COURT OF APPEAL
DATE: 12 JULY 1971
APALOO J.S.C., JIAGGE AND SOWAH JJ.A.
CASES REFERRED TO
(1) Ward v. Barclays Parkins & Co. [1939] 1 All E.R. 287.
(2) The Arpad [1934] P. 189; 103 L.J.P. 129; 152 L.T. 521; 50 T.L.R. 505, C.A.
NATURE OF PROCEEDINGS
APPEAL from the decision of the Sekondi Circuit Court which dismissed the appellant’s claim for goods sold and delivered and upheld the respondents counterclaim for damages for breach of contract and conversion. The facts are fully set out in the judgment of Sowah J.A.
COUNSEL
Joe Reindorf for the appellant.
Dr. A. K. Fiadjoe for Dr. Ekow Daniels for the respondents.
JUDGMENT OF SOWAH J. A.
This is an appeal from the decision of the Circuit Court, Sekondi, dismissing the plaintiff-appellant’s (hereafter referred to as the appellant) claim for goods sold and delivered and allowing the counterclaim of the defendant-company-respondent (hereafter referred to as the respondents) in respect of damages for breach of contract and conversion of logs delivered to the respondents and subsequently sold by the appellant to other purchasers. The damages awarded were N¢1,732.65 for the breach and N¢200.00 for the tort of conversion.
The appellant being dissatisfied with the judgment has appealed to this court and the only ground of appeal was: “Judgment was against the weight of the evidence,” though, in my view, the appeal itself raised a few legal issues. Counsel, however, under this blanket ground, argued these legal grounds.
The parties to this appeal entered into an agreement on 15th March 1968, whereby the appellant agreed to supply, export and sawmill logs produced from his timber concession to the respondents. In the event the main theme of this action had been the meaning and import of this agreement. The relevant portions of this agreement read as follows:
“It is hereby mutually agreed between Messrs. Timber and Transport Co. Ltd. of Asokwa, Kumasi and Mr. T.T. Danquah, bearing property mark ‘YAD’ now residing at Ateiku in the Wassaw-Fiase district of Ghana, that Messrs. Timber and Transport Co., Ltd. place at his disposal their caterpillar in Mr. T.T. Danquah’s concession known as Ben East Forest Reserve near Ateiku, under the following conditions:
(1) That Mr. T.T. Danquah, will be responsible for the following trees; cross-cutting, and also be responsible for the payment of compensation to farmers for the destruction of cocoa trees and
foodstuff farms, if any exist, within the area of operation.
[p.385] of [1971] 2 GLR 383
(2) That Mr. T. T. Danquah will pay royalties, silviculture fees, etc. of trees felled to the Ministry of Lands.
(3) That in the case of fuel etc. for the caterpillar, Mr. T. T. Danquah will be responsible for the supply of gas oil only and that Messrs. Timber and Transport Co., Ltd. be responsible for the engine oil, spare parts etc. and the wages of the caterpillar driver and boys. Further Mr. T. T. Danquah should find accommodation for the caterpillar personnel.
(4) That the cost of transportation of Messrs. Timber and Transport Co., Ltd. caterpillar by road and rail from Kumasi and Ateiku and vice versa will be equally divided and 50 per cent each to be borne by Mr. T. T. Danquah and Messrs. Timber and Transport Co., Ltd.
(5) That the undermentioned prices have been agreed upon between both parties to be paid by Messrs. Timber and Transport Co., Ltd. to Mr. T. T. Danquah, that the undermentioned prices are subject to be reviewed by both parties when the occasion demands:
EXPORT LOGS FAO SAWMILL LOGS VENEER
Mahogany N¢40.00 N¢24.00 30NP
Sapale 40.00 24.00 30NP
Makore 25.00 20.00 —
Edinam — 16.00 25NP
Wawa — — 10NP
Odum — — 30NP
Emeti — — 25NP
Walnut — — 25NP
(6) That Messrs. Timber and Transport Co., Ltd. will bear the freight charges from Ateiku to Takoradi and export duty and f.o.b. charges on the export logs to be borne by Mr. T. T. Danquah. The amount representing the export duty and f.o.b. charges to be deducted on the invoices to be issued by Messrs. Timber and Transport Co., to Mr. T.T. Danquah.”
