84 (1) of the Bills of Exchange Ordinance (Cap. 155) which is in the following terms:-
“A promissory note is an unconditional promise in writing made by one person to another signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money, to, or to the order of, a specified person or to bearer.”
The times of payment in Exhibit “B” are neither fixed nor determinable on the face of the document. Nor is the promise unconditional, for the reference to the repairs makes it subject to the condition that the repairs turn out to be in accordance with the contract to repair. For these reasons we hold that Exhibit “B” is not a “promissory note”. It is clear that Exhibit “B” is not, and was never intended to be, a negotiable instrument.
Exhibit “B” being neither an agreement nor a promissory note it follows that it cannot operate to extinguish any rights which the defendant had under Exhibit “A”, which was an agreement executed by both parties. The learned Judge was in our opinion wrong in holding that it did so operate.
It is perhaps advisable to point out that the plaintiff has made no claim in this case for an account or for the return of the lorry so we express no opinion as to his rights in either of these respects.
For the reasons we have given we allow the appeal, set aside the judgment of the Divisional Court, including the order as to costs and any costs paid thereunder must be refunded. The judgment of the Magistrate’s Court is restored including the order as to costs and the appellant is entitled to the costs of the proceedings in the Divisional Court and in this Court. Costs in the Divisional Court are to be taxed, counsel’s fee being fixed by the trial Judge. The costs in this Court are assessed at £45 11s 9d.
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