JOSEPH ADEMOLA AKIN-TAYLOR v. BOJA INVESTMENT & DEVELOPMENT COMPANY LIMITED & ORS
(2013)LCN/6454(CA)
In The Court of Appeal of Nigeria
On Wednesday, the 7th day of August, 2013
CA/L/440/1997
JUSTICES
IBRAHIM MOHAMMED MUSA SAULAWA Justice of The Court of Appeal of Nigeria
JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria
CHINWE EUGENIA IYIZOBA Justice of The Court of Appeal of Nigeria
Between
JOSEPH ADEMOLA AKIN-TAYLOR (For and on behalf of the Estate of Late Chief G. Akin Taylor) Appellant(s)
AND
1. BOJA INVESTMENT & DEVELOPMENT CO. LTD.
2. ABAYOMI SUNDAY BENJAMIN AWONIYI
3. KOLE SAVAGE & CO.
4. CHIEF REGISTRAR OF TITLES Respondent(s)
RATIO
WHETHER OR NOT AN ESTATE AGENT IS AN INDEPENDENT PERSON
It is now the accepted position under our law that an estate agent despite his style is an independent person engaged on a commission basis to find and introduce a willing purchaser. He is not the agent of the vendor to contract on his behalf and his actions are only attributable to the vendor in a limited case as for example the making of representation as to the conditions of the property. An estate agent does not have actual, implied nor ostensibly apparent authority to ask for or receive a pre-contract deposit as agent of the vendor. See Sorrel v. Finch (supra) applied in the case of Ezenwa v. Ekong (supra). PER IYIZOBA, J.C.A.
WHETHER OR NOT A DISCLOSED PRINCIPAL IS BOUND BY THE ACT OF HIS AGENT
Also, a disclosed principal, in law is not bound by any act of his agent which is outside the agent’s implied or apparent authority unless the principal in fact authorized the agent to do the particular act. See Ezenwa v. Ekong (1999) 11 NWLR (Pt.625) 5 at 72. PER IYIZOBA, J.C.A.
CHINWE EUGENIA IYIZOBA, J.C.A. (Delivering the Leading Judgment): The appellant was the owner of the property known as No. 50 Norman Williams Street, South West Ikoyi, Lagos. He was desirous of selling the property so he instructed the 3rd Respondent, a firm of Estate agents in that regard. The 1st and 2nd Respondents were tenants in the property. By a letter dated 4th October, 1991, the 3rd Respondent introduced the property to the 1st and 2nd Respondents as being available for sale at the price of N8,000,000.00. The 2nd Respondent by his letter of 16th October, 1991 responded offering the sum of N4.5 million which offer was rejected. On 9th November, 1992, the 2nd Respondent by another letter improved his offer to N9,000,000,00 which was also rejected. In its letter rejecting the offer dated 18th November, 1992 (Exhibit A4) the 3rd Respondent indicated that the Appellant is ready to accept the sum of N10,000,000.00 for the property. On 16th April,1993, the 1st and 2nd Respondents by another letter (Exhibit A8) informed the 3rd Respondent that they are willing to pay the sum of N10 million for the property. The 3rd Respondent the same day by a letter Exhibit A9 accepted this offer on behalf of the Appellant as the purchase price of the property. The 1st and 2nd Respondents on 27th April 1993 by Exhibit A10 acknowledged the letter and indicated that they will make full payment on or before the 17th day of May, 1993. However, the Appellant by a letter dated 29th April, 1993 addressed to the 3rd Respondent stated that the sale price for the property was now US $500,000.00 or the equivalent in Pounds sterling. This very letter which was tendered as Exhibit A12 was conveyed to the 1st and 2nd Respondents by the 3rd Respondent by another letter, Exhibit A11. In their response dated 4th May, 1993, Exhibit A13, the 1st and 2nd Respondents wrote as follows:
“We acknowledge receipt of your letter which came just as we were about forwarding the enclosed cheques to you.
We are surprised about the foreign exchange consideration just introduced into our negotiations. We are a wholly Nigerian company and the Naira still remains the only currency we earn. We are financing the purchase of this property via loans from a Nigerian based financial institution, and the liquidation of some of our deposits.
In conformity with our promise in an earlier letter, find enclosed our cheques drawn in your name as instructed, in the total sum of N6m. being part payment for the aforementioned transaction. The balance of N4m will be made available as indicated in our letter dated 27th April, 1993.”
Three Cheques of N2million each amounting to N6 million were attached to the letter and copies thereof were admitted as Exhibit E14. On 6th May, 1993 the 3rd Respondent generated a letter which he wrote to the Appellant in the following terms which letter was tendered as Exhibit B1:
“RE: SALE OF 50 NORMAN WILLIAMS STREET, S.W. IKOYI
Further to your discussion of yesterday with the undersigned on the above subject matter, kindly confirm in writing your acceptance of the sale offer of N12 Million (Twelve Million Naira) only on the following payment arrangement.
i) Immediate payment of N2 Million only.
ii) Further payment of N4 Million when document is received; and
iii) Balance payment of N6 Million when the sale is concluded.
Please treat as urgent.”
Upon receipt of Exhibit B1, the Appellant wrote Exhibit B2 accepting the terms of payment. Following the acceptance of Exhibit B1 by the Appellant, the 3rd Respondent wrote Exhibit B by which he conveyed copies of Exhibits B1 and B2 to the 1st and 2nd Respondents. Exhibit B reads:
“RE: 50 NORMAN WILLIAMS STREET, S. W. IKOYI.
Previous correspondence and discussions on the above subject matter refers.
Please find enclosed herewith a copy of the letter sent to our client – Chief G. Akin Taylor detalining the payment plan for the above and a copy of his letter accepting same.
Please take note.”
