Messrs. Comptoir Commericial Industriel (Afrique) (Nigeria) Ltd Vs A. O. Onayemi (1972)
LawGlobal-Hub Lead Judgment Report
UDO UDOMA, JSC.
In Suit No. LD/290/1968 in the High Court of Lagos, the claim of the plaintiff, now respondent, against the defendants, herein appellants, as endorsed on the writ of summons was in the following terms:
“1. The plaintiff is a trader with her business premises situate at 55, Idumagbo Avenue, Lagos.
2. The defendants are importers and manufacturers’ agents and have their business premises at 11 Martins Street, Lagos.
3. The plaintiff ordered through the defendants who are the sole importers and manufacturers’ agents of Walgust brand Tomato Paste, Five hundred (500) cartons of the said Walgust Brand Tomato Paste, on the conditions that “Exclusivity” be guaranteed to the plaintiff.
4. The defendants agreed to and granted the guaranteed “exclusivity” to the plaintiff to cover Lagos and Ibadan for a period of three months after receipt of the goods.
5. In consideration therefore and relying on the representations of the defendants the plaintiff deposited the sum of Three hundred pounds (£300) with the defendants.
6. The defendants were unable to guarantee exclusivity to the plaintiff when the goods arrived, as a result of which the market was flooded with goods of the same type selling at a lesser price.
7. The plaintiff therefore was unable to sell and/or make any profits whatsoever on the goods.
8. The plaintiff therefore claims from the defendants:-
In obedience to an order of court made in that behalf both the plaintiff and the defendants filed and exchanged pleadings. In her statement of claim the plaintiff averred that some time in March, 1967, the defendants offered to order for her, she being a trader, Walgust tomato paste and puree from their principals, the manufacturers in Europe; that in furtherance of the offer, the defendants further represented, in respect of the goods, to grant her “exclusivity” (sic) to cover Lagos and Ibadan for a period of three months after the receipt of the goods aforesaid; that she relied on the representation that she would be the only trader exclusively to sell the brand of paste and puree, the subject-matter of the offer, which she accepted, and thereupon ordered 500 cartons of the said Walgust tomato products through the defendants, to be shipped to her in Nigeria in two lots of 250 cartons each, for which purpose she, at their request, deposited the sum of £300 with the defendants; that before the arrival of the goods, the markets in Lagos and Ibadan were flooded with goods of the same type and make, which were being sold at prices much lower than even the cost price of the goods on order.
As a result she only took delivery of and paid for the first 250 cartons of the goods on arrival, and, then only on the further representation, coupled with a promise, made to her that the defendants would make good any losses that might be incurred by her as well as refund to her, her deposit of £300; that she was unable to sell and make any profit on the first shipment of which she took delivery but instead sustained, losses; that the defendants took delivery of, and sold the second shipment of £250 cartons on arrival; and that in addition to the losses, which she sustained, the defendants have bluntly refused on demand to refund to her the deposit of £300.
Hence her claim as already stated. The defendants admitted in their Statement of Defence certain averments contained in plaintiff’s Statement of Claim to wit: the offer and acceptance; the payment of £300 deposit for the goods ordered; the order for 500 cartons of Walgust tomato paste and puree to be delivered in two lots of shipment of 250 cartons each.
The defendants, however denied ever representing to the plaintiff to make good her loses or to refund to her the deposit of £300 or that the markets in Lagos and Ibadan were flooded before the arrival of the first lot of shipment in Nigeria. The defendants then alleged that as distributors of the goods, the subject matter of the transaction between them, they never at any time sold the goods to any other dealer than the plaintiff. They further alleged that it was only when the plaintiff refused to take delivery of the second lot of shipment on arrival that they had perforce to take delivery of the said goods at C.I.F. price and thereby incurred a loss over and above the deposit of £300, which the plaintiff had paid to them and which they forfeited. The defendants therefore pleaded that the plaintiff’s claim be dismissed as misconceived, frivolous and speculative.
