Page 156 of [1959] 1 EA 152 (CAK)

grass verge, as alleged by P.C. Bayi, his body was found 7 ft. in on the grass verge. His body may have
been moved; but no inquiry seems to have been made as to this.
It does not appear how, if the boy was hit by the crash bar, as alleged by P.C. Bayi, the head-lamp of
the motor cycle was broken.
No consideration seems to have been given to the evidence of P.C. Bayi that the stationary car turned
round and went to Mityana and later, before the witness who made the plan and the sub-Inspector
arrived, “returned and stopped in same place”.
No comment was made upon a statement given to the police by Nanteza (Ex. 1) which, on the face of
it, seemed to cast some doubt on her evidence as given in court.
The impression on an appellate court is that the evidence was not adequately evaluated or fully
considered. The learned judge’s conclusion may well have been right; but the trial was unsatisfactory and
there should be a new trial before another judge. I would order accordingly. The appellant should have
the costs of the appeal and the costs of the first trial should be reserved to the judge at the new trial.
Forbes V-P: I agree and have nothing to add.
Windham JA: I also agree.
Appeal allowed. Order for a new trial.

For the appellant:

BKM Kiwanuka
BKM Kiwanuka, Kampala

For the respondent:

HSS Few (Crown Counsel, Uganda)
The Attorney-General, Uganda

Choitram v Lazar
[1959] 1 EA 157 (CAN)

Division: Court of Appeal at Nairobi

Date of judgment: 12 March 1959
Case Number: 83/1958
Before: Sir Kenneth O’Connor P, Forbes V-P and Windham JA
Sourced by: LawAfrica
Appeal from: H.M. Supreme Court of Kenya–Miles, J

[1] Sale of goods – Contract – Words “taken over” written by one party on list of damaged materials –
Disagreement as to price – Whether this can be evidence of contract for sale of goods – Sale of Goods
Ordinance (Cap. 290), s. 6 (1), s. 10 and s. 36 (K.) – English Sale of Goods Act, 1893, s. 4 (1) and s. 8 –
English Statute of Frauds, 1677, s. 17.
[2] Evidence – Sale of Goods – Words “taken over” written on list of damaged goods – Oral evidence
admitted at trial to explain words used – Whether oral evidence admissible – Indian Evidence Act, 1872,
s. 91, s. 92 (illustrations (f) and (g)) and s. 94.

Editor’s Summary
The appellants, a firm dealing in piece-goods, occupied shop premises on the ground floor and the
respondent who had a hairdressing business occupied premises on the first floor above the shop. By the
negligence of one of her employees, water escaped from the respondent’s premises and damaged a
quantity of cloth and fabric in the shop. The respondent through her husband admitted negligence and did
not deny liability in tort for such damage as might be proved. In pursuance of an agreement between the
parties, a surveyor on either side was appointed to assess the damage. After a list had been compiled
stating the landed price, selling price and yardage of the materials damaged, the respondent’s husband
endorsed thereon the following: “Taken over only 181 pieces of various materials . . . Not taking over the
prices mentioned”, and later, took over a further but smaller quantity of materials in circumstances which
were disputed. Negotiations regarding the value of the materials taken over failed and eventually the
appellants sued the respondent for damages for negligence and alternatively for nuisance, for Shs.
33,546/86, this being what they stated to be the selling prices of the damaged materials. The respondent
denied liability in damages to the amount claimed, undertook to account for the proceeds of the materials
taken over and paid Shs. 1,000/- into court. The appellants later filed an amended plaint and in para. 6A
they alleged for the first time a contract for sale of the damaged goods and also claimed in the alternative
in tort as before; the sum claimed as the purchase price being the same, namely, Shs. 33,546/86, and
damages in tort for an unspecified amount. There was also a prayer for “such other relief as may be just”.
The amended defence denied the alleged or any contract of sale of the damaged goods. The trial judge
found largely but not entirely on grounds of demeanour and credibility, that there had never been any
agreement between a partner in the appellant firm, and the respondent’s husband to purchase the
damaged goods and accordingly dismissed the appellants’ claim in so far as it was founded in contract.
He also accepted an explanation that by the words “taken over” the respondent’s husband meant that he
had “removed” and that he had not bought the goods. As regards the alternative claim in tort, the trial
judge found that, while liability was not denied, the appellants had failed to prove the damage suffered
and accordingly held himself unable to award any damages upon their claim for negligence, while in
respect of their claim for nuisance he awarded nominal damages in the sum of Shs. 40/- without costs,
and ordered that the respondent should have her costs incurred subsequent
Page 158 of [1959] 1 EA 157 (CAN)

