➥ CASE SUMMARY OF:
Chief Patrick A. Abusomwan V. Mercantile Bank Of Nigeria Ltd (1987)
by Branham Chima (LL.B.)
➥ SUBJECT MATTER(S)
Negligence.
Privity of contract.
➥ CASE FACT/HISTORY
This appeal is by Plaintiff against the judgment of the Court of Appeal Division, Benin City. On the 21st January, 1986, the Court of Appeal in a unanimous judgment set aside the judgment of the High Court, Benin City, granting Plaintiffs claim against the defendant for N127,273 (one hundred and twenty seven thousand, two hundred and seventy-three naira) being loss of profits as a result of the defendant’s negligence arising from a guarantee dated 30th January, 1978 for the importation of cement.
➥ ISSUE(S)
I. Whether the Respondent was negligent towards the Appellant, and whether appellant’s loss arose from such negligence.?
➥ RESOLUTION(S) OF ISSUES
[APPEAL ALLOWED]
↪️ ISSUE 1: IN APPELLANT’S FAVOUR.
[THE TRIAL COURT WAS RIGHT IN FINDING THE ALLEGATIONS OF NEGLIGENCE ESTABLISHED
‘It seems to me pertinent and necessary to observe that there appears to be a crucial misunderstanding of the issue before the Court. The claim before the Court is clearly one for an action for damages for negligence. The statement of claim in support of the writ of summons distinctly at paragraphs 6, 7, 8, 11, 12, pleaded the particulars of alleged negligence. The defendants at paragraphs 9, 10, 13 denied the allegations of negligence. It was therefore unarguable that the question of negligence was an issue between the parties to be resolved at the trial. At the trial plaintiff led evidence in support of his pleading. The defendant relied on the case of the plaintiff and did not lead any evidence. The trial Judge accordingly on the evidence before him found the allegations of negligence established. The trial Judge was right as to his findings of fact of negligence. In J.O.O. lmana v. Madam Jarin Robinson (1979) 3 & 4 S.C. at pp. 9-10, Aniagolu J.S.C., stated the position, “It is clear to us that once pleadings have been settled, and issues joined, the duty of the Court is to proceed to the trial of the issues – see The Gold Coast and Ashanti Electric Power Development Corporation Ltd. v. The Attorney- General of the Gold Coast (1937) 3 W.A.C.A. 215 and if one party fails or refuses to submit the issues he has raised in his pleadings for trial by giving or calling evidence in their support, the trial judge must, unless there are other legal reasons dictating to the contrary, resolve the case against the defaulting party.”’
APPELLANT WAS INJURED BY THE NEGLIGENCE
‘The facts are that Exhibits 9, the Guarantee, was made by the New Nigeria Bank Ltd. on behalf of the Appellant with the Respondent Bank in favour of Mr. Bassey. The endorsement on Exhibit 9 clearly provided that
“All documents, Bill of Lading and Invoices shall be drawn in favour of Mr. P. A. Ahusomwan and shall be endorsed to New Nigerian Bank Limited, Head Office, Mission Road, Benin City.”
However, when the Respondent Bank issued Exhibit 4, the Letter of Credit relying on Exhibits 9 and 12, it was raised in favour of Heilit (Nigeria) Ltd. instead of Mr. P. A. Abusomwan, on whose behalf Exhibit 9 was made. This was despite the fact that Exhibit 12 clearly indicated Appellant as the shipper of the consignment. Respondent Bank owed a duty to the New Nigeria Bank Limited to carry out the instructions on Exhibit 9. Appellant is such a person whose relationship with Exhibit 9 is so proximate that there is a duty to ensure that he was not injured by any acts of mis-performance or non-performance. The failure on the part of the Respondent to adhere to the instructions in Exhibit 9 is a mis-performance and is a breach of the duty to take care not to injure the appellant. Appellant was injured by this negligence.’
THE APPELLANT WAS A PARTY TO THE CONTRACT
‘The error in the view adopted by the Court of Appeal was that it relied on the privity of contract fallacy to hold that appellant not being a party to the contract could not sue. Appellant was the person on whose behalf Exhibit 9 was made and the specific instructions endorsed therein was intended to protect the interest of the appellant. Since Respondent Bank ignored the instructions in Exhibit 9, and this resulted in the loss claimed by the appellant, it was the breach of the duty of care owed to the appellant and which is an actionable wrong.’]
.
.
.
✓ DECISION:
‘The Court of Appeal was clearly wrong in their evaluation of the documents. They were clearly also wrong in setting aside the findings of fact of the trial Judge without showing that it was perverse. All the grounds of appeal argued succeed. The appeal is accordingly allowed.
The Judgment of the Court of Appeal and Costs awarded are hereby set aside. Judgment of the High Court and costs are restored.
Respondent shall pay to appellants costs assessed at N300 in this Court and N150 in the Court below.’
➥ FURTHER DICTA:
⦿ COURT OF APPEAL CAN MAKE FINDINGS WHERE TRIAL COURT FAILED TO
It is our law that where there is ample evidence and the trial judge failed to evaluate it and make correct findings, the Court of Appeal is at Liberty to evaluate such evidence and make proper findings, unless the findings rest on the credibility of witnesses – See Shell-BP Development Co. of Nigeria Ltd. v. His Highness Pere Cole & Ors. (1978) 3 SC.183. — Karibi-Whyte JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
Karibi-Whyte, J.S.C
➥ APPEARANCES
⦿ FOR THE APPELLANT(S)
⦿ FOR THE RESPONDENT(S)
➥ MISCELLANEOUS POINTS
➥ REFERENCED (LEGISLATION)
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)
