HENRY STEPHENS ENG. CO. LTD. V. COMPLETE HOME ENT. NIG. LTD.

HENRY STEPHENS ENG. CO. LTD. V. COMPLETE HOME ENT. NIG. LTD.

HENRY STEPHENS ENGINEERING CO. LTD.
V
COMPLETE HOME ENTERPRISES NIG. LTD.
SUPREME COURT OF NIGERIA
OBASEKI, J.S.C.
ESO, J.S.C.
NNAMANI, J.S.C.
UWAIS, J.S.C.
KAZEEM, J.S.C.
16th January, 1987.
SUIT NO. SC 9611985
1987 NSCC 21
Contract - Sale of goods - Sale by description - Whether a product was sold under a trade name - Implied
condition as to Merchantable quality - Sale of goods Law, Laws of Lagos State 197,1; Cap. 125 ss. 15(b),
53(1)(b), 53(2) and 54.
Foreign Law - Effect of wrong reliance on foreign law in judgment - Relief or remedy properly claimed - Sale of
Goods Act 1893, section 14(2), 14(3), 53 and 54 - Appeal dismissed.
Chief F. A. Akinbisehin (with M.A. Olukoya) for the Appellants.
Chief Debo S.A.N. (with Miss T. Egbe, A. Akpvoi and Miss M. Esedebe) for the
Respondents.
UWAIS, J.S.C. (Delivering the Lead Judgment): In this case both the appellant and
the respondent have appealed from the decision of the Court of Appeal. Their
appeals were dismissed on 20th October, 1986 with no order as to costs and we
reserved out reasons for the dismissals till today. I now give my reasons.
The appellant was the plaintiff in the High court of Lagos State sitting at Ikeja, while
the respondent was the defendant to the action which was brought by the plaintiff on
the 19th April, 1977. I will for ease of reference, henceforth refer to the appellant as
plaintiff and the respondent as defendant. The plaintiff?s claim was as follows:-
The plaintiff?s claim against the Defendant is for the sum of N28,082.65 being
balance of costs of various Machines sold and delivered to the Defendant at its own
request by the plaintiff in Lagos during this period 31st January, 1975 to 22nd
August, 1975 as per the invoices Nos. 4411 of 31/1/75; 4658 of 19/4/75, 4765 of
21/5/75, 4809 of 5/6/75, 5351 of 9/7/75 and debit note No. 365 of 22/8/75
respectively. The plaintiff also claims interest on the said balance at 10% per annum
from March, 1976 until judgment is given and thereafter at 5°% per annum until
payment of judgment debt and costs.
The defendant has refused and or neglected to pay the said sum of N28,082.65
despite repeated demands.”
Pleadings, which were ordered by the trial Court, were filed and served. The
defendant made the following counterclaim in its amended statement of defence.
“11. Whereof the Defendants Counterclaim:-
(1) For the sum of Fifty four thousand, six hundred and seventy six Naira, twenty five
kobo (N54,676.25) as special damages;
(2) General damages at the rate of N2,000.00 per month from the 9th of July, 1975
till date of judgment or replacement by new crane;
(3) Replacement of the faulty crane by a new one or in the alternative re-fund of
N66,443.33 already paid to the plaintiffs by the defendants for the faulty crane”.
It emerged from the pleadings and the evidence adduced at the trial that the plaintiff
supplied to the defendants at Port Harcourt all the machineries which were ordered
by the defendant from the plaintiff. Amongst the machineries was a hydraulic crane
described as „T.788 Koehring Crane” whose net selling price was N93,100.00. This
crane was the bone of contention. Of the net price the defend-ant paid the sum of
N66,443.33 to the plaintiff. It was the balance of the price and some charges that
were being claimed by the plaintiff.
As the crane developed trouble soon after its delivery and throughout the guarantee
period, the defendant complained that it was not suitable for the purpose for which it
was bought and was not therefore of merchantable quality.
The learned trial Judge relying on the evidence before him and the provisions of
section 14 subsections (2) and (3) of the English Sale of Goods Act, 1893 found that
the crane was not merchantable and made order in the following term:-
“On the counter-claim I make the following awards in favour of the defendants and I
so order:
(i) N54,676.25 being special damages for the cost of mitigation of liability.
