B.F.N. Limited V. Alhaji Balarabe Ibrahim (1987)

LawGlobal-Hub Lead Judgment Report

MAIDAMA, J.C.A.

This is an appeal by the plaintiff (now appellant) against the judgment of the High Court of Justice, Kano, delivered on the 7th June 1985; in which a sum of N5,250.00 (Five Thousand Two Hundred and Fifty Naira) which was less than the amount claimed by the appellant was awarded to him. In the High Court, the appellant’s claim as endorsed on the writ of summons, was for the sum of N8,739.75 (Eight Thousand, Seven Hundred and Thirty Nine Naira, Seventy- Five Kobo) being the balance of rentals in respect of a vehicle with registration No. KNA 9577 K which was let to the defendant (now respondent) on hire purchase agreement, dated 2nd of February 1977. Under clause 3 of the agreement, which was tendered and admitted as Exhibit ‘B’, it was provided inter alia –

“that the hirer shall pay to the owners on the signing of this agreement, the initial payment set out overleaf in consideration of the option to purchase hereby granted and pay the balance of the hire purchase price by monthly instalments set out overleaf to the owners at 1, Davis Street, Lagos, or such other address as the owners may direct in writing as long as the hiring shall continue…. ”

In accordance with these terms, the respondent made a deposit of N6,209.25k (Six Thousand, Two Hundred and Nine Naira, Twenty-Five Kobo) and undertook to liquidate the outstanding amount over a period of twelve consecutive monthly instalments of N1,750 on the 20th day of each month commencing 20th February 1977. Having done that, he took delivery of the vehicle and subsequently defaulted in the payment of monthly instalments for the months of February, March and April 1977. Unfortunately for him, the vehicle was in May 1977 involved in an accident and got damaged beyond repairs. Thereupon he contacted his insurers, The Lion of Africa Insurance Company – who asked him to take the vehicle to the U.T.C., the U.T.C. in turn contacted the appellant and informed them about the accident and the respondent’s claim. Later the appellant re-possessed the salvaged vehicle and sold it for N8,500.00 (Eight Thousand Five Hundred Naira) and in accordance with clause 5 of the agreement, which provides:-

“(a) ………………

(b) If the hired goods shall be lost, stolen, damaged or damaged to such an extent as to be in the opinion of the owners incapable of repair, the insurance monies payable to the owners under the said policy shall be applied in the order following, i.e.

(i) In paying to the owners the unpaid balance of the hire purchase price together with interest due in clause 4 hereof and –

(ii) In paying any surplus to the hirer.”

they also received from the insurers the sum of N3, 762.25k (Three Thousand, Seven Hundred and Sixty-Two Naira, Twenty-Five Kobo). Exhibit ‘C’ which was the respondent’s account with the U.T.C. showed a balance of N8,739.75k, after deducting the deposit paid by the respondent on signing the agreement, the salvage proceeds and the insurance claim from the Hire Purchase price of N27,211.25k. The appellant therefore asked the respondent to pay this amount but he did not do so.

It is relevant here to refer to clause 4 of the Hire Purchase Agreement which deals with the payment of rentals even if the goods hired were destroyed. Clause 4 of Exhibit ‘B’ provides:-

“During the continuance of the hearing the hirer shall –

(a) Punctually pay without previous demand all sums specified under clause 3 hereof when the same shall respectively become due and interest at the rate of 12 per cent per annum on all over due instalments until payment thereof.

(b) Keep the hired goods in good and serviceable repair and condition (fair, wear, and tear only excepted) and if the hired goods (or any part) be lost, destroyed or damaged will continue to pay the rents specified and will repair or replace the missing or damaged goods (or any part thereof) at the hirer’s cost and expense all replacements being in good repair condition and working order and of similar construction or capacity to those missing or damaged (provided always that the hirer shall not be deemed to have the owner’s authority to create a lien upon the hired goods)”.

It is in this wise that the appellant brought this action in the High Court to recover the outstanding balance. Pursuant to the order of the High Court, pleadings were filed and exchanged by the parties. In paragraphs 5, 6 and 7 of their Statement of Claim, the appellants averred as follows:-