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Claim against Defendants jointly and severally for moneys under a hire-purchase agreement with alternative claim against second Defendant for moneys due under a signed acknowledgment 1:n an account stated-Novation as a complete reply.

The facts of this case are sufficiently set out in the judgment.

O. Alakija for Appellants.

M. Thompson (Dove Edwin with him) for Respondents.

The following judgment was delivered:-

KINGDON, C.J., NIGERIA.

This is an appeal from a judgment of the Divisional Court sitting at Aba in favour of the plaintiffs.

'['he Writ was issued with the name of " G. B. Ollivant & Co., Aba" as plaintiffs. Since the agreement upon which the action was based is in the name of "G. B. Ollivant & Co., Ltd.", admittedly a different Company from" G. B. Ollivant & Co. ", it seemed at the outset of this appeal that it might have to be allowed on the third ground of appeal, viz., "because there was no privity of contract between the plaintiffs' firm and defendants established by plaintiff". But it was shown that the application for the writ dated the 13th December, 1933, was in the name of " G. B. Ollivant & Co., Ltd." and that the substitution in the writ itself of " G. n. Ollivant and Co." was a clerical error for which the plaintiffs were not responsible, and so, this position being accepted by the appellants' Counsel, this ground of appeal fell to the ground.

The plaintiffs claimed "against the defendants jointly and severally to recover the sum of £205 14s. 10d. being moneys due under a hire-purchase agreement dated 1st February, 1931, and made between the plaintiffs and the said Effioms Transport and signed by the said M. N. Effiom ". They sought" to recover in the alternative the sum of £205 14s. 10d. being a balance due under a signed acknowledgment in an account stated and dated 1931 by the said M. N. Effiom "

There were no formal pleadings but at the opening of the trial the defendants pleaded "Not person to be sued." After hearing the evidence and argument the learned trial Judge gave judgment" for £200 138. 10d. in favour of plaintiffs with lost ". He gave no reasons.

The real defence to the action and the main point in the appeal now before this Court is that the defendants could not be held liable because there had been a novation, a new contract between the plaintiffs and a new firm, known at first as " Effioms Transport and Engineering Company" and later, after the necessary formalities had been completed, as " Effioms Transport and Engineering Co., Ltd.", having been substituted for the original contract between the plaintiffs and the defendants with the consent of all parties.

If this novation is proved it is a complete defence to the action. This Court has no means of knowing on what ground the trial Judge rejected it; whether it was that he thought that though proved it was no defence, or whether he held that it was not substantiated by the evidence. This being so it has been necessary for this Court to examine 'in detail the evidence in support of the novation. In this respect it is fortunate that the greater part of the evidence is documentary or not in dispute. the question therefore turns not upon the credibility of the respective witnesses but upon the proper inference to be drawn from the documents and facts and this Court is in as good a position as the Court below to form an opinion as to what is the proper inference.

What, then, is the evidence of novation? It is as follows:-:First that in June, 1932, Effiom went to the plaintiffs' supervising agent and informed him verbally that Effioms Transport was sold to Effioms Transport and Engineering Company. The ~gent asked for a letter and on the 30th June, Effiom wrote the letter which became Exhibit " H " at the trial in the following terms:-

30th June,

A151/9/32

The Agent,

Messrs. G. B. Ollivant & Co., Ltd.

Dear Sir,

We beg' to advise you that Messrs. Effiom's Transport has been incorporated and formed under the name of Messrs. Effiom's Transport and Engineering Company with a Directorate.'

2. You ,,:ill please therefore debit the New Company with all accounts standing in the name of Effiom's Transport in your books.'

3. From henceforth we also beg to advise you all cheques as emanating from this office will be signed Me8llrs. O. 8. H. Wilcox and J. B. George and their signatures could be held valid.

Yours faithfully, (sgd.) M. N. EFFIOM.

Effom alleges that the plaintiffs' agent agreed verbally; at any rate upon receipt of this cretification the agent altered his Company's books by adding the words " and Co." to the name "Effioms Transport" appearing therein.

