Tika-tore Press Limited Vs Ajibade Abina & Ors (1973)

LawGlobal-Hub Lead Judgment Report

FATAYI-WILLIAMS, J.S.C.

In Suit No. LD/546/68 commenced in the Lagos High Court, the plaintiffs claimed against the defendants “the sum of 2,143pounds:6:11d being balance of monies due and payable by the estate of Monsuru Badaru Abina deceased in respect of the said deceased’s account with the plaintiff, which account the deceased maintained under the trade name of Olaosebikan Stores.”

Paragraphs 3-7 of the statement of claim filed in support of the claim read-

“3.The said Olaosebikan Stores in its business transactions with the plaintiff had an account with the plaintiff for goods supplied at its request on credit.

4. Before the death of the sole proprietor of the business (Mr. Monsuru Badaru Abina) the said account had the sum of 4,931pounds:18:1d due and payable as the value of goods supplied on credit. Several demands were made but the debt was not settled, whereupon the company then instructed its solicitor to investigate and find out the person or persons trading under the name and style of Olaosebikan Stores and to institute an action to recover the debt. The enquiry revealed that the managing Director of the Plaintiff Company at the time (namely Mr. Monsuru Badaru Abina) was the sole proprietor.
5. When the sole proprietor was confronted with the proof, namely a certified true copy of the registration of the business under the Registration of Business Names Ordinance, the said Monsuru Badaru Abina, deceased, asked the Plaintiff to be lenient and promised to liquidate the debt by instalments and the plaintiff agreed.
6. Upon the death of the sole proprietor of Olaosebikan Stores in 1967, the defendants were granted Letters of Administration of his estate by the Probate Division of the High Court of Lagos on the 29th day of November, 1967.
7. At the time of his death the said Monsuru Badaru Abina had paid some instalments leaving a balance of 2,465 pounds unsettled.”

After explaining how the deceased was given credit for the sum of 321pounds:13:1d due to him as the Managing Director of the plaintiffs at his death leaving the balance of 2,143pounds:6:11d now being claimed, the plaintiffs averred further in paragraphs 10 and 11 of their statement of claim as follows:

“10. When written demands were served on the defendants, the defendants by their solicitor’s letter dated 4th March, 1968 confirmed that they knew about the debt but expressed surprise that the matter was being re-opened because they were under the impression that the debt had been written off.

11. The plaintiff avers that the debt was not written off. The company permitted the deceased to liquidate the debt by instalments but at no time was the debt intended to be written off in the manner suggested in the defendants’ said letter.”

In their statement of defence, the defendants admitted the averments in paragraphs 3, 6 and 10 of the statement of claim but categorically denied those in paragraphs 5, 7, and 11. They then explained how the debt was incurred as follows.

Sometime in 1965, the plaintiff Company ordered various consignments of goods valued at about 10,000pounds for several of its female customers. When these goods arrived, they did not meet the market and the said customers failed to collect them. After the goods had been lying in the plaintiff company’s stores unclaimed for some time they were offered to Olaosebikan Stores to clear, sell and pay the plaintiff company as and when they were sold. The offer was accepted. All the directors of the plaintiff company as well as its secretary were then aware of the late Mr. M.B. Abina’s connection with the said Olaosebikan Stores. As the goods did not meet the local market it became increasingly difficult for the said Olaosebikan Stores to sell the goods and consequently by 1965 part of the goods to the value of about 3,645pounds had not been sold and had deteriorated in condition with the result that their value had depreciated considerably. Consequently, as a result of representations made to them by Abina, the Board of Directors of the plaintiff company at a meting held on 18th March, 1965, decided that if Abina could pay a total sum of 1,200pounds by the 30th September, 1965, the book balance of 2,465pounds would be waived and written off as bad debt. This decision was communicated to Abina in a letter dated 19th March, 1965. Later, following further representations to the Board by Abina, the date for the payment of the sum of 1,200pounds was further extended to 31st December, 1965. What transpired thereafter was then explained in paragraphs 13 to 15 of the statement of defence as follows:

“13. When the late M.B. Abina paid the agreed sum of 1,200pounds by the 16th December, 1965, the plaintiff then waived and wrote off the difference of 2,465pounds from their books.

15. The fact that the said amount of 2,465pounds was written off by the plaintiff company was subsequently reflected in its Balance Sheet for the year ending 30th April, 1965.
16. The defendants will contend at the trial that in view of the foregoing the plaintiff company is estopped from claiming the said sum of 2,465pounds.”

The plaintiff company later filed a reply to the above averments in which they further averred in paragraphs 4 and 5 as follows:-

“4. The plaintiff deny paragraphs 11 and 13 of the statement of defence and say further that there is no record to show that the sum of 2,465pounds has been waived, nor does the company have in its possession copy of the alleged letter dated 17th of September, 1965.

5. The plaintiff will contend that the matter alleged in paragraphs 11 to 14 of the statement of defence is no answer in law to the plaintiff’s claim in this action.”

At the hearing, one James Johnson (1st P1/W) the Secretary and Accountant of the plaintiff company testified for the plaintiff company and produced the company’s audited account for the year which ended on 30th April, 1965, (Ex ‘N’) which contained the following extract from the letter written by the Auditors to the Board of the plaintiff company:-

“Bad Debt 2,465pounds: 7d

This amount was formerly owed by the defunct Olaosebikan Stores which was written off on the instruction of the Board of Directors.”