Mobil Oil (Nigeria) Limited V. Abolade Olatunji Coker (1975)

LawGlobal-Hub Lead Judgment Report

A. G. IRIKEFE, J.S.C.

Before the High Court of the Ibadan Judicial division in suit I/80/68, the plaintiff/appellant’s writ was indorsed against the defendant/respondent in the following terms:-

“The plaintiff’s claim against the defendant is for the refund of the sum of 6,500 (Six Thousand, Five Hundred Pounds) being money paid by the plaintiff to the defendant in respect of the lease of a piece of land at Ibadan and in respect of which said piece of land the Privy Council in 1964, on appeal from the Supreme Court of Nigeria, refused to grant declaration of title to the defendant. The plaintiff claims that there has been a total failure of consideration.”

The small parcel of land in dispute in this case, with an area of some 846.53 square yards is situated at the junction of Oke Padre and Onireke Street, in Ibadan. The land appears to have had a chequered history. The evidence produced at the trial of this action shows that the appellant was using the land as a petrol filling station for the sale of the products, and that it had been put in possession thereof by the United Africa Company of Nigeria Limited who held under a sub-lease from one Faweze Moukarim (See Exhibit A) The sublease (Exhibit “A”) which was executed on 27th June, 1960 is stated to be for a term of 50 years, effective from 1st January, 1959. At the time of execution, the sum of 4,000 (Four Thousand Pounds) representing an advance payment of 20 years rent was made by the lessee to the lessor.

It would appear that, on 27th March, 1957, the plot of land in dispute had been the subject of an earlier conveyance between the Balogun Ibikunle family of Ibadan as grantors and the respondent as grantee of an estate in fee simple free from incumbrances. The particulars of this conveyance are recited in Exhibit “B”, a conveyance dated 3rd February, 1962 and executed by the respondent in favour of the appellant.

As the respondent, in spite of the conveyance from the Balogun Ibikunle family was unable to go on the land in dispute, he brought an action in the Ibadan High Court claiming a declaration of title and injunction against F. Moukarim and two others. We have stated earlier on, that the appellant was placed on the land by the United Africa Company of Nigeria Limited, who held under a sub-lease from Moukarim.

This action, Suit I/300/57, was dismissed and the respondent appealed against the dismissal to the Federal Supreme Court in Suit No. FSC. 218/1960. On 15th March, 1967, the Federal Supreme Court upheld the respondents appeal and awarded him title and injunction against Moukarim as originally claimed at the High Court, Ibadan. After the decision of the Federal Supreme Court, the respondent went on the land, ejected the appellant and took possession of its installations thereon. Being faced with this new situation, the appellant was obliged to take a new lease from the respondent as evidenced by Exhibit “D”

There is evidence that the appellant knew that Moukarim had, after the Federal Supreme Court judgment in FSC. 216/60, obtained final leave to appeal to the Privy Council in October, 1961. The respondent was at pains to draw attention to his root of title to the disputed land and did so in the following recital in the deed of lease, Exhibit “B”:-

“Whereas under and by virtue of a deed of conveyance dated the 27th day of March, 1957 and registered as No. 6 at page 6 in Volume 190 of the Register of Deeds kept in the Lands Registry of Ibadan, and executed by (1) Olatunde Akanmu, Mogaji Balogun Ibikunle family, (2) Gbadamosi Olasupo, (3) Raji Oduola and (4) Bello Lahan in favour of the lessor, the lessor became well and truly seized in fee simple free from incumbrances of the hereditaments hereinafter intended to be conveyed in fee simple absolute free from all incumbrance. And whereas the Federal Supreme Court of Nigeria on the 15th day of March, 1961 in suit No. FSC. 218/60 entitled A. O. Coker versus F. Moukarim, Johnson Aina and Ibadan District Council confirmed the title of Balogun Ibikunle family.”

