John Holt & Co. Ltd Vs Jonas N. Ezeuko (1975)
LawGlobal-Hub Lead Judgment Report
S. SOWEMIMO, J.S.C.
On 17th May, 1973, Agbakoba, J., sitting at the court of the Onitsha Judicial Division, East Central State, gave judgment in favour of the plaintiff, respondent before us, in the following terms:-
“In the final result I would say that plaintiff is entitled to credit of the value of 361 bags of produce at 2:8:6d. There was no contest as to the price of each bag. Item 1 therefore partially succeeds not on the strength of plaintiff’s case but on the reliability which I place on Exhibit B produced by the defendant. This would amount to a sum of 675:8:6d. The plaintiff succeeds on his own case in item 4 which is 18:2:6d, bringing the total to 893.11. The plaintiff is indebted in the sum of 224.17.1d to the defendant. The balance payable to the plaintiff by the defendant is 668.13.11d.
There will be no order as to costs. The partial success of plaintiff’s case depended on the view which I took of Exhibit B. The plaintiff neither founded his case on Exhibit B nor did learned Counsel rely on it.”
The claim before the learned trial Judge is:-
“18. WHEREFORE the plaintiff claims from the defendant the sum of 4,332.18.11d (Four Thousand, Three Hundred and Thirty Two Pounds, Eighteen Shillings and Eleven Pence) being money payable by the defendant to the plaintiff which amount constitutes plaintiff’s cash deposit and commission with the defendant as per account stated by the defendant dated the 16th of March, 1971 which said sum the plaintiff has requested but the defendant has refused and/or neglected despite repeated demands.”
It may be convenient at this stage to set out the counter-claim filed by the defendant company, now appellant before us, which is:-
“17. The defendant counter claims against the plaintiff the sum of 4,557:16 being money had and received by the plaintiff to the use of the defendant.”
We wish to draw attention to the provisions of the rules governing trial by pleadings and judgment thereon. We refer in this regard to the following rules in Order 33 of the High Court Rules of the High Court of East Central State Cap 61 volume 4 of the Laws of Eastern Nigeria 1963, Page 1618 at seqq:-
“1. In all suits written pleadings shall be ordered by the court unless the court considers in any particular suit that written pleadings are unnecessary.
“5. Every pleading shall contain a statement of all the material facts on which the party pleading relies, but not the evidence by which they are to be proved, such statement being divided into paragraphs numbered consecutively; and each paragraph containing as nearly as may be a separate allegation.
“6. The facts shall be alleged positively, precisely and distinctly, and as briefly as is consistent with a clear statement.
“7. Every statement of claim shall state specifically the relief which the plaintiff claims, either simply or in the alternative, and may also ask for general relief, and the same rule shall apply to any counter-claim made or relief claimed by the defendant in his defence.
“8. Where the plaintiff seeks relief in respect of several distinct claim of causes of complaint founded upon separate and distinct facts, they shall be stated, as far as may be separately and distinctly. The same rule shall apply where the defendant relies upon several grounds of set-off or counter-claim founded upon separate and distinct facts.
“9. The defendant’s pleading or defence shall deny all such material allegations in the petition as the defendant intends to deny at the hearing. Every allegation of fact, if not denied specifically or by necessary implication, or stated to be not admitted, shall be taken as established at the hearing.”
On the triable issue the learned trial Judge had this to say:-
The defendant company raised a counter’ claim of 4,557:16. In its statement of defence, the defendant company admitted plaintiff’s claim but contended that upon the counter claim the plaintiff would be indebted to the defendant in the sum of 224:17:1d and it is in respect of this debit balance that the defendant Company asks for judgment. The plaintiff does not dispute that he owes the sum of 4,557;16 to the defendant company but contends that that sum of money was expended by him in the ordinary course of business in the purchase of produce and other necessary expenses for the defendant company.
“The sole issue for consideration is: Has the plaintiff proved his case, if so, to which extent has he done so. But in another form, has the plaintiff proved that he expended the sum of 4,557:16 on behalf of the defendant company The plaintiff gave evidence of the day to day routine employed in the purchase of produce, The last date an official of the defendant company Mr. Onu visited and checked his stock of produce, money and equipment was the 13th of September, 1967. As usual the official and the plaintiffs signed the produce buyers Register put in evidence as Exhibit B. On this date Exhibit B showed a debit balance of 3,286.10 against the plaintiff. Between that date and the 18th of October, 1967, when the plaintiff fled from Calabar, he received remittances totalling 3,000. Actually 1,000 was in transit on the check date but for purpose of accounting this sum was regarded by both sides as having been remitted after 13th September, 1967. Credits to the plaintiff not being his commission and the security deposit accounted for the reduction of the debit balance to 4,557.10.