On the pleadings therefore the main issue in controversy and for determination appears straight forward and settled. It was this: Was there any breach of contract on the part of the defendants which had occasioned the loss and damage which the plaintiff alleged she had suffered? If so, what form did such a breach take and what was the contract breached? Such being the position, surely the onus was on the plaintiff to prove that there had occurred such a breach of contract as would entitle her to recover the damages that she claimed. When the case came up for trial, both sides gave evidence. For the purpose of establishing her claim, the plaintiff testified on her behalf and called one witness, a woman trader.
In the course of her testimony, the plaintiff tendered, among others, two documents which we consider of vital importance in this case, and which we propose to deal with later. The documents were admitted in the proceedings and marked Exhibits A and E. The plaintiff further testified that she refused to take delivery of the second lot of goods on arrival because she had sustained a loss of some £400 on the first lot of 250 cartons which she received, and that the defendants had refused despite demand in that respect, to refund to her the deposit £300 (Receipt, Exhibit E) which she had paid when she placed her order for the goods. She admitted, however, that the £300 she deposited was for the goods she The only witness for the defendants was Fasasi Adebayo a salesman.
He swore that before 1967 the defendants, as the manufacturers’ representative, never imported Walgust tomato into Nigeria; that when the first shipment of the goods arrived, the plaintiff had cleared the consignment herself from the wharf but that she refused second shipment thereby compelled the defendants to clear the consignment at total cost of £1,212:12s :6d; that the defendants only realised the sum of £942: 2s: 6d from the sale of the goods resulting in a shortfall of £370:10s which had to be offset with the sum of £300 deposited with the defendants by the plaintiff; and that the defendants suffered a loss of £70.10s in the whole transaction.
The learned trial Judge in a reserved judgment reviewed the evidence. He was of the opinion that the case of the plaintiff was not seriously challenged and that the facts were not in dispute. He therefore entered judgment for the plaintiff in the following terms: “There will be judgment for the plaintiff in the sum of £300, being the refund of the deposit she made with the defendants company, and for £400, loss sustained by her after she had sold the first consignment of the tomato, with one hundred guineas costs.” The defendants have brought this appeal against that judgment. They have complained in substance, firstly, that the plaintiff did not establish on the evidence that the defendants had committed in any way any breach of their contract in relation to “exclusivity”.
Secondly, that the learned trial Judge within the context of Exhibit A, misconstrued the word “exclusivity” to mean a guarantee of profit; and within the context of Exhibit E, the word “deposit”, as meaning “security or earnest for the performance of some contract”.
Thirdly, that the costs awarded the plaintiff were excessive. In his submissions in support of the defendants’ complaints, Mr. Awonyinfa, learned counsel for the defendants, contended that the onus rested squarely upon the plaintiff to show by evidence that the defendants had committed a breach of contract whereunder in terms of Exhibit A, the plaintiff was granted “exclusivity to cover Lagos and Ibadan for a period of three months”. Learned counsel contended that by the grant of “exclusivity”, the defendants did not guarantee that the plaintiff must make profit from the sale of the products, and, in any case, that there was no evidence that the markets were flooded through the instrumentality, or in consequence of any act on the part of defendants.
There was no evidence, it was further contended, that the traders who were selling the goods in the market had bought them from the defendants, and that, in the circumstances the action was misconceived and ought to have been dismissed the plaintiff, not being entitled to any damage whatsoever. Mr. Desalu, learned counsel for the plaintiff, in reply, contended that the learned trial Judge was right in entering judgment for the plaintiff and that the judgment should in no way be disturbed.
He maintained that the claim for £300 was for a refund of a deposit whilst the award of £400 related to damages suffered by the plaintiff, not necessarily on the basis of loss of profit. Learned counsel then submitted that while he would concede that there was no evidence that the defendants were responsible for the markets in Lagos and Ibadan being flooded with the goods in the manner described, still the defendants were bound by their contract in which they had undertaken to grant the plaintiff the exclusive right of selling the products in Lagos and Ibadan as expressed in Exhibit E.
As an alternative, it was conceded by learned counsel, that, in the event the court disagreed with his submission, he would ask that the case be remitted to the court below for a rehearing. It would appear that the case of the plaintiff was based on Exhibits A and E. The judgment of the learned trial Judge appears to have been based on the construction and application of the terms of these two documents. It is therefore necessary that both Exhibits be examined and their purport be considered in the light of the evidence before the court.
