ENGR. EMMANUEL UDEDIKE v. ENGR. (MRS) HAPPINESS UFOMADU
On Wednesday, the 13th day of June, 2018
CA/I/212/2012Before Their Lordships
CHINWE EUGENIA IYIZOBAJustice of The Court of Appeal of Nigeria
HARUNA SIMON TSAMMANIJustice of The Court of Appeal of Nigeria
NONYEREM OKORONKWOJustice of The Court of Appeal of Nigeria
Between
Before Their Lordships
CHINWE EUGENIA IYIZOBAJustice of The Court of Appeal of Nigeria
HARUNA SIMON TSAMMANIJustice of The Court of Appeal of Nigeria
NONYEREM OKORONKWOJustice of The Court of Appeal of Nigeria
Between
ENGR. EMMANUEL UDEDIKEAppellant
AND
ENGR. (MRS) HAPPINESS UFOMADURespondent
CHINWE EUGENIA IYIZOBA, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of Ogun State High Court Ota Judicial Division in Suit No HCT/96/09 delivered on the 25th day of June, 2012 Coram A. A. Babawale J.
THE FACTS:
The facts leading to the institution of this suit as summarized in the Appellants brief of argument are as follows:
Sometime in 2006, the claimant through his agent offered in a letter dated 16th December, 2006 to sell his one story building of 4 flats of 3 bedrooms each situate at No. 3 Kayode Anifowoshe Street, River Valley Estate, Ojodu-Berger, Ogun State to the defendant for N20,000,000 (Twenty Million Naira). In addition the said letter contained agency fee of 5% of the total consideration.
The defendant made a counter offer to purchase the property for N15, 000,000, rejecting the agency fee clause and introducing a new clause for vacant possession.
Being a radical departure from the terms offered by the claimant, the claimant unequivocally rejected the conditions in the defendant’s counter offer.
Sequel to the rejection of the defendant’s counter offer by the claimant, the defendant made a fresh offer in a letter dated 14th February, 2007 wherein she offered to pay the sum of N16,500,000 (Sixteen Million Five Hundred Thousand Naira) for the property. She further dropped her request for vacant possession and also changed her initial stance on payment of agency fee and offered to pay 3% of the total consideration as agency fee. She also offered to pay the proposed purchase price in three tranches with the last payment being on or before 30th October, 2007.
Being satisfied with the defendant’s terms of offer as contained in her letter of 14th February, 2007 the Claimant through his agent accepted the terms therein via a letter dated 20th February, 2007. The said letter of 20th February, 2007 further emphasized that neither possession nor ownership of the claimant’s property shall pass to the defendant until the defendant had fully paid the purchase price of N16.5m in accordance with the terms stipulated in her letter of 14th February, 2007,
Being satisfied and having accepted the terms stated in the Claimant’s letter of 20th February, 2007 and there being a consensus ad idem on those terms, the defendant in a bid to perform her contractual obligation under the contract informed the claimant that she needed a loan of N20million from her company to enable her pay the purchase price of the claimant’s property. Premised on this request the Claimant bona fide released to the defendant the original Certificate of Occupancy in respect of his property and also signed a deed of assignment solely to enable the defendant procure the loan.
………………………….A………………………………..
On receiving the loan the defendant made a part payment of N14 million to the claimant and promised to pay the balance of N2.5 million of the agreed N16.5 million purchase price in two instalments of N1m and N1.5m with post-dated cheques for 30th July, 2007 and 30th October, 2007, respectively.
Barely two weeks after the defendant had made the aforesaid part payment of N14million, the defendant in an apparent assertion of possession and ownership of the claimant’s property summoned her co-tenants in the claimant’s property and informed them that she had purchased the claimant’s property; hence, they should vacate the property forthwith. Every effort made by the Claimant through his agent to call the defendant to order and to get her mellow down her rash assertion of her false land ladyship proved abortive as she succeeded in terrifying two of her co-tenants away from the claimant’s property without the claimant’s permission and consent.
The Claimant presented the defendant’s cheque of 30th July, 2007 for payment, the said cheque was returned unpaid to the claimant. On being informed about this development, the defendant remorselessly maintained that she stopped the payment of the cheque because she was not given vacant possession.
Despite several demands by the Claimant for the full payment of the purchase price, a condition precedent to vacant possession, the defendant adamantly and obdurately refused to make the payments as agreed and within the stipulated time in the contractual terms stated in the letters of 14th February, 2007 and 20th February, 2007.
Due to the defendant’s persistent breach of her obligation to pay the full purchase price for nearly two years, the claimant (now appellant) was constrained to commence this suit against the defendant seeking the reliefs set out in his Amended Statement of Claim.
………………………….B………………………………..
The Respondents version of the facts differed. In her brief of Argument, she summarized her version thus:
The Claimant/Appellant by way of an offer to the Defendant/Respondent offered the Defendant/Respondent the sale of his property at No. 3, Kayode Anifowoshe Street, River Valley Estate, Ojodu-Berger, Ogun State. The Claimant/Appellant offer letter to the Defendant/Respondent was dated 16th December, 2006 and marked Exhibit DE1. Following the Claimant/Appellant letter, the Defendant/Respondent forwarded a response vide her letter of January, 8th 2007 which was admitted and marked Exhibit DE2. In her correspondence, the Defendant/Respondent requested that the Claimant/Appellant deliver vacant possession of the property to her as a pre-condition for the consummation of the transaction. Meanwhile, it is important to emphasize at this point that the Defendant/Respondent was one of the 4 (four) tenants on the property at the time this negotiation was in progress. Therefore her demand or request to have vacant possession of the property was genuinely born out of the fact that she would not anticipate any post transaction issues with the other tenants on the property.
Interestingly, the Claimant/Appellant did not object or decline or turn down the request made by the defendant/Respondent. The Claimant/Appellant through his Agent Barrister Fes Eke Eze of ONUZURUIKE Law Chambers (the counsel currently prosecuting this Appeal for the Claimant/Appellant in this Appeal) did not by way of any correspondence reject the issue of vacant possession raised by the Defendant/Respondent in her letter of January 8th 2007. Rather, there was an oral confirmation or assurance by the said Agent acting on behalf of the Claimant/Appellant that the Defendant/Respondent shall have vacant possession of the property on or before 30th October, 2007 when the rent of the last tenant on the property would have expired.
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This profound assurance made the Defendant/Respondent to apply for the loan from her Bank, Eco Bank PLC for the sum of N20,000,000.00 (Twenty Million Naira only) to the knowledge of the Claimant/Appellant and thereafter made a deposit sum of N14,000,000.00 (Fourteen Million Naira only) to the Appellant leaving a balance of the sum of N2,500,000.00 (Two Million Five Hundred Thousand Naira only) to be paid between 30th July 2007 and 30th October, 2007 in the sum of N1,000,000.00 (One Million Naira only) and N1,500,000.00 (One Million Five Hundred Thousand Naira only) respectively. Again the structured payment was based on the assurances of the Claimant/Appellant through his agent that the Defendant/Respondent shall have vacant possession of the property when the last tenant on the property would have vacated on the 30th October, 2007. In fact the sum of N16,500,000.00 (Sixteen Million Five Hundred Thousand Naira only) which was agreed as the purchase price between the Claimant/Appellant and the Defendant/Respondent was communicated via the Defendant/Respondent letter of 14th February, 2007 as a follow-up of her letter of January 8th 2007. Between January 8th and February 14th 2007 there was no written correspondences between the Claimant/Appellant Agent or Defendant/Respondent until 20th February, 2007 when the Claimant/Appellant through his agent aforesaid communicated to say he had accepted the sum of N16,500,000.00 as the purchase price of the property. As earlier pointed out, the sum of N14,000,000.00 (Fourteen Million Naira) was paid by the Defendant/Respondent to the Claimant/Appellant pursuant to a loan obtained by the Defendant/Respondent and to which the Claimant/Appellant is aware of because the cheque for the loan was issued in favour of the Claimant/Appellant who later returned the sum of N6,000,000.00 to the Defendant/Respondent and leaving a balance of N2,500,000.00 on the purchase price aforesaid and structured in accordance with the tenants expiry dates. The sum of N30, 000 was paid to the Claimant/Appellant as Bank charges (C.O.T.) for clearing the cheques for procuring the loan by the Defendant/Respondent. (Pages 86 89 of the Records) Exhibits DE5, DE6, DE7 and DE8. The sum of N14,000,000.00 have been paid by the Defendant/Respondent since April, 2007 on the property.
The Defendant/Respondent discovered the non-disclosure of a vital fact on vacant possession after payment of the sum of N14, 000,000.00 had been made that one of the tenant (Richwell Plaza managed by Mr. Patrick Obiorah) had actually paid rent on the property until 2010 and that vacant possession cannot be delivered to the Defendant/Respondent until after 2010. The Defendant/Respondent was naturally taken aback by this misrepresentation. In fact, up till this moment following the settlement of the Respondent Brief of Argument, the tenant Richwell Plaza is still on the property. Even while giving evidence at the lower Court in 2011, the Claimant witness (CW2) Barrister Fes Eke Eze admitted that Richwell Plaza Limited was still their tenant on the property and its tenancy subsisted till the time he gave evidence. (Page 284 records). The situation remains the same till date.
………………………….D………………………………..
By his Amended Statement of Claim dated 18/11/10 and filed on 23/11/10, the Claimant/Appellant claimed against the Defendant/Respondent as follows:
1. A DECLARATION that the defendant is in breach of the contract of sale of the claimant’s one story building of four (4) 3-bedroomm flats situate at No. 3 Kayode Anifowoshe Street, River Valley Estate, Ojodu Berger, Ogun State.
2. A DECLARATION that the claimant is at all material time the person entitled to possession and accruable rents in respect of the said building subject matter of the contract of sale between the claimant and defendant, the defendant having defaulted in the payment of the balance of purchase price.
3. A DECLARATION that the defendant is at all material time a tenant of the claimant liable to pay rent to the claimant at the rate of N250,000 per annum in respect of three (3) flats with effect from 1st January, 2007 till judgment is delivered having been possession of the said flats since 2007.
4. AN ORDER for rescission of the contract of sale between the claimant and the defendant in respect of the claimant’s one story-building situate at No. 3 Kayode Anifowoshe Street, River Valley Estate, Ojodu-Berger, Ogun State.
5. AN ORDER compelling the defendant to return the original Certificate of Occupancy No. 00012335 in respect of the said claimant’s property to the Claimant’s bank, Afribank Nigeria PLC for which the said claimant’s bank will issue a bank cheque of N14,000,000 in favour of the defendant via defendant’s bank, Eco Bank Nigeria PLC.
5a. AN ORDER compelling the defendant to return to the claimant all the documents transferred to her in respect of the said claimant’s building situate at No. 3 Kayode Anifowoshe Street, River Valley Estate, Ojodu Berger, Ogun State.
5b. AN ORDER compelling the defendant to deliver possession of the three (3) flats in the one story building situate at No. 3 Kayode Anifowoshe Street, River Valley Estate, Ojodu Berger, Ogun State to the claimant.
5c. AN ORDER setting aside the Governor’s consent fraudulently procured by the defendant in respect of Claimant’s property situate at No. 3 Kayode Anifowoshe Street, River Valley Estate, Ojodu Berger, Ogun State vide another forged deed of assignment dated 25th August, 2009 registered as 12/12/708 while the matter herein was already pending in Court.
6. AN ORDER of perpetual injunction restraining the defendant, her legal personal representatives, agents, privies and whosoever claiming through her from exercising any rights of ownership on the said claimant’s building.
7. The sum of N2, 000,000 (Two Million Naira) being general damages against the defendant.
8. The cost of this suit.
………………………….D………………………………..
The Defendant/Respondents further Amended Statement of Defence/Counterclaim is at pages 183 to 189 of the Record of Appeal. She denied the claims of the Appellant and counterclaimed as follows:
A. N3, 600,000.00 representing two years rent for No. 3 of 3 bedroom flats in the above named property subject matter of this suit.
B. N2, 000,000.00 general damages against the claimant for breach of contract.
C. The Defendant also claims cost of this action.
The Appellants Reply to the Statement of Defence and defence to counterclaim is at pages 90 to 106 of the Record. After close of pre-trial conference, the matter went to trial. Trial commenced on 12th May, 2011 with the Claimant calling two witnesses and the Defendant one witness. On 26th April, 2012 parties adopted their final written addresses. The trial Court in its judgment delivered on the 25th of June, 2012 granted the Appellants claim by declaring the Respondent in breach of the contract of sale of the property by her failure to pay the outstanding purchase price of N2.5 million but held that the breach was not so serious as to entitle the Appellant to a rescission of the contract of sale of the property. All the other claims of the Appellant and the counterclaims of the Respondent were dismissed. Dissatisfied with the judgment, the Appellant appealed by Notice of appeal dated 26/06/12 and filed on 27/06/12 at pages 293 295 of the Record.
………………………….E………………………………..
It was subsequently amended by an order of the Court. From the three grounds of appeal in the Amended Notice of Appeal filed on 23/11/16 the appellant distilled the following issues for determination:
1. Whether a vendor is entitled to the remedy of rescission of the contract of sale of property where a purchaser fails to fully pay the purchase price of the property (distilled from Ground One).
2. Whether the allegation that the document used by the respondent to procure the Governor’s consent was tainted with fraud was not proved on the totality of the compelling evidence before the trial Court (distilled from Ground Two).
3. Whether refusal by the purchaser to fully pay the purchase price of property goes to the root of the contract thereby entitling the vendor to the rescission of the contract (Distilled from Ground Three).
The Respondent on her part also set out three issues for determination which are in pari materia with the issues formulated by the appellant as set out above. In other words, the Respondent by the issues set out adopted the issues formulated by the Appellant.
APPELLANTS ARGUMENTS
ISSUE 1:
1. Whether a vendor is entitled to the remedy of rescission of the contract of sale of property where a purchaser fails to fully pay the purchase price of the property (distilled from Ground One).
………………………….F………………………………..
On this issue, learned counsel for the Appellant Fes Eze Eke Esq., relying on the cases ofODUSOGA V. RICKETTS(1997) 7 NWLR (PT. 511) 1 @16; MANYA V. IDRIS (2001) 8 NWLR (PT. 716) 627 @ 637; ODUFUYE V FATOKE (1977) 4 SC 11 submitted that where a purchaser of land made part-payment of the purchase price but defaulted in paying the balance there can be no valid sale even where the purchaser is in possession as such possession is incapable of defeating the vendor’s title. Learned counsel submitted that the trial Judge at page 290 of the Record found as a fact that both parties agreed that possession of the building shall be upon full payment of the purchase price in the following words:
In the case of the defendant, she was promised possession upon payment of the full purchase price. She failed to allow the claimant manifest his full intention before she stopped the payment of the balance.
Learned counsel quoted Ayo Salami JCA (as he then was) in MANYA V. IDRIS (SUPRA) thus:
The appellant herein made a part payment of the purchase price of land but refused to tender the balance in spite of several demands or extension of the stipulated time within which to pay the outstanding balance. The appellant’s refusal to pay up the remaining purchase price is FATAL to his acquisition of the land because he is not entitled to title to the property until the purchase price is fully paid notwithstanding his possession.”
at page 638:
At common law, payment of purchase price as well as possession vests the purchaser with equitable interest on the basis of which he can seek an order of specific performance. But where the purchaser fails to pay the purchase price FULLY he will have no right to a decree for specific performance. THERE WILL THEN BE A RIGHT IN THE VENDOR TO RESCIND THE CONTRACT OF SALE AND RESELL THE PROPERTY.”
“… the respondent should have exercised his lien over the property and resell and convey the property to any other person who might be desirous of buying the premises. He does not have to resort to the expensive and long process of litigation to recover the land in dispute or the balance of the purchase price.
………………………….F………………………………..
Learned counsel submitted that the learned trial Judge was manifestly in error to have refused to apply the above decision in the instant case thereby occasioning miscarriage of justice. Counsel also referred to MUSTAPHA V. ABUBAKAR & ANOR (2011) 3 NWLR (PT. 1233) 123 @ 146, which he claimed was similar to the instant case except that it was the erring purchaser who had sued for specific performance. There, the Court of Appeal Kaduna Division, per Orji Abadua (JCA) held as follows:
Similarly, where the buyer refuses to proceed with the contract in such circumstances as to amount to a repudiation or discharging breach, the seller may resort to the equitable remedy of specific performance or he may treat the breach as discharging the contract, forfeit any deposit but restore any payments made on account of the purchase price, and proceed to deal with the property as he desires. The seller may also sue for damages. THEREFORE, WHERE THE PURCHASER WHO HAD MADE A PART PAYMENT OF THE PURCHASE PRICE IS IN DEFAULT OF PAYMENT OF THE BALANCE, THERE IS RIGHT IN THE VENDOR TO RESCIND THE CONTRACT OF SALE AND RE-SELL THE PROPERTY.”
Learned counsel quoting Ogbuagu JSC in CHABASAYA V. ANWASI (2010) 10 NWLR (PT. 1201) 163 @ 187 submitted that the learned trial Judge ought to have given effect to the contract of the parties by holding that failure by the respondent to pay the balance of the purchase price on 30th October, 2007, as willingly agreed by the parties, entitled the appellant to rescission of the contract especially as the Appellant showed and indeed pleaded willingness and readiness to refund the part payment made by the purchaser. Counsel cited BEST (NIG.) LTD V. BLACKWOOD HODGE (NIG.) LTD & 2 ORS (2011) 1-2 S.C.(PT. L) 55 @ 74 & 75 where the Supreme Court refused to order specific performance where the purchase price was paid in full for a property in Burma Road, Apapa, Lagos but the purchaser failed to pay the consent fee (withholding tax) as agreed by the parties. The Supreme Court held that mere refusal of the purchaser to pay consent fee after full payment of purchase price is a breach of the material term of the contract and that the breach gives the aggrieved party a lee-way or an excuse for non-performance of its own side of the bargain. Learned counsel posed the question whether in the absence of a contrary intention, possession could precede payment of the full purchase price? He submitted that since the learned trial judge has found as a fact that full payment of the purchase price must be made before possession, that the respondent failed to make full payment of the purchase price and therefore has no right to demand for possession of the subject property or to use the issue of possession to stop the cheques of N1m and N1.5m earlier issued by her. Counsel submitted that the learned trial judge ought to have viewed the failure by the respondent to pay the outstanding sum of N2.5M as a fundamental breach of the contract entitling the Appellant to rescind the contract of sale.
………………………….G………………………………..
ISSUE 2
Whether the allegation that the document used by the respondent to procure the Governor’s consent was tainted with fraud was not proved on the totality of the Compelling evidence before the trial Court (Distilled from Ground Two).
Learned counsel faulted the conclusion of the learned trial judge that the Appellant failed to establish his claim that Exhibit CE19 the registered Deed of Assignment was forged. He cited the dissenting judgment of Nsofor JCA in BUHARI V. OBASANJO (2005) 2 NWLR (PT. 910) 241 AT 505, as to what is meant by fraud in equity. Counsel reproduced the Appellants averments in paragraphs 11 & 11a of his Amended Statement of Claim. He referred to Exhibits CE19, CE20 and CE21 and submitted that Exhibits CE19 and CE21 are clearly shown to be forged. He argued that the purported Governor’s consent predicated upon such fraud is liable to be set aside. Learned counsel argued:
The question, My Lords, is does it not affront the sense of justice that Your Noble Lords are being called upon to uphold a Governor’s consent procured with documents fraught with clear fraud and illegality with the sole motive of denying the Ogun State Government its much needed revenue for its developmental projects? Did equity not emphasize that he who comes before it must come with clean hands? Exhibit CE 21 has no consideration at all on the face of it while Exhibit CE 19 has N10million naira consideration thereon as the purchase price of the property, subject matter of this suit whereas,
it is a common ground between the parties that the purchase price of the property is N16.5million naira…………
………………………….H………………………………..
He cited the case of SHOBAJO V. IKOTUN (2003) 14 NWLR (PT. 840) 237 @ 257-259 which highlighted the following principles:
1. Equity will not allow the law to be used as an instrument of fraud. Otherwise the society will reproachfully ask equity “Why did you stand by and watch the law being used as an engine of fraud when it is your cardinal duty to temper and moderate the law?
2. Wrongful acts are no passport to favour as no one is allowed to take advantage of his own wrong. (In the instant case the defendant/respondent pulled wool over the eyes of the Governor of Ogun State by misrepresenting the amount of consideration for the property so as to pay a paltry sum as revenue to the state and this unconscionable act is what Your Lordships are herein called upon to endorse, God forbid!)
3. Where fraud is established (as in the case now before Your Lordships) the property transaction by which the purchaser bought the legal estate is cancelled by equity because the eyes of equity are too holy to behold fraud.
4. Moral obliquity and failure to maintain certain established moral standards (such as the deliberate deleting of the amount of consideration by the defendant/respondent, in the instant case, from Exhibit CE19 so as to deprive the Ogun State Government the amount of revenue it ought to derive from such property transaction) are decreed against in our society.
5. Finally, he who must come to equity must do so with clean and unsoiled hands. In the instant case, the hands of the defendant/respondent are enmeshed in fraudulent misrepresentation which has effectively robbed the Ogun State Government of millions, yes millions of naira in revenue.”
He urged the Court to resolve this issue in favour of the appellant.
………………………….I………………………………..
ISSUE 3:
Whether refusal by a purchaser to fully pay the purchase price of property goes to the root of the property contract thereby entitling the vendor to the rescission of the contract (Distilled from Ground Three).
Learned counsel for the Appellant on issue 3 relying on the cases of BEST (NIG) LTD V. BLACKWOOD HODGE (NIG) LTD & 2 ORS (SUPRA) @ 74 AND 75; ODUSOGA V. RICKETTS (SUPRA);Â CHABASAYA V. ANWASI (SUPRA); MANU V. IDRIS (SUPRA) AND MUSTAPHA V. ABUBAKAR (SUPRA) submitted that the intentional refusal/failure to tender full payment of purchase price of property is a breach that strikes at the very root of the property contract thereby entitling the vendor to either seek the equitable remedy of specific performance or the rescission of the contract. Learned counsel submitted that by electing to rescind the contract as in this case, authorities abound that the vendor can even resell and convey the land to another interested buyer. Learned counsel submitted that the learned trial judge after accepting Exhibits CE14 and CE15 as ensconcing the terms of the contract between the parties and that the respondent was entitled to possession on payment of the full purchase price of N16.5 Million, was wrong in holding that the payment of N14m and refusal to pay the balance of N2.5m was not such fundamental breach of the contract as would entitle the Appellant to rescind the contract. Counsel submitted relying on JFS INVESTMENT LTD V. BRAWAL LINE LTD & 2 ORS. (2010) 12 S.C. (PT.) 110 @ 162 AND A.G. RIVERS STATE V. A.G. AKWA IBOM STATE & ANOR (2011) 3 S.C. 1 @ 226 that parties are bound by the terms of contract they freely entered into.
………………………….J………………………………..
RESPONDENTS ARGUMENTS.
ISSUE 1:
WHETHER A VENDOR (THE APPELLANT) IN A CONTRACT OF SALE OF PROPERTY IS ENTITLED TO THE REMEDY OF RESCISSION OF THE CONTRACT WHERE A PURCHASER FAILS TO FULLY PAY THE PURCHASE PRICE OF THE PROPERTY.
Solomon A. Imosemi Esq., for the Respondent in his brief submitted that the actual fundamental breach was the failure of the Appellant to deliver vacant possession as promised. He argued that the cases of ODUSOGA VS RICKETTS (SUPRA) and MANYA VS IDRIS (SUPRA) referred to by learned Appellant???s counsel are distinguishable from the current Appeal. He opined that in the instant case, there was never a time the Appellant made specific demand for the balance of the sum of N2, 500,000.00 (Two Million Five Hundred Thousand Naira) after the circum- stances of the disagreement between the Appellant and the Respondent occurred. Counsel submitted that in all the cases including ODUFUYE VS FATOKE (SUPRA) the Court observed that specific demands were made through communication for the payment of the balance of the purchase sum and the defaulting parties in the cases had refused to pay the balance. Counsel submitted that in the instant case, the Respondent was aware that there was an outstanding sum of N2,500,000.00 (Two Million Five Hundred Thousand Naira) pending on the transaction, but that the Appellant was in fundamental breach regarding one of the tenants on the property (Richwell Plaza) who is currently still on the property till date. Counsel argued that the Respondent had always been willing to pay the balance of the sum of N2,500,000.00 right from inception hence the issuance of the postdated cheques for 30th July 2007 and 30th October, 2007. He submitted that fundamentally the issue of vacant possession was critical to the totality of the contract between the Appellant and the Respondent in the suit which was amplified through correspondences, words and conduct of the parties in the suit. He submitted that the trial Judge in his judgment indicated that he believed the Defendant/Respondent in her claim that the payment of the future installments were structured to coincide with the period when the then valid tenancies on the property would lapse.
………………………….K………………………………..
Counsel submitted that given the current circumstances of this case, the Appellant cannot be entitled to rescind the contract for the sale of the property. He further submitted that it is the Claimant/Appellant that is guilty of a fundamental breach of the purchase Agreement. He opined that this is captured in the Appellants deliberate misrepresentation of facts regarding delivery of vacant possession. He referred to the evidence of CW2 under cross-examination that Richwell Plaza was still their tenant on the property and that its tenancy subsists even as at the time he gave evidence in 2011. He submitted that CW2 testified under further cross examination That the last tenancy was to expire in December 2007 whereas the Respondent had anticipated upon oral assurances communicated to her by the said Agent of the Appellant to reinforce the Respondents letter of January 8th, 2007 that full possession would be delivered by 30th October 2007. Counsel submitted that the discovery that possession would not be granted to the Respondent (a fact corroborated by CW2 under cross-examination) at page 284 of the records was what gave rise to the fundamental breach in this suit. Counsel urged us to resolve this issue in favour of the Respondent.
ISSUE TWO
WHETHER THE ALLEGATION THAT THE DOCUMENT USED BY THE RESPONDENT TO PROCURE THE GOVERNORS CONSENT WAS TAINTED WITH FRAUD WAS NOT PROVED ON THE TOTALITY OF THE COMPELLING EVIDENCE BEFORE THE TRIAL COURT.
Learned counsel submitted that Exhibit CE19 the Deed of Assignment was voluntarily executed by the Appellant and subsequently forwarded to the Lands Registry Office Oke – Elewo Abeokuta where the Governors consent was processed and obtained. Counsel submitted that the allegation of forgery of Exhibits C19 and C21 being criminal in nature must be proved beyond reasonable doubt. Counsel submitted that the ground of the alleged forgery by the Respondent was that there was a consideration of N10million on Exhibit CE19 instead of the N16.5m agreed upon. Counsel argued that Exhibits CE19 and CE21 are documents voluntarily executed by the Appellant in favour of the Respondent to enable the latter procure the loan facility from her Bank Eco Bank Plc in respect of this transaction. Learned counsel referred to the findings and evaluation of the learned trial Judge on the evidence led by the parties on the issue and submitted that the trial judge rightly held that there was nothing from his careful observation of Exhibit C19 to suggest that the consideration was deleted and a lower figure inserted by the Respondent. Citing the cases of EGONU VS EGONU (1978)1112 SC, 111; WOLUCHEM VS GUDI (1981) 5 SC. 291 and OBODO VS OGHA (1987) 2 NWLR (PT 54) 1;
………………………….L………………………………..