(it) N2000.00 per month from the 20th day of September, 1976 until today being loss
of profit.
(iii)That a person agreed to by both shall be appointed to ascertain the value of the
Koehring T.788 Crane now lying in the Defendants Company?s site at Port Harcourt
and the difference between the amount so valued and the cost price which is
N95,100.00 shall be the normal damages awarded. On this exercise, both parties,
should bear the costs.”
From this decision both the plaintiff and the defendant appealed to the Court of
Appeal. In his judgment (with which Ademola and Nnaemeka-Agu, JJ.C.A.
concurred) Nasir P. observed as follows:-
“I have taken the pains to reproduce the pleadings in some details in order to
emphasise that the area of disagreement between the parties was very narrow. It
was limited to the issue of the crane. If the crane is accepted as being of
merchantable quality and fit for the purpose for which it was bought, that would have
proved the case for the Appellants (Plaintiff) and would have sealed the fate of the
Respondents (Defendant) in respect of the counterclaim. „1 am in agreement with
the learned trial Judge and with learned counsel that the solution to this problem is to
be found in section 14 of the Sale of Goods Act,
1893.................................................................................................... ........
„I need only to add that section 54 of the Sales of Goods Act, 1893 adds that the
buyer may, where appropriate, claim special damages.......?
„In the present case the learned trial Judge had found that the crane was not suitable
for the work for which it was purchased in the sense that it had broken down many
times. There is hardly any challenge to this finding of fact. I accept if:? (Italics mine)
The learned President quoted and provisions of section 14 subsections (2) and (3) of
the Sale of Goods Act, 1893 and alluded to sections 53 and 54 thereof be-fore
holding that the defendant?s counter-claim was well founded. He then considered the
defendant?s claim for loss of profit and the evidence of the only witness called in that
respect by the defendant and concluded:-
“I therefore find is difficult in the light of the evidence on the Record of Appeal to
agree with the learned trial Judge that the Respondents are entitled to the award of
N2,000.00 per month as loss of profit. This award is therefore quashed.?
Finally, the learned President varied, to some extent, the order made by the learned
trial Judge in the following terms:
„To sum up my decision in this appeal I make the following orders:-
(1) The counter-appeal by the Respondent (defendant) succeeds as follows:-(a) The
sum of N54,676.25 awarded to the Respondents (defendant) by the learned trial
Judge is affirmed.
(b) The Respondents (defendant) are entitled to the refund of N66,443.33 being
payments made to the Appellants (Plaintiff) in respect of the crane and I so order.
(c) The general damages of N2,000.00 per month from the 9th July, 1975 to date is
hereby set aside.
I am in agreement with the learned trial Judge that the parties should bear their costs
in the trial court. They should also bear their costs in this Court.?
It is from this decision that both the plaintiff and the defendant have appealed to this
Court. The plaintiff filed 10 grounds of appeal which are lengthy. I deem it necessary
to quote, for the purpose of clarity, only grounds 1, 7 and 8, which deal with
substantial questions of law, and to avoid the other grounds, which raise questions of
fact or mixed law and tact, since there have been concurrent findings of the facts in
the trial Court and the Court of Appeal; and no special circumstances have been
shown by the plaintiff?s counsel to enable us say that the findings were untenable.
The three grounds read:
“1. The learned trial Judges of the Court of Appeal erred in law and misdirected
themselves on the facts when they held that the applicable law is section 143(3) of
the Sale of Goods Act, 1893 and that the Appellant (plaintiff) was in breach of the
implied condition that the goods are fit for the purpose that they were bought within
the meaning of section 14(3) of the said Act.
Particulars
(1) The learned Judges failed to consider the effect and applicability of the Sales of
Goods Law Chapter 125 Laws of Lagos State of Nigeria, 1973 as opposed to the
Sales of Goods Act, 1893 which is a statute of general application.
(ii) Sections 2(1) and (2) of the Law (Miscellaneous Provisions) Law Chapter 65,
Laws of Lagos State limits the extent to which the law of England shall be in force
and specifically restricts its application where a state Enactment covers the same
point.
