Ayodele James V. Mid-motors Nigeria Co. Ltd (1978)

LawGlobal-Hub Lead Judgment Report

ANIAGOLU, J.S.C.

The plaintiff (hereinafter called “the appellant”) has appealed from the judgment of the High Court of the Benin Judicial Division holden at Benin dismissing his claim for 15,000 pounds for fraudulent misrepresentation, against the defendants (hereinafter referred to as “the respondents”), a claim instituted by him in 1971 in the Benin High Court of the then Mid-Western State of Nigeria. While the appellant has contended, upon the grounds of appeal filed, that having regard to the evidence adduced on either side before the trial court the learned trial Judge was wrong in dismissing his case, the respondents have urged on us to affirm the judgment and dismiss the appellant’s case but upon grounds other than those relied on by the court, their contention being that the appellant had failed to prove his case in accordance with his pleadings and deserved to have his case dismissed at the close of his case; that the learned trial Judge needed not to have gone into a determination of the evidence adduced by the appellant since the evidence was not in accord with his pleadings and should have been ignored. The issue in this appeal, therefore, strongly revolved around the validity of the respondents’ contention which emphasised the importance of pleadings in a civil action.

In the circumstances it is necessary to reproduce the statements of claim and defence filed by the parties. The Statement of Claim dated 15/10/71 and filed on 16/10/71 reads:

“STATEMENT OF CLAIM:

1. At all material times the plaintiff was a transporter carrying on business under the name and style of AJILEYE & SONS. 2. At all material times the defendant company was and still is a limited liability company registered under the laws of Nigeria and carrying on business as dealers in various types of vehicles. The defendant was also at all material times an Insurance agent or broker.3. On the 18th March, 1970 the plaintiff entered into a Hire-Purchase Agreement with the defendant for the sale of a new commercial vehicle described as HINO KA300 for the sum of 5,418:7pounds and the plaintiff will rely on the agreement at the trial of this action. 4. The said vehicle was later registered as WD. 3725. 5. Before the plaintiff took delivery of the vehicle, the defendant insisted that the plaintiff must insure the said vehicle with an Insurance Company called Continental Insurance Company Limited.
2. In April, 1970 the defendant in order to induce the plaintiff to insure the said vehicle with the Continental Insurance Company Limited represented to the plaintiff that the said Continental Insurance Company Limited was a genuine, sound and business-worthy company legally authorised to transact business in Nigeria.
3. In reliance upon the defendant’s said representation the plaintiff insured the said vehicle with the said Continental Insurance Company Limited and paid the sum of 360pounds (Three Hundred and sixty pounds) as premium for comprehensive insurance through the defendant company which issued Continental Insurance Company Limited’s cover note as well as Certificate of Insurance. The plaintiff will at the trial of this action rely on both the cover note and the Certificate of Insurance. 8. The said representation was made fraudulently by the defendant in that the defendant knew that it was false. 9. On the 14th June, 1970 the plaintiff’s vehicle WD. 3725 was involved in an accident along Lagos/Kaduna Road and it was badly damaged. 10. On the 12th July, 1970, the plaintiff personally lodged a report of the accident to the defendant who advised that the plaintiff should contract the Continental Insurance Co. Ltd. directly and the defendant gave the address of the Insurance Company as 37, Sapele Road, Benin. 11. On getting to 37, Sapale Road, Benin, the plaintiff discovered that the Continental Insurance Co. Ltd. could not be located there at all and all efforts by the plaintiff and his solicitors to locate the whereabout of the Continental Insurance Co. Ltd. proved totally abortive. 12. On the 15th July, 1971, the Insurance Division of the Federal Ministry of Trade in Lagos in reply to the letter from the plaintiff’s lawyers Messrs. Gani Fawehinmi & Co. confirmed that Continental Insurance Company Limited was not a registered Insurer under the Laws of Nigeria. The plaintiff will rely on the said letter referred to above at the trial of this action.
4. A letter dated 17th July, 1971 and written by the plaintiff’s solicitors Messrs. Gani Fawehinmi & Co. to continental Insurance Co. Ltd. at 37, Sapele Road, Benin in connection with the accident involving plaintiff’s vehicle was returned unclaimed.
5. A photostat copy of the said letter from the Federal Ministry of Trade was forwarded to the defendant by the plaintiff’s solicitors Messrs. Gani Fawehinmi & Co. on the 18th July, 1971, accompanied by a letter demanding an explanation from the defendant. 15. Up till now, the defendant has failed to furnish the plaintiff or the plaintiff’s solicitors with any explanation at all.
6. The plaintiff’s vehicle which was being used for commercial business before the accident has been lying at the Police Station at Kaduna Motor Traffic Division after it was towed there soon after the accident occurred.
7. The plaintiff’s transport business which was being operated with the said vehicle WD. 3725 has been ruined by the accident as there is no existing Continental Insurance Company to meet plaintiff’s claim on the damaged vehicle WD. 3725. 18. As a result of the excessive damage to vehicle WD3725, the plaintiff has been unable to pay the monthly instalment of 326:10:7pounds under the Hire-Purchase Agreement referred to in paragraph 3 above. 19. Before the accident, the plaintiff was realising a net monthly profit of 400pounds (Four hundred pounds) and since the accident the plaintiff has lost these profits and consequently he has been unable to pay the monthly instalments due under his purchase agreement.
8. By reason of the defendant’s said fraudulent misrepresentation the plaintiff has suffered loss and damage.

SPECIAL DAMAGES: Outstanding instalments dueon the vehicle as per Hire

Purchase Agreement dated 18th March, 1971, 3, 9187pounds

GENERAL DAMAGES: 1 1,081:13pounds

Total- 1 5,000pounds

Whereof the plaintiff claims as per his writ of summons.

Dated THIS 15th day of October, 1971

(Sgd.) Gani Fawehinmi

plaintiff’s Solicitor.

116, Denton Street,

Ebute-Metta.

F/Sc…5/-

Service…2/-

Mileage…3/-

10/- Pad.

CR. No. 039682 of 16/10/71.”

