KLM ROYAL DUTCH AIRLINES v. BIRDS, BEASTS AND REPTILES AGENCY
November 27, 1967
HIGH COURT
GHANA
CORAM
- AMISSAH J.A
Areas of Law
- Contract Law
- Commercial Law
- Civil Procedure
November 27, 1967
HIGH COURT
GHANA
CORAM
AI Generated Summary
This appeal concerned whether KLM Royal Dutch Airlines letter of 28 July 1964, sent while respondents awaited a Ghana-based guarantor, was properly construed by a magistrate as a guarantee for Animal Distributors, Inc.s payment for live animals shipped from Ghana to New York. The letter stated KLM was holding a guarantee from Animal Distributors, Inc. for $600 plus freight and asked when the shipment would be ready. Relying on the letter, respondents shipped via KLM; Animal Distributors, Inc. paid only $200.24, citing deaths in transit. Amissah J.A. held the wording, viewed by an ordinary reader in context, was ambiguous and should be construed against KLM, concluding the letter amounted to an assurance that respondents should ship and KLM would see them paid up to the indicated amount. The court also affirmed that the FOB contract placed risk on the buyer at shipment under section 62(g) of the Sale of Goods Act. The appeal was dismissed.
JUDGMENT OF AMISSAH J.A.
The issue in this appeal turns within a very narrow compass. It is whether the learned trial magistrate was right or not in construing a letter written by the appellants, the Royal Dutch Airlines, as a guarantee for payment of the price of live animals consigned by the respondents to Messrs. Animal Distributors, Inc., a corporation in New York.
Some time in 1964, the respondents agreed to send animals to this corporation in New York. According to the president-director of the respondents it was a condition of the contract that the corporation should find somebody in Ghana to guarantee them against payment for the animals or to send the money to the respondents, presumably in advance of consignment. The guarantee was asked for, if indeed it was, for the obvious purpose of providing someone here on whom the respondents could fall if the corporation were to fail to pay for any animals sent them. If this was the true position, and the learned magistrate held that it was, then in my view it lends a distinctive colour to what took place subsequently.
While waiting for the guarantee the respondents received a letter dated 28 July 1964, from the appellants, a resident company in Ghana, in the following terms:
"Dear Sirs,
We are holding a guarantee from Messrs. Animal Distributors, New York of $600 (£214 5s. 9d.) plus freight charges for a shipment of live animals.
Would you kindly advise us when your shipment will be ready so that we can inform consignee.
We are enclosing our time table for which you will note that the most convenient flight is leaving Accra on Saturday morning at 08.40.
Yours faithfully,
K.L.M. ROYAL DUTCH AIRLINES
(Signed) A. de Jager
General Manager for Ghana."
The respondents, on the strength of this letter shipped some crates [p.676] of live animals by the appellants' airline to the corporation in New York. The total value of this shipment was £159 5s. 9d. Later upon demand the corporation sent a cheque for $200.24 (two hundred dollars and twenty-four cents) or £71 2s. in payment for the animals. The respondent therefore sued the appellants as the guarantors of the corporation for the payment of the full price of the animals shipped. The learned magistrate found that the letter quoted above was a guarantee and found the appellants liable to make up the difference between the full price of the animals and the money paid by the New York Corporation. It is from this decision that the appellants have appeale