Mandillas and Karaberis Ltd. v. Chief Yesufu D. Otokiti (1963)

LawGlobal-Hub Lead Judgment Report

BAIRAMIAN, F.J.

The plaintiffs have appealed, and the defendant has cross-appealed, from the judgement in the Benin Suit No. 27 of 1957 given on 8th November, 1960.
The parties entered into a contract on the 5th November, 1953, in relation to the defendant’s concessions in the Forest Reserve, with a view to his giving the plaintiffs all the logs he extracted.

There is in evidence an agreement in writing Exhibit A, put in by consent at the trialwhich recites that the company advanced a loan of #31,800 in timber vehicles, to enable the defendant to exploit his timber concessions, fell timber and supply on sale all the timber to the company; the next recital mentions the concessions, which cover about 150 square miles, and the terms of agreement follow in regard to the timber to be supplied to the plaintiffs at their beach and the prices to be paid; and the defendant was to repay the loan of #31,800 in logs within six months. The final clause is that the agreement was to endure for five years, but could be terminated on twelve months notice, which, however, if given by the defendant, would not take effect until his account was completely balanced.

In addition to giving the defendant two Lorries on credit, the company gave him money for his forest permit and made also other cash advances to him; they supplied him with petrol, tyres, and tubes, and they repaired his lorries on credit. He supplied logs, but not in sufficient quantity, and his debit mounted, so the plaintiffs decided when the six months or so were over, that they would give him no more credit. He had some logs felled and lying in the forest, but was unable to spend the money for taking them to the waterside.

The plaintiffs considered whether it was worth their taking the logs to the waterside themselves, but it seems decided against it. Moreover, the Lorries needed over hauling, and the defendant took one to the Benin garage in November, 1954, and the other in February, 1955. He wanted them repaired on credit, but that was refused. He had no money to have them repaired elsewhere, and left his Lorries in the garage which was an open air garage.

The plaintiffs wished him to take them away. Eventually, near November, 1956, he wished to remove them; there is a letter from the company to him, dated 13th November, 1956, in which he is told that he had always been and still was at liberty to remove them. When his agent went to do so, the Lorries could not be found. There was conversation between the parties. He claimed #31,200 as value and a vast amount as damages. The plaintiffs wrote in January, 1957 that they were willing to pay what they thought was the value #3700 but no more. Early in April, 1957, the plaintiffs sued for #33,238’17.7d “being debt owed by the defendant” .

The Statement of Claim avers that the plaintiffs sold two Lorries on credit, and supplied petrol, etc., and made cash advances against logs; also that they repaired the Lorries on credit. Two accounts were annexed to it.

The Defence denies the accounts and goes on to allege an oral agreement between the parties as having been entered into on the 5th November, 1953, the terms of which are similar to those set out in the written agreement of that date-Exhibit A-with, however, these additions:
“The plaintiff shall advance all monies necessary for the manufacture of the logs either in cash or in kind including:
(i) The value of 2 Austin ex army type Lorries B 1505 and B 1506 at #3900 each and the cost of repairs to these lorries.
(ii) The official fee payable as royalty for licence to fell timber and
manufacture logs in a Forest Reserve.
(iii) The cost of  labour and material necessary for felling and evacuation of logs from the Forest Areas BC, BC15/2 and BC3/1 respectively to the plaintiff’s beach at Sapele.
(iv) The plaintiff shall make these money advances aforesaid throughout the 5 years period as and when necessary and requested so to do.
(v) The defendant shall pay for these money advances by the supply of logs and shall supply logs to the value of not less than ‘a3300 in each of the first six months commencing on the 5th day of November, 1953 in liquidation of the value of the two Austin lorries B 1505 and B 1506. and thereafter the said lorries shall become his bona fide property.”

The defence goes on to admit taking the lorries as a credit of #3 1,800, and two cash advances amounting to #3450, alleging it was pursuant to that oral contract; a number of pages of narrative follow, and then comes a counter claim partly about the lorries and partly about the logs left in the bush, and about a few items of credit due to the defendant.
The plaintiffs’ reply is a denial of the oral agreement alleged with sundry other denials.

Before the trial the defendant amended his counter-claim, to add claims, both for general and special damages, for breach of contract.
Neither party referred to the written agreement, Exhibit A, but on the day of trial it was put in by consent, together with some other documents, before the hearing began.
Giving evidence in chief, the defendant said that after signing Exhibit A he took it home and had it read to him; he discovered it did not contain all that had been agreed, and told one Mr Karaberis about it, but supplied logs in accordance with the agreement in Exhibit A.

The judgment begins with the pleadings, then deals with the 3 plaintiffs’ claim and the evidence, which it says is not in accordance with their pleading:- they did not plead Exhibit A-and on the authority of Adenuga v. Lagos Town Council, 13 W.A.C.A. 125, decides that the plaintiffs’ “present” claim must fail and it is dismissed.

The judgment then goes on to the defendant’s case and refers to the recitals in Exhibit A; it says that upon consideration of all the evidence:-
“There was an agreement between the parties for the plaintiffs to advance the defendant with loans in cash and in kind to exploit both concessions in the interest of both parties for a period of 5 years certain”
It recites clause 7 on the duration, and goes on to say:-
“Their promise to make these advances in cash or in kind to the defendant is mutual and collateral and interdependent on the defendant’s promise to supply them with logs throughout the five-year period. The defendant must succeed on this portion of his counter-claim”.

That is the portion claiming damages for breach of contract by reason of the Plaintiffs refusing further credits.
It is a curious situation: the plaintiffs claim is dismissed because the did not plead Exhibit A; the defendants counter claim is bolstered up with portions of Exhibit A which he did not plead and a collateral contract for cash advances based on his promise to supply them with logs for five years. The judgment overlooks the fact that Exhibit A recites they agreed to give him #3 1,800 in Lorries in regard to his supplying them with logs.

It was obvious from the evidence that Exhibit A was the contract between the parties: after having it read to him, the defendant did not press for a fresh document to embody what was missing but supplied logs in accordance with it, and he let Exhibit A go in by consent. When a contract is reduced to writing, the writing gives the terms agreed upon. The defendant set up an oral agreement and repudiated