On 22/11/71 the defendants filed their 18 – paragraphed Statement of Defence dated 18/11/71. The said Statement of Defence is as set out hereunder:-

“STATEMENT OF DEFENCE

1. Save and except as hereinafter expressly admitted the defendant denies each and every allegation of fact stated in the plaintiff’s Statement of Claim as if same were set out seriatim and expressly traversed.
2. The defendant admits paragraph 2 of the Statement of Claim to the extent that it is a limited liability company but specifically denies being an Insurance agent or broker at all material times as alleged in part of the said paragraph. The defendant will at the trial put the plaintiff to the strictest proof of this later part of paragraph 2 of the Statement of Claim. 3. The defendant admits paragraph 3 of the Statement of Claim and will at the trial contend that the transaction between the plaintiff and the defendant was purely one of Hire Purchase.
3. The defendant denies paragraph 5 of the Statement of Claim and will at the trial put the plaintiff to the strictest proof. 5. The defendant did not at the material time represent to the plaintiff the said Insurance Company as alleged in paragraph 6 of the Statement of Claim. 6. The defendant denies paragraphs 6, 7 and 8 of the Statement of Claim and will at the trial put the plaintiff to the strictest proof thereof.
4. The defendant denies paragraph 10 of the Statement of Claim and will at the trial put the plaintiff to the strictest proof of same. 8. The defendant is not in a position to admit or deny paragraphs 11, 12, 13 and 16 of the Statement of Claim. 9. The defendant denies paragraphs 14 and 15 of the Statement of Claim and will at the trial put the plaintiff to the strictest proof of same.
5. The defendant will at the trial put the plaintiff to the strictest proof of the facts averred in paragraph 17 of the Statement of Claim. 11. The defendant by way of special defence avers and will establish at the trial that:

(a) Mid-Motors Nigerian Company Limited is not the agent of the Continental Insurance Company Limited.

(b) Continental Insurance Company Limited is a separate company Mid-Motors Nigeria Company Limited and to the best of defendant’s knowledge and information it is incorporated under the Laws of Nigeria.

(c) That the Mid-Motors Nigeria Company Limited operates within its objects and is only bound within same.

(d) That neither the Mid-Motors Nigeria Company Limited itself nor its agents or servants made the alleged representation of inducement in respect of Continental Insurance Company Limited to the plaintiff at the time of purchase of the said HINO KA 300 or at any time. 12. The defendant did not make the representation complained of both in the Writ of Summons and the Statement of Claim by the plaintiff. In the alternative, the defendant avers that even if the alleged representation was proved – it was made honestly as it believed same to be true. The defendant did not make it fraudulently. (b) The plaintiff was not induced by the alleged representation to insure his vehicle with the Continental Insurance Company Limited. The plaintiff insured his vehicle with the said Insurance Company in reliance upon his own deliberate judgment and upon the inquiries made by himself, and NOT upon any statement of representation made by the defendant. (c) The plaintiff was not induced to insure the said vehicle with the said Insurance Company. (d) If the said Insurance Company is proved to be non-existing as at the material date of the transaction, the defendant was not aware of such non-existence and made the alleged representation if any, honestly, and in the belief that it was true.

13. The defendant will also at the trial by way of special defence contend that:

(i) That one New KA300 HINO Truck was sold to the plaintiff in accordance with the Hire Purchase agreement dated 18th March, 1970 and this agreement will be relied upon.

(ii) That the New KA 300 Hino Truck was sold in its patent name as requested for by the plaintiff.

(iii) That New KA 300 HINO Truck was duly delivered in accordance with the contract without any representation or fraud to the plaintiff.

(iv) No particular purpose for which the Hino Truck KA 300 was required is stated in the said agreement nor was the nature of the plaintiff’s business or Trade made known or stated in the said agreement.

(v) The defendant is not an Insurance Company nor an agent to one.

(vi) The said KA 300 Hino Truck complies with the specification stated in the Hire Purchase Agreement.

14. The defendant avers that the plaintiff is indebted to the defendant on the Hire Purchase Agreement dated 18th March, 1970 for the sum of 3,918:7pounds
15. The defendant is not in a position to admit or deny paragraph 19 of the Statement of Claim and will at the trial put the plaintiff to the strictest proof of same.
16. The defendant avers and will contend at the trial that it owed no duty of care to the plaintiff at the material time or at any other time in respect of plaintiff’s deliberate decision to insure his vehicle with the said Insurance Company.
17. The defendant will further contend that there is no inducement by representation or fraud as alleged in the Statement of Claim in respect of the said insurance by the plaintiff and in the alternative, if such is established, (which is denied), it does not entitle the plaintiff to damages now claimed.
18. The plaintiff’s Writ of Summons and Statement of Claim is speculative, frivolous and ought to be dismissed.

Dated at benin THIS 18th day of November, 1971.

(Sgd.) K.S. Okeaya-Inneh

Defendants’ Solicitor

70, Yakubu Gowon Road,

Benin City.

T/SD…5/-

Service… 2/-

Mileage…3/-

10/- Pd.

CR. No. 046351 of 22/11/71.”

It is to be observed that in none of the paragraphs of the Statement of Claim was it stated that the respondents were being sued for the fraudulent misrepresentation upon vicarious liability or that the acts alleged committed were done by the respondents’ agent or servant within the scope of his authority or within the course of his employment. The facts which the plaintiff adduced in evidence, put succinctly, were that the defendants were motor dealers who sold motor vehicles including HINO lorries. On 18/3/70 he entered into hire-purchase arrangement with the defendants for the purchase of a HINO lorry No. WD3725 pursuant to which he paid 2000 Pounds deposit, 1500 Pounds of which was part payment of the purchase price while 360pounds was for the insurance. It must be observed here that the two sums did not add up to 2000pounds but totalled 1860 pounds and that the plaintiff did not state in evidence what the difference of 140 pounds was for. Continuing, he swore that he entered into the transaction with “the General Manager of the defendant Company, Mr. Okoro, Ibadan Branch”, who told him he could take delivery of the lorry only after it had been insured; that the defendants were the authorized agents of an insurance company called the Continental Insurance Co. Ltd. and that they must protect their interest and hence they normally directed their customers to insure with the Continental Insurance Co. Ltd.; that he was convinced and agreed to insure with the said insurance company whereupon Mr. Okoro gave him a cover note (Exhibit D) of the Continental Insurance Co. Ltd. signed by him as the General Manager of the defendants, in respect of the said lorry. By way of further inducement for him to insure with the said Continental Insurance Co. Ltd., Mr. Okoro had told him that one popular Ondo man who had bought three of these lorries from them insured them with Continental Motors Insurance Company through them.”

Mr. Okoro also told him that that Insurance Company was the best insurance firm and

“that they were driving UAC out of Nigeria.” As he was yet discussing with Mr. Okoro, he swore, one Z.O. Olayele the “Ondo man” entered and produced his insurance agreement which he observed was with the said continental Insurance Co. Ltd. plaintiff said that after seeing the cover note, Exhibit D, he was convinced that the defendants were the authorized agents of the Continental Insurance Co. Ltd. It was signed by the defendants as authorized agents. We must pause here to point out that the cover note, Exhibit D bears a signed official stamp of the respondents, stamped over the portion of the cover note with the printed words “Authorised Representative.”

