Abc Merchant Bank (Nigeria) Limited V. Panalpina World Transport (Nigeria) Limited (2004)
LawGlobal-Hub Lead Judgment Report
PIUS OLAYIWOLA ADEREMI, J.C.A.
The appeal in this matter is against the decision of the Federal High Court sitting in Lagos delivered on the 12th of February, 2002 dismissing the plaintiff’s claim. The appellant who was the plaintiff in the court below had claimed against the respondent who was the defendant in the court below the sum of N2,900,000.00 (two million, nine hundred thousand naira) being the value of the plaintiff’s goods kept in the custody of the defendant pursuant to a collateral management protocol of agreement dated the 6th day of March, 1991 and lost on 12th of May, 1994 by the conduct and/or negligence of the defendant together with consequential loss at the rate of 21% per annum from 12th of May, 1994 until the date of judgment and thereafter interest on the judgment debt at the rate of 6% per annum until final payment.
Pleadings, in terms of statement of claim and statement of defence were filed and exchanged between the parties. Both sides led evidence in proof of the averments in their respective pleadings. At the close of the evidence, with the leave of the court, both sides submitted written addresses. In a considered judgment delivered on 12th February, 2002, the trial Judge dismissed the plaintiff’s suit in toto. Being dissatisfied with the decision, the plaintiff appealed therefrom upon a notice of appeal which carries eight grounds of appeal.
Distilled from the said grounds of appeal for determination by this court are five issues which as set out in the appellant’s brief of argument are in the following terms:
(1) Whether upon the undisputed facts the lower court was correct in coming to the conclusion that the respondent has discharged its duty to establish that it was not negligent for loss of the goods entrusted to it.
(2) Whether the respondent can set up the title of the judgment creditor in suit No. LD/94/91 as a defence to the appellant’s claim against the respondent for loss of the goods entrusted to the respondent.
(3) Whether the lower court was justified in its conclusion that the goods were forcibly taken away by the bailiff and policemen in execution of suit No.LD/94/91, and if the answer is in the negative whether the lower court should have held that the goods were wrongfully released by the respondent.
(4) Whether the lower court correctly placed the burden of proof of the case of each party having regard to the pleadings filed and evidence adduced at the trial.
(5) Whether the lower court was right to have failed to make any award at all for loss of the goods while they were under the custody of the respondent and for consequential loss.
For their part the respondent has raised only two issues for determination which as contained in their brief are as follows:
(1) Whether in the light of the uncontroverted evidence before the court the learned trial Judge held rightly that the goods warehoused were forcibly removed by the court bailiffs and policemen and thus not wrongfully released by the respondent as claimed by the appellant.
(2) Whether the appellant proved specifically its claim for the sum of N2,900,000.00 as damages for loss of the warehoused goods.
When this appeal came before us on the 3rd of March, 2001, Mr. Oladipo, learned counsel for the appellant, adopted his client’s brief of argument filed on the 7th of March, 2003 and the reply brief filed on the 10th of November, 2003 and urged that the appeal be allowed. Mr. Opasanya learned counsel for the respondent also adopted his client’s brief filed on 10th of April, 2003 and urged that the appeal be dismissed.
I have had a careful examination of all the issues raised for determination by the parties in this appeal. I am of the view that issues Nos. 1, 2, 3 and 4 on the appellant’s brief of argument can be taken together with issue No.1 on the respondent’s brief. Issue No. 5 on the appellant’s brief can be taken together with issue No.2 on the respondent’s brief. I shall treat the issues in the order in which I have set them out supra. After reviewing the evidence led by the parties and the findings made thereon, the appellant in its brief of argument submitted that in setting of the defence that the goods were carted away by the bailiff of the High Court of Lagos in execution of the judgment in suit No. LD/94/91 between Fidelity Union Merchant Bank Limited and Najem Holdings Ltd., the respondent did not prove what reasonable steps it took to safe guard the goods during the execution and that in spite of those reasonable steps so taken by them the goods were removed.
In the absence of proof of the reasonable steps taken, the defence set up cannot avail the defendant/respondent; they have not shown any reasonable step taken by them for the protection of goods in their possession; it was submitted while reliance was placed on the decision in Holts Transport Ltd. v. K. Chellarams & Sons (Nig.) Ltd. (1973) 1 All NLR (Pt.1) 202. The court below, it was submitted, was wrong in holding that the forcible removal of the goods was an act beyond the control and management of the respondent.