There was no written reaction from the 1st and 2nd Respondents to this letter rather they issued additional cheques (two Union Bank drafts dated 11/05/93) for total sum of N4,000,000.00 which the 3rd Respondent received. It was after this that the 3rd Respondent forwarded one of the Union Bank drafts dated 11/05/93 for the sum of N2,000,000.00 only to the Appellant. All this while, he held on to the earlier drafts he received and invested the rest of the money in a finance house which became distressed and the money was lost. The 3rd respondent issued two receipts acknowledging the receipt of aggregate sum of N10 Million as deposit towards purchase of the property in dispute in this case to the 1st and 2nd Respondents. At trial, while the Appellant and 3rd Respondent claimed that the money invested in the finance house was made for and on behalf of the 1st and 2nd Respondents, the 1st and 2nd Respondents claimed that the 3rd Respondent made the investment for the Appellant.
When it was clear to the parties that the money was lost in the finance house, the Appellant refused to sell the property to the 1st and 2nd Respondents and was attempting to sell it to other persons as a result of which the 1st and 2nd Respondents filed the suit leading to this appeal seeking specific performance of the agreement against the Appellant who was sued as the 1st Defendant, the 3rd Respondent was the 2nd Defendant while the Registrar of Titles was the 3rd Defendant. By their pleadings, the 1st and 2nd Respondents claimed that the purchase price agreed between the parties was the sum of N12 million, however, at the end of the trial judgment was entered in favour of the 1st and 2nd Respondents by the trial court which granted the prayer for specific performance of the agreement between the parties at the price of N10 Million. Being aggrieved the Appellant appealed against that decision by a notice of appeal which was amended. The 1st and 2nd Respondents filed a respondents’ notice that judgment of the lower court be affirmed on the grounds that:
1. There is a specifically enforceable contract between the Appellant and the 1st Respondent, under which the Appellant is obliged to sell the property in dispute to the 1st Respondent at the purchase price of N12 Million, and
2. The 3rd Respondent had the express authority of the Appellant to communicate the letter of acceptance dated the 16th of April 1993 (Exhibit A9) to the 1st Respondent.
In arguing the appeal the learned counsel for the Appellant relied on the 2nd Further Amended Notice of Appeal dated 10th November, 2003 which contained five grounds of appeal; out of which he had formulated four issues for determination in his amended Brief of Argument as follows:
“1. Whether upon a proper appraisal of the parties evidence on the point vis-a-vis the applicable laws, the learned trial Judge was right in finding (or holding) that the 2nd Defendant (a firm of Estate Agents) were the agents of the 1st defendant, with unqualified authority to contract on his behalf in respect of the property in dispute. (Grounds 2 & 5);
2. If the answer to issue 1 is in the negative, whether the lower court was right in granting specific performance of a contract predicated on Exhibits A8 & A9, having regard to the evidence on record and relevant laws;
3. Whether the evidence on record bear out the finding of the lower court that the investment of N8 Million Naira in Hanover Homes Loan & Finance Limited was at the instance and for the benefit of the 1st defendant (Ground 3)
4. Whether in any event, the learned trial Judge had requisite jurisdiction to order specific performance of a contract at a contractual consideration of N10 Million Naira, when there was no such claim before the lower court. (Ground 4)”
The 1st and 2nd Respondents formulated the following issues for determination based on the Amended Notice of Appeal and the Respondents’ Notice to affirm the judgment on other grounds:
“1. Whether there is a specifically enforceable contract between the Appellant and the 1st Respondent, under which the Appellant is obliged to sell the property in dispute to the 1st Respondent at a purchase price of N12 Million (Twelve Million Naira only)
2. Whether the 3rd Respondent had the express authority of the Appellant to conclude the contract of sale with the 1st and 2nd Respondents on behalf of the Appellant through the letter of acceptance dated 16th of April 1993 (Exhibit A9)
3. Whether the Appellant’s and 3rd Respondent’s allegation that the 1st and 2nd Respondents only paid a sum of N2 Million towards the purchase price is borne out by any evidence before the lower court.”
The Appellant’s learned counsel challenged the validity of issues one and three raised in the 1st and 2nd Respondents’ brief of argument contending that they did not arise from the grounds of appeal. Counsel urged the Court to strike out the issues and argument based on them. He argued in the alternative that the 1st and 2nd Respondents cannot seek to set aside the findings made by the trial court upon which it arrived at its decision in this case based on the Respondents’ Notice.
There is no doubt that issue number 1 in the 1st and 2nd Respondents brief are not same with the issues 2 and 4 of the appellant neither is their issue number 3 same with the Appellant’s issue number 3 as the 1st and 2nd Respondents’ counsel has stated. This notwithstanding, I am minded to determine this appeal based on the issues formulated by the Appellant which is more in line with the grounds of appeal. While doing so I will take cognisance of the Respondent’s notice and in determining the appeal I shall consider the arguments of learned counsel for the Respondent relating to these issues.
It is necessary to point out that a Respondent seeking to set aside a finding which is crucial and fundamental to a case can only do so through a substantive cross-appeal and cannot do so by an application or notice to affirm or vary the judgment on appeal on other grounds. Lagos State Council v. Ajayi (1970) 1 All NLR 291 @ 294 – 297; Oba Adeyinka Oyekan v. B.P. Nig. Ltd. (1972) 1 All NLR 45 @ 47 – 48 Elliochin (Nig.) Ltd. v. Mbadiwe (1986) 1 NWLR (Pt.14) 47; Arisons Trading & Eng. Coy Ltd. v. The Military Governor of Ogun State (2009) 15 NWLR (Pt.1163) 26.
