Volume 13 Part 1

NIGERIAN BANKING LAW REPORTS

[2004 – 2006]

VOLUME 13 PART I

To be cited as: [2004 – 2006] 13 N.B.L.R. PART I

Nigeria Deposit Insurance Corporation

Nigeria Deposit Insurance Corporation Plot 447/448 Airport Road Central Business District P.M.B. 284, Garki Abuja, Federal Capital Territory [FCT] Nigeria Tel: +23495237715-6, +523696740-44

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EDITORIAL BOARD

1. Professor J.O. Anifalaje Chairman Faculty of Law, University of Ibadan 2. Alheri Bulus Nyako Editor-in-Chief Board Secretary/Director, Legal Department N.D.I.C. 3. Michael Olufemi Olaitan Member Legal Practitioner 4. Gabriel Olukayode Kembi Member Registrar-General Corporate Affairs Commission 5. Adekunle Oladapo Omowole Member Legal Practitioner Corporate Affairs Commission 6. Nasiru Tijani Member Legal Practitioner Director, Nigerian Law School 7. Belema A. Taribo Member Legal Practitioner N.D.I.C. 8. Dan Ike Agwu Secretary Legal Practitioner N.D.I.C.

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LIST OF JUSTICES OF THE SUPREME COURT OF NIGERIA AS AT 31 JULY, 2013

1. HON. JUSTICE ALOMA MARIAM MUKHTAR (Chief Justice of Nigeria) 2. HON. JUSTICE MAHMUD MOHAMMED 3. HON. JUSTICE WALTER SAMUEL NKANU ONNOGHEN 4. HON. JUSTICE IBRAHIM TANKO MUHAMMAD 5. HON. JUSTICE CHRISTOPHER MITCHELL CHUKWUMA-ENEH 6. HON. JUSTICE MUHAMMAD S. MUNTAKA COOMASIE 7. HON. JUSTICE JOHN AFOLABI FABIYI 8. HON. JUSTICE SULEIMAN GALADIMA 9. HON. JUSTICE BODE RHODE VIVOUR 10. HON. JUSTICE NWALE SYLVESTER NGWUTA 11. HON. JUSTICE MARY PETER ODILI 12. HON. JUSTICE OLUKAYODE ARIWOOLA 13. HON. JUSTICE CLARA BATA OGUNBIYI 14. HON. JUSTICE MUSA DATTIJO MUHAMMAD 15. HON. JUSTICE KUMAI BAYANG AKAAHS 16. HON. JUSTICE STANLEY SHENKO ALAGOA

SENIORITY LIST OF JUSTICES OF THE COURT OF APPEAL AS AT 31 JULY, 2013

1. HON. JUSTICE ZAINAB ADAMU BULKACHUWA (Acting President) 2. HON. JUSTICE AMINAT ADAMU AUGIE 3. HON. JUSTICE IBRAHIM MOHAMMED MUSA SAULAWA 4. HON. JUSTICE CHIMA CENTUS NWEZE 5. HON. JUSTICE JOSEPH SHAGBOR IKYEGH 6. HON. JUSTICE RITA NOSAKHARE PEMU 7. HON. JUSTICE CHINWE EUGENIA IYIZOBA 8. HON. JUSTICE FATIMA O. AKINBAMI 9. HON. JUSTICE DALHATU ADAMU, CFR 10. HON. JUSTICE ABDU ABOKI 11. HON. JUSTICE THERESA NGOLIKA ORJI-ABADUA 12. HON. JUSTICE ITA GEORGE MBABA 13. HON. JUSTICE H.A. ABIRU 14. HON. JUSTICE MONICA B. DONGBAN-MENSEM 15. HON. JUSTICE CHIDI NWAOMA UWA 16. HON. JUSTICE ADAMU JAURO 17. HON. JUSTICE O.O. DANIEL-KALIO 18. HON. JUSTICE ABUBAKAR JEGA ABDULKADIR 19. HON. JUSTICE MOJEED ADEKUNLE OWOADE 20. HON. JUSTICE ISAIAH OLUFEMI AKEJU 21. HON. JUSTICE E. AGIM 22. HON. JUSTICE OLADEINDE GEORGE SHOREMI 23. HON. JUSTICE HELEN MORONKEJI OGUNWUNMIJU 24. HON. JUSTICE SIDI DAUDA BAGE 25. HON. JUSTICE AYOBODE OLUJIMI LOKULO-SODIPE v [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

26. HON. JUSTICE TOM SHUAIBU YAKUBU 27. HON. JUSTICE RAPHAEL CHIKWE AGBO 28. HON. JUSTICE OYEBISI FOLAYEMI OMOLEYE 29. HON. JUSTICE JUMMAI HANNATU SANKEY 30. HON. JUSTICE P.O. IGE 31. HON. JUSTICE I.S. BDLIYA 32. HON. JUSTICE MOHAMMED LADAN TSAMIYA 33. HON. JUSTICE EJEMBI EKO 34. HON. JUSTICE C.E. NWOSU IHEME 35. HON. JUSTICE M. FASANMI 36. HON. JUSTICE JONAH ADAH 37. HON. JUSTICE AMIRU SANUSI 38. HON. JUSTICE ABUBAKAR DATTI YAHAYA 39. HON. JUSTICE REGINA OBIAGELI NWODO 40. HON. JUSTICE MOORE A.A. ADUMIEN 41. HON. JUSTICE T. AKOMOLAFE-WILSON 42. HON. JUSTICE MOHAMMAD LAWAL GARBA 43. HON. JUSTICE UZO I. NDUKWE-ANYANWU 44. HON. JUSTICE JOSEPH TINE TUR 45. HON. JUSTICE O.A. OTISI 46. HON. JUSTICE PAUL ADAMU GALINJE 47. HON. JUSTICE HUSSEIN MUKHTAR 48. HON. JUSTICE OBANDE F. OGBUINYA 49. HON. JUSTICE T. ABUBAKAR 50. HON. JUSTICE UWANI MUSA ABBA AJI 51. HON. JUSTICE JOHN INYANG OKORO 52. HON. JUSTICE PHILOMEN MBUA EKPE 53. HON. JUSTICE HARUNA MOHAMMED TSAMMANI 54. HON. JUSTICE TIJJANI ABDULLAHI 55. HON. JUSTICE AHMAD OLAREWAJU BELGORE 56. HON. JUSTICE TUNDE OYEBANJI AWOTOYE 57. HON. JUSTICE J.S. ABIRIYI vi [2004 – 2006] 13 N.B.L.R. (PART I)

Seniority List of Justices of the Court of Appeal

58. HON. JUSTICE SOTONYE DENTON-WEST 59. HON. JUSTICE IGNATIUS IGWE AGUBE 60. HON. JUSTICE ABUBAKAR ALKALI ABBA 61. HON. JUSTICE JIMI OLUKAYODE BADA 62. HON. JUSTICE MASSOUD ABDULRAHMAN OREDOLA 63. HON. JUSTICE UCHECHUKWU ONYEMENAN 64. HON. JUSTICE KUDIRAT M. O. KEKERE-EKUN 65. HON. JUSTICE JAFARU MIKA’ILU 66. HON. JUSTICE A.GANA MISHELIA 67. HON. JUSTICE SAMUEL CHUKWUDUMEBI OSEJI 68. HON. JUSTICE MUHAMMAD AMBI-USI DANJUMA

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SENIORITY LIST OF JUSTICES OF THE FEDERAL HIGH COURT OF NIGERIA AS AT 31 JULY, 2013

1. HON. JUSTICE I. N. AUTA (Chief Judge) 2. HON. JUSTICE A. ABDUL-KAFARATI 3. HON. JUSTICE O. J. OKEKE 4. HON. JUSTICE S. YAHAYA 5. HON. JUSTICE ADAMU BELLO 6. HON. JUSTICE P. F. OLAYIWOLA 7. HON. JUSTICE ADAMU A. HOBON 8. HON. JUSTICE J. T. TSOHO 9. HON. JUSTICE GLADYS K. OLOTU 10. HON. JUSTICE J. E. SHAKARHO 11. HON. JUSTICE L. AKANBI 12. HON. JUSTICE C. M. OLATOREGUN-ISOLA 13. HON. JUSTICE BINTA F. M. NYAKO 14. HON. JUSTICE A. M. LIMAN 15. HON. JUSTICE S. YAHUZA 16. HON. JUSTICE A. I. CHIKERE 17. HON. JUSTICE M. I. SHUAIBU 18. HON. JUSTICE SALIU SAIDU 19. HON. JUSTICE A. O. FAJI 20. HON. JUSTICE G. O. KOLAWOLE 21. HON. JUSTICE B. BELLO ALIYU 22. HON. JUSTICE A. F. A. ADEMOLA 23. HON. JUSTICE M. I. AWOKULEHIN 24. HON. JUSTICE R. N. OFILI-AJUMOGOBIA 25. HON. JUSTICE A. L. ALLAGOA 26. HON. JUSTICE I. N. BUBA 27. HON. JUSTICE A. O. OGIE 28. HON. JUSTICE B. O. KUEWUMI 29. HON. JUSTICE M. G. UMAR viii [2004 – 2006] 13 N.B.L.R. (PART I)

Seniority List of Justices of the Federal High Court

30. HON. JUSTICE A. R. MOHAMMED 31. HON. JUSTICE R. M. AIKAWA 32. HON. JUSTICE P. I. AJOKU 33. HON. JUSTICE S. M. SHUAIBU 34. HON. JUSTICE A. A. OKEKE 35. HON. JUSTICE Z. B. ABUBAKAR 36. HON. JUSTICE I. M. SANI 37. HON. JUSTICE S. E. CHUKWU 38. HON. JUSTICE I. E. EKWO 39. HON. JUSTICE M. B. IDRIS 40. HON. JUSTICE MUHAMMED TANKO SALIHU 41. HON. JUSTICE MAUREEN ADAOBI ONYETENU 42. HON. JUSTICE OKON EFRETI ABANG 43. HON. JUSTICE DORCAS VENENGE AGISHI 44. HON. JUSTICE MUHAMMED SHITTU ABUBAKAR 45. HON. JUSTICE ISAH BATURE GAFAI 46. HON. JUSTICE FOLASHADE ADEJOKE OLUBANJO 47. HON. JUSTICE MUHAMMED NASIR YUNUSA 48. HON. JUSTICE IJEOMA LUCIA OJUKWU 49. HON. JUSTICE BABATUNDE OLAIDE QUADRI 50. HON. JUSTICE BABA GANA-ASHIGAR 51. HON. JUSTICE EMMANUEL A. OBILE 52. HON. JUSTICE CHUKWU JEKWU JOSEPH ANEKE 53. HON. JUSTICE D. U. OKOROWO 54. HON. JUSTICE PHOEBA M. AYUA 55. HON. JUSTICE NATHANIEL AYO-EMMANUEL 56. HON. JUSTICE SULEIMAN I. ALIYU 57. HON. JUSTICE MOHAMMED L. ABUBAKAR 58. HON. JUSTICE F.O. GIWA-OGUNBANJO

ix [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

59. HON. JUSTICE MUSA HARUNA KURYA 60. HON. JUSTICE EVELYN N. ANYADIKE 61. HON. JUSTICE UCHE MMA AGOMOH 62. HON. JUSTICE OLUREMI O. OGUNTOYINBO 63. HON. JUSTICE NGANYIWA H. AJIYA 64. HON. JUSTICE CHINDA R. S. ADELE 65. HON. JUSTICE FATU O. RIMAN

THE NIGERIAN BANKING SYSTEM

1. The Development of Banking in Nigeria The historical development of the financial system in Nige- ria dates back to 1892 when modern banking business commenced and a formal and institutional channel of saving mobilization was introduced into the economy with the establishment of the African Banking Corporation (“ABC”). The operation of ABC was later taken over in 1894 by the British Bank of West Africa (which later became Standard Bank) and subsequently, First Bank of Nigeria. Owing to the colonial heritage, the pioneer commercial banks in Nigeria were of foreign origin and their operations favoured finance of foreign trade and commerce. Thereafter, several other foreign and a host of indigenous banks were established. The establishment of indigenous banks was initially propelled largely by nationalistic con- sciousness rather than the existence of relevant resources, including basic skilled manpower, for running such institutions. Consequently, most of the early indigenous banks collapsed in rapid succession. Banks that failed during the early stage of the evolution of the Nigerian financial system were largely those with problems of inadequate capital, poor management, and fraudulent practices, among other factors. An important feature of the Nigerian financial system, especially before the establishment of the Central Bank of Nigeria (“CBN”), was small scope of operations of participating foreign institutions and the complete absence of any form of institutional regulatory framework which would provide the necessary guide for both the operations and orderly development of the system. These were some of the reasons behind the slow development of the financial system during the pre-CBN era. The situation however changed from 1958 when the CBN was established. Since then, series of efforts have been made xi [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports by the CBN and other relevant authorities to promote the growth and development of the Nigerian financial system. For example, the need to develop the system and create an avenue for investment of short term funds informed the issue by the CBN in 1960 of Treasury Bills as a supplement to Commercial Papers that were already in the market. Other money market instruments after the establishment of the CBN but prior to the introduction of the Structural Adjust- ment Programme (“SAP”) in 1986 included Treasury Cer- tificates in 1968, Certificates of Deposit in 1975 and the Bankers’ Unit Fund as well as Stabilisation Securities in 1976. The establishment of the CBN also aided the development of the capital market. This was achieved by ensuring the emergence of the securities markets and instruments (primary and secondary) and by promoting the establishment of development banks. Following the adoption of the SAP in 1986, and the subsequent deregulation of the financial system, the banking system witnessed radical changes. Apart from the introduction of measures and instruments to deregulate the financial services industry, the techniques and the range of products offered by the industry changed significantly. The major objective of the deregulation was to enhance economic efficiency and effective resource allocation through service- driven competition and improvement in quality and spread of financial services delivery. On July 6th, 2004 the Governor of CBN announced a banking reform programme aimed at strengthening and consolidating the banking system. The reform is expected to address the safety of depositor’s funds, enable the banking sector play an active developmental role in the economy and transform Nigerian banks into competitive players in the African and Global financial system.

2. The Nigeria Deposit Insurance Corporation One of the key measures introduced during the era of deregulation of the banking sector was the establishment of the xii [2004 – 2006] 13 N.B.L.R. (PART I)

The Nigerian Banking System

Nigeria Deposit Insurance Corporation (“NDIC”), with the promulgation of Decree No. 22 of 1988 now Cap 301 Laws of the Federation 1990 (as amended). The NDIC was established to insure all the deposit liabilities of licensed banks, promote banking stability and a sound financial system. Although the NDIC enabling Act was promulgated in 1988, the Corporation only commenced operations in March, 1989. The Nigeria Deposit Insurance Corporation scheme was introduced to provide a further layer of protection to depositors and complement the role of prudent bank management as well as the Central Bank of Nigeria’s (“CBN”) supervisory activities in ensuring a safe and sound banking system. It was also considered as an additional framework to serve as a vehicle for addressing some of the challenges that followed the deregulation of the financial system under the SAP. Prior to the establishment of the NDIC, the Govern- ment had played the role of what in industry parlance is referred to as an implicit insurer, by bailing out troubled banks in its bid to protect depositors. With deregulation, an explicit Deposit Insurance Scheme (“DIS”) became impera- tive. The establishment of NDIC was also informed by the change in government bank-support policy, the bitter experiences of prior bank failures in Nigeria and the lessons of other countries with bank deposit insurance schemes. The scheme aims at increasing the competitive efficiency of the banking system as well as reducing the system’s vulnerabil- ity to destructive runs, panic-induced shocks by reinforcing depositors’ confidence in the nation’s financial system. The mission of the Corporation is to protect depositors through effective supervision of insured institutions, provision of financial and technical assistance to eligible insured institutions, prompt payment of guaranteed sums and the orderly resolution of failed financial institutions. The Corporation currently acts as the Liquidator of thirty four (34) banks out of a total of thirty six (36) banks whose operating licenses were revoked by the Governor of the CBN. All depositors of the banks in liquidation who have xiii [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports come forward to file their claims have been paid their insured deposits while liquidation dividends making up 100% of total uninsured deposits have been declared and paid to depositors of ten (10) banks in Liquidation. In September 1997, the Corporation commenced publication of the Failed Banks Tribunals Law Reports (“FBTLR”) which contained only reported decisions of the Tribunal established under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 1994 and decisions of the Special Appeal Tribunal established under the Recovery of Public Property (Special Military Tribunal) Decree, 1984. In 1999, with the return to civil rule, the Corporation re- structured the publication into a compendium of decisions of all banking matters given by our superior courts of record from 1933 to date. This gave rise to the birth of the Nigerian Banking Law Reports (“N.B.L.R.”). Nigeria Deposit Insurance Corporation November, 2005

xiv

FOREWORD

Banking is the most important sub-sector of the economy of any nation. Banks facilitate economic transactions between various national and international economic units and by so doing encourage trade, commerce and industry. It is widely acknowledged that a sound and efficient finance industry, of which banks constitute the major segment, would promote growth of the real sector while the opposite is the case if the financial sector is repressed and inefficient. Therefore, the Law of Banking assumes a position of pre-eminence in economic development and this underscores the importance of a Law Report on the subject. The efforts of the Nigeria Deposit Insurance Corporation in the development of the Law of Banking through the publication of a banking law report started over 8 years ago. It would be recalled that in September, 1997, the Corporation launched the Failed Banks Tribunal Law Reports (“FBTLR”) at the International Conference Centre, Abuja. Although the Failed Banks Law Reports were short-lived following the advent of civil rule in 1999, they nonetheless served as a veritable reference material for Judges, Legal Practitioners, Jurists, Bankers, Students and the general public. It is for the foregoing reason that when the Corporation decided to expand the scope of the publication by including the decisions of the Supreme Court and the Court of Appeal on banking matters and re-named it the Nigerian Banking Law Reports (“N.B.L.R.”), I did not hesitate in giving my consent. The N.B.L.R. is a compendium of case law on Nigerian banking from 1933 to date. The first batch of the compendium contains cases decided between 1933–2002 which I understand would continue to 2004. Thereafter, the reports would be published regularly. This initiative will prove invaluable to users who would not have to wade through xv [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports different law reports when conducting research on Nigerian banking case law. The publication of the N.B.L.R. is one reliable means of disseminating information and knowledge of banking law and practices to depositors and other members of the public as part of the Corporation’s contribution to safe and sound banking practices. Hence, it is well known that the Corpora- tion did not embark upon publication of the N.B.L.R. in order to make profit. Specialized law reports are very rare mainly because of the tedium, great expenses, time and labour required to produce them. However, when available, such reports generate considerable public interest. I am therefore pleased that the presentation of the Nigerian Banking Law Reports has become a reality. The laudable decision of the Management of the NDIC to shoulder this onerous burden for the Nigerian Banking industry is a practical example of the social as well as corporate responsibilities expected of modern Corpora- tions. I have no doubt in my mind that the publication will en- dure and I am therefore pleased to recommend the Nigerian Banking Law Report, which is a worthy and befitting legacy for posterity, especially the world of learning, to all and sundry.

Hon. Justice Mohammed Lawal Uwais, GCON Chief Justice of Nigeria November, 2005

xvi

PREFACE TO THE NIGERIAN BANKING LAW REPORTS

The decision of the Nigeria Deposit Insurance Corporation to publish the Nigerian Banking Law Report has its origin from its involvement in the implementation of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act 1994. The Law was promulgated by the then Military Government with the combined objectives of recovering the debts owed to failed banks and prosecuting directors, officers and customers of banks who were sus- pected to have committed banking malpractices, which led to the collapse of most of the failed banks. Furthermore, in 1994, when the Corporation was appointed as the Liquidator to carry out the liquidation of some failed banks, it was observed that there were hardly any records relating to the winding up of banks that had failed in the past. There was also no sufficient data on the causes of the past bank failures. The Corporation therefore took the initiative, in September, 1997 to report and publish decisions of the Failed Banks Tribunal established under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 1994. This effort culminated into the publication of the Failed Banks Tribunal Law Reports (“FBTLR”). Thus, the Corporation was motivated by the need to place on per- manent record the lessons from the new wave of bank failures/distress, particularly with regard to the causes of such failures/distress and efforts made to resolve such failures. Hitherto, the absence of proper documentation relating to the bank failures experiences in the early fifties had made it exceedingly difficult for practitioners and researchers to make references to such failures. The decision to publish the FBTLR was to ensure that the mistakes of the past were not repeated, through elaborate documentation of the recent failures, the essence of which were captured in the decisions of the Failed Banks Tribunal. xvii [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

However, with the return to democratic rule in May, 1999, the Failed Banks Act was amended by the Tribunals (Certain Consequential Amendment, etc.) No. 62 of 1999, which abrogated the Tribunal. The civil and criminal jurisdictions of the Tribunal were accordingly transferred to the Federal High Court. Consequently, the title of the Publication was changed to Nigerian Banking Law Reports. Furthermore, in response to the new democratic dis- pensation, the Corporation decided to expand the scope of the publication into a compendium containing decisions of the Supreme Court, Court of Appeal as well as Federal and State High Courts on banking matters from 1933 to date in order to provide a comprehensive data base for all banking related cases decided by the superior courts of record. Also in order not to miss the tremendous achievements recorded by the Failed Banks Tribunal during their relatively short tenure, their decisions have been included in the compendium thereby making the N.B.L.R. very comprehensive. In addition, there is an index for the compendium up to 2002, which would soon be updated to 2004 and thereafter, it would be published on regular basis. It is therefore my hope that legal practitioners, my Lords the honourable justices and judges, distinguished scholars and law professors, bankers, students and the general public would find this initiative useful. I would like to express my profound appreciation to the Editorial Board of the Nigerian Banking Law Reports under the distinguished chairmanship of Prof. Anifalaje, an erudite professor of law and the Dean of the Faculty of Law, Uni- versity of Ibadan ably assisted by seasoned Legal Practitio- ners and staff of the Legal Department of the Corporation, for their patriotic commitment, diligence and ingenuity for details, that went into the production of the N.B.L.R.. They left no stone unturned in bringing the Corporation’s dream of making this worthy contribution to legal knowledge and research a reality. Their commitment in ensuring the com- pletion of the project is highly commendable. xviii [2004 – 2006] 13 N.B.L.R. (PART I)

Preface to the Nigerian Banking Law Reports

Management will on its part do everything possible to ensure that publication of the Nigerian Banking Law Reports (N.B.L.R.) is sustained. G.A. Ogunleye, OFR Managing Director/Chief Executive November, 2005

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TABLE OF CONTENTS

Page Index of Table of Cases Reported ...... xxiii Index of Subject Matter...... xxv Index of Nigerian Cases referred to...... xxxv Index of Foreign Cases referred to ...... li Index of Nigerian Statutes referred to ...... lv Index of Nigerian Rules of Court referred to...... lix Index of Books referred to...... lxi

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TABLE OF CASES REPORTED

Page 1. Access Bank Plc v. Maryland Fin. Co. and Consult Serv. 30 2. African Continental Bank Plc v. Odukwe 72 3. Ahmed v. Crown Merchant Bank Ltd 459 4. Akinnifesi v. NDIC 1 5. City Express Bank Ltd v. Trade and Financial Services 425 6. First Bank of Nigeria Ltd v. Moba Farms Ltd 45 7. First Bank of Nigeria Plc v. Mainasara 145 8. First Bank of Nigeria v. Sangonuga 234 9. Habib Nigeria Bank Ltd v. Gifts Unique Nig. Ltd 85 10. Intercontinental Bank Plc v. Citizens Int. Bank 168 11. Majekodunmi v. African International Bank Ltd 12 12. Muktari Uba & Sons Ltd v Lion Bank of Nigeria 415 13. NBCI v. Intergrated Gas (Nig) Ltd 279 14. NDIC v. Tasab Nigeria Company Ltd 111 15. Nigeria Explosives & Plastic Co. Ltd v. NDIC 330 16. Olieh v. Federal Republic of Nigeria 185 17. Peak Merchant Bank Ltd v. Central Bank of Nigeria 314 18. Societe Bancaire (Nig) Ltd v De Lluch 217 19. UBA Plc v. Akparabong Community Bank (Nig.)Ltd 356 20. Union Bank of Nigeria Plc v. Umeoduagu 128

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INDEX OF SUBJECT MATTER

AGRICULTURAL CREDIT GUARANTEE SCHEME FUND Loan granted under – Application of loan to purposes not approved – Effect – Section 13 Agricultural Credit Guarantee Scheme Fund Act, 1977 First Bank of Ni- geria Ltd v. Moba Farms Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 45

BANKING “Unauthorized lending or overdraft” – Pleading of – How proved African Continental Bank Plc v. Odukwe [2004 – 2006] 13 N.B.L.R. (Part I) 72 Account – Allegation of – Fraud and manipulation of account – Burden of proof – How discharged First Bank of Nigeria Plc v. Mainasara [2004 – 2006] 13 N.B.L.R. (Part I) 145 Account – Payment of money into account – How proved – Use of bank teller duly stamped First Bank of Nigeria Plc v. Mainasara [2004 – 2006] 13 N.B.L.R. (Part I) 145 Accounts – Accounts in debit or credit – What determines? – Whether use of red ink in entry material First Bank of Nigeria Ltd v. Moba Farms Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 45 Accounts – Merger of two or more accounts of customer – Right of Bank – When exercisable First Bank of Nigeria Ltd v. Moba Farms Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 45 Accounts – Merger of two or more accounts of customer by bank – Debiting of any of the account by bank – Whether consent of customer necessary First Bank of Nigeria Ltd v. Moba Farms Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 45 xxv [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

Banker and customer relationship – Allegation of negligence by bank – Need to plead with particulars and prove First Bank of Nigeria Plc v. Mainasara [2004 – 2006] 13 N.B.L.R. (Part I) 145 Banker and customer relationship – Cheque wrongfully dishonoured – “Drawer’s Attention required” – (DAR) or “Refer to Drawer” written on cheque – Meaning of – Whether defamatory – When libelous Access Bank Plc v. Maryland Fin. Co. and Consult Serv. [2004 – 2006] 13 N.B.L.R. (Part I) 30 Banker and customer relationship – Nature of – Breach of Contract to honour cheque – Measure of damages Access Bank Plc v. Maryland Fin. Co. and Consult Serv. [2004 – 2006] 13 N.B.L.R. (Part I) 30 Banker and customer relationship – Nature of – Duty of bank to honour cheque of customer – Limitation of – Effect of failure to honour cheque First Bank of Ni- geria Ltd v. Moba Farms Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 45 Banker/customer relationship – Bank failing to transfer customers money as instructed – Not refunding same to customer – Impropriety of Union Bank of Nigeria Plc v. Umeoduagu [2004 – 2006] 13 N.B.L.R. (Part I) 128 Banker/customer relationship – Jurisdiction of Federal High Court Intercontinental Bank Plc v. Citizens Int. Bank [2004 – 2006] 13 N.B.L.R. (Part I) 168 Banker/customer relationship – Whether Federal High Court has jurisdiction – Section 251(1)(d) of Constitu- tion of the Federal Republic of Nigeria, 1999 NDIC v. Tasab Nigeria Company Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 111 Bankers’ Tariff and Guidelines and policy – Whether a subsidiary legislation – Whether a court to take judicial notice of Habib Nigeria Bank Ltd v. Gifts Unique Nig. Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 85 xxvi [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Subject Matter

Banking business – Definition of – Section 61 Banks and Other Financial Institution Decree No. 25 of 1991 So- ciete Bancaire (Nig) Ltd v. De Lluch [2004 – 2006] 13 N.B.L.R. (Part I) 217 Cheque – “Clearing” – What it denotes UBA Plc v. Akpa- rabong Community Bank (Nig) Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 356 Cheque – When deemed cleared for purpose of payment UBA Plc v. Akparabong Community Bank (Nig.) Ltd. [2004 – 2006] 13 N.B.L.R. (Part I) 356 Combination of accounts – When bank is entitled – Ex- ception City Express Bank Ltd v. Trade and Finan- cial Services [2004 – 2006] 13 N.B.L.R. (Part I) 425 Definition of – Societe Bancaire (Nig) Ltd v. De Lluch [2004 – 2006] 13 N.B.L.R. (Part I) 217 Expression “connected with or pertaining to banking” – Import of Societe Bancaire (Nig) Ltd v. De Lluch [2004 – 2006] 13 N.B.L.R. (Part I) 217 Failed Bank – Customer obtaining judgment against failed bank before its liquidation – Customer asking liquidator to rank him prior to other depositors – Pro- priety of – Sections 5(1)(c), 25(B), 26 NDIC Act Cap. 301 Laws of the Federation of Nigeria,1990 Akinni- fesi v. NDIC [2004 – 2006] 13 N.B.L.R. (Part I) 1 Interest – Definition of – Award of – Principles governing First Bank of Nigeria v. Sangonuga [2004 – 2006] 13 N.B.L.R. (Part I) 234 Interest – Right of banker to charge Habib Nigeria Bank Ltd v. Gifts Unique Nig. Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 85 Irregularity and malpractice – Not constituting offences known to criminal law Olieh v. Federal Republic of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 185 Loan contract – Breach of – Assessment of damages for breach – Date to commence NBCI v. Intergrated Gas (Nig) Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 279 xxvii [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

Loan contract – Breach of – Damages for breach – Quan- tum of damages – Principles applicable – Whether action can lie for sum agreed to be lent as a debt NBCI v. Intergrated Gas (Nig) Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 279 Loans granted under the Agricultural Credit Guarantee Scheme Fund Act – Application of loan to purposes not approved – Effect – Section 13 Agricultural Guar- antee Scheme Fund Act, 1977 First Bank of Nigeria Ltd v. Moba Farms Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 45 Money paid by fraudsters into a bank – Victim alleging negligence on part of bank in opening account for fraudsters – Whether Federal High Court or State Court has jurisdiction Societe Bancaire (Nig) Ltd v. De Lluch [2004 – 2006] 13 N.B.L.R. (Part I) 217 Mortgage documents – Terms therein – Construction of – Applicable principles First Bank of Nigeria Ltd v. Moba Farms Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 45 NDIC – Power to present petition for winding-up of bank – Section 38 Banks and Other Financial Institutions Decree No. 25 of 1991 and sections 410(1) and 425 Companies and Allied Matters Act Cap. 59 Laws of the Federation of Nigeria, 1990 Ahmed v. Crown Merchant Bank Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 459 Nigeria Deposit Insurance Corporation – Official liquidator of bank – Liability for indebtedness of bank Nige- ria Explosives & Plastic Co. Ltd. v. NDIC [2004 – 2006] 13 N.B.L.R. (Part I) 330 Offence – Falsely boosting an account – Whether an offence known to law – Sections 435(2), 516 Criminal Code – Section 23(4) of the Failed Banks (Recovery of Debts) and Financial Malpractices Decree No. 18 of 1994 (as amended) Olieh v. Federal Republic of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 185 xxviii [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Subject Matter

Offence – Fraudulent false accounting – Section 435(2) Criminal Code Cap 77 Laws of the Federation of Ni- geria, 1990 – Ingredients of Olieh v. Federal Repub- lic of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 185 Other charges – Other than interest – Court to award entitlement to by evidence Habib Nigeria Bank Ltd v. Gifts Unique Nig. Ltd. [2004 – 2006] 13 N.B.L.R. (Part I) 85 Overdraft – Grant of – Documents required for proof of grant Muktari Uba & Sons Ltd v. Lion Bank of Ni- geria [2004 – 2006] 13 N.B.L.R. (Part I) 415 Phantom cheque – What is Olieh v. Federal Republic of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 185 Revocation of banking licence by the Governor of CBN – Effect thereof Peak Merchant Bank Ltd v. Central Bank of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 314 Revocation of licence of bank – Whether signifies death of bank Ahmed v. Crown Merchant Bank Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 459 Right of set off – When does it arise City Express Bank Ltd v. Trade and Financial Services [2004 – 2006] 13 N.B.L.R. (Part I) 425 Section 251(1)(d) Constitution of the Federal Republic of Nigeria, 1999 – Tenor and intendment of Societe Bancaire (Nig.) Ltd v. De Lluch [2004 – 2006] 13 N.B.L.R. (Part I) 217 Section 3(1)(d) Failed Banks (Recovery of Debts) and Fi- nancial Malpractices Decree No. 18 of 1994 (as amended) – Import of Olieh v. Federal Republic of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 185 Statement of account – Need for bank to demonstrate in open court how claim is arrived at Habib Nigeria Bank Ltd v. Gifts Unique Nig Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 85 xxix [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

Transactions between bank and customer to be strictly documented Muktari Uba & Sons Ltd v. Lion Bank of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 415 COMPANY LAW Liquidator – Purpose of appointing Akinnifesi v. NDIC [2004 – 2006] 13 N.B.L.R. (Part I) 1 CONTRACT Breach of – Reason for breach – Whether different reason may be later given for the breach NBCI v. Intergrated Gas (Nig) Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 279 Contract of loan of money – Breach of – Damages for – Principles applicable NBCI v. Intergrated Gas (Nig) Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 279 Of loan – Specific performance of – Whether Court can order NBCI v. Intergrated Gas (Nig) Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 279 Time being essence of – Implication – How determined NBCI v. Intergrated Gas (Nig) Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 279 DOCUMENTS Construction of – Principles applicable First Bank of Ni- geria Ltd v. Moba Farms Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 45 DEFAMATION Libel – Words complained of – Need to read together and find whether words in question carry defamatory meaning – Relevant considerations Access Bank Plc v. Maryland Fin. Co. and Consult Serv. [2004 – 2006] 13 N.B.L.R. (Part I) 30 GUARANTEE Determination of – Whether can be done by mere letter – Principles governing First Bank of Nigeria v. San- gonuga [2004 – 2006] 13 N.B.L.R. (Part I) 234 xxx [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Subject Matter

Discontinuance of by guarantor – Implication of First Bank of Nigeria v. Sangonuga [2004 – 2006] 13 N.B.L.R. (Part I) 234 Guarantor sued – Debtor not made a party – Propriety of – Effect Majekodunmi v. African International Bank Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 12 Principles governing Majekodunmi v. African Interna- tional Bank Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 12

INJUNCTION Interlocutory injunction – Whether can be issued to restrain the enjoyment of a legal right – Peak Merchant Bank Ltd v. Central Bank of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 314 Whether can be granted for a completed act Peak Mer- chant Bank Ltd v. Central Bank of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 314

JURISDICTION A point of law – When and how can it be raised Peak Merchant Bank Ltd v. Central Bank of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 314 Money paid by fraudsters into a bank – Victim alleging negligence on part of bank in opening account for fraudsters – Whether Federal High Court or State Court has jurisdiction Societe Bancaire (Nig) Ltd v. De Lluch [2004 – 2006] 13 N.B.L.R. (Part I) 217 Revocation of banking licence – When the court can exercise jurisdiction – What plaintiff must show – Sec- tion 49(1) Banks and Other Financial Institutions Decree No. 25 of 1991 Peak Merchant Bank Ltd v. Central Bank of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 314 xxxi [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

MORTGAGE Equitable mortgage – Deposit of title deed constitutes First Bank of Nigeria v. Sangonuga [2004 – 2006] 13 N.B.L.R. (Part I) 234 Equitable mortgage – Enforcement of – What holder of must do – Sections 22, 26 and 51 Land Use Act Cap. 217 Laws of the Federation of Nigeria, 1990 First Bank of Nigeria v. Sangonuga [2004 – 2006] 13 N.B.L.R. (Part I) 234 Equitable mortgage – Principles applicable Majekodunmi v. African International Bank Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 12 Equitable mortgage – What constitutes First Bank of Ni- geria v. Sangonuga [2004 – 2006] 13 N.B.L.R. (Part I) 234 Mortgagor – Rights of Majekodunmi v. African Interna- tional Bank Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 12

NIGERIAN DEPOSIT INSURANCE CORPORATION Revocation of licence of bank – Power to present petition for winding-up of bank – Section 38 Banks and Other Financial Institutions Decree No. 25 of 1991 and Sec- tions 410(1) and 425 Companies and Allied Matters Act Cap. 59 Laws of the Federation of Nigeria, 1990 Ahmed v. Crown Merchant Bank Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 459

PRACTICE AND PROCEDURE Abuse of court process – Features of Peak Merchant Bank Ltd v. Central Bank of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 314 Joinder – Joinder of bank whose cheque alleged to be forged – Guiding Principles – Order IV Rule 5(1) Federal High Court (Civil Procedure) Rules, 1976 UBA Plc v. Akparabong Community Bank (Nig.) Ltd. [2004 – 2006] 13 N.B.L.R. (Part I) 356 xxxii [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Subject Matter

Pleadings – Admission therein – Effect – Declaratory relief – Whether can be granted in default of pleading – Need to lead evidence Nigeria Explosives & Plastic Co Ltd v. NDIC [2004 – 2006] 13 N.B.L.R. (Part I) 330 Unchallenged evidence – Failure of appropriate party to give evidence – Effect Nigeria Explosives & Plastic Co Ltd v. NDIC [2004 – 2006] 13 N.B.L.R. (Part I) 330

WORDS AND PHRASES Banking – Definition of Societe Bancaire (Nig) Ltd v. De Lluch [2004 – 2006] 13 N.B.L.R. (Part I) 217 Banking – Expression “connected with or pertaining to banking” – Import of Societe Bancaire (Nig) Ltd v. De Lluch [2004 – 2006] 13 N.B.L.R. (Part I) 217 Banking business – Section 61 Banks and Other Financial Institution Decree No. 25 of 1991 Societe Bancaire (Nig) Ltd v. De Lluch [2004 – 2006] 13 N.B.L.R. (Part I) 217 Clearing – Meaning of UBA Plc v. Akparabong Com- munity Bank (Nig) Ltd [2004 – 2006] 13 N.B.L.R. (Part I) 356 Interest – Definition of First Bank of Nigeria v. San- gonuga [2004 – 2006] 13 N.B.L.R. (Part I) 234 Lien – Definition of First Bank of Nigeria v. Sangonuga [2004 – 2006] 13 N.B.L.R. (Part I) 234 Phantom cheque – Meaning of Olieh v. Federal Republic of Nigeria [2004 – 2006] 13 N.B.L.R. (Part I) 185 Unauthorised lending or overdraft – Meaning of African Continental Bank Plc v. Odukwe [2004 – 2006] 13 N.B.L.R. (Part I) 72

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INDEX OF NIGERIAN CASES REFERRED TO

Page 7up Bottling Co Ltd v. Abiola and Sons Bottling Co Ltd (2001) NWLR (Part 730) 469 128 A Aale v Olu (2001) 7 NWLR (Part 711) 119 356 Abaye v Ofili (1986) 1 NWLR (Part 15) 134 145 Abekhe v NDIC (1995) 7 NWLR (Part 406) 228 1 Abimbola v Abatan (2001) 9 NWLR (Part 717) 66 279 Abisi v Ekwealor (1992) 6 NWLR (Part 302) 643 279 Abusomwan v Mercantile Bank Ltd (1987) 3 NWLR (Part 60) 196 330 ACB Ltd v Apugo (2001) 5 NWLR (Part 707) 483 279 ACB Plc v Haston Nigeria Ltd (1997) 8 NWLR (Part 516) 110 330 ACB Plc v Ndoma-Egba (2000) 10 NWLR (Part 675) 229 330; 356 ACB Plc v Nwaigwe (2001) 1 NWLR (Part 694) 305 1; 356 Adah v NYSC (2004) All FWLR (Part 185), (2004) 13 NWLR (Part 891) 639 185 Adebanjo v Brown (1990) 3 NWLR (Part 141) 661 279 Adedeji v National Bank of Nigeria Ltd. (1989) 1 NWLR (Part 6) 212 234 Adeloye v Olona Motors Nigeria Ltd (2002) 8 NWLR (Part 769) 284 330 Adesanya v The President of Nigeria (1981) 2 NCLR 358 356 Adesola v Abidoye (1999) 14 NWLR (Part 637) 28 459 Adeyeri v Okobi (1997) 6 NWLR (Part 510) 534; (1997) 14 WACA 505 145 xxxv [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

Adigun v Ayinde (1993) 8 NWLR (Part 313) 516 1 Aeroflot v UBA (1986) 3 NWLR (Part 27) 188 145 Afoezioha v Nkokoro (1999) 8 NWLR (Part 615) 393 356 Afribank Plc v Collatex Commerce Ltd (2001) 8 NWLR (Part 714) 87 168 African Continental Bank Ltd v Balogun (1975) 1 All NLR 176 425 African Insurance Development Corp v Nigerian LNG Ltd (2004) 4 NWLR (Part 653) 494 12 A–G, Ondo State v Ekiti State (2001) 17 NWLR (Part 749) 706 111 Agha v IGP (1997) 10 NWLR (Part 524) 317 330 Agwu v State (1998) 4 NWLR (Part 544) 90 185 Agwu v State (1959) 4 FSC 102; (1965) NMLR 18 72 Ahmed v State (1998) 5 NWLR (Part 550) 493 185 Aigbe v State (1976) 1 NMLR 134 185 Ajero v Ugorji (1999) LRCN 2875 330 Ajewole v Adetimo (1996) 2 NWLR (Part 431) 391 314 Ajomale v Yaduat (No.2) (1991) 5 NWLR (Part 191) 266 279 Akeredolu v Akinremi (1986) 2 NWLR (Part 25) 710 85 Akibo v. Oduntan (1991) 2 NWLR (Part 171) 1 314 Akibu v Ray Auto Supply Ltd (2000) 14 NWLR (Part 686) 190 168 Akinbola v Plisson Fisko Ltd (1988) 4 NWLR (Part 88) 335 356 Aladu v State (1998) 8 NWLR (Part 563) 618 185 Alfa v Atanda (1993) 5 NWLR (Part 296) 729 356 Aliyu v Ibrahim (1992) 7 NWLR (Part 253) 301 314 Alli v Central Bank of Nigeria (1997) 4 NWLR (Part 498) 192 168 Alli v Ikusebiala (1985) 1 NWLR (Part 4) 630 425 xxxvi [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Nigerian Cases Referred to

Allied Bank of Nigeria Ltd v Akubueze (1997) 6 NWLR (Part 509) 374 425 Amokeodo v IGP (1999) 6 NWLR (Part 609) 467 459 Amusan v Obideyi (2001) 6 NWLR (Part 710) 647 234 Anatego v Anatago (1997) 9 NWLR (Part 519) 49 168 Anoh v Hirnyam (1997) 2 NWLR (Part 486) 174 314 Aoko v Fagbemi (1961) 1 All NLR 400 185 Aqua Ltd v Ondo State Sports Council (1988) 4 NWLR (Part 91) 622 1 Ariori v Elemo (1983) 1 SCNLR 1; (1983) 1 SC 13 279 Aro v Aro (2000) 3 NWLR (Part 649) 443 356 Aromire v Awoyemi (1972) 1 All NLR (Part 1) 101 356 Arubo v Aiyeleru (1993) 3 NWLR (Part 280) 126 12; 111 Awojugbabe Light Industries v Chinukwe (2004) FWLR (Part 229) 943; (1993) 1 NWLR (Part 270) 485 12; 234 Awojugbagbe Light Industries Ltd. v Chinukwe (1995) 11 NWLR (Part 390) 379 234 Awoniyi v. The Registered Trustees of Amorc (1990) 6 NWLR (Part 154) 42 30 Ayorinde v Oni (2000) FWLR (Part 3) 445; (2000) 2 SC 33 12 B Balogun v NBN (1978) 3 SC 155; (1978) 11 NSCC 133 30 Baroda v Iyalabani Ltd 40 WRN 53 459 Bello v A-G, Oyo State (1986) 5 NWLR (Part 45) 828 128 Bello v Eweka (1981) 1 SC 101 314 BON v Akintoye (1999) 12 NWLR (Part 631) 392 234 BON v Muri (1998) 2 NWLR (Part 536) 153 234 xxxvii [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

Bornu Holding Co Ltd v Bogoco (1971) 1 All NLR 324; (1971) NSCC 321 85 BP (West Africa) Ltd v Nigeria Maritime Services Ltd (1962) 1 All NLR 645 425 British & French Bank Ltd v Opaleye (1962) 1 SCNLR 60 45; 425 Bronik Motors Ltd v Wema Bank Ltd (1993) NSCC 226 217 C CAC v Sadika (2002) FWLR (Part 95) 248 356 CBN v Ahmed (2001) FWLR (Part 56) 670; (2001) 11 NWLR (Part 724) 369 12 CCB (Nig.) Ltd v Onwuchekwa (2000) 2 NWLR (Part 647) 65 459 Chinweze v Masi (1989) 1 NWLR (Part 97) 254 356 Chukujekwu v Olalere (1992) 2 NWLR (Part 221) 86 356 Civil Service Technical Workers Union v Agricul- ture and Allied Workers Union of Nigeria (1993) 2 NWLR (Part 273) 63 128 Clark v State (1986) 4 NWLR (Part 35) 381 185 Commissioner for Finance v Ukpong (2000) 4 NWLR (Part 653) 363 356 Commissioner for Works, Benue State v Devcon Ltd (1988) 3 NWLR (Part 83) 407 356 D Daboh v The State (1977) 5 SC 171 185 Dabup v Kolo (1993) 9 NWLR (Part 317) 254 279 Dike v African Continental Bank Ltd (2000) 5 NWLR (Part 657) 441 30 Din v African Newspapers Ltd (1990) 2 NSCC 313 (SC) 111 E Edem v Akainkpa LG (2000) 4 NWLR (Part 651) 70 356 xxxviii [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Nigerian Cases Referred to

Edokpolo & Co. Ltd v Sem-Edo Wire Ltd (1989) 4 NWLR (Part 116) 473 356 Egbe v Adefarasin (No. 2) (1987) 1 NWLR (Part 47) 1 128 Egbe v Alhaji (1990) 1 NWLR (Part 128) 546 85; 356; 425 Egbo v Agbara (1997) 1 NWLR (Part 481) 293 459 Egbue v Araka (1988) 2 NWLR (Part 84) 598 145 Eguamwense v Amaghizemwen (1993) 9 NWLR (Part 315) 1 314; 459 Egwim v State (1998) 1 NWLR (Part 532) 59 185 Eholor v Osayande (1992) 6 NWLR (Part 249) 524 356 Ejabulor v Osja (1990) 5 NWLR (Part 148) 1 30 Ekpere v Aforija (1972) 1 All NLR 220 12 Ekpoke v Udilo (1978) 6 – 7 SC 187 145 Ekwunife v Wayne (West Africa) Ltd (1989) 5 NWLR (Part 122) 422 45; 234 Emecheta v Ogueri (1996) 5 NWLR (Part 447) 227 459 Emegwara v Nwaimo (1953) 14 WACA 347 85 English Exporters (London) Ltd v Ayanda (1973) 3 SC 51 234 Eperokun v University of Lagos (1986) 4 NWLR (Part 34) 162 85 Ephraim Okeke and Others v A-G, Anambra State (1997) 9 NWLR (Part 519) 123 459 Etikemi v Ibekwe (1997) 7 NWLR (Part 514) 598 111 Eze v Ataise (2000) 10 NWLR (Part 676) 470 145 Eze v State (1992) 7 NWLR (Part 251) 75 185 Ezewani v Onwordi (1986) 4 NWLR (Part 33) 37 279 Ezewuja v Mazeh 15 WACA 87 12 xxxix [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

F Falobi v Falobi (1976) 1 NMLR 169 111 Famfa Oil Ltd v A-G, The Federation (2003) 12 SCNLR 85 168 Fashanu v Adekoya (1974) 6 SC 83 185 FBN Ltd v AP (1996) 4 NWLR (Part 443) 438 1 FBN Ltd v Pan Bisbilder (Nig) Ltd (1990) 2 NWLR (Part 134) 647 45 FBN Plc v Mary Medical Clinics (1996) 9 NWLR (Part 471) 195 234 FBN Plc v Nagarfi (1998) 6 NWLR (Part 555) 692 1 FBN Plc v Uwada (2001) FWLR (Part 50) 1696 85 FCSC v Laoye (1989) 2 NWLR (Part 106) 652 72 Fed Adm-General v Cardoso (1973) 11 SC 61 12 Federal College of Education v Anyanwu (1997) 4 NWLR (Part 501) 533 330 FMBN v Adesokan (2000) 11 NWLR (Part 677) 108 234 FRN v Ifegwu (2003) FWLR (Part 167) 703; (2003) 15 NWLR (Part 842) 113 185 Fumudoh v Aboro (1991) 9 NWLR (Part 214) 210 128 G Garba v University of Maiduguri (1986) 1 NWLR (Part 18) 550 72 Gbadamosi v The State (1991) 6 NWLR (Part 196) 182 185 Geosource Nig Ltd v Binagbara (1997) 5 NWLR (Part 506) 607 425 Goji v Ewete (2001) 15 NWLR (Part 736) 273 356 Green v Green (1987) 3 NWLR (Part 61) 460 356 H Hallaby v Hallaby 13 WACA 170 12 Hassan v Atanyi (2002) 8 NWLR (Part 770) 581 356 xl [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Nigerian Cases Referred to

Hassan v Maiduguri Management Committee (1991) 8 NWLR (Part 212) 738 279 Himma Merchants Ltd v Aliyu (1994) 5 NWLR (Part 347) 667 234 His Highness Uyo 1 v Egware (1974) 1 All NLR (Part 1) 293 30 I I T Palmer of Nigeria Ltd v Julio Fonseca 18 NLR 49 425 Ibekwe v Maduka (1995) NWLR (Part 392) 716 234 Ibenwelu v Lawal (1971) 1 All NLR 23 279 Ibrahim v Barde (1996) 9 NWLR (Part 474) 513 356 ICON Ltd v FMB Ltd (1995) 6 NWLR (Part 401) 570 356 Idugboe v Oil Field (1979) NCLR 30 459 Ifegwu v FRN (2001) 13 NWLR (Part 729) 103; (2003) FWLR (Part 167) 703 185 Ige v Farinde (1994) 7 NWLR (Part 354) 42 356 Ijale v Leventis & Co. Ltd (1959) SCNLR 255; 85; 279; (1959) 4 FSC 108 425 Ijebu-Ode Local Government v Balogun and Co Ltd (1991) 2 LRCN 289 330 Ijebu-Ode Local Govt v Balogun & Co Ltd (1991) 1 NWLR (Part 166) 145 279 Ikemson v State (1989) 3 NWLR (Part 110) 455 185 Ikenya v Ofune (1985) 2 NWLR (Part 5) 1 85 Ikomi v BWA Ltd (1965) NSCC 29 234 Ikpeazu v African Continental Bank Ltd (1965) NMLR 374 425 Insurance Broker of Nigeria v ATMC Ltd (1996) 8 NWLR (Part 466) 316 279 International Textile Industries (Nig) Ltd v Ad- eremi (1999) 8 NWLR (Part 614) 268 234 Iron Products Ltd v Sentinel Assurance Co Ltd (1992) 4 NWLR (Part 238) 734 415 Ishola v Ajiboye (1998) 1 NWLR (Part 532) 71 356 xli [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

Ishola v Societe Generale Bank (Nig) Ltd (1997) 2 NWLR (Part 488) 405 85; 145 Itauma v Akpe-Ime (2000) 12 NWLR (Part 680) 156 145 Iweka v A-G, Fed (1996) 4 NWLR (Part 442) 363 356 J JA Obanor & Co. Ltd v Co-operative Bank Ltd (1995) 4 NWLR (Part 388) 128 425 Jadesimi v Okotie-Eboh (1989) 4 NWLR (Part 113) 113 356 Jammal Steel Structures Ltd v African Continental Bank Ltd (1973) NSCC 619 217 John Holt Ltd v Oputa (1996) 9 NWLR (Part 470) 101 356 K Kadiri v Olusoga (1956) 1 FSC 59 12 Kaiyaoja v Egunla (1974) 2 SC 55 145 Kalu-Anya v AN (Nig) Ltd (1992) 6 NWLR (Part 247) 319 145 Katto v CBN (1999) 6 NWLR (Part 607) 390 30 Katto v Central Bank of Nigeria (1991) 9 NWLR (Part 214) 126 459 Keyamo v Lagos State House of Assembly (2002) 18 NWLR (Part 799) 605 168 Kolo v Midwest Newspaper Corp (1977) 11 NSCC 11 30 Korede v Adedotun (2001) 15 NWLR (Part 736) 483 425 Kotoye v CBN (1989) 1 NWLR (Part 98) 419 356 Kotoye v Saraki (1994) 7 NWLR (Part 357) 414 356 Koya v UBA Ltd (1997) 1 NWLR (Part 481) 251 145 L Labode v Otubu (2001) 7 NWLR (Part 712) 256 128; 234 Laja v IGB (1961) 1 All NLR 744 185 Lajumoke v Doherty (1969) 1 NMLR 281 356 xlii [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Nigerian Cases Referred to

M Macaulay v NAL Merchant Bank Ltd (1990) 4 NWLR (Part 144) 283 425 Macaulay v RZB Austria (2003) 18 NWLR (Part 852) 282 SC; (2004) FWLR (Part 192) 135 459 Madukolu v Nkemdilim (1962) 1 All NLR (Part 4) 587 185 Madukolu v Nkemdilim (1962) 2 SCNLR 341 168; 356; 459 Maigoro v Garba (1999) 10 NWLR (Part 624) 555 72 Mains Ventures Ltd v Petroplast Ind Ltd (2000) 4 NWLR (Part 651) 151 356 Maja and Others v Johnson (1951) 13 WACA 194 459 Mazin Eng Ltd v Tower Aluminium (1993) 5 NWLR (Part 295) 526 279 Merchant Bank Ltd v Federal Minister of Fi- nance (1961) All NLR (Part 2) 598 314 Metal Construction (WA) Ltd v Aboderin (1998) 8 NWLR (Part 563) 538 234 Metalimpex v AG Leventis & Co Nigeria Ltd (1916) 2 SC 91 425 Mobil Oil (Nig) Plc v IAL 36 Inc (2000) 6 NWLR (Part 659) 146 111 Mobil Producing Nigeria Ltd v Monokpo (2003) 12 SC (Part 11) 168 Mogaji v Odofin (1978) 3 – 4 SC 91 145 Mosheshe General Merchants Ltd v Nigeria Steel Products Ltd (1987) 2 NWLR (Part 55) 110 85 Mudumma v Jambo (2001) 15 NWLR (Part 736) 461 356 N National Bank (Nig) Ltd v Shoyoye (1977) 5 SC 181 12 xliii [2004 – 2006] 13 N.B.L.R. (PART I)

Nigerian Banking Law Reports

National Bank of Nigeria Ltd v Guthrie Nig Ltd and Another (1987) 2 NWLR (Part 56) 255 85 National Bank of Nigeria Ltd v PB Olatunde & Co Nigeria Ltd (1994) 3 NWLR (Part 334) 512 85 National Investment and Properties Co Ltd v Thompson Organisation Ltd (1969) 1 All NLR 138 279 NDIC v CBN (2002) 7 NWLR (Part 766) 272 314 NDIC v CBN (2003) 3 SC 1 314 NDIC v FMB Ltd (1997) 4 NWLR (Part 501) 519 459 NDIC v FMBN (1997) 2 NWLR (Part 490) 735 1 NDIC v Okem Enterprises (2004) 10 NWLR (Part 111; 168; 880) 107 217 NDIC v SBN (2003) 1 NWLR (Part 801) 321 111 Negbenebor v Negbenebor (1971) 1 All NLR 210 425 New India Assurance Company Ltd v Odubanjo (1971) 1 NCLR 363 425 Newbreed Org Ltd v Erhomosele (2002) 13 NWLR (Part 784) 251 30 Niger Insurance v Abed Bros (1976) 7 SC 35 279 Nigeria Engineering Works Ltd v Denap Ltd (2001) 18 NWLR (Part 746) 726 279 Nigeria v Olloh (2002) 9 NWLR (Part 773) 475 168 Nigerian Supplies Manufacturing Company v Nigerian Broadcasting Corporation (1967) 1 All NLR 35 279 Nkamu v Onum (1997) 5 SC 13 145 NNB Plc v Udobi (2001) 14 NWLR (Part 732) 1 356 Nnonye v Anyichie (2005) All FWLR (Part 253) 604 459 Nsirim v Nsirim (1990) 3 NWLR (Part 138) 285 318 NUR v NRC (1996) 9 NWLR (Part 473) 490 356 Nwaigwe v Transproject (Nig) Ltd (2000) 8 NWLR (Part 669) 364 45 Nwidenyi v Aleke (1996) 4 NWLR (Part 442) 549 356 Nwobodo v Onoh (1984) 1 SCNLR 1; (1984) All NLR 1 145 xliv [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Nigerian Cases Referred to

O Obasuyi v Business Ventures Ltd (2000) 5 NWLR (Part 658) 668 356 Obijuru v Anokwuru (2001) 17 NWLR (Part 743) 685 356 Obikoya v Wema Bank Ltd (1991)7 NWLR (Part 201) 119 234 Odekilekun v Hassan (1997) 12 NWLR (Part 531) 56 279 Odumosu v African Continental Bank Ltd (1976) 10 NSCC 635 234 Offoboche v Ogoja Local Govt (2001) 16 NWLR (Part 739) 458 30; 279 Oforlete v State (2000) 12 NWLR (Part 681) 415 356 Ogbomor v The State (1985) 1 NWLR (Part 2) 223 185 Oghene Ltd v Amoruwa (1986) 3 NWLR (Part 32) 856 12; 356 Ogini v Ogo Oluwa Motors (Nig) Ltd (1998) 1 NWLR (Part 534) 353 279 Ogunbiyi v Ishola (1996) 6 NWLR (Part 452) 12 85; 356; 425 Ogundiani v Araba (1978) 6 – 7 SC 55 12; 234 Ogunmade v Fadayiro (1972) 8 – 9 SC 1 356 Ogunsola v APP and Others (2003) 39 WRN 115 168 Ogwuru v Co-Operative Bank of Eastern Nigeria (1994) 5 NWLR (Part 365) 685 45 Ojengbede v Esan (2001) 18 NWLR (Part 746) 771 279 Ojora v Odunsi (1964) NMLR 12 356 Okai II v Ayikai II (1946) 12 WACA 3 279 Okene v Orianwo (1998) 9 NWLR (Part 566) 408 356 Okoebor v Eyobo Engineering Services Ltd (1991) 4 NWLR (Part 187) 553 425 Okoli v Ojiakor (1997) 1 NWLR (Part 479) 48 356 Okongwu v NNPC (1989) 4 NWLR (Part 115) 296 45 xlv [2004 – 2006] 13 N.B.L.R. (PART I)

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Okuneye v FBN Plc (1996) 6 NWLR (Part 457) 749 12; 234 Oladejo v The State (1994) 6 NWLR (Part 348) 101 185 Olale v Ekwelendu (1989) 4 NWLR (Part 115) 326 330 Olaloye v Balogun (1990) 5 NWLR (Part 148) 24 45 Olanlege v Afro Continental (Nig) Ltd (1998) 7 NWLR (Part 458) 29 45 Olanrewaju v Afribank Plc (2001) FWLR (Part 72) 2008; (2001) 13 NWLR (Part 691) 704 185 Oloko v Arogbo (1968) NMLR 68 459 Oloriode v Oyebi (1984) 5 SC 1 12 Olujitan v Oshiatoba (1992) 5 NWLR (Part 241) 326 356 Olumesan v Ogundepo (1996) 2 NWLR (Part 433) 628 356 Omega Bank (Nig) Plc v OBC Ltd (2002) 16 NWLR (Part 794) 483 45 Omotayo v Nigerian Railway Corporation (1992) 7 NWLR (Part 254) 471 128 Oniah v Onyia (1989) 1 NWLR (Part 99) 514 279 Onibudo v Akibu (1982) 7 SC 60 85 Onifade v Olayiwola (1990) 7 NWLR (Part 161) 130 85 Ononiwu v RCC Ltd (1995) 7 NWLR (Part 406) 214 356 Onuzulike v Commissioner Special Duties Anam- bra State (1992) 3 NWLR (Part 791) 815 314 Onwuchekwa v Ezeogu (2002) 9 SCNJ 125 425 Onwunalu v Osademe (1971) 1 All NLR 14 12 Onyema v Oputa (1987) 3 NWLR (Part 60) 259 459 Onyemaizu v Ojiako (2000) 6 NWLR (Part 659) 25 72 Oroyinyin v Raman (1997) 2 NWLR (Part 489) 613 279 Orubu v NEC (1988) 5 NWLR (Part 94) 323 1 xlvi [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Nigerian Cases Referred to

Osho v Phillips (1972) 4 SC 259 356 Otapo v Sunmonu (1987) 2 NWLR (Part 58) 587 356 Oversea Construction Ltd v Creek Enterprises Ltd (1985) 3 NWLR (Part 13) 407 145 Owe v Oshibanjo (1965) 1 All NLR 72 85 Owosho v Dada (1984) 7 SC 149 85 Oyebadejo v Olaniyi (2000) FWLR (Part 5) 829 85 Oyediran v The Republic (1967) NMLR 122 185 Oyegun v Igbinedion (1992) 2 NWLR (Part 226) 744 425 Oyekanmi v NEPA (2000) 15 NWLR (Part 690) 414 356 Oyekanmi v NEPA (2000) 82 LRCN 3205 85 Oyewole v Standard Bank of West Africa (1968) 2 All NLR 32 30 P P N Udoh Trading Company Ltd v Abere (2001) 11 NWLR (Part 723) 114 128 Pas Nig Ltd v NNS Co Ltd (1990) 6 NWLR (Part 159) 764 85 Patkun Industries Ltd v Niger Shoes Ltd (1988) 5 NWLR (Part 93) 138 128 Peenok Investment Ltd v Hotel Presidential (1982) 12 SC 1 12 Petroleum Training Institute v Uwamu (2001) 5 NWLR (Part 705) 112 330 Pharmatek Ind Ltd v Ojo (1994) 7 NWLR (Part 359) 751 356 Pincent v The State (1997) 1 NWLR (Part 480) 234 185 Prospect Textile Mills v ICI Plc England (1996) 6 NWLR (Part 457) 668 279 R R v Nwangagwu (1962) 1 All NLR 294 185 Re Madaki (1996) 7 NWLR (Part 459) 153 356 xlvii [2004 – 2006] 13 N.B.L.R. (PART I)

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Re Mbamalu (2001) 18 NWLR (Part 744) 143 356 Re Mogaji (1986) 1 NWLR (Part 19) 759 356 Rossek v African Continental Bank Ltd (1993) 8 NWLR (Part 312) 382 168 S Sadiku v A-G, Lagos State (1994) 7 NWLR (Part 355) 235 356 Saraki v Kotoye (1992) 9 NWLR (Part 264) 156 314 Saraki v Kotoye (No. 2) (1992) 3 NSCC 331 111 Saude v Abdullahi (1989) 3 NSCC Vol. 20 177 168 Saude v Abdullahi (1989) 4 NWLR (Part 116) 387 85; 425 Savage v Uwaechia (1972) 3 SC 214 128 Savannah Bank of Nigeria Ltd v Pan Atlantic Shipping & Transport Agencies Ltd (1987) 1 NWLR (Part 49) 212 128 Schroder and Co v Major (1989) 2 NWLR (Part 101) 1 1 Shell BP Petroleum Development Co Nig Ltd v Pere-Cole (1978) 3 SC 183 145 Shell Ltd v Imani Ltd (2000) 6 NWLR (Part 662) 639 356 Solanke v Abed (1962) 1 All NLR 230 12; 234 Soleh Boneh Overseas (Nig) Ltd v Ayodele (1989) 1 NWLR (Part 99) 549 145 Solicitor General, Western Nigeria v Adebonojo (1971) 1 All NLR 178 45 Solomon v Mogaji (1982) 11 SC 1 425 Sosanya v Onadeko (2000) 11 NWLR (Part 677) 34 356 Spasco Vehicle and Plant Hire Co. v Alraine (Nig.) Ltd (1995) 8 NWLR (Part 416) 655 279; 425 State v Aibangbee (1988) 3 NWLR (Part 84) 548 72 T Thadant v National Bank of Nigeria (1972) 1 SC 105 128 xlviii [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Nigerian Cases Referred to

Thomas v Olufosoye (1986) 1 NWLR (Part 18) 669 459 Tika Tore Press Ltd v Abina (1973) 1 All NLR (Part II) 244 234 Titilayo v Olupo (1991) 7 NWLR (Part 205) 519 30 Tofi v UBA (1987) 2 NWLR (Part 62) 707 185 Trade Bank Plc v Benilux Ltd (2003) 9 NWLR (Part 825) 416 217 Tsokwa Oil Marketing Co v BON Ltd (2002) 11 NWLR (Part 777) 163 72 U UBA Ltd v Abimbolu & Co (1995) 9 NWLR (Part 419) 371 45 Uba v Union Bank of Nigeria Plc (1995) 7 NWLR (Part 405) 72 425 UBN Ltd v Adediran (1987) 1 NWLR (Part 47) 52 356 UBN Ltd v Ayo Dare & Sons (Nig) Ltd (2000) 11 NWLR (Part 679) 644 234 UBN Ltd v Ozigi (1994) 3 NWLR (Part 333) 385 45 UBN Ltd v Sax (Nig) Ltd (1994) 8 NWLR (Part 361) 150 45; 234 UBN Plc v Emole (2001) 18 NWLR (Part 745) 503 330 UBN v ITTP (2000) 12 NWLR (Part 680) 102 111 Ude v Osuji (1998) 13 NWLR (Part 580) 1 279 Ugorji v Onwu (1991) 3 NWLR (Part 178) 177 356 Ukaegbu v Ugoji (1991) 6 NWLR (Part 196) 127 279 Ukpo v Adede (2000) 10 NWLR (Part 674) 1 356 Uku v Okumagba (1974) 3 SC 35 12; 356 Umudje v Shell BP Petroleum Development Co

Nig Ltd (1975) 9 – 11 SC 155 145 UNIC v Muslim Bank Ltd (1972) 1 All NLR (Part 1) 341 425 UNIC v UCIC Ltd (1999) 3 NWLR (Part 593) 17 185 Union Bank of Nigeria Ltd v Ozigi (1994) 3 NWLR (Part 333) 385 425 xlix [2004 – 2006] 13 N.B.L.R. (PART I)

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Union Bank of Nigeria Ltd v Penny-Mart Ltd (1992) 5 NWLR (Part 240) 228 425 Union Bank of Nigeria Plc v Akinrinmade (2000) FWLR (Part 5) 853 85 Union Bank of Nigeria Plc v Okoro (2002) 10 NWLR (Part 774) 1 330 Union Bank of Nigeria, Plc v Okubama (2000) 14 NWLR (Part 688) 570 30 United Calabar & Co v Elder Dempster Lines Ltd (1972) All NLR 681 279 Usman v Abubakar (2001) 12 NWLR (Part 728) 685 330 Usman v Garke (2003) 14 NWLR (Part 840) 261 145 Uwa Printers v Investments Trust Ltd (1988) 5 NWLR (Part 92) 110 279 Uzo v Nnalimo (2000) 11 NWLR (Part 678) 237 356 W West Africa Chemical Co. Ltd v Caroline Poultry Farm Ltd (2002) 2 NWLR (Part 644) 197 30 Whyte v Jack (1996) 2 NWLR (Part 431) 407 185 Wilcox v Queen (1961) All NLR 631 85 Willoughby v IMB Ltd (1987) 1 NWLR (Part 48) 105 356 Y Yesufu v African Continental Bank (1980) All NLR 293; (1981) 1 SC 74 1; 45; 85 Yesufu v Kupper International NV (1996) 5 NWLR (Part 446) 17 425 Yinka Folawiyo & Sons v T A Hammond Projects Ltd (1977) NCLR 465 459 Yoye v Olubode (1974) 1 All NLR (Part2) 118 279 Z Zebra Energy Ltd v FGN (2002) 18 NWLR (Part 798) 162 168 l

INDEX OF FOREIGN CASES REFERRED TO

A Page Accra Ltd v Thamas (1947) 12 WACA 160 356 Argosan Finance Co Ltd v Oxby [1964] 1 All ER 791 314 Austin Securities v North Gate Stores [1969] 2 All ER 753 1

B Bank of New South Wales v O’Conner [1889] 14 AC 273 12 Barrett Bros (Taxis) Ltd v Davies (1966) 1 WLR 1334 279 Beesly v Hallwood Estates Ltd (1961) Ch 105 234 Bower v Turner (1883) 32 LJ Ch 54 85 Bradford Old Bank v Sutclife [1918] 2 KB 833 12 Brickles v Small [1916] AC 599 279 British and Beningtons Ltd v North Western Ca- char Tea Company Ltd [1923] AC 48 279

C C & CB Ltd v Gordon [1903] AC 240 356 Castlegate Steamship Co Ltd v Dempsey (1892) 1 QB 854 279

D Dominion Trust Ltd v Kirkwood [1966] 1 All ER 968 217 Donoghue v Stevenson [1932] AC 562 217 Dorset Yatch Co Ltd v Home Office [1970] AC 1004 217 Dunlop Pneumatics Tyre Co v Selfridge & Co Ltd [1915] AC 847 425 li [2004 – 2006] 13 N.B.L.R. (PART I)

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E Ellis v Emmanuel (1876) 1 Ex D 157 234

F Flack v London and South Western Bank Ltd (1915) 31 TLR 334 30

G Garnett v M’kewan (1872) LR 8 Ex 10 45 Goss v Nugent 2 LJKB 127 425 Grant v Australian Knitting [1936] AC 85 217 Green v Sevin (1879) 13 Ch D 589 279 Gurtner v Circuit [1968] 2 QB 587 356

H Healey v Minister of Health [1955] 1 QB 221 314 Heaven v Fender (1883) 11 QBD 503 217 Henton v Paddison (1893) 68 LT405 234

I In re Sheen (1884) 25 Ch D 692 234 In re Wallis and Simmonds (Builders) Ltd (1974) 1 All ER 561 234

J Jayson v Midland Bank Ltd (1968) I Lloyd’s Rep 409 30

K Kreditbank Cassel GMBH v Schenkers [1927] 1 KB 826 425

L Le Lievre v Gould (1993)1 QB 491 217 Lloyd’s v Harper (1881) 16 Ch D 290 234 lii [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Foreign Cases Referred to

Lombard Finance Ltd v Brooke Plain Trading Ltd [1991] 2 All ER 762 145

M Midland Bank Ltd v Reckitt and Others [1933] AC 1 425 Miliangos v. George Frank Textile (Ltd) [1976] AC 443 279 Moorgate Mercantile Company Ltd v Twitchings [1975] All ER 314 234

P Parkin v Thorold (1852) 16 Beav 59 279 Perry v National Bank of England Ltd [1910] Ch 464 12 Plunkett v Barclays Bank Ltd [1936] 1 All ER 635 30 Proctor v Cheshire CC (1981) WN 43 356 Pyke v Hibernian Bank Ltd (1950) IR 195 30

R R v Fining English and Empire Digest page 1006 185 Re Vandervell Trust [1969] 3 All ER 496 356 Reckitt v Barnett Pembroke and Slenter Ltd [1929] AC 176 425 Royal British Bank v Turquand (1856) 6 E& B 327 425

S Salomon v Salomon [1897] AC 22 425

T Tiley v Thomas (1867) LR 3 Ch App 61 279

W Watkin v Hall (1868) LR 3 QB 399 30 liii [2004 – 2006] 13 N.B.L.R. (PART I)

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Watts v Christie English Report Vol. 50 Rolls Court Beavan 8–12 page 928 425

Y Youssaupoffi v Metro-Goldwyn-Mayer (1934) 50 TLR 30

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INDEX OF NIGERIAN STATUTES REFERRED TO

Actions Law Cap 3 Laws of Anambra State, 1986 s 20(1)(a)...... [2004 – 2006] 13 N.B.L.R. (PART I) 128 Agricultural Guarantee Credit Scheme Fund Act No. 20 of 1977 s 13...... [2004 – 2006] 13 N.B.L.R. (PART I) 45 Banks and Other Financial Institutions Decree No. 25 of 1991 s 12...... [2004 – 2006] 13 N.B.L.R. (PART I) 314 s 38(1)-(4) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 459 s 49(1) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 314 s 61...... [2004 – 2006] 13 N.B.L.R. (PART I) 217 s 338(1) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 459 Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 s 3 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 30 Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990 s 22...... [2004 – 2006] 13 N.B.L.R. (PART I) 459 s 25...... [2004 – 2006] 13 N.B.L.R. (PART I) 459 s 408...... [2004 – 2006] 13 N.B.L.R. (PART I) 459 s 410(1) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 459 s 415...... [2004 – 2006] 13 N.B.L.R. (PART I) 459 s 425...... [2004 – 2006] 13 N.B.L.R. (PART I) 459 s 425(1)(a)...... [2004 – 2006] 13 N.B.L.R. (PART I) 111 s 425(1)(d)...... [2004 – 2006] 13 N.B.L.R. (PART I) 1 s 624...... [2004 – 2006] 13 N.B.L.R. (PART I) 111 Constitution of the Federal Republic of Nigeria, 1999 s 6(6)(a)...... [2004 – 2006] 13 N.B.L.R. (PART I) 111 s 6(6)(b)...... [2004 – 2006] 13 N.B.L.R. (PART I) 111 lv [2004 – 2006] 13 N.B.L.R. (PART I)

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Constitution of the Federal Republic of Nigeria, 1999 – continued s 36(1) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 111 s 240...... [2004 – 2006] 13 N.B.L.R. (PART I) 111 s 241...... [2004 – 2006] 13 N.B.L.R. (PART I) 111 s 242...... [2004 – 2006] 13 N.B.L.R. (PART I) 72 s 243...... [2004 – 2006] 13 N.B.L.R. (PART I) 111 s 251(1)(d) ... [2004 – 2006] 13 N.B.L.R. (PART I) 111; 217 s 251(1)(e)...... [2004 – 2006] 13 N.B.L.R. (PART I) 111 s 315...... [2004 – 2006] 13 N.B.L.R. (PART I) 111

Criminal Code Cap 77 Laws of the Federation of Nige- ria, 1990 s 435(2) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 185 s 516...... [2004 – 2006] 13 N.B.L.R. (PART I) 185

Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990 s 23...... [2004 – 2006] 13 N.B.L.R. (PART I) 279 s 73...... [2004 – 2006] 13 N.B.L.R. (PART I) 85 s 74...... [2004 – 2006] 13 N.B.L.R. (PART I) 85 s 74(1) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 85 s 74(1)(a)...... [2004 – 2006] 13 N.B.L.R. (PART I) 85 s 75...... [2004 – 2006] 13 N.B.L.R. (PART I) 85 s 138(1) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 145

Failed Banks (Recovery of Debts) and Financial Mal- practices Decree No. 18 of 1994 (as amended) s 3(1)(d)...... [2004 – 2006] 13 N.B.L.R. (PART I) 185 s 23(4) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 185 s 3(1)(a)...... [2004 – 2006] 13 N.B.L.R. (PART I) 111 s 9 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 111

Land Use Act Cap 202 Laws of the Federation of Nige- ria, 1990 s 22(1) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 234 lvi [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Nigerian Statutes referred to

Land Use Act Cap 202 Laws of the Federation of Nige- ria, 1990 – continued s 22(2) ...... [2004 – 2006] 13 N.B.L.R. (PART I) 234 s 26...... [2004 – 2006] 13 N.B.L.R. (PART I) 234 s 51...... [2004 – 2006] 13 N.B.L.R. (PART I) 234

Nigeria Deposit Insurance Corporation Act Cap 301 Laws of the Federation of Nigeria, 1990 s 5(1)(c)...... [2004 – 2006] 13 N.B.L.R. (PART I) 1; 330 s 25(B)...... [2004 – 2006] 13 N.B.L.R. (PART I) 1 s 26...... [2004 – 2006] 13 N.B.L.R. (PART I) 1; 330 s 46...... [2004 – 2006] 13 N.B.L.R. (PART I) 1

Tribunals Certain Consequential Amendments Decree No. 62 of 1999 s 2 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 111

lvii

INDEX OF NIGERIAN RULES OF COURT REFERRED TO

Court of Appeal Rules, 2002 Order 3 rule 5(1).. [2004 – 2006] 13 N.B.L.R. (PART I) 356 Order 3 rule 15(1) ..[2004 – 2006] 13 N.B.L.R. (PART I) 356

Federal High Court (Civi1 Procedure) Rules, 1976 Order IV rule 5(1)..[2004 – 2006] 13 N.B.L.R. (PART I) 356

Federal High Court (Civil Procedure) Rules, 2000 Order 3 rule 1 ... [2004 – 2006] 13 N.B.L.R. (PART I) 168 Order 3 rule 2 ... [2004 – 2006] 13 N.B.L.R. (PART I) 168 Order 3 rule 3 ... [2004 – 2006] 13 N.B.L.R. (PART I) 168 Order 7 rule 8 ... [2004 – 2006] 13 N.B.L.R. (PART I) 168 Order 25 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 314

High Court of Anambra State (Civil Procedure) Rules, 1998 Order 3 rule 10 . [2004 – 2006] 13 N.B.L.R. (PART I) 356

High Court of Bendel State (Civil Procedure) Rules Order 40 rule 7 ... [2004 – 2006] 13 N.B.L.R. (PART I) 45

High Court of Lagos State (Civil Procedure) Rules Order 16 rule 11[2004 – 2006] 13 N.B.L.R. (PART I) 279

lix

INDEX OF BOOKS REFERRED TO

Bullen and Leake and Jacobs Precedents of Pleadings (13ed) art 1342, p 1499... [2004 – 2006] 13 N.B.L.R. (PART I) 279

Bullen and Leake and Jacobs Precedents of Pleadings (23ed) page 1455 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 279

Black’s Law Dictionary generally...... [2004 – 2006] 13 N.B.L.R. (PART I) 217 page 240 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 415

Black’s Law Dictionary (5ed) page 832 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 234

Black’s Law Dictionary (7ed) by Bvana Garner page 240 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 415 page 410 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 415 page 941 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 415

Bowstead & Reynolds Agency (16ed) article 27...... [2004 – 2006] 13 N.B.L.R. (PART I) 425

Chitty Contract (23ed) Volume II page 54, para 1106 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 279

Chorley and Smart Leading Cases in the Law of Banking (6ed) page 237 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 425

Clerks & Lindsel Tort (16ed) para 22...... [2004 – 2006] 13 N.B.L.R. (PART I) 234 para 28...... [2004 – 2006] 13 N.B.L.R. (PART I) 234 lxi [2004 – 2006] 13 N.B.L.R. (PART I)

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Gatley Libel and Slander (8ed) chapter 21, s 1 .... [2004 – 2006] 13 N.B.L.R. (PART I) 30 para 921, p 959.. [2004 – 2006] 13 N.B.L.R. (PART I) 30 para 959, p 415... [2004 – 2006] 13 N.B.L.R. (PART I) 30 para 963, s 12 .... [2004 – 2006] 13 N.B.L.R. (PART I) 30

Gowers Principle of Modern Company Law (4ed) page 719 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 1

Halsbury’s Laws of England pages 168 – 169, para 314...... [2004 – 2006] 13 N.B.L.R. (PART I) 145; 425

Halsbury’s Laws of England Volume 2 (3ed) generally...... [2004 – 2006] 13 N.B.L.R. (PART I) 30 para 322...... [2004 – 2006] 13 N.B.L.R. (PART I) 45

Halsbury’s Laws of England, Volume 14 (3ed) para 1003...... [2004 – 2006] 13 N.B.L.R. (PART I) 234

Halsbury’s Laws of England, Volume 20, (4ed) para 196...... [2004 – 2006] 13 N.B.L.R. (PART I) 234

Halsburys Laws of England (14ed) para 457...... [2004 – 2006] 13 N.B.L.R. (PART I) 145

Mayne & Mcgregor Damages (12ed) page 553 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 279

Mayne & Mcgregor Damages (14ed) page 595 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 279 page 596 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 279 lxii [2004 – 2006] 13 N.B.L.R. (PART I)

Index of Books referred to

Oxford Advanced Learner’s Dictionary New Edition page 58...... [2004 – 2006] 13 N.B.L.R. (PART I) 356

Paget Banking (6ed) 1961 page 8...... [2004 – 2006] 13 N.B.L.R. (PART I) LLUC

Paget Law of Banking (9ed) page 139 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 425

Palmer’s Company Law (12ed) page 1356 ...... [2004 – 2006] 13 N.B.L.R. (PART I) 459

Street Torts (4ed) para 58...... [2004 – 2006] 13 N.B.L.R. (PART I) 234 para 59...... [2004 – 2006] 13 N.B.L.R. (PART I) 234

Robert Burgress Sweet & Maxwell’s Laws of Loan & Borrowing, July 1993 Edition p 4075, para 477.. [2004 – 2006] 13 N.B.L.R. (PART I) 234

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[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION)

Akinnifesi v. Nigeria Deposit Insurance Corporation 1 a Akinnifesi v Nigeria Deposit Insurance Corporation

FEDERAL HIGH COURT OF NIGERIA, LAGOS DIVISION b SHUAIBU J Date of Judgment: 27 FEBRUARY, 2004 Suit No.: FHC/L/CS/1304/98

Banking – Failed bank – Customer obtaining judgment c against failed bank before its liquidation – Customer asking liquidator to rank him prior to other depositors – Propriety of – Sections 5(1)(c), 25(B), 26, NDIC Act Cap 301 Laws of the Federation of Nigeria, 1990 d Company law – Liquidator – Purpose of appointing Facts

By Originating Summon dated 10 February, 1999, which e was struck out on 15/7/99 but relisted on 21/10/99, the plaintiff/applicant claimed the following reliefs:– 1. A Declaration that the plaintiff is entitled to the full value of the judgment debt of N1,510,693.07k (One f Million, Five Hundred and Ten Thousand, Six Hun- dred and Ninety-three Naira and Seven kobo) with interest at the rate of 35% from 24/1/94 to 24/4/94 against the defendant which said judgment was en- g tered by the High Court of Edo State; Benin City on 25 March, 1996; per JO Omorodion, J in Suit No. B/114/96 between Mr Francis Akinnifesi v ICON Ltd (Merchant Bankers). h 2. An Order directing and or compelling the defendant to pay the judgment in full to the Plaintiff. The kernel of the plaintiff/applicant’s case was that sometimes in 1994 he opened a deposit account with ICON Ltd i (Merchant Bankers) and as at 6 October, 1995, the principal deposit with accrued interest stood at N1,510,693.07k as shown in Exhibit “FA1”. When the applicant made a series of demand for payment and the bank refused or neglected to j pay both the deposit and the interest thereon, he instituted an

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2 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) action at the High Court of Edo State whereupon a judgment a was entered in his favour in the sum of N1,510,693.07k with 35% interest from 24/1/94 – 24/4/94 as indicated in Exhibit “FA2”. And in spite of countless demands for the payment b of the judgment debt, the Bank refused and/or neglected to pay off the judgment debt. The crux of the plaintiff’s action was that since he was a judgment creditor, his claim should rank above of the other c depositors of the Failed Bank, this contention the defendant refused to agree with.

Held – d 1. The purpose of appointing a liquidator is basically to:– 1. take control of the Company; 2. collect its assets; 3. pay its debts; and e 4. distribute any surplus among the members in accordance with their rights. 2. The provision of section 25(B) of NDIC Act Cap 301 f empowers the receivers to pay the depositors and other creditors the net amount available for distribution to them. The provision of section 26 went further to provide that:– g “26. A Depositor shall receive from the Corporation as provided under sub-section (1)(c) of Section 5 of this Act a maximum amount of fifty thousand naira of assessable deposit of an insured bank in the event of a failure.” h The provision of section 5(1)(c) deals with payments to depositors in case of imminent or actual suspension of payment by the insured bank to the maximum amount provided in section 26. So long as the plaintiff’s claim is traceable to the deposit in ICON Ltd (Merchant Bank- i ers), the fact that he acquires a new status of being a judgment creditor does not derogate from the fact that he is a depositor within the contemplation of sections 5(1)(c) and 26 of the NDIC Act. j

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Akinnifesi v. Nigeria Deposit Insurance Corporation 3 a 3. Per curiam “Having held the view that the plaintiff is a depositor, he could not in my humble view take priority over other deposi- b tors notwithstanding the judgment in his favour since the assets and liabilities of ICON LIMITED has been taken over by the defendant as Liquidators. I could not but agree with the submission on behalf of the defendant that the duties of NDIC is statutorily (sic) defined and limited. Thus, they c could not exceed the payment of the maximum claim stipulated in Section 26 of the Act. I also agreed that a claim must be made as a condition precedent for settlement of claim. However, the delay or failure in making the claim shall not in my humble view foreclose the right of the plaintiff as pro- d vided under the NDIC Act. The defendant having taken further steps in this action can rightly be held to have waived his right to complain about the defect in the Originating Summon. The plaintiff should not be taken by surprise. Refer to Austin Securities Ltd v Northgate and English Stores Ltd e (supra). Accordingly, the application has failed and I so hold.”

Cases referred to in the judgment f Nigerian Abekhe v NDIC (1995) 7 NWLR (Part 406) 228 Adigun v Ayinde (1993) 8 NWLR (Part 313) 516 g Aqua Ltd v Ondo State Sports Council (1988) 4 NWLR (Part 91) 622 FBN Plc v Nagarfi (1998) 6 NWLR (Part 555) 692 h First Bank Nigeria Ltd v AP (1996) 4 NWLR (Part 443) 438 NDIC v FMBN (1997) 2 NWLR (Part 490) 735 Orubu v NEC (1988) 5 NWLR (Part 94) 323 i Schroder and Co v Major (1989) 2 NWLR (Part 101) 1 Yesufu v African Continental Bank (1980) All NLR 293

Foreign j Austin Securities v North Gate Stores [1969] 2 All ER 753

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Nigerian statutes referred to in the judgment a Companies and Allied Matters Act Cap 59 Laws of the Fed- eration of Nigeria, 1990 section 425(1)(d) Nigeria Deposit Insurance Corporation Act Cap 301 Laws of b the Federation of Nigeria, 1990, sections 5(1)(c), 25(B), 26, 46

Book referred to in the judgment c Gowers Principle of Modern Company Law (4ed) page 719 Counsel For the applicant: Macaulay d For the respondent: Tijani Judgment SHUAIBU J: By Originating Summon dated 10 February, e 1999, which was struck out on 15/7/99 but relisted on 21/10/99, the plaintiff/applicant claims the following reliefs:– 1. A Declaration that the plaintiff is entitled to the full f value of the judgment debt of N1,510,693.07k (One Million, Five Hundred and Ten Thousand, Six Hun- dred and Ninety-three Naira and Seven kobo) with interest at the rate of 35% from 24/1/94 to 24/4/94 against the defendant which said judgment was en- g tered by the High Court of Edo State; Benin City on 25 March, 1996; per JO Omorodion, J in Suit No. B/114/96 between Mr Francis Akinnifesi v ICON Ltd (Merchant Bankers). h 2. An order directing and or compelling the defendant to pay the judgment in full to the plaintiff. The above raises 2 questions for determination and these are:– i i. Whether having regard to the Judgment of the High Court of Edo State in Suit No. B/114/96 between Mr Francis Akinnifesi v ICON Ltd (Merchant Bank- ers) whereby judgment was entered in favour of the j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Shuaibu J Akinnifesi v. Nigeria Deposit Insurance Corporation 5 a applicant herein for the sum of N1,510,693.07k with interest at 35% from 24/1/94 – 24/4/94 against ICON Ltd (Merchant Banker) with respect to the deposit b kept by the applicant with the Bank which went into liquidation, the applicant is not a creditor of the Bank within the meaning of section 25(3) NDIC Act Cap 301 Laws of the Federation of Nigeria, 1990 and section 425(1)(d) of the Companies and Allied c Matters Act Cap. 59 Laws of the Federation of Nige- ria, 1990. ii. If the answer to question (i) is in the affirmative whether the respondent herein should not be ordered d to pay the said judgment debt in full to the applicant. In support of the Originating Summon is an 18 paragraph Affidavit deposed to by the plaintiff himself and annexed thereto are numbers of Exhibits marked e “FA1”–“FA7” respectively. The kernel of the plaintiff/applicant’s case is that sometime in 1994 he opened a deposit account with ICON Ltd (Mer- chant Bankers) and as at 6 October, 1995, the principal de- f posit with accrued interest stood at N1,510,693.7k as shown in Exhibit “FA1”. When the applicant made series of demands for payment and the bank refused or neglected to pay both the deposit and the interest therefrom, he instituted an g action at the High Court of Edo State whereupon a judgment was entered in his favour in the sum of N1,510,693.7k with 35% interest from 24/1/94 – 24/4/94 as indicated in Exhibit “FA2”. And in spite of countless demands for the payment h of the judgment debt, the Bank refused and/or neglected to pay off the judgment debt. In paragraphs 11–15 of the supporting affidavit, it was averred as follows:– i “11. That as a result of large scale in debtedness of ICON LIM- ITED MERCHANT BANKERS to depositors and creditors her Banking licence was revoked and upon the appointment of Nigerian Deposit Insurance Corporation as provisional Liquidator of ICON Limited Merchant Bankers I forwarded j my Claims to the NDIC for settlement and my Solicitors,

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SOLOMON ODIASE & CO. vide letter dated 31st March, a 1998 further demanded the payment of the judgment debt and accrued interest. Now produced and shown to me marked Exhibit ‘FA5’ is a copy of the letter. b 12. By letter dated 22nd June, 1998, the NDIC acknowledged my Solicitors’ letter dated 31st March, 1998 and promised to settle the judgment sum in line with the provisions of NDIC Decree No. 22 of 1988. Now produced and shown to me marked Exhibit ‘FA6’ is a copy of the letter. c 13. Barely one month after the letter referred to in Paragraph 12 above, I received another letter dated 24th August, 1998 from the NDIC wherein it was contended inter alia that the NDIC Decree No. 22 of 1988 ‘does not make provisions for Special preference of a Judgment Deposit/Creditor over any d other Depositor/Creditor’ and that I should file any claim at the verification Payment Centres for ICON LIMITED in Be- nin. Now produced and shown to me marked Exhibit ‘FA7’ is a copy of the letter. e 14. Upon the receipt of the letter referred to in Paragraph 13 above I became confused by the contents thereof as I had hitherto believed and relying on the contents of Exhibits ‘FA6’ that I was entitled to be paid the full value of the judgment sum as a Judgment Creditor. f 15. In order to clarify my position, I went to the Verification/ Payment Centre for ICON LIMITED in Benin to make enquiries where upon I was informed by the Officers of the defendant that the defendant could only pay me N50,000.00 g (Fifty Thousand Naira only) like any other Depositor notwithstanding the fact that I had obtained my judgment before the appointment of the defendant as liquidator of the Bank.” Arguing the application on behalf of the plaintiff/applicant, h the learned Counsel Miss Macaulay submitted that a banker’s statement of account is a sufficient proof to establish the extent of banker’s liability to customers and that the relationship between the applicant and the respondent is that of a creditor and a debtor relying on Exhibit “FA1” and the i cases of Yesufu v African Continental Bank (1980) All NLR 293 at 295 ratio 4N and FBN Plc v Mamman Nagarfi (1998) 6 NWLR (Part 555) 692 at 696 as well as First Bank Nigeria Ltd v AP (1996) 4 NWLR (Part 443) 438. And since the j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Shuaibu J Akinnifesi v. Nigeria Deposit Insurance Corporation 7 a applicant is a creditor of the Bank, he is entitled to sue the Bank if the demand of money lent is not complied with. It was further submitted on the applicant’s behalf that the b settlement of the applicant’s claim will not prejudice the right of the other claimants and that there is a distinction between the duties of NDIC as a provisional liquidator and as insurers of Bankers. c In opposition, the respondent filed a counter-affidavit of 10 paragraphs deposed to by one Sam Ehizuenlen, a litigation officer with the respondent. The main substance of the counter-affidavit is that the control of ICON Ltd was taken d over since April, 1995 wherein in September, 1996 a sole administrator was appointed to take charge of the bank. Consequently, on 16 January, 1998, the banking licence of ICON Ltd was revoked and NDIC was appointed provi- e sional liquidators – who requested all depositors to forward their claim vide an advertisement in the National Newspa- pers. Several depositors and creditors responded and the respondent had been paying the net amounts available from f time to time and in accordance with NDIC Decree No. 22 of 1988 (as amended) but the plaintiff has failed to file his claim at the verification payment centre for ICON Ltd in Benin, Edo State. g It was the submission of Mr Tijani on the defendant/ respondent’s behalf that based on the affidavit in support of the Originating Summons as well as the counter-affidavit, the following facts are not disputed and these are:– h (1) The plaintiff has at all material time been a customer of ICON Ltd Merchant Banker. (2) The Central Bank of Nigeria took over the control of i ICON Bank and subsequently appointed an interim board in April, 1995. And on 16/11/98 the Banking licence of ICON Ltd was revoked by the Central Bank of Nigeria and the defendant was appointed as j a provisional liquidator.

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(3) Pursuant to the above, an advertisement was caused a in the National Dailies calling on all depositors of the Bank under liquidation to come with their claim for settlement. b (4) The plaintiff did not make any claim to the defendants. (5) However, the plaintiff has obtained a judgment in a Benin High Court against ICON Ltd for the amount c of deposit he made with the Bank in liquidation. It is against the above background, the Learned Counsel Mr Tijani submitted that the issues to be determined are as follows:– d 1. Whether the plaintiff is a depositor or creditor of ICON Ltd in liquidation. 2. If the plaintiff is a depositor or creditor what amount e should he be paid by the defendant. 3. Whether the plaintiff as judgment creditor will have priority over other Creditors and/or Depositors . It was Mr Tijani’s submission respecting issue No. 1 above f that considering the averment in paragraph 4 of the plaintiff’s own supporting affidavit, the plaintiff was a Customer of a Failed Bank (ICON Bank Ltd) and he can also be described as a depositor with the Bank relying on the case of g NDIC v FMBN (1997) 2 NWLR (Part 490) 735 at 766–767 as well as section 46 of NDIC Act Cap 301 Laws of the Federation of Nigeria, 1990 which defines deposits:– “as monies lodged by the general public with any person for safe h keeping or for purpose of any interest or dividend whether or not such monies are repayable upon demands on a giving period of notice or upon a fixed date.” Thus, the relationship arose in normal banker/customer rela- i tionship. Respecting issue No. 2 it was submitted on behalf of the defendant that it is a creation of a statute ie NDIC Act Cap 301 Laws of the Federation of Nigeria, 1990 (as amended) j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Shuaibu J Akinnifesi v. Nigeria Deposit Insurance Corporation 9 a and it means that the defendant must abide by the statute in settling its depositors as well as discharge of its duties. Reli- ance was placed on section 26 of the NDIC Act. And the b only amount which a depositor is entitled is N50,000 and the plaintiff’s position as judgment creditor notwithstanding. Thus, it is only net amount available at the time of liquidation that will be distributed. It was further submitted that a c claim must be made as a condition precedent for settlement of claim. And where as in the instant case there is no claim, no amount can be made, relying on section 25(1) of the said Act which provides for an advertisement. d As to whether the plaintiff’s claim will take precedence over depositors, Mr Tijani on behalf of the defendant submitted that neither CAMA nor NDIC Law has provided that, referring to sections 494 of CAMA and 25(3) of the NDIC Act on the equality of depositors. It was further submitted e that section 45(1) of CAMA being referred to by the plaintiff’s Counsel is a general provision which is relevant to companies other than those in liquidation and cannot over- ride specific provision under NDIC Act which deals with the f relevant subject matter. References were made to the following cases:– 1. Aqua Ltd v Ondo State Sports Council (1988) 4 NWLR (Part 91) 622; g 2. Orubu v NEC (1988) 5 NWLR (Part 94) 323; 3. Schroder and Co. v Major (1989) 2 NWLR (Part 101) 1. Finally it was submitted on the defendant’s behalf that the h originating summons in the presentation having not been signed by a Judge should be discountenanced with, as same is incompetent. Replying on point of law, the learned Counsel on the i plaintiff’s behalf, Miss Macaulay submitted that the status of the plaintiff has changed the very day when judgment was entered in his favour. And that the duty of the defendant as provisional liquidator is well spelt in Abekhe v NDIC (1995) j 7 NWLR (Part 406) 228 at 240–241 as well as in Gowers –

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Principle of Modern Company Law (4ed), page 719. Fur- a thermore, the provision of CAMA extends to Failed Banks relying on section 38(3) BOFID; section 425(1) of CAMA and section 25(3) of NDIC Act as well as the case of Austin b Securities v North Gates Stores [1969] 2 All ER 753 at 754. Finally, the objection as to non-signing of the Originating Summons was not brought timeously and the defendant is deemed to have waived their right to object relying on c Adigun v Ayinde (1993) 8 NWLR (Part 313) 516. Considering the above submissions and on the strength of the affidavit evidence placed before me, the issues to be determined are those succinctly put by the defendant’s Counsel d and same could be summarised as follow:– 1. What is the status of the plaintiff respecting the asset of ICON Bank in liquidation; and e 2. What is the extent of the defendant’s obligation towards the plaintiff in the circumstance of this case. It is beyond argument that the plaintiff had vide Exhibit “FA2” obtained a judgment in the sum of N1,510,693.7k f against ICON Ltd (Merchant Bankers) in Suit No. B/114/96 at the High Court of Edo State. And it is beyond any dispute that the said judgment relates to a deposit the plaintiff kept with the said Bank together with interest. But before g same was paid the said Bank went into liquidation whereupon the licence was revoked and the defendant was appointed a provisional liquidator. The purpose of appointing a liquidator is basically to:– h (a) take control of the Company; (b) collect its assets; (c) pay its debts; and i (d) distribute any surplus among the members in accordance with their rights. The provision of section 25(B) of NDIC Act Cap 301 empowers the receivers to pay the depositors and other j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Shuaibu J Akinnifesi v. Nigeria Deposit Insurance Corporation 11 a creditors the net amount available for distribution to them. The provision of section 26 went further to provide that:– “26. A Depositor shall receive from the Corporation as provided b under sub-section (1)(c) of Section 5 of this Act a maximum amount of Fifty Thousand Naira of assessable deposit of an insured bank in the event of a failure. Note that the provision of Section 5(1)(c) deals with payments to depositors in case of imminent or actual suspension c of payment by the insured bank to the maximum amount provided in Section 26.” It is my respectful view that so long as the plaintiff’s claim is traceable to the deposit in ICON Ltd (Merchant Bankers), d the fact that he acquires a new status of being a judgment creditor does not derogate from the fact that he is a depositor within the contemplation of sections 5(1)(c) and 26 of the NDIC Act. e Having held the view that the plaintiff is a depositor, he could not in my humble view take priority over other depositors notwithstanding the judgment in his favour since the assets and liabilities of ICON Ltd have been taken over f by the defendant as liquidators. I could not but agree with the submission on behalf of the defendant that the duties of NDIC is statutorily defined and limited. Thus, they could not exceed the payment of the maximum claim stipulated in sec- g tion 26 of the Act. I also agree that a claim must be made as a condition precedent for settlement of claim. However, the delay or failure in making the claim shall not in my humble view foreclose the right of the plaintiff as provided under h the NDIC Act. The defendant having taken further steps in this action can rightly be held to have waived his right to complain about the defect in the Originating Summon. The plaintiff should not be taken by surprise. Refer to Austin Se- curities Ltd v Northgate and English Stores Ltd (supra). Ac- i cordingly; the application has failed and I so hold.

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a Majekodunmi v African International Bank Ltd

COURT OF APPEAL, LAGOS DIVISION ADAMU, ADEREMI, MUHAMMAD JJCA b Date of Judgment: 13 MAY, 2004 Suit No.: CA/L/117/99

Guarantee – Guarantor sued – Debtor not made a party – Propriety of – Effect c Guarantee – Principles governing Mortgage – Equitable mortgage – Principles applicable Mortgage – Mortgagor – Rights of d Facts

The respondent in the instant appeal had sought to recover a loan it advanced to a third party, Ile-Oluji Cocoa Products e Company Ltd. The appellants had guaranteed the loan owed the respondent by the third party. They deposited title deeds in respect of Nos. 36A and 36B Mainland Way, Dolphin Es- tate, Ikoyi, Lagos. Respondent also sought to recover a 21% f interest per annum on the borrowed sum from 30 December, 1995 until the judgment debt was eventually paid. The sum of thirteen million, seven hundred and nineteen thousand, three hundred and forty-six Naira, forty-five Kobo was the g amount of the loan enjoyed by the third party and guaranteed by the appellants. Before final judgment, appellants had applied firstly for the dismissal of the suit on the grounds that same was an h abuse of the lower court’s process and that the suit was caught by the doctrine of estoppel. Appellants had also prayed the court for an order for the joinder of the third party as a co-defendant. The two applications were refused and dismissed. The court finally obliged the respondent all i the reliefs it claimed and thus the instant appeal. The appeal by the relevant grounds of appeal also complains against the two interlocutory rulings of the trial court prior to the final judgment. j

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Majekodunmi v. African International Bank Ltd 13 a Appellants’ crucial issue pertains to the effect which the non-joinder of the third party, Ile-Oluji Cocoa Products Company Ltd, has on the decision of the court below. b Held – 1. The defendants/appellants were guarantors to Ile-Oluji Cocoa Products Company Ltd and consequently, deposited as security, their title deeds in respect of their prop- c erty at 36A and 36B Mainland Way Dolphin Estate, Ikoyi. By this, the defendants did no more than holding themselves out as undertaking to recompense the plaintiff/respondent should the principal debtor Ile-Oluji Co- d coa Products Company Ltd fail to pay its debt. 2. By entering into the agreement, the appellants assumed a secondary liability to answer for the debtor – Ile-Oluji Cocoa Products Company Ltd – who remains primarily e liable. 3. It thus follows that the liability of the principal debtor must first be clearly established after demand for payment has been made by the creditor and there has been f failure to pay. It is only then that the secondary debtors can be called to pay. 4. The law relating to debts is that generally, it is the duty of the debtor (in this case the principal debtor) to pay his g debt to the person or body from whom he borrowed money. In other words, it is a general principle that money is paid to a creditor by the principal debtor. 5. It follows from the above principle that the sum owed by the debtor must first be established on demand, by evi- h dence. It is when he failed to repay his just debt that recourse will be had to his guarantors. 6. By the state of the pleadings and going by the evidence of the only witness called by plaintiff/respondent, Ile- i Oluji Cocoa Products Company Ltd is a necessary party to this suit. Having failed to join the company and since no satisfactory explanation could have been proffered for the non-joinder, the suit ought to have been struck- j out or the entire proceedings set aside.

