1. Dispute over whether a payment for shares and services included a separate debt owed for assistance in procuring company shares. (Para 2 , 3 , 4 , 5 )
Back
Next 
1946 Supreme(SC) 40
Privy Council At Palestine
Sir John Beaumont, Sir Madhavan Nair , Justice Lord Normand, JJ.
Egged Co-operative Society Ltd. -Appellant
Versus
Levi Geffen -Resopndent
Privy Council Appeal No. 10 of 1945
Decided On : 10-10-1946
Advocates Appeared:
Batlett and Gluckstein, T. L. Wilson and Co., E. Dennis Smith, H. Goitein , Phineas Quass
Batlett and Gluckstein, T. L. Wilson and Co., E. Dennis Smith, H. Goitein , Phineas Quass
A document signed by only one party does not necessarily bar oral evidence; however, contemporaneous written evidence generally outweighs conflicting verbal testimony in determining whether a payment was intended to satisfy a specific debt.
Headnote:(A) Evidence Law - Admissibility of oral evidence - Document signed by only one party - Whether oral evidence is admissible to contradict the terms of a document signed by only one of the parties - If a document is signed by only one party, it may not constitute a formal written agreement that precludes the introduction of oral evidence to show the real intention of the parties. (Para 10)
(B) Contract Law - Satisfaction of debt - Weight of written evidence vs. verbal evidence - Where written documents, including a contemporaneous letter from the payee claiming a debt, are clear and unequivocal, they outweigh conflicting and unsatisfactory verbal evidence regarding whether a payment made under one agreement was intended to satisfy a debt under a separate, prior agreement. (Para 10)
Facts of the case:
An agreement was entered into where a party was promised a sum for assistance in procuring the majority of shares in a company. Subsequently, another agreement was made for the purchase of shares and the rendering of services. A payment was later made, and a document was signed by one party stating that this payment was the true consideration for the shares and services under the second agreement. The payor contended that this payment also included the sum due under the first agreement, alleging that the payee had signed a memorandum confirming receipt of that sum but later obliterated the signature. The payee denied signing the memorandum and claimed the first sum remained unpaid, supported by a contemporaneous letter sent to the payor's advocate.
Findings of Court:
The court found that the document specifying the payment as consideration for shares and services was signed by only one party and thus did not bar oral evidence. However, the written evidence—specifically the payment document and the payee's contemporaneous letter—was more cogent than the verbal evidence. The court rejected the trial court's finding that the payee had "pretended to sign" a receipt, noting that the payor's representative did not stop payment of the cheque or demand its return when the receipt was allegedly refused.
Issues: 1. Whether the payment made under the second agreement included the amount due under the first agreement. 2. Whether oral evidence was admissible to challenge the terms of a document signed by only one party.
Ratio Decidendi: A document signed by only one party does not necessarily constitute a written agreement that excludes oral evidence. In determining the parties' intentions, contemporaneous written evidence is given greater weight than conflicting verbal testimony. The conduct of the parties—specifically the failure to stop payment of a cheque upon the alleged refusal to sign a receipt—supports the conclusion that the receipt was never executed.
Result: Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether a lump sum payment constituted consideration for shares and services only or included a prior debt for procurement assistance. (Para 6 , 7 , 8 )
3. Written documents outweigh unsatisfactory verbal evidence; a document signed by only one party does not preclude oral evidence regarding the parties' true intentions. (Para 11 , 12 )
4. Appeal dismissed; judgment entered for the respondent. (Para 13 )
5. If an allegation of forgery regarding a signature on a receipt fails, can the court still find that the party intended to sign or pretended to sign?
The court found that if an allegation of fraudulent manipulation of a signature fails, it follows that the document was not signed, and a finding that a party merely pretended to sign is unsustainable. (Para 11 , 12 )
Sir John Beaumont.-
This is an appeal from the judgment of the Supreme Court of Palestine sitting as a Court of appeal dated 30-11-1943, reversing the judgment of the District Court of Tel Aviv dated 30-6-1943, and ordering judgment to be entered for the respondent for L.P. 500 with cost.
[2] In the year 1940, the appellants wished to acquire the majority of the shares in a company called Abir Company Ltd. The respondent was one of the share-holders in that company, and the appellants thought that he could influence other share-holders. Accordingly an agreement was entered into between the appellants and the respondent, the terms of which are to be found in a letter from the appellants to their solicitor, Dr. Ishayevitz, which was admittedly shown to the respondent. The letter is Ex. D-2, and contained the following provision :
"We hereby instruct you in your capacity as our advocate to communicate to Mr. Levi Geffen on our behalf that after we shall have procured the majority of shares in the Abir Company Ltd., either in our name or in the name of a trustee on our behalf, we shall pay him an amount of L. P. 250 for his help in procuring the majority of these shares."
After some other provisions not now material to be stated, the letter continued : "We shall pay him a further amount of L. P. 250 after completion of all the matters between ourselves and the Cohenstak Brothers who are the owners of the remaining shares in the above company." It is not now in dispute that the amount which became payable under this letter was L.P.500.
[3] On 7-11-1941, a memorandum of agreement, which is Ex. D-1, was entered into between the parties whereby the appellants agreed to pay the respondent L.P. 201 for his shares in the Abir Company Ltd., and the respondent agreed to perform various services in connection with such company and the transfer of its shares to the appellants.
[4] On 28-11-1941, Dr. Ishayevitz on behalf of the appellants paid to the respondent by cheque the sum of L.P.1000, and the respondent signed a document (the draft of which had been prepared by Dr. Ishayevitz), described as an agreement between himself and the appellants, which is Ex. D-6. In that document the parties confirm that the agreement was in addition to the agreement signed by the parties on 7-11-1941 and that the consideration seated in such last mentioned agreement was a merely formal consideration, and the agreement now being stated then contained the following paragraph :
"The parties hereby confirm that the true consideration for the aforesaid shares and for all the other undertakings of Geffen in the said agreement of 7-11-1941, is L.P. 1000 and Egged shall pay this amount by cheque to the order of Geffen drawn on the Anglo-Palestine Bank, Tel Aviv No. 57353 12951 and Geffen hereby confirms the receipt of this cheque."
[5] On the same date, i.e., 28-11-1941, but after the interview at which the cheque was handed over, the respondent wrote to Dr. Ishayevitz a letter, which is Ex. p-2. The letter was headed "without prejudice", but it was given in evidence by the respondent without objection and he was cross-examined upon it. The said letter contained 3 paras, which are material :
"(1) My rights in Abir Ltd. are 10 per cent. of the value and selling price of the whole business. Therefore I have to receive from Egged 10 per cent. of the sum paid for Abir. Compared to the sum which for example Konstock family received (50 per cent.=L.P. 5600) that means a sum of L.P. 1120.
" (2) In addition to the above sum, there is due to me a further L.P. 500 the sum which you promised to pay me-you and Egged-and bound yourselves to pay in accordance with the letter of 15-3-1940, which was deposited with you as a trustee.
"(3) On the basis of all the promises and according to your request in the office of Dr. Bernard Joseph, Jerusalem, and out of complete confidence, I signed all documents which were handed to me for signature without any dispute or argument and without even examin