Barely a year after its execution, the appellant commenced proceedings against the respondents for the sum of N¢1,826.44 “being the balance of the purchase price of timber logs sold and delivered to the defendants (as per attached statement) which said amount the defendants have refused to pay.”
The respondents denied liability and pleaded thus:
“(2) In answer to the plaintiff’s statement of claim the defendants aver that by an agreement entered into between the plaintiff and the defendants in 1968, it was mutually agreed that the defendants
[p.386] of [1971] 2 GLR 383
should place the disposal of the plaintiff, their caterpillar for the exploiting of a concession at Ben East forest reserve near Ateiku in consideration whereof the plaintiff was inter alia to sell exclusively to the defendants all the timber of any species felled in the said concession at an agreed ‘bush’ price.
(3) During the currency of the said agreement, the plaintiff in violation of the said agreement and without the consent of the defendants wrongfully sold logs to third parties whose property marks were ‘A.T.C,’ `N.H’ and ‘A.A’ respectively, and railed the said converted logs at our expense, particulars of which are annexed hereto.
(4) That in the circumstances, the plaintiff prejudiced and interfered with the entitlement of the
defendants thereto, and diminished the sum of money due to the defendants as a result of his converting the timber out on the said concession which was originally for the defendants unto his own use, whereby the defendants suffered loss and damage.
(5) If the plaintiff is entitled to any claim at all, the defendants say that by virtue of the plaintiff’s breach thereof the defendants are entitled to set off against the same sum of money lost by the defendants under the agreement, namely, the difference of amount which the defendants would have realised by the sale abroad of the ‘converted’ timber, which includes the cost of railing of the ‘converted’ timber at the expense of the defendants.”
It proceeded to set up a counterclaim in the following terms:
“(4) By reason of the said breach the defendants say that after crediting the plaintiff with the selling price of the ‘converted’ timber as though they had been offered to him in accordance with the terms of the agreement is entitled to debit the plaintiff with the sum of N¢1,732.65 being the balance of the amount which the defendants would have realised on export sales had the ‘converted’ timber been offered to the defendants as per the said agreement.
The defendants counterclaim:
(1) N¢1,732.65
(2) Damages.”
In reply to the respondents’ counterclaim, the appellant alleged as follows:
“(3) In further answer to paragraph (2), plaintiff avers that from the nature of the said agreement, it was subject to an implied condition that the purchase by the defendants from the plaintiff of export logs was strictly conditioned upon the defendants having export orders on hand for such logs as well as upon their having funds readily available for the purchase of the logs and upon
[p.387] of [1971] 2 GLR 383
mutual agreement on the prices of those logs whose prices were not indicated or fixed in the said agreement.
(4) As to paragraph (3) of the defence, plaintiff says that the sale of export logs to third parties was with the prior approval and valid written authority of the defendants themselves following their inability to pay to the plaintiff in May 1968 the sum of N¢3,098.32 owed by them in respect of logs already sold and delivered to them by the plaintiff.”
Though the respondents denied liability in the pleadings, the evidence shows that there was no serious contest that the goods were supplied to them and but for the counterclaim, the respondents would have been liable. The issue therefore turned upon the interpretation of the agreement and the rights and obligations of the parties during its currency.
It is clear from reading the agreement that nowhere in it was there an express provision that the plaintiff was to sell export and sawmill logs listed in the said agreement exclusively to the respondents. To the extent that the pleadings introduced an express provision, that averment is not sustainable. The legal position, however, is: “no stipulation ought to be implied in a contract unless upon the evidence, it must be taken to have been mutually intended and necessary to give business efficacy to the document.” See Ward v. Barclays Parkings & Co. [1939] 1 All E.R. 287 at p. 289.
