1. BOOTHIA MARITIME INC.
2. GLOBAL TRANSPORTE OCEANICO S. A. INC.
3. NIGERIAN PORTS AUTHORITY
v.
FAREAST MERCANTILE CO. LTD.
2001-LD-SC-839
Supreme Court
20th April, 2001.
Justices:
Adolphus Godwin Karibi-Whyte, J.S.C
Idris Legbo Kutigi, J.S.C
Emmanuel Obioma Ogwuegbu, J.S.C
Godfrey Okay Achike, J.S.C
Samson Odemwingie Uwaifo, J.S.C
Subject Matter(s):
1. Proceedings In Lieu Of Demurrer
2. Bill Of Lading
3.Shipping And Admiralty
Final Order:
Appeal Dismissed.
RATIO DECIDENDI
BILL OF LADING – Purpose And Functions Of A Bill Of Lading
“One of the three vital functions of a bill of lading, and indeed, which is relevant to this appeal, is that it is a document of title to the goods specified in it in the sense that where the owner of the goods indorses the bill of lading in favour of a purchaser for value and transfers same to him, the owner of the goods transfers the property in the goods to the purchaser; the purchaser may then be referred to as the ‘transferee’, ‘consignee’ or ‘indorsee’ of the bill of lading as the case may be, while the bill of lading is said to have been negotiated. It is important to underscore the fact that while a bill of lading is a negotiable or an assignable document of title to the goods, it is however NOT a negotiable instrument under the Bills of Exchange Act, because, unlike a bill of exchange, the bona fide holder of a bill of lading for value cannot acquire a better title than the transferor possesses; see Okay Achike, Commercial Law in Nigeria, (1985 ed.) P.284.”
BILL OF LADING – Different Kinds Of Indorsement On A Bill Of Lading
“Generally, there are three types of indorsement. First is the “special indorsement” i.e. where there is a specified person named in the bill of lading. e.g. where X bought goods from the owner or shipper, D. the following indorsement may be made on the bill of lading: “Deliver to X or order. (signed) D” Second, if X simply writes his name on the back of the said bill of lading, this is called an “indorsement in blank”. The effect of indorsement in blank is that it changes, i.e. converts, the “order” bill of lading to a “bearer” bill of lading so that a holder of the bill of lading indorsed in blank will transfer title in the goods effectively by mere delivery and without specifically mentioning the name of the purchaser from the person whose name was specified in the bill of lading. Thirdly, there may be the “restricted indorsement”. This arises where the holder of a bill of lading in blank restricts the indorsement and in turn reconverts it to an “order” bill of lading. Thus where as in our example, X sold the goods to T, he could indorse the bill of lading at the back “X” which makes the bill of lading a “bearer” bill: but if after the signature of “X” (at the back) the name of the buyer is written over the signature this becomes a restricted indorsement whereby the “bearer” bill of lading is reconverted to an “order” bill of lading. It may be further noted that an indorsement to “D only” after his signature equally illustrates an example of restricted indorsement.”
BILL OF LADING – Whether A Simple Indorsement On A Bill Of Lading And Delivery Of Goods Transfers The Property In The Goods To The Indorsee
“There is an aspect of the case that remains to be considered. Suppose the clearing agents, Musina (Nig.) Ltd., as contended by the defendants/appellants, were indorsees of the bill of lading by mere act of transfer of that shipping document to them by the plaintiff, would this be enough also to transfer the property in the goods to them so as to completely divest the plaintiff of the right to sue for the loss of some of the goods comprised in the bill of lading? Surely, this will depend on the legal effect of the mere transfer or even the mere indorsement on the bill of lading. The weight of judicial authorities in this regard makes it abundantly clear that such legal effect, must, at the end of the day, depend on what can be gleaned from the parties’ intention. Thus in the old case of Newsom & Anor v. Thornton & Anor. (1805) All E.R. (Rep) 226 at p.230 , Ellenborough, C.J. put it tersely and lucidly as follows: “A bill of lading, indeed, shall pass the property upon a bonafide endorsement and delivery, where it is intended so to operate in the same manner as a direct delivery of the goods themselves would do, if so intended.” (Emphasis is mine) The need to accord protection to consignees and indorsees of bills of lading against the baseless and adverse claims of persons who, without more, come in possession of these legal documents could not be over emphasised. In England, such protection was established by the enactment of the Bills of Lading Act, 1855. The effect of the Act is to assign the, contract of a freightment to the assignee of the bill of lading and who in turn takes the property in the goods. This is the effect of the provisions of Section 1 of the Act. Interestingly, the provisions of that Section have now been incorporated verbatim into our law as Section 375(1) of the Merchant Shipping Act, Cap. 224, Laws of the Federation of Nigeria, 1990 and states as follows: “Every consignee of goods named in a bill of lading, and every endorsee of a bill to whom the property in the goods therein mentioned shall pass upon by reason of such consignment or endorsement shall have transferred to and vested in him all right of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.” It is crystal clear from the above