to her payment of Shs. 1,000/- into court. The appellants appealed on the following two grounds, namely:
(a) that upon the pleadings and evidence the court ought to have found that there was a sale of the
materials by the appellants to the respondents although no price was agreed and that in the absence of an
agreement on price, the price payable must be a reasonable one by virtue of the provisions of s. 10 of the
Sale of Goods Ordinance, and (b) that if there was no contract at all whether express or implied, nor any
quasi-contract then the court ought, upon the claim in tort, to have awarded substantial damages based on
the full value of the goods.
Held –
(i) the case was within the scope of s. 10 (2) of the Sale of Goods Ordinance;
(ii) were it not for the words “taken over” written on the list of materials, it would not have been open
to the appellate court to interfere with the trial judge’s finding that there was no contract;
(iii) the words “taken over” which were both an admission and a memorandum in writing sufficient to
satisfy s. 6 (1) of the Ordinance were clear and such as to render inadmissible any attempt to
explain orally that what was meant was something different: accordingly, there was a contract for a
sale of goods but with no price agreed;
(iv) silence as to price within s. 10 of the Ordinance includes not only non-mention of price but also
non-agreement on price: Foley v. Classique Coaches Ltd., [1934] All E.R. Rep. 88; [1934] 2 K.B.
1 and May and Butcher Ltd. v. R., [1929] All E.R. Rep. 679; [1934] 2 K.B. 17 applied;
(v) a reasonable price for the piece goods taken over by the respondent would be their total landed
cost plus five per cent for profit.
Appeal allowed.
Per Windham, J.A.: “Quasi-contract, together with the special circumstances giving rise to it, must be
specially pleaded . . .”

Cases referred to in judgment

(1) Harnor v. Groves (1855), 15 C.B. 667; 139 E.R. 587.
(2) Smith v. Jeffryes (1846), 15 M. & W. 561; 153 E.R. 972.
(3) Rickman v. Carstairs (1833), 5 B. & Ad. 651; 110 E.R. 931.
(4) May and Butcher Ltd. v. R., [1929] All E.R. Rep. 679; [1934] 2 K.B. 17.
(5) Hillas & Co. Ltd. v. Arcos Ltd., [1932] All E.R. Rep. 494; 147 L.T. 503.
(6) Foley v. Classique Coaches Ltd., [1934] All E.R. Rep. 88; [1934] 2 K.B. 1.
March 12. The following judgments were read:

Judgment
Windham JA: The appellants are a firm carrying on business on the ground floor of a building owned
by them in Government Road, Nairobi, as dealers in piece-goods. On the first floor, immediately above
their shop, their tenant the respondent carries on a hairdressing establishment. On the evening of April 4,
1956, a tap was negligently left running on the respondent’s premises by an employee of the respondent,
with the result that water flooded through the floor and into the appellants’ shop and fell on to a number
of pieces of the appellants’ cloth and fabric of various descriptions, causing damage to some or all of it.
The respondent, through her husband Mr. Lazar, who acted as her agent in all the ensuing negotiations,
admitted her negligence to have been the cause of the flooding and never denied liability in tort for such
damage as it might be proved to have caused to the appellants’ fabrics. Subsequently, apparently at the
insistence of a Mr. Doulatram Bheroomal, a
Page 159 of [1959] 1 EA 157 (CAN)

