(Alhaji Jimoh Ajagbe) Appellant
and
(Layiwola Idowu) Respondent
A. M. MUKHTAR, JSC (Presided &
Delivered the lead judgment)
WALTER SAMUEL NKANU ONNOGHEN, JSC
IBRAHIM TANKO MUHAMMAD, JSC
JOHN AFOLABI, JSC
BODE RHODES-VIVOUR, JSC

The learned Counsel for the Appellant submitted that the Court below was wrong to have held that the Defendant did

A     not advert his mind to the necessary clause of transfer of title to the purchaser upon completion of installment, and by so doing re-wrote the agreement of the parties by raising issues that were ~ot raised by the parties. Reliance was placed

B     on the cases of Pascutto v. Adecentro (Nig.) Ltd. supra, Adunukwe v. Adebanjo (1999) 4 NWLR (Pt. 593) page 317 and Samson Ochonma v. Unosi supra. The conditions required for an agreement to qualify as a hire purchase

c agreement are stated in the Appellant’s brief of argument as:-

(a) The person giving out the goods must be the owner and the. transaction must be in writing.

(b) Owner’s right to hire rentals due under the hire purchase agreement.

(c) The right of repossession of the goods, upon breach of the term of hire purchase agreement.

F     Finally, it was submitted that from the facts of this case and the testimonies of the Respondent it is clear that the agreement is that of hire purchase and not credit sale as erroneously held by the Court below.

G In reply to the above submissions, the Respondent’s Counsel submitted that an agreement does not simpliciter become a hire purchase agreement just because it is- so headed or called. The test of whether the agreement is a hire purchase agreement or not is whether the so called hirer has an option of determining the contract or of purchasing the chattel after completion of the installmental payments.

Halsbury’s laws of England was referred to, and so was Section 2(1) of the Hire Purchase Act (Cap. 169) Laws of the Federation of Nigeria, 1990 which provides as follows:-

“Before any hire purchase agreement is entered into in respect of any goods, the owner shall state in writing to the prospective hirer otherwise than in the note or memorandum of the agreement, a price at which the goods may be purchased by him for cash (in this section referred to as the “cash price”).”

It was argued that the lower Court neither made a case for

the party nor rewrote the parties’ agreement, and that Exhibit

A ran afoul of the provisions of the hire purchase Act supra. What the Court did was to consider both parties evidence D visa-vis the contents of Exhibit A in reaching its decision. The learned Counsel referred to the three requirements of a valid hire purchase agreement stated by the learned Counsel

for the Appellant, and submitted that those requirements apply only where the transaction forms the parties’ intention and agreement.

Now, what did the Plaintiff plead in respect of this agreement and the claim? I will reproduce the relevant averments in the pleadings and the evidence in their proof.

“3. Sometimes in April, 1992 or thereabout, the Plaintiff paid the sum of twenty thousand Naira (N20,000.00) G to the Defendant as deposit for the supply of a Toyota Lite-ace bus to the Plaintiff by the Defendant.

· The Plaintiff made a further paym~i1t of the sum of two thousand Naira (N2,000.00) to the Defendant on or about the 3rd day of June, 1992 and the Defendant Delivered possession of a Toyota Lite-ace bus with registration No. as 68 GA and chassis No. 0019483 (hereinafter called “The Vehicle” to the Plaintiff.

5. The arrangement between the Plaintiff and the Defendant was that of credit – sale wherein the vehicle is sold to the Plaintiff at two hundred and fifty thousand Naira (N250, 000.00) and the Plaintiff is required to make monthly payments to the Defendant on or before the 8th of every month until the whole debt is liquidated.

6.The Plaintiff made payments totaling thirty-nine thousand Naira (N39, 000.00) to the Defendant leaving a balance of two hundred and eleven thousand Naira (N211, 000.00) to be paid to the Defendant under the credit sale agreement.”

“5. Under a Hire Purchase agreement executed at Ifon­ Osun on or about 3rd June, 1992, by the Defendant as owner of the first part and the Plaintiff as Hirer on the second part, the Plaintiff took on hire with an option to purchase the Defendant Toyota Liteace bus Motor vehicle with Diesel engine, chassis No. 0019483 and registration No. as 68 GA for a hire purchase price ofN250,000.00.

6. Under the terms of the said hire purchase agreement the Plaintiff was requested to make an initial deposit of N22,000.00 (twenty-two thousand Naira before collecting the said motor vehicle and thereafter to make thirty-eight (38) regular and consecutive monthly

installment payments of N6,OOO.OO (six thousand Naira) from 8th July, 1992 in order to complete payment of the total purchase price on 8th August 1995, or thereabout (the hire purchase agreement is hereby pleaded).”

The principle of hire purchase contract as contained in Halburys Lttws of England 1 st Edition, Volume 1 page 554 states thus:- ‘ “

“The contract of hire-purchase, or even more accurately the contract of hire with an option to Purchase is one under which the owner of a chattel lets it out on hire and undertakes to sell it to or that it shall become the property of the hirer conditionally on his making a certain number of payments. Until the making however of the last payment, no property in the chattel passes where the contract between the parties amounts to an absolute agreement to sell and buy, whether the instrument be called a hire purchase agreement or not, the property in the chattel passes upon delivery, provided that such was the intention of the parties ……………………………………. .

The difference between a contract of sale at a price payable by installment and a contract of hire purchase is that in the former, the purchaser has no option of D terminating the contract and returning the chattel, whereas in the latter there is none. In each case, the substance of the transaction or the agreement must be looked at and not the mere words.”

A careful consideration of the above principle, the provisions of the Hire Purchase Act, together with the requirements expected to be complied with, vis-avis the contents of exhibit ‘A’, one will find that it negates a valid hire purchase agreement. The learned trial Judge found Exhibit’ N not to contain an option to purchase, and that the Plaintiff was not given cash price for which the vehicle may be purchased. In the end he found Exhibit’ A’ not to be a valid hire purchase agreement thus:-

“In the circumstance, it is my view that exhibit’ A’ is not valid hire purchase agreement enforcement (sic) against the Plaintiff. The relationship between the Plaintiff and the Defendant therefore is, that, whereby the Plaintiff is expected to pay for the vehicle by installments Le credit also (sic). And in that case the ownership and possession have passed to the Plaintiff.” The Court below agreed with the trial Court, for in its judgment it posited inter alia thus:- “I have held above, that the transaction between the Defendant!