Wakilii

Daniel Meyer Export Ltd v Makali Cycle Mart (Civil Appeal No. 81 of 1954)

East African Court of Appeal · [1950] EACA 26 · 1950 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from High Court of Uganda dismissing suit on preliminary point
Decision
Matter remitted to High Court for trial on whether appellants entitled to payment under sections 57 or 59 of the Bills of Exchange Ordinance

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court held that the appellants could not sue as holders in their own name absent reindorsement, but should have been permitted to adduce evidence showing they were entitled to payment under sections 57 or 59 of the Bills of Exchange Ordinance as drawers compelled to pay. The matter was remitted for trial on those issues.

Outcome

Matter remitted to High Court for trial on whether appellants entitled to payment under sections 57 or 59 of the Bills of Exchange Ordinance

Facts

The appellants, a London confirming house, drew a bill of exchange on the respondents, Kampala bicycle dealers, for payment of bicycles ordered from Dutch manufacturers. The bill was payable to the appellants or order and they endorsed it in blank, rendering it payable to bearer. Barclays Bank subsequently endorsed it restrictively to the Standard Bank of South Africa Ltd for collection. The bill was accepted by the Standard Bank, Kampala, and dishonoured on presentation. The bill returned to the appellants' possession. The appellants sued on the bill. The High Court dismissed the suit on a preliminary point, holding the appellants were not holders and had no title to sue in their own name. The trial judge refused to admit evidence the appellants sought to adduce showing they had been compelled to pay the bill and were entitled to recover under section 59(2)(b) of the Bills of Exchange Ordinance.

Issues

  1. Whether a person in possession of a bill of exchange endorsed in blank and subsequently restrictively endorsed for collection can sue in their own name as holder.
  2. Whether the appellants were entitled to adduce evidence to show they fell within sections 57 and/or 59 of the Bills of Exchange Ordinance.

Orders

  • Appeal allowed.
  • Judgment and decree of the High Court set aside.
  • Proceedings remitted to the High Court for trial on the issues under sections 57 and 59 of the Bills of Exchange Ordinance and, if necessary, on the other issues raised.
  • Appellants awarded half the costs of the appeal.
  • Costs of the abortive hearing in the High Court to abide the result of the suit on rehearing.

Rules and key headnotes

Bills of Exchange — Holder — Definition — Effect of Restrictive Endorsement for Collection
Where a bill of exchange payable to order is endorsed in blank by the payee and subsequently endorsed restrictively for collection, the restrictive endorsement constitutes a special endorsement that displaces the prior endorsement in blank and converts the bill back into an order bill, such that the original payee cannot sue as holder in their own name absent reindorsement.
Bills of Exchange — Restrictive Endorsement — Effect on Ownership and Right to Sue
A restrictive endorsement for collection effects only an authority to deal with the bill as directed and not a transfer of ownership, but nonetheless constitutes the endorsee the holder for purposes of enforcement, temporarily divesting the endorser of the right to sue in their own name.
Bills of Exchange — Transfer Without Endorsement — Section 31(4)
Where the holder of a bill payable to order transfers it for value without endorsing it, the transferee acquires such title as the transferor had in the bill and the right to have the endorsement of the transferor, but is in the position of an equitable assignee unable to sue in their own name absent endorsement.
Bills of Exchange — Drawer's Right of Recourse — Section 57
A drawer who has been compelled to pay a bill of exchange has rights over against the acceptor under section 57 of the Bills of Exchange Ordinance, and is entitled to adduce evidence to establish such entitlement even where they cannot sue as holder.
Preliminary Objections — Premature Dismissal — Right to Adduce Evidence
Where a plaintiff seeks to adduce evidence showing entitlement to relief on an alternative basis, the court should permit such evidence to be led rather than dismissing the suit on a preliminary point, particularly where the pleadings are sufficiently widely drawn to encompass the alternative claim.

Legislation cited (16)

  • Bills of Exchange Ordinance s.2
  • Bills of Exchange Ordinance s.8(3)
  • Bills of Exchange Ordinance s.21(2)(b)
  • Bills of Exchange Ordinance s.31(1)
  • Bills of Exchange Ordinance s.31(4)
  • Bills of Exchange Ordinance s.32(6)
  • Bills of Exchange Ordinance s.34(4)
  • Bills of Exchange Ordinance s.35(1)
  • Bills of Exchange Ordinance s.38(1)
  • Bills of Exchange Ordinance s.54
  • Bills of Exchange Ordinance s.57
  • Bills of Exchange Ordinance s.59
  • Bills of Exchange Ordinance s.59(1)
  • Bills of Exchange Ordinance s.59(2)(b)
  • Bills of Exchange Ordinance s.63(2)
  • Bills of Exchange Ordinance s.88

Cases cited (9)

  • Suiters v Briggs [1922] AC 1
  • Denton v Peters (1870) LR 5 QB 475
  • Good v Walker (1892) 61 LJNS 736
  • Subramanian Chetty v Alagappa Chetty (1907) ILR 30 Mad 441
  • Stones v Butt (1834) 2 C & M 416
  • National Savings Bank v Tranah (1867) LR 2 CP 556
  • Mayer v Jadis (1833) 1 Mood & R 247
  • Merali Alibhai v Kikh and Edwards Ltd (EACA Civil Appeal No. 83 of 1954)
  • Hood v. Stewart

Full judgment

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

Daniel Meyer Export Ltd v Makali Cycle Mart (Civil Appeal No. 81 of 1954) [1950] EACA 26 (1 January 1950)
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.