Learned counsel submitted that by the very nature of the allegation of the Appellant against the Respondent, the standard of proof required from the Appellant in the circumstances of this case is beyond reasonable doubt. He opined that the Appellant did not by way of evidence invite or subpoena an officer from the Land Registry Oke – Elewo Abeokuta to substantiate or prove the allegation of fraud with regard to Exhibit CE19 or CE21. He argued that the Appellant himself did not give any evidence during trial to say that his signature was forged; rather he admitted that he executed the Deed of Assignment to enable the Respondent obtain loan from the Bank. He submitted that the Appellant in fact voluntarily surrendered his title documents namely his Certificate of Occupancy to the Respondent to facilitate the transaction. Counsel submitted that the cases of SHOMEFUN VS SHADE (SUPRA) AND BUHARI VS OBASANJO (SUPRA) cited by the Appellant are profoundly distinguishable from the instant suit. He argued that in the instant suit the Appellant voluntarily participated in the necessary documentation that led to the processing of Exhibit CE19 at the Lands Registry Abeokuta without which the Governors consent would not have been obtained. He submitted that the Appellant voluntarily executed Form 1C (an administrative document at Lands Registry Abeokuta) with his passport photograph attached, a preliminary step which sets in motion the process for obtaining the Governors consent. Counsel submitted that the Appellants allegation of fraud at the completion of the process was a mere afterthought. He urged the Court to discountenance the totality of the Appellants argument on this issue as lacking in merit.
ISSUE 3:
Learned counsel submitted that issue 3 purportedly distilled from ground 3 of the Amended Notice and grounds of Appeal does not arise from the ground.
………………………….M………………………………..
Counsel set out ground 3 of the Amended Notice and grounds of Appeal:
The learned Judge misdirected himself when he stated thus:
The type of breach in this case is that which can be compensated by the award of damages. This is more so in the circumstances of this case where the refusal of the Defendant was not merely wilful but based on the failure of the Claimant to deliver vacant possession of the property to her.”
He urged the Court to completely discountenance issue three and argument canvassed thereon as it is settled law that any issue for determination in an Appeal which does not arise from or relate to a ground of Appeal is incompetent and liable to be struck out. In support counsel cited and relied on the following cases: ONYESOH VS. NNEBUNDUN (1992) 3 NWLR (PT. 227) 315; KALU VS ODILI (1992) 5 NWLR (PT. 240) 130; UGO VS OBIEKWE (1989) 1 NWLR (PT. 99) 566; AGU VS. IKEWIBE (1991) 3 NWLR (PT. 180) 385.
Learned counsel however conceded that issue three is properly derivable from ground one of the Amended Notice of Appeal which has been addressed extensively in the Respondents brief.
Counsel urged us to strike out ground 3 as abandoned since no issue was formulated there from. He referred to the observation of Adekeye JSC in MINI LODGE LIMITED & ANOR. VS. CHIEF OLUKA NGEI (2010) 10 WRN 56, 66 RATIO 9. Counsel submitted that given the circumstances of this case, the observation was profoundly persuasive and meets the equity of this case. He urged us to dismiss the appeal and affirm the judgment of the lower Court.
RESOLUTION
The Respondent in his brief of argument raised a preliminary objection as to the competence of ground 3 of the Notice and grounds of appeal and issue 3 distilled there from. Mr. Fez Eke in his Reply brief submitted that the objection is incompetent as Respondent failed to comply with Order 10 Rules 1 & 3 of the Court of Appeal Rules 2016. Order 10 Rules 1 & 3 provide:
A respondent intending to rely upon preliminary objection to the hearing of the appeal, shall give the appellant 3 clear days notice thereof before the hearing, setting out the grounds of objection and shall file such notice together with twenty copies thereof with the registry within the same time.
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Where the Respondent fails to comply with this Rule, the Court may refuse to entertain the objection or may adjourn the hearing thereof at the cost of the Respondent or may make such order as it thinks fit.
Mr. Eke urged the Court to refuse to entertain the objection and to discountenance same. The requirement of giving the Appellant 3 clear days notice applies where the objection is as regards the hearing of the appeal. Here the Respondent is merely asking us to discountenance or ignore issue 3 formulated by the appellant claiming that the issue as argued is radically different from the ground 3 from which it was purportedly distilled. He is not objecting to the hearing of the appeal. Failure to give the Appellant 3 clear days notice is consequently of no moment. Even if the objection is to the hearing of the appeal, it is clear from the provisos that it is a matter completely at the discretion of the Court as to what order to make. Whenever the Appellant suffered no miscarriage of justice by the failure to give him the relevant notice and he had time and duly responded to the objection as in the instant case, the default will be ignored by the Court.
Even where the Appellant failed to file a Reply brief in response to the preliminary objection in the Respondents brief, but service was effected on him within sufficient time for him to have filed his Reply the Supreme Court in the case of UMANA JNR VS. NDIC (2016) LPELR-42556(SC) held that the default will be ignored and the preliminary objection heard. Now to the objection; Ground 3 of the Appellants amended Notice of Appeal and its particulars are as follows:
GROUND THREE:
The Learned trial judge misdirected himself when he stated thus:
The type of breach in this case is that which can be compensated with the award of damages. This is more so in the circumstance of this case, where the refusal of the defendant was not merely wilful but based on the failure of the claimant to deliver vacant possession of the purchased property to her.”
PARTICULARS OF MISDIRECTION
(a) The respondent committed a breach of a term of the contract between her and the appellant by her failure to pay the outstanding sum of N2.5m as found out by the learned trial judge.
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(b) A breach of a term of a contract entitles the innocent party to sue either:
(i) For specific performance and damages or
(ii) Rescission of the contract and damages.
(a) The stage for the delivery of vacant possession of the subject matter of this case had not reached by the time the respondent committed a fundamental breach of the contract as found by the learned trial judge.
(b) There was no evidence before the learned trial judge that the appellant was incapable of delivering vacant possession of the property to the respondent if the respondent had performed her own part of the contract fully.
(c) Exhibit CE15 which the learned trial judge accepted as the basis of the contract specifically stated that possession shall not pass to the respondent until full payment of the purchase price has been made.
(f) There was no basis for asking for vacant possession or in fact possession of the property since full payment has not been made.
The appellants issue 3 distilled from ground 3 above reads:
Whether refusal by the purchaser to fully pay the purchase price of the property goes to the root of the contract thereby entitling the vendor to the rescission of the contract.”
The above Ground 3 of the amended Notice of Appeal, its particulars and issue 3 formulated there from are quite clear and comprehensible. No one will be confused about the complaint of the Appellant as contained therein. The only problem is that it so overlaps with Ground 1 that it appears superfluous. The ground, the particulars, and issue could easily have come under Ground 1 and the issue formulated there from.
In the case of OLAKSANDR V LONESTAR DRILLING CO. LTD (2015) 9 NWLR (PT. 1464) 337 AT 396-397 cited by Mr. Eze, NWEZE JSC in Paras F-D observed:
???A ground of appeal and its particulars must be couched to ensure that the adverse party who reads same must not be left in any doubt as to what the appellant???s complaint is. However, where the parties to an appeal and the Court are not misled by the contents of a ground of appeal, the inelegance of the ground of appeal or its particulars would not invalidate the ground of appeal.”
The Respondents complaint is consequently mere technicality which did not occasion a miscarriage of justice. The problem can be taken care of by dealing with issues 1 & 3 together. The objection is lacking in merit and is overruled.
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Before dealing with issues 1 & 3, I shall quickly dispose of issue 2. The contention of the Appellant on issue 2 is that the learned trial judge erred in coming to the conclusion that the allegation of forgery of Exhibit CE19 was not established. He argued that Exhibit CE 21 has no consideration at all on the face of it while Exhibit CE 19 has N10 Million naira consideration instead of the actual purchase price of N16.5 Million naira. Exhibit CE19 is the Deed of Assignment between the Appellant and the Respondent. It is not contended that the Deed was not executed by the Appellant before it was forwarded to the Lands Registry Office Oke – Elewo Abeokuta where the Governors consent was processed and obtained on the application of the Appellant. The appellant signed all the necessary forms for the Governors consent and provided his passport picture. The allegation of forgery by the Appellant against the Respondent is criminal in nature and must be proved beyond reasonable doubt. The learned trial Judge on the issue at 286 287 of the Records found as follows: the submission that Exhibit CE19 and CE21 were forged documents was not established at all before me. I agree with the submission of the Defence counsel that the allegation of forgery which bothered on crime must be proved beyond reasonable doubt even if made in a civil matter. The mere fact that the consideration stated in Exhibit CE19 (the registered Deed of Assignment) was N10m whereas the actual consideration that the parties agreed upon was N16.5m does not make the document a forgery. As rightly submitted by the Defence counsel, Claimant voluntarily executed the document, albeit Claimant stated that he executed it in order to enable the Defendant obtain the loan from her Bank. I have had a good look at Exhibit CE19 and contrary to the submission of the Claimant counsel, there is nothing to suggest that the consideration was deleted to insert the lower consideration stated therein.”
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This finding of the learned trial Judge cannot be faulted. The Appellant had tendered Exhibits CE19, CE20 and CE21 and averred in his pleadings that Exhibits CE19 and CE21 were altered by the Respondent. In his address at page 219 of the Record counsel claimed that the Appellant never appended his signature to the documents but the claim is not supported by the evidence led at the trial. The Appellant did not lead evidence during the trial that his signature on Exhibits CE19 and CE21 were forged. On the contrary, he admitted that he executed the Deed of Assignment to enable the Respondent obtain loan from the Bank. He also voluntarily surrendered his title document, his Certificate of Occupancy to the Respondent to facilitate the registration of the transaction. There is no clear evidence that the alteration of the consideration in Exhibit CE19 was done by the Respondent or without the consent of the Appellant. The Appellant voluntarily participated in the necessary documentation that led to the processing of Exhibit CE19 at the Lands Registry Abeokuta. Form 1C (an administrative document at Lands Registry Abeokuta) was voluntarily executed by the Appellant with his passport photograph voluntarily attached. Without his participation, the Governors consent would not have been obtained. I am in agreement with learned counsel for the Respondent that the allegation of fraud was an afterthought conceived to undermine the case of the Respondent. The learned trial Judge is right that the Appellant failed to discharge the burden of proof placed on him by law to substantiate the allegation of fraud. It is not enough to allege that the Governors consent was procured with documents fraught with clear evidence of fraud and illegality with the sole motive of denying the Ogun State Government its much needed revenue. There must be evidence which proves beyond reasonable doubt that it was the Respondent who committed the act giving rise to the fraud. In the case of ADIMORA V AJUFO & ORS (1988) LPELR-182 (SC) OPUTA JSC observed:
Fraud implies a wilful act on the part of anyone, whereby another is sought to be deprived, by illegal or inequitable means, of what he is entitled to. Fraud for the purposes of the civil law includes acts, omissions and concealment by which an undue and unconscientious advantage is taken of another:GREEN V NIXON (1957) 23 Beav 530 at p.535.
Proof beyond reasonable doubt means clear evidence that the Respondent was indeed responsible for the alleged forgery.
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No such clear evidence was adduced. It was all mere speculation. The Respondent is right that it does not actually lie in the mouth of the Appellant given the role he played to make this allegation without any evidence from an officer or representative of the Ogun State Government and Land Registry Abeokuta. Issue 2 is resolved against the Appellant and in favour of the Respondent.
On issues 1 & 3, it seems well settled from a long line of authorities that in a contract for sale of land failure to pay the purchase price or part of the purchase price constitute a fundamental breach which goes to the root of the case and may give grounds for rescission of the contract of sale by the owner. See the following cases:ACHONU V OKUWOBI (2017) LPELR-42102(SC); NIDOCCO LIMITED VS. GBAJABIAMILA (2013) 6/7 SC (PT. 10) 92 OR (2013) LPELR-20899 (SC) NLEWEDIM VS. UDUMA (1995) 6 NWLR (PT. 402) 383; MANYA V. IDRIS (2001) 8 NWLR (PT. 716) 627; ODUFUYE V. FATOKE (SUPRA); ANWASI V CHABASAYA (2001) 1 NWLR (PT. 661) 408. This of course is a general statement of the law as it will all depend on the peculiar facts of each case.
In ACHONU V OKUWOBI (2017) LPELR-42102(SC), the purchase price for the property was N1, 500, 000.00. The purchaser accepted the offer and made part payment of N700, 000.00 in two instalments of N500, 000.00 and N200, 000.00 and was issued a receipt for the payment dated 3/6/92. She promised to liquidate the balance of N800.000.00 within one week. When she failed to honour the promise, the owner instructed his solicitors to write to her informing her that he would no longer sell the property because the project for which he needed the money from the sale of the property had been frustrated by her inability to pay the balance within the time agreed. The Court of first instance granted the purchaser an order of specific performance on the ground that there was a valid and subsisting contract of sale of which there was part performance. The Court of appeal however disagreed holding that time was of the essence and that there was no sufficient evidence justifying the order of specific performance. This view was upheld by the Supreme Court in the following words:
In the instant case, the purchaser, that is the appellant had failed to pay the balance of the purchase price at the expiration of the one week agreed upon by her and after extension of time and repeated demands for payment by the Respondent. The learned justices of the Court of Appeal were therefore justified when they quashed the trial Courts order for specific performance.
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It will seem consequently that where there is a definite contract for sale of property and a substantial part of the purchase price paid, failure to pay the outstanding balance may not necessarily entitle the owner to rescind the contract where time is not of the essence; and where failure to pay the balance is as a result of some misunderstanding yet to be settled by the parties, and third party interest had in the interval come into play. This explains the reasoning behind the observation of Adekeye JSC in MINI LODGE LIMITED & ANOR. VS. CHIEF OLUKA NGEI (2010) 10 WRN 56, 66 RATIO 9 that:
In a contract for sale of property where part payment was paid, the law is that the contract for purchase has been concluded and is final leaving the payment of the balance outstanding to be paid. The contract for the sale and purchase is absolute and complete for each party can be in breach for non-performance and for which any action can be maintained for specific performance.”
The observation is correct to the extent that the contract of purchase is conclusive and that failure by either party to perform any of his obligations under the contract is a breach for which an innocent purchaser can sue for specific performance. He may not succeed if there are other reasons in the contract of purchase militating against an order of specific performance. In the same vein an innocent seller can also sue for specific performance or he may choose to rescind the contract of sale. Success again depends on the peculiar circumstances of the case. The observation cannot be construed to mean that the innocent seller can only sue for specific performance and cannot opt for his right to rescind the contract.
The learned trial Judge in the instant appeal rightly held that the Respondent was the one in breach of the contract of sale by failing to pay the full purchase price and not the Appellant for failure, as strenuously argued by the Respondent to surrender vacant possession. The Respondents insistence on this point is quite surprising in view of the contents of Exhibits CE14 and CE15. The importance of these two Exhibits call for reproduction of the relevant parts. Exhibit CE14 dated 14/2/2007 reads:
???RE: OFFER FOR PURCHASE OF PROPERTY KNOWN AS NO. 3 KAYODE ANIFOWOSHE STREET, RIVER VALLEY ESTATE, OJODU
Further to our discussion of February 12, 2007 and your offer letter of December 16, 2006, please confirm that the under-listed are the agreed terms and conditions for the purchase of the above
………………………….T……………………………….
property. That is:
1. Price: N16.5 million NET
2. Agency: 3% of N16.5 million payable to Barrister Eke.
3. Payment Schedule:
a. N12.5 million payable on before 31 March, 2007.
b. 3% of N16.5 million payable along with the N12.5 million payment.
c. N2.0 million payable on before 31 July, 2007.
d. N2.0 million payable on before 31 October, 2007.
4. Original title documents (C of O) and evidence of payments of all statutory land charges and taxes at lands registry to be released upon payment of the N12.5 million deposit.
5. Post-dated cheques to be issued for payments 3(c) and 3(d) above.
Kindly acknowledge below or in writing that the above already discussed terms and conditions are acceptable to you.
Regards
SGD
HAPPINESS UFOMADU
Exhibit CE15 is the Reply to the above letter and is dated 20/2/2007. The relevant parts read as follows:
RE: NO. 3 KAYODE ANIFOWOSHE STREET, RIVER VALLEY ESTATE, OJODU
We refer to the above captioned matter and in particular your letter of 14th February, 2007 and hereby unequivocally state that any variation or deviation from the terms you stated in the aforesaid letter under reference shall automatically render void the entire sale transaction and any money or moneys paid by you to the vendor shall become refundable. For the avoidance of doubt, you must strictly keep to the schedule of payment and every term contained in your letter of offer of 14th February, 2007, failing which the entire sale transaction shall become null and void and of no effect.
Please note also that neither possession nor ownership of the said property shall pass to you until you have fully and effectively paid the agreed sum of =N=16.5m (Sixteen Million and Five Hundred Thousand Naira) to the vendor and kept to each and every term stated in your letter of 14th February, 2007 to us.
On our part, we shall ensure that every money meant for the vendor from you is passed to the vendor and where the sale transaction fails, every money of yours actually received by the vendor shall be returned to you.
Thanking you always.
Yours faithfully,
For: ONUZURUIKE LAW CHAMBER
SGD
Fes Eze Eke LL.M, BL. NP
Principal Solicitor & Notary Public
The above two Exhibits CE14 and CE15 contain in clear terms the agreement reached by the parties. But a careful perusal of all the correspondences tendered in this case as Exhibits shows that the relevance of Exhibit CE15 was not recognised. Its contents surely pulled the rug off the feet of the Respondent and demolished all her arguments and contentions. Learned counsel for the Defendant/Respondent in his Reply to the written address of the Claimant/Appellant on points of law at page 242 half heartedly submitted that Exhibit CE15 was not served or communicated to the Defendant/Respondent. However the document was duly pleaded in the last paragraph of the Appellants Reply to the Statement of Defence at page 129/130 of the Record and paragraph 7(d) of the Defence to Counterclaim at page 133 of the Record. It was admitted as Exhibit CE15 without any objection by the Respondent. The learned trial Judge rightly observed that Respondent Counsels argument in his address that Exhibit CE15 was not served on the Respondent amounted to giving evidence in the written address as the document was already in evidence without any objection. See page 285 of the Record. There, the learned trial Judge observed:
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“The claimant’s counsel in his written address submitted that Exhibits CE14 and CE15 embodied the agreement between the parties. He then summarized his opinion, the defence counsel chose to focus on only Exhibit CE14 and the (sic, he) concluded that the summary by claimant’s counsel which embodied Exhibit CE15 was done in order to mislead. Exhibit CE15 is a document which speaks for itself and its contents lend credence to the summary by claimant’s counsel. I cannot see any attempt to mislead in the said written address.
Thus the terms of the contract between the parties per Exhibits CE14 and CE15 which the learned trial Judge also accepted are as follows:
“1. Subject matter of contract of sale of land – claimant’s property Situate at No. 3 Kayode Street, River Valley Estate, Ojodu.
2. Agreed purchase price – N16.5 Million
3. Agency – 3% of purchase price (N16.5M)
4. Time for final payment of full purchase
Price on/before 30th October, 2007.
5. Possession and ownership – to pass upon full payment of agreed purchase price of N16.5 million.”
The terms are indeed clear and the learned trial Judge had no difficulty in finding that the defendant/respondent was promised possession upon payment of the full purchase price. The respondent paid N14 million as part payment and subsequently refused to pay the balance of N2.5 million on the ground that the appellant failed to give her vacant possession. The contents of Exhibits CE14 and CE15 will seem to suggest that in between the two correspondences there were oral discussions that led to variations in the contents of Exhibit CE14. For example, item 3, the payment schedule was completely varied. Instead of N12.5 million payable before 31/3/07, leaving a balance of N4million, N14million was paid leaving a balance of N2.5million.
How then does one explain the insistence in Exhibit CE15? that any variation or deviation from the terms you stated in the aforesaid letter under reference shall automatically render void the entire sale transaction and any money or moneys paid by you to the vendor shall become refundable. For the avoidance of doubt, you must strictly keep to the schedule of payment and every term contained in your letter of offer of 14th February, 2007, failing which the entire sale transaction shall become null and void and of no effect.”
This, with respect raises some suspicions about Exhibit CE15. Since the Respondent failed to challenge the document in her pleadings and evidence in Court we have no choice but to accept it as authentic. So by the agreement of the parties, the Respondent had to pay the full purchase price before possession can pass to her. It is only after she had paid the full purchase price that the failure of the appellant to deliver vacant possession would become an issue. Any alleged oral agreement to the contrary is of no moment as the parties are bound by the contents of Exhibits CE14 and CE15.
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The Respondent had to pay the full purchase price before possession can properly pass to her. As the learned trial judge put it, she failed to allow the claimant manifest his full intention before she stopped the payment of the balance. The Respondent was clearly the one in breach of the contract of purchase and not the Appellant. The big question therefore is whether the breach entitled the Appellant to rescind the contract of purchase in the peculiar circumstances of this case? Or put in another form and as couched under issue 3, whether the refusal by the Respondent to pay the full purchase price of the property goes to the root of the contract thereby entitling the Appellant to rescind the contract of sale? It is not in doubt that under normal circumstances, a refusal by a purchaser to complete the full payment under a contract of sale of land amounts to a breach which would entitle the owner either to rescind the contract or to sue for specific performance of the contract of sale. It is inconceivable that a purchaser will insist on ownership or retention of possession of property belonging to another when full payment for the property has not been made.
The Respondent apparently decided to take advantage of the great favour and warm hand of friendship extended to her by the Appellant who surrendered to her upfront all the documents of title to the property to enable her obtain a loan for the purchase of the property. The Appellant, having actually received the N20 million loan could easily have insisted on full payment of the purchase price. But on the contrary, he graciously obliged the Respondent and returned to her as requested N6 million accepting post dated cheques for the balance of N2.5million. These events led to the registration of title documents by the bank including a mortgage deed covering the loan facility. The Respondent ill advisedly and in contravention of the agreement in Exhibit CE15 believing that she now owned the property refused to pay the balance of the purchase price because she had not been given vacant possession. Her contention was that one of the tenants in the building had paid rent in advance to the Appellant such that the tenant would still be entitled to stay on in the flat after the entire purchase price would have been paid. All these matters go to no issue once it is accepted that Exhibits CE14 and CE15 govern the transaction. Respondents reference to Exhibit DE2, her offer letter of January 8 2007 in which she asked for vacant possession and which the learned trial Judge appeared to give credibility to is not helpful to her case. The offer was rejected and she made a counter offer Exhibit CE14 in which no mention was made of vacant possession. The learned trial judge in his judgment at page 284 of the Record observed:
The claimant and his witness also denied that the issue of vacant possession was not part of the agreement with the defendant because of Exhibit CE15. I do not believe the claimant and his witness in respect of this assertion. The stance taken by the claimant and his witness also does not appear reasonable to me all the facts of the case considered. How can a person make part payment of N14.0m for a property and not demand vacant possession. I believe the defendant when she stated that the future payments were to be made to coincide with the termination of the then valid tenancies.
The learned trial judge cannot approbate and reprobate. At page 285 of the Record His Lordship had accepted Exhibit CE15 in the following words:
Exhibit CE15 is a document which speaks for itself and its contents lend credence to the summary by claimant’s counsel. I cannot see any attempt to mislead in the said written address.
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If Exhibit CE15 is accepted as governing the transaction especially given that the Respondent made no effort to challenge its authenticity, all claims by the Respondent about vacant possession must be rejected notwithstanding the possibility that she may have been deceived or misunderstood the representations made by the Appellants agent, Mr. Fez Eze who testified as CW2. It is hard to believe that a highly qualified engineer such as the Respondent knowing the contents of Exhibit CE15 could continue to insist on vacant possession before payment of the balance of the purchase price. It is not in doubt as shown in the many authorities referred to above that failure to pay in full the purchase price as agreed by the parties is a fundamental breach entitling the owner to rescind the contract and sue for damages. The authorities however show that there must be a demand for the balance and refusal or failure to pay. Here, the Appellant did not demand the balance from the Respondent. At page 287, the learned trial judge observed:
I will deal with the first two issues by claimants counsel together. The issues were whether the failure of the defendant to pay the full purchase price at the agreed time and the arrogation of ownership of the claimants property to herself does not amount to breach of contract which entitled the claimant to rescind the contract. I must observe that contrary to the latter part of issue two formulated by the claimants counsel there was no single demand for the balance of the purchase price by the claimant from the defendant after the first cheque of instalment was dishonoured. That was the evidence of the claimant himself rather it was his agent who wrote Exhibit CE5 to the defendant after the incident. Exhibit CE5 was by no means a demand for payment of the balance but rather a letter which sought clarification on the status of the contract between the parties. Under cross-examination claimant stated that he does not want his balance payment but he wants his property back.
As I stated earlier, the right to rescind the contract also depends on the peculiar circumstances of each individual case. Where there are extenuating circumstances, the Court will hold that the breach is not so fundamental as to warrant rescission of the contract. Here, the Respondent had paid N14.0m out of the purchase price of N16.5m. The balance was just N2.5m. I agree with the learned trial Judge that it is unconscionable for the Appellant who had kept the Respondents N14.0m since 2007 and used it for his private business to now seek to return the money and take his property back for failure of the Respondent to pay the balance of N2.5m. More so, knowing that the Respondent paid for the property with money borrowed from the bank and that the title documents are with the bank and the property mortgaged to the bank. Too much has happened and it is simply not feasible or equitable to allow the Appellant to rescind the contract of sale. The viable option in the circumstances is an order of specific performance of the contract and possibly damages for the breach, if the circumstances permit. The Appellant had his tenant in one flat and has been collecting rent from the tenant all these years. Courts are not robots that adhere to technical rules without giving heed to the peculiar facts of the particular case. That is why the Courts can call on equity when necessary to do what is just and right for the parties. After all, the Appellant had parted willingly with his title documents. It appears the Appellant may have been so incensed by the manner in which the Respondent so quickly got rid of the two tenants and commenced reconstruction of the property without paying the balance of the purchase price and on top of it acting as if she was the master of the game Madam Know-it-all! He then took it upon himself to teach her one or two lessons! In this regard, I note the evidence of the Appellant that the tenant Mr. Patrick Obiorah a staff of Richwell Plaza Ltd a company in which he had majority interest would have been the easiest tenant to get rid of. But because of what he saw as the obduracy of the Respondent, the Appellant ensured that the tenant stayed put without any indication of intention to ever leave the flat. That was the reason why the respondent now reneged on paying the first instalment.
………………………….X………………………………..
She discovered what she claimed to be the non-disclosure of a vital fact on vacant possession that Mr. Patrick Obiorah had actually paid rent on the property until 2010 and that vacant possession cannot be delivered until after 2010. This in a nut shell is the genesis of this avoidable impasse. Even while giving evidence at the lower Court in 2011, the Claimants witness (CW2) Barrister Fes Eke Eze admitted that Richwell Plaza Limited was still their tenant on the property and that its tenancy subsisted till the time he gave evidence. (Page 284 records). The situation remains the same till date. The Appellant is clearly not as innocent as he wants the Court to believe. A purchaser who paid N14.0m out of total purchase price of N16.5 is entitled to worry about vacant possession. No one wants to purchase a law suit in the process of buying property. The Appellant is wrong in his postulation that a purchaser should pay the full purchase price, at which point a sitting tenant would then be given notice to quit. A purchaser has the right to negotiate vacant possession. I believe that was what the Respondent tried to do in spreading out payment of the balance of the purchase price the way she did. There was apparently a break-down in communication. It is possible that the person responsible for this break-down in communication is the Appellants agent, Mr. Eze. Be that as it may, my advice is that both the Appellant and the Respondent should climb down from their high horses and do the needful.
