Ebun Omoregie V. Breitenburger Portland Cement Fabrik (1962)

LawGlobal-Hub Lead Judgment Report

ADEMOLA, C.J.F

In the High Court of Lagos the Plaintiffs/Respondents claimed from the Defendant/Appellant the sum of £36,645-12s-6d, being value of goods which the Plaintiffs said they delivered to the Appellant for sale as their agent between April and August, 1957. In the alternative the Plaintiffs’ claim was for an account of the sale of the goods so delivered to the Defendant and payment over of such sum of money as may be found due.

The Plaintiffs are manufacturers of a brand of cement in Hamburg (Germany) known as Portland Cement. The defendant carries on business in Lagos under the name and style of Ebun Omoregie & Co.

Under an agreement, Exhibit E dated 6th July, 1056, made between the parties, the defendant became sole agent in Nigeria of the German Company for sale of Hercules cement on commission basis, the defendant having undertaken to form in Nigeria a company to be known as Hercules Portland Cement Distributing Company Limited. Under the belief that the Company would have been formed, the Plaintiffs shipped three consignments of cement to the defendant who had by then (October 1956) returned to Nigeria from Hamburg which he visited and where the agreement appeared to have been made. The Defendant took delivery of the cement. Be-tween October 1956 and October 1957 several shipments of cement were made to E. Omoregie & Co. and delivery was taken by the defendant. Only the first three consignments were made to the new Company which, for some reasons we are here not concerned with, was never formed.

Meanwhile, as the defendant himself had been anxious for someone from Germany to join him here, one Gunter Dreyer, the Export Manager of the Plaintiffs’ Company, came to Nigeria from Germany in the interest of the Company.

The defendant paid into the Bank to the account of Mr. Dreyer some monies as proceeds from the sale of cement. These were remitted to Ham-burg and Defendant’s account credited accordingly. When Mr. Dreyer left Nigeria for Germany and was succeeded by Mr. Bunz, all proceeds of sale were paid into the account of Omoregie & Co. and forwarded by the Defendant to the Plaintiffs in Germany.

It appears the facts were not in dispute. The defendant did not deny that cement to the value claimed was shipped to Lagos. It would appear his defence was that he introduced customers to buy the cement and either Mr. Dreyer or Mr. Bunz was present and that he did not agree to be responsible for the default of these customers. The controversy, therefore, was in what capacity did the defendant receive the consignments of cement shipped to Lagos.

The learned trial Judge found for the Plaintiffs and entered judgment against the defendant for the amount claimed. The alternative claim was not in the circumstances considered.

Against this judgment, the defendant has appealed to this Court.

Mr. Gardner, for the Appellant, accepted the findings of the learned trial Judge that the Appellant was an agent to the respondents; he con-tended, however, that the other findings as to the liability of the Appellant were not supported by the evidence before the Court, particularly the documentary evidence including the agreements, Exhibits E, L and M, entered into between the parties.

It seems unnecessary to set out the terms of these agreements since Mr. Lawson for the Respondents agreed that there is no clause in any of them creating a del credere agency, nor can such an agency be inferred from any of the agreements. It will be enough to say that the agreement,

Exhibit E, dated 6th July, 1956, contained a clause fixing the commission of the agent (the Appellant). I refer to clause 5 which states:–

“5.The Principal has to pay the agent a commission for each ton of “Hercules” – brand Portland cement sold in Nigeria and guarantees a fixed sum in case the commission does not reach or exceed this sum. The commission has to be paid monthly from all sales which have been paid by customers. At the present the commission is 1/- per ton, the guaranteed fixed sum £50-0s-0d.”

The second agreement Exhibit L made in January 1957 merely in-creased the commission payable. The third agreement Exhibit M is dated 22nd August, 1957, and I will refer to clause 8 only of this agreement, which, if anything, negatives the suggestion of a del credere agency. It reads:–

“8.If the said B.P.C.F. is unwilling to continue in any business in Nigeria, Mr. Omoregie will take all necessary steps to get in and transfer to the B.P.C.F. all amounts outstanding with customers.”