Thus, though the word “exclusively” does not appear in the agreement, the intention of the parties as to whether or not the plaintiff was to supply the species of timber listed in it exclusively to the respondents could easily be gathered from the tenor of the agreement and the subsequent conduct of the parties as brought out in evidence. These were that the respondents could, and did place at the disposal of the appellant, their caterpillar; there appeared to be no restriction on its user or any charges for its use. The appellant was to be responsible for fuel and the wages of the caterpillar crew.
The quantity of logs to be supplied was not stipulated. The only stipulation therein was the selling prices. A potent indication as to the intention of the parties was the conduct of the appellant in seeking prior permission from the respondents to sell logs, which had been felled in his own concession and for which he had not been paid, to other buyers. On this issue the learned judge came to the right conclusion when he held that:
“When a writing is not ex necessitate legis (as under the Statute of Frauds) the apparent deficiencies can be supplied by oral evidence since it may be that the parties themselves did not intend to commit to writing the whole of the contract. Nowhere in the agreement was the word ‘exclusively’ used but it did appear from the evidence that the intention behind it was that all species named in the agreement should be sold to the defendant company; if not there would be no reason for their being named in the agreement.”
[p.388] of [1971] 2 GLR 383
But if a stipulation of the nature discussed ought to be implied, there is an equally implied legal obligation that the respondents do make prompt payment of produce sold to them. This was the plea in paragraph ( 3) of the amended statement of reply which has been referred to above. The evidence led by the appellant in the court below was that as at the beginning of May 1968 he had supplied to the respondents logs and sawmill timber to the value of N¢3,000.00. This piece of evidence is supported by exhibit 1, a statement of account, tendered by the respondents.
He had a meeting with the management of the company and the persons present were Mr. Osei Bonsu, managing director, Mr. Berko, a director, and Mr. Aninakwa Osei Bonsu, the export manager. The appellant’s version of the proceedings at this meeting was as follows:
“ I went to the managing director, Mr. Osei Bonsu, in Kumasi to demand it. He called the accountant who furnished him with my accounts with them. He saw that he was owing me, but told me he could not pay since he had not paid his own employees. He called the director Mr. Berko and the export manager Osei Bonsu and had discussion with them. After that Osei Bonsu told me that he would find a way out to assist me to meet my liability. He told me that he would allow me to load my logs at the rail head and sell them to any buyer to pay my debt.”
This piece of evidence stood unchallenged, though the respondents had ample opportunity to dispute it if they so wished.
The representative of the company who gave evidence was not at this meeting. In many ways, his conduct at the railhead did support the appellant’s contention, namely, that he was permitted to sell logs to other purchasers. His own evidence was in these terms:
“As a result I explained to the export manager in writing. The original copy is at Kumasi. I wrote to tell him that I had already reported to him on two occasions that T. T. Danquah had railed Wawa logs to A.T.C.A. Osei Bonsu in turn informed me that we were having no contract against those Wawa logs and so I should allow him the plaintiff to rail those logs to any other buyer. Later on after three days a letter exhibit 4, came to me at Fosu and asking me to allow the plaintiff to rail only six trucks of logs to N.T.C. or any other buyers. The plaintiff loaded more than six trucks and so I had to keep the office informed. Before I went to the office in Kumasi, I had a surprise check from the company by Wilson Obuba and Yaw Mensah. As a result I was requested by Osei Bonsu, managing director, to appear before him in two days’ time in Kumasi together with my necessary documents concerning loadings. I sent the documents to Kumasi and was asked to go back.”
An examination of exhibits 1 to 4 tendered by the respondents indicated that at all material periods during the subsistence of the agreement, the respondents were unable to fulfil their obligation to pay for such logs
[p.389] of [1971] 2 GLR 383
as were supplied. Exhibit 1 supports the appellant’s assertion that he was owed N¢3,000.00 as at the beginning of May 1968.