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7. The non-joinder of the principal debtor Ile-Oluji Cocoa a Products Company Ltd by the plaintiff/respondent tantamount to the release of the principal debtor which on the authority of Perry v National Bank of England Ltd b (1910) Ch 464 translates to a discharge of the guarantors for the reason that all the proper parties were not before the court. 8. It is now well settled in the corpus of our laws that a c mortgagor has two types of rights; one legal, and the other equitable. He can exercise his legal right to redeem the property upon payment of the capital plus the interest to the mortgage on the contractual date. d 9. The other is equity of redemption which is primarily an equitable interest which rears its head as seen when the date for repayment is past and no payment has been made by the mortgagee. A mortgagor finding himself in that situation must initiate an action in the court of law e for redemption. 10. Even if the proper parties had been before the court, from the facts of this case, as presented before the court, what was created by defendants/appellants depositing f their title deeds with the respondent as guarantee for the repayment of the loan is an equitable mortgage. A charge was thus created on their properties. 11. It is a well-established rule of equity that a deposit of a g document of title without either writing or words of mouth will create a charge in the property, subject- matter of the title deeds. 12. In the absence of consent that charge can only be dis- h placed by actual payment of the debt. 13. A mortgagor approaching a court of equity to redeem must do equity by paying the principal, interest and costs before he can recover the property. i 14. Where the mortgage is by way of charge, and not by conveyance, the mortgagee takes no estate whatsoever in the land or in the property but he has generally only an equitable interest to be enforced by sale upon an order j

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Majekodunmi v. African International Bank Ltd 15 a of court. The equitable charge simpliciter only gives a right to payment out of the property. The strict mode of enforcing the charge is however, by sale or appointment b of a receiver under an order of court but never by foreclosure. 15. The indebtedness of the principal debtor must first be established before making an order for the sale of the c properties subject-matter of equitable charges. The consent of the Governor is not required to effect a proper sale; as between the ultimate buyer and seller the agreement is only inchoate. d 16. Unless and until the principal debtor, Ile-Oluji Cocoa Products Company Ltd has been found liable, it is impossible to hold the appellants liable by virtue of the guarantee they provided. In the absence of the principal debtor therefore, the Court was not in the position to e proceed and the action against the appellants should have been struck out. Appeal allowed. f Cases referred to in the judgment Nigerian African Insurance Development Corp v Nigerian LNG Ltd g (2004) 4 NWLR (Part 653) 494 Arubo v Aiyeleru (1993) 3 NWLR (Part 280) 126 Awojugbabe Light Industries v Chinukwe (2004) FWLR (Part 229) 943; (1993) 1 NWLR (Part 270) 485 h Ayorinde v Oni (2000) FWLR (Part 3) 445; (2000) 2 SC 33 CBN v Ahmed (2001) FWLR (Part 56) 670; (2001) 11 NWLR (Part 724) 369 Ekpere v Aforija (1972) 1 All NLR 220 i Ezewuja v Mazeh 15 WACA 87 Fed. Adm-General v Cardoso (1973) 11 SC 61 Hallaby v Hallaby 13 WACA 170 j Kadiri v Olusoga (1956) 1 FSC 59

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National Bank (Nig.) Ltd v Shoyoye (1977) 5 SC 181 a Oghene Ltd v Amoruwa (1986) 3 NWLR (Part 32) 856 Ogundiani v Araba (1978) 6–7 SC 55 Okuneye v First Bank of Nig. Plc (1996) 6 NWLR (Part 457) b 749 Oloriode v Oyebi (1984) 5 SC 1 Onwunalu v Osademe (1971) 1 All NLR 14 c Peenok Investment Ltd v Hotel Presidential (1982) 12 SC 1 Solanke v Abed (1962) 1 All NLR 230 Uku v Okumagba (1974) 3 SC 35 Foreign d Bank of New South Wales v O’Conner [1889] 14 AC 273 Bradford Old Bank v Sutclife [1918] 2 KB 833 Perry v National Bank of England Ltd [1910] Ch 464 e Counsel For the appellants: Olanipekun (with him Olagunji and Malik) For the respondent: Busari (with him Olusanya) f Judgment ADEREMI JCA: (Delivering the lead judgment) The appeal here is against the final judgment delivered on 18 February, g 2000 by the High Court of Lagos State, Lagos Judicial Divi- sion in Suit No. LD/2673/98. There had been two appeals against two separate rulings in two interlocutory matters which rulings were delivered on 15 January, 1999 and 26 h February, 1999 respectively. The respondent who was the plaintiff in the court below had by the endorsement in its statement of claim sought the following reliefs from the appellants who were the defendants before that court:– i (1) Against the defendants the sum of N13,719,346.45 (thirteen million, seven hundred and nineteen thousand, three hundred and forty-six Naira, forty-five Kobo) being the sum owed to the plaintiff by Ile-Oluji Cocoa Products Company Ltd as at 29 December, j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Majekodunmi v. African International Bank Ltd 17 a 1995, on a loan facility of N6,000,000 (six million Naira) granted by the plaintiff to the Ile-Oluji Cocoa Products Company Ltd on 28 May, 1992, at its re- b quest in the plaintiff’s ordinary course of business as a banker, and which sum Ile-Oluji Cocoa Products Company Ltd has failed, refused and/or neglected to repay despite repeated demands and the repayment of which the defendants guaranteed by way of a deposit c of title deeds to 36A and 36B, Mainland Way, Dol- phin Estate, Ikoyi, Lagos. (2) Interest on the said sum of N13,719,346.45k (thirteen million, seven hundred and nineteen thousand, three d hundred and forty-six Naira, forty-five Kobo) at the rate of 21% per annum from 30 December, 1995 until the satisfaction of any judgment which may be entered herein e AND/OR (3) An order of sale of:– (a) The property lying and situate at 36A Mainland Way, Dolphin Estate, Ikoyi, Lagos, more particu- f larly contained in the Deed of Sub-Lease dated 23 July, 1992 and registered as No. 96 at page 96 in Volume 1931 at the Lands Registry, Lagos; and g (b) Plot 36B Mainland Way, Dolphin Estate, Ikoyi, Lagos more particularly contained in the Deed of Sub-Lease dated 22 July, 1992 and registered as No. 94 at Page 94 in Volume 1931 at the Lands h Registry, Lagos. Pleadings, in terms of statement of claim and statement of defence were filed and exchanged between the parties. Suf- fice it to say that the appellants, then as the defendants had i entered a Conditional Memorandum of Appearance dated 5 October, 1998. The defendants/appellants thereafter brought an application seeking an order dismissing the plaintiff’s claim in its entirety on grounds inter alia:– j 1. that the suit is an abuse of court process,

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2. that the suit is caught by the doctrine of estoppel per a rem judicata and/or issue estoppel and all other known heads of estoppel. Arguments of Counsel on both sides were taken by the b learned trial Judge and in a reserved ruling delivered on 15 of January, 1999, the learned trial Judge dismissed the application as lacking in merit. Dissatisfied with the aforesaid ruling, the defendants/appellants lodged an appeal against it c by a notice of appeal dated 22 January, 1999 but filed on 26 January, 1999. Again, the defendants/appellants brought another application dated and filed on 10 February, 1999 seeking an order of the court to join, as a co-defendant, Ile-Oluji d Cocoa Products Company Ltd. Arguments of Counsel on both sides were entertained by the learned trial Judge. In a reserved ruling delivered on 26 February, 1999, the court refused the application. Being dissatisfied with the ruling of 26 February, 1999, the defendants again appealed against it e by a notice of appeal dated 5 April, 2000 but filed on 6 April, 2000. The substantive case had proceeded to hearing on 1 De- cember, 1999 when the plaintiff/respondent called only one f witness who tendered a number of documents as Exhibits. Thereafter on that day, the counsel for the plaintiff/respondent announced the closure of his client’s case. By the notes of court, the opening of the defence was adjourned g to 14 December, 1999 and that if the defendants failed to open their defence, the plaintiff/respondent would be invited by the trial Judge to proceed to address the court. The record of court indicates that on 14 December, 1999, when the h court resumed for the continuation of the hearing of the case and when the defendants were expected to open their defence, both the defendants and their Counsel were absent. At the request of Counsel for the plaintiff/respondent, the court i ordered that the plaintiff’s written address be filed and a copy thereof be served on Counsel to the defendants within 14 days from that day. The court further ordered, that the defendants “counsel should file his clients” written address within 14 days after service. The case was thereafter j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Majekodunmi v. African International Bank Ltd 19 a adjourned to 18 January, 2000 on which day again, both the defendants and their Counsel were absent from court. Of course, Counsel to plaintiff/respondent informed the trial b Judge that his client’s written address as directed by the court, had been filed. The court thereafter adjourned the case for judgment on 18 February, 2000. In a reserved judgment delivered on that date, the learned trial Judge granted all the reliefs sought by the plaintiff. Being dissatisfied with the c said judgment, the defendants had appealed to this Court by way of a notice of appeal dated 7 March, 2000. With the leave of the Court, an amended notice of appeal which carries ten grounds of appeal was filed by the appellants on 3 d June, 2002. Suffice it to say that the Amended Notice of Appeal encompasses all the grounds of appeal contained in the three original notices of appeal earlier filed. Distilled for determination by this Court are eight (8) is- e sues which asset out in the appellants’ brief of argument are in the following terms:– 1. In view of the fundamental averments contained in the pleadings coupled with the evidence led showing f clearly that it was Ile-Oluji Cocoa Products Company Ltd that obtained the banking facilities from the respondent and that was/is indebted to the respondent, whether the action or the case of the respondent g was/is properly constituted in the absence of the said main party or debtor; AND/OR 2. Whether the lower court possessed the requisite juris- h diction to adjudicate on the case and give judgment as it did in the absence of the main party/debtor. 3. Having regard to the fact that the pleadings have been filed and exchanged and parties have extensively i joined issues in Suit No. LD/916/96 earlier filed by the respondent in respect of this same subject matter; whether the filing of this later action by the respondent does not constitute a deliberate abuse of the j processes of court.

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4. Whether this suit is not caught by the doctrine of es- a toppel per rem judicata. 5. Does the lower court have jurisdiction to give judgment against the appellants and contemporaneous by b ordering the sale of their land and properties. 6. Considering the fact that appellants only guaranteed for Ile-Oluji Cocoa Products Company Ltd a term loan of a sums of N6 million (if at all) coupled with c the fact that no notice for the payment or refund of the said sum of N6 million was served on either the appellants or company; whether or not the lower court was right in giving judgment against the appellants at d all and/or in excess of the actual sum guaranteed by them. 7. Whether the appellants were afforded a fair hearing by the lower court and/or whether the entire proceed- e ings before the lower court confirmed with the rules of natural justice. 8. Having regard to the pleadings and the legally admissible evidence before the lower court, whether it f (lower court) was right in refusing the appellants’ application for joinder of the principal party and subsequently giving judgment against them. For its part, the respondent had identified five issues for de- g termination, which as contained in its brief of argument, are as follows:– 1. In the circumstances of the case before the trial court and given the pleadings and the evidence adduced, h was the non-joinder of Ile-Oluji Cocoa Products Company Ltd fatal to the hearing of the claim before the court? 2. Whether in the circumstances of this case, the evi- i dence led before the trial court sustained the judgment given by the court? 3. Without prejudice to the preliminary objection herein and/or in the alternative to the said preliminary j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Majekodunmi v. African International Bank Ltd 21 a objection, did the proceedings before the trial court constitute an abuse of process of court and was the suit caught by the doctrine of estoppel per rem judicata? b 4. Whether considering the totality of the proceedings before the trial court, the appellants were afforded a fair hearing? 5. Whether a judgment creditor enforcing a court or- c dered power of sale contained in an equitable mortgage is required to file a motion for leave to attach the immovable property, subject-matter of the equitable mortgage, before executing the judgment of the court d and whether the failure to obtain the Governor’s consent vitiates the sale transaction? When this appeal came before us for argument on 2 March, 2004, Chief Wole Olanipekun, SAN, learned Counsel for the e appellants adopted his clients’ brief filed on 9 July, 2001 and the reply brief filed on 21 March, 2002 and urged that the appeal be allowed. Mr Busari, learned Counsel for the respondent adopted his client’s brief filed on 3 October, 2001; f he sought the leave of the court to withdraw the first preliminary objection filed on behalf of his client and consequently the argument thereon contained in paragraphs 3, 11– 14 of his client’s brief on page 4. He finally urged that the g consolidated appeal be dismissed. I have had a careful study of the issues raised for determination. Issues Nos. 2 and 8 are the same. Indeed on the appellants’ brief, issues 1 and 2 have been shown to be in the h alternative. Those issues are similar to issue No. 1 raised in the respondent’s brief. I shall in this judgment take the four together. Issues Nos. 3 and 4 on the appellants’ brief are similar to issue No. 3 on the respondent’s brief of argument. i I shall take them together. Issues Nos. 5 and 6 on the appellants’ brief shall thereafter be taken while I shall later take issue No. 7 on the appellants’ brief which is similar to issue No. 4 on the respondent’s brief. Finally, I shall address issue j No. 5 on the respondent’s (sic).

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Issues Nos. 1, 2 and 8 on the appellants’ brief of argument a and issue No. 1 on the respondent’s brief center on the non- joinder of Ile-Oluji Cocoa Products Company Ltd. While the appellants are contending that the non-joinder of the com- b pany that took the loan from the respondent vitiates the entire proceedings, the respondent argued to the contrary. The appellants argued in their brief that at the earliest opportunity when they conceived the idea that the company was a necessary party, they brought an application for joinder c which was refused by the court below. For reason of non- joinder of the company, they have argued that the proceedings in this case should be terminated, reliance being placed on cases in the like of Ezewuja v Mazeh 15 WACA 87; Olo- d riode v Oyebi (1984) SC 1 at 5; Ekpere and Others v Aforija and Others (1972) 1 All NLR 220 and Oghene Ltd v Amoruwa (1986) 3 NWLR (Part 32) 856. On the contrary, the respondent argued in its brief that the deposit by the ap- e pellant of their title deeds and execution of the memorandum of deposit in favour of the respondent show a clear intention by the appellants to guarantee the facility granted to Ile- Oluji Cocoa Products Company Ltd. Reliance was placed on f the following authorities: Okuneye v First Bank of Nig. Plc (1996) 6 NWLR (Part 457) 749; African Insurance Devel- opment Corp. v Nigerian LNG Ltd (2004) 4 NWLR (Part 653) 494 and Ayorinde v Oni (2000) FWLR (Part 3) 445; (2000) 2 SC 33 in support of their contentions that the non- g joinder of Ile-Oluji Cocoa Products Co. Ltd did not vitiate the proceedings.

I shall start the consideration of the aforementioned issues h that the only reason which makes it necessary to make a person a party to an action is so that he should be bound by the result of the action and the issue to be settled therefore must be that which cannot be effectually and completely settled i unless he is made a party. This is a question of jurisdiction, see Uku and Others v Okumagba and Others (1974) 3 SC 35 and Peenok Investment Ltd v Hotel Presidential Ltd (1982) 12 SC 1. The facts which were held to have been proved are that the defendants/appellants were guarantors to Ile-Oluji j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Majekodunmi v. African International Bank Ltd 23 a Cocoa Products Company Ltd and consequently, deposited as security, their title deeds in respect of their property at 36A and 36B Mainland Way, Dolphin Estate, Ikoyi. By this, b the defendants did no more than holding themselves out as undertaking to recompense the plaintiff/respondent should the principal debtor – Ile-Oluji Cocoa Products Company Ltd fail to pay its debt. By entering into the agreement, the appellants assumed a secondary liability to answer for the c debtor – Ile-Oluji Cocoa Products Company Ltd – who remains primarily liable. It thus follows that the liability of the principal debtor must first be clearly established after demand for payment has been made by the creditor and there d has been failure to pay. It is only then that the secondary debtors can be called to pay. The law relating to debts is that generally, it is the duty of the debtor (in this case the principal debtor) to pay his debt to the person or body from whom e he borrowed money. In other words, it is a general principle that money is paid to a creditor by the principal debtor; see National Bank (Nig) Ltd and Another v Shoyoye and An- other (1977) 5 SC 181. It follows from the above principle f that the sum owed by the debtor must first be established on demand, by evidence. It is when he failed to repay his just debt that recourse will be had to his guarantors. In Bradford Old Bank v Samuel Sutcliffe [1918] 2 KB 833 the defendant, Frank Sutcliffe and his brother both as Directors of Sutcliffe g & Co Ltd gave a joint and several guarantee as security for the company’s borrowings from its bankers. The defendant became insane and the bank received a formal notice of this fact in 1899. The bank demanded payment of the company’s h in debtedness in 1912 and enforced the debentures held as part security. The bank later commenced an action. The defendants contended that the action was statute-barred. The court of first instance dismissed their case. On appeal, i Pickford, LJ in reasoning in a way germane to the issue under discussion here said at pages 840:– “The only question, therefore is whether on the construction of the guarantee the parties meant the words ‘on demand’ to mean what j they say. I cannot doubt that they did.”

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The only witness called by the plaintiff/respondent, one a Daniel Usman in his testimony before the court below had said inter alia:– “The two defendants are direct of (sic) the Ile-Oluji Cocoa Prod- b ucts Company Ltd. The defendants in March 1992 applied for and were granted a loan facility to the tune of N6 million. . . . The 1st and 2nd defendants guaranteed the facilities by depositing c their title documents to their properties at Nos. 36A and 36B Mainland Way, Dolphin Estate . . . Despite repeated demands in writing, the defendants failed to pay up, hence the reason for this case presently in court. The Ile-Oluji d Cocoa Industries Ltd is in receivership and it is insolvent.” By the state of the pleadings and going by the evidence of the only witness called by plaintiff/respondent, Ile-Oluji Co- coa Products Company Ltd is a necessary party to this suit. e Having failed to join the company and since no satisfactory explanation could have been proffered for the non-joinder, the suit ought to have been struck-out or the entire proceedings set aside – see Onwunalu v Osademe (1971) 1 All NLR f 14 and Oloriode v Oyebi (1984) 5 SC 1. The non-joinder of the principal debtor – Ile-Oluji Cocoa Products Company Ltd by the plaintiff/respondent tantamount to the release of the principal debtor which on the authority of Perry v Na- g tional Bank of England Ltd [1910] Ch 464 translates to a discharge of the guarantors for the reason that all the proper parties were not before the court. The court below lacked the jurisdiction to entertain it. Issues Nos. 1, 2 and 8 on the appellants’ brief are consequently, resolved in their favour. h Also, issue No. 1 on the respondent’s brief is answered in the affirmative. On issues 3 and 4 on the appellants’ brief, it was argued i that the present action constitutes a serious abuse of court process in the sense that the plaintiffs/respondents had instituted a similar action in Suit No. LD/916/96. In a short reaction to this submission, the respondent in its brief argued that the suit leading to this appeal did not constitute an abuse j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Majekodunmi v. African International Bank Ltd 25 a of court process since it was voluntarily withdrawn by or at the instance of the respondent before the present suit was filed and it therefore did not constitute an abuse of court b process. The term “Abuse of Court Process” is incapable of precise definition. However it involves, inter alia, the improper use of the judicial process by a party to a suit to interfere with the due administration of justice or to the irritation and annoyance of his opponent or even to harass the cate- c gory of the incidents of abuse of court process is never closed. There litigation of an already decided issue is an abuse of court process even if the matter is not strictly res judicata – see Arubo v Aiyeleru (1993) 3 NWLR (Part 280) d 126 and CBN v Ahmed (2001) FWLR (Part 56) 670; (2001) 11 NWLR (Part 724) 369. Given the facts of this case, the suit leading to this appeal does not constitute an abuse of court process since it was e voluntarily withdrawn before the filing of the present suit. No decision on the substance of Suit No. LD/916/96 nor any issue therein was decided upon, the well-known principles of res judicata are therefore not applicable. The decision in f Hallaby v Hallaby 13 WACA 170 has no application to this case; issue Nos. 3 and 4 raised by the appellants are therefore resolved against the appellants while issue No. 3 as raised by the respondent is answered in the negative. g I pause to say that treatment of issues Nos. 1, 2 and 8 on the appellants’ brief of argument and issue No. 1 on the respondent’s brief has a far-reaching effect on the other issues so identified. Suffice to say that having regard to the conclu- h sion I had reached, the remaining issues on both briefs are no longer efficacious. But the law enjoins that all issues must be addressed. Let me however say that it is now well settled in the corpus of our laws that a mortgagor has two types of rights; one legal, and the other equitable. He can i exercise his legal right to redeem the property upon payment of the capital plus the interest to the mortgage on the contractual date. The other is equity of redemption which is primarily an equitable interest which rears its head as seen j when the date for repayment is past and no payment has

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA 26 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) been made by the mortgagee. A mortgagor finding himself a in that situation must initiate an action in the court of law for redemption. See The Federal Adm-General and 12 Others v Cardoso and Others (1973) 11 SC 61. Given the facts of this b case as I have reviewed same (supra), there are no powers of sale to exercise. Even if the proper parties had been before the court, from the facts of this case, as presented before the court, what was created by defendants/appellants depositing their title deeds with the respondent as guarantee for the re- c payment of the loan is an equitable mortgage. A charge was thus created on their properties. It is a well-established rule of equity that a deposit of a document of title without either writing or words of mouth will create a charge in the prop- d erty, subject- matter of the title deeds; see Kadiri v Olusoga (1956) 1 FSC 59. In the absence of consent that charge can only be displaced by actual payment of the debt. In Bank of New South Wales v O’Conner [1889] 14 AC 273, it was held e that a mortgagor approaching a court of equity to redeem must do equity by paying the principal, interest and costs before he can recover the property. In Ogundiani v Araba (1978) 6–7 SC 55, the Supreme Court on the same issue f handed down the illuminating dictum at pages 74–75 when it reasoned:– “Where the mortgage is by way of charge, and not by conveyance, the mortgagee takes no estate whatsoever in the land or in the property but he has generally only an equitable interest to be en- g forced by sale upon an order of court. The equitable charge simpliciter only gives a right to payment out of the property. The strict mode of enforcing the charge is however, by sale or appointment of a receiver under an order of court but never by foreclosure.” (Italics mine for emphasis.) h The judgment of the court below does not run foul of the decision in Ogundiani v Araba (supra). The indebtedness of the principal debtor must first be established before making an order for the sale of the properties subject-matter of equi- i table charges. The consent of the Governor is not required to effect a proper sale; as between the ultimate buyer and seller the agreement is only inchoate, see: Solanke v Abed and Others (1962) 1 All NLR 230 and Awojugbagbe Light j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Majekodunmi v. African International Bank Ltd 27 a Industries Ltd v Chinukwe (2004) All FWLR (Part 229) 943, (1993) 1 NWLR (Part 270) 485. Issues 5 and 6 on the appellant’s brief of argument and issue No 5 on the respondent’s b brief are non sequitur – the proper parties were never before the court below. Issue 7 on the appellants’ brief and issue No. 4 on the respondent’s brief pose the question whether the appellants were accorded fair hearing or not at the court below. While the appellants argued, in their brief, in the c negative, the respondent contended in its brief that the appellants were given all the opportunity they needed. Let it be said that the provisions of fair hearing as entrenched in the Constitution can never be compromised, strict compliance d with them are not negotiable. But a careful reading of the records of proceedings shows that between 26 March, 1999 to 18 February, 2000 when the hearing and the delivery of judgment, (sic) all the parties and indeed, the complainant e now (the appellants) were accorded all the opportunity they needed to establish their defence and even cross-examine the only witness called by the plaintiff/respondent, only they refused to take the advantage. The said issues Nos. 7 and 4 are f thus resolved against the appellants. All issues having been resolved, and with the most crucial issues having been resolved in favour of the appellants, the result of that exercise is that this appeal, by my judgment, is g meritorious. It is allowed. The judgment of the court below delivered on 18 February, 2000 is hereby set aside. As Ile- Oluji Cocoa Products Company Ltd has, by this judgment, to be a necessary party, it is hereby directed that the com- h pany be joined as a party to this case. The case is remitted to the Chief Judge of High Court of Lagos State for hearing de novo before another Judge. The appellants are entitled to the cost of this appeal which I assess at N7,500 in favour of the i appellants. ADAMU JCA: I agree.

MUHAMMAD JCA: I had the opportunity of reading in ad- j vance the lead judgment prepared by my learned brother,

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Aderemi, JCA I agree with his reasonings and conclusion a that this appeal has merit and same should succeed. I offer a few words entirely by way of emphasis otherwise the lead judgment has sufficiently addressed all the issues b raised by the appeal. The respondent in the instant appeal had sought to recover a loan it advanced to a third party, Ile-Oluji Cocoa Products Company Ltd. The appellants had guaranteed the loan owed c the respondent by the third party. They deposited title deeds in respect of Nos. 36A and 36B Mainland Way, Dolphin Es- tate, Ikoyi, Lagos. Respondent also sought to recover a 21% interest per annum on the borrowed sum from 30 December, d 1995 until the judgment debt was eventually paid. The sum of thirteen million, seven hundred and nineteen thousand, three hundred and forty-six Naira, forty-five Kobo was the amount of the loan enjoyed by the third party and guaran- e teed by the appellants. Before final judgment, appellants had applied firstly for the dismissal of the suit on the grounds that same was an abuse of the lower court’s process and that the suit was f caught by the doctrine of estoppel. Appellants had also prayed the court for an order for the joinder of the third party as a co-defendant. The two applications were refused and dismissed. The court finally obliged the respondent all g the reliefs it claimed and thus the instant appeal. The appeal by the relevant grounds of appeal also complains against the two interlocutory rulings of the trial court prior to the final judgment. h Appellants’ crucial issue pertains to the effect which the non-joinder of the third party, Ile-Oluji Cocoa Products Company Ltd, has on the decision of the court below. I agree with his Lordship that the third party in this matter i is a necessary party without whom the dispute cannot be effectually determined. There is the necessity to ascertain not only that the loan had been enjoyed by the third party, but that same has matured and remained unpaid despite repeated j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA Access Bank Plc v. Maryland Finance Co. and Con. Service 29 a demands by the respondent. Only the third party can effectually supply the vital information. Absence of such a party in a process for the resolution of a dispute to that end is fatal b to the decision arrived at. I rely on the decision on Uku and Others v Okumagba and Others (1974) 3 SC 35 and Na- tional Bank (Nig) Ltd and Another v Shoyoye and Another (1977) 5 SC 181 to restate the point too. Unless and until the c principal debtor, Ile-Oluji Cocoa Products Company Ltd has been found liable, it is impossible to hold the appellants liable by virtue of the guarantee they provided. In the absence of the principal debt or therefore, the court was not in the position to proceed and the action against the appellants d should have been struck out; see Oloriode v Oyebi (1984) 5 SC 1. A case matter proceeded upon in the absence of the necessary jurisdiction, no matter how brilliantly conducted, comes to naught. It is as if it had never been undertaken. e It is fruitless to consider the other issues raised in the briefs of the parties with the foregoing crucial determination. Further, adopting the more detailed reasons outlined in the lead judgment, I hereby allow this appeal. I adopt all the f consequential orders made in the lead judgment including the order of cost. Appeal allowed.

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a Access Bank Plc v Maryland Finance Company and Consultancy Service

COURT OF APPEAL, LAGOS DIVISION b ADAMU, ADEREMI, MUHAMMAD JJCA Date of Judgment: 20 MAY, 2004 Suit No.: CA/L/520/99

Banking – Banker and customer relationship – Cheque c wrongfully dishonoured – “Drawer’s attention required” – (DAR) or “Refer to Drawer” written on cheque – Meaning of – Whether defamatory – When libellous Banking – Banker and customer relationship – Nature d of – Breach of contract to honour cheque – Measure of damages Defamation – Libel – Words complained of – Need to read together and find whether words in question carry defama- e tory meaning – Relevant considerations

Facts The respondent who was the plaintiff before the court below f had caused a writ of summons to be issued out against the appellant who was the defendant in that court claiming the sum of N5,000,000 (five million Naira) being damages for libellous endorsement by the defendant/appellant on a cheque issued by the plaintiff/respondent on 25 November, g 1992 in favour of Emotype Ltd. Both the plaintiff/respondent and the defendant/appellant agreed that the appellant endorsed the letters “D.A.R.” on the plaintiff/respondent’s cheque for N2,000 drawn on the h defendant/appellant who are plaintiff’s bankers. Again, both of them are ad idem that the letters D.A.R. when translated mean “drawer’s attention required”. The defendant’s witness under cross-examination agreed i that the plaintiff had sufficient funds in the account. The learned trial Judge found for the plaintiff/respondent and awarded it N1,500,000 as damages plus N5,000 costs. The defendant/appellant appealed to the Court of Appeal. j

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Access Bank Plc v. Maryland Finance Co. and Con. Service 31 a Held – 1. In an action for defamation the published words complained of must be read together and the trial Judge b before whom the case is being tried must in the first instance, in compliance with the dictates of the law rule whether the words in question are capable of carrying a defamatory meaning at all. If the words are, c by the judgment of the trial Judge not found to be defamatory of the plaintiff, the trial Judge will pronounce his verdict and there and then terminate the proceedings. (Kolo v Midwest Newspaper Corp. (1977) 11 NSCC 11; Awoniyi v The Registered Trus- d tees of Amorc (1990) 6 NWLR (Part 154) 42; Katto v CBN (1999) 6 NWLR (Part 607) 390 referred to.) 2. To be defamatory, an imputation need have no actual e effect on a person’s reputation; the law looks only to its tendency. Indeed an imputation may be defamatory even though it does not tend to make others think worse of the person to whom it refers. If it would tend to cause others to shun or avoid him or to exclude him f in a position where others would not want to enter into business transaction with him; then the words cannot but be defamatory. g 3. If the dishonour of the cheque is on the face of materials presented before the court wrongful, the words, “drawer” attention required” or “refer to drawer” endorsed on the cheque will be libellous. If, however, the dishonour, based on the materials before the trial h Judge is not found to be wrongful, those words can never be adjudged to be libellous. 4. The words “Refer to Drawer” have been interpreted to amount to a statement by the bank that “We are not i paying, go back to the drawer and ask why” or else “Go back to the drawer and ask him to pay”. Neither of these statements paint a very good picture of a man of business. It does not inspire confidence in people j who do business with him. That is why the court

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regard it as actionable libel that attracts substantial a damages without proof of actual damage. This is especially so if the words have been used by the very person who unjustifiably placed his victim in a posi- b tion where the words could be used on him. (Dike v ACB (2000) 5 NWLR (Part 657) 441 followed.) 5. To return a cheque with the endorsement “drawer’s attention required”, in the present day, cannot but on c the face of it be defamatory. The truth of such an endorsement, which will find expression in non- availability of funds in the account of the customer, will be a defence to any action founded on it. In the case at hand, from available evidence given by both d sides, there were funds in the account of the respondent is at the time the cheque was presented. The endorsement therefore defamatory and its imputation is one to the respondent’s discredit. On the state of the e pleadings and evidence led, the plaintiff/respondent need not prove malice against the defendant/appellant. 6. The relationship between a banker and a customer is one of contract but a contract, with a difference. A f customer/banker relationship is that of principal and agent. Thus, a cheque drawn on the banker by its customer is an order of the principal, in this case the customer, to his agent, the banker to pay out the sum of g the cheque, to the payee endorsed on the cheque. 7. A refusal by a banker to pay a customer’s cheque when he holds in hand, by the reason of keeping the account of the customer, a sum of money equivalent h to that endorsed on the cheque amounts to a breach of contract for which the bank is liable in damages. (Ba- logun v NBN (1978) 3 SC 155; (1978) 11 NSCC 133 followed.) i 8. The measure of damages in an action against a banker for breach of contract to honour the cheque that has been drawn by a customer against his account would depend on the status in life of the customer. If the customer is not a trader and is unable to prove the actual j

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Access Bank Plc v. Maryland Finance Co. and Con. Service 33 a damage he has sustained as a result of the wrongful refusal by the banker to pay the cheque, all he is entitled to by way of an award is nominal damages b If the plaintiff is able to prove that by reason of the said breach he has suffered considerable damage to his reputation and generally to his business, the plaintiff will been titled to special damages. There is evi- c dence, unchallenged and uncontradicted that the plaintiff/respondent was a financial consultant serving both government and corporate bodies to expedite loans to build the Gateway Hotel, Otta. d 9. For a bank to refer back a cheque to its drawer when such a customer has money in its account for the payment of such a cheque is clearly negligent and wrongful. (Dike v ACB Ltd (2000) 5 NWLR (Part 657) 441 at 458 referred to.) e Appeal dismissed.

Cases referred to in the judgment f Nigerian Awoniyi v The Registered Trustees of Amorc (1990) 6 NWLR (Pt 154) 42 Balogun v NBN (1978) 3 SC 155; (1978) 11 NSCC 133 g Dike v African Continental Bank Ltd (2000) 5 NWLR (Part 657) 441 Ejabulor v Osja (1990) 5 NWLR (Part 148) 1 His Highness Uyo 1 v Egware (1974) 1 All NLR (Part 1) 293 h Katto v CBN (1999) 6 NWLR (Part 607) 390 Kolo v Midwest Newspaper Corp (1977) 11 NSCC 11 Newbreed Org Ltd v Erhomosele (2002) 13 NWLR (Part i 784) 251 Offobache v Ogoja Local Govt (2001) 16 NWLR (Part 739) 458 Oyewole v Standard Bank of West Africa (1968) 2 All NLR 32 j Titilayo v Olupo (1991) 7 NWLR (Part 205) 519

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34 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I)

Union Bank of Nigeria, Plc v Okubama (2000) 14 NWLR a (Part 688) 570 West Africa Chemical Co Ltd v Caroline Poultry Farm Ltd (2002) 2 NWLR (Part 644) 197 b Foreign Flack v London and South Western Bank Ltd (1915) 31 TLR 334 Jayson v Midland Bank Ltd (1968) I Lioyd’s Rep 409 c Plunkett v Barclays Bank Ltd [1936] 1 All ER 635 Pyke v Hibernian Bank Ltd (1950) IR 195 Watkin v Hall [1868] LR 3 QB 399 d Youssaupoffi v Metro-Goldwyn-Mayer (1934) 50 TLR 587 Nigerian statute referred to in the judgment Bills of Exchange Act Cap 35 Laws of the Federation of Ni- geria, 1990, section 3 e Books referred to in the judgment Halsbury’s Laws of England Volume 2 (3ed) Gatley Libel and Slander (8ed), Chapter 21 section 1 (Gen- f eral Principles), paragraph 921 at page 959, paragraph 959 at page 415 and section 12 from paragraph 963 Counsel g For the appellant: Fadahunsi For the respondent: Ajayi (with him Ayeki) Judgment h ADEREMI JCA: (Delivering the lead judgment) The appeal here is against the judgment of the High Court of Lagos State sitting in Lagos delivered on 16 July, 1999. Briefly, the facts of the case are as follows the respondent i who was the plaintiff before the court below had caused a writ of summons to be issued out against the appellant who was the defendant in that court claiming the sum of N5,000,000 (five million Naira) being damages for libellous endorsement by the defendant/appellant on a cheque issued j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Access Bank Plc v. Maryland Finance Co. and Con. Service 35 a by the plaintiff/respondent on 25 November, 1992 in favour of Emotype Ltd. Pleadings in terms of amended statement of claim (with leave), statement of defence and amended reply b (with the leave of court) were filed and exchanged between the parties. The case thereafter proceeded to trial at the end of which written addresses were filed in the court upon the order of the trial Judge and exchanged between the parties. In a considered judgment delivered on 16 July, 1999, the trial c Judge found for the plaintiff/respondent and awarded it N1,500,000 (one million, five hundred thousand Naira) damages plus N5,000 costs all against the defendant/respondent. Being dissatisfied with the said judgment, the defendant/ d appellant appealed against same upon a notice of appeal dated 21 July, 1999, which with the leave of court, was later amended. The amended notice of appeal, which was filed on 12 June, 2002, comes with four grounds of appeal. Distilled e from the aforementioned grounds of appeal, for determination by the court are four issues. As set out in the appellant’s brief of argument, the issues are in the following terms:– (1) From the evidence and in particular, Exhibit “B” f (cheque for N2,000). Whether evidence adduced as to the date the defamatory word DAR was written, is at variance with pleadings. (2) Whether evidence of personal malice by PW1 who is g not a party to the suit could be substituted for malice against the plaintiff and whether evidence of malice was proved by the plaintiff. (3) Whether the Lagos High Court (Civil Procedure) h Rules, 1994 provide for a defendant to serve a reply to the plaintiff’s reply to a Defence. (4) Whether the sum of N1,500,000.00 awarded as damages is excessive i For their part, the respondent raised two issues for determination as contained in its brief of argument, they are as follows:– (1) Whether the learned trial Judge was right in holding that the defendant defamed the plaintiff and that the j defamatory substance was actuated by malice.

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(2) Whether the amount of damages awarded by the a learned trial Judge was excessive in the circumstance. When this appeal came before us on 1 March, 2004, Mr Fadahunsi, learned Counsel for the appellant adopted his b client’s brief of argument filed on 6 December, 2001. On issue No. 2 formulated on behalf of his client, he cited Gat- ley on Libel and Slander (8ed), Chapter 2l, section 1, Gen- eral Principles, paragraph 921 at page 959, paragraph 959 at c page 415 and section 12 from paragraph 963, section 3 Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 and Union Bank of Nigeria Plc v Okubama (2000) 14 NWLR (Part 688) 570 at 574. He urged that the appeal be d allowed. Chief Ajayi, SAN learned Counsel for the respondent adopted his client’s brief of argument filed on 1 No- vember, 2002, he submitted that none of the issues raised by the appellant challenged the decision of the trial Judge that the endorsement was libellous; he urged that the appeal be e dismissed. I have had a careful examination of the issues raised by both sides. I am clear in my mind that those issues raised by the respondent are very much germane to this appeal. In the consideration of this appeal I shall be guided f mainly by the said two issues of course, without prejudice to consideration being given to the four issues of the appellant. Issues Nos. 1 and 2 on the appellant’s brief are both materially similar to issue No. 1 on the respondent’s brief: I shall g take both together. Issue No. 4 on the appellant’s brief is also materially similar to issue No. 2 on the respondent’s brief. I shall take both together. I have read very carefully issue No. 3 raised by the appellant. I cannot see any relationship between it and any of the grounds of appeal on the h amended notice of appeal. In case I am held to be wrong on this view, I shall in this judgment, treat that issue last. On issue No. 1 the appellant has contended in its brief that i the evidence of the date of the return of the cheque, which is the foundation of the action, and the date pleaded are at variance, this is fatal to the suit, it was further argued. The denial of the date the said defamatory words were written resulted in an issue being joined and the evidence, which is j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Access Bank Plc v. Maryland Finance Co. and Con. Service 37 a at variance with the pleadings, as in the instant case, goes to no issue; reliance was placed on the decisions in West Africa Chemical Co. Ltd v Caroline Poultry Farm Ltd (2002) 2 b NWLR (Part 644) 495. There was no evidence of malice adduced by the plaintiff/respondent as affecting him personally. The isolated consideration of Exhibit “A” – the cheque – to the exclusion of Exhibit “B” – the statement of account is wrong in law. It was further contended while further submit- c ting that all the paragraphs of the pleadings must be considered and not treated in isolation; support was found for this submission in the decision in Titilayo v Olupo (1991) 7 NWLR (Part 205) 519. The respondent, in rebuttal of the d standpoint of the appellant submitted that the plea of the plaintiff/respondent as to malice was not rebutted by the defendant/appellant in its pleading neither was there evidence to contradict it; the allegation of malice, it was further submit- e ted, was admitted by the defendant/appellant. Finally, on this issue, the respondent submitted that the words “DAR” were libellous of the plaintiff/respondent in the way of its business and the judgment of the court below should be affirmed. f I shall begin the treatment of issues Nos. 1 and 2 on the appellant’s brief of argument together with issue No. 1 on the respondent’s brief saying that in an action for defamation the published words complained of must be read together g and the trial Judge before whom the case is being tried must in the first instance, in compliance with the dictates of the law rule whether the words in question are capable of carrying a defamatory meaning at all. If the words are, by the h judgment of the trial Judge not found to be defamatory of the plaintiff, the trial Judge will pronounce his verdict and there and then terminate the proceedings see Kolo v Midwest Newspaper Corp (1977) 11 NSCC 11; Awoniyi v The Regis- tered Trustees of Amorc (1990) 6 NWLR (Part 154) 42 and i Katto v CBN (1999) 6 NWLR (Part 607) 390. An examination of the pleadings exchanged between the parties leaves me in no doubt that both the plaintiff/respondent and the defendant/appellant are one that the appellant endorsed the j letters “DAR” on the plaintiff/respondent’s cheque for

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N2,000 drawn on the defendant/appellant who are plaintiff’s a bankers. Again, both of them are ad idem that the letters “DAR” when translated means “drawer’s attention required”. It is my view that the argument of the appellant that b because there is a conflict in the evidence as to the date when the cheque in question was returned and the date pleaded, and therefore that might be fatal to the case of the plaintiff/appellant, is not relevant to the consideration of the c main issue in this appeal. In fact, it over simplified the crucial issue in contention. It is true that the first PW – Michael Adewale Kazeem said he paid on behalf of the plaintiff/respondent to a third party – Emotype Ltd cheque for N2,000 on 25 November, 1992 but he was surprised that the d cheque was returned with a letter on 15/12/92; both the letter dated 15/12/92 and the cheque were tendered as Exhibit “A” and “A2” respectively. DW1 – Adegboyega Onyekanmi, a Sub-Manager Operations of the appellant said and I quote:– e “On 4/12/92 the balance on the account – N1, 216.02 on 7/12/92 – there was N344,877.53 on 4/12/92 – balance was 0783.00 credit . . . when we received N2,000.00 cheque on 4/12/92 in the account (sic) was in debt sum of N1,216.02. Since the balance cannot ab- f solve the N2,000.00 the cheque for N2,000.00 was returned back to the clearing house . . . On that same 7/12/92 in the afternoon another cheque for N344,103.55 was credited to the plaintiff’s account in the afternoon. On 8/12/92, there was N23,862.53 in the plaintiff’s account g on the same 8/12/92 there was another cheque for N3,000.00: payable from the plaintiff and this was paid because there was enough fund in the account then . . . Exhibit A is the plaintiff’s cheque drawn on the defendant. It is marked “DAR” – meaning “drawers attention required.” h Under cross-examination, the witness said:– “I know (sic) agree that exhibit A bore this stamp of our head office on 8/12/92 and not on 7/12/92, N344,103.52 was paid into the account of the plaintiff. N2,000.00 was deducted leaving i N342,887.55 . . . there was sufficient fund in the account on 8/12/92.” Going by the viva voce evidence of both parties and relating same to the pleadings, I cannot see how it can be properly j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Access Bank Plc v. Maryland Finance Co. and Con. Service 39 a said that the evidence of the plaintiff is at variance with its pleadings in any respect. As I have said, the main issue is whether the endorsement “DAR” – which they both agree to b mean drawer’s attention required – is libellous or not. This endorsement on cheque has been a subject matter of judicial interpretations over a long time. I shall now go in to the judicial authorities to find out the meaning it has been subjected to both in foreign courts and in our own courts. c For many years the banker could argue that his most common answer on dishonoured cheque “refer to drawer” or “drawer’s attention required” both of which materially mean the same thing, had no necessarily defamatory meaning. In d Flack v London and South Western Bank Ltd (1915) 31 TLR 334, the plaintiff’s cheque was returned unpaid during the moratorium at the outbreak of the First World War. The bank succeeded in their first defence to her action against e them, that they were preceded by the terms of the moratorium: they also succeeded in their contention that the words “refer to drawer” were not libellous. Sutton, J saying on this point that in his opinion, the words in their ordinary meaning amounted to a statement by the bank, “we are not paying; go f back to the drawer and ask why”, or else, “go back to the drawer and ask him to pay”. Again when occasion arose in England to construe these words in Plunkett and Another v Barclays Bank Ltd [1936] 1 All ER 635, du Pareq, J said at g pages 659–660 and quote him (sic):– “I have only to add that in the circumstances of this case the words ‘refer to drawer’ were, in my opinion, no libel. I respectfully adopt the language of Scrutton as he then was in Flaca v London and h South-Western Bank Ltd at page 336. There the learned Judge said:– ‘The words “refer to drawer” in my opinion, in then ordinary meaning, amounted to a statement by the bank, “we are not paying; go back to the drawer and ask why” or else “go back to the drawer and ask him to pay’.” i In the view he took of the case the bank were justified in not paying and he did not think it was possible to extract a libellous meaning from what had been said by the bank. However in 1950, the Irish Supreme Court changed the j tenor of the construction placed by court on these words

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA 40 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) when in Pyke v Hibernian Bank Ltd (1950) IR 195, a case in a which three cheques were wrongfully dishonoured with the answer “refer to drawer” two of the cheques bearing also the word “re-present”. A jury awarded £1 damages for breach of b contract and £400 for libel. Suffice it to say that the Su- preme Court of Ireland affirmed the verdict. It seems to me that if the dishonour of the cheque is on the face of materials presented before the court wrongful, the words, “drawer’s attention required” or “refer to drawer” endorsed on the ma- c terials before the trial Judge is not found to be wrongful, those words can never be adjudged to be libellous. This was the view expressed in Jayson v Midland Bank Ltd (1968) 1 Lloyd’s Rep 409 where the plaintiff claimed that the dishon- d our was wrongful and that “refer to drawer” was libellous. The jury found that the words were (in the words of the question the Judge put to them) likely to lower the plaintiff’s reputation in the minds of right thinking people. However, e this did not avail the plaintiff, because the jury found also that the dishonour was justified. The Court of Appeal (Eng- land) dismissed the plaintiff’s appeal on the point. In the construction of the aforesaid words, our courts are not left f out. In Dike v African Continental Bank Ltd (2000) 5 NWLR (Part 657) 441, this Court (Port-Harcourt Division) per the judgment of Ikongbeh, JCA said at page 458:– “The words ‘Refer to Drawer’ have been interpreted to amount to a statement by the bank that ‘We are not paying, go back to g the drawer and ask why’ or else ‘Go back to the drawer and ask him to pay’. Neither of these statements paint a very good picture of a man of business. It does not inspire confidence in people who do business with him. That is why the court regard it h as actionable libel that attracts substantial damages without proof of actual damage . . . This is especially so if the words have been used by the very person who unjustifiably placed his victim in a position where the words could be used on him.” i In modern days when good reputation is a scarce commodity among mankind, possession of same by anybody is an invaluable asset, which must be jealously guarded in the com- ity of good and virtuous people. I think that is why the court j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Access Bank Plc v. Maryland Finance Co. and Con. Service 41 a over the years have moved from liberal interpretation of those words to a seemingly strict and hard construction. The tendency for a man to do evil is more prevalent nowadays b unlike in the good old days. Let it be said that to be defamatory an imputation need have no actual effect on a person’s reputation; the law looks only to its tendency. Indeed an imputation may be defamatory even though it does not tend to make others think worse of the person to whom it refers. If it c would tend to cause others to shun or avoid him or to exclude him in a position where others would not want to enter into business transaction with him; then the words cannot but be defamatory see Youssaupoffi v Metro-Goldwyn- d Mayer (1934) 50 TLR 587 and Watkin v Hall (1868) LR 3 QB 399. To return a cheque with the endorsement “drawer’s attention required”, in the present day, cannot but on the face of it be defamatory. The truth of such an endorsement, e which will find expression in non-availability of funds in the account of the customer, will be a defence to any action founded on it. In the case at hand, from available evidence given by both sides, there were funds in the account of the f respondent at the time the cheque was presented. That endorsement is therefore defamatory and its imputation is one to the respondent’s discredit. On the state of the pleadings and evidence led, the plaintiff/respondent need not prove malice against the defendant/appellant. Issues Nos. 1 and 2 on the g appellant’s brief are therefore resolved against them. I answer issue No. 1 on the respondent’s brief in the affirmative. I shall now take on issue 4 on the appellant’s brief both of h which pose the question as to whether the sum of N1,500,000 (one million, five hundred thousand Naira) awarded as damages is excessive. The appellant has contended in its brief of argument that the amount awarded was excessive in the circumstances of this case; support for this submission was i found in the decision in Offobache v Ogoja Local Govt (2001) 16 NWLR (Part 739) 458; (2001) 7 SCNJ 468. On the other hand, the respondent having set out the principles the court should consider in determining whether an award j is justified or not, submitted that having regard to the station

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA 42 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) in life of the respondent, the nature of the libel and the mode a of the publication and of course the fact that the appellant has not shown any sign of remorse, the award is not excessive: indeed it was their submission that the award of b N1,500,000 is inadequate: reliance was placed on the decision in Ejabulor v Osja (1990) 5 NWLR (Part 148) 1. As I have said it is the assessment of the damages awarded that this court is now invited to examine. The principles are now c well-settled that appellate courts are always very reluctant to attempt to re-assess the amount of damages which the trial Judge has given; if however an appellate court must embark on that exercise it must be seen clearly to be that the trial Judge, in the course of assessing the damages, has proceeded d upon wrong principles of law or that the award was clearly an erroneous estimate for the reason that the amount was manifestly too large or too small – see His Highness Uyo I v Egware (1974) 1 All NLR (Part 1) 293 and Newbreed Org e Ltd v Erhomosele (2002) 13 NWLR (Part 784) 251. I must however not forget that it is the damages recoverable for dishonour of a cheque that is in question. However, generally, the law is that libel is actionable and proof of damages f is unnecessary. The reason for the law on these points as it stands is not far-fetched. Libel is a civil wrong and the law implies general damages. In other words, once libel is proved there is a presumption of damages. The primary aim g of damages is to place the plaintiff in as good a position as far as money can do it as if the matter complained of had not occurred. The relationship between a banker and a customer is one of contract but a contract with a difference. In a cus- h tomer/banker the relationship that is constituted is that of the principal and agent. Thus, a cheque drawn on the banker by its customer is an order of the principal in this case the customer, to his agent, the banker to pay out the sum of the cheque, to the payee endorsed on the cheque. For the ump- i teenth time, I wish to say that the law is well-settled that a refusal by a banker to pay a customer’s cheque when he holds in hand, by the reason of keeping the account of the customer, a sum of money equivalent to that endorsed on the j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Aderemi JCA Access Bank Plc v. Maryland Finance Co. and Con. Service 43 a cheque amounts to a breach of contract for which the bank is liable in damages see Balogun v NBN (1978) 3 SC 155; (1978) 11 NSCC 133. The measure of damages in an action b against a banker for breach of contract to honour the cheque that has been drawn by a customer against his account would depend on the status in life of the customer. If the customer is not a trader and is unable to prove the actual damage he has sustained as a result of the wrongful refusal c by the banker to pay the cheque all he is entitled to by way of an award is nominal damages see Oyewole v Standard Bank of West Africa (1968) 2 All NLR 32. It is however necessary for me to say also that in law, that if the plaintiff d is able to prove that by the reason of the said breach he has suffered considerable damage to his reputation and generally to his business, the plaintiff will been titled to special damages. There is evidence, unchallenged and uncontradicted e that the plaintiff/respondent was a financial consultant serving both government and corporate bodies to expedite loans to build the Gateway Hotel, Otta. In paragraph 7 of the amended statement of claim, the plaintiff/respondent averred:– f “The plaintiff has, in consequence been seriously injured in its character, credit and reputation and in the way of its said business and has been brought into public scandal, odium and contempt and the plaintiff claims the sum of N10,000,000.00 (Ten Million g Naira) being damages for libellous endorsement by the defendant on a cheque issued by the plaintiff on the 25th of November, 1992 on favour of Emtoype Ltd.” I think it must be pointed out that a judex in making his h award of damages should not be carried away; in fact must now allow his mind to be affected by any high-sounding figure of money claimed. He must look at the whole case dispassionately and let his award be a proper and sober assessment of the entire case. Undoubtedly, the amount of i N1,500,000 (one million, five hundred thousand Naira) awarded is very much on the high side. It is excessive. Hav- ing so found, it is my view that the justice of this case will be met by an award of the sum of N750,000 (seven hundred j and fifty thousand Naira). Accordingly, the award of

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N1,500,000 by the court below is hereby set aside in its a place I award N750,000. I have read issue No. 3 raised by the appellant: relating same to the grounds of appeal on the amended notice of ap- b peal, it does not flow from it at all. It is non sequitur. It is thus struck out. In the final analysis subject to what I have said as to the damages awarded by the court below which I have reduced c to N750,000. The respondent is entitled to the cost of this appeal which I assess and fix in their favour at N5,000.

ADAMU JCA: I was privileged to have read before now the d lead judgment of my learned brother Aderemi, JCA just delivered. I agree with his reason and the conclusion reached that the appeal is unmeritorious and should be dismissed. I accordingly hereby dismiss it and abide by the consequential orders made by my learned brother including the order on e costs.

MUHAMMED JCA: I read before now the judgment of my learned brother Aderemi, JCA and agree entirely with him f that the appeal is without merit. I adopt the reasonings to dismiss the appeal. For a bank to refer back a cheque to its drawer when such a customer has money in its account for the payment of such g a cheque is clearly negligent and wrongful. See Dike v African Continental Bank Ltd (2000) 5 NWLR (Part 657) 441 at 458. The second issue raised in the appeal pertains to the question of damages awarded by the court below. The amount is h excessive. An appellate court on that basis alone can set-in (sic) and re-assess the award so made. My brother has made an award, which in the circumstance I agree is reasonable. For the foregoing and the fuller reasons advanced in the i lead judgment, I hereby affirm the decision subject to the review of the damages awarded by the court below. I dismiss the appeal and abide by the order of cost. Appeal dismissed. j

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First Bank of Nigeria Ltd v. Mobe Farms Ltd 45 a First Bank of Nigeria Ltd and another v Moba Farms Ltd and others b COURT OF APPEAL, BENIN DIVISION MUNTAKA-COOMASSIE, AKAAHS, AUGIE JJCA Date of Judgment: 7 JUNE, 2004 Suit No.: CA/B/46/95 c Agricultural credit guarantee scheme fund – Loan granted under – Application of loan to purposes not approved – Ef- fect – Section 13 Agricultural Credit Guarantee Scheme Fund Act, 1977 d Banking – Accounts – Accounts in debit or cCredit – What determines? – Whether use of red ink in entry material Banking – Accounts – Merger of two or more accounts of customer – Right of bank – When exercisable e Banking – Accounts – Merger of two or more accounts of customer by bank – Debiting of any of the account by bank – Whether consent of customer necessary Banking – Banker and customer relationship – Nature of – f Duty of bank to honour cheque of customer – Limitation of – Effect of failure to honour cheque Banking – Loans granted under the Agricultural Credit Guarantee Scheme Fund Act – Application of loan to pur- g poses not approved – Effect – Section 13 Agricultural Guar- antee Scheme Fund Act, 1977 Banking – Mortgage documents – Terms therein – Construc- tion of – Applicable principles h Documents – Construction of – Principles applicable Facts The first plaintiff is a limited liability company, which was i incorporated under the Companies Decree, 1968 and is a customer of the first defendant, bank. The second plaintiff is its Managing Director. In 1979 the first plaintiff in its effort to establish a poultry j farm applied for a loan facility of N930,000. The application

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46 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) was processed and N750,000 was approved by the bank. a Later in 1981, the plaintiffs asked for an additional N100,000 which was granted thereby bringing the total loan approved to N850,000. The loan facility was secured by a b mortgage debenture dated 22 July, 1981 which was for N400,000 initially but later up-stamped to cover borrowing for N825,000. There was also a deed of legal mortgage for N400,000. The Central Bank guaranteed the loan by issuing c a Guarantee Certificate No. BD/FBN/80/34 for N750,000 (Exhibit “B”). The guarantee was later enhanced to cover borrowing of N 850,000 and N1,000,000 by Exhibits “C” and “DD”. The second plaintiff and two other people namely Lawrence E Oraka and Peter Okoh also executed a d guarantee (Exhibit “MM”) to secure the borrowing of N850,000 by the 1st plaintiff for the poultry farm project. The facility was fully utilised. The plaintiffs made the first repayment after which an epidemic swept through the farm, e which led to the decimation of the pullets. This was the state of affairs when the plaintiffs approached the defendants for a working capital of N150,000 which was approved in 1984 after the plaintiffs had submitted an acceptable cash flow f projection to the defendants and a sanction ticket was issued by the Head Office of the bank to the branch office in Warri. On or about 16 April, 1984 the second plaintiff issued a cheque for N20,400 for the purchase of maize but it was re- g turned unpaid. Three other cheques for various amounts were issued and were returned unpaid. As a result of the defendants’ refusal to make available money by honouring the cheques, the plaintiff could not buy the maize and since there was no food for the birds, they started to die of starva- h tion. When the second plaintiff made enquiries about the non-honouring of the cheques, the second defendant informed him that the loan facilities extended to them were fully utilised and were therefore exhausted. He then chal- i lenged the second defendant as to the truth of the assertion. He later realised that the sum of N67,111.76 had been transferred from the current account into the new working capital loan account No. 3 hence there were not sufficient funds to j

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First Bank of Nigeria Ltd v. Moba Farms Ltd 47 a the amount in the dishonoured cheques. This action taken by the defendants adversely affected the plaintiffs business to an extent that when the defendants agreed later to reverse b the debit of N67,111.76 to the current account the farm was already on its way to total collapse. Despite the collapse of the farm, the defendants wrote threatening to appoint a Re- ceiver/Manager to sell the property comprised in the mortgage debenture. This prompted the plaintiffs to take a pre- c emptive measure to forestall the defendants from carrying out their threat and also claiming damages for the losses they suffered as a result of the unauthorised transfer of the N67,111.76k from the 1st plaintiffs current account. This led d the first defendant to counter-claim for the debit balance in the plaintiffs’ loan account. The plaintiffs/respondents claimed against the defendant/ appellants jointly and severally an order compelling compli- e ance with terms of agreement under the Agricultural Credit Guarantee Scheme Fund; an order of mandatory injunction directing the first and second defendants to revert the unauthorized and/or wrongful debiting of the first plaintiff’s ac- f count; an order commanding the return of certain documents of title/securities; order of injunction restraining the sale of second plaintiff’s mortgaged properties; and an order cancel- ling and/or setting aside the debenture and mortgage agree- g ment entered into by the plaintiffs and the first and second defendants. The first and second defendants counter-claimed against the plaintiffs for payment of balance of monies outstanding in h various loans and overdrafts accounts and compound interest. After due trial, the learned trial Judge entered judgments for the plaintiffs in the total sum of N5,722,458.80, with interest at the rate of 20% from the date of judgment until the i judgment debt is paid with costs which he assessed at N2,000. In addition he ordered for the release of the deeds of lease dated 9/2/78 and registered as No. 37 at page 37 Vol- ume 517 and the one dated 27/6/67 and registered as No. 52 j at page 52, Volume 982, property of the second plaintiff’s

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48 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) uncle as well as the second plaintiff’s share certificate val- a ued at N2,645.95 back to the plaintiffs. The suit against the third defendant was dismissed; so also the counter-claim. Both parties were aggrieved by the decision. The first and b second defendants appealed against the judgment while the plaintiffs cross appealed.

Held – c 1. It is a general rule that where the parties have embodied the terms of their contract in a written document, extrinsic evidence is not admissible to add to or vary, subtract from or contradict the terms of the written agreement. d The loan facility totalling N850,000 was secured by the deed of legal mortgage and the mortgage debenture which were admitted in evidence as Exhibits “A” and “LL” respectively. Clause 24 of Exhibit “A” is word- e for-word as Clause 14 of Exhibit “LL” which defines an account and under these provisions, the bank (first appellant) is authorised at its discretion to combine any two or more accounts without giving notice to the bor- f rower (first respondent). 2. It is expressly provided in Exhibits “A” and “LL” that the appellants could exercise their discretion to combine any two or more of the first respondent’s accounts with- g out seeking their consent or even giving notice to them before proceeding to merge the accounts. The first and second respondents were fully aware of this; hence the request on the appellants to waive the exercise of the h power when they applied for the additional facilities of N150,000.00 in Exhibit “L”. 3. Where the words of any instrument are free from ambiguity in themselves, and where the circumstances of the i case have not created any doubt or difficulty as to the proper appellation (sic) of the words to claimants under the instrument or the subject matter to which the instrument relates, such an instrument is to be construed j

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First Bank of Nigeria Ltd v. Moba Farms Ltd 49 a according to its strict, plain and common meaning of the words themselves. In the construction of documents therefore, the words b therein should first be given their simple and ordinary meaning and under no circumstance may new or additional words be imported into the text unless the documents would be by the absence of that which is imported c impossible to understand. 4. Once two accounts have been merged by a bank upon the consent of the customer, it does not require the consent of the customer before any of the accounts is d debited because it is an incidence of the merger. 5. A customer who agrees that any of its accounts may be combined or merged by a bank, at its discretion without prior notice to him cannot thereafter complain about the e conduct of the banker which satisfies the customer’s previous overdraft from the proceeds of a new loan it has just given to the customer. f 6. A banker is not obliged to let his customer overdraw from his account unless he has agreed to do so. 7. The relationship in law between a bank and its customer has been that of a debtor and creditor. When a bank g credits the current account of its customer with a certain sum the bank becomes a debtor to the customer in that sum and conversely when a bank debits the current account of its customer with a certain sum, the customer h becomes a debtor to the bank in that sum. 8. A bank is bound to honour a cheque issued by its customer if the customer has enough funds to satisfy the amount payable on the cheque. Refusal to honour the i cheque amounts to a breach of contract and would render the banker liable in damages. 9. Unless precluded by agreement express or implied from the course of business, the banker is entitled to combine j different accounts kept by the customer in his own right,

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even though at different branches of the same bank, and a to treat the balance, if any, as the only amount really standing to his credit. So unless the account is a trust account, any two ac- b counts opened in the name of the same person can be combined or merged together, unless there is an agreement to the contrary. c 10. What determines whether an account is in credit is not the colour of the ink used. The usual banking practice to indicate the state of the accounts is to write “CR” or “DR” after the figures in the account. If the letters CR are used after the figure, it means the account is in credit d but if the letters “DR” follow the figures, it means the account has been overdrawn and therefore in debit.

11. In actions for the recovery of a loan, time starts running e when a demand for payment is made in writing. 12. The agreement allowing for merger and consequent debiting of the accounts of the plaintiffs/respondents, was not only illegal but unenforceable. This is because such f agreement is clearly forbidden by section 13 of the Agri- cultural Guarantee Credit Scheme Fund Act, 1977. The guarantee given by the Central Bank to secure the loan is therefore not enforceable against the Central Bank as it g was not party to the agreement and more so since it is against public policy. Although the loan had been given in instalments, the merger and debiting of the cross appellants’ accounts has invariably tainted the entire loan h agreement as the contract is indivisible. 13. The resultant effect is that neither the appellants in the main appeal nor the cross-appellants in the cross-appeal can sue on the contract because both parties are equally i guilty. The order which the learned trial Judge should have made, is to dismiss both the main claim as well as the counter claim. Appeal allowed. j

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First Bank of Nigeria Ltd v. Moba Farms Ltd 51 a Cases referred to in the judgment Nigerian British & French Bank Ltd v Opaleye (1962) 1 SCNLR 60 b Ekwunife v Wayne (WA) Ltd (1989) 5 NWLR (Part 122) 422 FBN Ltd v Pan Bisbilder (Nig) Ltd (1990) 2 NWLR (Part 134) 647 c Nwaigwe v Transproject (Nig) Ltd (2000) 8 NWLR (Part 669) 364 Ogwuru v Co-Operative Bank of Eastern Nigeria (1994) 5 NWLR (Part 365) 685 d Okongwu v NNPC (1989) 4 NWLR (Part 115) 296 Olaloye v Balogun (1990) 5 NWLR (Part 148) 24 Olanlege v Afro Continental (Nig) Ltd (1998) 7 NWLR (Part e 458) 29 Omega Bank (Nig) Plc v OBC Ltd (2002) 16 NWLR (Part 794) 483 Solicitor General, Western Nigeria v Adebonojo (1971) 1 f All NLR 178 UBA Ltd v Abimbolu and Co (1995) 9 NWLR (Part 419) 371 UBN Ltd v Ozigi (1994) 3 NWLR (Part 333) 385 g UBN Ltd v Sax (Nig) Ltd (1994) 8 NWLR (Part 361) 150 Yesufu v ACB (1981) 1 SC 74 Foreign h Garnett v M’kewan (1872) LR 8 Ex 10

Nigerian statute referred to in the judgment Agricultural Guarantee Credit Scheme Fund Act No. 20 of i 1977, section 13

Nigerian rules of court referred to in the judgment High Court of Bendel State (Civil Procedure) Rules, Order j 40 rule 7

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Book referred to in the judgment a Halsbury’s Laws of England Volume 2, (3ed) paragraph 322 at page 172 b Counsel For the appellants: Akpan For the first and second respondents: Arhiogbere c For the third respondent: Uroweyino

Judgment AKAAHS JCA: (Delivering the lead judgment) In paragraph d 30 of the third amended statement of claim, the plaintiffs claimed against the first, second and third defendants as follows:– “(a) An order compelling the 3rd defendant to order the 1st and e 2nd defendants to comply and/or abide by the terms of agreement under the Agricultural Credit Guarantee Scheme Fund Decree No. 20 of 1977 as the sole and exclusive con- trolling authority. (b) An order of mandatory injunction directing the 1st and 2nd f defendants to revert the unauthorised and/or wrongful debiting of the 1st plaintiff’s account being the immediate cause of action herein. (c) An order commanding the 1st and 2nd defendants to return g to the 2nd plaintiff forthwith the documents of title/securities to wit: (i) Deed of Lease dated 9th February, 1978 and registered as No. 37 at Page 37 in Volume 517 property of the 2nd plaintiff. h (ii) Deed of Lease dated 27th June, 1967 and registered as No. 52 at Page 52 in Volume 982 property of 2nd plaintiff’s uncle. (iii) The 2nd plaintiff’s share certificate valued at i N2,645.95. (d) An order of injunction restraining the 1st and 2nd defendants, their servants or agents from appointing a receiver/ manager to sell the 2nd plaintiffs property comprised in the above referred legal mortgage dated 31 March, 1982 or any j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA First Bank of Nigeria Ltd v. Moba Farms Ltd 53 a of 2nd plaintiff’s property/properties pending the determination of this suit. (e) An order canceling and/or setting aside the debenture and b mortgage agreement entered into by the plaintiff and the 1st and 2nd defendants and registered as No. 12 at page 12 in Volume 517 Benin City, for being void, the consent of the Governor of Bendel State having lapsed without the 1st defendants compliance with its mandatory conditions precedent c and/or precedent.” The first and second defendants, First Bank of Nigeria Plc and N Uka respectively counter-claimed against the plaintiffs and third defendant both jointly and severally. In para- d graphs 42, 43 and 44 of the statement of defence and counter-claim which was amended by an order of this Court dated 16/9/99, the first and second defendants/appellants claimed as follows:– e “42. By way of counter claim, the 1st defendant hereby claims jointly and severally against the 1st plaintiff as principal debtor and the 2nd plaintiff and 3rd defendant as guarantors as follows:– f (1) Payment of the sum of N3,990,828.42 being the total balance of the various amounts owing and payable by the 1st plaintiff to the 1st defendant as at 27th April, 1992 in respect of the 1st plaintiffs various loan and overdraft accounts showing the following balance as at g that date:– Loan Account No. 1 = N621,000.00 Loan Account No. 2 = N182,672,00 (2) Compound interest on the said sum of N3,990,828.42 at h the rate of 22.5% per annum from the date hereof until judgment and thereafter at 10% per annum until the debt is fully repaid. (3) An order that the plaintiffs owe the defendants as at 15th i June, 1996 the sum of N9,007,115.l8 being the sum claimed in reliefs (1) and (2) compounded at interest of 22.5% per annum from the 15th June, 1992 until 15th June, 1996. (4) An order that the plaintiffs pay the sum of j N9,007,115.18 together with interest of 22.5% per

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annum compounded therein from 15 June, until judg- a ment is entered for the 1st defendant’s bank, and thereafter, at 10% per annum, until the judgment debt is paid. Particulars of counter-claim b (43) The 1st defendant repeats paragraphs 1–41 of the 1st and 2nd defendants (sic) joint further amended statement of defence:– (1) Since 1979 or there about, the 1st plaintiff had been a borrowing customer of the 1st defendant at the 1st de- c fendant’s Warri branch within the jurisdiction of this Honourable Court. (2) The 1st defendant granted loan and over draft facilities to the 1st plaintiff at the plaintiffs’ written requests and upon the guarantees in writing of the 2nd plaintiff and d the 3rd defendant. At the trial of this case, the 1st defendant shall rely on the said written requests and guarantee details of which written requests and guarantees the 1st defendant shall give at the trial of this case. e (3) The said facilities a real so (sic) secured by:– (a) Legal mortgage dated 31 March, 1982 registered as No. 12/12/616 at the Lands Registry, Benin City. (b) Debenture dated 25 September, 1981. At the trial f of this case, the 1st defendant shall rely on these documents/instruments. (4) The 1st defendant avers that as at the 27 April, 1992 the 1st plaintiff’s indebtedness stood at N3,990,828.42. g (5) The 1st defendant avers that the 1st plaintiff’s current account (showing the overdraft balance of N3,037,156.42 as at 27/4/92) has been overdrawn as a result of the overdraft facility granted by the 1st defendant to the 1st plaintiff at the plaintiffs’ request as well h as in respect of interest charged on the said overdraft and on the 1st plaintiff’s various loan accounts aforesaid, bank commission and/or charged on the overdraft account. i (6) At the trial of this case, the 1st defendant shall rely on the 1st plaintiff’s certified statements of the various loan and over draft accounts. (7) The loan and overdraft facilities carry interest at bank rate prevailing from time to time. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA First Bank of Nigeria Ltd v. Moba Farms Ltd 55 a (8) The facilities are overdue for repayment. (9) The plaintiff (sic) have failed, refused or neglected to repay the said indebtedness of N3,990,828.42 or any b part thereof despite repeated demands by the 1st defendant contained in its letters to the plaintiffs particularly the 1st defendants letter Ref. 350/JOA/VOO dated 12/5/86 and Ref. 350/V600 dated 13/6/86. In their letter Ref. PME/2/86 dated 19/5/86, the plaintiffs promised c to repay the facilities but have failed to fulfil their promise. At the trial of this suit, the 1st defendant shall, rely on the said letters and hereby give notice to the plaintiffs to produce the 1st defendants above mentioned letters. d (10) The plaintiffs are not willing to repay the said indebtedness. (44) Wherefore the 1st defendant hereby repeats its counter-claim contained in paragraphs 42(i), (ii), (iii) and (iv) hereof and/or e claims as per the said paragraphs 42(i), (ii), (iii) and (iv) against the plaintiffs and the 3rd defendant jointly and severally by way of counter claim.” The third defendant did not file any pleadings to deny either f the claim or counter-claim. Three witnesses including the second plaintiff testified for the plaintiffs. An equal number, which included the second defendant, testified for the counter-claimants. Both sides also tendered several Exhibits g while the third defendant rested its case on that of the plaintiffs and first and second defendants. Learned Counsel for the parties then addressed the court and in a reserved judgment which the learned trial Judge, Bazunu, J delivered on 27/1/95, he entered judgments for the plaintiffs in the total h sum of N5,722,458.80 with interest at the rate of 20% from the date of judgment until the judgment debt is paid with costs which he assessed at N2,000. In addition he ordered for the release of the deeds of lease dated 9/2/78 and regis- i tered as No. 37 at page 37 Volume 517 and the one dated 27/6/67 and registered as No. 52 at page 52 Volume 982, property of the second plaintiff’s uncle as well as the second plaintiff’s share certificate valued at N2,645.95 back to j the plaintiffs. The suit against the third defendant was

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA 56 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) dismissed; so also the counter-claim. Both parties are ag- a grieved by the decision. The first and second defendants appealed against the judgment while the plaintiffs cross- appealed. b The facts of this case which have been articulated in the pleadings filed by the parties are as follows:– The first plaintiff is a limited liability company, which was incorporated under the Companies Decree, 1968 and is c a customer of the first defendant bank. The second plaintiff is its Managing Director. In 1979 the first plaintiff in its effort to establish a poultry farm applied for a loan facility of N930,000. The application d was processed and N750,000 was approved by the bank. Later in 1981, the plaintiffs asked for an additional N100,000 which was granted thereby bringing the total loan approved to N850,000. The loan facility was secured by a e mortgage debenture dated 22 July, 1981 which was for N400,000 initially but later up-stamped to cover borrowing for N825,000. There was also a deed of legal mortgage for N400,000. The Central Bank guaranteed the loan by issuing f a Guarantee Certificate No. BD/FBN/80/34 for N750,000 (Exhibit “B”). The guarantee was later enhanced to cover borrowing of N850,000 and N1,000,000 by Exhibits “C” and “DD”. The second plaintiff and two other people g namely Lawrence E Oraka and Peter Okoh also executed a guarantee (Exhibit “MM”) to secure the borrowing of N850,000 by the first plaintiff for the poultry farm project. The facility was fully utilised. The plaintiffs made the first h repayment after which an epidemic swept through the farm, which led to the decimation of the pullets. This was the state of affairs when the plaintiffs approached the defendants for a working capital of N 150,000 which was approved in 1984 after the plaintiffs had submitted an acceptable cash flow i projection to the defendants and a sanction ticket was issued by the Head Office of the bank to the branch office in Warri. On or about 16 April, 1984 the second plaintiff issued a cheque for N20,400 for the purchase of maize but it was j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA First Bank of Nigeria Ltd v. Moba Farms Ltd 57 a returned unpaid. Three other cheques for various amounts were issued and were returned unpaid. As a result of the defendants’ refusal to make money available by honouring the b cheques, the plaintiff could not buy the maize and since there was no food for the birds, they started to die of starva- tion. When the second plaintiff made enquiries about the non-honouring of the cheques, the second defendant informed him that the loan facilities extended to them were c fully utilised and were therefore exhausted. He then challenged the second defendant as to the truth of the assertion. He later realised that the sum of N67,111.76 had been transferred from the current account into the new working capital d loan account No. 3 hence there were not sufficient funds to the amount in the dishonoured cheques. This action taken by the defendants adversely affected the plaintiff’s business to an extent that when the defendants agreed later to reverse e the debit of N67,111.76 to the current account the farm was already on its way to total collapse. Despite the collapse of the farm, the defendants wrote threatening to appoint a Re- ceiver/Manager to sell the property comprised in the mort- f gage debenture. This prompted the plaintiffs to take a pre- emptive measure to forestall the defendants from carrying out their threat and also claiming damages for the losses they suffered as a result of the unauthorised transfer of the N67,111.76k from the first plaintiff’s current account. This g led the first defendant to counter-claim for the debit balance in the plaintiffs’ loan account. The appellants filed 17 grounds of appeal contained in the further amended notice of appeal which was deemed filed on h 26/9/2002. The first and second respondents also filed two grounds along with the notice of cross appeal. The appellants filed a brief of argument and cross-respondents’ brief. The first and second respondents on the other hand filed i only one brief of argument dealing with the main appeal as well as the cross-appeal. The third respondent also filed a brief. In the main appeal, the appellants formulated 9 (nine) is- j sues for determination. Five of the issues dealt with the

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA 58 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) original action while the remaining four were in respect of a the counter-claim. In regard to the cross-respondents’ brief, three issues were distilled therein. In the first and second respondents’ brief, 8 (eight) issues were formulated but issues b 3 and 6 were argued together, so also issues 5 and 7 while issues 1, 2, 4 and 8 were argued separately. The third respondent formulated only one issue for determination. The issues formulated in the appellants’ brief are:– c “1. Did the plaintiffs ever consent to the debit merger or combination of two of its accounts by First Bank Plc., with or without prior notice to the plaintiffs? 2. If the plaintiffs consented to such combination or merger of d accounts, can it be legitimately, held that loss or damage flows therefrom? 3. What is the effect of Section 13 of Decree No. 20 of 1977 on the debit of the First Bank? e 4. If the answer to issue No. 2 above be in the affirmative, then can the trial court award of special and general damages stand? 5. Was the award, of 20% interest on the judgment debt valid? f 6. Whether the trial court’s decision that the mortgage deed (exhibit ‘A’) was terminated by frustration was valid? 7. Was the debt claimed in the 1st and 2nd defendants’ counter claim proved against the plaintiffs? g 8. Was the defendants’ counter claim statute barred? 9. Whether the defendants were not entitled to judgment against the plaintiffs and 3rd defendants”. h The three issues contained in the cross-respondents’ brief are:– “1. Whether this court can order 20% interest on the special damages of N222,584.90k running from the date of dishon- i our of the plaintiffs’ cheques to the date of judgment? 2. Whether this court can award the cross appellants damages, on the footing of exemplary and punitive damages, in this case. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA First Bank of Nigeria Ltd v. Moba Farms Ltd 59 a 3. Whether this Court of Appeal will expunge the statement of accounts exhibits “GG”, “HH”, “JJ” and “KK” from the records.” b First and second plaintiffs/cross-appellants formulated the 8 (eight) issues for determination:– “(i) Whether the learned trial Judge having rightly found defendants’ appellants liable based on the uncontroverred evi- c dence in support of the items of special damages, acted judicially and judiciously in failing to order retroactively that interest should run on the said terms from 1984, the admitted date of the breach and/or wrongful acts of the said defendants/appellants/respondents that occasioned the loss d or injury to the plaintiffs respondents/cross appellants. (ii) Whether the learned trial Judge in his further assessment of general damages of N3,500,000.00 against the 2nd defendant/appellant/respondent who was agent of the 1st defendant/appellant/cross-respondent acted contrary to the equi- e table doctrine of double compensation in the award of damages as settled in a long line of decided cases by this Hon- ourable Court and the court of ultimate resort. (iii) Whether the learned trial Judge was right in dismissing the f defendants/appellants/cross-respondents’ counter-claim on other grounds different from the sound legal grounds ably urged on him by the plaintiffs/respondents/cross-appellant was laid down in the epoch making principles enunciated in the landmark cases of Yusuf v African Continental Bank Ltd g (1976) 4 SC 1 and African Continental Bank Ltd v Oba (1993) 7 NWLR (Part 304) 173. (iv) Whether the learned trial Judge was right and/or acted according to law in ordering interest assessed at 20% per cen- h tum upon the judgment debt from the date of judgment until date of payment. (v) Whether from the pleadings and evidence led in support thereof the plaintiffs/respondents/cross-appellants over- i whelmingly established their case beyond the balance of probabilities as required by Section 137 Evidence Act Cap. 112 Laws of the Federation of Nigeria, 1990. (vi) Whether the defendants/appellants/cross-respondents statements of accounts (exhibits GG, HH, JJ and KK) satisfied j the evidential conditions precedent for admissibility and/or

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probative value as mandatorily stipulated under Sections 37, a 97, 111–113 of the Evidence Act aforestated? (vii) Was the learned trial Judge right in holding that the defendants/appellants/cross-respondents were wrong to have b combined the accounts of the 1st plaintiffs/respondents/ cross-appellants with the 1st defendants/appellant/cross respondent without the express written consent to that effect duly signed by the 2nd plaintiff/respondent/cross- appellant. c (viii) Whether the alleged consent (which is denied) of the plaintiff/respondent/cross-appellant to divert founds (sic) to offset overdraft earlier granted by the 1st defendant/ appellant was illegal and therefore unenforceable in view of section 13 Agricultural Credit Guarantee Scheme which d exclusively governs the contract between the parties herein.” The issue formulated by the third defendant/respondent is:– e “Whether the defendants by their counter-claims were entitled to judgment against the 3rd defendant in view of the available evidence though the 3rd defendant did not file defence to the counter claim.” All the issues in the main appeal and the cross-appeal can be f narrowed down to the following six issues namely:– “1. Whether the 1st and 2nd respondents ever consented to the debiting, merger or combination of two of its accounts by the 1st appellant, with or without prior notice to them. g 2. What is the effect of Section 13 of Decree No. 20 of 1977 on the debit by the 1st appellant? 3. Was the mortgage deed terminated by frustration? 4. Is the trial court right in awarding both special and general h damages in an action based on contract? 5. Is the award of 20% interest on the judgment debt valid? 6. Is the action of the appellants in the counter-claim statute barred?” i A consideration of issues 3, 4, 5 and 6 will depend on the resolution of issue No. 2. On the merger of accounts and whether the consent of the respondents especially the first respondent was necessary before the first appellant could j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA First Bank of Nigeria Ltd v. Moba Farms Ltd 61 a merge or combine two of the first respondent’s accounts and the debiting of N67,111.76 from the N150,000 working capital granted to the respondents, the learned trial Judge b examined Exhibit “EE” and held that he could not find any where it was stated by the plaintiffs that the loan account of N150,000 should be debited with the over draft of N67,111.76. He therefore accepted the evidence of the first c plaintiff that no consent was given to the first defendant to debit the loan account with the sum of N67,111.76k. (See pages 202–203 of the records.) It is argued for the appellants that the terms and condi- d tions of the loan transaction was secured by two deeds, namely the mortgage debenture and mortgage deed dated 22 July, 1981 and 31 March, 1982 respectively and it is only the mortgage deeds signed by the parties to the loan transac- e tion that can be considered by the court to the exclusion of any evidence extrinsic to the deeds in interpreting its terms. It was argued for the respondents/cross-appellants that the alleged consent allowing for the merger and consequent deb- f iting of their accounts was not only illegal and unenforceable but was expressly forbidden by statute. Reliance was placed on section 13 of the Agricultural Credit Guarantee Scheme Fund Act No. 20 of 1977 which provides as follows:– g “13 (1) No loan granted pursuant to this Act shall be applied to any purpose other than that for which the loan was granted. (2) Any person who applies any loan granted pursuant to this Act in contravention of subsection (1) of this section h shall be guilty of an offence and shall be liable on conviction to a fine of an amount not less than the amount of the loan in respect of which the offence was committed or to imprisonment for not less than five years. i (3) Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of any director, manager, secretary or other similar officer of the body corporate (or any j person purporting to act in any such capacity) he as well

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as the body corporate shall be deemed to be guilty of the a offence and may be proceeded against and punished accordingly.” It is a general rule that where the parties have embodied the b terms of their contract in a written document, extrinsic evidence is not admissible to add to or vary, subtract from or contradict the terms of the written agreement. See: section 132(1) Evidence Act; Olaloye v Balogun (1990) 5 NWLR c (Part 148) 24; Olanlege v Afro Continental (Nig.) Ltd (1998) 7 NWLR (Part 458) 29; Union Bank of Nigeria v Ozigi (1994) 3 NWLR (Part 333) 385; Union Bank of Nigeria Ltd v Sax (Nig) Ltd (1994) 8 NWLR (Part 361) 150; Omega Bank (Nig) Plc v OBC Ltd (2002) 16 NWLR (Part 794) 483. d The loan facility totalling N850.000 was secured by the deed of legal mortgage and the mortgage debenture which were admitted in evidence as Exhibits “A” and “LL” respectively. Clause 24 of Exhibit “A” is word-for-word as Clause 14 of e Exhibit “LL” which defines an account and under these provisions, the bank (first appellant) is authorised at its discretion to combine any two or more accounts without giving notice to the borrower (first respondent). It states:– f “The expression ‘Account’ shall include any account of the borrower with the bank and whether current, deposit, loan savings or of any other nature whatsoever and at any branch of the bank and the borrower further authorises the bank at its discretion to com- g bine any two or more accounts at any time and without giving notice to the borrower.” At the time Exhibit “L” dated 21/3/84 was written in which first respondents requested for additional N150,000 credit h facilities to bring the loan to N1,000,000 since N850,000 had already been disbursed, they were fully conscious of the fact that the bank could combine two of their accounts without reference to them. This explains what was stated in paragraphs 4 and 5 therein in which the following requests were i made:– “This facility will not be used to absurd (sic) any existing overdraft balance in our current accounts which were overdrawn due to excessive high interest rate. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA First Bank of Nigeria Ltd v. Moba Farms Ltd 63 a Also any authority given to your company in the legal mortgage and debenture registered in your favour should be set aside so that you can see us through with full draw down of the facilities to the limits required on the cash flow projections including the highest b overdrawn in the cash flow projection.” These requests were not granted as can be seen in the appellants’ letter Ref. 350/NU/RMB of 26 March, 1984 received in evidence as Exhibit “I” is addressed to the Managing Di- c rector, Moba Farms Ltd No. 1118. Warri and it reads:– “Dear Sir, Application for Increased Facilities We refer to your recent application and confirm approval of the d following facilities: Loan No. 1 N621,000.00 Loan No. 2 N185,000.00 Loan No. 3 (Now working capital) N150,000.00 e Overdraft (Noted) N60,000.00 Approvals of these loans are subject to the following conditions: (1) You have been allowed a moratorium of four (4) months. Repayment for the first 4 months will be at the rate of N29,112.00 each and thereafter, at the rate of N33,312.00. f (2) We must be provided with your undertaking in writing to lodge daily sales into the current account. (3) All drawings must be supported by a copy of the delivery note or documents in evidence of the deliver of livestock g machinery or farming equipment. (4) All our security requirements must be complied with before draw down. (5) You should provide us with a written acceptance of the facilities approved as above. h Yours faithfully, For: First Bank of Nigeria Ltd., Signed: Manager.” The first and second respondents accepted the conditions i laid down in Exhibit “H’ when the second respondent wrote on 27 March, 1984 tendered in evidence as Exhibit “EE” which goes as follows:– “Moba Farms Ltd, j P.M.B. 118,

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Warri. Date: 27th March, 1984. a Our Ref: Your Ref: The Manager First Bank of Nig. Ltd. P.M.B. 1020, Warri. b Dear Sir, Increased Facilities We thank you for your letter dated 26th March, 1984 and wish to confirm as follows: c (a) You have our undertaking that as usual, all proceeds of the farm will be lodged with the bank; (b) Where possible, all drawings will be supported by invoices. However, it should be appreciated that under the present d conditions of procuring raw materials, which are never obtained in any definite one spot, cash withdrawals will occa- sionally be necessary, and on final purchases, invoices will be submitted after, since it will be impossible to obtain way- bills/invoices for raw materials before drawings are allowed. e (c) We accept the conditions of the additional facilities of N150,000.00 (One Hundred and Fifty Thousand Naira) approved with the full understanding that you will monitor the disbursements, while the loan is drawn down to the credit of our No. 2 account which will operate strictly on a credit ba- f sis, and which all proceeds of the farm will be lodged. The repayment of N29,112.00 (Twenty-nine Thousand, One Hundred and Twelve Naira) monthly from August, to No- vember, 1984 and there after at the rate of N33,312.00 g (Thirty-three Thousand, Three Hundred and Twelve Naira) is meant to cover our entire indebtedness to you, including the rated overdraft on current account No. 1. We wish to thank you for your kind assistance and trust that with mutual understanding, the new facilities will see us through our h present problems. Yours faithfully, Signed P.M. Eyekpimi i Managing Director Moba Farms Ltd.” It is therefore expressly provided in Exhibits “A” and “LL” that the appellants could exercise their discretion to combine j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA First Bank of Nigeria Ltd v. Moba Farms Ltd 65 a any two or more of the first respondent’s accounts without seeking their consent or even giving notice to them before proceeding to merge the accounts. The first and second re- b spondents were fully aware of this, hence the request on the appellants to waive the exercise of the power when they applied for the additional facilities of N150,000 in Exhibit “L”. Where the words of any instrument are free from ambiguity in themselves, and where the circumstances of the case have c not created any doubt or difficulty as to the proper appellation (sic) of the words to claimants under the instrument or the subject matter to which the instrument relates, such an instrument is to be construed according to its strict, plain and d common meaning of the words themselves. See: UBN v Ozigi (supra) at page 404 per Adio, JSC. This decision was followed in UBN Ltd v Sax (supra) at page 165. In the construction of documents therefore, the words therein should e first be given their simple and ordinary meaning and under no circumstance may new or additional words be imported into the text unless the documents would be by the absence of that which is imported impossible to understand. See So- f licitor-General, Western Nigeria v Adebonojo (1971) 1 All NLR 178. The answer to the first issue raised in this appeal, is that the first and second respondents consented to the merger or combination of two of its accounts when they executed Exhibits “A” and “LL. Once two accounts have g been merged it does not require the consent of the respondents before any of the accounts is debited because it is an incidence of the merger. A customer who agrees that any of its accounts may be combined or merged by a bank at its h discretion, without prior notice to him cannot thereafter complain about the conduct of the banker which satisfies the customer’s previous overdraft from the proceeds of a new loan it has just given to the customer. A banker is not i obliged to let his customer overdraw from his account unless he has agreed to do so. The relationship in law between a bank and its customer has been that of a debtor and creditor. When a bank credits the current account of its customer with j a certain sum, the bank becomes a debtor to the customer in

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA 66 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) that sum and conversely when a bank debits the current ac- a count of its customer with a certain sum, the customer becomes a debtor to the bank in that sum. See: Yesufu v Afri- can Continental Bank (1981) 1 SC 74. A bank is bound to b honour a cheque issued by its customer if the customer has enough funds to satisfy the amount payable on the cheque. Refusal to honour the cheque amounts to a breach of contract and would render the banker liable in damages. See c UBA v UBN Plc (1995) 7 NWLR (Part 405) 72. The protest which the first and second respondents lodged in Exhibit “R” for the appellants’ refusal to pay the amounts written in Exhibit “P”, “P3” was not because the account was in credit but that the N150,000 approved was to enable them run the d farm successfully and that they were not consulted. As explained by the second appellant in Exhibit “S” (the letter dated 30 March, 1984 addressed to the Regional Manager of the bank in Benin), he stated in paragraph 2 as follows:– e “We have also transferred the difference of N67,111.76k in our customer’s current account into the new working capital loan No. 3 account to bring the current account balance to agree with the new approved current overdraft limit of N60,000.00, whilst the f outstanding balance of the new loan account stands at N84,211.76. The transfer was effected after consulting the consent of our customers.” The first and second respondents were clearly at the mercy g of the appellants since they could exercise the discretion to merge or combine accounts. The appellants were justified in law in applying the funds standing to the credit of the respondents in the current account towards offsetting the debit h balance in the new working capital loan account No. In Halsbury’s Laws of England Volume 2, (3ed) the law regarding combining two accounts belonging to a single customer is stated in paragraph 322 at page 172 as follows:– i “Unless precluded by agreement express or implied from the course of business, the banker is entitled to combine different accounts kept by the customer in his own right, even though at different branches of the same back, and to treat the balance, if any, as the only amount really standing to his credit.” j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA First Bank of Nigeria Ltd v. Moba Farms Ltd 67 a So unless the account is a trust account, any two accounts opened in the name of the same person can be combined or merged together, unless there is an agreement to the con- b trary. See: British and French Bank Ltd v Opaleye (1961) All NLR 26. In Garnett v M’kewan (1872) LR 8 Ex 10 the customer had accounts at two different branches. The two accounts were both in the same name. One of the accounts was in debit and the bank without giving notice utilised the c credit in the other account, and refused to honour cheques drawn on the other account. It was held that the bank was entitled to do that, because there was no special contract and no usage proved to prevent the bank from doing that or to d require the bank to give him notice. The same scenario played itself out in the case under appeal as in that of Gar- nett v M’kewan (supra). The appellants’ hands in the present case have been further strengthened by the existence of the e contract Exhibits “A” and “LL” which allowed them to merge the first and second respondents’ accounts at their discretion. This leads me to issue No. 2. The respondents have ingen- f iously pointed to section 13 of the Agricultural Credit Guar- antee Scheme Fund Act. No. 20 of 1977 to argue that any consent purportedly granted by the plaintiffs/respondents, which is meant to divert funds from the said loan to offset an g overdraft, is illegal and unenforceable. The same issue was dealt with in First Bank of (Nig) Ltd v Pan Bisbilder (Nig) Ltd (1990) 2 NWLR (Part 134) 647 where the Central Bank guaranteed a loan of N116,500 under the Agricultural Guar- h antee Credit Scheme Fund Act, 1977 which was disbursed in two instalments of N60,000 and N56,500 but N30,000 of the N56,500 was withheld by the appellant in satisfaction of a previous overdraft granted to the respondent. The appellant contended that the withholding of the sum of N30,000 was i not without the respondent’s consent, a fact which the latter denied. The learned trial Judge rejected the respondent’s denial, nevertheless it found the agreement to divert the N30,000 to a purpose other than that of Agricultural Guaran- j tee Credit Scheme illegal, It found for the plaintiff and

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA 68 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) awarded the sum of N57,429 with costs assessed at N600 a out of a claim of N429,860. Both parties were dissatisfied. The defendant contested its liability as well as quantum of damages while the plaintiff contested the measure of dam- b ages awarded to it. It was argued by the respondent as it is being urged on us in this appeal, that the contract of loan being for a loan sui generis and one governed by statute was by its very nature a tripartite contract. It was therefore not c competent to modify or vary it without the concurrence of the Central Bank. Counsel for the respondent contended further that if the variation of the agreement of loan is illegal as being in breach of statute then it was incompetent. He argued that the parties cannot by their conducts or agreement d waive an illegality. In resolving the issue on appeal, this court held that the loan agreement subsists as an ordinary banking transaction between a banker and its customer but the guarantor or surety is released by the alteration. The e court held the view that where a statute merely prohibits a certain class of contract by stipulating a penalty for the prohibition without expressly providing whether or not the contract is void it does not follow ipso facto that the contract is f void or illegal. The court is to consider whether the statute is directed at discouraging entry into such contracts or whether it was intended at making revenue for the government or whether it is aimed that the contract shall not be entered into g so as to be valid. But on a further appeal by the plaintiff to the Supreme Court, the court construed section 13(1), (2) and (3) of the Agricultural Guarantee Credit Scheme Fund Act, 1977 and held that the collateral agreement between the h parties herein was void and illegal because its aim was to divert funds under the contract of loan to a purpose other than the purpose for which it was meant (ie poultry farming) and punishable by fine or imprisonment. And dealing with i the effect of an illegal contract, Achike, JSC espoused the principle as follows:– “Generally, the consequence of illegality in relation to the parties contract is that the court will not come to the assistance of any party to an illegal contract who wishes to enforce it. This position j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA First Bank of Nigeria Ltd v. Moba Farms Ltd 69 a of the law is founded on the principle of public policy and is expressed in the maxim ex-turpi causa non oritur actio, meaning that an action does not arise from a base cause. Therefore, it goes without saying that the promise or consideration exchanged by the b parties herein. i.e. to divert part of the loan contract guaranteed by the Central Bank of Nigeria to offset the appellant’s over draft is illegal and the reason by the parties in making the agreement to divert some of the funds to liquidate the overdraft was to promote an act expressly prohibited by statute. But whether or not a party c can recover under an illegal contact may depend on whether that party was aware privy to the illegality because it is unfair, in equity, for the guilty to hold the innocent party bound by an act of illegality that he is wholly unaware of. See Cowan v Milbourn d (1867) L.R. 2 Ex 230. The result is that generally, money paid or property transferred under illegal contract is irrecoverable where both parties are equally guilty of the fact of illegality. This is also buttressed by the maxim ‘in pari delicto potior est conditio de- fendentis and means that where the parties are both at fault, the e condition of the defendant is better’. See: Fashina v Odedina (1957) WRNLR 45 and Abesin & Anor v Iyaegbe (1958) WRNLR 67”. (See: Pan Bisbilder (Nig.) Ltd. v First Bank of Nigeria Ltd. (2000) 1 NWLR (Part 642) 684 at page 695).” f From the standpoint of the law, the cross appellants’ argument that the agreement allowing for a merger and consequent debiting of their accounts was not only illegal but unenforceable is unassailable. This is because such agreement is g clearly forbidden by section 13 of the Agricultural Guaran- tee Credit Scheme Fund Act, 1977. The guarantee given by the Central Bank to secure the loan is therefore not enforceable against the Central Bank as it was not party to the agreement and more so since it is against public policy. Al- h though the loan had been given in instalments, the merger and debiting of the cross appellants’ accounts has invariably tainted the entire loan agreement as the contract is indivisible. See: Ekwunife v Wayne (WA) Ltd (1989) 5 NWLR (Part i 122) 422. The resultant effect is that neither the appellants in the main appeal nor the cross-appellants in the cross-appeal can sue on the contract because both parties are equally guilty. The order which the learned trial Judge should have j made, is to dismiss both the main claim as well as the

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA 70 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) counter-claim. It will therefore be merely an academic exer- a cise to deal with issues 3, 4, 5 and 6. I however find it necessary to state that in cases of breach of contract, it is inappro- priate to award both general and special damages. See Ok- b ongwu v NNPC (1989) 4 NWLR (Part 115) 296. The statutory authority for the award of interest on a judgment is contained in Order 40 Rule 7 of the Bendel State High Court Rules applicable to Delta State and it provides that the Court c may order interest at rate not exceeding ten Naira per centum per annum to be paid upon any judgment, commencing from the date thereof or afterwards as the case may be. Before a court can depart from the power to award interest at the rate different from 10% per annum, under a discretion d envisaged by the opening clause of that rule, there must be facts and/or circumstances to justify such a course. See: Ekwunife v Wayne (WA) Ltd (supra) at page 454. The reasoning by the learned trial Judge that the entry in Exhibit e “KK” is not in red and therefore the account is not in debit is wrong. What determines whether an account is in credit is not the colour of the ink used. The usual banking practice to indicate the state of the accounts is to write “CR” or f “DR” after the figures in the account. If the letters CR are used after the figure, it means the account is in credit but if the letters “DR” follow the figures. it means the account has been overdrawn and therefore in debit. In actions for the g recovering of a loan, time starts running when a demand for payment is made in writing. See: UBA Ltd v Michael O Abimbolu and Co (1995) 9 NWLR (Part 419) 371. As I have already indicated, the claims of the plaintiffs h and the counter-claimants should have been dismissed because the contract on which the claims are based is tainted with illegality. Consequently the award of N2,222,458.90 as special damages and N3,500,000 as general damages to the i plaintiffs/cross-appellants and the order made for a return to the second plaintiff of the following documents (i) Deed of Lease dated 9/2/78 and registered as No. 37 at Page 37 Volume 517; j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akaahs JCA First Bank of Nigeria Ltd v. Moba Farms Ltd 71 a (ii) Deed of Lease dated 27/6/67 and registered as No. 52 Page 52 Volume 982; and (iii) Shares Certificate valued at N2,645.95. b are hereby set aside. I make no order as to costs.

MUNTAKA-COOMASSIE JCA: I am in agreement with the stance taken by his Lordship Akaahs, JCA I too agree that c the appeal is meritorious and same is hereby allowed by me. No order as to costs.

AUGIE JCA: I have read before now the lead judgment just delivered by my learned brother Akaahs, JCA and I agree d with him that the claims and counter-claim should have been dismissed because the contract on which the claims are based is tainted with illegality. The operative maxim in this type of case is “ex turpi causa non oritur actio” meaning e that from an illegal transaction no action can arise. See Nwaigwe v Transproject (Nig) Ltd (2000) 8 NWLR (Part 669) 364; Ogwuru v Co-operative Bank of Eastern Nigeria (1994) 5 NWLR (Part 365) 685. For this and the fuller rea- f sons given by my learned brother, I abide by the consequential orders made in the lead judgment. I make no order as to costs. Appeal, cross-appeal dismissed.

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a African Continental Bank Plc v Odukwe

COURT OF APPEAL, BENIN DIVISION AMAIZU, AUGIE, NGWUTA JJCA b Date of Judgment: 17 JUNE, 2004 Suit No.: CA/B/2/97

Banking – “unauthorized lending or overdraft” – Pleading of – How proved c Words and phrases – “Unauthorised lending or overdraft” – Meaning of

Facts d The plaintiff/respondent was an employee of the defendant/ appellant in its Agbor Branch. The respondent was given a query over an alleged unauthorized overdraft of N2,474,915.29. The respondent was subsequently dismissed e from the service of the appellant “for issuing unauthorized overdraft of N2.6m”. The respondent’s claim against the appellant was for:– “1. A declaration that the plaintiff is still in the employment of f the defendant and is entitled to the benefit accrued since the 1st day of September, 1985 when the defendant purportedly illegally and wrongfully dismissed plaintiff from its service, and/or 2 (a) A declaration that the plaintiff is entitled to the benefit g of a retirement with all his right and privileges given to him by virtue of his employment by the defendant. (c) Order of court that the plaintiff be paid special damages as follows:– h (1) Balance leave grant unpaid N838.20 (2) Send off for retired officers N1,000.00 (3) Half salary as a result of suspension from duty between July – i September (N839.33 x 3) N2,517.99 (4) One standard freezer N4,500.00 (5) A double charlet for plaintiff and wife in a good hotel for 2 (two) nights N2,000.00 j

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African Continental Bank Plc v. Odukwe 73 a 3 An order of court setting aside letter reference number PAD/IR/STA.502 emanating from the defendant as irregular and in breach of the rules of natural justice and against the b collective agreement between plaintiff and defendant. 4 An order of perpetual injunction restraining the defendant, its servants/agents/privies from further issuing and acting upon letter No. PAD/1R/STA.502 dated the 1st day of September, c 1988 dismissing or terminating the employment of the plaintiff without payment of his retirement benefits, rights or privileges. 5 Payment of the sum of N50,000.00 (Fifty Thousand Naira) as d damages.” The learned trial Judge entered judgment for the plaintiff/ respondent. The defendant appealed. e Held – Unauthorised lending or overdraft means that there is a ceiling beyond which the respondent could not grant loan or overdraft. f In the instant case, there was no proof that the respondent exceeded his limit to grant loans and facilities. Appeal dismissed. g Cases referred to in the judgment Nigerian Agwu v State (1959) 4 FSC 102; (1965) NMLR 18 h FCSC v Laoye (1989) 2 NWLR (Part 106) 652 Garba v Univeristy of Maiduguri (1986) 1 NWLR (Part 18) 550 Maigoro v Garba (1999) 10 NWLR (Part 624) 555 i Onyemaizu v Ojiako (2000) 6 NWLR (Part 659) 25 State v Aibangbee (1988) 3 NWLR (Part 84) 548 Tsokwa Oil Marketing Co. v BON Ltd (2002) 11 NWLR j (Part 777) 163

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74 Nigerian Banking Law Reports N.B.L.R. (PART I)

Nigerian statute referred to in the judgment a Constitution of the Federal Republic of Nigeria, 1999, section 242 b Counsel For the respondent: Dankwu & Co. For the appellant: Osayaba Osarenren & Co. c Judgment NGWUTA JCA: (Delivering the lead judgment) This is an appeal against the judgment of the then Bendel State High Court sitting at Agbor in the present Delta State. The plain- d tiff’s claim endorsed on the writ of summons issued on 12 November, 1990 and amended in paragraph 16 of the amended statement of claim reproduced hereunder:– “1. A declaration that the plaintiff is still in the employment of e the defendant and is entitled to the benefit accrued since the 1st day of September, 1985 when the defendant purportedly illegally and wrongfully dismissed plaintiff from its service, and/or f 2 (a) A declaration that the plaintiff is entitled to the benefit of a retirement with all his right and privileges given to him by virtue of his employment by the defendant. (b) Order of court that the plaintiff be paid special damages as follows: g (1) Balance leave grant unpaid N838.20 (2) Send off for retired officers N1,000.00 (3) Half salary as a result of suspension from duty between July – September h (N839.33 x 3) N2,517.99 (4) One standard freezer N4,500.00 (5) A double charlet for plaintiff and wife in a good hotel for 2 i (two) nights N2,000.00 3 An order of court setting aside letter reference number PAD/IR/STA.502 emanating from the defendant as irregular and in breach of the rules of natural justice and against the collective agreement between plaintiff and defendant. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ngwuta JCA African Continental Bank Plc v. Odukwe 75 a 4 An order of perpetual injunction restraining the defendant, its servants/agents/privies from further issuing and acting upon letter No. PAD/IR/STA.502 dated the 1st day of September, 1988 dismissing or terminating the employment of the plain- b tiff without payment of his retirement benefits, rights or privileges. 5 Payment of the sum of N50,000.00 (Fifty Thousand Naira) as damages.” c Pleadings were filed and exchanged. At the trial the plaintiff (respondent herein) testified for himself and closed his case. The defendant now appellant fielded six witnesses and at the close of its case learned d Counsel for the parties addressed the court. On 29 May, 1992 the trial court Edah, JA presiding, entered judgment for the plaintiff (now respondent in the following terms: “On the whole, therefor, I hold on the credible evidence before me e that the plaintiff has proved his case against the defendant on a balance of probabilities and that he is entitled to judgment. In the circumstances, judgment is hereby entered in favour of the plaintiff against the defendant in the following terms:– f 1. It is hereby declared that the plaintiff is entitled to the benefit of a retirement with all his rights and privileges given to him by virtue of his employment by the defendant. 2. It is hereby ordered that letter reference No. PAD/IR/ STA.502 emanating from the defendant be and is hereby set g aside as irregular, in breach of the rules of natural justice and against the collective agreement between, the plaintiff and defendant. 3. The recovery of the sum of N10,856.19 (Ten Thousand, h Eight Hundred and Fifty-six Naira, Nineteen Kobo) being special damages for unlawful dismissal. 4. The cost of this action is assessed at N500.00 in favour of the plaintiff.” Aggrieved by the said judgment the appellant appealed to i this Court on the following six (6) grounds:– “(i) Decision is against the weight of evidence. (ii) The learned trial Judge departed from the ambit of the contractual agreement between the plaintiff and defendant in j his judgment and thus came to a wrong conclusion.