ISSUE 1:
Whether upon a proper appraisal of the parties evidence on the point vis-a-vis the applicable laws, the-learned trial Judge was right in finding (or holding) that the 2nd Defendant (a firm of Estate Agents) were the agents of the 1st defendant, with unqualified authority to contract on his behalf in respect of the property in dispute. (Grounds 2 & 5);
APPELLANTS’ ARGUMENTS:
While arguing this issue, the learned Appellant’s counsel contended that the 1st and 2nd Respondents as Plaintiffs pleaded in paragraph 5 of their joint Statement of Claim that the Appellant put forward or held-out and paraded the 3rd Respondent to the Plaintiffs as being his duly authorized and accredited agent clothed with the plenitude of all the requisites, powers and mandate to bind the Appellant to the 3rd Respondent’s acts. This pleading, it was stated, was denied by the Appellant in paragraph 2 of his Statement of Defence. It was submitted that the Appellant only instructed the 3rd Respondent to secure offers from persons and communicate same to him. It was submitted that the 1st and 2nd Respondents failed to prove these averments in their pleadings and that they tendered no documentary evidence to substantiate same. Pleadings are not evidence. It was submitted further that the oral evidence of the parties and Exhibits A – A12 and G all support the case of the Appellant that the 3rd Respondent was only mandated to scout for prospective buyers of the properly and communicate offers to the Appellant and so the 1st and 2nd Respondents knew that the Appellant reserved absolute right to accept or reject any offer. It was therefore submitted that Exhibits A-A12 and G radically contradicts the pleading of the 1st and 2nd Respondents and therefore knocks the bottom off their case. Akanmu v. Adigun (1993) 7 NWLR (Pt.304) 218 @ 235 was referred to. Counsel also referred to the cases of Mogaji v. Odofin (1978) 4 SC 1; Onwuka v. Maduka (2002) 9 -10 SC 148 and Agbanelo v. UBN Ltd. (2000) FWLR (Pt.13) 2197 to submit that the trial court failed to properly appraise the evidence before him in arriving at his decision which occasioned a miscarriage of justice.
He urged the Court to reverse the finding that the 3rd Respondent was clothed with unqualified authority to contract on behalf of the Appellant.
RESPONDENTS’ ARGUMENTS:
The 1st and 2nd Respondents purportedly addressed this issue as their issue number 2. In actual fact, the 1st and 2nd Respondents did not at all address the question raised under this issue but avoided to confront same frontally. While treating this issue, the 1st and 2nd Respondents were actually responding to the arguments of the Appellant under his issue number 2. The only argument which the 1st and 2nd Respondents made that slightly relates to this issue is at page 27 of their brief where they stated thus:
“It is the 1st and 2nd Respondents’ respectful submission that the italicized portions of Exhibit A4 quoted above depict, incisively, that the Appellant authorized the 3rd Respondent to conclude the contract with the 1st, Respondent provided the purchase price stipulated by the Appellant [N10 million] was agreed”‘
RESOLUTION OF ISSUE 1:
With all due respect, the above submission of counsel is still off the mark and did not answer the question posed under Appellant’s issue 1 which is whether the 3rd Respondent as agent of the Appellant had unqualified or unlimited authority to contract on his behalf in respect of the property in dispute.
Where a party fails to advance argument in answer to an issue canvassed by his opponent he will be deemed to have conceded to the issue. In the instant case, counsel to the 1st and 2nd Respondents has failed to canvass argument which directly touch on the question formulated but has chosen instead to dance around the matter. It is more honourable and good advocacy for counsel to concede to a point which is clearly against him and not to argue blindly. It is clear that under the facts of this case that the 1st and 2nd Respondents did not lead any credible or acceptable evidence to support their pleading in paragraph 5 of their joint Statement of Claim that the Appellant put forward or held-out and paraded the 3rd Respondent to the Plaintiffs as being his duly authorized and accredited agent clothed with the plenitude of all the requisites, powers and mandate to bind the Appellant to the 3rd Respondent’s acts. It is evident that at every stage of the journey, the 3rd Respondent had to revert back to the Appellant for directives. I therefore hold that there is no evidence before the trial court that supports its finding that the 3rd Respondent was clothed with unqualified authority and mandate to conclude the transactions concerning the said property on behalf of the Appellant. This issue is resolved in favour of the Appellant.
ISSUE 2
If the answer to issue 1 is in the negative, whether the lower court was right in granting specific performance of a contract predicated on Exhibits A8 & A9, having regard to the evidence on record and relevant laws.
APPELLANTS’ ARGUMENTS:
Arguing this issue the learned Appellant’s counsel referred to the evidence of the parties before the trial court and stated that the case of the 1st and 2nd Respondents was that Exhibit A8 was the offer they made which the Appellant through his agent, the 3rd Respondent accepted by Exhibit A9. He contended that before the 1st and 2nd Respondents paid any money based on the acceptance of their offer of N10 Million, the Appellant had made a counter offer of US$500,000.00. This fact, it was argued, was accepted by the 2nd Respondent in his evidence. Notwithstanding this the trial Judge found that Exhibits A8 and A9 constitute the letters of offer and acceptance of the N10 million selling price, respectively. The court also found that by Exhibits A14 and C, the 1st and 2nd Respondents have paid the sum of N10 Million hence he ordered specific performance of the contract based on the N10 Million paid. Counsel submitted that the process by which the trial Judge came to the conclusion that the 1st and 2nd Respondent are entitled to the order of specific performance was very casual and did not involve proper evaluation of evidence. He submitted that there is credible evidence that the Appellant did not accept the offer of N10 Million; that contrary to instructions, the 3rd Respondent accepted Exhibit A8 without the knowledge or consent of the Appellant and that the rejection of the said offer of N10 Million was duly communicated to the 1st and 2nd Respondents vide Exhibit A11. He submitted that there was no proper evaluation of evidence and that for instance the 1st Respondents, offer of N10 Million in Exhibit A4 was rejected by the Respondents, vide their Exhibit A5, yet the trial Judge held that by Exhibit A14 the 1st and 2nd Respondents made part payment of N6 Million as demanded by the Appellant in Exhibit A4.
He submitted that the 3rd Respondent was an estate agent of a disclosed principal (the Appellant) for whom he was marketing his property. The Appellant was not therefore bound by the act of his agent which is outside the agent’s implied or apparent authority. Universal Vulcanizing Nig. Ltd v. IUTTC (1992) 9 NWLR (Pt.266) 388 at 403.
