AFROTEC TECHNICAL SERVICES (NIGERIA) LTD (APPELLANT)
v.
MIA & SONS LTD AND ANOTHER (RESPONDENTS)
(2000) All N.L.R. 532
Division: Supreme Court of Nigeria
Date of Judgment: 15 December 2000
Case Number: SC 132/1992
Before: Abubakar Bashir Wali; Idris Legbo Kutigi; Anthony Ikechukwu Iguh; Aloysius Iyorgyer Katsina-Alu; Emmanuel Olayinka Ayoola, JJSC
ISSUES
Whether the transaction between the parties amounted to an absolute/outright sale or a conditional sale?
Whether the appellant had had the right to seize the equipment in question?
Whether the respondent had established a legal right to the equipment after the appellant had first parted with possession before receiving full payment for them?
Whether the appellant lost the right to a lien by parting with possession of the equipment in pursuance of the contract of sale?
Whether title/property in the equipment had passed to the respondent upon delivery in terms of the sale?
Whether the appellant had waived his right to a lien over the equipment and whether there was a second contract between the parties?
Whether the acceptance by the appellant of post-dated cheques as payment for the plant converted the conditional sale of the equipment to an absolute sale?
Whether the respondent was entitled to equitable relief in respect of the equipment?
Whether an order that the appellant return the equipment to the respondent in return for payment of balance of purchase price (specific performance) was a competent order?
FACTS
The respondent purchased from the appellant certain equipment for a total purchase price of N702,900. The respondent made an initial payment of N281,160 representing 40 percent of the purchase price. Thereafter the appellant installed the equipment at the plaintiff's site at Kontagora. The balance of 60 percent was to be paid in six equal instalments of N702,900, each secured by post-dated cheques.
The parties agreed in the contract of sale that the appellant should have a lien on all the machinery pending payment of the full purchase price of N702,900.
The six post-dated cheques issued by the respondent to the appellant bounced one after the other. Twenty-one other post dated cheques for smaller amounts as replacements also were returned unpaid. And all efforts to collect the balance of the sale price as agreed on, proved abortive.
Later, the appellant agreed to move the equipment from Kontagora to Kaduna at respondent's request for a fee of N30,000 which was paid. The appellant took advantage of this to exercise its lien by seizing the equipment on the ground that the respondent had failed to pay the balance of the purchase price.
The respondent then sought a perpetual injunction in the Kaduna High Court to restrain the appellant from selling the equipment, also for damages and an Order for Specific Performance enforcing re-delivery of the equipment to it at its Kaduna Quarry site.
The trial Judge (Ibiyeye J) found that there was a conditional sale between the parties, that the respondent had acted in violation of the conditions by refusing to pay and dismissed respondent's claims.
The appellant then sold the equipment to Afcon Engineering Ltd, the third party in the action.
Dissatisfied with the decision, the respondent appealed to the Court of Appeal, and the court allowed the appeal as follows:-
· A perpetual injunction restraining the defendant from selling the equipment;
· That the said equipment be delivered to the respondent subject to payment of the balance of the purchase price;
· Remitting the issue of general damages back to the High Court for assessment;
· That the third party releases the equipment.
The appellant appealed to the Supreme Court.
HELD (Majority judgment by Kutigi, JSC, Wali, Iguh and Katsina-Alu, JJSC concurring. Ayoola, JSC dissenting)
1. On sale of goods and transfer of ownership
The object of sale of goods is generally to transfer the property in the goods to the purchaser from the seller. (Sections 16-19 of the Sale of Goods Act, 1893). But where a contrary intention is shown, the property in the goods only passes to the buyer at such time as the parties intend. And, to ascertain the intention of the parties, regard must be had to the terms of the contract, the conduct of the parties and the circumstances of the case.
2. On the existence of lien
The unpaid seller's lien is his entitlement to retain the goods in his possession until the buyer has paid the whole of their price.
3. Conditional sale
The sale was a conditional sale and the appellant was entitled to exercise its right of lien both under the
contract agreement and under the Sale of Goods Act, the plaintiff having failed to satisfy the conditions of payment.
4. Property did not pass
The ownership in the equipment had not passed to the respondent when the appellant effected the seizure (lien). Property in the goods did not pass to the first respondent simply because the appellant had delivered the equipment to the first respondent.
5. Lien additional security
The appellant's right to be paid the contract price of the goods was independent of the existence of a lien; a lien being an additional security given to the seller who has yet to be paid.
6. Sale agreement binds parties
The parties are clearly bound by the sale agreement without any subtraction or addition. The court has no power to rewrite the agreement. Parties to a contract enjoy freedom to contract on their own terms so long as these are not illegal or unlawful.
7. Acceptance of cheques did not affect ownership
The acceptance by the appellant of cheques as payment for the equipment did not convert the conditional sale into an absolute sale. Payment by means of a negotiable instrument is prima facie conditional on the instrument being honoured at maturity. The seller's remedy to sue for the price is suspended during the currency of the instrument. If the instrument is honoured at maturity, the amount will be deemed to be paid. If it is dishonoured, the seller's remedies both under the contract of sale and the Sale of Goods Act, 1893 automatically revive and become enforceable.
8. Specific performance
A court of law must not grant to a party a relief which he has not sought or which is more than he has claimed. The Court of Appeal acted gratuitously and was wrong to grant an Order of Specific Performance for the equipment to be delivered to the respondent upon payment of the balance of purchase price, because this had the effect of enforcing the contract of sale in favour of the respondent.
