Captain Michael Chacharos & Anor V. Ekimpex Limited & Ors. (1988)
LawGlobal-Hub Lead Judgment Report
O. OBASEKI, J.S.C.
The amount of litigation that has taken place in this matter is reflected by the size of the record of proceedings in the courts below which has run up to 450 pages and the size of the briefs filed by each party to this appeal. The brief filed by the appellant ran up to 45 pages of the foolscap length type sheets while the brief filed by the respondents ran up to 81 pages.
The claims filed by Ekimpex Limited the plaintiff – 1st respondent in this appeal in the Federal High Court holden at Port Harcourt on the 26th day of September, 1977 as set out in the writ reads:
”The plaintiffs claim against the defendants jointly and severally is for a declaration:
- (a) that the plaintiff is entitled to the delivery of 18,000 tons (360,000 bags) of cement now on board the ship M. V. Cindy presently moored at Bonny, a place within the jurisdiction of this Honourable Court;
(b) that the plaintiff is entitled to the delivery of 5 barges, one tug boat and two mobile cranes now on board the said ship, M. V. Cindy.
- An order of court that the said 18,000 tons (360,000 bags) of cement, the 5 barges, one tug boat and the mobile cranes be delivered to the plaintiff by the defendants or their total value N800,000.’
This claim was amended in paragraph 24 of the amended statement of claim to read as follows:
”After all efforts to make defendants deliver the said cement had failed, plaintiff was compelled to file this action and claims against the defendants jointly and severally as follows:
- A declaration that the plaintiff is entitled to the delivery of 18,000 tons (360,000 bags) of cement, the five (5) barges, one (1) tug boat and two (2) mobile cranes also carried to Port Harcourt by the M.V. Cindy;
- An order of court that the said 18,000 tons (360,000 bags) of cement, the five (5) barges, one (1) tug boat and the two (2) mobile cranes be delivered to the plaintiff by the defendants;
- N1,115,668.96 (One million one hundred and fifteen thousand six hundred and sixty eight Naira ninety six kobo) special and general damages for breach of contract to deliver the said cement on time and for carrying additional cargo.
Particulars of Special Damages
(1) Additional Bank charges
on the letter of credit N60,000.00
(2) Loss of profit N180,000.00
(3) Additional discharge fee paid
to Mcdermott Nig. Ltd. N115,668.96
(4) Loss on damaged bags of cement N200,000.00
General Damages 460,000.00
Grand Total N1,115,668.96
The 4th defendants filed a defence and counterclaim and by paragraph 39 thereof counterclaimed as follows:
”39. The 4th defendants therefore claim as follows:-
(a) 495,000.00 US Dollars (N308,930.91) being unpaid freight B for the 18,000 tons of cement carried by Cindy to Port Harcourt;
(b) 352,000.00 US Dollars (N219,684.00) being damages for delay (demurrage) of the vessel Cindy;
(c) Delivery of the 5 barges, 1 tug boat, 2 Motor cranes or N500,000.00 being their value.
Pleadings were filed and delivered or served and at the close of pleadings, the issues raised on the pleadings came up for trial before Tofowomo, J. After hearing evidence called by the parties, he delivered a considered judgment. He observed that throughout the proceedings, the 1st and 2nd defendants, though served, never appeared to contest the case. More expressly, he said:
”As I stated earlier, throughout these proceedings in this case, the 1st and 2nd defendants or their counsel did not enter appearance except that on 10th November, 1977, when the ruling on the motion on the order for release of the vessel was delivered, one Mr. J. J. A. Rerri announced himself as appearing for 2nd defendants. The first defendants were shown to be a foreign company registered in Belgium and 2nd defendants, a limited liability company registered in Nigeria and acting as agents of the 1st defendants in Nigeria. The 1st and 2nd defendants were shown to have been served with the writ of summons, but none of them entered appearance, one of them filed a statement of defence and none of them defended the suit.”
He later observed:
”The proceedings in this case had lasted for more than one year and no other person up till now appears as the consignees of the cement cargo by producing his Bill of Lading and other shipping documents to counteract the genuiness of plaintiffs’ claim.” …… I hold that the plaintiffs have sufficiently established their claim by preponderance of evidence and they are declared owners of the cement and are entitled to the delivery of the cement ca+o to them.”
On the 2nd item of the claim, he held:
”Therefore I am quite satisfied with the evidence of the plaintiffs that the release of the Bills of Lading entitled them to take delivery of the deck cargo without hindrance.”
On the 3rd item of claim, i.e. claim for special and general damages, he said:
”On the issue of claim for special damages, they are those which the court will not award unless they are proved (see the case of Abdul Jaber v. Mohammed K. Basma 14 WACA 140). Therefore, I take the items of special damages one by one.
On item (1) Additional Bank charges estimated at N60,000.00 the On learned judge said ”And for causing such delay they could not be exonerated from being responsible to the additional bank charges.”
On items 2 and 4: Loss of profits on sound bags and loss damaged bags, the learned judge said…”I therefore hold that the defendants are liable to the plaintiff for all the damages sustained by the goods while in the custody of the defendants.”
On item 3: Additional discharge fee paid to Mcdermott (Nig.) Ltd., Warri, the learned judge held:
”It was shown that if the 3rd and 4th defendants had allowed the discharge of the deck cargo in time, such additional charges would not have been incurred. In the circumstances of this case, I find that the items of
special damages have been sufficiently established by plaintiffs against the defendants to entitle them to judgment entered in their favour.”
On the issue of general damages, the learned judge said:
…. Apart from the fact that the captain refused to deliver the cement cargo to the plaintiffs timely, all the other cargoes in the deck cargo and the sugar loaded on top, not expected by the plaintiffs to have been loaded in the vessel could have hampered the prompt discharge of the cement cargo …p.w.1. in his evidence emphasised that the plaintiffs sustained a lot of losses because of a long delay of the defendants to allow them to take delivery of the cement cargo …I believe their evidence and 1 regard the evidence of plaintiffs’ witness as true. And in this event, the defendants are liable in general damages which I estimate at N150,000.00.
It should be noted that the total amount of general and special damages claimed by plaintiffs was N1,015,668.96 and not N1,115,668.96 as stated in the amended statement of claim.”
On the counterclaim, the learned judge said:
”1. The claim for unpaid freight fails;
- I find that the plaintiffs are not liable to pay demurrage;
- Claim for delivery of deck cargo or N500,000.00 being the value.
The evidence before me revealed that the deck cargo was consigned to the 2nd defendants. The evidence of p.w.1 and p.w.4 was that when 2nd defendants were unable to meet the discharge expenses they negotiated with the plaintiffs and handed to them all the relevant shipping documents, namely, the Bills of
Lading Exhibits Nos. 7 and 8 and Customs Bills of Entry (Exhibits Nos. 9 and 10) which plaintiffs used while taking delivery and they paid all the discharge fees. The conditions as stipulated in the charter party agreement in respect of these items are not binding on the plaintiffs and therefore the 4th defendant’s claim on this item fails.”
Concluding the judgment, the learned trial judge said:
And I hereby give judgment as follows:
- I declare that the plaintiffs are entitled to the delivery of 18,000 metric tons (360,000 bags of cement) and 5 used barges, one used tug boat and 2 used mobile cranes carried to Port Harcourt by the vessel, ”M.V. Cindy.”
