A.A DALA INT’L TRADING CO. LTD & ANOR v. DAGANG INT’L TRADING CO. LTD & ANOR (2022)

A.A DALA INT’L TRADING CO. LTD & ANOR v. DAGANG INT’L TRADING CO. LTD & ANOR

(2022)LCN/15927(CA)

In The Court Of Appeal

(KANO JUDICIAL DIVISION)

On Tuesday, April 12, 2022

CA/K/424/2018

Before Our Lordships:

Ita George Mbaba Justice of the Court of Appeal

Abubakar Muazu Lamido Justice of the Court of Appeal

Usman Alhaji Musale Justice of the Court of Appeal

Between

1. A.A DALA INTERNATIONAL TRADING COMPANY LIMITED 2. ALHAJI AUWALU ABDU APPELANT(S)

And

1. DAGANG INTERNATIONAL TRADING COMPANY LIMITED 2. MR. SHI ZENG CHAO RESPONDENT(S)

RATIO:

THE BASIC ELEMENTS OF A BINDING CONTRACT

The basic elements of binding contract are therefore offer, acceptance/consideration, capacity to contract and intention to create a legal relationship. See also Dangote Gen. Textile Products Ltd & Ors Vs. Hascon Associates Nig Ltd & Anor (2013) 12 SCNJ 456, Akinyemi Vs. Odua Investment Co. Ltd. (2012) 1 SCNJ 127. See also Alfotrin Ltd Vs A.G. Federation & Ors (1996) 9 NWLR (Pt. 475) 634 @ 656; (1996) LPELR-414 (SC) per Iguh, JSC, to wit:
“To constitute a binding contract, there must be an agreement in that the parties must be in consensus ad idem with regard to the essential terms and conditions thereof; the parties must intend to create legal relations and the promise of each party, in a simple contract, not under seal, must be supported by consideration. There must be a concluded bargain which has settled all essential conditions that are necessary to be settled and leaves no vital term or condition unsettled.” PER MUSALE, J.C.A.

WHETHER OR NOT THE CONTENTS OF A DOCUMENTS ARE BINDING ON THE PARTIES SIGNOTORY TO IT

Again, in NWARIE Vs. ADAKWA (2016) LPELR – 41600 (CA), this Court held on signed document;
“It is trite that where a document is voluntarily signed by a person, the contents of such a document are binding on the signatory to it, and generally, no extrinsic evidence will be allowed to add to or reduce therefrom any of such contents. It will amount to injustice to allow such a person to renege from the position he had voluntarily created by signing such a document. The position is that a man must not be allowed to blow hot and cold with reference to the same transaction. In the instant case, Exhibit MKA1, a document voluntarily signed by the Appellant was the foundation of the Respondent’s case. It would therefore amount to injustice to allow the Appellant to renege from the position he voluntarily created by signing Exhibit MKA1. See ODUA INVESTMENT CO. LTD. Vs. TALABI (1991) 1 NWLR (Pt. 170) 761 and EZEUGO Vs. OHANYERE (1978) 6-7.” PER MUSALE, J.C.A.

USMAN ALHAJI MUSALE, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the Kano State High Court delivered by Hon. Justice Patricia Mahmoud on 13 March, 2017.

Briefly put, the 1st appellant duly represented by the 2nd appellant, entered into a reseller-ship agreement with the 1st respondent for the supply of various textiles. The 1st appellant agreed, amongst others to pay for the whole amount of goods received from the 1st respondent or return the good that are unsold within three (3) months of the receipt of the goods.

Following a disagreement between the parties arising from the above mentioned agreement, the appellants (then the plaintiffs) commenced this suit at the Kano State High Court of Justice (herein after referred to as “the trial Court” vide a writ of summons and statement of claim both dated 28th November, 2014 seeking several monetary claims and declaratory reliefs, under 16 (sixteen) head of reliefs, from the respondents (then the defendants/counter claimants).

The respondents counter-claimed against the appellants for the outstanding indebtedness of the appellants to the respondents in respect of the goods which were supplied on credit to the appellants by the respondents as well as for general, punitive and aggravated damages.

