–
J. M. AOUAD
V.
R. O. NZIMIRO AND ANOTHER
THE WEST AFRICAN COURT OF APPEAL, HOLDEN AT LAGOS, NIGERIA
31ST DAY JANUARY, 1944
2PLR/1944/81 (WACA)
–
OTHER CITATION(S)
2PLR/1944/81 (WACA)
(1944) X WACA PP. 73 – 76
LEX (1944) – X WACA PP. 73 – 76
–
BEFORE THEIR LORDSHIPS:
DONALD KINGDON, C.J., NIGERIA
GRAHAM PAUL, C.J., SIERRA LEONE
BAKER, J.
–
BETWEEN:
J. M. AOUAD — Plaintiff-Appellant
AND
1. R. O. NZIMIRO
2. M. N. NZIMIRO — Defendants-Respondents.
–
REPRESENTATION
C. W. Clinton — for Appellant
S. B. Rhodes — for Respondents
–
ISSUE(S) FROM THE CAUSE(S) OF ACTION
DEBTOR AND CREDITOR LAW:- Claim for balance of goods supplied for sale on basis of profit-sharing — Joint Venture — Proof and termination of — Absence of accounts — Absence of notice to terminate — How treated
–
PRACTICE AND PROCEDURE ISSUE(S)
APPEAL — PLEADING:- Amendment of pleadings on appeal — Where an amendment could change the subject matter of the action — Whether would not be allowed in the appeal
–
CASE SUMMARY
Plaintiff sued Defendants claiming (a) £207 15s. 4d., balance of goods supplied for sale on basis of profit-sharing, (b) £129 15s. share of estimated profit, and (c) £22 shop rent. The rent was admitted but not the other items. There had been an agreement for a joint adventure for ten years subject to termination on three months’ notice. No such notice had been given. Stock was taken on 29th September, 1941; but neither party produced accounts. Claims (a) and (b) were dismissed apparently on the ground that Defendants’ version of how the loss had occurred was as probable as Plaintiff’s; and Plaintiff appealed. On appeal Plaintiff abandoned claim (b) for share of profits; and when it appeared that claim (a) for balance of goods included £155 1s. relating to items in other transactions, Plaintiff applied to amend his claim to £52 14s. 4d. for shortage of stock and include the other items.
–
DECISION(S) OF THE WEST AFRICAN COURT OF APPEAL
Held (dismissing the Appeal) that:
(1) that an amendment which changed the subject matter of the action would not be allowed in the appeal;
(2) that once plaintiff established a shortage, the onus was on Defendants to account for the shortage
(3) that no notice to terminate having been given as agreed upon, the joint adventure was still in existence;
(4) that in the absence of provision for an account to be taken during the term of the adventure, the law would imply an agreement to account at reasonable periods, which account would, however have to cover the whole adventure;
(5) that there being no claim in the writ for an account and no proof of anything due to Plaintiff, the claim for balance of goods supplied could not be sustained.
–
–
MAIN JUDGMENT
The judgment of the Court was delivered by Baker, J.:
The claim of Plaintiff in this case as stated in his Writ of Summons is “for the sum of £359 10s. 4d. being £207 15s. 4d. balance of stock of goods supplied to the Defendants for sale and return on the basis of sharing the profit between cost price and sale of goods supplied. £129 10s. the Plaintiff’s share of estimated profit on the goods supplied by the Plaintiff to the Defendants after deducting the estimated profit to the Defendants on the goods returned by the Defendants to the Plaintiff and £22 shop rent.” Particulars of the value of the goods supplied by Plaintiff, the cash received and the balance of goods alleged to remain and the estimated profit thereon are set out on the Writ of Summons.
There were no pleadings but upon the hearing of the case at the outset Counsel stated that his defence was –
“1. Not indebted.
“2. Partnership which is to run for ten years and not liable to account yet, no such provision for accounting now”.
“3. Plaintiff has not given six months’ notice as agreed upon to terminate the partnership.”
“4. Plaintiff by his own act has made it impossible for Defendants to say whether there has been a profit or loss.”
The claim for rent was admitted.
There was an agreement entered into between the parties, the material part thereof for the purposes of this action being that the partnership business should be valid for a period of ten years and that three months’ notice should be given by either side in case of discontinuance.
Neither party produced any books of account but on the 29th September, 1941, the parties took stock of the balance of goods supplied by Plaintiff and then with Defendants.
