S. A. Uredi V. Jacob O Dada (1988)

LawGlobal-Hub Lead Judgment Report

CRAIG, J.S.C. 

The Plaintiff’s claim in the High Court of Lagos State was as follows:

“The Plaintiff’s claim against the Defendants jointly, severally or in the alternative is for sum of N100, 000.00 (One Hundred Thousand Naira) being special and general damages for breach of an oral contract when in or about January,1976 at Lagos the Defendants induced the Plaintiff to hand over to them sum of N50, 000.00 (Fifty Thousand Naira) which they promised they would refund back to him upon the completion of the contract which they claimed they were then executing at or around the Festival Village along Badagry Road which they told the Plaintiff was bringing them large amounts of profits which they promised they would share with the Plaintiff.

The Defendants have since completed the contract but have only after persistent demands refunded to the Plaintiff N4, 000.00 (Four Thousand Naira) out of the said N50, 000.00 (Fifty Thousand Naira) leaving a balance of N46,000.00 (Forty Six Thousand Naira) which they refused and or neglected to pay nor have they given the Plaintiff any share of the profits as promised.”

Pleadings were ordered and exchanged; and thereafter the case went on to trial. At the hearing, the Plaintiff gave evidence that he and the 1st Defendant had been close business associates in the North, later when the 1st Defendant was transferred to Lagos; the Plaintiff saw him in December 1975 and had discussions about doing further business together. They subsequently concluded an oral agreement involving N50,000.00. The Plaintiff gave the following particulars of the agreement in his evidence:

“The first Defendant told me he had a personal contract awarded to him at the Festival Village. He told me the job was a big and profitable one … He then suggested that I should bring some money towards the execution of the job and both share the profits. He told me that within 3-4 months I would be very rich as the contract was a profitable one.

I asked him how much he wanted me to deposit for the contracts. He asked me for N50, 000.00…

He further assured me that he was being paid monthly for the contract and that at the end of each month he would share the profit with me until the completion of the job when the N50,000.00 would be refunded to me”

The Plaintiff returned to his base in Zaria and by February 1976, he had paid the 1st Defendant a total sum of N50,000.00. The Plaintiff testified further:

“According to the agreement between us, I was to receive my first share of the profits at the end of March, 1976. At the end of March, the 1st Defendant did not give me my money. The same thing happened at the end of April, 1976 It was towards the end of July, 1976 that the 1st Defendant gave me some money.”

Altogether the Plaintiff has been paid the sum of N13,000.00 and he now claims the balance of N37, 000.00 in addition to the profits accruing to him on the money invested in the business. At some stage in the execution of the transaction, the Plaintiff pressed for a written acknowledgement of the moneys which he had paid, and the 1st Defendant sent him a letter Exhibit B which he signed as Managing Director of a Company and which tended to portray that the Plaintiff had business dealings with Messrs Ferou (Nigeria)

Ltd. The letter reads as follows:

“FEROU (NIGERIA) LIMITED

Building & Civil Engineering Contractor

Office: 3 Hall Lane

Apapa

Our Ref. PZ41/2/76 14th February, 1977

Mr. Dada,

Dada Press,

Zaria.

Dear Sir,

I wish by medium of this letter to advise you that we have got some vital informations about our debt outstanding with DAAS PILING & Construction Company. We have a hint from a very reliable source that the Federal Government might pay DAAS all that the Company is due probably by March. (Date not specified)

I hope that when the company is paid, they will be in a position to settle the debt which is being owed to FEROU (Nig.) Ltd.

At this point, I wish to remind you that the four thousand Naira (N4,000.00) which I have personally advanced to you will henceforth be regarded as having been taken from your initial capital contribution of N50,000.00. Thus your new capital now will be N46,000.00.

We are doing everything to recover our total debt from DAAS PILING and Constructions and as soon as this is recovered your own share (i.e. Capital of N46,000.00) plus profit will be remitted to you with all dispatch.

