Mobil Oil Nigeria Limited & Anor V. National Oil & Chemical Marketing Company Limited & Anor (2000)
LawGlobal-Hub Lead Judgment Report
ADEREMI, J.C.A.
In the court below (High Court of Lagos State) the plaintiff/respondent (National Oil and Chemical Marketing Company Limited) claimed against the 1st defendant/appellant Mobil Oil Nigeria Limited, the 2nd defendant/appellant, African Petroleum Limited and the 3rd defendant/respondent and Sungas Company Limited jointly and severally or severally as follows:-
(i) The sum of N1,474,813.42 (One Million, Four Hundred and Seventy Four Thousand, Eight Hundred and Fifteen Naira and Forty Two Kobo)(sic) being the amount due from and owing by the said defendants to the plaintiff for LPG products supplied by the plaintiff at the said defendant’s request and freight charges.
(ii) Interest at the rate of 81/2% per annum from the date of judgment and thereafter at the rate of 6% per annum until judgment debt and costs has been fully paid.
Pleadings which were finally settled and exchanged among the parties are the statement of claim, with the leave of court, the amended statement of defence of the 1st defendant, with the leave of court, the amended statement of defence of the 2nd defendant, the statement of defence of the 3rd defendant and the plaintiff’s reply.
After taking evidence of the witnesses called by the parties and the final addresses of their respective counsel the trial Judge in his reserved judgment granted the reliefs claimed by the plaintiff/1st respondent against the 1st and 2nd defendants only, in the following terms: (a) the 1st defendant/appellant- Mobil Oil Nigeria Limited to pay to the plaintiff/respondent (National Oil and Chemical Marketing Co. Ltd.), the sum of N1,347,484.11 (One Million, Three Hundred and Forty Seven Thousand, Four Hundred and Eighty Four Naira, Eleven Kobo) together with interest at the rate of 4% per annum from the date of judgment till the date of the Liquidation of the judgment debt, and (b) the 2nd defendant/appellant (African Petroleum Limited to pay to the plaintiff/respondent (National Oil and Chemical Marketing Co. Ltd.), the sum of N231,996.36 (Two Hundred and Thirty – One Thousand, Nine Hundred and Ninety Six Naira and Thirty Six Kobo) together with interest at the rate of 4% per annum from the date of judgment till the date of the liquidation of the judgment debt.
Being dissatisfied with the said judgment, the 1st defendant/appellant filed a Notice of Appeal which contains six (6) grounds set-out below;
(1) Judgment is against the weight of evidence.
(2) The learned trial Judge misdirected himself on the first issue for determination (which misdirection led him to find against the 1st defendant) when he stated thus:
“Whether Mobil Oil Ltd. (1st defendant) which sponsored and/or authorised Sungas Co. Ltd. (3rd defendant) to lift or bring LPG, from consignment of petroleum products and LPG procured by National Oil Ltd. (plaintiff) should be held responsible for payment or settlement of Debit Notes or Invoices for the cost of LPG Lifted and also freight charges and other incidental expenses incurred by the plaintiff on such lifting.
Particulars of Misdirection:
(a) The main issue for determination was not whether it was Mobil that sponsored Sungas for the lifting of LPG products since that point was never in dispute between the parties.
(b) Whether the particular consignment of LPG covered by the invoices Exhibits P1, and P3 were in fact allocated to Mobil (1st defendant) by the plaintiff and same lifted by Sungas from the AP depot as a result of the nomination by Mobil.
- Having regard to (a) the findings of the learned trial Judge that during the period covered by the plaintiffs claim, Sungas also lifted LPG from the same AP depot as a result with AP tripartite agreement with AP.
(b) The evidence of Sungas which was not disbelieved by the trial judge that no LPG was lifted by it from the AP depot since January, 1979 on Mobil’s Account.
(c) The fact that from the records kept by the 2nd defendant (AP) at its depot the LPG covered by Exhibits P1, P2 and P3 were not allocated to Mobil.
(d) The fact that the payment of subsidy by the NNPC for the LPG covered by Exhibits P1, P2 and P3 (which payment is always made to the Oil Marketer to whom the LPG is allocated) was not made to Mobil but was collected and kept by the plaintiff.
The decision of the learned trial Judge that Mobil should settle the invoices raised in Exhibits P1, P2 and P3 is perverse as there is no evidence to warrant or justify that decision or conclusion reached by the trial Judge.