“The plaintiff described in some detail the purchases he made against this debit balance. He claimed that his beach recorded the highest and heaviest produce transaction. Bags were not available and so he could not grade his produce until the 15th of October which continued till the 17th of October 1967. He said 1,555 bags were graded at 2.8.6d each totalling 3,770.17.6d and 10 drums of palm oil were stocked at a total cost of 167.16.6d. P.W.1, C.Enemuo, the plaintiff’s storekeeper, who had served him for 41/2 years gave evidence substantially to the same effect. There was only one noteworthy point of material difference and that was plaintiff’s positiveness that he gave new bags to customers to bring in produce; P.W.1 said new bags were not and were never given to customers; indeed his evidence was that bags, whether new or old, were never given to customers; they bring their produce in their old bags of various sizes. Plaintiff, continuing his evidence, said that as grading of produce was in progress Federal troops occupied Calabar on 18th October, 1967. That morning he was unable to reach the beach.
He had not delivered any of the 1,555 bags of grades produce or the 10 drums of palm oil to the Marketing Board or B.O.P. He left all supporting documents and other official papers at the beach. He had the sum of 426Pounds in the safe at the beach provided by the defendant company. All these were lost because the beach was inaccessible on the morning of the 18th of October and he abandoned his futile attempt half way through to the beach. After the plaintiff had settled down, he wrote the defendant on the 8th of December 1967, Exhibit M. Later the plaintiff prepared a statement of account, Exhibit D, as he said, from memory. Although Exhibit D is not the foundation of plaintiff’s claim, he used it as evidence to support expenses made by him on behalf of and chargeable against the defendant company. He would therefore succeed only if he could prove the expenses shown therein. There are seven items either of expenditure incurred or of money paid on behalf of the defendant company or lost in the course of execution of the defendant company’s business; it would be necessary to examine these items one by one.”
It is obvious that the learned trial Judge hereby considered a defence not raised in the pleadings to the counter-claim made by the defendant company. Evidence was received on behalf of the plaintiff on seven items of claim intended to offset not only the debit balance but raising another claim not pleaded. In his examination of this further evidence, the learned trial Judge held that, although the plaintiff alleged that 1,555 bags of palm kernels and ten drums of oil were bought for the defendant company and lost due to military action at the beach where they were kept, it was established only 361 bags of palm kernels were graded and lost due to military action. He therefore, decided the defendant company must be held liable for the loss. In coming to this conclusion the learned trial Judge observed as follows:-
“Having accepted the evidence of P.W.3 who is an independent witness, that the produce inspector grade about 400 bags, it follows that I will find that the 361 bags graded produce were in the beach.
Under the agreement advances made to the plaintiff by the defendant company and produce bought with money so advanced and every equipment supplied to the plaintiff remain the property of the defendant in the custody of the plaintiff. It follows that the 361 bags of graded produce are the property of the defendant. The plaintiff fled from Calabar on the 18th of October,1967 and abandoned the 361 bags at the beach on the approach of Federal troops which occupied Calabar the same day. By clause 6(b) of the agreement if the plaintiff delivered the produce to the Marketing Board or B.O.P. he would be entitled to credit for the value of the produce so delivered. Learned counsel for the defendant submitted that there was clearly a default and non-compliance with clause 6(b) disentitled the plaintiff to credit and he further urged that the plaintiff cannot shelter behind the theory of frustration of contract by supervening impossibility occasioned by military action, because there was no exception clause to that effect.
Learned counsel for the plaintiff who raised frustration by supervening impossibility relied on the rule laid down in Fibrosa Spolka Akoyjna v. Fairbairn Lawson Combe Barlour Ltd. (1942) 2 All ER 122. I do not think the rule in Fibrosa’s case applied; first, in this case the produce was not in transit, if anything, it was abandoned and destroyed by Military action; Secondly, neither party seeks to recover a sum of money from the other. All that the plaintiff claims is for credit against money advance so as to reduce his liability to the defendant who resists the claim. There is however no element of unjust enrichment as also in Fibrosa’s case. The question which falls for decision is which of the parties should bear the loss. The agreement did not regulate the rights and liabilities of the parties in the event of third party hostile act adversely affecting the property of the defendant in the possession and custody of the plaintiff. In the absence of any express term the court will imply a term objectively reasonable in all the circumstances of the case, the test being what the parties would have agreed if the situation had been present in their mind. It seems to me that in this respect no distinction could be drawn between property, like produce, purchased with defendant’s money and property such as equipment supplied by the defendant.
If there was a store-breaking in which the defendant’s safe was stolen, that would be a third party hostile act. In the absence of fraud or negligence, I do not think that the loss will lie with the plaintiff. There was no suggestion of fraud or negligence in the instant case. I do not think a distinction can be drawn between a third party’s hostile act by store breaking and stealing and a third party’s hostile act by military action. I therefore hold that the loss of the 361 bags of produce by military action should lie with the defendant company and accordingly the plaintiff will be entitled to credit for their value.”