Exhibit E which was the certificate of insurance, he said, was later sent to him. On 14th June 1970, the lorry was involved in an accident on the Lagos-Kaduna Road, near Kaduna. It was damaged beyond repairs and had to be towed to Kaduna. He reported the accident to the General Manager of the Ibadan Branch of the defendant company who directed him to No. 37, Sapele Road, Benin City, which he told him was the office of the Continental Insurance Co. Ltd. He went there but there was no such insurance company there. Instead, he saw boldly written on a sign board exhibited there “Paradise Pools Home” with pools papers scattered all about. He hastily travelled back to Ibadan and reported back to Mr. Okoro the general Manager of the Ibadan Branch of the defendant company. He threatened to report to the police whereupon Mr. Okoro directed him to go to Lagos and meet the overall boss of the defendants. Mr. Okoro travelled with him to Lagos. At Lagos, at the Bristol Hotel, they met the boss, the managing Director, one Mr. Igbinedion. They narrated the whole thing to him and after Mr. Okoro informed him that the plaintiff was threatening to report to the police, Mr. Igbinedion fumed at the mere mention of the police.

He advised the plaintiff against going to the Police and informed him he should go back to Ibadan with Mr. Okoro whom, he said, he would contact by phone as to terms of settlement when he got back to Benin. plaintiff swore that when the General Manager Mr. Okoro saw that he was boiling with rage after returning from Benin to search for the office of the Insurance Company, Mr. Okoro said that he knew that there was no such insurance company but that he had instructions from his Managing Director to carry on the insurance of vehicles bought from them with the said Continental Insurance Company Ltd. He stated that their Managing Director did not usually take advice and advised the plaintiff that he should rather find ways of getting his money back.

He cautioned him that dealing with “a big man” was always difficult and that he should not have resorted to the police. Several attempts were later made by the defendants, he said, to settle this matter out of court, but this was not to be as the defendants failed to implement the several promises they made. He therefore instructed his solicitor to take action which he did. The case of the defendants, as placed before the court by their District Manager, Ibadan, one Gabriel Omoruyi Okundaye, and their Managing Director, Gabriel Osawame Igbinedion, was a denial that the plaintiff ever met the Managing Director of the defendants at the Bristol Hotel; a denial that the Managing Director, at any time, either in his personal capacity or in his capacity as the Managing Director ever instructed the Branch Manager, Mr. Okoro, to insure the plaintiff’s vehicle with the Continental Insurance Company Ltd. or at all. They swore that the Board of Directors of the defendants never at any time took a decision that insurance of vehicles should be carried out by the company. It was not part of the duties of a branch Manager to receive premium in respect of insurance. If a branch Manager went out of his way to collect insurance premium he would be acting outside the duties of his office. The defendants were not insurance brokers for the Continental Insurance Co. Ltd. While Mr. Igbinedion denied as untrue that Mr. Okoro was ever the branch Manager of the defendants at Ibadan from 1969 to later part of 1970, Mr. Okundaye admitted that Mr. Okoro was the branch Manager before him at Ibadan but said he was later dismissed. He said he was an Urhobo man. He was in a position to know Mr. Okoro as, he said, Mr. Okoro was his brother-in-law. The defendants sought to prove that the business of insurance was not one of those authorised by their Articles and Memorandum of Association. The case was heard and determined by the learned trial Judge, and fought by the parties before him, on the basis of vicarious liability of the defendant company based upon the acts of Mr. Okoro as a servant or agent. No amendment of the pleadings was either sought for or made. In his judgment, the learned trial Judge held that Mr. Okoro was the Ibadan Branch Manager of the defendants that the insurance cover note, Exhibit D, was made out by Mr. Okoro and that the said Exhibit D constituted a representation by Mr. Okoro that the defendants were authorized agents of the Continental Insurance Company Ltd. But he held that Mr. Okoro issued the insurance cover note without authority express or implied. He came to these findings in the following words:- “It is therefore my opinion and I find as a fact that Exhibit ‘D’ was the Insurance Cover Note issued in respect of the vehicle before he was allowed to take delivery of it.

Exhibit ‘D’ bears the stamp of the defendant company as the authorized agent and over the stamp is the signature of Mr. Okoro described by the plaintiff as the General Manager of defendant’s company, Ibadan Branch. The Cover Note belongs to the Continental Insurance Company Limited and ex facie the defendant’s stamp on it is a representation by Mr. Okoro that it is the authorised agent of the Insurance Company. The evidence however shows that it was issued by Mr. Okoro without authority express or implied.

The defendant’s 1st witness testified that Mr. Okoro was the defendant’s last Ibadan Branch Manager before him and his testimony that Mr. Okoro is his brother-in-law lends great weight to the truth of that statements.” Continuing on the issue of Mr. Okoro’s authority the learned trial Judge further held: “I accept and believe the defendant’s 1st and 2nd witnesses testimony that it is not part of the defendant company’s business and not part of the defendant’s company managers and servants schedule of duties to collect insurance fees and issue cover notes on behalf of the Continental Insurance Company Limited or act as insurance agent on behalf of the defendant. “The court found as a fact that the Continental insurance company Ltd. was not a registered insurance company and that a fraud was perpetrated by Mr. Okoro on the plaintiff in respect thereof and that Exhibit D (the insurance cover note) was sufficient evidence of the fraudulent misrepresentation by Mr. Okoro to him. But it rejected the evidence of the plaintiff as to the oral representation said to have been made by Mr. Okoro about the Continental Insurance Company Ltd. as hereinbefore set out and found that the insurance premium of 360 pounds shown on Exhibit D to have been paid by the plaintiff was not in fact paid and that Exhibit D “told a lie” in respect thereof. We consider it necessary to quote in extenso the portion of the judgment relating to those findings. It reads: “I accept the evidence of the plaintiff’s 1st witness and I find as a fact that the Continental Insurance Company was not a registered Insurance Company and the receipt of 360pounds from the plaintiff by Mr. Okoro if that amount was ever paid was a fraud perpetrated on the plaintiff by Mr. Okoro. I cannot accept the evidence of the oral representation about the Continental Insurance Company Limited and defendant’s 2nd witness made by Mr. Okoro to the plaintiff as it is not substantiated. But Exhibit D the cover note is sufficient evidence of fraudulent misrepresentation by Mr. Okoro if it was ever paid for. The receipt Exhibit B speaks for itself. It is 2,000 pounds deposit for KA 300 Hino truck paid to the defendant’s company. I find myself unable to accept that evidence of plaintiff that part of this money was insurance premium.

There is no such statement on Exhibit B and I accept the defendant evidence on this point. The receipt Exhibit “b” and the Hire Purchase Agreement Exhibit C were issued the same day 18/3/70 while the cover note was issued on 10th April, 1970 and made effective from 13th April, 1970 a period of over 3 weeks later. Exhibit E gave the effective date of commencement as 10th April, 1970 and the date of expiry of insurance as 9th April, 1971. Exhibits B,C,D and E were all documentary evidence produced by the plaintiff. It is to be observed that the signature on the official cash receipt Exhibit B and that on the Motor Cover Note Exhibit D are different.

