Olaide Tugbobo V. Chief Faramobi Adelagun (1974) LLJR-SC

Olaide Tugbobo V. Chief Faramobi Adelagun (1974)

LawGlobal-Hub Lead Judgment Report

FATAYI-WILLIAMS JSC. 

This is an appeal from the judgment of the Lagos High Court dismissing the amended claims of the plaintiff against the defendant for-

(i) a full account of the Nigerian Produce Marketing Company’s stevedoring contracts carried out by the Faramobi Enterprises & Co., and the Defendant’s firm of Faramobi Enterprises from January, 1968, to the date of the hearing of the action;

(ii) payment by the defendant to the plaintiff of half the profits of such contracts;

(iii) an injunction restraining the defendant from operating the partnership’s business until the matter is disposed of.

In support of his claims the plaintiff averred in paragraphs 3, 4, 5, 6, 8, 9, 10 and 11 of his amended statement of claim as follows:-

“3. Prior to the 8th day of September, 1965, the plaintiff and the defendant entered into a business partnership agreement with the main purpose of carrying out stevedoring contracts. The partnership however at its inception did carry on other businesses.

4. On the 8th day of September, 1965, the plaintiff and the defendant as the sole partners and signatories applied for the registration of their partnership under the Registration of Business Names Act, 1961, as Faramobi Enterprises & Co. with the principal place of business at 22 Catholic Mission Street, Lagos.
5. The partnership was duly registered as No. 112830 and issued with a Certificate of Registration dated 20th September, 1965.
6. The plaintiff and the defendant agreed that the profits of the partnership shall be shared equally between the two of them and the partnership commenced business operations on 1st of October, 1965.
7. Between October, 1965, and December, 1967, the partnership, Faramobi Enterprises & Co., had some business transactions with the Nigerian Ports Authority, Nigeria Airways, the Nigerian national Shipping Lines Ltd., and the Ministry of Works and Housing, the profits of which were shared equally.
8. In January, 1968, the partnership, Faramobi Enterprises & Co. won a stevedoring contract of a continuing nature with the Nigerian Produce Marketing Company which said contract still subsists till this moment and according to its terms is likely to continue for the foreseeable future.
9. The said partnership commenced to operate the contract at Nigeria Produce Marketing Company’s Warehouses at Ikeja and Apapa in January, 1968, and still does.
10. From January, 1968, till this moment the defendant has refused in spite of repeated demands, to give account of the aforementioned Nigerian Produce Marketing Company contracts to the plaintiff and to pay over to the plaintiff his half share of the profits.”

The defendant’s reply to the above averments are stated in paragraphs 3, 4, 5, 7, 8 and 9 of his amended statement of defence. The reply reads-

“3. With reference to paragraphs 3 and 4 of the statement of claim the defendant admits that he on invitation of the plaintiff entered into a business partnership with the plaintiff but denies operating stevedoring contracts. The defendant further avers that he provided funds for running the said business. The plaintiff who described the business as that of clearing agents, was in charge of its day to day activities.

4. The defendant cannot admit or deny paragraph 5 of the statement of claim and with reference to paragraph 4 thereof the defendant cannot admit or deny that the partnership was registered under there Registration of Business Names.
5. The defendant admits paragraph 6 of the statement of claim but is not in a position to admit or deny that the business of the partnership was to commence on the 1st October, 1965.
6. The defendant is not in a position to admit or deny that Faramobi Enterprises & Co., had dealings with the various statutory Corporations and Ministry named in paragraph 8 of the statement of claim in that he did not participate personals in the said transactions except to the extent of supplying funds to the plaintiff for business purposes of which the defendant had no firsthand knowledge. The defendant admits that he shared with the plaintiff such profits as the plaintiff declared to him.
7. The defendant denies paragraphs 9 and 10 of the statement of claim.
8. In reply to paragraphs 11 and 12 of the statement of claim the defendant denies that he is liable to render an account to the plaintiff as claimed in the writ of summons.” It was common ground, however, that the Certificate of Registration (Ex. D) issued under the Registration of Business Names Act, 1961, to the firm of Faramobi Enterprises & Co. described the general nature of the firm’s business as “stevedoring contracts”.