- The cargoes the delivery of which have been made to them are their own without any conditions or hindrance;
3.(i) N60,000.00 as additional bank charges on the letter of credit;
(ii) N180,000.00 loss of profit on sound bags;
(iii) N115,558.00 additional discharge fees paid to Mcdermott (Nigeria) Ltd. Warri; and
(iv) N200,000.00 loss on the damaged bags and as general damages N150,000.00.
All items of the 4th defendant’s counter-claim fail as they lack substance and are hereby dismissed.”
Order as to costs”…
All told, I award N2,500.00 costs against the defendants jointly and severally in favour of the plaintiffs.”
Being dissatisfied with the judgment, the 3rd and 4th defendants, i.e. Captain Chacharos and L. & W. Shipping Agency appealed to the Court of Appeal on 9 grounds of appeal as follows:
1(a) The learned trial judge erred in law when he admitted in evidence the following documents:
- Exhibit 8 being a copy only of the Bill of Lading covering the cranes;
- Exhibits 7 and 8 – Bill of Lading are in the name of S. B. Shipping & Trading Agencies Limited when these were not endorsed to the plaintiff;
- Exhibit 19 when the invoice was not signed by Mcdermotts:
- Exhibit 20 when the court had earlier rejected it or evidence of it;
- Exhibit 23 when no foundation was laid;
- Exhibits 24 to 24g and Exhibits 25 to 25c when these not pleaded and also they offend section 90(3) of the Evidence Act;
- Exhibit 27(1-114) and Exhibits 28(1-57) when they were not pleaded and also offend section 90(3) of the Evidence Act;
- Exhibit 26 (a Nigerian Ports Authority Card) when it was not issued by the alleged employers of the witnesses, the 2nd defendants;
- (b) The learned trial judge erred in law in refusing in evidence the following documents:
- The Bill of Lading dated 19/4/77;
- The Logbook of M.V. Cindy;
- Documents dated 4/12/77 (2) and 6/12/77 and 21/3/78 signed by the plaintiffs’ representatives and relative to the condition of the cargo and its discharge from M. V. Cindy;
- Proforma Invoice dated 10/2/77;
- Letter from E. Pinto Basto e la Isle to the 4th defendants dated 17/3/77;
- The learned trial judge misdirected himself in law and on the facts in holding that Exhibit 1 the plaintiffs’ Bill of Lading. x x x x x x x x x x x x x x x xx x x x x
Points of Misdirection
(i) No proof of execution;
(ii) The Bill of Lading (Exhibit 1)has no relevance to the claim;
- 8. The learned trial judge misdirected himself in law and on the facts to hold that the plaintiffs claim based on Exhibits 12 and 13 was proved.
Points of Misdirection
No proof of execution of Exhibits 12, 13 and 14.
- The learned trial judge was wrong in law and the facts and on the facts to have awarded all the items of special damage claimed by the plaintiffs when there was no specific proof of these items;
6(d) The award of general damages is excessive;
7(e) The learned trial judge was wrong in law in that the defendants were denied a fair hearing of their case as provided under section 22(1) of the Constitution of the Federal Republic of Nigeria when on the 10th of January, and 11th of January, 1979, the defendants indicated that they had witnesses to give evidence on their behalf (some from above) and were denied the right to adduce such evidence and the learned trial judge proceeded to close the case of the defence and adjourned for address which he took only from the plaintiffs
8(f) That by virtue of clause 3 of Exhibit 1, the court had no jurisdiction to hear the case.
9(g) That the judgment is against the weight of evidence.
An amended additional grounds containing 15 grounds of appeal was filed and argued before the court. Further additional grounds were also filed.
Original grounds were renumbered 1-9;amended additional grounds 25-28. Grounds 3, 7, and 24 were abandoned and struck out. Grounds 2, 6, 17, 18, 21 and 26 were on 1st objection struck out for lack of particulars. Later on, grounds 12, 13, 16, 19, 20, 22 and 23 were also struck out for offending Order 3 Rule 20(4) of the Federal Court of Appeal Rules 1981. Only 12 grounds – 1, 4, 5, 8, 9, 10, 11, 14, 15, 25, 27 and 28 – were left and they were argued. Grounds 10, 11, 14, 15, 25, 27 and 28 read:
(10) The learned trial judge erred in law by awarding general damages at all in favour of the plaintiff/company after he had quantified in great details all the items of damages alleged to have been suffered by the plaintiff and made awards in respect of each item in the nature of special damages;
(11) Further and in the alternative, the learned trial judge erred in law in awarding the sum of N150,000(which is unreasonably high) as general damages in favour of the plaintiff/company after making an award in the nature of special damages in respect of each and every item of claim made.
(14) Further and in the alternative, the learned trial judge erred in law in making in favour of the plaintiff an award in the sum of N60,000.00 in the nature of special damages when the plaintiff did not prove that it suffered damage to that amount it not being within the powers of the trial judge to estimate the actual loss suffered by the plaintiff in terms of money.
(15) The learned trial judge erred in law in finding the 3rd and 4th defendants liable in respect of losses alleged suffered by the plaintiff by reason of the plaintiff having sold the cement at prices below what he expected to get for it in the absence of privity of contract between the plaintiff and the defendants;
(25) The learned trial judge misdirected himself in law and on the facts when he held at page 275 lines 2 and 5 of the records that p.w. 3 bought both the sound and broken bags of cement, and that the loss of the sound and broken bags had been proved, when there was no evidence led that p. w.3 bought all the cement on the vessel;
(27) The learned trial judge misdirected himself in law and on the facts when he found at page 276 lines 25-30 of the records that there was an agreement between the plaintiffs and the 4th defendants in breach of which he found the 3rd and 4th defendants liable in damages;
(a) No such agreement between the plaintiffs and the 4th defendants was pleaded or proved;
(b) The plaintiffs did not say in evidence that there was an agreement between them and the 4th defendants.
(28) The learned trial judge failed to evaluate the evidence and make correct findings on the issues before him and on the liability, if any, of the different defendants in the case, particularly, the question of delay to deliver the cargoes on board the vessel.”
After hearing arguments, the Court of Appeal delivered a considered judgment allowing the appeal only in respect of the award of N200,000.00 damages and dismissing the appeal on all other issues.
Olatawura, JCA. delivering the lead judgment (concurred in by Belgore and Aikawa, JJCA.) said:
”the appeal on damages succeeds in respect of the award of N200,000.00 on the bad bags and this will be disallowed.” Giving his reasons for this decision, he said:
”It appears to me that the plaintiff/respondent claimed twice in respect of the same 100,000 bags of cement; the first claim was as pleaded in paragraph 21 of the amended statement of claim while the second claim in respect of the 100,000 bags is as pleaded in paragraph 23 of the amended statement of claim as a part is part of a whole.”
The real conflict is in pleading the price of each damaged bags – paragraph 23 as N3.00 after pleading it as N1.50 in paragraph 21. Explaining further, the learned Justices of the Court of Appeal said:
”He was asking for loss sustained for not delivering the cement by 15th September, 1977 when the price was N3.50 per bag but that at the time he collected the cement on 6th December, 1977 the price had gone down thereby sustaining a loss of 50k per bag and it is this that he described as loss of profit under the particulars of damages. It could not have been his wish that the cement be damaged so as to make more profit than he would have if they were delivered in sound bags. I agree with Mr. Mbanefo the learned counsel for the appellants that the two claims cannot coexist. It is for this reason that I will disallow the award of N200,000.00 made in respect of bags of cement damaged.”
