Wakilii

Gangji v Pavetto (Civ. App. No. 19-1935.)

East African Court of Appeal · [1936] EACA 19 · 1936 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from High Court judgment in favour of defendant
Decision
Judgment of the High Court set aside; appellant not required to credit respondent with the disputed amount

Observed later treatment

No later-treatment classification is recorded for this judgment.

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AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

Where a defendant's clerk paid money into the wrong account with the plaintiff banker, the banker was not liable to credit the defendant for that amount. The mistake, if any, was the defendant's clerk's mistake, not the banker's. A banker conducting an ordinary banking transaction with a customer cannot be held liable for a mistake to which he was not a party. The principle is that money paid under mistake of fact is only recoverable where the mistake is as between the payer and the payee.

Outcome

Judgment of the High Court set aside; appellant not required to credit respondent with the disputed amount

Facts

The respondent was manager of a French firm (S.I.P.) in Zanzibar and also agent for a Marseilles merchant, N. Couzinet. In his capacity as Couzinet's agent, he entered into a copra transaction with Juma Chagpar. An overpayment of Rs. 1010.6.9 was made to Juma Chagpar, who agreed to refund it. Juma Chagpar drew a cheque on the appellant banker in favour of S.I.P. (not the respondent personally) because the respondent had no account in Juma Chagpar's books. The respondent's clerk, Raza Versi, paid the cheque into the S.I.P. account with the appellant. The respondent later claimed the appellant should credit his personal account with this amount, arguing his clerk had paid it into the wrong account by mistake. The trial judge found for the respondent. The appellant appealed.

Issues

  1. Whether money paid by the defendant's clerk into the wrong account by mistake of fact entitled the defendant to claim credit for that amount against the plaintiff banker.
  2. Whether a banker who receives money under instructions from a customer can be held liable to credit a third party for that money where the mistake was not the banker's mistake.

Orders

  • Appeal allowed.
  • Costs awarded to the appellant in the Court of Appeal and in the High Court.

Rules and key headnotes

Banking & Finance — Banker and Customer — Mistake of Fact — Money Paid to Wrong Account
A banker who receives money under instructions from a customer and credits it to the account specified is not liable to credit a third party for that money where any mistake was made by the third party or his agent, not by the banker.
Contract Law — Mistake — Money Paid Under Mistake of Fact — Recovery
Money paid under a mistake of fact is only recoverable where the mistake is as between the payer and the payee. Where a payee is not a party to the mistake, no claim for recovery lies against him.
Banking & Finance — Banker's Duty — Following Customer Instructions
A banker conducting an ordinary banking transaction is entitled to follow the instructions of a customer and cannot be expected to reverse those instructions without the customer's consent, even where a third party claims the payment was made by mistake.

Cases cited (2)

  • Chambers v Miller (143 E.R. 50)
  • China and Southern Bank Ltd v Te Thoe Seng (A.I.R. 1926 Rangoon 14)

Full judgment

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

Gangji v Pavetto (Civ. App. No. 19-1935.) [1936] EACA 19 (1 January 1936)
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.