1975-LCER-1005-SC
Other Citations
IN THE SUPREME COURT OF NIGERIA
On Friday, the 18th day of April, 1975
SC.278/1974
Before Their Lordships
TASLIM OLAWALE ELIAS….. Justice, Supreme Court
GEORGE SODEINDE SOWEMIMO….. Justice, Supreme Court
DANIEL O. IBEKWE….. Justice, Supreme Court
….. Justice, Supreme Court
Between
GEORGE ERABOR
Appellant
And
INCAR NIGERIA LIMITED
Respondent
HELD:
In the result, the appeal fails and it is hereby dismissed.
RATIO DECIDENDI:
T. O. ELIAS, C.J.N. (Delivering the Lead Judgment):
In 1964 the plaintiff was employed by the defendant company as a salesman on a monthly salary of 25 pounds (N50) and a commission of two per cent on every new car sold by the company and one and half percent on every second hand car sold by the company on the introduction of the plaintiff. The plaintiff was one of several salesmen so employed by the defendant, each salesman being assigned to specific Ministries and other establishments in Lagos, with the instruction that no one salesman should poach in the field of assignment of any other salesman.
on the out break of the civil war, it became impossible for the salesman assigned to the Ministry of Defence to carry out his duties normally because, as someone from the rebel enclave, he felt he was not safe to deal with the soldiers at that time. The salesman discussed the matter among his colleagues, including the plaintiff, and both he and the plaintiff then went before their European Manager who gave his oral consent to the plaintiffs including the Ministry of Defence in his portfolio. At the beginning of the civil war, the Ministry of Defence requisitioned all available cars from a number of car dealers, including the defendant.
P.2
After this commandeering, the plaintiff went to the Permanent Secretary of the Ministry of Defence and persuaded him to authorise the purchase of certain types of fiat cars from the defendant company. As a result of his first visit to the Ministry of Defence, the European Manager of the defendant company went with the plaintiff to the Ministry of Defence to discuss the details of the proposed sale of fiat cars, and some of the responsible officials went with the plaintiff and his European boss to the showroom of the defendant.
Between August 1967 and August 1968, the Ministry of Defence purchased a number of vehicles from the defendant to the tune of 1,179,335 pounds and the total commission due on this at the rate of one and a half percent is 17,690pounds.
The plaintiff’s employment with the defendant was terminated in March 1968 on the ground that business was very dull at the time, but the plaintiff was allowed to continue to function merely as a salesman at the usual rates of commission until this arrangement was determined in August 1968.
The plaintiff then wrote to the company claiming his commission as above but, as he did not obtain a reply to his letter, he instructed his solicitors to institute an action. The plaintiff’s Writ of Summons is endorsed as follows:
“The plaintiff’s claim against the defendant is for the sum of 35,144: 6pounds (Thirty-Five Thousand One Hundred and Forty Four Pounds and Six Shillings) being money due to the plaintiff as commission in respect of vehicles sold for the defendant by the plaintiff as particularly specified below:
1. Commission payable on vehicles sold by the plaintiff to the Nigerian Federal Ministry of Defence to the total value of 1,179,335:10 pounds from August 1967 to August 1968 at the rate of one and a half percent ………. 17,690pounds.
2. Commission compounded for vehicles sold to the Ministry of Defence subsequent to August 1968 17,454:16pounds.”
P.3
The defendant company denied that it was the plaintiff who introduced the business transactions between them and the Ministry of Defence, claiming that it was their European Manager who in fact did the introduction and conducted the negotiations leading to the sale of the several vehicles. The Permanent Secretary of the Ministry of Defence gave evidence as plaintiffs witness to the effect that it was the plaintiff that came to him and introduced the defendant to the Ministry of Defence and that the orders were placed as a result of the introduction.
The defendant, on the other hand, called a senior army officer who testified to the commandeering of the vehicles and tried to deny that the sale had been introduced by the plaintiff to the Ministry of Defence, but the learned trial Judge believed the Permanent Secretary as a truthful witness
After a careful review of all the evidence, the learned trial Judge came to the conclusion that the plaintiff was entitled to his commission on all the sales by the defendant to the Ministry of Defence between August 1967 and August 1968, when the relationship between the plaintiff and the defendant was effectively terminated.