Plaintiff said that stock was taken because he saw few goods in the shop and no money was being paid to him. Defendants denied this and said that “sales were dull and that Plaintiff, due to his experience during the last war when certain goods soared in price, suggested that certain of these goods should be sold under cost price and with the money realized goods purchased which were not likely to be imported during the war, viz., Dutch Prints and stored until prices advanced.” According to Defendants, it was after these goods had been purchased that stock was taken to ascertain their position.
When stock was taken goods were discovered amongst the stock chiefly Dutch Prints which Plaintiff admitted he had not supplied and Defendants stated that it was on account of the sale of goods below cost price and the purchase of the prints that an adverse balance of stock was caused and all previous profits liquidated.
The learned trial Judge gave judgment for the Plaintiff for £22 rent and dismissed the rest of the claim. Apparently the reason he dismissed the claim for the balance of goods supplied was that he considered that the Defendants’ version as to how the loss occurred was at least as probable as the Plaintiff’s. That reason appears to us to be inadequate since once the Plaintiff established the shortage, the onus was upon the Defendants to account for it. The reason for the dismissal of the claim for share of profits is given in the following passage from the judgment:
”But the plaintiff by his act of entering into this un-business-like arrangement without any agreement about the details as to how he was to protect his own interest in the profits on the sale, and the defendants, by their obstinacy in asserting that they kept no accounts, have between them quite impossible for me to say if there were any profits on the sales or not, much less to say how much, unless I were to make a blind guess, which I cannot be expected to do.”
The Appellant has appealed against the dismissal of the claim for balance of goods supplied and of the claim for share of profits. But at the hearing of the appeal his Counsel abandoned his claim for share of profits leaving only the question of balance of goods supplied in issue, i.e. the sum of £207 15s. 4d. But in the course of the hearing of the appeal it was pointed out to Appellant’s Counsel that from this sum three items in his particulars amounting to £155 1s. had been found to relate to entirely different transactions and should be deducted from the said sum of £207 15s. 4d. making a total of ”shortages” amounting to £52 14s. 4d only. Whereupon Counsel applied to amend his statement of claim to the sum of £52 14s. 4d for shortage of stock and to include the other three items relating to different transactions. An amendment of this nature would change the whole subject matter of the original action and the application was refused.
That leaves the sum of £52 14s. 4d. for balance of goods supplied as the most that Appellant could hope to recover on this appeal. As to this, we have already said that, in our view, the reason given by the learned trial Judge for dismissing this part of the claim was inadequate, since he failed to appreciate that the onus of proof had shifted. If therefore the decision of the case depended upon the truth or otherwise of the Defendants’ story, the defence failed.
In our opinion, however, the decision of the case does not depend at all on that question. There was a joint adventure between the Appellant and the two Respondents started by the written agreement put in evidence. That agreement was vague in certain important respects but one thing upon which it was quite definite was that the joint adventure was to continue for ten years subject to the condition “that when the parties shall deem it necessary to discontinue this document a notice of not less than three months will be given and all settlement made.”
No such notice has ever been given and the joint adventure has never been discontinued. It still is in existence. It did not come to an end when the Appellant took over the goods found to be still in stock when the stock was taken. It continued, the only change being that the Appellant had taken charge of the whole stock and he, instead of the Respondents went on with the selling of the goods-at much enhanced prices in at any rate some lines of goods. That this was so is clear from the evidence of the Plaintiff himself in cross-examination:-
”Q. When Mr. Nzimiro was ill and going to Enugu for operation he gave you the key so that you could see the condition of the goods?
A. No, it was given to me to sell the goods and pay the balance.”
The written agreement between the parties made no provision for any account of the joint adventure being taken during the ten years but in the absence of such provision the Court below was in our view right in holding that “the law will imply an agreement to account at reasonable periods”, Furthermore we consider that the date of the Writ was a reasonable time for any of the parties to ask that an account be taken but such account would have to be an account of the whole joint adventure to date, that is to say an account covering the joint adventure trading during the period when the Respondents had charge of the stock and the selling of it and also during the period after the Appellant took over the joint adventure stock and the selling.
The Appellant however did not sue for an account to be taken and obviously his action as taken was completely misconceived.
It is equally impossible to name a figure as the value of goods short returned to Plaintiff as it is to determine whether or not there was any profit on the sales, and if so how much. The Plaintiff entirely failed to prove that the sum of £52 14s. 4d. or any other sum was due to him for balance of stock of goods supplied to the Defendants for sale and return.
In these circumstances, we are of opinion that the trial Judge had no option but to dismiss the claim other than for the rent of £22 paid by Appellant for premises in which the goods were kept and which is not contested by Respondents.
We therefore dismiss the appeal and award the Respondents the costs of the appeal which we assess at 25 guineas.
–