O.C. MBANUGO AND OTHERS (TRADING UNDER THE STYLE AND NAME OF "TEN BROTHERS CLUB") (PLAINTIFFS)
U.A.C. (OF NIGERIA) LIMITED (DEFENDANTS)
(1961) All N.L.R. 804
Division: High Court of Lagos
Date of Judgment: 5th December, 1961
Case Number: Suit No. LD/406/60
Before: Lambo, J.
Action in Detinue.
One Akinola obtained a lorry from the defendants under a hire-purchase agreement. Subsequently, and before the payment of the final instalment on the lorry, he had the registration of the lorry changed from LD. 8170 (the number under which it was originally registered) to WA. 559. A Bailiff later seized the lorry under a Writ of Attachment obtained by a Judgment Creditor against Akinola's goods. No claim to the lorry was made to the Bailiff by the defendants. The lorry was subsequently sold by Public Auction by the Bailiff to one Nwakobi, who later sold it to the plaintiffs; both Nwakobi and the plaintiffs were unaware that a third party had any interest in the lorry. The defendants later seized the lorry and the plaintiffs brought this action against the defendants for its return, alleging that it was unlawfully detained by the defendants. In the alternative, they claimed the sum of £700 as the value of the lorry. At the trial, it was argued for the defendants that if Nwakobi had made reasonable inquiries she would have discovered the interest of the defendants, and was, therefore, under constructive notice of their interest.
(1) A sale by the Sheriff is not a sale in market overt; but where any goods in the possession of a Judgment Debtor at the time of seizure by a Sheriff, or other officer charged with the enforcement of a Writ, Warrant or other Process of Execution, are sold, without any claim having been made to the goods, the purchaser acquires a good title.
(2) A prospective purchaser of goods sold under a Writ, Warrant or other Process of Execution, is not deemed to have constructive notice of the interest of the true owner, merely because he omitted to make inquiries into the title to the goods before purchasing them at the Sheriff's auction.
Although the effect of section 16 of the Sheriffs and Civil Process Ordinance is to divest the true owner of goods of his title and vest the same in the purchaser of the goods where such goods are in the possession of a Judgment debtor and are seized and sold before a claim is made by the true owner; the true owner is not left without a remedy for he can still maintain an action for money had and received against the Judgment debtor.
Judgment for the Plaintiffs.
Cases referred to:-
Curtis v. Maloney, (1950) 2 All E.R. 982; 66 (Pt.2) T.L.R. 869; 94 Sol. Jo. 761.
Jones Brothers (Holloway) Limited v. woodhouse, (1923) 2K.B. 117; 92 L.J.K.B. 638; 129 L.T. 317; 67 Sol. Jo.518.
Dyal Singh v. Kenyan Insurance Limited, (1954) All E.R. 847; (1954) A.C. 287; 98 Sol. Jo.231.
Ordinances and Acts referred to:-
Sheriffs and Civil Process Ordinance, Cap. 189 section 16.
Chattels Transfer Ordinance, (Kenya) 1930.
Bankruptcy Ordinance, 1930, (Kenya) (Laws of Kenya, 1948, Cap. 30) section 45(3).
Bankruptcy and Deeds of Arrangements Act, 1913 (3 and 4 Geo. 5. c.34) section 15.
ACTION in Detinue.
Okafor for the Plaintiff.
Sofola for the Defendants.
Lambo, J.:-In this action, the plaintiffs' claim against the defendant is for the return of the plaintiffs' lorry, a Bedford tipper, No. WA.559, unlawfully detained by the defendant since the 29th of September, 1960, or, alternatively, the sum of £700 being the value of the said lorry. The plaintiffs also claim £200 for loss of profit at £40 per week and £150 general damages for the unlawful detention of the said lorry.