Thanks,

(SIGNED)

(S.A. UREDI)

MANAGING DIRECTOR”

The Plaintiff was puzzled at the tone of the letter and he questioned the 1st Defendant about it. The Defendant told him that the Company was his and that he was its Managing Director, When the Plaintiff protested further that he had no transaction with any Company, the 1st Defendant’s retort was to ask whether the Plaintiff was more concerned about the refund of his money or about the existence of the Company.

In his evidence, the Plaintiff denied any knowledge of this Company. He stated:

“I had no dealings with any Company. The 1st Defendant never told me he had a Company, All my transactions were with the 1st Defendant. It was the 1st Defendant that got the money from me.

I know nothing about DAAS COMPANY at the time I gave the N50,000.00 to the 1st Defendant. It was when I got Exh. “B” that I first know of the existence of DAAS COMPANY Ltd, I do not know anything between the 1st Defendant’s Company and DAAS COMPANY LTD”

In the Statement of Defence the 1st Defendant denied ever owing the Plaintiff any sum of money and in paragraph 8 of the Amended Statement of Defence he pleaded as follows:

“With reference to paragraph 14 of the Statement of Claim, the Defendants say that at all material times the Plaintiff knew that the 1st Defendant acted only as the Managing Director and agent of the 2nd Defendant. The Defendants will therefore contend at the trial of this suit that the 1st Defendant is personally a stranger to the transaction which is the cause of this action. Alternatively, the 1st Defendant will adopt the defence of the 2nd Defendants,”

On its own part, the 2nd Defendant also made similar averment. In paragraph 3 thereof, it pleaded as follows:

“The 2nd Defendant refer to paragraph 14 of the Statement of Claim and say that they are strangers to the contract which is the cause of this action and are therefore not liable to the Plaintiff thereupon. Alternatively, the second Defendants pleaded as hereinafter averred.”

In the subsequent paragraphs of the Statement of Defence the 2nd Defendant averred that:

1. That the oral agreement was made between the Plaintiff and the 2nd Defendant
2. That the Plaintiff agreed to join the 2nd Defendant in executing a contract in which the 2nd Defendant had been asked to supply sand and gravels to another company. Daas Piling & Construction (Nig.) Company Ltd.
3. When Daas Ltd, failed to pay for the goods supplied, both the Plaintiff and 2nd Defendant mutually agreed to stop the supply. (para. 12)
4. The said Daas Coy. Ltd. now owed the partnership the sum of N72, 175, 20 which amount was admitted in a letter dated 6th October 1976 written by Solicitors to Daas Coy. Ltd. (para. 23)
5. The 2nd Defendant has sued Daas Coy. Ltd. in Suit No. LD/800.77 at the Lagos High Court.

The Statement of Defence was rounded up in this manner:

“27 The Defendants say that the 2nd Defendants duly executed the oral contract between the Plaintiff on the one part and the 2nd Defendant on the other, which was to invest the sum of N50, 000.00 in a sub-contract they were executing at the Festac Village, with Daas, Piling and Constructions (Nig.) Ltd. as the main contractor, with a view to sharing profits.”

“28 …”

“29. With further reference to para 13 of the Statement of Claim, the Defendants say that the agreement to share profits was between the Plaintiff and the 2nd Defendants only, but that the profit (which has not as yet been determined) and the capital contribution (of which the Plaintiff now has a balance of N37,000.00) have not been paid by the main contractors.”

It will be seen from the pleadings filed and the evidence led, that the issues which the trial Judge had to decide were

1. Who the parties to the contract were; that is, did the Plaintiff enter into the oral agreement with the 1st Defendant or the 2nd Defendant
2. Could the Plaintiff recover his capital from the Defendants when the contract money had not been paid

After listening to both parties, the learned Judge in a considered judgment found that the agreement to contribute N50, 000.00 was made between the Plaintiff and the 1st Defendant only. He also found that the Plaintiff had no business connection what so ever with the 2nd Defendant. He therefore awarded the Plaintiff the sum of N37, 000.00 claimed, plus N10, 000.00 as profits. He dismissed the claim against the 2nd Defendant. The 1st Defendant was dissatisfied with that judgment and appealed to the Court of Appeal on several grounds. In its judgment, the lower Court affirmed the award of N37, 000.00 to the Plaintiff but by a majority decision, it dismissed the claim for N10, 000.00 profits. There has been no appeal on this aspect of the judgment and I would therefore not express any opinion on it. However the first Defendant was dissatisfied with the judgment of the lower Court and has appealed further to this Court on the following three main grounds of appeal.