What we can discern both from the pleadings and from the Certificate (Ex. D) is that there is no dispute –

(a) that there is a partnership agreement between the parties:

(b) that the general purpose of the partnership is the carrying out of stevedoring contracts;

(c) that, at its inception, it did carry out other “businesses” such as those of clearing agents;

(d) that the parties agreed that the profits of the partnership should be shared equally between the two of them; and

(e) that profits which accrued to the partnership in respect of business transaction carried out between October, 1965, and December, 1967, as declared by the plaintiff were so shared.

What is in dispute and in respect of which issues were joined by the parties is clearly stated in paragraphs 9 to 11 of the amended statement of claim. In those paragraphs the plaintiff averred that in January, 1968, the partnership secured a stevedoring contract with the Nigerian Produce Marketing Company, that the contract still subsists and, according to its terms, it is likely to continue for the foreseeable future. The said partnership commenced to operate the contract in January, 1968. From January, 1968, up to the institution of the present action, the defendant refused, in spite of repeated demands, to give account of the transactions carried out under the contract to the plaintiff and pay over to the plaintiff his own half share of the profits. The defendant denied all these averments. He also denied that he is liable to render an account to the plaintiff. In support of his claim the plaintiff called one Jacob Morakinyo Dawodu (1st Pl./W.), the senior accountant of the Nigerian Produce Marketing Company who produced a set of vouchers for payments made to Faramobi Enterprises & Co., between January, 1968, and September, 1968, and another set of vouchers for payments made to Faramobi Enterprises between October, 1968, and March, 1971.

The amounts paid were for “stevedoring contracts” carried out by the firms for the company. The total amount paid so far, as shown by the invoices in Exhibits B and B1, in respect of the contracts is £44,420:14:Od (N88,841,40). Another witness called by the plaintiff is Anthony Ayorinde Coker (2nd Pl.W.) who is the shipping officer of the Nigerian Produce Marketing Company. He had been with the Company for years and deals with the award of shipping contracts. With respect to the firms which performed the contracts referred to by the 1st Pl./W., the witness (Coker) testified that they has no information that the two firms were not the same and that at all times the Nigeria Produce Marketing company was dealing with them as if they were one and the same firm. He then testified further as follows:-

“I cannot say without referring to records whether a firm called Faramobi Enterprises applied to be awarded stevedoring contracts by my Company. Only contracts are awarded by my Company to Faramobi Enterprises & Co., and Faramobi Enterprises.”

In his own testimony the plaintiff complained that he had never shared in the profit of the firm’s business with the Nigerian Produce Marketing Company. Although he asked the defendant for an account on several occasions, his requests were ignored. As a result, he instructed his solicitor to write to the defendant but this also proved abortive.

In his defence on oath, the defendant admitted that the plaintiff is his partner in the firm of Faramobi Enterprises & Co. He also admitted that the firm was registered “to do and handle stevedoring business.” He contended, however, that the firm neither operated as a stevedoring contractor nor did it apply for a licence to carry on such business.

The defendant then described the firm’s business with the Nigerian Produce Marketing Company (hereinafter referred to as the NPMC) as follows:

“At Apapa I operated in back shed outside the wharf area and at 6, Burma Road, Apapa, Western Nigeria Marketing Board Building. My operation at Ikeja was also outside the wharf area. Stevedoring contractors work at the wharf. I have never worked inside the wharf. When I signed an application form with plaintiff for stevedoring work we expected it to be done inside the wharf area. Nigeria Produce Marketing Company paid for my services for Western Nigerian Marketing Board which NPMC represents. I never was a stevedoring contractor in respect of my dealings with the Board or NPMC. The NPMC never appointed Faramobi Enterprises & Co., as stevedoring contractors. The plaintiff has never been a partner in Faramobi Enterprises. I claimed for labour supplied from NPMC. I used and have so many letterheads and mistakenly used the one for Faramobi Enterprises. The NPMC treated me at all times as a labour contractor and NOT as a stevedoring contractor. Exhibit B confirms that. I was never paid nor did I ever claim for stevedoring contract but only for labour supplies.”

When he was cross-examined about the stevedoring work carried out by him, the defendant replied:- “I have never done any stevedoring work before. I know what a stevedoring contract is. All I know about it is work for NPA and shipowners- I do not know any more about it I do not know that a stevedoring contract involves the loading and off-loading cargoes into or from ships. I have never done this kind of work. I do not know whether a stevedoring contract also involves the ordinary business of supplying labour for loading goods into stores or off-loading such stores if the aim is to ship such goods. On 26/2/71 I used the letter-head which inter alia describes Faramobi Enterprises as stevedoring contractors. I was supplying labour only. I never supply labour for loading into ships or off-loading ships. In spite of the invoice dated 26/2/71 in Ex. B1 I say that I am not a stevedoring contractor.” (The underlining is ours).