partner in the appellant firm, Mr. Lazar purported to “take over” the cloth and fabric affected by the
water. The negotiations between Mr. Lazar and Mr. Doulatram Bheroomal and their respective advocates
included two alternative offers by the respondent to make payment of suggested amounts in full
settlement, but the appellants rejected them. Negotiations ensued in which it appeared that, at different
times, the appellants would have been content to accept the cost price of the damaged rolls of materials
plus 10 per cent. or 15 per cent. for profit. These suggestions were not accepted by the respondent who
alleged that some of the damaged cloth was unsaleable, being shop-soiled or of an out-of-date design,
that many pieces were entirely free from damage, and that in others the damage was of a superficial
nature and extended at most to the second or third fold of the roll. It was suggested that the appellants
should take back the undamaged cloth; but to this they did not agree. Eventually, in November, 1956, the
appellants sued the respondent in the Supreme Court of Kenya for damages in negligence, or
alternatively in nuisance, for Shs. 33,546/86, this being their total figure for what they stated to be the
selling prices of the materials in respect of which they claimed, the whole of which they alleged to have
been rendered unmerchantable. The respondent, in a statement of defence filed in February, 1957, denied
liability in damages to the amount claimed, undertook to account for the proceeds of the cloth taken over
and paid Shs. 1,000/- into court to answer any damages which the appellants might have suffered. In
June, 1958, the appellants filed an amended plaint in which by a new clause, 6A, they, for the first time,
based their claim upon an alleged contract of sale of the damaged goods by the appellants to the
respondent, and in the alternative in tort as before, the figure claimed as purchase price on the cause of
action in contract being the same, namely Shs. 33,546/86, as was previously claimed in tort, and the
damages claimed in tort now being in an unspecified amount. There was also a prayer for “such other
relief as may be just”. The amended defence denied the alleged or any contract of sale of the damaged
goods to the respondent.
Paragraph 6A of the amended plaint is in the following terms:
“6A. By verbal agreements entered into between Doulatram Bheroomal above-named on behalf of the
plaintiffs and the husband of the defendant on behalf of the defendant at Nairobi between April 4 and
7, 1956, it was agreed:
(a) that a survey of the damaged goods belonging to the plaintiffs should be made by two surveyors
one to be appointed on behalf of the plaintiffs and the other to be appointed by the defendant
and that the said surveyors should jointly ascertain the amount of the said damage and the value
of the damaged goods;
(b) that the defendant should purchase all such goods as were ascertained in the manner aforesaid
to have been damaged and should pay to the plaintiffs the full undamaged value thereof;
in pursuance of the said agreement a surveyor was appointed by each of the said parties and the
amount of damaged material was ascertained by agreement between them and the values thereof based
on landed cost price and selling price were agreed at the respective sums of Shs. 20,313/71 and Shs.
33,546/86 between the plaintiffs and the surveyor appointed on behalf of the defendant: in further
pursuance thereof the defendant by her agent on or about April 7, 1956, took delivery from the
plaintiffs of the said damaged goods.”

The learned trial judge, after hearing evidence at length, which included that of the partner Doulatram
Bheroomal for the plaintiffs and the respondent’s husband Lazar for the defence, gave judgment in which
he found, largely but
Page 160 of [1959] 1 EA 157 (CAN)

not entirely on grounds of demeanour and credibility, that there never had been any agreement between
Doulatram and Lazar whereby the latter bought the damaged goods from the former at their “full
undamaged value” or at all, and accordingly he dismissed the appellants’ claim in so far as it was
founded in contract. With regard to their alternative claim in tort, he found that, while the respondent’s
liability was not denied, the appellants had failed to prove, as indeed they did fail to prove, what if any
damage they had suffered through the water having fallen on their fabrics. Accordingly he held himself
unable to award them any damages upon their claim for negligence, while in respect of their claim for
nuisance he awarded them nominal damages in the amount of Shs. 40/- without costs, with an order that
the respondent should have her costs incurred subsequent to her payment of Shs. 1,000/- into court.
Against this judgment the appeal lies.
The main grounds of appeal that have been argued are two. The learned trial judge found as a fact that
the respondent never agreed to buy the appellants’ fabrics upon which water had fallen, whether at the
appellants’ figure or for any specified price. Learned counsel for the appellants, quite properly in my
view upon the evidence, does not seek to attack this finding. But he does attack the conclusion at which
the learned judge arrived on the finding, namely that there was no contract of sale concluded between the
parties, as represented by Doulatram on the one side and Lazar on the other. For he contends that, upon
the pleadings it was open to the court to find, and that upon the evidence the court ought to have found,
that there was a sale of the fabrics by the appellants to the respondent although no price was agreed, and
that, in the absence of such agreement on price, the price payable by the respondent must be a reasonable
one, by virtue of the provisions of s. 10 of the Sale of Goods Ordinance (Cap. 290). In short, it is
contended that the court should have found an implied contract to pay a reasonable price, and should
thereupon have decided what was in the circumstances of the case a reasonable price. That is the first
ground of appeal. The second and alternative ground is that, if there was no contract at all whether
express or implied, nor any quasi contract, then the court ought upon the claim in tort to have awarded
substantial damages based on the full value of the goods to the appellants at the time when the damage
occurred, and not merely nominal damages.
I turn to the first of these contentions; and the first point for decision is whether, upon the pleadings
and the presentation of the case in the court below, it was open to the appellants to rely on any contract
other than an express one with the price expressly agreed to. Although para. 6A of the amended plaint
alleges that the values of the damaged material
“based on landed cost price and selling price were agreed at the respective sums of Shs. 20,313/71 and Shs.
33,546/86”,

