LEVENTIS MOTORS LTD (PLAINTIFFS/APPELLANTS)

v.

P. E. AGBAJOR (DEFENDANT/RESPONDENT)

(1971) All N.L.R. 82

Division: Federal Supreme Court

Date of Judgment: 5th March, 1971

Case Number: SUIT NO. 238/1969.

Before: Ademola, C.J.N., Fatai Williams, Sowemimo, JJ.S.C.

Appeal from the High Court (Mid-West).

HELD:

(1)     On the evidence, it was impossible to see how the trial Judge could have come to any conclusion other than that the car was described to the defendant/respondent as a second-hand car and that he clearly understood it to be such. He was therefore clearly in error in his finding in this respect.

(2)     On the evidence the car was offered to the defendant/respondent as a second-hand car and he bought it as such. It was a case of sale by description. There was no question of any hidden defects in the car. The contract was therefore governed by section 15(b) of the Sale of Goods Law (Cap 115 Laws of the Western State of Nigeria).

(3)     On the evidence, there was no doubt that there was no breach of the implied condition in section 15(b) of the Sale of Good Law (Cap 115) that the car must be of "merchantable quality." Indeed the evidence does not permit of any other finding.

Appeal allowed: Judgment of Benin High Court set aside.

Case referred to:

Bartlett v. Sidney Marcus Ltd. (1965) 1 W.L.R. 1013 C.A.

Act referred to:

Sale of Goods Act, 1893 s. 14(1)(2) (England).

Law referred to:

Sale of Goods Act (Cap. 115. Laws of the Western State of Nigeria) S. 15(b).

APPEAL from the High Court (Mid-West).

SUIT NO. 238/1969.

Majekodunmi for the Plaintiffs/Appellants.

Ajuyah, for the Defendant/Respondent.

Fatai-Williams, J.S.C. (delivering the judgment of the court):-The appellants were the plaintiffs in the High Court, Benin City, where they had claimed from the defendant the sum of £850 being the outstanding balance still unpaid in respect of one Mercedes Benz 220S saloon car sold to the defendant by the plaintiffs at Benin City on 8th May, 1964. According to their statement of claim, the car which was second-hand at the time was offered to the defendant for £1,500. He agreed to pay this amount for the car, paid the sum of £650 in cash that same day and then signed the plaintiff's invoice. The balance of £850 was to be paid within one month of the sale either by the United Dominion Corporation (Nigeria) Ltd. of Lagos to whom he was applying for a loan or personally if the Corporation defaulted. After three written requests by the plaintiffs for the payment of the balance of £850, the defendant, on receiving the last request written on 31st August, 1964, informed the sales manager of the plaintiff company that what he asked for was a home-delivery car and not a second-hand car.

The defendant disputed the claim. Although he admitted buying the car from the plaintiffs, he averred further in paragraphs 4(b, c, and d), 5, 7 and 9 of his statement of defence as follows:-

"4      (b)     At the time of the agreement pleaded in paragraph 4(a) hereof the plaintiff in order to induce the defendant to buy the said car orally represented to the defendant that the said car was a 'home-delivery' car i.e. that the car was purchased and used by its first owner in Germany and had never been used in Nigeria before the sale to the defendant.

(c)     It was an implied condition of the said contract of sale that the said car was a 'home-delivery' car in the sense explained in para. 4(b) above.

(d)     Further or in the alternative the said sale was a sale by description and it was an implied condition of the said contract of sale that the said car was a 'home-delivery' car in the sense explained in para. 4(b) above.

5.      In breach of the said conditions the plaintiff delivered to the defendant the said car on 8th May, 1964 but the said car had in fact been used in Nigeria by its first owner between 1961 and 1963 at various places and in particular in Northern Nigeria, before it was sold to the defendant.

7.      The defendant discovered that the said car was not a 'home-delivery' car on 9th May, 1964 and on 10th May, 1964, invited the plaintiffs' agents Messrs C.P. Leventis (Junior) and G. O. Igbinedion to his office in Benin City and confronted them with his discovery.

9.      By reason of the facts alleged in paras. 5, 6 and 7 above, the plaintiff has lost the right to claim £850 as the balance of the contract price or any sum over and above £650 paid by the defendant to the plaintiff upon delivery of the said car on 8th May, 1964, or at all."