The defendant called only one witness in his defence. He is Oladisun Nathan Marsh (1st D/W.) who, at the material time, was the secretary of the NPMC. He testified that the NPMC does not employ stevedoring labour and that it is a shipping company which employs such labour. The witness admitted, however, that the NPMC would not be notified if the Marketing Board engaged stevedoring labour. Under cross-examination, Mr. Nathan Marsh further explained:-

“My company has a shipping department whose schedule of duties is specialised. I have never worked in that department. The labour supplied by the Company Faramobi Enterprises or Faramobi Enterprises & Co., is for conveying cargoes from the Board’s stores into ships. I know stevedoring companies that do labour contract work. I have not looked into Exhibits B1 and B2. I do not know what they contain.” (The underlining is ours).

The invoice stated 26th February, 1971, in the NPMC file Exhibit B1 to which reference was made by the defendant in answers to questions put to him under cross-examination was admitted as part of the documents enclosed in that file. The contents of this invoice are similar to almost all of those in the two files (Exs. B and B1).

The work for which payment was made is described in the said Invoice and it reads:-

“To cost of labour supplied as per attached chit. Bags received – 228.10 tns. c.c. “ Shipped – 771.0 tns. c.c. Shipped per ‘Branik’ ‘Rakvere’ and ‘Tetania’ Certified correct ? Principal Shipping Officer.”

In a reserved judgment, the learned trial Judge, after reviewing the evidence, observed –

“There is no evidence before the court that Faramobi Enterprises & Co., or Faramobi Enterprises ever applied for or obtained a licence to operate as stevedoring contractors nor is there any acceptable evidence that either firm ever applied to the NPMC in order to be able to do business with the Company as stevedoring contractors. Indeed, the defendant denied that he ever did any stevedoring business with the NPMC or with any other Company or person. As far as the case is concerned, I have before me evidence which conclusively establishes the fact that the Board itself and not the NPMC appointed the defendant’s firm not Faramobi Enterprises nor Faramobi Enterprises/Abiose Ajose Stevedoring Co. of 435/437 Herbert Macaulay Street, Yaba. There is no evidence before the court of the appointment of Faramobi Enterprises & Co. or Faramobi Enterprises for any labour contract or indeed for any other work with NPMC or Western Nigerian Marketing Board.”

The learned trial Judge then proceeded to make the following observation:-

“To succeed on all heads of claim the plaintiff must prove

(1) the existence of partnership between him and the defendant and that the firm commenced business and did stevedoring business with NPMC from 1968 or perhaps thereafter, but before he took out the writ.

(2) That it was a term of the partnership agreement that he the plaintiff must participate in the profits of the firm on a fifty-fifty basis.

(3) That on the facts established he is entitled to an injunction in terms set out in the writ. Of course if he fails on the first limb of this claim the plaintiff will also fail on the second and third limbs.” (The underlining is ours).

With respect to the existence of the partnership the learned trial Judge found as follows:-

“The partnership pleaded in the present case was entered into for a single adventure, namely stevedoring contracts. From the conduct of the parties and the evidence of the defendant which I accept the firm never took off the ground. The necessary stevedoring licence was not obtained and in fact the firm did not apply for any stevedoring licence. I cannot accept the evidence of the plaintiff that the firm did some other business up to the end of December, 1967.”

The learned trial Judge then considered the scope of the work of a stevedoring contractor with respect to the plaintiff’s claim as follows:- “A stevedoring contractor supplies stevedores to the shipowner or the charterer. What is established in evidence in the present case is that the defendant supplied labour to the Western Nigeria Marketing Board at the Board’s Warehouses at Ikeja and Apapa. The labourers carried loaded produce for shipment but the defendant’s liability for the labour supplied would be either to the Marketing Board or to the NPMC, its agent for payment to the defendant as the labour contractor. No charterer or shipowner figures in this contractual arrangement at all. The question of a stevedoring licence would not arise here and the defendant’s firm did not have one at any time material to the instant case.” Dealing with the payments made by the NPMC to the Faramobi Enterprises & Co., the learned trial Judge observed:- “Even if Faramobi Enterprises & Co., had been properly paid sums of money by NPMC for labour supplies to Western Nigerian Marketing Board the plaintiff would not be entitled to any share of it. His firm was prima facie interested in stevedoring contracts. He pleaded and gave oral evidence about the share of profits from stevedoring contracts.”

