Mandillas and Karaberis Ltd. v. Chief Yesufu D. Otokiti (1963)

LawGlobal-Hub Lead Judgment Report

BAIRAMIAN, F.J.

The plaintiffs have appealed, and the defendant has cross-appealed, from the judgement in the Benin Suit No. 27 of 1957 given on 8th November, 1960.
The parties entered into a contract on the 5th November, 1953, in relation to the defendant’s concessions in the Forest Reserve, with a view to his giving the plaintiffs all the logs he extracted.

There is in evidence an agreement in writing Exhibit A, put in by consent at the trialwhich recites that the company advanced a loan of #31,800 in timber vehicles, to enable the defendant to exploit his timber concessions, fell timber and supply on sale all the timber to the company; the next recital mentions the concessions, which cover about 150 square miles, and the terms of agreement follow in regard to the timber to be supplied to the plaintiffs at their beach and the prices to be paid; and the defendant was to repay the loan of #31,800 in logs within six months. The final clause is that the agreement was to endure for five years, but could be terminated on twelve months notice, which, however, if given by the defendant, would not take effect until his account was completely balanced.

In addition to giving the defendant two Lorries on credit, the company gave him money for his forest permit and made also other cash advances to him; they supplied him with petrol, tyres, and tubes, and they repaired his lorries on credit. He supplied logs, but not in sufficient quantity, and his debit mounted, so the plaintiffs decided when the six months or so were over, that they would give him no more credit. He had some logs felled and lying in the forest, but was unable to spend the money for taking them to the waterside.

The plaintiffs considered whether it was worth their taking the logs to the waterside themselves, but it seems decided against it. Moreover, the Lorries needed over hauling, and the defendant took one to the Benin garage in November, 1954, and the other in February, 1955. He wanted them repaired on credit, but that was refused. He had no money to have them repaired elsewhere, and left his Lorries in the garage which was an open air garage.

The plaintiffs wished him to take them away. Eventually, near November, 1956, he wished to remove them; there is a letter from the company to him, dated 13th November, 1956, in which he is told that he had always been and still was at liberty to remove them. When his agent went to do so, the Lorries could not be found. There was conversation between the parties. He claimed #31,200 as value and a vast amount as damages. The plaintiffs wrote in January, 1957 that they were willing to pay what they thought was the value #3700 but no more. Early in April, 1957, the plaintiffs sued for #33,238’17.7d “being debt owed by the defendant” .

The Statement of Claim avers that the plaintiffs sold two Lorries on credit, and supplied petrol, etc., and made cash advances against logs; also that they repaired the Lorries on credit. Two accounts were annexed to it.

The Defence denies the accounts and goes on to allege an oral agreement between the parties as having been entered into on the 5th November, 1953, the terms of which are similar to those set out in the written agreement of that date-Exhibit A-with, however, these additions:
“The plaintiff shall advance all monies necessary for the manufacture of the logs either in cash or in kind including:
(i) The value of 2 Austin ex army type Lorries B 1505 and B 1506 at #3900 each and the cost of repairs to these lorries.
(ii) The official fee payable as royalty for licence to fell timber and
manufacture logs in a Forest Reserve.
(iii) The cost of  labour and material necessary for felling and evacuation of logs from the Forest Areas BC, BC15/2 and BC3/1 respectively to the plaintiff’s beach at Sapele.
(iv) The plaintiff shall make these money advances aforesaid throughout the 5 years period as and when necessary and requested so to do.
(v) The defendant shall pay for these money advances by the supply of logs and shall supply logs to the value of not less than ‘a3300 in each of the first six months commencing on the 5th day of November, 1953 in liquidation of the value of the two Austin lorries B 1505 and B 1506. and thereafter the said lorries shall become his bona fide property.”

The defence goes on to admit taking the lorries as a credit of #3 1,800, and two cash advances amounting to #3450, alleging it was pursuant to that oral contract; a number of pages of narrative follow, and then comes a counter claim partly about the lorries and partly about the logs left in the bush, and about a few items of credit due to the defendant.
The plaintiffs’ reply is a denial of the oral agreement alleged with sundry other denials.

Before the trial the defendant amended his counter-claim, to add claims, both for general and special damages, for breach of contract.
Neither party referred to the written agreement, Exhibit A, but on the day of trial it was put in by consent, together with some other documents, before the hearing began.
Giving evidence in chief, the defendant said that after signing Exhibit A he took it home and had it read to him; he discovered it did not contain all that had been agreed, and told one Mr Karaberis about it, but supplied logs in accordance with the agreement in Exhibit A.