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(iii) The learned trial Judge gave a very restrictive interpretation a to the phrase – wilful disobedience of a lawful order – as contained in exhibit KI and thus came to a wrong conclusion in his judgment. b (iv) The learned trial Judge detailed (sic) in law when in his judgment he placed the onus of proof of special damages on the defendant. (v) The learned trial Judge was wrong in law in his interpretation of the scope of pleadings which led him to wrong as- c sessment of evidence. (vi) The learned trial Judge was wrong in law when he failed to take into consideration the admissions (sic) of the plaintiff under cross-examination in relation in exhibits B1, C1, D, d E3 ‘Embargoes on advances’. None of the grounds of appeal had particulars.” Consistent with the rules of the court, the parties, through their respective Counsel, filed and exchanged briefs of ar- e gument. From his six grounds of appeal learned counsel for the appellant in his briefs of argument, isolated the following three issues for the court to determine:– “(i) Was granting unauthorised loans within the scope of wilful f disobedience of lawful order and was it sufficiently pleaded and proved? (ii) Was the defendant wrongfully dismissed? (iii) Can an appeal court re-evaluate evidence given at the lower g court?” In his own brief of argument learned Counsel for the respondent also framed the following three issues for determination:– h “(1) Was it right in law to have dismissed the plaintiff/respondent on several allegations of crime which were neither reported to the police nor proved in court? i (2) Did the trial court correctly address and find on the issue of waiver (sic) by the defendant of the alleged misconduct of the plaintiff? (3) Was the plaintiff’s right to fair hearing and rules of natural justice breached by the actions of the defendants? j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ngwuta JCA African Continental Bank Plc v. Odukwe 77 a At this stage there is need to comment on the grounds of appeal and the issues formulated by learned counsel for the parties. Ground six complains that the learned trial Judge b was wrong in law when he failed to take into consideration the admissions of the plaintiff under cross examination in relation to Exhibits B1, C1, D1, E2 and E3 – “Embargoes on advances”. In effect the complaint is of non-evaluation of and ipso facto, non-ascription of probative value, to the al- c leged admissions. Counsel labelled it error in law but this court is not bound by Counsel’s classification of a particular ground of appeal. Whenever, as in this case, the complaint is exclusively on the evaluation of the evidence ie the alleged d admission in the light of the Exhibits, it is a ground of fact. See Maigoro v Garba (1999) 10 NWLR (Part 624) 555. The said ground 6, filed without leave of this Court in the court below, was filed in violation of section 242 of the Constitu- e tion of the Federal Republic of Nigeria, 1999. It is therefore incompetent and it is hereby struck out. From a careful examination of the grounds of appeal and the issues framed therefrom the third issue – that is whether an appeal court f can re-evaluate the evidence given at the lower court, stems from ground 6 rather than ground 1 as stated by learned Counsel. Ground 6 having been struck out as incompetent the third issue based on it goes with it. There is need for more surgical operation. Learned Counsel for the appellant g said that issue one is distilled from grounds 2, 3, 5 and 6 of the grounds of appeal and that the second and third issues “cover ground 1 of the appeal”. It is accepted and correct practice to frame an issue for determination from several h grounds of appeal, in appropriate cases it is permitted to frame an issue from each ground of appeal but on no account should counsel distil more than one issue from one ground of appeal. See Onyemaizu v Ojiako (2000) 6 NWLR i (Part 659) 25. In this case the second and third issues are said to emanate from ground 1 and since there cannot be two issues from the one ground of appeal and since it cannot be determined which of the two issues to jettison and which j one to retain the said ground one of appeal must be taken as

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ngwuta JCA 78 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) having been abandoned as there is no issue based on it. The a two issues do not properly relate to any ground of appeal and in consequence ground 1 of the ground of appeal and issues are incompetent and are hereby struck out. In the end b the appellant is left with issue 1 distilled from grounds 2, 3, 5 and 6. The issues formulated by learned Counsel for the respondent are also bedevilled with a fundamental vice. The re- c spondent filed neither a cross appeal nor a respondent’s notice. He has to adopt or modify the issues presented by the appellant. At any rate he cannot formulate issues outside the grounds of appeal. In my view issue one flows from the d grounds of appeal and appears to be a variant of the appellant’s issue 1. However the second and third issues, appear to come from the blues as they are neither adoptions of the issues nor do flow from any of grounds 1 to 5 of the surviv- ing grounds of appeal. I therefore strike out issues 2 and 3 in e the respondent’s brief as incompetent. This leaves the parties with issue one in their respective briefs of argument. In their combined effect the two issues raise the question whether unauthorised loans come within the scope of wilful disobe- f dience to lawful order if proved to warrant a dismissal of the respondent on allegations of crime which have not been proved in court. The main point of the appellant’s argument is the alleged g unauthorised loan granted by the respondent contrary to the terms of Exhibits “B1”, “D2”, “E2” and “E3”. Counsel referred to Exhibits “D”, “E”, “O”, “P”, “T”, “U” and “W” for admission he said were made by the respondent. He argued h that the queries the respondent admitted receiving were based on unauthorised lendings. Counsel submitted that no proof of unauthorised lending was needed as the respondent did not deny granting the loans at the earliest opportunity. i He said the denial in court was of no avail as the combined effect of Exhibits “B1”, “C1”, “D2”, “E2” and “E3” was to take away all forms of discretionary lending power from the respondent. He urged the court not to give any weight to the evidence of the respondent tending to contest what he j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ngwuta JCA African Continental Bank Plc v. Odukwe 79 a admitted and for which he apologised in answer to one of the queries. He relied on Agwu and Others v The State (1965) NMLR 18; (1959) 4 FSC 102 and urged the Court to b reject the respondent’s denials which contradicted his earlier written statements. Counsel referred to paragraph 22 of the amended statement of defence and said the court below should have drawn the inference that wilful disobedience of lawful order was pleaded. He said the trial Judge was wrong c to have gone on a “voyage of discovery to scrounge for evidence of the lack of official received stamp f (sic) Branch on the documents to come to the conclusion that the plaintiff did not receive the documents the breach of which the appel- d lant complained of”. He referred to the dictum of Eso, JSC in State v Aibangbee (1988) 3 NWLR (Part 84) 548 and argued that the lower court deviated from its duty to make findings of fact based on the credibility of the witnesses and e to decide the merits of the case on the findings. After deviat- ing to issues that bear no relation to the issue of unauthorised loan and whether the same was pleaded and proved, learned counsel concluded that the grant of unauthorised f loan was within the scope of wilful disobedience of lawful order and that it was sufficiently pleaded and proved. In dealing with issue 1 in his own brief, learned Counsel for the respondent said the allegations made against the re- g spondent are:– “(a) Fraud; (b) Opening of several current accounts with fictitious names and addresses which cannot be traced; h (c) Embezzlement”. Counsel argued that though the allegations are criminal in nature the matter was not reported to the police and so the respondent was neither charged to court nor convicted by a i court of law, He cited Garba University of Maiduguri (1986) 1 NWLR (Part 18) 550 and argued that the executive council of the appellant is not competent to deal with allegation of crime against the respondent. He referred to FCSC v j Laoye (1989) 2 NWLR (Part 106) 652; (1989) 4 SCNJ 146

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ngwuta JCA 80 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) at 16 and argued that in allegations of crime the relevant a provision of the Constitution must be adhered to. He said the court below was right to have held that the failure to prove the allegations of crime was fatal to the prosecution’s case. b The respondent earned a query over an alleged unauthorised over draft of N2,474,915.29. It was further alleged that he, “in anticipation of an imminent removal from Agbor Branch” granted further facilities amounting to c N210,153.26. The query did not state that the later sum was unauthorised. The query was dated 5 May, 1988 and the respondent’s answer dated 27 June, 1988 appears to have assumed that the amount sum of N210,253.76 was also unau- d thorised overdraft thus bringing the total to N2,685,070.55 in the reply to the query. On 1 September, 1988 the appellant dismissed the respondent from its service “for issuing unauthorised overdraft of N2.6m”. e The sole issue the court below had to determine, and with which I respectively accept as the issue in this appeal, is whether or not the summary dismissal of the respondent by the appellant is lawful in the prevailing circumstances. f The terms of the contract of master/employee between the parties are spelt out in Exhibit “K1”. The relevant article is Art.4 (iv)(a)(ii) herein reproduced:– g “4 (iv) Summary dismissal (a) An employee may be summarily dismissed for certain offences covered by the broad heading of gross misconduct. Such offences include proven cases of: (ii) Wilful disobedience of a lawful order or seri- h ous negligence . . .” Neither the term “wilful disobedience of a lawful order” nor “serious negligence” was defined in Exhibit “K1”. Be that as it may the expression “proven cases of” implies that the dis- i missal must be based on more than a mere allegation of wilful disobedience or serious negligence. From the point of view of the respondent, unauthorised lending was neither pleaded nor proved by the appellant. On the other hand the j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ngwuta JCA African Continental Bank Plc v. Odukwe 81 a appellant is of the view that at the earliest opportunity the respondent in answer to the query concerning same, admitted and apologised for giving unauthorised overdraft and the b respondent’s evidence in court tending to contest an issue earlier admitted and apologised for ought, in the absence of explanation to be rejected as an afterthought. This position finds support in the dictum of Onyeama, JSC in Agwu and c Others v The State (1965) NMLR 18; (1959) 4 FSC 102 an authority relied on by the appellant. The alleged admission is contained in the respondent’s answer to the query dated 27 May, 1988 the relevant portion d of which is herein reproduced: “But if my action in granting overdraft in order that the branch can break even run counter to management’s desire and aspiration, I apologize for my action”. I understand the above to mean that the respon- e dent’s apology is predicated on the assumption but without conceding, that the loans were in conflict with the appellant’s desires and aspirations. If the three page answer to the query is read as a whole it will be clear that the respondent did not accept any impropriety or breach of the appellants f regulation in his action which would have formed the basis for apology. I have stated earlier in this judgment that the use of the g expression “proven cases of” in Article 4 of Exhibit “K1” implies at least that the matter has gone beyond a mere allegation and that the veracity of the allegation has been established though not necessarily in court. Now if unauthorised lending is encompassed in the broad heading of “gross mis- h conduct”, was it established on the evidence before the court below? I have carefully read the entire proceedings. Unau- thorised lending or overdraft means that there is a ceiling beyond which the respondent could not grant loan or over i draft. In his considered judgment, the learned trial Judge found that “it is not pleaded nor evidence led by the defendant to show what these head office approved limits were beyond which the plaintiff was not permitted to grant j loans and facilities.” The lower courts finding is based on a

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ngwuta JCA 82 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) portion of the query alleging “total unauthorised facilities, a loans and excess over drafts over and above head office approved limits.” As found by the learned trial Judge, a finding with which b I am in respectful agreement, the only evidence touching on permitted limit was given by the respondent. He swore that it is only in respect of a loan or overdraft above N500,000 that a branch Manager requires the approval of head office c to grant to bank customers. This evidence was not challenged nor was it in its nature inherently incredible. The lower court has right to accord appropriate weight. The alleged overdraft of N2.6m was not made en bloc and going d by the unchallenged evidence of the respondent which the court below accepted and relied on it was incumbent on the appellant to break the sum up with reference to the dates the loans were granted and show that a loan granted on a par- e ticular date was more than N500,000, without which it cannot be said that the respondent granted unauthorised loan or overdraft, at any particular point in time. The appellant relied on Exhibits “B1”, “C1”, “D2”, “E2” f and “E3”, to say that the respondent granted overdrafts in defiance of embargos placed on lending. However the respondent denied receiving any of the Exhibits and in attempt to prove the contrary the appellant sought to rely on the evi- g dence of PW5 who took over from the respondent who handed him over the Exhibits placing embargo on lending. I have carefully considered the amended statement of defence and I agree with court below that the appellant pleaded no facts that can form the basis of the reception of the evidence h that the PW5 took over from the respondent and or that the respondent handed over the said Exhibits to the PW5. On the issue of whether or not the respondent received Exhibits – “B1”, “C1”, “D2”, “E2” and “E3” learned Coun- i sel for the appellant resorted to disparaging language in his claim that the learned trial Judge “went on a voyage of discovery to scrounge for evidence of the lack of official received stamp of Agbor Branch on the documents j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ngwuta JCA African Continental Bank Plc v. Odukwe 83 a to come to the conclusion that the plaintiff did not receive the document the breach of which the appellant complained of.” I agree with learned Counsel for the appellant that the role of b a trial Judge as stated by Eso, JSC in the case he cited The State v Aibangbee (1988) 3 NWLR (Part 4) 548 is to hear evidence to evaluate the evidence, to believe or disbelieve witnesses, to make findings of fact based on the credibility c of the witnesses who testified and to decide the merits of the case based on the findings. Now applying the above to documentary evidence in this case Exhibits “B1”, “C1”, “D2”, “E2” and “E3” the court can hardly evaluate and as- d cribe probative value to them without examining their contents. In its scrutiny of the documents the court found that they emanated from the appellant’s office in Lagos and were meant to be sent to area and branch offices of the appellant. The Exhibits bore the official stamp of the area office, Be- e nin, meaning that, they were received in Benin not Agbor where the respondent is a Branch Manager. It could have been selective justice and unjustified leaning towards the appellant for the lower court to ignore the portion of the evi- f dence of the appellant which lends support to the contention of the respondent that he did not receive the Exhibits. The documents were tendered in order to fix the respondent with knowledge of their contents. In order to achieve its set goal g the appellant was required to do more than tendering documents which contained information that they were received in Benin, not Agbor. There is no evidence that the respondent was in Benin at the material time. h In view of the foregoing I have come to the conclusion that the alleged unauthorised loans were not pleaded and ipso facto not proved and it serves no useful purpose in this appeal to determine whether or not what was not pleaded i and proved is within the scope of wilful disobedience of lawful order. It was therefore wrong to dismiss the respondent from the service on the allegation that was not proved and could not have been proved in view of the amended j pleadings relied on by the parties. It is my view that this

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ngwuta JCA 84 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) appeal is devoid of merit and it is hereby dismissed with a N5,000 costs to the respondent.

AMAIZU JCA: I have had the privilege of a preview of the reasons for the judgment just delivered by my learned b brother Ngwuta, JCA. In my respectful view he has adequately covered all the grounds. I hereby adopt his reasons. I also dismiss the appeal as having no merit. I abide by the consequential orders made in the said lead judgment of my c learned brother Ngwuta, JCA including the order as to costs.

AUGIE JCA: I have read before now the lead judgment just delivered by my learned brother, Ngwuta, JCA and I agree with him that the appeal lacks merit. It is one thing to aver a d material fact in issue in one’s pleadings and quite a different thing to establish such fact by evidence. Thus, where a material fact is pleaded and is either denied or disputed by the other side, the onus of proof clearly rests on him who asserts e such a fact to establish the same by evidence. See Tsokwa Oil Marketing Co v BON Ltd (2002) 11 NWLR (Part 777) 163 where the Supreme Court held that the respondent having denied knowledge of the receipts of the documents in its Kano office, the appellant would have produced evidence of f postage and delivery to Kano, but that the appellant failed to do. In the circumstances, and for the reasons given by my learned brother in the lead judgment. I also dismiss the appeal. I abide by the order as to costs. g Appeal dismissed.

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Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 85 a Habib Nigeria Bank Ltd v Gifts Unique Nigeria Ltd

COURT OF APPEAL, KADUNA DIVISION b SALAMI, BA’ABA, ALAGOA JJCA Date of Judgment: 17 JUNE, 2004 Suit No.: CA/K/84/2003

Banking – Bankers’ Tariff and Guidelines and policy – c Whether a subsidiary legislation – Whether a court to take judicial notice of Banking – Interest – Right of banker to charge Banking – Other charges – Other than interest – Court to d award entitlement to by evidence Banking – Statement of account – Need for bank to demonstrate in open court how claim is arrived at e Facts This is an appeal against the decision of the Kaduna State High Court of Justice, sitting in Kaduna. The plaintiff claimed against the defendant the sum of N605,411.12 being f the outstanding debt arising from N500,000 overdraft facility granted to the defendant to enable it finance a contract awarded to it by the plaintiff. The overdraft, which was subject to payment of interest and other bank charges, was to be g repaid within sixteen weeks. The defendant defaulted because the overdraft which was sought and obtained was to finance a contract of supply awarded it by the plaintiff and which contract was revoked on account of late supply or delivery. The plaintiff insisted on its right to cancellation not- h withstanding the defendant’s request for extension of time within which to deliver the goods. The defendant now resorted to instalment repayment, as it could not dispose of the goods with plaintiff’s particulars inscribed on them. i The action was brought under undefended list. After service of the writ of summons on the defendant and during the pendency of the suit, the defendant refunded the sum of N540,000. The plaintiff’s outstanding claim, which went to j trial, was N263,358.29.

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The suit was later transferred from the undefended to the a general cause list. Pleadings were consequently ordered and settled by the parties. Evidence was adduced by both parties whose Counsel also addressed the court. Learned trial Judge, b Kurada, J, in a reserved and considered judgment, dismissed the plaintiff’s claim in toto. The plaintiff was unhappy and has appealed to the Court of Appeal. c The grouse of the appellant was that the lower court failed to take judicial notice of the Banker’s Tariff and Guidelines and Policy being a subsidiary legislation and that the statement of account produced in court without further evidence d should be sufficient to prove its case at the lower court.

Held – 1. As the titles of the documents suggest, Bankers’ Tariff e and Guidelines and Fiscal Policy means no more than list of charges, guidelines and policy to guide banks. They have, therefore, no force of law and the trial court and the Court of Appeal will for that reason not take ju- f dicial notice of them under section 74(1)(a) of the Evi- dence Act Cap 112 Laws of the Federation of Nigeria, 1990. 2. Bankers’ Tariff and Guidelines and Government Fiscal g Policy do not constitute subsidiary legislation, they do not fall into class or nature of document the court must take judicial notice of, it is incumbent on the appellant, to successfully prove their contents, to produce them in evidence. It is consequently obligatory on the appellant h to tender the Bankers’ Tariff and Guidelines as well as Federal Government Fiscal Policy in view of the clear provisions of sections 73 and 74(1)(a) of the Evidence Act which has not placed any duty, statutory or other- i wise, on the court to take judicial notice of their contents if it is to succeed. 3. By universal custom or practice of banking, a banker has the right to charge interest at the reasonable rate on all j

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Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 87 a overdrafts but there is no similar custom in respect of the other charges the appellant rolled together in the instant claim. So it has a duty to prove on credible evidence that b it was so entitled. Some banks charge commission on current account, it is not established that banks are entitled to charge commission on overdraft or loan accounts and commission to a chamber. All these have to be proved on balance of probability. c 4. Per curiam “The learned trial Judge, in my view, rightly observed that it was not sufficient to simply dump the ledger or statement of account on the court without further explanation as to how d the interest charges which is not a liquidated sum and other charges got up to the sum claimed as per statement of claim. The view taken by the learned trial Judge seems further strengthened by appellant’s failure to produce the Approved e Bankers’ Tariff and Guidelines, including the Fiscal Policy of the Federal Government of Nigeria, on which the appellant’s case was predicated. The case for appellant is further weakened by the Supreme Court’s approval of Court of Ap- peal decision that statements of account are not sufficient ex- f planation of debits and lodgments: Yesufu v A.C.B. (1981) 1 SC 74, (1981) All NLR 293.” Merely throwing a statement of account or ledger on the court, without more, does not discharge onus of proof placed g on the appellant to prove its case on preponderance of evidence. Appeal allowed in part. Cases referred to in the judgment h Nigerian Akeredolu v Akinremi (1986) 2 NWLR (Part 25) 710 Bornu Holding Co Ltd v Bogoco (1971) 1 All NLR 324; i (1971) NSCC 321 Egbe v Aihaji (1990) 1 NWLR (Part 128) 546, 590 Emegwara v Nwaimo (1953) 14 WACA 347 Eperokun v University of Lagos (1986) 4 NWLR (Part 34) j 162

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First Bank of Nigeria Plc v Uwada (2001) FWLR (Part 50) a 1696 Ijale v Leventis and Co Ltd (1959) SCNLR 255; (1950) 4 FSC 108 b Ikenya v Ofune (1985) 2 NWLR (Part 5) 1 Ishola v Societe Generale Bank Nig Ltd (1997) 2 SCNJ 1; (1997) 2 NWLR (Part 488) 405 c Mosheshe General Merchants Ltd v Nigeria Steel Products Ltd (1987) 2 NWLR (Part 55) 110 National Bank of Nigeria Ltd v Guthrie Nig Ltd and Another (1987) 2 NWLR (Part 56) 255 d National Bank of Nigeria Ltd v PB Olatunde & Co. Nigeria Ltd (1994) 3 NWLR (Part 334) 512 Ogunbiyi v Ishola (1996) 6 NWLR (Part 452) 12 Onibudo v Akibu (1982) 7 SC 60 e Onifade v Olayiwola (1990) 7 NWLR (Part 161) 130 Owe v Oshibanjo (1965) 1 All NLR 72 Owosho v Dada (1984) 7 SC 149 f Oyebadejo v Olaniyi (2000) FWLR (Part 5) 829 Oyekanmi v NEPA (2000) 82 LRCN 3205 Pas Nig Ltd v NNS Co Ltd (1990) 6 NWLR (Part 159) 764 g Saude v Abdullahi (1989) 4 NWLR (Part 116) 387 Union Bank of Nigeria Plc v Akinrinmade (2000) FWLR (Part 5) 853 Wilcox v Queen (1961) All NLR 631 h Yesufu v ACB (1981) 1 SC 74; (1981) 1 All NLR 293 Foreign Bower v Turner (1883) 32 LJ Ch 54 i

Nigerian statute referred to in the judgment Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, sections 73, 74, 74(1), 74(1)(a), 75 j

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Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 89 a Counsel For the appellant: Dangana For the respondent: Hussaini b Judgment SALAMI JCA (Delivering the lead judgment) This is an appeal against the decision of the Kaduna State High Court of c Justice, sitting in Kaduna. The plaintiff claimed against the defendant the sum of N605,411.12 being the outstanding debt arising from N500,000 overdraft facility granted to the defendant to enable it finance a contract awarded to it by the d plaintiff. The overdraft, which was subject to payment of interest and other bank charges, was to be repaid within sixteen weeks. The defendant defaulted because the overdraft which was sought and obtained was to finance a contract of supply awarded it by the plaintiff and which contract was e revoked on account of late supply or delivery. The plaintiff insisted on its right to cancellation notwithstanding the defendant’s request for extension of time within which to deliver the goods. The defendant now resorted to instalment f repayment, as it could not dispose of the goods with plaintiff’s particulars inscribed on them. The action was brought under the undefended list. After service of the writ of summons on the defendant and during g the pendency of the suit, the defendant refunded the sum of N540,000. The plaintiff’s outstanding claim, which went to trial was N263,358.29. The suit was later transferred from the undefended to the h general cause list. Pleadings were consequently ordered and settled by the parties. Evidence was adduced by both parties whose Counsel also addressed the court. Learned trial Judge, Kurada, J, in a reserved and considered judgment, dismissed i the plaintiff’s claim in toto. The plaintiff was unhappy and has appealed to this court on eight grounds of appeal from which eight issues were distilled. All the grounds of appeal are not concise or suc- j cinct; rather, they are made up of arguments and narratives

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA 90 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) contrary to the express provisions of Order 1, Rule 2(3). See a Onifade v Olayiwola (1990) 7 NWLR (Part 161) 130, 156. Since the respondent is at peace with them, I think it is not my duty to stir the hornet’s nest. Some of the grounds even b border upon illegality. It is doubtful if any of the grounds would have survived the holocaust if the learned Counsel had sought for striking them out. Briefs of argument were filed and exchanged at the appel- c lant’s/respondent’s and appellant’s reply briefs which were adopted and relied upon by the respective Counsel at the hearing of the appeal. In the appellant’s brief the following issues were identified:– d “i Does (sic) the plaintiff’s failure to tender the Bankers’ Tar- iff and Guidelines fatal to its case since the trial court has statutory obligation to take judicial notice of Bankers’ Tar- iff and Guidelines and also in view of the defendant’s admission that it was prepared to pay the accrued interest in e addition to the principal amount. ii Does the plaintiff have any evidential burden to prove the contents of exhibit 1 (i.e. the statement of account) when the document was already admitted in evidence and before the trial court in view of Section 132 of the Evidence Act? f iii Could the trial court’s judicial perusal of the contents of exhibit 1 amount to a voyage of discovery and investigation? iv Does the plaintiff have any burden to orally explain or interpret the contents of exhibit 4 which was a document ad- g mitted in evidence before court in view of the prohibition placed by Section 132 of the Evidence Act. v Was the learned trial Judge right when he failed to make a specific finding and pronouncement on the meaning and ef- h fect of the contents of exhibit 4 and exhibit 5 when the two documents were given different interpretations by the parties in their pleadings and oral evidence before the court upon which issues were strongly joined. vi Was the learned trial Judge right when he failed to award at i least N80,000.00 to the plaintiff; the sum which the defendant through DW1 clearly admitted as the outstanding amount of defendant’s indebtedness to the plaintiff but rather chose to entirely dismiss the plaintiff’s claim as lacking in merit? j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 91 a vii Was the learned trial Judge not in error when he relied heavily on decided cases for his decision when the facts and issues involved in these cases were clearly opposite or different from those involved in the instant case before him. b viii Was the trial court’s verdict dismissing the plaintiff’s claim in its entirety not unreasonable in view of the fact that the defendant made binding admissions before and during trial capable of entitling the plaintiff to succeed in its claim upon c defendant’s admission.” The respondent on the other hand, formulated the following four issues as against eight framed in the appellant’s brief:– “a Whether it is the duty of the court to presume the exact inter- d est rate the plaintiff charged the defendant when the interest rate was not pleaded in the plaintiff’s statement of claim. b Can the plaintiff without the express consent of the defendant charge and debit the cost of recovery of its funds from the defendant through the latter’s accounts. e c Whether exhibit 4 which conveys 25% interest waiver to the defendant could rightly be said to have lapsed after the defendant have (sic) repaid the principal sum. d Whether the trial court could enter judgment against the de- f fendant when the plaintiff did not prove their case against the defendant.” I have examined the two formulations and wish to observe that the appellant’s issues ii, iii and iv as well as its issues vi g and viii are repetitive. Issues ii, iii and iv are variant of one another, while issues vi and viii merely reiterate each other. I believe Counsel should learn to appreciate that echoing does not improve an argument. The issues calling for deter- h mination, shorn of all the repetitions, are appellant’s issues i, ii, v, vi and vii. At the hearing of the appeal all briefs of argument were adopted and reliance placed on them. Learned Counsel did i not elucidate on the respective briefs of argument. Learned Counsel for appellant formulated the issues serially in Ro- man figures but argued them in Arabic figure. On issue 1, learned Counsel for appellant, in the appel- j lant’s brief, submitted that it was under no obligation to

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA 92 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) tender the Bankers’ Tariff and Guidelines in evidence, in a view of the prohibition placed by section 73 of the Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990. Rather, learned Counsel submitted that it was the trial court b that had the burden to discharge its statutory obligation under section 74(1) of the Evidence Act by looking for and relying on the document on account that the document is a subsidiary legislation, made by Central Bank of Nigeria to c regulate the activities and powers of all banks in Nigeria, pursuant to the power conferred on the Central Bank of Ni- geria by the Banks and Other Financial Institutions Act. Learned Counsel further contended that the learned trial d Judge “admitted” in his own judgment that the Court of Ap- peal held in First Bank of Nigeria Plc v Uwada (2001) FWLR (Part 50) 1696 “that the rates approved in the Central Bank Guidelines as to interest vary from time to time and e the court is entitled to take judicial notice of this”. Counsel for appellant submitted further that it is settled law that a fact admitted by a party either prior to the case or during the trial need not be further proved by the other party. f See Pas Nig Ltd v NNS Co Ltd (1990) 6 NWLR (Part 159) 764 particularly at page 772. In the respondent’s brief, it was contended that the evidence led by the appellant went to no issue, as the interest g chargeable was not pleaded in the statement of claim wherein the appellant claimed 21% and led evidence on 27%. Learned Counsel urged the court to hold that the plaintiff having failed to establish the original interest rate and h how and when it varied, it was not entitled to charge interest on the respondent. The respondent’s answer in this regard, with respect, did not meet appellant’s case. In this issue, the appellant is not i dwelling on pleadings being at variance with evidence rather it is contending that the Court ought to take judicial notice of the Central Bank’s Bankers’ Tariff and Guidelines and the Federal Government Policy. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 93 a Be that as it may, the appellant’s submission encompass- ing admission by a party either prior to the case or during the trial need not be further proved does not belong to this b issue. Consequently, I ignore it as it is respectfully irrelevant to this issue. It is, in my respectful opinion, that the learned Counsel for appellant misconceived the finding of the learned trial c Judge predicated on the case of First Bank of Nigeria Plc v Uwada (supra) at page 95 of the record, the learned trial Judge held:– “Without such evidence, it cannot be said that the interest and d other charges were linked to the Guidelines or made on the basis of the Guidelines. In First Bank of Nigeria Plc v Uwada (Supra) at page 1709, the Court of Appeal held that rates approved in the Central Bank Guidelines as to interest vary from time to time and the court is entitled to take judicial notice of this . . .” e What the learned trial Judge was drawing at is that the rate of interest fixed in the Bankers’ Tariff and Guidelines is not static, it is liable to shift or vary from time to time and the court is entitled to take judicial notice of these vagaries. f I cannot agree with the submission of learned Counsel for the appellant, in the appellant’s brief, that the Bankers’ Tar- iff and Guidelines and Fiscal Policy of the Federal Govern- ment are subsidiary legislations made by the Central Bank of g Nigeria which the trial court should take judicial notice of by virtue of section 74 of the Evidence Act Cap 112. Section 74(1)(a) of Cap 112 provides as follows:– “74 (1) The court shall take judicial notice of the following h facts: (a) all laws or enactments and any subsidiary legislation made thereunder having the force of law now or heretofore in force, or hereafter to be in force, i in any part of Nigeria”. (Italics mine.) As the titles of the documents suggest, Bankers’ Tariff and Guidelines and Fiscal Policy means no more than list of charges, guidelines and policy to guide banks. They have, j therefore, no force of law and the trial court and this Court

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA 94 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) will for that reason not take judicial notice of them under a section 74(1)(a) of the Evidence Act Cap 112. In view of the conclusion I have just arrived at, on section 74(1)(a) of the Evidence Act, the reliance placed on section b 73 of the same Act became otiose. Section 73 provides as follows:– “73. No fact of which the court must take judicial notice need be proved.” c Having found that Bankers’ Tariff and Guidelines and Gov- ernment Fiscal Policy do not constitute subsidiary legislation, they do not fall into class or nature of document the court must take judicial notice of, it is incumbent on the ap- d pellant, to successfully prove their contents, to produce them in evidence. It is consequently obligatory on the appellant to tender the Bankers’ Tariff and Guidelines as well as Federal Government Fiscal Policy in view of the clear provisions of e sections 73 and 74(1)(a) of the Evidence Act which has not placed any duty, statutory or otherwise, on the court to take judicial notice of their contents if it is to succeed. f I answer issue 1 in the positive and ground 1 of the grounds of appeal from which it appears to have been derived is dismissed. On issue ii, learned Counsel for appellant submitted that g the appellant having tendered Exhibit 1, had no duty to orally prove its contents. Learned counsel then contended that, once a document was admitted, the parties are precluded from adducing oral evidence to prove or explain its h contents: See section 132(1) of the Evidence Act. Learned Counsel further submitted that the learned trial Judge could easily ascertain the veracity of the figures by reaching at a calculator and a plain sheet without calling on an expert arithmetician to assist him. He referred to the cases of Oye- i badejo v Olaniyi (2000) FWLR (Part 5) 829, 852 and Union Bank of Nigeria Plc v Akinrinmade (2000) FWLR (Part 5) 853. Learned Counsel submitted that the case of Ishola v So- ciete Generale Bank Nig Ltd (1997) 2 SCNJ 1; (1997) 2 j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 95 a NWLR (Part 488) 405 cited in the judgment by the learned trial Judge was not relevant. I am, with respect, firmly of the view that the learned b counsel for the appellant is acting under misapprehension of the provisions of section 132(1) of the Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990. The subsection provides thus:– c “132 (1) When any judgment of any court or any other judicial or official proceedings, or any contract or any grant or other disposition of property has been reduced to the form of a document or series of documents, no evidence may be given of such judgment or proceedings, or of the d terms of such contract, grant or disposition of property except the document itself or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained; nor e may the contents of any such document be contradicted altered, added to or varied by oral evidence: Provided that any of the following matters may be proved . . .” (Italics mine.) f There are two important issues in this section; firstly, it excludes oral evidence of the contents of documents. Sec- ondly, and subject to the exceptions contained in the proviso, oral evidence will not be permitted for the purpose of contradicting, altering, adding to or varying the contents of a g document. It is apt at this stage to recite the portion of the judgment, learned Counsel for appellant is complaining of even though h Counsel did not specifically lay his finger on any particular line or paragraph. I am not unaware that he referred to the last paragraph of page 96 of the record but he distinguished the case of Ishola v Societe Generale Bank (Nig) Ltd, which is not contained in the last paragraph of page 96. It is, there- i fore, for convenience and avoidance of doubt to start from the penultimate paragraph of the page concerned. The relevant passage reads as follows:– “By virtue of Section 38 of the Evidence Act, entries in books of j accounts regularly kept in the course of business, are relevant

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whenever they refer to a matter into which the court has to en- a quire, but such statement shall not be evidence to charge any person with liability. A party tendering such statement must still adduce sufficient evidence if he must establish the liability of his opponent on the items therein contained. Thus, a party that claims b interest and other charges including miscellaneous charges, as in this case, has the duty to plead and proffer credible evidence in proof thereof. See Ishola v Societe-Generale Bank (Nig.) Ltd (1997) 2 SCNJ 1. c It is the duty of a bank which avers that there is an agreement between itself and its customer to charge interest and other charges on loan, advances or overdraft as in this case, to establish by credible evidence that the rate of interest which it is charging is within the terms of the agreement and that such interest and other d charges are within the prime lending rate as contained in the Cen- tral Bank of Nigeria Guidelines to Banks on interest rate by virtue of Section 15 of the Banking Act. It is not sufficient to simply dump the ledger or statement of account to the court as the PW1 e did in this case, without any explanation as to how the interest charges and the other charges built up the figure claimed by the plaintiff and as contained in the statement of account. The plaintiff must clearly explain the entries there in; for it is not the duty of the court to embark on a voyage of discovery and investigation which f is not the function of the court. See First Bank of Nigeria Plc v Mamman Nig. Ltd & 1 Or. (2001) FWLR (Part 31) 2990 at 2906; Duriminiya v C.O.P (1961) NRNLR 70 at 73 and Bala Angyu & 1 Or. v Alhaji Shehu Malami & 1 Or. (1992) 9 NWLR (Part 264) 242 at 253.” (Italics mine.) g Clearly what the learned trial Judge had in mind in the re- cited portion of the judgment is not evidence to contradict, alter, add to or vary contents of a document. Learned trial h Judge in my view questioned the right of the appellant to simply dump the ledger or statement of account on the court without demonstrating in open court by credible evidence how the claim contained in the statement of account, Exhibit 1 was arrived at. If the Judge, after he had reserved the mat- i ter for judgment and in the comfort of his chambers, reached out to a calculator and a sheet of paper to ascertain the figures, he would be “on a voyage of discovery and investigation” which is not part of his function. It is not part of the j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 97 a function of the court to embark on a voyage of discovery and investigation. A court’s adjudicating duty is predicated upon evidence led in open court and subjected to empirical b test under cross-examination in the open court, otherwise the court will be guilty or accused of doing cloistered justice. Apart from the cases cited by the learned trial Judge, there is a long line of cases frowning upon tendering of evidence c without adducing evidence on its contents and the court em- barking on their examination Owe v Oshibanjo (1965) 1 All NLR 72, 75; Wilcox v Queen (1961) All NLR 631; Emeg- wara v Nwaimo (1953) 14 WACA 347, 348; Ikenya and An- other v Akpala Ofune and Others (1985) 2 NWLR (Part 5) d 1; Onibudo v Akibu (1982) 7 SC 60, 62 where the Supreme Court per Bello, JSC stated as follows:– “It needs to be emphasized that the duty of a court is to decide between the parties on the basis of what has been demonstrated, e tested, canvassed and argued in court. It is not the duty of a court to do cloistered justice by making an inquiry into the case outside court even if such inquiry is limited to examination of documents which were in evidence, when the documents had not been exam- f ined in court and their examination out of court disclosed matters that had not been brought out and exposed to test in court and were not such matters that, at least must have been noticed in court.” See also the case of Bornu Holding Co Ltd v Bogoco (1971) g 1 All NLR 324; (1971) NSCC 321, 324 – 6 where the Su- preme Court reviewed in extenso the authorities on the point thus:– “So far as the question of the account book is concerned, we are in no doubt that the analysis that the learned trial Judge made of the h entries in exhibit O went far beyond the actual questions asked in respect of it of the 4th defence Witness, the Assistant Accountant of the defendants, who kept exhibit O. In Queen v Wilcox (1961) All NLR 631 the Federal Supreme Court at page 633 said:– i ‘What has caused us some concern in this appeal is the learned Judge’s examination of exhibit M’. This is a book kept by the bank in which all cheques emanating from the Treasury are entered, and evidence was given that the entry concerning the cheque in question had been partly erased. j There was no suggestion by the prosecution what the words

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erased were. The learned Judge however, examined the era- a sure by means of a magnifying glass outside the court and said in his judgment that the name “Smith” was written there and other letters erased leaving only the letters “S” and “T”. The independent examination of exhibits by a court was con- b sidered in Muhammadu Duriminiya v Commissioner of Po- lice (1961) NRNLR 70, in which the courts aid this:– “The Magistrate examined the books, but apparently not in court-for the record does not show that he observed or c was shown any entries in court, except the few we have mentioned–and in examining them out of court, as appears from his judgment, he observed numerous points which ought to have been brought out in court at the hearing but were not. In doing this, the Magistrate was d not trying the case, he was investigating it. A trial is not an investigation, and investigation is not the function of a court. A trial is the public demonstration and testing before a court of the cases of the contending parties. The demonstration is by assertion and evidence, e and the testing is by cross-examination and argument. The function of a court is to decide between the parties on the basis of what has been so demonstrated and tested. What was demonstrated in court at this trial failed f to support the prosecution case, and the Magistrate should have dismissed the case. It was no part of his duty to do cloistered justice by making an inquiry into the case outside court not even by the examination of documents which were evidence, when the documents g had not been examined in court and the Magistrate’s examination disclosed things that had not been brought out and exposed to test in court, or were not things that, at least must have been noticed in court. We respectfully agree with these observations and con- h sider that the course pursued by the learned Judge in regard to exhibit M was not correct”’, and in Owe v Oshibanjo (1965) 1 All NLR 72 we said at page 75:– i ‘The trial Judge, however, without referring what he thought was a discrepancy to the parties for their explanation, took upon himself to decide the issue he created for himself on his own examination and inspection of the plans. With respect we think it was a mistake on the part j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 99 a of the learned trial Judge to take that course of his own accord and to give judgment upon matters on which the parties or their counsel were no the ardour on which there was no evidence before him. b In the case of The United African Company Ltd v The Commissioner of Police WACA 2889–2924, July and October, 1948, cyclostyled WACA Reports page 72) the West African Court of Appeal (Sir Henry Blackall, P) in c similar circumstances made the following observations:– “At the hearing of the appeal sit was submitted on behalf of the appellant company that while the company was admittedly liable for the acts of its servants, the learned Judge should have taken upon d himself to consider the entries which so largely contributed to his conclusions without giving the company an opportunity of being heard, the issue as to the policy of the company never having been an issue during the hearing. The appellant company e therefore sought leave to call additional evidence on these matters.” The West African Court of Appeal there after granted leave in that case to call additional evidence and ob- f served further as follows:– “It is entirely contrary to the usual practice that the court should after the close of the trial, and in the absence of either party, raise an entirely fresh issue based upon the examination of certain documents g tendered for another purpose, and without sum- moning the parties again before him, proceed to determine this issue for the purpose of assessing the penalties to be imposed. When as the result of fur- h ther consideration of the evidence the Judge reached a conclusion which would of necessity affect his view of the gravity of the offence, and consequently of the appropriate penalty, he should in our view have indicated to the appellants the nature i of the issue thus raised and afforded them an opportunity of giving further evidence in relation thereto.” With these observations we respectfully agree and would point out that where it is necessary that a point arising j for determination in a case should be further clarified by

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evidence after the close of the trial, it is the duty of the a court trying the case to invite the parties to supply such evidence or explain such point or points and it is wrong for the court in these circumstances to substitute its own views for matters on which there should be, and there b was no evidence before the court. Mr Pessu for the plaintiff sought to distinguish those cases on the basis that exhibit O was tendered by the defendants and as questions were asked in regard to it, the learned trial c Judge was entitled to examine it as a whole. We agree that the learned trial Judge was certainly entitled to examine it as a whole but he should not, as he did, have relied on his own observations from an examination of exhibit O to decide matters which had not emerged from the actual evidence d given before him without either first putting the points to the witnesses or inviting counsel to comment on them if they so wished. We do not think that it makes any difference that exhibit O was put in by the defendants. The learned trial Judge was in error in dealing with it in the way that he did.” e Exhibit “1” is the respondent’s statement of account with the appellant. In my respectful opinion, it is not within the contemplation of section 132(1) of the Evidence Act Cap 112. It is neither a judgment of a court nor any other judicial nor f official proceedings nor is it a contract nor a grant nor other disposition of property, which has been reduced into writing. It is respectfully a mere summary of the transactions between the parties. The interest rate chargeable was not g pleaded and no admissible evidence could be adduced thereon. Since the rates fluctuate it would be impracticable for the learned trial Judge to merely reach out at the calculator and do the calculation himself, contrary to the postula- h tion of the learned Counsel for appellant, simply because the Exhibit was rendered in simple English. There are other amounts debited to the account, which had to be pleaded and established. The cost of recovery of the debt is one of such i instances and is apparently duplicated. It has to be shown not only that the respondent was liable to the charge, but also that the appellant incurred such expenses on respondent’s behalf. The appellant neglected to discharge these burdens of proof. The appellant’s charges does not include j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 101 a interest and legal charges only. The appellant in addition to the interest and legal fees included in his claim of N263,358.29 other items, such as commission on turnover, b value added tax, cost of Form “A”, Commission to Mainas- sara Chambers. By universal custom or practice of banking, a banker has the right to charge interest at the reasonable rate on all overdrafts – Bower v Turner (1883) 32 LJ Ch 54 but there is no similar custom in respect of the other charges c the appellant rolled together in the instant claim. So it has a duty to prove on credible evidence that it was so entitled. Some banks charge commission on current account, it is not established that banks are entitled to charge commission on d overdraft or loan accounts and commission to a chamber. All these have to be proved on balance of probability. The learned trial Judge, in my view, rightly observed that it was not sufficient to simply dump the ledger or statement of ac- e count on the court without further explanation as to how the interest charges which is not a liquidated sum and other charges got up to the sum claimed as per statement of claim. The view taken by the learned trial Judge seems further f strengthened by appellant’s failure to produce the approved Bankers’ Tariff and Guidelines, including the Fiscal Policy of the Federal Government of Nigeria, on which the appellant’s case was predicated. The case for appellant is further weakened by the Supreme Court’s approval of Court of Ap- g peal decision that statements of account are not sufficient explanation of debits and lodgments: Yesufu v ACB (1981) 1 SC 74; (1981) 1 All NLR 293:– “Finally on this point, in paragraph 11 of the statement of claim h the plaintiffs stated:– ‘. . . plaintiffs may also found on various cheques issued by the defendant on his said current account as well as vouchers, debit notes and other relevant documents/books kept by the i plaintiffs touching on defendant’s said current account’. Not one cheque or other document was tendered in evidence. The Federal Court of Appeal after dealing with the insufficiency of exhibit 8 continued, and I agree with their views: ‘So in our view, besides exhibit 8, the plaintiff would still j have to furnish legal evidence of the indebtedness of the

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defendant to it in the sum claimed on the writ of summons a for as was observed by the Supreme Court in Jolasimi Zaria v Alhaji Abdul Small (1973) 6 S.C. 61 at 68, it is the duty of the plaintiff in this case in consonance with Section 135 of the Evidence Act to leave facts to the court which on a b proper appraisal would enable the court to give it judgment. Definitely on the face of exhibit 8 alone plaintiff would not be entitled to judgment in the sum claimed by it. We have pointed out above that exhibits 18-18N would not be suffi- c cient having regard to Section 37 of the Evidence Act to charge the defendant with liability in respect of the overall debit balance shown thereon or part thereof. On the evidence for the plaintiff and the authority of Cuthbert vs. Ro- barts Lubbock & Co. (supra) the overdraft granted to the de- d fendant by the plaintiff consisted of the cheques drawn by the defendant on the plaintiff when the former was not in fund, which cheques were honoured. The least the plaintiff could have done by way of supporting evidence for the entries in exhibit 18–l8N could be to put the cheques so drawn e by the defendant in evidence or if they had been destroyed or lost, to give secondary evidence of them. Neither was done. . . .”. (Italics mine.) By the same token, Kayode Eso, JSC who wrote the lead f judgment stated at pages 73–74 thus:– “For the least, the respondents should then have done, after being granted an order of non-suit to use the words of Federal Court of Appeal:– g ‘. . . by way of Supporting evidence for the entry in exhibits 18 to 18N, would be to put the cheques so drawn by the defendant in evidence or if they have been destroyed or lost to give secondary evidence of them.’ h The respondent could not have a better indication.” Exhibits “18-18N” are the statements of account in that case. This decision puts it beyond doubt that merely throwing a statement of account or ledger on the court, without more, i does not discharge onus of proof placed on the appellant to prove its case on preponderance of evidence. I answer appellant’s issue ii in the positive and it fails. The ground of appeal from which it is framed fails and is j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 103 a dismissed. Its issues iii and iv being only a variant of issue ii equally fail and the grounds of appeal from which they are framed are also dismissed. b Next issue for consideration is appellant’s issue v. In this connection appellant contested, in his brief, that the learned trial judge fell into great error when he failed to specifically make findings and pronouncement on exhibits “4” and “5” c on which parties joined issues. Learned Counsel submitted that respondent forfeited the 25% interest rebate given it since it did not pay the N238,869.81 by the end of July, 2000. It is settled law learned Counsel for appellant submit- d ted that counter-offer does not amount to acceptance of the offer as counter-offer vitiates the offer except if the counter- offer is accepted. Learned Counsel argued that in the present appeal the counter-offer was not accepted and in the result e the offer per Exhibit “4” was voided: TAT Yagba, BB Kanyip & S.A. Ekwo at pages 6–8 (sic). Learned Counsel then argued that the conditional interest offer of 25% lapses and no longer binds the appellant. It is therefore appellant’s f case that the respondent is now liable to pay the full- accumulated interest. I am respectfully of the view that the submission of the learned Counsel for appellant that the learned trial Judge g ought to have pronounced on the legal effect of Exhibits “4” and “5” as to whether the conditional waiver was valid after the end of July is misconceived. Exhibit “4” emanated from the appellant granting respondent 25% interest waiver on h condition it paid up its liability of N85,000 outstanding capital and the sum of N238,869.81 as remaining interest by the end of July, 2000. The respondent, in its reaction through Exhibit “5”, requested that the time be postponed up to Au- i gust, 2000. The court in its judgment on the issue of the appellant’s offer of the discount to the respondent and the latter’s counter offer found thus:– “Now, while the law is that if a discount is allowed a buyer for j payment within a stated period, the full payment is payable at the

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end of that period should the reduced price not have been paid. a See Leyland Nig. Ltd v Dizengoff W.A. (Nig) Ltd (1990) 2 NWLR (Part 134) 610 at 624. The plaintiff in the instant case has not proved which is the reduced amount and which is the full amount; and there is no evidence as to how much of the amount claimed is b interest and how much other charges.” (Italics mine.) It is, therefore, crystal clear that the learned trial Judge, contrary to learned Counsel’s submission in the appellant’s brief, made pronouncement on the issue of offer and coun- c ter-offer allegedly raised by Exhibits “4” and “5”. That the trial Judge did so is manifest from the excerpt from the judgment just set out in this judgment. Learned trial Judge apparently agreed with the appellant who, consequently lost d right to question the judgment on that ground as the decision did not thereby aggrieve it. Interestingly, the learned trial Judge as it could be seen relied on the case of Leyland Nig Ltd (supra) which the appellant is seeking to use in its brief e to overturn his judgment. The dilemma of the learned trial Judge like that of this court or any other person associated with the case is the value of the interest in respect of which a waiver of 25% had f been granted. Is it N238,869.81 or N263,358.29 claimed in the statement of claim dated 7 December, 2000. It is apt to note that Exhibit “4” offering 25% reduction in the interest payable was written on 26 June, 2000. 25 per centum of g N263,358.29 claimed is not N238,869.81. It is therefore well nigh impossible for this court, like it was for the trial court, to ascertain the interest to be awarded to the appellant. The issue is, therefore, not whether appellant has forfeited its h right to waiver since it failed to pay N238,869.81 by the end of July, 2000 as conveyed to her in Exhibit “4”, but the learned Counsel failed to translate this to Naira and Kobo in both the court below and this Court. i The issue seems to me merely academic and this Court, like any other court, is not created to resolve academic matters such as the present one. It goes without saying but if authority is required for my so saying, I refer to the case of j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 105 a Akeredolu v Akinremi (1986) 2 NWLR (Part 25) 710, 725 where the Supreme Court per Nnamani, JSC said:– “It has long been established that this court will not tender an ad- b visory Opinion nor will it deal with a matter which is speculative or academic. The court deals with live issues.” And in Eperokun v University of Lagos (1986) 4 NWLR (Part 34) 162 at 179 Obaseki, JSC expressed his view on the c matter in this manner:– “This court has held repeatedly that it is not part of its function to entertain and decide hypothetical and academic questions not arising from the facts of the case.” d The learned Counsel for appellant argued strenuously that the counter (sic) of the respondent vitiates the offer made by the appellant which is exact conclusion (sic) arrived at by e the trial court; neverthe less he said, for inexplicable reason, nothing on how the interest rate due or claimed could be ascertained. Consequently this issue is resolved against the appellant f and the ground of appeal, which it was distilled from, fails and is dismissed on account that the learned Counsel for appellant vehemently wrongly contested that the issue was not considered by the learned trial Judge when indeed he did g consider the issue. Appellant’s next issue to be examined is its issue vi wherein he submitted that the learned trial Judge was in h gravest error to refuse to at least award N80,000 to the appellant in view of the fact that the respondent admitted that sum. Learned Counsel further argued that the learned trial Judge found that the respondent admitted still owing the i plaintiff N80,000 as a balance of interest, nevertheless learned trial Judge failed to make the award. There is some substance in the submissions made by the learned Counsel for appellant in this issue. The learned trial j Judge himself found in his judgment that there was an

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA 106 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) admission of outstanding balance of interest of N80,000. a Rather than award same, he respectfully quibbled and strangely proceeded to dismiss the appellant’s claim in its entirety. The laws on admission, both statutory and judicial b are no longer recondite. It is well-settled that admission made by a party to a suit, once it is unequivocal and clear, need not be proved and the court is entitled to take it as proved and act on it. See section 75 of the Evidence Act Cap c 112 Laws of the Federation, 1990 and the case of Pas (Nig) Ltd v New Nigeria Salt Co Ltd (1990) 6 NWLR (Part 159) 764 cited in the appellant’s brief of argument. But, with respect to the learned Counsel for appellant, Pas (Nig) Ltd v d New Nigeria Salt Co Ltd (supra) page 772 is inept. The ratio decidendi of that case was made pursuance, although of a statutory provision, it is not Evidence Act. The decision in that case was predicated upon Order 27, Rule 3 of the Rules e of the Supreme Court which is similar to Order 29, Rule 3 of the Kaduna State High Court (Civil Procedure) Rules Cap 58 of the Laws of Kaduna State of Nigeria, 1991. The appellant’s failure to invoke the provisions of the rule f of court renders the dictum in that case not to be directly relevant or material to the circumstances of this case. See also in this connection the cases of National Bank of Nigeria Ltd v Guthrie Nig Ltd and Another (1987) 2 NWLR (Part 56) 255, 263 and Mosheshe General Merchants Ltd v g Nigeria Steel Products Ltd (1987) 2 NWLR (Part 55) 110, 120. It is, however, basic principle of our law, which requires h no further citing of authorities that, in civil proceedings, what is admitted requires no further proof. Section 75 of the Evidence Act (supra) and the case of Owosho v Dada (1984) 7 SC 149, 163–164 where Aniagolu, JSC said i thus:– “But a plaintiff need not proceed to prove an admitted fact. And a fact is deemed to be admitted if it is neither specifically denied nor denied by implication, having regard to the other facts averred in the pleadings.” j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 107 a And in National Bank of Nigeria Ltd v PB Olatunde & Co. Nigeria Ltd (1994) 3 NWLR (Part 334) 512, 526 wherein the Supreme Court, per Uwais, JSC also said:– b “These averments together with those in paragraphs 6 to 9 of amended statement of claim were admitted by the appellant in paragraph I of its statement of defence which reads:– ‘The defendant admits paragraphs 1–9 of the statement of c claim’. In effect, the respondent did not need to adduce evidence to prove the averments in paragraphs 1 to 9 of its amended statement of claim. However, the respondent could not have safely adopted this attitude because if it did so it would not be able to establish the d terms of the contract. . . .” (Italics mine.) Although the respondent did not admit owing the appellant N80,000 in its statement of defence, its managing Director, as its only witness, nevertheless testified on its behalf as fol- e lows in her evidence-in-chief:– “When the plaintiff waived the interest we had an outstanding balance of N80,000.00 to pay after paying N130,000.00 as interest. We defaulted in paying the balance of the interest due to economic f pressure. The plaintiff now wrote to say that since we defaulted, the full interest plus their solicitors fees and other miscellaneous charges would now be paid, our opinion was not sought, the plaintiff just communicated their decision to me through my lawyer . . . g To the best of my knowledge, the defendant owes the plaintiff only N80, 000.00.” (Italics mine.) Under cross-examination the witness reiterated that the outstanding interest was only N80,000. h The learned trial Judge in this regard found as follows:– “The defendant in its statement of defence denied that the plaintiff is entitled to the amount claimed and this court would be urged to dismiss the plaintiff’s claim with costs. However, in her evidence- i in-chief the DW1 testified that to the best of her knowledge, the defendant owes the plaintiff only N80,000.00 as the balance of the interest. She also admitted under cross-examination that the defendant has a balance of N80,000.00 as interest to pay. By the defendant s’ admission, therefore, it has been established or proved that j the defendant has N80,000.00 to pay as balance of interest to the

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plaintiff. But, as I have said, where the plaintiff fails to link the in- a terest charged to the Central Bank Tariff and Guidelines upon which he has relied as his authority to charge the interest claimed,by failing to lead evidence to as to how the interest vary from time to time and how the interest built up then the interest is b unlawful. First Bank of Nig. Plc v Uwada (supra). I am bound to follow this authority and therefore, the interest being unlawful even though admitted, I do not think I can ask the defendant to still pay the same, and it is for this reason that I must say that I am un- c able to award even this amount, The end result is that the entire claim of the plaintiff must fail and it is hereby dismissed.” (Italics mine.) I concur with the reasoning and conclusion of the learned d trial Judge but for the apparent conflict that does exist in the reasoning. The learned trial Judge, who is not entitled to approbate and reprobate ought to have awarded the sum of N80,000 admitted having found that the same “has been established or proved” ex-debito justitiae. The respondent hav- e ing agreed to liability of N80,000 outstanding interest it would look ridiculous or unjust if the court should come to a startling decision that the respondent was not owing a far- thing especially when it is customary for banks to charge in- f terest on loans and overdraft. It is in the interest of justice in the circumstance of this case to allow the admitted sum. It would have amounted to miscarriage or travesty of justice if the plaintiff’s claim had been dismissed in the face of clear g and, in my opinion, unequivocal and unambiguous admission by the respondent of its indebtedness to the plaintiff/ appellant to the tune of N80,000. See Oyekanmi v NEPA (2000) 82 LRCN 3205. h I answer this question in the positive and the ground of appeal from which it is framed succeeds and is allowed. The last issue to be considered is appellant’s issue vii. In this regard, appellant’s main thrust was that the trial court i was in error by relying on decided cases, which are clearly irrelevant to the facts of the case. The two cases learned counsel for appellant is not happy with are Ishola v Societe- Generale Bank Nigeria Ltd (supra) and First Bank of j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Salami JCA Habib Nigeria Bank Ltd v. Gifts Unique Nigeria Ltd 109 a Nigeria Plc v Uwada (supra). Learned Counsel told the court, in the appellant’s brief that issues were clearly joined in those cases as to the banks’ lack of unilateral right to b charge interest, the rate of interest charged, the accuracy of the computation of interest as well as the accuracy of the figures posted in the statement of account. But in the instant case the defendant never challenged or disputed the plaintiff’s right to charge interest, neither did it query the interest c charged or the accuracy of the entry in the statement of account.

The submission of the learned Counsel for the appellant d respectfully appears academic as I am unable to see the benefit which will accrue to his client in the event of the success or otherwise of the issue and the relevant ground of appeal. Be that as it may, the relevance of those cases is that e whoever sets out to claim interest (sic) other charges including miscellaneous charges has the duty to plead and adduce credible evidence to prove or establish the claim on preponderance of evidence. Furthermore, it is not sufficient for the f plaintiff/appellant to merely dump the ledger or statement of account on the court and turn its back: Yesufu v ACB 4 (supra). It must, in addition, demonstrate in open court how the ledger was got up. The court is interested in knowing the g authority of the bank to vary the interest rate. There is no substance in this issue, which is also resolved against the appellant.

Finally and more importantly, for a ground of appeal to be h competent or valid it ought to be a challenge to validity or derive from a ratio decidendi of the judgment of the court below. A ground of appeal based on even an obiter dictum of the trial court is considered incompetent. This is because i an appeal pre-supposes existence of some decisions – vide Egbe v Aihaji (1990) 1 NWLR (Part 128) 546, 590; Saude v Abdullahi (1989) 4 NWLR (Part 116) 387, 429,431; Ogun- biyi v Ishola (1996) 6 NWLR (Part 452) 12, 22–23 and Ijale j v Leventis and Co Ltd (1959) SCNLR 255; (1950) 4 FSC

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108. Issue vii, in the appellant’s brief of argument for ease a of reference reads as follows:– “vi. Was the learned trial Judge not in error when he relied heavily on decided cases for his decision when the facts and b issues involved in those cases were clearly opposite or different from those involved in the instant case before him.” Since the ground of appeal from which issue vii is framed is not derived from a ratio decidendi nor even obiter dictum of c the trial court, the ground is incompetent and the issue is consequently bad. Both of them are, consequently, struck- out. Learned counsel for appellant equally failed to ask for d leave to raise and argue fresh issue. The appeal partially succeeds and is allowed and the decision of the learned trial Judge dismissing appellant’s claim in toto is varied by awarding N80,000 to the appellant, oth- e erwise the appeal fails and is dismissed. There is no order as to costs, therefore, each party to bear its own costs.

BA’ABA JCA: I have had a preview of the judgment of my learned brother, Salami, JCA in draft and I agree with his f reasoning and conclusion. I abide by the consequential order.

ALAGOA JCA: I agree. g Appeal allowed in part.

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Nigerian Deposit Insurance Corp. v. Tasab Nigeria Company Ltd 111 a Nigerian Deposit Insurance Corporation v Tasab Nigeria Company Ltd and another b FEDERAL HIGH COURT OF NIGERIA, LAGOS DIVISION MUSTAPHA J Date of Judgment: 30 JUNE, 2004 Suit No.: FHC/L/FBC/81/2000 c Banking – Banker/customer relationship – Whether Federal High Court has jurisdiction – Section 251(1)(d) of Constitu- tion of the Federal Republic of Nigeria, 1999 d Facts This is a Motion on Notice dated 12 March, 2003 brought by the defendants/applicants pursuant to Order 9, Rule 1 of the Rules of this Court and under the inherent jurisdiction of this e Court for an order striking out this suit for want of jurisdiction on the following grounds: (i) The suit as presently constituted amounts to a re- hearing of Suit No. LD/529/92 before the Lagos f High Court in respect of which a considered judgment had been delivered. (ii) By section 251 of the 1999 Constitution, the Federal High Court does not have supervisory or appellate g jurisdiction over matters that have been concluded at the Lagos State High Court. (iii) By a combined effect of sections 240, 241 and section 243 of the 1999 Constitution of the Federal Re- h public of Nigeria, the Federal High Court and the Lagos State High Court are Courts of co- ordinate jurisdiction. (iv) By sections 240 to 243 of the 1999 Constitution, the i Court of Appeal is the appropriate court with the appellate and supervisory jurisdiction over the Lagos State High Court. And for all further orders as the Honourable Court may j deem fit to make in the circumstance.

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The motion is supported by an affidavit of 8 paragraphs a in opposition to which the plaintiff filed a counter-affidavit of 7 paragraphs dated 6 February, 2001 annexed to which is a certified true copy of the Ruling of MA Ope-Agbe, J b Chairman of Failed Banks Tribunal Lagos, Zone 2 delivered on 15 October, 1996. The learned Counsel for the defendants/applicants put forward the following issues for determination:– c (i) Whether the cause of action raised in the originating application before this Court is the same cause of action and issues canvassed in Suit No. LD/529/92. (ii) If the answer to issue No. 1 is positive whether Fed- d eral High Court has constitutional powers or jurisdiction to entertain and determine causes of action or issues already determined by Lagos State High Court and can Federal High Court assume jurisdiction to e hear a matter in the absence of an order of the Court of Appeal directing it. (iii) Whether Federal High Court has jurisdiction to hear and determine issues arising out of Banker/customer f relationship. On the first issue she submitted that the cause of action in this suit was the same set of facts constituted in Suit No. LD/529/92 which had the same cause of action. She said that g the cause of action was that the defendants/applicants herein purportedly obtained a loan from the plaintiff/respondent and refused, neglected or omitted to repay the said loan as at (sic) when due. She referred to paragraphs 3 and 4 of the h supporting affidavit which according to her were neither disputed nor denied by any paragraph of the counter-affidavit and so were deemed to have been admitted. The cases of Fa- lobi v Falobi (1976) 1 NMLR 169 and Samuel Etikemi v To- i chukwu Ibekwe (1997) 7 NWLR (Part 514) 598 were referred to. The learned Counsel therefore submitted that the same facts in this suit formed the basis of the two actions. She j

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Nigerian Deposit Insurance Corp. v. Tasab Nigeria Company Ltd 113 a reinforced this submission by reference to the findings of the Tribunal in its Ruling dated 15 October, 1996 page 5 paragraph 3 annexed as Exhibit “A” to the plaintiffs counter- b affidavit. It was argued that the parties were the same, the two actions were the same and that this process was a re- hearing of Suit No. LD/529/92. On issue No. 2 she submitted that this matter constituted a c re-hearing of Suit No. LD/529/92 and there was no provision for re-hearing of the matter that has been concluded by courts of competent jurisdiction more so when such Court was a High Court which was of co-ordinate jurisdiction with d the Federal High Court in the hierarchy of Courts in Nigeria. Referring to the case of NDIC v SBN (2003) 1 NWLR (Part 801) 321 at page 363 ratios 13 and 14, it was argued that since the matter has been concluded in the State High Court, e it was unconstitutional for the Federal High Court to purportedly exercise jurisdiction and rehear this matter. On the last issue, the case of UBN v ITTP (2000) 12 NWLR (Part 680) 102 ratio 3 was cited in support of the ar- f gument that since this was a transaction between a customer and a bank, Federal High Court had no jurisdiction to hear issues arising out of a banker/customer relationship. She urged the Court to decline jurisdiction. g In his address the learned Counsel for the plaintiff placed reliance on the counter-affidavit filed in opposition to this motion and Exhibit “A” attached thereto. He objected to this h motion on the ground that it was an abuse of the Court process and drew the attention of the Court to the fact that earlier, in this suit, the defendants brought a similar application dated 2 July, 1996 before Ope-Agbe, J wherein the defendants pleaded res judicata on the ground that it had earlier i been adjudicated upon in Suit No. LD/529/92 but Ope- Agbe, J ruled that the Court had jurisdiction. It was argued that in the present application, the defendants/applicants merely re-arranged the prayers and brought the same appli- j cation that had been decided upon. Relying on the case of

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Arubo v Aiyeleru (1993) 3 NWLR (Part 280) 126 at page a 146 the Court was urged to dismiss the application if found to be an abuse of the Court process. b Held – 1. The proviso to section 251(1)(d) of Constitution of the Federal Republic of Nigeria, 1999, cannot be interpreted to have the effect of conferring exclusive c jurisdiction on States High Courts and completely taking away that jurisdiction of the Federal High Court to entertain causes and matters relating to individual customer and Bank. (NDIC v Okem Enterprises Ltd d SC/93/2003refers) 2. The extent of the inconsistency of Decree No.18 of 1994 as amended by Decree No.62 of 1999 with section 251(1)(d) of the 1999 Constitution is that by giving the e Federal High Court exclusive jurisdiction in the Failed Banks (Recovery of Debts) vis-à-vis customer and bank transactions, it is inconsistent with the proviso in section 251(1)(d) which says the Federal High Court shall not f have exclusive jurisdiction in such matters. (NDIC v Okem Enterprises Ltd SC/93/2003 refers) 3. The Federal High Court shall have jurisdiction in matters of dispute between an individual customer and his bank g in respect of transactions between the individual customer and the bank in consistence with the proviso in section 251(1)(d) of 1999 Constitution. The arguments of the applicant Counsel that Decree No. 62 of 1999 is h unconstitutional and that this Court has no jurisdiction to determine issues arising out of a banker/customer relationship are therefore rejected. (NDIC v Okem Enter- prises Ltd SC/93/2003 refers) i 4. An abuse of process means that the Court’s process must be used bona fide and properly and must not be abused. (Arubo v Aiyeleru (1993) 3 NWLR (Part 280) 126 at page 142 refers) j

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Nigerian Deposit Insurance Corp. v. Tasab Nigeria Company Ltd 115 a 5. It is an abuse of the Court process for a suitor to litigate again over an identical question which has already been decided against him even if the matter is not strictly res b judicata. 6. The fact that the defendants in the instant case have a right to defend this suit and to be heard in objection to it, does not mean they cannot be guilty of abusing the proc- c ess of this Court if it can be shown for example that the issue they are raising has already been decided by a Tri- bunal or Court of competent jurisdiction. After all an abuse of process lies in the manner that right to defend d and be heard in opposition is exercised and not the exercise of the right itself. (Saraki v Kotoye (1992) 9 NWLR (Part 264) 156 at Page 188–189 refers) 7. Ope-Agbe, J having held that the parties in Suit No. e LD/529/92 and the parties in this suit are the same and that the cause of action in Suit No. LD/529/92 and this suit are the same ie a claim for the recovery of the total outstanding sum of money plus interest arising out of a f banker/customer relationship, issue No.1 postulated by the defendants as to whether the cause of action raised in the originating summons before this Court is the same with the cause of action and issues canvassed in Suit No. g LD/529/92, is an abuse of the Court process having already been decided by Ope-Agbe, J. Such a decision, according to section 2(2) of the Tribunals (Certains Conse- quential Amendments, etc.) Decree No. 62 of 1999 is h preserved. 8. This question was litigated before the tribunal and Ope Agbe, J held that the judgment given by Lagos State High Court will not operate as res judicata. It is there- i fore an abuse of the Court process for the defendants to raise again before this Court the question whether this suit amounts to a rehearing of Suit No. LD/529/92 when the Tribunal had decided that issue by holding that that j suit will not operate as a res judicata.

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9. Jurisdiction of Federal High Court a Per curiam “On issue No. 2, it is conceded that this Court does not exercise supervisory or appellate jurisdiction over matters that b have been concluded at the Lagos State High Court. It must however not be forgotten that by FAILED BANKS DE- CREE No. 18 of 1994, the Federal Military Government established Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Tribunals. The Tribunals were con- c ferred with powers inter alia to recover debts owed to a Failed Bank. It is enacted in that Decree that any part heard proceeding relating to a matter for which the Tribunal has jurisdiction, which is pending before any Court on the date d of making the Decree i.e. 9 November, 1994, may in a civil case, be discontinued, with the leave of the Court and transferred to the Tribunal for fresh hearing under the Decree. This explains how this suit which was pending before Lagos State High Court found its way to the Failed e Banks Tribunal, Lagos Zone II. In 1999 the Tribunals were themselves dissolved and jurisdiction hitherto exercised by them was conferred on the Federal High Court or the High Court of a State as the case may be courtesy TRIBUNALS f (CERTAIN CONSEQUENTIAL AMENDMENTS, ETC) DECREE No. 62 of 1999. This further explains how this suit which was pending before Failed Banks Tribunal, Lagos Zone II ended in Federal High Court Lagos and hence in this Court. It is therefore wrong to say that this Court cannot as- g sume jurisdiction in this case in the absence of an order from the Court of Appeal. It is also wrong to say that by assuming jurisdiction in this case, this Court is exercising supervisory or appellate jurisdiction over a Court of co-ordinate jurisdiction. It is jurisdiction conferred by operation of the law.” h Dismissing the motion.

Cases referred to in the ruling i Nigerian A–G, Ondo State v Ekiti State (2001) 17 NWLR (Part 749) 706 Arubo v Aiyeleru (1993) 3 NWLR (Part 280) 126 j

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Nigerian Deposit Insurance Corp. v. Tasab Nigeria Company Ltd 117 a Din v African Newspapers Ltd (1990) 2 NSCC 313 (SC) Etikemi v Ibekwe (1997) 7 NWLR (Part 514) 598 Falobi v Falobi (1976) 1 NMLR 169 b Mobil Oil (Nig) Plc v I.A.L. 36 Inc (2000) 6 NWLR (Part 659) 146 NDIC v Okem Enterprises Ltd (2004) 10 NWLR (Part 880) c 107 NDIC v SBN (2003) 1 NWLR (Part 801) 321 Saraki v Kotoye (No. 2) (1992) 3 NSCC 331 UBN v ITTP (2000) 12 NWLR (Part 680) 102 d Nigerian statutes referred to in the ruling Companies and Allied Matters Act, 1990, section 425(1)(a), 624 e Constitution, 1999, sections 6(6)(a) and (b), 36(1), 240–243, 251(1)(d), 251(1)(e), 315, and (b) Failed Banks Decree No. 18 of 1994, sections 3(1)(a), 9 f Tribunals Certain Consequential Amendments Decree No. 62 of 1999, section 2

Counsel g For the plaintiff/respondent: Sorunke For the defendant/applicant: Ohai

Judgment h MUSTAPHA J: This is a Motion on Notice dated 12 March, 2003 brought by the defendants/applicants pursuant to order 9, rule 1 of the Rules of this Court and under the inherent jurisdiction of this Court for an order striking out this suit i for want of jurisdiction on the following grounds: (i) The suit as presently constituted amounts to a re- hearing of Suit No. LD/529/92 before the Lagos High Court in respect of which a considered judg- j ment had been delivered.

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(ii) By section 251 of the 1999 Constitution, the Federal a High Court does not have supervisory or appellate jurisdiction over matters that have been concluded at the Lagos State High Court. b (iii) By a combined effect of sections 240, 241 and section 243 of the 1999 Constitution of the Federal Re- public of Nigeria, the Federal High Court and the Lagos State High Court are Courts of co- ordinate ju- c risdiction. (iv) By sections 240 to 243 of the 1999 Constitution, the Court of Appeal is the appropriate Court with the appellate and supervisory jurisdiction over the Lagos d State High Court. And for all further orders as the Honourable Court may deem fit to make in the circumstance. The motion is supported by an affidavit of 8 paragraphs in e opposition to which the plaintiff filed a counter-affidavit of 7 paragraphs dated 6 February, 2001 annexed to which is a certified true copy of the Ruling of MA Ope-Agbe, J Chair- man of Failed Banks Tribunal, Lagos, Zone 2 delivered on f 15 October, 1996. The learned Counsel for the defendants/applicants put forward the following issues for determination:– (1) Whether the cause of action raised in the originating g application before this Court is the same cause of action and issues canvassed in Suit No. LD/529/92. (2) If the answer to issue No. 1 is positive whether Fed- eral High Court has constitutional powers or jurisdic- h tion to entertain and determine causes of action or issues already determined by Lagos State High Court and can Federal High Court assume jurisdiction to hear a matter in the absence of an order of the Court i of Appeal directing it. (3) Whether Federal High Court has jurisdiction to hear and determine issues arising out of banker/customer relationship. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JCA Nigerian Deposit Insurance Corp. v. Tasab Nigeria Company Ltd 119 a On the first issue, she submitted that the cause of action in this suit is the same set of facts constituted in Suit No. LD/529/92 which has the same cause of action. She said that b the cause of action is that the defendants/applicants herein purportedly obtained a loan from the plaintiff/respondent and refused, neglected or omitted to repay the said loan as at when due. She referred to paragraphs 3 and 4 of the support- c ing affidavit which according to her were neither disputed nor denied by any paragraph of the counter-affidavit and so are deemed to have been admitted. The cases of Falobi v Falobi (1976) 1 NMLR 169 and Samuel Etikemi v To- chukwu Ibekwe (1997) 7 NWLR (Part 514) 598 were re- d ferred to. The learned Counsel therefore submitted that the same facts in this suit form the basis of the two actions. She reinforced this submission by reference to the findings of the e Tribunal in its Ruling dated 15 October, 1996 page 5 paragraph 3 annexed as Exhibit “A” to the plaintiffs counter- affidavit. It was argued that the parties are the same, the two actions are the same and that this process is a re-hearing of f Suit No. LD/529/92. On issue No. 2 she submitted that this matter constitutes a re- hearing of Suit No. LD/529/92 and there is no provision for rehearing of the matter that has been concluded by g Courts of competent jurisdiction more so when such Court is a High Court which is of co-ordinate jurisdiction with the Federal High Court in the hierarchy of Courts in Nigeria. Referring to the case of NDIC v SBN (2003) 1 NWLR (Part h 801) 321 at page 363 ratios 13 and 14, it was argued that since the matter has been concluded in the State High Court, it is unconstitutional for the Federal High Court to purportedly exercise jurisdiction and rehear this matter. i On the last issue, the case of UBN v ITTP (2000) 12 NWLR (Part 680) 102 ratio 3 was cited in support of the argument that since this is a transaction between a customer and a bank, Federal High Court has no jurisdiction to hear j issues arising out of a banker/customer relationship.

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She urged the Court to decline jurisdiction. a In his address, the learned Counsel for the plaintiff placed reliance on the counter-affidavit filed in opposition to this motion and Exhibit “A” attached thereto. He objected to this b motion on the ground that it is an abuse of the Court process and drew the attention of the Court to the fact that earlier, in this suit, the defendants brought a similar application dated 2 July, 1996 before Ope-Agbe, J wherein the defendants c pleaded res judicata on the ground that it had earlier been adjudicated upon in Suit No. LD/529/92 but Ope-Agbe, J ruled that the Court had jurisdiction. It was argued that in the present application, the defendants/applicants merely re- d arranged the prayers and brought the same application that had been decided upon. Relying on the case of Arubo v Ai- yeleru (1993) 3 NWLR (Part 280) 126 at page 146 the Court was urged to dismiss the application if found to be an abuse e of the court process. On the first issue raised by the defendants/applicants, he contended that the parties are not the same in that in the suit before the State High Court, it was the Commercial Trust f Bank (Nig) Ltd; while in the present suit it is NDIC. It was therefore submitted that the plea of res judicata or estoppel cannot be sustained by the defendants. The case of Arubo v Aiyeleru (supra) at page 143 paragraph 11 was relied upon. g On the second issue, he noted that this action was actually commenced at Failed Banks Tribunal based on section 3(1)(a) of Failed Banks Recovery of Debts Decree, 1994 which section still subsists by virtue of section 315 of 1999 Constitution. He submitted that section 9 of Failed h Banks Decree, 1994 confers exclusive jurisdiction on the Failed Banks Tribunal to adjudicate on proceedings for recovery of unpaid debts which jurisdiction is now conferred on Federal High Court by Tribunals Certain Consequential i Amendments Decree No. 62 of 1999. Paragraph 5 of the schedule is said to specifically substitute “FAILED BANKS TRIBUNALS” with the words “IN THE FEDERAL HIGH COURT”. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JCA Nigerian Deposit Insurance Corp. v. Tasab Nigeria Company Ltd 121 a On the third issue, he submitted that NDIC is not a Bank and so banker/customer relationship does not arise between it and the defendants. NDIC, it was argued is an agency of b the Federal Government set up to protect Depositors’ deposits and that this suit is before the Court consequent upon the liquidation of COMMERCIAL TRUST BANK and the appropriate, law empowering NDIC is section 425(1)(a) of Companies and Allied Matters Act, 1990. Reference was c made to section 251(1)(e) of 1999 Constitution which empowers Federal High Court to look into matters arising from the operations of the Companies and Allied Matters Act. This Court having been vested with jurisdiction both by d the Companies and Allied Matters Act and the Constitution, it was submitted that the Court can adjudicate on this matter and so has jurisdiction. e The Court was urged to dismiss the preliminary objection. In reply on points of law, the learned Counsel for defendants/applicants contended that since the existence of the judgment in Suit No. LD/529/92 between COMMERCIAL f TRUST BANK and TASAB has been admitted by both parties, the defendants need not provide copy of that judgment. She placed reliance on Din v African Newspapers Ltd (1990) 2 NSCC 313 (SC). On the abuse of process she submitted that based on Saraki v Kotoye (No. 2) (1992) 3 NSCC 331 at g page 349 where a party has a right under a statute to do anything it cannot be an abuse of process and that in the instant case the defendants have a right to defend the suit and to be heard in objection to the suit. She referred to section 6(6)(a) h and (b) and section 36(1) of 1999 Constitution. The learned Counsel submitted that section 2 of Decree No. 62 of 1999 which transferred all cases from Failed Banks Tribunal to Federal High Court must be read subject i to section 3 of the same Decree which according to him says it is only if parties agree that matters that took place before the Tribunal will have effect in Federal High Court. He therefore submitted that there is no basis for the submission j that this application is an abuse of the Court process. The

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JCA 122 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) case of Mobil Oil (Nig) Plc v I.A.L. 36 Inc (2000) 6 NWLR a (Part 659) 146 at page 168 was referred to. He placed reliance on the case of A–G, Ondo State v Ekiti State (2001) 17 NWLR (Part 749) 706 at 767 in support of b the submission that Decree 62 of 1999 in so far as it purports to extend the jurisdiction of this Court contrary to section 251(1)(d) and (s) is unconstitutional. In reaction to the argument that NDIC is empowered by c section 425(1)(a) of the Companies and Allied Matters Act, he contended that NDIC is not one of the entities mentioned in section 624 of the Companies Act. Finally, it was submitted that since the objection of the d defendants is based on section 251(1)(d) and sections 240– 243 of the Constitution, the issue of whether the parties are strictly the same, is irrelevant. I will deal first with issue No.3 postulated by the learned e Counsel for the defendants/applicants. In the action filed before the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Tribunal on 15 May, 1996 the applicant claims against the respondent ie TASAB (Nigeria) Co. f Ltd as follows:– (i) The sum of N5,797,574.54 being the grand total of the loan aforesaid granted by the applicant to the respondent in May, 1990 plus all accrued interest g thereon as at 31/12/95 which the applicant has demanded but which the respondent has refused or failed to pay. (ii) Interest on the said sum of N5,797,574.54 from h 31/12/95 at the rate of 21% per annum until the date of judgment and thereafter at the rate of 21% until judgment is fully satisfied. It was argued that this Court has no jurisdiction to determine i issues arising out of a banker/customer relationship. It is enough to say that the Supreme Court in its judgment delivered on 23 April, 2004 in the case of NDIC v Okem Enter- prises Ltd and Another (2004) 10 NWLR (Part 880) 107 j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JCA Nigerian Deposit Insurance Corp. v. Tasab Nigeria Company Ltd 123 a held that the proviso to section 251(1)(d) of 1999 Constitu- tion of the Federal Republic of Nigeria cannot be interpreted to have the effect of conferring exclusive jurisdiction on b States High Courts and completely taking away that jurisdiction of the Federal High Court to entertain causes and matters relating to individual customer and bank. Supreme Court also held that the extent of the inconsistency of De- cree No.18 of 1994 as amended by Decree No. 62 of 1999 c with section 251(1)(d) of the 1999 Constitution is that by giving the Federal High Court exclusive jurisdiction in the Failed Banks Recovery of Debts vis a vis customer and bank transactions, it is in consistent with the proviso in section d 251(1)(d) which says the Federal High Court shall not have exclusive jurisdiction in such matters. Decree No. 18 of 1994 as amended by Decree No. 62 of 1999, it was further held, is to be read in the light that the Federal High Court e shall have jurisdiction in matters of dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank inconsistent with the proviso in section 251(1)(d) of 1999 Constitution. f The arguments of the applicant Counsel that Decree No. 62 of 1999 is unconstitutional and that this Court has no jurisdiction to determine issues arising out of a banker/customer Relationship are therefore rejected. g The next issue for determination is whether the filing of the motion under consideration amounts to an abuse of the process of this Court. In Arubo v Aiyeleru (1993) 3 NWLR (Part 280) 126 at page 142, Nnemeka-Agu, JSC defined an h abuse of process to mean that the Court’s process must be used bona fide and properly and must not be abused. In that case the Supreme Court held that it is an abuse of the Court process for a suitor to litigate again over an identical ques- i tion which has already been decided against him even if the matter is not strictly res judicata. The fact that the defendants in the instant case have a right to defend this suit and to be heard in objection to it, j does not mean they cannot be guilty of abusing the process

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JCA 124 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) of this Court if it can be shown for example that the issue a they are raising has already been decided by a Tribunal or Court of competent jurisdiction. After all an abuse of process lies in the manner that right to defend and be heard in b opposition is exercised and not the exercise of the right itself. See for example the case of Saraki v Koyote (1992) 9 NWLR (Part 264) 156 at page 188–189 where Karibi-Whyte, JSC held “it is not the exercise of the right PER SE, but its c improper and irregular exercise which constitutes an abuse”. It is averred in the counter-affidavit filed in opposition to this motion that the motion under consideration was made earlier and ruled upon on Wednesday 15 October, 1996 by d Ope-Agbe, JA. Certified true copy of the said Ruling has been annexed to the counter-affidavit as Exhibit “A”. It would be seen therein that Tasab (Nigeria) Ltd ie first defendant in the instant case, by way of preliminary objection prayed for an order striking out or dismissing the application e for recovery of debt brought against the debtor as the Tribu- nal as constituted lacks the jurisdiction to try the action. The grounds of objection are:– f (a) The respondent/applicant herein was sued and found liable in Suit No. LD/529/92 in 1993 by a Lagos High Court. (b) The plaintiff therein and the applicant herein levied g execution against the respondent/applicant to satisfy the said judgment. (c) The facts of the said Suit No. LD/529/92 and the parties as well as the cause of action were the same with h the one presently before the Honourable Tribunal. In the Ruling Ope-Agbe, J made the following findings of facts:– (i) That Commercial Trust Bank Nigeria Ltd instituted i an action in the Lagos High Court in Suit No. LD/529/92 against the debtor/applicant herein and one other Alhaja A. Bolaji who is described as the alter ego of the debtor/applicant. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JCA Nigerian Deposit Insurance Corp. v. Tasab Nigeria Company Ltd 125 a (ii) That the parties in Suit No. LD/529/92 and the parties herein are the same–this fact is by this application of the debtor/applicant conceded. b (iiii) That the cause of action in Suit No. LD/529/92 and this action in this Tribunal are the same. It is a claim for the recovery of the total outstanding sum of money plus interest arising out of a banker/customer c relationship. (iv) That judgment was entered in Suit No. LD/529/92 in favour of the applicant/respondent against the debtor/ applicant herein. d (v) That the plaintiff in Suit No. LD/529/92 who is the applicant/respondent herein levied execution against the defendants in that suit who are the debtor/ applicant herein. e The contention of the Counsel for the debtor/applicant before the Tribunal was that on the facts before the Tribunal, they raised the plea of res judicata and the applicant are not entitled to bring a fresh suit. Ope-Agbe, J the Tribunal f Chairman held that notwithstanding the fact that judgment was entered against the Debtor/applicant who were defendants in Lagos State High Court and execution levied, since some sums still remained outstanding then by virtue of sec- g tions 3(1)(a) and 9 of Failed Banks Decree No. 18 of 1994, the Tribunal has jurisdiction to entertain the suit and that the judgment given at the Lagos State High Court will not operate as a res judicata but only as a relevant fact to the issue in the action before theTribunal. h Ope-Agbe, J having held that the parties in Suit No. LD/ 529/92 and the parties in this suit are the same and that the cause of action in Suit No. LD/529/92 and this suit are the same ie a claim for the recovery of the total outstanding sum i of money plus interest arising out of a banker/customer relationship, issue No. 1 postulated by the defendants as to whether the cause of action raised in the originating summons before this Court is the same with the cause of action j and issues canvassed in Suit No. LD/529/92, is an abuse of

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JCA 126 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) the Court process having already been decided by Ope- a Agbe, J .Such a decision, according to section 2(2) of the Tribunals (Certain Consequential Amendments, Etc) Decree No. 62 of 1999 is preserved. b One of the grounds relied upon by the defendants is that this suit as presently constituted amounts to a re-hearing of Suit No. LD/529/92 before the Lagos State High Court in respect of which a considered judgment had been c delivered. This question was litigated before the tribunal and Ope- Agbe, J held that the judgment given by Lagos State High Court will not operate as res judicata. It is therefore an d abuse of the Court process for the defendants to raise again before this Court the question whether this suit amounts to a rehearing of Suit No. LD/529/92 when the Tribunal had decided that issue by holding that that suit will not operate as a e res judicata. On issue No. 2, it is conceded that this Court does not exercise supervisory or appellate jurisdiction over matters that have been concluded at the Lagos State High Court. f It must however not be forgotten that by Failed Banks Decree No. 18 of 1994, the Federal Military Government established Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Tribunals. The Tribunals were con- g ferred with powers inter alia to recover debts owed to a Failed Bank. It is enacted in that Decree that any part-heard proceeding relating to a matter for which the Tribunal has jurisdiction, which is pending before any Court on the date h of making the Decree ie 9 November, 1994, may in a civil case, be discontinued, with the leave of the Court and transferred to the Tribunal for fresh hearing under the Decree. This explains how this suit which was pending before Lagos State High Court found its way to the Failed Banks i Tribunal, Zone II, Lagos. In 1999 the Tribunals were themselves dissolved and jurisdiction hitherto exercised by them was conferred on the Federal High Court or the High Court of a State as the case may be courtesy Tribunals j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JCA Nigerian Deposit Insurance Corp. v. Tasab Nigeria Company Ltd 127 a (Certain Consequential Amendments, Etc) Decree No. 62 of 1999. This further explains how this suit which was pending before Failed Banks Tribunal Lagos Zone II ended in b Federal High Court Lagos and hence in this Court. It is therefore wrong to say that this Court cannot assume jurisdiction in this case in the absence of an order from the Court of Appeal. It is also wrong to say that by assuming c jurisdiction in this case, this Court is exercising supervisory or appellate jurisdiction over a Court of coordinate jurisdiction. It is jurisdiction conferred by operation of the law. In the final analysis I hold that there is no merit in this motion. It is therefore hereby dismissed.

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a Union Bank of Nigeria Plc v Umeoduagu

SUPREME COURT OF NIGERIA b MOHAMMED, IGUH, KALGO, EJIWUNMI, EDOZIE JJSC Date of Judgment: 2 JULY, 2004 Suit No.: SC.10/2000

Banking – Banker/customer relationship – Bank failing to transfer customer’s money as instructed – Not refunding c same to customer – Impropriety of Facts The facts of this case as gleaned from the pleadings as no d evidence was called, is that the respondent purchased seven bills totalling US$ 121,038 from the appellant bank in 1982 on the agreement that the appellant should immediately transfer the said sum to the respondent’s suppliers overseas being payment for goods purchased from them by the re- e spondent. The appellant failed or neglected to remit or transfer the sum as agreed. As a result, the respondent had to ar- range to pay the said sum to the overseas suppliers in 1983 when they came to Nigeria and demanded the payment from f him. The respondent then demanded from the appellant to know the whereabouts or what happened to the bills he purchased from them in 1982, but was only requested to exercise patience. He waited patiently until 1995 when his pa- g tience was exhausted and he joined the appellants in the search for the said sum. In the cause of his investigations, he discovered that the appellants were keeping the sum in their account in the Central Bank of Nigeria. As a result the re- h spondent demanded from the appellants the refund of his money in US dollars or its equivalent in Naira at that time. The appellants failed to do so and the respondent filed this action on 19 June, 1996. i Held – Once it became clear that the appellant bank had defaulted in remitting its customer’s money to the latter’s overseas partners as agreed, the appellant bank was obliged, as a j

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Union Bank of Nigeria Plc v. Umeoduagu 129 a matter of course to refund the money to its customer the respondent. Appeal dismissed. b Cases referred to in the judgment Nigerian c 7-Up Bottling Company Ltd v Abiola and Sons Bottling Co. Ltd (2001) 13 NWLR (Part 730) 469 Bello v A-G, Oyo State (1986) 5 NWLR (Part 45) 828 Civil Service Technical Workers Union v Agriculture and d Allied Workers Union of Nigeria (1993) 2 NWLR (Part 273) 63 Egbe v Adefarasin (No. 2) (1987) 1 NWLR (Part 47) 1 e Fumudoh v Aboro (1991) 9 NWLR (Part 214) 210 Labode v Otubu (2001) 7 NWLR (Part 712) 256 Omotayo v Nigerian Railway Corporation (1992) 7 NWLR (Part 254) 471 f P N Udoh Trading Company Ltd v Abere (2001) 11 NWLR (Part 723) 114 at 129 Patkun Industries Ltd v Niger Shoes Ltd (1988) 5 NWLR g (Part 93) 138 Savage v Uwaechia (1972) 3 SC 214 Savannah Bank of Nigeria Ltd v Pan Atlantic Shipping & h Transport Agencies Ltd (1987) 1 NWLR (Part 49) 212 Thadant v National Bank of Nigeria (1972) 1 SC 105

Nigerian statute referred to in the judgment i Actions Law Cap 3 Laws of Anambra State, 1986, section 20(1)(a)

Counsel j Parties absent and not represented

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Judgment a KALGO JSC: (Delivering the lead judgment) The dispute in this appeal is on a very narrow compass. It is simply for the determination of when the cause of action has arisen in the b case having regard to the circumstances. The case did not go to trial and no evidence was called at all. Everything was based on the pleadings of the parties. According to paragraph 13 of the statement of claim, the c plaintiff now respondent, claimed against the appellant for:– “(a) Payment to the plaintiff of the said sum of $121,038 (One Hundred and Twenty-one Thousand and Thirty-eight Dol- lars) which the plaintiff purchased from the defendant but d which the defendant failed and/or neglected to remit to the plaintiff’s overseas customers, or its naira equivalent at the official parallel market rate of N82.50 (Eighty-two Naira, Fifty Kobo) per Dollar amounting to N9,985,635 (Nine Mil- lion, Nine Hundred and Eighty-five Thousand, Six Hundred e and Thirty-five Naira). (b) Interest on the said sum claimed at 21% per annum from 1995 till payment of the sum claimed or date of judgment in this suit, whichever is earlier.” f In the amended statement of defence filed by the appellant, paragraph 16 reads:– “Defendant will contend the following preliminary points: g (a) The plaintiff statement of claim discloses . . . no cause of action against the defendant; (b) That the plaintiff’s cause of action having accrued in 1982, is statute barred; (c) That the plaintiff lacks competence to institute the action for h recovery of the deposits.” By this averment, the appellant has raised a preliminary objection that no cause of action is disclosed in the statement of claim and that the action of the respondent is statute- i barred. The learned trial Judge, quite properly in my view, decided to hear the parties on the preliminary objection before proceeding to trial. I say this is proper in the circumstances because if he decides to sustain the preliminary j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kalgo JSC Union Bank of Nigeria Plc v. Umeoduagu 131 a objection, that is the end of the matter as far as he is concerned. The learned trial Judge Amaizu, J (as he then was) after hearing the parties on the objection, overruled it, and b ruled that the plaintiff respondent had a cause of action and that “in the state of the plaintiff’s pleading the action is not statute-barred”. Dissatisfied with the ruling, the appellant appealed to the c Court of Appeal which by a majority decision dismissed the appeal. He now appealed here. The facts of this case as gleaned from the pleadings as no evidence was called, is that the respondent purchased seven d bills totalling US$121,038 from the appellant bank in 1982 on the agreement that the appellant should immediately transfer the said sum to the respondent’s suppliers overseas being payment for goods purchased from them by the re- e spondent. The appellant failed or neglected to remit or transfer the sum as agreed. As a result, the respondent had to ar- range to pay the said sum to the overseas suppliers in 1983 when they came to Nigeria and demanded the payment from f him. The respondent then demanded from the appellant to know the whereabouts or what happened to the bills he purchased from them in 1982, but was only requested to exercise patience. He waited patiently until 1995 when his patience was exhausted and he joined the appellants in the g search for the said sum. In the cause of his investigations, he discovered that the appellants were keeping the sum in their account in the Central Bank of Nigeria. As a result the respondent demanded from the appellants the refund of his h money in US dollars or its equivalent in Naira at that time. The appellants failed to do so and the respondent filed this action on 19 June, 1996. In the briefs of argument filed by the parties and ex- i changed between them, in this appeal, issues for the determination of this court were formulated. The 3 (three) issues raised by the appellants read:– “(1) Whether having regard to respondent pleadings, the majority j of the justices of the court below were right to uphold the

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opinion of the learned trial Judge that respondent’s cause of a action did not arise in 1982 or 1983 or latest 1987, but rather in 1995 following his demand for refund of the sum after his alleged “discovery”. b (2) Whether the court below was right to confirm the trial court’s decision that appellant’s failure to perform its part of contract immediately in 1982, or respondent’s payment to his suppliers in 1983 or the event in 1987 does not vest him with right of action for recovery of the sum until the event of c 1995. (3) Whether the appellant was not prejudiced by failure of the court below to consider all its case, particularly that discovery of the fact per se is not justiceable and therefore could not be a basis for respondent’s action, and that demand for d the sum was not an ingredient of the contract.” The respondent raised only one issue thus:– “Whether the Court of Appeal was right when it agreed with the trial court that the respondent’s cause of action arose and accrued e in 1995 and consequently the action was not statute barred.” I have carefully looked at the parties’ issues raised in this appeal, and it appears to me that they are all pointing or leading to the same thing, and although the appellant’s is- f sues are germane to the grounds of appeal, their issue 1 which is identical with the respondent’s sole issue, summed it up altogether. Therefore in my consideration of this appeal, I shall take the appellant’s issues together. g At the hearing of this appeal in this court, neither the appellant’s nor the respondent’s counsel was in court, but as both of them have filed their respective briefs, those briefs were deemed to be argued in this case by virtue of the provi- h sions of Order 6 Rule 8(6) of the Supreme Court Rules, 1985 as amended. I have already indicated that I shall consider the appellant’s three issues together, I now do. Issue 1 appears to me i to be the most important in the determination of this appeal and that issues 2 and 3 can conveniently be argued in it. Is- sue 1 asked the question whether the majority decision of the Court of Appeal was right to uphold the opinion of the j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kalgo JSC Union Bank of Nigeria Plc v. Umeoduagu 133 a learned trial Judge that the respondent’s cause of action in this case arose in 1995 and that the action was not statute- barred. The two points which arise for decision in this issue b are (a) what in any particular case is the cause of action and (b) when does it arise or terminate. c Cause of action has been defined in the Dictionary of Eng- lish Law, Second Impression page 325 as “the fact or combination of facts which give rise to a right to sue”. This definition was closely followed in many decisions of this court d particularly in Egbe v Adefarasin (No. 2) (1987) 1 NWLR (Part 47) 1; Savannah Bank of Nigeria Ltd v Pan Atlantic Shipping and Transport Agencies Ltd (1987) 1 NWLR (Part 49) 212; Thadant v National Bank of Nigeria (1972) 1 SC e 105; Patkun Industries Ltd v Niger Shoes Ltd (1988) 5 NWLR (Part 93) 138. In the recent decision of this court in P N Udoh Trading Company Ltd v Abere (2001) 11 NWLR (Part 723) 114 at 129 it was held that:– f “Cause of action had been defined by courts to mean a combination of facts and circumstances giving rise to the right to file a claim in court for a remedy. It includes all things which are necessary to give a right of action and every material fact which has to be proved to entitle the plaintiff to succeed.” g See also Bello v A-G, Oyo State (1986) 5 NWLR (Part 45) 828. Having defined the “cause of action” the next point is what is to be looked at or examined in order to determine h whether there is “cause of action” in any particular case. In the case of 7-Up Bottling Company Ltd and Others v Abiola and Sons Bottling Co. Ltd (2001) 13 NWLR (Part 730) 469 at page 495 this court held that:– i “The law is sufficiently settled that in determining whether the plaintiff’s (respondent’s) action discloses any cause of action or the nature thereof, the court will necessarily restrict itself to the plaintiff’s/respondent’s statementof claim without recourse to the defendant’s/appellant’s statement of defence vide Shell B. P. Ltd & j Ors. v Onasanya (1976) NSCC 334 at 336; (1976) 6 SC 89. See

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also Aladegbemi v Fasanmade (1988) 3 NWLR (Part 81) 129.” a (Italics mine.) Also in Labode v Otubu (2001) 7 NWLR (Part 712) 256 at page 276, this court held that in determining whether or not b pleadings disclose any reasonable cause of action, the trial court will only examine the writ of summons and the statement of claim. It will not examine the statement of defence or any defence by way of affidavit. See also Fumudoh v c Aboro (1991) 9 NWLR (Part 214) 210; Civil Service Tech- nical Workers Union v Agriculture and Allied Workers Un- ion of Nigeria (1993) 2 NWLR (Part 273) 63. Having stated the relevant law on the matter, I now wish d to examine the material available before the trial court in determining whether the respondent had any cause of action in this case. The relevant material here is the statement of claim of the respondent which in paragraphs 3–6, 8, 9, 10, e 11 and 12 read as follows:– “3. In 1982, the plaintiff purchased from the defendant at its Onitsha New Market Road Branch a total sum of $121,038 (One Hundred and Twenty-one Thousand and Thirty-eight f United States of America Dollars) covering seven bills for transfer to a correspondent bank for payment to the plaintiff’s customers overseas for goods purchased by the plaintiff. The particulars of the bills purchased by the plaintiff and their respective values in dollars areas follows: g (a) IBC 82/2433 for USD17,291.00 (b) IBC 82/2434 for USD17,299.00 (c) IBC 82/2431 for USD17,286.00 (d) IBC 82/2432 for USD17,286.00 h (e) IBC 82/2439 for USD17,299.00 (f) IBC 82/2436 for USD17,286.00 (g) IBC 82/2438 for USD17,291.00 i 4. After payment of diverse charges, the defendant contracted and agreed to remit the sum so purchased to the plaintiff’s customers whose particulars were known to the defendant through the correspondent bank, the particulars of which were also known to the defendant. j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kalgo JSC Union Bank of Nigeria Plc v. Umeoduagu 135 a 5. For reasons not known to the plaintiff, the defendant failed and/or neglected to remit the sum so purchased, and did not inform the plaintiff of the whereabouts of the United States Dollars so purchased by the plaintiff. Whenever the plaintiff b made inquiries, the plaintiff was advised to exercise patience and that attempts were on course to locate the whereabouts of the dollars purchased by him. 6. Exasperated by the long waiting and without knowing pre- c cisely when to be paid for goods supplied and cleared by the plaintiff, the plaintiff’s overseas customers flew into Nigeria in 1983 to demand payment by the plaintiff to enable them finance the business of their relation in Nigeria. 8. In order to maintain good and smooth business relationship d with his overseas customers, the plaintiff quickly settled his account with his customers by paying for full value of the goods supplied to him by his said customers. 9. In 1995, the plaintiff became convinced that the defendant was not serious in its alleged efforts to trace the where abouts e of the sum of USD121,038 purchased by the plaintiff from the defendant to be remitted by the defendant to the plaintiff’s overseas customers. 10. When in 1995 the plaintiff intensified his investigations of f the whereabouts of the sum purchased which investigation took him to the Central Bank of Nigeria, the plaintiff discovered to his dismay that the defendant is indeed having and keeping the plaintiff’s money and making use of the same in the course of its business, a fact which the defendant con- g cealed from the plaintiff. 11. Consequently upon this discovery, the plaintiff has made repeated and several demands on the defendant to pay to him the sum so purchased, or credit his account with the naira equivalent at the prevailing parallel market exchange rate of h N82.50 per dollar. 12. Instead of honouring the plaintiff’s demand, the defendant resorted to imposing conditions before releasing the money to the plaintiff.” i From the above paragraphs the following facts are revealed:– 1. The respondent purchased from the appellant in 1982 a total of 7 bills to the tune of 121,038 US Dollars for j remittance to his customers overseas.