The learned trial Judge in considering the relationship of the parties upon which, rightly in my view, he based his judgment, put the position thus:–

“I am satisfied from the Plaintiffs’ evidence and the mass of documents tendered that the defendant Ebun Omoregie was at all material times the agent of the Plaintiffs. I am also satisfied that as such agent he incurred liability to the Plaintiffs in the sum of £36,645-12s-6d being value of goods delivered by the Plaintiffs to him between April and August 1957. I am further satisfied that the defendant agreed to pay the value of the goods supplied to him not later than two months after the date of delivery.”

This finding, Mr. Gardner argued, put the defendant in the position of a del credere agent to the Respondents which, in his submission, he was not.

The learned trial Judge, it would appear, arrived at this conclusion from “the mass of documents tendered”. Indeed, many letters between the par-ties were put in evidence, and I am of the opinion that there are arguments in favour of construing a few as tending to make the defendant a del credere agent whilst the mass do not support this view. It seems to me, however, that what was contemplated between the parties is to be looked for, in the first instance, in agreements (Exhibits E, L and M) to which they subscribed.

Now, a del credere agent is described in Bowstead on Agency, 12th Ed.0 at page 3, in the following words:

“A del credere agent is a mercantile agent who, in consideration of extra remuneration, called a del credere commission, guarantees to his principal that third persons with whom he enters into contract on behalf of the principal shall duly pay any sums becoming due under these contracts.”

The learned author continues at page 4 thus:–

“In effect a del credere agent is a surety for the persons with whom he deals…………………………………………………………………………A del credere agency may be inferred from a course of conduct between the parties………………………………………………. ……… …….. ………….. ………………………………………………………………………………………………………………………………………………………………….

The obligation of the agent is confined to answering for the fai-lure of the other contracting parties, owing to the insolvency or the like, to pay any ascertained sums which may become due from them as debts.”

An examination of the agreement between parties to the present appeal shows that the agent (the appellant) received a monthly commission which was fixed at 1/-per ton for all sales which have been paid for by the customers with a guaranteed fixed sum of £50. This is shown in clause 5 of the agreement, Exhibit E. Six months later, a new agreement, Exhibit L, was entered into. In clause 5 of that agreement there is provided a commission of 1/3d for the first 1,500 tons and 1/- for all exceeding quantities, with a guaranteed fixed sum of £75 per month. The question is, can it be inferred from these agreed commissions that a higher reward or commission was paid to the Appellant in order to make him responsible to indemnify the Respondents for the default of customers? A test has been laid down in a few cases. In the case Sutton & Co v. Grey (1894), 63 L.J. Q.B. 633 Lord Esher, M.R. quotes the fol-lowing passage from the judgment of Baron Alderson in Couturier v. Hastie, 22 L.J. Exch. 97 where the learned Judge laid down the test for distinguish-ing a contract of guaranty-a special promise to answer for the debt of another person within the Statute of Frauds, and a contract of indemnity:–

“The other and only remaining point is whether the defendants are responsible by reason of their charging a del credere commission, though they have not guaranteed by writing signed by themselves. We think they are. Doubtless, if they had for a percentage guaranteed the debt owing, or performance of the contract by the vendee, being totally unconnected with the sale, they would not be liable without a note in writing signed by them; but, being the agents to negotiate the sale, the commission is paid in respect of that employment; a higher reward is paid in consideration of their taking greater care in sales to their customers, and precluding all questions whether the loss arose from negligence or not, and also for assuming a greater share of responsibility than ordinary agents-namely, responsibility for the solvency and performance of their contracts by their vendees. This is the main object of the reward being given to them    . . . . . . . .”

“ It does not appear to me that there are words in the salient clause (5) of the agreement Exhibit E or Exhibit L by which the parties are bound which are capable of being interpreted , or from which one can say in the words of Baron Alderson that-

Other Citation: (1962) LCN/0973(SC)