Wakilii

Damji v Neb (C.A. 13-1930.)

East African Court of Appeal · [1930] EACA 25 · 1930 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from a ruling in bankruptcy proceedings concerning the validity of a bill of sale
Decision
Appeal dismissed with costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal held that the bill of sale was void for non-conformity with the statutory form prescribed in the Bills of Sale Amendment Act 1882. The omission of the words relating to interest from the security clause, while including a separate covenant to pay interest, constituted a departure from the statutory form calculated to mislead creditors inspecting the register as to whether default in interest payment gave a right to seize the secured chattels. The appeal was dismissed.

Outcome

Appeal dismissed with costs

Facts

The appellant granted a bill of sale to secure payment of 3,000 shillings. The bill of sale departed from the statutory form by omitting the words 'and interest thereon at the rate of per cent per annum' after the description of the secured sum, though it contained separate covenants for payment of interest. The matter arose in bankruptcy proceedings where the trustee challenged the validity of the bill of sale. The lower court ruled the bill of sale void for non-conformity with the statutory form. The appellant appealed, arguing alternatively that the bill secured both principal and interest, or at least the principal sum.

Issues

  1. Whether the omission of the words 'and interest thereon at the rate of per cent per annum' from a bill of sale constituted such a departure from the statutory form as to void the document under section 9 of the Bills of Sale Amendment Act 1882.
  2. Whether the bill of sale secured payment of interest in addition to the principal sum.

Orders

  • Appeal dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Bills of Sale — Statutory Form — Material Departure
A bill of sale that omits from the security clause the statutory words relating to interest, while including a separate covenant to pay interest, constitutes a material departure from the statutory form prescribed in the Bills of Sale Amendment Act 1882 and is void under section 9 of that Act.
Bills of Sale — Departure Calculated to Mislead
A departure from the statutory form of a bill of sale is calculated to mislead where a creditor inspecting the register might reasonably conclude that default in payment of interest gives a right to seize the secured chattels, when in law no such right exists because interest is not secured by the bill.
Bills of Sale — Security for Interest — Covenant Distinguished
Where a bill of sale secures only the principal sum and contains a separate covenant to pay interest, default in payment of interest does not give the grantee a right to seize the assigned chattels under section 7 of the Bills of Sale Amendment Act 1882, as the interest payment is not secured by the bill.

Legislation cited (2)

  • Bills of Sale Amendment Act 1882 s.9
  • Bills of Sale Amendment Act 1882 s.7

Full judgment

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

Damji v Neb (C.A. 13-1930.) [1930] EACA 25 (1 January 1930)
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.