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2. The appellant contracted and agreed to remit the said a amount immediately to the respondent’s customers whose particulars were known to the appellant. 3. The appellant failed or neglected to remit the said sum b and refused to inform the respondent of what happened to the money. 4. The respondent’s customers overseas having waited for sometime without receiving the money, flew to c Nigeria in 1983, to collect the same, and the respondent had to quickly pay them the amount to maintain his good relationship with them. 5. The respondent continued to make enquiries from the d appellant about the money but was each time told to be patient. 6. In 1995, the respondent in course of his investigation e about the money, discovered that the money was kept by the appellant in an account in the Central Bank of Nigeria and was making use of same in the course of their business. f 7. The respondent demanded from the appellant the payment to him of the said money but the appellants refused or neglected to do so. From these hard facts or averments, there is no doubt in my g mind, that the combination of them, clearly revealed that the failure by the appellants to pay back the amount involved to the respondent, after refusal to comply with his original request to remit the amount to his customers overseas, gives h him the right to complain culminating in the cause of action. I find accordingly. This leads me to the next question of when did the cause of action arise in this case. The cause of action normally arises as soon as the combination of facts giving the right to complain accrued or happened. In this i case, as soon as the respondent discovered that his money which the appellant agreed to remit overseas to his customers was not remitted as agreed, his cause of action has arisen. In this case, the respondent’s cause of action arose in j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kalgo JSC Union Bank of Nigeria Plc v. Umeoduagu 137 a 1995 when he made the discovery in the Central Bank of Nigeria. I do not agree with the submission of the learned counsel for the appellant in his brief that the cause of action b arose in 1983 when the respondent paid his overseas customers because, as at that time, it was not clear what happened to the money and the appellant could not be blamed for anything at that stage. The appellant might have sent or c remitted the amount and then for some reason, the money got stuck or stranded in transit in some other correspondent bank. So there is no ground for complaint then unless it is definite that the amount had not been sent or remitted. This was the result of the discovery in 1995 by the respondent. I d am therefore of the firm view that the cause of action in this case arose in 1995, and the period of limitation against the respondent started to run as from 1995. e It is abundantly clear that the respondent took out the writ of summons in this case on 19 June, 1996. Therefore taking the whole of 1995 and uptill June, 1996 when the action was filed, there was a period of only one and a half years. Ac- cording to section 20 of the Actions Law (Cap 3) Laws of f Anambra State, 1986, the right of action in this type of case shall cease to exist 6 years after the cause of action arose. Therefore, by filing this case just within one and a half years after the cause of action arose, the respondent was within g time and his action is not statute-barred. I am in complete agreement with the trial court and the Court of Appeal that on the state of the respondent’s statement of claim, he has a cause of action and his action is not statute-barred. h From all what I have said above, I find that there is no merit in this appeal and no special reasons to justify any in- terference with the concurrent findings of the lower courts. I accordingly dismiss this appeal and affirm the decision of i the Court of Appeal. I award N10,000 costs to the respondent against the appellants.

MOHAMMED JSC: I entirely agree with the judgment just j delivered by my learned brother, Kalgo, JSC, that this

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Mohammed JSC 138 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) appeal has failed. In a case like this one, where the defence a of limitation of action has been put up, the duty of the court is to look into the facts of the case as given in both the writ and the statement of claim in order to ascertain when, from b the state off acts, the party’s right to seek a judicial remedy has arisen. From the combination of facts given by the respondent it is abundantly clear that he came to know about the where- c abouts of the missing money when he conducted a search which took him to the Central Bank. It was then that he discovered that the money had been kept in the Central Bank in the appellant’s name. The discovery has established a prima d facie default by the appellant. It was only then that the cause of action has arisen and the respondent could institute a claim for the recovery of the amount. e For the more detailed reasons given in the lead judgment, I too dismiss this appeal and affirm the majority decision of the Court of Appeal. I abide by the consequential order made by my learned brother in the lead judgment. f

IGUH JSC: I have had the privilege of reading in draft the judgment just delivered by my learned brother, Kalgo, JSC and I entirely agree that this appeal is without merit and should be dismissed. g What calls for determination in this appeal is whether the court below was right when it agreed with the trial court that the respondent’s cause of action accrued in 1995 and that h consequently the suit was not statute-barred. It is now well-settled that in considering whether an action to enforce a legal right is statute-barred, the court should confine itself to the averments in the writ of summons and the i statement of claim which allege the factual situations that gave rise to the cause of action. See Egbe v Adefarasin (1987) 1 NSCC (Vol. 18) 1 at 16 or (1987) 1 NWLR (Part 47) 1 and Omotayo v Nigerian Railway Corporation (1992) j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Iguh JSC Union Bank of Nigeria Plc v. Umeoduagu 139 a 7 NWLR (Part 254) 471. A recourse to the averments in the statement of defence in this exercise does not arise. Now, paragraphs 9, 10, 11, 12 and 13 of the respondent’s b statement of claim aver as follows:– “9 In 1995, the plaintiff became convinced that the defendant was not serious in its alleged efforts to trace the whereabouts of the sum of USD121,038 purchased by the plaintiff from c the defendant to be remitted by the defendant to the plaintiff’s overseas customers. 10 When in 1995 the plaintiff intensified his investigations of the whereabouts of the sum purchased which investigations d took him to the Central Bank of Nigeria, the plaintiff discovered to his dismay that the defendant is indeed having and keeping the plaintiff’s money and making use of the same in the course of its business, a fact which the defendant concealed from the plaintiff. e 11 Consequent upon this discovery, the plaintiff has made repeated and several demands on the defendant to pay to him the sum so purchased, or credit his account with the Naira equivalent at the prevailing parallel market exchange rate of f N82.50 per Dollar. 12 Instead of honouring the plaintiff’s demand, the defendant resorted to imposing conditions before releasing the money to the plaintiff. g 13 Whereof the plaintiff claims from the defendant as follows:– (a) Payment to the plaintiff of the said sum of $121,038 (One Hundred and Twenty-one Thousand and Thirty- eight Dollars) which the plaintiff purchased from the de- h fendant but which the defendant failed and/or neglected to remit to the plaintiff’s overseas customers, or its Naira equivalent at the official parallel market rate of N82.50 (Eighty-two Naira, Fifty Kobo) per Dollar amounting to N9,985.635 (Nine Million, Nine Hundred i and Eighty-five Thousand, Six Hundred and Thirty-five Naira). (b) Interest on the said sum claimed at 21% per annum from 1995 till payment of the sum claimed or date of judg- j ment in this suit, whichever is earlier.”

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The Court of Appeal in resolving whether the respondent’s a action is statute-barred commented thus:– “In Anambra State where this cause of action arose and where the action was commenced the period of limitation as prescribed by b Section 20(1)(a) of the Actions Law of Anambra State, 1981 as contained in the Laws of Anambra State of Nigeria, 1986 is six years. This point would seem to be accepted by both sides to the contest.” c It went on:– “In paragraphs 9 and 10 of the statement of claim the respondent pleaded that in 1995, following his investigation of the whereabouts of the money purchased by him, he discovered in the Cen- d tral Bank, to his chagrin, that the appellant was in fact keeping and making use of his money in the course of its business. This fact was concealed by the appellant to the respondent. In paragraphs 11 and 12 of the statement of claim the respondent pleaded that consequent upon this discovery, the respondent demanded the refund e of his money or to credit his account with the said money. This demand, the appellant failed to meet, but rather imposed certain conditions before it could release his money to him. The respondent sued in June, 1996.” f The court then opined:– “I have had a good look at the statement of claim. I shall reserve my comments on certain aspects of it as I do not intend to prejudice the trial. We are only at the preliminary stage as to whether g the respondent can maintain the action having regard to the limitation of action under the Actions Law of Anambra State, 1986. My view is that he can.” The facts of this case as pleaded in the statement of claim h may be summarized as follows:– 1. The respondent purchased from the appellant in 1982 a total of 121,038 United States Dollars for remittance to his customer overseas. i 2. The respondent made endless enquiries about the remittance but was consistently advised to exercise patience and that attempts were on course to locate where the money was. j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Iguh JSC Union Bank of Nigeria Plc v. Umeoduagu 141 a 3. In 1995, the respondent appeared satisfied that the appellant was hiding something from him. 4. In the same 1995, the respondent went to the Central b Bank of Nigeria and discovered from his investigations and to his dismay that the appellant was keeping his money and making use of the same in the course of its business. This fact the appellant concealed from the c respondent. 5. Consequent upon this discovery, the respondent made repeated demands on the appellant for payment to him of the sum so purchased, which demands the appellant d failed to comply with. 6. In 1996, the respondent was obliged to file his action against the appellant. e A cause of action, without doubt, is the fact or facts, which establish or give rise to a right of action. It is the factual situation which gives a person the right to judicial relief. See Egbe v Adefarasin (supra) and Savage v Uwaechia (1972) 3 f SC 214. A close study of the facts of this case as above set- out, clearly discloses that the cause of action arose from the discovery in 1995 by the respondent that his money which the appellant claimed it had been tracing for several months without success was in the possession of the said appellant; g and despite repeated demands, the said appellant refused and/or neglected to pay the same over to the said respondent. In other words, the respondent was obliged to file his action against the appellant in 1996 on discovery in 1995 that his h money was with the appellant and after he had duly made demands on the appellant for its payment to him without success. The court below dealt exhaustively with this issue of i when the respondent’s cause of action arose when per Ubae- zonu, JCA stated:– “In paragraph 5, the respondent pleaded that the appellant did not remit the money and did not inform the respondent of the where- j abouts of the money so purchased. Whenever the respondent made

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enquiries he was advised by the appellant to exercise patience as a attempts were being made to locate the whereabouts of the money. In paragraphs 6 and 8, the respondent pleaded that exasperated by the long waiting, he had to pay his overseas customers in 1983 in order, apparently, to save his business reputation. Meanwhile, the b search for the whereabouts of the money purchased by the respondent continued. One may ask – why did the respondent not sue the appellant at this stage? I would ask – sue for what? At that stage it was not clear to the respondent what had happened to the money. c The respondent was searching or investigating the whereabouts of the money. The appellant, apparently, was also engaged in the investigation while asking the respondent to exercise patience. There was not a breach of any contract at that stage as the money might have been remitted to a foreign bank, and something happened in d transit.” I entirely agree with the above observation of the Court of Appeal and fully endorse the same. It is clear to me that up till 1995 when the respondent was persistently asked to ex- e ercise patience by the appellant and that all attempts were being made to locate his money, there was no legal basis for the respondent to proceed against the appellant by way of a court action. There was, however, cause for the respondent f to go to court after 1995 when he discovered that the appellant was wrongfully keeping his money and doing business with it and that the said appellant refused to pay it over to the said respondent.The period of limitation as prescribed by g section 20(1)(a) of the Actions Law of Anambra State, 1986 is six years and the respondent’s action against the appellant was filed in 1996. It is clear to me that the Court of Appeal was perfectly right when it held that the respondent’s action was not statute-barred. h It is for the above and the more detailed reasons contained in the leading judgment of the learned brother, Kalgo, JSC that I, too, find no substance in this appeal which I hereby i dismiss with costs to the respondent against the appellant which I assess and fix at N10,000.00.

EJIWUNMI JSC: As I have had the opportunity of reading before now the judgment just delivered by my learned j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Union Bank of Nigeria Plc v. Umeoduagu 143 a brother, Kalgo, JSC dismissing this appeal, the appeal is also dismissed by me for the reasons given in the said judgment. The events that led to this appeal began in 1983 when the b respondent deposited his money, a total sum of N9,985,635 for the purchase of $121,038 (one hundred and twenty-one thousand and thirty-eight Dollars) and for the onward transmission of the said foreign currency to the customers of the c respondent through an overseas bank. It turned out that the appellant failed and or neglected to transmit the said sum as agreed. The matter remained that way until the respondent on his own found out in 1995 that the money had been down d with the Central Bank of Nigeria where the appellant had placed it to effect its transmission in dollars to the customers of the appellant. There can be no doubt that the cause of action arose when e though the appellant had failed to transmit the money as agreed between it and the respondent as scheduled, then went on to fail to do anything to ameliorate the position by taking immediate steps to deal with the matter after the re- f spondent had managed to discover his money by taking ur- gent and immediate steps to effect the transfer, even at its own cost. That the respondent’s cause of action arose at that point in 1995 is settled law. See Egbe v Adefarasin (No. 2) (1987) 1 NWLR (Part 47) 1; Savannah Bank of Nigeria Ltd g v Pan Atlantic Shipping and Transport Agencies Ltd (1987) 1 NWLR (Part 49) 212; P N Udoh Trading Company Ltd v Abere (2001) 11 NWLR (Part 723) 114 at 129. h This appeal for all the reasons given above and the fuller reasons in the lead judgment of Kalgo, JSC lacks merit. It is therefore dismissed by me and I award costs in the sum of N10,000 only. i EDOZIE, JSC: I had the privilege of reading in advance the draft of the leading judgment just read by my learned brother, Kalgo, JSC and I am in agreement with his reasoning and conclusion in dismissing the appeal. It is a matter for j regret that a reputable bank such as the appellant bank

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC 144 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) should in the circumstances of this case seek to take refuge a under the limitation law. In my view, once it became clear that the appellant bank had defaulted in remitting its customers money to the latter’s overseas partners as agreed, the b appellant bank was obliged, as a matter of course to refund the money to its customer the respondent. Had the appellant been properly advised, the protracted litigation culminating in this appeal would have been averted. c For the reasons lucidly set out in the leading judgment, I also dismiss the appeal with N10,000 costs to the respondent. Appeal dismissed. d

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First Bank of Nigeria Plc v. Mainasara 145 a First Bank of Nigeria Plc v Mainasara

COURT OF APPEAL, KADUNA DIVISION b BA’ABA, UMOREN, JEGA JJCA Date of Judgment: 15 JULY, 2004 Suit No.: CA/K/56/01

Banking – Account – Allegation of – Fraud and manipula- c tion of account – Burden of proof – How discharged Banking – Account – Payment of money into account – How proved – Use of bank teller duly stamped Banking – Banker and customer relationship – Allegation of d negligence by bank – Need to plead with particulars and prove

Facts e The plaintiff/respondent claimed against the defendant/ appellant as follows:– “(a) A declaration that the plaintiff, being the holder of Account No. 7862 with the defendant is entitled to f his statement of account 7862 for the period 1982– 1990. (b) An order directing the defendant to issue the plaintiff with the Statement of Accounts No. 7862 for the pe- g riod covering 1982–1990. (c) N300,000,000.00 (Three Hundred Million Naira) being damages for fraud and refusal to issue the plaintiff with his statement of account as and when due.” h The respondent is a business man who among other things carries on the business of a private clinic under the name and style of Muhammadiya Medical Centre in Gusau, Zamfara State while the appellant is a public limited liability com- i pany, carrying on banking business throughout Nigeria with a branch at Canteen Road, Gusau, Zamfara State. The respondent maintains a current account with the defendant at it’s Gusau Branch and the Account No. is 7862. According j to the respondent, between the periods of 1982 to 1990, the

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146 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) respondent made lodgments worth billions of Naira which a the appellant deliberately refused to issue the respondent with the statement of account covering the said periods despite several demands. However, the respondent was issued b with three statements of account covering the year 1991 to 1994 from which serious fraud and misrepresentation was found by the respondent. The respondent claimed that the refusal and negligence to post his lodgment covering the c year 1982 to 1990 and serious fraud was committed which greatly contributed to the downfall of the respondent’s business hence the institution of the action against the appellant. The appellant on the other hand admitted having banking d business with the respondent but denied deliberately refusing to issue the respondent with the statement of account for the periods of 1982 to 1990. According to the appellant, the respondent received statement of account and such information relating to same at all material times and in addition, the e respondent made periodic check (sic) at the appellant’s office to reconcile the lodgments made from his statements of account so received. The appellant denied that the respondent or any member of his management lodged any com- f plaint with the appellant or the Law Enforcement Authori- ties regarding the purported refusal or negligence to issue statements of accounts prior to this action. It is the case of the appellant that all the sums presented for lodgment in g the respondent’s account including those for the transactions covering the period 1991 to 1994 for which statements of account were issued to the respondent were correctly entered. h The learned trial Judge entered judgment in favour of the plaintiff/respondent in the sum of N500,000 as general damages plus N600 and cost of N50,000. The defendant appealed to the Court of Appeal. i

Held – 1. Payment of money into an account may be proved either by the oral evidence of the person who actually made the j

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First Bank of Nigeria Plc v. Mainasara 147 a payment personally to the bank or by the production of bank tellers or acknowledgement showing on the face of it that the bank had received the payment. This is be- b cause a bank teller duly stamped with an official stamp of the bank and properly initialed by the cashier constitutes prima facie proof of payment of the sum of the money therein indicated and a customer after producing c such a receipt needs not to prove more unless the payment is being seriously challenged. (Aeroflot v UBA (1986) 3 NWLR (Part27) 188 at 190; Ishola v SGB (Nig) Ltd (1997) 2 NWLR (Part 488) 405 referred to.) d 2. Where there is allegation of fraud in the amount credited to the account of a customer, the fraud must be proved beyond reasonable doubt by virtue of section 138(1) Evidence Act. e In the instant case, the respondent failed to lead credible evidence in support of his allegation of fraud by failing to call his cashier or the person who made the lodgments in his Account No. 7862. f 3. A plaintiff, as a matter of law is required in an action on negligence to state or give particulars of negligence and to recover on the negligence pleaded in those particulars. It is not sufficient for a plaintiff to make a blanket alle- g gation of negligence against a defendant on a claim of negligence without giving full particulars of the terms of negligence relied on as well as the duty of care owed to him by the defendant. Accordingly, in an action on negligence a plaintiff to succeed must in addition top lead- h ing and establishing the particulars of negligence relied on, he must also state and establish duty of care owed to him by the defendant, the fact upon which that duty is founded and the breach of that duty by the defendant. As i the respondent in this appeal has not provided the particulars of negligence as required by the rules of pleadings, his claim of negligence ought not to have been granted. Even if evidence is led in support of negligence, j if the particulars have not strictly been provided any

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award on negligence cannot stand. There is in fact no a evidence of negligence led in this appeal to support a claim on negligence. (Machine Umudje v Shell BP Pe- troleum Development Co Nig Ltd (1975) 9–11 SC 155 at b 166–167; Koya v UBA Ltd (1997) 1 NWLR (Part 481) 251 at 291 referred to.) Appeal allowed. c Cases referred to in the judgment Nigerian Abaye v Ofili (1986) 1 NWLR (Part 15) 134 d Adeyeri v Okobi (1997) 6 NWLR (Part 510) 534; (1997) 14 WACA 505 Aeroflot v UBA (1986) 3 NWLR (Part 27) 188 Egbue v Araka (1988) 2 NWLR (Part 84) 598 e Ekpoke v Udilo (1978) 6–7 SC 187 Eze v Ataise (2000) 10 NWLR (Part 676) 470 Ishola v Societe Generale Bank (Nig) Ltd (1997) 2 NWLR f (Part 488) 405 Itauma v Akpe-Ime (2000) 12 NWLR (Part 680) 156 Kaiyaoja v Egunla (1974) 2 SC 55 g Kalu-Anya v AN (Nig) Ltd (1992) 6 NWLR (Part 247) 319 Koya v UBA Ltd (1997) 1 NWLR (Part 481) 251 Mogaji v Odofin (1978) 3–4 SC 91 Nkamu v Onum (1997) 5 SC 13 h Nwobodo v Onoh (1984) 1 SCNLR 1; (1984) All NLR 1 Oversea Construction Ltd v Creek Enterprises Ltd (1985) 3 NWLR (Part 13) 407 i Shell BP Petroleum Development Co Nig Ltd v Pere-Cole (1978) 3 183 Soleh Boneh Overseas (Nig) Ltd v Ayodele (1989) 1 NWLR (Part 99) 549 j

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First Bank of Nigeria Plc v. Mainasara 149 a Umudje v Shell BP Petroleum Development Co Nig Ltd (1975) 9–11 SC 155 Usman v Garke (2003) 14 NWLR (Part 840) 261 b Foreign Lombard Finance Ltd v Brooke Plain Trading Ltd (1991) 2 All ER 762 c Nigerian statute referred to in the judgment Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, section 138(1) d Book referred to in the judgment Halsbury’s Laws of England (14ed), paragraph 457

Counsel e For the appellant: Roland Respondent in person BA’ABA JCA: (Delivering the lead judgment) This is an ap- f peal against the judgment of the Zamfara State High Court, sitting at Gusau, delivered on 10 November, 1999. The plaintiff, Alhaji Muhammadu Manasara (trading in the name and style of Muhammadiya Medical Centre) now respon- g dent, issued a writ of summons dated 9/5/96 against the First Bank of Nigeria Plc, the defendant, now appellant. Pleadings were ordered, filed, exchanged and amended. The case went to trial on the respondent’s amended statement of claim con- h tained at pages 83–84 of the record and the appellant’s amended statement of defence dated 24/11/97 at pages 142– 143 of the record. The respondent as plaintiff as per paragraph 7 of the amended statement of claim, claims as follows:– i “7. Whereof the plaintiff claimed against the defendant as follows:– (a) A declaration that the plaintiff, being the holder of Ac- count No. 7862 with the defendant is entitled to his j statement of account 7862 for the period 1982–1990.

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(b) An order directing the defendant to issue the plaintiff a with the statement of accounts No. 7862 for the period covering 1982–1990. (c) N300,000,000.00 (Three Hundred Million Naira) being b damages for fraud and refusal to issue the plaintiff with his statement of account as and when due.” At the trial three witnesses including the respondent testified in support of the case for the respondent while two witnesses c testified for the appellant. After the conclusion of the evidence of the parties and address by counsel to the parties, the learned trial Judge in his judgment inter alia held:– “It has been finally argued by the learned counsel for the defen- d dant that the plaintiff is only claiming damages simpliciter. There- fore this should be interpreted as general damages. However considering reasonable duty of care as shown by the defendant in the transaction and considering the age of the account the court ought not to grant paragraph C of the statement of claim so claimed. That e no damages should be awarded against the defendant on the other hand the learned counsel for the plaintiff has averred that by evidence of PW1 and PW2 and that of DW2 a case has been made out against the defendant. I do agree with the learned counsel for f the plaintiff that the evidence of PW1 and PW2 is uncontradicted and must be acted upon. However as in granting damages all the circumstances of the case are to be put under consideration. In final conclusion, judgment is hereby entered in the favour of the plaintiff as per supra (c) of the said paragraph. On general dam- g ages the court has considered the amount involved, the period of their relationships as well as the deliberate refusal of the defendant to issue the plaintiff with statement of account. On this it is hereby ordered that the plaintiff is entitled for this defendant the sum of N500,000,000.00 as general damages plus N600.00 and the cost of h this case fixed at N50,000.00.” The facts of this appeal are simple and are as follows The respondent is a business man who among other things carries on the business of a private clinic under the name and i style of Muhammadiya Medical Centre in Gusau, Zamfara State while the appellant is a public limited liability company, carrying on banking business throughout Nigeria with a branch at Canteen Road, Gusau, Zamfara State. The j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA First Bank of Nigeria Plc v. Mainasara 151 a respondent maintains a current account with the defendant at it’s Gusau Branch and the Account No. is 7862. According to the respondent, between the periods of 1982 to 1990, the b respondent made lodgments worth billions of naira which the appellant deliberately refused to issue the respondent with the statement of account covering the said periods despite several demands. However, the respondent was issued c with the statements of account covering the year 1991 to 1994 from which serious fraud and misrepresentation was found by the respondent. The respondent claimed that the refusal and negligence to post his lodgment covering the year 1982 to 1990 and serious fraud was committed which d greatly contributed to the downfall of the respondent’s business hence the institution of the action against the appellant. The appellant on the other hand admitted having banking e business with the respondent but denied deliberately refusing to issue the respondent with the statement of account for the periods of 1982 to 1990. According to the appellant, the respondent received statement of account and such information relating to same at all material times and in addition, the f respondent made periodic check at the appellant’s office to reconcile the lodgments made from his statements of account so received. The appellant denied that the respondent or any member of his management lodged any complaint g with the appellant or the Law Enforcement Authorities regarding the purported refusal or negligence to issue statements of accounts prior to this action. It is the case of the appellant that all the sums presented for lodgment in the re- h spondent’s account including those for the transactions covering the period 1991 to 1994 for which statements of account were issued to the respondent were correctly entered. Dissatisfied with the judgment, the appellant appealed to i this court by its notice of appeal dated 26/11/99, filed on 29/1/99 containing only one ground of appeal. With the leave of this Court, granted on 1/11/2000 the original notice and ground of appeal as amended bringing the total number j of grounds of appeal to five grounds.

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When the appeal came up for hearing on 20/4/04, learned a Counsel for the appellant simply adopted the appellants brief and did not proffer any oral argument. The respondent who appeared in person also adopted and relied on his briefs. b The appellant, in the appellant’s brief dated 11/10/2001, filed on 12/10/2001 formulated the following issues for determination:– “i. Whether the plaintiff has sufficiently proved the allegation c of fraud given that this amount to (sic) a crime and the standard of proof is beyond reasonable doubt. ii. Whether the finding by the learned trial Judge that the plaintiff deposited the sum of N2,603 was recorded leaving d unrecorded the sum of N600 is supported by legal evidence before the court. iii. Whether the finding of the trial Judge that defendant had failed or refused to provide the plaintiff with his statement of account and therefore acted negligently is supported by e the evidence before the court. iv. Whether the judgment is not against the weight of evidence. v. Whether the award of damages of N500,000,00.00 in the circumstances of the case is not manifestly excessive.” f The respondent filed his brief titled “respondent’s brief of defence” dated 22/10/2001 filed on 23/10/2001 and a second brief also titled “respondent’s Brief of Defence” dated 31/10/2001, filed on 1/11/2001 but did not formulate any g issue in the said briefs. This being the case, I take it that the respondent has adopted the issues formulated by the appellant. I will now proceed to consider and determine the issues h formulated by the appellant in this appeal. Arguing the appellant’s issues Nos. 1 and 2 together, AB Mahmood, SAN, learned Counsel for the appellant to the appellant’s brief, commenced by stating that the position of i our law is that whenever allegation of fraud amounting to a crime is made in a civil proceedings, the burden of proof is on the party alleging the fraud and in this appeal the burden is on the respondent as plaintiff. He submitted that the j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA First Bank of Nigeria Plc v. Mainasara 153 a standard of proof where crime is alleged is proof beyond reasonable doubt. Learned SAN for the appellant further submitted that par- b ticulars of the fraud must be clearly stated in the pleadings and the evidence must tally with the pleadings relying on the provisions of section 138(1) of the Evidence Act. Reference was made to Nwobodo v Onoh (1984) All NLR 1; (1984) 1 c SCNLR 1 and Kalu Anya v African Newspaper of Nigeria Ltd (1992) 6 NWLR (Part 247) 319, 333 by the learned SAN in support of his submission or the standard of proof where a crime is alleged. He referred to paragraphs 4 and 5 of the d amended statement of claim where the respondent pleaded the commission of fraud against the appellant, pointing out that following the demand for particulars of the alleged fraud, by the appellant, the respondent provided a list of items contained at page 31 of the record showing series of e amounts alleged to have been paid between the 12 March, 1986 and 8 October, 1991 into the respondents account. That the amounts range between the sum of N310 (three f hundred and ten Naira only) N1,533 (one thousand, five hundred and thirty-three Naira only) the total amount alleged to have been paid was N14,463.30 out of this amount N11,922.35, was alleged to have been recorded in the respondent’s account leaving a balance of N2,500 (two g thousand, five hundred Naira only) unrecorded. He referred to the evidence of PW1, PW2 and PW3 and Exhibits “1A– 1F”, “2A” and “2B” and “3A-3” relied upon by the respondent and submitted that the learned trial Judge based on the h evidence relating to payment of items 13–16 listed in the particulars shows that N3,203 was deposited but only N2,603 was recorded leaving N600 unrecorded and that according to the learned trial Judge that amounts to proof of i fraud beyond reasonable doubt. Learned SAN posed a question on how a customer to a bank proves that he has paid money to a bank? Apparently, answering the question he referred to the case of Aminu Is- j hola v Societe Generale Bank (Nig) Ltd (1997) 2 NWLR

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(Part 488) 405. It is contended by the learned SAN for the a appellant that in the instant case the respondent did not invite the person or persons who actually made the payment to testify in support of his case. Instead, the respondent relied b on documentary evidence, specifically tellers in his possession and copies of statement of accounts. Learned SAN for appellant further submitted that there was evidence before the court that there were alterations on those tellers, Exhibits c “2A” and “2B”. It is contended that there is no evidence offered by the respondent as to who was responsible for those alterations neither was it shown all the alterations were duly initiated by both parties. d Relying on the English case of Lombard Finance Ltd v Brooke Plain Trading Ltd and Others (1991) 2 All ER 762 and Halsbury’s Laws of England (14ed) paragraph 457, learned Counsel argued that instrument or deed is vitiated by e material alterations and that Exhibits “2A” and “2B”, being instruments have been rendered void by the alterations except if it can be proved that the alterations was made by appellant in which case the court could find the appellant bound by the contents of the alteration. He pointed out that f there is no evidence whatsoever on how the alteration came about. Concluding his submission on issue Nos. 1 and 2, learned SAN for the appellant urged the court to hold that the g finding of the learned trial Judge on the question of fraud was erroneous and to hold that on the evidence the alleged fraud has not been proved beyond reasonable doubt. He urged the court to resolve Nos. 1 and 2 in favour of the h appellant. The respondent in his brief dated 22/10/2001, filed on 23/10/2001 stated that the appellant wants the case to go on indefinitely and that this will not be in the interest of justice. i He pointed out that the case is clear and the appellant is fully aware but he is only presenting baseless and delaying statements. The respondent argued that the appellant’s refusal to issue the respondent with the statement of account cannot be j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA First Bank of Nigeria Plc v. Mainasara 155 a denied. The case of Nwobodo v Onoh (1984) 1 SCNLR 1; (1984) All NLR 1; Kaiyaoja v Egunla (1974) 2 SC 55; Ad- eyeri v Okobi (1997) 6 NWLR (Part 510) 534; (1997) 14 b WACA 505 and Aminu Ishola v Societe-Generale Bank (Nig) Ltd (1997) 2 NWLR (Part 488) 405 etc. as contained in the appellant’s brief are not applicable and will riot (sic) help the appellant in anyway. It is argued that what is impor- c tant is that the appellant ought to have presented statement of account if they have a contrary view to the truth of this case. Pointing out that all these quotations could not prove or tell the respondent why the appellant liquidated the respondent’s company worth billions of Naira. d In effect the respondent wants the court to affirm the judgment of the trial court and dismiss the appeal. In the second brief dated 31/10/2001, filed on 1/11/2001, e the respondent stated that the appeal is just an attempt to ob- struct and manipulate the true cause of justice. He urged the Court to strictly adhere to the verdict of the Zamfara State High Court of Justice dated 29/4/2001. It is further stated by f the respondent that the truth of the claim is the sum of N300,000,000 only being damages for fraud, negligence, and misrepresentation of the respondent’s account maintained with the appellant. g In conclusion the respondent urged the court to dismiss the appeal. As it is the law that parties as well as the court are bound by pleadings, it is necessary in my view to reproduce h the relevant paragraphs of the pleading of the parties which will form the basis of the evidence to be led by the parties. Evidence led not in conformity with pleadings, and/or upon facts not pleaded goes to no issue. See Nkamu v Onum i (1997) 5 SC 13; Ehpoke v Udilo (1978) 6–7 SC 187; Abaye v Ofili (1986) 1 NWLR (Part 15) 134; Egbue v Araka (1988) 2 NWLR (Part 84) 598; Oversea Constuction Ltd v Creek Enterprises Ltd (1985) 3 NWLR (Part 13) 407; Eze v Ataise j and Others (2000) 10 NWLR (Part 676) 470.

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I consider paragraphs 3, 4, 5 and 6 of the amended state- a ment of claim at pages 83 84 of the record relevant and are hereby reproduced below:– “3. The plaintiff maintains a current account with the defendant b at its Gusau Branch and the Account No. is 7862. 4. The plaintiff avers that between the periods of 1982 to 1990 the plaintiff made lodgment worth billions of Naira, which the defendant deliberately refused to issue the plaintiff with c the statement of account covering the said periods despite see ra1 demands. 5. The plaintiff further avers that he was issued with statement of account covering the year 1991 to 1994 by which serious fraud and misrepresentation was found by the plaintiff and d the plaintiff would rely or the said statement of account, defendant hereby gives notice 6. The plaintiff will contend during the trial of this action that by refusing and or neglecting to post his lodgment covering e the year 1982 to 1990, serious fraud was committed much contributed to the down fall of the plaintiff’s business, the plaintiff would rely on the statement of account covering the year 1982 to 1990 and all other documents relating to the said lodgment, the defendant is hereby given notice to pro- f duce the same at the hearing of this suit.” I also consider paragraphs III, IV, V, VI, VII, VIII and IX of the amended statement of defence at pages 142 143 of the record relevant and are reproduced below as follows:– g “III. The defendant denies paragraph 4 of the statement of claim and puts the plaintiff to the strictest proof thereof. The defendant avers that it neither deliberately refused nor neglected to issue the plaintiff with statements of account for h the period 1982–1990. IV. In response to paragraph 4, the plaintiff received statement of accounts and such information relating to same at all material times. The plaintiff also made periodic checks at the i defendant’s office to reconcile the lodgment made by his staff with the statement of account V. The defendant further avers that neither the plaintiff nor any member of his management ever lodge (sic) any complaint with the defendant or the Law Enforcement Authorities j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA First Bank of Nigeria Plc v. Mainasara 157 a regarding the purported refusal or negligence to issue statements of account prior to this action. VI. The defendant denies paragraph 5 of the statement of claim b and puts the plaintiff to the strictest proof thereof. VII. The defendant further avers that all the sums presented for lodgment in the plaintiffs account including those for the transactions covering the period 1991 to 1994 for which statements of account were issued to the plaintiff were cor- c rectly entered. VIII. The defendant denies paragraph 6 of the statement of claim and puts the plaintiff to the strictest proof thereof. The defendant also avers that it never breached any duty it owes d the plaintiff as his banker. IX. The defendant will for its defence rely on ledgers, tellers, correspondence, registers, cheques, statements of account and other bankers’ books in general and hereby puts the paintiff on notice to produce originals of documents in his e possession.” Having joined issues by their pleadings the parties led evidence in support of their respective case. I intend also to reproduce the portion of the evidence that I consider relevant f in the determination of the issues. The evidence of PW1, Alhaji S Abdulkadir, the Chief Ac- countant, starts from pages 56–57 of the record and the rele- g vant portion of the evidence is as follows:– “In the year 1994, while on reconciliation of account, I detected some frauds in that same account. I drew the attention of the medical director to the matter, thereafter we forwarded the matter to the Chairman/Managing Director, Alhaji Muhammadu Mainasara h Gusau. He in turn took legal action which was struck out by court. The fraud had to do with misrepresentation of various amount e.g. When N100.00 was taken to the bank, the bank would record Thirty Naira when bank teller reads N100.00. I detected other i frauds after the one in which case was struck out. I drew the attention of the Managing Director. We discovered that the amounts in tellers do not agree with the amount in on statement of account. So the Managing Director took the matter to the court. The frauds are: 1. On 12/3/86, N820,000.80 was taken to the bank but bank j recorded N320,000.00.

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2. On 26/10/96 we took N714.75 but bank recorded N614.75. a 3. 6/11/90 we took N1,026.10 to the bank out, the bank recorded N826.10. 4. On 7/11/90 we took (sic) to the bank, it record N594.70. b 5. 8/11/90 N743.05 but it recorded N643.03. 6. 13/11/90 N1,533.75 it recorded N1,333.75. 7. 16/11/90, N1,562.70 recorded N1,462.70. 8. 21/11/90, N534.60 recorded N434.60. c 9. N1,194.50 recorded N1,094.50. 10. 22/11/90, N564.00 recorded N1,057.00. 11. 12/12/90, N1,257.57 recorded N1,057.00. 12. 6/12/90, N672.70 recorded N42.70. d 13. 31/1/91, N553,100 recorded N453.00. 14. 30/9/91, N1,260.00 recorded N1,060.00. 15. 4/10/91, N310.00 recorded N210.00. 16. 8/10/91, N1,080.00 recorded N880.00. e It was through the reconciliation I realized this through the statement of account and tellers, the statement of account was given to us as a result of effort (sic) of our lawyer. If I see the statement I can identify it because of the logo of the 1st Bank and their letter f heading and stamp, also it bears our account number. (Shown) this, the statement of account. Bello: We seek to tender it in evidence. They are six copies. David: No objection. g Court: The statement of account admitted and marked exh. 1 ‘A’. Bello: We seek to tender the 2 booklets of sellers in evidence. David: No objection. h Court: Admitted and exhs. 2A & B. PW1 (contd): It was through the counsel we got the statement of account. We have our booklet bank teller without statement of account. If I see the 9 booklet I can identity them as they have name of the M. M. Centre and the account number (shown) these are the i 9 booklets. Bello: We seek to tender them in evidence. David: No objection. Court: Admitted and marked exh. 3(A) to (1). j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA First Bank of Nigeria Plc v. Mainasara 159 a PW1 (contd.): The refusal to issue us with statement of account has caused (sic) us a lot. It also affected us in getting financial assistance as we cannot get financial stability. Some are contract and other activities. I would want the court to award any damages, b heavy damage that it is all.” PW2 is Ibrahim Afolabi Alake, a Medical Director with Mohammadiya Medical Centre also gave evidence in support of the case of the respondent as plaintiff at page 61 of c the record, that portion of the evidence that I consider relevant is as follows:– “We maintain an Account No. 7862 usually cashier lodges the amount with the bank at the end of the day. The following morn- d ing he or she brings back the teller. Sometime in 1994 the accountant gone over the accounts informed me that (sic) had seen some abnormalities. The amount in the teller would be more than in the statement of account. So we went to Chairman/Managing e Director and went over them he instructed to contract the lawyer. We went with the tellers, statement of account and our record book. I can identity (sic) the tellers because of the account number and the signature of the Managing Director (shown exhibits 2A, 2B, 3A–3I) these are the tellers. If I see the statement of account I f can identity (sic) it (shown) exhibits1A-1F, this is the statement of account. I am the Medical Director since 1989. The business was not well as we lost some patronage, some bank and corporation used to come. Even the 1st bank used to come to us. Clients would not be sure whether drugs will be there drugs may be short. That is g all.” The respondent Alhaji Muhammadu Mainasara, gave evidence as PW3 at pages 62–65 of the record:– h “I have seen the statement of account myself. If shown to me I can identify it. I have ever (sic) signed the fraud. I saw them in State- ment of Account from the bank. If I see the Statement of Account from the bank I can identity (sic) because of the letter heading of the bank (shown exhibits 1A–1N without objection). This is the i statement of account the accountant has also shown to me the bank tellers. I have signed some of the bank tellers. I can identify them because there are some which are signed by me (show exhibits 2A & 2B). These are the bank tellers signed by me when I checked the tellers I found that the amount in the tellers was not the amount re- j corded in the statement of account. There are other statements of

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account for two years between 1985 and 1989 which have not a been given to us, I have booklets of banktellers of the said period. If I see the booktellers (sic), I can identify them because I have signed them. (Shown exhibits 3A–3I) these are the bank tellers. I will like the court to order the defendant to pay me compensation b in the sum of N300,000,000.00 because they have ruined my companies because of this. That is all.” The appellant on the other hand as defendant also gave evidence, I am only going to refer to the evidence of DW2 who c testified at pages 69–71 of the record. DW2 Abdul Ayo Shite, a banker with the appellant testified as follows:– d “I could recall sometimes as a current account officer M. Abdul- kadir who was the account (sic) and doctor Alaka in charge of medical center, worked (sic) into my office in Gusau Branch as current account officer with their statement despatched to them. When they came in they said they wanted to raise an inquiry. On e some postings made into their account (sic). I called for the ledger card and compared to their statements which showed the same postings. But the duplicate teller under their custody was featuring different figures. f Immediately, I called for original vouchers and made comparison, we realized that there were some amendments made in their copy. As at that time the lady cashier who always brought cash to the bank was over the counter she was called upon to my table. I questioned her the (sic) amount she paid in. The lady told them of the g altered figures in their duplicate copies. At this point the accountant M. Abdul kadir talked to the cashier that she should meet them in the office. I was not willing to allow them go with their copies but they were understood that they were satisfied and the rest to be h treated in their office administratively that is how they left with the understanding that if anything come again (sic) they would come back since then I did not hear from them. Later I learned that the lady was sacked. That is all. In 2B the amount in words was One Thousand and Eighty Naira from the amount in figures it was i N1,080 the 1st zero it shows a sign of cleaning (eraset). From the experience I have this is how it was no difference from exhs.(1) to (69) N1,080 in figured and this was exact amount in the denomination of N20. The amount in figure is placed as against N20 denomination and this is the only amount talked by the cashier it is in j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA First Bank of Nigeria Plc v. Mainasara 161 a practice that the said amount must be ticked with red biro. But the N200 which the difference (sic) between the teller and the posting in the ledger was written against N10 denomination. This shows that this N200 was not collected nor entered into the ledger we had b N880.00 in the bank the status of the ledger card is that of giving the true position of the customers account. In 6/11/90 the entry in 2A was N1,026.10. I notice an amendment both in words and in figures the zero after the one thousand has been amended the c amount in words, one thousand is also amended. On ledger sheet on 6/11/98 the deposit was N826.10 which is the true position there are the part of interest they showed me that morning during my tenure with the bank the relationship between plaintiffs with the bank was cordial. There wasn’t any complain (sic) from him d during my stay. No complain to any law information agents as experience banker the account was meager account the deposits were in meager amount (sic).” Based on the evidence adduced by the parties and the docu- e mentary evidence tendered as exhibits, the learned trial Judge in his judgment contained at pages 91–95 inter alia held:– “By the above it is well established that a total sum of N3,203.00 f was deposited but only sum of N2,603.00 was recorded leaving unrecorded sum of N600.00. I am therefore satisfied that in respect of this amount, fraud has been proved beyond reasonable doubt. Accordingly judgment is hereby entered in favours of the plaintiff in respect of bank.” g As rightly submitted by the learned SAN for the appellant, the standard of proof of allegation of crime in a civil case, is proof beyond reasonable doubt as provided in section 138(1) h of the Evidence Act Cap 112 Laws of the Federation of Ni- geria, 1990 which provides:– “138 (1) If the commission of a crime by a party to any proceeding is directly in issue in an (sic) proceeding civil or i criminal, it must be proved beyond reasonable doubt.” The decisions of the Supreme Court of Nigeria cited by the learned SAN for the appellant in support of his submission is in accord with the provisions of section 138(1) of the Evi- j dence Act reproduced above.

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The question now is having regard to the evidence ad- a duced before the trial Judge, can it be said that fraud was proved against the appellant beyond reasonable doubt. As can clearly be seen from the portion of the evidence of b the witnesses who testified for the respondent including the respondent himself which I deliberately reproduced, none of the witnesses mentioned the amount involved in the alleged fraud in his evidence. With the greatest respects to the c learned trial Judge, his finding that it is well-established that the total sum of N3,203 was deposited but only the sum of N2,603 was recorded leaving unrecorded the sum of N600 is neither pleaded nor supported by the evidence adduced in d support of the case of the respondent. It is clear that the sum of N600 claimed not to have recorded was arrived at through an exercise of addition and subtraction by the learned trial Judge personally hence it cannot be regarded as evidence. e A trial is not an investigation, and an investigation is not the function of a court. A trial is the public demonstration and testing before a court of the cases of the contending parties. The demonstration is by assertion and evidence and the f testing is by cross-examination and arguments. The function of a court is to decide the case between the parties on the basis of what has been so demonstrated and tested. g Having alleged lodgments of various amounts to the appellant bank, the onus is squarely on the respondent to establish this very material fact by admissible and credible evidence. Payment of money into an account may be proved either by the oral evidence of the person who actually made h the payment personally to the bank or by the production of bank tellers or acknowledgement showing on the face of it that the bank had received the payment. This is because a bank teller duly stamped with an official stamp of the bank i and properly initiated by the cashier constitutes prima facie proof of payment of the sum of the money therein indicated and a customer after producing such a receipt needs not to prove more unless the payment is being seriously j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA First Bank of Nigeria Plc v. Mainasara 163 a challenged. See Aeroflot UBA (1986) 3 NWLR (Part 27) 188 at 190 and Ishola v SGB (Nig) Ltd (supra) 405 at 427. Although the appellant by a notice dated 22/7/97 gave no- b tice to the respondent to supply particulars of the alleged fraud and misrepresentation in respect of the statement of accounts pleaded in paragraphs 5 and 6 of the amended statement of claim the respondent responded by merely fil- c ing a document titled, “Particulars of Fraud and Misrepre- sentation in Respect of Account No. 7862” on 13/10/97 at pages 31–32 of the record. The statement of account was admitted in evidence and marked Exhibit “1A–F”, upon d which the respondent relied at the hearing. It is significant to observe that out of the 16 items contained in Exhibit “1A–1F”, only items 13–16 were pleaded, that perhaps explains why the learned trial Judge took them e into consideration. It cannot be disputed that the alleged fraud was not proved beyond any reasonable doubt by the respondent as required by law. Even though DW2 in his evidence said the tellers relied f upon by the respondent were altered and amended, the learned Counsel for the respondent at hearing, failed to cross-examine DW2 on the issue of the alterations and amendments of the documents. The learned trial Judge made g no finding in respect of the evidence of the alterations and amendments at all in his judgment. The respondent in the present appeal failed to lead credible evidence in support of his allegation of fraud by failing h to call his cashier or the person who made the lodgments in his Account No. 7862. Having regard to what has been discussed above, I agree with the learned SAN, for the appellant that the allegation of i fraud was not proved beyond reasonable doubt as required by law by the respondent. The finding of the learned trial Judge that the respondent had deposited the sum of N3,203 but only the sum of N2,603 was recorded leaving unre- j corded the sum of N600 is also not supported by legal

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA 164 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) evidence. I therefore resolve issues 1 and 2 in favour of the a appellant against the respondent. I must state that I was not privileged to see the Exhibits before writing this judgment because when I requested for b the Exhibits, I was informed by the Exhibits keeper that the Exhibits have not been transmitted to this court and the position remained the same up to the time of writing this judgment. c On issue No. 3 for determination, that is whether the finding of the learned trial Judge that the defendant has failed or refused to deliver to the plaintiffs statement of account when due is supported by the evidence, learned SAN for appellant d submitted that the finding is not supported by the evidence adduced. Pointing out that the respondent in his statement of claim averred that between the periods of 1982–1990 he paid in billions of naira but the evidence showed that most e transactions of the account were in the range of N300 to N2,000. It is further submitted that there was no oral complain (sic) or in writing from the respondent to the appellant. Reference was made to the evidence of PW3, the plaintiff, f DW1 and DW2 by the learned SAN who urged us to resolve issue No. 3 also in favour of the appellant against the respondent. As stated earlier, the respondent did not formulate issues g and his argument is therefore not in issue but a general reply which I have earlier stated while dealing with issues Nos. 1 and 2 so the argument is applicable to issue No. 3 as well. h The one issue that ought to be stressed is that a plaintiff, as a matter of law is required in an action on negligence to state or give particulars of negligence and to recover on the negligence pleaded in those particulars. It is not sufficient for a plaintiff to make a blanket allegation of negligence i against a defendant on a claim of negligence without giving full particulars of the terms of negligence relied on as well as the duty of care owed to him by the defendant. See Machine Umudje and Others v Shell BP Petroleum j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA First Bank of Nigeria Plc v. Mainasara 165 a Development Company Nigeria Ltd (1975) 9–11 SC 155 at 166–167. Accordingly, in an action on negligence, a plaintiff to succeed must in addition to pleading and establishing the b particulars of negligence relied on, he must also state and establish duty of care owed to him by the defendant, the fact upon which that duty is founded and the breach of that duty by the defendant. See Koya v United Bank for Africa Ltd c (1997) 1 NWLR (Part 481) 251 at 291. As the respondent in this appeal has not provided the particulars of negligence as required by the rules of Pleadings, his claim of negligence ought not to have been granted. d Even if evidence is led in support of negligence if the particulars have not strictly been provided any award on negligence cannot stand. There is in fact no evidence of negligence led in this appeal to support a claim on negligence. e I observe that inspite of the fact that the respondent is a very old cashier to the bank, he has failed to tender any document in support of his claim that his request for his bank statements were not honoured by the appellant. f In the cause of resolving issues Nos. 1, 2 and 3, I think I have equally resolved issue No. 4 that is whether the judgment is not against the weight of evidence. I therefore based on the aforesaid, resolve issues Nos. 3 g and 4 in favour of the appellant against the respondent. Having resolved issues Nos. 1, 2, 3 and 4 in favour of the appellant, I agree with the learned SAN for the appellant that h it is no longer necessary to resolve issue No. 5, as it will amount to an academic exercise. It is not within the competence of a Judge to make a case for the parties. See Itauma v Akpe-Ime (2000) 12 NWLR i (Part 680) 156 at 175. A trial Judge before whom evidence is adduced by the parties before in a civil case comes to a decision as to which evidence he believes or accepts and which evidence he re- j jects, he should first of all put the totality of the testimony

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA 166 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) adduced by both parties on that imaginary scale; he will put a the evidence adduced by the plaintiff on side of the scale and that of the defendant on the other side and weigh them together. He will then determine which is heavier not by the b number of witnesses called by each party but by the quality or the probative value of the testimony of those witnesses. The thrust therefore in this approach is to enable the trial court to determine the dispute upon the principle that in civil c cases disputes between parties ought to properly be decided on the balance of probabilities. See Mogaji v Odofin (1978) 3–4 SC 91 and Usman v Garke (2003) 14 NWLR (Part 840) 261 at 279. d In the instant appeal, where the trial court who saw and heard the witnesses failed to raise the proper inferences upon the facts presented to it, then the appellate court ought to and justifiably too overturn such erroneous conclusion reached e by the trial court. See Shell BP Petroleum Dev Co Nigeria Ltd v His Highness Pere Cole the Pere of Kumbowei Clan and 6 Others (1978) 3 SC 183; Soleh Boneh Overseas (Nig.) Ltd v Ayodele and Another (1989) 1 NWLR (Part 99) 549 f page 84. Having regard to the aforesaid, I hold that this is an appropriate case for this Court to interfere with the finding of the trial court. g In the result, the appeal succeeds and is hereby allowed. The judgment of the trial court, delivered on 10 November, 1999 by the learned trial Judge, Mika’ilu, J (as he then was) is hereby set aside and substituted by an order of dismissal h of the Suit No. SS/95/9/96. I award costs assessed at N4,000 in the lower court and N5,000 in this court in favour of the appellant against the respondent. i UMOREN JCA: I have had a preview of the judgment of my learned brother, Baba Alkali Ba’aba, JCA just read. I agree with his reasoning and conclusion that the appeal is meritorious and should be allowed and I hereby also allow it. I j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA First Bank of Nigeria Plc v. Mainasara 167 a abide by all consequential orders contained in the lead judgment including order as to costs. b JEGA JCA: My learned brother Ba’aba, JCA had obliged me the draft of the judgment he had just delivered. I perused the said draft and found that it had treated all the issues raised by this appeal exhaustively. I adopt the judgment as mine and allow the appeal. I abide by all the consequential c orders made in the lead judgment including order as to costs. Appeal allowed.

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a Intercontinental Bank v Citizens International Bank and another b FEDERAL HIGH COURT OF NIGERIA, LAGOS DIVISION, UKEJE CJ

Date of Judgment: 4 NOVEMBER, 2004 Suit No.: FHC/L/CS/137/2003 c Banking – Banker/customer relationship – Jurisdiction of Federal High Court

Facts d This Ruling flows from a Notice of Preliminary Objection brought by the first defendants/applicants challenging the jurisdiction of this Court to hear and determine the plaintiff’s suit herein. e The Motion dated and filed on 6 May, 2003 was predicated upon following four grounds, that is to say:– “That in the Originating Summons dated February 3rd, 2003, the plaintiff/respondent seeks a determination of the following f question 1. As between the 1st and 2nd defendants, to whom should the plaintiff return the sum of N18,093,190, sent to the plaintiff by the 1st defendant, purportedly acting upon the Instruction g of and on behalf of the 2nd defendant for the opening of a fixed deposit account? 2. The plaintiff/respondent’s cause of action as disclosed in the said Originating Summons dated February 3rd, 2003 and h the1st defendant affidavit in support thereof is founded on Banker/Customer relationship, which does not fall within the purview of the limited but exclusive jurisdiction conferred on the Federal High Court. 3. The Originating Summons dated February 3rd, 2003, is not i properly before the Court, in that it was not in the manner prescribed by law. 4. The subject matter of this Suit is not one that should have been commenced by way of Originating Summons.” j

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Intercontinental Bank v. Citizens International Bank 169 a The Notice of Preliminary Objection was not supported by an affidavit. Consequently, the plaintiff/respondent filed no counter- affidavit. b Learned Counsel Affen, contended that the Court lacked jurisdiction to entertain this Suit, upon the facts as stated in the Motion Paper. That by the issue raised by plaintiff for determination by the Court, that the plaintiff had usurped c this Court’s function, as the relief sought by the plaintiff and the question raised for determination were inconsistent with each other (that is to determine the party entitled to the money, as between the first and second defendants), and the d reliefs sought were therefore incompetent, as the plaintiff had unilaterally resolved the first issue in favour of the second defendant, against the first defendant. Learned Counsel urged the Court to determine the issue against the plaintiff. e (Learned Counsel adverted to Exhibits “A” and “B” and reliefs 1, 2, 3 and 4.) On the second ground, learned Counsel posited that the matter was one between a banker/customer relationship, as f could be seen from the issue raised for determination; paragraphs 3, 4, 5, 6, 7 and 8 of the affidavit in support of the originating summons. Learned Counsel submitted that actions founded on g banker/customer relationship did not fall within the limited jurisdiction of the Federal High Court, but was within the jurisdiction of a State High Court. He cited Federal Mort- gage Bank of Nigeria v Olloh (2002) 9 NWLR (Part 773) h 475 at 490. Learned Counsel urged the Court to hold that instruction on the opening of an account did not fall within the jurisdic- i tion of the Federal High Court. On ground 3, learned Counsel argued that the jurisdiction of a court could be properly invoked where the proceedings were, inter alia, initiated upon due compliance with condi- j tions precedent to the exercise of jurisdiction.

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Arguing further, that by the provisions of Order 7 Rule 8 a of the Federal High Court (Civil Procedure) Rules, 2000, an originating summons is issued upon its being signed by a Judge in chambers. b That the originating summons herein made no provision for the signature of a Judge; and so the originating summons was not signed. Accordingly the originating summons, which was the c very document to vest jurisdiction on the Court had not been issued properly, as envisaged by Order 7 Rule 8. Accordingly, that the originating summons was incompe- d tent and that the Court was enjoined to discountenance its existence in its entirety:– “4. On the 4th ground, Learned Counsel submitted that the issues raised in this Suit are not such as can be raised in an Originating Summons.” e In response to the defendants/applicants’ submission, Miss Adeniji, on behalf of the plaintiff/respondent sought to rely on the originating summons and the affidavit in support thereof. f Learned Counsel posited that upon the facts of the case, an originating summons is one of the ways in which an aggrieved party can approach the Court, where issues do not g turn on facts or where there is no dispute or the likelihood of disputes in the facts. That in this case, that there was no dispute but that the cheque was issued to the plaintiff by the first defendant on h the instructions of the second defendant (paragraphs 4, 8 of the affidavit in support) which were unchallenged. Learned Counsel urged the Court to hold that the commencement of this action by originating summons was cor- i rect and that the suit itself was competent. On the issue of jurisdiction, Learned counsel submitted that it has been judicially held that by the proviso to section 251(l)(d) of the 1999 Constitution, the State High Court has j

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Intercontinental Bank v. Citizens International Bank 171 a been conferred with exclusive jurisdiction in matters arising out of banker/customer relationship. That the proviso does not exclude the Federal High Court b from entertaining cases such as the substantive suit herein. That the proviso does not affect the jurisdiction of the Fed- eral High Court in banker/customer cases but merely opens up the hitherto closed door in section 35(l)(d) to admit State c High Court. Learned Counsel further submitted that even if the Sum- mons was not issued in the manner prescribed, that it was a mere irregularity which did not affect the substance of the d case. Order 7 Rule 3 of the Federal High Court (Civil Proce- dure) Rules 2000, which provides as follows:– “Contents of Summons (3) Every Originating Summons shall e include statement of questions on which the plaintiff seeks the determination or direction of the Court or, as the case may be, a concise state- f ment of the relief or remedy claimed in the proceeding begun by the Originating Summons with sufficient particulars to identify the cause or causes of action in respect of which g the plaintiff claims that relief or remedy.”

Held – h 1. The Federal High Court and States High Courts have a shared jurisdiction in any matter involving a banker/customer relationship. (NDIC v Okem Enter- prises (2004) 10 NWLR (Part 880) 107 at 183 refers.) i 2. In the circumstances the omission by a Judge to sign the originating summons herein though required by Order 7 Rule 8 of the Federal High Court (Civil Procedure) Rules, 2000 is one that the court has power to remedy j under Order 3, Rules 1–3 of the same Rules. (Famfa Oil

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Ltd v A-G, Federation (2003) 12 SCLR 85 at 87; Mobil a Producing Nigeria Ltd v Monokpo (2003) 12 SC (Part 11) at 89 refers.) 3. It is settled practice that once there are conflicting aver- b ments in the affidavit evidence of opposing parties, it is not for the Court to accredit one version and thereby discredit the opposite side. c It is the law that unless there is a document which settles the opposing averment one way or the other, the best option is for the Court to take oral evidence. There is no document by either party which indisputably settles this suit one way or the other. d The only course open to the Court now therefore, is to convert the originating summons to a writ of summons and order the parties to file their pleadings in readiness e for a full scale trial, with witnesses. 4. By the provisions of Order 7, Rule 3 of the Federal High Court (Civil Procedure) Rules, 2000, it therefore becomes clear that by formulating issues for determination f in the originating summons, the plaintiff has not usurped the functions of the court but instead has strictly complied with the dictate of the order. g Cases referred to in the ruling Nigerian

Afribank Plc v Collatex Commerce Ltd (2001) 8 NWLR h (Part 714) 87 Akibu v Ray Auto Supply Ltd (2000) 14 NWLR (Part 686) 190 Alli v Central Bank of Nigeria (1997) 4 NWLR (Part 498) i 192 Anatego v Anatago (1997) 9 NWLR (Part 519) 49 Famfa Oil Ltd v A-G, Federation (2003) 12 SCNLR 85 j

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Intercontinental Bank v. Citizens International Bank 173 a Keyamo v Lagos State House of Assembly (2002) 18 NWLR (Part 799) 605 Madukolu v Nkemdilim (1962) 1 ANLR 587 b Mobil Producing Nigeria Ltd v Monokpo (2003) 12 SC (Part 11) 89 NDIC v Okem Enterprises (2004) 10 NWLR (Part 880) 107 c Nigeria v Olloh (2002) 9 NWLR (Part 773) 475 Ogunsola v APP and Others (2003) 39 WRN 115 Rossek v African Continental Bank Ltd (1993) 8 NWLR (Part 312) 382 d Saude v Abdullahi (1989) 3 NSCC Vol. 20 177 Zebra Energy Ltd v FGN (2002) 18 NWLR (Part 798) 162

Nigerian rule of court referred to in the ruling e Federal High Court (Civil Procedure) Rules, 2000, Order 3 rules 1–3, Order 7 rule 8

Counsel f For the plaintiff: Adeniji (with her Akinyemi) For the first defendant: Affen (with him Coker (Mrs), later Edward (with Opurum) g Judgment UKEJE CJ: This Ruling flows from a notice of preliminary objection brought by the first defendants/applicants chal- h lenging the jurisdiction of this Court to hear and determine the plaintiff’s suit herein. The Motion dated and filed on 6 May, 2003 is predicated upon following four grounds, that is to say:– i “That in the Originating Summons dated February 3rd, 2003, the plaintiff/respondent seeks a determination of the following question: As between the 1st and 2nd defendants, to whom should the plaintiff return the sum of N18,093,190, sent to the plaintiff j by the 1st defendant, purportedly acting upon the Instruction

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of and on behalf of the 2nd defendant for the opening of a a fixed deposit account”? The plaintiff/respondent’s cause of action as disclosed in the said Originating Summons dated February 3rd, 2003 and the 1st defendant affidavit in support thereof is founded on Banker/Customer Relationship, which b does not fall within the purview of the limited but exclusive jurisdiction conferred on the Federal High Court. The Origi- nating Summons dated February 3rd, 2003, is not properly before the Court, in that it was not in the manner prescribed c by law. The subject matter of this Suit is not one that should have been commenced by way of Originating Summons.” The notice of preliminary objection was not supported by an affidavit. Consequently, the plaintiff/respondent filed no d counter-affidavit. The matter came before this Court for argument on 12 March, 2004 when Affen, learned Counsel for the applicant opened his argument. e Learned Counsel Affen, contended that the Court lacks jurisdiction to entertain this Suit, upon the facts as stated in the motion paper. That by the issue raised by plaintiff for determination by the Court, that the plaintiff has usurped this f Court’s function, as the relief sought by the plaintiff and the question raised for determination are inconsistent with each other – (that is to determine the party entitled to the money, as between the first and second defendants), and the reliefs g sought are therefore incompetent, as the plaintiff has unilaterally resolved the first issue in favour of the second defendant, against the first defendant. Learned Counsel urged the Court to determine the issue against the plaintiff. (Learned Counsel adverted to Exhibits “A” and “B” and reliefs 1, 2, 3 h and 4).

1. Issue2 On the second ground, learned Counsel posited that the mat- i ter is one between a bank/customer relationship, as can be seen from the issue raised for determination; paragraphs 3, 4, 5, 6, 7 and 8 of the affidavit in support of the originating summons. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje CJ Intercontinental Bank v. Citizens International Bank 175 a Learned Counsel submitted that actions founded on banker/customer relationship do not fall within the limited jurisdiction of the Federal High Court; but is within the ju- b risdiction of a State High Court. He cited Federal Mortgage Bank of Nigeria v Olloh (2002) 9 NWLR (Part 773) 475 at 490. Learned Counsel urged the Court to hold that instruction c on the opening of an account does not fall within the jurisdiction of the Federal High Court. Ground 3 d On ground 3, learned Counsel argued that the jurisdiction of a court can be properly invoked where the proceedings are, inter alia, initiated upon due compliance with conditions precedent to the exercise of jurisdiction. He referred to:– e 1. Rossek v African Continental Bank Ltd (1993) 8 NWLR (Part 312) 382 at 437 at 487 B–G. 2. Madukolu v Nkemdilim (1962) 1 ANLR 587 at 595. f Arguing further, that by the provisions of Order 7 Rule 8 of the Federal High Court (Civil Procedure) Rules, 2000, an originating summons is issued upon its being signed by a Judge in chambers. g That the originating summons herein made no provision for the signature of a Judge; and so the originating summons was not signed. Accordingly the originating summons, which is the very h document to vest jurisdiction on the Court have not been issued properly, as envisaged by Order 7 Rule 8. Accordingly, that the originating summons is incompetent i and that the Court is enjoined to discountenance its existence in its entirety. On the fourth ground, Learned Counsel submitted that the issues raised in this Suit are not such as can be raised in an j originating summons.

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That originating summons is appropriate where the issue a or question involved is one requesting the construction of a written law, instrument, deed, will or other document or where there is unlikely to be any substantial difference on b issues of fact; or where some question of pure law is involved. Learned Counsel referred to:– 1. Keyamo v Lagos State House of Assembly (2002) 18 c NWLR (Part 799) 605 at 613 E–F. 2. Anatego v Anatago (1997) 9 NWLR (Part 519) 49. That in this case, there are substantial and fundamental dis- d putes as borne out by paragraphs 3–8 of the affidavit in support and also Exhibits “B” and “C” of the one hand and Ex- hibit “D” of the other hand. Learned Counsel therefore submitted that there are sub- e stantial facts which can only be martialled out in a conten- tious suit. Therefore, that the initiation by an originating summons of this Suit which is intended for hostile proceedings, is in- f appropriate. Learned Counsel referred to:– 1. Prof. Ogunsola v APP and Others (2003) 39 WRN g 115 at 137. 2. Zebra Energy Ltd v FGN (2002) 18 NWLR (Part 798) 162. In conclusion, learned Counsel, urged the Court to upon the h arguments rendered above, decline jurisdiction and dismiss or strike out the Suit herein as constituted. That was learned Counsel’s submission. In response to the defendants/ applicants’ submission, Miss Adeniji, on behalf of the plain- i tiff/respondent sought to rely on the originating summons and the affidavit in support thereof. Learned Counsel posited that upon the facts of the case, an originating summons is one of the ways in which an j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje CJ Intercontinental Bank v. Citizens International Bank 177 a aggrieved party can approach the Court, where issues do not turn on facts or where there is no dispute or the likelihood of disputes in the facts. b That in this case, that there is no dispute but that the cheque was issued to the plaintiff by the first defendant on the instructions of the second defendant (Paragraphs 4–8 of the affidavit in support) which are unchallenged. c Learned Counsel urged the Court to hold that the commencement of this action by originating summons is correct and that the Suit itself is competent. In support, learned Counsel cited the following case:– d 1. Akibu v Ray Auto Supply Ltd (2000) 14 NWLR (Part 686) 190 at 193–4 which held that where there is no dispute as to facts or where there is no hostile situation, an originating summons e can be used to commence same. Learned Counsel urged the Court to hold that commencing this Suit by originating summons was appropriate. f 2. Jurisdiction On the issue of jurisdiction, learned Counsel submitted that it has been judicially held that by the proviso to section g 251(l)(d) of the 1999 Constitution, the State High Court has been conferred with exclusive jurisdiction in matters arising out of banker/customer relationship. That the proviso does not exclude the Federal High Court h from entertaining cases such as the substantive Suit herein. That the proviso does not affect the jurisdiction of the Fed- eral High Court in banker/customer cases but merely opens up the hitherto closed door in section 35(l)(d) to admit State i High Court. She cited:– 1. Afribank Plc v Collatex Commerce Ltd (2001) 8 NWLR (Part 714) 87 at 89. 2. Alli v Central Bank of Nigeria (1997) 4 NWLR (Part j 498) 192.

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Learned Counsel further submitted that even if the summons a is not issued in the manner prescribed, that it is a mere irregularity which does not affect the substance of the case. Famfa Oil Ltd v A-G, Federation (2003) 12 SCNLR 85 at b 87, where it was held that an originating summons signed by a Registrar rather than a Judge is a mere irregularity, and does not vitiate the Suit. That it is the duty of the Registrar not of the applicant to take the originating summons to the c Judge for signature; therefore the failure of the Judge to sign is a mere irregularity which cannot be placed at the feet of the litigant. Learned Counsel urged that this procedural irregularity d should not vitiate the case, more so as the defendants/applicants have suffered no injustice thereby. Alhaji Dahiru Saude v Alhaji Akin Abdullahi (1989) 3 NSCC Vol. 20 P.177 at 178. e That the defendants have not alleged any injustice. That not signing the originating summons is a mere irregularity, which can be cured. That both parties are aware of the case. That the Registrar’s administrative error should not destroy f the case. Famfa v A-G of the Federation (supra). Learned Counsel urged the Court to hold that the error is not fatal and that it is an irregularity which can be cured. g Replying on points of law, Edwards, learned Counsel on behalf of the first defendant/applicant, conceded to the argument that the Federal High Court has jurisdiction in banker/customer relation cases. h Learned Counsel therefore withdrew the second leg of his objection (jurisdiction). This learned Counsel attributed to the Supreme Court decision in NDIC v Okem Enterprises Ltd (2004) 10 NWLR (Part 880) 107 at 183. i Ground 3 Learned Counsel submitted that Famfa Oil Ltd v Attorney General of the Federation does not apply and is distinguishable. That in this case, the originating summons was not j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje CJ Intercontinental Bank v. Citizens International Bank 179 a signed at all, whether by a Judge or a Registrar. And for the disobedience of that order of court, the Court should hold that the originating summons is not properly before the b Court. Ground 4 It is the argument of Mr Edwards that the subject matter of c this Suit is not amenable to an originating summons procedure. Learned Counsel adverted to the plaintiff/applicant’s argument that there is no conflict of facts in this case. d Learned Counsel adverted to the many conflicts – the opposing parties’ cases and submitted that the case should have been commenced by a writ of summons; and the defendants would have replied appropriately in their pleadings. e That the defendants did not file a counter-affidavit as the defendant did not wish to waive their right; so they filed a preliminary objection, instead. That the first defendant would wish to call witnesses and can only do so in a trial by f writ of summons. Learned Counsel therefore urged the Court to either strike out the substantive Suit herein to enable parties come back (sic) with a properly signed writ of summons; or in the alter- g native, to convert the originating summons to a writ of summons and order pleadings. That was learned Counsel, Edwards’ reply on points of law. That also marks the end of both Counsels’ argument in h this preliminary objection. Now, the issues for determination are naturally, those four issues raised by the first defendants/applicants in their pre- i liminary objection, thus:– 1. Whether the Federal High Court has jurisdiction in a matter flowing from a banker/customer relationship; 2. Whether the originating summons herein is properly j before this Court.

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3. Whether the subject matter of this Suit is one amena- a ble to a commencement by a writ of summons and not an originating summons. 4. Whether the plaintiff is entitled to formulate an issue b as one for determination by this Court in this case. 5. To make appropriate consequential orders. I shall now consider the issues, seriatim. c

1. Whether the Federal High Court has jurisdiction in a matter of banker/customer relationship. d Both in the notice of preliminary objection and in his prime arguments, Mr Affen, learned Counsel for the defendants/ applicants had posited that the Federal High Court lacks jurisdiction in this matter. e Ms Adeniji for the plaintiff/respondent had objected. However, Edwards for the defendants/applicants during reply on points of law, withdrew them upon this ground of objection, relying upon the recent Supreme Court decision in f NDIC v Okem Enterprises (2004) 10 NWLR (Part 880) 107 at 183, in which the Supreme Court, construing the provisions of section 251 (1)(d) of the Constitution, as well as the proviso thereto, held that both the Federal High Court and g States High Courts have a shared jurisdiction in any matter involving a banker/customer relationship. Consequently, this issue requires no further construction. h 2. Whether the originating summons herein is properly before this Court. It is the strong contention of Affen, learned Counsel for the defendants/applicants, that by Order 7 Rule 8 of the Federal i High Court (Civil Procedure) Rules, 2000, that an originating summons is issued when it is signed by a Judge in chambers; but that the originating summons in this case were not so signed by a Judge. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje CJ Intercontinental Bank v. Citizens International Bank 181 a That it is consequently incompetent, having not been commenced by due process of law. Learned Counsel relied on:– b 1. Rossek v African Continental Bank Ltd (1993) 8 NWLR (Part 312) 382 at 497. 2. Madukolu v Nkemdilim (1962) 1 All NLR 587 at 593. c Under Order 7 Rule 8 of the Federal High Court (Civil Pro- cedure) Rules, 2000, it is provided that:– “An Originating Summons is issued upon its being signed by a Judge in Chambers.” d Admittedly, the originating summons in this case dated and filed on 3 February, 2003, was not signed by a Judge. For her part, Ms Adeniji contends that the summons not being signed by a Judge is a mere irregularity which can be e remedied. She relied on:– 1. Famfa Oil Ltd v A-G, Federation (2003) 12 SCNLR 87 which held that a summons signed by a registrar of court does not vitiate the Suit, the error, being an ad- f ministrative matter which does not involve the party but is an error of the court. 2. Alhaji Dahiru Saude v Alhaji Akin Abdullahi (1989) 3 g NSCC (Vol. 20) P. 177 at 178, which held that a procedural irregularity should not vitiate a Suit, once it can be shown that no party has suffered any injustice. In this regard, I refer to Order 3 Rule 1 of the Federal High h Court (Civil Procedure) Rules, 2000 which provides as follows:– “Effect of 1. (1) Where in beginning or purporting to begin Non-compliance any proceedings or at any stage in the course i of or in connection with any proceedings, there has, by reason of anything done or left undone, been a failure to comply with the requirements of the rules whether in respect of time, place, manner from or content or in any j other respect, the failure may be treated as an

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irregularity and if so treated, will not nullify a the proceedings, or any document, judgment or order therein. (2) The Court may on the ground of such a fail- b ure as mentioned in sub- rule (1) of this rule and upon such terms as to costs or otherwise as it thinks just . . . exercise its powers under these Rules to allow such amendment (if any) to be made and to make such Order, (if c any) dealing with the proceedings generally as it thinks fit.” This case is at its very infancy. Nothing indeed has been done in this case. I believe that it would be in the interest of d justice to allow any applicable amendment to be done to the originating summons, to save the life of the Suit, which may then be heard upon its merit. 1. In this regard, I rely on the case of Famfa Oil Ltd v e Attorney-General of the Federation (supra). 2. Mobil Producing Nigeria Ltd v Monokpo (2003) 12 SC (Part II) at 89 wherein the Supreme Court, per Uwaifo, JSC, held that:– f “. . . The prevailing view is that even when a judgment has been prepared before it is delivered, a motion is brought which may be relevant to the substance of that judgment, the motion should be considered and deter- g mined before the judgment may or may not be there after delivered see Mokwe v Williams (1997) 11 NWLR (Pt. 528) 309 at 321; Savannah Bank (Nig) Ltd v SIO Corporation (2001) 1 NWLR (Pt. 693) 194 at 208. This is always to avoid taking a course that may pre- h empt or foreclose the possibility of doing real justice between the parties . . .” In the circumstances, I hold that the omission by a Judge to sign the originating summons herein, though required by i Order 7 Rule 8 of the Federal High Court (Civil Procedure) Rules, 2000, is one that this Court has power to remedy under Order 3 Rule 1(1)–(3) of the same Rules. I therefore hold that based upon the Supreme Court decisions in j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje CJ Intercontinental Bank v. Citizens International Bank 183 a Famfa v Attorney General, and also Mobil Producing Nig Unlimited v Monokpo both supra I find that the originating summons shall be amended in the manner to be ordered in b this Ruling, infra. 3. Whether the Suit herein is amenable for trial under the originating summons procedure. The defendants contend that since there are hostile aver- c ments in the affidavit in support of the originating summons, as well as in the affidavit in support of the preliminary objection herein, that the Suit is not suitable for an originating summons procedure. d It is settled practice that once there are conflicting averments in the affidavit evidence of opposing parties, it is not for the Court to accredit one version and there by discredit the opposite side. e It is the law that unless there is a document which settles the opposing averment one way or the other, the best option is for the Court to take oral evidence. f There is no document by either party which indisputably settles this Suit one way or the other. The only course open to the Court now therefore, is to convert the originating summons to a writ of summons and g order the parties to file their pleadings in readiness for a full- scale trial, with witnesses. 4. Whether the plaintiff is entitled to formulate an issue for determination by this Court, as the plaintiff has h done in its originating summons. The short take under this head is a positive answer. That position is borne out of the provisions of Order 7 Rule i 3 of the Federal High Court (Civil Procedure) Rules, 2000, which provides as follows:– “Contents of Summons (3) Every Originating Summons shall include statement of questions on which the plaintiff seeks the deter- j mination or direction of the Court or,

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as the case may be, a concise state- a ment of the relief or remedy claimed in the proceeding begun by the Originating Summons with sufficient particulars to identify the cause or b causes of action in respect of which the plaintiff claims that relief or remedy.” It therefore becomes clear that by formulating the issue for c determination in the Originating Summons, the plaintiff has not usurped the functions of this Court. Instead, the plaintiff has strictly complied with the dictate of Order 7 Rule 3 of the Federal High Court (Civil Procedure) Rules, 2000. I d therefore resolve this head in favour of the plaintiff/respondent, and hold that the plaintiff/respondent properly formulated the issue for determination in their Originat- ing Summons in terms of Order 7 Rule 3 of the Federal High e Court (Civil Procedure) Rules, 2000. 5. Consequential Orders Based upon the foregoing, the defendants/applicants have won some issues and lost some. f So also the plaintiff/respondent. The sum total therefore, is that the plaintiff/respondent’s originating summons shall and is hereby ordered to be converted to a writ summons. g Pleadings shall be ordered and, upon settlement of pleadings, the matter shall proceed to trial, as appropriate. And I so order.

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Olieh and another v. Federal Republic of Nigeria 185 a Olieh and another v Federal Republic of Nigeria

COURT OF APPEAL, CALABAR DIVISION b CHUKWUMA-ENEH, THOMAS, OMOKRI JJCA Date of Judgment: 25 NOVEMBER, 2004 Suit No.: CA/C/157/99

Banking – Irregularity and malpractice – Not constituting c offences known to criminal law Banking – Offence – Falsely boosting an account – Whether an offence known to law – Sections 435(2), 516 Criminal Code – Section 23(4) of the Failed Banks (Recovery of d Debts) and Financial Malpractices Decree No. 18 of 1994 (as amended) Banking – Offence – Fraudulent false accounting – Section 435(2) Criminal Code Cap 77 Laws of the Federation of Ni- e geria, 1990 – Ingredients of Banking – Phantom cheque – What is Banking – Section 3(1)(d) Failed Banks (Recovery of Debts) f and Financial Malpractices Decree No. 18 of 1994 (as amended) – Import of Words and phrases – Phantom cheque – Meaning of g Facts The accused persons (appellants) were charged at the Failed Banks Tribunal and convicted in the main of the offence of falsely boosting an account. Not satisfied with the verdict, h they appealed to the Court of Appeal contending in the main that such an offence was not known to law. The brief background of what led to the trial of the appellants was as follows:– i “Sometime in 1994, African Continental Bank Plc. due to its poor liquidity problem was taken over by the Central Bank of Nigeria who appointed the bank’s management team led by the 1st accused as the Chief Executive/Managing Director. The management team was charged with the responsibility of turning the bank j around and they went into action by mapping out strategies to

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enable them achieve their aim. One of their strategies which led to a this case was that in November, 1995, the managing Director (1st accused at the trial) through the zonal heads instructed the branch managers to embark on massive and aggressive mobilization of funds in order to regularise the bank’s 1iquidity problems with b Central Bank of Nigeria and to keep the bank a float. The police investigation report, Exhibit W in page 32 aptly described the events that followed. The report is as follows:– ‘iii. Investigation also confirms that African Continental Bank c branches involved founded the customer’s accounts to enable them issue their own personal cheques achieving a recycling and painting the picture of seemingly healthy business transaction to make African Continental Bank assume the posture of buoyancy thus pulling the wool over the eyes d of the Central Bank of Nigeria and convincing it that Afri- can Continental Bank’s feverish account was picking up. iv There is no single evidence to show that the payments made to the unfounded accounts of the customers were converted e to individual use. The customer on the receipt of the fund returns it to African Continental Bank which in turn paid back to the Central Bank of Nigeria when still in clearing house and in their account at Citizens Bank when it was thrown out of the clearing house. Indeed evidence of pay- f ments by African Continental Bank was seen in the statements of accounts obtained by the detectives from the Cen- tral Bank of Nigeria and Citizens Bank respectively.’ The 4th prosecution witness stated in his police report and in his evidence that no money was lost as a result of the phantom g cheques issued. Apparently, from the above, the acts of the appellants were done in the interest of African Continental Bank Plc. and with no intention to defraud African Continental Bank Plc. or Central Bank of Nigeria or any other person.” h Section 435(2) of the Criminal Code Cap 77 Laws of the Federation of Nigeria, 1990 provides:– “Any person who being a director, officer or member of a corporation or company does any of the following acts with intent to de- i fraud:– (a) destroys, alters, mutilates or falsifies any book, document, valuable security or account which belongs to the corporation or company or any entry in any such book, document or account or privy to any such act; or j

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Olieh and another v. Federal Republic of Nigeria 187 a (b) makes or is privy to making any false entry in any such book, document or account; or (c) omits or is privy to omitting any material particular from any b such book, document or account is guilty of a felony and is liable to imprisonment for seven years.” It is glaringly clear that there is no ingredient of “falsely boosting an account” in the above section. c The provisions of section 516 of the Criminal Code Cap 77 Laws of the Federation of Nigeria, 1990. It provides:– “Any person who conspires with another to commit any felony, or d to do an act in any part of the world which if done in Nigeria would be a felony, and which is an offence under the laws in force in the place where it is proposed to be done is guilty of a felony and is liable if no other punishment is provided to imprisonment for 7 years, or, if the greatest punishment to which a person con- e victed of the felony in question is liable is less than imprisonment for 7 years, then to such lesser punishment.” Again there is no ingredient of “falsely boosting an account” in the above provision. f Section 23(4) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) provides:– g “Where a person aids, abets, counsels, procures or conspires with any other person to commit any of the offences under this Decree are in guilty of the offence and liable on conviction to the same punishment as prescribed for that offence under this Decree (sic).” h The provisions of section 3(1)(d) of the Failed Banks Decree and it provides:– “The Tribunal shall have power to:– (a) ...... i (b) ...... (c) ...... (d) Try other offences relating to the business or operation of a j bank under any enactment.”

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Held – a 1. In section 435(2) of the Criminal Code, there is no ingredient of “falsely boosting an account”. 2. In section 516 of the Criminal Code there is no ingredi- b ent of “falsely boosting an account”. 3. Section 23(4) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree 1994 is not c referable to the offence of “falsely boosting an account”. The provision presupposes that there must be a substantial offence committed before it can be applied. One cannot aid, abet, counsel, procure or conspire to commit an unknown offence or a non-existent offence. So, where d in the first place no offence is committed, section 23(4) of the Failed Banks Decree is irrelevant and inapplicable. e 4. Per curiam “I have also carefully perused the Criminal Code, Banks and other Financial Institutions Decree No. 25 of 1991 (BOFID), NDIC Decree of 1988 and of course Failed Banks Decree, 1994, particularly Section 19 in its entirety, nowhere is the f offence of “falsely boosting an account” described or stated. There is no such offence known to law and I dare say that such offence is nonexistent in our criminal law. There is no law prohibiting the cross-firing of cheques or boosting of an g account as the learned Tribunal chairman stated in his judgment at page 171 of the record of proceedings. There is no provision relating to cross-firing of cheques and boosting of accounts. The appellants can only be tried and convicted for conspiracy if their act is an offence known to law.” h 5. The offence of “falsely boosting an account” is not referrable to the provisions of sections 435(2) and 516 of the Criminal Code and it bears no reasonable relationship with the provisions of section 23(4) of the Failed Banks i Decree. 6. The section 3(1)(d) Failed Banks Decree did not create any offence, it only gave the Tribunal jurisdiction to try other offences relating to the business or operation of a j

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Olieh and another v. Federal Republic of Nigeria 189 a bank under any enactment. The expression “other offences” means other offences defined in a written law. The provision admits that the Tribunal cannot try and b convict any person for any offence not known to law or not provided for in any enactment. This is in consonance with the clear and unambiguous provision of section 33(12) of the 1979 Constitution which was in operation when the appellants were tried and convicted by the Tri- c bunal. As there is no offence known to law as “falsely boosting an account”, there cannot be any conspiracy to commit such. It is clear that one cannot conspire to commit an offence which is not known to law or which d is non-existent. This is clearly and glaringly obvious from the provisions of section 516 of the Criminal Code. 7. For the prosecution to succeed under section 435(2) of the Criminal Code, it must prove:– e (a) That the appellants are Directors or officers of the company; (b) That their acts were done with the intention to defraud; f (c) That the appellants destroyed, altered, mutilated or falsified any book, document or account of their employers; g (d) That the book must be in possession of the appellant or their employers; (e) That the appellants made or are privy in making false entry in such book; h (f) That the appellants omitted or are privy in omitting any material particular from any such book. Irregularity and malpractice in banking do not constitute offences known to our criminal law. i 8. “A ‘phantom cheque’ is a cheque not backed by funds. It is as empty as a piece of paper. On the face of it, it is not ‘phantom’. It becomes ‘phantom’ when it is returned unpaid”. j Appeal allowed.

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Cases referred to in the judgment a Nigerian Adah v NYSC (2004) All FWLR (Part 185); (2004) 13 b NWLR (Part 891) 639 Agwu v State (1998) 4 NWLR (Part 544) 90 Ahmed v State (1998) 5 NWLR (Part 550) 493 Aigbe v State (1976) 1 NMLR 134 c Aladu v State (1998) 8 NWLR (Part 563) 618 Aoko v Fagbemi (1961) 1 All NLR 400 Clark v State (1986) 4 NWLR (Part 35) 381 d Daboh and Others v The State (1977) 5 SC 171 Egwim v State (1998) 1 NWLR (Part 532) 59 Eze v State (1992) 7 NWLR (Part 251) 75 e Fashanu v Adekoya (1974) 6 SC 83 FRN v Ifegwu (2003) FWLR (Part 167) 703; (2003) 15 NWLR (Part 842) 113 f Gbadamosi v The State (1991) 6 NWLR (Part 196) 182 Ifegwu v FRN (2001) 13 NWLR (Part 729) 103; (2003) FWLR (Part 167) 703 Ikemson v State (1989) 3 NWLR (Part 110) 455 g Laja v IGB (1961) 1 All NLR 744 Madukolu v Nkemdilim (1962) 1 All NLR (Part 4) 587 Ogbomor v The State (1985) 1 NWLR (Part 2) 223 h Oladejo v The State (1994) 6 NWLR (Part 348) 101 Olanrewaju v Afribank Plc (2001) FWLR (Part 72) 2008; (2001) 13 NWLR (Part 691) 704 Oyediran v The Republic (1967) NMLR 122 i Pincent v The State (1997) 1 NWLR (Part 480) 234 R v Nwangagwu (1962) 1 All NLR 294 Tofi v UBA (1987) 2 NWLR (Part 62) 707 j

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Olieh and another v. Federal Republic of Nigeria 191 a UNIC v UCIC Ltd (1999) 3 NWLR (Part 593) 17 Whyte v Jack (1996) 2 NWLR (Part 431) 407 b Foreign R v Fining English and Empire Digest page 1006

Nigerian statutes referred to in the judgment c Criminal Code Cap 77 Laws of the Federation of Nigeria, 1990, sections 435(2), 516 Failed Banks (Recovery of Debts) and Financial Malprac- tices Decree No. 18 of 1994 (as amended), sections 3(1)(d) d and 23(4)

Counsel e For the appellants: Ekong For the respondents: Salman

Judgment f OMOKRI JCA: (Delivering the lead judgment) This is an appeal by the appellants against the judgment, conviction and sentence of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Tribunal, Zone V, Lagos, g (herein after referred to as the Tribunal) presided over by Justice Amina A Augie (as he then was). The appellants and nine others were arraigned before the Tribunal for offences of stealing contrary to section 390(9), h false accounting contrary to section 435(2) and conspiracy contrary to section 516 of the Criminal Code. They were also charged with the offences under sections 19, 20, and 23(4) of the Failed Banks (Recovery of Debts) and Financial i Malpractices in Banks Decree No. 18 of 1994. The first appellant, Greg Olieh, was the second accused person before the Tribunal and was charged with counts 1, 2, 3 and 14 and convicted on count 1. The second appellant, j Adiele Chuks, was the third accused before the Tribunal. He

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA 192 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) was charged with counts 1, 2, 3, 4, 5, 6 and 9, but convicted a on counts 1, 4 and 9, which I now reproduce below: “1. That between 1 September and December 31st, 1995 you, Ejiofor A. Ezekwe, you Greg Olieh and you Adiele A. Chuks b whilst in the employment of African Continental Bank Plc. In the capacities of Managing Director, Manager of Trans Amadi Branch of African Continental Bank Plc., Port Har- court and Zonal Head of ACB Plc respectively conspired with O. O. Philips of 6, Trans Amadi Independence Layout, c Port Harcourt (now at large and outside the country) who issued two cheques of Allied Bank Ltd, Port Harcourt No. 001087645 of 30/11/95 for Eight Million Naira only (N8,000,000.00) and 00187619 of 30/11/95 for Two Million d Naira Only (N2,000,000.00) on his unfounded account to falsely boost the balance of African Continental Bank Plc’s clearing account with the Central Bank of Nigeria leading to false accounting contrary to Section 435(2) of the Criminal Code Cap. 77 of the Laws of the Federal Republic of Nige- e ria, 1999. 4. That you, Ejiofor Ezekwe (now at large and out of the country) between 1 September, 1995 and 31 December, 1995, you Mrs Asigo Anyaegbunam and you Adiele A. Chuks whilst in f the employment of A.C.B. Plc in the capacities of Managing Director, Branch Manager Port Harcourt (Main) and Zonal Head of the bank in Port Harcourt respectively conspired with you Lloyd Alamene the managing director of Desma- rine Nigeria Ltd, customer of the bank in Port Harcourt Main g Branch who issued two Diamond Bank cheques No. 10107 of 30/11/95 for Seventeen Million Naira (N17,000,000.00) and No. 10109 of 30/11/95 for Three Million Naira Only (N3,000,000.00) to falsely boost the balance of the account of African Continental Bank Plc with the Central Bank of h Nigeria leading to false accounting and thereby committed an offence contrary to Section 435(2) of the Criminal Code Cap. 77 Laws of the Federal Republic of Nigeria, 1990. 9. That you, Monday C. Nwankwo between 8 and 31 Decem- i ber, 1995 at the Airport branch of the African Continental Bank Plc., Port Harcourt branch being an officer of the bank to wit: Branch Manager did conspire together with Adiele A. Chuks, the Zonal Head of A.C.B. Plc. in Port Harcourt to falsify, alter, mutilate, conceal and use phantom cheque on j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 193 a Current Account No. 000280 of Onhohnogu Mechanical En- gineering Works for Ten Million Naira (N10,000,000.00) to falsely boost the balance of A. C. B. Plc clearing account with the Central Bank of Nigeria and you thereby committed b an offence punishable under Section 23(4) of Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree, 1994.” The appellants were found guilty and convicted on the three c counts on 18 August, 1998, and they were later sentenced on 26 August, 1998. While the first appellant was sentenced to a fine of N20,000.00 (twenty thousand Naira) or 9 months’ imprisonment in default of payment of the fine, the second d appellant was sentenced to a fine of N30,000 (thirty thousand Naira) or 12 months’ imprisonment in default of payment of the fine. Dissatisfied with the judgment, conviction, and sentence, e the appellants appealed to the Special Appeal Tribunal which was subsequently dissolved by the coming into operation of the 1999 Constitution on 29/5/99. Sequel to that the appeal was transferred to the Court of Appeal and assigned to this division. The notices of appeal were filed on 15th of f September, 1998, containing five grounds of appeal. On 28/10/02, the first appellant was granted leave by this court to file and add a supplemental record of appeal containing the notices and grounds of appeal filed by the first appellant. g By a further order of this court made on 28/10/02 the appeals of the first and second appellants were consolidated and ordered to be heard on the same record of appeal. Sub- sequently, the appellants separately filed amended notices of h appeal each containing five identical grounds of appeal on 11/11/03. The grounds of appeal shorn of the particulars are:– “i. The learned Chairman of the Tribunal erred in law in con- i victing the appellants on count 4 of the charge for conspiring with others to falsely boost the account of the African Continental Bank Plc., Port Harcourt as there is no such offence in existence in our laws. ii. The learned Chairman of the Tribunal misdirected himself j by convicting the appellants for conspiring to falsely boost

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African Continental Bank Plc., Port Harcourt account as a there was no evidence before the Tribunal as to that effect. vi. The learned Chairman of the Tribunal erred in law in convicting the appellants for conspiracy under Section 516 of the Criminal Code an offence he was not charged with and b not giving him the opportunity to plead to the charge. iv. The sentence is excessive having regard to the evidence before the Tribunal and the circumstances of the case. v. That the judgment is unreasonable and cannot be supported c having regard to the evidence before theTribunal.” From the five grounds of appeal the appellants distilled three issues for determination in their brief of argument and they are:– d “1. Whether the appellants can be convicted for conspiracy to boost an account when such offence is unknown in our laws. 2. Whether from the evidence before the Tribunal, the prosecution had proved beyond all reasonable doubt that A.C.B. e Plc’s account with the Central Bank of Nigeria was boosted by the activities of the appellants. 3. Whether the appellants can be convicted for conspiracy simpliciter under Section 516 of the Criminal Code without their being so charged and taking their plea accordingly.” f The respondent in its own brief of argument raised a preliminary objection as to the incompetence of the notice of appeal in the appellants’ brief of argument but withdrew g same before this Court on 28/9/04. The respondent in its brief adopted the issues formulated in paragraph 3 of the appellants’ brief. Both counsel adopted their briefs of arguments. h Learned counsel for the applicants, Mr EO Ekong, argued the three issues together in his brief of argument. He submitted that the learned Chairman of the Tribunal did not consider the offence of fraudulent accounting contrary to section 435(2) of the Criminal Code in respect of the seventh i accused person, Monday C Nwankwo and came to the conclusion that the prosecution failed to prove the vital ingredients necessary to sustain the offence alleged against him in count 8. Consequently, the charge failed and the seventh j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 195 a accused person was found not guilty of the offence of fraudulent false accounting and the chairman discharged and acquitted him. b Mr Ekong pointed out that the facts of the case and the evidence led against the seventh accused person are the same as in the case of the appellants who were tried together therefore, the appellants could also not be convicted for c fraudulent false accounting contrary to section 435(2) of the Criminal Code as the evidence led at the trial cannot in any way support the charge. He also submitted that the appellants cannot therefore be convicted for conspiracy to commit d an offence contrary to section 435(2) of the Criminal Code. Learned counsel for the appellants relying on the case of Oladejo v The State (1994) 6 NWLR (Part 348) 101 at 111, submitted that the chairman of the Tribunal was wrong in e convicting the appellants under section 516 of the Criminal Code for the offence of conspiracy under which they were never charged without first amending the charge and com- plying with the provisions of sections 162–164 of the Crimi- f nal Procedure Act, therefore the conviction should be quashed. Mr Ekong submitted also that though the appellants were g alleged to have conspired with others to issue six cheques, two cheques each in counts 1, 4 and 9 in the sum of N10 million, N20 million and N10 million, respectively used in falsely boosting the balance of ACB’s account with the Cen- tral Bank of Nigeria thereby leading to false accounting con- h trary to section 435 of the Criminal Code, there is no evidence of how the account of the African Continental Bank Plc with Central Bank of Nigeria was boosted and how it amounted to fraudulent false accounting. Moreover, counsel i pointed out that the alleged phantom or dud cheques were never tendered to show the reason why they were returned. He argued that the only way to explain the non-honouring of the cheques is to tender it as the reason for not honouring the j cheque must be endorsed on it.

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Counsel also submitted that although the chairman con- a cluded at page 171 of the record of proceedings that the cross-firing of cheque is an unlawful act and that the crime involved is the boosting of the account of African Continen- b tal Bank with Central Bank of Nigeria, there are no provisions relating to cross-firing of cheques and boosting of accounts in our laws. He then submitted that no person can be tried under section 516 of the Criminal Code unless the of- c fence is provided under our law and concluded that the trial of the appellants was null and void. Learned counsel for the respondent, Mallam Aliyu Sal- man, SAN, also argued that the three issues formulated by d the appellants in the respondent’s brief of argument (sic). He also adopted the briefs of argument filed by the respondent and made a brief submission before the court. The learned SAN submitted that the findings of the learned Tribunal e chairman and the subsequent conviction of the appellants was proper and in accordance with the intent of the Decree under which the Tribunal tried the appellants. He placed reliance on the provisions of section 435(2) of the Criminal Code, sections 3(1)(d) and 23 of the Failed Banks (Recovery f of Debts) and Financial Malpractices Decree, 1994, and submitted that the said provisions empower the Tribunal to try and if found guilty, convict the offender for an attempt to commit or conspiracy with any other person or to frame any g new charge against the accused person and that includes the offence of conspiracy under section 516 of the Criminal Code. He also submitted that the appellants were found guilty of h the principal offence of boosting an account which led to false accounting which is contrary to the express provision of section 435(2) of the Criminal Code which is an offence known to law. i Learned Senior Advocate of Nigeria submitted that from the evidence before the, Tribunal, the appellants’ act in a bid to aid African Continental Bank Plc from being sent out of the Central Bank of Nigeria clearing house committed acts j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 197 a which are tantamount to making or being privy to making false entry in the account of African Continental Bank Plc with Central Bank of Nigeria. He submitted further that the b appellants’ act of conspiracy was perpetuated along with other connected persons by means of various correspon- dences in the form of memos through Exhibits “K1–K8” which form part of the company’s books provided for the use of officers of African Continental Bank Plc. He argued c that instructions were sent to the appellants through Exhibits “K1–K8” and were carried out knowing same to be unlawful but by adopting a scheme to raise funds from unorthodox practice by abusing the clearing rule system by the use of d phantom cheques. He referred to Exhibit “M” tendered before the Tribunal at pages 42-45 of the record of proceedings. Relying on the cases of Gbadamosi v The State (1991) 6 NWLR (Part 196) 182; Oyediran v The Republic (1967) e NMLR 122 and Daboh and Others v The State (1977) 5 SC 171. Mallam Salman, SAN submitted that the learned Tri- bunal Chairman acted justly when considering the totality of the evidence before the Tribunal against the appellants, he f inferred conspiracy from the conduct of the appellants. He also submitted that the appellants played active roles in the conspiracy to falsely boost the account of African Continen- tal Bank Plc with Central Bank of Nigeria and the defence of merely obeying an instruction which they knew to be unlaw- g ful did not avail the appellants before the Tribunal. He was of the view that it was wrong for the appellants to have submitted in their brief of argument that the particulars h of the charge of false accounting must be established before the appellants could be convicted for conspiracy to commit the substantive offence. He also argued that the respondent having tendered Exhibits “K1–K8” and “AC–D” which necessarily form part of the accounts of African Continental i Bank Plc on which the appellants along with other convicted persons communicated their scheme of conspiracy, it was unnecessary for the prosecution to show before the Tribunal why the dud cheques issued were returned because the ap- j pellants knew from the onset that the accounts over which

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA 198 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) the cheques were drawn were not funded. Learned Senior a Advocate of Nigeria concluded that the failure of the prosecution to tender the statement of account of African Conti- nental Bank Plc to establish that the account was actually b boosted should not disturb the conviction of the appellants for the offence of conspiracy. Issue No.1 is fundamental in the sense that if indeed the Tribunal convicted the appellants for an offence which is c unknown in our laws then the whole trial including conviction and sentence will amount to a nullity. It is observable that the three counts for which the appellants were charged relates to conspiracy to falsely boost the account of African Continental Bank Plc. thereby leading to false accounting d contrary to section 435(2) of the Criminal Code and section 23(4) of the Failed Banks (Recovery of Debts) and Financial Malpractices Decree, 1994. However, at the conclusion of the trial the Tribunal chairman convicted the appellants for e the offence of conspiracy under section 516 of the Criminal Code. At this juncture, it is necessary to consider the brief background of what led to the trial of the appellants. Sometime in f 1994, African Continental Bank Plc due to its poor liquidity problem was taken over by the Central Bank of Nigeria who appointed the bank’s management team led by the first accused as the Chief Executive/Managing Director. The man- g agement team was charged with the responsibility of turning the bank around and they went into action by mapping out strategies to enable them achieve their aim. One of their strategies which led to this case was that in November, h 1995, the managing Director (first accused at the trial) through the zonal heads instructed the branch Managers to embark on massive and aggressive mobilization of funds in order to regularise the bank’s 1iquidity problems with Cen- i tral Bank of Nigeria and to keep the bank afloat. The police investigation report, Exhibit “W” in page 32 aptly described the events that followed. The report is as follows:– “iii. Investigation also confirms that African Continental Bank branches involved founded the customer’s accounts to j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 199 a enable them issue their own personal cheques achieving a recycling and painting the picture of seemingly healthy business transaction to make African Continental Bank assume the posture of buoyancy thus pulling the wool over b the eyes of the Central Bank of Nigeria and convincing it that African Continental Bank’s feverish account was picking up. iv There is no single evidence to show that the payments made c to the unfounded accounts of the customers were converted to individual use. The customer on the receipt of the fund returns it to African Continental Bank which in turn paid back to the Central Bank of Nigeria when still in clearing house and in their account at Citizens Bank when it was d thrown out of the clearing house. Indeed evidence of payments by African Continental Bank was seen in the statements of accounts obtained by the detectives from the Cen- tral Bank of Nigeria and Citizens Bank respectively.” e The fourth prosecution witness stated in his police report and in his evidence that no money was lost as a result of the phantom cheques issued. Apparently, from the above, the acts of the appellants were done in the interest of African f Continental Bank Plc and with no intention to defraud Afri- can Continental Bank Plc or Central Bank of Nigeria or any other person. g The Tribunal after hearing the evidence of PWs 1, 2, 3 and 4 came to the conclusion at page 171 lines 11–25 of the record:– “What the 7th accused person did with the cheque of Owhornogu h Mechanical Engineering Works at the bankers cheque of African Continental Bank was therefore a cross- firing of cheques which is an unlawful act and this unlawful act was aimed at boosting the account of African Continental Bank with Central Bank of Nigeria so that African Continental Bank would remain in clearing. i In other words, there was an attempt to paint a false picture before Central Bank of Nigeria that African Continental Bank was solvent enough to remain in clearing even though African Conti- nental Bank had over shot its over draft limit of N1.54 billion naira j by N698.66 million naira. The criminal purpose in this case is

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therefore the false boosting of the balance of African Continental a Bank clearing account with the Central Bank of Nigeria . . ..” (Italics mine.) The Tribunal in convicting the first, second and third ac- b cused (second and third accused are the appellants) stated at page 184 lines 9–17 that:–

“I am therefore satisfied from the totality of the evidence before c me that the prosecution has established the case against the 1st, 2nd and 3rd accused persons and proved beyond reasonable doubt that the aforesaid accused persons conspired to falsely boost the balance of African Continental Bank’s account with the Central Bank of Nigeria in their capacity as Managing Director, Branch d Manager and zonal head respectively. Consequently, I find the 1st, 2nd and 3rd accused persons guilty of the aforesaid offence and convict them accordingly.” Also, the Tribunal Chairman in sentencing the appellants e stated at page 201 lines 25–30 of the record of proceedings as follows:– “The 1st, 2nd, 3rd, 6th and 7th convicts are officers of African Continental Bank to wit; Managing Director, Zonal Head and f Branch Managers. They were discharged and acquitted on counts of fraudulent false accountings (sic) stealing etc., and were all convicted on the counts of conspiracy to falsely boost African Continental Bank’s account with Central Bank of Nigeria.” g It is therefore clear and undeniable that the appellants who were the second and third convicts were convicted for conspiracy to falsely boost African Continental Bank’s account with Central Bank of Nigeria. h At this stage it is important that I examine the provisions of sections 435(2) and 516 of the Criminal Code and section 23(4) of the Failed Banks (Recovery of Debts) and Financial i Malpractices Decree No.18 of 1994, as they relate to the conviction of the appellants for the offence of boosting the account of African Continental Bank Plc with the Central Bank of Nigeria in order to remain in the clearing house. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 201 a Section 435(2) of the Criminal Code provides:– “Any person who being a director, officer or member of a corporation or company does any of the following acts with intent to de- b fraud:– (a) destroys, alters, mutilates or falsifies any book, document, valuable security or account which belongs to the corporation or company or any entry in any such book, document or account or privy to any such act; or c (b) makes or is privy to making any false entry in any such book, document or account; or (c) omits or is privy to omitting any material particular from any such book, document or account is guilty of a felony and is d liable to imprisonment for seven years.” It is glaringly clear that there is no ingredient of “falsely boosting an account” in the above section. More importantly, the same Tribunal chairman discharged and ac- e quitted the appellants on the counts of fraudulent false accounting contrary to section 435(2) of the Criminal Code. See page 201 lines 25–30, reproduced above. Again, the Tribunal chairman also at page 187 lines 30–38 found as fol- f lows:– “In this case before the Tribunal, I have not only deliberated on the evidence presented by the prosecution I have gone the extra length to produce most of this evidence in the body of this judgment, to g bare it all so to speak and I will not hesitate to say that there is no iota of evidence before the Tribunal to sustain a charge of stealing and conspiracy to steal leveled against the officers of African Con- tinental Bank, to wit; the Managing Director, the Zonal Heads and the branch managers. To start with, it is pertinent to point out here h that the charge against them for fraudulent false accounting contrary to and punishable under Section 435(2) of the Criminal Code failed because the vital ingredients necessary to sustain the charge were not established by the prosecution.” i After arriving at the above conclusion, it is not easy to understand how the Tribunal came to the conclusion that the appellants conspired to falsely boost the account of African Continental Bank Plc with Central Bank of Nigeria in order j to remain in the clearing house.