9. No grounds for equitable relief
No grounds for equitable relief. The respondent was not entitled to equitable relief, because it did not establish any legal right in the property or machinery subject matter of the contract. The property or title in the goods conditionally sold to the respondent remained perpetually in the appellant as an unpaid seller and as contained in the sale agreement.
10. Waiver not pleaded or proved
As waiver (of a right to the equipment) was not expressly pleaded, it could not be raised by the respondent as against the appellant. In any event, the appellant had not waived its lien by dealing with the machines in any manner inconsistent with the lien or by making any new arrangement with the plaintiff which is inconsistent with the continuance of its lien.
11. Clean hands for injunction
The plaintiff seeking a perpetual injunction must come to equity with clean hands. If he is in breach of his own obligations, he will not be granted an injunction. Accordingly, the respondent cannot succeed in his claim for injunction if he is in breach of his own obligations (to pay the purchase price).
12. Purpose of filing a brief (obiter)
The purpose of filing a brief is to state with accuracy, brevity and precision whatever is essential to the clear and adequate understanding of the questions which are required to be considered by the court.
TK Agbesanwa for the appellant.
OAR Ogunde for the respondent.
Third party/respondent absent not represented
The following cases were referred to in this judgment:
Nigeria
Adigun v Amao [1979] LRN 54
Alhaji Abdulahi Baba v Nigerian Civil Aviation Training Centre, Zaria (1991) 5 NWLR (Part 192) 388
Bookshop House Ltd v Stanley Consultant Ltd (1986) 2 NWLR (Part 26) 87
Buraimo v Adeniyi (1990) 2 NWLR (Part 133) 406
Ekpenyong v Nyong (1975) 2 SC 71
Kofi v Mensah 1 WACA 76
Maiden Electronic Works Ltd v Attorney General of the Federation [1974] 1 All NLR 179
Makanjuola v Balogun (1989) 3 NWLR (Part 108) 192
Nanka-Bruce v Commonwealth Trust Ltd (1926) AC 77
Niger Benue Transport Co Ltd v Narunmal & Sons Ltd (1986) 4 NWLR (Part 33) 117
Obiomaa v Olomu (1978) 3 SC 1
Oduye v Nigerian Airways (1987) 2 NWLR (Part 55/126)
Ogbonaiya v Okudo (1979) 6-9 SC 32
Olurotimi v Ige (1993) 8 NWLR (Part 311) 257
Osei Kofi v Mensah [1930] 1 WACA 76
Sengena v Poku [IX WACA 143]
Yakassai v Incar Motors (Nig) Ltd (1975) All NLR 287; [1975] NSCC 284
Foreign
Alluminium Industries Vassen Bv v Romalpa Alluminium Ltd [1976] 2 All ER 552
Beswick v Beswick (1968) AC 58
Biddle Combe v Bond [1835] 4 A & E 332
Bloxam v Sanders [1825] 4 B & C 941
Chalmers, Ex parte (1873) LR 8 Ch App 289
Citing Poulton & Son v Anglo - American Oil Co Ltd [1911] TLR 216
Clarke, Re (1887) 36 Ch D 348
Coddington v Paleologo (1867) LR 2 Exch 193
Darnhouwer & Co Ltd v Christian [1917] KB 37
Doak v Bedford (1964) 2 QB 587
Feliciana [1915] 59 CJ 456
Flint v Brandon (1803) 8 Ves 159
G E Ry v Lords [1909] AC 109
Grice v Richardson [1877] 3 App Cas 319
Gunn v Bokkow, Vaughan and Co (1875) LR 10 Ch App 491
Hendy Lennox (Industrial Engines) Ltd v Grahamme Puttick Ltd [1984] 2 All ER 152
Hungmann v Brieseman (1892) 67 LT 642
Hutton v Watling (1948) Ch 26
Leith's Estate, Re (1866) LR 1 PC 296
Lord v Price (1874) LR 9 Ex 54
Martindale v Smith (1841) 1 QB 389
Mc Entire v Crossley Bros Ltd (1895) AC 457
Palmer v Bramley (1895) 2 QB 405
Parker v Gossage [1835] 2 C M&R 617
Poulton and Son v Anglo-American Oil Co Ltd (1911) 27 TLR 216
R v Saddlers Co [1863] 10 HL 404, 425
R v Ward v Bignall [1967] QB 543; [1967] 2 All ER 449
Rigby v Connol (1880) 14 Ch D 482
Scott and Alvarez's Contract, Scott v Alvarez, Re (1895) 2 Ch 603 CA
The Bineta (1967) 1 WLR 121
The Elder (1893) P 119
Thompson v Veale 1896 LT 130
Trustee of the Property of F Lord v Great Eastern Railway Company [1908] 2 KB 54
Valpy v Gibson 136 ER 737
Ward Ltd v Bignall (1967) 1 QB 534
Weeks v Goode (1859) 6 CB (NS) 367
Whiteley Ltd v Hilt (1918) 2 KB 808
The following statutes were referred to in this judgment:
Nigeria
Bills of Sale Act 1878
High Court Law Cap. 49 Laws of Northern Nigeria 1963: S 28
Sale of Goods Act 1893: Ss 1(2), (3), (4); 16; 17(1); 18(1); 19; 28; 38(1); 39; 41(1), (2); 43(2); 48; 55; 62(3)
The following books were referred to in this judgment:
Halsbury's Laws of England Vol. 28 (4ed) paragraph 702; paragraph 731; paragraph 751
Precedents of Pleadings, Bullen & Leaks & Jacobs
Sale of Goods (1974ed), Benjamin, paragr