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G. A. ADU
V.
A. O. MAKANJUOLA
THE WEST AFRICAN COURT OF APPEAL HOLDEN AT LAGOS, NIGERIA
24TH DAY OF APRIL, 1944
2PLR/1944/9 (WACA)
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OTHER CITATION(S)
2PLR/1944/9 (WACA)
(1944) X WACA PP. 168 – 171
LEX (1944) – WACA PP. 168 – 171
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BEFORE THEIR LORDSHIPS:-
DONALD KINGDON, C.J., NIGERIA
BAKER, J.
FRANCIS, J.
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BETWEEN:
G. A. ADU — Plaintiff-Appellant
AND
A. O. MAKANJUOLA (TRADING AS PROPRIETOR AND MANAGING DIRECTOR OF THE UNITED DEVELOPMENT TRADING COMPANY) — Defendant-Respondent
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ORIGINATING COURT(S)
APPEAL FROM THE JUDGMENT OF THE HIGH COURT, IBADAN DIVISION, IN SUIT NO. I/33 /1943.
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REPRESENTATION
J. I. C. Taylor with A. O. Thomas — for Appellant
A. O. Soetan — for Respondent
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ISSUE(S) FROM THE CAUSE(S) OF ACTION
ENVIRONMENTAL LAW — MINING:- Mining contract — Ambiguity — Effect of public policy — Minerals Ordinance (Cap. 93).
COMMERCIAL LAW — CONTRACT — AD IDEM:- Requirement that there be a meeting of the mind — Absence of due to ambiguity of contract terms — Legal effect
COMMERCIAL LAW — CONTRACT — LEGALITY:- Contract constituting a deceit on government authorities — Validity of — Duty of court thereto
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CASE SUMMARY
Respondent with two others registered themselves in 1933 as the United Development Trading Company, which in April, 1942, owned a prospecting right. In that month Appellant and Respondent agreed orally to prospect and mine under the name United Development Trading Company of which Respondent was owner and manager; Appellant to be manager of mining venture. On 20th October, 1942, they signed an agreement that Respondent should withdraw from the mining business and that Appellant shall carry it “alone personally in the name of and holder of Prospecting Right”. On 21st November, 1942, a Prospecting Right was issued to ”G. A. Adu … on behalf of the United Development Trading Company”. On 19th May, 1943, Respondent, as manager of United Development Trading Company, wrote a letter to the authorities indicating that Appellant’s Prospecting Right was on behalf of United Development Trading Company. Appellant regarded this letter as a breach of the agreement of 20th October, 1942, which, he claimed, put an end to the interest both of the Respondent personally and the United Development Trading Company in the mining venture and made him sole owner, and sued for damages; Respondent argued that only his personal interest ceased and that Appellant was to continue as agent of the United Development Trading Company in the mining venture. The trial Judge dismissed the suit on the grounds (1) that there had been no oral agreement as the parties were not ad idem and (2) that the agreement was in avoidance of s. 9 of the Minerals Ordinance.
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DECISION(S) OF THE WEST AFRICAN COURT OF APPEAL
Held (dismissing the appeal):
1. Agreement between the parties was not on a proper construction breached by the Defendant as it intended cessation of the personal interest of the Defendant in the mining business but that the Plaintiff should carry on as agent of the Company.
2. that there was a patent ambiguity in the agreement itself, and that if the true interpretation were that claimed by the Appellant, viz.: that the United Development Trading Company’s interest should cease, then the agreement was void and unenforceable as being against public policy since it contemplated a deceit on the mining authorities.
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MAIN JUDGMENT
The judgment of the Court was delivered by the President:
The Plaintiff-Appellant’s claim brought in the Ibadan Division of the High Court against the Defendant-Respondent was for –
“£1,060 0s. 2d. being general and special damages for the breach of an agreement entered into between the plaintiff and the defendant and dated 20th day of October, 1942.”
and the particulars given were:-
“Money expended on prospecting, pegging, labour, and other incidental expenses
in connection with mining … … … … … … £550 0 2
General damages … … … … … … £500 0 0
Total … … … £1,060 0 2
The agreement in question (which became Ex. “D” in the case) is in the following terms:-
Agreement
“1. A. O. Makanjuola of Ekotedo, Ibadan, Nigeria, 1st partner in the mining Business with Mr. G. A. Adu of Oke Bola, Ibadan, Nigeria, 2nd partner of the said Mining Business hereby mutually agreed with each other as follows:-
2. The 1st partner Mr. A. O. Makanjuola shall from the 20th day of October, 1942, withdraw, cease and discontinue his interests, rights and attentions from the partnership of the said Mining Business and the afore-mentioned 2nd partner in the person of Mr. G. A. Adu from this date, shall be carrying on the said business alone personally in the name of United Development Trading Company and holder of Prospecting Right.
3. That, the said 1st partner Mr. A. O. Makanjuola, from this date, has nothing to do any more with Mining Business as to whether loss or gain, and all the tools remaining belong to the said 2nd partner Mr. G. A. Adu and also the Kit Car No. B500.