The deed of lease, Exhibit “B” executed on 3rd February, 1962 is stated to be for a term of 10 years effective from 2nd May, 1961 at an annual rent of 1,300 (One Thousand, Three Hundred Pound). Rents totaling 6,500 representing advance payment for 5 years were paid to the respondent by the appellant at the execution of Exhibit “B”. The respondent’s success before the Federal Supreme Court would appear to have been short-lived for, on 7th April, 1964, the Judicial Committee of the Privy Council allowed Moukarim’s appeal and restored the decision of the High Court, Ibadan which had earlier dismissed the respondent’s action in Suit I/300/57. As the respondent’s title to the disputed land was rendered useless by the decision of the Privy Council, the appellant instituted the present action before the High Court, Ibadan. In the course of a trial in which the respondent called no evidence, the learned Judge, (Aguda J., as he then was), after a very careful examination of the authorities cited entered judgment in favour of the appellant as claimed. The respondent later appealed to the Western State Court of Appeal, which court, on 2nd March, 1973 upheld the appeal and dismissed the appellant’s claim. This appeal has been brought against the decision of the Western State Court of Appeal aforesaid.

Before setting out the grounds of appeal relied upon by learned counsel for the appellant before us, we should like to draw attention to those matters on which issues were joined between the parties at the court of trial, in order to make for an easy grasp of the case as a whole.The respondent in paragraph 2 of this statement of defence admitted paragraphs 1 to 3 of the statement of claim. These paragraphs aver as follows:-

“1. The plaintiff is a company incorporated in Nigeria with Limited liability under the Companies Act and had its registered office at No. 60 Broad Street, Lagos and a district office in Ibadan.

2. The defendant is a licensed surveyor and is resident in Ibadan.
3. By a deed of lease dated 3rd day of February, 1962 and registered as No. 17 at page 17 in volume 511 of the Register of Deeds at Ibadan, the plaintiff became owner of lease hold interest in the property described in the recited deed of conveyance dated 27th March, 1957, registered as No. 6 at page 6 in volume 190 of the Register of Deeds at Ibadan for a term of 10 years commencing from the 2nd day of May, 1961.
4. As a result of the afore recited deed of lease, the plaintiff paid the defendant the sum of 6,500 which represents the first 5 years rent under the said lease.
5. Before the execution of the lease recited in paragraph 3 above, the plaintiff had been in lawful occupation of the area covered by the lease by virtue of a sub-lease between one F. Moukarim and United African Company of Nigeria Limited dated 27th June, 1960 and registered as No. 34 at page 34 in volume 373 of the Register of Deeds at Ibadan for a term of 50 years, commencing from 1st January, 1959.

“6. In Suit No. I/300/57: A. O. Coker v. F. Moukarim and Others, the present defendant who was the plaintiff in suit I/80/68, claimed the property which is the subject matter of lease referred to in paragraph 3 above. The claim in Suit No. I/300/57, was dismissed.

7. The present defendant who was the plaintiff in Suit No. I/300/57, successfully appealed against the decision of the Ibadan High Court in FSC. 218/60 and judgment was entered in favour of the present defendant i.e. the plaintiff in I/300/57, for declaration of title and for injunction retraining one F. Moukarim the sub-lessee of lease registered as no. 34 at page 24 in volume 373 of the register of deeds at Ibadan.
8. By virtue of the success in appeal No. FSC. 218/60 the defendant entered and took possession of the petrol station of which the plaintiff was in lawful occupation. The plaintiff then entered into the lease referred to in paragraph 3 of the statement of claim.

9 Mr. Moukarim who was the respondent in FSC 218/60 appealed to the Privy Council against the decision of the Federal Supreme Court in FSC 218/60”

The respondent averred further in paragraph 3 of his amended statement of defence thus:-

“3. With reference to paragraph 10 of the statement of claim the defendant admits that the appeal to the Privy Council was allowed but denies the consequences of the judgment of the Privy Council and adds that the averment amounts to a conclusion of law and should be struck out.”

The learned trial Judge after holding that the nine averments carried above, being admitted, should be taken as proved, commented thus in his judgment:-

“In addition to the above facts, the plaintiff called oral evidence and tendered all relevant documents in evidence. The defence called no oral evidence but tendered one document in evidence. Both counsel then addressed me. From the submission of J. O. Coker for the defence it appeared that the defence is based mainly on the point that the action is misconceived in that it is based on failure of consideration. In fact, according to Mr. Coker, there was no such failure of consideration since the plaintiff knew at the time he was making the payment, that an appeal was pending before the Privy Council which might affect the title of the defendants and yet with that knowledge made payment to defendants. In reply Mr. Onalaja for the plaintiff submitted that in fact there had been a total failure of consideration.”