The judgment begins with the pleadings, then deals with the 3 plaintiffs’ claim and the evidence, which it says is not in accordance with their pleading:- they did not plead Exhibit A-and on the authority of Adenuga v. Lagos Town Council, 13 W.A.C.A. 125, decides that the plaintiffs’ “present” claim must fail and it is dismissed.

The judgment then goes on to the defendant’s case and refers to the recitals in Exhibit A; it says that upon consideration of all the evidence:-
“There was an agreement between the parties for the plaintiffs to advance the defendant with loans in cash and in kind to exploit both concessions in the interest of both parties for a period of 5 years certain”
It recites clause 7 on the duration, and goes on to say:-
“Their promise to make these advances in cash or in kind to the defendant is mutual and collateral and interdependent on the defendant’s promise to supply them with logs throughout the five-year period. The defendant must succeed on this portion of his counter-claim”.

That is the portion claiming damages for breach of contract by reason of the Plaintiffs refusing further credits.
It is a curious situation: the plaintiffs claim is dismissed because the did not plead Exhibit A; the defendants counter claim is bolstered up with portions of Exhibit A which he did not plead and a collateral contract for cash advances based on his promise to supply them with logs for five years. The judgment overlooks the fact that Exhibit A recites they agreed to give him #3 1,800 in Lorries in regard to his supplying them with logs.

It was obvious from the evidence that Exhibit A was the contract between the parties: after having it read to him, the defendant did not press for a fresh document to embody what was missing but supplied logs in accordance with it, and he let Exhibit A go in by consent. When a contract is reduced to writing, the writing gives the terms agreed upon. The defendant set up an oral agreement and repudiated

Exhibit A: he realised that if he accepted it as part of the contract, he would be faced with the difficulty of proving a separate oral agreement on the basis that he and the plaintiffs did not intend Exhibit A to be:- “a complete and final statement of the whole of the transaction” as it is put in section 131 (1) (b) of the Evidence Act.
Admittedly the plaintiffs made other advances and gave other credits, besides the #3 1,800; they doubtless thought it was in their interest to do so; and had the defendant been more diligent and efficient in supplying logs, all would have been well.

The plaintiffs cannot be saddled with an obligation to go on making advances regardless of the state of the defendants account. They had made it clear in exhibit A that they expected the #3 1,800 to be repaid within six months. If they gave other credits and advances outside the contract, it was within their discretion to stop whenever they thought that the situation was becoming unhealthy.

That it was in the course of 1954; they did not sue until April, 1957. The damages for breach of contract awarded to the defendant must be set aside
He complaints that the judgement denies him anything for the Lorries; it says:-
“There is no evidence of the contract of bailment as they were not ad idem as to the terms of repairs . . . they took as much care of the vehicles as they took of their own. They are not liable in detinue and the defendant’s claim in respect of the vehicles and damages for their loss must fail.”

The plaintiffs argue that they are not liable to pay anything unless it is proved that they used the Lorries. They are reminded that they offered to pay #3700 as the value of the Lorries which they would not have offered if they did not feel liable for the failure to hand back the Lorries. In my judgement they were liable, for lorries are big, solid things, and the plaintiffs did not explain how, with ordinary care, the sort of care they give to their own lorries, those of the defendant could have disappeared from their garage without their knowledge, and must be taken to have detained them; but the defendant has not shown that they were worth more.

The argument that one lorry had been used for 12 and the other for 15 months, before they were taken to the garage at Benin, overlooks the fact that the lorries had been used to run partly inside the forest. It was the defendant’s duty to remove his lorries, shortly after he had taken them to the garage, when he was told that they would not be repaired on credit. They were there, in an open-air garage for well nigh on two years; they would have needed more expense to put in repair in November, 1956, than they had needed when taken in.

The defendant had no money; if he had taken his lorries out in November, 1956, he would have been obliged to sell them. He could not have run them for profit, so he is not entitled to damages or loss of profit as from November 1956.

So far as the logs in the bush are concerned, the judgement says, rightly in my view, that the defendant had a duty to deliver logs at the waterside-which disposes of his claim.

To revert now to the plaintiffs’ claim and complaints

Adenuga v. Lagos Town Council related to the demolition of a building. The Council in their pleading relied on a particular notice one of two-they had given the plaintiff; in the appeal they wished to rely on the other, which explains why the court of appeal said that:

“The respondents were bound by their pleadings and could not set up an entirely different case at the trial in court or on this appeal.”