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I shall now examine the provisions of section 516 of the a Criminal Code. It provides:– “Any person who conspires with another to commit any felony, or to do an act in any part of the world which if done in Nigeria b would be a felony, and which is an offence under the laws in force in the place where it is proposed to be done 1k (sic) guilty of a felony and is liable if no other punishment is provided to imprisonment for 7 years, or, if the greatest punishment to which a person convicted of the felony in question is liable is less than imprison- c ment for 7 years, then to such lesser punishment.” Again there is no ingredient of “falsely boosting an account” in the above provision. d Section 23(4) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 provides:– “Where a person aids, abets, counsels, procures or conspires with e any other person to commit any of the offences under this Decree are guilty of the offence and liable on conviction to the same punishment as prescribed for that offence under this Decree (sic).” The above provision is not referable to the offence of f “falsely boosting an account”. The provision presupposes that there must be a substantial offence committed before it can be applied. One cannot aid, abet, counsel, procure or conspire to commit an unknown offence or a non-existent g offence. So, wherein the first place no offence is committed, section 23(4) of the Failed Banks Decree is irrelevant and inapplicable. I have also carefully perused the Criminal Code, Banks and Other Financial Institutions Decree No. 25 h of 1991 (BOFID), NDIC Decree of 1988 and of course Failed Banks Decree No. 18 of 1994, particularly section 19 in its entirety, nowhere is the offence of “falsely boosting an account” described or stated. There is no such offence known to law and I dare say that such offence is nonexistent i in our criminal law. There is no law prohibiting the cross- firing of cheques or boosting of an account as the learned Tribunal Chairman stated in his judgment at page 171 of the record of proceedings.There is no provision relating to j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 203 a cross-firing of cheques and boosting of accounts. The appellants can only be tried and convicted for conspiracy if their act is an offence known to law. b In Ifegwu v FRN (2001) 13 NWLR (Part 729) 103, Ad- eremi, JCA while dealing with a similar situation held at page 131 paragraphs D-F of the report that:– “The crime said to have been committed; going by the framing of c the two counts is ‘fraudulently granting credit facilities’. A felony or a crime must be seen to have been committed within the framework of the provision of the law under which it is charged. I have had a careful study of the Failed Banks Decree No. 18 of 1994 and BOFID; nowhere is the offence of ‘fraudulently granting d credit facilities’ described. That offence, in my respectful view is non-existent as far as our criminal law is concerned. It is sacro- sanct that no person shall be liable to be tried or punished in any court of this land except under the clear, unambiguous provisions e of a written law.” The decision of the Court of Appeal in Ifegwu v FRN (supra) was affirmed by the Supreme Court in the case of FRN v Ifegwu (2003) FWLR (Part 167) 703; (2003) 15 NWLR f (Part 842) 113 where it held that a court of law only has jurisdiction to punish for an offence provided in a statute. Niki Tobi, JSC after making reference to the findings of Aderemi, JCA at page 131 paragraph H of the report said at page 214 g that:– “I entirely agree with the above. An accused person can only be charged with an offence created by a penal statute. This can either be in the Criminal Code, the Penal Code or any other penal statute such as BOFID. In this, the relevant law is BOFID as the charges h were preferred under that Decree. A count which is an indictment on the conduct of an accused must be specific and precise. It must be tied to the offending section of the penal statute in order to enable the court deal with the specific criminal conduct.” i I have already shown above that the offence of “falsely boosting an account” is not referrable to the provisions of sections 435(2) and 516 of the Criminal Code and it bears no reasonable relationship with the provisions of section 23(4) j of the Failed Banks Decree.

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Learned counsel for the respondent, Aliyu Salman, SAN a at page 6 paragraph 5.06 of his brief of argument submitted that the offence for which the appellants were found guilty is an offence known to our laws. He argued that the appellants b were convicted for conspiracy to boost an account with the consequence that if the appellants had been found guilty of the principal offence of boosting an account it would have led to false accounting. This submission, with the greatest c respect, is speculative and it does not answer the question in issue. The learned Senior Advocate did not refer us to any statutory provision where cross-firing of cheques or boosting of an account is defined in a written law. d Now, what is cross-firing of cheques? What is “falsely boosting of an account”? What law says that cross-firing of cheques is an offence? What law says falsely boosting of an account is an offence? To my mind, there is no penal statute e dealing with cross-firing of cheques or falsely boosting of an account. It is now apposite to refer to the provisions of section 33(8) and (12) of the 1979 Constitution which is applicable to this case regard being had to the time of trial and conviction of the appellants. f Section 33(8) provides:– “No person shall be held to be guilty of a criminal offence on account of any act or omission that did not at the time it took place, g constitute such an offence; and no penalty shall be imposed for any criminal offence heavier than the penalty in force at the time the offence was committed.”

Section 33(12) provides: h “Subject as otherwise provided by this Constitution, a person shall not be convicted of a criminal offence unless that offence is defined and the penalty therefore is prescribed in a written law; and in this subsection a written law refers to an Act of the National As- sembly or a law of a State, any subsidiary legislation or instrument i under the provision of a law.” There is no doubt that by virtue of these provisions which are clear and unambiguous, the appellants shall not be held to be guilty of a criminal offence on account of any act or j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 205 a omission that did not at the time it took place constitute such an offence nor of an offence that is not defined in a written law and the penalty provided thereof. See Aoko v Fagbemi b (1961) 1 All NLR 400; Tofi v UBA (1987) 2 NWLR (Part 62) 707 and Ogbomor v The State (1985) 1 NWLR (Part 2) 223. The above cases upheld the fundamental principle of constitutional liberty based on the notion that a person is not c to be punished for an act or omission which at the time of its commission or omission did not constitute any offence under the law. No person can be so tried and convicted on it. There is no offence under our criminal law with the de- d scription of “falsely boosting an account”. The Tribunal Chairman at page 187 lines 35–42 of the record stated:– “. . . On the other hand, the evidence before the Tribunal revealed e what Mr Clarke referred to as ‘sharp practices by African Conti- nental Bank by boosting its balance with the Central Bank of Ni- geria in order to survive to be able to retain its banking license’, which practice I held to be an unlawful act.” f With due respect to the Tribunal Chairman an act is only unlawful if it is contrary to a penal statute where the offence is defined in a written law as stated under the clear and unambiguous provisions of section 33(12) of the 1979 Consti- g tution. It is not for the Tribunal or court to conclude that an act is unlawful when the law itself did not say so. The learned chairman in assuming jurisdiction to con- h vict the appellants for the offence of conspiracy under section 516 of the Criminal Code relied on the provisions of section 3(1)(d) of the Failed Banks Decree No. 18 of 1994 at page 165 lines 39–47:– i “It is clear from a careful reading of count 9, that the 7th accused person is being charged with conspiracy, an offence contrary to and punishable under Section 516 of the Criminal Code and therefore triable by this Tribunal which has power to ‘try other offences relating to the business or operation of a bank under any enact- j ment’. See Section 3(1)(d) of the Failed Banks Decree.”

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Learned Senior Advocate also submitted in page 6 para- a graph 5.12 of the respondent’s brief of argument that the learned Chairman of the trial Tribunal acted within his powers as conferred on him by sections 3(1)(d) and 23 of the b Failed Banks Decree to convict the appellants. I fail to see how the two provisions can be of relevance and assistance presently. I have already dealt with the provisions of section 23(4) of the Failed Banks Decree earlier on in this judgment c and I do not intend to repeat myself. That leaves me with the provisions of section 3(1)(d) of the Failed Banks Decree and it provides:– “The Tribunal shall have power to:– d (a) ...... (b) ...... (c) ...... Try other offences relating to the business or operation of a bank under any enactment.” e The above provision did not create any offence, it only gave the Tribunal jurisdiction to try other offences relating to the business or operation of a bank under any enactment. The f expression “other offences” means other offences defined in a written law. The provision admits that the Tribunal cannot try and convict any person for any offence not known to law or not provided for in any enactment. This is in consonance with the clear and unambiguous provision of section 33(12) g of the 1979 Constitution which was in operation when the appellants were tried and convicted by the Tribunal. As there is no offence known to law as “falsely boosting an account”, there cannot be any conspiracy to commit such. It is h clear that one cannot conspire to commit an offence which is not known to law or which is non-existent. This is clearly and glaringly obvious from the provisions of section 516 of the Criminal Code. It provides:– i “Any person who conspires with another to commit any felony or to do any act in any part of the world which if done in Nigeria would be a felony and which is an offence under the laws in force in that place where it is proposed to be done, is guilty of a felony . . .” j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 207 a Under section 3 of the Criminal Code, a felony is defined as “any offence which is declared by law to be a felony, or is punishable, without proof of previous conviction with death b or with imprisonment for three years or more”. See also section 2(1) paragraph 11 of the Criminal Procedure Act. From the above, it is crystal clear that for conspiracy to be a crime triable by the court or Tribunal it must involve an c agreement to commit a felony. See Eze v State (1992) 7 NWLR (Part 251) 75; Ikemson v State (1989) 3 NWLR (Part 110) 455; Clark v State (1986) 4 NWLR (Part 35) 381. The Tribunal Chairman also held at page 165 lines 43–47 d thus:– “It is true that the appropriate section of the Criminal Code is not expressly stated in count 9 of the charge but it has been held that where an indictment is merely defective but not bad in law, the e omission of the words in the indictment is not enough to set aside a conviction so long as an offence known to Law is disclosed in the indictment. See R. v Ijoma (1962) 1 All NLR 402.” The defects in counts 1, 4 and 9 in the charge are that they f did not disclose any offence known to law so they are very bad in law. They are not merely defective but they are hope- lessly and incurably bad in law. The case of R v Ijoma (supra) though quite instructive, is clearly distinguishable and therefore in applicable to the situation in this appeal. Simi- g larly, the facts of this case do not come within the ambit of section 166 of the Criminal Procedure Act which provides that:– “No error in stating the offence or the particulars required to be h stated in the charge and no omission to state the offence or those particulars shall be regarded at any stage of the case as material unless the accused was in fact misled by such error or omission.” As Tobi, JSC held in FRN v Ifegwu (supra) at page 215 of i the report, I too do not think that section 166 of the Criminal Procedure Act is applicable because the section presupposes a situation where an offence known to law is preferred. Naturally, where no offence known to law or a non-existent j offence is preferred, section 166 of the Criminal Procedure

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Act cannot be invoked to cure any error or omission arising a from an unknown or non-existent offence. In the result, it is my decision that the conviction of the appellants for the phantom offence of “falsely boosting an b account” by the Tribunal is a flagrant violation of the clear and unambiguous provisions of section 33(8) and (12) of the 1979 Constitution. Nobody can be convicted of any offence except that created under a written law and to convict any c person under non-existing offence or an offence unknown to law is unconstitutional, and void. See Aoko v Fagbemi and Another (supra); Ifegwu FRN (supra) and FRN v Ifegwu (supra). d It follows therefore that since counts 1, 4 and 9 in the charge are unknown to law the Tribunal had no jurisdiction to try the appellants, the judgment, conviction and sentence should be set aside. Where a court has no jurisdiction to ad- e judicate in a matter the proceedings of the court the ultimate adjudication will amount to a nullity, no matter its correctness and no matter how well decided (sic). The defect is extrinsic to the adjudication. See Madukolu v Nkemdilim f (1962) 1 All NLR (Part 4) 587. Ordinarily, the above conclusion sufficiently disposes of the appeal. However, the Supreme Court has deprecated the attitude of courts below in concluding matters without re- g solving other issues arising from the appeal as originally made to it. In Adah v NYSC (2004) All FWLR (Part 185), (2004) 13 NWLR (Part 891) 639 particularly at 649 Uwaifo, JSC said:– h “The court below not being the final court had a duty to the merit of the case upon the issues canvassed before it notwithstanding that it resolved the issue of jurisdiction to the effect that the Benue State High Court lacked jurisdiction. This is because if on appeal i to this court it was reversed on that issue, it would prevent the necessity of remitting the appeal as to it to resolve the other issues arising from the appeal as originally made to it (sic). See Ezeoke v Nwangbo (1988) 1 NWLR (Pt. 72) page 616; Bayol v Ahemba (1999) 10 NWLR (Pt. 623) 381, (1999) 7 SCNJ 223. The court j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 209 a below was in error to have failed to resolve all the issues canvassed before it rather than confine itself only to the issue of jurisdiction.” b Tobi, JSC at page 650 of the report had this to say:– “All courts below the Supreme Court are bound to take all issues canvassed by the parties, even when such issues appear super flou- sorspent. This is to enable the exercising appellate jurisdiction to determine the issues, even if in the alternative. I think this court c has the exclusive jurisdiction or should I say prerogative to do what the Court of Appeal did because it is the final bus stop of any litigation.” Bearing the above in mind I shall respectfully consider and d deal with issues 2 and 3 presently. Issue No. 2 is whether from the evidence before the Tri- bunal, the prosecution had proved beyond all reasonable doubt that the Continental Bank Plc’s account with the Cen- e tral Bank of Nigeria was boosted by the activities of the appellants. The appellants were charged together in count 1, for the offence of falsely boosting the account of African Continental Bank Plc leading to fraudulent false accounting f contrary to section 435(2) of the Criminal Code. For the prosecution to succeed it must prove:– (a) That the appellants are Directors or officers of the g company; (b) That their acts were done with the intention to defraud; (c) That the appellants destroyed, altered, mutilated or h falsified any book, document or account of their employers; (d) That the book must be in possession of the appellant i or their employers; (e) That the appellants made or are privy in making false entry in such book; (f) That the appellants omitted or are privy in omitting j any material particular from any such book.

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Apart from the fact that the first and second appellants were a officers of African Continental Bank Plc, there is no evidence before the trial Tribunal to prove the other elements of the charge. There is no evidence of any book, document or b account of the bank in their possession or in the possession of their employers which they altered or falsified or are privy in altering or falsifying. There is no evidence before the Tribunal of the intention by the appellants to defraud c their employer, African Continental Bank Plc. It is very clear that this cannot be the case because it was the management of African Continental Bank Plc that instructed them to procure cheques from the customers of the bank and to issue the said customers with a bank cheque to fund their d account. See Exhibits “K, K1–K8/’ and “AC–D”. This was confirmed by the third prosecution witness in her evidence- in-chief as follows:– “As a result of our investigation we found that the Central Bank of e Nigeria as at that time has been uncomfortable with the operation of the African Continental Bank account Central Bank of Nigeria then called on the management of A.C.B. under the 1st accused to look for means of reducing the overdrawn position. We discovered f that the management team adopted a scheme of survival to gather money from unorthodox practice by abusing the clearing rule system . . .” The gravamen of the offence of fraudulent false accounting g is that there must be an “intent to defraud”. It is trite law that where a special or specific intent forms the ingredient of an offence, that special or specific intent must be proved in order to secure a conviction Where it is not proved the accused h must be discharged See R v Nwangagwu (1962) 1 All NLR 294. The expression “intent to defraud” has been given judicial interpretation in Laja v IGB (1961) 1 All NLR 744. While considering the provision of section 419 of the Crimi- nal Code, the court relying on R v Fining in English and i Empire Digest page 1006 held that:– “In Section 419 of the Criminal Code the words “intent to defraud” mean an intent to deceive in such a manner as to expose any person to loss or the risk of loss.” j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 211 a In this case, there is evidence of the fourth prosecution witness that no funds were missing as regards the “phantom cheques” issued by the six customers of the African Conti- b nental Bank Plc. There is no evidence that the Central Bank of Nigeria lost any money. There is no evidence that any other person lost any money. There is no doubt that the strategy adopted by African c Continental Bank Plc is unethical or an abuse of the clearing rule system as stated by the third prosecution witness but it is not fraudulent and it does not amount to any crime known to law. d In fact, in Olanrewaju v Afribank Plc (2001) FWLR (Part 72) 2008; (2001) 13 NWLR (Part 691) 704, the Supreme Court per Katsina-Alu, JSC held that:– “Irregularity’ and ‘malpractice’ do not constitute offences known e to our criminal law. Thus banking malpractice, irregularities and dishonest practices for which the appellant was accused and dismissed do not constitute any offence known to law to warrant the respondent initiating criminal prosecution in respect of against the appellant before he could be dismissed from his employment.” f In fairness to the Tribunal chairman he held that the prosecution failed to prove the offence of fraudulent false accounting contrary to and punishable under section 435(2) of the Criminal Code at page 187 lines 30–42 quoted elsewhere g in this judgment. Now, did the prosecution prove that the account of Afri- can Continental Bank Plc was boosted by the activities of the appellants? I have perused the record of proceedings of h the Tribunal very carefully, particularly the evidence of the first, second, third and fourth prosecution witnesses and of course all the Exhibits tendered before the Tribunal but I cannot find any scintilla of evidence to establish or to prove i how the account of African Continental Bank Plc with the Central Bank of Nigeria was boosted. The prosecution must as a matter of fact and of law produce before the Tribunal, the particular ledgers, books, files or documents in posses- j sion of African Continental Bank Plc in which falsification,

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA 212 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) mutilation, destruction or alteration had been made or re- a corded by the appellants in order to establish or prove the activities of the appellants. Surprisingly, the prosecution did not tender any such documents. The alleged phantom b cheques issued by the customers of the African Continental Bank Plc and the corresponding cheques issued by African Continental Bank Plc to fund the customers’ account were not tendered in evidence. The statement of account of Afri- c can Continental Bank Plc with the Central Bank of Nigeria was not tended to show how its account was “falsely boosted”. Similarly, the statement of account of Central Bank of Nigeria reflecting the “falsely boosting”of African Continental Bank Plc was not tendered. d Furthermore, the alleged “phantom cheques” or “dud cheques” were not tendered to show that they were returned unpaid and why they were returned unpaid. The statement of e accounts of the six customers who issued the alleged “phantom cheques” were not tendered to establish or to prove that their accounts were unfunded. The proper thing would have been to tender their ledger cards or statements of account of f the six customers which were in possession of the bank in evidence before the Tribunal. Learned Senior Advocate of Nigeria, Aliyu Salman, in his brief at page 7 argued that it was not necessary for the g prosecution to show before the Tribunal why the dud cheques issued by the customers of the bank were returned. He submitted that the appellants knew from the onset that the accounts over which the cheques were drawn were not h funded. It should be noted that there is no burden on the appellants to establish their innocence. The burden is always on the prosecution to prove every element of the offence charged beyond reasonable doubt. See Pincent v The State (1997) 1 NWLR (Part 480) 234 where it was held that proof i beyond reasonable doubt imposes a duty on the prosecution to prove the main ingredient of the offence to the satisfaction of the trial Judge. See also Aladu v State (1998) 8 NWLR (Part 563) 618; Agwu v State (1998) 4 NWLR (Part j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 213 a 544) 90; Egwim v State (1998) 1 NWLR (Part 532) 59 and Ahmed v State (1998) 5 NWLR (Part 550) 493. It is also significant to point out that the expression b “phantom cheque” was explained by the fourth prosecution witness in his evidence at page 55 lines 9 to 12 that:– “A ‘phantom cheque’ is a cheque not backed by funds. It is as empty as a piece of paper. On the face of it, it is not ‘phantom’. It c becomes ‘phantom’ when it is returned unpaid.” That piece of evidence makes it rather more compelling for the prosecution to tender the cheques in issue so that the rea- d sons why the cheques were returned unpaid would be known, established and proved. Learned Senior Advocate of Nigeria also submitted that failure of the prosecution to tender the statement of account e to establish that the account was actually boosted should not disturb the conviction of the appellants for conspiracy. It is my view that having alleged in the charge that the appellants conspired to boost the account of ACB Plc with CBN, the f prosecution must prove same beyond reasonable doubt. See Oladejo v State (supra); Aigbe v State (1976) 1 NMLR 134. Without the statement of account of African Continental Bank Plc how can it be proved that its account with the Cen- g tral Bank of Nigeria was “boosted”? Documentary evidence is a veritable aid for assessing oral testimony. See Whyte v Jack (1996) 2 NWLR (Part 431) 407; UNIC v UCIC Ltd (1999) 3 NWLR (Part 593) 17 and Fashanu v Adekoya (1974) 6 SC 83. h In the circumstances, I must resolve the issue No. 2 in favour of the appellants. It is my conclusion that the prosecution did not prove beyond reasonable doubt or at all that the i account of African Continental Bank Plc with the Central Bank of Nigeria was “boosted” by the activities of the appellants. Issue No. 3 is whether the appellants can be convicted for j conspiracy simpliciter under section 516 of the Criminal

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Code without amending the charges and taking their plea a accordingly. Mr Ekong in his brief submitted that the Tribunal chairman having held that the appellants cannot be convicted un- b der section 435(2) of the Criminal Code ought not to have convicted them of the offence of conspiracy under section 516 of the Criminal Code under which they were never charged without first amending the charge and taking their c plea. He was of the view that the Tribunal should have complied with the provisions of sections 162–164 of the Crimi- nal Procedure Act as was enjoined in Oladejo v The State (supra). In that case this court held as follows:– d “Undoubtedly the court has ample power under Section 217 of the CPC to convict an accused person for an offence other than the one he was specifically charged with and tried. However, the correct approach to the application of the provisions of Sections 216 and 217 of the CPC is that if in the course of a trial there is evi- e dence of facts to prove an offence with which the accused person was not charged, the trial court should frame a new charge under Section 208 of the CPC and comply with that section and the relevant sections that follow.” f However, it will appear that the Tribunal chairman did not rely on the provisions of sections 162–164 of the Criminal Procedure Act in convicting the appellants for conspiracy under section 516 of the Criminal Code. Rather, the Tribunal g chairman at page 183 lines 11–22 relied on the provisions of sections 3(1)(d) and 23(3) of the Failed Banks Decree to convict the appellants. Section 3(1)(d) of the Failed Banks Decree has been h quoted and dealt with elsewhere in his judgment. Section 23(3) of the Failed Banks Decree provides:– “Where a person is charged with an offence under this Decree, but the evidence establishes the commission of another offence under this Decree, the offender shall not be entitled to acquittal but he i may be convicted of that other offence and punished as provided under this Decree.” The above provision differs materially from the provisions of sections 162–164 of the Criminal Procedure Act and j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA Olieh and another v. Federal Republic of Nigeria 215 a they are mutually exclusive. That being the case, pursuant to the provisions of section 23(3) read communally with section 3(1)(d) of the Failed Banks Decree, the Tribunal was b correct. The decision in the case of Oladejo v The State (supra) is distinguishable and inapplicable to the present case in this regard. Be that as it may, I have held that the offence of conspir- c acy is not made out, regard being had to the facts and circumstances of the case before the Tribunal. I have also held that the offence of “falsely boosting an account” is unknown in our criminal law, therefore, the appellants cannot be con- d victed for conspiracy to commit an offence which is unknown to law or non-existent. See the provisions of section 33(12) of the 1999 Constitution. Therefore, the question of committing the offence of conspiracy does not arise at all. It e is for this reason and others highlighted earlier in this judgment that I reach the conclusion that there is merit in this appeal. In the result, the trial of the appellants is unconstitutional, f null and void. I hereby allow the appeal. The judgment, including the conviction, is hereby set aside. The sentences imposed on the first and second appellants by the Tribunal are hereby quashed. g Appeal allowed.

CHUKWUMA-ENEH JCA: I have had the advantage of a preview in draft of the lead judgment just delivered by my h learned brother, Omokri, JCA. He has dutifully and exhaustively analyzed the facts and law applicable to this case. I entirely agree with him that there is merit in the appeal and it should be allowed. I abide by all the orders in the lead i judgment.

THOMAS JCA: I have had the privilege of reading in advance, in a form of draft, the lead judgment of my learned j brother, Jean Omokri, JCA

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I entirely agree with the conclusions and reasonings ar- a rived at in allowing the appeal of the appellants on merit. The judgment and conviction made by the Tribunal are also set aside, and I abide in quashing the sentences of the appel- b lants. Appeal allowed.

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Societe Bancaire (Nigeria) Ltd v. De Lluch 217 a Societe Bancaire (Nigeria) Ltd v De Lluch

SUPREME COURT OF NIGERIA b KUTIGI, KATSINA-ALU, KALGO, EJIWUNMI, PATS-ACHOLONU JJSC Date of Judgment: 10 DECEMBER, 2004 Suit No.: SC. 286/2002

Banking – Banking business – Definition of – Section 61 c Banks and Other Financial Institution Decree No. 25 of 1991 Banking – Definition of Banking – Expression “connected with or pertaining to d banking” – Import of Banking – Money paid by fraudsters into a bank – Victim alleging negligence on part of bank in opening account for e fraudsters – Whether Federal High Court or State Court has jurisdiction Banking – Section 251(1)(d) Constitution of the Federal Re- public of Nigeria, 1999 – Tenor and intendment of f Jurisdiction – Money paid by fraudsters into a bank – Victim alleging negligence on part of bank in opening account for fraudsters – Whether Federal High Court or State Court has jurisdiction g Words and phrases – Banking – Definition of Words and phrases – Banking – Expression “connected with or pertaining to banking” – Import of h Words and phrases – Banking business – Section 61 Banks and Other Financial Institution Decree No. 25 of 1991

Facts i The respondent (the plaintiff) entered into a business relationship with one Francis Philips whereby the latter promised to secure a contract for the respondent worth $55m for the construction of the Central Bank of Nigeria between, j 1992/94. The plaintiff/respondent claimed that she was

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218 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) induced to part with the total sum of $500,000 which was a later paid into the appellant bank. The respondent heard nothing else from the said Francis Philips and to her greatest chagrin and shock, she realised b too late that she had been made to part with her money under false pretences as it turned out. The money was paid into the joint account of Anthony Jiwueze and Francis Philips in the appellant bank. The respondent averred that the appellant c was negligent in opening an account for Mr Philips and Ji- wueze without keeping to or observing the laid down standard of care and procedure in the opening and operation of an account, and that the bank did not behave in a manner d expected to be followed by a prudent bank by so readily allowing Mr Philips and Jiwueze to open an account. At the High Court, the appellant raised a preliminary objection to the fact that the State High Court has no jurisdic- e tion stating that the subject matter of the action is a banking matter but not being one of bank and customer relationship. The High Court per Akinsanya, J after listening to the arguments of both counsel, dismissed the suit for lack of jurisdic- f tion, whereupon the appellant appealed to the Court of Ap- peal. The Appellate Court found merit in the appeal and allowed it and set aside the ruling of Akinsanya J holding that the State High Court is competent to adjudicate in the claims g on this matter. The defendant as the appellant in this case appealed to the Supreme Court. Section 251(1)(d) Constitution of the Federal Republic of h Nigeria, 1999 which states as follows:– “Notwithstanding anything to the contrary contained in Constitu- tion and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High i Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters – connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, j

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Societe Bancaire (Nigeria) Ltd v. De Lluch 219 a coinage, legal tender, bills of exchange, letters or credit promissory notes and other fiscal measures: Provided that this paragraph shall not apply to any dispute be- b tween an individual customer and his bank in respect of transactions between the individual customer and the bank.”

Held – c 1. The expression “connected with or pertaining to” involves or imports the state of affairs where the matter in issue involves a transaction which is peculiar to a banking operation and can only be carried on by the bank or a d financial institution. It equally connotes the operational duties of a bank in respect of or in relation to its functions within the limits of its licence. 2. Section 251(1)(d) in its tenor and intendment embraces e all possible conceivable matters touching on banking whether on issue of tort or contract but not being a point on bank and customer relationship. f 3. A matter which involves some elements of banking as expounded and expatiated above by way of decided cases is wide in its context that any attempt to remove it from the orbit of banking operations would be indulging g in legal semantics or even polemics. 4. The expression “connecting with or pertaining to banking” when examined synthetically imports transaction on matters that are related to or show affinity or intertwine h or have semblance or have interrelationship with banking. 5. Black’s Law Dictionary defines the word banking as follows:– i “The business of banking, as defined by law and custom, consist in the issue of notes payable on demand intended to circulate as money when the banks are banks of issue; in receiving deposits payable on demand; in discounting com- j mercial paper; making loans of money on collateral security;

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buying and selling bills of exchange; negotiating loans, and a dealing in negotiable securities issued by the government, state and national, and municipal and other corporations.” 6. To constitute the business of banking today, the banker b must also undertake to pay cheques drawn upon himself (the banker) by his customers in favour of third parties up to the amount standing to their credit in their “current accounts” and to collect cheques for his customers and c credit the proceeds to their “current accounts”. 7. The term banking business has been defined in section 61 of Banks and Other Financial Institutions Decree No. 25 of 1991 as follows:– d “Banking business” means the business of receiving deposits on current account, savings account or other similar account, paying or collecting cheques, drawn by or paid in by customer; provision of finance or such other business as the e Governor, may, by order published in the Gazette, designate as business.” 8. Per curiam “If an action is brought against any person on negligence, it f presupposes that the action is brought on the ground that the defendant has breached duty of care he owes to the propo- nent. Even if a duty of care arises due to some form of affinity in banking matters between the combatants as being espoused by the respondent in this case, would that oust the g jurisdiction of an appropriate court so statutorily designated? As the respondent based her action on the tort of negligence, which imports there was a duty of care and the respondent has said that she is not a customer which indeed she is not, h I find it highly irresistible not to express the view that the nature of the relationship subsisting between the parties touches inferentially or circumstantially on a matter relating to and therefore connected to and pertaining to banking. I say this because it is a fact not denied that the fraudsters i forged the money in the appellant bank thereby making the appellant in exercise of its banking operations the holder of the respondent’s money though without her consent but nevertheless in possession of it. The money is in the bank’s possession in its capacity as a bank in the context of j

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Societe Bancaire (Nigeria) Ltd v. De Lluch 221 a its being a repository of money normally lodged or paid in there, and in this case the money said to belong to the respondent who is not a customer. It is in the exercise of its duties as a bank that they became repository of the respon- b dent’s money.” 9. The matter touches on the issue of banking generally but certainly not a bank/customer relationship, it is difficult not to conclude that this case ought to have been brought c squarely before the Federal High Court as it is obvious it falls within the intendment of the primary law as reflected in section 251(1)(d) of the Constitution but not including the portion with the proviso. That being the d case, it is my view that this matter should be or ought to be brought squarely before the Federal High Court, which ought to exercise jurisdiction in this case. Appeal allowed. e Cases referred to in the judgment Nigerian f Bronik Motors Ltd v Wema Bank Ltd (1993) NSCC 226 Jammal Steel Structures Ltd v African Continental Bank Ltd (1973) NSCC 619 NDIC v Okem Enterprises Ltd (2004) All FWLR (Part 210) g 1176; (2004) 10 NWLR (Part 850) 107 Trade Bank Plc v Benilux Ltd (2003) 9 NWLR (Part 825) 416 h Foreign Dominion Trust Ltd v Kirkwood [1966] 1 All ER 968 Donoghue v Stevenson [1932] AC 562 i Dorset Yatch Co. Ltd v Home Office [1970] AC 1004 Grant v Australian Knitting [1936] AC 85 Heaven v Fender (1883) 11 QBD 503 j Le Lievre v Gould (1993)1 QB 491

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Nigerian statutes referred to in the judgment a Banks and Other Financial Institutions Decree No. 25 of 1991, section 61 b Constitution of the Federal Republic of Nigeria, 1999, section 251(1)(d)

Books referred to in the judgment c Black’s Law Dictionary Paget Banking (6ed) 1961, page 8

Counsel d For the appellant: Usoro, (with him Adams and Akpabio) For the respondent: Ayorinde (with him Elelu)

Judgment e PATS-ACHOLONU JSC: (Delivering the lead judgment) The respondent (the plaintiff) entered into a business relationship with one Francis Philips whereby the latter promised to se- f cure a contract for the respondent worth $55m for the construction of the Central Bank of Nigeria between 1992/94. The plaintiff/respondent claimed that she was induced to part with the total sum of $500,000 which was later paid into the appellant bank. g The respondent heard nothing else from the said Francis Philips and to her greatest chagrin and shock, she realised too late that she had been made to part with her money un- h der false pretences as it turned out. The money was paid into the joint account of Anthony Jiwueze and Francis Philips in the appellant bank. The respondent averred that the appellant was negligent in opening an account for Mr Philips and Ji- wueze without keeping to or observing the laid down stan- i dard of care and procedure in the opening and operation of an account, and that the bank did not behave in a manner expected to be followed by a prudent bank by so readily allowing Mr Philips and Jiwueze to open an account. j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC Societe Bancaire (Nigeria) Ltd v. De Lluch 223 a At the High Court, the appellant raised a preliminary objection to the fact that the State High Court has no jurisdiction stating that the subject matter of the action is a banking b matter but not being one of bank and customer relationship. The High Court per Akinsanya, J after listening to the arguments of both counsel, dismissed the suit for lack of jurisdiction, whereupon the appellant appealed to the Court of Ap- c peal. The Appellate Court found merit in the appeal and allowed it and set aside the ruling of Akinsanya, J holding that the State High Court is competent to adjudicate in the claims on this matter. d The defendant as the appellant in this case appealed to this court and framed two issues which are as follows:– “I Is it correct, as held by the Court of Appeal, that “the High Court of Lagos State still has jurisdiction” e under section 251(1)(d) of the 1999 constitution “to entertain any claims connected with bank and banking except such claims were connected with fiscal measures or revenue of the Federal Government of f Nigeria”? (Italics ours.) II. Does this appeal fall within the sole proviso in section 251(1)(d) of the 1999 constitution, in which circumstance the Lagos State High Court would be g seised of jurisdiction?” The respondent on the other hand argued that the case being one of negligence simpliciter and having nothing to do with banking matters in stricto sensu ought not to come within h the provision of section 251(1)(d) of the 1999 Constitution being no more than a simple case of tort, and therefore as she contended, is within the jurisdiction of the State High Court. The respondent company formulated only one issue i which is:– “Whether the Court of Appeal was right in holding that the High Court of Lagos State has jurisdiction over this action being an action which raises an issue of negligence in the ordinary course of banking practice and business only and not relating to any matter j of fiscal measure or revenue of the Federal Government.”

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To my mind the issue framed by the appellant collapse into a one issue as set out by the respondent. The appellant’s counsel has written a 31 page brief on this very simple matter in which he exhaustively discussed fiscal b measures and policies and revenue of the Federal Govern- ment in relation to the history of vesting of powers in the Federal High Court. He further discussed very much at length such cases as Jammal Steel Structures Ltd v African c Continental Bank Ltd (1973) NSCC 619 and also Bronik Motors Ltd v Wema Bank Ltd (1993) NSCC 226. Obviously, when this brief was written the judgment of this court on NDIC v Okem Ent Ltd (2004) All FWLR (Part d 210) 1176; (2004) 1 NWLR (Part 880) 107 had not been given, otherwise the appellant’s brief which is in a form of treatise and which is very verbose, would not have been so written. It is instructive that the Supreme Court exhaustively e discussed the two cases of Jammal Steel Structures and Bronik Motors in NDIC v Okem Ent Ltd (supra). Now the issue then is this, should the action be commenced in the High Court in this sort of case. For us to understand the nu- f ances of the matter in controversy, let me go back to section 251(1)(d) of the Constitution which states as follows:– “Notwithstanding anything to the contrary contained in the Consti- tution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal g High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters – connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or against h the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters or credit promissory notes and other fiscal measures: Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of i transactions between the individual customer and the bank.” It is agreed by both sides that the respondent was not a customer of the appellant. If that is so, what then was the respondent in relation to the bank? The appellant argued that j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC Societe Bancaire (Nigeria) Ltd v. De Lluch 225 a the lodging of the money falsely or fraudulently removed from the respondent and paid into the account of the alleged fraudsters in the appellant bank could only be a civil cause b or matter connected with or pertaining to banking. The respondent’s replicatio argued with gusto and unction that there is no way the criminal lodgment of the money in the appellant bank could be described as something connected with or pertaining to banking. I believe that the expression c “connected with or pertaining to” involves or imports the state of affair where the matter in issue involves a transaction which is peculiar to a banking operation and can only be carried on by the bank or a financial institution. It equally d connotes the operational duties of a bank in respect of or in relation to its functions within the limits of it licence. The appellant’s case can be said to be that the lodgment of the money by Philips and Jiwueze in the account in the appel- e lant bank has situated the bank in relation to the respondent a state of responsibility of flow holding and being a repository of the respondent’s money. The respondent argued con- trariwise that the complaint of the respondent is nothing f more than a simple case of negligence. From the analysis of the respondent’s argument in her brief as she strives to make out an issue of negligence, it is to be implied that the appellant owes a duty of care or to be g assumed to owe a duty of care to the respondent. When does a duty of care arise? Actually, a duty of care has its origin in the concept of forseeability. This principle was first enunciated in Heaven v Fender (1883) 11 QBD 503 at 509, where h Brett, MR said:– “Whenever one person is by circumstances placed in such a position with regard to another that everyone of ordinary sense who did think would at once recognise that if he did not use ordinary care and skill in his own conduct with regard to those circum- i stances he would cause danger of injury to the person or property of the other, a duty arises to use ordinary care and skill to avoid such danger.” In Donoghue v Stevenson [1932] AC 562 at 581 in approv- j ing the judgment of the Court in Heaven v Fender (supra)

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC 226 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) and Le Lievre v Gould (1993) 1 QB 491 at 497, Lord Atkin a said:– “The rule that you are to love your neigbour becomes in law, you must not injure your neighbour; and the lawyer’s question, who is b my neighbour?, receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably c to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.” What are those precautionary measures the respondent said d the appellant ought to have taken that it did not take. I suppose that would feature in the main trial of the case.

Indeed, aside from such cases as Dorset Yatch Co. Ltd v e Home Office [1970] AC 1004 at 1052 where Lord Pearson said that it would be unhelpful to consider the question as to the existence of a duty of care in isolation from the various elements and variables that circumscribe the duty of care, f and perhaps the other earlier case of Grant v Australian Knitting [1936] AC 85 at 103, it is important to fully appreciate and understand the nuances that she be considered in our understanding of the duty of care. In the Dorset Yatch Co Ltd case (supra), Lord Wright said:– g “All that is necessary as a step to establish the tort of actionable negligence is to define the precise relationship from which the duty to take care is deduced. It is however essential in English Law that the duty of care should be established: The mere fact that h a man is injured by another’s act gives itself no cause of action; if the act is deliberate, the party injured will have no claim in law even though the injury is intentional, so long as the other party is merely exercising a legal right. If the act involves lack of due care, i again no case of actionable negligence will arise unless the duty to be careful exists.” I do not intend to discuss the issue of negligence at this stage as that would be agitated later in the High Court presumably. j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC Societe Bancaire (Nigeria) Ltd v. De Lluch 227 a Section 251(1)(d) in its tenor and intendment embraces all possible conceivable matters touching on banking whether on issue of tort or contract but not being a point on bank and b customer relationship. I have decided to make a small forage as much as reasonably possible in quest to understand the case made out by the respondent that her action was based purely on negli- c gence and that being the case, it would be wrong to pigeon- hole the case within the framework of section 251(1)(d) of the constitution. I shall pause here and would not proceed further in my analysis of the point in negligence. d It is hardly worth repeating that a matter which involves some elements of banking as expounded and expatiated above by way of decided cases is wide in its context that any attempt to remove it from the orbit of banking opera- e tions would be indulging in legal semantics or even polemics. Among the facts averred by the respondent in her statement of claim are that the appellant failed in its duty to inquire into the background of Philips and Jiwueze who f lodged the money in his bank. Which is why her case was built on negligence. The respondent drew the attention of the court to the case of Trade Bank Plc v Benilux Nig. Ltd (2003) 9 NWLR (Part 825) 416. I shall now make a g comparative critical examination of this case and the case on appeal. In Benilux Nig Ltd (case), this company had a transaction with the firm of Messrs Accountable Finance and Invest- h ment Co. as a result of which the latter issued a cheque in favour of the respondent marked “not negotiable” and to be drawn at the appellant which is a bank. The appellant, Trade Bank, paid the money to a stranger instead of the right per- i son, where upon the respondent issued a writ. The only issue formulated in that case was whether the High Court of Lagos State is vested with the jurisdiction to hear and determine the case. The leading judgment in that case in the j Supreme Court did not touch on the issue as to which court

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC 228 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) ought to be vested with jurisdiction of the case. The Court a merely said:– “I have no doubt that the respondent in the case in hand can sue the appellant in conversion for the proceeds of the cheque which b the appellant paid to a stranger who is not the payee of the cheque. The respondent’s case is simply a tort of conversion and action . . . can lie by the plaintiff at any State High Court.” There was no exhaustive discussion on the import of the ex- c pression “connected with or pertaining to banking” as obviously that point was not assiduously canvassed before the court. In the first place, in Trade Bank Plc v Benilux Nig Ltd (supra) the payee of the cheque was the respondent so, there was obviously a duty of care. In the present case under con- d sideration, the fraudsters paid the loot into the appellant bank but in their names. They became customers to the bank. How then shall we describe the relationship between the respondent whose “stolen money” was lodged in the ap- e pellant. Could such state of affair arising out of the spurious transaction between the two scoundrels and the respondent and tangentially affecting the appellant give rise to an act on the part of the appellant that can be described as “connecting f with and pertaining to the bank”. The expression “connecting with or pertaining to banking” when examined synthetically imports transaction on matters that are related to or show affinity or intertwine or have semblance or have inter- g relationship with banking. What then is banking?” Black’s Law Dictionary defines the word banking as follows:– “The business of banking, as defined by law and custom, consist in h the issue of notes payable on demand intended to circulate as money when the banks are banks of issue; in receiving deposits payable on demand; in discounting commercial paper; making loans of money on collateral security; buying and selling bills of exchange; negotiating loans, ad (sic) dealing in negotiable securi- i ties issued by the government, state and national, and municipal and other corporations.” At common law, there does not appear to be any definition of banking although Diplock, LJ had in the case of j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC Societe Bancaire (Nigeria) Ltd v. De Lluch 229 a Dominion Trust Ltd v Kirkwood [1966] 1 All ER 968 at 986 – 7 as follows (sic):– “I am inclined to agree with the Master of the Rolls and the author b of the current edition of Paget on Banking (6ed Edition) (1961) page 8, that to constitute the business of banking today, the banker must also undertake to pay cheques drawn upon himself (the banker) by his customers in favour of third parties up to the amount standing to their credit in their “current accounts” and to c collect cheques for his customers and credit the proceeds to their current accounts.” In the same case Lord Denning, MR had said at 979:– d “. . . It must be remembered that a recital of usual characteristics is not equivalent to a definition. The usual characteristics are not the sole characteristics. There are other characteristics, which go to make a banker. in particular, stability, soundness and probity . . . Like many other beings, a banker is easier to recognize than to de- e fine. In case of doubt it is, I think, permissible to look at the reputation of the firm amongst ordinary intelligent commercial men.” What the learned jurist was saying is that you cannot easily compartmentalise the term “banking”. In other words, it de- f fies positive and readily identifiable definitions. On the other hand, the term banking business has been defined in section 61 of Banks and Other Financial Institutions Decree No. 25 of 1991 as follows:– g “Banking business” means the business of receiving deposits on current account, savings account or other similar account, paying or collecting cheques, drawn by or paid in by customer; provision of finance or such other business as the Governor, may, by order h published in the Gazette, designate as business.” If an action is brought against any person on negligence, it presupposes that the action is brought on the ground that the defendant has breached duty of care he owes to the propo- i nent. Even if a duty of care arises due to some form of affinity in banking matters between the combatants as being espoused by the respondent in this case, would that oust the jurisdiction of an appropriate court so statutorily designated? j As the respondent based her action on the tort of negligence,

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC 230 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) which imports there was a duty of care and the respondent a has said that she is not a customer which indeed she is not, I find it highly irresistible not to express the view that the nature of the relationship subsisting between the parties b touches inferentially or circumstantially on a matter relating to and therefore connected to and pertaining to banking. I say this because it is a fact not denied that the fraudsters forged the money in the appellant bank thereby making the c appellant in exercise of its banking operations the holder of the respondent’s money though without her consent but nevertheless in possession of it. The money is in the bank’s possession in its capacity as a bank in the contex to fits being a repository of money normally lodged or paid in there, and in d this case the money said to belong to the respondent who is not a customer. It is in the exercise of its duties as a bank that they became repository of the respondent’s money. e The respondent had lampooned the appellant for not exercising an accepted high standard in opening account for the two men. Holding therefore as I do that the matter to my mind touches on the issue of banking generally but certainly f not a bank/customer relationship, it is difficult not to conclude that this case ought to have been brought squarely before the Federal High Court as it is obvious it falls within the intendment of the primary law as reflected in section 251(1)(d) of the Constitution but not including the portion g with the proviso. That being the case, it is my view that this matter should be or ought to be brought squarely before the Federal High Court, which ought to exercise jurisdiction in this case. The appeal therefore succeeds. h I cannot however fail to comment at the manner the respondent in this matter readily parted with the sum of money being claimed. Would she do the same thing in Germany where she hails from? The consideration for parting with the i money is tainted with dirt, corruption and blatant dishonesty. I can’t help saying that she had hoped to reap an uncon- scionable unimaginable profit, id est, reaping where she did not sow. It is the likes of her that watered and manured the j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC Societe Bancaire (Nigeria) Ltd v. De Lluch 231 a revolting and nauseating advance fee fraud which now thrives in the mentality and culture of our society. It is a hideous culture hitherto unknown which having been intro- b duced and allowed to flower in the minds of louts inebriated with making fast money by dishonest means has become a malignant cancer that has given this country a bad name and for which the society is fighting hard to destroy and obliter- ate. It would seem that the respondent and the fraudsters had c all the decease (sic) of greed and cupidity in their body mechanism. In the final analysis, the appeal succeeds and it is allowed. d I set aside the judgment of the court below and affirm the ruling of the High Court. I strike out the main suit erroneously filed in the State High Court. I shall make no order as to costs having regard to the nature of this case. e KUTIGI JSC: I have had the privilege of reading in draft the judgment just delivered by my learned brother Pats- Acholonu, JSC I agree with his reasoning and conclusions. The facts show that the matter is clearly one of banking even f though not strictly of “bank/customer” type. The proviso to section 251(1)(d) of the Constitution under which both the Federal High Court and State High Court exercise concurrent jurisdiction therefore will not apply. (See NDIC v Okem g Enterprises Ltd (2004) All FWLR (Part 210) 1176; (2004) 10 NWLR (Part 850) 107.) It is therefore my view that the Federal High Court has exclusive jurisdiction in this matter as provided under section 251(1)(d) (the proviso excluded). h The appeal therefore succeeds and it is allowed. The judgment of the Court of Appeal is set aside while the ruling of the High Court is restored. I also make no order as to costs. i KATSINA-ALU JSC: I have had the advantage of reading in draft the judgment of my learned brother Pats-Acholonu, JSC in this appeal. For the reasons he has given, I also allow j the appeal.

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The evidence before the Court clearly shows that the re- a spondent is not a customer of the appellant bank. There was clearly therefore no banker/customer relationship which would have conferred the State High Court with jurisdiction b under the proviso to section 251(1)(d) of the 1999 Constitu- tion: See NDIC v Okem Enterprises Ltd (2004) All FWLR (Part 210) 1176; (2004) 10 NWLR (Part 880) 107. As I have already indicated, I also allow the appeal and c set aside the decision of the Court of Appeal. I abide by the consequential orders.

KALGO JSC: I have had a preview of the judgment just delivered by my learned brother Pats-Acholonu, JSC in this d appeal. I agree with him entirely that there is merit in the appeal and it ought to be allowed. This appeal is on an interlocutory issue. The substantive matter has not gone to trial yet. The facts giving rise to this appeal have been compre- e hensively set out in the leading judgment of my Lord Pats- Acholonu, JSC and I am not adding anything more to it. The main issue to be determined by this court is whether the High Court of Lagos State or the Federal High Court has f jurisdiction to entertain the action of the respondent. The main contention was whether the action involved “banking business” as defined in section 61 of Banks and Other Financial Institutions Decree No. 25 of 1991 and g whether it bordered on negligence simpliciter of the appellant bank. The contention of the appellant was that although the action involves banking matters, it does not touch on banker/customer relationship and so the proviso to sec- h tion 251(1)(d) of the 1999 Constitution did not apply. There- fore, counsel further argued, that “banking business” as defined by section 61 of the Banks and Other Financial Institutions Decree No. 25 of 1991 did apply to this case i even though the action was based on negligence. For the respondent it was submitted that since the action was based on negligence only, it has nothing to do with banking matters and therefore, the provision to j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kalgo JSC Societe Bancaire (Nigeria) Ltd v. De Lluch 233 a section 251(1)(d) of the 1999 Constitution did not apply and the Lagos State High Court has jurisdiction to entertain the case. b It is not in dispute that the respondent is not a customer of the appellant and therefore the proviso to section 251(1)(d) did not apply. But the whole transaction giving rise to the case as disclosed by the statement of claim, has revealed c some banking transaction or business, and in my respectful view, the matter is one “connected with or pertaining to banking”. In the case of NDIC v Okem Enterprises Ltd (2004) All FWLR (Part 210) 1176; (2004) 10 NWLR (Part d 880) 107, this Court held that the Federal High Court has exclusive jurisdiction to entertain all civil causes and matters under section 251(1)(d) of 1999 Constitution and that in respect of the proviso to paragraph (d) thereof, it has concurrent jurisdiction with the State High Courts. Therefore, since e this case does not come under the said proviso, but has some connection with banking transaction or business, it is my view that the Federal High Court should have the exclusive jurisdiction to entertain it under paragraph (d) of subsection f (1) of section 251 of the 1999 Constitution. I therefore find merit in this appeal. For what I have said above, and the more reasons given in the leading judgment of my learned brother Pats-Acholonu, g JSC, this appeal succeeds and is hereby allowed. I set aside the decision of the Court of Appeal and restore that of the trial High Court. I abide by the consequential orders made in the leading judgment including the order as to costs. h EJIWUNMI JSC: I have had the privilege of reading before now the judgment just delivered by my learned brother, Pats-Acholonu, JSC and I am in full accord with his i reasoning that led him to the conclusion that the appeal is meritorious. For the reasons given in the said judgment, I will also uphold the appeal and the consequential orders made. j Appeal allowed.

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a First Bank of Nigeria v Sangonuga

COURT OF APPEAL, LAGOS DIVISION OGUNBIYI, SALAMI, GARBA JJCA b Date of Judgment: 17 JANUARY, 2004 Suit No.: CA/L/231/99

Banking – Interest – Definition of – Award of – Principles governing c Guarantee – Determination of – Whether can be done by mere letter – Principles governing

Guarantee – Discontinuance of by guarantor – Implication d of Mortgage – Equitable mortgage – Deposit of title deed constitutes Mortgage – Equitable mortgage – Enforcement of – What e holder of must do – Sections 22, 26 and 51 Land Use Act Cap 202 Laws of the Federation of Nigeria, 1990 Mortgage – Equitable mortgage – What constitutes f Words and phrases – Interest – Definition of Words and phrases – Lien – Definition of

Facts g The first defendant is a limited liability company with its registered office at 8/10, Broad Street, Lagos and its principal place of business at No. 6 Airport Road, Ikeja. The plaintiff was the solicitor legal adviser to the first defen- h dant’s company. The third to sixth defendants are the chil- dren of the late Eric DO Atuanya and were sued as represen- tatives and beneficiaries of the estate of the late Eric D O Atuanya. The second defendants are the bankers of the first i defendant. That sometimes in 1982, Mr Atuanya approached the plaintiff for financial assistance to enable him (Mr Atuanya) to finance the contract awarded to the first defendant by the j

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First Bank of Nigeria v. Sangonuga 235 a Federal Government. The plaintiff could not avail him with the request. Mr Atuanya then applied to the second defendant for a loan of fifty thousand Naira (N50,000) for the first b defendant to execute the contract. The second defendant approved and granted a loan of thirty-five thousand Naira (N35,000) for the first defendant. Subsequently, Mr Atuanya invited the plaintiff to sign a memorandum of guarantee for c the first defendant in respect of the said loan. The plaintiff along with Mr Atuanya jointly executed the memorandum of guarantee dated 8 October, 1982. The plaintiff also deposited the title deeds of the property registered as No. 26 at page 26 in volume 1709 of the Lands Registry, in Lagos and d the original building plans of his house, with the second defendant. By a letter dated 1 June, 1984, the plaintiff wrote to the e second defendant revoking his guarantee of the overdraft facilities granted to the first defendant by the second defendant. The plaintiff also asked for the release of all (his), the plaintiffs’ title deed and other documents with the second defendant per letter dated 12 June, 1984, but the second de- f fendant replied the plaintiff’s letter and refused to release the title deeds and other documents with the second defendant. Consequently, the plaintiff therefore subsequently wrote many letters pressing for the release of his documents, but g the second defendant bluntly refused to release the same. That the second defendant never at any time made any demand on the plaintiff to pay the loan in respect of which the plaintiff signed a memorandum of guarantee. The failure by h the second defendant therefore to release the documents gave rise to the plaintiff instituting the action in respect of which this appeal now lies. By his fifth amended statement of claim, the plaintiff’s i claim before the lower court against the defendants jointly and severally at pages 491–492 of the record were as follows:– “(a) A declaration that the plaintiff is not liable to the second de- j fendant under the guarantee dated 8 October, 1982.

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(b) A declaration that the refusal of the second defendant to re- a lease the plaintiffs’ title deeds is wrongful and illegal. (c) An order directing the second defendant to return to the plaintiff the original title deeds, approved building plans and b all other documents in its possession relating to the plaintiffs’ property which is registered as Number 26 at Page 26 in Volume 1709 of the Lands Registry at Lagos. (d) Payment of the sum of N1,000,000 being damages for detinue.” c Sequentially and in the fifth amended statement of defence and counter-claim filed by the second defendant, the said defendant also counter-claimed against the plaintiff as follows:– d “(a) Payment of the sum of N67,659.92 plus interest thereon at the rate of 7% per annum from 24 July,1987 until final liquidation. (b) An order of specific performance compelling the plaintiff to e submit forthwith an application for Governor’s consent to the equitable mortgage it intended to create in favour of the 2nd defendant by the deposit of the Deed of Conveyance dated 25 March, 1978 registered at No. 26/26/1709 Lagos and the f execution of the memorandum of deposit dated 16 Septem- ber, 1982. (c) An order of specific performance compelling the plaintiff to execute a deed of Legal Mortgage over the property comprised in the Deed of Conveyance dated 25 May, 1978 and g registered as No. 26/26/1709 Lagos. (d) An injunction to restrain the plaintiff from demanding for or withdrawing the Deed of Conveyance dated 25 March, 1978 and registered as No. 26/26/1709 Lagos from the possession, h power or custody of the 2nd defendant until the sum of (N67,659.92) Sixty Seven Thousand, Six Hundred and Fifty Nine Naira, Ninety-Two Kobo and interest accruing thereon owing by the 1st defendant as principal debt or and the plaintiff as guarantor to the 2nd defendant is fully liquidated.” i In his considered judgment while the plaintiff succeeded on his claims, the second defendant’s counter-claim succeeded in part to the sum of (N35,000) thirty five thousand Naira plus interest at the rate of (7%) seven per cent per annum j

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First Bank of Nigeria v. Sangonuga 237 a with effect from 24 July, 1987 until the whole debt is finally liquidated. Being dissatisfied with the said judgment of the lower b court the second defendant, as the appellant, has now appealed to the Court of Appeal.

Held – c 1. By the very act of the respondent depositing the title deeds with execution of a memorandum of deposit, same had indicated only one clear intention and purpose which was the creation of an equitable mortgage. d 2. In law it is generally accepted that a mere deposit of a title deed which cannot be accounted for in any other way, is taken as part performance of a contract to create a legal mortgage even when no word about a contract e has been said, such a deposit creates an equitable mortgage. 3. An equitable mortgage is a specific lien or charge upon a real property to secure the payment of money or the per- f formance of some other obligations which a court will recognize and enforce, but which lacks the essential features of a legal mortgage because it grows out of a transaction of the parties without any deed. g A lien or charge created by the deposit of title deed(s) with an intention to create an equitable mortgage is a specie of an equitable mortgage. It is immaterial there- h fore that the form of security is either temporary, as a mortgage by assignment subject right of redemption, or permanently as an outright assignment. 4. For an equitable mortgage to be enforceable, the consent i of the governor of the state where the property is situate must first be obtained for a valid and an enforceable transaction in law. 5. By the provisions of section 22 of the Land Use Act, j where there was execution of the mortgage deed before

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the Governor gave his consent, contrary to the stipula- a tion of section 22(1) of the Land Use Act, the instrument cannot for reason of obtaining consent subsequent to execution render the document or instrument invalid in b view of section 22(2) of the Land Use Act (supra). There is nothing in the Act preventing prior execution of an instrument before an approach is made to the Gover- nor for his consent. So that the provision that the consent c of the Governor must first be had and obtained before a mortgage can be made, means no more than that the agreement entered into will remain inchoate until the Governor’s consent thereon is sought and obtained. d That the governor cannot give consent blindfolded without his foreknowledge of what he is called upon to give consent, thereto. e 6. Further still and by giving the transaction another con- ceptual perception in the light of the doctrine of estoppel, the resultant outcome would nonetheless amount to a binding contract of mortgage between the parties. In f other words and by applying the legal principle to the matter at hand wherein the appellant acted upon the assurance given by the respondent and thereby advanced money to the latter at the face value of his words, equity g and justice demand that the respondent ought to be estopped from going back on his words. 7. The respondent in this appeal under the contract agreement had the duty to obtain the governor’s consent. With h him having failed to do so, he cannot now turn round and use same as a sword to attack the other party. The respondent cannot rely on his own illegality to declare the mortgage void. In other words, the transaction is i only voidable having regard to the plethora of authorities. It is incumbent and expected of the respondent to perfect the transaction for purpose of specific performance of same as agreed upon by the parties. j

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First Bank of Nigeria v. Sangonuga 239 a 8. By the respondent opting out of the agreement, his intention was to frustrate the contract which he willingly entered into. He should not in the circumstance be allowed b to benefit from his own deliberate act by approbating and reprobating at the same time. 9. Lien has been defined by Black’s Law Dictionary (5ed) at page 832 as:– c “A claim or charge on property for payment of some debt . . . Right or claim against some interest in property created by law as an incident of contract. Right to enforce charge upon property of another for payment or satisfaction of debt . . .” d 10. In the circumstance of the case and the deduction therefrom the determination, it is obvious that a contractual lien, from the Black’s Law Dictionary definition, was created in favour of the defendant/appellant when e the plaintiff/respondent handed over his title deed as security for the facility to be extended to the first defendant/appellant. It is not in question that the plaintiff/ respondent unequivocally agreed that the defendant/ f appellant should retain the title deed of his property until the overdraft facility being granted had been repaid. 11. The deposit by the respondent amounts to an equitable mortgage rendering the transaction only voidable pend- g ing the requisite consent of the Governor of Lagos State. 12. From the date of the discontinuance per Exhibit “E”, it meant that the guarantee ceased from that day to be a continuing guarantee. In other words, by the discontinu- h ance, it did not mean that the guarantor was discharged from liability already incurred up to the date of the discontinuance. It however only meant that any additional liability incurred by the principal debt or after that date, i will not be the responsibility of the guarantor. 13. The law of suretyship/guarantorship is that once a surety or guarantor paid the amount under the suretyship/ guarantorship, he is discharged from all obligations j thereunder, even if the indebtedness be higher than the

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amount so guaranteed. In other words, if an action for a breach were brought against the principal and his surety or guarantor, such surety or guarantor would be discharged from his obligation on payment of the amount b so guaranteed. 14. A guarantor cannot determine his liability under a guarantee agreement by a mere writing of a letter without more. A guarantor remains answerable for the principal c sum granted as overdraft plus accrued interest at the rate agreed to or prescribed upon his guarantee and before notice to determine is given. 15. Respondent can only be discharged of his liability under d contract of guarantee in the following four circumstances:– “(a) where his obligation under the guarantee contract has been satisfied: e (b) where the principal debt had been extinguished by act or acts of the parties; (c) where a limitation or prescriptive period had elapsed; (d) where a court applied a presumption which operates to f terminate the contract of guarantee.” 16 The respondent herein has not brought himself within any of these exceptions when he purportedly determined the guarantee contract. The termination was therefore a g farce. Having shown that the termination was a charade or a nullity all the duties of the respondent, including seeking and obtaining the consent of the Governor to mortgage under the agreement of guarantee, subsist. h 17. Interest as it obtains within the circle of banking institutions is the money payable by a banker to a customer for money deposited or as money payable by a customer to his banker for money had and received from the bank as i loan overdraft, advances or any other related banking transaction. 18. The award of interest in Nigeria is still subject to the common law principle and practice as stated in the j

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First Bank of Nigeria v. Sangonuga 241 a Supreme Court’s decision in Ekwunife v Wayne (West Africa) Ltd (1989) 5 NWLR (Part 122) 422, 448 that interest may be claimed and proved where it is contem- b plated by the agreement or agreed upon or under a mercantile practice or under a principle of equity such as breach offiduciary relationship. Appeal allowed. c Cases referred to in the judgment Nigerian Adedeji v National Bank of Nigeria Ltd (1989) 1 NWLR d (Part 6) 212 Amusan v Obideyi (2001) 6 NWLR (Part 710) 647 Awojugbagbe Light Industries Ltd v Chinukwe (1993) 1 e NWLR (Part 270) 485 Awojugbagbe Light Industries Ltd v Chinukwe (1995) 11 NWLR (Part 390) 379 BON v Akintoye (1999) 12 NWLR (Part 631) 392 f BON v Muri (1998) 2 NWLR (Part 536) 153 Ekwunife v Wayne (West Africa) Ltd (1989) 5 NWLR (Part 122) 422 g English Exporters (London) Ltd v Ayanda (1973) 3 SC 51 FMBN v Adesokan (2000) 11 NWLR (Part 677) 108 First Bank of Nigeria Plc v Mary Medical Clinics (1996) 9 h NWLR (Part 471) 195 Himma Merchants Ltd v Aliyu (1994) 5 NWLR (Part 347) 667 Ibekwe v Maduka (1995) NWLR (Part 392) 716 i Ikomi v BWA Ltd (1965) NSCC 29 International Textile Industries (Nig) Ltd v Aderemi (1999) 8 NWLR (Part 614) 268 j Labode v Otubu (2001) 7 NWLR (Part 712) 256

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Metal Construction (WA) Ltd v Aboderin (1998) 8 NWLR a (Part 563) 538 Obikoya v Wema Bank Ltd (1991)7 NWLR (Part 201) 119 Odumosu v African Continental Bank Ltd (1976) 10 NSCC b 635 Ogundiani v Araba 1978) 6–7 SC 55 Okuneye v FBN Plc (1996) 6 NWLR (Part 457) 749 c Solanke v Abed (1962) 1 All NLR 230 Tika Tore Press Ltd v Abina (1973) 1 All NLR (Part II) 244 UBN Ltd v Ayo Dare & Sons (Nig) Ltd (2000) 11 NWLR (Part 679) 644 d UBN Ltd v Sax (Nig) Ltd (1994)8 NWLR (Part 361) 150 Foreign Beesly v Hallwood Estates Ltd (1961) Ch 105 e Ellis v Emmanuel (1876) 1 Ex D 157 Henton v Paddison (1893) 68 LT 405 In re Sheen (1884) 25 Ch D 692 f In re Wallis and Simmonds (Builders) Ltd [1974] 1 All ER 561 Lloyd’s v Harper (1881) 16 Ch D 290 g Moorgate Mercantile Company Ltd v Twitchings [1975] 3 All ER 314

Nigerian statute referred to in the judgment h Land Use Act Cap 202 Laws of the Federation of Nigeria, 1990, sections 22(1); 22(2); 26 and 51

Books referred to in the judgment i Black’s Law Dictionary (5ed) at page 832 Clerks & Lindsel Tort (16ed), paragraphs 22–28 Halsbury’s Laws of England (3ed), Volume 14, paragraph 1003 j

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First Bank of Nigeria v. Sangonuga 243 a Halsbury’s Laws of England (4ed), Volume 20, paragraph 196 Robert Burgress Sweet & Maxwell’s Laws of Loan & Bor- b rowing July 1993 edition, page 4075 paragraph 477 Street Torts (4ed), paragraphs 58–59

Counsel c For the appellant: Ogunkeye (with him Njoku) For the respondent: Sangonuga (with him Oyebolu) d Judgment OGUNBIYI JCA: (Delivering the lead judgment) The appeal in this matter is against the judgment of OO Obadina, J delivered on 17 February, 1995 at the Lagos Judicial Division e of the High Court of Lagos State. From the pleadings and the evidence at the trial, the case for the plaintiff briefly was as follows:– That the first defendant is a limited liability company with f its registered office at 8/10, Broad Street, Lagos and its principal place of business at No.6 Airport Road, Ikeja. The plaintiff was the solicitor and legal adviser to the first defendant’s company. The third to sixth defendants are the chil- g dren of the late Eric DO Atuanya and were sued as represen- tatives and beneficiaries of the estate of the late Eric DO Atuanya. The second defendant is the banker of the first defendant. h That sometimes in 1982, Mr Atuanya approached the plaintiff for financial assistance to enable him (Mr Atuanya) to finance the contract awarded to the first defendant by the Federal Government. The plaintiff could not avail him with i the request. Mr Atuanya then applied to the second defendant for a loan of fifty thousand Naira (N50,000) for the first defendant to execute the contract. The second defendant approved and granted a loan of thirty-five thousand Naira j (N35,000) for the first defendant. Subsequently, Mr Atuanya

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA 244 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) invited the plaintiff to sign a memorandum of guarantee for a the first defendant in respect of the said loan. The plaintiff along with Mr Atuanya jointly executed the memorandum of guarantee dated 8 October, 1982. The plaintiff also depos- b ited the title deeds of the property registered as No.26 at page 26 in Volume 1709 of the Lands Registry, in Lagos and the original building plans of his house, with the second defendant. c By a letter dated 1 June, 1984, the plaintiff wrote to the second defendant revoking his guarantee of the overdraft facilities granted to the first defendant by the second defendant. The plaintiff also asked for the release of all (his), the d plaintiffs’ title deed and other documents with the second defendant per letter dated 12 June, 1984, but the second defendant replied the plaintiff’s letter and refused to release the title deeds and other documents with the second defendant. e Consequently, the plaintiff therefore subsequently wrote many letters pressing for the release of his documents, but the second defendant bluntly refused to release the same. That the second defendant never at any time made any de- f mand on the plaintiff to pay the loan in respect of which the plaintiff signed a memorandum of guarantee. The failure by the second defendant therefore to release the documents gave rise to the plaintiff instituting the action in respect of g which this appeal now lies. By his fifth amended statement of claim, the plaintiff’s claim before the lower court against the defendants jointly and severally at pages 491–492 of the record were as fol- h lows:– “(a) A declaration that the plaintiff is not liable to the second defendant under the guarantee dated 8 October, 1982. (b) A declaration that the refusal of the second defendant to re- i lease the plaintiffs’ title deeds is wrongful and illegal. (c) An order directing the second defendant to return to the plaintiff the original title deeds, approved building plans and all other documents in its possession relating to the plaintiffs’ j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 245 a property which is registered as number 26 at page 26 in volume 1709 of the Lands Registry at Lagos. (d) Payment of the sum of N1,000,000 being damages for detinue.” b Sequentially and in the fifth amended statement of defence and counter-claim filed by the second defendant at pages 502-511 of the record, the said defendant also counter- c claimed against the plaintiff as follows:– “(a) Payment of the sum of N67,659.92 plus interest thereon at the rate of 7% per annum from 24 July,1987 until final liquidation. (b) An order of specific performance compelling the plaintiff to d submit forthwith an application for Governor’s consent to the equitable mortgage it intended to create in favour of the 2nd defendant by the deposit of the Deed of Conveyance dated 25 March, 1978 registered at No. 26/26/1709 at Lagos and e the execution of the memorandum of deposit dated 16 Sep- tember, 1982. (c) An order of specific performance compelling the plaintiff to execute a deed of Legal Mortgage over the property comprised in the Deed of Conveyance dated 25 May, 1978 and f registered as No. 26/26/1709 at Lagos. (d) An injunction to restrain the plaintiff from demanding for or withdrawing the Deed of Conveyance dated 25 March, 1978 and registered as No. 26/26/1709 at Lagos from the posses- g sion, power or custody of the 2nd defendant until the sum of (N67,659.92) Sixty Seven Thousand, Six Hundred and Fifty nine Naira, Ninety-two Kobo and interest accruing thereon owing by the 1st defendant as principal debt or and the plaintiff as guarantor to the 2nd defendant is fully liquidated.” h In his considered judgment at pages 396 and 397 while the plaintiff succeeded on his claims, the second defendant’s counter claim succeeded in part to the sum of (N35,000) thirty-five thousand Naira plus interest at the rate of (7%) i seven per cent per annum with effect from 24 July, 1987 until the whole debt is finally liquidated. Being dissatisfied with the said judgment of the lower court the second defendant, as the appellant, has now j appealed to this Court. By leave of the court granted on

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23 October, 1996, the defendant/appellant filed on 29 Octo- a ber, 1996 an amended notice of appeal dated 25 October, 1996, and challenging the said judgment wherein nine grounds of appeal were filed. By further leave of the court b granted on the 13 February, 2001, the amended notice of appeal dated 25 October, 1996 was further amended and a further amended notice of appeal dated 15 February, 2001 containing ten grounds of appeal was filed on 19 February, c 2001. From the ten grounds of appeal filed, the appellant distilled six issues for determination as follows:– (i) Whether any valid security over the property com- d prised therein was created in favour of the defendant/appellant by the deposit with it, of the plaintiff/ respondent’s title deed? e (ii) Whether the defendant/appellant is entitled to a lien on the title deed of the plaintiff/respondent? (iii) Whether the defendant/appellant should have been held in detinue? f (iv) Even if the defendant/respondent was liable in detinue, whether the court applied the correct criteria for the assessment of the damages? (v) What is the liability of the plaintiff/respondent to the g defendant/appellant under the contract of guarantee? (vi) Whether the defendant/appellant should not have been entitled to the orders of specific performance as h prayed for in the counter claim? From his own perception, the respondent on his brief of arguments formulated four issues from the appellant’s grounds of appeal as follows:– i (a) Whether from the pleadings and the evidence led, the deposit by the respondent of his title deeds amounts to an equitable mortgage, which requires the consent of the Governor of Lagos State? j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 247 a (b) Whether the lower court rightly held in law that the appellant was liable in detinue? (c) Whether the lower court was correct in it’s holding b that the date for the commencement of payment by the respondent under the guarantee was 24 July, 1987? (d) Whether the holding of the lower court refusing to c order specific performance as claimed by the appellant in its counter claim is justifiable in law? As a pre-requisite and having regard to the issues formulated by the appellant, the cumulative effect of their analytical de- d ductions in my humble opinion could comfortably fuse the six issues into four. In other words, while issues (i) and (ii) could be harmonized into one, same applies to (iii) and (iv) which are also very closely related. I would however wish to e point out that the formulation in the appellant’s issue No. 4 should appropriately read defendant/appellant and not defendant/respondent. This should be the situation having regard and reference to the trend of the parties on the appeal. f In summary therefore, it is pertinent that the appellant’s issues should be consolidated with (i) and (ii) being the first and (iii) and (iv) being the second; while (v) and (vi) should be three and four issues respectively. g It is noteworthy to restate that with the four issues raised on the appellant’s brief, the deductive contents therefrom are not far-fetched from those raised by the respondent but same which could knitly (sic) be reconciled and fitted one into the h other, as serially reproduced. It is on that premise of the consolidation therefore that the submission by Counsel would be considered. On the appellant’s first issue, the learned counsel, Obato- i sin Ogunkeye submitted that the transaction between the plaintiff/respondent and the defendant/appellant did not lead to the creation of an equitable mortgage. That a creation of an equitable mortgage is an inference made by the courts, j applying the equitable maxim “Equity looks on that as done

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA 248 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) which ought to be done” and the maxim “Equity looks to the a intent rather than to the form.” Furthermore, that it is an inference made to ensure that a person who expresses the intent of mortgaging his property b to secure an obligation and for that purpose deposits the title deed to his property with the person to whom the obligation is owed, is not released from the commitment to so secure his obligation, where for one reason or the other, the legal c mortgage has not been or may not be created. That since “Equity does not act in vain”, the court therefore cannot infer the existence of an invalid creation. Furthermore, the learned Counsel related the importance d of asserting the difference between the proposition that an equitable mortgage never came into existence and the proposition that an equitable mortgage was created but rendered void by the operation of section 22 of the Land Use e Act. In other words, that if an equitable mortgage never came into existence, the Court then would be at liberty in the exercise of its equitable jurisdiction to consider if any other form of security not prohibited under section 22 of the said f same Act came into existence. This he argued is by virtue of the deposit of title deed, coupled with the intention to constitute such deposit as security for the over draft facility granted to Wayss & Freytag (Nig.) Ltd. g Further still that the court is obliged in the exercise of its equitable jurisdiction, to infer from the transaction between the parties a form of security permissible under the law, which will actualize their intentions that the deposit of the h title deed should constitute security for the loan. That “equity looks to the intent rather than to the form”. The learned counsel made reference to the saying by the learned authors of Snell’s Principles of Equity (27ed) at page 39 wherein the equitable maxim lies at the root of equitable doctrines gov- i erning mortgages. Further reference also was made to The Law of Real Property (3ed) by Megarry & Wade, page 895. In further reference to section 22 of the Land Use Act and with particular emphasis to the phrase shall not “alienate his j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 249 a right of occupancy or any part thereof, without the prior consent of the Governor”, the counsel opined that if a form of security which does not amount to an alienation of a right b of occupancy can be inferred from the transaction between the parties, then such form of security will not be prohibited by the Land Use Act. That in order to enforce the intention of the parties, the Court ought to hold that it is that form of security that was created when plaintiff/respondent delivered c the title deed of his property to the defendant/appellant, with the intention of its being used to secure the overdraft facility extended to Wayss & Freytag (Nig) Ltd. That the nature of the said form of security being an equitable charge on the d property, the learned counsel argued, was that which did not require the consent of the Governor. Reference to substantiate in support was made to the learned authors of The Law of Real Property (supra) at page 896. That a form of security e which does not effect a change in ownership, whether tem- porarily as a mortgage by assignment subject to a right of redemption, or permanently as an outright assignment, is a form of security which does not alienate the right of occu- f pancy. That from the circumstance of the transaction, there is clear manifestation of prerequisites creation of an equitable charge having been established and which did not effect any change of ownership and requiring Governor’s consent. The learned Counsel submitted further and distinguished be- g tween a charge and a mortgage which he argued are clearly distinguishable. In other words, that while a mortgage is an assignment of interest in property subject to a right of redemption, a charge is not an assignment of any right or in- h terest in property. Specific reference was made to the decision of this court in the case of Okuneye v First Bank of Ni- geria Plc (1996) 6 NWLR (Part 457) 749. That it cannot be validly argued that equitable charges are included within the i prohibition of section 22 of the Land Use Act on the basis of the residuary, phrase “or otherwise” because that phrase does not admit of any transaction which does not amount to an alienation. Counsel further argued that the intention of j the Land Use Act which was introduced to restrict private

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA 250 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) property rights under the common law does not extend to a acts which do nor amount to alienation. The authority of Okuneye v First Bank (supra) as further cited in support. In the circumstance, that if the submission that a valid eq- b uitable charge was created on the property comprised in the title deed of the plaintiff/respondent is upheld, the effectual result would entitle the defendant/appellant to a lien on the title deed until the debt owed to it by Wayss & Freytag (Nig) c Ltd is fully repaid. That even independently of a subsistence or otherwise of an equitable charge, a contractual lien had nevertheless been created in favour of the defendant/ appellant when the plaintiff/respondent handed over his title d deed as security for the facility to be extended to the first defendant/appellant: in support was the case of Re: Wallis and Simmonds (Builders) Ltd [1974] 1 All ER 561 at 567. That it is the duty of the court to mitigate the harshness of a statu- e tory provision consequent to which the principle of equity should be applicable even in the absence of an equitable charge having been created. That the intention of the plaintiff/respondent should be perfected in the enforcement of an equitable lien on the title deed until the loan with which it f was secured has been fully repaid. Correspondingly to that of the appellant’s issue supra is also the respondent’s first issue wherein the learned Coun- g sel, Ehijeagbon Oserogha, Esq. affirmatively reiterated the trite legal principle that parties in an appeal are bound by their pleadings and the evidence led by them at the lower court. The learned Counsel laid great emphasis on the h Exhibits as well as the pleadings of parties in particular the appellant’s counter-claim and the submissions of counsel before the lower court. The deductive effect, the counsel argued, was that the parties must have intended that an equitable mortgage be created. That the submission of the i appellant’s counsel to the contrary cannot in the first place, be a substitute for the pleadings and the evidence led in this matter at the lower court. Secondly, that the only reason why the respondent was required to deposit his title deeds as a j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 251 a collateral to the granting of the overdraft facility was so that in the event of a default by the first defendant, the appellant bank will have an alternative cover to the personal guarantee b already given by the respondent and the late Chairman of the first defendant company. That the alternative security would be to enforce the appellant’s equitable mortgage which unfortunately, in the absence of the consent b the Governor of Lagos State rendered same null and void. The authority cited c in support is the case of BON v Akintoye (1999) 12 NWLR (Part 631) 392 at 403. Further reference was made to sections 22, 26 and 51 of the Land Use Act; also the case of In- ternational Textile Industries (Nig.) Ltd v Aderemi (1999) 8 d NWLR (Part 614) 268 at 312, 313. That the argument proffered by the appellant in applying some industry by submitting that the deposit of the title deed did not require the Governor’s consent to be valid e and enforceable in law, but which deposit of the documents was conceded to constitute some form of security, clearly contravenes the provisions of the Land Use Act. That party is bound by the terms of their contracts. That with the appel- f lant himself having conceded to the existence of an equitable mortgage, the decision of the lower court was therefore right and ought to be upheld. For the determination of this appeal and having earlier g reconciled and harmonized the issues raised by both parties, I would prefer the formulation of the issues by the respondent. Briefly and before dwelling into the issues, it would be h pertinent to make some passing remarks on the preliminary objection raised by the respondent in his brief of arguments. Same is predicated and related to a supposed appellant’s brief dated 15 February, 2001. The said brief is unknown to i this appeal which was argued on the brief dated 19 and filed on 21 April, 2004. The submission of the respondent on the incompetent nature of the existing brief therefore has no foundational basis and consequent to which the preliminary j objection is hereby accordingly struck out.

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The first issue raised a question whether or not the deposit a by the respondent of his title deeds amounts to an equitable mortgage, which requires the consent of the Governor of Lagos State. While the appellant vehemently argued in the b negative, the respondent firmly supports the contrary. It is trite law and needless to emphasize that parties to an appeal are bound by their pleadings as well as the evidence as it was at the lower court, and which said line of claim c or defence cannot be changed on appeal therefore. An appeal is simply a continuation of the case which as before the lower court. The determination of the first issue and the subsequent ones cannot be divorced from that which was d before the lower court. In other words, the respondent’s case as the plaintiff which was upheld by the lower court was to the effect that by depositing his title deeds with the appellant, an equitable mortgage is deemed to have been created e in law, consequent to which the consent of the Governor of Lagos State was required for it to be valid and enforceable in law. With reference to the record of proceedings at page 387, f the learned trial Judge having evaluated the entire case before him held “that the plaintiff has created an equitable mortgage on his said property in favour of the second defendant bank”. The learned appellant’s counsel rested his argu- g ment of the transaction being an equitable charge on the property and made reference to the authors of the Law of Real Property (supra) at page 896 wherein they restated and said:– h “An equitable charge is created by appropriating specific property to the discharge of some debt or other obligation without there being any change in ownership either at law or in equity. No special form of words is required. It is sufficient if an intent that the property should constitute a security can be gathered.” i In the consideration of this issue, the document Exhibit “E” is very relevant in order to determine the intention of the parties at the material point in time. For instance, the said Exhibit “E” on the one hand clearly states the purpose for j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 253 a which the deposit of the title deed was intended wherein it said:– “. . . to create an equitable mortgage upon all the property com- b prised therein . . . for securing the payment and discharge . . . of sums due . . .” On the other hand, the appellant at page 511 of the record on his counter-claim at paragraphs (b) and (c) at lines 4–13 had c the following claims to make against the respondent as the plaintiff among others:– “(b) An order of specific performance compelling the plaintiff to submit forthwith an application for Governor’s consent to the d equitable mortgage it intends to create in favour of the 2nd defendant by the deposit of the Deed of Conveyance dated . . . (c) An order of specific performance compelling the plaintiff to execute a Deed of legal Mortgage over the property com- e prised in the Deed of Conveyance dated 25 May, 1978 and registered 26/26/1709 Lagos.” Further still and at page 373 of the record of appeal from lines 1 – 8, it was the submission of the appellant’s counsel f that the parties intended that an equitable mortgage be created on the submission of the title deeds. The counsel therefore urged the court on the premise to grant an order of specific performance against the plaintiff to submit an appli- g cation in respect of the equitable mortgage and to execute a legal mortgage in respect of the property covered by the title deeds. Following from the foregoing deductions, it is not in h doubt or controversy therefore that the intention of the parties was to create an equitable mortgage. The learned appellant’s counsel largely made out a submission to distinguish between a charge and mortgage and i argued that an equitable charge as it is at hand cannot possibly be included within the prohibition of section 22 of the Land Use Act based on the residuary phrase “or otherwise”, especially where the matter before us does not amount to an j alienation.

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From the cumulative deductions of the appellant’s argu- a ments, it is my humble opinion that he cannot divorce the applicability of section 22 of the Land Use Act to the equitable charge, which he sought to distinguish from legal b mortgage. In other words, and with the prevailing circumstance, wherein parties clearly intended by their agreement to create a legal mortgage, the distinguishing factor is not in my view, of relevance especially where it would not change c the legal effect of that intended by the parties.With reference to the record of appeal for instance, in his oral testimony, the plaintiff/respondent admitted that he gave his consent to his property being used as security for the loan granted to Wayss & Freytag (Nig.) Ltd. Further, in clause 1 of Exhibit d “E”, the said plaintiff/respondent agreed that he intended to create in favour of the defendant/appellant an equitable mortgage on the property comprised in the title deed he deposited as security for the payment and discharge of all sums e which might be owing to the defendant/appellant by him alone or jointly with other persons, and whether as principal debtor, or guarantor. He also agreed in Clause 2 of the agreement that when called upon, he will execute a legal f mortgage. Needless to restate that these are expressions of intention to appropriate the title deed and property comprised therein as security not only for an overdraft as granted but also to secure the plaintiff/respondent’s in debt- g edness under the contract agreement. Deducing from the conduct of parties, even in the absence of a formal consent obtained from the governor it is sufficient that the intention to appropriate the property to the discharge of a debt was clearly manifested and thus creating a sufficient pre requisite h of an equitable charge. Without any need of a mathematical calculation, it is an established principle of law, well- grounded, that “equity looks on that as done which ought to be done”. i In other words, “equity looks to the intent rather than to the form”. The authors of Snells Principles of Equity, (27ed) at page 39 held the view that the said maxim lies at the root of equitable doctrines governing mortgages. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 255 a Furthermore, it has also been firmly established that even the history of the creation of equitable mortgage itself bears out the willingness of the court to enforce intentions even b if appropriate formalities or legal validity have not been met. The authority underlining the said laid down principle is the Law of Real Property (3ed) by Megarry and Wade, page 895. c By the provision of section 22 of the Land Use Act, same provides that a holder of a statutory right of occupancy shall not “alienate his right of occupancy or any part thereof” without the prior consent of the governor. d It is evident that by the very act of the respondent depositing the title deeds with the execution of a memorandum of deposit, same had indicated only one clear intention and purpose which was the creation of an equitable mortgage. e On the authority of BON v Akintoye (1999) 12 NWLR (Part 631) 392 at 403, it was held that:– “ . . . . in law it is generally accepted that a mere deposit of a title deed which cannot be accounted for in any other way, is taken as f part performance of a contract to create a legal mortgage even when no word about a contract has been said, such a deposit creates an equitable mortgage.” Following from the said authority, it is obvious that the mat- g ter in issue and before us stands on a stronger footing wherein parties specifically agreed to enter into the contractual transaction. Consequent to which the intentions in favour of a creation of legal undertaking cannot be disputed. h With further reference to the Black’s Law Dictionary, (6ed) at page 1010 for instance, same defines an equitable mortgagee as follows:– i “an equitable mortgage is a specific lien or charge upon a real properly to secure the payment of money or the performance of some other obligations which a court will recognize and enforce . . . but which lacks the essential features of a legal mortgage because it grows out of a transaction of the parties without any j deed.”

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From the foregoing definition, it is as rightly argued by the a learned respondent’s Ccounsel that alien or charge created by the deposit of title deed(s) with an intention to create an equitable mortgage is specie of an equitable mortgage. It is b immaterial therefore that the form of security is either temporary, as a mortgage by assignment subject to a right of redemption, or permanently as an outright assignment. Further still, by the provisions of sections 22, 26 and 51 of c the Land Use Act, same are very clear on the requirement that, for an equitable mortgage to be enforceable, the consent of the governor of the state where the property is situate must first be obtained for a valid and an enforceable transac- d tion in law. It is pertinent to state that the said sections 22 and 26 of the Act had been well interpreted in the authority of Awojugbagbe Light Ind Ltd v Chinuike (1995) 11 NWLR (Part 390) 379 wherein their Lordships of the apex court per e Bello, CJN in delivering the leading judgment affirmed the decision reached by their Lordships of the Court of Appeal, Ibadan Division and thereby dismissing the entire appeal. The said section 22 without the provisio to subsection (1) f for instance reads as follows:– “22 (1) It shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his g right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise however without the consent of the Governor first had and obtained:– h Provided that the consent . . . (2) The Governor when giving his consent to an assignment, mortgage, or sub lease may require the holder of a statutory right of occupancy to submit an instrument executed in evidence of the assignment, mortgage or i sub lease and the holder shall when so required deliver the said instrument to the Governor in order that consent given by the Governor under sub section (1) may be signified by endorsement thereon.” j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 257 a The provision of section 26 of the same Act also states thus: “26. Any transaction or any instrument which purports to confer on or vest in any person any interest or right over land other b than in accordance with the provisions of this Act shall be null and void.” In the said authority under reference, the appellants contended that the failure to have obtained the Governor’s con- c sent before the Mortgage deed was executed rendered same as null and void by the operation of section 26. The respondents on the contrary however disputed and argued that since the parties had intended the mortgage deed to be effec- d tive after the Governor’s consent, its prior execution and physical delivery did not make it effective but rendered it inchoate pending the requisite consent in accordance with the intention of the parties. e Relevant to further substantiate in support is as set out in Halsbury’s Laws of England (4ed) Volume 12, paragraph 1329 which states thus:– f “1329. Delivery of deed: In order to be effective a deed must be delivered as the act and deed of the party expressed to be bound by it, as well as sealed. No special form or obser- vance is necessary for the delivery of a deed, and it may be made in words or by conduct. The usual form of deliv- g ering a deed by words is for the executing party to say, while putting his finger on the seal, ‘I deliver this as my act and deed’. It is not necessary however to follow this form of execution, nor is it necessary that the deed should actually be delivered over into the possession or custody h either of the person intended to take the benefit of the deed, or to a third person to the use of the party taking the benefit of the deed, though if the party to be bound so hands over the deed, that is sufficient delivery without i any words. What is essential to delivery of the document as a deed is that the party whose deed the document is expressed to be (having first sealed it) shall by words or conduct expressly or impliedly acknowledge his intention to be immediately and unconditionally bound by the pro- j visions contained in it.”

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The same principle italicised in the Halsbury’s edition supra a as also applied in the case of Beesly v Hallwood Estates Ltd (1961) Ch 105 where a company was held to be bound by a lease which had been signed, sealed and delivered by the b company, even though it had not been sent to the other side. It was delivered as an escrow, subject to condition that the tenant should hand over the counterpart. He did hand it over and the company was held bound accordingly because the c condition had been fulfilled. Also in the case of Ayo Solanke v Abraham Abed and An- other (1962) 1 All NLR 230 the trial court dismissed the plaintiff’s claim and was held to be in an unlawful posses- d sion of the premises on the ground that the governor’s consent was necessary to make the agreement lawful and since it was not obtained, the contract was held to be null and void. e On an appeal however, their Lordships of the Supreme Court reversed the decision on the account that the ordi- nance did not provide a penalty for alienation without consent and in the absence of which the act was not illegal. At f page 234 of the report their Lordships per Unsworth, FJ in their reasonings came to the following conclusion at page 234:– “For these reasons I am of the opinion that it was not open to the g defendant, in the circumstances of this case, to rely upon his own wrongful act so as to allege as against the plaintiff, that the agreement of tenancy was null and void and unenforceable under section 11 of the Land and Native Rights Act. The agreement was not illegal.” h On the authority of Awojugbagbe Light Ltd v Chinukwe (1993) 1 NWLR (Part 270) 485 on the appeal to the Court of Appeal at pages 509–510 Salami, JCA had the following to say on the relevant applicable provisions of the Land Use i Act and for the preference made to the deductions arrived at in the case of Solanke v Abed (supra):– “The selection of this decision is informed by the provisions of section 22 of the Land Use Act (supra). Where there was j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 259 a execution of the mortgage deed before the Governor gave his consent, contrary to the stipulation of section 22(1) of the Land Use Act, the instrument cannot for reason of obtaining consent subsequent to execution render the document or instrument invalid in b view of section 22(2) of the Land Use Act (supra) . . . There is nothing in the Act preventing prior execution of an instrument before an approach is made to the Governor for his consent. So that the provision that the consent of the Governor must c first be had and obtained before a mortgage can be made, means no more than that the agreement entered into will remain inchoate until the Governor’s consent thereon is sought and obtained.” That the governor cannot give consent blindfolded without d his foreknowledge of what he is called upon to give consent, thereto. Further still and by giving the transaction another concep- tual perception in the light of the doctrine of estoppel, the e resultant outcome would nonetheless amount to a binding contract of mortgage between the parties. In other words and by applying the legal principle to the matter at hand wherein the appellant acted upon the assurance given by the respon- f dent and thereby advanced money to the latter at the face value of his words, equity and justice demand that the respondent ought to be estopped from going back on his words. The principle governing the meaning of estoppel by g conduct is clearly laid down in the case of Moorgate Mer- cantile Company Ltd v Twitching [1975] 3 All ER 314 at 323 where it was held as follows:– “The principle upon which estoppel in pais is founded is that the law should not permit an unjust departure by a party from an as- h sumption of fact which he has caused another party to adopt for the purpose of their legal relations.” Also in the case of Tika Tore Press Ltd v Ajibade Abina (1973) 1 All NLR (Part II) 244 at 253 Fatayi-Williams, JSC i (as he then was) invoked the following principle wherein he said:– “. . . where one party has by his words, or conduct, made to the other a promise or assurance which was intended to effect the legal j relations between them and to be acted on accordingly, then, once

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the other part (sic) had taken him at his word and acted on it, the a one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance had been made to him. He must accept their legal relations as modified by himself, even though it is not supported in b point of law by any consideration but only by his word.” The appellant in that case under reference was urged to take all necessary steps to obtain and forward the consent, soon- est to the second respondent therefore. c It is significant to note that the respondent in this appeal under the contract agreement had the duty to obtain the Gov- ernor’s consent. With him having failed to do so, he cannot now turn round and use same as a sword to attack the other d party. The respondent cannot rely on his own illegality to declare the mortgage void. In other words, the transaction is only voidable having regard to the plethora of authorities under reference supra. It is incumbent and expected of the e respondent to perfect the transaction for purpose of specific performance of same as agreed upon by the parties. Further still I would restate that the respondent’s own misdeed cannot give him any right of action which he instituted at the f trial court in the absence of the consent which as alleged ought first to have been obtained. The respondent’s suit should, in his own coin, also have been declared as incompetent, if the agreement was null and void as he claimed. By g the respondent opting out of the agreement, his intention was to frustrate the contract which he willingly entered into. He should not in the circumstance be allowed to benefit from his own deliberate act by approbating and reprobating at the same time. h With the deduction arrived at thus far, the answer to the question whether the defendant/appellant was entitled to a lien on the title deed of the plaintiff/respondent is unequivo- i cally clear cut and obvious, without much ado, which same is in the positive. Lien has been defined by Black’s Law Dictionary (5ed) at page 832 as:– “A claim or charge on property for payment of some debt . . . Right or claim against some interest in property created by law as j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 261 a an incident of contract. Right to enforce charge upon property of another for payment or satisfaction of debt . . .” In the circumstance of the case and the deduction therefrom b the determination, it is obvious that a contractual lien, from the Black’s Law Dictionary definition, was created in favour of the defendant/appellant when the plaintiff/respondent handed over his title deed as security for the facility to be c extended to the first defendant/appellant. It is not in question that the plaintiff/respondent unequivocally agreed that the defendants/appellants should retain the title deed of his property until the over draft facility being granted had been repaid. d In the case of Re: Wallis and Simmonds (Builders) Ltd [1974] 1 All ER 561 at 565, it was held and said:– “The immediate freeholder of land prima facie has a right to pos- e session of that land but over a considerable period, a convenient custom grew up by which deeds of land might be deposited with a lender as type of informal security. In such cases the lender had a lien on the deeds as the sinews of the land until he is paid.” It has been restated earlier that the law is well-established f and enunciated on the principle wherein equity regards as done that which ought to be done. In other words, where it appears that a rigid application of statutory provisions would result in unfairness or injustice done to one of the parties, a g court is obliged to mitigate the harshness of such provisions by the application of equitable principles in order to do justice. From the record of appeal and the deduction of the matter at hand, it is not an issue that the plaintiff/respondent in- h tended that his title deed should constitute security for the over draft facility being granted by the defendant/appellant to Wayss & Freytag (Nig) Ltd at page 314 of the record for instance the plaintiff/respondent himself in his testimony i stated and said:– “My document was deposited as security for a loan by the Chair- man/Managing Director of the 1st defendant company.” Needless to restate that the respondent at the material time j could not have expected to have the document back before

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA 262 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) the repayment of the loan had been made. With the loan in a the circumstance being outstanding, it is equitable therefore that the appellant is entitled to retain possession of the deed. As rightly submitted, by the appellants counsel, it is my b humble opinion also that the intention of the plaintiff/respondent should be perfected in the enforcement of an equitable lien on the title deed until the loan with which it was secured has been fully repaid. c In the circumstance therefore, I hold the view that the appellant succeeds on its issue No. 1 which same is accordingly resolved in its favour. In other words the deposit by the respondent amounts to an equitable mortgage rendering d the transaction only voidable pending the requisite consent of the governor of Lagos State. The second issue raised is whether the lower court rightly held in law that the appellant was liable in detinue? e In his arguments to substantiate the issue, the appellant’s counsel emphasized that, for the refusal to be wrongful, it must be unconditional. That where the defendant refused to relinquish possession to the plaintiff in the belief that he had f a right to retain the chattel, provided such belief was regarded by the court to be reasonable, the counsel restated that such would not amount to a wrongful retention. That a defendant who retains possession of a chattel belonging to g the plaintiff after its return has been demanded, in the belief that he has a right to retain the possession is entitled to a reasonable time to satisfy himself as to the entitlement of the plaintiff to the immediate possession of the chattel. That h within that period, he cannot be said to have unlawfully or wrongfully retained possession of the chattel as to render him liable to a claim in detinue. The learned counsel to buttress his submission, cited the authority of Clerks & Lindsel i on Tort (16ed), paragraphs 22–28, also Street on Torts, (4ed), pages 58–59. That if the liability of the plaintiff/respondent under the guarantee was not terminated by the discontinuance of the j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 263 a guarantee, it was reasonable to the defendant/appellant to have believed that it was entitled to hold on to the title deed which was deposited as security until the liability of the b plaintiff/respondent to it has been repaid. The learned Coun- sel reiterated by way of emphasis that the retention of the plaintiff/respondent’s title deed by the defendant/appellant was not wrongful. c On the assessment of damages in the event the defendant/appellant was liable in detinue, that the award of N250,000 damages against the said defendant/appellant without specifying any specific criterion on which the court d based its assessment, was wrongful since damages in detinue are not made at large. That such damages could be ordered only on proof but are not to be presumed. The authority in support was the case of Odumosu v Africa Continental Bank Ltd (1976) 10 NSCC 635 at 642, also BON v Muri (1998) 2 e NWLR (Part 536) 153. That the award of damages made by the learned trial Judge was speculative and arbitrary in respect of an alleged f loss which was not proved and which decision the learned counsel urged this court to reverse on the authority of Odumosu v African Continental Bank Ltd (supra). In response to the said issue, the learned respondent’s g counsel reiterated the definition of detinue and cited the Su- preme Court authority of Labode v Otubu (2001) 7 NWLR (Part 712) 256 at 276. That having regard to the circumstance of this case, the detention of the respondent’s title documents was not justified. The learned counsel urged the h court to hold that the appellant is liable in detinue, especially after the ruling of 28 April, 1987 as held by the lower court. The authority in support was the case of English Exporters London Ltd v Ayanda (1973) 3 SC 51 and also the Supreme i Court case of Amusan v Obideyi (2001) 6 NWLR (Part 710) 647. That the trial Judge based his decision in awarding the sum on legal considerations and evidence before it. The learned counsel therefore urged this Court to uphold the j lower court’s decision on the issue.