The learned trial Judge then proceeded to examine the merits of the above submission and observed thus:-

“The first point therefore for decision is whether there has been such a total failure of consideration that entitles the plaintiff to a refund of the money paid by him to the defendant. Now the undisputed facts are that at the time the plaintiff made payment of the sum of 6,500 as 5 years rent to the defendant, the plaintiff believed that the defendant had such a title to the land to enable him make the grant of the lease. In my view whether the defendant believed likewise is immaterial. What is material is that in fact it transpired that the defendant had no such title; and in consequence he could not grant the 5 years lease in respect of which admittedly the 6,500 was the rent. There is no doubt that the grant of the 5 years lease was the consideration for the payment of 6,500 made by the plaintiff. This is made abundantly clear in the deed of lease, Exhibit “B” in this case, clause 1. And since the defendant “had no right of title to take a grant of the lease, there is a total failure of consideration and in the circumstances the plaintiff is bound to succeed in this suit.”

The learned Judge then concluded his judgment on that aspect of the case on which issue were joined by the parties thus:

“In his address Mr. Coker made much of the point that the plaintiff did not make payment of rent to the United Africa Company of Nigeria Limited (U.A.C.) until after this suit had been instituted as witnessed by exhibits E, E1 and E2. In my view this is not sufficient reason to defeat the claim of the plaintiff. In fact whether they made payment to the U.A.C or not is immaterial; what is material is that the defendant had in his hands at the moment money belonging to the plaintiff which in equity he must disgorge.”

Before the Western State Court of Appeal, the respondent relied on three grounds of appeal which read as follows:-

“(i) That the judgment is against the weight of evidence.

(ii) That the learned trial Judge was wrong in giving judgment in favour of the plaintiff/respondent when in view of paragraph 8 of the statement of claim and the evidence before the court there was no total failure of consideration.

(iii) The learned trial Judge was wrong in holding that the cases of Newsome v. Graham & Anor. (1856) 10 ER 437 and Barber v. Brown & Anor. – (1856) 140 ER. 50 were applicable to the points in issue in the suit herein when the claims and facts of the cases were different from those before him.”

Although the record before the Western State Court of Appeal does not show that the respondent’s counsel advanced any argument in respect of the first ground of appeal before that court, we are in no doubt that, as the respondent adduced no evidence at the trial, the said ground is not available to him and should have been struck out. See Odufunade v. Rossek – (1962) 1 ANLR 98. The respondent appears to have rested his case on the remaining two grounds of appeal, and the decision of the Western State Court of Appeal at the end of the hearing before us. Learned counsel for the appellant before us relied on the following 4 grounds of appeal which he argued together:-

(i) That the learned Justices of Appeal erred in law to have held that there had not been a total failure of consideration.

(ii) That the learned Justices of Appeal erred in law to have based the case on a mistake of law, which was not pleaded in the amended statement of defence.

(iii) That the learned Justices of Appeal erred in law to have decided the appeal on fresh point not argued in the court below to wit: mistake of law about the payment of 6,500 or N13,000 to the defendant/respondent.

(iv) That the learned Justices of Appeal erred in law to have held that the case of Newsome v. Graham & Anor (1929) 10 ER 437 and Barber v. Brown & Anor. (1856) 140 ER 50 were not applicable to the points in issue in this case and distinguishable from the facts of the case under consideration in this case.

It is the submission of learned counsel for the appellant that it was incumbent on the Western State Court of Appeal to have scrutinised the matters on which the respondent, who had chosen to call no evidence in the lower court, joined issue with the appellant. These matters, counsel contended, are as contained in the 9 paragraphs of the statement of claim which were admitted in the respondent’s amended statement of defence. Partial failure of consideration, counsel further submitted, was not one of those matters and it was an error for the Western State Court of Appeal to have held that there had not been a total failure of consideration in the absence of such pleading or evidence from the respondent. Again, learned counsel submitted on behalf of the appellant that the Western State Court of Appeal was similarly in error to have decided the case before it on a point it took suo motu to wit: that the sum of 6,500 had been paid under a mistake of law and as such not refundable when this was not an issue canvassed at the trial. Finally, learned counsel re-emphasized his reliance on the cases of Newsome v. Graham & Anor (1829) 10 E.R. 437 and Barber v. Brown & Anor (1856) 140 ER 50 and argued that the said decisions ought rightly to apply to the facts of this case.

