3PLR – NDIWE V. SHINGLETON & CO. LTD
POLICY, PRACTICE AND PUBLISHING, 3PLR, LAW REPORTS
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NDIWE
V.
SHINGLETON & CO. LTD
COURT OF APPEAL
(ENUGU DIVISION)
MONDAY, 6TH JULY. 1992
SUIT NO. CA/E/140/90
3PLR/1992/68 (CA)
OTHER CITATIONS
2 NWLR (Pt. 274) 242.
BEFORE THEIR LORDSHIPS
FRANCIS OLISA AWOGU, J.C.A. (Presided)
GEORGE ADESOLA OGUNTADE, J.C.A. (Read the Leading Judgment)
SAMSON ODEMWINGIE UWAIFO, J.C.A.
BETWEEN
VERONICA NDIWE (Substituted for Fred Ndiwe who Carried on Trade as Ndiwe & Co
AND
SHINGLETON AND COMPANY LIMITED (Suing By their Attorney Reuben Ono)
REPRESENTATION
- Ofodile – for the Appellant
J.O. Ernest Egbuna – for the Respondent
MAIN ISSUES
BILLS OF EXCHANGE- Exchange Control Act, 1962 -Allegation of contravention of’- Ho”, proved.
BILLS OF EXCHANGE – Goods exported to Nigeria from England – Payment for goods by a Bill of Exchange – Whether illegal.
CONTRACT – “Ex facie illegality,” of contract – Meaning of.
CONTRACT – Illegality of cone act – Burden of proof of – Ham, discharged. COURT – Judge – Role and duty of
WORDS AND PHRASES – “Ex facie illegality” of contract – Meaning of
MAIN JUDGEMENT
OGUNTADE, J.C.A. (Delivering the Leading Judgment):
The respondent in this appeal was the plaintiff before the Onitsha High Court where he claimed against Banister F. Ndiwe (now deceased) the following relict’s:
“1. `Payment of the total sum of N32,673.85 as follows:
(a) Payment of the sum of £25,341.04 being outstanding its equivalent in naira and kobo being N32,113.85 and (b) N560.00 Bank interest and collection charges and protest fees and expenses.
- An order of the court on the defendant to hand over to the plaintiffs:
(a) The Customs Bill of Entry lot the goods comprised in Bill of Exchange No.5308.
(b) The attested invoice for the said goods (4 copies).
(e) Current Tax Clearance Certificate of defendant.
(d) Copy defendants Insurance Certificate tot the said consignment.
(e) A set of Nigerian Central Bank Form duly completed, signed and stamped by the defendant.
- Interest on the said debt from 19-12-78 till date of judgntentat 1517r per annum.
The parties later filed and exchanged pleadings after which the Suit was tried by Onwuamaegbu J. The trial Judge on 28th September, 1987 delivered judgment in the matter. He granted all the claims made by the plaintiff.
The defendant was dissatisfied with the judgment of the lower court. On October 2, 1987, he filed a notice of appeal against the said judgment. In all he raised eight grounds of appeal.
After the appeal was filed in this court, the defendant before the lower court who brought the appeal was reported to have died on September 12, 1989. His widow who applied to be substituted for the deceased appellant was accordingly substituted as the appellant by this court. The result is that the present appellant is Mrs. Veronica Ndiwe, the widow of Barrister F. Ndiwe (deceased).
In the appellant’s brief filed, the issues for determination in the appeal were stated to be the following:
“3.01 Whether the learned trial Judge was right in entering judgment for the plaintiff when there was no indication by the parties in their pleadings of compliance with the Exchange Control Act, 1962, which non-compliance makes the transaction in question ex-facie illegal.
3.02 Whether the learned trial Judge was right when he held that the plaintiff’s claim was based on the contract of affreightment when P. W.2 in his evidence said that the claim is based on exhibit I which is the Bill of Exchange’?
3.03 Can the judgment of the learned trial Judge be enforced when the documents which the defendant is required to return to the plaintiff are not in the custody of the defendant.
3.04 Did the learned trial Judge acted properly when he failed to consider and act on the uncontroverted and uncontradicted evidence of D.W. I as expert from the Central Bank.”
The respondent in its brief also set out the issues for determination. But I think that the issues as formulated by the appellant reflect fully the grounds of appeal filed and to which the issues raised are tied.