While most of the authorities cited hold that failure to pay part of the purchase price as negotiated is a fundamental breach entitling the vendor to rescind the contract, the situation is bound to differ where the vendor has voluntarily parted with title documents to the property and the property is already the subject of a registered mortgage deed by a bank that provided the loan for the purchase; all to the knowledge of the vendor. Further, the Respondent did not refuse to pay the balance. Issues arose which needed to be sorted out. Rather than engage in negotiation to sort out the issues, the Appellant decided he wanted his property back. At the trial he testified that it was not a question of money, that he wanted his property back.
………………………….Y………………………………..
The circumstances of the case make it impossible to grant an order of rescission of the contract. The appropriate remedy is an order of specific performance. The appeal is consequently lacking in merit and is hereby dismissed. The judgment of the lower Court is affirmed. I make no order as to costs.
HARUNA SIMON TSAMMANI, J.C.A.: My learned brother, C. E. lyizoba, JCA has admirably and exhaustively considered in depth the legal and factual issues that came up for determination in this appeal. I agree totally with the findings and the views expressed by my learned brother in the judgment, and adopt same as mine.
It is obvious from the oral and documentary evidence adduced by the parties as shown on the Record of Appeal, that the Respondent was apparently in breach of the terms of the Contract of sale as depicted in Exhibits CE14 and CEL5. That breach would ordinarily have entitled the Appellant to rescind the contract, but considering the entire circumstances of the case, it would be inequitable to allow him to do so. For that reason, I agree entirely with my learned brother that the justice of the case will be met if we order for specific performance of the contract as stipulated in Exhibits CE14 and CE15. See Gaji v. Paye (2003) 8 NWLR (Pt. 823] 583; LSPDC & Anor v. Nigerian Land & Sea Foods Ltd (1992) 5 NWLR (pt. 244) 653 and Help (Nig.) Ltd v. Silver Anchor (Nig.) Ltd (2006) 5 NWLR (Pt. 972) 196.
On that note, I agree with my learned brother that this appeal should not be allowed. It fails and is accordingly dismissed. I abide by the consequential order(s) made in the lead judgment.
NONYEREM OKORONKWO, J.C.A.: I had the privilege of reading in draft the leading judgment of my learned brother Chinwe Eugenia lyizoba, J.C.A.
I agree entirely with the reasoning therein and the conclusion arrived thereat. The appeal lacks merit and ought to be dismissed. The appeal is hereby dismissed by me and the judgment of the lower Court delivered on the 25th of June, 2012 is hereby affirmed.
Appearances:
FES EZE EKE ESQ. WITH HIM, D. A. IKEM ESQ. AND S.C. EMEH ESQ.For Appellant(s)
SOLOMON A. IMOSEMI ESQ.For Respondent(s)
Appearances
FES EZE EKE ESQ. WITH HIM, D. A. IKEM ESQ. AND S.C. EMEH ESQ.For Appellant
AND
SOLOMON A. IMOSEMI ESQ.For Respondent
Appearances
MR. ARCHIBONG NKANA v. ABIMBOLA HUNDEYIN
On Friday, the 12th day of January, 2018
CA/L/786/09(CONSOLIDATED)Before Their Lordships
MOJEED ADEKUNLE OWOADEJustice of The Court of Appeal of Nigeria
CHIDI NWAOMA UWAJustice of The Court of Appeal of Nigeria
HAMMA AKAWU BARKAJustice of The Court of Appeal of Nigeria
Between
Before Their Lordships
MOJEED ADEKUNLE OWOADEJustice of The Court of Appeal of Nigeria
CHIDI NWAOMA UWAJustice of The Court of Appeal of Nigeria
HAMMA AKAWU BARKAJustice of The Court of Appeal of Nigeria
Between
MR. ARCHIBONG NKANA
-CA/L/786/09
AND
ABIMBOLA HUNDEYIN
-CA/L/39M/11Appellant(s)
AND
ABIMBOLA HUNDEYIN –
-CA/L/786/09
AND
1. MR. ARCHIBONG NKANA
2. UNION DICON SALT PLC
3. THE REGISTRAR OF TITLES, LAGOS STATE LANDS REGISTRY
-CA/L/39M/11
CHIDI NWAOMA UWA, J.C.A. (Delivering the Leading Judgment): The appeal is against the judgment of the High Court of Lagos State, presided over by Y,O. Idowu, J. delivered on the 5th day of June, 2009.
The trial Court dismissed the appellant’s claim for possession and arrears of rent primarily on the premise that the appellant had failed to establish evidence of a tenancy relationship between him and the Respondent.
The background facts on the part of the Appellant are that on the 1st day of March, 2001, Union Dicon Salt Plc sold to the appellant, the property known as No. 3, Biaduo street, South-west, Ikoyi, Lagos. It was made out that prior to the sale of the property to the Appellant, the Respondent had been a tenant of Union Dicon Salt Plc on the property. On the sale of the property to the Appellant, Union Dicon Salt Plc was said to have written letters to its tenants inclusive of the Respondent introducing the Appellant as the new owner of the building. The company was said to have issued Notices to Quit to all the tenants. The Appellant made out that he caused fresh Notices to Quit to be served on the tenants including
the Respondent, the notices were followed by the service of 7 days Notices of owners intention to recover Possession.
The Respondent did not vacate the premises on the basis of an alleged breach by the Union Dicon Salt plc of a prior agreement to sell the property to her. This led to the Appellant instituting Suit No. LD/1629/2003 against the Respondent. By the Appellant’s 2nd Amended Statement of claim of 26th April, 2004, the following reliefs were sought:
………………………….A………………………………..
a. Possession of all that 2 bedroom semi detached house situate at No 3 Biaduo Street, South West Ikoyi, Lagos,
b. A mandatory injunction compelling the Defendant to discharge her terminal obligations by redecorating the premises and settling and discharging all outstanding electricity, telephone, water and township bills.
c. Arrears of rent from August, 2000 to 30 November, 2001 in the sum of N400,000.00 per anum.
d. Mesne profits at the rate of N1,000,000.00 from 1st December, 2001 until possession is given up.”
The respondent defended the action and also counter claimed as follows:
“SPECIFIC PERFORMANCE of the contract for the sale of No. 3 Biaduo Street, South-West Ikoyi, Lagos between the counter – claimant and the 2nd Defendant;
b. ALTERNATIVELY N20 Million (N20,000,000.00) being special, exemplary and general damages for BREACH of the contract of sale against the 1st and 2nd Defendant;
c. COST of the action.”
The appellant responded to the counter claim. At the close of the trial, the learned trial judge dismissed the Appellant’s claim and granted the Respondent’s alternative claim for damages. The appellant who was dissatisfied with the judgment appealed to this Court. A sole issue was formulated for the determination of the appeal as follows:
“Whether the dismissal of the Appellant’s claim for possession and other incidental reliefs was not in the light of the evidence led at the trial erroneous, particular regard being had to the undisputed fact before the Court that the Respondent was prior to the sale of the property, a tenant of the Appellant’s predecessor in title?
Grounds 1,2,3,4 and 5.
The Respondent also distilled a sole issue for the determination of the appeal thus:
“In view of the state of evidence led at the trial Court whether the trial Court was not right in dismissing the Appellant’s claim for recovery of possession for failure of the Appellant to establish his entitlement to possession of the property at No. 3 Biaduo Street, South West, Ikoyi, Lagos.”
Grounds 1, 2, 3, 4 and 5.
………………………….B………………………………..
Before the main appeal was argued, the learned counsel to the Respondent Ayo Adesanmi Esq. in appeal No. CA/L/786/09 and for the appellant in appeal No. CA/L/39/11 with Omolade Adeyemi and Olayide Salami Esq. raised and argued his preliminary objection filed on 16/6/17 pursuant to Sections 2 (1) and 24 of the Legal Practitioners Act, CAP 207, Laws of the Federation. The following reliefs were sought:
1. AN ORDER of this Honourable Court striking out and/or dismissing the appeal for being incompetent.
2. AND FOR SUCH further orders as this Honourable Court may deem fit to make in the circumstances of this case.
The grounds upon which the application was brought are as follows:
1. The suit leading to the instant appeal was instituted at the High Court of Lagos state (lower Court) vide a Writ of Summons and Statement of Claim dated 21st July, 2003 and filed on 30th July 2003.
2. The statement of claim which was filed with the writ of summons in initiating the action at the lower Court was signed by “Excellence Solicitors”.
3. “Excellence Solicitors” is not a person known to law.
4. By virtue of Sections 2(1) and 24 of the Legal Practitioners Act, “Excellence Solicitors” is not a person whose name is on the Roll of Legal Practitioners authorized to practice as a Barrister and Solicitor in Nigeria.”
5. Appellant’s counsel admitted, when the appeal came up for hearing on May 30, 2017, that the statement of claim before the lower Court was signed by an entity unknown to law as a person or legal practitioner.
6. Arising from the foregoing, the Statement of Claim signed by “Excellence Solicitors” is incompetent and evidence led In respect of same warrants the dismissal of this appeal.
7. Further to the above, this appeal premised on the appellant’s incompetent claims before the lower Court is incompetent.
8. Further to the foregoing, the instant appeal and the reliefs sought thereat in respect of the incompetent claims filed before the lower Court are incompetent and without merits having been premised on incompetent claims.”
The application was supported by a five paragraph affidavit to which Exhibit 1 the statement of claim dated July 21, 2003 but, filed on July 30, 2003 was attached and a written address. Also relied upon is a reply address in response to the Respondent’s counter affidavit and written address filed on 12/10/17, these processes were adopted and relied upon by learned counsel in urging us to strike out or dismiss the appeal.
………………………….C………………………………..
Reliance was placed on the case of FBN VS. MAIWADA (2013) 5 NWLR (PT. 1348) P.444 at 485. It was argued that the appellant conceded that the statement of claim was signed by a firm in paragraph 3 of the counter affidavit. In paragraph 4 of the affidavit in support of the application, it was deposed that the appellant’s statement of claim dated July 21, 2003 was/is signed by ‘Excellence Solicitors’, Exhibit 1 attached to the affidavit, not a person known to law and/or a recognizable legal practitioner. It was deposed that the appellant’s appeal is premised on the appellant’s unsigned statement of claim before the lower Court.
In the learned counsel’s address in support of the respondent’s application, a sole issue was raised thus:
“In the light of Sections 2 and 24 of the Legal Practitioners Act and settled case law vis – a – vis the statement of claim signed by and/or in the name of a law firm, whether this Honourable Court will not dismiss this instant appeal.”
The learned counsel to the Respondent/Applicant identified the main issue as: whether a statement of claim signed by and/or in the name of a law firm is competent? The answer was in the negative. It was submitted that the appellant in his claim before the lower Court incompetently signed his statement of claim containing reliefs sought therein. Reference was made to the last page of Exhibit ‘1’, the appellant’s statement of claim. Reference was also made to Sections 2(1) and 24 of the Legal Practitioners Act (LPA) which provides for who can practice law in Nigeria, to the effect that it is only those whose names are on the role of the Supreme Court of Nigeria that can practice as a barrister and solicitor in the country. Rule 12 of the Rules of Professional Conduct (RPC) was also relied upon. See, OKAFOR VS. NWEKE(2007) 10 NWLR (PT.1043) 521 where the Supreme Court held as incompetent a notice of appeal endorsed by the law firm of a learned Senior Counsel. See, also N.N.B. PLC VS. DENCLAG LTD (2005) 4 NWLR (PT. 916) 540, NIGERIA ARMY VS. SAMUEL (2013) 14 NWLR (PART 1375) 466 at 483, MINISTRY OF WORKS & TRANSPORT, ADAMAWA STATE VS. YAKUBU (2013) 6 NWLR (PT.1351) 481 at 496 and OLAGBENRO VS. OLAYIWOLA (2014) 17 NWLR (PT. 1436) 313 at 366 TO 367. Also, in MOUDKAS NIG. ENT. LTD AND ORS VS. OBIOMA & ORS (2016) LPELR 40165 at 6 where the action was held to be incompetent despite an amendment where the writ of summons was competently signed but, the statement of claim was not properly signed. (See also, the additional list of authorities filed by the learned counsel to the Respondent). Similarly, the case of EKUNDAYO & ANOR VS. ABERUAGBA (2017) LPELR 42428 to the effect that an amendment cannot cure an incompetent process.
We were urged to dismiss the reliefs sought on appeal as they were premised on an incompetent statement of claim where the reliefs were sought. See, OJUKWU VS. ONYEADOR (1991) 7 NWLR (PT.203) 286 at 306, SKEN CONSULT VS. UKEY(1981) 1 SC 6 at 27, MACFOY VS. UAC (1962) AC 152; 3 ALL ER 1169 at 1172 and SLB CONSORTIUM VS. NNPC(2011) 9 NWLR (PT.1252) 317 at 336.
………………………….D………………………………..
In opposing the application, the learned counsel to the Appellant/Respondent O.O. Ogungbade Esq. filed a five paragraph counter affidavit and a written address in urging us to dismiss the objection. In his counter affidavit, it was deposed in paragraph 3 that the writ was properly signed but, that the appellant’s statement of claim had a signature above the appellant’s address for service. It was deposed that the signature of one Mrs. Abiodun Durojaiye on the writ of summons is the same as the signature that is on the statement of claim even though the name was omitted. It was deposed in paragraph 4 that the name of the legal practitioner who signed the statement of claim was not stated thereon.
In the address of the learned counsel to the appellant in opposing the application, a sole issue was also raised thus:
“Whether this appeal is incompetent by reason of Sections 2 and 24 of the Legal Practitioners Act having regard to the undisputable fact that the unidentified signature which appears on the Appellant’s Statement of Claim is the same as that which appears on the Writ of Summons duly signed by an identified legal practitioner.”
The learned counsel in his submission conceded that a process that is unsigned or signed defectively is worthless in the eye of the law. It was also conceded that the statement of claim was signed in the name of Excellence Solicitors but, it was argued that the appeal is competent since the legal practitioner who signed the statement of claim is discoverable from the records of Court. It was submitted that at page 4 of the printed records of appeal, where the last page of the statement of claim appears, there is a signature. The Learned counsel argued that the writ of summons which was signed by one Mrs. Abiodun Durojaiye, a legal practitioner in Excellence Solicitors is similar to the signature on the statement of claim. We were urged to compare the signatures which are the same. See, NGIGE VS. OBI (2006) 14 NWLR (PT. 999) 1 at 143 and Section 101 of the Evidence Act, 2011. In urging us to do substantial justice, reference was made to the case of WILLIAM VS. ADOLD INTERNATIONAL LTD. (2017) 6 NWLR (PT. 1560) PAGE 1 at LINES 19 and 20 to the effect that we could utilize the faulted process to do substantial justice. It was stressed that the signature on the statement of claim is the same as the one on the writ of summons which was filed on the same day.
………………………….E………………………………..
It was argued that, the objection is that the name of the owner of the signature is unknown not that the process in question has no signature. It was contended that Mrs. Abiodun Durojaiye’s name is on the roll of Legal Practitioners and that she signed the process in question. It was argued that the statement of claim was properly signed and that the argument that it was signed by an unknown person should fail. Further, that the law and judicial inclination to do substantial justice warrants a comparison of the signatures on the Writ and Statement of Claim which would lead to the conclusion that the Statement of Claim was indeed signed by an identified legal practitioner, Mrs. Abiodun Durojaiye.
On the proper order to make where a statement of claim is not properly signed is to hold that only the proceedings in respect of the incompetent process is incompetent. See, SLB CONSORTIUM VS. NNPC (supra). We were urged to dismiss the objection and if the issue is decided against the Appellant, to remit the suit to the trial Court for the Appellant/Respondent to file a properly signed statement of claim and rehear the dispute before the trial Court.
In his reply address to the Appellant’s counter affidavit and written address in opposition to the Respondent/Applicant’s application, it was submitted that it is clear that no name could be traced to the statement of claim as it was signed in the name of “Excellence Solicitors”. It was argued that no trial is being conducted by this Court to warrant the comparison of signatures. It was stressed that the Appellant has not made out that the statement of claim did not have beneath the signature on the statement of claim “Excellence Solicitors” as having signed same. We were urged to strike out the statement of claim and action at the lower Court that gave rise to this appeal. See, NIGERIAIN ROMANIAN WOOD & ANOR VS. J.O. AKINGBULUGBE (2010) LPELR – 9140 (CA) 1 at 31. It was concluded that an amendment cannot remedy the incompetent statement of claim. See, THOMAS VS. OLUFOSOYE (1986) 1 NWLR (PT.18) 669 at 682. We were urged to dismiss the Appellant’s suit at the lower Court, strike out and/or dismiss the appeal.
With the main appeal, the learned counsel to the Appellant, O.O. Ogungbade Esq. appearing with Toyese Owoade Esq. and O.O. Owotunmi Esq. relied on his brief of argument filed on 27/8/10, deemed properly filed on 18/5/11 and his reply brief filed on 11/3/13 in urging us to allow the appeal.
I had earlier on in this judgment given the sole issue as distilled by the Appellant for the determination of the Appeal. The learned counsel to the appellant was of the view that the trial Court was wrong to have dismissed the plaintiff’s (Appellant’s) case at lower Court. It was argued that the Appellant’s witnesses PW1 and PW4 had made it clear that Union Dicon Salt Ltd., the previous owners of the property had sold same to the appellant and that their evidence was not shaken under cross examination which was said to have established the pleadings in paragraphs 1, 3 and 4 of the 2nd Amended Statement of Claim at pages 30 – 31 of the records of appeal. Further, that prior to the sale to the Appellant, the Respondent was a tenant of Union Dicon Salt Plc. It was argued that the property having been sold to the Appellant, which was established, the appellant was correct to have asserted that the Respondent was his tenant. See, FARAJOYE VS. HASSAN (2006) 16 NWLR (PT.1006) 463. It was submitted that the trial Court at page 309 of the printed records confirmed that the Respondent as defendant was a tenant to the vendor to the claimant, in respect of the two (2) bedroom detached house and was paying an annual rent of N400,000.00. It was argued that the trial Court was wrong to have held that the appellant failed to establish the nature of the tenancy. Further, that the Respondent admitted being served with the Notices to quit, page 283 of the records, also page 308 in the judgment of the trial Court. It was concluded that based on the evidence led, the claim for possession ought to have been granted by the lower Court. We were urged to allow the appeal.
………………………….F………………………………..
In response, the learned counsel to the Respondent Ayo Adesanmi Esq. with Omolade Adeyemi and Olayide Salami Esq. relied on his brief of argument filed on 18/10/12 but deemed properly filed on 25/2/13. I had also earlier in this judgment outlined the sole issue asformulated by the Respondent for the determination of the appeal. The respondent identified the main issue to be whether the Appellant satisfactorily proved the essential ingredients or requirements that would entitle him to recovery of possession? The respondent was of the view that the Appellant did not. It was argued that the burden is on the appellant to establish that he is entitled to the recovery of possession of the property at No.3, Biaduo Street, South West, Ikoyi. See, ORJI VS. D.T.M. (NIG) LIMITED (2009) 18 NWLR (PT.1173) 467 at 490, ARCHIBONG VS. ITA (2004) 2 NWLR (PT. 858) 590 at 618 619, SECTIONS 131, 132 and 135 of the Evidence Act, 2011. Also, Section 36 of the Rent Control and Recovery of Residential Premises Law Cap R. 6 Laws of Lagos State of Nigeria, 2009 which defines who a landlord is. The Respondents case is a challenge to the Appellant’s claims as the landlord of No. 3 Biaduo Street, South West Ikoyi, Lagos. see, also OGHENE & SONS LTD VS. AMORUWA & ANOR (1986) 2 NSCC 845 at 849 to the effect that the identity of the real landlord must first be settled before determining an action for recovery of possession.
It was submitted that a landlord/tenant relationship must first be established before an institution of an action for recovery of possession.
See, Section 16 (1) of the Rent Control and Recovery of Residential Premises Law Cap. R. 6 Laws of Lagos State of Nigerian, 2003. It was submitted that the appellant did not lead evidence to establish his entitlement to the property or that he is entitled to an interest in reversion in the property. Further, that the evaluation of evidence by the trial Court which was faulted ought not to be disturbed, as it is within the purview of the trial Court to evaluate evidence except where the findings are perverse.
See HENSHAW VS. EFFANGA (2009) 11 NWLR (PT. 1151) 65, EBBA VS. OGODO (1984) 1 SCNLR 372, ODOFIN VS. AYOOLA (1984) 11 SC 72, BUNYAN VS. AKINGBOYE (1999) 7 NWLR (PT.609) 3 and AYAKORA VS. OBIAKOR (2005) 5 NWLR (PT. 919) 507.
On the service of the notices to quit, it was submitted that the Notices served on the Respondent are of no moment because there was no landlord and, tenant relationship between the Appellant and the Respondent. see, ODUTOLA VS. SAMUEL & ORS(1956) NSCC at 70 – 71 to the effect that service of a statutory Notice where there is no landlord and tenant relationship is irrelevant, thus making the Notices to quit served on the respondent, invalid. We were urged to dismiss the appeal.
In the appellants reply brief, it was submitted that with the state of evidence led, the dismissal of the Appellant’s claim for possession was wrong, despite the trial Court’s finding that the previous owners were vendors to the Appellant.
It is trite that where a preliminary objection has been raised challenging the competence of the case or an appeal as in the present situation, the preliminary objection must first be resolved to determine the competence or otherwise of the appeal. The reason is, where successful, the appeal ends there but, if unsuccessful, there would then be need to resolve the substantive appeal. See, ASANI SOGUNRO & ORS VS. AREMU YEKU & ORS (2017) LPELR – 41905 (SC), G.E.C. VS. AKANDE & ORS (2010) 18 NWLR (PT. 1225) 506. SPDC NIG. LTD VS. AMADI & ORS(2011) 14 NWLR (PT. 1266) 157 at 183. I would therefore consider first the preliminary objection raised and argued by the learned counsel to the Respondent.
It is at the stage of the present appeal that the learned counsel to the respondent faulted in his preliminary objection, the statement of claim attached as Exhibit 1 to the affidavit in support of the application, dated 21st July, 2003 but filed on 30th July, 2003, at pages 3 – 4 of the printed records of appeal. The learned counsel had argued that the statement of claim which the learned trial judge utilized in determining the appellant’s suit before the lower Court was not signed by a legal practitioner known to law and therefore incompetent. We were urged to strike out or dismiss the appeal from the decision of the lower Court as being incompetent. There is no doubt that the statement of claim bears a signature without an identifiable legal practitioner’s name beneath it. It was endorsed as follows:
“SGD
Excellence Solicitors,
Solicitors to the plaintiff,
NUJ Lighthouse (3rd floor),
3/5 Adeyemo Alakija Street,
Victoria Island, Lagos.”
………………………….G………………………………..
The learned counsel to the Appellant has not argued that a named legal practitioner signed beneath the signature but,rather that the signature on the writ of summons is the same as the one on the statement of claim. The learned counsel to the Appellant admitted in his paragraph 3 (c) and 4 of his counter affidavit that the name of the legal practitioner who was said to have signed the statement of claim was not stated thereon. What is beneath the signature is “Excellence Sollcitors” which is not the name of a legal practitioner or person known to law. It is apt at this point to reproduce hereunder the legislation governing the legal profession in Nigeria as to who can practice law in Nigeria. Sections 2(1) and 24 of the Legal Practitioners Act (LPA), Laws of the Federation of Nigeria, 2004 for ease of reference provides thus:
“2(1) subject to the provisions of this Act, a person shall be entitled to practice as a barrister and solicitor if, and only if, his name is on the roll.”
24. “In this Act, unless the context otherwise requires, the following expressions have the meanings hereby assigned to them respectively, that is to say…. Legal Practitioner means a person entitled in accordance with the provisions of this Act to practice as a barrister or as a barrister and solicitor, either generally or for the purposes of any particular office or proceedings.”
The purpose of the above provisions is to protect members of the legal profession, to ensure that only lawyers whose names are on the roll of legal practitioners sign legal documents to eliminate impersonators and/or non lawyers that have not been registered on the roll from legal practice and more recently, the seal of the legal practitioner is required to be against the signature of the legal practitioner in Court processes. The firm or chamber of a legal practitioner cannot perform the duties of a legal practitioner.See, FIRST BANK OF NIGERIA PLC and ORS VS. SALMANU MAIWADA (2013) 5 NWLR (PT.1348) 444 at 483 PARAS. B ???C. See, also SLB CONSORTIUM VS. NNPC (2011) 9 NWLR (PT.1252) 317 at 336.
No doubt, there is a signature endorsed on the statement of claim but, by the way the signature is endorsed, one cannot decipher the name of the person that signed it and the name was also not endorsed beneath it. The learned counsel while placing reliance on NGIGE VS. OBI (2006) 14 NWLR (PT.999) 1 at 143 and AIGBOBAHI VS. AIFUWA (2006) 6 NWLR (976) 270 at 294 and Section 101 of the Evidence Act, 2011 urged us to compare the signature on the statement of claim with other processes in the file to determine who signed it. I am of the view that the above authorities cited and relied upon by the Appellant do not apply to this case. Ngiges case would be applicable where the authenticity of a signature is challenged. In those line of cases too, the names of the authors or alleged authors were identifiable before the issue of comparison of signatures was resolved. Section 101 talks about a signature by “that person”, there is no named or identifiable person or legal practitioner that signed the statement of claim. Mere comparison of signatures cannot cure the anomaly.
………………………….H………………………………..
‘Excellence Solicitors’ is not a legal practitioner recognized by law. In the celebrated case of OKAFOR VS. NWEKE (2007) 10 NWLR (PT.1043) 521 the Supreme Court made it clear that where a firm of Solicitors signed the offending processes, the motion on notice, notice of cross – appeal and a brief of argument, the Apex Court held that the said processes were incompetent, same having not been issued by a legal practitioner known to law, and were consequently struck out. Subsequent Supreme Court decisions and those of this Court have consistently hammered that a firm of solicitors is not a legal practitioner recognized by law and cannot validly/legally sign and/or file any process in the Court. See, MINISTRY OF WORKS & TRANSPORT, ADAMAWA STATE VS. YAKUBU (2013) 6 NWLR (PT. 1351) 481 at 496, SLB CONSORTIUM VS. NNPC (2011) 9 NWLR (PT. 1252) 317 at 336, NIGERIA ARMY VS. SAMUEL (2013) 14 NWLR (PT. 1375) 455 at 483, OKARIKA VS. SAMUEL(2013) 7 NWLR (PT. 1352) 19, ALAWIYE VS. OGUNSANYA (2013) 5 NWLR (PT. 1348) 570. Also HAMZAT & ANOR VS. SANNI & ORS (2015) 5 NWLR (PT. 1453) 486. In a decision of this Court in MOUDKAS NIG. ENT. LTD & ORS VS. OBIOMA & ORS (2016) LPELR-40165 at P.6 10, where a writ of summons was competently signed but, the statement of claim was not properly signed, this Court held that the action as initiated was incompetent irrespective of the amendment done. In other words, even a purported amendment could not cure the incompetence. See, also EKUNDAYO & ANOR VS. ABERUAGBA (2017) LPELR – 42428 as to the impossibility of amending an incompetent process of the Court. In M.O. Moudkas’ case (supra) (2016) LPELR – 40165 (CA) at pages 6 – 8 paras. C E, his Lordship, Ikyegh, JCA in respect of a statement of claim not signed by a party or legal practitioner held thus:
“Of the statement of claim, I am of clear in my modest opinion that it was not signed by a recognized or known registered legal Practitioner or the claimants. It is on that score incurably defective”
Reliance in the above case was placed on amongst others, the Supreme Court decision of HAMZAT and ANOR VS. SANNI & ORS (2015) 5 NWLR (PT. 1453) 486 at PAGE 499 – 500 PARAS G A, where His Lordship, Galadima, JSC, reiterated that even where a writ of summons was signed by a legal practitioner but the statement of claim in the lower Court was not signed by a legal practitioner but by a law firm, thus:
“In view of our clear position in OKAFOR VS. NWEKE (supra) and other similar cases, I hold that the appellants’ statements of claim on which evidence was led, were a nullity, same having been signed in the name of a law firm which is not by the provisions of Sections 2(1) and 24 of the Legal Practitioners Act, Cap 2017, Laws of the Federation, 1990, a person entitled to practice as a Barrister and Solicitor.