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The concept of detinue had been defined in Black’s Law a Dictionary, (5ed) at page 405 as:– “A form of action which lies for the recovery . . . of personal chattels from one who acquired possession of them lawfully, but re- b tains without right, together with damages for the detention. Possessory action for recovery of personal chattels unjustly de- tained . . . The action of detinue is defined in the old books as a remedy founded upon the delivery of goods by the owner to another to keep, who afterwards refused to redeliver them to the c bailor . . . It is necessary that the defendant should have come lawfully into the possession of the chattel either by delivery to him or by finding it.” (Italics mine.) Detinue as expounded in Black’s Law Dictionary therefore, d is a possessory action for recovery of property unjustly de- tained. It is an action, which lies for the recovery of property from one who acquired possession of it but retains the same wrongfully, illegally or without right, together with damages e flowing from or for the detention. In the Supreme Court’s decision of Labode v Orubu their Lordships held that detinue is:– “a wrongful detention of plaintiff’s chattel by a defendant which is f evidenced by the refusal of the defendant or his agent to deliver the chattel upon demand. The original taking may be lawful . . . the detention becomes wrongful if the defendant has no reasonable justification for retaining the goods.” With the declaration that the transaction was only voidable, g the defendant/appellant had every reasonable justification for retaining the respondent’s title deeds. In the circumstance, the appellant could not therefore be held liable in detinue. h I would wish to restate further that from the date of the discontinuance per Exhibit “E”, it meant that the guarantee ceased from that day to be a continuing guarantee. In other words, by the discontinuance, it did not mean that the guar- i antor was discharged from liability already incurred up to the date of the discontinuance. It however only meant that any additional liability incurred by the principal debtor after that date, will not be the responsibility of the guarantor. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 265 a Consequently, the act of discontinuance should not therefore affect the possession of the title deed. Even if the deposit was to secure the guarantee only, the discontinuance did not b extinguish liability already accrued to the plaintiff/ respondent prior to the discontinuance. Contrary to the submission of the respondent’s counsel the retention of the title deed was not upon a void transaction, and the reason which c his submission and the authorities in support thereof, especially with regard to the compensation made, do not serve useful purpose as he contended. The reference made to the court’s ruling of 28 April, 1987 also did not in anyway aid the respondent’s case. d In the circumstance wherein the appellant’s retention of the title deeds was not wrongful, there can be no question requiring compensation or assessment of damages. This I hold because generally, it is only upon proof of a claim in e detinue, that damages may be ordered but not otherwise or on presumption. The relevant authorities in support are the cases of Chief JK Odumosu v African Continental Bank Ltd (1976) 10 NSCC 635 at 642 and BON v Muri (1998) 2 f NWLR (Part 536) 153. From the foregoing deductions, issue No. 2 is also resolved in favour of the appellant. In other words, the lower court in my humble view wrongly held that the appellant was liable in detinue in law and therefore un- g justly awarded damages against it. The third issue is whether the lower court was correct in its holding that the date for the commencement of payment by the respondent under the guarantee was 24 July, 1987? h In his brief of argument on this issue, the learned appellant’s Counsel urged this Court to have a close look at the contract of guarantee Exhibit “E1” (pages 13–16) in the supplementary records of appeal and in particular clause 1 of i the said Exhibit. That the learned trial Judge interpreted the phrase “interest thereon as aforesaid” in the last paragraph of clause 1 of Exhibit “E1” to refer to interest payment stipulated in the immediate preceding paragraph, whereas an ear- j lier stipulation of liability for interest payment was made in

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA 266 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) the first paragraph. Counsel further submitted that the phrase a “as aforesaid” cannot refer to the immediately preceding paragraph alone, but must refer to all preceding paragraphs. That on the basis of the provision of Exhibit “E1” the pri- b mary liability of the guarantor, (the plaintiff/respondent), is to pay to the defendant/appellant all sums owing by Wayss & Freytag (Nig) Ltd. This is comprised of the principal sum, plus interest at the commercial rate, accruing thereon as re- c flected in the statement of account of the debtor. However, that, if demand is made by the defendant/appellant or the guarantee is discontinued, from the date of such discontinuance or demand until payment, the plaintiff/respondent will be liable to pay the total liability of the debt or up to that d point, plus interest accruing thereon at the rate of 7% per annum. That the proviso, which seems to be the cause of the confusion, simply serves to specify the exact amount of the principal sum. That it is not meant to, and does not remove e the guarantor from the liability to pay the full sum owing on the account of the debtor as at the date a demand is made on the guarantor. That the phrase “interest thereon as aforesaid” refers not only to the 7% per annum which is payable on the f sum due from the date of termination of the guarantee, it also refers to interest payable by the principal debtor on the principal sum upto that point. Furthermore, that in the case at hand, where the plaintiff/ g respondent discontinued the guarantee before a demand could have been made by the defendant/appellant, the relevant date on which the indebtedness of the plaintiff/ respondent should be ascertained is the date on which the h guarantee was discontinued. The Counsel also reiterated the provision of clause 3 of Exhibit “El”, which provides that the guarantee shall be a continuing guarantee binding on the guarantor until the expiration of three months after receipt by the defendant/appellant of the notice of discontinuance. i That it is the amount standing as debit balance in the account of Wayss & Freytag (Nig) Ltd at the time the guarantee was discontinued, that the plaintiff/respondent has to pay- back with interest at the rate of 7% per annum. The learned j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 267 a counsel in support of his submission cited the authority in the case of Metal Construction (WA) Ltd v Aboderin (1998) 8 NWLR (Part 563) 538 at 549. b In his submission the learned respondent’s Counsel dwelt also extensively on Exhibit “E1” as being the same document binding the parties. That if there is any condition precedent to the guarantor’s c liability, the same must first be fulfilled before recourse could be made under the guarantee. Halsbury’s Laws of England, Volume 20, (4ed), paragraph 196 was cited in support. d That under the guarantee where no demand was made prior to either relinquishing same or notice of disclosure given of any amount owed as in this case, the respondent is, e by the guarantee ordinarily not liable under the above clause until the conditions precedent are met. That by the proviso in Exhibit “1”, the guarantee in question is limited in the sense to the extent that, whether or not the guarantee is a continu- ous one, whereby the liability of the guarantor arises after f demand is made, or not, the guarantor is only liable to the limit as stated by the proviso. The learned counsel recom- mended the case of In Re Sheen (1884) 25 Ch D 692 and also Henton v Paddison (1893) 68 LT 405 as relevant. That g even if at the date of demand upon the guarantor or due determination of liability of the guarantee, if it happens that the principal debtor owes more than the amount limited, the guarantor would only be liable to the extent limited in the h guarantee. The authority to buttress the submission was the decision in Ellis v Emmanuel (1876) 1 Ex D 157. That the legalistic introduction of new interest rates and new debit sum introduced by the appellant at his paragraph i 5.5.5 were neither supported by its pleadings nor oral and documentary evidence led by either of the parties at the lower court. The learned respondent’s counsel moved that the submissions by the appellant be discountenanced. That j contrary to the appellant’s brief, the basis of the award of

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA 268 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) damages against it by the trial Judge was not on the assump- a tion that the guarantee was discontinued on 1/6/84. That the proviso to Exhibit “E1” is clear as shown and held by the lower court therefore. The learned counsel re-emphasized b that the interpretation and the intention of the terms of the guarantee should be viewed from the position of an objective bystander which view the learned trial Judge took and applied. c At page 395 of the record the learned trial court held in respect of the counter-claim and said:– “The liability of the plaintiff as contained in exhibit E1 was (N35,000.00) Thirty-Five Thousand Naira plus interest at the rate d of 7% percent with effect from 24 July, 1987 until the whole debt is finally liquidated.” The central focus of consideration in the determination of this issue is the document Exhibit “E1” the deed of guaran- e tee, which was the contractual documentary agreement by the parties wherein same served as the bedrock binding factor between them. With reference to the said Exhibit “E1” therefore, the appellant on his submission at paragraph 5.5.6 f of his brief conceded that the sum owed by the respondent to the appellant under the contract of guarantee is the sum owing by Wayss & Freytag (Nig) Ltd on the day a demand was made by appellant or guarantee is discontinued by the respondent. For the purpose of ascertaining the sum owed, re- g course must be had to the document Exhibit “E1” and its interpretation thereof. By the provision of paragraph 1 of clause 1 of the guarantee at page 13 of the supplementary record same states that the guarantor:– h “guarantee payment . . . on demand of sums which now are or . . . hereafter may become due for owing . . . by the customer.” It is not in dispute between the parties that there was no demand made by the appellant under the guarantee as con- i tained in the terms before this suit was filed. There was however the evidence of the respondent having withdrawn his guarantee and hence the demand for the return of his title documents. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 269 a The relevant and pertinent question therefore is the extent of the plaintiff/respondent’s liability to the defendant/ applicant under the contract of guarantee. It is pertinent to b mention that the execution of the guarantee was made on the 8 October, 1982 as evidenced per the record at page 488 and restated by the plaintiff/respondent on his fifth amended statement of claim. c In the Court of Appeal decision of Obikoya v Wema Bank Ltd (1991) 7 NWLR (Part 201) 119 at 130 their Lordships per Tobi, JCA had this to say on interpretation of agreements:– d “Where the language of the agreement is clear and unambiguous, the only interpretative jurisdiction of the court is to make pronouncement on the clear and unambiguous language. It is the exclusive function of the parties to go into the terms of the agree- e ment and agree on them. And once that is done, the court cannot interfere. The court must give full meaning to the agreement.” Also at page 128 of the same authority (supra) Awogu, JCA in delivering the lead judgment had this to say:– f “The law of suretyship/guarantorship is that once a surety or guarantor paid the amount under the suretyship/guarantorship, he is discharged from all obligations thereunder, even if the indebtedness be higher than the amount so guaranteed. In other words, if an action for breach were brought against the principal and his surety g or guarantor, such surety or guarantor would be discharged from his obligation on payment of the amount so guaranteed.” In the matter at hand, clause 3 of Exhibit “E1” provides that h the guarantee shall be a continuing one and binding on the guarantor until the expiration of three months after receipt by the defendant/appellant of the notice of discontinuance. With the plaintiff/respondent’s letter having been written on 1 June, 1984, assuming that the letter was delivered to the i defendant/appellant or the same day, the appropriate relevant date ought to have been three months from that date as per the intention of parties, in other words, 1 September, 1984. With reference to Exhibit “W2” at page 52 of the sup- j plementary record, the certified true copy of the document

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA 270 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) reveals that the sum outstanding as at 31 August, 1984 is a N44,324.26 debit balance. It is also pertinent to mention that by the proviso to clause 1 of the said Exhibit “E1”, the sum guaranteed by the re- b spondent was to the extent of N35,000. However, the ad- dendum to that agreement is the payment of 7% interest per annum “on all sums due from us hereunder from the date of discontinuance of this guarantee . . . or demand by you until c payment”. Having regard to the circumstance of this case, by the interpretation of Exhibit “E1” binding the parties in the absence of any evidence to the contrary, the effective date of discontinuance must be 1 September, 1984. In other words, d having regards to Exhibit “E1” and also the decision in the authority of Obikoya v Wema Bank Ltd (supra) the total indebtedness ought to be the said principal sum of N35,000 plus the interest of 7% per annum therein and which as evidence by Exhibit W2 stands to the sum of N44,32426. This e was the debit balance in the account of Wayss & Freytag (Nig) Ltd and which in the absence of any evidence to the contrary stood as the total sum of liability against the guarantor which ought to attract the 7% interest per annum from f 1 September, 1984 until the debt is liquidated. I hasten to add at this point that the contention of guarantor’s liability only to the extent of the naked principal sum of N35,000 initially borrowed without more is not in my hum- g ble view reasonable. The appellant on the said issue should also succeed and same which is resolved in its favour. The fourth and the final issue is whether the holding of the lower court in refusing to order specific performance as h claimed by the appellant in its counter-claim is justifiable in law. The learned appellant’s Counsel was critical against the reasoning given by the lower court in refusing the claim i based on the ruling of Hotonu, J delivered on 28 April, 1987. Counsel unflinchingly stressed that reliance on such without more was very inadequate to the refusal. He consequently sought to further rely on their earlier submission j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 271 a under issue No. 1 above and asserted that the document Ex- hibit “E” is merely an evidence of the intention with which the title deed was deposited. That it was not an “agreement b of equitable mortgage”, as one could have a deed of mortgage. That it is an agreement to create an equitable mortgage but not an agreement creating an equitable mortgage. That Exhibit “E” is regarded as an “agreement of equitable mortgage”; the fact therefore that the Governor’s consent was not c obtained prior to the execution thereof does not render the agreement void. That the agreement is only inchoate until consent is obtained to make it complete. The learned Coun- sel in support cited the case of Ibekwe v Maduka (1995) 4 d NWLR (Part 392) 716 at 725. That by the provision of section 22 of the Land Use Act the responsibility lied on the plaintiff/respondent as the e holder of the right of occupancy to apply for Governor’s consent to perfect his intention to create an equitable mortgage. That the plaintiff/respondent therefore, ought not to be allowed by the Court to take advantage of his own wrong doing, to escape his obligation under a contract he willingly f entered into, The authority of Adedeji v National Bank of Nigeria Ltd (1989) 1 NWLR (Part 96) 212 at 212–225 was in support and relevant. That the plaintiff/respondent should not be allowed to use the Land Use Act as an instrument of g fraud. The court ought not to allow him to avoid his obligation to create an equitable or legal mortgage in favour of the defendant/appellant under the pretext and cover of the Act. The authority to buttress the submission was the Halsbury’s h Laws of England (3ed), Volume 14, paragraph 1003. The learned Counsel urged us to therefore allow the appeal. In his submission, the learned respondent’s Counsel restated the provision of the Land Use Act wherein section 51 i does not distinguish between requirement of a legal mortgage and an equitable mortgage with both having been defined under one heading. Thus he argued (sic) had accounted for the reasoning at subsection (a) of section 22 j that if there is an existing consent of the Governor to an

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA 272 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) equitable mortgage, there is no requirement to seek a further a consent to convert that equitable mortgage into a legal mortgage. That the authority of Ibekwe v Maduka cited by the learned appellant’s Counsel supra, is in applicable to the b subject matter of this appeal. Furthermore that the reliance made by the appellant on the case of Adedeji v NBN Ltd (supra) is irrelevant to his case. The counsel commended the decision in UBN v Ayo & Sons Nig Ltd (2000) 11 NWLR c (Part 679) 634 at 655 in support of his arguments. That with the uncontroverted evidence by the appellant supporting the respondent’s contention and pleading that the former had the responsibility to apply for the Governor’s d consent, the appellant cannot now be heard to retract the undertaking. That the failure is a clear demonstration that the appellant had not been diligent in protecting its interest. That equity does not indulge the indolent. The learned Counsel e therefore urged this Court to uphold the decision of the lower court. As rightly submitted by the learned respondent’s Counsel, it is trite rule of law that an order of specific performance is f an equitable relief, which is granted at the discretion of the court. However, it is also trite that the court in exercising its discretion must act judicially and judiciously. The learned respondent’s counsel relied on the authorities of Chidiak v g Coker and Anaeze v Anjaso (supra). With due respect to the learned Counsel, the said authorities in my humble opinion, do not aid his case. This I hold in view of the earlier deduction arrived at in the foregoing determination to the effect h that the transaction at hand was only voidable and same therefore is only inchoate but would be perfected and complete after the requisite consent is obtained. The relevant authority in support is the case of Ibekwe v Muduka under reference (supra). Further still and by the provision of sec- i tion 22 of the Land Use Act, the responsibility lies on the plaintiff/respondent as the holder of the right of occupancy, to apply for the governor’s consent to perfect his intentions for the creation of an equitable mortgage. As rightly argued j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA First Bank of Nigeria v. Sangonuga 273 a and submitted by the learned appellant’s Counsel, in my view, the respondent in the circumstance ought not to be allowed to take an advantage of his own lapses or wrongdoing b and thereby escape his obligation under a contractual agreement which he consciously and willingly entered into. On the said proposition, the authority of Adedeji v National Bank of Nigeria Ltd (supra) is relevant and apt in substantiation. c In the circumstance and with all the necessary prerequisites for the grant of orders of specific performance as prayed for in the counter-claim having been met, the lower court with due respect therefore was wrong in not ordering d such same. Consequently, the appellant also succeeds on issue No. 4 which is resolved in its favour. On the totality of this appeal and with all the issues being e resolved in favour of the appellant, its appeal and all the rounds thereon succeed and are allowed. The appeal is allowed while the judgment of the lower court per OO Obadina, J delivered on 17 February, 1995 at Lagos Judicial Division of the High Court of Lagos State is set aside. In f other words and for the avoidance of any doubt in allowing the appeal, I make an order that the plaintiff’s/respondent’s claim before the lower court is dismissed and in its place enter judgment for the defendant/appellant per its counter- g claim against the plaintiff/respondent in the term of the following orders:– (1) Payment of the sum of N44,324.26 plus interest h thereon at the rate of 7% per annum from 24 July, 1987 until final liquidation. In the event of failure to comply; (2) An order of specific performance is made compel- i ling the plaintiff/respondent to submit forthwith an application for Governor’s consent to the equitable mortgage it intended to create in favour of the second defendant by the deposit of the Deed j of Conveyance dated 25 March, 1978 registered at

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No. 26/26/1709 Lagos and the execution of the a memorandum of deposit dated 16 September, 1982. (3) An order of specific performance is further made compelling the plaintiff to execute a Deed of Legal b Mortgage over the property comprised in the Deed of Convenyance dated 25 May, 1978 and registered as No. 26/26/1709 Lagos. (4) An order of injunction is made restraining the plain- c tiff from demanding for or withdrawing the Deed of Conveyance dated 25 March, 1978 and registered as No. 26/26/1709 Lagos from the possession, power or custody of the second defendant until the sum of d (N44,324.26) forty four thousand, three hundred and twenty four Naira twenty six Kobo and the interest accruing thereon owing by the first defendant as principal debtor and the plaintiff as guarantor to the e second defendant is fullyliquidated. The appellant succeeds on his appeal therefore while the judgment of the lower court is set aside. There shall be costs of N5,000 in favour of the appellant against the respondent. f Appeal succeeds with N5,000 costs.

SALAMI JCA: I had a preview of the judgment just delivered by my learned brother, Ogunbiyi, JCA with which I g agree entirely. I am in agreement with the reasoning contained therein and the conclusion arrived thereat. I however, propose for purposes of mere emphasis a few words of mine. h Firstly, the respondent having guaranteed a loan or overdraft granted to Wayes & Freyta (Nig.) Ltd cannot just walk out of his obligation under the agreement without first discharging his liability to the appellant. A guarantor cannot determine his liability under a guarantee agreement by a i mere writing of a letter without more. A guarantor remains answerable for the principal sum granted as overdraft plus accrued interest at the rate agreed to or prescribed upon his guarantee and before notice to determine is given. See j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA First Bank of Nigeria v. Sangonuga 275 a Lloyd’s v Harper (1881) 16 Ch D 290, 320 which was followed by the Supreme Court in Ikomi v BWA Ltd (1965) NSCC 29, 35. Respondent can only be discharged of his li- b ability under contract of guarantee in the following four circumstances:– “(a) where his obligation under the guarantee contract has been satisfied; c (b) where the principal debt had been extinguished by act or acts of the parties; (c) where a limitation or prescriptive period had elapsed; (d) where a court applied a presumption which operates to terminate the contract of guarantee.” d See Sweet & Maxwell’s Laws of Loan & Borrowing by Robert Burgess, July 1993 Edition, page 4075, paragraph 477 and also Obikoya v Wema Bank Ltd (1991) 7 NWLR (Part 201) 119 at 128. e The respondent herein has not brought himself within any of these exceptions when he purportedly determined the guarantee contract. The termination was therefore a farce. f Having shown that the termination was a charade or a nullity, all the duties of the respondent, including seeking and obtaining the consent of the Governor to mortgage under the agreement of guarantee, subsists. g Furthermore on interest. Interest as it obtains within the circle of banking institutions is the money payable by a banker to a customer for money deposited or as money payable by a customer to his banker for money had and received from the bank as loan, overdraft, advances or any other re- h lated banking transaction. The award of interest in Nigeria is still subject to the common-law principle and practice as stated in the Supreme Courts decision in Ekwunife v Wayne (West Africa) Ltd (1989) 5 NWLR (Part 122) 422, 448 that i interest may be claimed and proved where it is contemplated by the agreement or agreed upon or under a mercantile practice or under a principle of equity such as breach of fiduciary relationship. See also Himmna Merchant Ltd v Alhaji Aliyu j (1993) 5 NWLR (Part 347) 667; (1994) SCNJ 87 and UBN

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Ltd v Sax (Nig) Ltd (1994) 8 NWLR (Part 361) 150. The a learned trial Judge was therefore seriously in error when he pegged the liability of the respondent to the sum of N35,000 guaranteed by him without interest even though parties b agreed to payment of interest at the rate of 7% per annum. Finally, the respondent, having deposited his title to his property as equitable mortgage, has a duty to seek and obtain the consent of the Governor to mortgage the property. c See Awojugbagbe Light Industries Ltd v Chinukwe (1993) 1 NWLR (Part 270) 485, 509–510, which was affirmed by the Supreme Court in the case of Awojugbagbe Light Industries Ltd v Chinukwe (1995) 11 NWLR (Part 390) 379. It is d immaterial that parties had entered into agreement before seeking the consent of the Governor. It seems to me that the view is supported and expressly provided for in section 22(2) of the Land Use Act which provides as follows:– e “(2) The Governor when giving his consent to an assignment, mortgage or sub lease may require the holder of a statutory right of occupancy to submit an instrument executed in evidence of the assignment, mortgage or sub lease and the holder shall when so required deliver the said instrument to f the Governor in order that the consent given by the Governor under subsection (1) of this section may be signified by endorsement thereon.” The respondent is the holder of a statutory right of occu- g pancy who should have applied for the consent of the Gov- ernor but failed, refused or neglected to do so. He cannot be allowed to turn around to foist his neglect as a basis of his claim. It is settled law that no one should be permitted to h profit by his own wrong or default. This is aptly put by the Latin expression nollus commodum capere patost de injuri sua propria. See Adedeji v NBN Ltd (1989) 1 NWLR (Part 96) 212, 226–227 and First Bank of Nigeria Plc v Mary i Medical Clinics (1996) 9 NWLR (Part 471) 195, 204. For this reason and the fuller reason contained in the lead judgment of my learned brother, Ogunbiyi, JCA I also allow the appeal and set aside the judgment of the trial court. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA First Bank of Nigeria v. Sangonuga 277 a I abide by all the consequential orders including the order as to costs proposed in the lead judgment of my learned brother, Ogunbiyi, JCA. b GARBA JCA: I have had the opportunity to read in draft, the lead judgment delivered by my learned brother, Ogunbiyi, JCA. c It is now an established principle of law that one of the ways of creating an equitable mortgage over property is by mere deposit of title deeds with clear intention that the deeds should be taken or retained as security for a loan. See: Ogundiani v Araba (1978) 6–7 SC 55 at 73 and FMBN v d Adesokan (2000) 11 NWLR (Part 677) 108 as, well the case of Okuneye v FBN (1996) 6 NWLR (Part 457) 749 cited by Counsel, at page 756. There can be no doubt as to the intention of the respon- e dent, a lawyer and legal adviser, that the deposit he made of his title deeds with the appellant was to secure the loan to be granted and thereby created not only an equitable charge, but an equitable mortgage. Exhibit “E” expressly and clearly f set out that intention. In addition, section 22 of the Land Use Act, 1978, did not render the said equitable mortgage void, but in effective until such time consent of the Governor, as required, was ob- g tained. In other words, the mortgage so created was only inchoate or incapable of being enforced until the required consent was sought for and received. See the Supreme Court case of Awojugbagbe Light Industries v Chinukwe (1995) 4 h NWLR (Part 390) 379 at 415–6 which affirmed the decision of the court in the case reported in (1993) 1 NWLR (Part 270) 485 cited in the lead judgment. Be that as it may, it would be quite inequitable for the re- i spondent, a lawyer conscious and fully aware or presumed to be, of provisions of the Act and its legal implications, willingly and willfully, eyes wide opened, to be allowed now to claim that what he did and caused the appellant to j rely and act upon, was void. More inequitable for him is to

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Garba JCA 278 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) claim any benefit from his own failure to discharge an obli- a gation imposed by section 22(1) of the Act on him yet to seek and obtain the consent of the Governor in his relationship with the appellant. The courts have consistently refused b to allow people like the respondent to claim any benefits from their own deliberate acts of unfairness by trying to ex- ploit or hide under any absurd technicalities there may be in the law. The senses and sensibilities of equity, fair play and c fairness are always protected and enforced by the courts in all legal agreements or relationship freely entered into or created by the parties themselves. The duty to do so in this appeal could not be more compulsive. d For the more detailed reasons contained in the lead judgment that I find merits in the appeal, I too resolve all the issues in favour of the appellant, allow the appeal and adopt all the orders in the lead judgment as mine. e Appeal succeeds and allowed in terms of lead judgment. Appeal allowed.

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Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 279 a Nigeria Bank for Commerce and Industry v Intergrated Gas (Nigeria) Ltd b SUPREME COURT OF NIGERIA ONU, EJIWUNMI, TOBI, MUSDAPHER, EDOZIE JJSC Date of Judgment: 21 JANUARY, 2005 Suit No.: SC 253/2000 c Banking – Loan contract – Breach of – Assessment of damages for breach – Date to commence Banking – Loan contract – Breach of – Damages for breach – Quantum of damages – Principles applicable – Whether d action can lie for sum agreed to be lent as a debt Contract – Breach of – Reason for breach – Whether different reason may be later given for the breach e Contract – Contract of loan of money – Breach of – Dam- ages for – Principles applicable Contract – Of loan – Specific performance of – Whether Court can order f Contract – Time being essence of – Implication – How determined

Facts g At the instance of the respondents, a company and its Man- aging Director respectively who were the plaintiffs at the trial court, the appellant bank, therein defendant, in 1983, offered to grant the former a term loan of N500,000 (five h hundred thousand Naira) for the purpose of establishing a Liquefied Petroleum Gas Bottling Plant at Ikot-Ekpene, Akwa-Ibom State. The loan, though denominated in local currency was to cover the foreign currency component to be i used for the importation of the machinery and accessories from the manufacturers, Kosan Crisplant in Denmark. The offer of the loan was conveyed to the plaintiffs in the defendant’s “letter of intent” dated 25 March, 1986 (Exhibit “F”) j which stipulated several conditions, to be fulfilled by the

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280 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) plaintiffs before the actual disbursement of the loan. It was a stipulated that the disbursement of the loan would be made from the head office of the defendant after the parties had executed a formal agreement, to wit, the investment and b mortgage agreement (Exhibit “V”) and the disbursement was to be in the form of the defendant bank opening a letter of credit in favour of the overseas suppliers and the manufacturers of the required machinery. c By a letter of acceptance dated 14 April, 1986 (Exhibit “G”), the plaintiffs wrote to the defendant accepting the offer transmitting to it several documents made in compliance with the terms of the offer. It is the plaintiffs’ case that de- d spite the fact that they had complied with the conditions stipulated in Exhibit “F” and have executed on 4 September, 1986, the investment and mortgage agreement Exhibit “V”, the defendant neglected to open the letter of credit for the e importation of the machinery. As evidence that they had fulfilled the conditions precedent for the disbursement of the loan, the plaintiffs tendered several documentary Exhibits and in particular exhibits “T” and “U” which were internal f memoranda of the defendant in which its officials were alleged to have admitted that the plaintiffs had satisfied the conditions for the opening of the letters of credit on their behalf. At the time the plaintiffs accepted the defendant’s offer, the cost of the machinery to be imported from Denmark g was 951,310 DM as per proforma invoice dated 26 June, 1985 (Exhibit “M”). But by 26 June, 1986, the price had escalated to 1,045,247 h DM vide the proforma invoice Exhibit “N”. With the introduction of the Second Tier Foreign Exchange Market Scheme (SFEM) on 29 September, 1986, resulting in the de- valuation of the Naira, the cost of importing the machinery, according to the plaintiffs had risen to over N4 million. It is i the plaintiff’s contention that due to the defendants’ delay in opening the “letters of credi”’ timeously, it was responsible for excessive cost in the importation of the machinery. Upon the foregoing scenario, the plaintiffs by a writ of summons j

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Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 281 a in Suit No. LD/48/87 filed in the Lagos High Court on 12 January, 1987 commenced action against the defendant. The plaintiffs/respondent’s claim against the defendant b was for the sum of N4,081,361 being the increase in the cost of the L.P.G. project by the plaintiffs under the finance of the defendant which increase was occasioned by the defendant’s delay in opening the relevant letter of credit for c the importation of the said machinery and equipment. In its reaction, the defendant denied liability for the plaintiffs’ claim alleging inter alia, that the plaintiffs did not comply with the terms in Clause 7 of Exhibit “F” incorpo- d rated in the investment and mortgage agreement (Exhibit “V”) with respect to the plaintiffs’ undertaking that any overrun in project cost or short fall in the sources of finance (difference between the new cost of the machinery and loan e approved) shall be borne by them without recourse to the defendant for financial assistance. By the defendant’s letter of 29 April, 1986 (Exhibit “H”), the overrun cost of the project as at that date was calculated to be N208,871 which f amount ought to have been paid by the plaintiffs before the “letter of credit” could be opened. At the trial, each party called four witnesses to advance its respective stand points and at the conclusion of the case, the g learned trial Judge, Fafiade, J in a judgment delivered on 25 January, 1996, held that the defendant was in breach of the terms of the contract in that it failed to open the “letter of credit”’ even after all conditions stipulated had been com- h plied with. Accordingly, she entered judgment against the defendant in the sum of N1,612,512.42 being the amount payable to bring in the equipment less the agreed amount of the loan which was N500,000. The alternative claim was i struck out. Dissatisfied with the judgment, the defendant lodged an appeal to the Court of Appeal, Lagos Division. Both parties, the defendant/appellant and the plaintiffs/respondents, j through their Counsel, filed and exchanged briefs and after

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282 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) hearing the appeal, the Court of Appeal, in a unanimous de- a cision delivered on 31 May, 1999 while holding that the respondents were in breach of the agreement for failing to pay the overrun cost, it held that the appellant as per exhibits “T” b and “U” had waived its right to insist on the overrun cost and consequently had breached the agreement by not opening the “letter of credit” for the importation of the machinery. It accordingly affirmed decision of the court of first in- c stance both on liability for breach of contract and quantum of damages flowing therefrom. This is a further appeal by the appellant.

Held – d 1. If a party alleges breach of contract for the wrong reason or for no reason at all, he may yet justify his action if there were in existence at the time, facts or causes which would have provided a good reason for terminating the e contract. 2. In assessing damages for breach of a loan contract, the normal date of assessment is the date of breach. f 3. Time is said to be of the essence of the contract in the following instances:– (1) Where the parties have expressly stipulated in their contract that the time fixed for performance must be g exactly complied with. (2) Where the circumstances of the contract or the nature of the subject-matter indicate that the fixed date must be exactly complied with eg the purchase of a h leasehold house required for immediate occupation. (3) Where time was not originally of the essence of the contract, but one party has been guilty of undue delay, the other party may give notice requiring the i contract to be performed within a reasonable time. 4. Where a party to a contract undertakes to do some particular act, the performance of which depends entirely on himself, and the contract is silent as to the time of j

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Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 283 a performance, the law implies an agreement that it shall be executed within a reasonable time having regard to all the circumstances of the case. In the case in hand, the b investment and mortgage agreement dated 12 Septem- ber, 1986 which incorporated the terms contained in the “letter of intent” of 25 March, 1986 (Exhibit “F”) did not stipulate expressly any date for the performance of the c contract except that it provided “disbursement is to be made from the head office after signing the investment and mortgage agreement depending on actual requirements and payable directly to the suppliers/civil contractors/creditors on production of confirmed invoices/ d certificates”. The words “after signing the investment and mortgage agreement” has no time limit. (Niger Insurance v Abed Bros (1976) 7 SC 35; Mazin Eng Ltd v Tower Aluminum e (1993) 5 NWLR (Part 295) 526 followed.) 5. If a person contracts to lend money, and then, in breach of contract, refuses or fails to advance the money, the f borrower cannot sue for the money agreed to be loaned as a debt, for this would be tantamount to a decree of specific enforcement and such a decree will not normally be granted for a contract of loan. But the borrower can g claim damages for the failure to advance the money. The damages may, of course, be merely nominal but if expense has been reasonably incurred in procuring the loan elsewhere, that expense is recoverable as special damage, and so can any other loss which was within the con- h templation of the parties. If the borrower can only procure the loan from other sources at a higher rate of interest than that agreed under the contract, and this was reasonably foreseeable at the time when the contract was i made, it seems that the borrower can recover the additional interest he will have to pay as damages from the lender. If the borrower is unable to raise the money from other sources at all, and he is consequently unable to en- j ter with or complete some transaction for which the

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money was required, it is theoretically possible that the a lender might be liable for loss of profit on such a transaction or other consequential loss. 6. In contracts for the loan of money, the normal measure b of damages for the lender’s failure to provide the money is the amount required by the borrower to go into the market and effect a substitute loan for himself less the amount the contractual loan had required. There may c also be consequential losses. Thus the damages may include the cost of raising the money elsewhere. Further, the plaintiff may recover for the loss of any contract which hinged upon the loan if the defendant was aware d of the purpose for which the plaintiff was entering into the loan. 7. The measure of damages in a breach of a contract for a e loan is not necessarily limited to the higher interest at which the borrower can obtain a substitute loan. The borrower may be entitled to other consequential losses which he is able to establish as flowing naturally from the breach or which was within the contemplation of the f parties. In the instant case, if the parties had agreed on a fixed date for the disbursement of the loan and due to the ap- g pellant’s default the cost of the importation had escalated far beyond the cost price at the fixed date for the disbursement, the plaintiffs would have been entitled to recover as damages the excess amount it cost them to im- h port the machinery and even if they were unable to import the goods, they would have been entitled to damages for breach of contract. However, as already demonstrated, there was no fixed date for the disbursement of the loan; the respondents were in breach of the contract i by their default in the payment of the cost overrun without which letter of credit could not be opened. Appeal allowed. j

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Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 285 a Cases referred to in the judgment Nigerian b Abimbola v Abatan (2001) 9 NWLR (Part 717) 66 Abisi v Ekwealor (1992) 6 NWLR (Part 302) 643 ACB Ltd v Apugo (2001) 5 NWLR (Part 707) 483 Adebanjo v Brown (1990) 3 NWLR (Part 141) 661 c Ajomale v Yaduat (No.2) (1991) 5 NWLR (Part 191) 266 Ariori v Elemo (1983) 1 SCNLR 1; (1983) 1 SC 13 Dabup v Kolo (1993) 9 NWLR (Part 317) 254 d Ezewani v Onwordi (1986) 4 NWLR (Part 33) 37 Hassan v Maiduguri Management Committee (1991) 8 NWLR (Part 212) 738 e Ibenwelu v Lawal (1971) 1 All NLR 23 Ijale v Leventis & Co. Ltd (1959) SCNLR 255; (1959) 4 FSC 108 f Ijebu-Ode Local Govt. v Balogun & Co. Ltd (1991) 1 NWLR (Part 166) 136 Insurance Broker of Nigeria v ATMC Ltd (1996) 8 NWLR (Part 466) 316 g Mazin Eng Ltd v Tower Aluminum (1993) 5 NWLR (Part 295) 526 National Investment and Properties Co Ltd v Thompson Or- h ganisation Ltd (1969) 1 All NLR 138 Niger Insurance v Abed Bros (1976) 7 SC 35 Nigeria Engineering Works Ltd v Denap Ltd (2001) 18 NWLR (Part 746) 726 i Nigerian Supplies Manufacturing Company v Nigerian Broadcasting Corporation (1967) 1 All NLR 35 Odekilekun v Hassan (1997) 12 NWLR (Part 531) 56 j Offoboche v Ogoja LG (2001) 16 NWLR (Part 739) 458

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Ogini v Ogo Oluwa Motors (Nig) Ltd (1998) 1 NWLR (Part a 534) 353 Ojengbede v Esan (2001) 18 NWLR (Part 746) 771 Okai II v Ayikai II (1946) 12 WACA 3 b Oniah v Onyia (1989) 1 NWLR (Part 99) 514 Oroyinyin v Raman (1997) 2 NWLR (Part 489) 613 Prospect Textile Mills v ICI Plc England (1996) 6 NWLR c (Part 457) 668 Spasco Vehicle and Plant Hire Co v Alraine (Nig) Ltd (1995) 8 NWLR (Part 416) 655 d Ude v Osuji (1998) 13 NWLR (Part 580) 1 Ukaegbu v Ugoji (1991) 6 NWLR (Part 196) 127 United Calabar & Co. v Elder Dempster Lines Ltd (1972) All NLR 681 e Uwa Printers v Investments Trust Ltd (1988) 5 NWLR (Part 92) 110 Yoye v Olubode (1974) 1 All NLR (Part 2) 118 f Foreign Barrett Bros (Taxis) Ltd v Davies (1966) 1 WLR 1334 Brickles v Small [1916] AC 599 g British and Beningtons Ltd v North Western Cachar Tea Company Ltd [1923] AC 48 Castlegate Steamship Co. Ltd v Dempsey (1892) 1 QB 854 h Green v Sevin (1879) 13 Ch D 589 Miliangos v George Frank Textile (Ltd) [1976] AC 443 Parkin v Thorold (1852) 16 Beav 59 Tiley v Thomas (1867) LR 3 Ch App 61 i

Nigerian statute referred to in the judgment Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, section 23 j

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Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 287 a Nigerian rule of court referred to in the judgment High Court of Lagos State (Civil Procedure) Rules, Order 16 rule 11 b Books referred to in the judgment Bullen and Leake and Jacobs Precedents of Pleadings (13ed), art 1342 page 1499 c Bullen and Leake and Jacobs Precedents of Pleadings (23ed) page 1455 Chitty Contract (23ed) Volume II, page 54 paragraph 1106 d Mayne & Mcgregor Damages (12ed), page 553 Mayne & Mcgregor Damages (14ed), pages 595–596 e Counsel For the appellant: Badejo (with him Okedo [Miss]) For the respondents: Tijani f Judgment EDOZIE JSC: (Delivering the lead judgment) At the instance of the respondents, a company and its Managing Di- g rector respectively who were the plaintiffs at the trial court, the appellant bank, therein defendant, in 1983, offered to grant the former a term loan of N500,000 (five hundred thousand Naira) for the purpose of establishing a Liquefied Petroleum Gas Bottling Plant at Ikot-Ekpene, Akwa-Ibom h State. The loan, though denominated in local currency was to cover the foreign currency component to be used for the importation of the machinery and accessories from the manufacturers, Kosan Crisplant in Denmark. The offer of i the loan was conveyed to the plaintiffs in the defendant’s “letter of intent” dated 25 March, 1986 (Exhibit “F”) which stipulated several conditions, to be fulfilled by the plaintiffs before the actual disbursement of the loan. It was stipulated j that the disbursement of the loan would be made from the

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC 288 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) head office of the defendant after the parties had executed a a formal agreement, to wit, the investment and mortgage agreement (Exhibit “V”) and the disbursement was to be in the form of the defendant bank opening a letter of credit in b favour of the overseas suppliers and the manufacturers of the required machinery. By a letter of acceptance dated 14 April, 1986 (Exhibit “G”), the plaintiffs wrote to the defendant accepting the of- c fer transmitting to it several documents made in compliance with the terms of the offer. It is the plaintiffs’ case that despite the fact that they had complied with the conditions stipulated in Exhibit “F” and have executed on 4 September, d 1986, the investment and mortgage agreement Exhibit “V”, the defendant neglected to open the letter of credit for the importation of the machinery. As evidence that they had fulfilled the conditions precedent for the disbursement of the e loan, the plaintiffs tendered several documentary exhibits and in particular Exhibits “T” and “U” which were internal memoranda of the defendant in which its officials were alleged to have admitted that the plaintiffs had satisfied the f conditions for the opening of the letters of credit on their behalf. At the time the plaintiffs accepted the defendant’s offer, the cost of the machinery to be imported from Denmark was 951,310 DM as per proforma invoice dated 26 June, 1985 (Exhibit “M”). g But by 26 June, 1986, the price had escalated to 1,045,247 DM vide the proforma invoice Exhibit “N”. With the introduction of the Second Tier Foreign Exchange Market h Scheme (SFEM) on 29 September, 1986, resulting in the de- valuation of the Naira, the cost of importing the machinery, according to the plaintiffs had risen to over N4 million. It is the plaintiff’s contention that due to the defendants’ delay in opening the “letters of credit” timeously, it was responsible i for excessive cost in the importation of the machinery. Upon the foregoing scenario, the plaintiffs by a writ of summons in Suit No. LD/48/87 filed in the Lagos High Court, on 12 January, 1987 commenced action against the defendant. In j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 289 a paragraph 30 of their amended statement of claim, their reliefs were formulated thus:– “30. Where of the plaintiffs’ claim against the defendant as fol- b lows:– (1) The sum of N4,081,361.00 being the increase in the cost of the L.P.G. project machinery and equipment to be imported by the plaintiffs under the finance of the defendant which increase was occasioned by the defen- c dant’s delay in opening the relevant letter of credit for the importation of the said machinery and equipment. Or in the alternative N : K d 1 (a) Fee for import licence not valid for foreign exchange 100.00 (b) Front end fee paid to the defendant 7,500.00 (c) Legal fees for the agreement 7,830.00 (d) Stamp duty and registration fees e for agreement 4,445.75 (e) Equipment price increase due to delay 236,576.00 (f) Equipment cost overrun due f to SFEM 844,945.00 (g) Interest at 15% on equity call ups N200,000 30,000.00 (h) Document and administration expenses 2,000.00 g Travel and hotel expenses 2,080.00 Total N4,136,416.75 In its reaction, the defendant denied liability for the plaintiffs’ claim alleging inter alia, that the plaintiffs did not h comply with the terms in clause 7 of Exhibit “F” incorporated in the investment and mortgage agreement (Exhibit “V”) with respect to the plaintiffs’ undertaking that any overrun in project cost or short fall in the sources of finance i (difference between the new cost of the machinery and loan approved) shall be borne by them without recourse to the defendant for financial assistance. By the defendant’s letter of 29 April, 1986 (Exhibit “H”), the overrun cost of the pro- j ject as at that date was calculated to be N208,871 which

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC 290 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) amount ought to have been paid by the plaintiffs before the a “letter of credit” could be opened. At the trial, each party called four witnesses to advance its respective stand points and at the conclusion of the case, the b learned trial Judge, Fafiade, J in a judgment delivered on 25 January, 1996, held that the defendant was in breach of the terms of the contract in that it failed to open the”‘letter of credit” even after all conditions stipulated had been com- c plied with. Accordingly, she entered judgment against the defendant in the sum of N1,612,512.42 being the amount payable to bring in the equipment less the agreed amount of the loan which was N500,000. The alternative claim was d struck out. Dissatisfied with the judgment, the defendant lodged an appeal to the Court of Appeal, Lagos Division. Both parties, the defendant/appellant and the plaintiffs/respondents, e through their Counsel, filed and exchanged briefs and after hearing the appeal, the Court of Appeal, in a unanimous decision delivered on 31 May, 1999 while holding that the respondents were in breach of the agreement for failing to pay the overrun cost, it held that the appellant as per Exhibits f “T” and “U” had waived its right to insist on the overrun cost and consequently had breached the agreement by not opening the “letter of credit” for the importation of the machinery. It accordingly affirmed decision of the court of first g instance both on liability for breach of contract and quantum of damages flowing therefrom. This is a further appeal by the appellant. It’s notice of appeal dated 30 June, 1999 contains three grounds of appeal h and based on them, the appellant has in its brief of argument raised the following three issues:– “2.01 Is the doctrine of waiver an issue between the parties in this case? i 2.02 Can it be said that exhibits “T” and “U”constitute a waiver in such a way as to make the appellant liable for breach of contract for not disbursing the loan granted to the respondents and letter of credit for the purchase of the machinery and equipment before 29 September, 1986? j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 291 a 2.03 If the appellant is liable for breach of contract between the parties, are the respondents entitled to the amount of N1,612,512.42 as damages?” b On their part, the respondents identified two issues, viz:– “1. Whether the Court of Appeal was right in affirming the decision of the trial court that the appellant was liable for breach of the contract between the appellant and the respondents. c 2. Whether the Court of Appeal was right in not interfering with the award of N1,612,512.42 (One Million, Six Hundred and Twelve Thousand, Five Hundred and Twelve Naira, Forty-Two Kobo) as damages against the appellant”? d The appellant’s first and second issues relate to the respondents’ first issue all of which deal with the appellant’s liability for breach of contract. The contention of the learned Counsel for the appellant both in his brief and reply brief is e that the Court of Appeal having found that the respondents had failed to pay the overrun cost, it was wrong to have held that the appellant was in breach of the contract on the ground that it had waived its right to insist on that payment stressing that the equitable plea of waiver was not pleaded f nor was it canvassed at the court of first instance. It was further contended that the internal memoranda of the appellant (Exhibits “T” and “U”) contained no representation to the respondents that the payment of overrun cost was not to be g insisted upon. Learned Counsel argued that the plea of waiver was completely irrelevant to the proceedings and that since it was not specifically pleaded, it went to no issue citing in support the cases of Odekilekun v Hassan (1997) 12 h NWLR (Part 531) 56 at 72; Ibenwelu v Lawal (1971) 1 All NLR 23 and Oniah v Onyia (1989) 1 NWLR (Part 99) 514. Referring to the contents of Exhibits “T” and “U”, learned Counsel emphasized again that the facts stated therein could i not support a plea of waiver. The following cases were alluded to:– Ariori v Elemo (1983) 1 SCNLR 1; (1983) 1 SC 13; Ukaegbu v Ugoji (1991) 6 NWLR (Part 196) 127; Yoye v Olubode (1974) 1 All NLR (Part 2) 118 and Ude v Osuji j (1998) 13 NWLR (Part 580) 1.

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Responding, learned Counsel for the respondents submit- a ted in his brief that there was a binding contract between the parties as evidenced by Exhibit “F” and Exhibit “V” and that the appellant was in breach of that contract by failing to b open “letter of credit” for the disbursement of the loan after the respondents had executed Exhibit “V” on 4 September, 1986 although dated 12 September, 1986. Counsel pointed out that in keeping with Order 16 Rule 11 of the High Court of Lagos State (Civil Procedure) Rules, the plea of waiver c was raised in paragraphs 23, 24, 25, 26 and 27 of the amended statement of claim. He argued that it was immaterial that the word “waiver” was not used in the said paragraphs of the amended statement of claim and for this con- d tention, reference was made to the cases of Adebanjo v Brown (1990) 3 NWLR (Part 141) 661; Hassan v Maiduguri Management Committee (1991) 8 NWLR (Part 212) 738 at 747; Prospect Textile Mills v ICI Plc England (1996) 6 e NWLR (Part 457) 668 at 684. Learned Counsel was of the view that the Court of Appeal was right in treating Exhibits “T” and “U” as a waiver adding that they amounted to an admission against interest under section 23 of the Evidence f Act pointing out that the appellant did not complain about the second respondent’s letters Exhibits “X” and “Y” in which the respondents made a proposal for the sharing of the overrun cost between the parties. g It was further contended that the question of the breach of Clause 7 of Exhibit “F” was most irrelevant since the entire agreement had crystallized into Exhibit “V” the execution of which by both parties presupposed that all the conditions precedent had been complied with. Learned Counsel can- h vassed that there is concurrent findings of the two lower courts that the appellant was in breach of the contract and that there is no reason advanced to interfere with the findings relying on the cases of Ojengbede v Esan (2001) 18 i NWLR (Part 746) 771; Abimbola v Abatan (2001) 9 NWLR (Part 717) 66. Finally, learned Counsel citing the case of Oroyinyin v Raman (1997) 2 NWLR (Part 489) 613 argued that where a j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 293 a contract is silent as to time of performance, the law implies an obligation that the act should be performed within a reasonable time. He however, submitted that in the circum- b stances of this case in which the import licence had a limited life span and the Second Tier Foreign Exchange Market was impending, time was of the essence of the contract and that the appellant by failing to open letter of credit timeously was rightly adjudged to have been in breach of the contract. c In dealing with the various points canvassed above, I will as a convenient starting point refer to a passage in the judgment of the Court of Appeal at page 324 line 34 et seq. where it held:– d “There is no evidence that the overrun cost or the short fall was paid by the respondents. That is a clear breach of Clause 7 of Ex- hibit “V”. However, the respondents further argued in their brief that Exhibits “T” and “U” both of which were written by officials e of the appellant constitute a waiver or an admission against interest . . .” (Italics for emphasis.) And after discussing the principle or the doctrine of waiver, the court at page 326 line 34 et seq concluded thus:– f “Ordinarily, I would have said that there was no obligation on the appellant to open letters of credit since the 1st respondent had failed to comply with the Provisions of Clause 7 in exhibit F, but from what I have discussed above, both exhibits “T” and “U” con- g stitute a waiver. The trial Judge was therefore right in holding that having failed to open letter of credit, the appellant on the face of exhs. “T” and “U” have breached the contract.” From the above passages, the Court of Appeal held that the respondents having not paid the overrun cost was in breach h of Clause 7 of Exhibit “V”. There being no appeal or cross- appeal against that finding, its correctness or otherwise cannot be questioned in this appeal. Where a party has not appealed against a finding of the trial court or Court of Appeal, i he cannot be heard to question that finding on appeal: see Ijale v Leventis & Co. Ltd (1959) SCNLR 255; (1959) 4 FSC 108; Dabup v Kolo (1993) 9 NWLR (Part 317) 254 at 269. With great respect to learned Counsel for the respon- j dents, it was not open to him to submit, as he did at page 13

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC 294 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) of his brief that the question of breach of Clause 7 of Exhibit a “F” is most irrelevant. The role of a respondent is to support the judgment appealed against and not to criticise it: see Ajomale v Yaduat (No. 2) (1991) 5 NWLR (Part 191) 266 at b 285. Since the Court of Appeal had found that the respondents were in breach of Clause 7 of Exhibit “V” by not paying the overrun cost, all that remains to be examined is its treatment c of Exhibits “T” and “U” as constituting a waiver, thus shifting liability for the breach of contract from the respondents to the appellant. The appellant has contended that the doctrine of waiver d was not pleaded and was not an issue before the court of first instance but the respondents have stated the contrary. Exhibits “T” and “U” were pleaded in paragraphs 25 and 26 of the amended statement of claim at page 29 of the record e as follows:– “25. The plaintiffs aver that on 17 September, 1986, the Assistant Legal Adviser of the defendant wrote to the defendant’s Managing Director confirming that the loan granted to the f plaintiffs was due for disbursement. Notice to produce the said letter ref. LPG 533/039 is hereby given to the defendant. 26. The plaintiffs further aver that on 29 September, 1986, the General Manager (Operations) of the defendant also wrote to the defendant’s Controller of Investigation Supervision g drawing the defendant’s attention to the undue delay attend- ing the opening of the letter of credit in respect of the plaintiffs’ L.P.G. project. The plaintiffs will rely on the said defendant’s internal memorandum ref. No. FM(07)/FUP/4. No- tice to produce which is hereby given to the defendant.” h As rightly pointed out at page 11 of the respondents’ brief, it is not necessary to plead an equitable defence in a special form so long as it is stated in a manner to show that it is relied upon. This view was expressed by this court in the case i of Adebanjo v Brown (1990) 3 NWLR (Part 141) 661 at pages 677–678 thus:– “While it is the rule, as stated by this court in Ibenweluv Lawal (1971) 1 All NLR 23 at 24 that all equitable defences must be j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 295 a pleaded fully and with full particulars, it is my view that in this case, the defendant sufficiently complied with the requirement . . . It is not necessary to plead estoppel in any special form so long the matter constituting estoppel is stated in such a manner as to show b that the party relies upon it as defence or answer. See Bullen and Leake’s Precedent of Pleadings, 6th Edition, Page 646.” See also Ezewani v Onwordi (1986) 4 NWLR (Part 33) 37; Abisi v Ekwealor (1992) 6 NWLR (Part 302) 643. Thus if, in c the instant case, the respondents were relying on a waiver by the defendant of its right on the contract to insist on the payment of cost overrun, the averment and particulars would have been couched in a manner such as this:– d “If the defendant is relying on the payment of overrun cost by the plaintiffs as stipulated in the contract, the plaintiffs shall contend that the defendant had waived its right thereto. Particulars e The waiver is contained or is to be inferred from the letters of the defendant dated. . . or alternatively from the conduct of the defendant in that it represented that the overrun cost would be borne by it and thereby induced the plaintiff to believe that the contract still subsisted and acting upon that belief, the plaintiff . . .”. f See Bullen & Leake & Jacobs, Precedents of Pleadings, (13ed) article 1342, page 1499. It is my view that the averments in paragraphs 25 and 26 g of the amended statement of claim is a far cry from raising anything even remotely suggesting a waiver. And as will be demonstrated anon, the contents of the documents, Exhibits “T” and “U, can hardly be construed as constituting such a h plea. In Exhibit “T” dated 17 September, 1986, DW2, Assistant Manager, Legal of the appellant bank, in an internal memorandum addressed to the appellant’s Managing Director i wrote as follows:– “We wish to confirm to the Managing Director that the investment and mortgage agreement in respect of the approved loan of N500,000 on the above named company has been duly stamped and submitted for registration at the Cross River State Lands j Registry. Accordingly, there is therefore a legal basis for the

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disbursement of the loan. The Managing Director may therefore a wish to authorise the appropriate departments i.e. supervision/accounts to take further action on the matter.” Exhibit ‘U’ is another internal memorandum dated 29 Sep- b tember, 1986 addressed by the appellant’s General Manager to its Controller of Investment Supervision. It reads in part:– “Further to our numerous discussions on the above subject matter, I wish to remind you once more about the need to speed up the c disbursement of funds under the World Bank line of credit It is surprising that the following four projects in respect of which documentation has been completed over six weeks ago have still not had their letters of credit established. d These are:– 1......

2. Integrated Gas e 3...... 4......

Progress towards early disbursement in respect of the remaining f ones also doesn’t appear to have been made. Lack of progress in making disbursement to the World Bank projects is causing very serious concern to management. The above unsatisfactory situation therefore should not be allowed to continue. g By this memo therefore, your Department and Merchant Banking Operations Department are hereby given two weeks (i.e. up to the 10 October, 1986) to ensure that documentation in respect of the projects whose assessment of sponsor’s contributions have been h completed and accepted by the Managing Director are finalised for disbursement (i.e. letters of credit are established within this dead- line) . . .” As is evident from the two Exhibits partly reproduced i above, there is no mention whatsoever of payment of cost overrun let alone any suggestion that the appellant was going to waive its right to insist that the respondents should pay same. In the case of Barrett Bros (Taxis) Ltd v Davies j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 297 a (1966) 1 WLR 1334 at 1339, Lord Denning, MR expounded the principle of waiver thus:– “Secondly the letter . . . was a waiver of the condition. The princi- b ple of waiver is simply this: If one party by his conduct leads another to believe that the strict rights arising under the contract will not be insisted upon, intending that the other should act on that belief, and he does act on it, then the first party will not afterwards c be allowed to insist on the strict rights when it would be inequitable for him so to do . . .” The principle enunciated above was adopted with approval by this court in the case of United Calabar & Co v Elder d Dempster Lines Ltd (1972) All NLR 681 at 690. Discussing the principle of waiver as a ground of defence, the learned authors of Bullen and Leake and Jacobs, (23ed) at page 1455 have this to say:– e “Where the defendant relies upon the failure of the plaintiff to perform a condition of the contract as to the precise time or mode of performance fixed by the contract as a ground for canceling or re- pudiating the contract or as justifying his own refusal to perform f his own obligations, the plaintiff may reply that the defendant has waived his right to insist that the contract should be or have been performed according to its original tenor”. ‘Waiver is not a cause of action, but a man may be debarred by the doctrine of waiver from asserting that an original condition precedent is still operative g and binding’ (see Harlley v Hymans (1920) 3 KB 475 per M. C. Cardie, J p.495). A waiver may be oral or written or inferred from conduct (Bremar Handelsgese Uschattmbh v Vanden-Avenne Izegein P.V.B.A. (1978) 2 Lloyds Rep 109) It arises where one h party leads the other to believe that he will not insist on the precise stipulation in the contract e.g., as to time of performance, and the other party has acted on that belief and has thereby prejudiced his position, the first party cannot afterwards insist on the terms of the original contract e.g. as to time or otherwise (see Levey & Co. v i Goldberg (1922) 1 K.B. 688 request to withhold delivery). Whether it is called waiver or forbearance on his part, or an agreed variation or substituted performance, does not matter. It is a kind of estoppel. By his conduct he evinced an intention to affect their legal relations. He made in effect a promise not to insist on his j strict legal rights. That promise was intended to be acted on and

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was infact acted on. He cannot afterwards go back on it (Charles a Richards Ltd v Oppeheim (1950) 1 K.B. 616 per Denning, LJ page 623).” It can be seen from the foregoing that waiver is a form of b estoppel and a plaintiff relying on it must plead that the defendant made a representation to him in consequence of which he acted to his prejudice. In the instant case Exhibits “T” and “U” contained no representation by the appellant c bank that it was not insisting that the plaintiffs should pay the cost overrun. This is apart from the fact that the said Ex- hibits “T” and “U” were not addressed to the plaintiffs, rather, they were correspondence exchanged inter se by offi- d cials of the appellant bank. There is no evidence the respondents were induced to act to their prejudice by reason of the said Exhibits. It is, therefore, my considered view that Ex- hibits “T” and “U” could not by any stretch of the imagina- e tion constitute a waiver to warrant the shifting of liability for the breach of the contract to the appellant bank. With much respect to the learned Justices of the Court of Appeal, neither of the parties introduced or relied on waiver in their f case and I am unable to hold that in the circumstances of this case, Exhibits “T” and “U” constituted a waiver. A court is not competent to make a case for the parties different from the case they made for themselves. This principle was re- cently restated by this Court in the case of Spasco Vehicle g and Plant Hire Co. v Alraine (Nig) Ltd (1995) 8 NWLR (Part 416) 655 at 669 where Iguh, JSC observed:– “It is an elementary and fundamental principle of the determina- h tion of disputes between parties that judgment must be confined to the issues raised by the parties in their pleadings. It is not competent for the trial court suo motu to make a case for either or both of the parties and then proceed to give judgment on the case so formulated contrary to the case of the parties before him: see Com- i missioner for Works Benue State & Anor v Devcon Development Consultants Ltd & Anor (1988) 3 NWLR (Part 83) 407; Ochonma v Ashiri Unosi (1965) NMLR 321 at 323; Nigerian Housing De- velopment Society Ltd & Anor v Yaya Mumuni (1977) 2 SC 57; Adeniji & Ors. v Adeniji & Ors. (1972) 1 All NLR (Part 1) 298; j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 299 a A.C.B. Ltd v A.G. Northern Nigeria (1967) NMLR 231. This principle of law is, without doubt, in accordance with common sense as to permit trial courts to wander out of issues raised by the parties in their pleadings and to found their judgment on such issues b would not only take parties by surprise and make nonsense of pleadings, it might well result in the denial to one or the other of the parties of the right to fair hearing pursuant to the audi alteram partem rule as enshrined in the 1979 Constitution of Nigeria (see c Metalimpex v A.G. Leventis & Co. Ltd (1976) 2 S.C. 91; Kalio v Kalio (1977) 2 S.C. 15; George v Dominion Flour Mills Ltd (1963) 1 SCNLR 242; Shell B.P. Ltd v Abedi (1974) 1 All NLR (Part 1) 13; Alhaji Ogunlowo v Prince Ogundere (1993) 7 NWLR (Part 307) 610 at 624.” d Had the learned Justices of the Court of Appeal borne the above principle in mind, they might not have fallen into the error of construing Exhibits “T” and “U” as a waiver. e Respondents’ counsel in supporting the judgment of the court below has argued strenuously that Exhibits “T” and “U” amounted to an admission on the part of the appellant that all the conditions precedent for the disbursement of the loan had been satisfied by the respondents. It is trite law f that in civil cases, admissions by a party are evidence of facts asserted against but not in favour of such a party although they are not estoppels or conclusive against the party against whom they are tendered. Speaking on the place of g admissions in civil cases, Beoku-Betts, J in Okai II v Ayikai II (1946) 12 WACA 3, had this to say:– “The place of admission in civil cases is admirably stated in Hals- bury’s Laws of England, 2nd Edition, Volume 13, Pages 574 and h 575 thus:– ‘In civil cases, statements made otherwise than by way of testimony in court by a party to the proceedings are evidence of the truth of the facts asserted but not in favour of such i party. Although what a party has said on some former occasion may, without injustice be presumed to be true as against himself, yet no presumption of truth arises when such statements are tendered in evidence in his favour. As the value of an admission depends on the circumstances in which it was j made, evidence of such circumstances is always receivable to

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affect the weight of the admission. Thus the party against a whom it is tendered may show that it was made under an erroneous view of the law or in ignorance of the facts, or when his mind was in an abnormal condition’.” b Admissions are therefore no estoppels and are not conclusive against a party against whom they are tendered. The party has the right to explain the circumstance and show that the admissions were due to misconception or ignorance of c the real facts or other circumstances which sufficiently explain them: see the case of Insurance Broker of Nigeria v Atlantic Textiles Manufacturing Company Ltd (1996) 8 NWLR (Part 466) 316 at 329. d In the instant case, Mr Alfred Oritshagbemi Eredu, DW3, the appellant’s Assistant General Manager in part of his evidence stated at page 101 of the record:– “We did not disburse the money for the import licence as plaintiff e had to meet some pre-conditions . . .” . . . “As at 25/9/86 there was the required valid liquits (sic). Exhibit ‘F’ is a letter of Intent provides (sic) additional payment. This was f the reason we did not open letter of credit. Besides there was no valid import licence as at 25/9/86. Besides the amount on the import licence does not meet the amount on the invoice; again the difference in amount of money was not provided by the plaintiff.” g The substance of the above extract is that the plaintiffs had not met the preconditions for the appellant to open letter of credit and if Exhibits “T” and “U” conveyed contrary information, it was an error. h Still in support of the judgment in their favour, the respondents’ Counsel referred to Exhibits “X” and “Y” being letters they addressed to the appellant whereby they proposed that the cost overrun be shared by both parties or treated as a loan to the respondents. The appellant made no i response to those letters and by implication rejected the pro- posals which was an attempt to vary the binding obligations which both parties had voluntarily entered into. In my view, Exhibits “X” and “Y” are completely irrelevant as they j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 301 a could not be said to have dispensed the respondents’ obligation to pay the cost overrun as provided for in the contract Exhibits “F” and “V”. b Finally, respondents’ counsel had contended that with the execution of Exhibit “V “by both sides, all the preconditions had been met for the disbursement of the loan and therefore that the appellant had no defence whatsoever. c It is a well-established principle, that if a party, alleges breach of contract for the wrong reason or for no reason at all, he may yet justify his action if there were in existence at the time, facts or causes which would have provided a good d reason for terminating the contract. In British and Bening- tons Ltd v North Western Cachar Tea Company Ltd (1923) AC 48 at page 71, Lord Summer stated the principle of law applicable as follows:– e “. . . I do not think that the case, as reported, lays it down that a buyer, who has repudiated a contract for a given reason which fails him, has, therefore, no other opportunity of defence either as to the whole or as to part, but must fail utterly. If he had repudiated, given no reason at all, I suppose all reasons and all defences in the f action, partial or complete, would be open to him. His motives certainly are immaterial and I do not see why his reasons should be crucial.” In the present case, even if the respondents had thought that g the appellant did not attach any importance to the payment of the overrun cost, the appellant bank was perfectly entitled to rely on that condition as a defence to the action. For all the foregoing reasons, I will resolve the issues un- h der consideration in favour of the appellant. The appellant’s third issue for determination which covers the respondents’ second issue relates to the quantum of damages awarded for the alleged breach of contract by the i appellant. It will be recalled that the trial court awarded and the Court of Appeal affirmed the sum of N1,612,512.42 as damages to the respondents representing the loss occasioned by the breach of the contract. The contention of the learned j counsel for the appellant in his briefs is that the amount so

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC 302 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) awarded cannot be justified in law and in the circumstances. a He pointed out that the amount represents the shortfall or overrun cost as at 29 September, 1986 which the Court of Appeal found to be the respondents’ responsibility to pro- b vide under the agreement between the parties. It was stressed that the respondents incurred no loss as it never purchased the machinery on the ground that it could no longer afford the high cost not with standing that the ap- c pellant was still willing to go ahead with its own undertaking. Learned Counsel referred to the cost of the machinery as calculated by the learned trial Judge at page 157 of the record where she said:– d “4th plaintiff witness Assistant Manager in Central Bank of Nige- ria, Foreign Operations Department told the court he worked in the exchange rate section. He therefore gave evidence of exchange rate at various times relevant to the quotations exhibits “M” and “N” for plaintiffs’ project. Cross-examined by counsel for defence, e witness said as at 12/9/86 one Dutch Mark sold for N2,3378 which related to 1,045,240 Dutch Mark will be N2,414,052. One Dutch Mark as at 26/9/86 when SFEM started was sold for N2,269.20, (therefore) 1,045,250DM then exchanged for N2,112,512.42k and f this was what plaintiffs would have paid to bring in the equipment if they had decided to import the equipment after SFEM. This evidence as to the exchange rate remains unchallenged.” It is based on that calculation that the trial court awarded to the respondents the sum of N2,112,512.42 less the value of g the loan of N500,000 amounting to N1,612,512.42k. It is not clear why the assessment of damages was reckoned as at 29 September, 1986 for the normal date of assessment of damages is the date of breach: see Miliangos v George Frank h Textile (Ltd) [1976] AC 443 at 468. This is by the way as there is no appeal on that. In attacking the award by the trial court which was affirmed by the court below learned Coun- sel for the appellant argued to the following effect:– i If in fact, the obligation to disburse the loan arose on 12 September, 1986, then the amount required to open letter of credit would have been N2,414,052 whereas on 29 Septem- ber, 1986 (which was the lower court’s yardstick) it would j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 303 a have been N2,112,512.42. This shows that the amount required to import the equipment on 29 September, 1986 was in fact N301,549.58 less than it would have been on 12 Sep- b tember, 1986 or early September when the lower court found that the appellant’s obligation arose. Thus the plaintiff would have suffered no loss in the sense that from uncontroversial evidence, Naira appreciated c slightly in value on 29 September, 1986 as compared to 12 September, 1986. Learned Counsel, therefore, submitted that when no damage is suffered, a breach of contract does not attract any compensation citing in support the following au- d thorities:– Uwa Printers v Investments Trust Ltd (1988) 5 NWLR (Part 92) 110, Mayne and Mcgregor on Damages, (14ed) pages 595–596 paragraph 862; Ijebu-Ode Local Gov- ernment v Adedeji Balogun & Co. Ltd (1991) 1 NWLR (Part e 166) 136; Nigerian Supplies Manufacturing Company v Ni- gerian Broadcasting Corporation (1967) 1 All NLR 35; Na- tional Investment and Properties Co. Ltd v Thompson Or- ganisation Ltd (1969) 1 All NLR 138. f Responding, learned Counsel for the respondents canvassed that to be entitled to an award of damages, the plaintiff has no burden to show that he actually purchased the equipment. Counsel drew attention to the fact that there are g concurrent findings by the two lower courts on the amount assessed as damages and argued that it is not the practice to interfere with such findings. He craved in aid the following authorities: Nigeria Engineering Works Ltd v Denap Ltd h (2001) 18 NWLR (Part 746) 726; Ojengbede v Esan (2001) 18 NWLR (Part 746) 771 and Abimbola v Abatan (2001) 9 NWLR (Part 717) 66. He pointed out that there had been fluctuations in the value of the Naira from 26 June, 1985 to 8 January, 1988 adding that it would be erroneous to con- i tend as the appellant had done that the respondents would have suffered no loss as the Naira had appreciated in value on 29 September, 1986. Finally learned Counsel urged that as the damages awarded were neither manifestly too low nor j excessive nor based on wrong principles, it ought not to be

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC 304 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) interfered with. He cited and relied on the following authori- a ties:– Offoboche v Ogoja LG (2001) 16 NWLR (Part 739) 458 at 491; ACB Ltd v Apugo (2001) 5 NWLR (Part 707) 483 at 499; Ogini v Ogo Oluwa Motors (Nig) Ltd (1998) 1 b NWLR (Part 534) 353 at 362–363. The whole basis of the respondents’ claim is that as a result of the appellant’s delay in disbursing the loan the cost of the importation of the machinery had escalated far beyond c the loan contracted for, due to rising costs and depreciation in value of local currency. Fluctuation in prices of commodi- ties is a natural phenomenon in export trade transactions and unless an importer settles for the price at a fixed date, he d must be prepared to bear the cost of the commodity as at the time of actual payment. The reference to 12 September, 1986 by the trial court as the date the appellant’s obligation to open letter of credit (sic) raises the question as to whether there was a fixed date for the performance of the contract e and if there was such a fixed date, whether that date was of the essence of the contract. Time is said to be of the essence of the contract in the following instances:– (1) Where the parties have expressly stipulated in their f contract that the time fixed for performance must be exactly complied with: Brickles v Small [1916] AC 599. (2) Where the circumstances of the contract or the na- g ture of the subject matter indicate that the fixed date must be exactly complied with eg the purchase of a leasehold house required for immediate occupation. Tley v Thomas (1867) LR 3 Ch App 61. h (3) Where time was not originally of the essence of the contract, but one party has been guilty of undue delay, the other party may give notice requiring the contract to be performed within a reasonable time: i Parkin v Thorold (1852) 16 Beav 59; Green v Sevin (1879) 13 Ch D 589. Where a party to a contract undertakes to do some particular act, the performance of which depends entirely on himself, j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 305 a and the contract is silent as to the time of performance, the law implies an engagement that it shall be executed within a reasonable time having regard to all the circumstances of b the case:– Castlegate Steamship Co. Ltd v Dempsey (1892) 1 QB 854; Niger Insurance v Abed Bros (1976) 7 SC 35; Mazin Eng Ltd v Tower Aluminum (1993) 5 NWLR (Part 295) 526 at 528. In the case in hand, the investment and c mortgage agreement dated 12 September, 1986 which incorporated the terms contained in the “letter of intent” of 25 March, 1986 (Exhibit “F”) did not stipulate expressly any date for the performance of the contract except that it provided “disbursement is to be made from the head office after d signing the investment and mortgage agreement depending on actual requirements and payable directly to the suppliers/ civil contractors/creditors on production of confirmed invoices/certificates”. e The words “after signing the investment and mortgage agreement” has no time limit. It is my view that no time was fixed for the disbursement of the loan let alone any such time fixed being of the essence of the contract. Since the f contract was silent as to time being of the essence of the contract, the appellant was only required to act within a reasonable time. From 12 September, 1986 to 29 September, 1986 when SFEM came into operation is a period of g 17 days. In my humble view a delay of about 17 days can hardly be regarded as in ordinate in the circumstances of the case. On the quantum of damages awardable assuming there h was a breach of contract by the appellant which is not conceded, it must be borne in mind that the agreement between the parties was that of a loan. On the measure of damages for breach of such a contract, the learned authors of Chitty i on Contract (23ed), Volume 11, Page 54, paragraph 1106 had this to say:– “If a person contracts to lend money, and then, in breach of contract, refuses or fails to advance the money, the borrower cannot j sue for the money agreed to be loaned as a debt, for this would be

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tantamount to a decree of specific enforcement and such a decree a will not normally be granted for a contract of loan. But the borrower can claim damages for the failure to advance the money. The damages may, of course, be merely nominal but if expense has been reasonably incurred in procuring the loan elsewhere, that b expense is recoverable as special damage, and so can any other loss which was within the contemplation of the parties. If the borrower can only procure the loan from other sources at a higher rate of interest than that agreed under the contract, and this was rea- c sonably foreseeable at the time when the contract was made, it seems that the borrower can recover the additional interest he will have to pay as damages from the lender. If the borrower is unable to raise the money from other sources at all, and he is consequently unable to enter with or complete some transaction for d which the money was required, it is theoretically possible that the lender might be liable for loss of profit on such a transaction or other consequential loss.” Similar views were expressed in Mayne & Mcgregor on e Damages (12ed), page 553, paragraph 553 thus:– “In contracts for the loan of money, the normal measure of damages for the lender’s failure to provide the money is the amount required by the borrower to go into the market and effect a substi- f tute loan for himself less the amount the contractual loan had required . . . There may also be consequential losses. Thus the damages may include the cost of raising the money elsewhere . . . Further, the plaintiff may recover for the loss of any contract g which hinged upon the loan if the defendant was aware of the purpose for which the plaintiff was entering into the loan. The authority for this is the decision in Manchester and Oldham Bank v Cook (1883) 49 L.T. 674. The plaintiff asked the defendant bank for a h loan to enable him to purchase an interest in a colliery. The defendant agreed but failed to find the money, and the plaintiff was unable, apparently to obtain the money elsewhere and so unable to complete the purchase. It was held that he could recover damage in respect of the loss of the colliery purchase, the court stressing i that “the bank had express notice of the purpose for which the money was required”. And in Astor Properties v Tunbridge Wills Equitable Friendly Society (1936) 1 All ER 531, where the money to be lent was to be used by the plaintiff for a purchase-money mortgage, damages were allowed for the estimated loss of the j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Edozie JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 307 a rents that the plaintiff would have obtained from the property for the period of delay before the plaintiff obtained the property by means of a substitute loan.” b I have deliberately quoted extensively from Chitty on Con- tracts and Mayne and Megregor on Damages to emphasise the point that the measure of damages in a breach of a contract for a loan is not necessarily limited to the higher interest at which the borrower can obtain a substitute loan. The c borrower may be entitled to other consequential losses which he is able to establish as flowing naturally from the breach or which was within the contemplation of the parties. In the instant case, if the parties had agreed on a fixed d date for the disbursement of the loan and due to the appellant’s default the cost of the importation had escalated far beyond the cost price at the fixed date for the disbursement, I think that the plaintiffs would have been entitled to recover e as damages the excess amount it cost them to import the machinery and even if they were unable to import the goods, they would have been entitled to damages for breach of contract. However, as already demonstrated, there was no fixed f date for the disbursement of the loan, the respondents were in breach of the contract by their default in the payment of the cost overrun without which letter of credit could not be opened. Above all, it has been demonstrated that the cost of g the importation of the machinery was cheaper as at 29 Sep- tember, 1986 than it was as at 12 September, 1986 due to the slight appreciation of the Naira at the former date, the implication being that the plaintiffs would have incurred no loss on the importation of the equipment on the latter date. I will h also resolve the issue under consideration in favour of the appellant. In the event, this appeal is meritorious and is accordingly allowed. The judgments of the two lower courts are hereby i set aside and the respondents’ claims are dismissed with costs to the appellant assessed at N10,000.00.

ONU JSC: I am in entire agreement with the judgment just j delivered by my learned brother, Edozie, JSC that the appeal

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 308 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) is meritorious and it accordingly succeeds with costs to the a appellant in the sum of N10,000.

EJIWUNMI JSC: As I have had the privilege of reading be- b fore now the judgment just read by my learned brother, Edozie, JSC I am quite satisfied that all the issues raised in the appeal have been carefully considered. I therefore agree entirely with the conclusion reached in the judgment that the c appeal has merit. For the reasons given in the said judgment, the appeal is also allowed by me, and I therefore set aside the judgments of the two lower courts. I abide with the other orders made as to costs in the lead d judgment.

TOBI JSC: The main quarrel in this appeal is related to delay. While the respondents allege delay on the part of the e appellant, the appellant denies that there was any delay on its part. As far as the respondents are concerned, the delay on the part of the appellant caused or occasioned a breach of contract. f Let me first tell the story of the contractual relationship between the parties. The respondents were the plaintiffs in the High Court. The appellant was the defendant. The re- g spondents were granted a loan of N500,000 to finance the importation of a Liquified Petroleum Gas Bottling Plant. The loan was said to be under the World Bank line of credit. It is the case of the respondents that the appellant delayed h the opening of the letters of credit until the Second Tier For- eign Exchange Market Scheme (SFEM) came into effect, which caused a decline in the value of the naira and resulted in the rise in cost of the machineries. It is the case of the appellant that there was neither delay nor any step on its part i that is tantamount to a breach of contract. To the appellant, the respondents did not comply with all the conditions necessary for the letters of credit to be opened, particularly on the responsibility to pay overrun cost. j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Tobi JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 309 a After hearing evidence and address of Counsel, the learned trial Judge believed the story of the respondents. She did not believe the story of the appellant. She therefore gave b judgment to the respondents. In the judgment, the learned trial Judge said at page 155 of the record:– c “Did defendant commit a breach of the contract between the defendant and the plaintiffs? There is no other conclusion than answering the above question in the positive. defendant in no ambiguous way failed to perform its part of the contract inspite of the plaintiffs’ efforts to secure this loan and the plaintiffs as a result of d this non-performance were precluded from processing with the project and hence therefore committed a breach of contract between them and the plaintiffs which they had more than 24 days from 4 September, 1986 to perform.” e The appellant’s appeal to the Court of Appeal was dismissed. That court agreed with the judgment of the learned trial Judge. Dismissing the appeal, the Court of Appeal said at page 324 of the record:– f “There is no evidence that the overrun cost or the short fall was paid by the respondents. That is a clear breach of Clause 7 of Ex- hibit V.” g Dissatisfied, the appellant has come to this court. Three issues are formulated in the brief of the appellant as follows:– “2.01. Is the doctrine of waiver an issue between the parties in this h case? 2.02. Can it be said that exhibits “T” and “U” constitute a waiver in such a way as to make the appellant liable for breach of contract for not disbursing the loan granted to the respon- i dent and opening letters of credit for the purchase of the machinery and equipment before 29 September, 1986? 2.03. If the appellant is liable for breach of contract between the parties, are the respondents entitled to the amount of j N1,612,512.42 as damages?”

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The respondents formulated the following two issues for de- a termination:– “1. Whether the Court of Appeal was right in affirming the decision of the trial court that the appellant was liable for breach b of the contract between the appellant and the respondents. 2. Whether the Court of Appeal was right in not interfering with the award of N1,612,512.42 as damages against the appellant.” c One issue raised by the appellant in this appeal is waiver hinged on Exhibits “T” and “U”. The argument of learned Counsel for the appellant is that as waiver was neither pleaded nor an issue in the trial court, the Court of Appeal d was wrong in deciding the appeal on it. He submitted, apparently in the alternative, that Exhibits “T’ and “U” did not constitute waiver. Learned counsel for the respondents submitted that by e Exhibits ‘F’ and ‘G’ there was a valid contract between the parties and that there was a breach of that contract as the appellant failed to disburse money to the overseas suppliers of the LPG equipment. On the issue of waiver, learned Counsel f submitted that waiver as a word need not be used in pleadings if the application of the doctrine can be deduced or ascertained from the entire pleadings in the case. He submitted that Exhibits “T” and “U”constituted waiver. g It is the law of pleadings that waiver, as an equitable remedy, should be specifically pleaded. The word “waiver” need not appear in the pleadings but the party relying on it must plead sufficient facts to enable the court come to the conclusion that the opposite party has clearly exhibited a conduct h of waiver in the matter or transaction. Was the issue of waiver pleaded in the statement of defence? Did the issue arise in the High Court? I have carefully gone through the third amended statement of defence and I cannot place my i hands on a defence of waiver, either directly or by the use of descriptive and associated revealing language. It does not appear to me that the issue of waiver was even raised in the High Court. In view of the fact that the issue was not j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Tobi JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 311 a pleaded in the statement of defence coupled with the fact that it was not raised in the High Court, the respondents cannot raise it here, and I so hold. Litigation is not a game of b tricks and traps but one where the parties must sincerely and unequivocally place their case before the court for purpose of full and total adjudication. Parties are not allowed to litigate in installments of possible defence at the appellant level c when they have not made a case at the trial. This is not acceptable as it will spring surprise at the opposite party. However the law allows parties to introduce fresh point on appeal, if the appellate court is satisfied of the conditions for d allowing such evidence to be led, but this should be with leave of the court. Learned Counsel for the respondents submitted in his brief that Exhibits “T” and “U” constitute waiver. He con- e tended that Exhibits “T” and “U” were properly pleaded and admitted in evidence. Exhibits “T” and “U” may properly be pleaded and admitted. It is quite a different consideration whether they were pleaded in the context of waiver. If exhibits were pleaded as mere exhibits qua documentary evi- f dence without iota of waiver, a court of law will reject the submission of Counsel that the exhibits pleaded waiver. Both Exhibits “T” and “U” emanated from the appellant. While the subject matter of Exhibit “T” is “Integrated Gas g (Nig.) Ltd.”, the subject matter of Exhibit “U” is “letter of credit for World Bank project”. As I indicated earlier, it is not possible for me to come to the conclusion on the bare wordings of the exhibit without more that they constitute h waiver. In one breath, Counsel submitted that Exhibits “T” and “U” constitute waiver and in another breath, he submitted that they are admission against interest. The concept of i waiver and that of admission against interest are different and should not be taken together as if they mean the same thing. While waiver is a complete defence to an action, admission against interest may be used against the party who j admits, but may not invariably come to his aid by way of

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Tobi JSC 312 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) obtaining judgment. The court will have to consider the a relevance and weight of the admission in the case. Let me take Exhibits “F” and “G”. Exhibit “F” com- mences as follows:– b “I am pleased to inform you that after due consideration of your application, the Nigerian Bank for Commerce and Industry has approved an investment in Integrated Gas Nigeria Ltd by way of term loan of N500,000 under the World Bank line of credit on the c terms and conditions stated hereunder and other usual conditions contained in the investment and mortgage agreement.” One of the special terms and conditions is stated in paragraph 9 in the following terms:– d “The bank also reserves its right to withdraw this within six (6) months from the date of this letter, if necessary documents are not executed/pre-disbursement conditions have not been completed with effective steps have not been taken to implement project.” In reply to Exhibit “F”, the respondent sent Exhibit “G” to e the appellant. It reads in part:– “We refer to and thank you for your letter of intent dated the 25 March, 1986 offering us a term of loan of N500,000 under the World Bank line of credit. We have carefully studied the terms f and conditions of the loan and to indicate our acceptance, we return herewith two copies of the letter of intent duly signed by us. We confirm that the balance of N200,000 (Two Hundred Thou- sand Naira) previously unpaid by sponsors have been called up and received. This brings sponsors contribution to a total of g N450,000 (Four Hundred and Fifty Thousand Naira).” As it is, Exhibit “F” is an offer and Exhibit “G” is an acceptance. There is consideration and there is clearly an intention to create legal relationship as the two exhibits show. There is h capacity on the part of the parties to contract, they being incorporated companies. There are concurrent findings of the two lower courts that there was a breach of contract in this matter. I do not see my way clear in interfering with the i findings because it is not perverse. In the light of the above and the more detailed reasons given in the leading judgment by my learned brother, Edozie, JSC I too allow the appeal. I set aside the judgment j

[2004 – 2006] 13 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Tobi JSC Nigeria Bank for Com. and Industry v. Intergrated Gas (Nigeria) Ltd 313 a of the High Court and the Court of Appeal and dismiss the respondents’ claims. I award N10,000 costs to the appellant. b MUSDAPHER JSC: I have had the honour to read in advance the judgment of my Lord Edozie, JSC with which I entirely agree. For the same reasons very lucidly set out in the judgment, which I adopt as mine, I too, allow the appeal and set aside the decisions of the lower courts. The respondents’ c claims before the trial court are hereby dismissed in their entirety. I abide by the order for costs contained in the aforesaid leading judgment. d Appeal allowed.

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a Peak Merchant Bank Ltd v Central Bank of Nigeria and others b FEDERAL HIGH COURT OF NIGERIA, LAGOS DIVISION MUSTAPHA J Date of Judgment: 31 JANUARY, 2005 Suit No.: FHC/L/CS/229/2003

Banking – Revocation of banking licence by the Governor of c CBN – Effect thereof Injunction – Interlocutory injunction – Whether can be issued to restrain the enjoyment of a legal right Injunction – Whether can be granted for a completed act d Jurisdiction – A point of law – When and how can it be raised Jurisdiction – Revocation of banking licence – When the e court can exercise jurisdiction – What plaintiff must show – Section 49(1) Banks and Other Financial Institutions Decree No. 25 of 1991 Practice and procedure – Abuse of court process – Features f of

Facts The plaintiff instituted an action against the defendants by a g writ of summons on 4 March, 2004 claiming 3 declaratory reliefs and 4 injunctive reliefs inter alia that the revocation of the plaintiff’s licence by the first and second defendants was done without due process. h In reaction to the plaintiff’s suit and motion for injunction, the defendant filed Notices of Preliminary Objection on grounds that:– (a) The plaintiff’s claims disclose no reasonable cause i of action. (b) The applicant/plaintiff has not disclosed any legal right to any reliefs sought. (c) That the action is an abuse of court process. j

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Peak Merchant Bank Ltd v. Central Bank of Nigeria 315 a Arguing the notice of preliminary objection, the defendant’s Counsel submitted that the entire Suit be dismissed or struck out as the plaintiff’s claim discloses no reasonable cause of b action. He further submitted that for the action of the plaintiff to be justiciable, the plaintiff must show bad faith in the revocation of its banking licence by the first defendant in the absence of which this court lacks jurisdiction. c The second defendant argued that a court cannot grant an injunction over a completed act as the revocation has been completed and the second defendant has taken over as liquidator. d The plaintiff’s counsel while reacting argued that the courts have jurisdiction to determine whether the defendants followed due process in the revocation of the plaintiff’s banking licence. e Held – 1. The issue of jurisdiction is a point of law and can be raised at any time, even orally. f 2. The issue of jurisdiction is not a matter for demurrer proceedings and that it is much more fundamental than that and does not entirely depend as such on what a plaintiff may plead as facts to prove the relief he seeks. g 3. Once the CBN revoked a banking licence of a Bank, the Bank ceases to have any legal right to conduct banking business until the banking licence is restored. h 4. Once a licence is revoked, the Governor of CBN is empowered to appoint NDIC or any other person as the official receiver or as provisional liquidator and such a person shall have powers conferred under the CAMA. i 5. An interlocutory injunction can only be issued to restrain a threatened wrong to a right and not to restrain the lawful enjoyment of a legal right. 6. It is trite law that an injunction is not granted for a com- j pleted act.

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7. Where a court is asked to restrain a party from doing an a act pending the decision in a matter before it, but the act has been done, no order to restrain will be made. 8. For the Court to have jurisdiction to entertain this type of b action in view of provisions of section 49(1) of Banks and Other Financial Institutions Decree No. 25 of 1991 the plaintiff has to show or allege bad faith in the way the revocation was done and indicate elements that con- c stitute bad faith. 9. For the plaintiff to show bad faith so that its action could be entertained, it would have to indicate how capricious and illegal the revocation was, which must be done at d the threshold of the suit being placed before the court because the court is to presume that the act complained of was done in good faith. In the instant case, the plaintiff failed to specifically state e that the CBN Governor in revoking its banking licence acted in bad faith and did not indicate elements that constitute bad faith. f 10. One of the common features of an abuse of court process is the improper use of the judicial process by a party in litigation to interfere with the due administration of justice. g Suit struck out.

Cases referred to in the ruling Nigerian h Ajewole v Adetimo (1996) 2 NWLR (Part 431) 391 Akibo v Oduntan (1991) 2 NWLR (Part 171) 1 Aliyu v Ibrahim (1992) 7 NWLR (Part 253) 301 i Anoh v Hirnyam (1997) 2 NWLR (Part 486) 174 Bello v Eweka (1981) 1 SC 101 Eguamwense v Amaghizenwen (1993) 9 NWLR (Part 315) 1 j

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Peak Merchant Bank Ltd v. Central Bank of Nigeria 317 a Merchant Bank Ltd v Federal Minister of Finance (1961) All NLR (Part 2) 598 NDIC v CBN (2002) 7 NWLR (Part 766) 272 b NDIC v CBN (2003) 3 SC 1 Onuzulike v Commissioner Special Duties Anambra State (1992) 3 NWLR (Part 791) 815 c Saraki v Kotoye (1992) 9 NWLR (Part 264) 156 Foreign Argosan Finance Co Ltd v Oxby [1964] 1 All ER 791 d Healey v Minister of Health (1955) 1 QB 221

Nigerian statute referred to in the ruling Banks and Other Financial Institutions Decree No. 25 of e 1991, sections 12 and 49(1)

Nigerian rule of court referred to in the ruling f Federal High Court (Civil Procedure) Rules, 2000, Order 25 Judgment MUSTAPHA J: On 4 March, 2004 the plaintiff instituted an g action against the defendants in this Court claiming the following reliefs:– (a) A declaration that the purported revocation of the plaintiff’s banking licence by the first and second de- h fendants was without due process and in contravention of the clear and specific provisions of the Banks and Other Financial Institutions Act, 1991 as amended. i (b) An order of this honourable Court setting aside the order of revocation of the plaintiff’s banking licence by the first and second defendants. (c) An order directing the defendant to restore the bank- j ing licence of the plaintiff.

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(d) A declaration that the defendants are not entitled to a seal or take over or attempt to seal or in any way whatsoever interfere with the management or control or the running of the plaintiff Bank except in strict b compliance with the specific provisions of the Banks and Other Financial Institutions Act, 1991 as amended. (e) A declaration that the first defendant is not entitled c to appoint the second defendant as a liquidator of the plaintif. (f) An order of injunction restraining the defendants by themselves, their agents or servants from taking any d steps to wind up the business of the plaintiff including appointing liquidator or receiver for the plaintiff or applying for the purchases or acquisition of the plaintiff. e (g) An order of injunction restraining the defendants by themselves, their agents or servants from using members of the Nigeria Police Force or any force or group of persons whatsoever or self help to seal the f plaintiff bank or prevent the plaintiff from doing its normal business or interfering with its operations. It filed contemporaneously on the same day Motion on No- tice seeking for the following injunctive reliefs:– g 1. A mandatory order of injunction directing the defendants, their agents, servants and/or privies to vacate the offices or premises of the plaintiff situate at No. 12, Adetokunbo Ademola Street, Victoria Island, La- h gos and its other branches nationwide pending the hearing and determination of this suit. 2. An interlocutory order of injunction restraining the defendants by themselves, their agents or servants i from taking any steps or further steps to take over the management, control and/or to wind up the business of the plaintiff including appointing any liquidator or receiver for the plaintiff or applying for the purchase j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JSC Peak Merchant Bank Ltd v. Central Bank of Nigeria 319 a or acquisition of the plaintiff pending the hearing and determination of/his suit. 3. An interlocutory order of injunction restraining the b defendant its servants, agents and/or privies from appointing the second defendant as a liquidator or receiver/Manager of the plaintiff pending the hearing and determination of this suit. c 4. An order maintaining the status quo ante 28/02/03 pending the determination of this suit. And for such further order or other orders as this honourable Court may deem fit to make in the circumstances. d In reaction, the defendants filed notices of preliminary objection to the hearing of the substantive suit and the motion on notice. e In its notice of preliminary objection dated 14 March, 2003 the first defendant seeks for the dismissal/striking out of theplaintiff’s motion on notice dated 3 March, 2004 on the ground that the Court lacks the jurisdiction to entertain f the action or grant the reliefs sought. The application is predicated upon the following grounds:– 1. The plaintiff’s claims disclose no reasonable cause of action. g 2. The applicant has not disclosed any legal right to any of the reliefs sought. In their notice of preliminary objection dated 10 March, 2003 the second and third defendants seek for an order dis- h missing or alternatively striking out this action on the grounds that:– (a) the action discloses no cause, or reasonable cause of action (and if at all); i (b) the plaintiff has no right of action, alternatively; (c) the right of action against the second and third defendants (if any) can only be enforced; j (d) by an action for judicial review;

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(e) the action is frivolous, vexatious and an abuse of a court process. The Court, based on the agreement of all Counsel, ordered that written addresses be submitted in respect of the notices b of preliminary objection. The written addresses were subsequently adopted in open Court. With respect to Grounds 1, 2, 3 and 7 of its notice of preliminary objection, the learned Counsel for the first defen- c dant submitted that the plaintiff’s application for interlocutory injunction and the entire Suit should be dismissed on the ground that the action discloses no reasonable cause of action. Referring to section 49(1) of Banks and Other Finan- d cial Institutions Act (as amended) hereinafter referred to as BOFIA and the case of NDIC v CBN and Another (2002) 7 NWLR (Part 766) 272 at 297, the learned Counsel for the first defendant submitted that for this action to be justiciable, e the plaintiff must show that the defendant acted in bad faith in revoking its licence and give sufficient particulars of same on the part of the official who did the act complained of, otherwise this Court lacks jurisdiction to entertain the mat- f ter. Rather than show bad faith on the part of the first defendant, it was argued that the documents relied upon in the statement of claim and motion on notice for injunction, indicated that the first defendant acted in good faith and fol- g lowed the procedure laid down by law in that the plaintiff was given opportunity to address the problems leading to the revocation but the plaintiff failedto remedy the problems. The first defendant was said to have complied with the h provision of section 12(e) of BOFIA in revoking the plaintiff’s banking licence and revoked the licence in exercise of its statutory duty under BOFIA as amended. On the plaintiff’s motion for interlocutory injunction, it i was submitted that since the plaintiff has not shown bad faith on the part of the first defendant in revoking its licence, it lacks the requisite legal right to pray for an order of injunction. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JSC Peak Merchant Bank Ltd v. Central Bank of Nigeria 321 a The attention of the Court was drawn to the fact that licence of the plaintiff was revoked and its management taken over by the second defendant before this action was filed. It b was therefore argued that since an injunction is not granted for a completed act, the prayer for injunction must fail. The case of Ajewole v Adetimo (1996) 2 NWLR (Part 431) 391 was relied upon. c In their address, the learned Counsel for the second and third defendants submitted that going by the state of the plaintiffs pleadings, the plaintiff is not entitled to any remedy as against the second defendant because the plaintiff d admits in paragraph 8 of the Statement of Claim and paragraph 7 of the Affidavit in Support of its motion for injunction that the first defendant informed it of the monetary credit, foreign trade and Exchange Policy Guidelines for e 2002, increasing the minimum paid-up capital of banks to N1 billion by December, 2002. The attention of the Court was also drawn to paragraphs 12–13 of the statement of claim and paragraphs 11–12 of the supporting affidavit that as at 27 January, 2003 the plaintiff was yet to comply with f the guidelines as issued by the first defendant showing that the plaintiff has at all material times, loan to deposit ratio below the acceptable statutory limit and liquidity ratio below the statutory limit. It was therefore submitted that by virtue g of section 12(e) of BOFIA as amended the Governor of CBN can with the approval of the Board of Directors and by Notice published in the Gazette revoke any licence granted under the Act if a Bank fails to comply with an obligation h imposed upon it by or under the Act. The learned SAN for the second and third defendants submitted that no wrong has been done to the plaintiff and no consequent damage occasioned as the plaintiff has simply mentioned attempts at i compliance with the directive of the CBN and in none of the paragraphs is actual compliance mentioned before the revocation of the licence. It was observed that the pith and kernel of the plaintiff’s j claim as obvious from its pleadings and motion on notice is

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JSC 322 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) that the defendants are not entitled to revoke the banking li- a cence of the plaintiff. It was therefore submitted this action is a challenge on the administrative action carried out by the second defendant and that the plaintiff is not entitled to b come by way of writ of summons claiming declaratory reliefs. Relying on the case of Merchant Bank Ltd v Federal Minister of Finance (1961) All NLR (Part 2) 598 it was submitted that the supervisory jurisdiction of the Court over c statutory authorities lies only to examine the process of coming to an administrative decision and not to question the decision itself. If however the trial Court is to exercise supervisory jurisdiction over administrative actions, it was argued that it cannot constitute itself into an appellate court by mak- d ing inconsistent findings, one by the Governor and the other by the court. The cases of Healey v Minister of Health (1955) 1 QB 221 at 228 and Eguamwense v Amaghizenwen (1993) 9 NWLR (Part 315) 1 at 19 were referred to. e It was submitted that this Court cannot exercise its declaratory jurisdiction in respect of a matter already decided by the appropriate authority ie the first defendant. The cases f of Argosan Finance Co Ltd v Oxby [1964] 1 All ER 791 and Bello v Eweka (1981) 1 SC 101 were referred to. It was observed that under Order 47 rule 3 of Federal High Court (Civil Procedure) Rules, 2000 that a plaintiff fil- g ing an action for judicial review, must obtain leave of the trial court and that failure to obtain leave before issuance of the writ against the defendants ousts the jurisdiction of the court. Since the plaintiff has not applied for leave for judi- h cial review, it was submitted that the action is in competent. On abuse of court process, the learned SAN for the second and third defendants submitted that this action which was filed after the presentation of a petition for winding-up i the plaintiff in Suit No. FHC/L/CP/221/03 is calculated at frustrating the quick hearing of the said petition and the due administration of justice. It was argued that it is for all intents and purposes frivolous and from the pleadings of the j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JSC Peak Merchant Bank Ltd v. Central Bank of Nigeria 323 a plaintiff it is weightless and targeted at delaying the winding-up petition before this Court. It was further submitted that by the provision of section b 49 of BOFIA, the only ground upon which the Court can have jurisdiction to hear and determine an action instituted at the instance of a person complaining of the exercise of the power granted by the first defendant under the Act is to c show that the decision to revoke the banking licence herein was done in bad faith and that the plaintiff has not established bad faith. The case of NDIC v CBN (2003) 3 SC 1 at page 11 was referred to. d The plaintiff having failed to show bad faith by pleading positive facts sufficient to displace the reasons for the revocation as contained in the Gazette and having simply con- centrated its statement of claim on the attempts made by it to e shore up its capital base in line with the directive of the first defendant cannot invoke the jurisdiction of this Court. Finally, the Court was urged to dismiss this Suit on the ground that it amounts to an abuse of the Court process or f strike out the Suit for want of jurisdiction, lack of cause or reasonable cause of action and right of action. In his own address, the learned Counsel for the plaintiff g contended that if the Governor of CBN in the exercise of his administrative power does not follow the prescribed procedure stipulated in sections 12 and 13 of BOFIA as amended, a writ of summons with a declaratory relief shall lie to question such quasi judicial power of the Governor. The h procedure by way of declaratory action, it was argued, will not have the effect of bringing about existence of two inconsistent findings one by the Governor and the other by the Court since if the Governor acted contrary to the law in re- i voking the licence, the Courts will have jurisdiction in determining that revocation is void. Reliance was placed on the case of Eguamwense v Amaghizemwen (1993) 9 NWLR (Part 315) at page 38 where Muhammadu, JSC held that an j applicant can invoke by way of declaration, the supervisory

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JSC 324 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) jurisdiction of the High Court to correct fundamental errors a of law committed by the prescribed authority. The English cases cited by the second and third defendants are said to be persuasive only. Those cases are said to be either not appo- b site to the issue in the instant case or irrelevant. It was argued that if the Bank complains that it was not heard and applies to set aside the revocation of its licence, the Court has jurisdiction to entertain the same and that in c the instant case even if the Governor can be called a Minis- ter, there is no provision in BOFIA precluding the plaintiff from challenging in court the revocation of its licence. The learned Counsel submitted that there is no law that d makes the use of judicial review procedure the only means of challenging an administrative act and that a plaintiff can elect to seek redress either by way of a writ of summons or by way of an application for judicial review. Reliance was e placed on the cases of TN Anoh and 5 Others v Dennis Hirn- yam (1997) 2 NWLR (Part 486) 174 and Onuzulike v Com- missioner Special Duties Anambra State (1992) 3 NWLR (Part 791) 815. Since BOFIA has not prescribed any proce- f dure for questioning the act of the revocation of a banking licence by the CBN Governor writ of summons and action for declaration can be employed. The Court was therefore urged to hold that the plaintiff is g entitled to issue a writ against the defendants and that this Suit is competent. On whether or not the plaintiff’s statement of claim discloses a reasonable cause of action, the learned Counsel for h the plaintiff referred to paragraph 15 of the statement of claim and submitted that the claim is based on the alleged wrong done to it and several material facts have been pleaded. He urged the Court to hold that a reasonable cause i of action has been disclosed in the statement of claim. Since by Order 25 of the Rules of this Court a demurrer is not allowed, the notices of preliminary objection are said to be contrary to the (Civil Procedure) Rules of this Court. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JSC Peak Merchant Bank Ltd v. Central Bank of Nigeria 325 a In his reply, the learned Counsel for the second and third defendants contended that the issue of the appropriate form of action to question ministerial and administrative decisions b of public bodies and officials was not an issue before the Court in Merchant Bank v Federal Minister of Finance (1961) All NLR 623 and no decision was given on the issue and so the case is unhelpful. c Restrictions to the award of declaration are said to include where the issues are not justiciable and where the proceedings are capable of being brought by judicial review and a declaratory procedure is pursued by the plaintiff in order to d by pass the procedural safeguards. The Court’s jurisdiction to grant declaration is said to be limited to declaring contested legal rights, either subsisting or prospective of the parties. It was submitted that in so far as a declaratory action e is predicated on the existence of civil right in the plaintiff to bring the action, the grant of a banking licence is not a civil right and the revocation of the licence does not effect the civil right of the plaintiff and so the plaintiff’s action is not justiciable. The cases of Merchant Bank Ltd v Federal Min- f ister of Finance (supra) at page 627 and Aliyu v Ibrahim (1992) 7 NWLR (Part 253) 301 were relied upon. Paragraph 15 of the statement of claim it was contended, g does not qualify as sufficient pleading of material facts required to set up a case on breach of statutory duty and that in the absence of any further pleading the statement of claim cannot be said to disclose a reasonable cause of action. h Finally, it was submitted that the preliminary objection of the second and third defendants in so far as it challenges the jurisdiction of this Court is not a demurrer and so the Court should discountenance the submission of the plaintiff on that i score. The first issue for determination is whether the Notices of Preliminary Objection are contrary to the provision of Order 25 of the Rules of this Court. The said Order abolishes a j demurrer and replaced it with a system whereby any point of

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JSC 326 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) law shall be raised in the pleadings and set down for hearing a and disposal at any time before trial. It has been held in many cases however that the issue of jurisdiction is a point of law and can be raised at any time even orally. In the case b of NDIC v CBN (2002) 7 NWLR (Part 766) 272 at page 290 the Supreme Court held that the issue of jurisdiction is not a matter for demurrer proceedings and that it is much more fundamental than that and does not entirely depend as such c on what a plaintiff may plead as facts to prove the relief he seeks. I have already reproduced the nature of the preliminary objections raised by the defendants. Since jurisdiction of this Court is challenged, I hold that it is not a demurrer and so the Notices are not contrary to the provisions of Or- d der 25 of the Rules of this Court.

