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:
- 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.
- 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.
- 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:
As a condition in order to enable the defendant recover its money within the stipulated six months duration the Plaintiff agreed that the defendant should take a lien on the cartons of wine as added security. It was also agreed that the defendant should warehouse the goods and effect sales thereof. The Plaintiff shall rely on its letter to the defendant dated 24th September, 1991, and do hereby give notice to the defendant to produce the original.
While the respondent not only refuted and denied emphatically that the price of the wine cleared was worth over a million naira, it nevertheless averred at p. 8 thus:
Further to paragraph 7b (supra) the defendant avers that although defendant agreed to warehouse the wines, i.e. 6921 cartons (8 containers of wine) after clearance at the Wharf, the plaintiff surreptitiously and in a brazen breach of contract diverted 5 containers (4,209 cartons) of the said wines to another warehouse without the knowledge of the defendant and had been selling same and keeping the proceeds of the wines. Uptill now, the plaintiff is still keeping those wines at his warehouse and has made no repayment to the defendant whose funds had been committed by the plaintiff.
The argument of the appellant is from my observation woolly to say the least. The contract agreement was for the warehousing of 6,921 cartons of wine but for some unaccountable reasons the appellant made available only about a third of that to the respondent. Using the expression of the respondent in its pleadings, “the plaintiff surreptitiously and in a brazen breach of contract diverted 5 containers (4,209 cartons) of the said wine without the knowledge of the defendant and had been selling some and keeping the proceeds of the wines.” The intent of the parties was that the carton of the wines and the title deeds used in the mortgage would help to shore up the necessary security the bank needed. It is to be noted that even though the appellant filed a reply to the statement of defence, it did not challenge the allegation of the surreptitious act that sort of breached the contract. In his evidence in court the sole witness for the appellant in cross-examination said:
“All the cartons have been sold and the proceeds paid into a bank. I cannot confirm to which bank the proceeds was paid. I do not know why the plaintiff gave the defendant only a part of the consignment and not the whole…I am not aware that the plaintiff delivered the wine to the defendant as a lien to secure the prepayment of the loan”.
In fact, the evidence is so sparse and prefatory that it is difficult to discern whether the plaintiff was serious with the case. The answers given in the cross-examination were so paltry that not much came out of it. The appellant stealthly kept the larger consignment of the cartons of wine that were meant to be added security. Even if some cartons of wine were sold, it was to help reduce and defray the cumulative loan facility. It is incumbent on the appellant to show that it was not owing any money to the respondent and I believe that this could have been effectively done if it had applied or subpoenaed its accounts with the bank.
The parade of such inexplicable ignorance of the detail facts that would persuade the court by the evidence of the appellant’s sole witness is not only disconcerting but seriously undermines the nature of the case being put forward by the appellant. First, he did not know why the cartons of wine were delivered for warehousing; next, he did not know which bank the money was paid into; thirdly he did not know the purpose of warehousing the wine. What was he then to prove – was it merely to parrot what the company or the Managing Director his elder brother had asked him to say. It is not the duty of the court to speculate or base its decision on a mere conjecture. It is long a settled law that the evidence of facts and circumstances on which a plaintiff relies and to which it seeks the court to find in its favour and the inferences deducible there from must so preponderate in favour of the basic proposition he is seeking to establish that it must have the distinctive quality of clarity, for clarity of expressions bespeaks the clarity of the mind. In my view, there is nothing to urge in favour of the appellant as its case is utterly watery lacking in substance and weight.
The 3rd issue is in respect of the nature of the defence put up by the respondent, and the counter-claim made. To be factual, this issue is really connected to issue No.1. I observe that most of the evidence adduced by the respondent were in form of documentary exhibits. The angst of the appellant is that the respondent did not account for the money realized by the latter after the sales. However, let me carefully examine the documents i.e. the exhibits tendered in the court by the respondent. Exhibit ‘F’ which was a letter from the appellant to the respondent reads as follows:
“We will very much appreciate it if you let us know your terms for the finance, we do not mind sharing a percentage of the profit with your organization. Our immediate concern is to get the goods out of the wharf to avoid further demurrage or subsequent auctioning by government as overtime cargo.”