The matter proceeded to trial with the appellants calling five witnesses in support of their case, while the respondents called a lone witness to prove their case.

The trial Court delivered judgment wherein the suit filed by the appellants was dismissed and the claim of the respondents (then the defendants) was partly granted.

Dissatisfied with the decision of trial Court, the appellant filed this appeal vide a notice of appeal dated 4th December, 2017 with five grounds therein.

In his brief of argument filed on the 1st February, 2019, learned counsel for the appellants submitted two issues for the determination of the appeal, as follows:
1. Whether or not learned trial judge was wrong in admitting and placing reliance on Exhibit N (a memorandum of understanding allegedly procured by deception and in the course of an out of Court settlement between parties). Distilled from Ground 1.
2. Whether the findings and holding by the learned trial judge that the plaintiffs are indebted to the defendants in the sum of N55,672,646 is not perverse in the light of the pleadings and evidence before the Court.
Distilled from Grounds 2, 3 and 5.
Ground 4 was abandoned.

The learned counsel for the respondents filed his brief of argument on the 30th September, 2019 and it was deemed properly filed on 8th/03/2021. He adopted the issues formulated by the appellants.

On Issue No. 1, the learned counsel for the appellants submitted that the learned trial judge was wrong in admitting Exhibit N and placing great reliance upon same in finding for the defendant’s counter-claim. The learned counsel further submitted that Exhibit N being a memorandum of understanding did not bind the parties for being a mere letter of intent, the learned counsel relied on, BPS CONSTRUCTION AND ENG CO LTD Vs. FCDA (2017) ALL FWLR (Pt. 878) 405 @ 433 – 435.

It was also contended by the learned counsel that Exhibit N was made in the course of making amicable settlement between the parties at the EFFC and for this, it is inadmissible. The counsel cited and relied on Section 26 of the Evidence Act, 2011 which provides, that in civil cases no admission is relevant if it is made either upon an express condition that evidence of it is not to be given, or in circumstances from which the Court infer that the parties agreed together that evidence of it should not be given.

The learned counsel further referred to the case of FAWEHINMI Vs. NIGERIAN BAR ASSOCIATION (NO. 2) (1989) 2 NWLR (Pt. 105) 358 @ 622 – 623, where the Supreme Court held that:
“Without prejudice” protects subsequent or even previous correspondence and admissions made during “a bonafide attempt to settle a dispute” and that any correspondence made along the line of bonafide settlement of a dispute, even if not expressly marked so is inadmissible”

The learned counsel also referred to the cases of UNITED WORLD INC Vs. MTS LTD (1998) 10 NWLR (Pt. 568) 106 at 118 and AKANBI Vs. ALATEDE NIG. LTD (2000) FWLR (Pt. 11) 1928.

The learned counsel for the appellant submitted that Exhibit N was ab initio inadmissible having proclaimed itself to be a document made in the course of party’s attempt at an amicable settlement of their dispute at the EFCC and respectfully urged this honourable Court to so found and to resolve the issue in favour of the appellants.

The learned counsel for the respondents on this issue submitted that the crux of the appellant’s argument borders on 2 issues. The first is that Exhibit N is memorandum of understanding and not an agreement and the second is that Exhibit N is a document made “without prejudice’’ hence Exhibit N is inadmissible in law. He continued that the name given to Exhibit N is immaterial. What is of essence is whether the said document contains the elements of a valid agreement as entered by the parties. The learned counsel submitted that equity looks at the intent and not the form.

Furthermore, learned counsel for the respondent submitted that all the cases relied upon by the appellant in substantiating their assertion are distinguishable. That in the case of BPS CONSTRUCTION AND ENG LTD Vs. FCDA for instance, the document under contention was in respect of an inchoate contract while Exhibit N in this suit is a valid agreement duly executed by both parties and was never subjected to any contingency.

It was also contended by learned counsel for the respondent that Exhibit N was duly executed by both parties and as such both parties intended to be bound by it. The learned counsel cited relied on the case of KOLOKUMA/OPOKUMA LGA Vs. EGBE (2015) ALL FWLR 1714, the Court held thus:
“When a document containing contractual terms is signed, then in the absence of fraud or misrepresentation, the party signing it is bound and it is wholly immaterial whether he has read the document or not.”