The case of the plaintiff before the lower court is that the plaintiff who carried on business as an Overseas Supply and Export Company was based in Bromley, Kent, England. The defendant, a solicitor based at Onitsha also carried on a trading and import business. On 26 October, 1978, the defendant placed an order for 50 9889 I 125ML Ozala Baby Mixture from the plaintiff as suppliers and financiers. The plaintiff raised a pro-forma invoice on ac & F contract with the defendant. The goods were shipped to the defendant in Nigeria on Bill of Lading No.676A dated 11th December, 1978. In payment for the said goods the plaintiff drew on the defendant Bill of Exchange No. 5308 dated 19 December, 1978 for £25,341.04. The defendant accepted the Bill of Exchange, the terms of which were (I) that the defendant would pay for the goods 30 days after acceptance and(2)that the Bill would carry interest at the rate of 15% per annum from 19 December, 1978. The defendant cleared the goods from the port of arrival in Nigeria – i.e. Port Harcourt. The Bill of Exchange drawn by the plaintiff and accepted by the defendant matured for payment on 22 January, 1979. The defendant dishonoured the Bill. The plaintiff protested the Bill. The defendant was subsequently sued for the reliefs earlier stated above.
The defendant in his statement of defence raised the following defences to plaintiff’s suit:
(a) That the suit of the plaintiff is invalid.
(b) That the power of attorney given by the plaintiff to its agent to pursue the recovery of the amount claimed cannot be relied upon for the purpose of this suit.
(c) That the goods were ordered by a company known as and called OZALA MEDICALS (NIGERIA) LIMITED of 12, Old Cemetery Road, Onitsha.
(d) That the defendant was not the consignee of the goods and had acted merely as a stake-holder for the plaintiff as consignor and Ozala Medicals (Nig) Ltd. as consignee or buyer.
The plaintiff filed a reply to the defendant’s statement of defence. It was averred that the goods were shipped to the defendant as buyer and that the defendant had ordered the goods in his own name.
At the trial, an employee of the Union Bank of Nig. Ltd., Onitsha, testified as P.W.1. He tendered as Exhibit I the Bill of Exchange accepted by the defendant. The Bill of Lading was tendered as Exhibit 2 and the Attested Invoice was tendered as Exhibit 3. P.W. I gave evidence that the Bill exhibit 1 was dishonoured. It was protested. But the defendant failed and or neglected to honour it. The Bill of Entry relative to the Bill of Exchange exhibit I was tendered as exhibit 4.
The next plaintiff’s witness was Mr, J.O. Ernest Egbuna, a Legal Practitioner who had a power of attorney from the plaintiff. He gave evidence that the goods were ordered by the defendant and that they were shipped to him by the plaintiff. He said further that when the Bill of Exchange accepted by the defendant matured, the defendant refused to honour it. The Bill was protested. The protest deed was tendered as exhibit 5. P.W.2 further listed a number of documents which the defendant was to have submitted but which he failed to submit to enable the Central Bank of Nigeria to make a remittance of the cost of the goods to the plaintiff in England.
At the close of the case for the plaintiff, the defendant who had contended in his pleading that he was not the buyer of the goods but that he had acted merely as a stake-holder did not testify. This was in spite of the fact that documents were before the court showing that the goods were ordered by the defendant and shipped to him. And that the defendant had accepted the Bill of Exchange drawn for theme payment due on the goods.
Rather, the defendant called D.W.1 an employee of the Central Bank of Nigeria who came to testify that exhibit I lacked the attributes of a valid Bill of Exchange.
Before I consider in greater depth the issues raised by this appeal, it is important to reproduce a letter exhibit I 0 written by the defendant. The letter reads: “FRED O. NDIWE Rej. No: ON. 18183
Manager, Messrs Ndiwe & Co.,
Barclays Bank of Nig. Ltd. 84, Outa Road
Bright Street, Onitsha. Onitsha.
27th March, 1988.
Sir,
Re: Shingleton & Co. Ltd. of Bromley, Kent. England.
Thank you for your memo No.IBC.79/1322 of the 16th of March, 1979 reminding us of the sum £25,341.04 now due and payable to the-abovementioned through A.P. Bank Limited their Bankers in England. It is not our intention to delay any payments due on documents which we have accepted on our honour. We definitely intend to pay but, as you are no doubt aware of, extenuating circumstances of the squeeze and fire have created for us very regretable set-backs.
We realize of course that the Federal Military Government, in good faith, turned on the squeeze to revitalise our National economy in order to contain inflation. The squeeze has however suffocated our business to the point that our customers, as you can see, have not been able to pay us as regularly as we ourselves have expected them to do. Besides, the fire which engulfed and gutted the Bridge Head Market, Fegge, has left us a miserable victim. Goods which we retrieved as the fire was raging got carted away by rogues just as we hustled to and fro the sheds to salvage the cartons. Most of these have however been recovered but have had to be kept by the police as exhibits until the cases concerning them are disposed of.
The setbacks are however, purely temporary. With due patience on the part of all concerned, the difficulties beclouding our hopes will soon be cleared. We are taking up without delay the question of extension of time within which payment must be paid and it is our hope that you will hear from the above-named company in due course giving you further instructions on this matter.