The learned trial Judge also considered the issue of profit sharing and found as follows:- “Profit sharing is, in my view, however an essential element in determining the existence of partnership between the parties in relation to the non-stevedoring work done for the Marketing Board and for which NPMC paid so much. The cases one can rely on for this proposition are Re Fisher & Sons (1912) 2 KB 491; Ross v. Parkyns (1875) 44 LJ Ch 610; Walker v. Hirsh (1884) 27 Ch D 460. The plaintiff never shared in any profits made by Faramobi Enterprises & Co., which never handled any stevedoring contracts.” The learned trial Judge then dismissed the plaintiff’s claim in its entirety after observing finally as follows:- “Neither the firm nor the plaintiff is in honour and conscience entitled to participate in the fruits of the labour of the defendant and any person or persons who might be constituting with him the firm known as Faramobi Enterprises/Abiola Ajose Stevedoring Company, or Faramobi Enterprises or Faramobi Enterprises & Co., which according to Exhibit B is a Federal Government registered contractor, a forwarding, clearing and shipping agent and none of which firms engaged in any stevedoring contracts. The Faramobi Enterprises & Co., whose name was registered for reasons which ought to be known to the defendant and the plaintiff was forgotten since its birth in 1965. The plaintiff has no right to disturb its quiet repose in this crude manner.”

In the appeal now before us against the judgment, learned counsel for the appellant complained, with obvious justification, that the learned trial Judge based most of his findings on matters which were clearly not in issue before him. Learned counsel then observed that what was in dispute and what the learned trial Judge should have considered is whether the partnership business carried out any stevedoring business from 1968 to 1971 as contended by the plaintiff. He then submitted that there was abundant evidence, uncontradicted, that the partnership carried out such business during that period. Since the learned trial Judge made no comment on this uncontradicted evidence he must have accepted it and he should not have attached any weight to the evidence of Mr. Nathan Marsh as he did. Learned counsel also pointed out that the evidence of equal sharing of profits adduced by the plaintiff was neither denied nor was it contradicted in cross-examination and that in actual fact, the defendant not only admitted this in his pleading but also said nothing about it in his own testimony. The main plank of the defence was that the partnership did not carry out any stevedoring contracts at the material time. Dealing with the observation made by the learned trial Judge that the plaintiff was not entitled to participate in the “fruits of the labour” of the firm known as Faramobi Enterprises & Co., which, according to the learned trial Judge was “forgotten since its birth in 1965,” learned counsel submitted that that was a clear misdirection in view of the clear evidence that the firm of Faramobi Enterprises and Co, is very much alive and did carry out some contact between 1968 and 1971. Learned counsel also submitted that since a partner who sets up a different business in competition with the partnership business is liable to account for the profits made in that other business to his partner, the defendant in the case in hand is liable to account to the plaintiff and the learned trial Judge should have so ordered.

Finally, it was submitted that the question as to whether or not the partnership obtained a stevedoring licence, not having been pleaded by either party, is completely irrelevant to the plaintiff’s claim and should not have been considered by the learned trial Judge in arriving at a decision. Once there was uncontradicted evidence that a stevedoring contract of a continuing nature has been awarded to the firm, the defendant is liable to account to the plaintiff for the profits made under the contract and the learned trial Judge should have so ordered. The submissions of learned counsel as for the defendant in reply may be summarised as follows. While it is conceded that the document (Exhibit D) constitutes a partnership between the parties, that partnership was for one adventure only, that is, the execution of stevedoring contracts. Moreover, since the claim of the plaintiff with respect to contracts executed in 1968 in the name of Faramobi Enterprises & Co., can be separated from those executed between 1969 and 1971 in the name of Faramobi Enterprises, the claims are divisible and different considerations apply to each period. With regards to contracts executed in 1968 by Faramobi Enterprises & Co., the learned trial Judge would have held the defendant accountable, had he been satisfied that these were stevedoring contracts and that the partnership was competent to execute such contracts. Having found that they were not stevedoring contracts, he was perfectly entitled to dismiss the plaintiff’s claim as he did. With respect to the contracts awarded between October 1968 and March, 1971, which were executed by Faramobi Enterprises which is a different firm, the plaintiff, on whom lay the onus, ought to have pleaded that he did not consent to the formation of this firm by the defendant. Since he did not so plead, he cannot now complain about the contracts carried out by this other firm. In any case, neither the firm known as Faramobi Enterprises & Co., nor that known as Faramobi Enterprises is competent to execute stevedoring contracts because neither of them has a stevedoring licence. As the contracts did not involve the loading of ships, the contracts executed by Faramobi Enterprises are not stevedoring contracts and for that reason alone, the plaintiff’s claim for an account was rightly dismissed, and so also is the claim for an injunction which has been overtaken by the disposal of the case.