He submitted that an estate agent (being an independent person engaged on a commission basis to find and introduce a willing purchaser for property) is not the agent of the vendor to contract on his behalf citing Ezenwa v. Ekong (1999)11 NWLR (Pt.625) 55 at 72 E – G. Counsel also submitted that an estate agent employed by a vendor to find a purchaser is an agent in a limited sense only and cannot conclude a contract without the vendor’s express authority De Bussche v. Alt (1878) 8 Ch.D 286 at 310; Mullens v. Miller (1882) 22 Ch.D. 194; Sorrel v. Finch (1977) AC 728 at 753. He argued that an estate agent normally has no authority to sell land even when he was instructed as to price at which the vendor will sell as his function is to solicit offers and transmit them to his principal. Keen v. Mear (1920) 2 Ch 514; Wragg v. Lovette (1948) 2 All ER 968.
Based on these authorities, counsel submitted that the 3rd Respondent’s acceptance vide Exhibit A9 of the offer of N10 Million in Exhibit A8 is null and void as he acted without reference to and clearance from a disclosed principal. He referred to Incar Nig. Plc. v. Bolex Enterprises Nigeria Plc. (2001) 5 SC (Pt.II) 224. He stated that the learned trial Judge relied heavily on the 3rd Respondent’s acceptance of Exhibit A8 vide Exhibit A9 to draw conclusion which led him to order specific performance against the Appellant. He therefore urged this Court to hold that:
1. The 3rd Respondent’s mandate was to introduce buyers to the Appellant for the latter to accept;
2. It could not be reasonably found that the 3rd Respondent had the general authority to accept the offer of Exhibit A8 as it purported to have done vide Exhibit A9 or to sell the property in issue without reference first to the Appellant for his acceptance of the particular offer;
3. The Appellant rejected the offer in Exhibit A8 and that being so, the 1st and 2nd Respondents failed to prove that there was a valid contract of sale between them and the Appellant capable of being enforced by an order of specific performance;
4. The finding of the court below which run contrary to 1 – 3 above is clearly perverse and the decree of specific performance anchored on it should not be allowed to stand.
RESPONDENTS’ ARGUMENTS:
The arguments of the 1st and 2nd Respondents which relate to this issue can be found under their issue 2 which was argument advanced in answer to issue one of the Appellant. In his argument, learned counsel for the 1st and 2nd Respondents, referred to Exhibits A8 and A9 and submitted that Exhibit A9 was clearly stated to have been written “on behalf of” the Appellant’ Despite this, the Appellant argued that the 3rd Respondent did not act with his authority. He referred to the cases of Ezenwa v. Ekong (supra) and Incar Nigeria Plc. v. Bolex Enterprises Nigeria Plc. (supra) cited by the Appellant and submitted that it is clear from the judgments that the court recognized that an estate agent may be authorized to sell property and such sale would be valid. He stated that the crucial issue upon which the case of Ezenwa was decided turned on the evidence before the court which showed that the principal had reserved for himself the right to decide what price to sell the property and there was no shred of evidence in that case, unlike in the instant case, that the vendor agreed that the property be sold at a particular price. He submitted that the peculiar facts of a case will determine whether an estate agent does have the authority to conclude a binding contract. He submitted that under the facts of this case the 3rd Respondent had the authority of the Appellant to conclude the contract by virtue of Exhibit A9. He referred to the testimony of the Appellant on the 19th of April 1996 where he stated under cross-examination thus: “I see Exhibit A9 – it is in line with my instruction at that time” and submitted that the Appellant himself has admitted that he gave the instruction. He said that a binding contract came into force once that acceptance was made and it was no longer possible for the Appellant to communicate the counter-offer of US $50,000.00.
RESOLUTION OF ISSUE 2:
It is now the accepted position under our law that an estate agent despite his style is an independent person engaged on a commission basis to find and introduce a willing purchaser. He is not the agent of the vendor to contract on his behalf and his actions are only attributable to the vendor in a limited case as for example the making of representation as to the conditions of the property. An estate agent does not have actual, implied nor ostensibly apparent authority to ask for or receive a pre-contract deposit as agent of the vendor. See Sorrel v. Finch (supra) applied in the case of Ezenwa v. Ekong (supra).
Also, a disclosed principal, in law is not bound by any act of his agent which is outside the agent’s implied or apparent authority unless the principal in fact authorized the agent to do the particular act. See Ezenwa v. Ekong (1999) 11 NWLR (Pt.625) 5 at 72.
The issue in this case is whether there was a binding contract between the parties based on Exhibits A8 and A9? In other words, was the 3rd Respondent mandated to accept the offer of N10 Million made by the 1st and 2nd Respondents?
The facts are that on 16th of April, 1993, the 1st and 2nd Respondents by (Exhibit A8) informed the 3rd Respondent that they are willing to pay the sum of N10 million for the property in issue. The 3rd Respondent the same day accepted this offer on behalf of the Appellant as the purchase price of the property by (Exhibit A9).
In Exhibit A9 the 3rd Respondent wrote as follows:
“Your letter dated 16th instant on the above subject matter refers:
We write on behalf of our client – Chief Akin Taylor and hereby accept the sum of N10 Million only as the purchase price for the subject property”
So, clearly by Exhibit A9 the 3rd Respondent accepted Exhibit A8 representing that he had the Authority of the Appellant to do so. Based on the testimony of the Appellant on the 19th of April 1996 while under cross-examination that the acceptance was in line with his instruction, referred to above. I find that that acceptance was made in accordance with the instructions of the Appellant. It therefore means that the 3rd Respondent accepted the offer with the authority consent and knowledge of the Appellant and therefore the acceptance is valid and not null and void as contended by the learned Appellant’s counsel. The cases of Ezenwa v. Ekong (supra); Incar Nig. Plc. v. Bolex Enterprises Nigeria Plc. etc cited by the Appellant, though good law, are not applicable in this case based on the fact that I have found as a fact that the acceptance of the offer of N10 Million was made with the consent and knowledge of the Appellant. There was valid acceptance made at this stage.