It seems to me that by the ordinary rules of mutuality which are applicable to contracts as the one under consideration, if the appellant was under legal obligation to supply and sell logs and sawn timber exclusively to the respondents, the reciprocal obligation, in the absence of a stipulation to the contrary in the contract, was for the respondents to make prompt payment of goods supplied and delivered. This the respondents failed to do. In these circumstances, it was open to the appellant either to repudiate the contract as a whole or to waive such rights as he had of enforcing immediate payment. From the evidence, it does appear that the parties mutually agreed upon a waiver. The appellant was not paid and apparently did not insist upon it and the respondent did allow the appellant to sell logs and sawn timber specifically mentioned in the agreement to other purchasers.
The dispute is about the extent of the waiver. The respondents contend that they authorised the appellant to sell only six truckloads of logs. The appellant says that he was allowed to sell those logs for which the respondents had no contract, presumably with other buyers. The only admissible evidence on this issue was given by the appellant. Mr. Okine was not at the meeting and the instructions contained in exhibit 5 to him from his headquarters are no evidence against the appellant; those present at the meeting elected not to give evidence and no reason was given for their inability so to do.
Even assuming that the appellant was in breach of his agreement, the respondents had full knowledge of the said breach in May 1968, yet raised no objection and continued to do business with him. The exhibits tendered by the respondents showed that the first debit raised in this respect against him was on 31st March 1969, after the issue of the writ. It is difficult to see how the respondents could maintain an action for breach when all through the period of the agreement, they were unable to fulfil their obligations to make prompt payments. If the appellant had elected to, he would have been absolved from continuing with the contract.
To imply a term that the purchaser shall make prompt payment on delivery of the produce by the seller in a contract of sale is not to vary or add to the terms of the agreement. Indeed in the contract of sale of goods, the payment of the price and the delivery of the goods are concurrent conditions. It is to give business efficacy to that contract and to the extent that the learned trial judge held such implication would amount to a variation of the contract, he was wrong. If the learned circuit judge had considered the appellant’s evidence in juxtaposition to the exhibits tendered by the respondents, to the testimony of the then export manager and the conduct of Okine in permitting the appellant to load timber under his control even before he received exhibit 5; he would have concluded that the appellant’s evidence on this aspect was more than probable. Indeed that was the only admissible evidence before him.
[p.390] of [1971] 2 GLR 383
Perhaps owing to the view that I have taken, it is not necessary to discuss the issue of damages. It is , however, difficult to find what principle and on what evidence the court awarded damages under two different heads, viz. N¢1,732.65 for breach of contract and N¢200.00 general damages presumably under conversion. The principles on which damages, if proved in a case as this, could be assessed have been laid down in several authorities, see The Arpad [1934] P. 189 at p. 233, C.A.:
“Turning to the earlier authorities on this part of the case, I may observe that, in the scores of cases which are reported as dealing with the measure of damage in an action against a carrier or in an action founded on failure to deliver goods sold to the plaintiff, there is, so far as I have been able to ascertain, no statement in any judgment that the damages might be higher on the allegation of a tort than they would be in contract. On the contrary, as between seller and buyer it has been decided that the buyer cannot recover larger damages in tort than in contract …”
If, as was argued by counsel for the respondents, the claim for conversion was maintainable because the logs were removed from the railhead when they were already in the possession of the respondents, then the respondents could not simultaneously maintain an action for breach of contract as the appellant must be taken, at least, to have fulfilled his obligation under the contract by the said delivery. The only cause of action which could accrue in such circumstances would be one in conversion.
As already observed and stated, it is not necessary to go into detailed discussion as, in my view, the respondents had no answer to the appellant’s claim, and the claim ought to have succeeded.
Accordingly, I would allow the appeal and set aside the judgment appealed from. In lieu of it, I would enter judgment for the plaintiff on his claim and dismiss the counterclaim with costs here and below.
JUDGMENT OF APALOO J.S.C.
I agree and cannot usefully add anything
JUDGMENT OF JIAGGE J.A.
I also agree.
DECISION
Appeal allowed.
S.A.B.