The learned counsel further contended that Exhibit N was admitted without objection. The counsel relied on the case of OLALOYE V. ATTORNEY GENERAL AND C. J. OGUN STATE (2015) ALL FWRL (Pt. 774) 71, the Court held that:
“When documents are unrebutted, a Court of law has no other option than to accept and act on same. In the instant case, where the appellants failed to rebut the evidence proffered by the respondent, the trial Court rightly relied on same.”

In response to the appellants’ contention that Exhibit N is a document made without prejudice, it was humbly submitted that the assertion is not correct. The appellants heavily relied on Section 26 of the Evidence Act to buttress their arguments.

That Section 26 entirely borders on “Admission of facts” and not on “Without prejudice”.

The relevant section if at all the argument of the appellants is anything to come by should be Section 196 of the Evidence Act which provide for the inadmissibility of a document marked “without prejudice.” The learned counsel submitted that Exhibit N was never marked “without prejudice” and hence does not fall within the contemplation of this provision. The learned counsel relied on the case of GRAYSHOT ENTERPRISE Vs. MIN OF AGRICULTURE (2002) FWLR (Pt. 106) 1055.

The learned counsel for the respondent contended that assuming without conceding that the appellants indeed intended to rely on Section 26 of the Evidence Act as the basis of their contention on the alleged existence of an obligation to treat Exhibit N as a document made without prejudice, we still maintain that this provision cannot avail the appellants in the light of the facts of this case.

In the instant case, there is no express condition on the face of Exhibit N itself, nor as adduced by either of the plaintiffs and/or defendants, to the effect that evidence of it should not be given in a civil case. The 2nd appellant himself gave evidence on it, by alleging that two of his houses had been sold in partial fulfillment of the payment due under Exhibit N.

The learned counsel further submitted that there are absolutely no circumstances, surrounding this case from which the Court can infer that the parties agreed together that evidence of Exhibit N should not be given. If ever there was, it was at the point of tendering of the exhibit that the appellant ought to have objected to it. Their failure is a form of an informal admission by conduct of the contents of the exhibit. In AKINBIYI Vs. ANIKE (1959) WRNLR 16, failure of a plaintiff to cross-examine the defendant on his counter-claim was held as admission of the items claimed by the defendant. The learned counsel urged this Court to hold that the learned trial judge was right in admitting and placing reliance on Exhibit N.

On Issue No. 2, it is the respectful submission of learned counsel for the appellant that by paragraph 30 of the plaintiff’s reply and defence to counter-claim couple with the memorandum of understating executed on 12th day of May, 2014 the 1st plaintiff’s debts were reduced to N83,672,645 whereupon the 1st plaintiff paid the sum of N13,277,704 with goods so returned, a bank draft of N4,000,000 and two houses worth 28 million besides, he paid the sum of 4 million by installment payments. The 1st plaintiff paid the sum N49,277,704 leaving the balance of N34,439,941. In addition, the 1st plaintiff paid at the EFCC office to the defendants, the sum of $120,000. The learned counsel submitted that the defendants calculated the figures with malafide intention.

The learned counsel further submitted that the respondents admitted the appellant’s position, page 168 of the record (except the element of the dollar payment) by their paragraph 16 and 24 of their reply to defence to counter-claim.
Paragraph 24 provide as follows:
“In response to paragraph 30 of the defence to counter-claim and further to paragraph 16 above, the defendants/counter-claimant admit the payments by the 1stdefendants/counter-claimants of the sum of N4,000,000 and refunded goods worth about N13,277,704.00 as well as N28,000,000 proceeds from the sale of the sale of the two properties, but deny the dollar payment and put the plaintiffs to the strictest proof thereof. ”
Paragraph 16 provides as follows:
“The defendants/counter-claimants further aver that after the agreements, as stated in the memorandum of understanding, were reached and in efforts to liquidate part of their indebtedness to the 1st defendant/counter claimant, the plaintiffs/defendants to the counter-claim paid about N4,000,000 and refunded goods worth about N13,277,704.00 to the 1st defendant/counter-claimant who also sold two properties worth about N28,000,000.00 belonging to the 2nd plaintiff/defendant to the counter-claim of further liquidate the indebtedness. It was also agreed that the two cases filed by the plaintiffs/ defendants to the counter claimants, in order to shield themselves from paying their indebtedness should be withdrawn.”

