In a claim for detinue, an unlawful sale of the goods will not divest the defendant of “actual possession”

ENTERPRISE BANK LIMITED v. DEACONESS FLORENCE BOSE AROSO & ORS (for themselves and as Representatives of the Children of Chief M. O. Olatunji)

SUPREME COURT OF NIGERIA

(MUNTAKA-COOMASSIE; RHODES-VIVOUR; NGWUTA; ARIWOOLA; MUHAMMAD, JJ.SC)

Kayode Olatunji (trading under the name Kaylat Enterprises) obtained a loan from the Appellant. His father, Chief M.O. Olatunji, guaranteed the loan. The loan was also secured by a legal mortgage over a property located in Ado-Ekiti. Kayode Olatunji failed to repay the loan and the Appellant obtained judgment against him under the Undefended List procedure. Chief M. O. Olatunji was not a party to the proceedings and notice of default or demand were never served on him.

An auctioneer, acting on behalf of the Appellant, accompanied by heavily armed policemen entered Chief Olatunji’s premises and removed the sawmill equipment including a 75KVA generator and cash. The equipment were sold to a third party.

Chief M.O. Olatunji sued the Appellant, its agent and the third party purchaser claiming among other things, damages for wrongful detention and losses arising from the illegal, unlawful and reckless actions of the (then) defendants. Namely:

1. Owena Bank Plc (now Enterprise Bank Ltd)

2. Oreoluwa Falana (the Auctioneer)

3. Chief Olukayode (who bought Chief M. O. Olatunji’s Sawmill equipment, generator, etc.)

The trial court found that the defendants acted illegally, entered judgment in favour of Chief Olatunji and awarded the sum of N30,273,000.00 (Thirty Million, Two Hundred and Seventy Three Thousand Naira) against the 1st and 2nd defendants. The 1st defendant (now Appellant) lodged an appeal at the Court of Appeal. The appeal was dismissed. The Appellant further appealed to the Supreme Court.

One of the issues raised for determination was:

“Whether the learned Justices of [the] Court of Appeal were correct in their decision which upheld the appellants liability to the respondent in the Tort of Detinue despite the fact that the appellant was not in actual possession of the equipment at the time the respondent demanded for its return.”

Learned counsel for the Appellant argued that at the time the Respondent demanded for the return of the Sawmill equipment, they (the Respondents) knew that the Appellant was not in actual physical possession of the equipment. Learned counsel therefore submitted that having parted with possession of the goods by the sale to a third party, the Appellant could no longer be liable in detinue.

In response, counsel to the Respondents argued that, the Appellant did not expressly deny in its pleadings that it had physical possession or that it had wrongfully transferred the Respondents’ Sawmill equipment to the third party.

Counsel finally submitted that if the Appellant improperly parted with the possession of the goods, it is not a defence to state that the goods were not in the possession of the Appellant when the demand was made.

The Supreme Court noted the position of the lower courts that due to the fact that the removal of the goods from the Respondents’ premises was illegal, the transfer of the said goods to a third party was illegal as the Appellant had no title to pass. Therefore, as no title passed, the Appellant was still in constructive adverse possession, and a claim a detinue will succeed.

The Supreme Court dismissed the appeal holding as follows:

“The essence of detinue is that the defendant holds on to property belonging to the plaintiff and fails to deliver the property to the plaintiff when a demand is made. The goods must be in the custody of the defendant at the time the demand for them is made before an action in detinue can succeed. The cause of action in detinue is refusal of the defendant to return the goods to the plaintiffs if after the plaintiff must have made a demand for them. A claim for detinue would fail if at the time the plaintiff made a demand, the goods were not in the defendants’ actual possession. In such a case the plaintiff might have a cause of action in conversion but definitely not detinue. The plaintiff can still sue in detinue and succeed if he is able to show by credible evidence that the defendant wrongfully or improperly parted with possession of the goods before the plaintiff made a demand for them.

The appellant had possession of the respondents’ goods on 13/8/97 after the respondents goods were illegally taken away from the respondents’ premises by agents of the appellant and hurriedly “sold” the same day, 13/8/97 at an auction that an Ondo State High Court found to be illegal. The auction sale was a total nullity. The appellant parted with possession of the goods improperly, consequently title in the goods remained with the appellant on 14/8/97 when the respondent made a demand for them and thereafter. The seizure and sale of the respondents’ goods having been declared invalid, the subsequent purchase of the goods by a thirty party is invalid. The respondent has been able to show by credible evidence that the appellant wrongfully/illegally parted with possession of the goods on 13/8/97. The appellant is liable in detinue to the respondents.”

Counsel:

Prof. T. Osipitan, SAN with A. M. Kayode and J. Ozuloha for the Appellant.

Chief A. S. Awomolo, SAN with Chief V. O. Awomolo, O. Ibrahim, A. Oguntaye, T. Osobo and A. Arosanya, for the Respondents.

This summary is fully reported at (2013) 10 CLRN

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