Wakilii

Khimji Bhimji and Bros v Jetha (Civil Appeal No. 27 of 1947)

East African Court of Appeal · [1948] EACA 54 · 1948 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from Resident Magistrate's Court, Nairobi, dismissal of claim on guarantee
Decision
Appellant granted decree for Sh. 838/30 with interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court held that where a written guarantee is informal and does not contain all the terms of the contract, oral evidence is admissible under proviso 2 to section 92 of the Indian Evidence Act 1872 to prove the full terms of the agreement. The guarantee in this case covered payment for the goods if the principal failed to return them or pay within eight days. Appeal allowed.

Outcome

Appellant granted decree for Sh. 838/30 with interest and costs

Facts

On 17 October 1945, George Biazzos and the respondent Shivji Jetha went to the appellant's shop. Biazzos ordered goods worth Sh. 838/30 to sell elsewhere, with an agreement to pay later or return the goods within eight days. Biazzos was unknown to the appellant, so Shivji Jetha agreed to act as surety. The respondent wrote on the goods list "Guaranteed to be the stuffs returned" and signed it. Biazzos took the goods but never returned them or paid for them. The appellant sued in April 1947. The Resident Magistrate held that the written guarantee covered only return of goods, not payment of their price, and dismissed the claim.

Issues

  1. Whether the guarantee given by the respondent extended only to the return of goods or also to payment of their price in default of return by the principal debtor.
  2. Whether oral evidence was admissible to prove the precise terms of an informal written guarantee under sections 91 and 92 of the Indian Evidence Act 1872.

Orders

  • Judgment of the lower Court set aside.
  • Appellant to have decree for Sh. 838/30.
  • Interest at 6% per annum from date of action to date of final payment.
  • Costs awarded to appellant here and below.

Rules and key headnotes

Contract of Guarantee — Construction — Scope of Surety's Liability
A surety is a favoured debtor and must never be charged beyond the precise terms of his engagement, but in dealing with a guarantee as a mercantile contract the Court does not apply merely technical rules but construes it so as to give effect to what may fairly be inferred to have been the real intention and understanding of the parties as expressed in the writing.
Documentary Evidence — Admissibility of Oral Evidence — Incomplete Written Contract
Where it is evident that a document does not contain all the terms of the contract, it is doubtful whether sections 91 and 92 of the Indian Evidence Act 1872 apply at all.
Documentary Evidence — Proviso 2 to Section 92 Indian Evidence Act — Oral Agreement on Silent Matters
Under proviso 2 to section 92 of the Indian Evidence Act 1872, the existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved, and in considering whether this proviso applies the Court shall have regard to the degree of formality of the document.
Documentary Evidence — Informal Written Contract — Admissibility of Oral Evidence
Where a written contract is so informal and difficult to understand that it is hard to regard it as a complete contract within sections 91 and 92 of the Indian Evidence Act, oral evidence is admissible to ascertain the precise terms of the contract, particularly where the writing consists of a brief pencilled note that does not clearly express what has been guaranteed.

Legislation cited (3)

  • Indian Evidence Act 1872 s.91
  • Indian Evidence Act 1872 s.92
  • Indian Contract Act s.126

Cases cited (2)

  • Harris v Gamble (1887) 7 Ch D 877
  • Chunanram Molilal v Divanchand Govindram (1932) 56 ILR Bom 180

Full judgment

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Khimji Bhimji and Bros v Jetha (Civil Appeal No. 27 of 1947) [1948] EACA 54 (1 January 1948)
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.