The defendant thereupon counterclaimed against the plaintiffs as follows:-

(a)     £1,000 as general and special damages for breach of the conditions of sale of the contract; and

(b)     £1,000 being damages for fraudulent misrepresentation, i.e. deceit.

The evidence in support to the plaintiffs' claim, given by Gabriel Igbinedion (1st P.W) and the sales managers of the plaintiffs in Benin City at the material time may be summarised as follows. Following a discussion which he had earlier with the defendant about the purchase of a Mercedes Benz saloon car, he contracted the defendant on 8th May, 1964, after he had received a consignment of four of these cars, all second-hand, from Lagos on 7th May, 1964. The defendant came to see him and after inspecting them decided to take one of the cars, a Mercedes Benz 220S saloon. After informing the defendant that the price was £1,500, the defendant said he would like one Mr Carol, their vehicle inspection officer, to examine the car. They both got into the car and drove it to the office of Mr Carol who after testing the car said it was in very good condition. The car then had a current vehicle licence (Ex. 1) issued in the name of one Mr Nzegwu. After the inspection, the defendant offered to pay £650 in part payment for the car and to pay the balance of £850 when he got a car advance from the Union Dominion Corporation (Nigeria) Ltd. The defendant then paid the sum of £650 in cash and signed the plaintiffs' invoice (Ex. 2) the contents of which are as follows:-

"INVOICE                                                                                                                62/No. 15751

Station Lagos                                                                                                                     8/5/64

Mr P. E. Agbajor                                                                      DR. to LEVENTIS Motors Limited           

                                                                                      Cash-for the following

One               Mercedes Benz 220S Second Hand complete with tools and spare wheel.

                        Eng. 048016

                                      Ca. 031471                                                                                 £1,500

                                                                        Deposit                                                                                   650

                                                                        Balance to be paid                                                          850

                         C. E. Leventis

                                         Rec. 12108         P. E. Agbajor                                 8/5/64"

After signing the invoice (Ex. 2) the defendant took the 1st P.W to his office where he filled and signed the application form (Ex. 8) for an advance of £850 from the United Dominion Corporation (Nig.) Ltd. and made the advance payable to the plaintiff's headquarters in Lagos. Para. 2(a) of the letter to the company which is on the reverse side of Ex. 8 and signed by the defendant and wherein he asked for hire-purchase terms reads:-

"I have inspected and approved the vehicle and am prepared to take delivery at once. I acknowledge that I have seen a written statement of the cash price of the vehicle which corresponds exactly with that stated overleaf."

The cash price stated overleaf is £1,500.

In July, 1964, when it was discovered that the balance of £850 had not been paid, the 1st Pls/W wrote two letters to the defendant. When he received no reply, he caused their solicitor (Mr Aluyi) to write a demand letter to him in August, 1964, but the defendant ignored this letter also. Later, in a telephone conversation, the defendant said he had asked for a home-delivery car and not a second-hand one. Explaining what is referred to in the car trade as a home-delivery car, the 1st Pls/W testified as follows:-

"A home-delivery car brought into Nigeria cannot have a Nigerian car licence unless it has been sold out to someone who wants to use it in Nigeria. A home-delivery so sold, becomes a second-hand car if the purchaser or plaintiff wants to sell it to another person. The owner of the car as shown in exhibit 1 is Nzegwu. When the car was sold to the defendant, the instruction book and book containing the history of the car were in the car. I handed the books to the defendant...The defendant never asked for a home-delivery car."

Under cross-examination, 1st Pls/W stated that he delivered the car's service book (Ex. 4) to the defendant. He also stated that the vehicle licence (Ex. 1) was on the windscreen of the car when it was sold to the defendant. Finally, he admitted that the car had done 21,000 miles at the time it was sold to the defendant and that its speedometer was still working at the time.

Mr Christo Leventis (2nd Pls/W) who also signed the invoice (Ex. 2) explained that the defendant did not query the description of the car as second-hand when he signed the invoice. When he was asked by the court why the car had only the dealer's licence plates and not the usual registration number plates, Leventis replied as follows:-

"The defendant said he did not want any registration number with the car hence we did not bother to deliver one with the car. We told Lagos about this. He said he wanted to use his own numbers. The car did not come with any registration number."