Being dissatisfied with the damages awarded against them in the judgment, the 3rd and 4th defendants have further appealed to this Court against the judgment of the Court of Appeal. The plaintiff was also dissatisfied with that part of the judgment disallowing the award of N200,000.00 made in respect of the bags of cement damaged by the learned trial judge and cross appealed against that part of the judgment to this Court.
Without the particulars, the grounds of appeal filed with the notice of appeal by the 3rd and 4th defendants are as follows:
- The learned Justices of the Court of Appeal erred in law in upholding the award of N180,ooo.00 as special damages when it is clear from their judgment that the claim of N180,000.00 (being loss of profit on all the cement carried by the ship) cannot co-exist with the claim for N2oo,ooo.00 special damages (being loss of profit on part of all the cement carried by the vessel)
- The learned Justice of the Court of Appeal failed (erred) in law to appreciate the ratio decidendi in the case of Czarnikov v. Koufos (1969) 1 AC 50 cited by the appellants namely, that the measure of damages in a case of delay to deliver goods carried by sea is the difference between the market price at the time when the goods should have arrived and the market price at the time they did arrive.
- The learned Justices of the Court of Appeal erred in law in dismissing the appeal against the N60,ooo.oo being additional bank charges when this item of special damages was not specifically proved.
- The learned Justices of the Court of Appeal erred in law in allowing both the award of N180,000.00 special damages for breach of contract and N150,000.00 as general damages to stand when to do so in this case amounts to double compensation;
- The learned Justices of the Court of Appeal erred in law in also finding the appellants liable for losses alleged suffered by the respondents by reason of the respondents having sold the cement at prices below what they expected for it in the absence of privity of contract between the respondents and the appellants to supply and deliver cement on or before 30/4/77;…
- The learned justices of the Court of Appeal erred in law in holding the appellants liable for delay in delivering the cement and for carrying additional cargo when the appellants are exempted from liability for delay by Exhibit 1 (the Bill of Lading) and when under the charter party, (Exhibit 29) the ship is authorised to carry cement and other cargo.
- The learned Justices of the Court of Appeal erred in law in allowing an award of N180,000.00 (360,000 bags at 50k less each) as special damages to stand when the evidence led by the respondents did not support their findings.
8.The learned Justices of the Court of Appeal erred in law in dismissing the appeal against the award of N1155,688.96 as special damages when the appellants liability to pay or refund this amount or part thereof to the respondents was not established.
- The learned Justices of the Court of Appeal erred in law also in holding that inadmissible Exhibits 19; 24 to 24(g); 25 to 25(c) and 27 and 28 were admissible thus occasioning a substantial miscarriage of justice which should necessitate the reversal of the whole judgment.
- The learned Justices of the Court of Appeal erred in law in also holding that inadmissible Exhibits 7, 8, 20, 23 were admissible this occasioning a substantial miscarriage of justice which should necessitate reversal of the whole judgment.
- The judgment is against the weight of evidence. As stated earlier, the plaintiffs also cross-appealed against part of the judgment of the Court of Appeal to this Court and the grounds of appeal set out in the notice of appeal are (without the particulars) as follows:
- The learned Judges of the Court of Appeal erred in law when they held that the award of the trial court of the sum of N200,000.00 (Two hundred Thousand Naira only) damages as loss of profit amounted to double compensation.
- The learned judges erred in law and came to a wrong conclusion on the facts when they disallowed in its entirety, the appellants’ claim for loss of profits on the remaining 260,000 bags that were not damaged and observed that their counsel made an abortive attempt to justify the award of N180,000.00 (One hundred and eighty thousand Naira) and that in any event, a claim of 50k per bag loss on the 260,000 sound bags was not in fact made in paragraph 23 of their statement of claim;
Copious briefs were filed by counsel to each party (both the appellants and the respondent) selling substantial arguments in support of the issues arising for determination in the appeal. What are the issues for determination in this appeal
The issues set out in the brief filed by the appellants are six (6) in number and read:
(1) whether the court has jurisdiction to hear and determine the case;
(2) whether on the case put forward by the plaintiff in its writ of summons the pleadings and the evidence led, it is entitled to judgment having regard to the evidential burden which rests on it;
(3) whether the 3rd and 4th defendants, i.e. the appellants are liable to the plaintiff in respect of its claim;
(4) whether the damages awarded as special and general damages have been proved as required by law;
(5) whether, if any damages have been proved and double compensation has been awarded;
(6) if the court has jurisdiction to hear and determine the case, whether the counter-claim ought to succeed.
On these issues the respondent has added the only issue arising for determination of the cross-appeal, i.e.
whether the Court of Appeal was justified in disallowing the award of N200,000.00 as special damages for broken/damaged bags of cement when the said award in no way constituted double compensation, i.e. having regard to the High Court’s award of N180,000.00 damages for loss of profits on the sound bags of cement only.
It is desirable and indeed right and necessary to deal first with the issue of jurisdiction. The issue of jurisdiction is one issue that escapes the checks and balances and indeed the rigid rules of pleadings. It can be raised at any stage of the proceedings either in the court of first instance or on appeal and if successful brings the proceedings to an end. This is because a court lacking in jurisdiction cannot hear and determine the matter and if it goes on to hear and determine the matter, the whole proceedings and judgment is a nullity and will be so declared either on appeal or in a substantive suit at the instance of a party to the proceedings.
Learned counsel for the appellants, Kehinde Sofola, SAN. Elaborating on his written submissions on this issue, submitted that the Federal High Court, Port-Harcourt, has no jurisdiction to entertain the suit. The civil jurisdiction of the court is as set out in Section 230(1) of the Constitution and Section 7(1) of the Federal High Court Act, 1973. The nature of the claims does not bring the claims within any of the paragraphs of sub-section (1) of the Federal High Court Act, he contended. He observed that it might be argued that the matter comes within the Admiralty Jurisdiction of the Court. He then referred to the cases of (1) Bronik Motors Ltd. & Anor. v. Wema Bank Ltd. (1963) 6 SC. 158 at 289;
(2) Jamal Steel Structures Ltd. v. African Continental Bank Ltd. (1973) 1 All NLR. (Part 2) p. 208 at p. 222; and
(3) Mandara v. Attorney-General of the Federation (1984) 4 S.C. 8 In reply, Abayomi Sogbesan, SAN. who appeared as counsel for the respondent referred to the particulars of claim I stated in the amended claim at page 68 of the record of proceedings which have been set out in full earlier in this judgment and submitted that on the claim as further exemplified in the amended statement of claim which went to trial the dispute was an Admiralty matter within the meaning of Section 7(1)( d) of the Federal High Court Act 1973. He then cited in support the meaning this Court gave in the decision in American Insurance Co. v. Ceekay Traders Ltd. (1981) 5 SC. 81. I agree with him. The Admiralty Jurisdiction conferred on the Federal High Court is that Admiralty Jurisdiction in England that was once conferred on the State High Courts in Nigeria up to 1960 by virtue of the Admiralty Jurisdiction Act of 1960. It includes claims in respect of (a) loss or damage to goods carried in a ship and (b) any agreement relating to the carriage of goods in a ship [see Section 1(1)(g) and (h) of the English Administration of Justice Act 1956].
The claims filed by the respondents are ex facie for goods carried in a ship which has not been discharged from the ship. There is pleaded an agreement relating to the goods (cement) in the ship and the issue of ownership arises from a claim based on this agreement. I hold that there is no substance in appellants’ contention and declare that the Federal High court had jurisdiction to entertain this action.
