–
STERIOS THOMOPULOS AND ANOTHER
V.
JOHN MANDILAS
THE WEST AFRICAN COURT OF APPEAL, HOLDEN AT LAGOS, NIGERIA
3RD DAY OF NOVEMBER, 1944
2PLR/1944/34 (WACA)
–
OTHER CITATION(S)
2PLR/1944/34 (WACA)
(1944) X WACA PP. 269 – 271
LEX (1944) – X WACA PP. 269 – 271
–
BEFORE THEIR LORDSHIPS:
DONALD KINGDON, C.J., NIGERIA
HARRAGIN, C.J., GOLD COAST
BROOKE, J.
–
BETWEEN:
1. STERIOS THOMOPULOS
2. ARIST THOMOPULOS – Defendants-Appellants
AND
JOHN MANDILAS – Plaintiff-Respondent
–
ORIGINATING COURT(S)
Appeal from the judgment of the Supreme Court Lagos.
–
REPRESENTATION
E. J. Alex-Taylor – for 1st Appellant
J. I. C. Taylor – for 2nd Appellant
I. F. Cameron – for Respondent
–
ISSUE(S) FROM THE CAUSE(S) OF ACTION
COMMERCIAL LAW:- Partnership – Evidence of formation – Partnership agreement by conduct preceded by agreement to agree – How established
–
CASE SUMMARY
Respondent averred in his Statement of Claim that by a verbal agreement in March, 1936, he and Appellants became partners on the footing that his share of profits and losses would be 25 per cent, 1st Appellant’s 50 percent and 2nd Appellant’s 25 per cent. In March, 1936, 2nd Appellant was in Europe. According to Respondent’s evidence (which was believed) they all met at Ondo at Christmas, 1935, and decided that 1st Appellant should also go abroad at the end of March, 1936, Respondent taking entire charge of the business, which should from 1st April become a partnership on the above footing of sharing profits and losses; further, Respondent and 1st Appellant met in March and confirmed the Christmas agreement but left it to be drawn up after 2nd Appellant’s return. 1st Appellant gave no evidence.
For Appellants it was argued that if Respondent’s case was a contract made at Christmas, it was at variance with his pleading; if one made in March, 2nd Appellant’s absence refuted the averment of the three verbally agreeing.
Respondent’s case was that the March agreement between him and 1st Appellant bound all three as 2nd Appellant had already agreed to the terms, and that subsequent conduct of all three confirmed existence of partnership.
–
DECISION(S) OF THE WEST AFRICAN COURT OF APPEAL
Held (dismissing the Appeal) that:
At first there had been a mere “agreement to agree”, which subsequently was implemented by all parties as shown by their conduct, the mode of dealing adopted by partners being evidence of the formation and original terms of a partnership if such terms are not set forth in any document.
–
–
MAIN JUDGMENT
The judgment of the Court was read by the President:
The Plaintiff-Respondent claimed from the two Defendants-Appellants-
“(1) Declaration that Plaintiff and Defendants are partners in the firm of S. Thomopulos carrying on business at 6 Davies Street, Lagos and elsewhere in Nigeria.
“(2) Dissolution of the said partnership.
“(3) An account of the firm’s profits and of the share thereof which the Plaintiff is entitled and
“(4) Payment to the Plaintiff of such share.”
The Plaintiff obtained judgment practically in terms of his writ and the Defendants now appeal against that judgment.
By his Statement of Claim the Plaintiff averred-
“By a verbal agreement made in or about March, 1936, the Plaintiff and Defendants became partners in the business carried on at 6 Davies Street, Lagos and elsewhere in Nigeria under the firm name of S. Thomopulos in terms of which 50 per cent of the profits of the business was to belong to the first Defendant and 25 per cent each to the Plaintiff and the second Defendant, the losses to be similarly divided.”
Both Defendants in their pleadings traversed this and averred that the 2nd Defendant was in Europe in March, 1936. This last fact is common ground. It is also common ground that the 1st Defendant furnished the whole of the capital of the alleged partnership.