As plaintiff evidence shows that nothing beyond this 2,000 pounds was paid by the plaintiff it is clear that Exhibit D told a lie that the insurance premium of 360 pounds has been paid. There seems to have been a well organised conspiracy by Okoro and the plaintiff to deceive the defendant about insurance of the vehicle. If the 2,000 pounds paid has been debited against the hire purchase of the vehicle. Where is the 360 pounds premium paid for the insurance”

While recognising the importance of pleadings, as we have shown in the course of this judgment, the result of this appeal does not turn on the pleadings but on the facts adduced in evidence. We therefore consider it important to deal with the law of the liability of a principal for the act of his servant or agent with particular reference to the facts of this case. But before then let us set out the complaints of the appellant as set out in his grounds of appeal and his argument before this court. Mr. Akinsoto for the appellant had altogether five grounds of appeal, the original ground which was the omnibus ground complaining against the weight of evidence and four additional grounds contained in his motion for leave to argue additional grounds of appeal which motion was granted. He withdrew ground 5 after the motion was granted and in the course of his argument also withdrew ground 2, leaving him with grounds 3 and 4 which he argued together and the omnibus ground 1 which he argued separately. We now set out these grounds which he argued.

“1. That the decision is against the weight of evidence.

3. The learned trial Judge erred in law and on the fact when he said at line 22 of page 58 that:

‘The burden is on the representor of establishing that the representation was made by the person charged as representor or where he is not alleged to have personally made it with his authority.’

And at line 28 of page 58 that: ‘The plaintiff has failed to prove that Okoro made the fraudulent misrepresentation with authority of the defendant’

in that it is not necessary in order to fix defendant with liability to prove that the servant made the fraudulent misrepresentation with the defendant’s authority.

4. The learned trial Judge erred in law when he said at page 58 from line 1,..question then is whether making representation at all is within the class of acts incidental thereto, and if it is, the further enquiry may become necessary, whether the representation sued upon belongs to the class of representation which the alleged servant, agent or partner is, by virtue of his service, employment or the nature of the partnership business or adventure authorised to make in that it is not the making of the representation that must be within the scope of the agent/servant’s employment but the actual work he was doing at the time he was making the representation.”

Arguing the appeal under grounds 3 and 4 Mr. Akinsoto contended that there was, in law, no need for the appellant to establish an employer’s specific authority for an act done before liability could be fixed on the employer. The transaction, he said, with which Mr. Okoro was engaged was the sale of vehicles. The company was entitled by its Memorandum and Articles of Association to sell vehicles and it was in the course of the sale of the vehicle that Mr. Okoro made the representation which was complained of. The representation was with reference to the vehicle which was being sold. The hire purchase arrangement was geared to the insurance itself, and the trial Judge had agreed that Mr. Okoro was the manager. He further submitted that the issue of whether the fraud was committed for the benefit of the matter did not arise. The important thing was that the representation was made in the course of the employee’s employment and touched the transaction in which he was engaged. He referred to the cover note, Exhibit D, and to the finding of the learned trial Judge that Exhibit D was the insurance cover note and bore the stamp of the defendant company as the authorised agent. In the face of those findings, he contended, the learned trial Judge was wrong in that part of his judgment where he held that “the evidence however shows that it was issued by Mr. Okoro without authority express or implied.” Mr. Okoro, he said, was the person in charge of the defendants’ business in Ibadan. The fact that insurance was not one of the matters covered by the Memorandum and Articles of Association of the respondent company was irrelevant. In support of his propositions counsel referred to page 124 of the 11th Edition of Clerk & Lindsell on Torts Arts 196 and 197 and Lloyd v. Grace, Smith & Co. (1912) AC 716. In respect of the omnibus ground Mr. Akinsoto submitted that the Hire Purchase Agreement, Exhibit C, had acknowledged the payment by the appellant of an initial sum of 1,500 Pounds made on 18th March, 1970. This corresponded with the date on Exhibit B being the receipt for the payment of 2,000 Pounds. Even though the date on the Insurance Cover Note, Exhibit D, was 3rd April, 1970 there was no doubt, he submitted, that the 2,000 pounds was paid on 18th March, 1970. There was no reason therefore, he said, why the learned trial Judge should have doubted the sum of 360pounds as shown in the cover note, Exhibit D, as having been paid by the appellant. On the totality of the evidence before the court, he finally submitted that the judgment of the trial court was wrong and prayed that it be set aside and re-trial ordered. The general law has been stated that a corporation aggregate is liable to be sued for any tort provided that:

(1) it is a tort in respect of which an action will be brought against a private individual;

(2) the person by whom the tort is actually committed is acting within the scope of his authority and in the course of his employment as agent of the corporation; and (3) the act complained of is not one which the corporation would not, in any circumstances, be authorized by its constitution to commit unless perhaps the corporation has expressedly authorized the act. (See Volume 9, Halsbury’s Laws of England, 4th edition paragraph 1374).

Among the acts for which a corporation can be held liable in tort is fraud. Not being a human person the corporation or company, of necessity, acts through human beings who are its agents or servants and the corporation or company, like every master, is liable for the fraud committed by its servant or agent in the course of its service

Dealing with the relationship between tort and agency – a relationship which in law has been clearly recognised – stoljar in his book THE LAW OF AGENCY makes these observations: “In the second place, P is also liable where A commits not a physical but an economic wrong, the main instance of this being where a perpetrates a fraud upon P’s client or customer. In this situation, it certainly is true to say that A acts as an agent as distinct from a servant, the reason for this distinction being simply this: that A would have no opportunity of committing the fraud, unless he is in a position of agent and thus able to deal contractually with the third party. Further, where A so acts as agent, P becomes liable to T not only where A is a servant, but also where he is an independent contractor; for in the law of agency P’s liability does not depend on A’ s precise employee-status, since P can be liable whether A is employed or ‘self-employed” provided he is an agent.

One has to concede that it is difficult to find actual modern instances of a fraud by an independent contractor. Yet, as will be remembered as early as Hern v. Nichols (1701) Holt KB 462 there is mention of P’s liability for the deceit of his factor, the latter being of course an independent middleman rather than a servant. It follows that P’s liability for A’s fraud operates very differently, regarding occasion and extent, from the vicarious liability that applies to master and servant. This difference has been much overlooked; which has not only led to misleading questions but has also led to an over-simplification of the tort-agency relationship: so when it is stated that a principal is liable for his agent’s torts, this is true of a tort such as fraud, but not true of trespass or negligence i.e. wrongs relating to physical “service, not of contractual agency.” Stoljar, The Law of Agency, 1961 Edition pp. 8-9″.