In his defence, the defendant, a Chief Superintendent of Police at the material time, gave his own version of the sale as follows. On 7th May, 1964, after receiving a telephone call from the 1st Pls/W, he went to see him on the following morning. There was parked outside the house a black Mercedes Benz 220S saloon car which the 1st Pls/W described to him to the hearing of one Oritsejafor (2nd D/W) as a home-delivery car just landed in Lagos, that it had never been driven in Nigeria before save the journey from Lagos to Benin, and that the mileage in Germany was 4,000 but that in order to bring it to Nigeria and reduce custom's duty the mileage was raised to 21,000. He inspected the car. There was a vehicle licence (Ex. 1) on the windscreen but he did not go close enough to it to inspect it. On the whole the external appearance of the car was good. At first the car was offered to him for £1,400 but later, after the car had been tested, £1,500 was demanded for it. He agreed to the increased price. Later he got Mr Carol, the police vehicle inspection officer, who is also a qualified automobile engineer, to have a look at the car. About this, he testified as follows:-

"I requested Mr Carol to road test the 220S saloon car. Mr Carol, plaintiffs' 1st witness and I entered the car and we drove up to the aerodrome road towards the township. Mr Carol was driving. Mr Carol expressed the opinion that the car was good."

After the car had been tested and he had agreed to buy it for £1,500, the invoice (Ex. 2) was produced to him to sign. What then transpired was described by the defendant as follows:-

"I read the paper and found it related to my purchase of the car. The car was there described as a second-hand car. I asked plaintiff's 1st witness why the car was described as a second-hand car and he said that was how they described second-hand cars. I myself regard a home-delivery car as a second-hand car. I signed the paper."

The defendant, continuing his evidence stated that after signing the invoice, they all drove to his house where he gave the 1st Pls/W, cheque for £650. When he asked for documents relating to the car, the 1st Pls/W said he would bring them to him on the following day. He denied receiving car's history and service book (Ex. 4) from the 1st Pls/W. He said he found Ex. 4 hidden under a piece of paper covering the left front door of the car on the Sunday following the sale. When he examined Ex. 4 he found that the car had been bought since July 1961 in Germany, used for three months there and brought to Nigeria where it had been in use before he bought it. He then inspected the name on the vehicle licence and saw the name Nzegwu there. As a result of this discovery he intercepted the forms (Ex. 8) for the advance of £850 which he was to send to the United Dominion Corporation (Nig.) Ltd. He also sent for both the 1st and 2nd Pls/Ws and told them that they had sold to him as a home-delivery car, a car that had been in use in Nigeria for three years. The two witnesses showed surprise and started blaming each other. He then told them that he had intercepted the forms (Ex. 8) as he was not going to pay £1,500 for a three year old car. Notwithstanding this discovery, he registered the car and took out an insurance policy for it. Finally, the defendant explained that he was not willing to pay the amount claimed by the plaintiffs because he would not have bought the car if he had known its true condition. Under cross-examination, however, he testified further as follows:-

"I accepted the description of the car in exhibit 2 as second-hand. I did not report the matter to the police until the writ in this action was issued out. I re-registered the car in Aba in May. I reported the matter to the police in December, 1964. The registration number of my former car was EW1. After the inspection of the car and in the presence of Mr Carol the plaintiffs' 2nd witness gave the price of the car as £1,500 Mr Carol is a qualified automobile engineer. I told Mr Carol to road test the car because I wanted value for my money."

To further questions, the defendant admitted that he did not at anytime offer to return the car and have back his money.

The defendant called four witnesses (three are police officers) two of whom confirmed that the car offered to him by the plaintiffs and which he bought from them was described by the 1st Pls/W as a home-delivery car. One of these two, an Acting Chief Supt. of Police named Oritsejafor (2nd D/W), admitted however, that he looked at the speedometer of the car and also tried to buy it for £1,400 but that he was annoyed when the 1st Pls/W decided to sell the car to the defendant. The 4th D/W was one Vincent Egbina who was in charge of the accounts at the Police Headquarters in Benin. He testified that he dealt with advances for the purchase of motor cars and that home-delivery cars were classified as second-hand cars.