However, this is not the end of the matter. It is also clear from the evidence that as admitted by the 2nd Respondent in his oral testimony, that before consideration could pass based on that acceptance made pursuant to Exhibit A9, the Appellant made a counter-offer of US$500,000.00 see Exhibit A12. In my view, since no consideration had passed at this stage, the counter-offer re-opened negotiation between the parties. The counter-offer was in fact rejected by the 1st and 2nd Respondents by virtue of Exhibit A13 by which also they forwarded three bank drafts (Exhibit A14) to the 3rd Respondent which he retained. The content of Exhibit A13 had been set out above. It was at this stage that parties exchanged Exhibits B, B1 and B2. Because of their importance, I will set out the vital s of these documents.
Exhibit B1 dated 6th May 1993 written by the 3rd Respondent to the Appellant.
“RE: SALE OF 50 NORMAN WILLIAMS STREET, S.W. IKOYI
Further to your discussion of yesterday with the undersigned on the above subject matter, kindly confirm in writing your acceptance of the sales offer of N12 Million (Twelve Million Naira) only on the following payment arrangement.
(i) Immediate payment of N2 Million naira only
(ii) Further payment of N4 Million when document is received; and
(iii) Balance payment of N6 Million when the sale is concluded.
Please treat as urgent.”
Upon receipt of Exhibit B1, the Appellant wrote Exhibit B2 date d 7th May, 1993 accepting the terms of payment:
“RE: SALE OF 50 NORMAN WILLIAMS STREET, S. W. IKOYI
Your letter of 6th May, 1993 in respect of the above refers.
I hereby confirm my acceptance of the terms and conditions of the sale as stated in your letter under reference.”
Following the acceptance of Exhibit B1 by the Appellant, the 3rd Respondent now wrote Exhibit B dated 10th May, 1993 by which he conveyed copies of Exhibits B1 and B2 to the 1st and 2nd Respondents. Exhibit B reads:
“RE: 50 NORMAN WILLIAMS STREET, S.W. IKOYI
Previous correspondence and discussions on the above subject matter refers.
Please find enclosed herewith a copy of the letter sent to our client – Chief G. Akin Taylor detailing the payment plan for the above and a copy of his letter accepting same.
Please take note.”
It must be noted that by Exhibits B and B1 the 3rd Respondent introduced a new price of N12 Million to the 1st and 2nd Respondents, in addition to outlining the terms of payment for the property. There was no written reaction from the 1st and 2nd Respondents to this letter rather they issued additional cheques (2 Union Bank drafts) for N4,000,000’00 which the 3rd Respondent received. See Exhibit C. In their pleading and in his oral evidence, the 2nd Respondent stated that they accepted the revised price of N12 Million but that they rejected the conditions of payment stated in Exhibit B1. There is no other piece of evidence exactly showing how this happened, apart from Exhibits B – B2. In his evidence in chief on 3rd May, 1995, 2nd Respondent stated:
The 2nd Def. informed me that the 1st Def. had reviewed the price of the property to N12m. He informed me by forwarding a copy of the letter between him and the 1st Def…. I accepted the new offer of N12m verbally from the 2nd Def. I then proceeded and made available the Union Bank drafts for N2m each.”
It is clear from the above that the final price agreed between the parties as payable for the property was the sum of N12 Million and not sum of N10 Million stated in Exhibits A8 and A9 and that this review of price was done by virtue of Exhibits B to B2. The learned trial Judge was therefore wrong to have ordered specific performance based on the sum of N10 Million as the agreed purchase price instead of the sum of N12 Million finally agreed between the parties as the purchase price of the property. This agreement on the sum of N12 Million is in line with the pleadings of the 1st and 2nd Respondents at paragraph 24 of their Amended Statement of Claim and the oral evidence of the 2nd Respondent which I have set out above. The order so made did not find any support in the evidence, pleading and claims of the 1st and 2nd Respondents. It cannot therefore be allowed to stand. It amounts to the trial court making a case for the 1st and 2nd Respondents which is contrary to their claims which the court as a dispassionate arbiter is not allowed to do. Thus, I find that the order of specific performance as made by the trial Judge did not reflect the agreement of the parties and cannot be allowed to stand. But this is not ‘the end of the matter as the 1st and 2nd Respondents filed a respondents’ notice.
I must state that it is clear that there is evidence before me that the parties agreed on the price of N12 Million as the purchase price for the property, so if this is a proper case for order of specific performance to be made, it has to be predicated on the actual price agreed between the parties upon which the 1st and 2nd Respondents based their claims in this case and not on any other price. However, I will like to consider the other issues before arriving at the proper order to make in this appeal.
Issue 2 is resolved in favour of the Appellant without deciding at this stage whether there is an enforceable contract on the basis of which order of specific performance could be made as prayed for by the 1st and 2nd Respondents.
Issue 3:
Whether the evidence on record bear out the finding of the lower court that the investment or N8 Million Naira in Hanover Homes Loan & Finance Limited was at the instance and for the benefit of the 1st defendant (Ground 3).
APPELLANT’S ARGUMENTS:
Arguing this issue, the learned Appellant’s counsel submitted that the 1st and 2nd Respondents pleaded tersely that they had paid the cumulative sum of N10 million towards liquidation of the agreed sale price which sum was accepted by the Appellant and the 3rd Respondent. This averment, he stated, was denied by the Appellant and the 3rd Respondent. He stated further that the 3rd Respondent pleaded facts to contradict and controvert the averment that the sum of N10 Million was paid towards the agreed purchase price. He stated that the 3rd Respondent pleaded particulars of, and gave evidence on why and how the sum of N8 Million out of the N10 Million passed to him by 1st and 2nd Respondents was invested in a finance company, following a private arrangement between him and the 2nd Respondent, acting for the 1st Respondent. He submitted that this arrangement to the knowledge of the 1st and 2nd Respondents was outside the scope of the 3rd Respondents agency in respect of the property in dispute. He stated that the Appellant was not even aware that additional sum of N8 Million has been passed to the 3rd Respondent and was not a party to the investment in the finance company. He stated that the 3rd Respondent pleaded these facts in his defence and that when the 2nd Respondent was informed that the investment could not be retrieved at maturity, he reacted to the development through a letter dated 24th September, 1993, Exhibit J.