This Court is conferred with discretionary powers to grant an interlocutory injunction as is being sought by the appli- e cant. But like any discretion, it must be exercised judicially and judiciously. It is not in dispute the fact that the Banking Licence of the plaintiff Bank was revoked by the Governor of CBN with the approval of the Board of Directors in exer- f cise of the powers conferred on him by section 12 of BOFIA in a Statutory Instrument No. 1 of 2003 issued on 28 Febru- ary, 2003 and gazetted in Federal Republic of Nigeria Offi- cial Gazette No.10 of Volume 90 of 28 February, 2003. By g the said revocation the plaintiff ceased to have any legal right to conduct any banking business until the licence is restored by the CBN or a court of law has set aside the order of revocation after a full trial. Once such a licence is re- h voked, the Governor is empowered by section 38(3) of BOFIA to appoint NDIC or any other person as the official receiver or as a provisional liquidator and such a person shall have powers conferred under the Companies and Al- lied Matters Act. Such powers of course include the power i to take possession of, collect, get in the property of the Company and grant security over the property. They therefore have the legal right to occupy the offices and premises of the plaintiff Bank nationwide so as to protect the funds of j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JSC Peak Merchant Bank Ltd v. Central Bank of Nigeria 327 a the depositors. You cannot by way of an interlocutory injunction restrain them from exercising that right. As was held by the Supreme Court in the case of Akibo v Oduntan b (1991) 2 NWLR (Part 171) 1 an interlocutory injunction can only be issued to restrain a threatened wrong to a right and not to restrain the lawful enjoyment of a legal right. The mandatory injunction sought in Relief No. 1 cannot c be granted at this stage. It can only be granted after a full trial of this case if the Court arrives at a finding that the revocation was not made in good faith and should be set aside. d It is also not in dispute the fact that in addition to revoking the licence of the plaintiff Bank, the Bank was sealed and its management was taken over. All these acts were done before this Suit was instituted in this Court on 4 e March, 2003. It is trite law that an injunction is not granted for a completed act. See for example the case of Ajewole v Adetimo (1996) 2 NWLR (Part 431) 391 where the Supreme Court held that where a court is asked to restrain a party f from doing an act pending the decision in a matter before it, but the act has been done, no order to restrain will be made. Reliefs 2 and 3 are targeted at completed acts. They are g therefore refused. The notice of preliminary objection to the plaintiff’s motion on notice for interlocutory injunction succeeds. The motion is therefore dismissed. h The preliminary objection is also targeted at the entire suit in that it is being sought to have it dismissed or struck out. The first issue to be determined in that respect is whether the plaintiff’s action is within the jurisdiction of this Court. In i the case of NDIC v CBN (2002) 7 NWLR (Part 766) 272 the Supreme Court held that for the Court to have jurisdiction to entertain this type of action in view of provisions of section 49(1) of BOFIA, the plaintiff has to show or allege bad faith j in the way the revocation was done and indicate elements

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JSC 328 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) that constitute bad faith. It was further held that for the a plaintiff to show bad faith so that its action could be entertained, it would have to indicate how capricious and illegal the revocation was. This, it was held must be done at the b threshold of the suit being placed before the Court because the Court is to presume that the act complained of was done in good faith. The Court will therefore be deprived of jurisdiction unless bad faith is alleged positively by the plaintiff c in its averments. It would be seen therefore that this Court will only have jurisdiction to entertain this suit if the plaintiff shows in their statement of claim that the first defendant in revoking the d banking licence acted in bad faith because there is presumption of good faith in favour of the Federal Government, the CBN or any officers of the Government or CBN created by section 49(1) of BOFIA. In the instant case, it is averred in e paragraphs 15 and 16 of the statement of claim that the purported revocation of the plaintiff’s banking licence by the first and second defendants was without due process and in contravention of the clear and specific provisions of the f Banks and Other Financial Institutions Act, 1991, notwithstanding that the circumstances of such were non-existent. Other steps are said to be open to the regulatory body to take in the light of the issues being raised by the defendants other than the extreme step of revoking the licence of the Bank, g sealing the Bank and taking over its management. These averments, beside the fact that they do not expressly state the due process that was not followed, they do not also state specifically that the CBN Governor in revoking the licence h acted in bad faith and do not indicate elements that constitute bad faith. I agree that there is no element of bad faith in the revocation of plaintiff’s Banking Licence pleaded in the Statement i of Claim so as to confer jurisdiction on this Court. Rather what the plaintiff has done, as rightly pointed out by the learned SAN for the second and third defendants, is to simply show attempts made by the plaintiff to shore up its j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Mustapha JSC Peak Merchant Bank Ltd v. Central Bank of Nigeria 329 a capital base in line with the directive of the Central Bank of Nigeria. The next issue to be considered is that of abuse of the b Court process. In the case of Saraki v Kotoye (1992) 9 NWLR (Part 264) 156 it was held that one of the common features of an abuse of Court process is the improper use of the judicial process by a party in litigation to interfere with c the due administration of justice. In the instant case it is averred in paragraphs 12 and 13 of the statement of defence of the second and third defendants that a petition to wind-up the plaintiff Bank was presented to this Court on the 3 d March, 2003 and that a copy of the petition pursuant to the order of Mustapha, J in Suit No. FHC/L/CP/221/2002 made on 3 March, 2003 was advertised in both the Daily Times and The Comet on 4 March, 2003 even before the opening of the court registry and filing of this action. I agree with the e learned SAN for the second and third defendants that the filing of this action by the plaintiff on 4 March, 2003 is calculated to frustrate the hearing of the aforesaid petition and due administration of justice. It therefore amounts to an f abuse of the process of this Court. In the final analysis I hold that this action must be struck out and it is hereby struck out for lack of jurisdiction on the part of this Court to entertain it and also for the abuse of the g process of this Court.

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a Nigeria Explosives & Plastic Company Ltd v Nigeria Deposit Insurance Corporation and another b FEDERAL HIGH COURT OF NIGERIA, IBADAN DIVISION YAHAYA J Date of Judgment: 4 FEBRUARY, 2005 Suit No.: FHC/IB/CS/57/98

Banking – Nigeria Deposit Insurance Corporation – Official c liquidator of bank – Liability for indebtedness of bank Practice and procedure – Pleadings – Admission therein – Effect – Declaratory relief – Whether can be granted in default of pleading – Need to lead evidence d Practice and procedure – Unchallenged evidence – Failure of appropriate party to give evidence – Effect

Facts e The plaintiff, a company licensed to import and sell water gel explosives and seismic detonators used for mining, quarrying and petroleum industries had a banker/customer relationship with the second defendant with which the plaintiff f entered into an agreement to partially finance the importation of water gel explosives and detonators. The terms of the agreement were:– g 1. On arrival, the goods would be stored in warehouses at Isolo, Lagos and Asaba Delta State Magazines. 2. The second defendant was to hold the keys to the warehouses. h 3. The second defendant should provide security. 4. The plaintiff was to source for buyers of the explosives and it would inform the second defendant that it has buyers for the goods and the second defendant i would instruct its staff to open the warehouse and thereby supervising the sale. 5. The proceeds should be paid into the plaintiff’s banker’s acceptance account to offset the facilities. j

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Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 331 a When the goods arrived in the Country, the second defendant had arranged for the goods to be moved to Asaka in Enugu and appointed a senior Manager in the bank to b supervise the sale. This was contrary to the agreement. The said Manager appointed by the second defendant sold the goods but defrauded the bank of the proceeds. The plaintiff further gave evidence that it had requested c the sum of N806,000 to be transferred from the Port Har- court Branch of the second defendant to its current account at Marina branch in Lagos but it was not done. The plaintiff claimed against the defendants jointly and d severally as follows:– “a A declaration that plaintiff is entitled to be paid the sum of N44,982,603 being the value of the explosives and detonators. e b An order compelling the defendants to pay to the plaintiff the sum of N44,982,603 being the value of the explosives and detonators. f c Interest on the above sum of N44,982,603 at the rate of 21% per annum since 5 October, 1995 until the date of judgment and 20% until the whole debt is finally liquidated. g d An order compelling the defendants to pay to the plaintiff the sum of N11,024,565 being 25% prospective profit of the book value of the cost of the explosives and detonators. h e A declaration that the first defendant being the official liquidator of the second defendant is under a legal duty pursuant to the Companies and Allied Mat- ters Act and other relevant laws to pay the indebted- i ness of the second defendant to the plaintiff. f An order compelling the defendants to pay to the plaintiff the sum of N806,858.97 being the sum withdrawn for transfer by the second defendant from j the plaintiffs account in Port-Harcourt to its Lagos

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account since 7 October, 1992 but which sum the a first defendant has neglected and/or refused to make available to the plaintiff’s account in Lagos despite repeated demands. b g Interest on the said sum from 7 October, 1992 to the date of judgment at the rate of 21% per annum. h Interest of all sums at the rate of 10% per annum from the date of judgment till final payment.” c The defendants neither filed a defence nor appeared at the trial.

Held – d 1. Where evidence called by a plaintiff in a civil case is neither challenged nor contradicted, the onus of proof on him is discharged on a minimal proof. e 2. An admission in the pleadings is the strongest form of proof since what is admitted requires no further proof. 3. A court does not grant a declaration of right either in default of pleading or by such evidence which must be f credible. In other words, a declaratory relief is never granted based on admission or in default of filing statement of defence, unless the plaintiff adduces evidence in proof of his claim. g In the instant case, it was necessary for the plaintiff to lead evidence since there are declaratory reliefs among the reliefs being sought by the plaintiff in its amended statement of claim. h 4. A principal whether disclosed or not is liable for the fraud of his agent where such fraud is perpetrated whilst the agent is acting within the actual or apparent scope of authority. i In the instant case, the second defendant is liable for the fraud of its agent (Mrs Adighije). 5. The first defendant is an official liquidator of the second defendant and oversees the business of the failed banks. j

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Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 333 a Second defendant is one of such banks and by virtue of section 5(1)(c) and section 26 of the NDIC Act Cap 301 Laws of the Federation of Nigeria, 1990 the first defen- b dant is liable for the indebtedness of the second defendant. Claim granted. c Cases referred to in the ruling Nigerian Abusomwan v Mercantile Bank Ltd (1987) 3 NWLR (Part 60) 196 d ACB Plc v Haston Nigeria Ltd (1997) 8 NWLR (Part 516) 110 ACB Plc v Ndoma-Egba (2000) 10 NWLR (Part 675) 229 e Adeloye v Olona Motors Nigeria Ltd (2002) 8 NWLR (Part 769) 284 Agha v IGP (1997) 10 NWLR (Part 524) 317 Ajero v Ugorji (1999) LRCN 2875 f Federal College of Education v Anyanwu (1997) 4 NWLR (Part 501) 533 Ijebu-Ode Local Government v Balogun and Co. Ltd (1991) g 2 LRCN 289 Olale v Ekwelendu (1989) 4 NWLR (Part 115) 326 Petroleum Training Institute v Uwamu (2001) 5 NWLR (Part 705) 112 h UBN Plc v Emole (2001) 18 NWLR (Part 745) 503 Union Bank of Nigeria Plc v Okoro (2002) 10 NWLR (Part 774) 1 at 20(C) i Usman v Abubakar (2001) 12 NWLR (Part 728) 685

Nigerian statute referred to in the ruling NDIC Act Cap 301 Laws of the Federation of Nigeria, 1990, j sections 5(1)(c) and 26

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Judgment a YAHAYA J: The claims of the plaintiff against the defendants jointly and severally as per its amended statement of claim are as follows:– b a A declaration that plaintiff is entitled to be paid the sum of N44,982,603 being the value of the explosives and detonators. c b An order compelling the defendants to pay to the plaintiff the sum of N44,982,603 being the value of the explosives and detonators. c Interest on the above sum of N44,982,603 at the rate d of 21% per annum since 5 October, 1995 until the date of judgment and 20% until the whole debt is finally liquidated. d An order compelling the defendants to pay to the e plaintiff the sum of N11,024,565 being 25% prospective profit of the book value of the cost of the explosives and detonators. e A declaration that the first defendant being the official f liquidator of the second defendant is under a legal duty pursuant to the Companies and Allied Matters Act and other relevant laws to pay the indebtedness of the second defendant to the plaintiff. g f An order compelling the defendants to pay to the plaintiff the sum of N806,858.97 being the sum withdrawn for transfer by the second defendant from the plaintiffs account in Port-Harcourt to its Lagos ac- h count since 7 October, 1992 but which sum the first defendant has neglected and/or refused to make available to the plaintiff’s account in Lagos despite repeated demands. i g Interest on the said sum from 7 October, 1992 to the date of judgment at the rate of 21% per annum. h Interest of all sums at the rate of 10% per annum from the date of judgment till final payment. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 335 a The plaintiff filed an amended statement of claim. The defendants neither filed a defence nor appeared at the trial. The defendants despite numerous adjournments b granted them to file their defence, did not deem fit to file one. On 29 September, 2002 Mr Adesina Olaniyi, the learned counsel for the defendants orally applied to the court to c withdraw their appearance for the defendants on the ground that the defendants, despite the receipt of the three letters they wrote to them requesting them to come to their chamber to assist them with facts for their defence, had refused to d come. Their oral application to withdraw their legal representation for the defendants was granted. e Fresh hearing notice was issued for service on the defendants. On 13 February, 2004, Mrs O Eniola who appeared for the defendants informed the court that they withdrew their f appearance for the defendants on 29 September, 2003, but they had been briefed again by the defendants, only that they had not perfected their brief. She asked for an adjournment to allow the defendants perfect their brief. g Miss Omage who appeared for the plaintiff opposed the application for adjournment. With some reluctance, the court adjourned at the instance of the defence to 31 March, 2004 for hearing. h On 31 March, 2004, Mrs O Eniola who appeared for the defendants informed the court that the defendants were yet to perfect their brief. They had not even paid their professional fees. She asked for an adjournment. However, in the i event that the court refused her application for adjournment, they would be withdrawing their appearance for the defendants. This application was strongly opposed by the plaintiffs’ counsel Mrs Shahimi. She informed the court that the j only witness they intended to call was in court.

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The application for adjournment was refused by the court a and the plaintiff was allowed to call his only witness who was present in court on that date. Consequently, Mrs O En- iola applied to withdraw her appearance for the defendants. b Her application was granted, and PW1 was invited into the witness box. She is Jadesola Oyetoro Lokulo Sodipe of the Nigerian Explosives and Plastics Company Ltd, Oke-Afa, Isolo, Mushin, Lagos. She is the company secretary of the c plaintiff. She said the plaintiff company is a company licenced by the Federal Government to import and sell water gel explosives and seismic detonators used by mining, quarrying d and petroleum industries. She knows the defendants. The plaintiff and the second defendant have a banker/customer relationship. The first defendant, she said is an institution created by a statute to oversee the business of failing and e failed bank. The second defendant is a commercial bank. PW1 added that the plaintiff and second defendant have a banker/customer relationship. The plaintiff was operating a current account and a banker’s acceptance account at the f second defendant’s Marina branch. The plaintiff also maintained a current account at the second defendant’s Port Har- court branch. She testified to the fact that the plaintiff had a licence to g import water gel explosives and seismic detonators. The plaintiff approached the second defendant to partially finance the importation of the said goods. The second defendant obliged it and the finance was on terms. The second de- h fendant agreed to partially finance the importation of the water gel explosives and detonators at N45 million. The terms are that:– i 1. On arrival, the goods would be stored in warehouses at Isolo, Lagos and Asaba Delta State Magazines. 2. The second defendant was to hold the keys to the warehouses. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 337 a 3. The second defendant should provide security. 4. The plaintiff was to source for buyers of the explosives and it would inform the second defendant that it b has buyers for the goods and the second defendant would instruct its staff to open the warehouse and thereby supervising the sale. c 5. The proceeds should be paid into the plaintiff’s banker’s Acceptance Account to offset the facilities. PW1 further stated that the value of the explosives imported was N45 million and the anticipated profit was set at least d 25% of the book value of the imported goods. She said the second defendant lent N25 million of the N45 million. She could not however remember how much was lent to the plaintiff. It could not be more than N10 million. e PW1 testified to the fact that the conditions for sale and storage were not complied with. Before the plaintiff could source for buyers, the second defendant had arranged for the goods to be moved to Asaka in Enugu and appointed a Sen- f ior Manager by name Mrs Adighije to supervise the sale. Mrs Adighije sold the goods but defrauded the bank (the second defendant) of the proceeds. The witness said, then the plaintiff made a formal complaint to the bank (second g defendant). As a result, an investigating panel was set up to investigate the matter. The second defendant gave all the copies of the report submitted to it by the Bank Audit and Inspection Division to the plaintiff. h The report was in evidence as Exhibit “A”. PW1 further stated that the second defendant obliged the plaintiff with the two queries issued to Mrs Adighije and two memos and a letter written to her. They were in evidence as Exhibits “B- i B4” respectively. The witness went further to state that Mrs Adighije was aware of the investigation and the plaintiff had even written j her a letter. It was in evidence as Exhibit “C”.

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PW1 said, the second defendant informed the first defen- a dant of the activities of Mrs Adighije and it set up a disciplinary committee. The first defendant also reported the matter to Assistant Inspector-General of Police in Lagos. The b committee’s report and the letter of complaint to Lagos were tendered and admitted in evidence as Exhibits “D” and “D1” respectively. The witness further told the court that the findings and c recommendations of the committee were that Mrs Adighije actually defrauded the bank (second defendant) and that she should be dismissed and prosecuted. The dismissal letter and the letter that Mrs Adighije should be prosecuted were in d evidence as Exhibits “E and E” respectively. The witness further testified to the fact that the plaintiff had requested that funds be transferred from the Port- Harcourt branch of the second defendant to its current ac- e count at Marina Branch in Lagos, but it was not done. She said, the money was transferred but never got to Ma- rina Branch. They knew this when they cross-checked the balance at Port-Harcourt branch and the balance on the ac- f count at Marina Branch and discovered that the balance at Marina branch did not reflect the amount transferred. The amount transferred to Marina branch from Port-Harcourt branch, the witness said was a little over N806,858.97k. The g Current Account ledger from the Port-Harcourt branch was in evidence as Exhibit “F”. PW1 added that when the plaintiff discovered that the amount transferred from the Port-Harcourt branch was not h credited to its Account, they made a complaint and the bank promised to look into it. The witness said after some subsequent visits the bank furnished them with some documents ie memo and two Ra- i dio messages. They were in evidence as Exhibits “G-G” respectively. Lastly, the witness said the sum of N806,858.97k has not been credited into the Marina Branch up till now. She urged j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 339 a the court to grant their prayer as contained in their amended statement of claim. With this the plaintiff closed its case. b In his address Mr A Adenipekun, the learned Counsel for the plaintiff told the court that the defendants neither filed a defence nor called any witness. He said, the law is that where the statement of claim is filed and served on the de- c fendants and the defendant fails to put in his defence contradicting the averments contained in the statement of claim or the oral evidence, the court will take the plaintiff’s facts as unchallenged and uncontradicted. It amounts to the admis- d sion of the plaintiff’s claim by the defendant. He referred the court to the case of Usman v Abubakar (2001) 12 NWLR (Part 728) 685 at 707F–G. The learned counsel then formulated three issues for de- e termination in this case:– 1. Whether the plaintiff has proved that it is entitled to the value of the explosives and detonators and the interest accruing there from. f 2. Whether the plaintiff is entitled to the sum of eight hundred and six thousand, eight hundred and fifty- eight Naira (N806,858) being the amount debited from its account by the second defendant. g 3. Whether the first defendant is liable for the indebtedness of the second defendant. On the first issue, the learned counsel submitted that it is en- h titled to the value of the Explosives and Detonators purchased by virtue of the agreement reached between the plaintiff and the second defendant. He referred to the evidence of PW1 and Exhibit “A” and urged the court to hold i that there is a contract between the parties. He further contended that the law is that an agreement between the parties can be inferred from the conduct of the parties, documents exchanged between them or document j emanating from either of the parties. He urged the court to

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J 340 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) construe that by virtue of Exhibit “A”, there is an agreement a between the parties. He referred the court to the case of Pe- troleum Training Institute v Uwamu (2001) 5 NWLR (Part 705) 112 at 122–123F. b He urged the Court to hold that the second defendant breached the terms of the agreement by transferring the goods from the agreed warehouse in Lagos to Asaka in Enugu and secondly to hold that the second defendant c breached the terms of the agreement when one of its senior staff Mrs Adighije misappropriated the proceeds of the sales of the explosives and detonators. He referred to Exhibit “A” page 6 paragraph 4.18 and page 8 where the second defen- d dant admitted that their staff misappropriated the funds. The learned counsel said, there is evidence that she was dismissed for misappropriating the funds. He referred the court to Exhibits “F3–B4” and “C” and the evidence of PW1 e to show that following the report made to the first defendant, the first defendant took steps to report Mrs Adighije. He referred to Exhibits “D and D”, and submitted that a principal whether disclosed or not is liable for the fraud of his agent f where such fraud is perpetrated whilst the agent is acting within his actual or apparent scope of authority. He said, there is evidence that Mrs Adighije is a staff of the second defendant. There is evidence that the second defendant as- g signed her to handle the sale of the detonators. He urged the court to hold the defendants liable in this respect. He relied on the case of African Continental Bank Plc v Ndoma-Egba (2000) 10 NWLR (Part 675) 229 at 239E-H. Also on the h cases of Abusomwan v Mercantile Bank Ltd (1987) 3 NWLR (Part 60) 196 at 219H –A and Union Bank of Nigeria Plc v Okoro (2002) 10 NWLR (Part 774) 1 at 20(C). On the second issue, the learned Counsel submitted that i the plaintiff is entitled to the sum of N806,858.97 being the amount which the plaintiff instructed the second defendant to transfer from its Port-Harcourt account to Lagos account, which never got to plaintiff’s Lagos account even though the j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 341 a plaintiff’s Port Harcourt account was debited. He referred to Exhibits “F” and “G–G” showing that the money did not get to the plaintiff’s Lagos account. b The learned counsel said, this is a banker/customer relationship, equivalent to debt or creditor relationship. A bank which has a customer’s money is under obligation to pay the customer on demand. The learned Counsel submitted that c the second defendant has breached this obligation and is liable in negligence and breach in contract. He referred the court to the cases of Union Bank of Nigeria Plc v Okoro (supra); UBN Plc v Emole (2001) 18 NWLR (Part 745) 503 d at 519–520F–G and ACB Plc v Haston Nigeria Ltd (1997) 8 NWLR (Part 516) 110 at 136. On the third issue, the learned counsel said there is evi- e dence that the second defendant is in liquidation by the first defendant. He referred to the preliminary objection filed by the defendants dated the 12/1/01 and also Exhibit “A”. He submitted that the first defendant is a body created by the f Federal Government to take over the management and control of failed banks and to act as the official receiver and liquidator of any such bank. The second defendant, he said, is one of such banks. He g referred to section 5(1)(c) and section 26 of the NDIC Act Cap 301 Laws of the Federation of Nigeria, 1990. He urged the court to hold that the first defendant is liable for the indebtedness of the second defendant. h He urged the court to grant the claims of the plaintiff. In this case, the defendants neither filed a defence nor appeared at the trials. It is only the plaintiff that called a wit- i ness to prove its case against the defendants. It is settled law that the onus of proof is on the plaintiff and it is discharged where the evidence called by him is un- j contradicted as in this case.

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In Nathaniel O Ajero v Bernard Ugorji (1999) LRCN a 2875 at 2904 it was held by the Supreme Court that:– “Indeed this court has held by a host of judicial cases that where evidence called by a plaintiff in a civil case is neither challenged b nor contradicted, the onus of proof on him is discharged on a minimal proof.” See also the case of Agha v IGP (1997) 10 NWLR (Part 524) 317 and the case of Ijebu-Ode Local Government v Ba- c logun and Co. Ltd (1991) 2 LRCN 289 at 307 where it was held that:– “Where there is evidence to support a claim as here which remains unchallenged or uncontradicted by the other party, the court is d bound to accept the evidence in support of the claim.” In the present case, the defendants neither filed a statement of defence nor appeared at the trial. Therefore they are deemed to have admitted all the averments in the amended e statement of claim. An admission in the pleadings is the strongest form of proof since what is admitted requires no further proof. f In the instant case, the plaintiff led evidence at the trial, but the defendants led no evidence at all. I hold that the defendants have not denied the allegations as contained in those paragraphs of the plaintiff’s amended statement of claim and therefore even without the evidence of the plain- g tiff in respect of those paragraphs, those paragraphs remain proved and established and require no further proof. See Olale v Ekwelendu (1989) 4 NWLR (Part 115) 326 at 329; Federal College of Education v Anyanwu (1997) 4 NWLR h (Part 501) 533 and Usman v Abubakar (supra). However, it is necessary for the plaintiff to lead evidence since there are declaratory reliefs among the reliefs being sought by plaintiff in its amended statement of claim. This is i because a court does not grant a declaration of right either in default of pleading or by such evidence which must be credible. In other words, a declaratory relief is never granted based on admission or in default of filing statement of j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 343 a defence, unless the plaintiff adduces evidence in proof of his claim. See Adeloye v Olona Motors Nigeria Ltd (2002) 8 NWLR (Part 769) 284. b The issues for determination are as formulated by the learned counsel for the plaintiff. For the purpose of clarity I will reproduce the entire averments in the amended statement of claim:– c 1. The plaintiff is a private limited liability company incorporated in Nigeria with its registered office at Oke- Afa, Isolo, Mushin, Lagos state. d 2. The plaintiff is licensed by the Federal Government of Nigeria to import, store and sell water gel explosives and seismic detonators mainly used by mining, quarrying and oil companies in their operations. e 3. The first defendant is a body created under and by virtue of a statute passed by the Federal Government with powers inter alia to take over the management and control of failing banks and generally act as offi- f cial receiver and/or liquidator of any such failing or failed bank. 4. The second defendant is a public limited liability g banking institution with its head office at No. 11 Ikenegbu Layout, Owerri, Imo State and has branches in Lagos, Port Harcourt, Ibadan and other States of the Federation. h 5. The first defendant is the official liquidator of the second defendant. 6. At all times material to the transaction leading to this suit, the plaintiff was a customer of the second defen- i dant at its Marina Lagos Branch at which it maintained a current account and banker’s acceptance account. The plaintiff also maintained at the second defendant’s Port Harcourt branch a current account with j account No. 021034.

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7. The plaintiff avers that sometime in 1991, it was a granted a licence by the Federal Government of Nigeria to import various dimensions of water gel explosives and seismic detonators from the plaintiff’s b overseas suppliers to be supplied on contract to various mining, quarrying and oil companies in Nigeria. 8. The second defendant at the request of the plaintiff undertook to partially finance the importation of the c said goods through the issuance of acceptances to the tune of about N8 million. 9. The plaintiff avers that the terms upon which the second defendant agreed to finance the importation of the d said goods on behalf of the plaintiff include the following: i that on the arrival of the said goods at the Lagos sea port, they shall be stored, as agreed, in ware- e houses situated at Oke-Afa, Isolo, Mushin, Lagos and Asaba, Delta State Magazines; ii that the second defendant shall have full control of f the warehoused goods by keeping the keys to such warehouses in the second defendant’s custody at all times; iii that the second defendant shall provide adequate g security to safeguard the warehoused goods. iv that the plaintiff shall source for buyers of the warehoused goods and such warehoused goods shall be released with the consent and written au- h thority of the second defendant; v that all sale proceeds shall be paid into the plaintiff’s Bankers Acceptances Facility Account domiciled at the second defendant’s Marina i Branch, Lagos until the principal amount advanced to the plaintiff by the second defendant and the interest agreed upon by both parties have been completely liquidated. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 345 a vi that all amounts over the advanced sum plus agreed interest is to be kept in the plaintiff’s account to be released by the second defendant to b the plaintiff as and when requested by the plaintiff. 10. Upon the arrival of the explosives and detonators at the port of discharge, the second defendant took c immediate physical possession of the goods and arranged for their warehousing. 11. The second defendant put the book value of the explosives at N44,982,603 (forty-four million, nine d hundred and eighty-two thousand, six hundred and three Naira) 12. The plaintiff avers and shall contend at the trial that the anticipated profit was at least 25% of the value of e the goods. 13. When the plaintiff was negotiating for prospective buyers, it discovered that the second defendant had f transferred the explosives from the agreed warehouse in Lagos to Asaka in Enugu without the knowledge and or consent of the plaintiff, thereby making it difficult or impracticable for the plaintiff to negotiate the sale of the goods with potential buyers. g 14. The second defendant later assigned one of its senior Managers and Head of Corporate Banking Division, one Mrs Ngozi Bosede Adighije to supervise the stor- h age, handling and sale of the explosives and detonators and pay over the proceeds of sale into the plaintiff’s Acceptances Facility account so as to reduce the plaintiff’s indebtedness to the second defendant. i 15. The second defendant, through its senior Manager appointee, sold the plaintiff’s detonators and explosives and realized several millions of Naira profit. 16. Out of the whopping sum realized from the sale, j the second defendant’s senior Manager/appointee

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defrauded the bank of the sum of N20,053,311.41 be- a ing proceeds from the sales of the plaintiff’s detonators and explosives. 17. The second defendant’s senior Manager appointed to b co-ordinate the sale of the imported explosives and detonators failed to pay the proceeds of sale into the account of the plaintiff as agreed by the plaintiff and the second defendant. c 18. When the plaintiff complained to the second defendant about non-payment of the proceeds of sale of the explosives and detonators to the plaintiff’s ac- d count by second defendant’s senior Manager, Mrs Adighije, investigation was ordered to be carried out on the activities of Mrs Adighije by the second defendant. e 19. Investigation carried out by the second defendant on the activities of the said Mrs Adighije revealed that Mrs Adighije had defrauded the second defendant to the tune of N20,053,311.41 being proceeds of the sale f of the explosives and detonators imported by the plaintiff. 20. When the plaintiff became aware of the averments contained in paragraph 19 above, it mounted pressure g on the second defendant in ensuring that Mrs Adighije pay to its account the proceeds realized from the sale of the imported explosives and detonators. h 21. The second defendant kept the plaintiff informed of all the efforts made in ensuring that Mrs Adighije paid back to the plaintiffs account the money she defrauded the bank on the sale of the imported explosives and detonators and thus second defendant gave i the plaintiff all documents and letters pertaining to the investigation of Mrs Adighije. In this connection, the plaintiff hereby pleads the following documents and letters and Notice is hereby given to the second j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 347 a defendant to produce their originals at the trial of this suit:– i Internal Memorandum of Progress Bank of Nige- b ria Plc dated 6 September, 1995 titled RE: NEPCO TRADE FINANCE; ii Internal Memorandum of Progress Bank of Nige- ria with reference NO. PBN/HO/CI/IR/CBD/95/ c 10 dated 5 October, 1995 titled Report of a Spe- cial Investigation into the Involvement of Mrs NBJ Adighije in handling, storing and sales of PBN’s Plc Explosives and Detonators stored at d Nigeria Coal Corporation’s Magazines, Enugu. iii Memorandum of Progress Bank of Nigeria dated 8 September, 1995 titled: “Query on various is- e sues relating to your involvement in handling, storing and sales of PBN Plc’s Explosives and Detonators at Nigeria Coal Corporations Maga- zines, Enugu and Nepco Magazine, Asaba, Delta State. f iv Letter reference PBN/HO/LD/EC/96/116 dated 19 July, 1996 and titled “Request for assignment of a prosecutor for the prosecution of a staff Mrs NBJ g Adighije by the failed banks tribunal for her involvement in handling, storing and sales of explosives and detonators belonging to a facility customer of the bank (NEPCO) stored at Nigeria h Coal Corporation’s Magazine, Enugu. v Internal Memorandum of Progress Bank of Nige- ria Plc dated 7 September, 1995 titled “Query on Fictitious Expenditures incurred in respect to your i handling of our explosives and detonators with an attachment of a table of expenses occurred by Mrs NBJ Adighije. vi Memorandum of Progress Bank of Nigeria dated j 7 September, 1995 titled “Sales of Explosives and

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Detonators with an attachment of records of a sales”. vii Letter referenced PBN/HO/CI/95/807 dated 1 No- vember, 1995 and titled “Charges preferred b against Mrs NBJ Adighije, former Senior Man- ager – Corporate Banking Department – Lagos, Central Office”. viii Report dated 5 January, 1996 titled “Report on the c proceedings and Recommendations of the Disci- plinary Committee Meeting held on the first day of December, 1995 at the Corporate Planning and Staff Development Classroom, Head Office An- d nex, Amakohia”. ix Report of Progress Bank of Nigeria Plc titled “Report on the Proceedings of the Disciplinary Committee Meeting held on the 1 December, e 1995 at the Training School Classroom Head Of- fice Annex, Amakohia, Involving Mr CU Noku, Mr RC Ukaogo, Mr EA Nwagwu, Mr SI Chukwu and Mrs NBJ Adighije (pages 16–25)”. f x Letter referenced PBN/SA/HO/96/622 dated 14 February, 1996 titled “Summary Dismissal”. 22. The plaintiff avers that the second defendant eventu- g ally dismissed the said Mrs Adighije from its services on 14 February, 1996 in line with the recommendations of a disciplinary committee on account of the said Mrs Adighije’s fraudulent activities in respect of the plaintiff’s explosives and detonators through its h letter dated 14 February, 1996 wherein the second defendant wrote to the said Mrs Adighije as follows amongst others:– “Your actions have exposed the bank to a possible loss i of over N20 million and are likely to bring the bank as a financial institution into disrepute.” 23. Furthermore, the second defendant also informed the plaintiff of the efforts made at ensuring that Mrs j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 349 a Adighije was arraigned before the Failed Bank Tribu- nal by the first defendant for financial malpractices. In this regard plaintiff pleads the following documents b and hereby give Notice to the second defendant to produce the originals at the trial of this suit: a Letter referenced PBN/HO/LD/EC/96/116 dated 19 July, 1996 titled “Request for. Assignment of c a Prosecutor for prosecution of a staff: Mrs NBJ Adighije by Failed Banks Tribunal for her involvement in handling, storing and sale of Ex- plosives and Detonators belonging to a facility d customer of the bank (NEPCO) stored at Nigeria Coal Corporation’s Magazine, Enugu”. b Letter from Nigeria Deposit Insurance Corpora- tion dated 30 December, 1996 titled “Criminal e Complaint against Mrs Adighije – Former Senior Manager, Progress Bank of Nigeria Plc over N13 Million with an attachment dated 2 December, 1996 written to the Assistant Inspector General f of Police ‘D’ Department, Alagbon Close, Ikoyi, Lagos”. 24. Plaintiff avers that in 1997, the first defendant through its Legal Adviser informed the second defendant that g its staff Mrs Adighije was the one that should be prosecuted and not the plaintiff as the second defendant was planning then and which it eventually carried out. Plaintiff shall at the trial of this case rely on h the first defendant’s report titled: Progress Bank of Nigeria Plc v Nigeria Explosive & Plastics Company Ltd dated 24 September, 1997. Notice is hereby given to the second defendant to produce the said report. i 25. On or about 7 October, 1992, the second defendant through its Branch Manager at Port Harcourt, transferred the sum of N806,858.97k from the plaintiff’s account No. 0012034 in the second defendant’s j branch in Port Harcourt to the plaintiff’s Bankers

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acceptances account at Marina Branch in Lagos but a the second defendant negligently and/or fraudulently refused and/or failed to credit the said account with the transfer. b PARTICULARS a The plaintiff’s Current Account ledger and all the relevant documents of transfer indicated that the second defendant debited the plaintiff’s ac- c count with the said sum of N806,858.97k. b The document also indicated that the sum had been transferred to Marina. d c The plaintiff’s account at Marina was never credited with any such payment. The plaintiff hereby pleads: i Current Account Ledger No. 42515. e ii second defendant Memorandum Reference No. PEN/HO/CI/MAR/96/169 dated 11 March, 1996. iii second defendant’s letters dated 13 November, f 1996 and 3 December, 1996. 26. By reason of the above, the second defendant has been denying the plaintiff legitimate interest the money would have been earned and has also g wrongfully been accruing compound interest at the plaintiff’s Bankers’ Acceptance Account at its Marina Branch Office in Lagos which position would have been substantially reversed if the proper entries had h been made. 27. The plaintiff avers that by the agreement between it and the second defendant, the second defendant was to credit its account with all payments made into it in- i clusive of all transfer payment. 28. The plaintiff hereby gives the defendant Notice to produce all letters and documents pertaining to or in any manner relevant to the transaction and the j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 351 a plaintiff hereby also pleads all or any such letters or documents. 29. The plaintiff avers that it is entitled to the full book b value of N44,982,603 given to the explosive and detonators by the second defendant, Progress Bank of Nigeria Plc. 30. The plaintiff also claims 25% prospective profit on c the cost of price N44,982,603 which comes to N11,024,565.75. All these paragraphs were not denied by the defendants and therefore I repeat even without the evidence of the plaintiff d in respect of those averments, those averments remain proved and established and require no further proof, except for declaratory reliefs. e On the first issue for determination, I will first consider whether or not there is a binding contract between the parties. As could be seen from paragraphs 8–11 of the amended f statement of claim above, the evidence-in-chief of PW1 and Exhibit “A” there was an agreement freely entered into by the parties. There is evidence which I believe that the plaintiff is a g company licensed by the Federal Government of Nigeria to import, store and sell water gel explosives and seismic detonators used by mining quarrying and petroleum industries. There is also evidence that the plaintiff and second defen- h dant have a banker/customer relationship. There is evidence which goes to establish that the plaintiff got a licence to import water gel explosives and seismic detonators and it approached the second defendant to partially finance the im- i portation of these goods at N45 million and the second defendant obliged it. The terms of agreement as shown in Ex- hibit “A” and in the evidence of PW1 were that the goods on arrival would be stored in warehouses at Isolo, Lagos and j Asaba, Delta State Magazines.

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The second defendant was to hold the keys to the ware- a houses and should also provide security. The plaintiff was to source for buyers of the Explosives and detonators and it would inform the second defendant b that it has buyers for the goods and the second defendant would instruct its staff to open the warehouse and thereby supervising the sale. The proceeds should be paid into the plaintiff’s bankers c acceptance account to offset the facility. There is evidence that the value of the explosives imported was N45 million and the anticipated profit was set at least 25% of the book value of the imported goods. d In view of the foregoing, I hold that there is a valid and binding contract between the parties and it gave rise to enforceable contract between them. I therefore agree with the e learned Counsel for the plaintiff that there is an agreement between the plaintiff and the second defendant as revealed above. However, was there any breach of the terms of agree- f ment? In deciding a dispute between the parties arising from an allegation of breach of a contract, the court has to give effect to the terms of the contract agreed between the parties. See g PTI v Uwamu (supra). I have been urged by the learned Counsel for the plaintiff to hold that the second defendant had breached the terms of agreement by transferring the goods from agreed warehouse h in Lagos to Asaka in Enugu and secondly one of its senior staff Mrs Adighije misappropriated the proceeds of the sale of the goods. It was part of the agreement that on arrival of the goods, i they would be stored at warehouses situated at Oke Afa, Isolo, Mushin, Lagos and Asaba, Delta State Magazines and that all the proceeds of the sale should be paid into the plaintiff’s Bankers’ Acceptance Account to offset the facility. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 353 a It is obvious as the evidence shows, that the second defendant transferred the goods from agreed warehouse in La- gos to Asaka in Enugu State and appointed Mrs Adighije, a b senior Manager of the second defendant to supervise the sale. Mrs Adighije misappropriated the proceeds of the sale. There is evidence that Mrs Adighije was dismissed in Ex- hibit “E” based on the report of the Internal Investigation c and Disciplinary Committee set up by the second defendant (Exhibit “D”) for misappropriating the proceeds of the sale after having been given queries in Exhibits “3-4” and “C1” and, upon the report made to the first defendant by the sec- d ond defendant the first defendant took steps to report Mrs Adighije to Attorney-General Lagos as shown in Exhibit “D”. The second defendant also in Exhibit “E” directed that she be prosecuted. e It is therefore clear that the second defendant had breached the terms of the agreement validly entered into by the parties and should therefore be held liable for the breach of contract. f There is evidence that Mrs Adighije was at a material time a Senior Manager of the second defendant and was assigned by the second defendant to supervise the storage, handling and sale of explosives and detonators and pay over g the proceeds into the plaintiff’s Bankers Acceptance Ac- count to offset the facility. Mrs Adighije had therefore acted as an agent of a disclosed principal, the second defendant. It is settled law that a principal whether disclosed or not is h liable for the fraud of his agent where such fraud is perpetrated whilst the agent is acting within the actual or apparent scope of authority. See ACB Plc v Ndoma-Egba (supra) cited by the learned Counsel for the plaintiff. i I am satisfied based on the evidence before me that the second defendant is liable for the fraud of its agent (Mrs Adighije). j First issue resolved in favour of the plaintiff.

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On the second issue, it is submitted that the plaintiff is en- a titled to the sum of N806,858.97k being the amount debited from its account by the second defendant. There is undisputed evidence that the plaintiff was a cus- b tomer of the second defendant and it maintained a current account and Bankers Acceptance Account at Marina Lagos Branch of the second defendant and also maintained at the second defendant’s Port Harcourt branch a current Account. c There is evidence that the plaintiff requested that the sum of N806,858.97k be transferred from its Port-Harcourt current account to Lagos current account. Even though the plaintiff’s Port Harcourt current account was debited, the d plaintiff’s Lagos current account was not credited. Exhibit “F” the Current Account Ledger No. 42515 maintained by the plaintiff at the second defendant’s Port Harcourt branch shows that the said account was debited. Exhibit “G” from e Marina Lagos branch of the second defendant shows that there is nowhere where the credit of N806,585.97k was reflected in the plaintiffs account ledger in Marina Branch, even though the transfer was actually effected. The evidence f of PW1 supports Exhibit “G” that even though the money was transferred but it never got to Marina Branch. PW1 said, they know this, when they cross-checked the balance at Port-Harcourt branch and the balance on the account at Ma- rina Branch and discovered that the balance at Marina g branch did not reflect the amount transferred. Exhibits “G1” and “G2” (radio messages) do not confirm that the amount was received at Marina Branch of the second defendant. Paragraphs 25(a)–(c) of the amended statement of claim has h not been challenged or contradicted. The evidence shows that there was a banker/customer relationship between the plaintiff and the second defendant. A bank which has a customer’s money is under obligation to i pay the customer upon demand. Failure of the second defendant’s Port Harcourt branch to effectively transfer the said amount to its Marina Branch as requested by the plaintiff amounted to a breach of the contract. j

[2004 – 2006] 13 N.B.L.R. (PART I) (FEDERAL HIGH COURT, IBADAN DIVISION) Yahaya J Nigeria Explosives & Plastic Co. Ltd v. Nigeria Deposit Ins. Corp. 355 a I resolve this second issue in favour of the plaintiff. As regards the third issue, there is also evidence that the first defendant is an official liquidator of the second defen- b dant and oversees the business of the failed banks. Second defendant is one of such banks and by virtue of section 5(1)(c) and section 26 of the NDIC Act Cap 301 Laws of the Federation of Nigeria, 1990 the first defendant is liable for c the indebtedness of the second defendant and I so hold. Third issue is also resolved in favour of the plaintiff. In view of the foregoing, it is crystal clear that the plaintiff by credible evidence has proved its case on the balance d of probability and judgment is hereby given in its favour in terms of its claims.

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a United Bank for Africa Plc v Akparabong Community Bank (Nig.) Ltd and another b COURT OF APPEAL, CALABAR DIVISION CHUKWUMA-ENEH, THOMAS, OMOKRI JJCA

Date of Judgment: 22 MARCH, 2005 Suit No.: CA/C/79/2001 c Banking – Cheque – “Clearing” – What it denotes Banking – Cheque – When deemed cleared for purpose of payment d Practice and procedure – Joinder – Joinder of bank whose cheque alleged to be forged – Guiding Principles – Order IV Rule 5(1) Federal High Court (Civil Procedure) Rules, 1976 Words and phrases – “Clearing” – Meaning of e

Facts The first respondent Akparabong Community Bank Ltd as a unit bank retains the second respondent, First Bank of Nige- f ria Plc, through their Ikom Branch as her correspondent bank through whom she clears her and her customers’ cheques and also maintains an account with the said branch mainly for those purposes. On 24/3/98 the first respondent’s g customer, Cultural Centre Board (Africance Project) paid in a UBA Plc., Lagos East Branch cheque no. 000291771 for the sum of N9,020,000 (nine million and twenty thousand Naira) into her account No. 00426 held with the first re- h spondent. The first respondent in turn paid the said cheque into her account with the second respondent to enable her give her customer, Cultural Centre Board (Africance Pro- ject), credit. However, the second respondent neither re- i turned the UBA Plc cheque to the first respondent nor credited her account with the value of the cheque. Unhappy with the state of affairs, the first respondent instituted proceedings against the second respondent before j

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United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 357 a the Federal High Court, Calabar, seeking the following reliefs:– (a) The sum of N9,020,000 (nine million and twenty b thousand Naira) being value of UBA Plc., Lagos East Branch cheque No. 000291771 paid by the plaintiff into her account No. 01402000134001 held at the defendants Ikom Branch within jurisdiction of c this Honourable Court. (b) An account of the interest and other earnings accruing on the said sum of N9,020,000 (nine million and twenty thousand Naira) from 24 March, 1998 till d date (sic). (c) N100,000,000 (one hundred million Naira) being general damages for breach of contract. e (d) N50,000,000 (fifty million Naira) being damages for loss of reputation arising from the plaintiffs inability to meet her obligations, consequent upon the defendant’s wrongful conversion of the said sum of f N9,020.000 (nine million and twenty Naira). On the 24/6/98 the first respondent filed a motion on notice praying for:– “An order compelling the defendant/respondent to immediately g credit the plaintiff/appellant’s account No. 01420001340 held at the defendant/respondent’s Ikom Branch within jurisdiction of this honourable court with the sum of N9,020,000.00 (Nine Million and Twenty Thousand Naira) being value of United Bank for Af- rica Plc., Lagos East Branch cheque No. 000291771 paid by the h plaintiff/applicant into her aforesaid account since 24 March, 1998.” Reacting to the proceedings before the trial court, appellant brought a motion on notice praying for:– i “(a) An order granting leave to the applicant to be joined in this matter as an interested party who may be affected by any interlocutory order that may (sic) made and/or the final outcome of the matter. j (b) Or in the alternative to the first prayer above.

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(c) An order restraining the defendant/respondent on crediting a the plaintiff/respondents account No. 0140320001340 held at defendant/respondent’s Ikom Branch with the sum of N9,020,000.00 (Nine Million and Twenty Thousand Naira) or in anyway paying the said sum being the purported value b of a forged/faked cheque of the applicant’s Lagos East- Branchovertotheplaintiff/respondent. And such order or orders as the Honourable Court may deem fit to make in the circumstances of this case.” c By consent of the Counsels the two applications were consolidated for the purposes of hearing them together. After hearing the submissions of the Counsel and considering the affidavits and counter-affidavit the trial Judge refused the d application for joinder on the ground that the appellant is not a necessary party to the suit as constituted. The trial Judge opined that at best the appellant is a necessary witness to the second respondent but definitely not a necessary party to the e suit as constituted because no claim whatsoever is made against the appellant. Dissatisfied with the ruling and order of the lower court, the appellant appealed to this court. f

Held – 1. A trial court can order:– g (a) Persons who may be entitiled to or whom claim some share or interest in the subject matter of the suit; or (b) Persons who may likely to be affected by the result h of the suit. (Iwekav A-G, Federation (1996) 4 NWLR (Part 442) 363 followed) 2. By Order IV Rule 5(1) Federal High Court (Civil Proce- i dure) Rules, 1976, there are four requirements to be joined as a party to the suit. They are:– 1. To a person who may be entitled to some share or interest in dispute in the matter before the court. j

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United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 359 a 2. A person who claims some share of interest in the subject matter before the court or; 3. The person may be likely to be affected by the out- b come or result in the matter before the court. 4. The justice of the case before the court requires joining of the other party. 3. In the instant case, looking at the plaintiff/respondent’s c claims at pages 14–17 of the record, the name of United Bank for Africa Plc, is not made as a party, but the facts remain that the Cheque No. 000291771 was paid by the plaintiff Akparabong Community Bank into her account d No. 0140200012400 at First Bank Plc (defendant) Ikom Branch within the jurisdiction of the Federal High Court, Calabar. Thus despite the pleading or allegation in respect of the cheque of UBA Plc (interested party), the e plaintiff did not want to be joined in the suit. But not only that, the second defendant before this court, had earlier raised in its statement of defence at paragraph 5 stated above that, the defendant is not in a position to return the said cheque which was discovered to be forged f and had not been returned to it by United Bank for Af- rica Plc, who received same at the Central Bank. 4. There was no way in which the defendant First Bank Plc could definitely and properly determine its defence g without joining the intervener. This same applies to the plaintiff Community Bank who was more concerned about crediting its customers money in the sum of N9,020,000. Without joining the interested party, plain- h tiff/respondent would have found it difficult if not impossible to prove his claim. 5. The term “clearing” basically is used to denote the system of collecting payment for cheques paid into banks. i 6. A cheque is said to be cleared when it has been paid by the branch of the bank on which it is drawn, that is to say, the branch of the bank where the account on which the cheque is drawn is domiciled. j Allowing the appeal by majority.

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Cases referred to in the judgment a Nigerian Aale v Olu (2001) 7 NWLR (Part 711) 119 b ACB Plc v Ndoma-Egba (2000) 8 NWLR (Part 669) 389 ACB Plc v Nwaigwe (2001) 1 NWLR (Part 694) 305 Adesanya v The President of Nigeria (1981) 2 NCLR 358 c Afoezioha v Nkokoro (1999) 8 NWLR (Part 615) 393 Akinbola v Plisson Fisko Ltd (1988) 4 NWLR (Part 88) 335 Alfa v Atanda (1993) 5 NWLR (Part 296) 729 Aro v Aro (2000) 3 NWLR (Part 649) 443 d Aromire v Awoyemi (1972) 1 All NLR (Part 1) 101 CAC v Sadika (2002) FWLR (Part 95) 248 Chinweze v Masi (1989) 1 NWLR (Part 97) 254 e Chukujekwu v 0lalere (1992) 2 NWLR (Part 221) 86 Commissioner for Finance v Ukpong (2000) 4 NWLR (Part 653) 363 f Commissioner for Works, Benue State v Devcon Ltd (1988) 3 NWLR (Part 83) 407 Edem v Akainkpa LG (2000) 4 NWLR (Part 651) 70 Edokpolo & Co. Ltd v Sem-Edo Wire Ltd (1989) 4 NWLR g (Part 116) 473 Egbe v Alhaji (1990) 1 NWLR (Part 128) 546 Eholor v Osayande (1992) 6 NWLR (Part 249) 524 h Goji v Ewete (2001) 15 NWLR (Part 736) 273 Green v Green (1987) 3 NWLR (Part 61) 460 Hassan v Atanyi (2002) 8 NWLR (Part 770) 581 i Ibrahim v Barde (1996) 9 NWLR (Part 474) 513 ICON Ltd v FMB Ltd (1995) 6 NWLR (Part 401) 570 Ige v Farinde (1994) 7 NWLR (Part 354) 42 Ishola v Ajiboye (1998) 1 NWLR (Part 532) 71 j

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United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 361 a Iweka v A-G, Fed (1996) 4 NWLR (Part 442) 363 Jadesimi v Okotie-Eboh (1989) 4 NWLR (Part 113) 113 John Holt Ltd v Oputa (1996) 9 NWLR (Part 470) 101 b Kotoye v CBN (1989) 1 N\VLR (Part 98) 419 Kotoye v Saraki (1994) 7 N\VLR (Part 357) 414 Lajumoke v Doherty (1969) 1 NMLR 281 c Madukolu v Nkemdilim (1962) 2 SCNLR 341 Mains Ventures Ltd v Petroplast Ind. Ltd (2000) 4 NWLR (Part 651) 151 d Mudumma v Jambo (2001) 15 NWLR (Part 736) 461 NNB Plc v Udobi (2001) 14 NWLR (Part 732) 1 NUR v NRC (1996) 9 NWLR (Part 473) 490 Nsirim v Nsirim (1990) 3 NWLR (Part 138) 285 e Nwidenyi v Aleke (1996) 4 NWLR (Part 442) 549 Obasuyi v Business Ventures Ltd (2000) 5 NWLR (Part 658) 668 f Obijuru v Anokwuru (2001) 17 NWLR (Part 743) 685 Oforlete v State (2000) 12 NWLR (Part 681) 415 Oghene Ltd v Amoruwa (1986) 3 NWLR (Part 32) 856 g Ogunbiyi v Ishola (1996) 6 NWLR (Part 452) 12 Ogunmade v Fadayiro (1972) 8–9 SC 1 Ojora v Odunsi (1964) NMLR 12 Okene v Orianwo (1998) 9 NWLR (Part 566) 408 h Okoli v Ojiakor (1997) 1 NWLR (Part 479) 48 Olujitan v Oshiatoba (1992) 5 NWLR (Part 241) 326 Olumesan v Ogundepo (1996) 2 NWLR (Part 433) 628 i Ononiwu v RCC Ltd (1995) 7 NWLR (Part 406) 214 Osho v Phillips (1972) 4 SC 259 Otapo v Sunmonu (1987) 2 NWLR (Part 58) 587 j Oyekanmi v NEPA (2000) 15 NWLR (Part 690) 414

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Pharmatek Ind. Ltd v Ojo (1994) 7 NWLR (Part 359) 751 a Re Madaki (1996) 7 NWLR (Part 459) 153 Re Mbamalu (2001) 18 NWLR (Part 744) 143 b Re Mogaji (1986) 1 NWLR (Part 19) 759 Sadiku v A-G, Lagos State (1994) 7 NWLR (Part 355) 235 Shell Ltd v Imani Ltd (2000) 6 NWLR (Part 662) 639 c Sosanya v Onadeko (2000) 11 NWLR (Part 677) 34 UBN Ltd v Adediran (1987) 1 NWLR (Part 47) 52 Ugorji v Onwu (1991) 3 NWLR (Part 178) 177 Ukpo v Adede (2000) 10 NWLR (Part 674) 1 d Uku v Okumagba (1974) 3 SC 35 Uzo v Nnalimo (2000) 11 NWLR (Part 678) 237 Willoughby v IMB Ltd (1987) 1 NWLR (Part 48) 105 e Foreign Accra Ltd v Thamas (1947) 12 WACA 160 C & CB Ltd v Gordon [1903] AC 240 f Gurtner v Circuit (1968) 2 QB 587 Proctor v Cheshire CC (1981) WN 43 Re Vandervell Trust [1969] 3 All ER 496 g Nigerian rules of court referred to in the judgment Court of Appeal Rules, 2002, Order 3 rule 5(1); Order 3 Rule 15(1) h Federal High Court (Civi1 Procedure) Rules, 1976, Order IV rule 5(1) High Court of Anambra State (Civil Procedure) Rules, 1998, Order 3 rule 10 i

Book referred to in the judgment Oxford Advanced Learner’s Dictionary New Edition, page 58 j

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United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 363 a Counsel For the appellant: Azikiwe b For the first respondent: Neji For the second respondent: Ironbar (with him Ene)

Judgment c OMOKRI JCA: (Delivering the lead judgment) This is an interlocutory appeal against the decision of Nwaogwugwu, J, of the Federal High Court, Calabar, delivered on 6 July, 1999, wherein, inter alia, he refused the application of the d appellant, UBA Plc., to be joined as a party to Suit No. FHC/CA/CS/34/98. For ease of reference and avoidance of confusion I shall refer to the interested party/appellant simply as appellant; I shall also refer to the first respondent e simply as first respondent and the defendant/respondent simply as second respondent. The facts of this case on appeal are that the first respondent, Akparabong Community Bank Ltd as a unit bank, re- f tains the second respondent, First Bank of Nigeria Plc, through their Ikom Branch as her correspondent bank through whom she clears her and her customers’ cheques and also maintains an account with the said branch mainly g for those purposes. On 24/3/98 the first respondent’s customer, Cultural Centre Board (Africance Project) paid in a UBA Plc, Lagos East Branch cheque no. 000291771 for the sum of N9,020,000 (nine million and twenty thousand h Naira) into her account no. 00426 held with the first respondent. The first respondent in turn paid the said cheque into her account with the second respondent to enable her give her customer, Cultural Centre Board (Africance Project), i credit. However, the second respondent neither returned the UBA Plc cheque to the first respondent nor credited her account with the value of the cheque. Unhappy with the state of affairs, the first respondent in- j stituted proceedings against the second respondent before

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA 364 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) the Federal High Court, Calabar, seeking the following re- a liefs:– (a) The sum of N9,020,000 (nine million and twenty thousand Naira) being value of UBA Plc, Lagos East b Branch cheque No. 000291771 paid by the plaintiff into her account no. 01402000134001 held at the defendant’s Ikom Branch within jurisdiction of this Honourable Court. c (b) An account of the interest and other earnings accruing on the said sum of N9,020,000 (nine million and twenty thousand Naira) from 24 March, 1998 till date (sic). d (c) N100,000,000 (one hundred million Naira) being general damages for breach of contract. (d) N50,000,000 (fifty million Naira) being damages for loss of reputation arising from the plaintiff’s inability e to meet her obligations, consequent upon the defendant’s wrongful conversion of the said sum of N9,020,000 (nine million and twenty thousand Naira). On 24/6/98 the first respondent filed a motion on notice f praying for:– “An order compelling the defendant/respondent to immediately credit the plaintiff/appellant’s Account No. 01402000134001 held at the defendant/respondent’s Ikom Branch within jurisdiction of this Honourable Court with the sum of N9,020,000.00 (Nine g Million and Twenty Thousand Naira) being value of United Bank for Africa Plc., Lagos East Branch cheque No. 000291771 paid by the plaintiff/applicant into her aforesaid account since 24 March, 1998.” h Reacting to the proceedings before the trial court, appellant brought a motion on notice praying for:– “(a) An order granting leave to the applicant to be joined in this matter as an interested party who may be affected by any in- i terlocutory order that may (sic) made and/or the final outcome of the matter. (b) Or in the alternative to the first prayer above. (c) An order restraining the defendant/respondent on crediting the plaintiff/respondent’s Account No. 01403200013400 j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 365 a held at defendant/respondent’s Ikom Branch with the sum of N9,020,000.00 (Nine Million and Twenty Thousand Naira) or in anyway paying the said sum being the purported value of a forged/faked cheque of the applicant’s Lagos East b Branch over to the plaintiff/respondent. And such order or orders as the Honourable Court may deem fit to make in the circumstances of this case.” By consent of the Counsel the two applications were con- c solidated for the purposes of hearing them together. After hearing the submissions of the Counsel and considering the affidavits and counter-affidavit the trial judge refused the application for joinder on the ground that the appellant is not d a necessary party to the suit as constituted. The trial Judge opined that at best the appellant is a necessary witness to the second respondent but definitely not a necessary party to the suit as constituted because no claim whatsoever is made e against the appellant. Dissatisfied with the ruling and order of the lower court, the appellant appealed to this court initially on four grounds as contained in the notice of appeal. With the leave of this f court the original notice of appeal was amended to include four additional grounds of appeal. The amended notice of appeal was further amended together with the appellant’s brief and reply brief with the leave of this Court on 28/2/03. g From the 8 grounds of appeal filed, the appellant distilled three issues for determination and they are as follows:– “(1) Whether the learned trial Judge misconceived and misapplied the law on joinder of a party to an existing action when he re- h fused to join the interested party/appellant as an interested party to the plaintiff/respondent’s action on the grounds stated in the ruling dated 6th day of July, 1999. (2) Whether on a proper evaluation of the facts and materials i placed before the lower court, the learned trial Judge exercised his discretion judicially and judiciously when he refused to grant the interested party/appellant’s motion on notice dated 24/7/98 and declined to join the interested party/appellant as an interested party to Suit No. FHC/CA/ j CS/34/98.

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(3) Whether the learned trial Judge was right when he ordered a that the defendant/respondent should within 14 days, pay the sum of N9,020,000.00 (Nine Million and Twenty Thousand Naira) into an interest yielding account in Savannah Bank Plc., Calabar Branch in the joint names of the plaintiff/ b respondent and defendant/respondent.” The first respondent brought a notice of intention to rely on preliminary objection pursuant to Order 3 Rule 15 of the Court of Appeal Rules and filed on 26/7/02. The substance c of the preliminary objection is that grounds 6, 7 and 8 of the amended notice of appeal and issue No. 3 of the appellant’s brief are incompetent and cannot be entertained by this court. d The grounds of the said objection are as follows:– “(1) The appellant was not a party to the 1st respondent’s interlocutory motion at the lower court. (2) The appellant can only appeal against the aspect of the ruling e refusing its joinder and not against the aspect touching on the substantive action in which it was not a party. (3) The said grounds of appeal are not related to the issues raised and canvassed by the parties at the lower court.” f The first respondent presented its brief dated 2/9/02 and filed the same day. At page 2 of the brief the first respondent made his submissions in support of the preliminary objection and he also formulated two issues in respect of the sub- g stantive suit as follows:– “(1) Whether on a proper evaluation of the facts and materials placed before the lower court, the learned trial Judge rightly exercised his discretion when he refused to join the appellant h as a party to the action before him. (2) Whether the learned trial Judge was justified in ordering that the amount in dispute be deposited in an interest yielding account in the Savannah Bank of Nig. Plc. in the joint names of Akparabong Community Bank Ltd. and First Bank of i Nigeria Plc.” The second respondent filed its Brief wherein it adopted the issues for determination formulated by the appellant in the appellant’s further amended Brief filed on 28/2/03. The j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 367 a appellant filed an amended reply Brief wherein he submitted that the preliminary objection raised by the first respondent is incompetent. b Where a preliminary objection is raised as to the competence of an appeal, the objection has to be determined first. See Goji v Ewete (2001) 15 NWLR (Part 736) 273 at 280. At this juncture, it behoves me to consider the preliminary c objection raised by the first respondent presently. The substance of the preliminary objection is that grounds 6, 7 and 8 of the amended notice of appeal are incompetent as they touch on and concern the substantive action before d the lower court and in which the appellant was not a party. Learned Counsel for the first respondent submitted that unless and until the appellant was joined as a party to the substantive action it had no locus standi to oppose an appli- e cation in a suit in which it was not a party. In his reply to the first respondent’s preliminary objection, learned Counsel for the appellant, Mr Uzoma Azikiwe submitted that the preliminary objection itself is incompetent, f misconceived, frivolous and belated and should be dismissed. He was of the view that the first respondent has not sought and has not been granted leave to raise this issue which was never raised and argued in the court of first in- g stance, Federal High Court, Calabar. Moreover, a party is not permitted to change his case on appeal. He referred to the cases of Okon Edem v Akamkpa Local Govt (2000) 4 NWLR (Part 651) 70 at 84; Oforlete v The State (2000) 12 h NWLR (Part 681) 415 at 428; Comm. For Finance & Eco- nomic Development and Another v Ukpong and Another (2000) 4 NWLR (Part 653) 363 at 387; Ukpo v Adede and 10 Others; (2000) 10 NWLR (Part 674) 1 at 14 and Uzo and Others v Nnalimo and 4 Others (2000) 11 NWLR (Part 678) i 237 at 252. Mr Azikiwe also submitted that the appellant has a locus standi because he disclosed its interest in the subject matter of the suit in the affidavit sworn to on 24/7/98 and the further and better affidavit sworn to on 6/8/98. He pointed j out that the first respondent waived its right to raise the

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA 368 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) preliminary objection when the application of the first re- a spondent was consolidated and she did not raise any objection to the third alternative prayer in the appellant’s application dated 24/7/98. b Having carefully considered the facts of the appeal and the submissions of Counsel it is apparent that the appellant’s submission that the preliminary objection is incompetent is misconceived and grossly speculative. The argument that the c first respondent has not sought and has not been granted leave to raise the issue which was never raised and argued before the court of first instance is incomprehensible and unwarranted. The preliminary objection is referable to d grounds 6, 7 and 8 of the grounds of appeal which obviously were filed after the ruling of the trial court. So, I cannot therefore see how the first respondent could have raised and argued same before the trial court. That submission is frivo- e lous and it is of no meaning. Raising of a preliminary objection is expressly and specifically provided for in Order 3 Rule 15(1) of the Court of Appeal Rules, 2002, and it is quite distinguishable from rais- f ing fresh issues on appeal. See: Goji v Ewete (supra). In this appeal, the first respondent has not raised any new issue. A preliminary objection is not synonymous with raising a new issue on appeal; therefore the first respondent is not required g to seek leave of this court. This is also glaringly apparent in the provisions of Order 3 Rule 15(1) of the Court of Appeal Rules, 2002. The correct approach where a respondent seeks to raise a preliminary objection to the grounds of appeal is to h give notice of his preliminary objection. See: Madumma v Jambo (2001) 15 NWLR (Part 736) 461 at 472; Nsirim v Nsirim (1990) 3 NWLR (Part 138) 285. The first respondent did not rest on his oars by simply filing the notice of intention to rely on preliminary objection, he has proffered argu- i ments relating to it in its brief and he moved same at the hearing of this appeal as it is required to do. See: Obijuru v Anokwuru (2001) 17 NWLR (Part 743) 685. In my view, the first respondent has complied fully with the provisions of j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 369 a Order 3 Rule 15(1) of the Court of Appeal Rules. I conclude therefore that the preliminary objection is properly before the Court and it is competent. b Now, let us examine the grounds of appeal. Grounds 6, 7 and 8 shown (sic) of their particulars read as follows:– “Ground 6:– The learned trial Judge erred in law when, without trial or c hearing the parties including the interested party/appellant on the matter prejudged the substantive issues for trial, introduced evidence facts and issues not submitted to him for adjudication by the parties based thereon he ordered that the defendant/respondent should within 14 days from the date of d the order, pay the sum of N9,020,000.00 (Nine Million and Twenty Thousand Naira) into an account in the Savannah Bank of Nig. Plc. in the joint names of the parties on record pending the determination of the suit. e Ground 7:– The learned trial Judge erred in law when, without jurisdiction there being no proper application for preservation of the subject matter of the suit, he made an order compelling the defendant/respondent to pay the disputed sum of f N9,020,000.00 into an interest yielding account in Savannah Bank Plc. in the joint names of the plaintiff/respondent and the defendant/respondent. Ground 8:– g The learned trial Judge misdirected himself in law when after finding that the plaintiff/respondent’s application was premature he still proceeded to make an order, without any proper application, compelling the defendant/respondent to pay the h disputed sum into an account in Savannah (sic) Plc. on the ground that:– ‘The court is duty bound to ensure that the subject matter of a suit before it does (sic) not evaporate or pass from hand to hand to the detriment of any party who i may be successful at the end of trial.’ ” It is glaringly clear from the above that the order of the lower court which grounds 6, 7 and 8 of the further amended notice of appeal seek to reverse in no way referred to any act j to be done or carried out by the appellant. I am of the view

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA 370 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) that the submissions of Mr George Neji for the first respon- a dent at page 3 of the first respondent’s brief is sound and correct in law. Unless and until the appellant is joined as a party to the substantive suit, it has no locus to oppose an b application in a suit in which it was not a party except with the leave of the court. Consequently, the appellant cannot maintain an appeal in respect of the order in question. There cannot be an appeal against what had not been decided c against a party. See Ogunbiyi v Ishola (1996) 6 NWLR (Part 452) 12 at 23; Afoezioha v Nwokoro (1999) 8 NWLR (Part 615) 393 and Nwidenyi v Aleke (1996) 4 NWLR (Part 442) 349. Bearing that in mind the appeal of the appellant presently must be limited to the refusal of the lower court to join d it as a party in the substantive suit. Apparently, the confusion of the appellant in appealing against the said order of the lower court must have arisen because of the consolidation of the two motions namely, e motion filed on 25/6/98 by the first respondent and the motion filed on 24/7/98 by the appellant. It is well-settled law that consolidation of Suits is for convenience of the trial. Each Suit retains their separate identity and character and f each must be separately considered on its own merits as evidence in respect of one does not become the evidence in the other. They remain different Suits for all intents and purposes except only for the purposes of the trial. See Okene v g Orianwo (1998) 9 NWLR (Part 566) 408. Viewed from this backdrop, the mere fact that the two motions were consolidated did not give the appellant any locus standi to appeal against the order made by the trial court in respect of the h motion filed by the first respondent against the second respondent. I, therefore, agree with the submissions of Mr Neji that grounds 6, 7 and 8 of the further amended notice of appeal are incompetent. An issue for determination which is based on incompetent grounds of appeal is at large and goes i to no issue. Such issues will be struck out as worthless. This is because it is grounds of appeal that provide the legal basis for any attack made on the judgment or ruling of a trial court. It is the grounds of appeal that give life, meaning and j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 371 a content to the issues raised in the appeal for determination. See: John Holt Ventures Ltd v Oputa (1996) 9 NWLR (Part 470) 101 at 113; Ononiwu v RCC Ltd (1995) 7 NWLR (Part b 406) 214; Sadiku v A-G, Lagos State (1994) 7 NWLR (Part 355) 235 and Egbe v Alhaji (1990) 1 NWLR (Part 128) 546. Accordingly, the preliminary objection of the first respondent is hereby upheld. Grounds 6, 7 and 8 and issue No. 3 to- c gether with the arguments in that behalf are hereby struck out. Having disposed of the preliminary objection, I will now examine the merits or otherwise of the appeal. The issues formulated in this appeal have been set out earlier in this d judgment so I need not repeat myself. It is pertinent at this juncture to pause and reflect on the issues for the determination as set out above. In my view, issues 1 and 2 formulated by the appellant are similar or analogous and ought to have e been condensed into one. Indeed the first respondent formulated only one issue in this respect and it appears to be more concise, succinct and therefore more acceptable and prefer- able. I shall therefore rely on issue 1 formulated by the first f respondent. Now, on a proper evaluation of the facts and materials placed before the lowercourt, did the trial Judge exercise his discretion correctly when he refused to join the appellant as g a party to the action before him? The appellant submitted that having regard to the provisions of Order IV Rule 5(1) of the Federal High Court (Civil Procedure) Rules, 1976, that were operative in 1998 the lower court is empowered to join h all the persons who may be entitled to or will claim some share or interest in the subject matter of the suit. Mr Azikiwe submitted that the provisions of Order IV Rule 5(1) of the Federal High Court clearly stated the requirement for joining a party to a suit. He referred to the cases of Re: Mogaji i (1986) 1 NWLR (Part 19) 759; Ige and Others v Farinde and 6 Others (1994) 7 NWLR (Part 354) 42 and submitted that a person can be joined against the wish of the plaintiff. He submitted also that it is not a condition precedent to the j joinder of an intervener that the plaintiff must have made a

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA 372 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) claim against him or that he must be a party to the contract a between the original parties to the action. In the appellant’s amended reply Brief no new point was canvassed rather it repeated its submissions at pages 6–12 of b the further amended appellant’s Brief. The first respondent in its Brief submitted that the appellant was not envisaged in the contractual relationship between the second respondent (the banker) and the first re- c spondent (the customer). He argued also that the appellant having divested itself of its interest in the subject matter, it is a complete stranger to the suit. He argued that the case before the trial court can be effectually and completely dis- d posed off by the trial court without joining the appellant. He relied on Green v Green (1987) 3 NWLR (Part 61) 480; La- jumoke v Doherty (1969) NMLR 281; Okoli v Ojiakor (1997) 1 NWLR (Part 479) 48. e It is significant to note that the power of joinder is not at large it must be exercised in accordance with the rules of court. A court of law can only grant an application for joinder of parties where the rules of court provide for it. See: Iweka f v A-G, Federation (1996) 4 NWLR (Part 442) 362 at 371. The relevant rule necessary for consideration in this appeal is Order IV Rule 5(1) of the Federal High Court (Civil Procedure) Rules. It is therefore convenient to preface this g aspect of the judgment by considering the relevant portion of the rules. It provides:– “5 (1) If it appears to the court, at or before the hearing of a suit, that all the persons who may be entitled to or who h claim some share or interest in the subject matter of the suit, or who may be likely to be affected by the result, have not been made parties, the Court may adjourn the hearing of the suit to a future day, to be fixed by the court and direct that such persons be made either plain- i tiffs or defendants in the suit as the case may be . . .” Now, the duty of the court is to give effect to words used in a statute where they are plain and unambiguous. See: Ogunmade v Fadayiro (1972) 8–9 SC 1 and NUR v NRC j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 373 a (1996) 9 NWLR (Part 473) 490 at 503. The principle of interpretation is that actual words used in a statute must be interpreted in literal, grammatical or ordinary meaning without b any sentiment, decoration or quibble. A court should not and must not read into any enactment words which are not to be found there. See: Osho v Phillips (1972) 4 SC 259; Ibrahim v Barde (1996) 9 NWLR (Part 474) 513 at 577 where the c Court held that:– “It is a cardinal rule of construction of statute that statues should be construed according to the intention expressed in the statutes themselves.” From the plain and unambiguous words employed in Order d IV Rule 5(1) of the Federal High Court (Civil Procedure) Rules, the only requirement for joining a party to a Suit are:– “(a) Persons who may be entitled to some share or interest in the e subject matter of the suit; or who claim some share or interest in the subject matter or the suit; (b) Persons who may be likely to be affected by the result of the litigation.” f In Iweka v A-G, Federation (1996) 4 NWLR (Part 442) 362, this Court while interpreting the provisions of Order 3 Rule 10 of the High Court (Civil Procedure) Rules, 1998 of Anambra State which is similar to and identical with Order g IV Rule 5(1) of the Federal High Court (Civil Procedure) Rules, 1976 stated clearly that by virtue of the aforesaid rules a Judge can order the joinder of:– “(a) Persons who may be entitled to or who claim some share or h interest in the subject matter of the suit; or (b) Persons who may be likely to be affected by the result of the suit.” The court went further to say that:– i “While under (a) the applicant must prove that he is entitled to some share or interest in the subject matter of the suit; under (b) all he is expected to prove that he is likely to be affected by the result of the suit. The conditions in (a) and (b) are disjunctive. Therefore an application for joinder under the order will succeed if either (a) j and (b) is established.”

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At page 373 of the report, the court said that:– a “Under Order 3 Rule 10 of the High Court of Anambra State, an applicant need not wait until his interest in the subject matter of a suit is affected before applying to be joined. The rule envisages an b anticipatory conduct. The applicant is thus granted some element of speculation.” The ratio of the decision of the Court of Appeal in the above case apply mutatis mutandi to the provisions of Order IV c Rule 5(1) of the Federal High Court (Civil Procedure) Rules, 1976, which is applicable to the case now on appeal. There- fore, the fulfillment of any of the two conditions aforestated is sufficient to persuade the court to join a person as a party d in the suit. The fact that the plaintiff must have a claim against the person applying for joinder is not one of the requirements under Order IV Rule 5(1) of the Federal High Court (Civil e Procedure) Rules, 1976 and neither did it say that there should be a contractual relationship between an intervener and the existing parties for an order of joinder to be made. These are not conditions precedent for an order of joinder f under the aforesaid rules. The learned trial Judge was wrong when he concluded at page77 lines 8–22 that:– “I have carefully examined the plaintiff’s claim, no claim whatsoever is made against the UBA party seeking to be joined. The stand point of the law is that the court does not grant an applica- g tion seeking to join as a co-defendant a party whom the plaintiff(s) do not have any claim against, so it was held by the Supreme Court in the case of Edokpolo v Sem Edo Wire Co. Ltd. (sic) (1989) 4 NWLR (Part 116) 473. See also the Court of Appeal de- h cision in Chief Johnson Olujitan and Another v Deacon JK Osha- toba (1992) 5 NWLR (Part 241) 326 at 329 ratio 6 where Achike, (JCA) as he then was warned that a person should not be joined as a defendant against whom there is no claim by the plaintiff. In the result therefore, the application of UBA to be joined as a co- i defendant in this suit fails and is accordingly refused.” It is important to note that each case must be decided on its own merits depending always on its own peculiar circumstances. Regard must also be had to the rules under which j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 375 a the application is brought. It is unfortunate that from the record of proceedings provided and presented before us in this appeal the learned trial Judge did not consider the clear and b unambiguous provisions of Order IV Rule 5(1) of the aforesaid rules under which the application for joinder was brought. If he had adverted his mind to the rules and be guided by it (sic) he would have known that there is no re- c quirement under that rule that there must be a claim against an applicant for joinder before he could be joined in the suit. A trial court has the duty and responsibility to ensure that the proceedings accorded with the justice of the case by joining either as plaintiffs or defendants all persons who d may be entitled to or who may claim some share or interest in the subject matter of the suit. In Jadesimi v Okotie-Eboh – In Re Lessey (1989) 4 e NWLR (Part 113) 113 at 126, this Court held that:– “when the suit has been filed the trial Judge becomes ‘dominus- litis’ and he assumes the duty and responsibility to ensure that the proceedings agree with the justice of the case by joining either as f plaintiffs or defendants, all the persons who may be entitled to or who claim some share or interest in the subject matter of the suit or who may likely to be affected by the results if they had not already been made parties.” g These words are completely in consonance with the provisions of Order IV Rule 5(1) of the Federal High Court (Civil Procedure) Rules, 1976, which is applicable in this case on appeal. It is incomprehensible that the court below did not consider the rules in its ruling. This is palpable because a h consideration of the application for joinder should begin from a careful perusal of the rules. The courts’ function is to do justice between the parties to a dispute before it and not to administer justice in the abstract. The justice administered i by the court is justice in accordance with the law. The rules of court are made to ensure smooth administration of justice. It is therefore only by the orderly administration of the law and obedience to the rules that legal justice can be attained. j See: Alale v Olu (2001) 7 NWLR (Part 711) 119 at 127;

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Willoughby v International Merchant Bank (Nig.) Ltd (1987) a 1 NWLR (Part 48) 105. Quite apart from the provisions of Order IV Rule 5(1) of the Federal High Court (Civil Procedure) Rules, 1976, there b is a plethora of cases where courts have held that a person can be joined as a defendant against the wishes of a plaintiff whether or not there is a claim against an intervener. In Re: Mogaji (1986) 1 NWLR (Part 19) 759, the Supreme Court c held that:– “A person can be joined as a defendant against the wishes of a plaintiff if:– (a) when the justice of the matter demands that the party has to d be joined before the case can be properly determined; or (b) when the plaintiff’s case or the defendant’s case in the existing action cannot be effectually and completely determined without the joinder.” e It appears all that the trial Judge did was to confine himself to plaintiff’s statement of claim and come to the conclusion that no claim whatsoever is made against the UBA party (appellant) seeking to be joined. He did not consider the f statement of defence filed by the second respondent who is an existing party in the suit and neither did he consider whether the defendant’s (second respondent’s) case in the existing action can or cannot be effectually and completely g determined without the joinder. It is implicit in the decision of the Supreme Court in In Re: Mogaji (supra) that the court is obliged to consider the plaintiff’s case as well as the defendant’s case in the existing action for the purpose of effec- h tually and completely adjudicating upon and settling all the questions in the matter. The Supreme Court in In Re: Mogaji at page 768 went on to say that:– “It seems fairly clear that the keywords are; ‘effectually and com- i pletely to adjudicate upon and settle all the questions’. The aim is to put an end to litigation and not to have as Lord Denning said in Re Vanderville’s Trust: White v Vanderville Trust (1969) 3 All E.R. 496 at 499; two parallel proceedings in which the self-same issue was raised leading to different and inconsistent results.” j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 377 a In Lajumoke’s case cited and heavily relied upon by Mr Neji the Western State Court of Appeal per Eso, JCA (as he then was) pointed out that it was not laying down a rule that a b party can never be joined in any event against the wishes of the plaintiff. This could happen. In that case the plaintiff brought an action for damages against a defendant for negligence. The defendant applied to join the plaintiff’s son as a co-defendant and the application was refused. It would seem c the court drew a distinction between an application for joinder by a plaintiff or an intervener on one hand and on the other hand, an application by a defendant to which neither the plaintiff nor the person to be joined consents. It is in re- d spect of the later that the court particularly frowned. Indeed at page 292, Eso, JCA (as he then was) said:– “From all these decisions considered, it is our view that one principle evolves clearly and that is in the class of cases where joinder e is sought by the defendant against the wishes of the plaintiff and without the consent of the person to be joined, that is, where the joinder is not being sought by an intervener nor is a joinder sought by the plaintiff in the action, the court has always been reluctant to allow the joinder.” f In the present case on appeal the application for joinder was made by the appellant who to all intent and purposes is an intervener and ought to have been joined in the interest of justice and for the purpose of effectually and completely de- g termining all the issues in the substantive matter. In Gurtner v Circuit and Others (1968) 2 QB 587 cited with approval in In Re: Mogaji (supra) the Court of Appeal in England held that where the determination of an action between two par- h ties would directly affect a third person’s legal right or his pecuniary interest, the courts had a discretion, to order the third person to be added to the action on such terms as the court consider desirable so that all matters in dispute could i be “effectually and completely determined and adjudicated upon”. The above decision is in consonance with the, provisions of Order IV Rule 5(1) of the Federal High Court (Civil Pro- j cedure) Rules, 1976.

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It is significant that the ratio of the court in In Re: Mogaji a was cited with approval and re-echoed forcefully in Ige v Farinde (1994) 7 NWLR (Part 354) page 42 at 66 where the Supreme Court held inter alia:– b “A key test for the joinder of an intervener whether as a plaintiff or a defendant is whether he will be directly affected by the judgment of the court in the suit by curtailing or interfering with the enjoyment of his legal rights. This is because the only reason which c makes it necessary to make a person a party to an action is so that he should be bound by the result of the action, and the question to be settled therefore, must be a question in the action which cannot be effectually and completely settled unles she is a party.” d The law is settled that the courts will not generally compel a plaintiff to proceed against a party whom he has no desire to prosecute unless:– “(a) where a very strong case is made out, showing that in the e particular case justice cannot be done and the case cannot be properly determined without the new defendant brought in; or (b) when the plaintiff’s case or the existing defendant’s case f cannot be very effectually and completely determined without the joinder.” See also Aromire v Awoyemi (1972) 1 All NLR (Part 1) 101. In Green v Green (1987) 3 NWLR (Part 61) 480, the Su- g preme Court held inter alia:– “. . . one reason which makes it necessary to make a person a party to an action is so that he should be bound by the result of the action (ratio 9).” h “A person whose interest is involved or is in issue in an action and who knowingly chose to stand by and let others fight his battle for him is equally bound by the result in the same way as if he were a party (ratio 10).” i “Where the determination of an action between two parties would directly affect a third party’s legal rights or his pecuniary interest, the court has a discretion to order the third person to be added as a party (ratio 17).” j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 379 a In Chinweze and Another v Masi and Another (1989) 1 NWLR (Part 97) 254, Oputa, JSC held at pages 266–268 that:– b “If a plaintiff fails to join a necessary party, and it, appears from the proceedings that such person ought to have been joined the trial Judge could suo motu join him. If the court could suo motu join a necessary party, a fortiori, the court has a duty to join him if c he applied to be made a party to enable him defend his interest. In the instant case, since the 2nd defendant (2nd respondent) has a proprietary interest in and over the property in dispute his joinder is unquestionable.” d I must point out that the appellant has clearly and unequivocally shown his pecuniary interest in the sum of N9,020,000 which is the subject matter before the court below, it being undisputed that the cheque in question is its cheque and the e value of it will be debited to its account. I have no hesitation in holding that the appellant is eminently qualified to be joined as a defendant. I am further fortified in my view by the decision of the Supreme Court in Ige v Farinde (supra) where it held inter alia that:– f “Where an applicant seeking to be joined establishes that he has an interest in the subject matter of the action and/or in the eventual result of such action the application for joinder may be granted. Where the determination of an action between the parties would g directly affect a third person’s legal right or his pecuniary interest, the courts have a discretion to order the third person to be added to the action on such terms as the court considers desirable so that all matters in dispute could be effectually and completely determined h and adjudicated upon.” It is also instructive to refer to the dictum of Oputa, JSC in Chinweze and Another v Masi and Another (supra) at page 267 where he said:– i “It will amount to judicial quibbling to refuse to join the 2nd defendant. It is also the policy of the courts to avoid as much as possible a multiplicity of suits. Learned counsel for the appellants submitted that the 2nd defendant should have come by 3rd party j proceedings or file a separate suit for specific performance. The

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simple answer to that submission is that the court has a duty to a prevent the expensive luxury of having two separate suits where it can by joinder settle the whole matter in one action . . .” The first respondent averred in paragraphs 4 and 7 of its b statement of claim as follows:– “4. On 24 March, 1998 the plaintiff’s customer, Cultural Centre Board (Africance Project) paid in United Bank for Africa Plc., Lagos East Branch Cheque No. 000291771 for N9,020,000.00 (Nine Million and Twenty Thousand Naira) c into her Account No. 00426 held with the plaintiff. At the trial the plaintiff shall rely on her copy of the teller evidenc- ing the said payment. 7. Up till date the defendant has neither returned the aforesaid d United Bank for Africa Plc. cheque to the plaintiff nor credited her Account No. 014020013400 inspite of having received value for the cheque.” These averments show clearly and unequivocally that the e cheque indispute belongs to the appellant. In its statement of defence filed on 30/7/98 which appears at pages 24 to 25 of the record of proceedings the second respondent averred that the said cheque no. 000291771 for the f sum of N9,020,000 was forged. The second respondent pleaded in paragraphs 5, 6, 13, 14 and 18 of the statement of defence as follows:– “5. The defendant is not in a position to return the said cheque g which was discovered to be forged and had not been returned to it by United Bank for Africa Plc, who received same at the Central Bank clearing house. 6. Paragraph 8 of the statement of claim is admitted only to the extent that the defendant is in a fiduciary relationship with all h its customers, not only the plaintiff. It is such fiduciary relationship between banks and their customers that has made United Bank for Africa Plc not give value to the forged instrument. i . . . 13. The defendant was not surprised therefore when the cheque was found to be forged. It has not returned to it till date from the clearing house. Letter from United Bank for Africa Plc confirming its forgery dated 3/6/98 is hereby pleaded. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 381 a 14. The defendant states that it is only the United Bank for Af- rica Plc whose cheque it was that can through the clearing house instruct and/or clear the cheque for payment. b . . . 18. United Bank for Africa Plc having written to the defendant that the instrument was forged, the defendant is compelled to believe them. Releasing or giving value therefore will be an c act of recklessness and stupidity.” It is abundantly clear from the averments reproduced above that the cheque in issue belongs to the appellant and the money to be paid will definitely come from its vault or cof- d fers. The second respondent who was sued by the first respondent is merely a convenient conduit pipe for the transaction. All the second respondent did was to accept cheque into its account for onward transmission to the clearing e house for value. Neither the cheque nor the value of it belongs to the second respondent rather they belong to the appellant. It is obvious that if the lower court enters judgment for the first respondent and the second respondent is com- f pelled to give value to the cheque in question without joining the appellant in the suit, it will work an injustice on the appellant who was never heard because in the end result it is its funds that are involved and not that of the second respon- g dent. Certainly such a situation would lead to multiple proceedings between the appellant and the first respondent and possibly the second respondent. This is exactly what the law seeks to prevent. See In Re: Mogaji (supra) and Ige v h Farinde (supra). It is undesirable to have two parallel proceedings on the same issue. Moreover, if the appellant is not joined in the existing suit before the lower court, there is every likelihood that the ap- i pellant may refuse to be bound by any order made by the lower court behind its back touching its funds. This is particularly so in view of the averments of the second respondent in paragraphs 14 and 18 of its statement of defence j where it said that it is only the appellant whose cheque it is

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA 382 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) that can, through the clearing house, instruct and or clear the a said cheque for payment and that the said appellant had already written to second respondent that the cheque was forged and it is compelled to believe it. The second respon- b dent said that in the circumstances releasing or giving value to the forged cheque will be an act of recklessness and stupidity. The above averments make it rather more compelling for the court, in the interest of justice to join the appellant as c a party in the pending suit. See: Ige v Farinde (supra) and Uku v Okumagba (1974) 3 SC 35. In Alfa v Atanda (1993) 5 NWLR (Part 296) 729, this court held at page 740 that:– d “Anyone whose presence is crucial and fundamental to the resolution of a matter before the court must be made a party to the proceedings.” See also Oghene Ltd v Amoruwa (1986) 3 NWLR (Part 32) e 856. Furthermore, a careful perusal of the averments of the second respondent in paragraphs 5, 6, 13, 14 and 18 of the statement of defence reproduced above clearly reveal that f the defence of the second respondent is intricately woven around the appellant. In In Re: Mogaji (supra) and Ige v Farinde (supra) the Supreme Court held that a person sought to be joined as a defendant should have the same in- g terest as the existing defendant. It is undeniable that from the said averments of the second respondent and the facts deposed to in the appellant’s affidavit, further and better affidavit and further further affidavit (which was unchallenged) h at pages 22, 33–38 of the record of proceeding, the appellant and the second respondent have the same or common interest in the substantive suit. Now, the appellant in its main affidavit, further and better i affidavit and further further affidavit, which was unchallenged and uncontroverted, has sufficiently shown that it has pecuniary interest in the subject matter in the substantive suit. It has shown that it will be directly affected by the j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 383 a determination of the substantive suit. It has also shown that not only is it a necessary party to the suit, but that failure to join it will result in the claim before the court not being ef- b fectually and completely determined. In my view the court has jurisdiction to join a person whose presence is necessary for the prescribed purpose of effectually and completely adjudicating upon and settle all questions involved in the cause c or matter before it. The lower court ought to have joined the appellant. In conclusion it is my view that by the clear provisions of Order IV Rule 5(1) of the Federal High Court (Civil Proce- d dure) Rules, 1976, once it appears to the court from its record that all persons who may be entitled to or, who claim some share of interest in the subject matter of the suit or, who may be likely to be affected by the result have not been made parties to the action, it should exercise its discretion in e favour of the joinder and direct that all such persons should be made parties to the action. Having regard to the facts elucidated above, it is my view f the substantive suit cannot effectually and completely be determined without joining the appellant. The learned trial Judge was therefore wrong to have concluded that the Suit before it could be determined without the appellant. g Mr Neji submitted that it made no difference that the transaction relates to a cheque belonging to the appellant’s customer but what is in issue is that value had already been given to the cheque and first respondent’s (plaintiff’s) account with the second respondent (defendant) was not cred- h ited accordingly. In my view it is premature to come to the above conclusion presently. The issue whether the cheque had attracted proceeds or value cannot be determined until evidence is heard in the substantive suit. The second respon- i dent has averred in his statement of defence that the cheque in issue was forged. Until it is determined whether or not the cheque is forged at the hearing in the substantive case value cannot be given to the cheque. So the argument that the door j of the stable was closed after the horse had bolted can only

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA 384 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) have meaning after hearing of witnesses in the substantive a suit. It is clear to me that the issues to be determined are:– (1) Whether or not the cheque is forged; (2) Whether or not the cheque has been cleared; b (3) Whether or not the account of the appellant has been debited by the CBN; and (4) Whether or not the value or proceeds of the cheque c had been paid to the second respondent. A careful perusal of the statement of defence of the second respondent reproduced above clearly revealed that it has not in anyway admitted that the value of the cheque had been d paid to it. Mr Neji for the first respondent referred to paragraph 8 of the further and better affidavit filed by the appellant and submitted that the cheque in question had been cleared and the account of second respondent credited e with the proceeds. Let us examine paragraph 8. It read as follows:– “8. That as the fake cheque was not returned unpaid within the stipulated time owing to the fact that it had got ten missing, it f was assumed, underclearing house procedure that the cheque had cleared and the account of the applicant with the Central Bank of Nigeria was debited in favour of the defendant/ respondent.” g Based on the said paragraph 8, Mr Neji concluded that is evident therefore that the application had lost all rights to be made a party to the suit having divested its interest in the subject matter of the case. With due respect to learned Coun- sel, I cannot subscribe to his views. His submission is based h on a wrong premise and it is misconceived. An assumption is not a fact and it is misleading to rely on an assumption as the basis for a legal submission. The words “assume” and “assumption” are defined clearly at page 58 of Oxford Ad- i vanced Learner’s Dictionary New Edition as:– “(a) Assume:– To think or accept that something is true but without having proof of it. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 385 a (c) Assumption:–

a belief or feeling that something is true or that something will happen, although there is no proof.” b Contrary to the submission of Counsel, the appellant did not admit that the cheque in issue had cleared and its account with the Central Bank of Nigeria debited in favour of the c second respondent. This is clear from paragraph 9 of the same further and better affidavit, which the Counsel cleverly avoided. Paragraph 9 reads:–

“That I know for a fact that the forged/fake cheque could not have d cleared as it was never issued by GOF & Associates who never had up to N500,000.00 (Five Hundred Thousand Naira) in its account with the Lagos East Branch of the applicant.” e From the above it can be seen that the conclusion that the appellant had divested its interest in the subject matter of the case is very far from the truth and it is as mischievous as it is misleading. From the averment of the appellant in paragraph 9 of the further and better affidavit is clear that there is a se- f rious allegation that the cheque in dispute is forged and the cheque could not have cleared as GOF and Associates never had up to N500,000 in its account. This also accords with the second respondent’s averment in paragraphs 5–18 of its g statement of defence. The trial Judge himself at pages 75–79 of the record said:–

“It is not yet certain whether the cheque is forged or not. Whether h or not value ought to be given to the cheque at all, whether by giving value to the cheque the defendant is estopped from raising the issues of any defect on the face of the cheque whether the entire transaction is illegal. All the above are issues that the court will determine at the trial of the substantive suit after taking full i evidence.” I cannot agree more with the trial Judge in this respect. If this is the case how then can it be concluded that the appel- j lant had divested its interest in the subject matter?

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The submissions of Counsel, which the lower court re- a corded at page 66 of the record, read as follows:– “He submitted (sic) assuming but without conceding that UBA has interest in this matter, that (sic) that interest was extinguished by b the time they passed the money to First Bank i.e. from the moment they credited the account of First Bank. That they (UBA) shut the door after the horse must have bolted away. That it is now too late in the day for them to complain. That UBA is merely a busy body who has nothing to do.” c Firstly, if as the trial Judge found it is not yet certain whether the cheque in dispute is forged or not or whether or not value ought to be given to the cheque at all, then one wonders if there was any horse at the stable at all not to talk d of it bolting away. The above issues are very crucial and fundamental to the determination of the substantive suit. Moreover, if the above issues are determined presently in an interlocutory application then the trial court would have de- e termined the main issues in the substantive suit without taking full evidence. Courts have a duty of ensuring that in dealing with interlocutory matters they keep clear and re- frain from commentary on issue that would eventually call f for determination in the substantive suit. See In Re: Mbamalu (2001) 18 NWLR (Part 744) 143 at 162, NNB Plc v Udobi (2001) 14 NWLR (Part 732) 1; ICON Ltd v FBM Ltd (1995) 6 NWLR (Part 401) 370 and Ige v Farinde g (supra). In Kotoye v Saraki (1994) 7 NWLR (Part 357) 414 at 462, the Supreme Court held that:– “In an interlocutory application or appeal, the court must avoid h making any observation in the ruling or judgment which might appear to prejudge the main issues in the proceedings relative to the interlocutory application, and which may have the effect of affecting the merits of the substantive case or remove the substratum thereof.” i Also in Pharmatek Ind Ltd v Ojo (1994) 7 NWLR (Part 359) 751 at 760, this Court held that:– “Judges while making interlocutory rulings must desist from making any finding which may prejudice the substantive case. The j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 387 a grant of all the reliefs sought by the applicant in this case will indi- rectly amount to deciding the main issue in the substantive appeal at the interlocutory stage thereby knocking the bottom out of the substantive appeal.” b Secondly, there is no evidence whatsoever to support the submission of counsel for the first respondent, Mr Neji, that value has been given to the cheque in dispute and that the c amount involved has been paid to the second respondent. Devoid of any evidence, the submission of Counsel is nothing but mere conjecture and speculation. More importantly, the submission of Counsel is not a substitute for evidence. See: Obasuyi v Business Ventures Ltd (2000) 5 NWLR (Part d 658) 668 at 690, where the Supreme Court held inter alia that:– “As far as the facts of any given case are concerned, the address of counsel is supposed to deal only with the evidence before the e court. The mere mention of a matter in the course of such address is never a substitute for the evidence that has not been led, nor can it supplement the in adequacy of the evidence already given at the trial . . .” f In Aro v Aro (2000) 3 NWLR (Part 649) 443 at 457, this court held that:– “The argument of counsel to a party, however brilliant cannot form or be valued as evidence in favour of a party or take the place g of evidence which is lacking in his case.” See also Mains Ventures Ltd v Petroplast Ind Ltd (2000) 4 NWLR (Part 651) 151 at 161; Ishola v Ajiboye (1998) 1 NWLR (Part 532) 71; Chukujekwu v Olalere (1992) 2 h NWLR (Part 221) 86 and Ugorji v Onwu (1991) 4 NWLR (Part 178) 177. In the result I find that the trial court acted without adequate consideration of the provisions of Order IV Rule 5(1) i of the Federal High Court (Civil Procedure) Rules and omitted to take into consideration matters that are relevant, and that led to a wrongful exercise of its discretion. The guiding principle in the exercise of discretion is that the discretion j being judicial must at all times be exercised not only

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Omokri JCA 388 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) judicially but also judiciously. See: ACB Plc v Ndoma-Egba a (2000) 8 NWLR (Part 669) 389; Union Bank of Nig Ltd v Adediran (1987) 1 NWLR (Part 47) 52. There is merit in this appeal and it deserves to succeed. I, therefore, resolve b the only issue for determination in favour of the appellant and a fortiori grounds 1–5 succeed. Accordingly, I will allow the appeal and set aside the ruling of the Federal High Court delivered on 6/7/99 in Suit c No. FHC/CA/CS/34/98. I order that the appellant, United Bank for Africa Plc be and is hereby joined as the second defendant in Suit No. FHC/CA/CS/34/98 pending before the Federal High Court. Costs in the sum of N10,000.00 to the d appellant. Appeal allowed.

THOMAS JCA: I have had the advantage of reading in draft, e the lead judgment just delivered by my learned brother, Jean Omokri, JCA and I entirely agree with his reasoning and conclusion that the appeal has merit. It has to be allowed and I also allow same. f I will however, at the expense of repetition, express my little views as the appeal is an interlocutory appeal against the decision of the Federal High Court, Calabar, delivered on 16 July, 1999 in which the appellant, was refused to be g made an “interested party” to join as a parry to Suit No. FHC/CA/CS/34/98. The interested party had also moved a motion to grant an injunction restraining the First Bank – defendant/respondent from crediting the account of Akpa- h rabong Community Bank Ltd being the plaintiff/respondent at the said First Bank, Ikom Branch in the sum of N9,020,000.00. Before I express my opinion on the relevant issue in the appeal, I state straight away that the appellant’s interested party grounds of appeal number 6, 7 and 8 of the i further amended notice of appeal granted by this court on 19 March, 2003 is incompetent. Therefore, the issue 3 distilled from the said incompetent grounds of appeal is also stale. The reason for this is that the interested party/appellant was j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Thomas JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 389 a not at the material time, a party before the trial court and hence his motion on notice at High Court to be joined as a party to the suit. A party not yet joined by the court, can not, b even on appeal, touch and concern the substantive matter between the disputants. I therefore agree with the preliminary objection made by the first respondent in his intention made in compliance of Order 3 Rule 5(1) Court of Appeal c Rules, 2002. The first respondent’s preliminary objection as predicated on his grounds are that:– “1. The appellant was not a party to the 1st respondent’s interlocutory motion at the lower court. 2. The appellant can only appeal against the aspect of the ruling d refusing its joinder and not against the aspect touching on the substantive action in which it was not a party. 3. The said grounds of appeal are not related to the issues raise and canvassed by the parties at the lowercourt.” e The above basis of first respondent cannot be faulted. More- over, the exercise of the use of the constitutional rights under section 243 of the 1999 Constitution of Nigeria is not a father Christmas. f A person interested in his constitutional right to appeal must comply with the requirement in section 243(a) and (b) as the case may be. In the appeal at hand, the interested party/appellant has not applied to be granted leave to this g court to argue his issue 3 distilled from his grounds 6, 7 and 8. Issue 3 of the interested party/appellant as stated above, being stale is discount enanced. h Now to the remaining issues under consideration in this appeal. There is no doubt that the major reason for the appellant is that the lower trial court refused to join the party to Suit No. FHC/CA/CS/34/98 between the first and second respondents who were the plaintiff and defendant respec- i tively. The appellant’s prayer 1 in his motion on notice at the trial court was as follows:– “An order granting leave to the applicant to be joined in this matter as an interested party who may be affected by any interlocutory j order that may be made and/or the final outcome of the matter.”

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The above prayer was made on the application in respect of a the Federal High Court (Civil Procedure) Rules in Order IV Rule 5(1) which says:– “Order IV Rule 5(1):– b If it appears to the court, at or before the hearing of a suit, that all persons who may be entitled to or who claim some share or interest in the subject matter of the suit, or who may be likely to be affected by the result, have not been made parties, the court may adjourn . . . and direct that such per- c sons be made either plaintiffs or defendants in the suit as the case may be . . .” There is no doubt that the above provisions of the Federal High Court (Civil Procedure) Rules are clear and unambigu- d ous. There are four main requirements in the rule, to wit; requirement to be joined as a party to the suit. They are:– 1. To a person who may be entitled to some share or interest in dispute in the matter before the court; e 2. A person who claims some share of interest in the subject matter before the court or; 3. The person may be likely to be affected by the out- f come or result in the matter before the court; 4. The justice of the case before the court requires joining of the other party. See cases of Iweka v A-G Federation (1996) 4 NWLR (Part g 442) 363. To understand why the interested party/appellant applied to the trial court to be joined as a party, there is need to look at the first respondent’s claim at the Suit he filed as well as h the statement of defence filed by the second respondent at the lower trial court. They read thus:– “In the particulars of claim dated 18 June, 1998 and the statement of claim dated 8 July, 1998 (pages 3 and 14–17 respectively, of the i record). The plaintiff/respondent claimed against the defendant/respondent inter alia, as follows:– 1. The sum of N9,020,000.00 (Nine Million and Twenty Thou- sand Naira) being value of United Bank for Africa Plc., La- gos East Branch cheque No. 000291771 paid by the plaintiff j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Thomas JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 391 a into No. 0140200012400 held at the defendant’s Ikom Branch within the jurisdiction of this Honourable Court. 2. An account of the interest and other earnings accruing on the b said sum of N9,020,000.00 (Nine Million and Twenty Thou- sand Naira) from 24 March, 1998 till date.” The cheque no. 000291771 the value of which is claimed by the plaintiff was allegedly issued by GOF & Associates in c favour of Cultural Centre Board (Africance Project), the purported customers of the plaintiff/respondent. In the statement of defence (pages 24–25 of the record) filed on 30/7/98, the defendant/respondent averred that the d said cheque no. 000291771 for the sum of N9,020,000 was forged. The defendant/respondent pleaded in paragraphs 5, 6, 13, 14 and 18 as follows:– “5. The defendant is not in a position to return the said cheque e which was discovered to be forged and had not been returned to it by United Bank for Africa Plc., who received same at the Central Bank clearing house. 6. Paragraph 8 of the statement of claim is admitted only to the extent that the defendant is in a fiduciary relationship with all f its customers, not only the plaintiff. It is such fiduciary relationship between banks and their customers that has made United Bank for Africa Plc. not give value to the forged instrument. g 13. The defendant was not surprised therefore when the cheque was found to be forged. It has not returned to it till date from the clearing house. Letter from United Bank for Africa Plc. confirming its forgery dated 3/6/98 is hereby pleaded. h 14 The defendant states that it is only the United Bank for Af- rica Plc whose cheque it was that can through the clearing house instruct and/or clear the cheque for payment. 18. United Bank for Africa Plc., having written to the defendant that the instrument was forged, the defendant is compelled to i believe them. Releasing or giving value therefore will be an act of recklessness and stupidity.” Now, looking at the plaintiff/respondent claim at pages 14– 17 of the record, the name of United Bank for Africa Plc, is j not made as a party, but the facts remain that the cheque no.