The lorry, WA.559, was bought by the plaintiffs for the sum of £430 from one Mrs Fanny Nwakobi who herself had purchased the lorry from a public auction conducted by the Bailiff on the 2nd of August, 1960. Fanny had paid the sum of £377 for the purchase of the lorry as per the receipt from the Bailiff dated the 3rd August, 1960 (exhibit B). When she sold the lorry to the plaintiffs for the sum of £430, the latter obtained a receipt from her dated the 13th of August, 1960, (exhibit A).
According to the Auction Notice (exhibit H) dated the 28th of July, 1960, the lorry had been sold pursuant to a Writ of Attachment issued by the court in Suit No. IK. 728/58 which was a case between one Ali Balogun and Karimu Akinola in which Judgment was obtained against the defendant, Karimu Akinola. According to the hire-purchase agreement (exhibit K), it is obvious that the lorry which was originally registered as No. LD. 8170 was given to Karimu Akinola by the defendant company on hire purchase. There is evidence which I believe that, on the 26th of July, 1960, when the lorry was seized, Karimu Akinola had not paid off the hire-purchase instalments on the lorry. According to the terms of agreement (exhibit K) dated the 18th of August, 1959, the hire-purchase instalments were to be paid over a period of 12 months, the first of such monthly payments was to be made on the 3rd of October, 1959, and subsequent payments were to be made on the 3rd day of each month during the hiring.
It is clear from the evidence of James Akerele, the hire-purchase controller of the defendant/company that Karimu Akinola to whom the lorry covered by the hire-purchase agreement, exhibit K, was hired had, contrary to the terms of the hire-purchase agreement, changed the registration number of the lorry from L.D.8170 to WA.559. I find that the lorry registered as WA.559 is the same lorry which is subject to the hire-purchase agreement, exhibit K. I also find on the evidence that it is the same lorry that was sold by the Bailiff on the 2nd of August, 1960, to Mrs Fanny Nwakobi following attachment under the writ issued at the instance of the execution creditor. I also find on the evidence that the lorry was found in possession of the execution debtor (Karimu Akinola) and that, while it was in his said possession, it was seized by the court Bailiff, the third plaintiffs' witness.
In his evidence, the defendant's witness testified to the fact that Karimu Akinola told him that he explained to the Bailiff when the lorry was about to be seized that it was not his lorry, but had got it from the U.A.C. on hire-purchase agreement.
There is no evidence before me that when Fanny Nwakobi purchased the vehicle at the public auction conducted by the Bailiff, she knew that a third-party other than the execution debtor was interested in the lorry. I believe also that when the plaintiffs purchased the lorry from Fanny Nwakobi, they were not aware that any other person besides the latter was interested in it.
The question now is, did Fanny Nwakobi acquire a good title to the lorry at the time of her purchase at the public auction conducted by the Bailiff on the 2nd of August, 1960? In answering this question, I would refer to section 16 of the Sheriffs and Civil Process Ordinance, Cap. 189, of the Laws of Nigeria, which reads as follows:-
Where any goods in the possession of a Judgment debtor at the time of seizure by a Sheriff, or a Deputy Sheriff, or other officer charged with the enforcement of a writ, warrant, or other process of execution, are sold by such Sheriff, Deputy Sheriff or other officer, without any claim having been made to the same:-
(a) the purchaser of the goods so sold shall acquire a good title to those goods.
There is no evidence before me that at the time the lorry was purchased by Fanny Nwakobi at the aforesaid public auction, the defendant/company laid any claim to the lorry. In Halsbury's Law of England, 3rd Edition, Volume 16, at 58, Paragraph 90, under the heading "Title acquired by purchaser", the following statement of the law appears:-
A Sale by the Sheriff is not a sale in market overt, but where any goods in the possession of an execution debtor at the time of seizure by the Sheriff are sold by the Sheriff without any claim having been made to them, the purchaser acquires a good title subject to the right of any person, who may prove that at the time of sale he had a good title to any of the goods, to any remedy to which he may be entitled against the purchaser.