It was again submitted that the execution against the goods in possession of the respondent was unlawful in that those goods did not belong to the judgment-debtor in suit No. LD/94/91 i.e. Najem Holdings Limited and the respondent should therefore have shown what reasonable steps it took to prevent the unlawful execution as it was its responsibility to protect the goods while relying on Ranson v. Platt (1911) 2 KB 291 and Coldman v. Hill (1919) 1 KB 443.
In its response, the respondent in its brief of argument, contended that issue as to whether the respondent took reasonable step or not was never joined at the court below. In the alternative, it was again contended that if an attempt had been made to resist the execution or undertake any of the steps suggested by the appellant that would have constituted an obstruction which is punishable by virtue of section 28 of Sheriff and Civil Process Act, Cap. 407, Laws of Nigeria, 1990. The appellant, it was again argued never responded to the notification of the attachment given to it in terms of exhibit nor did it act on it; had the appellant reacted the goods would have been salvaged, it was further argued, adding that the present complaint by the appellant was in bad faith.
It was again argued contrary to the submission of the appellant that goods of a third party may be attached in execution of a writ of Fifa albeit wrongfully or accidentally by virtue of the provision of section 34(1) of Sheriff and Civil Process Act, Cap. 407, 1990.
The execution carried out was a lawful one as there was no state of belligerence, it was further contended. Reviewing the evidence led, the respondent opined that the trial Judge came to a right decision that the defendant/respondent discharged its duties; while urging that issues 1 to 4 in the appellant’s brief be resolved against it and the appeal therefore be dismissed.
The case of the plaintiff/appellant as could be gleaned from the pleading is thus: a company by name Aramco Nigeria Limited one of the customers of the plaintiff/appellant which was engaged in banking business got a credit facility of three million naira from the plaintiff to enable it import gastoxins. The letters of offer and acceptance were tendered at the trial as exhibits B and B1 respectively. It was a term of the banking facility that the goods to be imported shall be secured by a right of lien hypothecation of the goods to be imported with the facility.
The instrument of the lien was tendered as exhibit C at the trial. By a tripartite agreement tendered as exhibit D between the plaintiff of the first part the defendant/respondent as the warehousing company of the second part and Aramco Nigeria Limited as the depositing of the third part the defendant/respondent contracted to keep in its warehouse the 390 cartons of gastoxin chemicals to the order of the plaintiff and in furtherance of a right of lien of the plaintiff and the pledge of the afore-mentioned goods by Aramco Nigeria Limited to the plaintiff. By exhibit D, the defendant was only to release the goods or part thereof on the written instructions or confirmation of the plaintiff. There was to be no third party lien or encumbrance on the goods.
By exhibits E – E2; a letter written by the defendant to the plaintiff, the warehouse warrant on the insurance policy respectively the defendant wrote to the plaintiff to confirm that the goods were in its custody. It was its further case that in breach of the agreement the defendant on or about 12th May, 1994 without any written authority from the plaintiff addressed a letter to the later informing it that the goods had been released to a third party and the plaintiff was thereby put to loss and damage.
The goods it was further averred were worth N2,900,000.00 at the date of deposit and income therefrom was at the rate of 21% per annum, which the plaintiff lost; hence the claim as stated supra.
The defendant/respondent’s case, again, as gathered from its pleadings is thus:-
while agreeing that it entered into a tripartite agreement with those mentioned by the plaintiff/appellant, denied that the plaintiff ever placed any goods in its custody pursuant to the agreement dated 12th May, 1994. It also denied ever wrongfully releasing the 361 cartons of gastoxins to a third party.
It was emphatic that the said goods were kept in a warehouse at No. 8/10 Commercial Road, Apapa owned by Aramco Nigeria Limited pursuant to an agreement between the defendant/appellant and Aramco Nigeria Limited upon being intimated by a letter dated 19th May, 1994 by its security supervisor that its warehouse located at 8/10 Commercial Road, Apapa leased from Aramco Nigeria Limited was broken into by same people including court bailiffs and policeman to levy execution in respect of suit No. LD/94/91 between Fidelity Union Merchant Bank Limited and Najem Holdings Limited and that the 361 cartons of gastoxin were removed the appellant quickly informed the defendant/respondent by a letter dated 31st May, 1994.
However the defendant/respondent initiated inter-pleader proceedings on 3rd June, 1994 in respect of the goods which process is still pending in court; contending further that the subject-matter of the suit is one of bailment.
That the goods were removed pursuant to the execution of judgment in suit No. LD/94/91 Fidelity Union Merchant Bank Limited v. Najem Holding Ltd. is not in doubt. The bone of contention is whether the execution was lawful or not. The plaintiff/appellant’s position is that the execution was unlawful and that the only way by which the defendant/respondent could have exonerated itself from blame was to have taken reasonable steps to resist the execution. The defendant/respondent on the other hand as I have reviewed supra, contended that it did all that was lawfully and reasonably possible for it to do to resist the execution.