I will leave the 2nd issue for the moment and go on to deal with the 3rd issue, i.e. whether the 3rd and 4th defendants i.e. the appellants are liable to the plaintiffs in respect of its claim. This takes me to an examination of the pleadings and evidence and findings made by the courts below to ascertain the status of the 3rd and 4th defendants in relation to the plaintiff/respondent, i.e. whether they stand in stand in contractual relation with each other or otherwise. I refer to paragraphs 1, 2, 3, 4, 5, 6, 7,8, 10, 11, 12, 13, 15, 20, 21 and 22 of the amended statement of claim. They read as follows:
- The plaintiff is a limited liability company with its Port Harcourt office at No. 16 Ohaeto Street, Port Harcourt. Plaintiff carries on mostly the business of importation of cement;
- The 1st defendant is a company registered in Belgium; 2nd defendant is a limited liability company registered in Nigeria and is agent of the 1st defendant in Nigeria;
- The 4th defendant is a company registered in Greece and is the owner and manager of the ship called and known as ”M.V. Cindy”. The 3rd defendant is the captain of the said ”M.V. Cindy”;
- In the month of February, 1977, plaintiff company opened a letter of credit to the 1st defendant company through African Continental Bank, Lagos, for the supply to it (plaintiff) of 18,000 metric tonnes of cement. The said letter of credit No. 710/77 dated 17/2/77 shall be founded upon at the trial;
- The purchase price of the said cement as per the letter of credit and the invoice (dated 23/2/77) is $1,008,000 (One million and eight thousand US dollars) i.e. N800,000.00 (eight hundred thousand Naira);
- The $1,008,000.00 (N800,000.00) covered cost and freight of the cement and delivery was to be in Port Harcourt on liner terms;
- The Bill of Lading covering the consignment of cement was sent to plaintiffs company through African Continental Bank, Lagos and is dated 23/2/77;
- Delivery of the said consignment of cement was to be at Port Harcourt on or before 30/4/77;
- On 20/9/77; 3rd defendant sent a cable message to the plaintiff to the effect that they had instructions not to deliver the cement. On 25/9/77; the 3rd defendant sent a similar message;
- The plaintiff thereafter went to the said M. V. Cindy and held discussions with the 3rd defendant to whom all necessary documents like the original Bill of Lading and Invoices were presented. 3rd defendant still refused to deliver;
- After all efforts to make the defendants deliver the said cement had failed, plaintiff filed this action in court;
- By an agreement dated 9/10/77 made between the plaintiff and representatives of the 4th defendant, it was agreed that plaintiff should take delivery of the cargo to the plaintiffs;
- Plaintiff then made arrangements to take delivery but before it could do so, 3rd and 4th defendants filed a motion to stop plaintiffs taking delivery. The said motion was dismissed and plaintiff subsequently started taking delivery;
- The plaintiff contended that the said ship, M.V. Cindy was to load only plaintiffs’ cement for Port Harcourt but went on to load the said barges, tug boats, cranes and sugar. The said sugar belongs to Nigerian Bottling Company Ltd. Their letter of 21st June, 1977 shall be founded upon at the trial;
- As a result of the extra load on the said ship, many bags of cement were damaged. 100,000 bags were damaged and had to be sold as refills at N1.50 per bag instead of at 3.50 per bag. Loss is therefore N200,000.00.
- Plaintiff further contended that as a result of their delay in delivery, plaintiff had to pay additional bank charges. Amount paid were N60,000.00
Also relevant are paragraphs 4, 6,7, 8, 9, 10, 11, 12, 13, 15, 16, 17, 18, 20, 24, 25, 26 and 28 to 38 of the amended statement of defence of the 3rd and 4th defendants/appellants dated 14/4/78 and filed on 17/4/78. These paragraphs read:
- Save that it is admitted that the 3rd defendant was at all material times, but is not now, the master of the vessel ”Cindy” paragraph 3 of the statement of claim is denied. The owners of the vessel ”Cindy” are and were at all material times Viafiel Companie Naviera S.A. while the 4th defendants are and were their Managers and agents with their authority to defend the claim and raise the counterclaim.
- Paragraphs 5 and 6 of the statement of claim are denied. It is denied that the plaintiff was the owner of or entitled to possession of the cement carried on the ”Cindy” or any part thereof.
- Paragraph 7 of the statement of claim is denied. If the Bill of Lading alleged to cover the consignment of cement herein and said to be dated 23/2/77 is the Bill of Lading exhibited to the affidavit herein of Godwin Ekiyor dated ”Golynia 23/2/77 said Bill of Lading does not and cannot cover the shipment of cement herein as the vesel ”Cindy” was in Lisbon on 23/2/77 and not Gdynia;
- Further and in the alternative, it is denied that the plaintiffs were the endorsees of the Bill of Lading passed upon or by reason of such endorsements. In the premises, it is denied that the plaintiffs have any right whatsoever to sue the defendants in this action;
- Further, it is averred:
(i) That the vessel Cindy did not load cement, or any other cargo at Gdynia at all material times to this case;
(ii) That on the date of the Bill of Lading aforementioned (23/2/77) the Cindy, chartered by 1st defendant from 4th defendant under Charter Party dated 4/2/77 had not been delivered to 1st defendant for the purposes of the charter party, but was discharging cargo of wheat at Lisbon and later at Leixoes, Letter From E. Pinto and Baso 4 Ca, Lda (ship’s agents) to 4th defendants in Piraeus, Greece, dated 17/3/77 will be founded upon so also certificate of survey of the Cindy dated 7/4/77 will be founded upon;
(iii) That the cement carried on the Cindy were in separate bags and not slings as shown in the aforementioned plaintiffs’ Bill of Lading. Defendant will rely on documents signed by plaintiffs’ representatives dated 4/12/77, 6/12/77 and 21/2/78;
(iv) That the aforesaid plaintiffs’ Bill of Lading was neither issued nor signed by the Master of the Cindy or any person authorised by him, the 4th defendant or the shipowners or any person authorised by him, the 4th defendant or the shipowners or any person authorised by them;
- No admissions are made to paragraph 8 of the statement of claim. The defendants are not parties to any contract between plaintiffs and 1st defendant regarding the sale and delivery of any cement.
- Save that it is admitted that the vessel Cindy anchored in Lagos roads on May 21, 1977 whilst awaiting discharging orders, paragraph 9 of the statement of claim is denied. The movement of the Cindy from the port of loading cement (Rostock East Germany) to Antwerp, Lagos and Port Harcourt was as directed by the charterers, their servants or agents. Telex from Mr. Spijkers to 3rd defendants in Rostock dated 18/4/77 will be founded upon; so also the Master’s logbook;
- Further, the defendants say that Waltina Enterprises Limited of 18, Abonema Wharf Road, Port Harcourt acted as charterers’ agents at all times material to this case and were therefore advised as such agents to arrange for discharge of the ship;
- No admissions are made to paragraph 10 of the statement of claim. Further or in the alternative if the defendants refused to deliver the cement to the plaintiff such refusal was entirely lawful.
- Save that it is admitted that the said cement was not delivered to the plaintiffs and that it is averred that any refusal to deliver the said cement was entirely lawful, paragraph 11 of the statement of claim is denied. The plaintiff did not produce the Bill of Lading mentioned to the 3rd defendants or at all.