4. That, I, G. A. Adu the 2nd partner, this 20th day of October, 1942, hereby promise faithfully to refund the share of Two hundred and fifty-four pounds, three shillings and tenpence (£254 3s. 10d.) to Mr. A. 0. Makanjuola the 1st partner D.V. on the 30th day of October, 1943, which the said 1st partner Mr. A. o. Makanjuola had contributed formerly for the execution of the business.
“Dated at Ibadan this 20th day of October, 1942.
(Sgd.) A. O. MAKANJUOLA
Signed by the said A. O. Makanjuola in the presence of_______________
(Sgd.)?
(Sgd.) G. A. ADU
Signed by the said G. A. Adu in the presence of _______________
(Sgd.)?
The High Court held that the contract was not one that the Court could enforce and entered judgment for the Defendant.
This appeal is brought against that judgment.
Shortly the facts are that the Defendant in partnership with two other men named Olamijulo and G. Makanjuola set up a general trading business in produce and on the 28th July, 1933, were registered in the name of the “United Development Trading Company” under the Registration of Business Names Ordinance, 1926. The partnership was not incorporated as a company under the Companies Ordinance. In April, 1942, the Plaintiff and Defendant entered into a verbal agreement – as the Plaintiff puts it—
“to prospect, develop and mine. We were to prospect under the name United Development Trading Company of which the Defendant is the owner proprietor and Manager. I was to be the Manager of the Mining Venture.”
The Plaintiff stated that he put £261 6s. 3d. into this mining venture and the Defendant contributed £25 3s. 10d. and that £530 0s. 2d. was expended in prospecting and development.
Apparently at the time of this verbal agreement the United Development Trading Company owned a Prospecting Right, and their first prospector was one Okubadejo.
On the 20th October, 1942, the agreement Ex. “D” (already quoted) was entered into and later, namely on the 21st November, 1942, Prospecting Right No. 208 /1942 was issued by the Chief Inspector of Mines to “G. A. Adu, Yoruba, aged 42, c/o. P.O. Box 52, Ile-Ife on behalf of United Development Trading Company, P.O. Box 241, Ibadan to prospect for minerals except coal and diamonds ”.
The learned trial Judge’s reasons for holding that the contract (Ex. D) was not one which the Court can enforce were two, namely (1) that the parties were not ad idem and consequently there was no verbal agreement and (2) that the agreement was in avoidance of section 9 of the Minerals Ordinance (Cap. 93). As to this we think that there is a patent ambiguity in the agreement itself, the words in paragraph 2 “alone personally” being irreconcilable with the words “in the name of United Development Trading Company and holder of Prospecting Right.”
The Defendant contends that all that was intended by the agreement was that his personal interest in what might be described as the sub-venture of the mining business should cease, but that the Plaintiff should carry on as before as agent of the United Development Trading Company in the mining venture. If this is the correct interpretation the agreement is not open to objection and the taking out of Prospecting Right No. 208 /1942 by the Plaintiff in the terms already quoted is also in order, there no avoidance of the provisions of section 9 of the Minerals Ordinance.
But then so also in order is the letter Ex. G. which is what the Plaintiff alleges constitutes the breach of the agreement and is in the following terms—
MEMORANDUM
“The United Development Trading Co. (2nd copy)
General Produce & Import Merchants.
A. O. Makanjuola, Proprietor & Managing Director.
Tel. Address” UNDETRACO” Phone No. 131 19th May, 1943.
Code A.B.C., 6th Bently, Lieber, Private
P.O. Box 241,
Ibadan.
“Chief Commissioner, Western Province, Ibadan
Chief Inspector of Mines, Jos.
Director of Surveys Department, Lagos.
Resident, Oyo Province
Resident, Kabba Province
Wolfram Production Board, Jos.
“Copy: Mr. G. A. Adu, Prospector for Messrs U.D.T.C., Ibadan.
“Sirs,
We have the honour to notify you that all applications, letters or any documents on behalf of the above Company in Mining Business should only be signed by our Ibadan Manager, Mr. A. O. Makanjuola.
That Mr. G. A. Adu with P.R.208/42 can only prospect on behalf of Messrs. United Development Trading Company and submitted for the Manager’s signature.
That all applications and documents, etc., previously signed by Mr. G. A. Adu before the above date should remain valid for the Company.
Yours faithfully,
(Sgd.) A O. MAKANJUOLA
Manager
The United Development Trading Copy”
On the basis of the Defendant’s interpretation of the agreement (Ex. D) this letter could not possibly constitute a breach of that agreement and the action must fail; but the Plaintiff contends that the Defendant’s interpretation is not correct, and that what the agreement contemplated was that both the Defendant personally and the United Development Trading Company should cease to have anything to do with the mining venture and that he, the Plaintiff, should carry on as sole owner.
If this is indeed the true interpretation, we are of opinion that the agreement is void and unenforceable, being against public policy since it contemplates the perpetration of a deceit upon the mining authorities, a deceit which was actually perpetrated when the Plaintiff subsequently obtained Prospecting Right No. 208 /1942.
In any event the Plaintiff’s action could not succeed.
For these reasons the appeal is dismissed with costs assessed at 15 guineas.
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