I shall start by saying that a judgment creditor and a judgment debtor are the persons respectively entitled to the benefit of and liable under an enforceable judgment or order see Order 4 of Sheriffs and Civil Process Law; Judgment (Enforcement) Rules. The Sheriff who is an officer of the court in the performance of his duty in relation to execution of judgment has as duties and liabilities generally under the writ in three-fold: viz:-
(1) to the judgment creditor, to obey the writ and any lawful instructions that have been given him;
(2) to the judgment debtor, not to do any act not authorized so to do;
(3) to the court, to make a return to the writ, if required so to do.
See Domine v. Grimsdall (1937) 2 AER 119.
In his testimony before the trial Judge, the only witness called by the plaintiff/appellant said:-
“361 Cartons of gastoxin chemicals had been carted away. The plaintiff knew this through a letter from the defendant (Panalpina) to the effect that a group of people including a bailiff came to the warehouse where the goods were kept and moved (them) away 361 cartons of the chemicals”
In proof of the plaintiff/appellant lien on the goods the witness said:-
“Exh. E2 is authorization issued by the defendant in favour of the plaintiff evidencing that the product in question were being held to the order of ABC Merchant Bank. ABC Merchant believed on the basis of exh. E2 that the goods in the custody of the defendant were owned by them. They did not react because they believed that they would get what was stipulated in the contract and they were not in a position to react based on the contract agreement”
The witness went further to say as to the knowledge of the plaintiff regarding the whereabouts of the goods:-
“ABC Merchant Bank knew that at all time the goods were in the warehouse of Aramco but they were there without their consent. ABC Merchant knew about this in ex. E written on 6/8/91”.
I have read the evidence of the only witness called by the defendant/respondent, one Joseph Alexander Ikpong. He confirmed the existence of the tripartite agreement among the three parties as stated supra and that was exhibit “D”. He did not contradict the material evidence given by the only witness of the plaintiff, safe to say that in establishing the fact the defendant/respondent took some steps to ward off the execution or counter it, he said that the defendant inter-pleaded.
The learned trial Judge on the issue as to whether the defendant/respondent was negligent in releasing the goods to the third party said:-
“I do agree with the learned counsel for the defendant that the alleged negligence of the defendant was in releasing the goods to a third party but no evidence was tendered to prove this assertion i.e. release …That apart from not having adduced evidence of release, the plaintiff did not adduce evidence on the particulars of negligence pleaded in paragraph 12 of the statement of claim…
It is my opinion that the defendant proved by uncontrovertible and abundant evidence that the goods were forcibly taken away by policemen and court bailiff in the execution of a court judgment in suit No. LD/94/91 and the defendant tendered exhibits H1-H4 to buttress this fact we in the court including both learned counsel are in vantage position to know that a reasonable law abiding citizen in the position of the defendant in this case could not have resisted the execution or attempted to stop the bailiff and his group from effecting the removal of the goods. This court was impressed when evidence was led by the defendant to show that she went an extra mile in employing the services of a reputable firm of legal practitioners to file inter-pleader summons in respect of their goods, she also took immediate steps to inform the plaintiffs of what happened to the goods in question but the plaintiff instead of reacting by joining forces with the defendant to fight for the goods to be retrieved or reclaimed became non-challant because she wanted to enforce exhibit D…
I hold that under both the common law and contract the defendant has discharged her duties to take reasonable care to protect the plaintiff’s goods against any imminent danger”
From the pleadings and the evidence before the court, it was clear that the defendant/respondent did not claim ownership of the goods neither did it claim any interest thereon. The goods were only deposited with it in its warehouse and that by Aramco Nigeria Limited according to its case. As between the plaintiff/appellant and Aramco Nigeria Limited the defendant respondent was a stakeholder. The defendant/respondent had in paragraph 18 of its statement of defence averred that the subject-matter of the suit was one of bailment. I cannot but agree with that averment. Indeed, the tenor of the pleading and the evidence points clearly to that.
The defendant /respondent was therefore a bailee of goods. In law, a bailee of goods… incurs certain obligations dependent upon his status, and quite independent of his liability in contract. Let me say that again, in law, the obligations of the bailee are founded on negligence. He is under a duty to take care of the goods bailed. It is a duty which at common law exists quite apart from any contract, and which is imposed on him (the bailee) because he has been put in possession of another’s goods.