provisions that it is not every consignee or indorsee of a bill of lading who may have a right to sue on it, but only a consignee or indorsee to whom the property in the goods mentioned therein shall pass upon by reason of such consignment or indorsement because, at that juncture, he would have transferred to and vested in him the right to sue and the reciprocity of the corresponding liabilities relating to such goods.Obviously, the passing of the property in the goods depends on whether the consignee or indorsee gave value for the bill of lading to the person who got it from the consignor of the cargo. Therefore, to deny the plaintiff/respondent the right to sue on the bill of lading which the defendants/appellants contend has been vested in the Musina (Nig.) Ltd., as indorsee, a prima facie right to sue must be established in favour of Musina (Nig.) Ltd. by proving that it gave value for the bill of lading to the Savannah Bank of Nigeria Ltd. (the consignees) who got it from the consignors of the goods. The facts of this case are not dissimilar from those of Niger Bras Shipping Line Ltd. & Anor v. Aluminium Extrusion Industries Ltd. (1994) 4 NWLR (pt.341) 733, a decision of the Court of Appeal which the lower Court relied on in deciding in favour of the respondent herein in that the appellants herein, who asserted that the property in the goods passed to Musina (Nig.) Ltd., and who had the duty to prove the truth thereof, failed to do so. Finally, I find the recent decision of this Court in Brawal Shipping (Nigeria) Limited v. F.J. Onwadike Co. Limited & Anor. (2000) 11 NWLR (Pt.678) 387, which in many respects are similar to the facts of the present appeal, illuminating. In the leading judgment of the Court, Uwaifo, JSC opined: ” …. The property in the goods passes not by the mere assignment and delivery of the bill of lading but by the contract between the assignor and the assignee, or otherwise between the consignor and the consignee, or indorser and indorsee by which it is intended that the property should pass.” I respectfully endorse this statement.”
BILL OF LADING – Concept Of A Bill Of Lading; Whether A Bill Of Lading Is Also A Contract
“A definition of the expression “Bill of Lading” and its characteristics become relevant in determining the relationship of the plaintiff and its agent, Musina Nigeria Ltd. as averred in the said paragraphs of the statement of claim. It is defined in Blackburn on Sale, 3rd ed. Page 421 as: “A writing signed on behalf of the owner of the ship in which goods are embarked, acknowledging the receipt of the goods, and undertaking to deliver them at the end of the voyage (subject to such conditions as may be mentioned in the bill of lading). The bill of lading is sometimes an undertaking to deliver the goods to the shipper by name, or his assigns; sometimes to order or to assigns, and not naming any person, which is apparently the same thing, and sometimes to a consignee by name, or assigns, but in all its usual forms it contains the word assigns. The bill of lading is therefore, a written contract between those who are expressed to be parties to it, on behalf of their principals if they are agents, that is, generally speaking, between the master of the ship on behalf of his principals the ship owners, on the one part, and the person named as shippers of the goods on behalf of the person who, at the time of shipment, was his principal, on the other part, by which it is agreed that the ship owner is to deliver the goods to the person who shall fill the character of assign.” A bill of lading is called a “semi-negotiable” instrument because (subject to some exception) the transferee thereof acquires no better title to the goods than the transferor has to give, for example, where the latter is a thief. Its characteristics which place the holder in a favoured position include: (a) It is a document of title to goods it represents and its transfer is equal to the physical transfer of the goods. Thus a person who in good faith and for valuable consideration, takes a bill of lading from the purchaser of goods, takes free from the vendor’s lien for the unpaid price and his right of stoppage in transitu as against an insolvent purchaser. See Cahn v. Pockett’s Bristol Channel Steam Packet Co. (1899) 1 Q. B. 643. The transferee or indorsee of a bill of lading is not affected by fraud on the part of the transferor in obtaining an indorsement. (b) The benefit (and also the burden) of the original contract of carriage passes to the consignee and he may sue thereon.”
PLEADINGS – Whether Documents Referred To In Pleading Constitute Part Of It
“Examining first the English authority of Day v. William Hill (Park Lane) Ltd. (supra) which learned Counsel strongly submits has received approval not only of the Court of Appeal but even this Court. I am of opinion that its first ratio, to wit, “if documents were referred to in a pleading, they became part of the pleading, and it was open to the Court to look at them without the necessity for any affidavit exhibiting them” is unquestionably a good authority that has been acted upon under our law; See Banque Genevoise de Commerce et de Credit v. Cia Mar Di Isola Spetsai Ltd. (No.2) (1992) 2 SCNLR 310. (1962) Vol. 1 All NLR 570 and for brevity referred to as B.G.C.C v. C.M.I.S. (No.2) (1962) 2 SCNLR 310, (1962) 1 All NLR 570 at p.576 and Lawal v G.B. Ollivant (Nig) Ltd. (1972) 1 All NLR (Pt. 1) 207, at pp. 212-214.”