This fact, he submitted, was pleaded by the 3rd Respondent which the 1st and 2nd Respondents denied and by section 139 of the old Evidence Act, the 3rd Respondent and the 1st and 2nd Respondents had the legal burden to prove the particular facts each averred in projection of their divergent positions on the issue of N8 Million investment.
He submitted that it was not in dispute that the parties agreed to the purchase price of N12 Million and that out of the N10 Million the 1st and 2nd Respondents claimed to have passed on to the 3rd Respondent, only the sum of N2 Million had been paid to the Appellant. What is in dispute is whether the arrangement to do so was between the 3rd Respondent and the 1st and 2nd Respondents or between the 3rd Respondent and the Appellant.
He submitted that a party seeking specific performance must show that he has either performed or is willing to perform his obligations under the contract. It is therefore important to resolve the vital point of: ‘at whose instance and for whose benefit the sum of N8 Million was invested’. He submitted that the 1st and 2nd Respondents pleaded in paragraph 9 of their Statement of Claim that they will rely on bank statements and other banker’s books of various banks to establish the receipt by the Appellant and the 3rd Respondent of the proceeds of the instruments by which N10 Million was paid, but however they failed to tender any oral or documentary evidence to show or establish the claim. He then contended that the provisions of section 149(d) of the Evidence Act must be invoked against the 1st and 2nd Respondents. He further submitted that the 3rd Respondent’s evidence as to how he made the investment of N8 Million for the 1st and 2nd Respondents was not challenged. Rather, the 1st and 2nd Respondents denied the existence of Exhibit J but admitted same under cross-examination. He submitted that at the trial court it was not contested that the 2nd Respondent wrote Exhibit J in respect of the N9 Million investment. He argued that the comment of the trial Judge on this document ‘fly in the face of the content’ and is not supported by the pleading and evidence on record and is speculative. WAAC Co. Ltd. v. Akinsete (1999) 13 NWLR (Pt.636) 600 @ 607 and Akeredolu v. Akinremi (1989) 3 NWLR (Pt.108) 164 @ 173 were referred to in this regard. He submitted that the evidence led by the 1st and 2nd Respondents on this issue radically conflicts with their pleading in paragraph 6 of their Reply to 2nd Defendant’s Statement of Defence and that a party must be consistent with his pleading and in proving it and not turn summersault during trial. He contended that the Plaintiffs’ evidence containing material contradictions ought to have been discountenanced. He referred to the cases of Ugwu v. Onuigbo (1999) 13 NWLR (Pt.636) 512 @ 28; Rockanolf Property Co. Ltd. v. RCC Nig. Ltd. (1998) 2 NWLR (Pt.539) 685 @ 699 and UBN v. Erigbuem (2003) FWLR (Pt.180) 1365.
He submitted that the 3rd Respondent’s unchallenged evidence on the issue is corroborated by Exhibit J and is preferable to the case of the 1st and 2nd Respondents. He submitted that order of specific performance is an equitable remedy which can be granted at the discretion of the court. Relying on the case of Univeral Vulcanizing Nig. Ltd. v. I.U.T.T.C. (1992) 9 NWLR (Pt.266) 389 at 403 he contended that specific performance ought not to be ordered in this case because of absolute bad faith demonstrated by the 1st and 2nd Respondents and their attempt to overreach the Appellant.
RESPONDENTS’ ARGUMENTS:
Addressing this issue, learned counsel for the 1st and 2nd Respondents referred to the submission made on behalf of the Appellant that only the sum of N2 Million out of the sum of N10 Million passed to the 3rd Respondent was paid to the Appellant and submitted that the issue will be resolved by examination of Exhibits A8, A9, B to B2. Counsel submitted that the terms of the contract is borne by Exhibits A8 and A9 and not Exhibits B1 and B2 as contended by the Appellant as there was an already concluded binding contract at the time Exhibits B1 and B2. were made and the 1st and 2nd Respondents were not parties to them. He submitted that Exhibits B1 and B2 are attempts by the Appellant to unilaterally modify the terms of the contract which is not permissible. He referred to the evidence in chief of the 2nd Respondent that he rejected the ‘staged payment’ arrangement contained in Exhibit B1 to buttress his argument. He emphasized that there was no agreement between the parties on ‘staged payment’. He submitted further that the Appellant himself never intended to adhere to the staged payment arrangement as he concealed the fact that he had collected the original title documents to the property in dispute from ACB from his agent and the 1st and 2nd Respondents and maintained in his pleadings and evidence in chief at trial that the title documents had not been released to him as at April, 1994. It was only while under cross-examination that he admitted that he received the title documents since January 1994. He urged the Honourable Court to hold that the staged payment was never treated by the parties as part of the terms of the contract. He referred to the evidence of 2nd Respondent that he never asked the 3rd Respondent to make an investment on their behalf as the 1st and 2nd Respondents run an investment company and could have done so themselves if need for that arose. He submitted that the trial court’s evaluation of Exhibit J was proper and correctly done and is more consistent with other documentary evidence, particularly Exhibits E and E1 which are purchase receipts issued by the 3rd Respondent. He submitted that the contention of the Appellant that he is not bound by the 1st and 2nd Respondents’ payment to the 3rd Respondent is not borne out by evidence as the Appellant admitted he had received a cheque drawn in 3rd Respondent’s name without question and cannot therefore contend that the 3rd Respondent does not have his authority to receive payment. He submitted that the Appellant cannot now repudiate or deny the authority of the 3rd Respondent to receive purchase money paid pursuant to the transaction. He submitted that the case of Sorrel v. Finch (supra) does not establish that an estate agent cannot under any circumstance receive purchase money on behalf of his principal. He therefore urged this Court to affirm the decision of the trial court.