For the respondent, it was submitted that having regard to all the circumstances of the case it could not be said that the consideration had totally failed.

Learned counsel for the respondent drew our attention to the case of Dimes v. Grand Junction Canal Coy & Ors (1852) 10 ER 301 at 312 as authority for the proposition that a decision of a lower court remains valid and binding until set aside on appeal. The following passage appears in the report at page 312:

“We think that the order of the Chancellor is not void; but we are of opinion, that he was disqualified as a Judge that it was a voidable order, and might be questioned and set aside by appeal or some application to the Court of Chancery, if a prohibition would not lie.”

We understood counsel to be saying that, until the decision of the Federal Supreme Court in FSC 218/60 was reversed by the Privy Council on 7th April, 1964, the lease Exhibit “B” passed a valid title pro tanto to the appellant and that, therefore, the consideration cannot be said to have totally failed.

We are not persuaded by this argument, firstly because this defence was not pleaded and was therefore not available to the respondent and secondly because Exhibit “B” as a contract was not severable and was indeed a representation that the respondent had a good title which as the document says he had acquired from the Balogun Ibikunle family with effect from 27th March, 1957. The decision of the Privy Council, if valid, and no argument was addressed to us on its invalidity, would relate back to the root of title of the respondent, and would in effect mean that his title was useless as from the date the land was conveyed to him on 27th March, 1957 by the Balogun Ibikunle family.

We are satisfied that the above contingency loomed large in the minds of the parties to Exhibit “B” and would appear to explain the presence of the indemnity clause which appears as clause 3(d) of the lessors’ convenants with the lessees thus:

“That the lessor for himself, and his successors-in-title or anyone deriving title under them shall at all times hereafter keep indemnified the said lessee its successors-in-title against all claims, actions and all other proceedings which may be taken hereafter by any body or person against the said leases relating to and concerning the premises hereby demised and in particular to indemnify the lessees against any claim for compensation for the buildings now on the land and in default of the lessor paying the said compensation the lessees shall deduct the same from any monies whatsoever due to the lessor until such time as the debit shall be satisfied.”

There was also evidence before the court of trial, which was not challenged that, with the reversal of the judgment of the Federal Supreme Court in FSC. 218/1960 by the Privy Council, the appellant as evidenced by Exhibits E, E1 and E2 had to go into an arrangement with the United Africa Company of Nigeria Limited by paying mesne profits for the period covered by Exhibit “B”. In such situation, it would be clearly inequitable for the respondent to retain the rent of 6,500. See Chitty on Contracts 21st Edition, article 214 where the following passage occurs under the heading Distinction between mistakes of law and fact:

“And in equity, the rule as to irrecoverability is not inflexible there being cases in which the court has power to relieve against mistakes of law, as well as against mistakes in fact that is, where there is any equitable ground which makes it, in the particular case, inequitable that the party who received the money should retain it.”

See – Ministry Of Health v. Simpson & Ors. (1950) AER p. 1137

We are satisfied that the learned trial Judge was right in his application of the decisions in Newsome v. Graham & Anor (1829) 10 ER 437 and Barber v. Brown & Anor (1856) 140 E.R. 50 to the facts of this case.

The Western State Court of Appeal therefore also erred in our view in purporting to base it decision on the irrecoverability of money paid under a mistake of law, a point which was neither pleaded nor canvassed before the court of trial.

In the result the appeal succeeds and it is allowed, we accordingly set aside the decision and order of the Western State Court of Appeal dated 2nd March, 1973 and restore in full the decision and order of the trial court (Aguda J.) dated 3rd March, 1971. And this shall be the judgment of the court. The respondent shall pay to the appellant costs assessed at N114 costs in the Western State Court of Appeal and N200 in this court.

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Other Citation: (1975) LCN/2061(SC)