“1. that the learned trial judges misdirected themselves in law as to when a partnership is dissolved in line with the provision of section 33 (1)(b) of the partnership law of Lagos State.

(ii) IN THE ALTERNATIVE:

That the learned trial judges misdirected themselves in applying the provision of section 33(i)(b) of the partnership Law of Lagos State instead of section 45 which is more appropriate to the issue before the Court.

2. (iii) The learned judges erred in law and on facts of the case to have dismissed the Defendant/Appellant Claim that the Respondent is not entitled to recover N37,000.00 from him when the contract sum has not been collected.

3.(iv) The learned trial judges misdirected themselves on facts to have come to the conclusion that the Appellant has not proved that a case in which the contract sum yet to be paid was pending in Court.”

It is unnecessary to set out the particulars of the grounds of appeal because they are similar to the three issues formulated by the Appellants’ Counsel in his Brief of Argument. These issues are as follows:

“1 (a) The first issue for determination is whether learned trial judge and appellate judges were right in holding that Appellant has not proved sufficiently enough that Suit No.LD/800/77 which has to do with the balance payable for the sub-contract job for which the partners were involved was pending in Court.

(b) Whether if the lower courts had been satisfied that Suit LD/800/77 was in fact pending in Court, the decisions of the lower Courts as to payment of balance of N37, 000.00 to the Respondent would not have been the same.

2. The second issue for determination is as to whether from the evidence so far put before the lower court, it could be said that Appellant or Ferou (Nig.) Ltd. has received the balance payable in respect of the sub sum from Daas Piling & Construction (Nig.) Ltd.
3. The 3rd issue for determination is whether a partnership meant for a single venture or undertaking can for all purposes be held to have been finally terminated/dissolved on the completion of the single venture or undertaking without realisation of the money payable in respect of the single venture or undertaking.”

But in the Respondent’s reply he has set out only one issue for determination and that is:

“Whether the Courts below were correct in holding that the special contract between the Appellant and the Respondent having been executed, the Partnership has come to an end, and that the Respondent is entitled to have the balance of the advance he gave to the Appellant paid back to him.”

I consider that issue as formulated to be a tidy and correct assessment of the issues involved in this case.

After this Court has heard Mr. Akiyode in argument, it became quite apparent that the issues involved in this appeal turn entirely on the pleadings. It must be remembered that it is a cardinal principle of the Rules of Practice that parties are bound by their pleadings and evidence led on matters not pleaded goes to no issue. See National Investment & Property Company Ltd. v. Thompson Organisation Ltd. (1969) NMLR 99. Emegokwe v. Okadigbo (1973) 4 S.C.113 Abosede Williams v. O. Williams & Anor. (1974) 3 S.C.83

Furthermore, any fact admitted in a party’s pleadings, need not be proved by the other party. See section 74 of the Evidence Act Chief Okparaeke & Ors. v. O. Egbuonu & ors. (1941) 7 WACA 53.

Now, let us take a quick look at the pleadings in this case.

In the amended statement of claim, the Plaintiff pleaded in paragraph 13 as follows:

“At that stage the Plaintiff suddenly realised how easy it would be for the first Defendant to deny the whole transaction as there was nothing in writing between the first Defendant and himself. The Plaintiff then demanded a written acknowledgement not only of the receipt of the said sum of N50,000.00 but also a statement to the effect that the profits of the contract were agreed to be shared between him and the 1st Defendant.”

In paragraph 4 of the Amended Statement of Defence the Defence replied as follows:

“The Defendants deny the first sentence of paragraph 13 of the statement of claim but admit the second statement thereof.”