The learned trial Judge in his judgment stated –
“Plaintiff gave evidence and deposed that on or about Christmas, 1935 Plaintiff and Defendants met together and agreed to form a partnership to come into existence in the following March.”
and
“The Plaintiff as a witness created a very good impression on my mind and I believe him when says a verbal agreement was entered into by the parties to form a partnership commencing at the end of the financial year of 1935;” (i.e. on the 1st April, 1936)
and
“The first Defendant did not go into the witness box to deny the partnership and I am satisfied from all the evidence before me that a partnership did in fact exist between the three parties;”
The whole of this Appeal is an attack upon this finding that a partnership did in fact exist between the three parties.
Perhaps the most dangerous attack is that which criticises the evidence given and the Jude’s findings as compared with the Plaintiff’s pleading. The Appellants seek to put the Plaintiff-Respondent upon the horns of a dilemma in regard to the date upon which the alleged partnership contract was made.
The Plaintiff-Respondent’s evidence was —
“Whilst in Ondo at Christmas 1935 the Defendants both came and spent Christmas with me. It was also decided amongst the three of us that first Defendant should also go home on leave and on business at the end of the financial year, i.e. 31st March and I should in the meantime take entire charge of the business. We also discussed at that time after the 31st March the business should become a partnership from the 1st April, 1936. We decided that 1st Defendant should take and suffer 50 per cent of the profits and losses and 25 per cent to each of us both profits and losses; this we all agreed to. That was all that was discussed at Christmas. In March, 1936, I went to Benin to take stock at Benin with 1st Defendant. I met 1st Defendant there and he told me (that whilst 2nd Defendant was in Lagos on his way home) hearsay. We discussed the partnership and confirmed our Christmas agreement about the partnership. We left the drawing up of the agreement of partnership until 2nd Defendant returned.”
Upon this the Appellants argue-
If the Respondent’s case is that the contract was made in December, 1935, that is at variance with his pleading, and since he made out no case to support his pleading it was unnecessary for the 1st Defendant to go into the witness box to refute the only case that was made out and the Defendants were entitled to judgment. If on the other hand the Respondent’s case is that the contract was made in March, 1936, then the admitted fact that 2nd Defendant was not present refutes the averment that the three parties verbally entered into a contract of partnership in that month, and, if the Judge held that they did, he must be wrong.
The argument is forceful and escape from the horns of the dilemma not easy. But we think that the Plaintiff-Respondent does manage to escape. If the averment in the Statement of Claim is looked at closely it will be seen that it does not allege that all three (i.e. Plaintiff and both Defendants) were parties to the verbal agreement.
Counsel for Respondent puts it thus—
“Our plea is that ‘By a verbal agreement made on or about March, 1936, the Plaintiff and 1st Defendant became partners ‘ – Our case is that that verbal agreement was made between Plaintiff and 1st Defendant and it had the effect of binding all three in a partnership agreement, because 2nd Defendant had already agreed to the terms and the subsequent conduct of all three confirmed the fact of the existence of the partnership.”
This case is not at variance with the pleading and there is evidence to support it, the only question is whether, in law, a valid partnership can be created in the manner suggested. We are of opinion that it can and consequently that this attack upon the judgment fails.
We think that the correct way to regard what occurred in Christmas 1935 is that at that time there was an “agreement to agree” (to borrow an expression used by Maugham, L.J. in Foley v. Classique Coaches Ltd. (1934 Vol. 103 L.J. K.B.D. p. 550 at p. 554) which did not of itself constitute a binding contract, that that agreement was subsequently implemented by all three parties so that a partnership actually came into being on the 1st April, 1936 as is shown by the conduct of all, and that the formal implementing of the agreement to agree took place as between the Respondent and 1st Appellant when they met in March, 1936. “The mode of dealing adopted by partners is evidence of the formation and original terms of a partnership if such terms are not set forth in any document.” (24 Halsbury 2nd Edition p. 418 para. 807.)
For the rest the Appeal attacks the learned trial Judge’s findings of fact and belief of the Plaintiff’s evidence.
As to this the case is somewhat remarkable in that each side was able to produce documents in which the other side had put on paper exactly the opposite of their present cases. But the difference is that the Plaintiff went into the box and gave an explanation, whereas the 1st Defendant did not. The facts that by agreement all the parties were to bear their share of losses as well as take their share of profits, and that actually they did so bear their share of losses are strong prima facie evidence of a partnership, and we think that the learned trial Judge was fully justified in coming to the conclusion to which he did upon the facts.
The Appeal is dismissed with costs assessed at 50 guineas.
–