(4) The learned trial Judge erred in law and also misdirected himself on the facts when in deciding the effective date of Mobil’s sponsorship of Sungas for the lifting of LPG he stated thus:
(5) The learned trial Judge erred in law in finding against the 1st defendant when he failed to resolve the conflict in the evidence of the plaintiff and the 1st defendant on the mechanism for the implementation of the agreement reached by the major Oil Marketers on the importation of which conflicts is a prerequisite to a finding of liability against the 1st defendant.
(6) The learned trial Judge erred in law in dismissing the claim against Sungas on the ground that there was no contract between it (Sungas) and the plaintiff when:-
(a) Having regard to the nature of the agreement reached by the Oil Marketers Sungas was in fact and in law the purchasers and ultimate user consumer of the LPG products and should therefore be bound to pay for LPG products lifted by it.
(b) Having been established that Mobil did not invoice and did not receive payment from Sungas for the LPG product in Exhibits P1, P2 and P3 alleged to have been lifted by Sungas, it was unequitable and unjust to have dismissed the claim against Sungas.
The 2nd defendant/appellant also filed a Notice of Appeal against the said judgment on 15th November, 1989. Incorporated into the said Notice of Appeal is four grounds of appeal and they are set-out below without their particulars:-
(1) The learned trial Judge erred in law and misdirected himself on the facts in holding that the 2nd defendant was liable to pay for freight charges as contained in Exhibits P11, P12 and P13 all totaling N231,996.30.
(2) The learned trial Judge erred in law and misdirected himself on the facts when he held at page 17 of his judgment that “All the lifting of Liquified Petroleum Gas by Sungas Company Ltd. were from those procured by National Oil Limited and stored at African Petroleum Depot at Apapa.”
- The learned trial Judge misdirected himself on the facts when he agreed with PW1, Mr. Agunbiade at page 16 of the judgment that Exhibits P11, P12 and P13 were properly raised on 2nd defendant as a result of the supply of LPG to the 3rd defendant when in fact the evidence was that the said supply was a sale by the 2nd defendant to the 3rd defendant out of the 2nd defendant’s stock. There was also no evidence before the court that it was the 2nd defendant that was allocated and paid for the LPG, in respect of which Exhibits P11, P12 and P13 were raised.
- The learned trial Judge misdirected himself on the facts and erred in law in awarding judgment against the 2nd defendant on account of the lifting of the plaintiff’s LPG by the 3rd defendant when there was no evidence whatsoever before the court to show that the 2nd defendant ever agreed to pay for the said LPG consumed or utilized by the 3rd defendant.
In its brief of argument, the 1st defendant/appellant raised three issues for determination and they are in the following terms:-
(1) Whether National Oil established the following considering its claim on the pleadings and evidence led:
(a) A request for, and the allocation of the entire consignment of the LPG imported on the vessel Davon to Mobil;
(b) That Sungas lifted the entire consignment of the LPG on the Vessel Davon from the AP Depot;
And
(c) That Sungas lifted same as a result of its nomination by Mobil and not as a result of a tripartite arrangement with AP.
(2) What is the relevance if any of Mobil’s letter of 20/4/79 (Exhibit Pt.10) withdrawing its nomination of Sungas and was the trial Judge right in his use of that Exhibit particularly as it relates to the effective date of same.
(3) Assuming (but without conceding) that National Oil allocated the LPG or the Davon to Mobil and that Sungas lifted same on Mobil’s nomination, should the trial Judge have dismissed the claim against Sungas when the evidence reveals that no payment and/or full payment has been found for those liftings.
The 2nd defendant/appellant (African Petroleum Limited) formulated two issues for determination in their brief, they are in the following terms and I quote:
(1) Whether AP can be held liable to pay freight charges being claimed by National unless it is established that;
(a) AP lifted the quantity of the LPG in question direct by itself, or through its sponsored company; and
(b) AP has in fact paid the price of the said LPG but omitted to pay the freight charges.
(2) Whether or not AP, having paid for the price and freight charges of its share of the imported LPG cannot sell some of it to Sungas without being called upon to pay again the freight charges in respect of the quantity so sold to Sungas out of its owned stock of the imported LPG.
Judge erred in law in dismissing the claim against Sungas Co. Ltd. on the ground that there was no contract between the third defendant (Sungas) and the plaintiff (National Oil).