and although it is this latter sum which is claimed in the prayer to the plaint to be due “under para. 6A
hereof”, yet para. 6A nowhere states that the respondent agreed to buy the goods for Shs. 33,546/86, or
for the “selling price”. It does no more than allege that the respondent agreed that Shs. 33,546/86 was the
selling price. The agreement there alleged is that the respondent should purchase the damaged goods for
“the full undamaged value thereof”, and it is nowhere stated that it was agreed that such value should be
taken to be the selling price or the landed cost price or any specified figure in between, although the
highest figure is not unnaturally the one hopefully inserted in the prayer. In short the claim under para.
6A is a claim upon a consensual contract of sale for a price expressed not in figures but in a phrase the
meaning of which it is not alleged that the parties were agreed upon. It does not seem to me that such a
claim is far removed from a claim upon a consensual contract in which the price, not being expressly
agreed upon, is to be deemed, by operation
Page 161 of [1959] 1 EA 157 (CAN)

of s. 10 (2) of the Sale of Goods Decree, to be a “reasonable price”. Whether in the light of decided
authorities the facts bring the case within the scope of s. 10 (2) at all is a question that I will consider
presently. For the moment, I am concerned with whether on the pleadings and presentation of the case the
appellants can be allowed to advance the contention. I would hold that they can, upon a not unduly
liberal interpretation of para. 6A of the plaint, considered together with three further factors. One is the
prayer for “such other relief as may be just”. Another is issue No. 4, framed by the learned trial judge in
the following sufficiently wide terms: “If there was such an agreement” (sc: as alleged in para. 6A of the
plaint) “what is the price payable for the goods?” Lastly, in opening his case below, learned counsel for
the appellants said, with regard to his contractual claim:
“By agreement damaged stocks taken over, i.e. sold to the defendant. I rely on s. 36, Sale of Goods
Ordinance, delivery. Section 10; reasonable price. I submit something more than cost price should be
allowed”,

thereby making it clear at the outset that he would contend that s. 10 (2) was applicable. There was no
objection to these opening submissions, and thereupon the issues, including issue No. 4, were framed.
I would here pause to make it clear that the pleadings, framed issues and opening submissions would
preclude, in my view, any alternative contention that, failing the establishment of a consensual contract
of sale with no agreement upon price, the court should have found for the appellants upon quasi-contract,
that is to say upon some non-contractual relationship between the parties of such a nature that the law,
upon equitable principles, would treat them as if they had contracted although they had not.
Quasi-contract, together with the special circumstances giving rise to it, must be specially pleaded, as in
the present case it was not. The learned trial judge rightly came to the same conclusion on this point.
I come now to the most difficult matter for decision in this appeal, namely whether this court can and
ought to hold that there was any agreement at all for the sale of the fabrics by the appellants to the
respondent, represented by Doulatram and Lazar respectively, in view of the learned trial judge’s finding
of fact that there was not. The sequence of events following upon the discovery of the running tap and
the flooding through the ceiling of the appellants’ shop on the evening of April 4 is described in the
following passage from his judgment:
“It was agreed that evening by Mr. Doultram and Mr. Lazar that each side should appoint an assessor to
examine the damages caused. In pursuance of this arrangement Mr. T. P. H. Scade of Scade and Pentreath
Ltd. was appointed on behalf of the plaintiffs and Mr. J. E. Higginson of Higginson Wiseman Ltd. on behalf
of the defendant. These two gentlemen, both of whom are experienced assessors, examined the damaged
goods on April 5. They agreed that a total of 184 pieces of cloth had been damaged by water. At this stage
Mr. Scade took no further part in the examination but Mr. Higginson proceeded to make a detailed
examination of each piece of damaged cloth and to ascertain the price and yardage. He drew up a schedule
(exhibit 1) containing details of the landed price, selling price and yardage of each item. This was later sent to
Mr. Scade who accepted it. On April 7 Mr. Lazar removed 181 pieces of cloth. He endorsed the schedule
(exhibit 1) as follows: ‘Taken over only 181 pieces of various materials (bale No. 142 not taken over). The
yardage will be checked. Not taking over the prices mentioned.’ Later on the remaining three pieces of
material were taken by Mr. Lazar. The circumstances in which this material was taken away by Mr. Lazar are
in dispute. Mr. Lazar sold some of the material privately at Limuru realising according to him
Page 162 of [1959] 1 EA 157 (CAN)
between Shs. 700/- and Shs. 750/-. The remainder were put up for sale by auction, the sale being conducted
by Mr. Higginson. This sale realised Shs. 3,301/50 gross, less charges of Shs. 319/-, the net proceeds being
Shs. 2,982/50. In fact only a small portion of the cloth was sold at the auction. In pursuance of an
arrangement between Mr. Higginson and Mr. Lazar, Mr. Lazar bought back 166 items since the prices which
were being realised were in his opinion too low. The defendant’s solicitor subsequently sent a cheque for Shs.
1,000/- to the plaintiff on account of the proceeds of sale. This was returned by the bank because of
mutilation. I am informed that this sum still remains unpaid. It does not however enter in this action. The
unsold material is still in the defendant’s possession.”