In the case of Curtis v. Maloney (1950) 2 A.E.R. 982, a Sheriff in execution of a writ of fieri facias, seized a motor cabin cruiser in the possession of the execution debtor, and sold it by public auction. The sale had been advertised and no claim was made to the vessel before the sale. It subsequently appeared that the cabin cruiser had, in fact, belonged to C., who claimed from the purchaser the return of the vessel or its value and damages for its detention. It was held by the Court of Appeal (Somervell, Cohen and Denning L.J.J.) that the purchaser acquired a good title and, therefore, he was entitled to retain the vessel as against the former owner.
Denning, L.J. at 986 of the Judgment states:-
This is yet another instance of a contest between the Common Law rule that no man can give a better title than he has got and the Statutory exceptions in favour of innocent purchasers. I do not think we ought to whittle down the protection which Parliament has given to innocent purchasers. In a commercial community, it is very important that their title should be protected.
The words of this Section are clear beyond peradventure-"the purchaser shall acquire a good title," and I think they should be given their full effect. The proviso is to be explained by the anxiety of the draftsman not to deprive the original owner of his remedy against the execution creditor, or against any wrong-doer who has converted the goods prior to the sale. If it were not for the proviso the execution creditor might have argued that the original owner's claim for money had and received was not preserved because the action for money had and received is only sustainable by a true owner who is claiming the proceeds only of the goods themselves, and that it failed when he ceased to be a true owner. Any such argument, good or bad, is defeated in advance by the proviso. In my opinion, the Section gives a good title to the innocent purchaser and this appeal should fail.
It follows from this that whilst the plaintiffs in this case acquired a good title to the property, the defendant/company is not entirely left without remedy, for, it seems, it can maintain against the execution creditor an action for money had and received. And, it would appear that the failure of the defendant/company to give notice of their interest to the Bailiff as agent of the execution creditor would not estop it from maintaining the action.
In Jones Brothers (Holloway), Limited v. Woodhouse, (1923) 2 K.B. 117, there was hire-purchase agreement under which the plaintiffs let to the tenant of premises certain furniture the value of which was about half of that of all the goods upon the premises. The defendant, who was the lessor of the premises, having recovered Judgment against the tenant for arrears of rent obtained a fieri facias thereon, under which the Sheriff seized all the goods on the premises and some days later, on April 27, 1921, sold them by public auction The sale realised £105-8s-8d and after deduction of the Sheriff's charges and other sums, about one half of that amount or £52-10s-6d was received by the defendant in respect of the Judgment debt. The plaintiffs were informed of the seizure of the goods some days before the sale, but they gave no notice to anyone that the goods hired belonged to them and they made no inquiries until May 1922, when they, for the first time, learned of the execution and sale. In an action by the plaintiffs against the defendant to recover the sum last above mentioned as money had and received by the defendant to the use of the plaintiff it was held that the action was well founded. It was also held that in the circumstances the plaintiffs were not estopped from maintaining the action by reason of their not having informed the Sheriff as agent of the defendant or at all, that the goods hired belonged to them and should not be sold. It was further held, however, that the plaintiffs were not entitled to recover the whole amount received by the defendant but only a proportion thereof corresponding to their share of the goods sold.
