➥ CASE SUMMARY OF:
Tika-tore Press Limited v Ajibade Abina & Ors. (1973) – SC
by “PipAr” B.C. Chima
Supreme Court – SC. 187/1971
➥ JUDGEMENT DELIVERED ON:
Friday, December 7, 1973
➥ AREA(S) OF LAW
Waiver of loan granted to smaller sum.
➥ NOTABLE DICTA
➥ LEAD JUDGEMENT DELIVERED BY:
⦿ FOR THE APPELLANT
⦿ FOR THE RESPONDENT
➥ CASE HISTORY
The case of the defendants/respondents, as can be gathered, both from the statement of defence and from the evidence given in support, seems to be this. Having finally agreed, in effect, that Monsuru Abina should pay the sum of 1,200 pounds on or before the 31st December, 1965, in full and final settlement of the sum of 3,665pounds which he then owed the plaintiffs/appellants, and this amount having been paid as agreed, the plaintiff/appellants have waived their right to claim the balance and are therefore estopped from claiming it as they have done in the lower court.
➥ ISSUE(S) & RESOLUTION
Whether the Plaintiff/Appellant has waived his right on the loan granted?
RULING: Yes. IN RESPONDENT’S FAVOUR.
A. “In short, the defence is one of estoppel by conduct. All the arguments about whether the evidence was indicative of the defence, either of “accord and satisfaction” or of “waiver”, or whether there was consideration for the “waiver” or not merely begged the issue and appear to have been put forward in an abortive effort to sidetrack the defence of estoppel, put forward by the defendants/appellants, and accepted by the learned trial Judge who rightly held that it “would be inequitable to enforce the claim.” As a matter of fact, it may now be said, with commendable justification, that the former theoretical view that there is no consideration or nothing in writing to support the variation of the contract no longer nullifies the effect of the defence of estoppel.”
B. “Indeed, consideration is scarcely relevant, since the agreement to accept a lesser sum, in full and final settlement, concerns the modification or discharge of the contract, not its formation. In effect, this defence of estoppel by waiver (if it may be so conveniently described) is always pleaded by way of defence. It is set up, not as the foundation of an action for breach of contract, but as an answer to the contention of a creditor that the letter of the original contract must be observed. The principle, as we understand it, is that where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other part has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as modified by himself, even though it is not supported in point of law by any consideration, but only by his word. (See Combe v. Combe (1951) 1 All ER 767 as per Denning, L.J. (as he then was) at page 770).”
C. “Applying the above principle to the case in hand, and bearing in mind the facts which the learned trial Judge accepted, we are unable to see any merit in the contention of the learned counsel for the plaintiffs/appellants that the learned trial Judge was in error, in holding as he did, that it would be inequitable to allow the plaintiffs/appellants to enforce their claim against the defendants/respondents. Indeed, no point of any real substance appears to have been urged upon us in this appeal which can affect our view that the learned trial Judge was right both in his assessment of the facts and in his decision. We accordingly dismiss the appeal with costs assessed at N86.00 (Eighty-six Naira).”
➥ MISCELLANEOUS POINTS
➥ REFERENCED (STATUTE)
➥ REFERENCED (CASE)
⦿ WHERE A CREDITOR HAS AGREED TO COLLECT A LESSER SUM, EQUITY WILL NOT ALLOW HIM DO OTHERWISE WHERE INEQUITABLE
Lord Denning, M.R., in D & C Builders Ltd. v. Rees (1965) 3 All ER 837 at 840: “In point of law, payment of a lesser sum, whether by cash or cheque, is no discharge of a greater sum. This doctrine of the common law has come under heavy fire. It was ridiculed by Sir George Jessel, MR., in Couldery v. Bartrum (1881) 19 Ch. D. 394 at p. 399. It was held to be mistaken by Lord Blackburn in Foakes v. Beer (1884) 9 App. Cas at p. 622. It was condemned by the Law Revision Committee in their Sixth Interim Report (Cmnd 5449) paragraph 20 and 22. But a remedy has been found. Equity has stretched out a merciful hand to help the debtor. The courts have invoked the broad principle stated by Lord Cairns L.C., in Hughes v. Metropolitan Railway Co. (1877) 2 App. Cas 439 at p. 448: ‘…….it is the first principle upon which all courts of equity proceed if parties, who have entered into definite and distinct terms involving certain legal results………afterwards by their own act, or with their own consent, enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, that the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable, having regard to the dealings which have taken place between the parties.’ It is worth noting that the principle may be applied, not only so as to suspend strict legal rights, but also so as to preclude the enforcement of them. This principle has been applied to cases where a creditor agrees to accept a lesser sum in discharge of a greater. So much so that we can now say that, when a creditor and a debtor enter on a course of negotiation, which leads the debtor to suppose that, on payment of the lesser sum, the creditor will not enforce payment of the balance, and on the faith thereof the debtor pays the lesser sum and the creditor accepts it as satisfaction; then the creditor will not be allowed to enforce payment of the balance when it would be inequitable to do so. In applying this principle, however, we must note the qualification. The creditor is barred from his legal rights only when it would be inequitable for him to insist on them. Where there has been a true accord, under which the creditor voluntarily agrees to accept a lesser sum in satisfaction, and the debtor acts on that accord by paying the lesser sum and the creditor accepts it, then is is inequitable for the creditor afterwards to insist on the balance.”
➥ REFERENCED (OTHERS)