(ii) Under the Sale of Goods Law there Is no implied condition of fitness for any
particular purpose if goods are sold under a trade name.
(iv)There was uncontroverted evidence supporting the pleadings that the crane was
sold under a trade name”.
“7. The award of the sum of N66,443,33 to the Respondents (defendant) by the
learned trial Judge proceeded upon the application of an entirely wrong principle of
law in regard to the assessment of damages (if any) and/or constituted and
erroneous estimate of the damages (if any) to which the Respondents (defendant)
were entitled in that it was without any foundation and/or excessive.
Particulars
(1) Having found that the Respondents (defendant) had led evidence in support of a
claim for damages for breach of warranty and not in support of any case setting up
the breach of warranty in diminution or extinction of the price, the learned appellate
Judges failed to appreciate that it was no longer open to them to find as they did that
a refusal to order a refund of the purchase price will make it unfair to leave the
Respondents (defendant) with defective crane.
(ii) The proper measure of damage for breach of warranty of quality is prima facie the
difference between the value of the goods at the time delivery to the buyer and the
value they would have had if they had answered to the warranty. A claim can also be
sustained for consequential losses.
(iii)The order far the refund of the sum of N66,443.33 being part payment of the
purchase prices was not based on the consequential loss to the Respondents
(defendant).
(iv)There was no basis whatsoever for the order for a refund of the purchase price.
(v) The Respondents (defendant) is (sic) not entitled to claim both for his (sic) loss of
profits as he (sic) must choose one of the two.
(vi)The instant award is tantamount to double compensation for the Respondents
(defendant).
“8. The learned Judges (sic) of the Court of Appeal erred in law in affirming the
award by the learned trial Judge of the sum of N54,676.25 as special damages in
mitigation of the Respondents? (defendant?s) liability under the contract.
Particulars
(i) The loss quantified special damages occurred outside the period of warranty
Exhibit J.
(ii) The responsibility for repairs to the crane outside the period of the warranty was
clearly that of the Respondents.
(iii)The evidence adduced does not support the claim Exhibits L3, L4, L5, L6 and L7
are not for costs of hire.
(iv) Exhibit L3 was for repairs of Bantam Mobile Crane and not for Khoehring T.788
crane.
(v) The Khoehring T.788 crane was only one of items of machinery purchased from
the Appellant (plaintiff).
(vi)The judgment of the learned Judge (sic) of Appeal Court is against the weight of
evidence.
-
(vii)1here was no evidence of complaint in all other items purchased in the transaction”.
It is to be observed from the foregoing that although the grounds of appeal allege
errors in law some of the particulars of the grounds raise pure issues of fact on which
both the lower courts had made concurrent findings.
The plaintiff had filed a brief of argument in which the issues for determination in the
appeal were set-out as follows:-
(2) (3)
Whether the Court of Appeal was right in dismissing the Appellants (plaintiff) appeal
and confirming the award of N54,676.25 made to the Respondents (defendant)
Ordering a refund of the deposit of N66,443.33 made by the Defendants. Setting
aside the award of N28,082.65 with interest at 10% from 1976 until date of judgment
and 5% thereafter until payment of judgment debt.
(4) Whether the Crane Khoehring (sic) T.788 was sold under a trade name, If the
answer is in the affirmative, and which should be, there would be no implied
condition as to its fitness.
(5) Whether Khoehring (sic) T.788 (Crane) was of merchantable quality.
(6) Whether there was sufficient and credible evidence to support the delivery of
Exhibit J i.e. the warranty.
(7) Whether the Respondents should keep the Khoehring (sic) T.788 (crane) get the
refund of the amount already paid and also get damages under the two heads:?
Again it is to be noted that none of the issues formulated by the plaintiff relate to
ground 1 of appeal which deals with the application of the Sale of Goods Law, Cap.
125 of the Laws of Lagos State, 1973. The oral argument of learned counsel for the
plaintiff made no reference also to the Law.