In considering the submissions made before us in this appeal, we think the claim for an injunction, as formulated, has been terminated by the disposal of the proceedings in the High Court. In this respect, we recall that the claim is for an injunction restraining the defendant from operating the partnership business “until this matter is disposed of” presumably in the Lagos High Court. Since that court has disposed of the matter by dismissing the plaintiff’s claim, the appeal against the dismissal of the claim for an injunction seems to us to be misconceived. In any case, no useful purpose will be served by making an order, even if this is possible, the effect of which will end with the disposal of this appeal. With respect to the main claim for an account, we repeat again that what is in dispute and on which issues were joined is this. Was the firm of Faramobi Enterprises & Co., the general nature of whose business is “stevedoring contracts,” and of which the plaintiff and the defendant are partners, awarded some contracts by the NPMC between 1968 and 1971? Were the contracts within the scope of the partnership and did the firm execute the contracts on its own or did another firm by the name of Faramobi Enterprises, owned by the defendant, also execute some of the contracts? If the two firms execute the contracts, is the defendant liable to account to the plaintiff for all the profits made by the two firms on the contracts?

In our view, the Partnership Act 1890, (which is a statute of general application and is therefore in force in Lagos State), does not lay down any new law. It is merely declaratory of the common law on the subject; (see Lawal v. Younan (1961) All NLR 245 at page 255).

That being the case, it is, we think, pertinent to refer to Section 30 of the Act which provides that-

“If a partner, without the consent of the other partners, carries on any business of the same nature as and competing with that of the firm, he must account for and pay over to the firm all profits made by him in that business.”

The next question then is this. Does the firm Faramobi Enterprises & Co., of which the plaintiff and the defendant are partners, and the firm of Faramobi Enterprises owned by the defendant alone, both carry on businesses of the same nature and does the latter compete with the former in the carrying of the these businesses? According to the evidence adduced at the trial, there are two batches of Invoices in the files (Exhibits B and B1). Those for Faramobi Enterprises & Co., are for the contracts executed between 27th January, 1968 and 5th October, 1968. The others are for the firm of Faramobi Enterprises simpliciter and are for contracts executed between 11th October, 1968 and 26th February, 1971. The businesses of the two firms, as described in the heading of the two sets of Invoices, include that of “Forwarding, Clearing, Shipping Agents and Stevedoring Contractors.”

From this, it is clear, not only that the two firms carry on businesses of the same nature, but also that the business ramifications of the firm of Faramobi Enterprises & Co., are now much wider than those in respect of which the parties entered into the partnership. In considering the implications of the similarity in the nature of the businesses of both firms to which we have referred, we recall to mind the statement of Cotton, LJ., in Dean v. MacDowell (1878) 8 Ch D 345 at p. 354 about the rules and principles of accountability of partners. It reads:- “There are clear rules and principles which entitle one partner to share in the profits made by his co-partners. If profit is made by business within the scope of the partnership business, then the partner who is engaging in that secretly cannot say that it is not partnership business. It is that which he ought to have engaged in only for the purpose of the partnership.

Again, if he makes any profit by the use of any property of the partnership, including, I may say, information which the partnership is entitled to, there the profit is made out of the partnership property, and therefore, of course, it must be brought into the partnership account. So, again, if from his position as partner he gets a business which is profitable, or if from his position as partner he gets an interest in partnership property, or in that which the partnership requires for the purpose of the partnership, he cannot hold it for himself, because he acquires it by his position as partner, and acquiring it by means of that fiduciary position, he must bring it into the partnership account. That is the obligation arising from the fiduciary relation which partners bear one to another.”