Consequently, the statements of claim are hereby struck out.”
………………………….I………………………………..
Similarly, in the same judgment his Lordship Peter Odili, JSC at page 505, paras, D – G held thus:
“From what is put across by learned counsel for the respondent to which the learned counsel for the appellant merely glossed over and doing that failed to appreciate the danger their processes and competence were in, I find it easy to go along with the contention of the respondent that the appellants’ statement of claim on which evidence was led is a nullity having not been signed by a legal practitioner as known by the definition of Section 24 of the Legal Practitioners’ Act and so the statement of claim has to be struck out as a nullity and of course along with that striking out would be the evidence hanging on the purported pleadings. This is a situation well established by this Court in OKAFOR VS. NWEKE (2007) 10 NWLR (PT. 1043)521.
I hereby strike out the statement of claim and this appeal as the preliminary objection is upheld.”
His Lordship, Ariwoola, JSC, at page 505 – 506, paras. H – A in support, held that:
“The statement of claim upon which the evidence relied upon by the trial Court was based having been signed by a person not known to law as a legal practitioner, as required by our law, is incompetent, it deserves to be discountenanced and struck out. ..
Indeed as the saying goes, you cannot put something on nothing and expect to it stay, it will fall. Evidence led in the case based on the incompetent statement of claim is also incompetent and should be discountenanced and struck out.”
His Lordship, M.D. Muhammad, JSC at page 506 on his part, in support, held that:
“In upholding respondent’s preliminary objection that the appellant’s statement of claim on which the evidence leading to the decision in his favour rests is incompetent. Same is struck out.”
His Lordship, Aka’ahs, JSC in support and emphasizing on the stand of the Apex Court at page 507 held thus:
There is no dispute whatsoever that the statement of claim was not signed by a legal practitioner in accordance with Sections 2(1) and 24 of the Legal Practitioners Act, Cap. 207, Laws of the Federation.
It is therefore not a valid statement of claim: See: OKAFOR VS. NWEKE (2007) 10 NWLR (PT. 1043) 521. One of the conditions to be fulfilled upon which a Court would be competent to assume jurisdiction is that the matter coming before the Court is initiated by due process of law and upon fulfillment of all conditions precedent to the exercise of the jurisdiction.
………………………….J………………………………..
The statement of claim upon which the evidence of the plaintiff is based is not a valid document and no evidence could be considered on a defective statement of claim.
The said statement and evidence are liable to be expunged from the record. It is trite that you cannot put something on nothing and expect it to stand. See: SKENCONSULT (NIG.) LTD VS. UKEY (1981) 1 SC 6. No issues could have been joined on the pleadings unless the statement of claim was valid. Although the writ of summons is valid and the suit itself is still legally in existence, the striking out of the statement of claim as well as the statement of defence together with the evidence adduced on the pleadings cannot extinguish the suit. Consequently, this Court cannot make an order dismissing the suit. The plaintiffs/appellants are entitled to have a second bite at the cherry if they so choose.”
See, also a very recent decision of the full Court of the Supreme Court concerning
the position of the law in OKAFOR VS. NWEKE (supra), in Appeal No. SC. 9/2006. CHIEF GABRIEL IGBINEDION & ORS VS. UMOR ASUQUO ANTIA delivered on 15/12/2017 to the effect that OKAFOR VS. NWEKE (supra) has come to stay. All other decisions along that line emphasize that a process of the Court, in this case a statement of claim, signed in the name of a law firm Excellence Solicitors”, is not a person entitled to practice as a Barrister and Solicitor thus making the statement of claim on which evidence was led, incompetent. The statement of claim is fundamentally defective. Having held that the statement of claim is incompetent, as well as the evidence of the appellant as plaintiff based on the invalid document, in consequence the statement of claim, Exhibit 1 in the application is a nullity. I hold that the preliminary objection succeeds and is upheld. The statement of claim dated 21st July, 2003, filed on 30th July, 2003 and the evidence led in its support are discountenanced and hereby struck out.
Generally, this Court as an intermediate Court has the duty to pronounce on all the issues raised before it because it would be wrong on its stand and decision upholding a preliminary objection, in this case striking out the statement of claim as well as the evidence led utilizing the faulted statement of claim. Having held that the statement of claim utilized by the trial Court is a nullity as well as the evidence led in line with the same statement of claim, it would be a mere academic exercise to look into the substantive arguments in the appeal and resolution of the issues therein.
In the final analysis, having upheld the preliminary objection, the appeal is hereby struck out.
Parties to bear their respective costs.
CA/L/39M/2011
The appeal is against the judgment of Y.O. Idowu, J. of the High Court of Lagos State, delivered on the 5th day of June, 2009 in which the Court held that there was a valid contract between the Appellant and the 2nd Respondent gave judgment in favour of the Appellant by granting the alternative relief sought by the Appellant, without considering the principal relief.
The background facts are that the 1st Respondent instituted an action against the Appellant for possession of the two (2) Bedroom semi-detached house situate at No. 3, Biaduo Street, South West, Ikoyi, Lagos (The property) arrears of rent and other ancillary reliefs upon being served with the writ of summons and statement of claim, the Appellant counter claimed against all the Respondents on the ground that having purchased the property from the 2nd Respondent, she became the owner of the property.
It was made out that at the time of purchase the 2nd Respondent was unable to give the appellant the Deed of Assignment on the ground that the 2nd Respondent had not perfected its own title to the property. The names in the lands registry was still that of the original and former owners of the property.
………………………….K………………………………..
Thereafter, the Appellant sought the following reliefs from the trial Court:
a. “SPECIFIC PERFORMANCE of the contract for the sale of No. 3 Biaduo Street South-West Ikoyi, Lagos between the counter claimant and the 2nd Defendant,
b. ALTERNATIVELY, N20m (N20,000.00) being special, exemplary and general damages for BREACH of the contract of sale, against the 1st and 2nd Defendants;
c. COST of the action.”
The claims were mainly against the 2nd Respondent who did not defend the counter claim at the trial and thus did not join issues with the Appellant. It was made out by the Appellant that sometime in June 2000 the 2nd Respondent gave instructions to the Appellant to act as its agent in the sale of the property. The appellant made an offer to the 2nd Respondent to purchase the property through two letters dated 1st February, 2001, Exhibit ‘L’, at pages 122 – 124 of the printed records of appeal. The 2nd Respondent was said to have accepted her offer by writing to her through a letter dated 6th February, 2001 admitted and marked Exhibit E, pages 125 and 126 of the printed records.
At the close of the trial, the trial Court found in favour of the appellant that there was a valid contract between the Appellant and the 2nd Respondent, Exhibit ‘E’ was held to be a clear, concise and specific acceptance of the offer of the appellant to purchase the property by the 2nd Respondent. The trial Court after holding that there was a valid contract for the sale of the property between the Appellant and the 2nd Respondent granted the alternative relief of N10,000,000.00 (Ten Million Naira) in favour of the Appellant against the 2nd Respondent as damages for breach of contract without giving reasons for not granting the principal relief/claim for specific performance.
………………………….L………………………………..
The appellant was dissatisfied with the grant of the alternative relief thus this appeal in which the appellant sought for an order allowing the appeal and setting aside the judgment of the lower Court awarding the alternative relief of damages and grant an order of specific performance of the contract. Two issues were distilled for the determination of the appeal as follows:
“Issue 1
Considering the finding of the lower Court that there was/is a valid contract between the Appellant and the 2nd Respondent, whether the lower Court was not in error in refusing to order specific performance of the contract of sale :-
Ground 1.
Issue 2
Whether the learned trial judge did not fall into grave error in considering and granting the alternative relief of the Appellant without considering at all her principal relief for specific performance:- Ground 2.
In reaction to the appeal, the learned counsel to the 1st Respondent O.O. Ogungbade Esq., raised a preliminary objection to the appeal which was argued in his brief of argument filed on 17/11/14 but deemed properly filed on 24/4/17. I will come to the objection later.
In arguing the appeal, Ayo Adesanmi Esq., appearing with Omolade Adeyemi and Olayide Salami Esq., relied on his brief of argument filed on 18/10/12 as well as his reply to the 1st respondent’s brief filed on 9/5/17 in which he responded to the Respondent’s preliminary objection and a reply to the 2nd respondent’s brief filed on 11/8/14 but deemed filed on 24/4/17 in urging us to allow the appeal.
In arguing his first issue, it was submitted that the trial Court rightly held that there was a valid contract between the Appellant and the 2nd Respondent with Exhibit ‘E’ as an acceptance of the offer made by the appellant. This finding was argued not to have been appealed against. It was argued that a contract entered into freely is binding on the parties and it is the duty of the Court to enforce it as it is. See, BEST (NIG) LTD VS. B.H. (NIG) LTD (2011) 5 NWLR (PT. 1239) 95 at 117, 126, MANYA VS. IDRIS (2001) 8 NWLR (PT.716) 627 at 639; AYANLERE VS. FMB (NIG) LTD (1998) 11 NWLR (PT. 575) 621 at 629 and FBN VS. AKINYOSOYE (2005) 5 NWLR (PT. 918) 340 at 398. It was argued that the trial Court ought to have given effect to the contract it held that existed between the Appellant and the 2nd Respondent by decreeing specific performance of the contract of sale. See, HELP (NIG) LTD VS. SILVER ANCHOR (NIG.) LTD (2006) 5 NWLR (PT. 972) 196 at 208 and BEST (NIG.) LTD VS. B.H. (NIG.) LTD (2011) 5 NWLR (PT. 1239) 95 at 119. It was argued that the appropriate order to have been made was that of specific performance. Reliance was placed on the cases of DAUDA VS. L.B.I. CO. LTD (2011) 5 NWLR (PT.1241) 411 at 428, OHIAERI VS. YUSUF (2009) 6NWLR (PT. 1137) 207 at-229 and GAJI & 2 ORS VS. PAYE (2003) 8 NWLR (PT. 823) 583 at 607 amongst others. It was further argued that the Appellant would not be adequately compensated in damages, also that the value of the property has increased significantly from when Exhibit E the acceptance was made by the 2nd Respondent in 2001, also that the Appellant has been in possession and occupation of the property for a long time, before the purchase. It was argued that the Appellant cannot purchase an alternative property for the sum of N18,000,000.00 which was the agreed purchase price of the property. See, MUMU VS. AGUR (1993) 8 NWLR (PT.313) 573 at 584 and ADIO VS. ATTORNEY GENERAL OYO STATE (1990) 7 NWLR (PT. 163) 448 at 494 – 495 amongst others.
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It was submitted that this is an appropriate situation for the grant of an order of specific performance. We were urged to exercise our discretion in favour of the Appellant and decree specific performance of the contract of sale between the Appellant and the 2nd Respondent.
On the appellant’s second issue, it was submitted that the appellant’s main relief as contained in its counter claim is for specific performance of the contract of sale of No. 3 Biaduo Street, South-West Ikoyi, Lagos between the appellant and the 2nd Respondent. It was submitted that where a relief is sought in the alternative, the Court should consider first the principal or main relief sought. It is only where the Court finds that for any reason, it cannot grant the principal relief that it would consider the alternative relief; reasons must be given for not granting the principal relief. See, ODUTOLA HOLDINGS LTD VS. LADEJOBI(2006) 12 NWLR (PT. 994) 321 at 352, LAMURDE LOCAL GOVERNMENT VS. KARKA (2010) 10 NWLR (PT. 1203) 574 at 597. MERCANTILE BANK OF (NIG) LTD VS. ADALMA (1990) 5 NWLR (PT. 153) 747 at 769. 769; UBA PLC VS. MUSTAPHA (2004) 1 NWLR (PT. 855)Â 443 at 485 and MICHAEL VS. YUOSUO (2004) 15 NWLR (PT. 895) 90 at 119. Further, that it is the plaintiff’s claim that vests jurisdiction on the Court. See, EKPENYONG VS. NYONG (1975) 2 SC 71 at 80; ADEYEMI VS. OPEYORI (1976) 9 – 10 SC 31 and OHAKIM VS. AGBASO (2010) 19 NWLR (PT. 1226) 172 at 235 – 236. It was stressed that the trial Court in its judgment did not consider the main claim of specific performance before the grant of damages for breach of contract, the alternative relief. This was argued to be perverse. See, ONAYEMI VS. IDOWU (2008) 9 NWLR (PT. 1092) 306 at 337. We were urged to hold that it was wrong for the trial Court to have granted the alternative claim for damages without considering the principal relief of specific performance. We were urged to set aside the grant of the alternative relief and grant the main relief of specific performance.
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In response to the appeal as indicated earlier in this judgment,the learned counsel to the 1st Respondent O.O. Ogungbade Esq. with Toyese Owoade Esq. and O.O. Owotunmi Esq., relied on his brief of argument filed on 14 but deemed filed on 24/4/17 in which he incorporated his Notice of preliminary objection in which he urged that we uphold the preliminary objection and dismiss the appeal. The 1st Respondent’s preliminary objection challenged the competence of the Appellant’s appeal and contended that it is liable to be struck out. The grounds were given as follows:
(i) The Appellant in her counter claim sought the claims for specific performance and damages in the alternative indicating that she would be satisfied with the grant of either claim.
(ii) Having been granted the alternative claim for damages, the appellant is not within the law, an “aggrieved’ party” capable of invoking and exercising the right of appeal contained in Section 243 of the Constitution of the Federal Republic of Nigeria 1999 (As Amended).
It was argued that the right of appeal to this Court provided for in Section 243 of the Constitution is available to an aggrieved party only. See, MOBIL OIL VS. MONOKPO (2003)115 LRCN 3016. The reliefs sought by the appellant as counter claimant at the trial Court were reviewed. It was argued that the Appellant having been granted the relief sought by her, cannot be an aggrieved party for the purpose of an appeal pursuant to Section 243 of the Constitution. Reliance was placed on the case of HELP NIG. LTD VS. SILVER ANCHOR (NIG) LTD (2005) 140 LRCN 2038 where an appeal to the Supreme Court was dismissed. The appellant took out an action for specific performance of a land sale and claimed in the alternative, a refund of the part payment. In the above decision, the appellant contended that the Court ought to have granted an order of specific performance. We were urged to dismiss the appeal.
In responding to the main appeal, it was submitted that the trial Court’s decision to grant the Appellant her alternative relief for damages was at the discretion of the Court based on the facts presented before the Court. It was argued that the appellate Court would not normally interfere with the trial Court’s exercise of discretion. See, ATIKU VS. YOLA L.G. (2003) 1 NWLR (PT. 802) PAGE 487, UNIVERSITY OF LAGOS VS. OLANIYAN (NO.1) (1985) 1NWLR (PT. 1) 156 at 163, UKWU VS. BUNGE (1997) 8 NWLR (PT. 518) PAGE 527. Further, that the argument that the trial Court ought to have granted the claim for specific performance was misplaced since the appellant had an alternative claim. It was contended that the argument that damages would not adequately compensate the appellant is belated. See, HELP (NIG) LTD VS. SILVER ANCHOR (NIG) LTD (2006) (supra) at PAGE 222 PARAGRAPHS E – E. Further, that the order for specific performance could not have been granted in favour of the appellant since she was not a party to the alleged agreement of sale. The Letter of the Appellant addressed to the 2nd Respondent dated 1st February, 2001 at pages 122 – 123 of the printed records was referred to, where the appellant clearly stated that she acted as solicitor to SFM Limited, her client who was interested in the outright purchase of the property. At page 124, the appellant also made reference to a prospective buyer and indicated that she was to be paid an agency fee at the conclusion of the transaction. Reference was made to the response by the 2nd Respondent on 6th February, 2001 accepting the offer for the sale of the property and to pay her agency fee. Further, the evidence of the PW3 under cross examination at page 271 of the records and the evidence of the Appellant under: oath, adopted at pages 284 285 of the records to the effect that she was acting as agent to the purchaser as well as the 2nd Respondent were referred to. It was submitted that the 2nd Respondent had not accepted the cheque or draft for the sale of the property therefore an order for specific performance could not be ordered. See, NIGERIAN LAND and SEA FOOD CO. LTD VS. ROADSIDE ENGINEERING FOUNDARY LIMITED & ANOR (1987), NWLR (PT.48) 191 and BIOKU VS. LIGHT MACHINE (1986) 5 NWLR (PT.39) 42. It was concluded that the trial Court considered the claim for specific performance before the grant of the alternative relief. We were urged to dismiss the appeal.
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On the part of the 2nd Respondent, the learned counsel Felix Oyekoya Esq., appearing with Saratu Dan Abu relied on his brief of argument filed on 1/7/14 but deemed filed on 24/4/17 same was adopted as his argument in this appeal in urging us to dismiss same. The learned counsel adopted the two issues for determination as formulated by the appellant. On his first issue, it was submitted that the grant of an order for specific performance like every other equitable remedy is discretionary, which must be exercised judicially and judiciously. See, HELP (NIG) LTD VS. SILVER ANCHOR (NIIG) LTD (2006) 5 NWLR (PT. 972) 196 at P. 208, PARAGRAPHS C – H. It was submitted that the appellant did not lead material evidence in proof of the facts averred in support of the main relief for specific performance at the lower Court but proved the alternative relief sought.
See, NNB PLC VS. EGUN (2001) 7 NWLR (PT. 711) 1 at P. 19, PARAGRAPH G. It was argued that the appellate Court would only interfere with the exercise of discretionary power only when such discretion was exercised on the wrong or insufficient materials or where no weight or insufficient weight was given relevant consideration or where it is in the interest of justice to interfere. See, REMAWA VS. NACB C.F.C. LTD (2007) 2 NWLR (PT. 1017) 155 at P. 178. PARAGRAPHS C E, BELLO VS. A.G. LAGOS STATE (2007) 2 NWLR (PT. 1017) 115 at PP. 153 – 154, PARAGRAPHS H – A and BABATUNDE VS. P.A.S. & T.A. LTD (2007) 13 NWLR (PT.1050) 113 at P. 150, PARAS. C – E, to the effect that the appellate Court would only interfere with the exercise of the lower Court’s discretion in the most extra ordinary circumstances. It was also argued that where the plaintiff would be adequately compensated by remedy of damages, the Court will not grant an order of specific performance. See, AFROTEC TECH. SERV. (NIG) LTD VS. MIA & SONS LTD (2000) 15 NWLR (PT. 692) 730 at P. 790. PARAGRAPHS B – C and HELP (NIG) LTD VS. SILVER ANCHOR (NIG) LTD (supra) at PP 217 218, PARAS G – B. Further, that the contract was between the Appellant and the 2nd Respondent only, therefore an order of specific performance would be hard on the other respondents who were not part of the contract. It was argued that the subject matter of the contract has been sold to a third party; therefore a specific performance order could not be made. See, INT. TEXTILE IND. (NIG.) LTD VS. ADEREMI (1999) 8 NWLR (PT. 614) 268 at P. 304, PARAGRAPHS B C. It was contended that where a property is sold or transferred to a third party, such a property would have invariably lost its character. We were urged to resolve the first issue in favour of the 2nd Respondent.
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On the second issue, it was argued that when a party makes a claim in the alternative, he wants either of the reliefs sought in which case either of the reliefs sought would suffice for the purpose of satisfying the claims in the alternative. See, HELP (NIG) LTD VS. SILVER ANCHOR (NIG) LTD (2006) (SUPRA) at P. 222, PARAGRAPHS E G.It was contended that based on the evidence before the trial Court, it appropriately evaluated and considered all the Appellant’s reliefs and was justified to have granted the alternative claim for damages. It was submitted that where an alternative relief is sought, the Court can grant either of the reliefs and that a claimant cannot insist on the grant of the other reliefs. See,OJO VS. OKITIPUPA OIL PALM PLC (2001) 9 NWLR (PT. 719) 679 at PAGE 694, PARAGRAPHS B – D. It was reargued that a grant of specific performance would work hardship against the 1st Respondent who was not a party to the contract between the Appellant and the 2nd Respondent. It was submitted that the trial Court was right to have granted the Appellants alternative monetary relief for damages. Further, that the findings of the trial Court are not perverse and should stand. It was concluded that a party must lead evidence in support of his averment. See, IHEANACHO VS. EJIOGU (1995) 4 NWLR (PT. 389) 324 at 338, PARAGRAPHS C – D. We were urged to hold that the appellant failed to lead evidence in support of his averment for her main relief of specific performance at the lower Court.
The learned counsel to the Appellant/Respondent responded to the 1st Respondent’s preliminary objection in his reply to the 1st Respondent’s brief of argument. In opposition to the 1st Respondent’s preliminary objection, the learned counsel to the Appellant defined who an aggrieved person is and relied on the cases of AKINBIYI VS. ADELABU (1956) SCNLR 109 and MOBIL OIL VS. MONOKPO (2004) ALL FWLR (PT. 195) 575 at 616. It was argued that the appellant is an aggrieved person therefore capable of appealing against the decision of the lower Court, the lower Court having deprived the appellant of what was due to her after the lower Court agreed with the case she made out before it. It was re-argued, that the lower Court ought to have granted the main relief of specific performance rather than the alternative relief and that an appeal would lie against the refusal of a Court to do what it is duty bound to do. See, AKPAN VS. BOB (2010) 17 NWLR (PT. 1223) 421 at 464 465. It was concluded that the respondent did not attack any of the grounds of appeal and by this conceded the complaints of the appellant as being valid.
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In reply to the 1st respondent’s arguments in the main appeal, the contents of the reply brief are basically a reargument on the order the lower Court ought to have made, an order of specific performance. The lower Court having found that the appellant proved her case and no reason was given for refusing to consider the principal relief before granting the alternative relief. The case of HELP VS. SILVER (2006) (supra) was distinguished, because in the above case, the trial Court dismissed the main claim, gave reasons for doing so before proceeding to grant the alternative relief. The principal relief was said not to have been considered by the trial Court in the present appeal. We were urged to intervene to enforce the terms of the agreement between the parties by granting the principal relief sought in the appellant’s counter claim for specific performance to enable the appellant to continue enjoying her long possession.
In the appellant’s reply to the 2nd respondent’s brief of argument filed on 11/8/14, as a preliminary point, we were urged to discountenance the issues formulated by the 2nd respondent as not having been tied to the grounds of appeal. On the other hand, the learned counsel responded to the issues as argued in the Respondent’s brief. It was reargued that parties are bound by the terms of contracts validly entered into and that the Courts are to give effect to the contract. Reliance was placed on the following cases, MANYA VS. IDRIS (2007 FWLR (PT.23) 1237 at 1250, AP LTD VS. OWODUNNI (1991) 8 NWLR (PT. 210) 391 at 414, ALH VS. HUSSEIN (2004) FWLR (PT.194) 496 at 508 and BRIG VS. BPE (2011) 18 NWLR (PT.1332) 209 to the effect that specific performance was ordered despite the fact that a 3rd party had acquired interest in the res. It was also reargued that the lower Court having found that there was a valid contract between the parties, ought to have granted the order of specific performance to enforce the express terms of the contract entered by the parties. See, amongst a host of authorities cited and relied upon by the learned counsel to the appellant, M.V. CAROLINE MAERSK VS. NOKOY INVESTMENT LTD (2002) 12 NWLR (PT. 782) 472, STB LTD VS.ANUMNU (2008) 14 NWLR (PT. 1106) 125 at 155 to the effect that it is only when a principal relief cannot be granted, that the Court would consider the alternative relief.
It is trite that where a preliminary objection is raised, same must be determined first before going into the substantive issues, appeal in the present situation.
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I have examined the arguments in support and against the preliminary objection in which the learned counsel to the 1st respondent cited and relied on Section 243 of the Constitution of the Federal Republic of Nigeria as to who can exercise his right of appeal to the Court of Appeal. The learned counsel to the 1st Respondent has not made out that the appellant was not a party to the proceedings in the lower Court as provided in the above Section. See, SOCIETE GENERALE BANK NIGERIA LTD VS. AFEKORO & ORS (1999) LPELR -3082 (SC) at P. 25, PARAS A – D. His Lordship, Ogundare, JSC in defining who an “aggrieved party” is held thus:
“In Exparte sidebotham, in Re sidebotham (1880) 14 CGD 458 at 465 James, L.J. declared as long ago as over a century: It is said that any person aggrieved by any order of the Court is entitled to appeal. But, the words person aggrieved’ do not really mean a man who is disappointed of a benefit which he might have received if some other order had been made. A ‘person aggrieved’ must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something, or wrongfully refused him something, or wrongfully affected his title to something.”
See, also ABACHA VS. F.R.N. (2014) LPELR – 22014 (SC) and IN RE: ALHAJA AFUSAT IJELU & ORS VS. LAGOS STATE DEVELOPMENT & PROPERTY CORPORATION & ORS (1992) NWLR (PT. 266) 414; (1992) LPELR – 1464. In this appeal, the appellant appealed, as a person with a legal grievance that the grant of the alternative relief deprived her of specific performance of the contract of sale which she felt she was entitled to. It is therefore erroneous for the learned counsel to the 1st respondent to have argued that the appellant is not an “aggrieved party” since she was granted the alternative relief. On my part, I would say that if the appellant was not aggrieved by the decision of the lower Court, she would not have appealed. The case of MOBIL OIL VS. MONOKPO (2003) (supra) cited and relied upon by the learned counsel to the 1st respondent is not applicable to the appeal since the judgment of the lower Court was given in respect of the appellant who participated in the proceedings as a party, a decision which did not go down well with the her, thus this appeal.
I hold that the preliminary objection raised and argued by the 1st respondent is without merit, same is hereby dismissed.
With the main appeal, I have examined the issues formulated by the parties and I would adopt the appellant’s two issues which cover the issues at stake in this appeal, also covers those formulated by the respondents. As a preliminary point in the appellant’s reply brief to the argument of the 2nd respondent’s learned counsel, it was submitted that the issues formulated by the 2nd respondent are incompetent as they are not related to the grounds of appeal. I have examined the issues formulated by the learned counsel to the 2nd Respondent; they are similar to those formulated by the appellant’s learned counsel except that they are differently worded. I cannot fault the issues as formulated by the 1st respondent. The preliminary point argued by the appellant in paragraphs 2.2 of her brief of argument is hereby discountenanced.
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The appellant’s first issue is considering the finding of the lower Court that there was a valid contract between the Appellant and the 2nd Respondent, whether the lower Court was not wrong not to have made an order of specific performance of the contract of sale?
There is no doubt from the decision of the trial Court that there was in existence a valid contract of sale of the property in question between the Appellant and the 2nd Respondent. A contract freely entered into by the parties is binding on the parties and truly, it is the duty of the Court to enforce it. This the appellant sought by seeking an order for specific performance from the Court of the contract of sale. It is true that generally, an order of specific performance is a discretionary remedy but, it must be judicially and judiciously exercised. The Court is expected to balance the interest of both sides properly in its bid to do justice to the contending parties. To this end, the learned trial Court in its judgment, at page 312 of the printed records righty held that there was a binding contract between the appellant and the 2nd Respondent, relying on Exhibit ‘E’, dated 6th February, 2001, the letter of acceptance of the offer of sale of the property in question, written to the Appellant by the 2nd Respondent. As highlighted by the learned counsel to the appellant, at page 312 of the printed records, the learned trial judge in holding that there was a valid contract between the Appellant and the 2nd respondent held thus:
???Having looked through Exhibit ‘E’, dated 6/2/01 from Union Dicon Salt Plc, I do agree with the counter claimant that indeed Exhibit ‘E’ is an acceptance of the offer made by counter claimant.