The question whether or not the crane was of merchantable quality is a question of
fact. Both the trial court and the Court of Appeal had found that the crane was not of
merchantable quality. The plaintiff has not shown sufficient reason why this Court
should interfere with the concurrent findings. It follows therefore that the crane was
not of merchantable quality. See section 15(b) of the Sale of Goods Law, Cap. 125
which provides:-
“15. Subject to the provisions of this Law and of any written law in that behalf there is
no implied warranty or condition as to the quality or fitness for any particular purpose
of goods supplied under a contract of sale, except as follows:-
(b) Where the goods are bought by description from a seller who deals in goods of
that description (whether he be the manufacturer or not), there is implied conditions
that the goods shall be of merchantable quality......:?
And where there is breach of condition or warranty the provisions of sections 53 and
54 of the Sale of Goods Law, Cap. 125 will apply. These sections read:-
“53(1) Where there is a breach of warranty by the seller or where the buyer elects or
is compelled to treat any breach of a Condition on the part of the seller as breach of
warranty, the buyer is not by reason only of such breach of warranty entitled to reject
the goods, but he may:
(a)................................................................................................. ....
(b) maintain an action against the seller for damages for the breach of warranty.
(2) The measure of damages for breach of warranty is the estimated loss directly
and naturally resulting in the ordinary cause of events from the breach of warranty.
(3)................................................................................................. .........
(4)................................................................................................. ........
54. Nothing in this Law shall affect the right of the buyer ............. to recover interest
or special damages in any case where bylaw interest or special dam-ages may be
recoverable or to recover money paid where the consideration for the payment of it
has failed.
Thus although both the lower courts erroneously relied on the provisions of the
English Sale of Goods Act, 1893 to give judgment for the defendant, the judgment
stands valid since it is in accordance with the above provisions of the Sale of Goods
Law, Cap. 125. In Joseph Falobi v. Elizabeth Falobi, (1976) N.M.L.R. 169 at p.177;
(1976) 9 S.C.1 at p.13; this court (per Fatal Williams, J.S.C., as he then was) held as
follows:-
„The next question is this. Can a court make an order under the Infants Law
notwithstanding the fact that the application to it was made under another statute
(i.e. English Statute) which is clearly inapplicable? In our view, if a relief or remedy is
provided for by any written law (or by common law or in equity for that matter), that
relief or remedy, if properly claimed by the partly seeking it, cannot be denied to the
applicant simply because he has applied for it under the wrong law. To do so would
,
be patently unjust.? (Italics mine).
The circumstance in this case is not any different from the one in Falobi?s case. The
awards made to the defendant by the Court of Appeal concerned the refund of the
part-price paid by the defendant for the crane and the special damages suffered by
the defendant in repairing the Khoehring crane and hiring another crane in order to
execute Its contract with a third party. I am therefore satisfied that the plaintiff?s
appeal has no merit and it deserved to be dismissed.
With regard to the cross-appeal brought by the defendant only one ground was filed.
It reads:-
„The Court of Appeal erred in law in quashing the order for the payment of N2,000.00
per month by the Respondent (plaintiff) from 20th September, 1976 up to the date of
judgment when the evidence on which the order was made, was unchallenged and
made by an expert purely on the ground that he was not in the Company at the time
of the transaction.
Particulars
uncorroborated evidence of an expert on which there is no cross-examination was
established to be good in the case of Adel Boshalli v. Allied Commercial Exporters
Limited, (1961) All N.L.R. (Part 4) 917 and followed by the Supreme Court in
S.C.O.A. Motors v. Ibadan and Sawmills Timbers Exports Ltd., de-livered on 18th
March, 1971:?
This ground was abandoned by Chief Akande, learned Senior Advocate, for the
defendant, in the course of his oral argument. Hence the cross-appeal was
dismissed.
It was for the foregoing reasons that I agreed on 20th October, 1986 that both the
plaintiff?s appeal and the cross-appeal by the defendant should be dismissed with no
order as to costs, as each party was to bear its costs. And I also endorsed the order
that the defendant shall release the Khoehring T.788 crane to the plain-tiff.
OBASEKI, J.S.C.: There is an appeal and a cross- appeal in this matter from the
decision of the Court of Appeal to this Court. I dismissed both the appeal and crossappeal
on the 20th day of October, 1986 after reading the briefs filed by the parties
and hearing their counsel in oral argument.