- Save that it is averred that the refusal to deliver the said cement to the plaintiff was entirely lawful, paragraph 12 of the statement of claim is admitted;
- Save that no admissions are made as to the term or effect of the said 9/10/77, paragraph 13 of the statement of claim is admitted;
- Further, the defendants aver:
(i) That the agreement was signed pursuant to a written undertaking by G. A. Ekiyor dated 9/10/77 on behalf of the plaintiffs;
(ii) That the discharge of all cargo to the plaintiffs (including the sugar not claimed by the plaintiffs) was to facilitate the release of the Cindy then under arrest by order of court on plaintiffs’ ex-parte application, and not in recognition of plaintiffs’ rights to the cement;
(iii) That the defendants at the time of signing the agreement believed Mr. Eddy Ekiyor a Director of the plaintiffs who had visited the 4th defendants in their London Office without title documents to claim the cement and who promised to produce the relevant Bills of Lading later in Nigeria. The afore-said agreement was signed 2 days after the defendants’ arrival in Nigeria when the ship was already under arrest in Port Harcourt, in the belief erroneously as it later turned out that plaintiffs were the receivers of the cargo of cement;
- Thai the defendants further aver that it was only after defendant obtained the court order on 26/10/77 a certified true copy of the motion paper, affidavit and exhibits (including the Bill of Lading dated 23/2/77) to plaintiffs’ ex parte motion for the arrest of the Cindy that the defendant realised for the first time that the plaintiffs were and are not the receivers of the cement on the Cindy;
- The defendants admit paragraph 14 of the statement of claim and aver that the said letter of 12/10/77 and all other instructions to 3rd defendants to discharge the cargo were issued in pursuance of or pursuant to the agreement dated 9/10/77 aforementioned;
- The 4th defendant denies paragraph 15 of the statement of claim and avers that their motion which was granted subject to certain conditions was to release the Cindy from arrest and not ”to stop plaintiff from taking delivery of the cargo” cement;
- Paragraph 16 of the statement of claim is denied. At all times the said cement could be discharged freely or almost freely from the vessel Cindy;
- Paragraph 17 of the statement of claim is denied. If (as to which no admissions are made) the sum of N30,000.00 (Thirty thousand Naira) was paid to McDermott Nigeria Ltd. such sum was not paid outright but was merely paid by way of deposit;
- Paragraph 18 of the statement of claim is denied. The 3rd defendants at all times material to this case acted in the interest and safety of the vessel and all persons on board. The 3rd defendants’ letter to the Acting Harbour Master, Bonny, dated 10/11/77 and the letter from P. K. Hall-Thompson to Waltina Enterprises Ltd. dated 15/9/77 will be founded upon;
- Paragraph 19 of the statement of claim together with the loss and damages therein alleged is denied. If the plaintiff incurred any expenses, the defendants were not responsible for it or at all. The defendants will rely on the ruling of the Revenue Court, Port Harcourt in this case dated 10/11/77;
- Save that it is admitted that the vessel ”Cindy” in fact loaded barges, cranes, sugar and other goods in addition to the said cement, paragraph 20 of the statement of claim is denied;
- Further, the defendants aver that the Cindy was chartered by 1st defendant and not the plaintiff and her movements or what she carried was directed by the charterers or her agents. The defendants will rely on their instructions and particularly on telex by Spijker aforementioned;
- Paragraph 21 of the statement of claim is denied, the defendants will rely on the Tally Sheets and other records of discharge of cargo from the Cindy and particularly on documents dated 4/12/77 and 6/12/77 and 21/2/78 each signed by plaintiffs’ representatives;
- Paragraph 22 of the statement of claim is denied. The defendant however aver that there was delay by the plaintiffs in discharging the ship as directed by this court as aforementioned;
- Paragraph 23 of the statement of claim is denied;
- Save that it is admitted that the plaintiffs have in fact filed this action, paragraph 24 of the statement of claim is denied.
- The 4th defendants are the agents and Managers of the vessel Cindy, which carried 18,000 tons of cement from Rostock to Port Harcourt;
- The Cindy was chartered by the 4th defendant to the 1st defendant under charter-party dated 4/2/77 at a daily rate of 4,050 US dollars per day;
- Clause 18 of the said charter-party provides as follows:
”Owners to have a lien upon all cargoes and sub-freight belonging to the time charter and any Bill of Lading freight for all claims under the charter-party and charterers to have a lien on the vessel for all monies paid in advance and not earned.”
- As at 24/11/77, the outstanding hire-charge on the charter-party was 447,878.75 dollars equivalent to N292,463.69. As at 23/2/78 when the Cindy completed discharge the outstanding hire charge was 816,428.75 US dollars and the hire increases daily by 4,050.00 US. dollar;
- The contract of carriage of the cement was contained in or evidenced by a Bill of Lading dated Rostock 19/4/77 signed by the 3rd defendant on behalf of the owners of the Cindy which Bill of Lading incorporated all the terms conditions, liberties and exceptions contained in the charter-party aforementioned. The original Bills were forwarded to the 1st defendant by the shippers of the cement; 36.
- The said Bill of Lading expressly provided on the face thereof ”freight payable at destination”.
Neither the said freight nor the outstanding hire charge or any part thereof has been paid to the defendants or owners. The outstanding hire charge stands at 816,478.75 US dollars as at 23/2/78 and the freight payable at destination is US dollars 1,008,000.00 less 513,000.00 US dollars, i.e. 495,000.00 US dollars being the difference between the cost of the cement in Rostock and 1,008,000.00 US dollars paid by the plaintiff. The defendants will rely on the invoice by RHEA to the 1st defendant covering the 18,000 tons of cement;
Paragraph 37 pleaded no facts but arguments, so I shall omit it.
- The 4th defendant also claims delivery of the 5 barges, tugboats, motor cranes and spare parts carried by the Cindy by virtue of assignment of the same by the 1st defendant and dated 4th October, 1977.”
It is therefore clear from the pleadings that the issue of liability was very much contested by the 3rd and the 4th defendants now appellants. If the Cindy was on hire to the 1st defendant, who has not appealed and there is a charter-party agreement in evidence; if the 1st defendant gave instructions to the 3rd defendant as to what loads to carry and the barges, cranes and sugar were in addition to the cement cargo loaded on to the Cindy in pursuance of that instruction. I do not see the breach committed by the 3rd and 4th defendants. Further, if the Bill of Lading Exhibit 1 was not signed by the 3rd defendant and if the 1st defendant has failed to pay the cost of hire or hire charge due and was in arrears to the tune of 447,878.75 US dollars or N292,463.69 as at 24/11/77 and 816,428.75 US dollars as at 23/2/78, the 3rd and 4th defendants were entitled to exercise their right of lien notwithstanding that the 1st defendant received the freight charges for the 18,000 tons of cement which he failed to pass on to the appellants by paying the hire charges. What is intriguing is that the Bill of Lading covering the consignment of cement tendered in court Exhibit 1 was not signed by the 3rd defendant who was the Master of the Ship. It also described the cement as packed in 12.857 slings containing 28 bags each when other evidence did not show such package.