DEMURRER PROCEEDINGS/APPLICATIONS/PROCEEDINGS IN LIEU OF DEMURRER – Definition And Concept Of Demurrer Proceedings
“The well-known principle in regard to demurrer is that only the facts pleaded in the statement of claim should be considered on the assumption that they are accepted as true but that the defendant upon those facts makes a case to dispose of the plaintiffs claim in limine as being unsustainable in law. see Fadare v. Attorney-General of Oyo State (1982) 4SC 1; Federal Capital Development Authority v.Naibi (1990) 3 NWLR (Pt.138) 270; Williams v.Williams (1995) 2 NWLR (Pt.375) 1; Brawal Shipping lid. v. F. I. Onwadike Co. Ltd. (2000) 11 NWLR (Pt.678) 387.”
Demurrer Proceedings/Applications/Proceedings In Lieu Of Demurrer – Necessary Documents To Be Filed In Demurrer Proceeding; Whether Affidavit In Support Of The Application Is Required
“In demurrer proceedings under the Rules, Rule 1 postulates that the plaintiff should have filed a statement of claim. otherwise, there will be no basis for the defendant to conceive that he has a good legal or equitable defence to the suit. Therefore, as a general rule, the application cannot be brought before the plaintiff files his statement of claim but must be filed before the filing of the statement of defence. In an application under Order 27, the filing of an affidavit in support of the demurrer is unacceptable as it is a written statement of facts on oath sworn or affirmed before someone who has authority to administer it. In civil proceedings parties may agree that their case be tried upon affidavit and the Court may order that any particular facts be proved by affidavit. It is mandatory that affidavit used in Court shall contain only a statement of facts and circumstances to which the witness deposes, either of his own personal knowledge or from information which he believes to be true. (See Section 86 of the Evidence Act, Cap. 112, Laws of the Federation of Nigeria, 1990) It will therefore be a contravention of Rules 1 and 2 of Order 27 to permit an affidavit supporting an application in demurrer proceedings. An affidavit contains facts alone and a defendant is precluded from answering any questions of fact raised in the statement of claim since he is taken to have admitted the truth of the plaintiff’s allegations and no evidence respecting matters of fact and no discussion of questions of fact are allowed.”
DEMURRER PROCEEDINGS/APPLICATIONS/PROCEEDINGS IN LIEU OF DEMURRER – Conditions For A Demurrer Application
“The principles enshrined in Order 27 Rule 1-3 of the former Federal High Court Rules, 1976 is very clear and well settled. It is that where a defendant relies on the allegations in the statement of claim for an application to dismiss the suit that no cause of action has been made out, he need not rely on any evidence for such application. The applicant is regarded as having admitted the facts pleaded in the statement of claim as true. – See Fadare v. Attorney-General of Oyo State (1982) 4 SC 1; Brawal Shipping Ltd. v. F. I. Onwadike Co. Ltd. (2000) 11 NWLR (Pt. 678) 387.”
DEMURRER PROCEEDINGS/APPLICATIONS/PROCEEDINGS IN LIEU OF DEMURRER – Rules Guiding Demurrer In The Federal High Court
“…Order 27 of the Federal High Court (Civil Procedure) Rules 1976, Cap .134 Laws of the Federation, 1990 (hereinafter simply referred to as “Order 27”). I shall now reproduce the provisions of Order 27. They run as follows: “1. Where a defendant conceives that he has a good legal or equitable defence to the suit, so that even if the allegations of the plaintiff were admitted or established, yet the plaintiff would not be entitled to any decree against the defendant, he may raise this defence by a motion that the suit be dismissed without any answer upon questions of fact being required from him. 2. For the purposes of such application, the defendant shall be taken as admitting the truth of the plaintiff’s allegations, and no evidence respecting matters of fact, and no discussion of questions of fact, shall be allowed. 3. The Court, on hearing the application, shall either dismiss the suit or order the defendant to answer the plaintiff’s allegations of fact, and shall make such order as to costs as the Court deems just.” The above provisions are otherwise usually referred to as provisions relating to demurrer or demurrer procedure.”
DEMURRER PROCEEDINGS/APPLICATIONS/PROCEEDINGS IN LIEU OF DEMURRER – Necessary Documents To Be Filed In Demurrer Proceeding; Whether Affidavit In Support Of The Application Is Required
“For the proper understanding of the procedural law contemplated by application relating to demurrer, it must be borne in mind that by Rules 1 and 2 of Order 27 as amplified by a maze of judicial authorities relating to these two rules, that it is now trite that in demurrer proceedings the only relevant and competent document that the trial Court is obliged to look at is the plaintiff’s statement of claim. This, of necessity, must be so because the combined effect of Rules 1 and 2, forbids the defendant to answer upon questions of fact, or embark on discussion of questions of fact because the defendant will be deemed to have admitted the truth of the plaintiffs allegations as set out in the statement of claim. Such a defendant is precluded from filing an affidavit because the content of an affidavit, necessarily, by the rules governing such a document, must contain statements of facts and circumstances to which the deponent deposes: see Section 86 of the Evidence Act.”