The paragraphs are clear, concise and specific. I hold that there is a valid contract between the counter claimant and Union Dicon Salt Plc. i.e The 2nd Defendant to counter claim.”
There was no appeal against the above finding of the trial Court. The respondents have not faulted the above holding but, have argued that since the appellant sought an alternative relief, the lower Court was right to have granted same. The respondents have not also questioned the validity of the contract between the Appellant and the 2nd respondent which is enforceable. There are in existence in this appeal, circumstances which make it equitable for the Court to have granted a decree of specific performance. There is no doubt that the appellant was in possession and occupation of the property at No. 3 Biaduo Street, South West Ikoyi, Lagos for more than ten years before the contract of sale in Exhibit ‘E’ dated 6th February, 2001. The respondents have not made out otherwise. All that was argued is that since the Appellant sought an alternative relief and got same, she cannot turn around to challenge the non granting of the relief of specific performance. I agree with the submissions of the learned counsel to the appellant that the property is located in a prime location of Lagos and it is impossible for the appellant to purchase an alternative property for the sum of N18,000,000.00 which was the agreed purchase price for the property. Also, with the grant of N10,000,000.00 (Ten Million Naira) damages in the alternative relief, would not be adequate for non sale of the property to the Appellant.
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See, AFROTEC TECH. SERV. (NIG) LTD VS. M.I.A. & SONS LTD (2000) 15 NWLR (PT.692) 730. In HELP (NIG) LIMITED VS. SILVER ANCHOR (NIGERIA) LIMITED (2006) LPELR-1361(SC), the Apex Court held that generally specific performance is a discretionary remedy. The discretion is judicial discretion and is exercised on well settled principles. His Lordship, Katsina-Alu, JSC (as he then was) at PP. 6 – 7, para E held that:
The jurisdiction to order specific performance is based on the existence of a valid, enforceable contract
The respondents have not made out that it would be impossible to enforce the contract of sale. The house is still in existence and it was not argued that it has changed form. The trial Court did not also find that an order of specific performance cannot be enforced. The trial Court simply chose the alternative relief sought. IN INTERNATIONAL TEXTILE INDUSTRIES (NIGERIA) LIMITED VS. DR. ADEREMI & ORS (1999) 8 NWLR (PT. 614) 268 the Supreme Court held that: To sue for specific performance is to assume that the contract is still subsisting and therefore to insist that it should be performed. That would mean that the plaintiff would not want it repudiated unless for any reason the Court was unable to aid him to enforce specific of it.
In the present case, the trial Court did not give any reason for its inability to make an order of specific performance after expressing its displeasure at the behavior of the second respondent concerning the breach of contract of sale, by selling the property to another after accepting the appellant’s offer to buy the same property. The fundamental rule is that specific performance would not be ordered if there is an absolute remedy at law in answer to the plaintiff’s claim, that is, where there would be adequate compensation by the common law remedy of damages but where as in the present case, the damages awarded in the alternative relief would be inadequate in terms of acquiring a similar property in the same area, the main relief ought to have been considered. The alternative relief would normally be resorted to where it is impossible to effect the performance of the main relief, in this case an order of specific performance. In UNIVERSAL VULCANIZING NIG. LTD. VS. IJESHA UNITED TRADING & TRANSPORT CO. LTD. & ORS (1992) SC, the Supreme Court as to when an order of specific performance would be made, per Kutigi, JSC (as he then was) at PP. 36 – 37, paras. D A held that:
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“A decree of specific performance is a decree issued by the Court which constrains a contracting party to do that which he has promised to do. It is a remedy for breach of contract provided by equity to meet those cases where the common law remedy of damages is inadequate (See BESWICK VS. BESWICK (1968) A.C. 58 H.L.). Thus where a vendor or lessor of land refuses to carry out his contract, an order of specific performance may be granted requiring him to execute the necessary conveyance or lease since one piece of land is not necessarily the same as another and damages may therefore not be an adequate remedy. But, a plaintiff will be left to his remedy at law if a decree of specific performance would inflict a hardship on the defendant. Consequently, the principle is that specific performance will generally not be granted where damages would be adequate remedy.
Hardship on the part of the respondents was not found by the trial Court and damages would not be adequate for the Appellant who resides at the property in question and also carries out her business on the same property for a long time. In determining whether specific performance should have been decreed or not, the competing interests of the parties should be considered and the fact that the contract entered into in Exhibit E could still be performed. It is noteworthy that the 2nd Respondent did not contest the claim at the lower Court. I hold that the trial Court was in error to have refused to grant an order of specific performance. The appellant’s first issue is resolved in her favour.
The appellant’s second issue is whether the learned trial judge did not fall into great error in granting the alternative relief of the Appellant without considering the principal relief for specific performance? The law is that where a claim or relief is in the alternative, the Court should first consider whether the main/principal relief ought to succeed before resorting to the consideration and grant of the alternative relief. It is after the Court has found that for any reason it cannot grant the principal claim that the alternative relief would be resorted to. On the alternative relief, see the Supreme Court decisions of THE M.V. “CAROLINE MAERSK” SISTER VESSEL TO M.V. CHRISTIAN MAERSK & ORS (2002) LPELR-3182 (SC) and AGIDIGBI VS. AGIDIGBI (1996) 6 NWLR (PT.454) 300, 313 where his Lordship, Ayoola, JSC held that:
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Where a claim by a party to a suit succeeds and the Court grants same, there will be no need to consider any alternative claim thereto”
In the present case, the appellant’s case in the lower Court succeeded. The trial Court ought to have first considered the main relief sought for specific performance of the contract of sale, then there would have been no need to consider the alternative relief. See, LAMURDE LOCAL GOVERNMENT VS. KARKA (2010) 10 NWLR (pt. 1203) 574 at 597. In ODUTOLA HOLDINGS LTD. VS. LADEJOBI (2006) 12 NWLR (PT. 994) 321 at 352 the Apex Court per Onoghen, JSC (as he then was) held that:
“It is settled law that once the main claim or relief succeeds there is no need to consider or grant an alternative relief – see, AGIDIGBI VS. AGIDIGBI (1996) 6 NWLR (PT.454) 300 AT 313.
The trial Court is duty bound to consider the principal relief claimed where there is enough evidence to support the grant of the principal relief, in such a case the alternative relief would not be considered. The alternative relief is usually resorted to where the principal relief is not supported by the evidence adduced. In the present appeal, it is clear and not in doubt that the trial Court found that the appellant as plaintiff proved her case but, the trial Court did not consider the grant of the main claim (the plaintiff’s case having succeeded) of specific performance but, instead decided to award damages for the breach of contract, page 313 – 314 of the printed records.
Alternative claims are usually considered and granted where the grant of the substantive claim is not possible or unjust. The 2nd respondent who did not defend the case at the lower Court did not show the impossibility of performance or show that it would be unjust. I am of the humble view that the lower Court was in error to have considered and granted the alternative relief without first considering the principal claim, it is perverse.
Having resolved the appellant’s two issues in her favour, I hold that the appeal is meritorious, I allow same. In consequence, the award of N10 Million (Ten Million Naira) as damages in favour of the counter claimant (appellant) against the 2nd Defendant (2nd Respondent) to the counter – claim for breach of contract of sale between the 2nd Defendant (2nd Respondent) to the counter – claim i.e. Union Dicon Salt Plc and the counter claimant is set aside. Instead, I hereby grant the order for SPECIFIC PERFORMANCE of the contract for the sale of No. 3 Biaduo Street, South West Ikoyi, Lagos between the counter-claimant and the 2nd Defendant (2nd Respondent).
I award costs of N100,000.00 (One Hundred Thousand Naira) against the 1st and 2nd Respondents.
MOJEED ADEKUNLE OWOADE, J.C.A.:Â I read in advance the judgments in Appeal Nos. CA/L/786/09 and CA/L/39M/11 delivered by my learned brother, CHIDI NWAOMA UWA. JCA.
I abide with the consequential orders and orders as to costs.
HAMMA AKAWU BARKA, J.C.A.: I agree.
Appearances:
O. O. Ogungbade, Esq. with him, Toyese Owoade, Esq. and O. O. Owotunmi, Esq. for CA/L/78609.
Ayo Adesanmi, Esq. with him, Omolade Adeyemi and Olayide Salami, Esq. for CA/L/39/11For Appellant(s)
O. O. Ogungbade, Esq. with him, Toyese Owoade, Esq. and O. O. Owotunmi, Esq. for the 1st Respondent in CA/L/39/1.
Ayo Adesanmi, Esq. with him, Omolade Adeyemi and Olayide Salami, Esq. for CA/L/786/09.
Felix Oyekaja, Esq. with him, Saratu Dan Abu for the 2nd Respondent in CA/L/39/11For Respondent(s)
Appearances
O. O. Ogungbade, Esq. with him, Toyese Owoade, Esq. and O. O. Owotunmi, Esq. for CA/L/78609.
Ayo Adesanmi, Esq. with him, Omolade Adeyemi and Olayide Salami, Esq. for CA/L/39/11For Appellant
AND
O. O. Ogungbade, Esq. with him, Toyese Owoade, Esq. and O. O. Owotunmi, Esq. for the 1st Respondent in CA/L/39/1.
Ayo Adesanmi, Esq. with him, Omolade Adeyemi and Olayide Salami, Esq. for CA/L/786/09.
Felix Oyekaja, Esq. with him, Saratu Dan Abu for the 2nd Respondent in CA/L/39/11For Respondent
AFROTEC TECHNICAL SERVICES (NIGERIA) LTD V. MIA & SONS LTD AND ANOTHER
On Friday, the 15th day of December, 2000
SC 132/1992Before Their Lordships
Abubakar Bashir Wali- Justice of The Supreme Court of Nigeria
Adolphus Godwin Karibi-Whyte Justice of The Supreme Court of Nigeria
Anthony Ikechukwu Iguh;Justice of The Supreme Court of Nigeria
Aloysius Iyorgyer Katsina-Alu Justice of The Supreme Court of Nigeria
Emmanuel Olayinka AyoolaJustice of The Supreme Court of Nigeria
Between
Before Their Lordships
Abubakar Bashir Wali- Justice of The Supreme Court of Nigeria
Adolphus Godwin Karibi-Whyte Justice of The Supreme Court of Nigeria
Anthony Ikechukwu Iguh;Justice of The Supreme Court of Nigeria
Aloysius Iyorgyer Katsina-Alu Justice of The Supreme Court of Nigeria
Emmanuel Olayinka AyoolaJustice of The Supreme Court of Nigeria
……………………………A……………………………
Kutigi, JSC (Delivered the Leading Judgment):– In the Kaduna High Court, the plaintiff’s claims against the defendant read as follows:-
“(1) Perpetual injunction restraining the defendant, its servant, or agents or other officers acting on its behalf from disposing of by sale or otherwise the equipments.
(2) Damages.
(3) Specific performance of agreement of installation of equipments i.e.
(a) Parker 5245/4 crushing plant combination.
(b) Foden model dump truck
(c) BD 440 generating set.
(d) Spare parts for crushing plant.
at the Kaduna Quarry site of the plaintiff by the defendant or in the alternative refund of all monies paid by the plaintiff to the defendant on the said equipments.”
Pleadings were filed and exchanged between the parties and the case proceeded to trial. At the trial the plaintiff called two witnesses while the defendant called only one witness. After hearing evidence from both sides and the addresses of their Counsel, the trial court adjourned for judgment. In a considered judgment delivered on 21 July 1989, the learned trial Judge Ibiyeye J, after reviewing all the evidence before him, came to the conclusion that the transaction between the parties was a conditional sale and that the plaintiff had acted in violation of the conditions of sale i.e. instalmental payments. The learned trial Judge, therefore dismissed plaintiff’s claims in their entirety as lacking in merit.
On the 24 July 1989, the defendant sold the plant or machinery to Afcon Engineering Ltd, the third party herein.
Dissatisfied with the decision of the learned trial Judge, the plaintiff appealed to the Court of Appeal, holden at Kaduna.
……………………………B……………………………
In a reserved judgment delivered on 10 April 1991, the Court of Appeal unanimously allowed the appeal, set aside the judgment of the Kaduna High Court and then proceeded to make the following orders in favour of the plaintiff:-
“1. A perpetual injunction restraining the defendant whether by themselves, their servants, agents, privies or other representatives from selling, leasing or otherwise creating any encumbrance on the equipments subject matter of this suit.
2. That the said equipments be delivered to the plaintiff subject to the defendant paying the entire sum outstanding as balance of the total cost of the equipments, taking into account N381,160, the plaintiff had so far paid to the defendant.
3. Order remitting the issue of general damages back to the High Court for assessment.
4. Third party to release the equipments, if it had taken possession of the same, forthwith.
5. N500 costs to the plaintiff.”
Aggrieved by the decision of the Court of Appeal, the defendant has now appealed to this Court on seven grounds of appeal. It is not necessary to reproduce them. It suffices to say that pursuant to the rules of court, the parties filed and exchanged their briefs of argument which were adopted at the hearing.
The seven issues distilled from the grounds of appeal and submitted by the defendant for the determination of this Court are as follows:-
“(i) Whether the Court of Appeal was right in its view that ownership in the equipment passed to the plaintiff on proper construction of Exhibit 1 merely because the defendant had delivered the equipments at the site of the plaintiff at Kontagora.
(ii) Whether the Court of Appeal was right in its view that acceptance of negotiable instruments as payment for the equipment had converted the conditional sale of these equipment into an absolute sale.
(iii) Was the Court of Appeal right in its view that the only remedy open to the defendant was an action for the recovery of the balance of the sum unpaid and not in its exercise of the right of lien or repossession of the plant when the agreement between the parties provided for those remedies?
(iv) Was the Court of Appeal right in holding that plaintiff has established a legal right in the equipments as to entitle it to the equitable reliefs sought?
(v) Was the Court of Appeal right in holding that the defendant has waived all the restrictive conditions in Exhibit 1 when the waiver of the same as a defence was not specifically pleaded nor were circumstances and facts amounting to waiver pleaded in answer to the plaintiff’s pleadings?
(vi) Was the Court of Appeal right in making an order to enforce the second agreement when the respondent failed to fulfil its obligation under the first contract?
(vii) Whether the Court of Appeal was right in making an order that the said equipment be delivered to the plaintiff subject to the plaintiff paying the entire sum outstanding as balance of total cost of the equipment taking into account N381,160 the plaintiff has so far paid to the defendant when such relief was not placed before the trial court.”
……………………………C……………………………
The plaintiff on its part, submitted six issues in its brief of argument as arising for determination thus:-
“(a) Whether having regard to the pleadings and evidence led, the defendant established any legal right to the equipment in dispute.
(b) If so, whether such legal right could be defeated by the “right of lien” or “right to immediate possession” clauses following the failure of the plaintiff to complete the payment for the equipment.
(c) Whether the said rights of lien and “immediate possession” have been waived by the conduct of the parties.
(d) Whether the plaintiff has by pleadings and evidence established the defence of waiver.
(e) Should the Court of Appeal have granted the relief that the equipment be delivered to the plaintiff subject to the defendant being paid the entire sum?
(f) Was the Court of Appeal right in holding that the plaintiff had established a legal right to the equipment?”
I have examined the two sets of issues and found them to be basically the same even though the questions raised by the plaintiff appear to be short and succinct. I will therefore adopt the set of issues identified by the defendant for my consideration of the appeal.
The facts of this case which are not in dispute for the purposes of this appeal are as set out in paragraphs 1, 2, 3, 4, 5, 6, 7 and 8 of the plaintiff’s amended Statement of Claim as follows:-
“(1) The plaintiff is a limited liability company with its registered office in Kaduna engaged in civil construction and other related works.
(2) The defendant is a limited liability company engaged in the business of plant sales with its head office at Lagos and branches in major towns in Nigeria.
(3) The plaintiff by virtue of its business was a customer of the defendant.
(4) The plaintiff by its LPO No 0358 of 8 February 1978 made ordered:-
(a) Parker 5245 crushing plant combination.
(b) Foden dump truck.
(c) BD 440, 440 KVA generating set from the defendant. The plaintiff shall at the hearing of this suit use and rely on its above stated LPO.
……………………………D……………………………
(5) The plaintiff states that the total value of its order mentioned in paragraph 4 above was as stated below:-
(a) Parker 5245/4 crushing plant combination – N476,600
(b) Foden model dump truck – N84,000
(c) BD 440 generating set – N66,000
(d) Spare parts for crushing plant – N38,000
(e) Transportation of equipment to Kontagora – N28,000
(f) Commissioning fee – N10,000
N702,600
(6) The plaintiff further states that the equipments ordered above mentioned in paragraph (4) above was to be delivered at the plaintiff’s construction site at Kontagora by the defendant.
(7) The plaintiff in view of paragraph (4) above undertook by its letter of 28 March 1978 to pay the defendant the sum of N702,900 for the supply of the equipments ordered and above mentioned in paragraph (5) of the Statement of Claim, subject to terms and conditions stated in the said plaintiff’s letter of 28 March 1978. The plaintiff shall at the hearing of this suit use and rely on its said letter of 28 March 1978 to the defendant.
(8) The plaintiff states that it made a down payment of N281,160 i.e. 40 percent of the total sum for the equipments mentioned in paragraph (5) above wherein the defendant proceeded and installed the equipments at the plaintiff’s site at Kontagora. The plaintiff shall at the hearing of this suit use and rely on the defendant’s letter of 29 April, 1978 acknowledging receipt of the payment aforementioned by the plaintiff.”
……………………………E……………………………
These paragraphs of the amended Statement of Claim were admitted in paragraphs 2 and 6 of the amended Statement of Defence which are set out as follows:-
“(2) The defendant admits paragraphs 1, 2, 3, 4, 5, 6 and 7 of the Statement of claim.
(6) The defendant admits paragraph 8 of the Statement of Claim but avers that other condition of sales contained in the sales agreement were not fulfilled by the plaintiff.”
One other fact which is not in dispute in this case is that at a stage the defendant agreed to move the equipments from Kontagora to Kaduna at plaintiff’s request for a fee of N30,000 which was paid. The defendant now took advantage of this to effect a seizure of the equipments on the ground that the plaintiff had failed to pay up the remaining instalments for the equipments as provided in the sales agreement between the parties.
The plaintiff in paragraph 7 of its amended Statement of Claim above had pleaded its own letter to the defendant dated 28 March 1978 and that it would use and rely on it. The defendant agreed with it. That was the sales agreement between the parties. It was tendered and admitted as Exhibit 1 at the trial. Exhibit 1 is a two (2) paged document. I will set it out in full thus:-
“28 March 1978
Afrotec Technical Services Nig. Ltd,
P.M. B. 1061,
Oshodi,
Lagos State.
Dear Sirs,
Supply of Items of Plant and Equipment
We hereby unconditionally and irrevocably under-take to pay Afrotec Technical Services Nigeria Limited (hereinafter referred to as Afrotec the total sum of N702,900 (Seven hundred and two thousand, nine hundred Naira) in consideration of their supplying us with the under-mentioned equipment on the following terms and conditions.
Equipment
Ex-Isolo Ex-Isolo
1 No Parker mobile crushing plant model 5245/4’/7606 N476,000
1 No Foden Quarry dump Truck Model FC27 N84,000
Fast moving recommended spare parts to value N38,900
BD 440 440KVA Generating Set N66,000
Prices
The agreed prices are as detailed above and are understood to be on the basis of delivery Ex Afrotec’s yard at Isolo Industrial Estate.
……………………………F……………………………
Delivery
The items of plant detailed above are to be delivered to site at an additional agreed price of N28,000 (twenty-eight thousand Naira).
Commissioning
Afrotec to attend to commissioning and to provide skilled engineer to supervise installation at an additional cost of N10,000 (ten thousand Naira) being five weeks at the rate of N2,000 per week.
Terms of payment
We confirm that the total contract price of N702,900 is to be paid to Afrotec on the following terms:-
40 percent cash deposit of N281,160 (two hundred and eighty-one thousand, one hundred and sixty Naira) payable in advance of delivery.
Balance of 60 percent payable by six equal instalments of N70,290 (seventy thousand, two hundred and ninety Naira) each secured by post dated cheques payable on the 27 April, 27 May, 27 June, 27 July, 27 August and 27 September respectively.
Interest
The interest charge on the instalmental payments is to be for Afrotec’s account.
We unconditionally and irrevocably agree that Afrotec shall have a lien on all the machinery until such time as Afrotec receive payment of the full contract amount of N702,900.
We also confirm that should we fail to pay any of the instalments detailed above within one month of the due date, Afrotec shall take immediate possession of those properties in specie that remains unpaid for within the subject of this transaction without hindrance and without recourse.
Yours faithfully,
For: Mia & Sons Limited.
(Signed) (Signed)
Alhaji M. I. Atta R. H. Maggs
Managing Director. Financial Controller.”
As could be seen therefore from the pleadings and the evidence led at the trial, the only serious issue before the learned trial Judge and therefore the Court of Appeal was as to whether or not the defendant had the right to seize the equipments in question. And in determining that issue, it appears to me that the lower courts were called upon to resolve a very narrow issue as to whether the transaction between the parties amounted to an absolute/outright sale or a conditional sale as contended by the plaintiff and the defendant respectively. I will proceed to consider the issues.
Issues (i), (ii), (iii) and (iv)
These issues can conveniently be treated together as they all relate to the proper interpretation of Exhibit 1 above, and what remedies or rights are available to the parties as a result of such an interpretation. It was argued that since it is common ground between the parties that the Sale Agreement dated 28 March 1978 (Exhibit 1) was the basis upon which the sale was conducted, the Court of Appeal ought to have held the parties bound by its provisions; and that it should have interpreted the agreement to identify the intention of the parties as to whether or not the property in the goods passed to the plaintiff on the installation of the plant in Kontagora by the defendant. That the Court of Appeal was in serious error when it held that under Section 18(1) of the Sale of Goods Act 1893 which is a received English statute of general application in force in England on 1 January 1900 (see Section 28 High Court Law Cap. 49 Laws of Northern Nigeria 1963 Vol. 2, hereinafter simply referred to as the Act), mere installation of the plant in Kontagora passed the title in the plant to the plaintiff without regard to the express intention of the parties in Exhibit 1. That Section 18 of the Act deals with unconditional sale of goods unlike in the present case where the sale is conditional. Reference was made to Section 19 of the Act and to the following authorities:-
Buraimo v Adeniyi (1990) 2 NWLR (Part 133) 406;
Oduye v Nigerian Airways (1987) 2 NWLR (Part 55/126);
Niger Benue Transport Co Ltd v Narunmal & Sons Ltd (1986) 4 NWLR (Part 33) 117;
Bookshop House Ltd v Stanley Consultant Ltd (1986) 2 NWLR (Part 26) 87;
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Ogbonaiya v Okudo (1979) 6-9 SC 32.
We were also referred to specified conditions in Exhibit 1 headed “terms of payment” and “interest” respectively, which the plaintiff had failed to fulfil and which did not pass ownership to it thus leaving the defendant with the right to repossess the plants.
The plaintiff on the other had contended that having regard to the pleadings and evidence, it established a legal right to the equipments especially when the defendant had parted with possession before receiving full payment for them. That there is no provision in the Act which makes a seller who has parted with possession to retain title unless there is specific provision or clause in the sale agreement to that effect. We were referred to Section 17 of the Act and to the cases of:-
Alluminium Industries Vassen Bv v Romalpa Alluminium Ltd [1976] 2 All ER 552.
Hendy Lennox (Industrial Engines) Ltd v Grahamme Puttick Ltd [1984] 2 All ER 152.
Yakassai v Incar Motors (Nig) Ltd (1975) All NLR 287.
It was also contended that by parting with possession the right of lien and immediate possession were lost and that title passed to the plaintiff when the contract herein was made.
As I have indicated above the very narrow and decisive issue to be decided in this appeal is whether the sale or transaction between the parties amounted to an outright sale or a conditional sale.
I have reproduced above the sale agreement (Exhibit 1). I say straight away that I am in no doubt whatsoever that the facts of this case show clearly that the equipments or machinery were sold to the defendant conditionally. The conditions being that “The defendant shall have a lien on all the machinery until a time that the defendant received payment of the full contract amount of N702,900″, and that “the defendant shall take immediate possession of the machinery within one month should the plaintiff fail to pay any of the instalmental payment detailed in Exhibit 1”. In other words I am of the view that the property in the equipments or machinery had never passed to the plaintiff when the defendant effected the seizure which is the subject matter of this action. The parties are clearly bound by the provisions in the sale agreement (Exhibit 1) without any subtraction or addition. The court has no power to rewrite the agreement. I have carefully perused the agreement herein and have found nothing illegal in any of its provisions. Exhibit 1 is in fact fortified by the provisions of Sections 38, 39 and 40 of the Act. They read in part:-
“Rights of Unpaid Seller Against the Goods
Unpaid Seller defined
S 38(1) The seller of goods is deemed to be an “unpaid seller” within the meaning of this Act:-
(a) When the whole of the price has not been paid or tendered;
(b) When a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.
(2) Omitted.
Unpaid Seller’s Rights
Section 39(1) Subject to the provisions of this Act and of any Statute in that behalf, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law.
(a) A lien on the goods or right to retain them for the price while he is in possession of them;
(b) Omitted
(c) Omitted
(2) Where the property in goods has not passed to the buyer, the unpaid seller has in addition to his other remedies, a right of with holding delivery to and coextensive with his rights of lien
……………………………H……………………………
Unpaid Seller’s Lien
Seller’s Lien
Section 41(1) Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely:-
(a) where the goods have been sold without any stipulation as to credit;
(b) where the goods have been sold on credit, but the term of credit has expired;
(c) where the buyer becomes insolvent.
(2) The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent of bailee or custodier for the buyer.”
One of the facts not in dispute in this case is that the six post dated cheques issued by the plaintiff to the defendant in accordance with Exhibit 1 each bounced one after the other. Twenty-one other post dated cheques for smaller amounts as replacements also were returned unpaid. And all efforts to collect the balance of the sale price as agreed in (Exhibit 1) proved abortive. There is no doubt at all that the defendant is an unpaid seller under the Act. It was therefore acting within its rights when though acting as an agent of the plaintiff, it seized the machinery which had lawfully come into its possession at the relevant time. The short of it all is that the contract of sale between the parties being conditional, the defendant was entitled to exercise its right of lien both under the contract agreement (Exhibit 1) and under the Act, the plaintiff having woefully failed to satisfy the conditions of sale of paying the 60 percent balance of the sale price. The case of Yakassai v Incar Motors (Nigeria) Ltd (supra) which was relied upon by the Court of Appeal and which was cited by learned Counsel for the plaintiff will not apply here. In that case the Supreme Court held that the sale therein was an outright or complete or absolute sale. In the instance case the sale as I have found is conditional. So also in Kofi v Mensah 1 WACA 76, the West African Court of Appeal also held that the sale therein being an outright sale, the purchaser was not bound by the agreement which allowed the seller to seize the lorry or property on failure of instalments. That I believe was as it should have been. The agreement to seize the property when the sale was absolute or outright is contrary to the provisions of the Act discussed above. The property in the lorry vested immediately in the purchaser and the seller could no longer take possession of it on failure by the purchaser to pay the instalment. These two authorities do not therefore apply in this appeal where the sale as I have already concluded is a conditional sale. The court in the two cases above rightly held that in an outright sale, the seller’s remedy lies in an action to recover the balance of purchase price owed by the purchaser only. I therefore resolve Issues 1, 2, 3 and 4 in favour of the defendant as follows:-
(1) The Court of Appeal was wrong in its view that ownership in the equipment passed to the plaintiff on proper construction of Exhibit 1.