If I may refer to the judgment of the learned trial judge, the learned judge cited the dictum of Lord Bramwell in the case of Sewell v. Burdick (1884) 10 Appeal Cases p.74 at p. 105 but which he did not seem to have applied in relating to the case of the appellants. Lord Bramwell said of the Bill of Lading:
”It is a receipt for the goods stating the terms on which they were delivered to and received by the ship, and therefore an excellent evidence of those terms, but it is not a contract. That has been made before the Bill of Lading was given. Take for instance, goods shipped under a charter-party and a Bill of Lading differing from a charter-party, as between shipowner and shipper the charter-party is binding.”
In this case, the House of Lords was examining the Bills of Lading Act 1855.
The learned trial judge heard evidence from 5 witnesses who testified on behalf of the plaintiffs. The number of documentary evidence admitted runs to over 150. The 1st and 2nd defendants filed no defence, entered no appearance and called no evidence. The 3rd and 4th defendants filed a defence and 4th defendant counter-claimed and called evidence in support of the defence and counter-claim. The plaintiffs’ witnesses testified very closely along the lines of the pleadings in the amended statement of claim.
The learned trial judge, making his findings, held that
(1) the plaintiffs showed that they contracted with the 1st defendants for the purchase of 18,000 metric tonnes (360,000 paper bags) of cement and they opened an irrevocable confirmed letter of credit (Exhibit 20) with the African Continental Bank Ltd., Lagos in favour of 1st defendants; and
(2) the African Continental Bank’s correspondent Bank dealing directly with the 1st defendants abroad was the Trade Development Bank in Geneva;
(3) that the transaction was cost and freight contract and the plaintiffs were shown to have complied by paying the cost of the goods and freight;
(4) they (plaintiffs) obtained all the necessary shipping documents including the Bill of Lading (Exhibit”I”) the invoice (Exhibit 2) and the customs Bill of Entry;
(5) that the invoice indicated that the transaction was C & F. contract;
(6) the Bill of Lading Exhibit 1 was duly endorsed by the 1st defendants on page 1 and duly endorsed by the A.C.B. Ltd. on page 2;
(7) that despite the denial of the signature on Exhibit 1 by the 3rd defendant, the signature was shown to have been signed under the provision of Clause 34 of the Charter Party Agreement (Exhibit 29) dated 4th February, 1977 made between 1st defendants and the owners of the vessel ”M.V.Cindy”;
(8) that in the absence of any other Bill of Lading Exhibit 1 is genuine.
(9) that throughout the proceedings no one appeared before the Court (Federal High Court) or on another occasion to claim the cement cargo which plaintiffs had claimed and are still claiming;
(10) that the plaintiffs have sufficiently established their claim to the ownership of the cement and are entitled to the delivery of the cement cargo to them.
It was also established that the 3rd and 4th defendants were under no contractual liability to the plaintiffs. They were bound to the 1st defendant by the charter party Exhibit 29 by which the 1st defendant hired the vessel ”M.V. Cindy” from the 4th defendants principals Viafiel Co. Naviera S.A. (owners of the Cindy). The vessel was to be employed in lawful trades for the carriage of lawful merchandise only between good and safe ports or places where she can safely be always afloat within the following limits:
”T/C Trip out Spain to Nigeria via port(s) in CONT always WIWL;
Cargo: Bagged cement plus 8barges each 70 tons weight (Dim: 40 x 5; 05 x4.5 mtrs.) plus 2 small tugs and/or some small cranes.
Owners guaranteed 6 barges on deck. Without guarantee owners planning place the other two barges diagonally on hatch covers between mast houses at Master’s discretion (length between mast house hold no.2 – is 36 mts). Barges to be loaded on deck at charterers’ risk and expense. Owners guaranteed 21,000 tons DNCC on 27’s w draft”
Clause 13 of Exhibit 29 deals with responsibility and exemptions. It reads:
”The owners only to be responsible for delay in delivery of the vessel or for delay during the currency of the charter for loss or damage to goods, if such delay or loss has been caused by want of due diligence on the part of the owners or their managers in making the vessel sea worthy and fitted for voyage or any other personal act or omission or default of the owners or their manager.
The owners not to be responsible in any other case nor for damage or delay whatsoever howsoever caused even if caused by the neglect or default of their servants …”
With the existence of such a term in the charter party contract, there is no basis for the award of damages, general or special against the 3rd and 4th defendants. The Bill of Lading is no contract between 3rd and 4th defendants of the one part and the plaintiffs of the other part. It imposes no contractual obligation on the 3rd and 4th defendants apart from obligation as a bailee of goods. No date of delivery of the cement was expressly stated thereon.
A Bill of Lading is a receipt for goods stating the terms on which they were to be delivered to and received by the ship. It provides excellent evidence of those terms but it is not a contract. (See Sewell v. Burdick (1884) 10 App. Cases page 74 at p.105.)
As in the instant appeal where goods are shipped under a charter party and a Bill of Lading differing from the charter party as between the shipowner (4th defendant) and the shipper (1st defendant), the charter party is binding. Even then, on the issue of delay complained of in the instant appeal, Clause 13 of the conditions at the back of Exhibit 1sets out the condition for liability. It reads:
The carrier shall not be responsible for any loss sustained by the merchant through delay of the goods unless caused by the carriers’ personal gross negligence.”
It does appear from Exhibits 3, 4, 5, 16 that 3rd and 4th defendants acted strictly in accordance with the charter party as 1st defendant was in default in payment of cost of hire.
The irrevocable letter of credit Exhibit 20 only bound plaintiffs and 1st defendant. It created a C & F contract which was binding on 1st defendant. By the C & F contract, plaintiff has to pay the price to cover cost, insurance and freight to 1st defendant on acceptance or receiving shipping documents. There is evidence that 3rd and 4th defendants complained of non payment of cost of hire. Explaining the meaning of the C & F contract, Lord Blackburn in the case of Ireland v. Livingston (1972) LR. 5 HL 395 said:
”The terms at a price ”to cover cost, freight and insurance, payment by acceptance or receiving shipping documents” are very usual and are perfectly well understood in practice. The invoice made out debiting the consignee with the agreed price (or the actual cost and commission, with the premiums of insurance and the freight as the case may be) and giving him a credit for the amount of freight which he will have to pay to the shipowner and after delivery and the balance of draft is drawn on the consignee which he is bound to accept (if the shipment be in conformity with his contract) on having handed to him the charter party, Bill of Lading and Policy of Insurance.”
In view of the agreement in Exhibits 3, 4, 5, 6 and 16, the 3rd and 4th defendants have conceded the claims in items 1(a) and 1(b) and 2 of the items of claim and the issues in respect of those claims were no longer issues for decision. Exhibits 4 is a telegram (of which Exhibit 3 was a copy) which was sent to the plaintiffs by the 3rd defendant that his operators L & W Shipping Agency, i.e. 4th defendant has instructed him not to commence discharge due to the fact that already two months hire remains unsettled. This was copied to the 1st defendant who hired the vessel and the 4th defendant.
Exhibit 5 is an agreement dated 9th October, 1977 between the plaintiffs and the 4th defendant that the 4th defendant had agreed to discharge all the cargo on board M. V. Cindy including 18,000 metric tons of cement and deliver the said cargo to plaintiffs and that further negotiations go on while the discharge continues. Both parties agreed to make it an interim order of the court and apply to court for adjournment of this matter.
Exhibit 6 is a letter forwarding a copy of the agreement to the 3rd defendant and instructing 3rd defendant to take all measures to discharge the cargo without prejudice to the owners’ right under the charter party, Exhibit 29 and to have regard to Clause 18 of the said charter party. Exhibit 16 is the letter from the plaintiffs to the 4th defendants requesting 4th defendant to deliver cargo to them.