A good exposition of the general principle is to be found in the judgment of the House of Lords in Houldsworth v. City of Glasgow Bank (1874-1880) All ELR (Reprint) p. 333: (1880) 5 App. Cas. 317. Lord Selborne put the matter clearly in his own speech at p. 339 of the Reprint in which he said: “The principle on which Barwick v. English Joint Stock Bank, Mackay v. Commercial Bank of New Brunswick, and Swire v. Francis, relied upon the appellant, were decided was thus stated by Willes, J., in the first of those cases and repeated (from his judgment) by the Judicial Committee in the two latter (LR 2 Exch. at pp. 265, 266); “The master is answerable for every such wrong of the servant or agent as is committed in the course of the service, and for the master’s benefit, (because, although the master may not have authorised the particular act), he has put the agent in his place to do that class of acts, and he must be answerable for the manner in which that agent has conducted himself in doing the business which it was the act of his master to place him in.”

To the principle so stated no exception can, in my opinion, be taken, though the manner in which the master is to be answerable, and the nature and extent of the remedies against him, may very according to the nature and circumstances of particular cases.

That principle received full recognition from this House in National Exchange Co. v. Drew and New Brunswick and Canada Rail and Land Co. v. Conybeare, was certainly not meant to be called in question by any one of the learned Lords who decided in Western Bank of Scotland v. Addie. It is a principle, not of the law of torts, or of fraud or deceit, but of the law of agency equally applicable whether the agency is for a corporation (in a matter within the scope of the corporate powers) or for an individual; and the decisions in all these cases proceeded, not on the ground of any imputation of vicarious fraud to the principal, but because (as it was well put by Willes, J., in Barwick’s case; “with respect to the question whether a principal is answerable for the act of his agent in the course of his master’s business, no sensible distinction can be drawn between the case of fraud and the case of any other wrong.” It is important to note the words: “in the course of the master’s business” as they relate to Mr. Okoro in the discharge of his master’s functions of selling motor vehicle to the public in Ibadan. The facts of Houldsowrth (supra), as set out in the head note, were that the appellant was induced by the fraudulent misrepresentation of the respondent banking company to purchase shares in the company. Some months later the company was found to be insolvent and went into liquidation. The appellant was placed on the list of contributories, and was compelled to pay calls in respect of his shares. After the winding up had commenced, he brought an action against the company claiming as damages the price he paid for the shares and the amount of calls paid and payable by him. It was held, inter alia, that where a person was induced to buy stock or shares in a company by the fraudulent misrepresentations of a director or servant of the company, those misrepresentations could be imputed to the company. Barwick v. English Joint Stock Bank (1867) LR 2 Exch. 2959 Exch. Ch. also reported in (1861 to 1873) All ER (Reprint) 194: approved in Houldsworth (supra), emphasized not only the liability of the company but also the issue of pleadings. We shall return to that case when dealing with the submission on pleadings. Barwick (supra) has made the principal answerable for acts of his agent in the course of the master’s business and for the master’s benefit. The requirement in that case that it should be “for the master’s benefit” certainly placed much burden upon an innocent plaintiff who was defrauded by a servant or agent. Happily the matter was set right in Lloyd v. Grace, Smith & Co. (1912) AC 716 where it was held by the House of Lords to be too restricted and that the master may now be liable even though the servant intended to benefit no one but himself. In Lloyd v. Grace, Smith & Co. (supra) a solicitor was held liable for the fraud of his managing clerk who induced a client to transfer property to him and then dishonestly disposed of the property for his own benefit. Adopting the language of Holt C.J. in Hern v. Nichols (1701) 1 Salk 289 in which he said:

“For seeing somebody must be a loser by this deceit, it is more reason that he that employs and puts a trust and confidence in the deceiver should be a loser, than a stranger.”Earl Loreborn, in Lloyd v. Grace, Smith & Co. (supra) at p. 725 held: “If the agent commits the fraud purporting to act in the course of business such as he was authorized, or held out as authorised, to transact on account of his principal, then the latter may be held liable for it.” (underlining supplied) Lord Shaw of Dunfermline was of similar view when at p. 740 ibid he stated:

“I look upon it as a familiar doctrine as well as a safe general rule, and one making for security instead of uncertainty and insecurity in merchantile dealings, that the loss occasioned by the fraud of a third person in such circumstances ought to fall upon the one of the two parties who clothed that third party as agent with the authority by which he was enabled to commit the fraud.” (underlining supplied)

Lloyd v. Grace, Smith & Co. was cited with approval and applied by Privy Council in The United Africa Co. Ltd. v. Saka Owoade (1954) 13 WACA. 207 at 211 and by the Federal Supreme Court in W.N. Iko v. John Holt & Sons Ltd. and Anor. (1957) FSC 50

In discussing the appellant’s case the learned trial Judge wrote: “In this instant case the question arises whether Mr. Okoro was acting within the scope of his employment. The Mid-Motors Nigeria Company Ltd. is not an Insurance Company. It is not one of its objects to carry on insurance business or act as agents of insurance companies. The only agencies it can undertake are expressly stated in Clause 3(4), 3(5) and 3(14) of the Memorandum of the Association in Exhibit ‘L’ and do not include agency for insurance companies. The employment of Mr. Okoro which the defendant company is entitled to do under Clause 3 (17) of the Memorandum of Association does not empower Mr. Okoro to do all such things as are outside the objects of the company and the defendant’s witnesses have given evidence which I believe and have accepted that he was acting outside the scope of his employment.”

With every respect for the learned trial Judge, it is immaterial to the liability of the respondents that the business of insurance was not one of the businesses it was incorporated to undertake under its Memorandum and Articles of Association. Once the servant or agent is acting in the course of his employment in respect of his master’s business the master will be liable, and if he is so acting it is immaterial that the act in question has even been expressly prohibited by the corporation Limpus v. London General Omnibus Co. Ltd. (1862) 1 H & C 526; (1861-1873) All ER (Reprint) 556). Mr. Okoro who was admittedly the manager of the Ibadan Branch of the respondent company, and was so found by the learned trial Judge, was, as far as Ibadan was concerned, the company. He was the manager who had the duty of controlling and selling the company’s vehicles in Ibadan. In Ibadan he was the authority of the company and was not subject to any other person there. To the general public in Ibadan he personified the company. It is to be noted that although the Managing Director of the respondents denied that Mr. Okoro was the Branch Manager of their Ibadan Branch, yet the respondents in paragraph 3 of the Statement of Defence admitted paragraph 3 of the Statement of Claim which reads:

“3. On the 18th March, 1970 the plaintiff entered into a Hire purchase Agreement with the defendant for the sale of a new commercial vehicle described as HINO KA 300 for the sum of 5,418:7pounds and the plaintiff will rely on the agreement at the trial of this action.”By this admission the company had agreed that the transaction conducted by their man at Ibadan legally raised contractual relation between them and the appellant and therefore, to that extent, that their man at Ibadan was their agent whose act committed the company to the contract of Hire-purchase. In other words the respondents admitted that the transaction entered into between the appellant and their representative at Ibadan (who was, and was found, to be Mr. Okoro) created a genuine hire-purchase agreement between the appellant and the respondents, yet they denied that the fraudulent representation made by the same representative was proximate enough to pin liability on them. Mr. Okoro’s act was sufficient and proximate enough to net them 2000 pounds (two thousand pounds) hire-purchase benefit but not to affix liability to them in respect of his fraudulent misrepresentation. We feel that the justice of this case dictates to the contrary.