(2) The Court of Appeal was wrong in its view that acceptance of negotiable instruments or cheques as payment for the equipment had converted the conditional sale into an absolute sale.
(3) The Court of Appeal was wrong in its view that the only remedy open to the defendant was an action for the necessary of the balance of the sum unpaid.
(4) The Court of Appeal was wrong in holding that the plaintiff had established a legal right in the equipment as to entitle it to equitable reliefs sought.
Issues v and vi
These relate to the findings by the Court of Appeal that defendant had waived all the restrictive conditions in Exhibit 1 and whether or not there was a second contract between the parties. The defendant said the plaintiff neither pleaded waiver nor facts amounting to such waiver. The plaintiff contended otherwise. It referred to paragraphs 9 and 23 of the Statement of Claim and to Exhibit 11 a letter dated 3 July 1981 written by the defendant to the plaintiff.
I have carefully examined the entire pleadings in this case. There is nowhere in the pleadings where waiver is expressly pleaded. But did the act of the respondents in installing the equipment after dishonour of plaintiff’s cheques (both original and replacements) and a demand for a fresh letter of lien in its letter of 3 July 1981 constitute waiver? My answer is in the negative. I also say that there was no second or new contract between the parties herein and none was produced.
Now, let us see what the Act has to say about loss or termination of lien:-“Termination of Lien
Section 43(1) – The unpaid seller of goods loses his right of retention thereon –
(a) omitted
(b) omitted
(c) By waiver thereof
(2) omitted.”
The Act thus recognised that the unpaid seller’s lien may be waived.
But it must be stressed that by proceeding to install the machines in Kontagora after the initial dishonour of the six post dated cheques, the defendant was merely fulfilling the terms of agreement (Exhibit 1) which included installation at Kontagora. Failure to install would have amounted to a breach of the contract. Secondly the proposal to issue ten new post dated cheques in replacement of the original six which were also dishonoured, was conveyed to the defendant vide plaintiff’s letter MIA/A/27 dated 25 May 1981 (see defendant’s letter Exhibit 11 dated 3 July 1981) wherein the defendant made its own suggestion including the request for a fresh letter of lien. It is noteworthy that the proposals in the letter under reference came only after the defendant had repossessed the equipments/machinery which event had taken place before 28 March 1980 (see paragraph 21 of the amended Statement of Claim). The defendant has not been shown to have waived its lien by dealing with the machines in any manner inconsistent with the lien or by making any new arrangement with the plaintiff which is inconsistent with the continuance of its lien. A lien may be lost if the seller refuses to deliver the goods on some ground other than the buyer’s failure to pay or tender the price, or on some ground other than his right of lien. That is not the case here (see Hungmann v Brieseman (1892) 67 LT 642; Weeks v Goode (1859) 6 CB (NS) 367). Exhibit 1 being the agreement pleaded and relied upon by the parties, all subsequent acts of the parties in fulfilment of the agreement must be treated as such but not as giving rise to new contracts each and every time a proposal is made on how to effect a performance by a defaulting party. There was absolutely no need for the defendant to have asked the plaintiff for a fresh lien when Exhibit 1 had provided for same. The request was superfluous. The fact was that the ten new cheques still bounced, one after the other and so the defendant remained an unpaid seller. I therefore resolve issues (v) and (vi) in favour of the defendant and hold that the Court of Appeal erred when it held that the defendant had waived its right of lien as contained in Exhibit 1 which is the only agreement or contract pleaded and relied upon by the parties. I also hold that the plaintiff did not establish any legal right in the equipments as to entitle them to any of the reliefs claimed.
……………………………I……………………………
Issue vii
This issue is directed against the following order made by the Court of Appeal:-
“That the said equipments be delivered to the plaintiff subject to the plaintiff paying the entire sum outstanding as balance of the total cost of the equipments, taking into account N381,160 the plaintiff had so far paid to the first respondent (defendant).”
There is no dispute about the fact that this is certainly not one of the reliefs sought by the plaintiff against the defendant in the trial court. The defendant also made no counter-claim in its Statement of Defence before the High Court against the plaintiff. The order made by the Court of Appeal is therefore clearly gratuitous. It is not the function of a court of law to make a gratuitous award. Such an award will be incompetent. (See for example Ekpeyong v Nyong (1975) 2 SC 71; Obiomaa v Olomu (1978) 3 SC 1). The issue therefore succeeds.
Having come to the conclusion as I have done above that the plaintiff did not establish any legal right in the property or machinery subject matter of the contract, it automatically failed to qualify for any of the reliefs sought by it against the defendant. The property or title in the goods conditionally sold to the plaintiff remained perpetually in the defendant as an unpaid seller and as contained in the sale agreement (Exhibit 1).
It is noteworthy to observe here now that the Act, hitherto a received English statute of general application in Kaduna State, has since been Nigerianised vide the Sale of Goods Edict No 15 of 1990. This is as it should be. All such laws should be Nigerianised as soon as possible to enable us know what laws actually govern us without having to travel all the way to England for the purpose!
On the whole this appeal therefore succeeds and it is allowed. The judgment of the Court of Appeal including its orders, are hereby set aside. The judgment of the learned trial Judge delivered on 21 July 1989 dismissing plaintiff’s claims is restored. The defendant is awarded costs of this appeal which is fixed at N10,000 against the plaintiff.
Wali, JSC:– I have read before now the lead judgment of my learned brother, Kutigi, JSC and I agree with his reasoning that the appeal has merit and ought to succeed.
The vexed question that arises for determination in this appeal and upon which, the resolution of other issues raised depends, is issue 1 in the appellants’ brief of argument. It reads as follows:-
“1. Whether the Court of Appeal was right in its view that ownership in the equipment passed to the respondent on proper construction of Exhibit 1, merely because the appellant had delivered the equipment’s at the site of the respondent at Kontagora.”
Learned Counsel for the respondent criticised the manner the issues in the appellants’ brief were framed. He in particular referred to the Grounds 1 and 3 and contended that they could not be attached to any issue in the appellant’s brief. It was also his complaint that Ground 2 was split into two by framing two issues out of it to wit Issues (i) & (iv) and submitted that a ground of appeal ought to relate to only one issue for determination. Learned Counsel further complained that Issues (iii) and (vi) were not based on or related to any ground of appeal.
I have examined the issues framed by the appellant as related to the grounds of appeal and have arrived at the conclusion that the only issue that could not be hinged to any ground of appeal is Issue (vi), and for that reason it is hereby struck out. On the Question relating to formulating two issues from a single ground viz Issues (i) and (iv) arising from Ground 2, it is not against the procedure relating to briefs of argument that one or more issues are formulated out of a ground of appeal, but I agree that it is inelegant to do so and it may at times be incomprehensible and confusing. The purpose of filing a brief is to state with accuracy, brevity and precision whatever is essential to clear and adequate understanding of the questions which are required to be considered by the court. Ground 1 is in my view covered by Issue (i), Ground 3 by Issue (ii) and Ground 4 by Issue (iii) of the appellants’ brief.
From the pleadings and evidence lead in this case, both oral and documentary the parties entered into agreement for the sale of specific goods and the conditions attached to such contract. These are contained in Exhibit 1 dated 28 March 1978. It is a short document and for the purpose of clarity and convenience Exhibit 1 is reproduced hereunder:-
……………………………J……………………………
“Afrotec Technical Services Nigeria Ltd
P.M.B. 1061,
Oshodi,
Lagos State.
Dear Sirs,
Supply of Items of Plant And Equipment
We hereby unconditionally and irrevocably undertake to pay Afrotec Technical Services Nigeria Limited [hereinafter referred to as Afrotec] the total sum of N702,900 [seven hundred and two thousand, nine hundred Naira] in Consideration of their supplying us with the under-mentioned equipment on the Following terms and conditions:-
EQUIPMENT N Ex-Isolo
1 No Parker Mobile Crushing Plant Model 5245/4’/7606 N476,000
1 No Foden Quarry Dump Truck Model FC27 N84,000
Fast moving recommended spare parts to value – N38,900
BD 440 KVA Generating Set N66,000
Prices
The agreed prices are as detailed above and are understood to be on the basis of Delivery Ex Afrotec’s yard at Isolo Industrial Estate.
Delivery
The items of plant detailed above are to be delivered to site at an additional agreed price of N28,000 [twenty-eight thousand Naira].
Commissioning
Afrotec to attend to commissioning and to provide skilled engineer to supervise Installation at an additional cost of N10,000 [ten thousand Naira], being five Weeks at the rate of N2,000 per week.
Terms of Payment
We confirm that the total contract price of N702,900 is to be paid to Afrotec on the following terms.
40 percent cash deposit of N281,160 [two hundred and eighty-one thousand, one hundred and sixty Naira] payable in advance of delivery.
Balance of 60 percent payable by six equal instalments of N70,290 [seventy thousand, two hundred and ninety Naira] each secured by post dated cheques payable on the 27 April, 27 May, 27 June, 27 July, 27 August and 27 September respectively.
Interest
The interest charge on the instalmental payments is to be for Afroctec’s account.
We unconditionally and irrevocably agree that Afrotec shall have a lien on all the machinery until such time as Afrotec receive payment of the full contract amount of N702,900.
We also confirm that should we fail to pay any of the instalments detailed above within one month of the due date, Afrotec shall take immediate possession of those properties in specie that remains unpaid for within the subject of this transaction without hindrance and without recourse.
……………………………K……………………………
Yours faithfully,
For: Mia & Sons Limited
Alhaji M. I. Atta R. H. Maggs
Managing Director Financial Controller.”
Following this agreement the appellant delivered the plant and accompanying equipment at the agreed site in Kontagora Town, Niger State and installed them. Before the delivery and installation of the plant and equipment, the respondent paid 40 percent of the contract price to wit N281,166 and the balance of N428,860 to be paid by six equal instalments of N70,290, each secured by post-dated cheque payable on 27 April, 27 May, 27 June, 27 July, 27 August and 27 September, 1978 respectively.
The following stipulations were specifically provided in Exhibit 1:-
“1. The interest charge on the instalmental payments is to be for Afrotec’s account.
2. We unconditionally and irrevocably agree that Afrotec shall have a lien on all the machinery until such time as Afrotec receive payment of the full contract amount of N702,900.
3. We also confirm that should we fail to pay any of the instalments detailed above within one month of the due date, Afroctec shall take immediate possession of those properties in specie that remains unpaid for within the subject of this transaction without hindrance and without recourse.”
The object of sale of goods is generally to transfer its ownership to the purchaser from the seller. See Sections 16-19 of the Sale of Goods Act 1893. But where a contrary intention is shown the property in the goods only passes to the buyer at such time as the parties to the contract intend to. And for the purpose of ascertaining the intention of the parties, regard must be had to the terms of the contract, the conduct of the parties and the circumstances of the case.
In R.V. Ward Ltd v Bignall [1967] 2 All ER 449 at 453; (1967) QB 534 CA, Diplock LJ stated:-
“. . . in modern times very little is needed to give rise to the inference that property in specific goods is to pass only on delivery or payment.”
Having regard to the contents of Exhibit 1 and the conduct of the parties in this case, can it be concluded that the ownership of the specific goods sold and delivered passed to the respondent?
The respondent agreed in Exhibit 1 unconditionally and irrevocably that Afrotec shall have a lien on all the machinery sold and delivered under that contract, until such time as Afrotec receives payment of the full contract amount of N702,900. It was agreed by the parties in Exhibit 1 that should the respondent fail to pay any of the instalments detailed in Exhibit 1 within one month of due date, the appellant Afrotec shall take immediate possession of those properties in specie that remains unpaid without hindrance and without recourse. This shows that the passing of the property to the respondent is conditional to the payment in full of the contract price as agreed in Exhibit 1.
Perusing through the documents tendered and admitted in the course of trial there was an attempt by the parties to reschedule the payment of the outstanding debts which was never concluded after default by the respondent. The respondent made a proposal to the appellant in that regard which the latter replied by a counter-proposal. A counter offer by the offeree operates as a rejection of the original offer, thus terminating it. So it is futile for the respondent to claim that Exhibit 1 had been replaced or altered by another agreement which he called novation. The conditions in Exhibit 1 were still binding and enforceable at the time of litigation. There was no waiver by the appellant of his right of lien over the equipment sold and delivered to the respondent’s site in Kontagora. The delay by the appellant in exercising the rights given him in Exhibit 1 was only to give the parties more time and opportunity to reach amicable settlement which the respondent failed to avail himself by resorting to unfulfilled promises and hollow undertaking before he resorted to litigation.
With consent and tacit approval of the respondent, the appellant regained possession of the equipment, that is when he was to remove them from Kontagora to Kaduna for servicing and relocation to another site in Kaduna. It was then he decided to hold on to them in exercise of his lien for the unpaid debt. The appellant was more or less at that time like the respondent’s agent. See Section 41(2) of the Sale of Goods Acts 1893 and Grice v Richardson [1877] 3 App Cas 319.
Section 41(1) of the Sale of Goods Act, 1893 provides as following:-
“Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely:-
[a] When the goods have been sold without any stipulation as to credit; [b] Where the goods have been sold on credit, but term of credit has expired; [c] Where the buyer becomes insolvent.”……………………………L……………………………
Paragraphs [b] and [c] could apply in the present case, because:-“[I] the appellant was an unpaid seller;
[II] the stipulated period of credit had expired; [III] the buyer [who is the respondent] had become insolvent; and [IV] the seller was in possession of the goods or part of them.”Section 62(3) of the Sales of Goods Act 1893 also defined insolvency as followings:-
“A person is deemed to be insolvent within the meaning of this Act who has either ceased to pay his debts in the ordinary course of business, or cannot pay his debts as they become due, whether he has committed an act of bankruptcy or not.”
(See the Feliciana [1915] 59 CJ 456; R v Saddlers Co [1863] 10 HL 404, 425; Parker v Gossage [1835] 2 C M&R 617, 620 and Biddle Combe v Bond [1835] 4 A & E 332, 337). The respondent was unable to pay his debts when they became due and was therefore insolvent.
By virtue of the provision of Section 39 of the Act the powers granted to the unpaid seller under Part (iv) thereof can be exercised by him “notwithstanding that the property in the goods may have passed to the buyer”. See also Section 41(2) of the Act that also provides that the seller – “may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee . . . for the buyer”. See Grice v Richardson [1873] 3 App Cas 319.
It is implicit in Section 28 of the Act that delivery of the goods is conditional on payment and where payment is not forthcoming or if the buyer becomes insolvent, the seller is entitled to retain the goods even during the currency of a period of credit. (See Bloxam v Sanders [1825] 4 B & C 941 at 949).
Subsequent to the judgment of the trial court in which the respondent as plaintiff lost to the appellant as defendant resulting in the dismissal of the action filed, the respondent brought an application for injunction to stay the implementation of the judgment pending appeal.
Parties filed affidavits and counter-affidavits and made oral submissions when the application was heard. In a considered ruling, the learned trial Judge refused the application and concluded:-
“In sum the applicant has failed to establish that the res it seeks to preserve is still in existence or in the possession of the respondent. This Court shall not therefore exercise its discretionary power in vain.”
The learned trial Judge found that before filing the litigation by the respondent due warning by the appellant to the respondent that in exercise of their right of lien on the equipment in their possession, they intend to dispose of same by sale to satisfy the debt or part thereof and as a result of which the said equipment were thereafter sold and delivered to Messrs Ofcon Engineering Co Ltd. Section 48(2) & (3) confers on the unpaid seller the right to sell goods in his possession in exercise of his lien over the same in order to satisfy his debt or part thereof. It provides thus:-
“48 (2) Where an unpaid seller who has exercised his right of lien or retention or stoppage in transit sells the goods, the buyer acquires a good title thereto as against original buyer.
(3) Where . . . the unpaid seller gives notice to the buyer of his intention to re-sell, and the buyer does not within a reasonable time pay or tender the price, the unpaid seller may re-sell the goods and recover from the original buyer damages for any loss occasioned by his breach of contract.
An unpaid seller can exercise the statutory right of resale of the goods in his possession whether or not property in the goods has passed to the buyer or not and the new buyer acquires good title in such goods. See R v Ward v Bignall [1967] QB 543; [1967] 2 All ER 449.”
Under Section 48 of the Sales of Goods Act, the unpaid seller retains the right to sell the identified property where the buyer has become insolvent. The right of sale can be exercised by the seller under this section where he has been in continuous possession of the goods or where he has regained possession by exercising his right of lien or stoppage of the goods in transit. This right is available to him whether or not the property in the goods has passed to the original buyer who has become insolvent by his failure to pay or tender the purchase price as agreed in the contract, within a reasonable time. The intention to sell the goods must be notified to the insolvent buyer. What is a reasonable time in this context is a question of fact. (See Darnhouwer & Co Ltd v Christian [1917] KB 37). In that case it was agreed by the parties that payment was to be made within 90 days of the arrival of the goods. Over 90 days of the arrival of the goods the purchaser did not pay for the goods or take delivery of the same. The seller gave three days notice to the buyer on expiry of which he sold the goods. It was held that the three days notice is reasonable having regard to all the surrounding circumstances of the case. The resale of the goods rescinded the original contract and the property in the goods reverted in the unpaid seller which had previously passed to the original buyer. This act of resale rescinded the original contract, thus reverting the property in the goods to the seller who passed good title in them to the new buyer.
The Court of Appeal was therefore wrong in its conclusion that:-
“I have considered all the relevant issues above and it is my judgment that this appeal must succeed and it is allowed. I hereby set aside the judgment of Ibiyeye J delivered on 21 July 1989.
I also agree that the third party, Afcon Engineering Company Ltd, did not obtain any title in the equipment in dispute which the first respondent allegedly sold to it. The first respondent had no proprietary rights over the equipment when it sold and delivered it to the second respondent. After parting with the property in the goods, the company had no right to pass over to the second respondent. It is also quite plain that the second respondent bought the equipment with the knowledge of this suit and that in itself will disqualify it from obtaining any property in the equipment. The second respondent is hereby ordered to released the equipment, if it had taken possession of the same, forthwith.”
It is for these and other reasons ably stated in the judgment of my learned brother Kutigi, JSC which I have already expressed my agreement with that I also hereby allow this appeal, set aside the judgment and orders of the Court of Appeal and restore the judgment of the trial court. I award N10,000 costs to the appellant against the respondent.
……………………………M……………………………
Iguh, JSC:– I have had the privilege of reading in draft the judgment just delivered by my learned brother, Kutigi, JSC and I am in full agreement with him that there is merit in this appeal and that the same should be allowed.
It is not in dispute that the transaction in issue is a contract of sale between the appellant and the first respondent in respect of the appellant’s Parker Crushing Plant with its auxiliary equipment, that is to say:-
1. Parker 5245/4 Crushing Plant Combination
value at N476,000
2. Foden quarry dump
Truck model FC27 N84,000
3. BD440 generating set N66,000
4. Spare parts N38,900
Transportation of the plant by the appellant to the first respondent’s site at Kontagora together with the agreed fees for the commissioning of the equipment were assessed and fixed at N38,000, thus bringing the total contract price of the sale to N702,900. The contract which is in writing was duly executed by the appellant and was tendered in evidence at the hearing as Exhibit 1.
Pursuant to the terms of Exhibit 1 dated 28 March 1978, the first respondent, as the purchaser, “unconditionally and irrevocably” undertook to pay to the appellant, as the seller, the said total sum of N702,900 as consideration for the sale and delivery of the plant to the first respondent’s site at Kontagora. The precise terms of payment were expressly stipulated by the parties as follows:-
“1. 40 percent cash deposit of N281,160 (two hundred and eighty-one thousand, one hundred and sixty Naira) payable in advance of delivery.
2 Balance of 60 percent payable by six equal instalments of N70,290 (seventy thousand, two hundred and ninety Naira) each secured by post dated cheques payable on the 27 April, 27 May, 27 June, 27 July, 27 August and 27 September respectively.”
The parties further agree that the appellant would have a right of lien on all the machinery until such time as the contract amount was fully paid. The first respondent finally bound itself to the appellant as follows:-
“We also confirm that should we fail to pay any of the instalments detailed above within one month of the due date, Afrotec shall take immediate possession of those properties in specie that remained unpaid for within the subject of this transaction without hindrance and without recourse.”
On receipt of the payment of N281,160 and the post-dated cheques, the appellant proceeded to install and commission the equipment with its accessories at the Kontagora quarry site of the first respondent. Regrettably, however, all the first respondent’s post-dated cheques on presentation for payment by the appellant on their respective due dates were dishonoured and returned unpaid. Another set of post-dated cheques issued by the first respondent to the appellant in replacement of the bounced cheques were themselves again dishonoured and returned unpaid. All efforts by the appellant to collect the unpaid balance of the contract price of the said plant and equipment from the first respondent proved abortive.
Following the first respondent’s request for the dismantling, transportation and reinstallation of the plant at its new site at Kaduna, the appellant proceeded to Kontagora, dismantled the plant but transported the same to the appellant’s warehouse in Kaduna. This, it did in exercise of its right to retake immediate possession of the property in issue as provided for in Exhibit 1. The appellant again demanded the unpaid balance of the purchase price of the equipment from the first respondent. After the failure by the first respondent to meet a revised payment proposal agreed to by the parties, the appellant resolved to exercise its right of lien and/or retention over the plant and to sell the same and refund the first respondent’s deposit.
Accordingly, the appellant addressed the letter, Exhibit 14 to the first respondent affecting it with notice of its intention to dispose of, by sale, the crushing equipment in issue. It was after the receipt of this notice that the first respondent instituted this action claiming against the appellant as follows:-
“(i) Perpetual injunction restraining the defendant, its agents, servants or other officers acting on its behalf from disposing of by sale or otherwise the equipments.
(ii) Damages.
(iii) Specific performance of agreement of installation of equipments i.e.
(a) Parker 5245/4 crushing plant combination
(b) Folden model dump truck
(c) BD 440 generating set
(d) Spare parts for crushing plant at Kaduna quarry site of the plaintiff by defendant or, in the alternative, refund, of all monies paid by the plaintiff to the defendant on the said equipment.”
……………………………N……………………………
The learned trial Judge, Ibiyeye, J as he then was, at the conclusion of hearing held that the appellant’s action was in the exercise of its right of lien and/or its right to withhold the subject matter of the sale until full payment of the contract price. He accordingly dismissed all the first respondent’s claims in their entirety.
Aggrieved by this decision of the High Court, the first respondent appealed to the Court of Appeal, Kaduna Division, which court in a unanimous decision allowed the appeal, set aside the judgment and orders of the trial court and proceeded to order as follows:-
(i) Perpetual injunction restraining the appellant, its servant and/or agents from disposing of by sale or otherwise the equipment in issue.
(ii) Specific performance of the contract of sale and delivery of the equipment by the appellant to the first respondent subject to payment of the outstanding balance of the contract price by the said first respondent.
(iii) An order remitting the issue of general damages claimed to the trial High Court for assessment.
The appellant being dissatisfied with this judgment of the Court of Appeal has now appealed to this Court.
There can be no doubt that having regard to the pleadings and the evidence before the court together with the various legal questions that were canvassed by learned Counsel for the parties, a number of issues would appear to arise for determination in this appeal. I propose to examine, by way of emphasis only, some of these issues as framed by the parties. These comprise of:-
(i) Whether the Court of Appeal was not in error by holding that property in the plant with its accessories had passed to the first respondent by virtue of the contract, Exhibit 1, merely because the appellant had delivered the equipment at the site of the first respondent at Kontagora.
(ii) Whether the Court of Appeal was not in error when it held that the only remedy open to the appellant was an action for the recovery of the unpaid balance of the contract sum and not in its exercise of the right of lien and/or immediate possession of the plant as provided for in the agreement between the parties.
(iii) Whether the Court of Appeal was right in its view that acceptance of negotiable instruments as payment for the plant had converted the conditional sale thereof into an absolute sale.
(iv) Whether the Court of Appeal was not in error to have held that the 1st respondent had established a legal right in the equipments as to entitle it to the equitable reliefs sought.
(v) Whether the first respondent by its pleadings and evidence establish the defence of waiver.
(vi) Whether the Court of Appeal was not in error by making an order that the said plant/equipment be delivered to the first respondent subject to payment of the outstanding balance of the contract price by the first respondent to the appellant.
I will now consider these issues. I will take Issue 1 first.
Issue 1 poses the question whether the Court of Appeal was not in error by holding that property in the plant had passed to the first respondent under Exhibit 1 merely because the appellant did deliver the same at the site of the first respondent at Kontagora. As I have already pointed out, it is not in dispute that the transaction in issue is a contract of sale which under Section 1 of the Sale of Goods Act 1893 is a contract whereby the seller transfers or agrees to transfer property in goods to the buyer for a money consideration called the price. (See Doak v Bedford (1964) 2 QB 587).
Under Section 1(2) of the Sale of Goods Act 1893, hereinafter also referred to as the Act, a contract of sale may be conditional or absolute. It ought to be stressed from the onset, however, that a contract of sale reduced into writing, such as Exhibit 1, must be construed and given effect to like any other written contract. (See Coddington v Paleologo (1867) LR 2 Exch 193 at 200). So, where any right, duty or liability would arise under a contract of sale by implication of law, such right, duty or liability may be negatived or varied inter alia by the express agreement of the parties. It is principally the intention of the parties, as shown by the terms of the contract, amongst other considerations, which determines the time when the property in the goods, the subject matter of a contract of sale, is transferred or passes to the buyer. Accordingly, Section 17(1) of the Act provides that where there is a contract for the sale of specific goods, the property in them is transferred to the buyer at such time as the parties thereto intend it to pass. No difficulty can therefore arise where the contract between the parties expressly states when or at what time the property in such goods passes to the buyer.
……………………………O……………………………
Section 17(2) of the Act, however, provides that for the purpose of ascertaining the intention of the parties, regard must be had to the terms of the contract, the conduct of the parties, and the circumstances of the case. (See Nanka-Bruce v Commonwealth Trust Ltd (1926) AC 77). It should be pointed out that Section 18 of the same Act lays down three rules which govern the passing of property in specific goods unless a different intention is expressed in the contract. These rules, however, are mere presumptions and the law does permit parties to a contract to settle the point for themselves by any intelligible expression of their intention. (See McEntire v Crossley Bros Ltd (1895) AC 457 at 467). The said rules do not, however, apply to the facts of the present case and need not be given any consideration in this judgment.
In dealing with the question whether property in the goods in issue had passed from the appellant to the first respondent, the learned trial Judge observed as follows:-
“It is also apparent that by virtue of the default, property in the said three equipment has not passed to the plaintiff. It therefore has not established any legal right for which any equitable remedy could be ordered. I therefore failed to see any basis for ordering perpetual injunction or any injunction or ordering specific performance of the contract covered by Exhibit 1.”
The Court of Appeal, for its own part, was of the view that in so far as the appellant had delivered the plant and equipment at the first respondent’s Kontagora site, property in the said goods had passed to the first respondent.
I think the question of the property in goods must be distinguished from the possession of them. In particular it needs be emphasised that property in the goods does not connote possession of such goods. The property in the goods may be transferred to the buyer before or after he has taken possession of them or, indeed, at the time the goods are delivered to him. In the present case, it is common ground that the contract of sale which is binding on the parties and governs the transaction in issue is Exhibit 1. The question which must now be asked is whether from a close interpretation of Exhibit 1, one can come to a definite conclusion that the intention of the parties was that the property in the goods passed to the first respondent on the installation of the plant at its Kontagora site.