It is further submission of the learned counsel for the appellant that from the above stated pleadings there was no basis for the lower Courts holding thus:
“If the defence of the plaintiff is that since Exhibit N they have repaid a further N21,277,704 then I find they have to prove such payment.”

The learned counsel contended that in arriving at the findings that the plaintiffs were indebted to the defendants/counter claimants the sum of N55,672,646, the learned trial judge did not take into proper consideration the fact as pleaded by the defendants/counter claimants:
“The defendants/counter-claimants further aver that after agreements, as stated in the memorandum of understanding, were reached and in efforts to liquidate part of their indebtedness to the 1st dependent/counter-claimant, the plaintiffs/defendants to the counter-claim paid about N4,000,000 and refunded goods worth about N13,277,704.00 to the 1st defendant/counter-claimant.”

It was also the contention of the learned counsel for the appellant that nowhere in that pleadings had the plaintiffs admitted being indebted to the defendants in the sum of N55,672,645 as found by the trial judge. That the findings of the learned judge was not borne out of pleadings and is at best speculative.

The learned counsel cited and relied on the case of IKENTA BEST (NIG.) LIMITED Vs. ATTORNEY GENERAL RIVERS STATE (2008) LPELR-1476 (SC). Where the apex Court had this to say regarding the issue of speculation “Speculation has no place in our Courts. Neither the parties nor the Court is permitted or entitled to speculate anything. A Court will interfere to set any speculation aside. See the case of OVERSEAS CONSTRUCTION CO. (NIG.) LTD Vs. CREEK ENTERPRISES (NIG) LTD (1985) 3 NWLR (PT. 13)407 and BAKARE Vs. A.C.B. LTD (1986) 5 SC 48.

It is contended by the learned counsel for the appellant that the lower trial Court did not find the contradictory statement of facts and claims of the defendants as contained in paragraphs 43 and 45 strange enough to query their claim to have proven their case.

In paragraph 43, the defendant stated thus:
“Consequently, the plaintiffs are still indebted to the defendants/counter-claimant in the sum of N83,672,646.00 (eight three million, six hundred and seventy-two thousand, six hundred and forty -ix naira).”
Yet in paragraph 45 (A) the defendants claim as follows:
“An order of this Honourable Court directing the plaintiffs, jointly and severally, to pay to the defendants/counter-claimants the sum of $318,864.03 (Three hundred and eighteen thousand, eight hundred and six four dollars, three cents) and N55,672,646.00 (Fifty-five million, six hundred and seventy-two thousand six hundred and forty-six Naira) being the outstanding indebtedness of the plaintiffs to the defendants/counter claimants in respect of the goods which were supplied on credit to the plaintiffs by the 1stdefendant/counter claimant.”

The above contradictory facts as pleaded by the counter-claimants have been held to be fatal to the plaintiff’s claim, the learned counsel submitted and rely on the case of DANASABE ABDULLAHI Vs. STEPHEN EZRA HEDIMA (2010) LPELR-3556 (CA).

The learned counsel urged this Honourable Court to resolve Issue No. 2 in favour of the appellants. In all, he urged the Court to allow the appeal, set aside the decision of the lower Court and in it is stead dismiss the defendant’s counter-claim.

In response, the learned counsel for the respondent submitted that they counter-claimed the sum of N55,672,646 (fifty-five million, six hundred and seven two thousand, six hundred and forty-six Naira) being the outstanding indebtedness of the appellants to the respondents in respect of the goods which were supplied on credit to the appellants by the respondents.

The learned counsel further submitted that when asked under cross-examination whether he has completed repaying his indebtedness to the defendant after execution of Exhibit N, PW1 answered “upon the agreement, I have not completed the payment. I am still owing Mr. Shi (the 2nd respondent N30,950,350 and $ 195,670.” This at the best is a clear admission of the indebtedness, page 61 of the record.