It is true that Mr. Okoro was not called to give evidence by either party. Having regard to the provisions of Sections 134 to 136 of the Evidence Act, Cap. 62, we hold the view that the duty of calling Mr. okoro rested squarely on the respondents in the face of Exhibits B, C and D (the official receipt for 2000 pounds, the Hire-Purchase Agreement and the Insurance Cover Note, respectively) exhibits, the making of which must be imputed to the respondents, and which on their face value vary representations the implications of which it was the duty of the respondents to rebut. We appreciate that the learned trial Judge has held that he was unable to accept the evidence of the oral representation about the Continental Insurance Company Limited said by the appellant to have been made by Mr. Okoro to him “as it was not substantiated but he also found that “Exhibit ‘D’ the cover note is sufficient evidence of fraudulent misrepresentation by Mr. Okoro if it was ever paid for.”

We are unable to appreciate the basis upon which the learned trial Judge has doubted that the 360 pounds insurance premium shown on Exhibit D was paid by the appellant when the payment of the 2000 pounds shown on the receipt Exhibit B, was not denied by the respondents and the said 2000 pounds was stated by the appellant as being the totality of the hire-purchase deposit and the insurance premium. The evidence points irresistibly to the conclusion that the 360 pounds insurance premium was in fact paid, the mix up of the date (18/3/70) on which the receipt (Exhibit B) and the Hire-Purchase Agreement (Exhibit C) were made and the date (10/4/70) on which the cover note (Exhibit D) was issued to which the learned trial Judge rightly made reference notwithstanding. In any case, the learned trial Judge having found that Mr. Okoro was fraudulent, we do not see that the appellant, in all the circumstances, had not been made the victim of the fraud by the false and oral representations alleged by the appellant to have been made to him by Mr. Okoro. The onus would appear to fall squarely on the respondents, in the face of all the evidence, facts and circumstances, to disprove the evidence of the appellant that Mr. Okoro made the false and oral representations testified to by him. We now turn to the contention of Chief Williams on the state of the pleadings. He submitted that appellant’s counsel never really sat down to think of the correct basis for his action. There were, he said, two distinct methods of attacking a corporation in an action of tort, firstly, that the corporation itself did the act which constituted the action through its agents and secondly, that the act or omission was done by a servant of the corporation in an action of tort, firstly, that the corporation in the course of his employment and therefore the corporation was vicariously liable for the tort. The evidence in the present case, he submitted, pointed to the second arm and therefore Mr. Okoro’s name ought to have featured in the pleadings. Nowhere in the pleadings, he said, was Mr. Okoro’s name mentioned or vicarious liability made the basis of the action. He referred to paragraphs 5, 6 and 8 of the Statement of Claim and submitted that the learned trial Judge ought not to have dealt, in his judgment, with the question of vicarious liability. What he ought to have done, he said, was to ignore the evidence and dismiss the plaintiff’s case as not having been proved in accordance with his pleadings. He invited us to do what the trial Judge ought to have done, namely, ignore the plaintiff’s evidence and dismiss his case. He submitted that sending the case back for retrial would amount to giving the plaintiff a second chance to prove his case – a course which this court, he said, often frowned upon. In support of his submissions on the pleadings Chief Williams drew our attention to “Atiyah on Vicarious Liability in the Law of Torts” 1967 Edition at pp. 8 & 9 where the learned Author dealing with the subject of “Pleading” stated:

“It seems that a plaintiff must clearly distinguish between personal and vicarious liability in his pleadings. If he only pleads personal liability he will not be allowed to make out an alternative case based on vicarious liability, and if he only pleads vicarious liability he will not be allowed to make out a case of personal liability. This tends to support the traditional view of vicarious liability for on the master’s tort theory it might be urged that there is no essential difference between the two types of liability.” Two cases in support of the propositions were therein cited: Rands v. McNeil (1955) 1 QB 253 and Esso Petroleum Co. Ltd. v. Southport Corporation (1956) AC 218. He also referred to the decision of this court in National Investment & Properties Co. Ltd. v. The Thompson Organisation Ltd. and 2 ors. (1961) 1 All NLR 138. In reply, Mr. Akinsoto for the appellant, referred us to Order 7 Rule 13(1) of the Rules of the Supreme Court 1961 which provides that:

“13. -(1) It shall not be necessary for the respondent to give notice of motion by way of cross-appeal; but if a respondent intends upon the hearing of the appeal to contend that the decision of the court below should be varied, or that it should be affirmed on grounds other than those relied on by that court he shall within one month after service upon him of the notice of appeal cause written notice of such intention to be given to every party who may be affected by such contention, whether or not such party has filed an address for service. In such notice the respondent shall file with the Registrar of the court below six copies of such notice of which one shall be included in the record, and the other office copies provided for the use of Judges.”