When this appeal came before us on the 10th of November, 1999, Professor Kasunmu S.A.N. learned counsel for the 1st defendant/appellant adopted the brief of 1st defendant/appellant filed on 8/11/91 and urged that the appeal of his client be allowed. Mr. Kehinde Sofola S.A.N. learned counsel for the plaintiff/respondent while adopting the brief of his client filed on 13/10/93 in response to the appeal lodged by the 1st defendant/appellant and the second brief of his client filed on 14/10/96 in response to the appeal lodged by the 2nd defendant/appellant he urged that the two appeals be dismissed and the judgment of the court below affirmed. Prince Adediji Adedoyin, learned counsel for the 2nd defendant/appellant while adopting the brief of argument of the client filed 12/72/94 and the reply to the plaintiff/respondent’s brief filed on 28/10/96 he urged that the appeal of his client be allowed and judgment of the lower court to the extent to which his client is affected, be dismissed Mr. Okpeseyi, learned counsel for the 3rd respondent adopted the brief of his client filed on 25/3/97 submitting that his client was not a proper party to the appeal, consequently, he urged that the appeal should be dismissed while the judgment of the court below be affirmed.
It was common ground among the parties that as a result of the liability of the local refinery to meet the demand of the Nigerian Market in the area of liquefied petroleum gas (LPG) seven major oil marketing companies entered into an agreement to import LPG into the country to meet the shortfall. Among these major oil companies are the 1st defendant/appellant, the plaintiff/respondent and the 2nd defendant/appellant. The marketers, at the material time had subsidiaries or agents sponsored by them to lift LPG allocated to such marketers. The 1st defendant/appellant at the material time sponsored the 3rd defendant/respondent – Sungas Co. Ltd. On its own admission, the plaintiff/respondent through its witness (PW1 D. Agunbiade) said that the 1st defendant/appellant informed other marketers that its (Mobil Oil Co.) sponsorship of Sungas Co. Ltd. terminated from May, 1981 and that 2nd defendant/appellant (African Petroleum) was thereafter responsible for Sungas limited liftings of gas. Indeed, the 1st defendant/appellant also conceded this point on its brief of argument. In paragraphs 10 and 15 of its statement of claim the plaintiff/respondent avers thus:
Para 10
“The plaintiff further states that as the said Co-ordinator from 1975 to 1982 it was responsible for the procurement of liquified petroleum gas (LPG) for the said Oil Marketers, the cargoes of which were discharged at the Lagos Ports to the available storage at the African Petroleum Depot Apapa.”
Para 15
“The plaintiff contends that as the 3rd Defendant was not a member of the major oil marketers, the 3rd defendant obtained from time to time at all material times product supplies from the plaintiff from the said storage depot on the 1st defendant’s instructions, orders, authority and/or directions on its account and with its (the said 1st defendant’s) promise to pay for same.
Reacting to the afore-mentioned paragraphs, the 1st defendant/appellant in paragraphs 6 and 8 of its amended statement of defence avers;
Para 6
“The 1st defendant denies that the entire consignment of imported LPG product is discharged at the African Petroleum Depot Apapa as alleged in paragraph 10 of the statement of claim but avers that the quantity of LPG product it (the 1st defendant) agrees to lift in any consignment is discharged at the Nidogas storage Tank at Creek Road, Apapa.”
Para 8
“The 1st defendant admits paragraphs 14, 15, 16 and 17 only to the extent that it recommended or sponsored the 3rd Defendant up to January, 1979 for the lifting or buying of LPG allocated to the 1st defendant but denies all other allegations contained in those paragraphs. The 1st defendant further declares that the lifting of LPG that it sponsored the 3rd Defendant for is from the Nidogas Storage Tank at Creek Road, Apapa.”
The clear-cut issues centre on the putting forward of the 3rd Respondent (Sungas) as its agent in respect of the agreement reached among the Oil Marketers. Although, the 1st defendant/appellant averred that, it sponsored 3rd defendant to lift LPG for it from the Nidogas Storage Tank at Creek Road Apapa giving an impression that if the 3rd defendant lifted LPG from another source it (3rd defendant) must be taken to have gone on its own frolic for which the 1st defendant/appellant could not be held liable. However 1st D/W -Emmanuel Akinola Obi the Supply Manager of 1st defendant/appellant said under examination – in-chief and I quote him;
“Sometimes in September, 1975 the Badagry Creek was been dredged and so all LPG discharges went into AP. Ltd. installations. We subsequently reconciled LPG by Sungas and accepted the invoice for January, 1979 and we paid.”