The learned trial Judge, however, disallowed the second leg of the plaintiff’s claim for commission calculated at a total of 17,454pounds on vehicles allegedly sold by the defendant to the Ministry of Defence subsequently to August 1968; this was a rough guess, as the plaintiff could not establish how many vehicles were sold, if any, after he had left the defendant’s employment.
From this judgment in Suit No. LD/346/70 delivered on August 7, 1973, by George, J., in the Lagos High Court, the present appeal has been brought on a total of eleven grounds which may be set out as follows:
“1. The judgment of the learned trial Judge was against the weight of evidence.
2. The learned trial Judge erred in law by admitting Exhibits A-A1 in evidence and finding on the said Exhibits A-A1 when the said Exhibits A-A1 purported to have been made by the said witness, were neither signed nor stamped by witness who tendered the said Exhibits A-A1 in evidence.
P.4
3. The learned trial Judge erred in law by considering the contents in Exhibits A-A1, when the said Exhibits A-A1 did not show the signature of an authorised official of the Ministry of Defence as well as the official stamp of the said Ministry of Defence to indicate the items of the vehicles sold by the defendant to the said Ministry of Defence.
4.The learned trial Judge erred in law to have held that what the plaintiff is required to prove in order to recover his commission is that he introduced the Ministry of Defence to the defendant and that introduction was the foundation on which the negotiation for the purchase proceeded when in fact the documents Exhibits D, E & F the basis of the agreement between the parties did not so provide.
5.The learned trial Judge erred in law by not considering the effect of the contents in Exhibits D, E and F as the basis of relationship between the plaintiff and the defendant.
6. The learned trial Judge was wrong to have held that the many subsequent approaches made to the Ministry of Defence by the plaintiff were made with the full knowledge and approval of the defendant in the normal course of the plaintiff’s duties as a salesman when there was no evidence to support the plaintiff’s claim as pleaded by him.
7. The learned trial Judge misdirected himself when he held that the evidence of the Sales Supervisor who was in charge of the salesman at the material time shows that in the period under consideration it was not convenient for Sales Manager to countersign the sales report while there was evidence of 5th D.W. that the sales report was signed and countersigned by the Sales Supervisor and Sales Manager or the Assistant and also the evidence of 6th D.W. as well as Exhibits BB-BB3 clearly showed the practice and custom of defendant.
8. The learned trial Judge erred in law when he held that on construction of Exhibits D and E the plaintiff was entitled to commission, notwithstanding the specific provisions of the contents in Exhibits D and E and in particular clauses 6 and 7 in the said Exhibit D.
9. The learned trial Judge was wrong to have rejected the evidence of the 2nd D.W. and 3rd D.W. on the basis that they were not independent witnesses when as a matter of fact references were made to the 3rd D.W. by the plaintiff as being the man who accompanied him to see the 2nd P.W.
P.5
10. The learned trial Judge erred in law by holding that the evidence of the 3rd P.W. and that of the plaintiff override the provisions in Exhibits D and F and the evidence of the 3rd D.W. 5th D.W. and 6th D.W.
11. The learned trial Judge erred in law to have admitted Exhibit H and found on same as indicating the purchases by the Ministry of Defence from the defendant, when the said Exhibit H did not emanate from the said Ministry of Defence.”
Mr. Adeleke, learned counsel for the appellant, argued strenuously that the plaintiff did not introduce the business in terms of the contracts of employment between the plaintiff and the defendant and that, even if it should be held that the plaintiff did introduce the business as such, he had not satisfied all the conditions precedent to his entitlement to claim the commission.
In particular, learned counsel argued that the plaintiff’s action in including the Ministry of Defence in his portfolio had not been properly authorised by the defendant company in accordance with established practice, which he was not able to substantiate before us. He again submitted that one of the conditions precedent was that, after each sale or series of sales, the salesman should have had his returns duly endorsed and countersigned by the Manager of the defendant company, and that the plaintiff had not been able to comply with this condition. He noted, however, that this point was never raised in the court below, and so we refused to entertain the point on the appeal before us.
Also, learned counsel for the appellant submitted that whatever the court might decide with regard to the first leg of the claim relating to the period August 1967 to August 1968, the plaintiff should be disallowed the second leg of his claim relating to the period subsequent to August 1968, as the claim was merely speculative and should not be entertained because the claim had not been established with the necessary particularity as to evidence of the actual sales, if any, and the production of the supporting documents.