and contended that the respondents, not having given the required notice, ought not now to ask that the judgment be affirmed on other grounds, to wit, inadequacy of pleadings. The case was fought, he submitted, on the basis of vicarious liability and judgment delivered on the same basis. This court, he contended, should decide the appeal on the merit of the case heard and determined by the lower court. The importance of pleadings has often been emphasized by this court. Pleadings should be sufficient, comprehensive and accurate. As has been stated by this court in Abimbola George and 2 ors. (Trading as Abimbola George and Sons) v. Dominion Flour Mills (by its Attorney, Leslie Howard) (1963) 1 All NLR 71 at 77, the aim of pleadings is to give notice of the case to be met, which enables either party to prepare his evidence and arguments upon the issues raised by the pleadings and saves the other side from being taken by surprise. It was pointed out in that case that, apart from anything else, this notice makes for economy since the parties must confine themselves only to the issues raised in the pleadings. In the National Investment & Properties Co. Ltd. case (supra) at p. 142 to 143 this court reiterated the supreme importance of adherence to pleadings in these words: “Now just as an appellant is bound by his grounds of appeal so at the earlier stage of the action both parties are bound by their pleadings and it is elementary that admissions in pleadings do not have to be proved. In so far as pleadings do not contain admissions then the matters alleged must be proved in evidence, but that evidence cannot derogate from the pleadings as Chief Akin Olugbade seems to us to think it could. See Idahosa v. Oronsaye 4 FSC. 166 at 171. A plaintiff must call evidence to support his pleadings and evidence which is in fact adduced which is contrary to his pleadings should never be admitted. It makes no difference, as Chief Akin Olugbade suggested, that the other side did not object to the evidence or that the Judge did not reject it. It is our course, the duty of counsel to object to inadmissible evidence and the duty of the trial court any way to refuse to admit inadmissible evidence, but if notwithstanding this evidence is still through oversight or otherwise admitted then it is the duty of the court when it comes to give judgment to treat the inadmissible evidence as if it had never been admitted. This has long been the case but it is clearly set out in the judgment of this court in Bada v. The Chairman L.E.D.B. SC. 501/65 of the 23rd of June, 1967. We cannot therefore look at or accept evidence on the record here when it runs contrary to the pleadings of the plaintiffs.”For a party to limit or restrict the ambit of his pleadings may sometimes, as shown in Esso Petroleum Co. Ltd. v. Southport Corporation (supra), inhibit the party’s case. It was a case in which an oil tanker was stranded in a river estuary and to prevent her breaking her back, the master jettisoned 400 tons of her oil cargo which the tide carried to the foreshore, occasioning damage. The foreshore owners brought an action against the ship owners based on trespass, nuisance and negligence alleging that the stranding was caused by faulty navigation which the defence denied. No allegation of unseaworthiness was made in the plaintiffs’ pleadings. The court found against the plaintiffs on the three heads. An attempt was made to switch the plaintiffs’ case on to the unpleaded issue of unseaworthiness but this was refused. In his judgment Lord Normand at p. 238 observed: “The function of pleadings is to give fair notice of the case which has to be met so that the opposing party may direct his evidence to the issue disclosed by them. In fact the evidence in the case was concerned only with the negligence alleged. The result was that the master of the vessel was acquitted by Devlin, J., of the negligence alleged, and the logical consequence was that the owners were also acquitted by him.”Continuing at page 239 he stated: “I do not wish to speculate on what might have been alleged, nor on what evidence might have been adduced by either side on other allegations, nor on how the onus might have shifted in consequence of other allegations and evidence. Confining myself to the actual allegations of negligence and to the evidence in the case, I find the conclusion inevitable that, since the master has been acquitted of the faults alleged against him, the owners must also be acquitted. I wish to associate myself with the observations of my noble and learned friend, Lord Radcliffe, on the value of the pleadings. To condemn a party on a ground of which no fair notice has been given may be as great a denial of justice as to condemn him on a ground on which his evidence has been improperly excluded.” (Underlining supplied). From the foregoing quotations and especially the underlined passages it is clear that Esso’s case (supra) is one of vicarious liability arising from (to borrow the language of Stoljar) wrongs relating to physical service not of contractual agency. The issue in the case in hand is more than that which arises from mere master and servant relation. The master can act independently of the servant. A corporation cannot; it has always to act through its agent (or servant). Such agency arises from a contractual relationship (express or implied). In the former case (i.e. simple master and servant relation) vicarious liability of the master arises only on the primary liability of the servant; not so in the latter case. For the act of its agent is in law that of the corporation. It is this situation that makes the tort-agency relation unique and (once again to borrow the language of Stoljar) “it follows that (the principal’s) liability for (the agent’s) fraud operates very differently, regarding occasion and extent, from the vicarious liability that applied to master and servant. This difference has much been overlooked (as indeed, it appears to have been in the instant case);which has led to an over-simplification of the tort-agency relation; so when it is stated that a principal is liable for his agent’s (i.e. “Agency” in its proper legal sense as distinct from the loose or general sense in which it is often applied to any master/servant relation) tort, this is true of a tort such as fraud, but not true of trespass or negligence that is, wrongs relating to physical service, not contractual agency”-Stoljar Op. Cit. We think it is necessary in this connection to explain the term agency. That term has “in popular use a number of different meanings, but in law the word agency is used to connote the relation which exists where one person has an authority or capacity to create legal relations between a person occupying the position of principal and third parties”; and the relation (i.e. of agency) also arises “whenever one person called, the agent has authority to act on behalf of another called the principal and consents (expressly or by implication) so to act” – See Halsbury Laws of England Vol. 1, 4th Ed. Para. 701 at p. 418; also International Harvester Co. of Australia Pty Ltd. v. Carrigans Hazeldene Pastoral Co. (1958) 100 CLR 644 at 652 (Aust. High Court). Mr. Akinsoto, rightly in our view, pointed in his reply, to the failure of the respondents to give notice under Order 7 Rule 13 (1) of the Supreme Court Rules 1961 as hereinbefore stated. Undoubtedly, this was a case deserving of the giving of the notice. But Mr. Akinsoto did not object to Chief Williams raising the issue without giving notice. He allowed all the argument of the respondents to be heard before he drew court’s attention to the said Order 7 Rule 13. Rule 13 (2) gives the court the power to order a postponement or adjournment of the appeal upon such terms as to costs or otherwise as may be just. Mr. Akinsoto did not ask for adjournment and did not complain that he was in anyway prejudiced by the failure to give notice. Having regard, however, to the general view we have taken of the justice of this case, we decided to continue hearing the appeal and to determine the issues raised, notwithstanding the said failure to give the said notice. Having dealt with the importance of pleadings generally we now return to the specific pleadings in the instant case in the con of the Statement of Claim as raising sufficient case against the respondent company. Where a company is said to have done an act, by the very fact of a company not being a human being, it can only do the act through its human agents or servants. Where the said agent or servant has committed an act the company may rightly be said to have committed the act since in law, by the principle of vicarious responsibility, the act of the agent or servant is the act of the company. The evidence by which the act is to be proved against the company will be the conduct of the agent or servant. In this regard, there does not appear to be a clearly discernible difference, in terms of a corporation’s liability, between the two classifications submitted by Chief Williams. Whether it is stated that the corporation itself did the act which constituted the action through its agents or that the act or omission was done by a servant of the corporation in the course of his employment and therefore the corporation was vicariously liable for the tort, amounts practically to the same thing, for, in each case the corporation is being charged with liability vicariously. What a plaintiff has to make sure about (and this must be made clear in the pleadings) is whether he is holding the servant or agent personally liable or the corporation liable vicariously. Ideally, in order not to appear to take the company by surprise, the pleadings should indicate that the company is being charged with liability vicariously by the act of its named agent or servant. We cannot however, subscribe to the contention of the respondents that the Statement of Claim in the case in hand was so defective as to warrant a dismissal of the appellant’s case at the close of his case. It was clear from the pleadings and conduct of the case even at this stage that the respondent company was being held vicariously liable. The same sort of objection was taken in Barwick (supra). The decision on it of Willes, J., (see pp. 198-199 of the Reprint) was commented upon with approval, by Lord Selborne in Houldsworth v. City of Glasgow Bank (supra) at pages 339-340. Dealing with the first criticism of Lord Cranworth’s statement that “an incorporated company cannot, in its corporate character, be called on to answer in an action for deceit” he explained the law in these words:

“The sequel of Lord Cranworth’s words appear to me to show that in using these expressions (perhaps technically inaccurate) he had substance, and not form, in view. In the old forms of common law pleading fictions were not seldom allowed, but not so as in the result to make the rights or remedies of the parties depend on the fiction rather than on the law applicable to the real facts which were allowed under those forms of pleading to be given in evidence. In Barwick’s case (2) a corporation was directly charged with fraud upon the pleadings (no mention being made of agency) and an objection taken on that ground was treated by Willes, J., as technical. He said (L.R. 2 Exch. at p. 266): “If a man is answerable for the wrong of another, whether it be fraud or other wrong, it may be described in pleading as the wrong of the person who is sought to be made answerable in the action.”

Unlike, in Esso Petroleum Co. Ltd. case above, the appellant’s case against the respondents was one of fraud. He did not shift his ground, in the course of the proceedings to base his case on any other ground of tort. It is clear that the Esso case cannot apply to this appeal and that Chief Williams contention on the pleadings must fail.

Courts, while respecting and being guided by rules of procedure, must always do, and clearly be seen to do, substantial justice. The justice of the case in the instant appeal commands that the appellant should be compensated for the obvious wrong done to him by the respondents through their servant and agent, Mr. Okoro. We are of the view that the learned trial Judge had not made a proper appraisal of the law arising out of the facts as contested before him and had in fact wrongly applied the law as to the responsibility of the respondents for the acts of Mr. Okoro vis-a-vis the appellant.

Turning to the issue of damages, the trial Judge held that there was no sufficient evidence on which to assess any damages. He held further that: “The plaintiff was not tricked into buying the lorry. He was only tricked into insuring with an unregistered Insurance Company. There is no evidence that the vehicle was a total loss. If there had been such evidence the Insurance Company would be liable to pay the assessed value of the vehicle before the accident to the plaintiff and defendant as the property in the vehicle was still in the defendant at the date of accident. The plaintiff took no steps to get the lorry repaired but abandoned it at the Motor Traffic Division in Kaduna and last heard of it in 1970. He failed to take steps to mitigate damages and minimise his loss. If it had been a total loss and the assessed value would have been the cost price he would have been a total entitled to receive only the amount he had paid before the accident and the balance would go to the defendants.”

With every deference to the trial Judge, the appellant took immediate and necessary steps he was expected to, after the accident. He promptly travelled to the respondents’ branch office at Ibadan and reported the accident to Mr. Okoro, the Branch Manager of the respondents, who directed him to 37, Sapele Road, Benin City, which was the supposed office of the supposed insurance company. He went to this office and did not find the insurance company. He reported his failure to Mr. Okoro who took him to the Managing Director of the respondents in Lagos, to whom he reported. It has to be remembered that the appellant was bound by the terms of the Hire-Purchase Agreement, Exhibit C. Paragraphs 3(g) and (h) of the said exhibit bound the appellant to take the course of action which he took. They read:

“3. The Hirer shall during the hiring:-

(a) Not represent the goods to be his own property or allow himself to be held out as the true owner thereof or sell charge pledge or assign the goods or purport to do so and keep the goods free and exempt from legal process

(b) Forthwith give notice to the owners in the event of the goods being damaged in any way of being lost or stolen.”

The evidence was that it was the respondents, consistent with their ownership of the lorry, who went and towed the lorry into their garage in Benin. What else was the plaintiff expected to do in all the circumstances Absolutely none and we are satisfied as to this.

There is a difference between a measure of damages based on tort principles and a measure based on contract principles. The appellant’s claim was based on the tort of fraud or deceit.

“…the correct measure of damages in the tort of deceit, states McGregor on Damages, 13th Edition, paragraph 1357 p. 907, “is an award which serves to put the plaintiff into the position he would have been in if the representation had not been made to him, and not, as with breach of condition or warranty in contract, into the position he would have been in if the representation had been true. In other words, if the plaintiff has been induced by the deceit to conclude a contract, he is not entitled, as he is in contract, to recover in deceit for the loss of his bargain. “The appellant was undoubtedly induced by Mr. Okoro’s deceit to part with the 360 pounds which he paid as Insurance Cover Note and he was entitled to its recovery. He would not have parted with the 360pounds if the representation had not been made to him. We are, however, of the view that the justice of this case would better be met by a proper assessment by the lower court of the damages. No damages were assessed by the trial Judge, his view being that no evidence had been led upon which damages could be assessed. We are however of the opinion that there exists some evidence (such as the 360 pounds payment evidence) but not all the evidence that could be adduced for a just assessment of the damage suffered by the plaintiff. We hold that, on the evidence, the respondents are liable on the claim. The only issue remaining is one for the assessment of damages. In order that the parties may be at liberty to place all the materials necessary before the court so that the court may arrive at a just assessment, we have come to the conclusion that the best course is to send this case back to the High Court, Benin for an assessment of damages only, in favour of the plaintiff. Under the provisions of Section 22 of the Supreme Court Act, 1960, this court possesses wide powers to assess damages, or reassess damages awarded by the lower court, an appeal to this court having regard to that section being by way of rehearing (see the observations of Greer, LJ, in Flint v. Lovell (1935) 1 KB 354 at 360 and Lord Wright in Davies v. Powell Duffryn Collieries (1942) AC 601 at 616-617 and, therefore, we could have proceeded to assess the damages as a way of mitigating litigation expenses yet, we have decided to take the course of sending the case back for the assessment of damages because (i) the trial Judge had not assessed any damages leaving us to determine whether it was too high or too low and (ii) it would afford the parties a better opportunity of calling further evidence on the issue. The costs of this further hearing by the High Court will abide the result of the further hearing.

Accordingly, this appeal must be allowed and is hereby allowed. The judgment of the High Court, benin, in this case, Suit No. B/78/71, including its order for costs, is hereby set aside. In its place it is hereby ordered that judgment be, and is hereby, entered for the plaintiff/appellant against the defendants/respondents on the issue of the liability of the defendants/respondents.

It is FURTHER ORDERED that the remaining issue of damages be remitted back to the High Court, Benin, for a rehearing on the issue of assessment of damages in favour of the plaintiff/appellant only, and that the parties be at liberty to call all the evidence necessary for the said assessment.

The appellant will have the costs of this appeal which we assess at N381.60.

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Other Citation: (1978) LCN/1975(SC)