Similarly 5th D/W -Babatunde Dawodu, a supply superintendent, who was at the material time an employee of the 2nd defendant/appellant said under examination – in – chief and I quote:
“The products ordered by National Oil Ltd. were stored with African Petroleum Ltd. at Apapa. All lifting of LPG on Sungas Co.Ltd. are debited to Mobil Oil Ltd. The invoice would be prepared by National Oil Limited…
It was at a meeting in 1981 that Mobil Oil Ltd. would back out of support for supply of LPG to Sungas Co. Ltd. Sungas Co. Ltd. continued to lift LPG up till sometime in 1981…
As at the time that liftings were made by Sungas Co. Ltd. as in Exhibits P11 to P13, African Petroleum Ltd. was not aware that Mobil Oil Ltd. had withdrawn their support for Sungas Co. Ltd.” I have had a careful study of the account of the perception and evaluation by the trial Judge of the totality of the evidence led before him; his findings cannot be faulted and so it will be wrong for this court, an appellate court, to disturb such unassailable findings. See (1) Lawai v. Dawodu & Anr (1972) 8/9 SC 83 and (2) Obisanya v. Awoko & An (1974) All NLR (Pt.1) 420.
Reflecting on issues 1 and 2 formulated by the 1st defendant/appellant in its brief of argument and issue 1 formulated by the plaintiff/respondent it seems to me that the first issue raised by the plaintiff/respondent is more appropriate having regard to the state of the pleadings and the totality of the evidence led. And from what I have discussed supra that issue 1 must be resolved in favour of the plaintiff/respondent and I so resolve it. And being the conduit pipe through whom LPG passed to the 1st defendant/respondent, the 3rd defendant/respondent to that extent was its (1st defendant/appellant) agent. That relationship, in my view, creates agency by estoppel. See Raccah v. Standard Co… Nigeria Ltd. (1922) 4 NLR 48. Exhibit D3 is the minutes of the meeting; the binding effect of Ex. D3 must find expression in the parties that attended the meeting signing such minutes. After all, in law when a document is signed by a party, the fact of agreement is proved by his signature and in the absence of fraud or misrepresentation or the availability of the plea of Non Est Factum, it is wholly immaterial that he has not read the contract or does not know its contents. Ex D3 not having been signed by the 2nd defendant/respondent is not binding on it. Consequently, the 3rd defendant/respondent would, in the ordinary business transaction be liable to pay for whatever LPG it lifted after the valid withdrawal of its sponsorship by the 1st defendant/appellant. But DW5 – Babatunde Dawodu an employee of the 2nd defendant/appellant answering questions under cross-examination by Mr.Akinyele counsel for the 3rd defendant/respondent said:
“We used to charge Sungas Ltd. through Mobil Oil Ltd. Sungas Co. Ltd. lifted LPG from us (AP. Ltd.) after Mobil Oil Ltd. had withdrawn their support for Sungas Co. Ltd. The document now shown to us was prepared by our company, now admitted as Exhibit D25. The documents shown to me are receipts, now admitted as Exhibit D26.”
As I said above, the 3rd defendant/respondent was not a party to the agreement reached by the major oil marketers, as to the lifting of LPG. It is an axiomatic principle of the law that a contract, as a general rule does not confer rights or obligations on persons who are not parties to it. The evidence of DW5 under-cross-examination was not challenged. If anything at all, it was an admission against interest in favour of the plaintiff/respondent but against the 2nd defendant/appellant. I further wish to say that where the evidence is unchallenged or uncontradicted, the onus of proof is satisfied on a minimal proof since there is nothing on the other side of the scale. See Buraimoh v. Bamgbose (1989) 3 NWLR (Pt.109) 352. Suffice it to say that the plaintiff/respondent has rightly abandoned its case against the 3rd defendant/respondent. Issue one raised in the brief of argument of the 2nd defendant/appellant is therefore answered in the affirmative. On issue 2 therein, there is no evidence that the 2nd defendant/appellant paid for the freight of the LPG which it admitted it sold to the 3rd defendant/respondent and so it (2nd defendant/appellant) is duty bound to pay the freight charges. Perhaps, it should be observed here that the plaintiff/respondent for reasons best known to it had not claimed for the cost of LPG collected by 3rd defendant/respondent from (2nd defendant/appellant but rather limited itself to the freight charges.)
In sum, from all I have said above, the irresistible conclusion I can reach is that the appeal of the 1st defendant/appellant which I adjudge to be unmeritorious is hereby dismissed. So also is the appeal of the 2nd defendant/appellant dismissed for reason of lack of merit. Consequently, the judgment of the court below is affirmed. The plaintiff/respondent and the 3rd defendant/respondent are entitled to the cost of the appeal which I assess at N3,000.00 to each of them (plaintiff/respondent, and 3rd defendant/respondent against the 1st defendant/appellant and 2nd defendant/appellant).
Other Citations: (2000)LCN/0653(CA)