It was his view that the respondent’s entitlement to commission must be limited to the period during which the respondent was an employee or a salesman on commission vis-a-vis the defendant company, and that, once the employment has been duly terminated, the respondent should not be entitled to any further commission.
P.6
Mr. Akinrele, learned counsel for the respondent, submitted in reply that the learned trial Judge was right to have held as he did that the respondent was responsible for the introduction of the business transacted between the defendant and the Ministry of Defence during the period August 1967 to August 1968.
He further submitted that the respondent is entitled not only to the commission earned up to the date of the effective termination of his relationship with the defendant company, but also the commission he is claiming for the period subsequent to August 1968. He referred us to British Bank Ltd. v. Novimex Ltd. (1949) 1 All E.R. 155, as authority for the proposition that the mere termination of the respondent’s employment in August 1968 should not dis-entitle him to commission earned on sales carried out subsequently between the defendant and the Ministry of Defence.
In that case the defendants agreed in writing with the plaintiffs that they would pay certain commission in respect of a consignment of oilskins with which it had been arranged, with the plaintiffs’ assistance, that a third company, with whom the defendants had not at that time direct contact, should supply the defendants. The letter written by the defendants to the plaintiffs contained the following, inter alia:-
“We also undertake to cover you with an agreed commission on any other business transacted with your friends (i.e. third company). In return for this you are to put us in direct touch with your friends.”
Under this arrangement, the plaintiffs put the defendants in direct contact with the third company. The defendants entered into further transactions with that third company but refused to pay commission to the plaintiffs in respect thereof. It was held by the Court of Appeal, overruling Denning, J., as he then was, that, as the plaintiffs had executed their part of the transaction, the defendants were bound to pay, in default of agreement as to the amount, a reasonable sum as commission on all their subsequent business with the third company, whether or not such business was a direct consequence of the plaintiffs’ introduction.
This decision is, if we may say so, no authority for the proposition suggested by learned counsel for the respondent. In the first place, it turned on the peculiar facts of that case, especially the undertaking, not only to pay for the first business transacted between the defendants in that case and the third company, but also for “any other business” transacted with the third company. There was not in the present case any such undertaking given by the defendant company, the Incar Nigeria Limited.
P.7
In the second place, the contracts between the plaintiff and the defendant in our instant case, as contained in Exhibits D, E, and F, could only be viewed as envisaging a relationship between the plaintiff and the defendant so long as the contract of employment and the supplementary contract between March 1968 and August 1968 are concerned. We do not find that in the present case, therefore, there is an agreement between the appellant and the respondent that the commission should be payable to the respondent until the crack of doom.
Were this to be inferred from the actual contracts between the parties, then all salesmen paid salary and commission in similar circumstances throughout the Federation would be able to turn round and claim a kind of royalty for life from their previous employers, even long after they had ceased to have any dealings with those employers.
This would be obviously contrary to the development of business transactions and reasonable economic arrangements in our developing society. It would, of course, be otherwise if there were express undertakings on the part of the defendant company in our case that the respondent should be entitled to his commission indenfinitely, but we should require clear words to that effect before we could infer that that was necessarily the case. In the British Bank Ltd. the defendants undertook “to cover you with an agreed commission” and Denning, J., refused this head of claim on the ground that it was too vague. The learned Justices of the Court of Appeal, while over-ruling Denning, J. on this point, went on to hold that the defendants in that case should be regarded as having undertaken to pay a reasonable commission on any other business transacted with the third company.
They, however, refused to grant either the 5 percent or the 3 percent claimed in that case, but granted only a commission not exceeding one quarter penny (one farthing) per oil-skin. Again, it is to be noted that the terms of the undertaking of the defendants in that case permitted the inference that commission was to be payable on any other business whether or not it had resulted as a direct consequence of an introduction by the plaintiffs in the case and, therefore, it included a transaction arising, as happened in that case, from an advertisement in a newspaper.
P.8
We have spelt out all these in order to show that the decision in the British Bank Ltd. must be deemed to have turned on its own peculiar facts, facts not present in our instant case.
Even if we should be disposed to consider granting the respondent’s claim for commission on sales allegedly made subsequently to August 1968, we would be met with the two objections, first that the respondent failed to establish that those sales actually took place since determination of his employment and, secondly, that there was an undertaking on the part of the appellant in this appeal to pay him commission indefinitely, even though the quantification of the amount would be difficult to make from time to time thereafter.