I have said that section 16 of our Sheriffs and Civil Process Ordinance is a substantial reproduction of Section 15 of the Bankruptcy and Deeds of Arrangements Act, 1913-vide, Halsbury's Statutes of England, (2nd Edition), Volume 2, at 306. This same section is reproduced, with minor modifications in Section 45(3) of the Bankruptcy Ordinance, 1930 (Laws of Kenya, 1948, Cap. 30). In this connection, I will refer to the Privy Council case of Dyal Singh v. Kenyan Insurance Limited, (1954) 1 A.E.R. 847. In 1946, 'N' who owned a motor ominibus borrowed a sum of money from the respondents on the security of the vehicle and gave them a chattel mortgage which was registered in accordance with the provisions of the Chattels Transfer Ordinance, 1930. A creditor of 'N' obtained Judgment against him and execution followed with a sale by public auction of the vehicle by the court Broker in 1948, when it was bought by the appellant. No claim to the vehicle was made by the respondents or anyone else before the sale, and the Bailiff sold, or purported to sell, the absolute property in the vehicle. In 1950, the respondents, purporting to act under rights which they claimed to possess under their chattel mortgage and its registration, seized the vehicle while it was in the appellant's possession. It was held that the words "person from whom recovery is sought" in section 45(3) of the Bankruptcy Ordinance, 1930, related altogether to the words "no person shall be entitled to recover against such Bailiff or any other person acting under his authority", and should not relate back to the words "the purchaser of the goods so sold", the subsection gave a good title to the purchasers, whether or not they had notice that the goods were not the property of the execution debtor, even though in some cases the true owner might be deprived of one of his remedies; and, therefore, the appellant had secured a clear title in respect of the vehicle.
It was contended by Mr Sofola, learned Counsel for the defendant/company that, had Mrs Fanny Nwakobi made a reasonable inquiry, she would have discovered the true owner of the lorry to be the defendant/company. In answer to this submission, I would refer to page 850 of the Privy Council Judgment I have just cited where Lord Reid stated:-
One would expect a Bailiff to be required to make reasonable inquiry, but it is difficult to see what reasonable inquiry as to title could be expected of a person who intended to bid for goods at a sale by auction.
I cannot, therefore, find any substance in the submission that Mrs Nwakobi could have discovered the true owner of the lorry before she purchased it by public auction, as I had no evidence before me as to the nature of inquiry she was expected to make in order to be fixed with notice of the defendant/company's interest.
I have already stated that I believe the Bailiff's evidence that at the time that he was about to seize the lorry from the execution debtor, the latter did not tell him that a third-party was interested in it. I hold, therefore, that the Bailiff had no notice of a third party's interest when he seized the lorry. The execution debtor was not called as a witness. Even if he were called and had stated that he informed the Bailiff that the lorry did not belong to him, I would be slow to attach any weight to his evidence for, by altering the registration number of the vehicle from LD.8170 to WA.559 without the knowledge of the defendant/company, it seems to me that he had actively attempted, in breach of the terms of the hire purchase agreement, to place the vehicle beyond the reach of the hirers and to exercise full dominion thereon.
It was also argued by Mr Sofola that the printed auction notice (exhibit H) was worthless as there was no evidence of a Judgment of a competent Court which would warrant the putting up of an auction notice. He also submitted that the writ of fieri facias was not produced in order to show that it was signed by the proper authority and contended in effect that until that was done, the sale was invalid. It is clear from the auction notice that Karimu Akinola was the defendant in suit No. IK. 728/58 and that the writ of attachment and sale of the lorry in question was issued following a Judgment obtained against him in the action. Neither the validity of the Judgment nor, indeed, that of the writ, was put in issue at the trial. I am, therefore, of the opinion that the point cannot be raised for the first time during Counsel's address. In any case, I consider the point totally irrelevant to my consideration of this case.
There would, therefore, be Judgment for the plaintiffs against the defendant for the return of the plaintiffs' lorry, Bedford tipper No. WA.559, seized by the defendant since the 29th September, 1960. In the alternative, the defendant/company is ordered to pay to the plaintiffs the sum of £700 being the value of the said lorry.
On the question of loss of profits from the 29th September, 1960, when the lorry was seized, to the 5th November, 1960, when the action was brought, the plaintiffs' evidence that the lorry was fetching £40 per week was un-contradicted. The plaintiffs had claimed the sum of £200 in this connection. I award them the amount as claimed. I also award them £10 general damages. The defendant will pay the costs of this action which I fix at 70 guineas.
Judgment for the Plaintiffs.