”We desire that you give instruction to the Master to proceed at once with the discharge of all the cargo on board M.V.Cindy including the 18,000 metric tonnes of cement to us.
We undertake that all the bills of lading with all support documents will be available to you before completion of the discharge of the cargo.
We hereby agree that in consideration of your delivering up to us the cargo of cement on board M/V Cindy we hereby agree that all discharging costs, port charges and other expenses incurred in the unloading of all the cargo on board M/V Cindy excluding the deck cargo of five barges, two cranes and tug boats shall be for our account and discharged at our own risk.”
Exhibit 7 is the bill of lading in respect of two used cranes shipped by 1st defendant and subject to the terms and conditions of the charter party Exhibit 29. Exhibit 8 is the bill of lading in respect of 5 used barges and I used tugboat shipped by 1st defendant and subject to the terms and conditions of the charter party dated 4.2.77, Exhibit 29. They were shipped on deck at shipper’s risk. Clause 18 of the charter-party Exhibit 29 reads:
”The owners” (i.e. 4th defendants in this matter)”
to have a lien upon all cargoes and sub freights belonging to the Time charterers and any bill of lading freights for all claims under the charter and the charterers to have a lien on the vessel for all moneys paid in advance and not earned.”
It is significant that in Exhibit 1, Exhibit 7 and Exhibit 8 (all three bill of ladings) the space for shipper was filled as CIA Kos International, i.e. the 1st defendant whereas the space for consignee was filled as ‘ORDER’, i.e no name was inserted in the space while notify address on Exhibit 1 was stated as ‘Ekimpex Ltd., 8 Ikorodu Street, Box 2046, Fadeyi, Lagos, Nigeria, that on Exhibits 7 as well as Exhibit 8 was stated as S. B. Shipping Agencies Ltd. 18/20 Rhodes Crescent Apapa-Lagos-Nigeria. However, in Exhibit 1 in the space for freight, details, charges etc. there is a stamp which reads:
”Deliver to M.S. Ekimpex Ltd. or Order” and signed for and on behalf of African Continental Bank Ltd. by the Manager and Accountant.
However, Exhibit 18 the invoice issued by 1st defendant dated 23/2/77 shows that payment for the consignment in Exhibit 1 was paid for by letter of credit issued by the African Continental Bank No. HW.710/77.
Paragraph 10 of the amended statement of defence clearly denies the existence of any contractual relationship between the plaintiffs and the 3rd and 4th defendants. It reads:
”No admissions are made as to paragraph 8 of the statement of claim. The defendants are not parties to any contract between the plaintiffs and the 1st defendant regarding the sale and delivery of any cement.”
More explicitly, paragraph 11 pleads as follows:
”Save that it is admitted that the vessel ”Cindy” anchored in the Lagos roads on May 21, 1977 whilst awaiting discharging orders, paragraph 9 of the statement of claim is denied. The movement of the Cindy from the port of loading cement (Rostock, East Germany) to Antwerp Lagos and Port Harcourt was as directed by the charterers, their servants or agents. Telex from Mr. Spykers to 3rd defendants in Rostock dated 18/4/77, will be founded upon. So also the Master’s logbook.”
It does appear that as against the 3rd and 4th defendants, the plaintiffs/respondents discharged its onus of proof only in respect of items 1(a) and 1(b) and 2 of the claim. However, in respect of the claims in items 3 and 4, the plaintiffs have totally failed to discharge the onus of proof to establish the liability of the 3rd and 4th defendants in damages either in contract or in tort.
The plaintiffs/respondents cannot properly found their action against the 3rd and 4th defendants in contract and tort of detinue. There was no evidence that the said ship MN Cindy was to load only plaintiffs’ cement for Port Harcourt as pleaded in paragraph 20 of the amended statement of claim. The letter dated 21st June, 1977 on which the plea was founded was not produced. Likewise, there was no evidence to support the allegation in paragraph 21 that it was as a result of the extra load on the said ship that many bags of cement were damaged as pleaded in paragraph 21 of the statement of claim. There was no evidence of date on which the cement was to be delivered to support the pleading. There was no evidence of breach of contract by the appellants and there was no evidence to support the action in detinue, if any. Exhibit 16 set out above completely destroys the contention of the plaintiffs. So does Exhibit 29.
The plaintiffs/respondents have by their claim sought to recover from the 1st and 2nd defendants for breach of contract of sale and recovered.
In respect of the same goods, the plaintiffs seek to recover from the 3rd and 4th defendants for breach of contract of affreightment evidenced by the Bill of Lading Exhibit 1 issued by the principals of the 4th defendants. Breach of contract by the 1st defendant as seller and the 2nd defendant as his agent.
It is settled law that in the event of breach of contract by the seller in failing or refusing to ship the goods or tender valid documents, the buyer has his remedies in an action for damages for non-delivery. The time or times when the goods ought to be delivered in a C.I.F. contract means the time or times when the documents (which represent the goods) would have been tendered to the buyer, if the seller had shipped at the agreed time and sent the documents to the buyer with all reasonable diligence. The seller said Scrutton, J. in Landauer & Co. v. Craven & Speeding Bros. (1912) 2 KB 94 at p.105 must as soon as possible after he has sent forward the cargo ”send the documents to the vendee or consignee”. He is bound to tender the documents to the buyer ”within a reasonable time” after shipment, said Lord Birkenhead and ”with all reasonable dispatch” said Lord Atkinson in Johnson v. Taylor Bros. & Co. (1920) AC. 144 at pp.149, 156.
The documents must be valid, and effective at the time of tender. The validity of Exhibit 1, the Bill of Lading was challenged by the 3rd and 4th defendants/appellants but the learned trial judge held it was genuine. Since the learned trial judge proceeded to find the 1st and 2nd defendants liable on the claims and condemned them in damages, is it to be inferred that the learned trial judge treated 1st and 2nd defendants as carriers or that the bill of lading Exhibit 1 was in truth and in fact not genuine It has long been common practice for bills of lading to be drawn in sets usually of three parts but sometimes of more. These were dispatched for safety by different routes to the buyer. Often the seller or shipper kept a part to himself. The 1st and 2nd defendants ought therefore to have had a copy in their possession but did nothing to effect delivery of the goods to the plaintiffs till the action came to court. They did not contest the suit either. They did not also contest the allegations in the defence of the 3rd and 4th defendants that they were the charterer of the vessel Cindy and that they were in default of the hire charges. They did not contest the defence of the 3rd and 4th defendants that by the terms of the charter-party and the instruction of the 1st defendants cranes, barges and tugboats were loaded in addition to the cement consignment on the Cindy. They did not contest the defence that by the terms of the charter party, the 3rd and 4th defendants were not liable for the delay complained off. They did not contest the defence that there was another set of bills of lading signed by the 3rd defendant which made freight payable at destination. Where, therefore, a seller is before the court in the circumstances in which the 1st and 2nd defendants find themselves at the suit of the buyer and the bill of lading in the hands of the buyer is impugned by the shipowner and the master the failure of the seller to support the genuiness of the bill of lading is fatal to the buyer’s claim against the shipowner because a bill of lading in the hands of the buyer is supposed to have been sent by the seller. The Bills of Lading Act 1855 an English Statute applicable in this matter, enables the consignee or assignee of goods to sue in all respects as if he was the shipper of the goods. The effect of the Act is to assign the contract of affreightment to the assignee of the bill of lading who takes the property for section 1 of the Act provides:
”Every consignee of goods named in a bill of lading, and every endorsee of a bill of lading, to whom the property in the goods therein mentioned shall pass upon or by reason of such consignment or endorsement, shall have transferred and vested in him all rights of suit, and shall be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.”