Enclosed herewith, however, please find TWO Quadruplicate copies of the Bills of Entry relative to our Acceptances of the said goods as follows: (a) CUSTOMS BILL OFENIRYSERIALNO.A.322678-Passed by Customs & Excise of Nigeria at APAPA on the 13th of February 1979. This refers to the Bill of Lading No.676A which invoiced to us 532 Cartons of 96 x 125ml. OZALA BABY MIXTURE -part-contained in Container No. ACEU 16084-3 for which we paid the sum of N3,389.12k as Customs Duty under receipt No.3391 (A.267/79) as shown thereon the said Bill of Entry. (b) CUSTOMS BILL OF ENTRY SERIAL NO. A.322688 – Also passed on the same 13th February, 1979 at APAPA by the said Customs & -Excise of Nigeria. This refers to Bill of Lading No.676B which invoiced only 76 cartons of 96 x 125ml of same OZALA BABY MIXTURE part-contained in the said container No. ACEU 160084-3. For this we paid only N511.08k as Customs Duty under receipt No.2786 (A.267/79) as shown on the said Bill of Entry. We hereby lodge with you these TWO Bills of Entry (Serial Number A. 322687 and 322688 as shown) just as we have received them from the Authorities at Lagos. We humbly request you to keep these documents in your custody for the purpose of obtaining in favour of our valuable funders mentioned above. the necessary approval of the Central Bank of Nigeria fur Foreign Exchange required for remitting to our said customers their money being the said sum of N25.341.04(Twenty five thousand, three hundred and forty-one pounds and four newpence only) in English sterling.
Kindly acknowledge receipt from us of the said Bills of Entry.
Thanking you.
Yours faithfully,
(Sgd) F.O. NDIWE NDIWE & CO.
Now in the appellant’s brief filed, it was argued that the plaintiff did not show that the permission of the Minister of Finance was obtained before the transaction was carried into effect. It was argued that the plaintiff contravened the Exchange Control Act. 1962, and that therefore the contract was illegal. The following cases were referred to in support of the appellant’s contention: Chief Harold Sodipo v. Lemininkainen OY & Anor. (No.2) (1986)1 NWLR (Pt. 15) 220; Ledge v. Royal Exchange Assurance Corporation (1900) 2 Q.B 214 al 220: Re An Arbitration Between Mahmoud And Ispahani (1921) All ER (Reprint) 217 at 222.
It was further argued that the statement of claim and evidence led did not disclose that the defendant was a registered chemist and druggist.
The first question I ask myself is – Was there any illegality appearing ex facie on the plaintiff’s statement of claim as framed? In Sodipo v. Lemminkainen Oy (No. 1) (1985) 2 NWLR (Pt.8) 547 Aniagolu J.S.C. explaining what “ex-facie illegality” means said:
“Running through all these cases is the one common feature that ex facie or from the facts adduced in evidence or from surrounding circumstances, the illegality of the transaction has become apparent. In such a case the trial Judge must act to enforce and protect the law of the land. But the illegality has to be apparent. The Judge is not to embark on an inquisitorial investigation where nothing illegal is apparent.”
Eso, J.S.C. in Chief Sodipo v. Lemminkainen OY & Anor. (No.]) (1986) 1 S.C. 197 at 217; (1986) I NWLR (Pt.15) 220 commenting on the meaning of “ex facie” illegality as given by Aniagolu, J.S.C. in the earlier case (supra) said:
“A Judge exists to determine disputes and to examine with due care and microscopic sense all matters before him in his pursuit of justice. He is not there to trap any party or to set in motion what parties have not brought before him. He is not the Grand Inquisitor envisaged by Dostoevsky in his Brothers Karamazou. He is a Judge governed by rules. In Lim Poh Chao v. Camden and Islington Area Health Authurih (1976) Q.B. 629 at p.649 Lord Scarman gave an imaginative picture of the Judge. He said:
“The judge, however wise, creative and imaginative he may be is ‘cabin ‘d, cribb ‘d, confin `d, bound in’ not as Macbeth to his fancy doubts and fears’ but by the evidence and arguments of the litigants.”
Looking closely at the plaintiff’s statement of claim, there is nothing therein that even remotely raises any issues of illegality. It was simply aerie of an overseas exporter selling goods to a Nigerian importer under a C & F Contract which was to be paid for by a Bill of Exchange. Certainly, it is not illegal to pay for a transaction through a Bill of Exchange drawn by an exporter in England and accepted by an importer in Nigeria.