In coming to a decision whether or not the contract was between the Plaintiff and the 1st Defendant or the Plaintiff and the 2nd Defendant, the learned trial Judge held that the admission contained in paragraph 4 of the amended statement of Defence concludes the issue that ‘the transaction was in fact one between the Plaintiff and the 1st Defendant.

I agree with the learned Judge in this respect of course, there were other facts which tended to confirm that the business deal was between the Plaintiff and the 1st Defendant. For instance, the Judge found as a fact that the parties “dealt with each other on friendly basis” which arose from the business relationship they had built up when the 1st Defendant was in the North. That observation is quite correct: in consequence of that friendship, no receipts were issued for the N50,000.00 deposited by the Plaintiff – although it was paid in bits. Even when the Plaintiff collected part of this amount no receipt was demanded from the Plaintiff by the 2nd Defendant – Company. In fact, apart from exhibit B, there was no other document to support the fact that any transaction existed between the Plaintiff and the 2nd Defendant. This is strange especially when it is remembered that the 2nd Defendant is a limited liability company.

The Court of Appeal affirmed the finding of fact made by the trial Court and I see no reason to upset those findings. Another point which arose on the pleadings is the denial of liability by both Defendants. I had already referred to paragraph 5 where the second Defendant pleaded that they were strangers to the contract.

In the same Amended Statement of Defence the first Defendant in paragraph 8 made the same plea: he said as follows:

“At all material times the Plaintiff knew that the first Defendant acted only as a Managing Director and agent of the second Defendant. The Defendants will therefore contend on the trial of this suit that the first Defendant is personally a stranger to the transaction which is the cause of this action.”

Now the question that one would ask is -Who then was liable if both Defendants were “strangers” on the contract This, it must be admitted was an issue of fact on the evidence before the trial Court.

It seems to me that in trying to evade liability, both Defendants adopted a shifty stance on the pleadings. The 1st Defendant says that he was a stranger to the contract and was merely acting as agent to the 2nd Defendant. Because of this stand which the first Defendant took on the pleadings, he denied himself the opportunity of stating what the terms of the oral agreement were between him and the Plaintiff. In consequence, the Plaintiff’s evidence on the point remained uncontradicted.

The 2nd Defendant took the same stand and contradicted itself when it went on to state that the partnership agreement was between the Plaintiff and the Company. It will be seen that by denying obvious facts, the Defendants have presented a confused case, and consequently cast a lot doubt on their testimony.

Again, it must be stated that the issue as to which of the two Defendants had entered into a partnership agreement with the Plaintiff remained an issue of fact, especially since the agreement was oral. The trial Judge accepted the version presented by the Plaintiff and the Court of Appeal confirmed that finding. In this Court, the Appellant’s Counsel was unable to convince us that that finding was wrong and I would uphold it.

On the 1st issue formulated by the Appellant, he has asked this Court to hold that the Appellant had successfully proved that the 2nd Defendant had taken Court action against Daas Construction Company Limited (in Suit No. LD/800/77) in respect of the amount due to the Plaintiff on the partnership agreement for the supply of sand and gravels to Daas Construction Company Ltd. Now two points are worthy of consideration on this issue.

The first is that, in respect of the suit referred to, (Suit No.LD/800/77) the Defendants pleaded facts relating to it in paragraphs 10-23 of the Statement of Defence:

(a) In paragraph 11, they made reference to several local purchase orders etc., relating to the transactions but they did not tender any of them in the proceedings.

(b) In paragraphs 16-21, they referred to different amounts which had been paid on the contract and the balance which remained outstanding, but they did not tender any letter, voucher or other documents where these payments were reflected.

(c) In paragraph 22, they pleaded the fact that they had sued Daas Piling Construction Company Limited in Suit No.LD/800/77 For non-payment of the amount due to them and in respect of which the amount claimed by the Plaintiff formed a part.

Again, regrettably, the Defendants did not tender any copy of the writ of summons, the pleadings or any orders of Court made in the suit or other relevant document relating to that case.