It is contended by the learned counsel that the respondent in an attempt to sway the mind of this Honourable Court from substantial justice decided to dwell heavily on technicality in arguing this issue as formulated. The appellant specifically at paragraphs 4.09, 4.10 and 4.11 of the appellants’ brief of argument made a heavy whether on the typographic error in the record of appeal where my lord at the trial Court was erroneously quoted to have used the figure of “N21,277,704” instead of “N13,277,704.

To substantiate that it was indeed a typographical error, it will be gleaned from the record (at the same page 612), that the learned trial judge made a direct and unequivocal reference to paragraph 30 of the appellant’s reply and defence to counter-claim (found at page 141 of the record) when pointing out that the appellants made claim of having made further payment in their pleadings. In the said paragraph, the appellants claimed that after the signing of the memorandum of understanding, they returned the goods and in addition cash payment in the sum of “N13,277,704” which informed the decision of my lord to have held that the appellants failed to prove same. It is this cash payment of “N13,277,704” that was referred to in the judgment of the trial Court and not N21,277,704 as wrongly typed by the Court’s registry.

Again, the appellants apart from the above, also at paragraph 4.19, 4.20, 4.21 and 4.22 of the appellants’ brief of argument alleged that paragraphs43 and 45 of the respondents’ counter-claim (found at page 116 of the record) are contradictory.

On this, we humbly submit that there is no contradiction whatsoever. Paragraph 43 which averred the sum of N83,672,646.00 (eight three million, six hundred and seven two thousand, six hundred and forty-six naira) was simply a background to substantiate how the relief sought at paragraph 45 was arrived at.

My Lords, a look at paragraph 40 of the counter-claim (found at page 115 of the record) will be tremendously helpful in clearing the air. The said paragraph clearly shows that the initial Naira debt was N100,950,350.00. Upon execution of Exhibit N, the appellants’ goods worth 13,277,704.00 were returned and the sum of N4,000.00 was paid to the respondents leaving the outstanding sum to stand at N83,672,646.00 by way of simple mathematical calculation. It is the outcome of this calculation that formed the basis of the claim of N83,672,646.00 at paragraph 43.

Going a bit further, by the content of the same Exhibit N, the appellant also sold two of his houses both of which value stood at N28,000,000 and same was also deducted from N83,672,646.00 which left the outstanding balance to stand at N55,672,646.00 which also formed the basis of the relief sought at paragraph 45.

Therefore, to argue that there is contradiction in the light of the above facts is not sustainable in law and same is not enough to state that the learned trial judge was perverse. On the basis of this, I urge my Lords to discountenance same with the view to doing substantial justice in this case.

Finally, in the case of KEYAMO Vs. FOLORUNSO (2011) ALL FWLR (Pt. 586) PAGE 484:
“A trial judge has the right within the precinct of the case before him to explore all angles and aspects of facts, look at them with an analytical mind, express his opinion and make his findings based on the evidence before him.”

The learned trial judge after a thorough evaluation of the facts and evidence before it came to the rightful conclusion in this suit.

In view of the all the above, the learned counsel urged this Honourable Court to dismiss this appeal and affirm the decision of the trial Court in the interest of justice.

RESOLUTION OF ISSUES
The basic elements of binding contract are therefore offer, acceptance/consideration, capacity to contract and intention to create a legal relationship. See also Dangote Gen. Textile Products Ltd & Ors Vs. Hascon Associates Nig Ltd & Anor (2013) 12 SCNJ 456, Akinyemi Vs. Odua Investment Co. Ltd. (2012) 1 SCNJ 127. See also Alfotrin Ltd Vs A.G. Federation & Ors (1996) 9 NWLR (Pt. 475) 634 @ 656; (1996) LPELR-414 (SC) per Iguh, JSC, to wit:
“To constitute a binding contract, there must be an agreement in that the parties must be in consensus ad idem with regard to the essential terms and conditions thereof; the parties must intend to create legal relations and the promise of each party, in a simple contract, not under seal, must be supported by consideration. There must be a concluded bargain which has settled all essential conditions that are necessary to be settled and leaves no vital term or condition unsettled.”