RESOLUTION OF ISSUE 3:
This issue which is whether the trial Judge’s finding that the investment of the sum of N8 Million was made by the 3rd Respondent on behalf of the Appellant is very crucial to the resolution of this appeal as it determines whether or not the order of specific performance ought to have been made in favour of the 1st and 2nd Respondents as prayed.
It is not disputed that the 3rd Respondent who was agent of the Appellant received aggregate sum of N10 Million paid by the 1s and 2nd Respondents but only paid the sum of N2 Million to the Appellant. The explanation he offered for this was that based on Exhibits B to B2 parties agreed to ‘staged payment’ arrangement to enable the sum of N8 Million deposited by the 1st and 2nd Respondents to be invested on their behalf by the 3rd Respondent to enable them realize additional N2 Million to make up the N12 Million purchase price agreed between the parties.
While the Appellant is contending that Exhibits B to B2 contain the actual terms of the contract between the parties, the 1st and 2nd Respondents are contending that it is Exhibits A8 and A9 that contain the actual terms agreed. Based on the findings I made earlier under Issue 2, particularly based on the acceptance of the 1st and 2nd Respondents that parties agreed to the sum of N12 Million as the purchase price and that this price review was done pursuant to Exhibits B to B2, I find that Exhibits B to B2 represents the terms of the contract between the parties rather than Exhibits A8 and A9.
I refer to the oral evidence of the 2nd Respondent on 3rd May, 1995 set out above, and state that the 2nd Respondent did not say anything at that stage about rejecting the terms of payment given at the same time with the reviewed price by virtue of Exhibit B1 but merely said that he accepted the reviewed price which was communicated to him along with the terms of payment. Based on the above, I tend to believe that the 1st and 2nd Respondents accepted all the terms in Exhibits B, B1 and B2. I so find based on the admission of the 1st and 2nd Respondents that they accepted the reviewed price of N12 Million. Although the 2nd Respondent later said under cross-examination that he rejected the terms of payment in Exhibit B1, the circumstances and the available evidence do not support the denial. If they did not accept those terms of payment communicated along with the reviewed price of N12m, they would have written the 3rd Respondent, as they had previously been doing, expressly rejecting those terms and clearly stating their position on the matter. See Exhibits A1, A5 and A13 where they previously rejected in writing terms they did not agree to during negotiation. Based on the fact that Exhibits B – B2 are in writing, the 2nd Respondent cannot say that he accepted part of the contents of these letters orally and rejected part, except he had written to make this clear. The need for them to have written became imperative upon the receipt of Exhibit D which clearly implies that the earlier sum of N6 Million the 1st and 2nd Respondents paid to the 3rd Respondent was not paid over to the Appellant but had been retained by the 3rd Respondent as at the time Exhibit D was written. The 2nd Respondent should have been put on his alert at this stage that the 3rd Respondent was implementing Exhibit B1 and ought to have communicated his position clearly to the Appellant and the 3rd Respondent that they did not agree to that arrangement. Having not written to reject those terms in the circumstances, he will be taken to have accepted all the contents, including the terms of payment stated in Exhibit B1. When these circumstances are viewed alongside Exhibit J, one is inclined to accept the contention of the 3rd Respondent that he made the investment on behalf of the 1st and 2nd Respondents. This is because if, as the 2nd Respondent said, that when he received Exhibit D, he demanded that the 3rd Respondent forwards all the money paid to the Appellant, he should have done more than he did in the circumstance by ensuring that the Appellant was aware of his position. I do not accept that he demanded and was given receipt (Exhibit E1) at this moment because of the time interval between issuance of Exhibit D and Exhibit E1: an interval of about 21 days. Furthermore, in the light of the above and of the fact that the 2nd Respondent said that the 3rd Respondent confided in him that he lodged the money (N8,000,000.00 purchase price) in a finance company in September, 1993 and this was done without his knowledge and involvement, his reaction ought not have been as in Exhibit J. This is because, at that stage, it was not clear to him that the Appellant is aware of the fact that they have paid the sum of N8,000,000.00 to the 3rd Respondent. He should have communicated with the Appellant at this stage and demanded immediately that the deal be concluded and deed of assignment executed in his favour. He should not have directed a letter to the 3rd Respondent talking about the 3rd Respondent bringing his personal relationship with the MD to bear and about his sleep having been murdered in the past three days. Having regards to the above and the evidence of the 3rd Respondent who asserted that he made the investment for the benefit of the 1st and 2nd Respondents and with their consent and that the Appellant was not aware of the situation, particularly in the light of Exhibits H and H1 the trial Judge was wrong to have concluded in the circumstance that the investment was made at the instance of and for the benefit of the Appellant; the fact that a previous similar investment had been made by the 3rd Respondent on behalf of the Appellant notwithstanding. The only snag is that Exhibits E and E1 show that money was received from the 1st and 2nd Respondents by the 3rd Respondent as deposit for 50 Norman Williams Street while in fact the investments the 3rd Respondent claimed he made in finance company on behalf of the 1st and 2nd Respondents was not made in their names but in the name of the 3rd Respondent and DW2. This implies that the money was paid as deposit towards 50 Norman Williams Street but the 3rd Respondent utilized same to make investment in his name. See Exhibits M – M3 and Exhibits N.O and O1. It therefore means that the investment was not made on behalf of the 1st and 2nd Respondents but for the personal benefit of the 3rd Respondent. In the light of the above, I find that there is no clear evidence before the court to show that the said investment of funds in the Hanov Capital House Ltd or Hanover Home Loan & Savings Ltd was made at the instance and for the benefit of the Appellant. In this regard, I agree with the Appellant’s submissions that the evidence of the 1st and 2nd Respondents did not establish their pleading in paragraph 6 of their Reply to the 2nd Defendant’s Statement of Defence that the investment was an arrangement entirely between the Appellant and the 3rd Respondent and that the 2nd
Respondent came to the knowledge of same in April, 1994.