The law is long settled that in interpreting the provisions of a written contract, no addition thereto or, subtraction therefrom is permissible. The words used must be given effect to and no word should be ignored in the interpretation of the intention of the parties, otherwise the court will be seen as rewriting the agreement between the parties. (See Bookshop House Ltd v Stanley Consultant Ltd (1986) NWLR (Part 26) 87 at 97). I will now examine closely the specific conditions under which the transaction was entered into.
Although the contract, Exhibit 1, admittedly stated that the plant and equipments were to be delivered by the appellant at the Kontagora site of the first respondent, it carefully made provisions as to how the price of the equipments were to be paid by the first respondent. This was by payment of 40 percent cash deposit and the liquidation of the balance by six equal instalments of N70,290. Each of these instalments was secured by a post dated cheque payable on the 27 day of every month, beginning with the 27 April 1978 and terminating on the 27 September 1978. In particular, the parties expressly stated thus:-
(i) That the first respondent unconditionally and irrevocably agreed that the appellant shall have a lien on all the machinery until such time as the appellant received payment of the full contract price of N702 900.
(ii) That should the said first respondent fail to pay any of the instalments within one month of the due date, the appellant shall take immediate possession of those goods that remained unpaid for without hindrance.
It is clear to me, from a close examination of the above terms, particularly the powers conferred on the appellant under Item (ii) above that the transaction in issue was clearly not an absolute sale but a conditional contract of sale. In my view, it was the intention of the parties under its terms that the transfer of the property in the goods was subject to the fulfilment by the first respondent of the full terms and expressed conditions of the agreement. This must be so as it was expressly agreed to by the parties that the appellant shall take immediate possession of the goods without hindrance on the first respondent’s failure to comply fully with the conditions of the transaction.
……………………………P……………………………
In this regard, reference must be made to Section 1 subsections (2), (3) and (4) of the Sale of Goods Act 1893 which stipulate as follows:-
“(1) . . .
(2) A contract of sale may be absolute or conditional.
(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer the contract is called a sale; but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled the contract is called an agreement to sell.
(4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.”
Accordingly, where a contract for the sale of specific goods, as in the present case, is made subject to a condition which to all intent and purposes suspends the passing of property, the property will not pass to the buyer at the time of the making of the contract, but only when the agreed condition as stipulated by the parties is fulfilled. Until then, the contract takes effect as an agreement to sell, and not an outright or absolute sale of the goods.
In the present case, all the post-dated cheques meant to clear the 60 percent of the purchase price spread over six months were dishonoured on presentation for payment. Other additional cheques issued by the first respondent in respect of these payments were also dishonoured and returned unpaid on presentation. I think the court below was in error to have held that property in the goods passed to the first respondent simply because the appellant, as contracted in Exhibit 1, had delivered the equipment at the Kontagora site of the first respondent. It is my view that had that court properly construed Exhibit 1 as a whole, it would have come to the irresistible conclusion that the transaction in issue was not an absolute sale but a conditional contract of sale and that the property in the goods could not have passed to the first respondent as the agreed conditions and stipulations governing the contract of sale had not been fulfilled by the first respondent. Issue one must therefore be resolved in favour of the appellant.
I must, however, hasten to point out that my resolution of Issue 1 in favour of the appellant cannot be regarded as any matter of great moment in this appeal. This is because the ultimate decision I intend to reach in this appeal would appear to be the same, whether or not property in the goods in issue had passed to the first respondent under and by virtue of Exhibit 1. For the moment, I will proceed to examine Issue 2.
Issue 2 concerns the right of lien, retention of possession or withholding delivery of the goods, the subject matter of the contract of sale. The question is whether the exercise of these rights was open to the appellant or whether the only remedy open to it was an action for the recovery of the balance of the unpaid contract sum.
A lien, broadly speaking, is a right to retain that which is in one’s possession belonging to another till certain demands of the person in possession are satisfied. The unpaid seller’s lien however, is his entitlement to retain the goods in his possession until the buyer has paid or tendered the whole of their price. (See Martindale v Smith (1841) 1 QB 389 at 396). The point that must be emphasised is that the unpaid seller’s right of lien depends on his being in possession of the goods at the time he exercises his right of lien. Even where the seller is in possession of the goods as agent or bailee for the buyer, as is the case in the present appeal, he may still exercise right of lien. (See Poulton and Son v Anglo-American Oil Co Ltd (1911) 27 TLR 216).
……………………………Q……………………………
Lien arises if the following conditions are satisfied, namely:-
1. The seller is unpaid;
2. The goods have been sold without any stipulation as to credit, or the stipulated period of credit has expired, or the buyer has become insolvent; and
3. The seller is in possession of the goods or part of them.
Accordingly, Section 41(1) of the Sale of Goods Act provides that subject to the provisions of the Act, the unpaid seller of goods who is in possession of them is entitled to a lien over the goods and therefore to retain possession of them until payment or tender of the price.
By Section 38(1) of the Act, the seller of goods is deemed to be an “unpaid seller” within the meaning of the Act when:-
(1) the whole of the price has not been paid or tendered; or
(2) a bill of exchange or other negotiable instrument has been recovered as conditional payment, and the condition on which it was recovered has not been fulfilled by reason of the dishonour of the instrument or otherwise as in the present case.
Perhaps, it ought to be mentioned that where an unpaid seller who is in possession of the goods has exercised his right of lien or retention resells the goods pursuant to his powers under the Act, the buyer acquires a good title thereto as against the original buyer. See Section 48(2) of the Sale of Goods Act, 1893 which provides thus:-
“48 (2) where an unpaid seller who has exercised his right of lien or retention or stoppage in transit resells the goods, the buyer acquires a good title thereto as against the original buyer”
Under this subsection, therefore, the second buyer acquires a good title to the goods as against the original buyer and it would not matter that the unpaid seller at the time of the sale was not the owner of the goods. (See The Bineta (1967) 1 WLR 121). See too Section 39(1) of the Sale of Goods Act, 1893, wherein it is expressly provided that subject to the provisions of the Act and not withstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods has inter alia and by implication of law a lien over the goods or the right to retain them for the price while he is in possession of them. Such unpaid seller is not liable in conversion as the original buyer, being in default, is not entitled to possession of the goods. (See Lord v Price (1874) LR 9 Ex 54).
There is also the provision of Section 39(1)(c) which, subject to the provisions of the Act and notwithstanding that the property in the goods may have passed to the buyer, confers on the unpaid seller a right of resale of the goods but as limited by the Act. And by Section 39(2) of the Act, even where the property in the goods has not passed to the buyer, the unpaid seller has, in addition to his other remedies, a right of withholding delivery similar to and co-extensive with his rights of lien where the property has passed to the buyer as prescribed under Section 39(1) as aforesaid. (See Ex parte Chalmers (1873) LR 8 Ch App 289 at 292). It is thus apparent that a lien, although it may only arise stricto sensu when the property held belongs to another, on the other hand, the right to withhold delivery exercised by the unpaid seller over goods in which he still has the property has, quite rightly, been described as a quasi-lien. See Ex parte Chalmers (supra).
In the result, therefore, the unpaid seller has the same right of retention or withholding delivery of the goods in his possession sold whether or not the property in them has passed to the buyer. (See Ward Ltd v Bignall (1967) 1 QB 534 at 545).
Applying the above principle of law to the facts of the present case, it is clear to me that whether or not the property in the goods had passed to the first respondent on the delivery of the plant and equipment at its Kontagora site, the appellant, once the goods were in its possession, would only be liable to deliver them to the first respondent on payment or tender of the balance of the purchase price. See Section 28 of the Sale of Goods Act 1893). The appellant was entitled until then to retain possession of the goods, the subject matter of the contract of sale, either by virtue of its lien as an unpaid seller, if the property had passed (See Section 39(1) of the Sale of Goods Act, 1893), and I do not so hold, or by virtue of his right to withhold delivery of the goods, if the property had not passed (See Section 39(2) of the Act). In either case, the appellant, as an unpaid seller had a right to resell the goods as it appears it did. See too Ward Ltd v Bigmall (supra) per Diplock, LJ I think the appellant was entitled in all the circumstances of this case to exercise its right of lien and/or retention of possession of the goods in issue as provided both under the Act and pursuant to the terms of Exhibit 1.
It was then submitted by learned Counsel for the first respondent that the appellant lost its right of lien over the goods the moment possession of them was first obtained by the first respondent by delivery at its Kontagora site. Without doubt, Section 43(1) of the Sale of Goods Act 1893 provides that the unpaid seller of goods loses his right of lien or right of retention when, inter alia, the buyer or his agent lawfully obtains possession of the goods. But it is settled law that although possession of the goods may have passed to the buyer or his agent so as to terminate the unpaid seller’s statutory right to a lien, the contract itself between the parties, as is the case in the present appeal, may make express provision for or create a special right in the seller which is analogous to a lien. Where such express provision is agreed to by the parties, it cannot be doubted that it will be binding on the parties.
……………………………R……………………………
In this connection, it ought to be stressed that rights which have been conferred on sellers or buyers under the Sale of Goods Act, 1893 are rights that arise under the contract between the parties by the implication of law. Section 55 of that Act, however, provides that where any right, duty or liability would arise under a contract of sale of goods by implication of law, it may be negatived or varied inter alia by express agreement between the parties. Accordingly, if the contract between the parties expressly creates a lien, a right of retention of the goods, repossession thereof or other form of security for the price, such express terms will prevail over, and therefore exclude the statutory implication of a lien etc, at least to the extent of any inconsistency with the express terms. (See Re Leith’s Estate (1866) LR 1 PC 296 at 307 and 308). This is because parties to a contract enjoy their freedom to contract on their own terms so long as these are not illegal and/or unlawful. The terms of a contract between parties are therefore clothed with some degree of sanctity and if any question should arise with regard to the contract, the terms in any document which constitutes the contract are invariably the guide to its interpretation. When parties enter into a contract, they are bound by the terms of that contract and it cannot be anything but unfair to read into such a contract the terms on which there has been no agreement save terms which may arise by implication of law and in respect of which there is nothing in the contract that expressly provides otherwise. (See Alhaji Abdulahi Baba v Nigerian Civil Aviation Training Centre, Zaria (1991) 5 NWLR (Part 192) 388 at 392 and 393).
Exhibit 1 makes express provisions for the rights of lien and immediate possession of the goods in issue reserved to the appellant as terms of security for the contract price. It seems to me that even if the goods were at all material times in the possession of the first respondent, there was clearly by express agreement, reserved to the appellant as the seller, and as between itself and the first respondent, the buyer, a special property or interest in the plant and/or equipment until the full price was paid. This price was never fully paid and I entertain no doubt that the appellant rightly exercised its rights over the goods as agreed to by the parties in Exhibit 1. See Benjamin’s Sale of Goods (1974ed) paragraphs 1079 and 1083.
Finally, on issue 2, is the finding of the Court of Appeal that the only remedy open to the appellant was an action for the recovery of the unpaid balance of the contract sum and not in its exercise of the right of lien and/or possession/retention of the goods. In the first place and as I have repeatedly pointed out, the contract Exhibit 1 confers the exercise of the rights of lien and/or possession of the goods on the appellant as security for the price of the plant and equipment. This is quite apart from its rights over the goods under the provisions of the Sale of Goods Act 1893. In the second place, the appellant’s right to be paid the contract price of the goods is, under the law, quite independent of the existence of a lien; a lien being an additional security given to the seller who has yet to be paid; but he has a right to be paid besides and independently of his lien. (See The Elder (1893) page 119 at 131). It is thus settled that the right of the seller to sue for the price of the goods is independent of his other remedies against the goods. Indeed under Section 43(2) of the Sale of Goods Act 1893, the seller does not loose his right to lien merely because he has obtained judgment for the price of the goods unless and until the buyer has fully satisfied the judgment debt by payment of the full contract price to the seller. The Court of Appeal, with respect, was therefore in error when it held that the only remedy open to the appellant was an action for the recovery of the balance of the price of the goods and not in its exercise of the right of lien or retention of the plant pursuant to the terms of Exhibit 1.
There is next Issue 3 which poses the question whether the court below was right when it held that acceptance of negotiable instruments as payment for the plant per se converted the conditional sale of the equipment to an absolute or outright sale. In this regard, it must be conceded that where a negotiable instrument is given by a debtor to his creditor, the question of upon what terms it is given is clearly one of fact depending on the intention of the parties. (See Palmer v Bramley (1895) 2 QB 405 and Gunn v Bokkow, Vaughan and Co (1875) LR 10 Ch App 491 at 501). It must however be added that the intention to take an instrument in absolute payment for goods sold must be clearly shown and not deduced from ambiguous expressions.
There can be no doubt that payment may, by agreement, as in the present case, be made by means of a negotiable instrument such as a cheque. It is equally well settled that payment by means of a negotiable instrument is prima facie conditional on the instrument being honoured at maturity. The seller’s remedy to sue for the price is suspended during the currency of the instrument. If the instrument is honoured at maturity, the amount therein will accordingly be deemed effectively paid. If, on the other hand, it is dishonoured, the seller’s remedies both under the contract of sale in issue and the Sale of Goods Act 1893 automatically revive and become enforceable. That seems to me to be the position of the law. See too Section 38(1)(b) of the Sale of Goods Act 1893.
In the present case, it is not in doubt that the intention of the parties was that the entire balance of the purchase price be secured by post dated cheques. The issue was clearly not a question of accepting the post dated cheques as unqualified payment for the goods but as a promise to pay the cheques on the due dates. As things turned out, however, all the cheques in question were, on presentation for payment, dishonoured.
It cannot be disputed that the acceptance of a negotiable instrument is normally treated as conditional payment. Certainly, on the facts of the present transaction, the negotiable instruments issued by the first respondent and accepted by the appellant were taken as conditional payment. It is my view that where, as in the present case, a negotiable instrument taken as conditional payment for the price of goods is dishonoured, various remedies for the breach of such contract of sale including but not limited to an action for the unpaid balance are available to the seller depending on the facts and circumstances of each case. I think the court below was in error to hold that the acceptance of a negotiable instrument in all cases ipso facto converted the conditional sale in issue, as in the present case, into an absolute sale in the absence of any evidence to establish that the parties agreed to such arrangement.
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I will now turn to Issue 4. This deals with whether the Court of Appeal was not in error by holding that the first respondent had established a legal right in the equipments as to entitle it to the equitable reliefs claimed. I will, in particular, deal with the equitable reliefs of specific performance and injunction claimed by the first respondent.
A decree of specific performance is a form of relief that is purely equitable in origin and is one of the earliest examples of the maxim that equity acts in personam. The fundamental rule is that specific performance will not be decreed if there is an absolute remedy at law in answer to the plaintiff’s claim, that is to say, where the plaintiff would be adequately compensated by the common law remedy of damages. (See Hutton v Watling (1948) Ch 26 at 36 and Re Scott and Alvarez’s Contract, Scott v Alvarez (1895) 2 Ch 603 CA at 612 and 615). The jurisdiction in specific performance is based on the inadequacy of the remedy at law. (See too Whiteley Ltd v Hilt (1918) 2 KB 808 at 819 and Re Clarke (1887) 36 Ch D 348 at 352). In Flint v Brandon (1803) 8 Ves 159, the learned Master of the Rolls succinctly explained the position as follows:-
“This Court does not profess to decree a specific performance of contracts of every description. It is only where the legal remedy is inadequate or defective that it becomes necessary for courts of equity to interfere . . . In the present case, complete justice can be done at law. The matter in controversy is nothing more than the sum it will cost to put the ground in the condition in which by the covenant it ought to be.”
(See too Beswick v Beswick (1968) AC 58 at 63).
Still on the issue of specific performance of the agreement for the installation of the plant by the appellant at Kaduna, attention must be drawn to a second equally important principle. This pertains to the well established principle that contracts which are personal in nature or which involve the performance of personal service will not be specifically enforced. So, in Rigby v Connol (1880) 14 Ch D 482 at 407, Jessel, MR was obliged, and quite rightly in my view, to observe as follows:-
“The courts have never dreamt of enforcing agreements strictly personal in their nature, whether they are agreements of hiring and service, being the common relation of master and servant, or whether they are agreements for the purpose of pleasure. . .”
In the present case, it cannot be disputed that there is an absolute remedy at law for the alleged breach complained of by the first respondent in that the first respondent would not only be adequately compensated by the common law remedy of damages, it did in fact make a claim for damages for the breach complained of. It is also clear to me that the contract sought to be specifically enforced is personal in nature and/or involve the performance of personal services. The contract is simply that of hiring and service between the first respondent and the appellant for the transportation of the plant and equipment from Kontagora to Kaduna at an agreed fee. It was an employment and/or a master and servant contract. In all these circumstances, it is clear to me that the court below was, with respect, in error to have decreed specific performance of such a category of contract.
On the issue of the perpetual injunction claimed, it is another fundamental principle that the court will only grant a perpetual injunction at the suit of a plaintiff in support of a right known to law or equity. The conduct of a plaintiff must also be taken into consideration in determining whether or not to grant an injunction. The plaintiff must come to equity with clean hands and if, therefore, he is in breach of his own obligations, he will not be granted an injunction. In the same vein, he who comes to equity must do equity. Accordingly, a plaintiff will not succeed in his claim for injunction if he is unable or unwilling to carry out his own obligations.
In the present case, no right known to law or equity was established by the first respondent over the plant and/or equipment in issue. The court below did not disturb the finding of the trial court that the first respondent failed to fulfil its obligations under Exhibit 1 as there was an outstanding debt of N635,059.78 representing 60 percent of the purchase price of the plant and equipment. I have also found that no legal or equitable claim was established by the first respondent in respect of the goods and that the appellant acted within its statutory and contractual rights in disposing of by sale the said plant and equipment. I think that the equitable doctrines that he who seeks equity must do equity and that he who comes to equity must come with clean hands are applicable in this case and are sufficient to defeat the claims of the first respondent for any equitable reliefs. Issue 4 is therefore resolved in favour of the appellant.
Issue 5 concerns the question of whether or not the rights of lien, retention and/or immediate possession over the goods provided for in Exhibit 1 were waived by the appellant in the present proceedings. In this regard, I need only state that the defence of waiver was neither pleaded by the first respondent nor was evidence on the point led. It is a basic principle of law that parties are bound by their pleadings and it is the case they present on the basis of those pleadings that must be considered by the courts of law. No question of waiver therefore arises in this case and the court below, with respect, was in error to have held that the appellant had waived its right of lien and/or repossession of the goods.
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There is finally Issue 6 which challenges the competence of the court below to have ordered that the equipment be delivered by the appellant to the first respondent subject to payment of the entire outstanding contract sum by the first respondent to the said appellant. I have earlier on in this judgment set out the three reliefs claimed by the first respondent against the appellant in these proceedings. Perhaps, I should also state that the appellant filed no counter-claim against the first respondent before the trial court for payment of the balance of the contract sum. I think I need to emphasize that the principle of law is well settled that a court of law must not grant to a party a relief which he has not sought or which is more than he has claimed. (See Ekpenyong v Nyong (1975) 2 SC 71 at 81-82; Makanjuola v Balogun (1989) 3 NWLR (Part 108) 192 at 206; Olurotimi v Ige (1993) 8 NWLR (Part 311) 257 at 271 etc.) It is clear that the relief in issue was neither before the trial court nor before the Court of Appeal. In particular, the trial court had no opportunity of making any pronouncement on this controversial relief which was gratuitously made in favour of the appellant by the court below. It seems to me plain that issue 6 must be resolved in favour of the appellant.
It is for the above and the other reasons contained in the judgment of my learned brother, Kutigi, JSC that I, too, allow this appeal and set aside the judgment and orders of the Court of Appeal made on the 10 April 1991 in these proceedings. The judgment and orders of the trial court are hereby restored and the first respondent’s claims are hereby dismissed. I subscribe to the order for costs made in the leading judgment.
Katsina-Alu, JSC:– I had the privilege of reading in draft the judgment of my learned brother Kutigi, JSC in this appeal. I agree with it. For the reasons he has given, I also would allow the appeal and set aside the decision of the lower court. I abide by the order for costs.
Ayoola, JSC (Dissenting):- By the letter dated 28 March 1980 the plaintiff wrote to the defendant as follows:-
“We hereby unconditionally and irrevocably undertake to pay Afrotec Technical Services Nigeria Limited (hereinafter Referred to as Afrotec the total sum of N702,900 (seven hundred and two thousand, nine hundred Naira) in consideration of their supplying us with the undermentioned equipment on the following terms and conditions.”
Having stated the equipment and terms and conditions as to price, delivery and commissioning, the plaintiff stated the terms of payment as follows:-
“We confirm that the total contract price of N702,900 is to be paid to Afrotec on the following terms.
40 percent cash deposit of N281,160. . . payable in advance of delivery.
Balance of 60 percent payable by six equal instalment of N70,290. . . each secured by post-dated cheques payable on the 27 April, 27 August and 27 September respectively.”
Then followed provision as to interest charged on the instalmental payment, the rate of which was not stated, and the following terms:-
“We unconditionally and irrevocably agree that Afrotec shall have lien on all the machinery until such time as Afrotec receive payment of the full contract amount of N702,900.
We also confirm that should we fail to pay any of the instalments detailed above within one month of the due date, Afrotec shall take immediate possession of those properties in specie that remains unpaid for within the subject of this transaction without hindrance and without recourse.”
Upon making a down payment of 40 percent of the purchase price the defendant installed the equipment at the plaintiff’s site at Kontagora. The plaintiff did not meet its obligation to pay instalments. It gave as reason breakdown of the equipment shortly after its installation at Kontagora and failure of the defendant to supply spare parts to resuscitate the broken down equipment. Believing that the equipment would be put to more profitable use in Kaduna the plaintiff requested the defendant and the defendant agreed in January 1980 to transfer the equipment to Kaduna and install the same on the plaintiff’s site. The defendant dismantled the equipment pursuant to that agreement. However, it transpired that instead of taking them to Kaduna it kept them in its warehouse. After several denials that it had repossessed the equipment, the defendant sometime in April 1980 claimed that it had repossessed them.
On these facts the plaintiff sued the defendant. By its defence the defendant asserted that it was “perfectly entitled” to take possession of the equipment “as such action was provided for in the sale agreement between the parties”. The defendant claimed that it exercised a right of lien on the plant after all negotiations for payment had collapsed. The defendant averred that the plaintiff having failed to perform its part of the contract was not entitled to the reliefs claimed.
The learned trial Judge, Ibiyeye, J (as he then was) dismissed the action. He found that the defendant rightly exercised its right of lien. He also held the view that by virtue of the default of the plaintiff property in the equipment had not passed to the plaintiff and, consequently, the plaintiff had not established any legal right to the remedies he claimed. All these findings were made after he had described the transaction as a hire purchase transaction.
On the appeal to the Court of Appeal the plaintiff’s argument, apart from the arguments on the now inconsequential issues of novation and waiver, was that the property in the equipment did pass to the plaintiff and that the trial Judge was wrong in holding to the contrary. It was further argued that by parting with possession, the defendant extinguished its right of lien, and that the sale being an outright sale the defendant had no right of repossession.
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For his part Counsel for the defendant in the Court of Appeal argued that the plaintiff had failed to establish a legal right and that the defendant had established its right of lien.
Uthman Mohammed, JA (as he then was) had no difficulty in allowing the plaintiff’s appeal. It is not difficult to follow the reasoning that led him to that conclusion from the following passages from his judgment which I now quote:-
“In relying on the right of lien the first respondent (the defendant) made it abundantly clear that it was passing the property and ownership to the appellant (the plaintiff).
In the case in hand the appellant claimed ownership of the equipment and it is quite clear that the first respondent did not deny that assertion. The learned Counsel for the respondents had no answer to the claim by the appellant that title to the equipment had been passed over to the appellant.
The tone of some of the documents clearly shows that the first respondent had transferred title of the equipment to the appellant. The only safety valve the company retained was the lien over the property which was agreed to be exercised until the balance due on the equipment was paid.”
On the question of lien, the learned Justice of the Court of Appeal (as he then was) held that since:-
“. . . The equipment in dispute was not in possession of the first respondent when he exercised the right of repossession.”
the argument that the defendant was an unpaid seller in possession of the goods until payment was not available to the defendant. He held that:-
“The fact that the seller no longer holds the goods in his capacity as seller, as is the case here, but as the buyer’s agent or bailee, may be evidence that he has waived his lien.”
The learned Justice further went on to say that acceptance by the defendant of negotiable instruments, cheques, as payment had converted “a conditional pay to an absolute payment, thereby, removing the necessity for exercise of lien.”
In the result, the Court of Appeal allowed the plaintiff’s appeal and entered judgment for the plaintiff restraining the defendant in terms of the plaintiff’s claim and ordering that the equipment be delivered to the plaintiff on condition that it pays the balance outstanding on the purchase price. The claim for damages was remitted to the High Court for assessment of damages.
The defendant has now appealed. For convenience the defendant, which is the appellant in this appeal, is referred to as “the defendant;” while the plaintiff, which is the respondent, continues to be referred to as “the plaintiff”.
It is evident that the transaction with which this case is concerned was clearly one of sale of goods. The trial Judge had some difficulties in classifying the nature of the transaction, which he described as “a hire-purchase or conditional sale”. Proceeding on the basis that: “It is settled law that conditional sales hardly pass title to the purchaser unless the attendant conditions have been executed”, he inevitably came to the conclusion, in effect, that there could have been no sale, and therefore, no passing of property until price was fully paid.
The ambivalence of the trial Judge in deciding the nature of the transaction is understandable, though, not justified. Hire-purchase, credit sale, conditional credit sale are all cognate transactions, the common factor they share is deferred payment of part or all of the purchase price. These though cognate transactions are distinguishable. For a better understanding and resolution of the issues that have arisen in cases such as the present one, the distinction should be borne in mind and not glossed over.
In the hire-purchase transaction there is no question of a sale coming into being unless and until the hirer exercises at the appropriate time the option to purchase the goods. Mixed in a hire-purchase transaction is a contract of hire an option to purchase.
In the credit sale transaction there is a sale on credit. The credit may take the form of payment of the entire purchase at an agreed future time or payment of the purchase price by agreed instalments. In a credit sale there is no question of an agreement to purchase the goods at a future time. A purchaser of goods under a credit sale agreement does not have the option, which the hirer has, of returning the goods and freeing himself from the obligation to pay further instalments. Two cases which show the nature and illustrate the consequences of a credit sale transaction are Osei Kofi v Mensah [1930] 1 WACA 76 and Yakassai v Incar Motors Nigeria Ltd [1975] NSCC 284 both of which have been referred to by Counsel in this appeal.
It is evident that a credit sale is not a hire-purchase transaction. A credit sale is a sale transaction subject to the same principles in regard to the passing of property in sale transactions which are not on credit.
The third cognate transaction is the conditional credit sale, which is distinguishable from a hire-purchase transaction because of the absence of option to purchase by the buyer or to resile from the sale by the seller. A credit sale may be conditional when by the agreement of the parties property passes to the buyer on condition that he pays the purchase price as agreed. The transaction in the case of Sengena v Poku [IX WACA 143] is an example of such conditional credit sale. In that case the buyer bought a lorry on terms that part of the purchase price would be paid by instalments. The seller reserved to himself the right to sell or use the lorry as his own in payment of the balance remaining should the buyer default in making instalment payments as agreed. On default of payment by the buyer, the seller seized the vehicles. The buyer challenged the seizure of the lorry on the ground that it had become his absolute property. The Divisional Court agreed with him and gave judgment for the buyer. On appeal, the West African Court of Appeal was of the view that:-
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“. . . the parties made it quite clear in terms of Exhibit ‘A’, particularly in clause 5, that the purchaser was not to acquire the property in the lorry unless and until the agreed instalments of the price were paid in full. Until then the purchaser had only the right to possession, user and control of the lorry so long as the agreed instalments of the price were punctually paid. It was made quite clear in clause 5 that upon any default in payment the owner could seize the lorry and upon notice given could ‘sell or use the lorry as his own in payment of the balance remaining.’ There was nothing whatever either unlawful or even unreasonable in that clearly expressed agreement between the parties.”