After reviewing the evidence adduced by both parties the learned trial Judge observed as follows:-

"According to the plaintiff the defendant never asked for a home-delivery car, indicating that he never attached to the car any such description or warranty.

This would appear to be so going even by the defendant's evidence. He did not say he asked for a home-delivery car. He however said the plaintiff offered the car to him as a home-delivery car. The defendant's witness said the plaintiffs' witnesses sold the car to the defendant as a home-delivery car. One side must be lying."

After making further observations regarding the foreign number plates (Ex. 6) and the history and service books (Ex. 4) the trial Judge found as follows:-

"I will say at this state that I believe in its entirety the description which the defendant said the plaintiffs' witnesses made to him of the car.

Now, although the defendant did not say he wanted a home-delivery car when he looked forward for the plaintiff to get a car from him to buy and so it cannot be said that that was an original condition on which the plaintiff was to sell him a car, it is my view that the plaintiffs' 1st witness by offering the car to the defendant as a home-delivery car and camouflaging it as such, introduced into the sale a warranty as to the condition of the car that the car was such...I will go even further and say that it appears to me the defendant by the £650 he paid, had paid what would be a fair price for the car."

He thereupon dismissed the plaintiffs' claim.

On the counterclaim, he found in favour of the defendant and awarded him damages assessed at £5 after finding as follows:-

"Turning now to the defendant's counterclaim it is my view that the defendant for the reason that the plaintiff as I have found sold to him a second-hand car which had been used in this country and had done, at least 17,000 miles during the period of such use is entitled to succeed on his counterclaim."

In the appeal before us against this decision, Mr Majekodunmi for the plaintiffs/appellants contended that the learned trial Judge was in error when he failed to consider the defendant/respondent's admission to the effect that the car was sold to him on 8th May, 1964 as home-delivery, that two days later on 10th May, 1964, he discovered that the car had been in Nigeria for the past three years but that he did not reject the car; instead he registered and insured the car in his own name until December, 1964, when he reported, after he had been served with the writ of summons in this case, to the police that the plaintiffs/appellants had practised fraud on him. Learned Counsel also complained that the judge was in error in awarding damages to the defendant/respondent who, in his testimony, stated that he accepted the description of the car as a second-hand car but did not return the car and ask for his money back. Finally learned Counsel submitted that on the evidence before the court, there was no breach of warranty and that the learned trial Judge erred in law in finding that there was.

For the defendant/respondent, Mr Ajuyah stated that his client's contention was that he was offered a home-delivery car, that he bought the car as such and that it turned out to be a second-hand car which had been in use in Nigeria for the past three years. Mr Ajuyah further submitted that it was the description of the car as a home-delivery car that induced the defendant/appellant to buy it, that in the circumstances he could either have rejected the car or sue for damages for breach of warranty. He decided to keep the car. Mr Ajuyah conceded however that the stipulation which the defendant/respondent had complained about was not as to any defect in the car but as to its description by the plaintiffs/appellants to the defendant/respondent.

From the evidence adduced by both parties and which the learned trial Judge accepted, it is obvious that the short point in dispute was whether what the defendant/respondent was offered and what he bought was a second-hand Mercedes Benz 220S saloon car or a home-delivery car.

In considering this point, it is difficult to lose sight of the fact that the defendant/respondent himself admitted that he signed the invoice (Ex. 2) in which the car was described as a second-hand car. In explaining why he signed, the defendant/respondent testified as follows:-

"I asked plaintiffs' 1st witness why the car was described as a second-hand car and he said that was how they described second-hand cars. (Home-delivery cars probably intended). I myself regarding a home-delivery car as a second-hand car, I signed the paper.

(The words in brackets are ours).

Even Vincent Egbina (4th D/W) one of his witnesses who was the accounts clerk in the Police Headquarters in Benin City at the material time also testified that:-

"Home-delivery cars are classified as second-hand cars."