In the foregoing passage from the judgment it is stated with justification that the
“circumstances in which this material was taken away by Mr. Lazar are in dispute.”

In brief, Doulatram gave evidence in which, while he was inconsistent and self-contradictory on the
question whether Lazar bought the material at its “full undamaged value” or whether on the other hand
no price or measure of value was agreed upon, he never wavered from his assertion that Lazar did buy
them when he took possession of them and did not merely take possession of them as his (Doulatram’s)
agent. Lazar, on the other hand, testified that, upon Doulatram becoming hysterical and insisting that he
should take the materials away, he took them away, but merely in order to dry them and then to dispose
of them as best he could on Doulatram’s behalf, and not as their purchaser. When asked in
cross-examination to explain what he had meant by the words “taken over” which he had endorsed on the
priced list of the materials, exhibit 1, which the respondent’s assessor Mr. Higginson had prepared, he
said:
“by ‘taken over’ I meant ‘removed’. I might have used the wrong expression. I am by birth a Czech. I was
taking them over because Mr. Doulatram was insisting. He was quite hysterical. I took them over on no
arrangement. I don’t know what was the intention eventually. I simply removed and dried them myself. I did
not buy them.”

This explanation of what he had meant by “taken over” was accepted by the learned trial judge, along
with his denial of any sale, the learned judge observing that:
“having seen both these gentlemen in the witness-box I have no hesitation in preferring the evidence of Mr.
Lazar where it is at variance between (sic) that of Mr. Doulatram.”

If it were not for what Lazar wrote on the list of materials, exhibit 1, it would not in my view have been
open to this court to interfere with the learned judge’s finding of fact, to the extent that it was based on
Lazar’s oral evidence which he accepted, that there was no contract for the sale of the materials by
Doulatram to Lazar. But it seems to me, after very careful consideration, that the meaning of those words
written by Lazar, which may be regarded both as an admission by him and as a memorandum in writing
sufficient to satisfy s. 6 (1) of the Sale of Goods Ordinance, is clear, and is such as to render inadmissible
any attempt on his part to explain orally that he meant by them something different.
Under s. 91 of the Indian Evidence Act, when the terms of a contract have been reduced to the form of
a document, and in all cases in which any matter is required by law to be reduced to the form of a
document, no evidence shall
Page 163 of [1959] 1 EA 157 (CAN)

be given in proof of the terms of such contract or of such matter except the document itself or secondary
evidence of its contents in cases in which secondary evidence is admissible; and, under s. 92, when such
a document has been so proved, no evidence of any oral agreement or statement is to be admitted as
between the parties to it for the purpose of contradicting, varying, adding to or subtracting from its terms.
The rule is the same in England.
Section 6 (1) of the Kenya Sale of Goods Ordinance is identical, to all intents and purposes, with s. 4
(1) of the English Sale of Goods Act, 1893, which reproduces the provisions of s. 17 of the Statute of
Frauds in relation to the sale of goods. It was held in several cases in England, before the passing of the
Sale of Goods Act, 1893, that the rule excluding parole evidence applies to contracts of which a note or
memorandum in writing was required under s. 17 of the Statute of Frauds in order to render them
enforceable. For instance in Harnor v. Groves (1) (1855), 139 E.R. 587, 588, which was an action for
breach of warranty, the plaintiff received from the defendant a contract note:
“Sold Mr. W. Harnor, per Mr. Howard, twenty-five sacks Whites, X.S., at Shs. 68/- per sack net. J. T.
Groves.”

The plaintiff sought to show that the bargain was that the flour should be of the same quality as flour sold
to one M., and he argued that the sold-note was not the contract, but only an incomplete memorandum of
a prior oral agreement. It was held, the plaintiff not having repudiated it, that the note was the contract
and that that alone could be looked at. Maule, J., said at p. 590:
“The contract between the parties was reduced into writing: and the rule is, that, where a contract, though
completely entered into by parole is afterwards reduced into writing we must look at that, and at that alone,
even though part of the terms previously agreed upon are not inserted in the written contract. It is by the
written contract alone–subject, of course, to be interpreted by the usages of trade, as in Syers v. Jonas–that the
parties are bound. And more especially is that so in a case where, as here, the contract is one which by the
statute of frauds is required to be in writing. The object of that statute, as appears from its title and preamble,
was to prevent frauds and perjuries; the legislature knew that parties who make bargains with each other often
take very different views of them; and therefore they provided, in order to remove the temptation as much as
possible, that, in cases of contracts for the sale of goods exceeding the value of 10L., the contract, or some
note or memorandum thereof, shall be in writing. The intention of the legislature was that the writing should
be the evidence, and the only evidence, of the contract, and that there should be no occasion to look beyond
it.”