On the 28th June, 1932, i.e. presumably after the verbal intimation but before receipt of Exhibit" H ", the plaintiffs gave . a receipt in the following terms (Exhibit E).

" Received from Effiom's Transport and Engineering Company, the "sum of forty pounds-shillings and-Pence on account".

The certificate of incorporation of the new Company as a Limited Company is dated the 2nd November, 1932, and upon receipt of the certificate a new ledger was, according to Effiom, opened and on page 20 thereof the continuation of the account with the plaintiffs is shown (Exhibit "K"). This begins by showing a balance of £227 19s. 9d. due to plaintiffs on the 1st February, 1933, and ends with a balance of £215 due to plaintiffs on the 31st October, 1933. It shows that payment!'! by cheque were made to plaintiffs on March 11th, April 29th and October 31st, 1933, and that further purchases. were made from plaintiffs on April 21st and October 31st, 1933. According to this exhibit the balance due on the 31st March, 1933, was £206 6s. 3d. On May 1st, it is shown as £179 17s. 4d.

There can be no doubt that this indebtedness of round about £200 has its origin in the balance due from Effioms' Transport to the plaintiffs on the hire-purchase agreement. On the 21st September, 1932, Effiom signed an acknowledgment (Exhibit " C ") agreeing the balance of account at the 31st August, 1932, at £242 8s. 4d. This is on a document headed

"G. B. Ollivant·& Co., Ltd., "

Aba,

"21st September, 1932.

" Federal A6 spare parts taken by Messrs. Effiom's Transport &; Co., " Aba."

The words " and Co. " are the ·important ones.

On the 30th November, 1932, the plaintiffs rendered an account (Exhibit "F") "To Messrs. Effioms Transport .& Engineering Company, Aba" showing a balance of £212 8s. 4d. due to plaintiffs, and on 31st March, 1933, the plaintiffs rendered another account (Exhibit " G") "To Messrs. EffiomsTransport Coy., Aba" showing the balance of account rendered as £212 8s. 4d.

It is not explained how this is reconciled with the £206 6s. 3d. which, as I have already mentioned, appears from Exhibit" K " to have been the balance on 31st March, 1933; but, again, there is no doubt that this indebtedness has its origin in the balance due from Effioms Transport to the plaintiffs on the hire-purchase agreement t

Apart from the question of accounts other documents put in at the trial show that on the 28th November, 1932, EfIfolll wrote the plaintiffs coffiplaining of their not ordering spares. This letter (Exhibit" D2 ") is signed in his own name but is headed

On the 25th Joouary, 1933, he wrote the plaintiffs another letter (Exhibit" D3 ") similarly headed and signed.

Do these documents prove the consent of all parties~ to the new contract? First, as to. the defendants to this action, Exhibit" H " conclusively proves their consent. Secondly, as to the plaintiffs the following is the evidence:-

(a) They have been notified of the change first verbally and then formally by Exhibit" H "~

(b) They have agreed to the change by acting as ·requested in paragraph 2 of Exhibit "H" and· adding the words" and Co. " to the words " Effioms Transport" in their books.

(c) They have accepted from the new Company payment on account of the original indebtedness of· the defendants.

(d) They have rendered to the new Company accounts showing the new Company as indebted to them in the balance originally due from the defendants.

Such conduct, to my mind, compels the inference that the plaintiffs were a consenting party to the novation;

Thirdly, as to the new Company, Effioms Transport· and Engineering Co., Ltd., the evidence is

(a) It has kept books showing that it owes to the plaintiffs the debt in respect of which the present claim is brought.

(c) It has accepted without demur accounts from the plaintiffs showing this debt as due from it to the plain tiffs.

Again I am compelled to hold that the only possible inference is that the new Company was a consenting party to the novation and can be held liable under the new contract ..

The novation was thus complete, and I consider that the defendants plea was good and should have been upheld. In my view they had an unassailable defence to the action.

I am of opinion that this appeal should be allowed, and that judgment should be entered for the defendants with costs in this Court and the Court below.