Therefore to our mind, the contention that a car described as a home-delivery car is different from one described as a second-hand car, is, in the particular circumstances of the instant case and bearing in mind the known facts about the particular car, fallacious. The car is, without any doubt, a second-hand car. That being the case, the distinction is one without a difference. Indeed, the defendant/respondent notwithstanding how the car might have been described to him, knew or ought to have known that he was buying a second-hand car for the following reasons:-

(a)     The car, at the time it was sold to the defendant/respondent, had a Nigerian vehicle licence (Ex. 1) made out in the name of one Nzegwu, the former owner, on the windscreen;

(b)     it had done at least 4,000 miles and probably 21,000 miles (the figure shown on its speedometer) at the time it was offered for sale;

(c)     it was at least three months old and probably older; and

(d)     it was clearly described in the invoice (Ex. 2) made out on 8th May, 1964, the date of the sale, and signed on that same day by the defendant/respondent as a "second-hand car".

In the face of all this overwhelming testimony, we do not see how the learned trial Judge could have come to any conclusion other than the car was described to the defendant/respondent as a second-hand car and that he clearly understood it to be such. He was therefore clearly in error in his finding in this respect.

There is evidence, supported by the particulars in para. 11 of his statement of defence and by the job card invoices (exhibits 10, 10A, 11-11h) that the defendant/respondent had to spend money on checking and welding the exhaust pipe, he had also had to buy a new battery and replace the front and rear springs of the car. The expenses of all these and of servicing the car, between 18th May, 1964 and 26th November, 1964, came to £79-5s.-4d. He may well have been annoyed about this because he claimed this amount in his counterclaim as "special damage". Nevertheless, what he bought was a second-hand car and he must expect to repair or replace parts which had become worn out.

As we have pointed out earlier, the car was offered to the defendant/respondent as a second-hand car and he bought it as such. It is, in our view, a case of sale by description. There was no question of any hidden defects in the car; this much was conceded by the learned Counsel for the defendant/respondent. The contract is therefore governed by the provisions of section 15 paragraph (b) of the Sale of Goods Law (Cap. 115 of the Laws of the Western State of Nigeria) applicable in the Mid-West at the material time. The provisions read:-

"Where goods are bought by description from a seller (whether he be the manufacturer or not), there is an implied condition that the goods shall be of merchantable quality: provided that if the buyer had examined the goods there shall be no implied conditions as regards defects which such examination ought to have revealed."

The above provisions are identical with those of section 14(2) of the English Sale of Goods Act, 1893. Thus in Bartlett v. Sidney Marcus Ltd. (1965) 1 W.L.R. 1013 (C.A.), a case in which the plaintiff, relying on the implied conditions in section 14(1) and (2) of that Act, had brought an action against the defendants for damages for breach of contract in respect of the sale of a second-hand car, Lord Denning, M.R., when interpreting the said section observed at pages 1016-1017 as follows:-

"It means that on a sale of a second-hand car, it is merchantable if it is in usable condition even though not perfect. This is very similar to the position under section 14(1). A second-hand car is reasonably fit for the purpose if it is in a roadworthy condition, fit to be driven along the road in safety, even though not as perfect as a new car.

Applying those tests here, the car was far from perfect. It required a good deal of work to be done on it. But so do many second-hand cars. A buyer should realise that when he buys a second-hand car defects may appear sooner or later; and, in the absence of an express warranty, he has no redress. Even when he buys from a dealer the most he can require is that it should be reasonably fit for the purpose of being driven along the road. This car came up to that requirement. The plaintiff drove the car away himself. It seemed to be running smoothly. He drove it for four weeks before he put it into the garage to have the clutch repaired. Then more work was necessary than he anticipated. But that does not mean that, at the time of the sale, it was not fit for use as a car. I do not think that, on the judge's findings, there was any evidence of a breach of the implied conditions."

Applying the above test, with which we agree, to the facts of this case, and bearing in mind that the defendant/respondent, after getting Mr Carol (the Vehicle Inspection Officer) to test the car because, as he put it, he wanted value for his money, agreed to pay the purchase price of £1,500, there is no doubt in our mind that there was no breach of the implied condition in section 15(b) of the Sale of Goods Law (Cap. 115) that the car must be of "merchantable quality". Indeed, the evidence does not permit of any other finding.