There can be no question that the claim of the plaintiff was based on a breach of contract between her and the defendants. The only documentary evidence of the terms of the contract purported to have been broken is Exhibit A – an invoice dated 18th April, 1967 for 250 cartons of Walgust tomato puree, the C.I.F. value whereof is shown thereon as £672. 4s. 41/2d. There is also endorsed on Exhibit A the following remarks:
“Note: Exclusivity granted to cover Lagos and Ibadan for a period of three months after receipt of the goods (first shipment).”
Then there is Exhibit E, which is receipt No. 081/892 of 11th March, 1967 for the sum of £300 issued to the plaintiff by the defendants. It is worthy of note that Exhibit E contains the under-mentioned particulars:-
“Article: 500 cartons of Walgust Tomato Paste Amount: Total £1,342.9s. 2d Payment: £300 – being deposit on the above order paid on SBWA cheque No. C/4 832122 of 11/3/67.”
We think learned counsel, Mr. Desalu, was right in conceding that there was no evidence – indeed not a tittle of evidence – that the defendants were responsible for the markets being flooded with the goods, the subject matter of the contract between the plaintiff and the defendants. It seems to us, having regard to Exhibit D – a copy of a letter addressed by the defendants to the Board of Customs dated 8th June, 1967, produced and tendered by the plaintiff – that the defendants were as much embarrassed and surprised as the plaintiff to learn of the market having been flooded with goods for the importation and distribution whereof they were the sole agent in Nigeria. It is significant as well as remarkable that the defendants were complaining in the letter, Exhibit D, that their investigation had revealed that the goods were being smuggled through Dahomey, a foreign country, into Nigeria. The purpose of the letter was to seek protection for their goods from the Board of Customs. In his judgment the learned trial Judge said
“On the loss of £400 sustained by the plaintiff after the 1st consignment of the tomato products had been sold, the evidence disclosed that the defendant company guaranteed exclusively of the particular brand of tomato to the plaintiff before she made a deposit of £300 and asked that the products be ordered for her.
Before the goods arrived the market had been flooded with the brand of tomato and she had to sell them at less than the cost price. She said that she would not have parted with her money, or ordered the goods, if no promises had been made to her. That she sustained loses was confirmed by the defendant company itself.”
The learned trial Judge then continued:-
“Who should bear the losses sustained by the plaintiff? On the evidence before me, I hold that the losses should be borne by the defendant company.”
From the above passages of the judgment it appears that the learned trial Judge did not properly direct his mind to the issue in controversy between the parties in the case, nor did he correctly approach the case of the plaintiff on the evidence before him. The learned trial Judge would appear to have thought that all the plaintiff had to do to succeed was to prove that she had suffered losses regardless as to how such losses had been brought about or as to whether such losses had been occasioned by any act on the part of the defendants within the terms of their contract.
It seems plain that on the evidence, the plaintiff did not even attempt to, nor did she establish any breach of contract on the part of the defendants. On the other hand, her refusal to take delivery of the second lot of 250 cartons of the tomato paste on arrival would constitute breach of contract on her part and was sufficient, we think, to disentitle her to a refund of the deposit of £300, especially as the defendants had perforce to take delivery of the goods at a total cost to them of £1,212.12s. 6d thereby incurring a loss of the sum of £370. 10s.
It must be remembered that the plaintiff had admitted in her evidence that the £300 was deposited by her for the goods she had ordered. We are of opinion that the learned trial Judge misconstrued and misapplied the word “exclusivity” in Exhibit A. He took it to mean a guarantee of profit to the plaintiff. We think that, in all the circumstances of this case, this action was misconceived.
Furthermore, there was no breach of contract proved as the evidence given by the plaintiff fell far short of the degree requisite to establish a breach of contract on the part of the defendants. At all events, the action ought to have been dismissed.
Accordingly, this appeal succeeds. It is allowed. The claim of the plaintiff in the Lagos High Court Suit No. LD/290/1968 is dismissed with 60 guineas costs; and this shall be the judgment of the court. The appellants are entitled to costs of this appeal assessed and fixed at 34 guineas.
Other Citation: (1972) LCN/1522(SC)
