Obasi Brothers Merchant Company Ltd. V Merchant Bank Of Africa Securities Ltd (2005)

LAWGLOBAL HUB Lead Judgment Report

PATS-ACHOLONU, J.S.C.

This is an action commenced by the appellant (plaintiff) in which it claimed the sum of N5,040,500.00 (five million, forty thousand, five hundred naira) being the total amount due to the appellant for the 4040 cartons of wine which the respondent (as defendant) took delivery thereof from the appellant of which the said respondent refused to render an account. It equally claimed interest at the rate of 21 per annum until the judgment is finally liquidated, and an injunction mandating (sic) the (defendant) respondent to release to the plaintiff its certificate of occupancy in respect of Plot K, Ojota-Ogudu GRA scheme, Lagos and certificate of occupancy in respect of Cadastral Zone, Abuja.

The respondent as the defendant denied any liability and in fact, counter claimed for the sum of N4,019,052.51. In the action that finally gave rise to this appeal, the appellant had averred it has instructed or authorized the respondent to issue a bank draft of N1,000,000.00 (one million naira) in favour of its subsidiary company Pole Star Industries Ltd., to debit the appellants’ facility yet to be opened with the defendant. The money was required to clear containers containing 6921 cartons of assorted wine. One of the conditions was that to enable the respondent recover its money within 6 months it should exercise a lien over the goods and to warehouse the goods to this effect. However, as it turned out, only 2712 cartons were delivered and which the appellant said was worth N3,993,700.00. Further 1328 cartons of assorted wine were received by the respondent which the appellant claimed the respondent sold but did not give any account of, and notwithstanding all these acts of the respondent, it still retained and detained the appellants’ title documents used as security for the grant of the facility.

While basically denying the claims of the appellant, the respondent stated that substantial quantity of the wine in its custody went bad and further added that though it was agreed that the respondent was to warehouse, 6,921 cartons of wine, the appellant in its breach of the contract diverted 5 containers containing 4,209 cartons of wine to another warehouse. It added further that of the 2,712 of the wine in its warehouse only 1,344 were sold for the sum of N479,314.00 as the rest had gone terribly bad to the knowledge of the appellant. In its counter -claim, it claimed a sum of N4,019,052.51 which it averred was the outstanding balance as at 31st of October, 1993, with interest at the rate of 85% on the debt up to a December, 1993 and thereafter on interest at 21% till final liquidation of the debt. It also claimed an order of enforcement of the right of sale of the mortgaged property. Now prior to this action the respondent had filed a suit against the appellant on the same subject matter which it withdrew, and it was struck out.

In the High Court, the appellant’s claim was dismissed but judgment was given to the respondent in respect of the counter-claim. On an appeal by appellant to the Court of Appeal that court equally dismissed the appeal, hence a further appeal to this court.

The appellant framed 3 issues for determination which are as follows:

1. Whether the Court of Appeal was right in holding that the appellant has not discharged the burden of proof placed on it by law, when facts admitted need not be proved.
2. Whether the Court of Appeal was right in holding that an order of dismissal of the respondent’s claim in suit No. LD/3356/92 did not create a bar to subsequent suit and thereby did not operate as estoppel per rem judicata.
3. Whether the Court of Appeal was right in holding that the respondent’s counter-claim was unchallenged and proved.

The respondent replicando framed more or less identical issues for considerations. It is not in my view necessary to re-state the issues formulated by the respondent.