There are pieces of evidence which suggest that the 1st and 2nd Respondents were aware of the investment but the evidence is not conclusive as to whether the investment was made on their behalf. However, since the 3rd Respondent made the investments in its own name and probably for its own benefit and also for the reason that the Appellant had received the initial deposit of N2,000,000.00 on the transaction through the 3rd Respondent, it does not lie in the mouth of the Appellant to now contend that the 3rd Respondent does not have his authority to receive purchase money regarding the transaction. While on the authorities of Ezenwa v. Ekong (supra) and Incar Nigeria Plc. v. Bolex Enterprises Nigeria Ltd. (supra), an estate agent does not have the authority to ask for and receive pre-contract deposit as an agent of the vendor, in this case the sum of N8 Million which the 3rd Respondent received was not a pre-contract deposit as the parties have by virtue of Exhibits B to B2 agreed on the terms for sale of the property at 50 Norman Williams Street, South-West Ikoyi, Lagos and the Appellant had received the initial sum of N2 Million through the 3rd Respondent. Any further payment made by the 1st and 2nd Respondents through the 3rd Respondent in the circumstances cannot be deemed to be pre-contract deposit received without instruction. It is rather further payment made in pursuance of the contract in a manner which has been accepted by the Appellant. The fact that the 3rd Respondent applied the funds to other purposes cannot be attributed to the 1st and 2nd Respondents unless it is clearly established that they are party to that or consented thereto. As I have said earlier the evidence on this is not conclusive. Based on this, it is not right for the Appellant to now argue that the 3rd Respondent does not have his authority to receive the additional sums paid by the 1st and 2nd Respondents. The Appellant had argued that the 3rd Respondent acted outside the scope of his agency in making the investment with the Hanover Home Loan & Savings Ltd citing the case of Incar Nigeria Plc. v. Bolex Enterprises Nigeria Ltd. (supra). The facts of that case show that the 4th Respondent who had no authority to do so instructed an agent who sold the property of the 1st Respondent. In this case, the issue is that the 3rd Respondent who clearly had the Appellant’s authority to receive payment from the 1st and 2nd Respondents utilized the funds received for other purposes. The case of Incar Nigeria Plc v. Bolex Enterprises Nigeria Ltd (supra) does not apply to the facts of this case.
Issue 4:
“Whether in any event, the learned trial Judge had requisite jurisdiction to order specific performance of a contract at a contractual consideration of N10 Million Naira, when there was no such claim before the lower court, (Ground 4)”
APPELLANT’S ARGUMENTS
The contention of the learned Counsel for the Appellant on this issue is that the final award made by the learned trial Judge is not in consonance with the claims of the 1st and 2nd Respondents. The learned trial Judge had ordered that a deed of transfer be executed in favour of the 1st Respondent at the purchase price of N10 Million when the Respondents in their pleading had put the purchase price at N12 Million. Learned Counsel relying on Akanmu vs. Adigun (1993) 7 NWLR (Pt.304) 218 @ 229 submitted that pleadings and evidence led determine the nature of the party’s case. Counsel urged the Court to set aside the order of specific performance as one which was given without jurisdiction.
RESPONDENTS’ ARGUMENTS:
The Respondents had indeed conceded that the learned trial Judge erred in putting the purchase price at N10 Million. They had filed a Notice of Intention that judgment be affirmed on grounds other than those relied on by the trial Court. They had conceded that the purchase price as pleaded by the 1st and 2nd Respondents as Plaintiffs was for the sum of N12 Million.
RESOLUTION OF ISSUE 4:
I had earlier resolved that the trial Judge had no competence to order specific performance in favour of the 1st and 2nd Respondents based on the purchase price of N10 Million which does not represent the final sum agreed upon by the parties. The evidence before the court is that the final price agreed between the parties for the property was N12 Million. Having regard to this fact and also the fact that it has been established that the 1st and 2nd Respondents had made payments up to the sum of N10 Million towards purchase of the property in dispute for which receipts were duly issued to them by the 3rd Respondent exactly in the same manner payment was received by him in respect of the two million naira which he had paid over to the Appellant, I hold the view that this is an appropriate case to grant the order of specific performance prayed for by the 1st and 2nd Respondents, not for the purchase price of N10 Million granted by the trial court but for the sum of N12 Million agreed to by the parties. Accordingly, this appeal succeeds in part. The judgment of Adeniji J. Of the High Court of Lagos State, Lagos
Judicial Division delivered on the 27th day of June, 1997 is hereby set aside. In its place, it is ordered as follows:
1. The Appellant is hereby ordered to execute a deed of transfer in favour of the 1st Respondent with respect to the property known as No. 50 Norman Williams Street, South-West Ikoyi, Lagos with Certificate of Title No. LO-47441 at the purchase price of N12 Million.
2. The 1st and 2nd Respondents are ordered to pay over to the Appellant the balance of the purchase price in the said sum of N2 Million deposited with Guarantee Trust Bank Plc No. 6 Adeyemo Alakija Street, Victoria Island, Lagos with the accrued interest.
I make no order as to costs.
IBRAHIM MOHAMMED MUSA SAULAWA, J.C.A.: Having had the privilege of reading the judgment, written and delivered by my learned brother, the Hon Justice, C.E. Iyizoba JCA, I have no hesitation in concurring with the reasoning and conclusion reached therein, to the effect that the instant appeal succeeds in part.
Hence, having adopted the reasoning and conclusion reached in the Judgment in question as mine, I hereby allow the appeal in part. The Judgment of the High Court of Lagos State, delivered on June 27, 1997 by Adeniyi, J, is hereby set aside by me. I abide by the consequential orders for specific performance regarding the sum of N12 Million adjudged to have been agreed by the respective parties.
No order as to costs.
JOSEPH SHAGBAOR IKYEGH, J.C.A.: I agree with the judgment of my learned brother, Iyizoba, J.C.A., and adopt it as my judgment in this appeal with nothing useful to add.
Appearances
Cyril Ogbekene Esq. with E. Ogbekene Esq. and S. Adubasimo (Miss)For Appellant
AND
A.A. Adegbonmire with O. Iyayi (Mrs.) for the 1st and 2nd Respondents
3rd Respondent no representedFor Respondent