(d) Lastly, they pleaded in paragraph 23 that the Defendant in the said suit (LD/800/77) i.e. Daas Construction Ltd., had written a letter dated 6/10/76 admitting their indebtedness in the sum of N81,711.50 as claimed on the writ. Again that letter was not tendered in evidence. In consequence of all these omissions which I have highlighted, there was nothing concrete to confirm that the Defendants had in fact taken action against Daas Ltd. or that the action was pending. Inevitably, the trial Judge came to the conclusion that the Defendants had not satisfactorily proved that there was any case pending in Court against Daas Construction Ltd. The Court of Appeal was of the same opinion, and I see no reason to differ from those views.

I now come to the second point on this issue and that is to consider what if any, is the relevance of proving that Daas Construction Company Limited is indebted to Ferou Nigeria Ltd.

The trial Judge had already held that the Plaintiff had no business transaction with Ferou Nigeria Ltd., this means that he had no money to collect from that company In those circumstances, it is of little consequence whether or not Daas Construction Company Ltd. was or was not indebted to Ferou Company Ltd.

The position might have been different if, for instance, the Defendants had admitted the plaintiff’s claim and were pleading for time to pay the judgment debt.

On the 2nd and 3rd issues, the Appellant has asked this Court to decide whether the Respondent could claim back the amount invested when the sum due on the sub-contract had not been recovered.

In deciding the point, the lower Courts held that sec. 33(1) of the Partner Law of Lagos State applied to the facts of the case. That section states as follows:

“33(1) (b) – Subject to any agreement between the parties, a partnership is dissolved if entered into for a single venture or undertaking by the termination of the venture or undertaking.”

In the High Court, the learned trial Judge held that the partnership was at an end when the business for which it was formed had been concluded, and the Plaintiff was therefore entitled to have his deposit back. The Court of Appeal agreed with that conclusion.

In his brief of argument, Mr. Akiyode argued first, that the contract should not be regarded as concluded until the moneys due on it have been collected. Secondly, Counsel contended that in a partnership, both parties should be ready to share the profits as well as any loss arising from the transaction. In this respect, Counsel referred the Court to sec.45 of the Partnership Law which he submitted, was more appropriate to this case than sec 31.

For the record, it is enough to state that section 45 merely provides that, subject to the agreement between the parties, the assets and liabilities of a partnership shall, on dissolution, be shared in the various proportions set out in the section.

Mr. Akiyode has presented his arguments on issues 2 and 3 to us in a very attractive form, but he seems to have overlooked the essential words in sections 33 and 45 of the Partnership Law. Both sections state quite clearly that the provisions of the Law shall be “subject to any agreement between the parties.”

This means that the overriding consideration in any partnership is the agreement between the parties. In the instant case, there was an oral agreement between the parties; details of that agreement were given in evidence by the Plaintiff when he said:

“He (i.e. 1st Defendant) further assured me that he was being paid monthly for the contract and that at the end of each month he would share the profit with me until the completion of the job when the N50, 000.00 would be refunded to me.”(ltalics mine.)

The 1st Defendant did not give any evidence to rebut the Plaintiff’s assertion. His defence was and has always been, that the business agreement was made between the Plaintiff and the 2nd Defendant (Ferou Nig. Ltd.), He, the 1st Defendant merely acted as agent of the 2nd Defendant.

As previously stated, the trial Court rejected that story and accepted the Plaintiff’s version of the whole incident.

This means that the binding contract between the parties is that the 1st Defendant shall refund the Plaintiff’s contribution of N50, 000.00 on completion of the business transaction.

The lower Courts gave effect to those terms of the agreement and I hold that they were right to do so.

In the result, the appeal fails on all grounds and it is dismissed. The judgment of the High Court of Lagos as amended by that of the Court of Appeal, is hereby confirmed. It is ordered that the 1st Defendant/Appellant shall pay to the Plaintiff/Respondent the sum of N37,000.00 together with costs assessed at N500.00.

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SC.106/1986