In this case, I propose to take issue No.2 first. The cornerstone of the appellants’ case here is that since the respondent filed a suit on a similar matter in contents as its counter-claim which it withdrew and which was struck out that the decision of the court in regard to that suit should operate as an estoppel per rem judicata and therefore, the counter-claim should be ignored. A final judgment is one which decides the rights of the parties. In other words, it is a decision on the merits of the case where the matter is assiduously canvassed and the rendition of a judgment is based on what is canvassed and agitated before the courts by the legal combatants. The question to resolve here is whether such is the position in the earlier suit No. LD/3356/92 hitherto filed in the High Court by the respondent. Therefore, for the doctrine of rem judicata to operate as estoppel, in all its ramifications, it is important that the case between the parties presently in court had been adjudicated between them before on its merits and the court had reached and delivered a final judgment. The doctrine does not operate in an inchoate manner, id est, it rests on a priori conception that the rights agitated and assiduously canvassed by the parties on the issues in controversy had earlier been determined. It is erroneous to construe a mere striking out of a case on the basis that because the proponent of the action had become lethargic or non-chalant to prosecute a case and the court relying on its inherent powers to strike out the case, it amounts to dismissal on the merit. See Rankin Udo & Ors. v. Mbiam Obot and Ors. (1989) 1 NWLR (Pt.95) 59 at 72.

The learned counsel for the appellant has tended to make a heavy weather in the case of Eronini v. Iheuko (1989) 2 NWLR (Pt.101) 46. An analytical and forensic comparison with that case shows a distinctive characteristic easily distinguishable. In the present case the respondent in this matter in its suit No. LD/3359/92 did nothing whatsoever to proceed with the action it initiated. In such a situation the court using its inherent powers struck out the case after the initiator of the action seriously manifested or evinced an intention not to continue or follow up, pursue or persevere with the case. The respondent would be presumed to have developed cold feet. The court seised with such proceedings would not ordinarily allow the case for which no further interest appeared to have been shown by the initiator of the action to stay in the court list. It therefore, used its untrammeled judicial powers which inhere in it to strike out the case. In the case of Leonard Eronini & Ors. v. Francis lheuko supra, the plaintiff who later was the respondent had initiated an action against the appellant. When he started to give evidence, his testimony markedly contradicted the facts averred in his pleadings. There was such a confusion in the presentation of the case that the plaintiff’s counsel decided to discontinue with the case and asked that the case be struck out. The defence counsel in that case wanted outright dismissal. Of course in the Supreme Court, this court held that the right decision the court below should have made was to dismiss the case. It was obvious that the case of the plaintiffs (respondent) in that matter was in tatters as it had no remedying factor. In other words, he fired his last salvo. His case was found to be completely bereft of any substance being completely empty of any remedying feature. In the present case, nothing had been done at all. When a party who filed an action in the court commenced giving evidence which is in conflict with the facts pleaded and raised such confusion that it becomes difficult to determine whether the plaintiff knows the facts of his case, and at a stage he asks the court to strike out the case, the court should dismiss it because there is nothing more to urge the court as the case sought to be put forward is visionless and worthless. This is not the case here where the original plaintiff abandoned its case. It is not even in all cases where a matter is dismissed that it completely terminates the case. Indeed, where a case is said to have been dismissed in the High Court but the circumstances show that such dismissal could not possibly connote or denote – the determination – as to put a finality to the case, the court views such dismissal as a mere striking out. See for example Order 30 rules 3 and 4 of the Lagos 2004 High Court Rules. It is my view that the determination of the suit hitherto instituted by the respondent was definitely not on merit.

I now deal with issue No. 1. Did the appellant as the plaintiff discharge the burden of proof placed on him. In other words, to have the judgment of the court in its favour it must place before the court weighty and substantial evidence which would out weigh whatever the respondent placed before the court. The law is that the facts elicited from the evidence of the plaintiff should so preponderate in favour of the claims made that the court should on balance decide in his favour.The appellant had submitted in its brief that the respondent substantially admitted the facts at paragraphs 2-3 of the record. It is to be expected that the purpose of the sale of wine by the respondent was to recoup for itself the loan facility extended to the appellant in the event of the respondent being unable to repay the money within 6 months. To clearly understand the nature of the transaction that took place, let me re-capitulate as to what really took place.

The appellant had averred as follows at paragraphs 4 and 5 respectively of its pleadings to wit:

Paragraph 4:

The said sum was required by the plaintiff to enable it clear its 8 by 20 containers of 6921 cartons of wine at the Apapa Wharf Terminal which said wine was valued at over N4 million naira at the date of clearance as (sic) the market price.

Paragraph 5: