ANDREW PHILLIPS (PVT) LTD v GDR PNEUMATICS (PVT) LTD 1986 (2) ZLR 65 (S)

Flynote

Agency — ostensible authority — prior transactions — forged order form bearing company stamp — standard commercial practice estoppel — principles — whether loss of rubber stamp used to forge order form is negligence founding an estoppel.

Delict — duty of care — duty to keep official stamp under lock and key.

Headnote

The respondent supplied goods to a third party on the strength of a forged order form bearing the impression of the appellant's rubber stamp. When sued for payment for the goods sold the appellant denied the purchaser to have been its agent and the respondent alleged an ostensible authority based on prior transactions between the parties and on standard commercial practice in respect of official order forms delivered by employees.

Held, that previous conduct between the parties consisting of six transactions occurring at least twenty seven months prior to the relevant incident is insufficient to justify the inference that the appellant had represented to the respondent that any person presenting its official order form bore its authority, strong evidence is needed to justify such an inference particularly where the bearer has no connection whatsoever with the party against whom it is sought to establish an estoppel.

Held, further, that the failure to keep the rubber stamp under lock and key can scarcely be classified as negligence, but even if it were the appellant was under no duty of care to the respondent to secure its own rubber stamp.

Held, further, that commercial practice does not allow the recipient of an order form to take on trust that it is a genuine rather than a fraudulent order. The safeguard against this type of fraud lies with the recipient of the order.