It is against this judgment that the defendant company has lodged this appeal.
The three grounds of appeal argued before us read:-
“1. The learned trial Judge erred in law to have credited to the plaintiff with the sum of 675:8:6d being the value of 361 bags of graded produce at 2:8:6d a bag contrary to the Agreement between the parties and particularly as the plaintiff bought produce with Defendant’s money. The plaintiff would only be entitled to a commission on 361 bags of graded produce delivered at the delivery point in accordance with paragraph 7 (b) of the Agreement.
- The learned trial Judge misdirected himself when he held and assessed the value of 361 bags of produce at 2Pounds:8:6d a bag and contended that there was no contest as to the price of each bag. When in his judgment the learned trial Judge had earlier held that “the defendant company denies that the plaintiff bought produce and further that if he did, he had not complied with the requirements of the written agreement between the parties to make the defendant company chargeable therewith”. The learned trial Judge thereby contradicted himself.
- The learned trial Judge misdirected himself after holding thus:-
“Item 1 concerns the purchase of 1,555 bags of Palm Kernel at a total cost of 3,770:17:6d. The plaintiff recalled this figure from memory. The produce was bought in October 1967, Exhibit “D” was made in 26/8/71 etc. “Having watched the hesitant attitude of the plaintiff & P.W.1 in the witness box during cross examination I am certainly not in a position to find on the fact in respect of this item in favour of the plaintiff without independent reliable evidence”. Their evidence of purchase of produce if true could have been fortified by evidence of some of the plaintiff’s customers between 14th September and 17th October 1967″. And after holding that produce was brought in by customers in their old bags of various sizes. And for the learned trial Judge to proceed to assess and value the 361 bags at 2:8:6d per bag which are part of item 1 in Exhibit “D” prepared from memory without independent evidence of price of purchase would amount to a misdirection.”
In arguing these three grounds together learned counsel for defendant company submitted that plaintiff did not use his money in purchasing the 361 bags of palm kernels. The learned trial Judge seemed to have made up the case on the basis of the 361 bags of palm kernels which neither party pleaded or canvassed before him. Section 6(a) & (b) of the Agreement between the parties reads:-
“6(a) the Company will pay to or credit the Trader for each and every ton of produce delivered by the trader to the company’s delivery point at Nwaniba/Board Stores/B.O.P. Calabar the official price (grade by grade) per ton delivered at such place as mentioned by the Eastern Region Marketing Board in the Eastern Region Gazette for the current buying season.
(b) For each ton of graded produce sold by the trader to the company the company will pay to the Trader or credit him with a commission of 5/- (FIVE SHILLINGS) and 20/- (Twenty Shillings) per ton on PK & P.O. respectively but such commission will not be payable by the company until the trader has balanced his produce trading account with the company for the current and all previous buying seasons and has paid to the company all debts that he owes to the company in respect of all trading transactions with the company of whatever kind including debts statute-barred and the company may use any money owing to the trader by the company in respect of such commission to pay any such debts owing by the trader to the company.”
In view of the above, the plaintiff is only entitled to the commission on purchases which had been delivered in accordance with subsection (1)(a). The plaintiff is entitled to such commission alone and the judgment should have been based only on that. We are of the opinion that the learned trial Judge was wrong to have given judgment for the value of 361 bags of palm kernels which the plaintiff never claimed, because he never used his money in purchasing any quantity of produce. His entitlement is restricted to commission made on purchases as provided in section 6(b) or Exhibit A. Learned counsel for the respondent referred us to Section 4 of Exhibit A. The plaintiff did not claim anything under that clause and the learned trial Judge did not base his judgment on that clause at all. Learned counsel for the appellant had suggested an amount that the respondent would have been entitled to as commission, but counsel for the respondent made no comment on that; and if we are so minded to give judgment for that amount we shall be doing so without the respondent having been heard thereon. We are, therefore, of the opinion that the learned trial Judge had based his judgment on a claim not canvassed by either party before him.
The appeal, therefore, succeeds and it is allowed. The judgment of Agbakoba, J., delivered on 17th May 1973, at the Onitsha High Court in favour of plaintiff/respondent is hereby set aside. In substitution therefore we enter judgment in favour of the defendant/appellant and dismiss the plaintiff/respondent’s claim in the High Court except for the amount of 18.2.6d on item (D) which was not challenged before us. Costs assessed at 209 Naira in this court and 70 Naira in the High Court are hereby awarded to the appellant company against the respondent. This shall be the judgment of the court.
Other Citation: (1975) LCN/2045(SC)