Harnor’s case (1) is still good law in England. It is cited at p. 616 of Phipson on Evidence (9th Edn.).
That learned author says, at p. 601:
“Where private documents are required by law to be in writing–e.g. . . . contracts within the Statute of Frauds
. . . and the like, extrinsic evidence is generally inadmissible to contradict, vary, or supplement their terms.”

I have no doubt that the same rule which applied to contracts within s. 17 of the Statute of Frauds applies
to contracts within its modern equivalent s. 4 (1) of the Sale of Goods Act and applies in Kenya to
contracts within s. 6 (1) of the Sale of Goods Ordinance.
In the present case it is clear that Doulatram and Lazar came to an agreement that Lazar should take
over 181 pieces of various materials (bale No. 142 not being taken over) and that the yardage would be
checked. It is also clear that Lazar did not agree to pay the prices demanded by Doulatram. The
endorsement by Lazar made upon the list of materials prepared by the parties’ surveyors,
Page 164 of [1959] 1 EA 157 (CAN)

in my opinion, exactly sets out the agreement between the parties. It is the contract between them, and s.
91 of the Indian Evidence Act applies to it not only because the terms of the contract were reduced to the
form of a document, but because, in my opinion, it was a contract for the sale of goods of the value of
more than Shs. 200/- and its subject matter was required by s. 6 (1) of the Sale of Goods Ordinance to be
reduced to the form of a document. I will consider later the question whether this agreement constituted a
contract of sale, and the question of price. The fact that the document was not signed by Doulatram does
not, of course, prevent it from being a written contract upon which the party signing could be sued,
particularly if the parties have acted upon it: Harnor v. Groves (1); Smith v. Jeffryes (2) (1846), 153 E.R.
972; and see illustrations (f) and (g) to s. 92 Indian Evidence Act.
Again, by s. 94 of the Indian Evidence Act:
“When language in a document is plain in itself, and when it applies accurately to existing facts, evidence
may not be given to show that it was not meant to apply to such facts.”

These sections give effect to the time honoured rule of interpretation of documents, expressed by
Denman, L.C.J., in Rickman v. Carstairs (3) (1833), 110 E.R. 931 at p. 935 in the words:
“The question . . . is, not what was the intention of the parties, but what is the meaning of the words they have
used”;

or, in the words of the commentary on s. 94 in Sarkar on Evidence (9th Edn.) at p. 744, which perhaps
have peculiar application to Lazar in the present case:
“It means that when the language is crystal clear and it applies correctly or definitely to existing facts, no
evidence can be allowed to show that the parties intended to mean something else, even though they have
acted long in a different way without understanding the true effect of the plain words in a document.”

The words written by Lazar at the foot of the list of 182 pieces of material with their respective cost and
selling prices were:
“Taken over only 181 pieces of various materials (bale No. 142 not taken over). The yardage will be checked.
Not taking over the prices mentioned.”

Later Lazar took over bale No. 142.

Now the expression “taken over” at the beginning of this entry might perhaps, if the first sentence be
read alone, be considered not in itself so crystal clear as to exclude a reasonable possibility of its having
been used loosely to mean no more than a mere physical taking of possession, without change of
ownership, although the latter is its face meaning. But it is impossible to attach the meaning of a mere
handing over of possession to the words “taking over” in the final sentence–“Not taking over the prices
mentioned”. That sentence, if so read, would be meaningless. The “prices mentioned” would be wholly
irrelevant if a mere taking of possession on Doulatram’s behalf were intended. They would only be
relevant if the words “taken over” and “taking over” meant, what indeed on the face of them they do
mean, purchasing. Clearly the whole entry means, and can only mean–“I agree to buy the stuff, but not at
the prices set out in this list”. Finally, while a reference to the dictionary meaning of the expression to
“take over” is not conclusive, it may be noted that it is defined in the Shorter Oxford Dictionary as
meaning–“to take by transfer from, or in succession to, another”, a meaning which imports a change of
ownership, such as occurs in a sale but not in a mere bailment.
Page 165 of [1959] 1 EA 157 (CAN)

I consider, therefore, that the learned trial judge erred in admitting and accepting Lazar’s evidence,
and in interpreting certain circumstantial evidence, to show that by these words he merely meant that he
was taking possession of the materials as agent for the appellants. The subsequent correspondence
between the parties’ advocates upon which the learned judge relied (even if admissible for that purpose)
was not sufficient to oust the plain meaning of the endorsement. The learned judge’s conclusion, upon all
the evidence, is expressed in the following words in his judgment:
“I find as a fact that the agreement was that the defendant should dispose of the goods on behalf of the
plaintiffs without incurring any responsibility for the prices obtained.”