It has long been the position for the holder of a bill of lading to be able to pass the property in the goods to an -assignee by endorsement and delivery thereof. [See Lickbarrow v. Mason (1787) 2 T.R. 63; Smith’s Leading Cases 13th Ed. Vol. 1 p.731].
There are however two qualifications to the above statement. The property passes in the goods not by mere assignment and delivery of the bill of lading, but by the contract between the assignor and assignee by which it is intended that the property should pass [Sewell v. Burdick (1884) 10 AC. 74 at 105]. The passing of property by such an assignment did not, however, confer upon the assignee any rights in connection with the contract of carrriage; he could not sue upon the contract of carriage nor was he liable under it. His remedy in the case of the goods being lost or damaged lay against the assignor [see Sasson CIF and FOB Contracts 3rd Edition p.132 para. 160 British Shipping Laws Vol. 5]. The courts did, however, assist an assignee, who presented a bill of lading to the shipowner and paid the freight, for it has
been held that delivery and acceptance of the goods in such circumstances constitute acts from which a contract can be inferred that the goods shall be delivered in accordance with the terms of the bill of lading [Barber v. Meyerstein (1870) LR. 4 H.L. 317]. This is normally true if there is a contract with the carrier, i.e. if the delivery order is issued by the owner (or in appropriate cases, charterer) of the vessel or on his behalf and incorporates the terms of the bill of lading. The principle has no application where the delivery order is issued by the seller, for such a document confers no rights against the carriers. And in absence of an attornment by the latter, no rights of action against him can be sustained.
The learned trial judge held that Exhibit 1 was signed under a clause in the charter party Exhibit 29. If Exhibit 1 was signed in pursuance of the provision of the charter-party, Exhibit 1 cannot escape being governed by the other terms of the charter-party and the plaintiffs’ rights of suit against the 3rd and 4th defendants are the rights of suits vested in the 1st defendants by virtue of the charter-party Exhibit 29. If the right of suits had been validly transferred from 1st defendants to the plaintiffs, the plaintiffs would not have been able to recover damages against the 1st defendants for the non delivery, the delay in delivery of the cement and for the damaged bags.
The successful prosecution of the claims against the 1st and 2nd defendants estops the plaintiffs from recovering damages from the 3rd and 4th defendants.
Having dismissed the contention of the plaintiffs that the 3rd and 4th defendants are liable to pay damages for the delay in delivering the consignment of cement, it will not be necessary for me to deal with the assessment of damages under the various heads in items 3 and 4 of the claim. As against the 3rd and 4th defendants, all the amounts assessed and awarded as damages are hereby set aside.
On the counter-claim, the 4th defendant alleged that had the plaintiffs discharged the cement at the agreed rate of 800 tons a day, the discharge should have been completed on 15/12/77 having commenced on 3/12/77. The discharge was not completed till 23/2/78. Therefore, the 4th defendants claimed US 8,000.00 per day which totals $495,000.00, i.e. N308,930.31 as unpaid freight; the cost of delivery to them of the 5 barges, 1 tug boat and 2 molar cranes or N500,000 being their value; a lien on the 18,000 Ions of cement or N320,164. 76 being its value and finally, N1,000,000.00 as general damages.
Learned counsel for the appellants quite properly submitted that the ship was chartered by the 1st defendant and by the terms of the charter party Exhibit 29, it was the 1st defendant who could control what it carried as well as its movement. The order of court arresting the ship it was contended by the appellants, contributed to the delay. It is amazing that the 1st and 2nd defendants never contested the plaintiffs’ claim. As the beneficiary in the letter of credit Exhibit 20, they were the contracting parties to the sale and shipment of the consignment of the cement. It is they who took the plaintiffs’ money. It was they who hired the ”MN Cindy”. Having hired the boat, the 1st defendant was the carrier of the goods by sea whom the plaintiffs can lay hands on. The 1st defendant is also bound to the 4th defendant by contract
the charter party Exhibit 29. The plaintiffs as rightly observed by the learned trial judge and the learned Justices of the Court of Appeal, are no parties or privies to the contract charter party Exhibit 29. Not being parties, they are not bound by any of the conditions stipulated in the contract. They are not bound to pay the cost of hire put at US $8,000 per day and for the period amounting to US $495,000 or N308,930.81. The 5 b
rges, one tug boat and 2 motor cranes according to the 3rd defendant belonged to the 1st defendant. They shipped them and were to pay the freight. I cannot find any proof of the plaintiffs’ liability for the cost of delivering them to the plaintiffs. I think the counter-claim was properly dismissed. Wisely, the 4th defendant has not appealed against the judgment on the counter-claim. As regards the cross appeal, I find that the decision of the Court of Appeal was in relation to the appeal brought to it by the 3rd and 4th defendants. The judgment of the Court of Appeal against the 1st and 2nd defendants still stands. The issues of liability of the 3rd and 4th defendants to pay damages having been resolved in their favour, the error clearly highlighted in the assessment by the Court of Appeal of the quantum of loss of profit resulting from the fall in price of sound bags by 50k and damaged bags or refills by N2.00 cannot succeed against them.
As the 1st and 2nd defendants did not appeal, the N200,000.00 award for loss of profit on damaged bags set aside by the Court of Appeal still stands against them and they remain liable to pay it.
All the damages and costs awarded against the 3rd and 4th defendants which total N506,358.96 are hereby set aside and the appeal succeeds. The cross appeal fails. The appeal is allowed. The damages, special and general damages amounting to N506,358.96 inclusive of costs awarded against the 3rd and 4th defendants/appellants by the Court of Appeal are hereby set aside.
The claim in respect of damages against the 3rd and 4th defendants/appellants is hereby ordered to be dismissed and is hereby dismissed. Costs to the 3rd and 4th defendants/appellants is assessed at N300 in this Court and N250.00 in the Court of Appeal.
M. L. UWAIS, J.S.C.: I have had the opportunity of reading in draft the judgment read by my learned brother Obaseki, J.S.C. I entirely agree with the judgment.
Accordingly, the appeal succeeds and the cross-appeal fails. I abide by the orders contained in the said judgment.
S. KAWU, J.S.C.: I have had the advantage of reading, in draft, the judgment of my learned brother, Obaseki, J.S.C. which has just been delivered. I entirely agree with his reasoning and conclusions and it is for those reasons set out in the judgment that I too will allow the appeal and dismiss the cross-appeal.
I abide by all the consequential orders made in the lead judgment including the orders as to costs.
A. B. WALI, J.S.C.: I have had the privilege of seeing before now, the judgment of my learned brother, Obaseki, J.S.C. and I entirely agree with the reasoning and the subsequent conclusions. For those same reasons which I hereby adopt as mine, I abide by all the orders made in the lead judgment, that of costs inclusive.
E. B. CRAIG, J.S.C: I have had the privilege of reading in draft, the judgment just delivered by my learned brother, Obaseki, J .S.C., I agree with his reasons and conclusions which I adopt as mine and have nothing which I can usefully add.
I too would allow the appeal and make the same consequential orders as contained in the lead judgment.