This matter comes for consideration under the Sale of Goods Law. The appellant
sold and delivered some machinery including a crane ?T.788 Khoehring Crane”
valued N93,100.00 to the respondent. The respondent paid some amount on account
before and after delivery and the appellant, finding that the respondent was
unwilling to pay the balance, commenced proceedings in the High Court to re-cover
the balance. The respondent after taking delivery of the crane discovered that it was
faulty and was unfit for the purpose for which it was bought. The respondent then
complained to the appellant and requested the fault to be corrected.
The respondent tried in vain to correct the fault. On being served with the writ of
summons, the respondent counter-claimed for:
(1) N54,676,25 special damages;
(2) N2,000.00 per month general damages;
(3) Replacement of the faulty crane by a new one or in the alternative refund of
N66,443.33 already paid to the plaintiffs by the defendants for the crane which was
later found faulty.
The questions for determination in the appeal before this Court were:
(1) whether Khoehring (sic) T.788 (crane) was of merchantable quality;
(2) whether the crane Khoehring (sic) T.788 was sold under a trade name; if the
answer is in the affirmative, and which should be, there would be no implied
condition as to its fitness;
(3) whether the Court of Appeal was right in dismissing the appellant?s appeal and
confirming the award of N54,676.25 made to the respondent;
(4) whether the Court of Appeal was right in ordering a refund of the deposit of
N66,443.33 made by the defendants and setting aside the award of N28,082.65 with
interest at the rate of 10% from 1976 until date of judgment and 5% thereafter until
payment of the judgment debt.
(5) whether the respondent should keep the Khoehring (sic) T.788 (crane) get the
refund of the amount already paid and also get damages under the two heads.
The Court of Appeal based its decision on the pre 1900 English Sales of Goods Law.
This Is no longer applicable as Lagos State has its own Sales of Goods Law Cap.
125 Laws of Lagos State 1973 in force. It is not permissible to apply foreign law
which has been supplanted by local law In any State in Nigeria.
These issues have received adequate treatment in the Reasons for Judgment just
delivered by my learned brother, Uwais, J.S.C. the draft of which I had the advantage
of reading in advance. I agree with them and I adopt them and incorporate
them herein.
It was for those reasons that I dismissed the appeal. See sections 15(b), 53(1)(b),
53(2) and 54 Sales of Goods Law Cap. 125 Vol. Law of Lagos State 1973.
ESO, J.S.C.: I have had a preview of the Reasons given by my learned brother
Uwais, J.S.C. for dismissing this appeal. I agree with them. 1 adopt them.
NNAMANI, J.S.C.: On the 20th October, 1986, I dismissed both the appeal and
cross-appeal in this matter with no order as to costs. I also ordered that the faulty
plaintiffs/appellants? crane be released to ft. Indicated that would give my reasons for
this judgment today. I now give my reasons.
I have had the advantage of reading in draft the reasons for judgment just de-livered
by my learned brother, Uwais, J.S.C. In it he has dealt with all the issues canvassed
before us in great detail. As the reasons he has given for his judgment are the same
as mine, I agree with and adopt the said reasons. Nothing which the appellant has
put before this Court has displaced the finding of the High Court and the Court of
Appeal that the Crane sold by the appellant to the respondent was not of
merchantable quality. That seems to me to be the Centre of the case. The orders for
refund of the purchase price partly paid, as well as special damages in respect of
loss of profit and cost of repairs had to follow. This Court rightly re-fused to be drawn
into a fresh examination of the bills rendered by the respondent since there were
already concurrent findings on them by the two lower courts.
The cross-appeal was rightly and wisely abandoned by the learned Senior Advocate
appearing for the respondent.
KAZEEM, J.S.C.: I have had the privilege of reading the draft of the Reasons for
Judgment just delivered by my learned brother Uwais, J.S.C. and I am satisfied that
it conveys the reasons why both the appeal and the cross-appeal were dismissed by
this Court on 20th October, 1986. I therefore have nothing more to add.
Consequently, I also endorse the Order that the Respondents should release the
defective Khoehring Crane No. T.788 to the Appellants.
Appeal dismissed.
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