In Francis Okagbue & 2 Ors. v. Janet Romaine (1982) 5 S.C. 133 at 156, the Supreme Court said:
“A close examination of all or most of the various decisions of this court on the subject clearly bears out the point made in the preceding paragraph. Dominion Flour Mills Ltd. was the case in which the decision re-stated the well-known principle of law that where a contract is not ex facie illegal and the question of illegality depends on the surrounding circumstances, then as a general rule the court will not entertain the question of its illegality unless it is raised in the pleadings; in such circumstances, evidence adduced in support of the unpleaded illegality clearly goes to no issue. The situation in North-Western Salt Co. Ltd. case is to the same effect.” The defendant in the instant case never pleaded any illegality. The nearest the defendant went to pleading illegality was in paragraph 2(1) of the statement of defence where the defendant averred:
“At the trial of this action, the defendant will however by way of preliminary objection:-
(a) challenge the legallity and/or propriety of this action with a view to showing its invalidity at law”
If the true intention of the defendant was to show that the transaction in respect of which the plaintiff sued contravened the Exchange Control Act. 1962, the above was hardly a way to do so. The specific act which the plaintiff did in relation to the transaction which contravened the A( t ought to have been pleaded. The Central Bank of Nigeria is the agent of the Federal Ministry of Finance for the purpose of compliance with the provisions of the Exchange Control Act, 1962. The facts available in this case show that the parties were agreed that the purchase price of the goods was to be remitted to the exporters in England through the Central Bank of Nigeria. Even the defendant himself acknowledged this position in exhibit 10 when in a letter to Barclay’s Bank of Nigeria Ltd. Onitsha, he wrote:
“We humbly request you to keep these documents in your custody for the purpose of obtaining in favour of our valuable funders mentioned above the necessary approval of the Central Bank of Nigeria for Foreign Exchange required for remitting to our said customers their money being the said sum of £25,341.04”
It seems to me therefore that the argument pressed on us in this appeal that the transaction was illegal is clearly baseless. The same is also true of the argument that Section 20 Poison and Pharmacy Act, 1958, Cap. 152 saved by Section 17 and Part A of the Third Schedule to the Pharmacists Act, 1964, was breached. Parties never pleaded such matters. Where was the evidence that the plaintiff was exporting a poisonous drug or substance to Nigeria?
The second issue queries whether the judgment of the lower court was right when it said that the plaintiff’s claim was based on a contract of affreightment instead of the Bill of Exchange Exh. I In the fifth issue, it was contended that the lower court did not hearken to the evidence of D.W.1 who said that Exh. I was not a valid Bill of Exchange. Issues two and five ought to be taken together. Appellant’s counsel was certainly in error to say that the lower court in its judgment said that the plaintiff’s claim was based on a contract of affreightment. The lower court did not say so. I do not think it is necessary for the purpose of this appeal to examine whether or not Exh. I was a valid Bill of Exchange. The plaintiff pleaded a simple C & F contract. The goods had been received by the defendant; and the defendant has not paid for the goods. Exh. I – the Bill of Exchange was the method by which the parties agreed payment. The defendant did not honour the Bill of Exchange. So the payment for the goods supplied to him remains outstanding. It is therefore idle to argue that because the Bill of Exchange is in some way defective, the obligation of the defendant to pay for goods supplied to him is extinguished.
The third issue contends that the judgment of the lower court could not be enforced because the documents which the trial Judge ordered the defendant to submit to the plaintiff were/are not in the custody of the defendant. The simple answer to that is that the defendant had the opportunity to defend the action. He elected not to give evidence. P.W.2 testified that the documents in question were in the possession of the defendant and that these would be needed to enable the Central Bank of Nigeria remit the money to the exporters in England. The defendant did not give evidence that he did not have the documents. He cannot in the guise of arguing the appeal give evidence which he ought to have given earlier but which he failed to give.
Finally is the fourth issue which says that the judgment is against the weight of evidence. Apart from the evidence called by the defendant through D.W.1 to show that Exh.1 was invalid, all the evidence by the two witnesses for the plaintiff was virtually unchallenged. There was a plethora of evidence to the effect that the defendant ordered goods from the plaintiff: that the goods were shipped to the defendant; that the defendant received the goods; and finally that he did not pay for them. In exhibit 10, the defendant himself admitted he was owing for the goods and begged for more time to pay for them. The defendant had no defence worth that description to the suit. On the evidence, the judgment of the lower court is unimpeachable.
This appeal is without any merits whatsoever. It accordingly fails and is dismissed with N750.00 costs in favour of the plaintiff/respondent.
AWOGU, J.C.A.: 1 agree that this appeal lacks merit. I too dismiss it with N750.00 costs to the plaintiff/respondent.
UWAIFO, J.C.A.: I read in advance the judgment of my learned brother Oguntade, J.C.A. just delivered. I agree with his reasoning and conclusion on every issue canvassed in this appeal. The defendant clearly had no defence to the action. He received the benefit of a patently lawful contract but would not want to meet his obligations under it. This is ruinous to business confidence and the sanctity of valid contracts entered into between parties.
I too dismiss the appeal as lacking in merit and award costs of N750.00 in favour of the respondent.
Appeal dismissed