Starting with Exhibit N, the Memorandum of Understanding (MOU for short), learned counsel to the appellant in my view raised a belated submission on it. From the record, no inscription of “without prejudice” is on Exhibit N. On the face of Exhibit N is; Memorandum of understanding,
Between
A. A. Dala International Trading Co. Ltd (debtor)
AND
Dagang International Trading Co. Ltd (creditor).
In respect to settlement of debt.

On page 567, it was agreed that at the time of executing this agreement, the debtor has performed the following:
1. Had refunded goods worth N13,277,704
2. Had paid N4,000,000 by Bank draft and Bank transfer
3. Total indebtedness of the debtor to the creditor was N83,672,646

It was further agreed that two of the properties of the debtor at Kano and Abuja shall be sold at N28,000,000 to defray the debt. When done, the debt shall reduce to N55,672,646.

This agreement was signed by Alh. Auwalu Abdu, for and on behalf of the debtor and Alh. Habibu Abdullahi Mahmud, for and on behalf of the creditor on the 12th/05/2014. See pages 565 – 569 of the record.

In my view, Exhibit N captured the minds of the parties, that voluntarily entered into the agreement and each signed in the presence of witnesses.

I have read the decision of the Apex Court in BPS CONSTRUCTION & ENG CO. LTD Vs. FCDA (supra) heavily relied upon by the appellants. In the Supreme Court decision, the MOU was made subject to signing a formal agreement by the parties. In the one under consideration, the parties were said to have executed the agreement through their duly authorized representatives. The two are therefore distinguishable.

In the record of the lower Court on page 60, Exhibit N was tendered without objection, the counsel will not be heard on appeal to raise issue on it as expounded by this Court in ADEKUNLE Vs. THE STATE (2018) LPELR – 45386 (CA).
The appellant’s failure, in his infinite wisdom, to register any opposition to the admission of the documents drains/divests him of the right to object to their admissibility before this Court. This constitute a serious coup de grace in the appellants’ view point on the issue.

I therefore decline the appellants’ enticing invitation to ostracise the documents from the appeal on account of inadmissibility.

Again, in NWARIE Vs. ADAKWA (2016) LPELR – 41600 (CA), this Court held on signed document;
“It is trite that where a document is voluntarily signed by a person, the contents of such a document are binding on the signatory to it, and generally, no extrinsic evidence will be allowed to add to or reduce therefrom any of such contents. It will amount to injustice to allow such a person to renege from the position he had voluntarily created by signing such a document. The position is that a man must not be allowed to blow hot and cold with reference to the same transaction. In the instant case, Exhibit MKA1, a document voluntarily signed by the Appellant was the foundation of the Respondent’s case. It would therefore amount to injustice to allow the Appellant to renege from the position he voluntarily created by signing Exhibit MKA1. See ODUA INVESTMENT CO. LTD. Vs. TALABI (1991) 1 NWLR (Pt. 170) 761 and EZEUGO Vs. OHANYERE (1978) 6-7.”

Let me also say that Exhibit N was voluntarily signed by the 2nd appellant and it was also the foundation of the respondent’s case. It would also amount to injustice to allow the appellants to renege from the position they voluntarily created by signing Exhibit N. What is more, the 2nd appellant at the lower Court during cross-examination at page 61 of the record said “I am still owing the 2nd defendant N30,950,350 and $195,000”.

Conclusively, I found no merit in this appeal. The appeal is dismissed. Consequently, the judgment of the lower Court in Suit No. K/549/2014 upheld in its totality.
No order as to cost.

ITA GEORGE MBABA, J.C.A.: I agree with the reasoning and conclusion of my learned brother, Musale, JCA in the lead judgment that the appeal has no merit. I too dismiss it and abide by the consequential orders in the lead judgment.

ABUBAKAR MU’AZU LAMIDO, J.C.A.: I have had the privilege of reading in draft the judgment delivered by my learned brother, USMAN ALHAJI MUSALE, JCA and I am in complete agreement with the reasoning and conclusion reached that this appeal is without any merit. I too dismiss the appeal and abide by all the consequential orders as contained in the lead judgment.