HENRY STEPHENS ENGINEERING CO. LIMITED (APPELLANT)

v.

COMPLETE HOME ENTERPRISES NIGERIA LIMITED (RESPONDENT)

(1987) All N.L.R. 28

Division: Supreme Court of Nigeria

Date of Judgment: 16th January, 1987

Case Number: (SC.96/1985)

Before: Obaseki, Eso, Nnamani, Uwais, Kazeem J.J.S.C

The appellant sold and delivered some machinery including a crane "T 788 Koehring crane" valued at N93,100.00 to the respondent. The respondent paid some of the amount before delivery. The balance was to be paid after delivery. After the delivery the respondent refused to pay the balance. The appellant therefore commenced proceeding in the High Court to recover the balance.

The respondent's case was that after taking delivery of the crane, it was discovered that the crane was faulty and unfit for the purpose for which it was bought. The respondent complained to the appellant and requested that the fault be corrected to no avail. On being served with the writ of summons the respondent counter-claimed for N54,676.25 special damages, N2,000.00 per month general damages, and replacement of the faulty crane by a new one or in alternative a refund of N66,443.33 already paid to the appellant.

During the trial the court found that the appellant supplied to the respondent all the machineries which were ordered by the respondent amongst the machineries was a hydraulic crane described as "T. 788 Koehring crane" whose net selling price was N93,100.00 and that the crane soon developed trouble after delivery and throughout the guarantee period. The learned trial Judge therefore relying on this evidence and the provisions of S14(2) and (3) of the English Sale of Goods Act 1893 found that the crane was not merchantable and awarded the counter claim of the respondent but added that a person agreed to by both the appellant and respondent should be appointed to ascertain the value of the crane and that the difference between the amount so valued and cost price should be the nominal damages awarded and that both parties should bear the costs.

Both appellant and respondent were dissatisfied with this decision and so appealed to the Court of Appeal. The Court of Appeal concurred with the judgment of the High Court but varied the order made by the learned trial Judge by awarding special damages to the respondent and the amount paid for the crane but not general damages.

Both the appellant and respondent again appealed against this decision. The appellant on the ground that the Court of Appeal erred in holding that the sale of Goods Act 1893 was applicable as opposed to the Sale of goods law, Laws of Lagos State of Nigeria and that the award of damages of the judge proceeded upon wrong principles of law. While the respondent contended that the Court of Appeal erred in quashing the order for the payment of N2000.00 per month by the appellant from 20th September 1976 up to the date of judgment. This ground of the respondent was later abandoned.

HELD:

1.      Although both lower courts erroneously relied on the provisions of the English Sale of Goods Act, 1893 to give judgment to the respondent, the judgment stands valid since it is in accordance with the provisions of the Sale of Goods Act. Section 15(b) of the Sale of Goods Law, Cap 125 provides that "where the goods are brought 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..."

2.      On the question of damages, the question whether or not the crane was of merchantable quality was a question of fact before both the Trial Court and the Court of Appeal. Both the trial Court and the Court of Appeal found that the crane was not of merchantable quality and the appellant had not shown sufficient reason why the court should interfere with the concurrent finding.

Appeal dismissed

Chief F.A. Akinbisehin with M.A. Olukoyo for the appellants.

Chief Debo Akande, SAN with Miss T. Egbe, A. Akpovi and Miss M. Esedebe for the respondents.

Cases referred to:-

Boshali v. Allied Commercial Exporters Ltd. (1961) ALL ANLR (Part4) 917.

Falobi v. Falobi (1976) NMLR 169 at 177 (1876) 9 SC 1 at 13.

S.C.O.A. Motors v. Ibadan Sawmills & Timber Exports Ltd. delivered on 18/3/71.

Statutes referred to:-

Sale of Goods Law, cap 125 Laws of Lagos State of Nigeria 1973.

The Law (Miscellaneous Provisions) Law Cap 65, Laws of Lagos State of Nigeria

Sale of Goods Act, 1893 of England.

Uwais, J.S.C. 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 our 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 a 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 cost 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 31/3/75, 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 debit 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 refund 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 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 defendant 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 was not suitable for the purpose for which it was bought and was not therefore of merchantable quality.

The learned trial judgment 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 mitigation of liability.

(ii) N2,000.00 per month from 20th September, 1976 until today being loss of profit.

(iii) That a person agreed to by both parties 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 Nneemaka-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. I 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 Sale of Good 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 it." (Italics mine).

The learned President quoted the provisions of section 14 subsections (2) and (3) of the Sale of Goods Act, 1893 and alluded to sections 53 and 54 thereof before holding that the defendant's counterclaim was well founded. He then considered the defendant's counterclaim 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 of the defendant and concluded-

"I therefore find it 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 term-

"To sum up my decision in this appeal I make the following orders:-

(2)     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 of judgment awarded to the Respondent (defendant) 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 fact, 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 to 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 conditioning that the goods are fit for the purpose that they were bought within the meaning of section 14(3) of the said Act.

PARTICULARS

(i)      The learned judges failed to consider the effect and applicability of the Sale of Goods Law Chapter 125 Laws of Lagos State of Nigeria, 1973 as opposed to the Sale 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 restrict its application where a state Enactment covers the same point.

(iii)    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 an 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

(i)      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 damages for breach of warranty of quality is prima facie the difference between the value of goods at the time of 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 for 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 for 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' (defendants) liability under the contract.

PARTICULARS

(i)      The loss quantified special damages occurred outside the period of warranty Exhibit 3.

(ii)     The responsibility for repairs to the crane outside the period of the warranty was clearly that of the Respondents (defendant).

(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 Barrtram Mobile Crane and not for Koehing T. 788 crane.

(v)     The Koehing T. 788 crane was only one of items of machinery purchased from the Appellant (plaintiff).

(vi)    The judgment of the learned judges (sic) of Appeal Court is against the weight of evidence.

(vii) There 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-

"(1)    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).

(2)     Ordering a refund of the deposit of N66,443.33 made by the Defendants.

(3)     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 Koeing (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 Khoeing (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 Khoening (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 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 a breach of condition or warranty the provisions of section 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 its 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 of special damages in any case where by law interest or special damages 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 ant, the judgment stands valid since it is in accordance with visions 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 Fatayi-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 party 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 in repairing the crane and the special damages suffered by the defendant in repairing the Khoeing 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 filled. 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 Boshali 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 Sawmills & timber Exports Ltd., delivered on 15th 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 orders to costs, as each party was to bear its costs. And I also endorsed the order that the defendant shall release the Khoering T.788 crane to the plaintiff.

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 cross-appeal 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 Khoering Crane" valued N93,100.00 to the respondent. The respondent paid some amount on account 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 recover 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.