Here the plaintiffs pleaded that they had given goods on credit and made cash advances against logs, and that they had given the defendant credit for the logs supplied; also that they had repaired his lorries; and they supplied statements of account. That pleading is not inconsistent with their having done what they did partly under exhibit A. They should have mentioned it; however, they tried to repair their omission by putting it in before the hearing began; and it went in by consent, which made it evidence for both sides and saved either side from being penalised at the other’s request, because of the omission to plead the written agreement, The plaintiffs were entitled to have their claim considered.
Although before commenting on the counterclaim the judgment dismisses the claim, it appears that the dismissal was not definitive: for towards the end the judgment says:
“I will order that a reputable accountant, to be agreed by the parties, do go into the account and determine the sum due between the parties in respect of the transaction between them as it is impossible for this Court
to determine any precise figure from the very doubtful Statement of Accounts and such book of original entries as were tendered in these proceedings. ”

That was not done. Learned Counsel for the plaintiffs, at the hearing of the appeal, referred to two pages of his closing address in the court below, as noted by the trial Judge, in which he referred specifically to exhibits and amounts showing the debits and credits and an ultimate balance in the plaintiffs’91 in favour of #32,637 14.11 d. They were not considered in the judgment. Counsel for the defendant before us merely said that the defence denied the account, but did not challenge or comment on any item in those exhibits. In these circumstances there is no occasion to have an accountant appointed. The plaintiffs are entitled to have judgment for that amount less the #3700 allowed against them for the lorries.

As regards costs, it seems fair to make no order. The following order is proposed:
The judgment of the 8th November, 1960, in the Benin Suit No. 27 of 1957 of the High Court of the Western Region, is set aside and replaced by a judgment awarding the plaintiffs two thousand six hundred and thirty seven pounds fourteen shillings and eleven pence and the defendant seven hundred pounds on his counterclaim, without any order as to costs of appeal or in the court below, with the net result that the defendant is ordered to pay the plaintiffs one thousand nine hundred and thirty seven pounds fourteen and eleven pence (#1,937’14.11 d).

TAYLOR, F.J.:- I agree with the Judgment that has just been out by my brother Bairamian, F.J., and only wish to comment on the pleadings in the Court of Trial. I have always been and I still am an adherent of the principle that if pleadings are to be of any value at all, as long as they remain unamended, parties must throughout their case be held bound by them. In the present case on appeal it is clear that the plaintiffs’ /appellants’ case a great extent bound up with a written agreement entered into between the parties and marked exhibit “A” in these proceedings for their Manager is recorded as saying in examination-in-chief

” I remember an Agreement in writing between my firm and the defendant. I have seen the Agreement exhibit “A”.
The record then continues as follows:

“Idigbe:-The plaintiffs have denied this Agreement.”
“Okorodudu:-We have never denied the existence of an Agreement
in writing.”

“Witness continuing:Exhibit “A” is the Agreement on which the Firm and the defendant conducted their dealings.”
In spite of the obvious importance of this Agreement and the requirement in the Rules of Court that it should be pleaded, neither the plaintiffs nor the defendant referred to it in their pleadings.

The defendant in fact relied both in his SID and in the counter-claim on an alleged oral Agreement of the same date as exhibit “A”. The plaintiffs/appellants filed a reply to the defendant’s counter-claim, and while denying the existence of any oral agreement, again remain silent as to the existence of exhibit “A”. At no stage of the proceedings was an amendment sought or made. The Learned Trial Judge in his Judgment held in so far as the plaintiffs’ case was concerned that:
“Plaintiffs did not plead the Agreement. They must stand or fall by their pleading. ”

With this statement of the law I am in complete agreement, but where, on this point, I beg to differ from the Learned Trial Judge in the Court below is, where in spite of the ‘defendants’ own failure also to plead or rely on exhibit “A” in the defence or counterclaim, he goes on to say that:
“As regards the defendant’s counterclaim, after hearing his evidence
and that of P.W.2 Anstatius Mandilas and considering exhibit” A”, and all the other exhibits I am satisfied that there was an agreement between the parties” .    …    ……..

It is difficult to see how the agreement which the plaintiffs and defendant did not rely on in their pleadings could not avail the plaintiffs, but could be used by the defendant to support the defence and counterclaim.

Either the Agreement should be rejected, or, having been tendered by consent of both Counsels at the beginning of the case, it should avail both parties. In my view, considering all the circumstances of this case the latter procedure should have been followed.

F.S.C.342/1961