It would, of course, have been otherwise if, before the termination of the contractual relationship between the appellant and the respondent company, there had been a firm contract of sale of fiat cars between the company and the Ministry of Defence, leaving only the question of a final settlement and payment for the vehicles already sold.
The appellant would in that case have been entitled to claim commission on such a sale even though he had before its conclusion ceased to be employed by the respondent. This would have been the case if the issue had not been settled as part of the general determination of the appellant’s entitlement, if any, in an action for wrongful dismissal.
It may be suggested that the apparent unreasonableness of requiring defendants to pay commission to plaintiffs in the circumstances of this case could be met by the defendants ceasing to do business with the Ministry of Defence or any particular customer, thereby terminating a relationship that might have been brought into being as a result of the plaintiff’s endeavours in this type of case.
That might well be a way out, although we hardly think that it is necessary, in the interest of reasonable business transactions in our country today, that employers of salesmen should be required to terminate all sales transactions with those to whom they might have been introduced at one time or another by the salesmen.
It seems to us that, in the absence of any express provision in the contracts between the salesman and his employers, the salesman’s entitlement to commission should be confined to the period of employment and any other period that may be specifically agreed between the parties.
P.9
We are not unaware of the decision in Levy v. Goldhill (1917) 2Ch.297 which is apparently to the contrary. In that case, the plaintiff in the course of travelling for his own business obtained orders for other traders on commission basis. The defendant agreed with the plaintiff as follows: “I agree to pay you half profits on receipt of orders (provided the customer is good). Same applies to repeats on any accounts introduced by you.”
The defendant later terminated the relation brought about by the agreement without giving any notice. It was held by Peterson J., that there was no contract of employment between the parties as such and that the defendant was entitled to terminate their relationship with the plaintiff without notice. The learned Judge held, however, that, notwithstanding the termination of the relationship, the plaintiff was entitled to commission on orders whenever received if they came from customers introduced by the plaintiff.
The reasoning of the learned Judge was in part that “the agreement is not for a definite period. It is for an indefinite term”, and that it was within the power of the defendants to put an end to the matter by ceasing to deal any further with the customers already introduced by the plaintiff: Bilber v. Hasse & Co. 5 Times LR677.
In the course of his extensive review of the authorities, however, the learned Judge examined Weare v. Brimsdown Lead Co. (103 L.T. 429) in which the plaintiff was employed by the defendant for twelve months as agent for the sale of white lead manufactured by them upon the terms that he was to receive two and half per cent commission upon all sales direct or indirect.
The Court of Appeal held the plaintiff was not entitled to any commission after he had left the service of the defendants. The true test which the majority judgment (Avory J., with whom Phillimore J. agreed) applied is as follows:
“I think the question in this case is simply whether the parties contracted either that the plaintiff should be employed for all time or that he should be paid commission after he had left the defendant’s service on orders given by customers previously introduced by him.
P.10
The authorities which have been cited may all be reconciled in this way: in some of them the Court has construed the contract as implying a term that the plaintiff is to be paid commission after he has left his service. Applying that test to this case, I can find nothing in the terms of this contract importing either that the plaintiff was to be employed for all time or that he was to be paid commission on order given by customers after he had left the defendants’ service.”
Peterson, J., put the difference between that case and Levy v. Goldhill with which he was immediately concerned in these words:
“In that case the agreement of employment was for a fixed term, and the learned Judge came to the conclusion that the remuneration was only payable to the plaintiff in respect of orders obtained during the term of the employment.
The question in this case is one of construction, and I have come to the conclusion that under this agreement the plaintiff is entitled to commission or orders whenever received if they come from customers who have been introduced by the plaintiff.”
There can be no doubt that the circumstances in Levy v. Goldhill are as different from those in our present case as they are from those in Weare v. Brimsdown Lead Co. We think that the test applied in this latter case is applicable to the instant case.
In the result, the appeal fails and it is hereby dismissed. The cross-appeal by the respondent also fails. The judgment of George, J., delivered in Suit No. LD/346/70 on August 7, 1973, together with the costs, is hereby affirmed. The respondent is awarded costs assessed at N180.00 in this Court. And this shall be the judgment of the Court.
P.11
Counsel
Mr. A. Adeleke…..For Appellant
And
Mr. Akinrele…..For Respondent