A consequence of this is that the owner of the goods may succeed against the bailee with an action for damages by reason of the loss damage to the goods, see Meux v. Great Eastern Railway Company (1895) 2 QB 387. In a case, Alexander v. Railway Executive (1951) 2 AER 442, the plaintiff deposited his trunk boxes at the defendants’ “left luggage” office. In the plaintiff’s absence the defendants permitted another person to have access to the luggage, who unlawfully removed some items from them. In spite of an exemption clause which excluded the defendants from liability for loss, misdelivery or damage to any article exceeding five pounds, the defendants were held liable for breach of contract.
By deliberately allowing an unauthorized person access to the luggage, the defendants had committed a fundamental breach of the contract. In the instant case, the goods were no doubt put in the possession of the defendant/respondent. It is common ground that an execution was carried out by the bailiff of the court in conjunction with the policemen. I pause to say again that from the available facts, the defendant/respondent was a stakeholder. The steps taken by the bailiff in conjunction with the policemen can be likened unto an action brought against a person, in the instant case, a stakeholder, in possession of goods in which it had no interest but which are the subject-matter of rival claims.
When a bailiff moves in pursuit of an execution of the order of court, it is the force of law that is in motion. If the defendant/respondent did nothing whilst the execution lasted if it took some time or after the execution, he failed to take any lawful steps or action he would primafacie, be liable in damages. In the instant case, there is the uncontroverted evidence that the defendant/respondent brought an inter-pleader summons which, having regard to its position or status, is a stakeholder’s inter-pleader.
To my mind, in the circumstances of this case, the only lawful steps the defendant/respondent could have taken and which it took is to resort to taking out an inter-pleader summons I find support in the case of Sofola v. C.L.C. (Nig.) Ltd. In Re v. T. Learning Ltd. (1991) 3 NWLR (Pt. 178) 125 which at page 131 where this court in explaining the “role expected of a stakeholder said at page 131:-
“Is a situation where an action is brought or threatened against a legal personality the like of a banker or a person the like of a stakeholder who is in possession of money or goods in which he has no interest but which are the subject of rival claims. It will be unjust to put such a person in possession of money or goods in which he has no interest into an unnecessary expense of defending such an action. Under the English Rules, Order 17 of the Supreme Court Practice, 1999, he may bring such rival claimants before the master (a Judge in Nigeria context) to determine the rightful owner between the rival claimants and to shield himself from possible court action any of the rival may want to foist on him. That type of inter-pleader summons is known as, ‘stakeholder’s inter-pleader’.”
That was exactly what the defendant/respondent did in the instant. And the learned trial Judge rightly adjudged it to be the only proper and lawful thing a stakeholder in its position should do. It must not put up any forceful resistance to the officials of the court in the course of carrying out the execution otherwise it would run foul of the law. Having regard to all I have been saying issues Nos. 1, 2, 3 and 4 on the appellant’s brief are hereby answered in the affirmative. I also answer issue No.1 on the respondent’s brief in the affirmative.
On issue No.5 on the appellant’s brief and issue No.2 on the respondent, brief which query the rationale behind the failure of the trial Judge to make an award for the loss of the goods while they were under the custody of the respondent; going by the appellant’s issue and whether the appellant proved specifically its claim for the sum of N2,900,000.00 as damage for the loss of the warehoused goods, going by the second issue of the respondent; suffice it to say that having regard to all I have been saying supra, the plaintiff/appellant is not entitled to any damages.
Even if the defendant/respondent had been adjudged to be negligent, the claim of N2,900,000.00 as value of the goods being special damage must be strictly proved see Oshinjinrin & Ors. v. Alhaji Elias & Ors. (1970) 1 All NLR 153.
There is no scintilla of evidence in proof of the special damage. I am not unmindful of the fact that if the plaintiff/appellant had succeeded in its case it would have established negligence and consequently should recover such sum of money as will replace the lost goods, so far as can be done by compensation in money, in the same position as if the loss has not been inflicted on it of course subject to the rule of law as to remoteness of damage. See Lagos City Council Caretaker Committee & An. v. Unachukwu & An. (1978) 3 S.C. 199.
Having regard to what I have said in respect of the earlier issues treated, an award of any damage for loss would be an exercise in futility. It would only be cosmetic. Issue No.5 on the appellant’s brief is consequently answered in the affirmative; while I answer issue No.2 on the respondent’s brief in the negative. In sum, the result of all I have been saying is that this appeal is unmeritorious. It is thus dismissed with cost of N5,000.00 in favour of the respondent.
Other Citations: (2004)LCN/1586(CA)