From the above statement of the law, with which we agree, it seems to us that the defendant would be liable to account to the plaintiff if, and only if, the contracts executed by both the Faramobi Enterprises & Co., and the Faramobi Enterprises for the NPMC come within the scope of the partnership business. We will now proceed to consider whether they did. The contracts concerned are clearly not those of “Forwarding, Clearing and Shipping Agents.” They are also not related to the work of “Building and Civil Engineering Contractors” which is the only additional business included in those enumerated in the heading of the Invoices of the Faramobi Enterprises. The only other business which both firms have held themselves out to be capable of performing, as shown in the heading of their respective Invoices, is that of “Stevedoring Contractors.”

It now remains for us to consider whether there is evidence to show that the contracts on which the plaintiff’s claim is based on comes within the scope of the work of “stevedoring contractors.” According to the Shorter Oxford English Dictionary, a “stevedore” is one employed to load and unload the cargoes of a ship. It follows from this that a stevedoring contract is one under which stevedores are employed to load and unload the cargoes of a ship while a stevedoring contract is one executing a stevedoring contract. In effect, a stevedoring contractor is a special kind of labour contractor.

To say, therefore, that a labour contractor, in the particular circumstances of the case in hand, where almost all the Invoices show that the contracts consist mainly of loading produce into ships or unloading them from ships, is different from a stevedoring contractor is to create a distinction without a difference. The learned trial Judge was therefore in error in drawing such a distinction. We are sure that if he had given due regard to the evidence of Dawodu, the senior Accountant of the NPMC (1st P1./W.) that the payments “were made for stevedoring contracts” and that the files (Exhibits B and B1) containing the Invoices were marked “Labour/Contractors Bills,” and also to the evidence of Coker (2nd PI./W.), the Principal Shipping Officer of the NPMC, in which he said that this “department deals with the award of shipping contracts: and that for the purposes of these contracts the two firms -Faramobi Enterprises & Co., and Faramobi Enterprises – were dealt with by the NPMC as one and the same firm, the learned trial Judge would not have come to this vital but erroneous conclusion. Moreover, it should have been clear to him that the defendant used a business name which is very similar to that of the partnership firm with a sinister purpose in mind. He could have used a completely different name but he chose not to do so.

There can be no doubt that the use of that name for his own firm was calculated to mislead the NPMC, and did mislead that company into thinking that the contracts were still being awarded to Faramobi Enterprises & Co. What the defendant appears to have done is to use his own firm to carry out the contracts which were earlier being performed by the partnership firm of Faramobi Enterprises & Co. As a partner, the defendant is not allowed to derive any exclusive advantage by engaging in transactions in rivalry with the firm. To use the words of the learne Editors of Lindley on Partnership, 11th Edition, at pp. 398-399, this is because – “A partner, moreover, is not allowed, in transacting the partnership affairs, to carry on for his own sole benefit any separate trade or business which, were it not for his connection with the partnership, he could not have been in a position to carry on. Bound to do his best for the firm, he is not at liberty to labour for himself to their detriment; and if his connection with the firm enables him to acquire gain, he cannot appropriate that gain to himself on the pretence that it arose from a separate transaction with which the firm had nothing to do.”

In dismissing the claim for account the learned trial Judge observed that he had before him evidence that it was the Western Nigeria Marketing Board and not the NPMC which appointed the defendant’s firm as one of its contractors. That evidence was not pleaded and should have been ignored. Moreover, even if it was pleaded, since nobody from the Board was called by the defendant to testify to this effect, we do not see how the learned trial judge, on the basis of the inconclusive contents of some letters and the clearly unreliable testimony of Mr. Nathan Marsh, could have made that specious observation.

Furthermore, since the granting of a stevedoring licence was also not pleaded by any of the parties and is therefore not in issue in the case, the learned trial judge should not have referred to the failure of the plaintiff to prove that the partnership firm has obtained such a licence; he should also not have allowed the absence of such proof to affect his consideration of the plaintiff’s claim. In any case, failure to obtain such a licence could only mean that Paramobi Enterprises & Co. has not been licensed to carry out the work of “stevedoring contractors” and also that it has been carrying out the work of a legal partnership illegally. Even if this were so, we are of the view that the plaintiff would still be entitled to an account On this point, we would like to refer to another observation of the learned editors of Lindley on Partnership, 11th Edition, pages 149-150. It reads:

“If an illegal act has been performed in carrying on the business of a legal partnership, and gain has accrued to the partnership from such act, and the money representing that gain has been actually paid to one of the parties for the use of himself and co-partners, he cannot set up the illegality of the act from which the gain accrued as an answer to a demand by them for their share of what he has received. Upon this principle it was held in Sharp v. Taylor 2 Ph. 801, that a partner was entitled to an account against his co-partner of moneys which actually come to the hands for the latter upon the employment of a ship in a manner not permitted by the navigation laws.”