The test whether a contract of sale of specific goods is conditional or not is whether the contract is made subject to a condition which suspends the passing of property, so that the property will not pass to the buyer when the contract is made, but only when the condition is fulfilled. That is made clear in Section 1(2) and (3) of the Sales Good Acts 1893 as follows:-
“(2) A contract of sale may be absolute or conditional
(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer the contract is called sale; but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled the contract is called an agreement to sell.”
It seems clear from the provisions of Section 1(3) that for a contract of sale to be conditional the parties must have agreed either:-
(1) that the transfer of property in the goods is to take place at a future time; or,
(2) that the transfer of property in the goods is subject to some conditions thereafter to be fulfilled.
By Section 62(1) of the Act a “contract of sale” includes an agreement to sell as well as a sale. Between the two, there is no intermediate category (see Benjamin’s Sale of Goods (1974ed) paragraph 19).
That payment of price is deferred or agreed to be by instalments does not by itself make a contract of sale a conditional sale. In order to determine whether a contract of sale is a conditional sale the totality of the agreement must be considered. Where there is express term as to the passing of property there is no problem. Effect must be given to such term. It is where there is no such express term that resort must be had to a construction of the agreement, if in writing, to deduce the intention of the parties. Usually, such conditions are, for example, inferred from terms enjoining the buyer to insure the goods against risks, or empowering the seller to inspect the goods to ensure its good condition, or as in Adigun v Amao [1979] LRN 54 requiring the good (a lorry) to be registered in the seller’s name, to mention but a few. In the case of Senena v Poku (supra) there was no difficulty in construing the contract of sale as a conditional sale. The parties themselves described the transaction, though inexactly, as an agreement to “purchase under a hiring purchase system” and the seller expressly reserved the right to himself “to sell or use the lorry as his own in payment of the balance remaining” in the event of the buyer’s default.
In the present case neither the court below nor this Court had the benefit of the reasoning of the trial Judge that led him to conclude that the contract of sale was a conditional sale. He seemed to have been of the view that every credit sale is a conditional sale. That is erroneous. It needs to be stated that where the nature of a transaction or the intention of the parties is to be deduced from construction of an agreement in writing or from the terms of a contract the trial court should demonstrate from which terms and by what construction such intention is discovered.
Be that as it may, the Court of Appeal considered the terms of the contract whereby the defendant shall have lien over the equipment until the plaintiff paid the purchase price in full and the defendant had the right to repossess the equipment, in specie, if the instalments were not paid. Notwithstanding those terms, the Court of Appeal held that the defendant had “behaved in a way which established beyond all doubt that it had transferred the title” to the plaintiff.
The substance of the defendant’s Counsel’s argument on this aspect of the appeal is that the Court of Appeal ignored the intention of the parties as could be identified in the agreement. The terms which he submitted disclosed an intention of the parties that passing of property in the goods is conditional are those which gave a lien to the defendant and which reserved the right to the defendant to “take immediate possession of the equipment should the plaintiff fail to pay any of the instalments within one month of the due date”. It was argued that: “The right to take immediate possession does not support the right of ownership credited to the respondent by the Court of Appeal.” and, relying on Section 19(1) of the Act, that it was open to the seller to reserve to himself the right of disposal of the goods until a specified condition is fulfilled. In this regard I quote the submission made in the defendant’s brief thus:-
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“It is submitted that the specified condition which was not fulfilled by the respondent in this appeal is found in Exhibit 1 which states as follows:-
(a) “We unconditionally and irrevocably agree that Afrotec shall have a lien on all the machinery until such time as Afrotec receive payment of full contract of N709,200.”
(b) “We also confirm that should we fail to pay any of the instalments detailed above within one month of the due date Afrotec shall take immediate possession of those properties in specie that remains unpaid for within the subject of this transaction without hindrance and without recourse.”
Learned Counsel for the plaintiff argued for his part that the conduct of the defendant in parting with possession of the equipment before full payment was made and even after the plaintiff had defaulted in payment of three instalments together with charging of interest over the balance of purchase price were indicative of intention to pass property. Furthermore, it was argued, the defendant did not expressly reserve ownership by inclusion of a Romalpa clause. Finally, it was urged that “the clauses in Exhibit 1 relating to lien and possession cannot create any title” in the defendant after delivery of the equipment.
In my opinion, the question pertinent to the determination of the nature of the transaction is whether there is any term of the contract which makes the contract of sale a conditional sale. The submission of learned Counsel for the defendant that the terms of the agreement granting a lien and a right to take immediate possession of the goods to the defendant in case of the plaintiff’s default are conditions is in my opinion, misconceived. Those terms gave certain rights to the defendant and did not by themselves indicate that the plaintiff should do anything in order to acquire property in the goods. The proper approach to the relevance of the terms is whether the grant to the defendant of lien over the good and right to take immediate possession of the goods in case of default of payment raise an inference that delay in passing of property until payment of full purchase price by the plaintiff was intended.
That issue falls into proper perspective when the general nature of a lien is appreciated. The dissenting judgment of Fletcher Moulton, LJ, in Trustee of the Property of F Lord v Great Eastern Railway Company [1908] 2 KB 54 where at 63-64 explains the nature of a lien under English law thus:-
“A lien under English law is a very peculiar right, but its precise nature has been conclusively settled by a long line of decisions. In contrast to the operations of pledging or pawning the creation of the lien does not, strictly speaking, give to the holder any property in the goods subject to it: per Lord Esher in Yungmann v Briesemann. It is a right to retain the goods until the amount of the lien has been paid. During the period that the goods are so retained the true owner may be in complete possession of the goods and have and exercise over them most of the ordinary powers of an owner; and indeed in my opinion it is correct to say that there is nothing in English law which prevents his possessing and exercising any and every right of an owner in possession which is not inconsistent with the maintenance by the holder of the lien of his right to retain. Take for example the best-known and most familiar instance of a lien, namely, the lien of an innkeeper over the goods of a traveller at his inn for the amount of his charges. The traveller is in actual possession of all his goods. He wears the clothes; he reads the books. He can put them in his own box and lock them up, and during the traveller’s stay in the inn the innkeeper has no right to get at them nor to take them into own personal possession so as to deprive the owner of their use. The owner is even entitled to certain legal rights and remedies in respect of those goods which depend on possession. For example, if a man in the next room were to detain those goods, the traveller could bring detinue for them. Nothing that is done with the goods short of removing them from the hotel affects the existence of the lien. The owner may lock them up in cupboards in his rooms, of which he alone has the key, and if the innkeeper were to allot to the traveller a locker in the corridor or in the sample-room of the hotel for the purpose of holding his goods it would not, in my opinion, prejudice or affect the lien over them, even though the sacred word “demise” were used to describe the transaction, more especially if that “demise” was specifically for the sole purpose of holding goods which were to remain subject to the lien. But, although the innkeeper not only may but under certain circumstances must thus leave the goods in the actual possession of the owner, there are limits, which he may not pass without losing his lien. He must not permit the traveller to take the goods out of the Inn, or, to put it more generally, he must not do anything that amounts to an abandonment of the power to exercise his right of retention.”
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Then, at 71 he said:-
“As I have said, a lien gives no property in the goods, nor does it entitle the holder to take possession of the goods, for it implies that they are already in his possession in the sense that I have explained, and not in the uncontrolled possession of the owner.”
It is pertinent to observe that the House of Lords allowed the appeal in G E Ry v Lords [1909] AC 109.
It is clear that a lien is merely a right to retain the goods subject to it until the amount of the lien has been paid. The lien does not give to the holder any property in the goods. A legal lien was described in Halsbury’s Laws of England Vol. 28 (4ed) paragraph 702 thus:-
“In its primary or legal sense ‘lien’ means a right at common law in one man to retain that which is rightfully and continuously in his possession belonging to another until the present and accrued claims of the person in possession are satisfied. In the primary sense it is given by law and not by contract.”
Apart from lien which the law gives there is lien by contract, which is right to detain goods as security. In Halsbury’s Law of England (4ed) Vol. 28 paragraph 731 the nature and formation of such lien is described thus:-
“Lien in its proper sense is a right which law gives, but it is useful to speak of lien by contract, and numerous instances of a right to detain goods as security depends for their effect on the validity, scope and construction of the governing contract.”
Normally a lien implies that property in the goods is in another other than the person holding the lien. Section 39(1) provides that:-
“Subject to the provisions of this Law and of any written law in that behalf, notwithstanding that the property in the goods may have passed to the buyer, the unpaid seller of goods, as such, has by implication of law:-
(a) a lien on the goods for the price which he is in possession of them . . .”
By Section 39(2) when property in goods has not passed to the buyer the unpaid seller has right to withhold delivery. Commenting on Section 39(2) it was stated, quite rightly, in Benjamin’s Sale of Goods (1997ed) paragraph 15-029 that:-
“A lien, stricto sensu, can arise only when the property held belongs to another; hence, the right of withholding delivery’ exercised by the unpaid seller over goods in which he still has property, is a quasi-lien.”
Enough, I believe, has been said to show that the term as to lien contained in the agreement of the parties does not by itself raise any inference of an intention to delay the passing of property to the buyer. If anything, the inference which it raises is that which is consistent with the nature of lien, and that is, that property has passed to the buyer.
By the agreement of the parties the defendant was given a right to “take immediate possession of those properties in specie that remains unpaid for within the subject of this transaction without hindrance and without recourse” should the plaintiff fail to pay any of the agreed instalments within one month of the due date. I do not interpret this right as suggesting an intention to delay passing of property to the plaintiff.
The entire agreement must be read as a whole. By the agreement the plaintiff bought the equipment and agreed to pay an additional agreed price of N28,000 for delivery and an additional cost of N10,000 for commissioning of the plant. Interest was charged for delayed payment.
When it is disputed whether property has passed to the buyer or not, the approach which is in accord with the Sale of Goods Act 1893 is as contained in Sections 17 and 18 of the Act. In my opinion the following propositions should guide the court in determining the time when property passes when there is a contract for the sale of specific or ascertained goods:-
(i) Property in the goods is transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(ii) Where the terms of the contract, the conduct of the parties and the circumstances of the case disclose the intention such must be given effect to.
(iii) Where the terms of the contract, the conduct of the parties and the circumstances of the case, do not disclose a definite intention as to the time at which the property in the goods is to pass to the buyer, the presumptions contained in Section 18 of the Act should apply.
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In this case, the relevant provision of Section 18 is Rule 1, which provides that:-
“Where there is an unconditional contract for the sale of specific goods in a deliverable state the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of delivery, or both, be postponed.” (My emphasis.)
I have held that this is not a conditional contract for sale of the equipment. I also find that there is nothing in the terms of the contract, the conduct of the parties and the circumstances of the case that disclose any intention different from that presumed by Rule 1 of Section 18.
It is clear from the judgment of the trial Judge that he found that the defendant had exercised its “general right of lien in consonance with the spirit and intendment of Exhibit 1”. This was rejected by the Court of Appeal in a judgment delivered by Mohammed JCA (as he then was). They held that:-
“(i) The equipment was not in possession of the first respondent as seller but as bailee of the plaintiff when he exercised the right of repossession;
(ii) The acceptance of negotiable instruments as payment (before the cheques were dishonoured) had converted the conditional sale of the equipment into an absolute payment and the first respondent could not thereafter exercise its lien;
(iii) Following Yakassai v Incar Motors Nigeria Ltd (supra), that since the sale was an outright sale and property in the equipment had passed to the plaintiff, the defendant had no right of repossession even if he had agreed to that course.”
Mr Agbesanwa for the defendant puts his case against these findings in three ways. First, that the view of the Court of Appeal that the defendant not being in possession of the equipment as an unpaid seller but as a bailee could not exercise the unpaid sellers lien by virtue of its possession of the equipment, was erroneous in view of Section 41(2) of the Act. Secondly, that if the defendant “had refused the contract to transfer the plant to Kaduna, the right of lien and repossession provided in Exhibit 1 could not have been exercisable. It was by accepting the offer (i.e. to transfer the equipment to Kaduna) the appellant (i.e. the defendant) was able to exercise its right of lien and of repossession over the plants, since there was no time limit when those rights could be exercised, so long as the purchase price was still outstanding”. Thirdly, waiver not having been pleaded could not be raised.
Freedom of parties to determine the terms of their contract implies that the parties are free to agree that payment of the purchase price by a negotiable instrument may be taken as an absolute payment or conditional payment, conditioned on the instrument being honoured on maturity. The law is clear that payment by negotiable instrument is prima facie conditional. It is where the intention of the parties is that such payment is absolute that the prima facie view is excluded. Where payment is by negotiable instrument the legal position is clearly put in Benjamin’s Sale of Goods (op cit) paragraph 695 thus:-
“The seller’s remedy to sue for the price is suspended during the currency of the instrument. If the instrument is honoured at maturity, the amount expressed therein is efficiently paid; if it is dishonoured, the seller’s remedy reviews.”
The common sense view receives additional statutory support in Section 38(1)(b) of the Act which provides that the seller of goods is deemed to be an “unpaid seller” within the meaning of the Act when a bill of exchange or other negotiable instrument has been received as conditional payment, and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument or otherwise.
Acceptance of a negotiable instrument, normally treated as conditional payment of the purchase price, leads to waiver of the seller’s lien for the period of the currency of the instrument. The law is stated in Benjamin’s (op cit) paragraph 1066 as follows:-
“Where the buyer is given credit for the period of a bill of exchange or other negotiable instrument given by him to the seller in payment of the price, the seller’s lien is waived for that period, since acceptance of a negotiable instrument is normally treated as conditional payment. But if, before the goods are delivered to the buyer the negotiable instrument is dishonoured, or the buyer becomes insolvent, the seller’s lien will review, so that he may retain the goods until he is paid.” (My emphasis.)
The Court of Appeal was wrong in the view it held that payment by negotiable instruments even after the instruments were dishonoured destroyed the unpaid seller’s lien.
However, was the possession of the equipment under a contract to transfer the same to Kaduna and install it at the plaintiff’s site there, possession of an “unpaid seller” envisaged in Section 41(1) of the Act? That subsection reads:-
“Subject to the provisions of this Act, the unpaid seller of goods who is in possession of them is entitled to retain possession of them until payment or tender of the price in the following cases, namely:-
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(a) Where the goods have been sold without any stipulation as to credit;
(b) Where the goods have been sold on credit, but the terms of credit had expired;
(c) Where the buyer becomes insolvent.”
By subsection 1 of Section 43 the unpaid seller of goods looses his lien or right of retention thereon:-
(a) When he delivers the goods to a carrier or other bailee or custodier for the purpose of transmission to the buyer without reserving the right of disposal of the goods;
(b) When the buyer or his agent lawfully obtains possession of the goods;
(c) By waiver thereof.
It is clear from these two subsections that an unpaid seller who has ceased to be in possession of the goods looses his statutory lien. It was stated in Benjamin’s (op cit) paragraph 1068 that:-
“The unpaid seller’s right of lien depends on his being in ‘possession’ of the goods at the time he exercises his right of lien. The lien entitles the seller to retain possession, but not to regain possession of the goods after he has given it up.” (My emphasis.)
In Valpy v Gibson 136 ER 737 it was held, notwithstanding that the goods had come into possession of the buyer’s agents, who subsequently delivered them to the sellers to be repacked, that the lien was lost by the first delivery, and that the seller’s later possession for a limited purpose could not create a new lien for the price without the buyer’s agreement. Valpy v Gibson was decided before the Act was passed. Subsection 2 of section 41 of the Act provides that:-
“The seller may exercise his right of lien notwithstanding that he is in possession of the goods as agent or bailee or custodier for the buyer.”
Citing Poulton & Son v Anglo – American Oil Co Ltd [1911] TLR 216 it was stated in Benjamin’s (op cit) paragraph 1070 that as a result of the Act, the seller may exercise his lien until the price is fully paid, despite the fact that he acknowledges that he retains possession of the goods sold in the capacity of bailee to the buyer.
Section 41(2) is capable of two views. One is that “possession of the goods as agent or bailee or custodier for the buyer” includes regaining possession of the goods after the seller has parted with it and the buyer had already been in possession. The other is that these words apply only when the seller has not at any time parted with possession of the goods but has merely altered the capacity in which he possessed the goods. The latter will include a case in which the buyer is in constructive possession through his bailee or agent who happens to be the seller in continuous physical possession of the goods. The latter view is to be preferred.
For my part, I do not regard Section 41(2) as expanding the ambit of the statutory lien created by Section 39(1). It is made clear in Benjamin’s (op cit) paragraph 1058, and I agree with the view, that the seller’s lien is a qualification on his duty to deliver the goods to the buyer. That duty is imposed by Section 27 of the Act and is discharged upon delivery of the goods to the buyer and ceases to be subject to qualification.
Notwithstanding Section 41(2) of the Act, I am of the opinion that the principle in Valpy v Gibson (supra) still applies to this case. When the defendant delivered the equipment to the plaintiff it lost its statutory lien as an unpaid seller over the goods. Its possession of the goods as bailee of the plaintiff was possession by the plaintiff through it as bailee. The position is different from the case in which the seller had not at any intervening period been out of physical possession.
In my judgment, the defendant having delivered the equipment to the plaintiff had lost the statutory lien which it had pursuant to Section 39(1) of the Act, notwithstanding that it subsequently regained possession, under a separate contract as a bailee of the plaintiff for purpose of transporting the equipment to Kaduna.
Even if the defendant had not lost its lien, it has waived it by its conduct. The law is clear that lien is waived “where the party claims to retain goods on grounds different from those on which he rests his claim for lien, and makes no mention of lien.” (See Halsbury’s Laws of England (4ed) Vol. 28, paragraph 751). In my judgment, that the defendant assumed a contractual obligation to transfer the equipment to Kaduna and install it on the plaintiff’s site and proceeded to execute the contract and denied that it had repossessed the equipment amounted to waiver. That the defendant was negotiating for new terms of lien is hardly consistent, in my view, with the continuation of an existing lien. Besides, the defendant, as the exchange of letters between the parties shows, encouraged the plaintiff to prepare site for the equipment in Kaduna, and to transport the defendant’s crane to Kontagora pursuant to the agreement. The conduct of the defendant showed that it had wanted the transaction to continue as if it had no lien. A waiver arises where one party leads the other to believe that he will not insist on the precise stipulation in the contract e.g. as to the time of performance, and the other party has acted on that belief and has thereby prejudiced his position, the first party cannot afterwards insist on the terms of the original contract, e.g. as to time or otherwise: Bullen & Leaks & Jacobs, Precedents of Pleadings.
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The facts from which waiver could be inferred were pleaded and given in evidence. Although waiver was not expressly pleaded, there were sufficient facts pleaded the legal consequences of which would be inference of waiver if those facts were established.
Regardless of the lien, which the defendant had, by the agreement of the parties, the defendant was expressly empowered to take immediate possession of the equipment in case of plaintiff’s failure to pay instalments. By its letter of 21 April, 1980 the defendant claimed that it had repossessed the equipment. The Court of Appeal relying on Yahassai v Incar Motors Nigeria Ltd (supra) held that the defendant had no right of repossession since the sale was an outright sale and property had passed to the plaintiff.
In Kofi v Mensah 1 WACA 76 it was decided as the head note stated that:-
“When an outright sale of goods takes place and the purchaser makes default in paying the agreed instalments, the seller has no right to retake the goods, even though the purchaser in his contract has agreed to that course.”
Deane, CJ (of Gold Coast) delivering the judgment of the West African Court of Appeal relied on the authority of Thompson v Veale 1896 LT 130 for that proposition.
Kofi v Mensah (supra) was cited with approval in Yakassai v Incar Motors (supra). This Court in that case after quoting the passage in the judgment in Kofi v Mensah in which this principle of the case was enunciated said:-
“We ourselves agree with the principles of law enunciated above by their Lordships.”
This court has not been invited to depart from the decision in Yakassai‘s case. All that has been attempted by Counsel for the defendant is to distinguish it because, as he argued, the transactions in Yakassai and Kofi were conditional sales. In regard to Yakassai‘s case it was said that the reason for the decision was that the trial Judge should not have found that the sale was a conditional sale when such was not pleaded. In my opinion, these distinctions do not hold. Both Kofi‘s case and Yakassai‘s case show that a sale does not become conditional merely because the purchase price was payable by instalments.
It is expedient to observe that the principle in Kofi‘s case adopted and applied in Yakassai‘s case find support in the statement of the law as contained in Benjamin’s (op cit) paragraph 1147 as follows:-
“Where, following the contract of sale, the buyer has both possession of, and the property in, the goods, any retaining of the goods by the unpaid seller will (except in cases of fraud or misrepresentation) be a conversion against the buyer. In the cases, which support this proposition, the seller, did not purport, prior to the retaking to terminate the contract of sale on the ground that buyer had repudiated his obligations under the contract or had committed a fundamental breach. Would it have made any difference if he had done so? It is submitted that although direct authority is lacking, the assumption behind these cases that, once the seller has lost both his possession and his right of stoppage in transit, and has transferred the property in the goods to the buyer, he has no remedy against the goods themselves, and his only remedy is claim for the price or for damages under the contract. The assumption behind the statutory rules on the unpaid seller’s right of lien or of stoppage in transit is that if property has passed to the buyer and the goods themselves have reached the actual possession of the buyer or his agent, the unpaid seller has no further remedy against the goods: if the seller had common law power of revesting the property in himself by terminating the contract even where the buyer lawfully obtained both the property in, and possession of the goods, the statutory restrictions on the remedies of lien and stoppage could be easily evaded. Benjamin considered that: whenever the property has passed and the goods have reached the actual possession of the buyer the seller’s sole remedy is by personal action. He stands in the position of another creditor to whom the buyer may owe a debt; all special remedies in his favour qua seller are gone.”
It is worthy of note that the learned authors also stated at paragraph 1147 note 6 that:-
“An express power in the contract might entitle the seller to retake or to resell in these circumstances but the Bills of Sale Act 1878 might then apply.”
The circumstances referred to are those in which the seller had lost his possession and has transferred the property in the goods to the buyer. In passing, it is well to observe, further, that the above note further supports the position that provision of express power in the contract entitling the seller to retake the goods does not by itself raise an inference that the seller has not transferred the property in the goods.
On the strength of the principle followed in Yakassai‘s case, the conclusion that the defendant was not entitled to retake the equipment seems justified by authority. However, if there is a departure from Yakassai‘s case and I hold that effect ought to be given to the agreement of the parties conferring a right on the defendant to retake the equipment, it is expedient to consider the legal consequence of the defendant retaking the equipment pursuant to the agreement.
To put this aspect of the case in proper focus, it is right to note that what is challenged directly in this case, from the relief sought, is the right of the defendant to dispose of the equipment. As rightly noted by the trial Judge from the evidence of the only witness for the defence:-
“The three equipment are kept by the defendant in its exercise of right of lien stipulated in Exhibit 1 and pending the times when the plaintiff would pay the outstanding balance.”
Indeed the evidence of that witness read:-
“I still have possession of this three equipment. We are ready to release the three equipment if the balance of N635,059.78K is paid to us.”
The position thus taken by the defendant appears to me to be consistent with the claimed contractual right of the defendant as a holder of a contractual lien to retain possession pending the payment of sums due. No right of sale attaches to such lien. From the position taken by the defendant it would have been speculative for the Court of Appeal to proceed to explore whether the defendant had a right of resale and in what circumstances. Indeed, on this appeal the defendant put its case on the basis that property had not passed. There was no distinction drawn, or attempted to be drawn, between a right to mere retention of the equipment pending payment of the sums due and a right to sell, if any, where property had already passed to the buyer.
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The Court of Appeal granted the injunction claimed and subjoined thereto an order not expressly claimed:-
“That the said equipment be delivered to the plaintiff subject to the appellant paying the entire sum outstanding as balance of the equipment, taking into account N381,160 the appellant had so far paid to the first respondent.”
The defendant made an issue of this order on the ground that the relief was not claimed and the trial court had no opportunity of making any pronouncement on the relief. It is understandable that the trial Judge having proceeded on the footing that the plaintiff had no right to support the entire claim would not proceed to make any consequential order. There is usually reserved to any superior court a residual power to grant any consequential order which the justice of the case demands. In this case learned Counsel for the defendant on this appeal, argued, with commendable candour, thus:-
“The order recognised the need of the respondent to pay the unpaid balance before delivery to them. There is justice in the order.
A fortiori the appellant has the right to keep the plant and only to deliver it after being paid. There is also justice here.”
There is no difference in the two rendition of the order, the substance of which is that the plaintiff is only entitled to regain possession of the equipment if he tenders to the defendant the balance of the purchase price. The converse is that if he does not pay the purchase price he would not be entitled to regain possession. This was the understanding of the order which defendant’s Counsel considered just. I also add that not only is there justice in the order, but also, (i) it reasonably follows from and reflects the right claimed by the evidence tendered on behalf of the defendant and the right of the defendant to retain the equipment until payment is made; and (ii) it circumscribed the injunction granted to show that the injunction against disposal will be subject to the plaintiff making payment to regain possession of the equipment.
Besides, the order, though related in effect, is less onerous than an Order for Specific Performance of the contract to install the equipment claimed. Although the order enjoined the defendant to deliver the equipment to the plaintiff (subject to payment of the balance of purchase price) it fell short of ordering that the defendant should deliver it at a particular place or installing it.
In these circumstances, there is really no miscarriage of justice occasioned by the order which Counsel for the defendant himself conceded was just.
Of the seven issues formulated by learned Counsel for the defendant, he proffered no argument on the sixth issue and, indeed, did not challenge the finding by the Court of Appeal that there was a contract to transfer, service and install the equipment and that the defendant was bound under that contract to carry out its obligation. Although the court below held that the trial Judge was in error to refuse to grant specific performance of that contract, it did not itself order a specific performance of that contract. Instead, it ordered that the matter be remitted to the trial court for damages to be assessed. Although the appeal is against the whole decision, neither was there a ground of appeal relating to that aspect of the judgment nor was there issue directly formulated in relation thereto.
The Court of Appeal relying on Maiden Electronic Works Ltd v Attorney General of the Federation [1974] 1 All NLR 179 found a contract for transfer and installation separate from the contract of sale. A party is entitled to join several causes of action in one action. It follows that the cause of action on which the relief for injunction in this case was founded is quite separate from that on which the claim for damages was founded. The former is founded on the contract of sale while the latter is founded on the contract of transfer and installation.
The consequence of the defendant’s failure to challenge, on this appeal, the findings of the Court of Appeal on the question of breach of the second contract is that the order remitting the case for assessment of damages cannot be set aside. Also, where a party claims in regard to breach of contract damages and specific performance, refusal of specific performance on grounds of equity will not affect his right to the legal remedy of damages.
In the result, even if I have allowed this appeal in regard to the relief of injunction and specific performance, I would have dismissed it in regard to the order remitting the case to the High Court for damages for breach of contract to be assessed.
For the reasons, which I have given, it is evident that I would dismiss the appeal. In doing so, regrettably, my conclusion is not in agreement with the conclusion of my learned brothers. In this instance, I must tread the lonely path of one who dissents. If my minority opinion encourages further discussion of aspects of our sale of goods law it would have served some useful purpose.
Be that as it may, I would dismiss the appeal in its entirety with costs to the plaintiff.
Appeal allowed.