Wakilii

Bhagwanji and Co. v Mohamedbhai and Co. Ltd (Civil Suit No. 963 of 1952)

East African Court of Appeal · [1953] EACA 3 · 1953 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for damages for breach of contract
Decision
Plaintiffs awarded damages for breach of contract

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

An unpaid seller who becomes a bailee of goods retains a lien under section 41 of the Sale of Goods Ordinance. Under sections 48(2) and (3), an unpaid seller exercising a lien may resell goods after giving notice if the buyer fails to pay within a reasonable time. Where the market price had dropped significantly and the market was flooded, the resale price obtained was fair and reasonable in the circumstances.

Outcome

Plaintiffs awarded damages for breach of contract

Facts

In March 1951, plaintiffs contracted to sell corrugated steel sheets to defendants, with payment by sight draft. Defendants could not pay and requested plaintiffs retain the goods, agreeing to pay 6% interest and storage charges. Plaintiffs became bailees and held the goods. Defendants paid four instalments totalling Sh. 4,520 between April and June 1951. Despite repeated requests through 1951 and early 1952, defendants failed to pay the balance and collect the goods. On 4 June 1952, plaintiffs gave seven days' notice that they would resell if payment was not made. Defendants failed to pay. On 15 July 1952, plaintiffs resold the goods to M. R. Ghai & Sons at a significant loss due to a collapsed market. Plaintiffs sued for the difference between purchase and resale price, plus interest and storage charges.

Issues

  1. Whether an unpaid seller who has become a bailee of goods retains a lien on those goods under section 41 of the Sale of Goods Ordinance.
  2. Whether an unpaid seller exercising a right of lien may resell goods after giving notice to the buyer under section 48 of the Sale of Goods Ordinance.
  3. Whether the resale of the goods was at a fair market price.

Orders

  • Judgment for the plaintiffs as prayed.

Rules and key headnotes

Sale of Goods — Unpaid Seller's Lien — Retention as Bailee
Under section 41 of the Sale of Goods Ordinance, an unpaid seller of goods has a lien on them while they are in his possession, and this lien subsists notwithstanding that he is in possession of the goods as a bailee from the buyer.
Sale of Goods — Unpaid Seller's Right of Resale — Notice Requirement
The combined effect of sections 48(2) and 48(3) of the Sale of Goods Ordinance is that an unpaid seller who exercises a right of lien may resell the goods after giving notice to the buyer of his intention to do so, if the buyer does not within a reasonable time pay or tender the price.
Sale of Goods — Resale by Unpaid Seller — Fair Market Price
Where the market price for goods has dropped considerably and the market is flooded, a resale price slightly below the price obtainable for the most readily saleable portion of mixed-gauge goods constitutes a fair and reasonable price at the time of resale.

Legislation cited (3)

  • Sale of Goods Ordinance (Cap. 290) s.41
  • Sale of Goods Ordinance (Cap. 290) s.48(2)
  • Sale of Goods Ordinance (Cap. 290) s.48(3)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Bhagwanji and Co. v Mohamedbhai and Co. Ltd (Civil Suit No. 963 of 1952) [1953] EACA 3 (1 January 1953)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.