Not only are the reasons given by the learned trial judge for his decision unsatisfactory, we are also satisfied that he has not taken proper advantage of his having seen and heard the witnesses. Consequently, for the reasons which we have set out in detail above, we think that he was in error in dismissing both the claim for an account and also for the payment to the plaintiff of half the profits, if any, of the contracts.

The appeal therefore succeeds and it is allowed. The judgment of the learned trial judge dismissing the plaintiff’s claims for an account and for payment over to the plaintiff of half of the profits in Suit No. LD/60/70 in the Lagos High Court on 18th October, 1971, including the order as to costs, is accordingly set aside. Instead, we order as follows:

(1) that the defendant do render a full account of Nigerian Produce Marketing Company’s stevedoring contracts carried out first by the Paramobi Enterprises & Co. and later by the Paramobi Enterprises between January, 1968 and 16th March, 1971 when the hearing of the action commenced and in respect of which a total sum of N88,841.40k was collected by the defendant

(2) that the said defendant should pay over to the plaintiff half of the profits, if any, of such contracts;

(3) that dismissal of the claim for an injunction, for the reasons given earlier in this judgment, be and is hereby confirmed; and

(4) that the orders in (1) and (2) above shall be the judgment of the court.

In addition, the plaintiff is awarded costs in the Court below assessed at N126.00 and in this Court at N111.00.

its contractors. That evidence was not pleaded and should have been ignored. Moreover, even if it was pleaded, since nobody from the Board was called by the defendant to testify to this effect, we do not see how the learned trial judge, on the basis of the inconclusive contents of some letters and the clearly unreliable testimony of Mr. Nathan Marsh, could have made that specious observation.

Furthermore, since the granting of a stevedoring licence was also not pleaded by any of the parties and is therefore not in issue in the case, the learned trial judge should not have referred to the failure of the plaintiff to prove that the partnership firm has obtained such a licence; he should also not have allowed the absence of such proof to affect his consideration of the plaintiff’s claim. In any case, failure to obtain such a licence could only mean that Paramobi Enterprises & Co. has not been licensed to carry out the work of “stevedoring contractors” and also that it has been carrying out the work of a legal partnership illegally. Even if this were so, we are of the view that the plaintiff would still be entitled to an account On this point, we would like to refer to another observation of the learned editors of Lindley on Partnership, 11th Edition, pages 149-150. It reads:

“If an illegal act has been performed in carrying on the business of a legal partnership, and gain has accrued to the partnership from such act, and the money representing that gain has been actually paid to one of the parties for the use of himself and co-partners, he cannot set up the illegality of the act from which the gain accrued as an answer to a demand by them for their share of what he has received. Upon this principle it was held in Sharp v. Taylor 2 Ph. 801, that a partner was entitled to an account against his co-partner of moneys which actually come to the hands for the latter upon the employment of a ship in a manner not permitted by the navigation laws.”

Not only are the reasons given by the learned trial judge for his decision unsatisfactory, we are also satisfied that he has not taken proper advantage of his having seen and heard the witnesses. Consequently, for the reasons which we have set out in detail above, we think that he was in error in dismissing both the claim for an account and also for the payment to the plaintiff of half the profits, if any, of the contracts.

The appeal therefore succeeds and it is allowed. The judgment of the learned trial judge dismissing the plaintiff’s claims for an account and for payment over to the plaintiff of half of the profits in Suit No. LD/60/70 in the Lagos High Court on 18th October, 1971, including the order as to costs, is accordingly set aside. Instead, we order as follows:

(1) that the defendant do render a full account of Nigerian Produce Marketing Company’s stevedoring contracts carried out first by the Paramobi Enterprises & Co. and later by the Paramobi Enterprises between January, 1968 and 16th March, 1971 when the hearing of the action commenced and in respect of which a total sum of N88,841.40k was collected by the defendant;

(2) that the said defendant should pay over to the plaintiff half of the profits, if any, of such contracts;

(3) that dismissal of the claim for an injunction, for the reasons given earlier in this judgment, be and is hereby confirmed; and

(4) that the orders in (1) and (2) above shall be the judgment of the court.

In addition, the plaintiff is awarded costs in the Court below assessed at N126.00 and in this Court at N111.00.

Other Citation: (1974) LCN/1783(SC)