The facility was approved as made out in exhibit ‘H’. Exhibit ‘L’ shows that further facility of N459,714.00 was again provided by the bank. In exhibit ‘M’. The respondent wrote to the appellants as follows:
“We refer to our numerous correspondence in the above regard, most of which you preferred not to respond to. Your failure or unwillingness to remit the collections on the 3561 cartons of wine stored at your Oregun warehouse, is to say the least, an act of dishonesty and a breach of good faith.
Acting on the directive of our Board of Directors, we are going ahead to arrange for the sale of the inventory at Kirikiri Road Warehouse. You will be duly informed afterwards on the terms and conditions of the sales and any short-fall arising there from must be made good by you.
As at May 31, 1992, total outstanding on your facility stood at N1,842,467.23 and until this is liquidated, interest shall continue to accrue at a market determined rate, currently 45% per annum. Finally, please note that in the event of non- co-operation on your part in augmenting the wine sales proceeds, we would not hesitate to re-visit the legal recovery option.”
Exhibit ‘O’ was a letter warning the appellant of the lethargic manner it was treating the whole transactions, and the respondent wondered why the appellant was silent and could not reply its letters. It hinted taking drastic measures. In another letter to which the attention of Prince Obasi was drawn, his company was asked to liquidate or offset the total indebtedness which stood at N3,748,446.55 as at 30 September, 1993. In a reply to the letter demanding the repayment of that debt, the appellant wrote as follows inter alia;
“We are writing in respect of the above subject-matter, and also to thank you for the patience exhibited so far on our side concerning this issue. We wish to inform you that efforts are being made to see that we settle this debt as soon as possible. We hope to pay in at least N.5m as soon as the cement we negotiated arrives.”
The inference is (i) that the computation of the outstanding amount as made out by the respondent was accepted by the appellant as it did not refute it but rather pleaded for time (ii) it was in breach for delivering for warehousing far less than half of the cartons agreed by the terms of the contract. It is therefore, from my point of view inconceivable for the appellant to question why the amount realized from the sale of wine (most of which went bad and unsold) was not accounted for. The simple answer to that is that it was used to defray and cut down the indebtedness the appellant owed, which he never queried then.
It is disingenuous and a skewed thinking on the part of the appellant to maintain after tacitly and inferentially accepting the indebtedness as mentioned above to turn round and claim for accounts of the proceeds of the wine sold by the respondent which was used to step down the amount owed. It cannot possibly approbate and reprobate at the same time. Thus Shakespeare said in Macbeth “such welcome and unwelcome news at once. It is too hard to reconcile”. One of the problems in this case is the dearth of facts.
It is always tempting for lawyers to concentrate on the law and relegating the facts which give rise to the law to the background. The tool or the magic that should be in the possession of a seasoned advocate is the mastery of the facts of the case. I have always stated that knowledge of the facts of a case must be assiduously and painstakingly pursued. The facts must then be subjected to scrupulous analysis, and serious efforts made by the counsel to know how to elevate them to the pedestal that would convince the court to find in favour of the party seeking the courts’ intervention. I fail to see how very sparse or improvised stories or crass ignorance of essential facts by the appellant in this case could readily persuade a court to find in its favour. The passion for facts must be so all embracing and encompassing that it should always be in the mind of a counsel to a plaintiff, and reach a crescendo of addiction- metaphorically speaking. With such a weapon craftily grafted in a beautiful flowing prose in the pleadings, a good case for the proponent of the action is made unless the story told is riddled with falsehoods conjectures and speculations.
Indeed, the handling of the case in the lower courts lacked professionalism and proper appreciation of the elementary principle of law, to wit that facts – the inimitable stories surrounding a case i.e. on which most if not all cases depend; are the fountain heads or spring board of law. The case is dead right from the word go. There is nothing to commend it.
In the circumstances, I dismiss the appeal and affirm the judgment of the court below. There shall be costs to the respondent which I assess at N10,000.00
SC.290/2000