That is a finding which, in my view, with the greatest respect, is not only unwarranted on the evidence
for the reasons which I have given, but is inherently improbable. What clearly happened, I think, in the
light of Lazar’s own evidence, his written memorandum on exhibit 1, and his subsequent conduct in
selling some of the goods by auction, withdrawing others from sale, and keeping the rest, was that he was
constrained by Doulatram, no doubt unwillingly but in circumstances falling short of duress, to buy the
materials from Doulatram at a price not agreed upon, thereby obliging himself to recoup himself as best
he could by selling them for such prices as he could obtain. This conclusion is supported by an
unexplained admission by Lazar during the course of his evidence, when he said:
“I since treated these goods as my property and gave Mr. Doulatram to understand that I was treating them as
my property.”

Regarding the question whether any price was agreed upon between Lazar and Doulatram, the latter’s
evidence on the point was inconsistent, and at one stage he stated that the defendant agreed to buy them
at their “full undamaged value”. But this evidence was rejected by the learned trial judge, and rightly so
in view not only of the denials of Lazar (whose evidence he preferred) but of Doulatram’s admissions
elsewhere in his evidence. These admissions included the following statement in cross-examination:
“We were demanding the selling price. There was no agreement. He was offering landing price, we were
demanding selling price. We had not worked out any figure of agreement. He had no ready money to
discharge the debt. The agreement was to differ. I did not give way. He did not give way.”

From this evidence, and from Doulatram’s insistence that there was a sale, and from Lazar’s written
admission on exhibit 1, it is clear in my opinion that there was a sale of the goods at a price not agreed,
neither party insisting on his price as a condition of there being a sale at all.
In these circumstances learned counsel for the appellants contends that s. 10 (2) of the Sale of Goods
Ordinance (Cap. 290) came into operation, with the result that a “reasonable price” became payable by
operation of law. Section 10 provides as follows:
“10. (1) The price in a contract of sale may be fixed by the contract, or may be left to be fixed in manner
thereby agreed, or may be determined by the course of dealing between the parties.
“(2) Where the price is not determined in accordance with the foregoing provisions, the buyer must
pay a reasonable price. What is a reasonable price is a question of fact dependent on the
circumstances of each particular case.”
Page 166 of [1959] 1 EA 157 (CAN)

It is argued by learned counsel for the respondent that s. 10 (2) is only applicable if nothing was said by
the parties about price and not, as here, if at the time of the formation of the contract the question of price
was discussed but not agreed on; and in support of this contention the House of Lords case of May and
Butcher Ltd. v. R. (4), [1934] 2 K.B. 17, decided in 1929, is relied on. That case, and two others which I
will now consider, were decided, in so far as they touch upon the point now under consideration, with s.
8 of the Sale of Goods Act, 1893, in view, whose terms are identical with those of s. 10 of the Sale of
Goods Ordinance of Kenya.
All that May and Butcher Ltd. v. R. (4) was concerned with, however, and all that it laid down, was
the proposition that an agreement between two parties to enter into another agreement regarding an
essential term, as for instance price, is itself no agreement. Such was not the position in the present case,
as we have seen. There was no agreement to agree later on about the price. There was an agreement to
sell with the question of price left open. The following passage from the judgment of Viscount Dunedin,
at p. 21, puts the legal position clearly:
“To be a good contract there must be a concluded bargain, and a concluded contract is one which settles
everything that is necessary to be settled and leaves nothing to be settled by agreement between the parties. Of
course it may leaves something which still has to be determined, but then that determination must be a
determination which does not depend upon the agreement between the parties . . . No doubt as to goods, the
Sale of Goods Act, 1893, says that if the price is not mentioned and settled in the contract it is to be a
reasonable price. The simple answer in this case is that the Sale of Goods Act provides for silence on the
point and here there is no silence, because there is a provision that the two parties are to agree.”

Lord Warrington of Clyffe, at p. 22, said this:

“It is said that this case is to be treated on the same footing as if there had been no fixing of the price; as if the
contract had been silent as to the price, and the law may then imply a reasonable price; but in the present case
the facts preclude the application of any such principle. To do that would not be to imply something about
which the parties have been silent; it would be to insert in the contract a stipulation contrary to that for which
they have bargained to give them, not the result of their own agreement, but possibly the verdict of a jury, or
some other means of ascertaining the stipulated price. To do that would be to contradict the express terms of
the document which they have signed.”

From these passages it is contended that, in order that the statutory imposition of a “reasonable price”
should apply, there must have been silence as to price, in the sense of nothing having been said about it at
all. But that is neither what s. 10 provides nor what May and Butcher (4) decides. The limited scope of
that decision was later explained by the House of Lords itself when their Lordships discussed and
distinguished it in Hillas & Co. Ltd v. Arcos Ltd. (5), (1932), 147 L.T. 503. That silence as to price
includes for this purpose not only non-mention of price but also non-agreement on price is made clear not
only in the words of Lord Warrington of Clyffe in May and Butcher’s case (4) already quoted, where he
puts a “no fixing of the price” on the same footing as a “silence as to the price”: it is also made clear in
Foley v. Classique Coaches Ltd. (6), [1934] 2 K.B. 1, where Greer, L.J., at p. 11 says this:
“I think the words of Bowen, L.J., in The Moorcock are clearly applicable to a case of this kind, and that in
order to give effect to what both parties intended the court is justified in implying that in the absence
Page 167 of [1959] 1 EA 157 (CAN)
of agreement as to price a reasonable price must be paid, and if the parties cannot agree as to what is a
reasonable price then arbitration must take place. It is quite true that one cannot add to a contract an implied
term inconsistent with or which contradicts the express terms of the contract, but in a suitable case one can
imply a term, and in my judgment to imply a term in this contract that the price of the petrol supplied by the
respondent shall be reasonable is in no way inconsistent with the agreement.”

In short, the effect of the decided authorities appears to me to be this. If one man says “I will sell, but
only at my price, which is X”, and the other says “I will buy, but not at that price”, then there is no
contract at all, since each party has refused to contract except at a price to which the other will not agree.
But if, in agreeing to buy and sell, either nothing is said about price or (as is the case here) price is
discussed without agreement being reached on it but without at the same time each party refusing to
contract at all save on his own terms as to price, then in either of those cases s. 10 of the Sale of Goods
Ordinance will apply and the law will imply an agreement to pay a reasonable price. In my view,
therefore, the respondent having bought from the appellants the 182 pieces of cloth listed in exhibit 1,
was liable to pay the appellants a reasonable price for them. It only remains to decide what would be a
reasonable price.
In deciding what is a reasonable price s. 10 (2) requires that the surrounding circumstances shall be
taken into account. In the present case there was a paucity of evidence to enable any court to assess what
would be a reasonable price for this cloth, and the best that this court can do, as I see it, is to take the
landing cost price of each item as set out in the list exhibit 1 and to add to each some percentage for
profit. After perusing all the evidence I feel no more sympathy than did the learned trial judge for the
appellants, who through Mr. Doulatram were clearly endeavouring throughout to exploit the accidental
soaking of their cloth by making an exaggerated claim based on a selling price averaging, for the whole
of the materials, over fifty per cent. more than the landed cost prices. Mr. Doulatram stated in evidence
that, even in clearance sales, the appellants generally made from 5 to 10 per cent. profit on cloth sold, and
that they never sold below cost price. But Mr. Doulatram was not believed by the learned trial judge, who
considered that he was either very ignorant of his own business or was endeavouring to conceal his
knowledge. And a manufacturer’s representative, Mr. Mohindra, who dealt in piece-goods textiles and
had examined the materials in dispute, gave evidence that some of the material was old stock purchased
not later than 1950 (that is to say some six years before the accident) while of other pieces which he had
examined he stated, with regard to eleven bales of small yardages, that:
“the designs at that time were outmoded. When a design is outmoded I think it has often to be sold at a loss;
very much so.”

The burden of proving what was a reasonable price for the goods taken over was upon the plaintiffs.
They proved their landed prices and selling prices, but did not prove, to the satisfaction of the court, that
the whole of the goods taken over were saleable.
Taking all these factors into consideration I would hold a “reasonable price” for the 182 pieces taken
over by the respondent to be their total landed cost price plus five per cent. for profits. This would
amount to Shs. 20,313/71 plus Shs. 1,015/68, namely Shs. 21,329/39. I would accordingly allow the
appeal, set aside the judgment below, and order the respondent to pay to the appellants the sum of Shs.
21,329/39. Counsel have expressed their desire to submit their arguments regarding costs, here and
below, after the delivery of judgment.