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000291771 was paid by the plaintiff Akparabong Commu- a nity Bank into her account no. 0140200012400 at First Bank Plc (defendant) Ikom Branch within the jurisdiction of the Federal High Court, Calabar. Thus despite the pleading or b allegation in respect of the cheque of UBA Plc (interested party), the plaintiff did not want to be joined in the Suit. But not only that, the second defendant before this court, had earlier raised in its statement of defence at paragraph 5 c stated above that, the defendant, is not in a position to return the said cheque which was discovered to be forged and had not been returned to it by United Bank for Africa Plc., who received same at the Central Bank. (Italics mine.) d From the above pleadings of the two parties, I am of the view that even the trial court on its own part, could have called on the parties to address it on the necessity to join the United Bank for Africa Plc as a party to the Suit – thus to be an intervener, how much more when the proper intervener e applied to the lower court in accordance with Order IV Rule 5(1) of the lower trial court? It is clear that the trial lower court did not consider the averments of both the plaintiff and defendant party before it. f There was no way in which the defendant First Bank Plc, could definitely and properly determine its defence without joining the intervener. This same applies to the plaintiff Community Bank who was more concerned about crediting g its customers money in the sum of N9,020,000. Without joining the interested party, plaintiff/respondent would have found it difficult if not impossible to prove his claim. In the case of Iweka v A-G, Federation (supra) this Court h applied the provisions of Order 3 Rule 10 of the High Court of Anambra State (Civil Procedure) Rules, 1988 which is identical to the Order IV Rule 5(1) of the Federal High Court (Civil Procedure) Rules, 1976, and stated that a trial i court can order. (a) persons who may be entitled or who claim some share or interest in the same subject matter of the suit; or j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Thomas JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 393 a (b) persons who may be likely to be affected by the results of the suit. The above statement made by this Court in Iweka’s case (su- b pra) did not say that the plaintiff must have a claim for the interested party to be joined before granting the application. It was therefore, very wrong for the trial Judge who at page 77 lines 8–12 wrongly stated:– c “I have carefully examined the plaintiff’s claim, no claim whatsoever is made against the UBA party seeking to be joined. The stand point of the law is that the court does not grant an application seeking to join as a co-defendant a party whom the plaintiffs d do not have any claim against.” The above is not the position of law as erroneously made by the learned trial Judge. The position of the law is that each case must be considered on its peculiar circumstances in its e regard to the applicable rules of court, and in the instant appeal, or even at the trial court, Order IV Rule 5(1) ought to be considered in the application made by the appellant to be joined as a party to the suit. The lower trial court awfully f failed to apply the relevant Order IV Rule 5(1) of his own court and that occasioned a miscarriage on the appellant. I therefore allow the appeal of the appellant. The ruling of g the lower trial in Suit No. FHC/CA/CS/34/98 is set aside, and I order that the appellant UBA Plc is hereby joined as co-defendant in the above suit at the lower court.

CHUKWUMA-ENEH JCA (Dissenting): The appeal is from h the decision of Nwaogwugwu, J of the Federal High Court sitting in Calabar wherefore the interested party/appellant’s application by notice of motion of 24/7/98 to be joined as a party in this suit was refused. The said trial court also re- i fused to grant an order compelling the defendant/second respondent to credit the plaintiff/first respondent’s account with the sum of N9,020,000 at the defendant/respondent’s branch at Ikom. Rather it has, according to the record, how- j ever made an order as regards to the subject matter as herein

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA 394 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) after set out. The trial court has in regard to the said order a declared thus: At page 80 lines 24–28 as follows:– “It is hereby ordered that defendant shall within 14 days of making this order cause to be transferred the said sum of N9,020,000.00 b the subject matter of this suit now in their custody to Savannah Bank Plc., Calabar in an interest yielding account in the joint name of the plaintiff and the defendant such that none of the parties shall have assess to draw on the account pending the hearing and determination of the substantive suit or until the court otherwise c order.” Aggrieved by the decision, the interested party (appellant) has appealed to this Court. In the further amended notice of d appeal it has raised 8 (eight) grounds. Briefs or argument have been filed and exchanged between the parties within the rules of this Court. In the appellant’s brief of argument it has raised 3 (three) issues for determination as follows:– e (a) Whether the learned Judge misconceived and misapplied the law on joinder of a party to an existing action when he refused to join the interested party/ appellant as an interested party to the plaintiff/ f respondent’s action on the grounds stated in the ruling dated 6 July, 1999. (b) Whether on a proper evaluation of the facts and materials placed before the lower court, the learned trial g Judge exercised his discretion judicially and judiciously when he refused to grant the interested party/ appellant’s motion on notice dated 24/7/98 and declined to join the interested party/appellant as an in- h terested party to Suit No. FHC/CA/CS/34/98. (c) Whether the learned trial Judge was right when he ordered that the defendant/respondent should within 14 days, pay the sum of N9,020,000 (nine million i and twenty thousand Naira) into an interest yielding account in Savannah Bank Plc, Calabar Branch in the joint names of the plaintiff/respondent and defendant/respondent. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 395 a The first respondent (Akparabong Community Bank (Nig) Ltd) in its Brief has raised only two issues for determination as follows:– b 1. Whether on a proper evaluation of the facts and materials placed before the lower court, the learned trial Judge rightly exercised his discretion when he refused to join the appellant as a party to the action before c him. 2. Whether the learned trial Judge was justified in ordering that the amount in dispute be deposited in an interest yielding account in the Savannah Bank of Nige- d ria Plc in the joint names of Akparabong Community Bank Ltd and First Bank of Nigeria Plc. The second respondent in its Brief of Argument has adopted the issues for determination as formulated by the appellant. e A brief account of facts of this case, I think, will be most helpful in shedding light on the materials placed before the trial court. I set off by reproducing the reliefs as per the claim of the first respondent (as plaintiff) against the second f respondent (as defendant) before the trial court as follows:– “Wherefore the plaintiff claims against the defendant as follows:– (1) The sum of N9,020,000.00 (Nine Million and Twenty Thou- sand Naira only) being value of United Bank for Africa Plc, g Lagos East Branch cheque No. 000291771 paid by the plaintiff into her account No.0140200012400 held at the defendant’s Ikom Branch within jurisdiction of this Honourable Court. h (2) An account of the interest and other earnings accruing on the said sum of N9.020,000.00 (Nine Million and Twenty Thou- sand Naira) from 24 March, 1998 till date. (3) N100,000,000.00 (One Hundred Million Naira) being general damages for breach of contract. i (4) N50,000.000.00 (Fifty Million Naira) being damages for loss of reputation arising from the plaintiff’s inability to meet her obligations, consequent upon the defendant’s wrongful conversion of the said sum of N9,020,000.00 (Nine Million and j Twenty Thousand Naira).”

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The first respondent (as plaintiff) had filed a notice of mo- a tion on 28/6/98 praying the trial for “an Order compelling defendant/respondent to immediately credit the plaintiff/ applicant’s Account No.014020001240 held a the defendant/ b respondent’s Ikom Branch with the sum of N9,020,000.00 being the value of the UBA Plc, Lagos East Branch Cheque No.000291771 paid in by the plaintiff/appellant into her aforesaid account since 24 March, 1998”. c The appellant meanwhile applied to be joined as an interested party on the ground that it stands to be affected by the aforesaid interlocutory order and/or the final decision in the suit. d By consent of both sides, the two applications have been consolidated to be heard together. The appellant in its Brief has relied on the Provision of Order IV of the Federal High Court (Civil Procedure) Rules, 1976 (in operation in 1998) e to contend that the said rule requires that a person seeking to be joined as a party has to show that he may be entitled to some share or interest in the subject matter of the suit or may be likely to be affected by the result of the litigation f and does not require as contended in the Brief of first respondent to have a claim against the person seeking to be joined as a party and not even where the action is founded on contract as here. And submits that the trial court has erred g for having refused its application for joinder inspite of any interest in the subject matter and has cited a number cases in support including: Re Mogaji (1986) 1 NWLR (Part 19) 759; Benson Akintola Sunmonu Ige and Others v Babajide Akin- wunmi Farinde and Others (1994) 7 NWLR (Part 354) 42, h Lajumoke v Doherty (1969) 1 NMLR 281 to show that an application to join a person as a party is always granted where the justice of the case as here so demands. It also reviewed the averments in their pleadings and the i appellant’s depositions in its affidavit of 24/7/98 and better and further affidavit of 6/8/98 to submit that the sum of N9,020,000 is being held by the second respondent as a stakeholder; and that the question is compounded as the said j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 397 a cheque is “a fake cheque” clearly caught by section 24 of the Bill of Exchange Act Cap 35 Laws of the Federation of Ni- geria, 1990. On the question of being a necessary party, it b relies on Peter Chinweze and Others v Veronica Masi and Others (1989) 1 NWLR (Part 97) 254. The appellant has challenged the propriety of the order of the trial court preserving the res ie the sum of N9,020,000, c more seriously, it has alleged it was made suo motu, and refers to section 33(1) of the 1979 Constitution (now section 36(1) of the 1999 Constitution), Otapo v Sunmonu (1987) 2 NWLR (Part 58) 587 and Olumesan v Ogundepo (1996) 2 d NWLR (Part 443) 628; Rules 1, 2 and 4 of Order xxxiii of the Federal High Court (Civil Procedure) Rules, 1976 and Commissioner of Works, Benue State v Devcon Ltd (1988) 3 NWLR (Part 83) 407 at 420B to support its claim to a fair e hearing vis-à-vis the order made suo motu. Finally, the Court is urged to allow the appeal and set aside the ruling and the orders made by the trial court. The first respondent in its Brief of Argument has taken f a preliminary objection. It has as well put up a spirited response to the appellant’s case in regard to the main appeal and as I stated earlier it formulated two issues for determination. g In the preliminary objection, the first respondent has contended that grounds 6, 7 and 8 of the further amended notice of appeal being incompetent should be struck out. The said grounds of appeal have challenged the order of the trial h court as regards the preservation of the res which directed that the said sum of N9,020,000 be paid into the Savannah Bank Plc, Calabar Branch to abide the result of the pending suit. i The main plank of the objection is that the said grounds of appeal have complained about questions to be settled in the substantive action to which the appellant has not been joined as a party; and that until the appellant is so joined to the suit j it has no locus standi to oppose a prayer pertaining to an

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA 398 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) application in the suit an deo ipso, its appeal against the said a order in the suit before the court. In other words, the appellant has to confine its grounds of appeal to the refusal of its application for joinder no more no less. The Court is, there- b fore urged to strike out the said grounds and issue No. 3 raised therefrom as incompetent. On the facts it is submitted the appellant cannot be a necessary party as it has divested itself on any interest in c the proceeds of the said cheque. And so there are no questions to be settled between it (the appellant) and the first respondent. See: Green v Green (1987) 3 NWLR (Part 61) 480 and Registered Trustees, CAC v Sadika (2000) FWLR (Part d 95) 248, Sosanya v Onadeko (2000) 11 NWLR (Part 677) 34, Hassan v Atanyi (2002) 8 NWLR (Part 770) 581 and ACB Plc v Nwaigwe (2001) 1 NWLR (Part 694) 305. On the second issue, the first respondent has argued that e the parties were given ample opportunity on the question of preservation of the res, as borne out by the record before the trial court ordered the transfer of the res to another bank ie the Savannah Bank Plc. The Court is urged to dismiss the f appeal and uphold the lower court’s decision. The second respondent on its part in this appeal has argued in the same vein as the appellant and urged the Court to order the joinder of the appellant. The second respon- g dent’s appeal in this matter is as comprised in a sister Ap- peal No. CA/C/03/04 deconsolidated from the instant appeal by an order of this Court (not this panel). I have therefore resisted discussing this matter vis-à-vis the second respon- h dent’s said appeal in order not to pre-judge at this stage any matter in controversy in that appeal. Responding to the preliminary objection, the appellant has contended that without leave it is incompetent to raise for i the first time the issue of locus standi for determination: an issue not raised before the trial court. See: Patrick Oforlete v The State (2000) 12 NWLR (Part 681) 415 at 428 D–E, The Hon. Commissioner for Finance & Economic Development j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 399 a and Another v Samson Daniel Ukpong and Another (2002) 4 NWLR (Part 653) 363 at 387F–G, Domnic Uzo and Others v Chukwudi Nnalimo and Others (2000) 11 NWLR (Part 678) b 237 at 252B–E and 254B–C and Abraham Adesanya v The President of the Federal Republic of Nigeria (1981) 2 NCLR 358. It has referred to its affidavits sworn on 24/7/98 and 6/6/98 to assert its interest in the sum of N9,020,000 ie c the res. The appellant also has taken the point that the respondent has waived its rights by not having challenged the appellant’s application before and/or at the hearing of the same before the trial court and so, that it is precluded in this court from challenging the appellant’s locus standi in d the matter. See: Shell Trustees (Nig) Ltd v Inzani & Sons (Nig) Ltd and Alhaji Oyekanmi v National Electric Power Authority (2000) 15 NWLR (Part 690) 414 at 445E- F. The Court is once again urged on dismissing the preliminary ob- e jection to allow the appeal. In the light of the issues vigorously canvassed by the parties here, I have, as it were, gone into some details in tracing f the background to this appeal. I now go on to examine the position of either side based upon the three issues formulated by the appellant and I intend to take all the issues together but not before examining the preliminary objection so as to determine the fate of issue 3 in the context of the g appeal. Coming to the preliminary objection, I think it makes sense to set forth the appellant’s prayers as per its applica- h tion; they are as follows:– “(a) An order granting leave to the appellant to be joined in this matter as an interested party who may be affected by any interlocutory order that may be made and/or the final outcome i of the matter. (b) An order granting leave to the appellant to rely on the affidavit in support of this application in opposing the plaintiff’s application dated the 25th day of June, 1998. j Or in the alternative to the second prayer above

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(c) An order restraining the defendant/respondent from crediting a the plaintiff/respondent’s Account No. 014032000134000 held at the defendant/respondent’s Ikom Branch with the sum of N9,020,000.00 . . . or in any way paying the said sum being the purported value of a forged/fake b cheque of the appellant’s Lagos East Branch over to the plaintiff/respondent.” In the court below, the appellant’s application had to be consolidated with the first respondent’s application praying to c have its account with the second respondent credited immediately with the sum of N9,020,000 even though the appellant was not named as a party in the said application. It is trite that consolidation can only be for the convenience of d hearing the suits as mere consolidation of two or more suits cannot give to the parties to the consolidated suits any rights which ordinarily they could not have in the hearing of either suit. It is settled that each suit retains its individual identity e and character and has to be considered on its merits as the evidence in one suit does not ipso facto become the evidence in the other. See: Nwidenyi v Aleke (1996) 4 NWLR (Part 442) 349, Afoezioha v Nwokoro (1999) 8 NWLR (Part 615) f 393. This principle goes for the instant cases of the consolidated applications in this matter by the trial court. See: Ac- cra Perfumery Co Ltd v Thomas (1947) 12 WACA 160. g The first respondent’s grouse as I understand it, is that the appellant lacks the locus standi in regard to prayers (b) and (c) above unless and until it has been made a party in the substantive suit; a fortiori that the appellant cannot h maintain an appeal in regard to prayers (b) and (c) in its application. It is therefore submitted that in so far as grounds 6, 7 and 8 have complained against the trial court’s order on the preservation of the res made in the suit, they i are therefore incompetent; so also issue three raised from them. In short, the appellant’s complaints in its appeal should be confined to the refusal of its joinder as a party to the action. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 401 a The appellant takes objection to the first respondent’s preliminary “objection” as being incompetent firstly for canvassing a fresh point not raised in the court below with- b out leave first obtained, and also on the contention that the first respondent cannot change its case on appeal and for this it has relied on – Okon Edem v Akamkpa Local Government (2000) 4 NWLR (Part 651) 70 at 80 C–D; Patrick Oforlete v c The State (supra); The Hon. Commissioner for Finance and Economic Development and Another v Samson D. Ukpong and Another (supra); Dr (Senator) Paul Oluoha Ukpo v UNiX Musa Adede and Others (supra) and Dominic Uzo and Others v Chukwudi Nnalimo and Others (supra). d Thirdly, that since the first respondent did not oppose the appellant’s application in the court below on any of several occasions before and/or at the hearing of the said consoli- e dated applications that the first respondent has to be taken as having waived its right to raise the instant preliminary objection. I must say that the whole essence of this objection against grounds 6, 7 and 8 and issue 3 therefrom is to contend the competence of the said grounds and issue; and to f have them struck out if upheld. The implication of the first respondent’s objection appears to me to have been misconceived by the appellant – in that g the right of an appellant to appeal as in this instance cannot be said to be at large; meaning that the right of appeal in every given situation is nonexistent except expressly so given to an appellant by statute. My attention has not been h drawn to any statute or law giving to the appellant, a non- party to this suit at the court below, the right of appeal in this regard against the order preserving the res (in regard to the first respondent application in this matter). However, I am aware of the general provision of section 243 of the 1999 i Constitution as to the exercise of right of appeal from the Federal High Courts and State High Courts in civil matters. How far the provision of the section has impacted on this matter I shall return to in a trice. There can be no doubt that j this question is a fundamental one that transcends beyond

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA 402 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) the root of grounds 6, 7 and 8 albeit issue 3 for determina- a tion in this matter. The first respondent is practically saying and rightly, in my view that the appellant not being a party in the substan- b tive suit cannot exercise any right of appeal against the said order preserving the res. The bottom line of this scenario is that it is only a party to a suit that can competently exercise a right of appeal in a suit. In relation to this matter it is suffi- c cient to contend that until the appellant is joined as a party to the instant suit it cannot exercise any right of appeal as of right or with leave of court. It follows therefore that until its joinder the appellant cannot completely initiate the instant d grounds of appeal and so issue 3 which are completely outside the purview of the trial court’s decision on the appellant’s application for joinder simpliciter. In other words, the appellant has no competence to challenge any questions per- e taining to the order preserving the res which is predicated on the first respondent’s application; notwithstanding the consolidation of the two applications. And as I observed above the consolidation has not conferred on either party to the consolidation any rights either party could not have had as f regards either of the consolidation applications. The instant order of the trial court that the res be paid into the Savannah Bank Plc, Calabar Branch in an interest-yielding account in the joint names of the plaintiff and the respondent such g that none of the parties shall have access to draw on the account pending the hearing and determination of the suit ie to abide the result of the suit, has been made in the substantive suit and is therefore not challengeable by the h appellant – a non party in the suit. Indeed, it (the appellant) has no locus standi to prosecute the said grounds in the matter. Furthermore, from the implication of section 243 (supra) i the appellant cannot be said to come within the ambit of the constitutional standpoint of being an aggrieved party capable of complaining against the instant order for the preservation of the res neither as of right or with leave as the case may j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 403 a be. I must at this stage advert to the provision of section 243 of the 1999 Constitution to expound upon this line of my reasoning above. It provides:– b “243. Any right of appeal to the Court of Appeal from the decisions of the Federal High Court or a High Court conferred by this Constitution shall be:– (a) exercisable in the case of civil proceedings at the instant of a party thereto, or with the leave at the Federal c High Court or the High Court or the Court of Appeal at the instance of any other person having an interest in the matter . .” (Italics mine.) The words of the foregoing provision couldn’t be clearer, d simple and unambiguous and do not require any of the interpretation aids to interpret them. They have to be given their literary meaning. The question to be resolved lies within the compass of whether the instant appellant in the context of e grounds 6, 7 and 8 is “a party thereto”, that it is to say, within the meaning of the said provision a competent appellant to raise the said grounds as regards the first respondent’s application in the suit. The words “a party thereto” f denote none other than a party in the suit from which the appeal lies. The parties thereto in this suit comprise the plaintiff (first respondent) and the defendant (second respondent):– thus they properly constitute the suit. The said words g (ie party thereto) cannot be stretched to include the appellant a non-party to the suit inspite of the consolidation of the two applications. It is beyond argument that the appellant therefore lacks the necessary standing in the suit to challenge the order preserving the res arising from the first respondent’s h application. The appellant not being a party thereto cannot proceed on this appeal as of right as per grounds 6, 7 and 8 against the said order preserving the res. Reverting to the other side of the coin for the appellant to come within the i meaning of “other person having interest in the matter,” as provided under section 243 of the 1999 Constitution it has firstly, to be joined as a party to the suit with leave of either the trial court or this Court; that is to say, before initiating j any steps in the prosecution of his appeal as per grounds 6, 7

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA 404 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) and 8. But the appellant has neither sought nor obtained a leave to appeal against the said order. See in Re: Madaki (1996) 7 NWLR (Part 459) 15. Under section 243 (supra) the appellant is not a party to the suit. b However, I must emphasise that it is settled that the Court will not on an application under this rule set out to decide questions of rights as the instant one. See Proctor v Cheshire CC (1981) WN 43. That notwithstanding, as the facts stand c here this Court cannot pronounce on the propriety or otherwise of having allowed the appellant to move its prayers (b) and (c) of its application before the court below because the first respondent has not appealed the issue. d The basis for raising the instant objection on grounds 6, 7 and 8 and issue 3 is to show that they are otherwise incompetent as there are certain features in regard to the said grounds and issue inhibiting the Court from exercising its e jurisdiction to determine the said issues based on the said grounds of appeal against the said order. That is to say, inso- far as competent parties to give the court necessary jurisdiction to decide the said issue against the said order is con- f cerned they are not before it (the court); the appellant not being “a party thereto” nor “other person having interest in the matter” in this suit with leave of this court obtained under section 243 (supra). See: Re Madaki (supra) and Madu- g kolu and Others v Nkemdilim (1962) 2 SCNLR 341; (1962) 2 NSCC (Vol. 2) 374. It all comes to this conclusion that unless proper parties as regards grounds 6, 7 and 8 and issue 3 therefrom are before h the Court it cannot proceed to adjudication on the said issue in controversy. Be it noted once again that the second respondent has no appeal here. Against the emerging scenarios, the three grounds i upon which the appellant has predicated its response to the preliminary objection become mere academic points and I go on to show so. The question of raising fresh issues on appeal without leave as well as the alleged inconsistency of the j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 405 a first respondent’s case at the lower court and here and the question of waiver pale into oblivion, that is, when the appellant’s case based on its three points is considered along b side the first respondent’s case on its preliminary objection. As can be seen, the first respondent requires no leave to take a point on the incompetence of the grounds of appeal against the said order to preserve the res nor for want of competent c parties to prosecute issue 3, based on grounds 6, 7 and 8 which have attacked the Order to preserve the res in the suit. Parties cannot by acquiescence confer jurisdiction on the Court. This objection can be taken at any stage of the pro- d ceeding even on appeal. See: Eholor v Osayande (1992) 6 NWLR (Part 249) 524; Akinbola v Plisson Fisko (Nig) Ltd (1988) 4 NWLR (Part 88) 335 and Ojora v Odunsi (1964) NMLR 12; (1964) 4 FSC 189. The charge of incompetence here clearly borders on want of jurisdiction in the wider e sense and the appellant as far as it goes is not an aggrieved party as regards the complaints it has laid against the said order preserving the res ie within the context of the definition of “appellant” in Order 1 Rule 2 of the 2002 Rules of f this Court. These points of objection are, therefore, not mere questions of irregularity that can be waived. They are fundamental questions that touch the very root of the compe- tency of the appellant vis-à-vis grounds 6, 7 and 8 against g the said order in the substantive suit. It also shows that the appeal against the order to preserve the res in the suit as per grounds 6, 7 and 8 have not been initiated by due process and thus the appeal based on the said grounds is not properly h constituted. Simply put as regards grounds 6, 7 and 8 and issue 3 there is no competent appellant. The said grounds of appeal are clearly incompetent. Therefore, the plea of waiver following from the above reasoning is untenable. The appel- i lant’s three pronged response to the first respondent’s objection, with respect, fall apart. In conclusion, I see merit in the objection and I uphold it and strike out grounds 6, 7 and 8 as well as issue 3 for determination predicated upon the said j grounds. I make no order as to costs.

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Having struck out grounds 6, 7 and 8 and issue 3, I now a come to the appellant’s appeal in so far it relates to its application for joinder. On the appeal itself, the appellant, has founded the instant application for seeking to be joined as b interested party on Rule 5(1) of Order IV of the Federal High Court (Civil Procedure) Rules, 1976, and it provides as follows:– “5 (1) If it appears to the court, at or before the hearing of a c suit, that all the persons who may be entitled to or who claim some share or interest in the subject matter of the suit, or who may be likely to be affected by the result, have not been made parties, the court may adjourn the hearing of the suit to a future day, to be fixed by the d court, and direct that such persons be made either plaintiffs or defendants in the suit, as the case may be . . . the person so served, whether he has appeared or not, shall be bound by all proceedings in the cause. e Provided that a person so served, and failing to appear within the time limited by the notice for his appearance, may at anytime before judgment in the suit, apply to the court for leave to appear, and such leave may be given f upon such terms (if any) as the court shall think fit.” (Italics mine for emphasis.) I would have thought that the foregoing provision is very clear, unambiguous and in simple language so that its liter- g ary meaning ought to be given effect without much ado particularly so as the provision, has been construed and scruti- nized in a number of cases binding on the court, the local causa celebra in this regard being Ige and Others v Farinde h and Others (supra). That is not to be. The appellant in paragraph 4.08 of its Brief has submitted that by the words used in the said rule, that is to say, and I quote “it appears to the court . . . who may be likely to be affected by the result have not been made parties” (hereinafter referred to as the first i limb of the rule), the court is duty bound to “direct” that such persons should be made parties to the action and that the court cannot “decline” or “refuse” to make the order as the court is enjoined to dispense justice to all manner of j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 407 a persons. The case of Peter Chinweze and Another v Veron- ica Masi and Another (supra) cited by the appellant in my view does not support the construction. The tenor of this b submission is to the effect that the court as the trial court here has no discretion in the matter of joinder of parties who claim interest in the subject matter. The appellant’s submission in this respect cannot stand against formidable judicial pronouncements of the higher courts that have overtime ex- c amined the said provisions for example: Re Mogaji (supra); Ige and Others v Farinde and Others (supra); Peter Chin- weze and Another v Veronica Masi and Another (1989) 1 NWLR (Part 97) 254 to mention but a few. Nor do I buy the d submission as being directed at acknowledging the liberal attitude of court in exercising the discretionary power conferred upon it under the said rule. Furthermore, the appellant has also in the said paragraph e of its brief submitted that by the word “may” used in the clause, “the court may adjourn the hearing of the suit to a future date to be fixed by the court and direct that such person be made either plaintiff or defendant . . .” (hereinafter f referred to as the second limb of the said rule), has to be construed as mandatory. For the proposition, the appellant has relied on the dictum in Nathaniel Kotoye v CBN and Others (1989) 1 NWLR (Part 98) 419 at 464 per Karibi- g Whyte, JSC – wherefore he held thus: “I do not think the word ‘may’ in Rule 5 can be interpreted as precatory. I think it is intended to be mandatory. Thus the application for injunction can only be by motion on notice”. I have read Chin- h weze’s case as well as Kotoye’s case cited here. These cited cases do not apply here. On a serious note, I can find no basis for relying on the above dictum clearly cited out of context by the appellant as there is no analogy both on the facts and circumstances and even on the applicable law between i the cited cases and the case in hand; they are not on all fours, indeed they are miles apart. The cited cases, therefore, have no relevance to the instant case. The appellant has to- tally misapprehended and misapplied the statements of law j as expounded in the above cited cases. In Chinweze’s case

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Rule 5(1) of Order IV of the High Court Rules Cap 61 of the a Laws of Eastern Nigeria, 1963 in pari materia with the instant Rule 5(1) being examined here, the Supreme Court per Uwais, JSC (as he then was) said that it is settled law that a b court as the instant trial court has a discretion by virtue of the said rule to join a party to a suit either as plaintiff or defendant whether on the application of the party or suo motu by the trial court. More particularly, the said dictum as per c Karibi- Whyte, JSC has been relied upon by the appellant for construing the word “may” in the above second limb of the instant Rule 5(1) as mandatory: this shows a total misapprehension of the principles of law contemplated in Ko- d toye’s case and its import as the locus classicus on interim and interlocutory injunctions. The word “may” (always importing a discretion) as construed in Kotoye’s case has been so interpreted (as mandatory) in respect of Rule 5 of Order XX of the Federal High Court (Civil Procedure) Rules, 1976 e – on injunctions, having no bearing nor affinity whatsoever to joinder of parties as here. I see no need or urgency in examining the peculiar circumstances of the construction in the cited cases. Again, this submission shows a total misunder- f standing of the unambiguous intendments of Rule 5(1) of Order 4 (supra). Hence, I reiterate that it is settled law that the power of the Court to make a person a party in a matter as the instant one whether plaintiff or defendant is discre- g tionary and so unless the discretion is premised on wrong principles an appellate court as this Court will be reluctant to interfere with the order. See: Ige and Others v Farinde and Others (supra). The worst that could happen to a suit for h non-joinder of a necessary party is the striking out of the suit but never a dismissal of the suit. The other singular aspect of the appellant’s misapprehension in this regard is as it affects the fiduciary relationship i imputed to the relationship between the first respondent and second respondent: which in the eye of the law tantamounts to agent and principal relationship. This is sequel to the arrangement by which the second respondent has agreed to j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 409 a clear the first respondent’s cheque as first respondent’s banker. Yet again, the appellant at paragraph 5.03 of its brief of b argument has surmised thus:– “. . . one of the issues that should be determined at the trial would be, who as between the interested party/appellant and the plaintiff/respondent on record is actually entitled to the sum of c N9,020,000.00 warehoused with the defendant/respondent i.e. second respondent as stakeholder, since the payee of the cheque had renounced all claims to the cheque.” I hasten to observe that the fundamental difference between d the case of the first respondent vis-à-vis that of the second respondent has been set forth hereinbefore. The second respondent has not averred to be a stakeholder nor can its position in this suit be construed as in tandem with being a e stakeholder in any legal sense of the word and cannot therefore, be in possession of the sum of N9,020,000 in the capacity of a stakeholder. The said sum of N9,020,000 in its hands represents the value of the cheque paid into the first f respondent’s account with the second respondent its banker for clearing. From the facts of the case, it is not the appellant’s case nay either of the parties and no issue has been joined in the pleadings showing that the value of the said g cheque has been deposited with the second respondent to abide the result of any arrangement whatsoever with the instruction of paying over the said money as directed by the appellant as would otherwise be the case if the second respondent were to be a stakeholder, for example, in a simple h betting or wagering contract. The second respondent has not been constituted the appellant’s agent vis-à-vis the value of the cheque in its hands. It, the second respondent, therefore does not stand as either an agent or stakeholder in the strict i legal sense of the term to the appellant. Without making any definitive findings as regards this question, apart from the duty to be honest and diligent which the agent owes to his principal it is settled that an agent is estopped from asserting j that a third party has a better right than his principal to

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA 410 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) receive moneys he received for his principal as a result of a his agency. One other fundamental misapprehension in the appellant’s argument here having crucial bearing on this case is the im- b plication of having cleared the said cheque paid into the first respondent’s account with the second respondent who has averred in paragraph 5 of the statement of defence that the appellant received the said cheque at the Central Bank c Clearing House. The term “clearing” basically is used to denote the system of collecting payment for cheques paid into banks. A cheque is said to be cleared when it has been paid by the branch of the bank on which it is drawn, that is to d say, the branch of the bank where the account on which the cheque is drawn is domiciled. That is precisely what transpired in this matter; it is common ground to both sides to the applications that the second respondent is still in pos- e session of the res ,ie the sum of N9,020,000; notwithstanding the said order for the amount to be paid into Savannah Bank Plc now in liquidation. In this matter, the second respondent has collected the f proceeds of the cheque on behalf of the first respondent, a non-clearing bank, to all intents and purposes, as a mere agent and it holds the proceeds at the disposal of the first respondent as its principal. See: Capital & Countries Bank Ltd g v Gordon [1903] AC 240. And so I agree with the first respondent in that wise (sic) that the logical conclusion is that the appellant has divested itself of all its interests in the res ie the proceeds of the cheque. h I have copiously set out above the position of the parties in this matter. Be it noted that the situation where competent parties are not before the court it affects the jurisdiction of the court to entertain the action. This is in contradiction to i the situation here where the Court is grappling with the application of a person seeking to be joined in an action as a necessary party. The former touches on jurisdiction of the court, which is not the case with the latter. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 411 a Already, I have dealt with the purport of the said Rule ie 5(1) and its application thereof and I observe that the appellant’s reasoning appears to me utterly askew and so at the b root of its apparent misapprehension of the said rule and its application. Central to this matter is the question of whether the trial court’s refusal to join the appellant to the action accords with the justice of the matter albeit upon its particular c facts. Putting it the other way round whether the interest of justice is better served by joining the appellant to the action. This cannot be done in vacuo, as can be seen, the cited cases relied upon by the appellant in espousing its stance in this d matter are not only apt as expounding the principles in regard to joinder of parties, they have also shown the wide powers of the court to join a person either as plaintiff or defendant in a proceeding subject to the rider of being a necessary party. In my judgment as postulated in Sosanya v e Onadeko (supra); Hassan v Atanyi (supra) what makes a person a necessary party does not depend on his having a relevant or vital evidence to give on some vital questions in the case as that makes him a necessary witness; nor that the f existing parties cannot proffer relevant argument to advance their interest. In the instant matter whether the appellant is a relevant witness is for the parties and the trial court to decide at the full scale hearing of the matter; it is not an issue g here. In exercising its discretion, the Court has always been mindful not to impose as it were, a defendant on an unwill- ing plaintiff, for it compounds the case further. However, the courts have always joined a person where his presence is h necessary as a party for the determination of the action. As regards the appellant I have not found it (as did the trial court) a necessary party here. To join the appellant to the suit will on the peculiar facts of this matter create i cumbersomeness in deciding the claims of the plaintiff/first respondent. I now go to decide as to whether the appellant is a necessary party deserving to be joined in the action for it to be j properly determined. It is my view that the answer to the

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA 412 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) above poser lies in scrutinizing the four reliefs claimed a against the second respondent as defendant to see whether the four reliefs or even any of them cannot properly be determined without the joinder of the appellant, as an inter- b ested party in the action. To this end, I have examined the averments in the parties’ pleadings as well as the depositions in the appellant’s affidavits in support of its application for joinder on the backdrop of the four reliefs claimed by the c first respondent (as plaintiff) against the second respondent (as defendant) and I see no question that cannot completely and effectively be settled unless and until the appellant is joined as a party in the action. d In parenthesis, the first respondent’s (ieplaintiff) claim consists of: 1. Recovery of N9,020,000.00 being the proceeds of the cheque which the second respondent in breach of con- e tract has not credited to the first respondent’s account authorized. 2. Account of the interest etc. accruing on the said sum of N9,020,000.00 with the second respondent. f 3. N100,000,000.00 damages for breach of contract and 4. N50,000,000.00 damages for loss of reputation etc. I examine these reliefs in some details as follows:– g In regard to the four reliefs above, the first respondent asserts the relationship of banker and its customer relationship between it and second respondent. It is also its contention h that the sum of N9,020,000 is now in the possession of the second respondent being proceeds of the cheque it paid into its account with the second respondent; that the appellant has divested itself of any interest in the proceeds of the said first respondent’s cheque is beyond question as the sum of i N9,020,000 is now in hands of the second respondent who has failed to credit the first respondent with the said N9,020,000 hence the relief for recovery of the said amount as an agent must pass on all moneys received under the j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA United Bank for Africa Plc v. Akparabong Com. Bank (Nig.) Ltd 413 a agency to its principal ie the first respondent. The first respondent contends that having sued in contract and the appellant being a stranger to that transaction cannot be a nec- b essary party in the suit for the recovery of the said proceeds of N9,020,000 with the second respondent (there is no privity of contract between the first respondent and the appellant) nor is the appellant an accounting party for any interest c and other moneys accruing thereon on the said amount. On the facts of this matter there is no way the appellant could be liable in damages for breach of contract nor even more so for damages for loss of reputation arising from the conversion of the said amount by the second respondent. There is d no relief on the claim to be resolved between the appellant and the first respondent.

The foregoing stance taken by the first respondent here e cannot be faulted. This action is founded in contract between the first and second respondents to exclusion of the appellant. The action is otherwise properly constituted and I see no reason to hold to the contrary. Therefore, I see that justice f would be better served by not joining the appellant. See: La- jumoke v Doherty (supra). The presence of the appellant is not essential for determination of the suit; in my judgment the appellant has not made out a case for me to hold other- g wise even moreso when the first respondent has not made claims against the appellant and where as here, the claims are founded in contract; a stranger to it should not be joined unless on a very strong case which I have held has not been established here. See: Edokpolo and Co Ltd v Sem-Edo Wire h Ltd (1989) 4 NWLR (Part 116) 473; (1984) NSCC (Vol. 15) 553 and Chief Johnson Olujitan and Another v Deacon JK Oshatoba (1992) 5 NWLR (Part 241) 326 at 329 per Achike, JCA (as he then was). The two cited cases make the point i that a person should not be joined as a defendant against whom there is no claim by the plaintiff. I have shown above in this case that the plaintiff has no claim whatsoever against the appellant and I find that the appellant has no interest or j share in the subject matter to be protected, if joined as a

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, CALABAR DIVISION) Chukwuma-Eneh JCA 414 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) party the joinder will complicate the determination of the a suit. The court below rightly in my view refused the application. I also refuse it. In conclusion, therefore, the appeal is unmeritorious. I b dismiss it and affirm the decision of the court below. The suit is remitted to the court below for continuation of hearing. The sum of N10,000 is awarded to the first respondent against the appellant as costs. c

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Alhaji Muktari Uba & Sons Ltd v. Lion Bank of Nigeria 415 a Alhaji Muktari Uba & Sons Ltd and another v Lion Bank of Nigeria b COURT OF APPEAL, KADUNA DIVISION JEGA, ALAGOA, KEKERE-EKUN JJCA Date of Judgment: 22 APRIL, 2005 Suit No.: CA/K/265/02 c Banking – Overdraft – Grant of – Documents required for proof of grant Banking – Transactions between bank and customer to be strictly documented d Facts The case of the respondent at the lower court was that it granted the appellant overdraft facility of N100,000 on 31 e December, 1988. To justify its case being placed on the undefended list, the respondent exhibited a letter from the first appellant dated 31 December, 1988 which is an application for overdraft facility of N100,000. On the right hand side of f the application for overdraft facility, there is a handwritten inscription which states as follows:– “Godiya The M/D has already gave a verbal approval pls process. (sic) g Signed 12/1/89.” Apart from the application for overdraft facility of N100,000 with the handwritten inscription of the MD signifying ap- h proval, there was nothing before the lower court to show what actually transpired between the parties. There was no letter of offer of the overdraft facility of N100,000 from the respondent to the appellants stating the terms of the offer in- i cluding the interest rate chargeable and the period of repayment. There was nothing exhibited before the lower court to show that the appellants particularly the first appe1lant, that it has withdrawn the amount indicated in the application for j overdraft facility. Also there was no statement of account of

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416 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) the first appellant with the respondent exhibited showing the a payments made from the date the facility was alleged to have been granted and the balance outstanding against the first appellant at the time of filing this Suit at the lower b court. In fact, from the facts of this case and the totality of the documentary exhibits attached in support of the case, there was nothing whatsoever to show that the respondent advanced an overdraft facility of N100,000 to the appellants. c The handwritten inscription on the application for overdraft facilities of N100,000 by the appellants to the respondent signifying verbal approval by the MD could not by any stretch of imagination be read to mean the grant of the facility applied. d The case in the lower court was placed on the undefended list and judgment given against the appellant/defendant, who appealed the decision. e

Held –

In modern banking, transactions are strictly documented and f terms of the transactions are explicitly stated. With regard to grant of overdraft facility, there must be a letter of offer stating the terms of the facility granted ie the interest rate, the duration of payment and the security for payment and there g must be acceptance by the applicant accepting the terms as contained in the offer. In the instant appeal, nothing has been placed before the lower court to show that the appellants have accepted the offer of overdraft facilities of N100,000 from the respondent. Since there is nothing on re- h cord to show that the overdraft facility of N100,000 had been offered to the appellants, equally there is nothing on record to show that the appellants have accepted the said offer, the issue of liquidated money demand does not arise at i all. Therefore, the respondent’s claim is not a liquidated sum.

Appeal allowed. j

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Alhaji Muktari Uba & Sons Ltd v. Lion Bank of Nigeria 417 a Case referred to in the judgment Nigerian Iron Products Ltd v Sentinel Assurance Co Ltd (1992) 4 b NWLR (Part 238) 734 Books referred to in the judgment Black’s Law Dictionary page 240 c Black’s Law Dictionary (7ed) by Bvana Garner pages 240, 410 and 941. Counsel d For the appellants: Abdulkadir For the respondent: Nwabuzor (Miss) Judgment e JEGA, JCA: (Delivering the lead judgment) By a writ of summons filed at the lower court on 12 June, 2001 which writ of summons was subsequently placed on the undefended list, the plaintiff/respondent claimed thus:– f “The sum of N193,917.57 (One Hundred and Ninety Three Thou- sand, Nine Hundred and Seventeen Naira, Fifty Seven Kobo) being the outstanding debit balance of loans granted to the appellants/defendants which the appellants/defendants have refused to pay despite repeated demands to do so. The respondent/plaintiff g also claim 21% interest on the said sum from the 18 March, 1999 till the day of judgment, and thereafter 10% court interest until the debt is fully liquidated.” On 27 July, 2002 after the learned trial Judge refused to h grant the notice of intention to defend, he entered, judgment for the respondent/plaintiff in the sum of N193,917.57 being the balance of overdraft facility granted to the appellants/ defendants since 1988 plus 21% interest as from 1999 until i the day of judgment. Thereafter at 10% court interest. Dissatisfied with the judgment, the appellants appealed to this court vide their notice of appeal dated 18 September, 2002 filed on the same date. The said notice of appeal con- j tained three grounds of appeal.

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We took the appeal on 25 January, 2005. In accordance a with the rules of this court, learned Counsel for the appellants adopted his Brief of Argument which was dated and filed on 24 September, 2002, he urged us to allow the ap- b peal. In the same vain, learned Ccounsel to the respondent adopted her Brief of Argument which was dated 2 March, 2004 and filed on the 5 October, 2004. Counsel urged us to dismiss the appeal and affirm the judgment of the lower c court. From the notice of appeal predicated on three grounds of appeal, learned Counsel to the appellants formulated two issues for determination. d The issues are stated thus:– “1. Whether the respondent’s claim is a liquidated sum? 2. Whether the trial court can draw inference on disputed facts.” The learned Counsel to the respondent on his part adopts the e first issue for determination formulated by the appellants and formulated one issue as follows:– “Whether the plaintiff/respondent is entitled to judgment given the circumstances of the case.” f The issues formulated by the appellants and ones formulated by the respondent are one and the same. In fact the respondent adopted the first issue for determination formulated by appellants and his second issue for determination is same g with that of the appellant but couched in different words. Accordingly, for the purpose of this appeal, the issues as formulated by the appellant would serve in the treatment of this appeal. h Issue No. 1 whether the respondent’s claim is a liquidated sum? Learned Counsel for the appellants in his submissions as contained in the Brief of Argument contains that (sic) the learned trial Judge on page 6 of the record was more con- i cerned about analyzing what the applicant need to establish was that his claim is in respect of a liquidated sum of money and the respondent taking all things into consideration has no defense whatsoever to the claim, that the lower court j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA Alhaji Muktari Uba & Sons Ltd v. Lion Bank of Nigeria 419 a went ahead to agree that the claim as presented was for a liquidated sum of money notwithstanding the failure and refusal of the respondent to attach the statement of account of b the first appellant and the instrument used in drawing the account. Further, the lower court dwelled into the notice of intention to defend and was of the view that the repayments alleged by the appellant must be in respect of the N100,000 c requested for on 31/12/88 and not the alleged N10,000. Learned Counsel referred to Order 23 Rule 1 of the Kano State High Court (Civil Procedure) Rules, 1988 under which the respondent’s writ of summons on the undefended list d was predicated and submits that the said Order 23 Rule 1 deals squarely on a claim to recover a debt or liquidated money demand. Learned Counsel contends that the fact that a claimant presented his claim as a claim to recover a debt or e liquidated money demand on the undefended list as envisaged by Order 23 Rule 1 of the Kano State High Court (Civil Procedure) Rules, 1988 does not ipso facto make such a claim liquidated. Counsel further argued that the fact that the lower court agreed that the claim of the respondent as f presented was a liquidated sum without much ado must be looked at taking into consideration the provisions of Order 23 Rule 1 of the Kano State High Court (Civil Procedure) Rules, 1988. That for the respondent’s claim to pass the test g of being called a liquidated sum of money, it must be shown that the amount claimed is fixed or has been agreed upon between the parties herein which was not the case before the lower court. Furthermore, the respondent’s claim must also h have been shown to be capable of ascertainment by mathematical computation or by operation of the law to warrant same to be called a liquidated money demand. Learned counsel for the appellant contends that the re- i spondent did not place anything before the lower court ie the statement of account and the instrument used to overdraw the account to show the amount claimed as being fixed or an amount that has been agreed upon by parties and very im- j portantly that the amount, the subject matter of the suit is

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA 420 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) capable of ascertainment by mathematical computation or by a operation of the law. Further, Counsel for the ii’(sic) appellants argues that Exhibits “A1”, “A2”, “B” and “C” attached to the respondent’s affidavit in support of their writ of sum- b mons at the lower court does not establish on their faces a prima facie evidence of indebtedness same not being an agreement between the parties herein that is capable of being ascertained by mathematical computation or operation of the c law. Learned Counsel submits that the burden of proof under sections 136 and 137 of Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990 has not been discharged to entitle the respondent to judgment on the undefended list, reference made to Iron Products Ltd v Sentinel Assurance Co. d Ltd (1992) 4 NWLR (Part 238) 734 at 739 Holding No. 5; Black’s Law Dictionary (7ed) by Bvana Garner pages 240, 410 and 941. e Further, Counsel argues that the learned trial Judge when considering the respondent’s claim did not advert his mind to the requirement of what a liquidated sum should be and by so doing entered judgment against the appellants. Finally, counsel urged us to resolve the first issue in their favour and f hold that taking the surrounding circumstances of the respondent’s claim into consideration, the learned trial Judge was wrong in entering judgment for the respondent. g In her reply to the issue No.1, learned Counsel to the respondent contends that under Order 23 Rule 1 of the High Court of Kano State (Civil Procedure) Rules, a claim for debt or liquidated money demand has been maintained h against the appellants. Learned Counsel to the respondent submits that the amount claimed from the appellants was a fixed amount with interest as a result of the facility of N100,000 granted the appellants as a result of their request to the respondent through their letter dated 31/12/88 to i which they attached the letter of grant belonging to Alhaji Muktari Uba as shown on pages 21–22 of the record of proceedings compiled by the appellants. Further, counsel to the respondent submits that Exhibits “A1”, “A2”, “B” and “C” j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA Alhaji Muktari Uba & Sons Ltd v. Lion Bank of Nigeria 421 a from pages 14–15 tell the story of how the appellants got the facility. Exhibit “A2” shows that a verbal approval was given as minuted on the letter and the facility was processed b on 12/1/89 as contained on page 21 of the record of proceedings. Exhibit “C” is the letter of demand from Messrs Kayode Olatunji & Co. that was written in 1994 when the total outstanding balance stood at N66,244.39 and the appellants/responded by their Exhibit “C” letter in September, c 1996 as shown on page 31 of the record of proceedings compiled by the appellants. That by Exhibit “B” and Exhibit “C” the appellants/respondents had that the appellant is only trying to hide under Exhibit “A” attached to their defense so d as not to pay and that Exhibit “A” is a different transaction entirely. Issue No. 1 is whether the respondent’s claim is a liquidated sum. Black’s Law Dictionary at page 240 defines what e a liquidated claim is. It states thus:– “A claim for an amount previously agreed on by the rites or that can be precisely determined by operation law or by the terms of the parties agreement.” f The term liquidated claim is defined by this Court in the case of Iron Products Ltd v SAC Ltd (supra) at page 745 paragraphs A- G. This Court states as follows:– “A liquidated claim or demand may be defined as a claim or de- g mand in which the amount is fixed, or has been agreed upon or is capable of ascertainment by mathematical computation or operation of law.” Order 23 Rule 1 of the High Court of Kano State (Civil Pro- h cedure) Rules, 1988 provides for the procedure to be followed in respect of liquidated money demand. It states thus:– “Order 23 Rule 1: Whenever an application is made to a court for i the issue of a writ of summons in respect of a claim to recover a debt or liquidated money demand and such an application is supported by an affidavit setting forth the grounds upon which the claim is based and stating that in the j deponent’s belief there is no defence thereto,

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the court shall, if satisfied that there are good a grounds for believing that there is no defence there to, enter the suit for hearing in what shall be called the ‘undefended list’and mark the writ of summons accordingly, and enter b thereon a date for hearing suitable to the circumstances of the particular case.” In the appeal at hand, the claim of the respondent as endorsed on the writ of summons is for the sum of c N193,917.57 (one hundred and ninety-three thousand, nine hundred and seventeen Naira, fifty seven Kobo). The respondent also claims 21% interest on the said sum as from the 18 March, 1999 to the date of judgment and thereafter d 10% court interest rate until the debt is fully liquidated. The case of the respondent at the lower court was that it granted the appellant overdraft facility of N100,000 on the 31 December, 1988 to justify its case being placed on the e undefended list, the respondent exhibited a letter from the first appellant dated 31 December, 1988 which is an application for overdraft facility of N100,000. On the right hand side of the application for overdraft facility, there is a hand- f written inscription which states as follows:– “Godiya The M/D has already gave a verbal approval pls process. (sic) g Signed 12/1/89.” Apart from the application for overdraft facility of N100,000 h with the handwritten inscription of the MD signifying approval, there is nothing before the lower court to show what actually transpired between the parties. There is no letter of offer of the overdraft facility of N100,000 from the respondent to the appellants stating the terms of the offer including i the interest rate chargeable and the period of repayment. There is nothing exhibited before the lower court to show that the appellants’ particularly the first appellant, that it has withdrawn the amount indicated in the application for over j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA Alhaji Muktari Uba & Sons Ltd v. Lion Bank of Nigeria 423 a draft facility. Also there is no statement of account of the first appellant with the respondent exhibited showing the payments made from the date the facility was alleged to b have been granted and the balance outstanding against the first appellant at the time of filing this suit at the lower court. In fact, from the facts of this case and the totality of the documentary exhibits attached in support of the case, there is no- c thing whatsoever to show that the respondent has advanced an overdraft facility of N100,000 to the appellants. The handwritten inscription on the application for overdraft facility of N100,000 by the appellants to the respondent signifying verbal approval by the MD cannot by any stretch of imagi- d nation be termed to mean the grant of the facility applied. In modern banking, transactions are strictly documented and terms of the transactions are explicitly stated. With re- e gard to grant of over draft facility, there must be a letter of offer stating the terms of the facility granted ie the interest rate, the duration of payment and the security for payment and there must be acceptance by the applicant accepting the terms as contained in the offer. In the instant appeal, nothing f has been placed before the lower court to show that the appellants have accepted the offer of overdraft facility of N100,000 from the respondent. Since there is nothing on record to show that the overdraft facility of N100,000 had g been offered to the appellants, equally there is nothing on record to show that the appellants have accepted the said offer, the issue of liquidated money demand does not arise at all. Therefore, the respondents claim is not a liquidated sum. h Accordingly, issue No.1 is resolved in favour of the appellants against the respondent. Issue No. 2 is centered squarely around issue No. 1 ie it stands or falls with issue No. 1. Since I have made a definite i finding that the claim of the respondent is not a liquidated money demand, then issue No. 2 becomes purely academic because there would be no facts to rely or infer from to decide the dispute between the parties. It is therefore abso- j lutely needless to give any consideration to issue No. 2.

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On the totality of the foregoing, I hold that the appeal suc- a ceeds and it is hereby allowed. The judgment of Yusuf, J in Suit No. K/384/2001 delivered on 27 September, 2002 is hereby set aside and in its place an order is made by this b honorable Court transferring this matter Suit No. K/384/2001 to the general cause list for a full trial on the pleadings. This Suit is remitted back to Kano State High Court to be assigned by the honourable Chief Judge to a c Judge other than Yusuf, J. The appellants are entitled to costs which I assess at N5,000.

ALAGOA JCA: I have had the advantage of reading before now the judgment of my learned brother Abubakar Abdul- d kadir Jega, JCA just delivered and I am in agreement with him that the appeal succeeds and should be allowed. I also allow it. Accordingly, the judgment of Yusuf, J in Suit No. K/1384/2001 delivered on the 27 September, 2002 is hereby e set aside, it is ordered that the said Suit No. K/384/2001 be transferred to the general cause list for hearing. The suit is therefore remitted back to the Kano State High Court Chief Judge for assignment to another Judge for hearing and f determination. I abide by the order on costs contained in the lead judgment.

KEKERE-EKUN, JCA: I have had the privilege of reading g before now a draft of the lead judgment just delivered by my learned brother Abubakar Jega, JCA He has comprehen- sively dealt with all the issues in this appeal. I have nothing more to add. I entirely agree with him that the appeal ought to be allowed, I abide by the consequential orders made in h the lead judgment. Appeal allowed.

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City Express Bank Ltd v. Trade and Financial Services 425 a City Express Bank Ltd v Trade and Financial Services b COURT OF APPEAL, LAGOS DIVISION SALAMI, AKAAHS, OGUNBIYI JJCA

Date of Judgment: 5 MAY, 2005 Suit No.: CA/L/75/2000 c Banking – Combination of accounts – When bank is entitled – Exception Banking – Right of set off – When does it arise d Facts The plaintiff, a foreign company had an agreement with Napex Nigeria Ltd fo..r the importation and supply of goods e – electric light bulbs, granulated sugar and tuna fish. The goods were to be imported into the country by the plaintiff with all sums of money due thereafter paid into the plaintiff’s accounts with the defendant bank. The defendant for f the purpose of these transactions agreed to take custody of the goods upon their arrival, but as it had no warehousing facilities of its own, an agreement was made between the plaintiff, defendant and Carnco Foods Ltd for the commodi- g ties to be kept at the warehouse of Carnco Foods Ltd. The agreements for importation of the goods were contained in Exhibits “F”, “F1” and “F2” which were duly entered into by the plaintiff, defendant and Napex Nigeria Ltd. Exhibits h “F”, “F1” and “F2” were respectively for electric lightbulbs, the tuna fish and the granulated sugar. The warehouse agreement is contained in Exhibit “G”. Under these agreements, the defendant acted as plaintiff’s i agent by warehousing the goods on arrival in Nigeria, releasing quantities to Napex Nigeria Ltd and received payments for the items released which funds were paid directly into plaintiff’s accounts which were established for purposes j of the transactions.

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The plaintiff to facilitate the execution of the contract a gave a power of attorney, Exhibit “D”, to one Mr Jean Pier- rot Damiani, a Lebanese national. There were three accounts opened in the plaintiff’s name with the defendant by the b plaintiff’s attorney. The three accounts which were always on credit were accounts numbers 1004549, 1003917 and 1004530. The defendant was entitled and received management fee for acting on behalf of the plaintiff. c On 31 December, 1991, the defendant debited the plaintiff’s account no. 1004530 with the sum of N2,025,716.77 which it alleged was a set off against an account number 1004174 belonging to Tecnicana Nigeria Ltd, a Nigerian d company. The plaintiff demanded for the reversal of the debit account but the defendant maintained that it had a right to so debit the account on the ground that Tecnicana Nigeria Ltd borrowed money from I B Finance Ltd considered to be e defendant’s agents. The basis for defendant taking this posture was that plaintiff’s attorney, Jean Pierrot Damiani sourced and obtained on behalf of the plaintiff, the loan for Tecnicana Nigeria Ltd to execute a Ministry of Defence contract. f The plaintiff was not agreeable with the defendant’s posture hence it took out a writ of summons from the High Court of Lagos State. Pleadings were settled and after hear- g ing witnesses called by both sides, as well as listening to their learned Counsel, the learned trial Judge in a reserved and considered judgment found in favour of the plaintiff. The defendant was unhappy with the decision and being thoroughly dissatisfied, appealed to the Court of Appeal. h

Held – 1. The right of a set-off arises whenever a customer is indebted to a banker upon the customers’ general balance i of accounts. In the ordinary course of transaction when a customer has an account with the bank which is in credit, and another which is in debit balance whether in the same branch or not, the banker is entitled to set-off j

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City Express Bank Ltd v. Trade and Financial Services 427 a on the credit in the one account which vests it with a right to use that credit in discharge of indebtedness in the other account. b 2. A banker is entitled to combine two accounts of a customer except it is agreed that they be separated (sic). 3. “(a) The right to combine does not exist where the accounts are not in the same right (not in the same name). See c Paget’s Law of Banking 9th Edition at Page 139. See also Chorley and Smart Leading Cases in the Law of Banking, 6th Edition at Page 237. Again see Allied Bank of Nigeria Ltd v Jonas Akubueze (1997) 6 NWLR d (Pt. 509) page 374 at page 399; Uba v Union Bank of Nigeria Plc (1995) 7 NWLR (Pt. 405) 72 at 80. (b) Knowledge of the fiduciary nature of an account, however acquired will prevent the banker from utilizing the account for his own benefit. See Paget’s Law of Bank- e ing, 9th Edition at page 139. (c) A bank has no such right on a partner’s private account, for an overdraft on partnership mandate so provides. See also Watts v Christie English Report Vol. 50 Rolls f Court Beavan 8–12 page 928 at p. 931. Held that those bankers have no lien on the deposit of a partner on his separate account, for a balance due to the bank from the firm. g (d) A banker cannot assert his lien over an account known to be a trust account whether so described or not. See Hals- bury’s Laws of England pages 168–169 paragraph 314.” Appeal dismissed. h Cases referred to in the judgment Nigerian African Continental Bank Ltd v Balogun (1975) 1 All NLR i 176 Alli v Ikusebiala (1985) 1 NWLR (Part 4) 630 Allied Bank of Nigeria Ltd v Akubueze (1997) 6 NWLR j (Part 509) 374

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BP (West Africa) Ltd v Nigeria Maritime Services Ltd a (1962) 1 All NLR 645 British and French Bank v Opaleye (1962) 1 SCNLR 60 Egbe v Alhaji (1990) 1 NWLR (Part 128) 506 b Geosource Nig Ltd v Binagbara (1997) 5 NWLR (Part 506) 607 I T Palmer of Nigeria Ltd v Julio Fonseca 18 NLR 49 c Ijale v Leventis & Co. Ltd (1959) 5 SCNLR 255; 4 FSC 108 Ikpeazu v African Continental Bank Ltd (1965) NMLR 374 JA Obanor & Co. Ltd v Co-operative Bank Ltd (1995) 4 d NWLR (Part 388) 128 Korede v Adedotun (2001) 15 NWLR (Part 736) 483 Macaulay v NAL Merchant Bank Ltd (1990) 4 NWLR (Part 144) 283 e Metalimpex v AG Leventis & Co. Nigeria Ltd (1916) 2 SC 91 Negbenebor v Negbenebor (1971) 1 All NLR 210 f New India Assurance Company Ltd v Odubanjo (1971) 1 NCLR 363 Ogunbiyi v Ishola (1996) 6 NWLR (Part 452) 12 Okoebor v Eyobo Engineering Services Ltd (1991) 4 NWLR g (Part 187) 553 Onwuchekwa v Ezeogu (2002) 9 SCNJ 125 Oyegun v Igbinedion (1992) 2 NWLR (Part 226) 744 h Saude v Abdullahi (1989) 4 NWLR (Part 116) 387 Solomon v Mogaji (1982) 11 SC 1 Spasco Vehicle & Plant Hire Company Ltd v Alraine Nige- i ria Ltd (1995) 8 NWLR (Part 416) 655 Uba v Union Bank of Nigeria Plc (1995) 7 NWLR (Part 405) 72 UNIC v Muslim Bank Ltd (1972) 1 All NLR (Part 1) 341 j

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City Express Bank Ltd v. Trade and Financial Services 429 a Union Bank of Nigeria Ltd v Ozigi (1994) 3 NWLR (Part 333) 385 Union Bank of Nigeria Ltd v Penny-Mart Ltd (1992) 5 b NWLR (Part 240) 228 Yesufu v Kupper International NV (1996) 5 NWLR (Part 446) 17 c Foreign Dunlop Pneumatics Tyre Co v Selfridge & Co. Ltd [1915] AC 847 Goss v Nugent 2 LJKB 127 d Kreditbank Cassel GMBH v Schenkers [1927] 1 KB 826 844 Midland Bank Ltd v Reckitt and Others [1933] AC 1 Reckitt v Barnett Pembroke and Slenter Ltd [1929] AC 176 e Royal British Bank v Turquand (1856) 6 E& B 327 Salomon v Salomon [1897] AC 22 Watts v Christie English Report Vol. 50 Rolls Court Beavan f 8–12 page 928 Books referred to in the judgment Bowstead & Reynolds Agency (16ed) Article 27 page 117 g Chorley and Smart Leading Cases in the Law of Banking, 6ed, page 237 Halsbury’s Laws of England, pages 168–169 paragraph 314 Paget’s Law of Banking (9ed), page 139 h Counsel For respondent: Obi i Judgment SALAMI JCA: (Delivering the lead judgment) This is an appeal against the decision of the High Court of Lagos State of Nigeria sitting in Lagos delivered on 25 April, 1997 per j Akinsanya, J.

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The plaintiff, a foreign company had an agreement with a Napex Nigeria Ltd for the importation and supply of goods – electric light bulbs, granulated sugar and tuna fish. The goods were to be imported into the country by the plaintiff b with all sums of money due thereafter paid into the plaintiff’s accounts with the defendant bank. The defendant for the purpose of these transactions agreed to take custody of the goods upon their arrival, but as it had no warehousing c facilities of its own, an agreement was made between the plaintiff, defendant and Carnco Foods Ltd for the commodi- ties to be kept at the warehouse of Carnco Foods Ltd. The agreement for importation of the goods are contained in Ex- hibits “F”, “F1” and “F2” which were duly entered into by d the plaintiff, defendant and Napex Nigeria Ltd. Exhibits “F”, “F1” and “F2” are respectively for electric light bulbs, the tuna fish and the granulated sugar. The warehouse agreement is contained in Exhibit “G”. e Under these agreements, the defendant acted as plaintiff’s agent by warehousing the goods on arrival in Nigeria, releasing quantities to Napex Nigeria Ltd and received payments for the items released which funds were paid directly f into plaintiff’s accounts which were established for the purposes of the transactions. The plaintiff to facilitate the execution of the contract gave a power of attorney, Exhibit “D”, to one Mr Jean Pier- g rot Damiani, a Lebanese national. There were three accounts opened in the plaintiff’s name with the defendant by the plaintiff’s attorney. The three accounts which were always on credit are accounts numbers 1004549, 1003917 and h 1004530. The defendant was entitled and received management fee for acting on behalf of the plaintiff. On the 31 December, 1991, the defendant debited the plaintiff’s account No. 1004530 with the sum of i N2,025,716.77 which it alleged was a set off against an Ac- count Number 1004174 belonging to Tecnicana Nigeria Ltd, a Nigerian company. The plaintiff demanded for the reversal of the debit account but the defendant maintained that it had j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 431 a a right to so debit the account on the ground that Tecnicana Nigeria Ltd borrowed money from I B Finance Ltd considered to be defendant’s agents. The basis for defendant taking b this posture was that plaintiff’s attorney, Jean Pierrot Damiani sourced and obtained on behalf of the plaintiff, the loan for Tecnicana Nigeria Ltd to execute a Ministry of De- fence contract. c The plaintiff was not agreeable with the defendant’s posture hence it took out a writ of summons from the High Court of Lagos State. Pleadings were settled and after hearing witnesses called by both sides, as well as listening to d their learned Counsel, the learned trial Judge in a reserved and considered judgment found in favour of the plaintiff. The defendant was unhappy with the decision and being thoroughly dissatisfied, appealed to this court on 8 grounds e of appeal contained in a notice of appeal dated on 9 May, 1997. The same notice of appeal does not bear any evidence of filing. However, there is an amended notice of appeal carrying 9 grounds of appeal. f In accordance with the practice and procedure of this Court, learned Counsel for defendant (hereinafter referred to as the appellant) filed appellant’s brief. On the other hand, learned Counsel for plaintiff (hereinafter referred to as respondent) filed a respondent’s brief. In each brief, issues for g determination were identified. The appellant framed 6 issues which are set down immediately hereinafter:– “(i) Whether or not the whole of the respondent’s business deal- ings in Nigeria were illegal and amounted to a nullity by h reason of the respondent’s contravention of the provisions of the Companies and Allied Matters Act Cap. 59 Laws of the Federation of Nigeria, 1990, the Banks and other Financial Institutions Act, Laws of Federation of Nigeria, i 1991 and the Money Lenders Law Laws of Lagos State of Nigeria, 1994. (ii) Whether the respondent’s attorney, Mr Jean Pierrot Damiani, was empowered by the power of attorney, exhibit D to enter into a contract with the Ministry of Defence and j borrow sums for that purpose.

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(iii) Whether for the purpose of the Ministry of Defence con- a tract, Tecnicana Nigeria Ltd assumed the role of the agent or front of the respondent; (iv) Whether, for the purpose of giving out the loan for the Min- b istry of Defence contract, I.B. Finance Ltd acted as the agent of the appellant; (v) Whether the appellant was authorized by the letter of set off, exhibit K, to recover the sums owed under the Ministry of Defence contract (and which sums were to be lodged in c the Tecnicana Account No. 1004174) from the respondent’s other account No. 1004530; and (vi) Whether on the preponderance of the evidence before the High Court of Lagos State, the respondent – as the plaintiff- d succeeded in discharging the burden of proof on it.” On the other hand, the respondent in its Brief formulated the following six issues as calling for determination also:– “(i) Whether if the respondent’s transaction in Nigeria is illegal, e can the appellant as a party to the transaction raise the issue of illegality and ask for its nullity after having benefited from the said transaction. (ii) Whether the respondent’s attorney, Mr Jean Pierrot Damiani was empowered by the power of attorney, exhibit f D to borrow for the contract between Ministry of Defence and Tecnicana Nigeria Ltd. (iii) Whether the respondent was a party to the Ministry of De- fence contract by the involvement of Tecnicana Nigeria g Ltd. (iv) Whether for the purpose of giving out the loan for the Min- istry of Defence, I. B Finance Ltd acted as the agent of the appellant. h (v) Whether the trial Court was right in holding that the appellant did not have the right of set off on the respondent’s Ac- count No. 1004530 against Tecnicana Nigeria Ltd Account No. 1004174. (vi) Whether trial court was right in holding that the respondent i proved its case.” The appellant’s first issue respectfully is not competent for two reasons. Firstly, it is formulated from a ground of appeal which is not as wide as the issue formulated. The relevant j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 433 a ground of appeal, as observed earlier is ground 9 of the grounds of appeal contained in the amended notice of appeal. It reads as follows:– b “9. Error in Law The learned trial Judge erred in law in allowing the plaintiff’s claim against the defendant when the whole of the plaintiff’s business activities in Nigeria were illegal and c amounted to a nullity by virtue of its (the plaintiff’s contravention of the provisions Section 56 of the Banks and Other Financial Institutions Act) or Decree No. 25 of 1991.” (Ital- ics mine.) The ground of appeal set out immediately above complained d about Banks and Other Financial Institutions Act but the issue which will soon be set out immediately hereunder extended appellant’s grouse to two other enactments. e The other two enactments raised in the issue framed are Companies and Allied Matters Act and Money Lender’s Law. The issue reads as follows:– “Whether or not the whole of the respondent’s business dealing in f Nigeria were illegal and amounted to a nullity by reason of the respondent’s contraventions of the Companies and Allied Matters Act Laws of the Federation of Nigeria, 1990, the Banks and Other Financial Institutions Act Laws of the Federation of Nigeria, 1991 and the Money Lender’s Law Laws of the Lagos State of Nigeria, g 1994.” It is very doubtful if the appellant is entitled to extend the scope of his issue wider than the ground of appeal which is set out earlier in this judgment. h The improperly extended issue has been argued in the Brief of Argument. Since the argument embraced material the appellant failed to include in its ground of appeal and those he is entitled to canvass, I am unable to separate the i legitimate argument from illegitimate ones. Indeed, it is not the function of the appellate court to dissect appellant’s argument on the issue and sieve the chaff from the grains. See Geosource Nig Ltd v Binagbara (1997) 5 NWLR (Part 506) j 607, 616; Korede v Adedotun (2001) 15 NWLR (Part 736)

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483 and BP (West Africa) Ltd v Nigeria Maritime Services a Ltd (1962) 1 All NLR 645. The issue here does not relate to the ground of appeal. It is for that reason struck out. The second defect in this issue is that it derives from a b ground of appeal which is not directed at any of the findings of the learned trial Judge. A ground of appeal, to be valid or competent, must derive from the decision of the trial court and must be a challenge to the validity of a ratio decidendi c not even an obiter dictum in the judgment on appeal. See Egbe v Alhaji (1990) 1 NWLR (Part 128) 506 at 590; Saude v Abdullahi (1989) 4 NWLR (Part 116) 387 at 429 and 431. An appeal presupposes the existence of some decision ap- d pealed against and since the issue of legality or otherwise of the respondent’s activities in the country was not in issue at the trial court, it cannot be raised at this stage. The conse- quences of formulating a ground of appeal not appealing e against a finding of the court below is to strike out the alleged incompetent ground of appeal vide Ogunbiyi v Ishola (1996) 6 NWLR (Part 452) 12, 22-23 and Ijale v Leventis & Co. Ltd (1959) 5 SCNLR 255; 4 FSC 108. Ground 9 of the grounds of appeal and issue (i) derived therefrom are in- f competent and are struck out. I wish to observe that, if the appellant’s issue (i) was valid, without so deciding, the respondent’s issue (i) would have fallen foul of our rules of practice and procedure. The g respondent, having not appealed, is required to confine its formulation of issues to the grounds of appeal filed by the appellant. In the instant appeal, the respondent’s first issue is not within the contemplation of appellant’s ground 9. Fur- h ther elaboration on this point does not serve any useful purpose since the appellant’s issue (i) had been struck out. The main issue, if not the only one, calling for determination in this appeal, to my mind, respectfully is the power of i Jean Pierrot Damiani, the donee of respondent’s power of attorney to borrow money on behalf of the respondent, his motive for so acting or otherwise is immaterial. This issue is covered by appellant’s and respondent’s issue (ii) in each j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 435 a brief. The issues are similar if not identical notwithstanding the manner they are phrased in the respective briefs. In this connection, learned counsel for appellant submit- b ted that Mr Damiani was authorized to borrow because Ex- hibit “D”, the power of attorney, permitted him to undertake “any . . . obligations” in relation to the successful execution of any contract he entered into on behalf of the respondent. c Learned Counsel further submitted that there is, by the power of attorney, the fact that the Board of Directors of the respondent had effectively vested its powers, functions and authority in Mr Damiani for the purpose of respondent’s op- d eration in Nigeria. Learned Counsel contended that the effect of granting him such unlimited managerial power without putting any check and balances on his activities constituted him as the sole alter ego of the respondent. The powers e and functions of a Managing Director had been assigned to him. Learned Counsel contends further that in the case of a company that performs trading activities such powers include the power to borrow money. Learned Counsel cited Palmer’s Company Law (24ed) page 248, paragraph 21–11; f page 661, paragraph 43–01; African Continental Bank Ltd v Balogun (1975) 1 All NLR 176 and Kreditbank Cassel GMBH v Schenkers [1927] 1 KB 826 844. g Learned Counsel for appellant again contended that appellant was authorized under Exhibit “D” to open and operate bank accounts and argued that operating a bank account involves a customer having the ability to do such things as are part and parcel of having a bank account; such things that h exist where there is a banker and a customer relationship. These Counsel contended included borrowing money on such terms and conditions as bank and its customer might agree upon. He then referred the court to the definition of a i bank in the Black’s Law Dictionary. Learned Counsel submitted that Mr Damiani, therefore, as the sole signatory to and operator of the respondent’s account and wielding such immense power on the strength of Exhibit “D” could prop- j erly and lawfully borrow money from the appellant without

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA 436 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) the need to seek or obtain consent from his head office in a Cyprus. The appellant, in turn, could not possibly be put on inquiry as to the validity of Mr Damiani’s activities in this regard and he need not, in the face of Exhibit “D”, look into b the internal management workings of the respondent: Royal British Bank v Turquand (1856) 6 E& B 327. “This is more so, as the loan was required in furtherance of one of the respondent’s own pursuits – that is, the Ministry of Defence c contract”. Learned Counsel then argued that the power to borrow money is implied and could be inferred from the latter part of Exhibit “D “which provides thus:– d “Undertake any obligations in relation to the . . . execution of any contract.” He then referred to Bowstead & Reynolds on Agency (16ed) Article 27 at page 117 and Spasco Vehicle & Plant Hire e Company v Alraine Nigeria Ltd (1995) 8 NWLR (Part 416) 655, 673 and Metalimpex v AG Leventis & Co Nigeria Ltd (1916) 2 SC 91 and JA Obanor & Co Ltd v Co-operative Bank Ltd (1995) 4 NWLR (Part 388) 128 and the case of Ye- f sufu v Kupper International NV (1996) 5 NWLR (Part 446) 17, 28. Learned Counsel for respondent argued that it is obvious g from Exhibits “L”, “M”, “N”, “N1”, “N2”, “O”, “P” particularly Exhibit “N” that the contract for the supply of gevachrome agfa powder G 602 was a matter between Ministry of Defence and Tecnicana Nigeria Ltd. See Exhibits “DD” and “EE”. An incorporated company has its own separate h legal entity. See Union Bank of Nigeria Ltd v Penny-Mart Ltd (1992) 5 NWLR (Part 240) 228, 237. Learned Counsel submitted that both parties are strangers to the Ministry of Defence contract. Learned Counsel for respondent submitted i that appellant’s contention that because Mr Damiani, the respondent’s attorney, was involved in the contract, implied that it was a contract for the respondent, was respectfully misconceived. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 437 a Learned Counsel for respondent contended that the loan agreement Exhibit “S” provided that the parties to the loan agreement are Tecnicana Nigeria Ltd, the borrower and that b I B Finance Ltd is the financier. Learned Counsel for respondent contended that the terms and conditions of Exhibit “S” are very clear and submitted that where the terms and conditions of an agreement which is clear and lucid had c been reduced into writing, person could not be heard that (sic) besides those terms and conditions set out that there are other evidence of terms. He relied on the case of Macaulay v NAL Merchant Bank Ltd (1990) 4 NWLR (Part 144) 283, 311 and Union Bank of Nigeria Ltd v Professor A O Ozigi d (1994) 3 NWLR (Part 333) 385, 400. Learned counsel also contended that Exhibit “D”, the power of attorney was not authority to borrow money be- e cause nowhere did Exhibit “D” provide for power to borrow money which must be expressly vested in the donee of a power of attorney on the authority of Chorley and Smart – Leading Cases in the Law of Banking by P E Smart (6ed) page 176. Finally, learned Counsel for appellant’s submis- f sion on the strength of Palmer’s Company Law in relation to the rules in Turquand’s case was considered by learned Counsel for respondent in the respondent’s Brief as mis- placed. g There is merit in the submission of the learned Counsel for respondent that an incorporated company has its own separate and distinct identity and entity. See Union Bank of Nigeria v Penny-Mart Ltd (1992) 5 NWLR (Part 240) 228, h 237 and Salomon v Salomon [1897] AC 22. The plaintiff, the defendant, Tecnicana Nigeria Ltd as well as I B Finance Ltd involved in this Suit have their separate and distinct identity or entity. I agree with learned Counsel for respon- i dent that Exhibits “L”, “M”, “N”, “N1”, “N2”, “O”, “P” and “Q” particularly Exhibit “N”, the contract for the supply of gevachrome agfa powder G 602 was between the Ministry of Defence and Tecnicana Nigeria Ltd. It is manifestly clear j that both parties in the instant appeal are strangers to that

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA 438 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) agreement. The contention of the appellant, in its brief, to a the effect that the involvement of Mr Damiani, respondent’s attorney, in the contract ipso facto made the contract that of respondent is preposterous. b The argument is misconceived. Even though Exhibit “D” was a donation of Power of Attorney to Mr Jean Pierrot Damiani by the respondent, he is merely an agent for a particular purpose and not for all purposes. He is appointed un- c der the power of attorney to supervise the three contracts comprising Exhibits “F”, “F1” and “F2”. There is nothing in law or under the power of attorney given to Mr Damiani stopping him, Damiani, from engaging in other fields of d human endeavours: Oyegun v Igbinedion (1992) 2 NWLR (Part 226) 744, 761. Exhibits “L”, “M”, “N”, “N1”, “N2”, “O”, “P” and “Q” showed that Jean Pierrot Damiani acted solely on behalf of Tecnicana Nigeria Ltd as its general e Manager. Exhibit “D” was rightly conceded by appellant in its Brief when it said that:– “This is because exhibit D is very clear in that it authorizes him to undertake any obligation in relation to the successful exercising or f implementation of such contract as he enters into on behalf of the respondent.” Exhibit “D” might have vested Mr Damiani with authority to source for and enter into a fresh contract on behalf of the g respondent, he had no authority whatsoever on the strength of Exhibit “D” to do so on behalf of another or strange company. He signed those documents as General Manager of Tecnicana Nigeria Ltd and not as the attorney of the re- h spondent. There is merit in the submission of the learned Counsel for respondent that no extrinsic evidence whether in writing or orally can be adduced to vary or add to the terms and i condition of the loan agreement, Exhibit “S”. Exhibit “S” expressly provided that Tecnicana Nigeria Ltd is the borrower of N1,800,000 while I B Finance Ltd is the financier. It is clearly a loan agreement between I B Finance Ltd and j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 439 a Tecnicana Nigeria Ltd. Where the terms and condition spelt out in an agreement such as Exhibit “S” are clear, lucid and unambiguous, it is trite that a party cannot by virtue b of the provisions of section 132(1) of the Evidence Act Cap 112 of the Laws of Federation of Nigeria, 1990, be heard to contend that besides the document into which the terms and conditions had been reduced there is evidence of the agree- c ment other than the document into which it had been reduced. In other words, it is more than settled that where an agreement which is reduced into a document is in dispute before a court, it is the document or secondary evidence d thereof that is admissible as evidence of the transaction. See Union Bank of Nigeria Ltd v Professor A. O. Ozigi (1994) 3 NWLR (Part 333) 385, 400; A A Macaulay v NAL Merchant Bank Ltd (1990) 4 NWLR (Part 144) 228, 311 cited in the respondent’s brief of argument. See also Goss v Nugent 2 e LJKB 127 cited with approval in I T Palmer of Nigeria Ltd v Julio Fonseca 18 NLR 49, 53; Solomon v Mogaji (1982) 11 SC 1, 13; Alli v Ikusebiala (1985) 1 NWLR (Part 4) 630, 641 and Onwuchekwa v Ezeogu (2002) 9 SCNJ 125. f It follows therefore that the parties to the loan agreement are Tecnicana Nigeria Ltd and I B Finance Ltd. The assets and the liability under the loan agreement accrued to the re- g spective parties to the transaction. The appellant and respondent are not parties to the loan agreement and can therefore not take advantage nor incur liability under the loan agreement, Exhibit “S”. Neither the appellant nor respondent was a party or signatory to the contract. They are strangers to the h loan agreement. It is settled law that a third party to a transaction such as the loan agreement, contained in Exhibit “5”, cannot sue on it even if it is made for its benefit. This is un- derlined by the general principle that a contract only affects i the parties to it and cannot be enforced by or against a person who is not a party even if the contract is made for his or its benefit and purports to give him right to sue. Vide Neg- benebor v Negbenebor (1971) 1 All NLR 210, 270–271. See j also the cases of Ikpeazu v African Continental Bank Ltd

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(1965) NMLR 374 and Okoebor v Eyobo Engineering Ser- a vices Ltd (1991) 4 NWLR (Part 187) 553 cited in the respondent’s brief. At page 561 of the latter report, Court of Appeal per Salami, JCA reasoned thus:– b “This submission or complaint is predicated upon a misapprehension of a simple principle of contract, ‘offer and acceptance’ It is obvious from the submissions set out that there are two contracts involved; there is the written contract between the 1st respondent and the Federal Government, exhibit J, in respect of which the ap- c pellant and his partners are not parties and there is the oral sub- contract between the parties herein. The job description in respect of the first contract awarded as per exhibit J is referable to “Bill of Quantities and Specifications” while the job content of the sub- d contract which the appellant was a party is referable to the site plan. In the sub-contract, the respondents offered orally to the appellant and his partners a job as defined in the site plan, exhibit F, and they accepted the offer. There is a mutual assent between the parties herein in respect of the sub-contract but the parties cannot e be said to be consensus ad idem on the contract signed in exhibit J. A contract is the result of the mutual assent of two parties to certain terms and there is no concluded binding agreement unless or until the terms are ascertained either expressly or by necessary im- f plication: Rossiter v Miller (1879) 3 AC 1124, 1139. The appellant not being a party to the contract contained in exhibit J cannot sue or enforce it even if the contract is made for their benefit. In Han- son v Radcliffe Urban District Council (1922) 2 Ch 490, the defendants who were a local authority dismissed a teacher who had g been engaged on a contract she signed with the managers of the school. It was . . . held that since the defendants who were not parties to the contract had terminated the teacher’s appointment, the teacher was entitled to seek the court’s declaration that the dismissal was null and void as the court actually did.” h Generally, a contract cannot be enforced by or against a person who is not a party; it only affects a party thereto. The principle is stated by Lord Haldane in Dunlop Pneumatics i Tyre Co v Selfridge & Co. Ltd [1915] AC 847 at 853. “. . . In the law of England certain principles are fundamental. One is that only a person who is a party to a contract can sue on it. Our law knows nothing of a jus quaesitum tertis arising by way of contract. Such a right may be conferred by way of property, as for j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 441 a example, under a trust but it cannot be conferred on a stranger to a contract as a right to enforce the contract. A second principle is that of a person with whom a contract not under seal has been made is to be able to enforce it, consideration must have been by b him to the promisor or to some other person at the promisor’s request. A third proposition is that a principal not named in the contract may sue upon it if the promisee really contracted as his agent. But again, in order to entitle him so to sue, he must have given c consideration either personally or through the promisee, acting as his agent in giving it.” (Italics mine.) See also Ikpeazu v Africa Continental Bank Ltd (1965) NMLR 374 where the Supreme Court at page 379 enunci- d ated the rules and I quote:– “What advantage, if any, can the bank gain from the deed, exhibit D? Can the bank sue on it as a guarantee? Not being a party to it we are of the view that the bank cannot acquire any rights under the deed. Generally, a contract cannot be enforced by a person e who is not a party, even if the contract is made for his benefit and purports to give him the right to sue upon it. Tweddle v Atkinson (1). This view was supported by the House of Lords in Dunlop Pneumatic Tyre Co. Ltd. v Selfridge & Co.Ltd. (2). f The position is stronger with regard to contracts under seal; unless a person is named as a party to the deed, he cannot maintain an action upon it – Chesterfield and Midland Silkstona Colliery Co. v Hawkins (3). The only exemption to this rule relates to indentures made about land which was introduced by section 5 of the Real g Property Act, 1845 to enable a stranger to take advantage of a benefit to him in the deed”. (Italics mine.) translation See also Negbenebor v Negbenebor (1971) 1 All NLR 210 at 218 and New India Assurance Company Ltd v Odubanjo h (1971) 1 NCLR 363 at pages 377 and 378:– “I am, therefore, not aware of any authority which allows the appellant to rely on exhibit J the contract document in respect of the agreement between the respondents and the government of the i Federal Republic of Nigeria to which he is neither a party nor has he given a consideration. The same is true of exhibit N which is the schedule of payment for the contract entered into on exhibit J. The appellant has not shown that the documents were incorporated into or adopted as forming part of the oral sub-contract. Indeed, j this much was conceded by the submission of the learned counsel

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for the appellant set forth above. The appellant having failed to a show that exhibits J, Hand bill of quantities form part of the contract and also not being a party to the contract, exhibit J, giving rise to the document is a stranger to them and cannot sue on the documents.” b In the circumstance, the appellant’s defence that it debited the debt Tecnicana to the respondent’s account does not avail it; the four companies being separate companies with c their distinct entity and identity. Indeed, all the letters written by Mr Damiani in this connection speak for themselves. They are all to the effect that the loan should be credited to the Tecnicana Nigeria Ltd and that Alhaji Yahaya should be paid from Tecnicana account. He signed the letter as the d General Manager of the Tecnicana Nigeria Ltd and not as respondent’s attorney. Be that as it may, assuming without so deciding, Mr Damiani told them that he wanted the loan for the purposes of executing the respondent’s purpose, it e ought to occur to the appellant to direct the attention of Mr Jean Pierrot Damiani to the fact that the balance in each of the respondent’s three accounts with it was more than sufficient to execute the Ministry of Defence contract. It should f equally have occurred to the appellant that respondent made it a party to all its contracts F, F1 and F2 with Napex as well as warehousing agreement with Carnco. But the appellant was not invited as it was customary to enter into the contract g of the Ministry of Defence with respondent. Damiani’s failure to involve the appellant in the contract with the Ministry of Defence ought also to put appellant on notice. Exhibits “L”, “M”, “N”, “N1”, “N2”, “O”, “P” and “Q” h conclusively show that Damiani acted as General Manager of Tecnicana Nigeria Ltd for and on behalf of that company and not on behalf of the respondent. I agree that there might be no express evidence showing i that appellant acted mala fide or in cohort with Mr Damiani, there was material on record from which it could be inferred that appellant acted in complicity with Mr Damiani. The manner the account for Tecnicana Nigeria Ltd was hurriedly j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 443 a opened without ascertaining the identity of the company puts the sincerity of appellant in doubt. Appellant opened account (sic) allegedly for that company solely on its tax b clearance without ascertaining the authority of Damiani to do so. The appellant did not demand for appellant’s memorandum and article of incorporation Exhibit “GG” which was obtained only after the loan had been allegedly granted c and disbursed. It failed to ask for Forms CO2 and CO7 of the same company. One is, therefore, not surprised where learned trial Judge found thus:– “The defendant being unable to recover from Tecnicana Nigeria Ltd-debit the outstanding to the plaintiff’s account and plead that d the plaintiff approved of it – in utter reliance on Exhibit “x” – which I record hereunder ‘Dear Mr Eguh, Mr Edwin Contran my colleague from Cyprus shall visit you e today to discuss my problem. I rely on your diplomacy and specially not to show him at all the first amount I have been able to pay. Unfortunately my head office knows already that you debited the whole amount and we were not able to cover this amount during the whole period. Anyway, I will contact f you tomorrow. Best regards. SGD. DAMIANI 09/3/93’ g To an informed mind – this letter is nothing short of a communication between conspirators over the existing deal. For reason of expediency, Mr Eguh made many compromises and the signature of Damiani is a magic wand that spurred him into action”. (Italics h mine.) I concur. It is manifestly clear from Exhibit “x” that the sum of money in dispute in this appeal is not the only Damiani’s sleight of hand. It can be garnered from this Exhibit that a i “first amount had been settled by the maker of Exhibit x, Mr Damiani, the appellant particularly its Mr Eguh had knowledge of impropriety of Damiani’s”. There is nothing from Exhibit “C”, a statement of account j and Exhibits “Y–Y3”, payment of sums of money to certain

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA 444 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) individuals, to infer respondent was engaged in other busi- a ness activities with other companies. Exhibits “Y”, “Y1”, “Y2” and “Y3” are instructions given to the appellant to issue bank drafts. It is not clear from those Exhibits the pur- b pose for effecting the payments. They could be for services rendered outside the country such as Exhibit “Y2” which reads:– “Dear Sir, c Would you please issue a bank draft in favour of Federal Bank of the Middle East for N1,000,000.00 . . .”.

All these are consistent with respondent’s transactions with d Napex Nigeria Ltd. The appellant’s contention if relevant would have been on firmer wicket if those exhibits were agreements entered into by the respondent with other companies or business concerns. These exhibits are not evidence e that the respondent transacted business through Damiani in the nature of Ministry of Defence contract. The payments are equally consistent with Mr Damiani secreting away respondent’s funds. They are clearly not evidence of pro- curement and execution of contract for or on behalf of the f respondent. I am unable to accept the submission of the learned counsel for appellant that Mr Jean Pierrot Damiani had implied g authority to borrow money on behalf of his principal, the respondent. The attorney had no power to do anything that the donor of the power can lawfully do. Generally, an attorney cannot act outside the powers granted in terms. The attorney h must not borrow unless there is express power to borrow and “power to draw on a banking account does not necessarily permit drawing on an overdrawn account, unless there is also a borrowing power, while a general clause in a power of attorney does not add to the power given in the rest of the i document”. See page 176 of Chorley & Smart Leading Cases in the Law of Banking (6ed) by PE Smart. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 445 a In Reckitt v Barnett Pembroke and Slenter Ltd [1929] AC 176, the appellant donated a power of attorney in favour of Lord Terrington to manage his affairs while he was b abroad and for the purpose of his affairs to sign and execute all documents which might be necessary or such as Terring- ton might consider fit. As the power of attorney did not in terms authorize Terrington to draw cheque, a question was c raised thereon by the appellant’s bankers whereupon the appellant wrote to them stating that he wished to cover the drawing of cheques upon the bank by Terrington “without restrictions”. d Lord Terrington drew a cheque upon the appellant’s bank payable to the respondents’ order, signed as the appellant’s attorney, but as the respondents knew, in payment of a debt of his own. The respondents accepted the cheque without e inquiry and received the proceeds. The cheque was drawn and handed over to the respondents by Terrington without the knowledge or authority of appellant who, on becoming aware of Terrington’s fraud, sued the respondents to recover f the amount of the cheque as damages for the conversion or for money had and received to appellant’s use.

Lord Hailsham, LC, at page 182 said:– g “I assume for the purpose of my judgment that the letter of 17 Au- gust, must be treated as a general extension of the power of attorney and not merely as an instruction to the bank. The question then is whether the power of attorney plus the letter did give Lord Ter- h rington authority to use the appellant’s money for the purpose of paying his private debts. This is purely a question of construction. It is plain that the letter has to be read in conjunction with the power of attorney to which it expressly refers; when so read it seems to me that the whole authority is expressly limited to acting i for the appellant in the management of his affairs; and I cannot construe the addition of the words “without restriction” as entitling Lord Terrington when he is drawing cheques on the appellant’s account to do so for any other purpose except for the dis- j charge of the appellant’s debts or in the conduct of his business”.

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The Lord Chancellor went further at page 183 to say that:– a “In the present case, the act which is challenged was the issue to the respondents of a cheque drawn on the account in payment of Lord Terrington private debt; in my view this was not within the b authority conferred upon Lord Terrington by the power of attorney and the appellant is not bound by it. The case is really on all fours with the case of John v Dodwell & Co. (1918) 1 AC 563 and in my judgment Rowlatt, J was right in following that case.” (Italics mine.) c See also Midland Bank Ltd v Reckitt and Others [1933] AC 1. The question is whether the power of attorney particularly paragraphs 4, 5 and 6 thereof authorized Mr Jean Pierrot d Damiani to borrow money on behalf of respondent, a financier in its own right. The relevant paragraphs read as follows:– “4. To apply to any bank or banking institution for the opening e of a banking account or accounts and to open, operate or close any banking accounts and to sign cheque for the purpose of the business of the company and endorse on behalf of the company any cheques, drafts or other negotiable instru- f ments which he may deem necessary or proper in relating to the company’s affairs. 5. To open up, establish, register, maintain, operate and manage branches of the company or to apply or secure a licence permit or an authority for the company to trade with limited li- g ability and generally to open and establish at any place or places, branches or place of business of the company and to do all acts and things needs say or expedient in that behalf including any application and leasing or hiring upon any h terms of promises for the purpose of carrying out the aforesaid powers and authorities. 6. To invest or participate or subscribe or take up any partnership, companies associations or other business entities on any terms and conditions that the attorney may deem fit.” i Clearly this is an issue of construction and I cannot construe any of the powers granted to Mr Damiani to include borrowing money to finance operation of another company. The power granted to the attorney of the respondent was for j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 447 a respondent’s affairs and not for the affairs of any other company irrespective of their trading relationship. The appellant was therefore negligent in opening account for Tecnicana b Nigeria Ltd on the strength of a mere tax clearance. The appellant was required to inquire into the characters, identity and power for taking loan of that company and having defaulted, it had failed to observe the standard expected of a c reasonable banker. UNIC v Muslim Bank Ltd (1972) 1 All NLR (Part 1) 341. The appellant was put on inquiry when the respondent’s attorney started to open account no. 1004174 for Tecnicana d Nigeria Ltd with funds transferred from respondent’s account 1003917, an action which is manifestly outside the scope of the power of attorney. It was further placed on notice when the third party account was closed with a cheque e made out in the joint names of Mr Damiani and the respondent. Firstly, when did the account became a joint account of the respondent and its attorney? It is equally unusual for an attorney to jointly settle the indebtedness of its principal which was in credit at the time material to the transaction. f Finally, appellant’s submission on implied or ostensible authority does not avail it, in the circumstance of this appeal. This construction should be seriously frowned upon and dis- g couraged. The end result is that it would have dire consequence on the donor of power of attorney as it would enable the agent to regard his principal’s account as an extension of his own and thereby commit atrocious fraud on his principal. h I am encouraged in this view by the case of Midland Bank v Reckitt (supra) at 18 where the House of Lords per Lord At- kin observed as follows:– “It would mean that the principal was saying either ‘give you ac- i tual authority within defined limits but ostensible authority to do what you like with my property so long as pretend (“purport”) to be doing it under this document; or I give you similar actual authority’. Such a construction would make powers of attorney a danger instead of a business facility and would certainly defeat the j intention of any reasonable principal. I think.”

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It is not in the interest of business to entertain the principle a of implied authority in the circumstance of the appeal. It would manifestly encourage gross abuse of the instrument. This issue is resolved against the appellant. b On issue V, there is no substance in the submission of the learned Counsel for appellant that Exhibit “K” amounted to an authority to the appellant granting it leave to combine or consolidate any of the respondent’s account to set off or c transfer any sums standing to the credit of one account to the satisfaction of any of the respondent’s liabilities on any other account or liabilities. The respondent’s three accounts, viz. 1003917, 1004549 and 1004530 were in its name and d were all in credit without any debit balance whatsoever. There is, however, a fourth account in the name of Tecni- cana Nigeria Ltd with Account No. 1004174 which has not been shown to be in debit balance. It is significant to note e that the purported debit was as a result of a loan approved for it by I B Finance Ltd, a company with 4,500,000 shares out of which the appellant holds 1,650,000 and Starco Mo- tors Nigeria Ltd holds the remaining 2,850,000. The major- f ity shareholder in the I B Finance Ltd is therefore Starco Motors Nigeria Ltd and not the appellant. The finance company is, therefore, not a subsidiary of the appellant. The appellant has not led a shred of evidence to justify the debt g owed to I.B. Finance Ltd. Translated to money lent by itself. Furthermore, the alleged consent to set-off comprised in Exhibit “K” was executed allegedly on 7 January, 1991. The loan to be set off was approved by I B Finance Ltd on 16 h May, 1991 to Tecnicana Nigeria Ltd which utilized same on the following day, 17 May, 1991. Can the alleged permission to set-off, Exhibit “K”, be valid when it preceded the indebtedness? The right of a set-off arises whenever a customer is indebted to a banker upon the customers’ general i balance of accounts. In the ordinary course of transaction when a customer has an account with the bank which is in credit, and another which is in debit balance whether in the same branch or not, the banker is entitled to set off on the j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 449 a credit in the one account which vests it with a right to use that credit in discharge of indebtedness in the other account. The purported indebtedness was not in existence when the b alleged consent, Exhibit “K”, was issued; one would be overstraining the words of Exhibit “K” to say that it had the loan in Exhibit “S” in contemplation. Learned Counsel for appellant sought to bolster Exhibit c “K” with Exhibit “X” which has been read elsewhere in this judgment. Exhibit “X” was written by Mr Damiani, respondent’s attorney, who was using his ostensible authority “to make a buck or two for himself” with the connivance of ap- d pellant’s senior Manager, Mr Eguh. Exhibit “X”, if anything, further strengthened the view that the appellant was acting without knowledge of his principal (the respondent) in entering into the Ministry of Defence contract, hence his e reference to his “problem” in Exhibit “X” which did not surprise Mr Eguh, DW1 to whom it was addressed. See paragraph 3 of page 5 of appellant’s brief for its assessment of Exhibit “X”. In the same brief, the learned Counsel for appellant took a different view of Exhibit “X” at the second f paragraph of page 23 where he contended thus:– “To make matters worse for the respondent, after the set off had been effected, its Mr Damiani proceeded to recognize and acknowledge the same without objection. His tone, in exhibit X, g rather than being one of anger or contention, was very desolate as if he were resigned to his fate.” Learned Counsel for appellant cannot approbate and reprobate. He cannot hold out Exhibit “X” as one emanating h from Lucifer at page 5 only to turn around at page 23 to credit it to an angel. Damiani’s tone is not one of anger nor contention because the set-off is meant to cement his intention to make a buck or two for himself when he was alone in i Nigeria. Clearly Exhibit “X” was therefore properly described by the learned trial Judge as “communication between conspirators.” Rather than say it made matters worse for respondent, it further exposed the complicity of j the appellant in the fraud against the respondent.

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At any event, the general principle of law is that a banker a is entitled to combine two accounts of a customer except it is agreed that they be separated: Halsbury’s Laws of England (3ed), Volume 2, page 174, paragraph 322. The learned b Counsel for respondent, in the respondent’s brief, has set out the four exceptions or, qualifications to the banker’s right to set off. The exceptions are set out immediately hereunder:– “(a) The right to combine does not exist where the accounts are c not in the same right (not in the same name). See Paget’s Law of Banking 9th edition at page 139. See also Chorley and Smart Leading Cases in the Law of Banking, 6th Edition at page 237. Again see Allied Bank of Nigeria Ltd v Jonas Akubueze (1997) 6 NWLR (Part 509) page 374 at page 399; d Augustine Chidozie Uba v Union Bank of Nigeria Plc (1995) 7 NWLR (Part 405) 72 at 80. (b) Knowledge of the fiduciary nature of an account, however acquired will prevent the banker from utilizing the account e for his own benefit. See Paget’s Law of Banking, 9th Edition at Page 139. (c) A bank has no such right on a partner’s private account, for an overdraft on partnership mandate so provides. See also Watts v Christie English Report Volume 50 Rolls Court f Beavan 8–12 Page 928 at P. 931. Held that those bankers have no lien on the deposit of a partner on his separate account, for a balance due to the bank from the firm. (d) A banker cannot assert his lien over an account known to be g a trust account whether so described or not. See Halsbury’s Laws of England Pages 168–169 paragraph 314.” The exceptions adumbrated above were approved by the Su- preme Court per Iguh, JSC in Allied Bank Nigeria Ltd v h Akubueze (supra) at 397–398:– “Now turning to the issue of combination of accounts, the general principle is that unless precluded by agreement express or implied from the course of business, the banker is entitled to combine cur- i rent accounts kept by a customer in his own right, even though at different branches of the same bank, and to treat the balance, if any, as the only amount standing to his credit; but the banker may not arbitrarily combine a current with a loan account. See Garnett v Makewan (1861–73) All ER 686. But see Buckingham and Co. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 451 a Ltd v London and Midland Bank Ltd (1895) 12 T.L.R. 70 where the banker was precluded by agreement. See too Re EJ Morel (1961) Ltd (1962) Ch 21, (1961) All ER 796. b In Greenhalgh v Union Bank of Manchester (supra) Swift, J at page 164 made bold to observe as follows:– ‘If a banker agrees with his customer to open two or more accounts, he has not, in my opinion, without the assent of the customer, any right to move their assets or liabilities from the c one account to the other; the very basis of his agreement with his customer is that the two accounts shall be kept separate, and if the customer pays bills drawn upon him not into his general account where they will be discounted and he will receive the benefit of being able to draw against them, but d into an – account in which they will only be used either to pay bills accepted by the bank or bills drawn by the customer which they are specifically to meet. I do not think a banker, any more than any other individual, can change them from e the one account into the other without the customer’s assent. On this point it seems to me the only question to be decided is, what is the agreement between the banker and the customer? And, if that agreement is, as I find it to be in this case, that there shall be a general account into which bills are f paid as cash and that there shall be an account into which bills shall be paid for some other purpose, bills or their proceeds cannot be moved from one account to the other at the whim of the banker without the consent, express or implied, of the customer’. g The above dictum, although . . . The dictum however received the clear approval of this court in British and French Bank Ltd v Opaleye (1962) 1 SCNLR 60 when Bairamian, FJ, as he then was succinctly put the matter as follows:– h ‘It turns out to be a question of the agreement between the customer and the bank. Apparently, as one may infer from the opening part of that passage, the agreement to keep the two accounts distinct and separate is inherent in the fact that the banker has agreed with his customer to open two or more i accounts. If the bank may merge them without notice, one can see that it may do him great harm. Suppose, for example, that the customer has a private account and a business account; that the business account is in funds, but the other is in debit; the customer, not knowing what the bank has done j or will do, gives out cheques on his business account to pay

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trade debts, say for goods bought; if the bank does not hon- a our them on presentment, it will do him harm. That is illus- trated in Buckingham and Co. v London and Midland Bank Ltd.” b In the said case of British and French Bank Ltd v Opaleye (supra), this Court held inter alia that where a customer opens two accounts with a banker, one in the customer’s own name and the other in a business name, there is, in the absence of any express agreement to the contrary, an im- c plied agreement that the accounts are to be kept distinct and separate. By this decision, which to this day has remained undisturbed, this Court approved and applied the decision of the English Court of Exchequer in Garnett v Mckewan (su- d pra), where Piggot, B observed as follows:– “No one would say that a banker might set off against his customer’s account a debt due to him from his customer in another capacity, a private debt, for example, a debt due to him as carrying e on some distinct business. Nor has a banker any right to compound two accounts lodged with him by one person in two different capacities. He would have no right to blend them, a personal account and a trust account.” Bramwell, B in agreeing with Piggot, B had this to say:– f “It is admitted that in some cases the bank could not debit the customer with a debt due to him, for example, a debt due to the bank as carrying on a different business as that of brewers. Nor again would they have any right to blend two accounts kept by one per- g son with them in different characters as a personal and trust account.” Account numbers 1003917, 1004549 and 1004530, the three accounts opened with appellant bank, in the name of the re- h spondent by the latter’s attorney are in the same right. But the first account was the general account while the second and third accounts were for the lodgments of the proceeds of sales of the sugar and tuna fish respectively. These accounts being in the name of respondent and for some distinct busi- i ness or character cannot be set off against the account of Tecnicana Nigeria Ltd, a company that has no relationship with the respondent. Tecnicana Nigeria Ltd has Nigerian Di- rectors and stands in a different capacity to the respondent. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 453 a The accounts cannot therefore be combined with any of the respondent’s account even if respondent owns Tecnicana Nigeria Ltd without notice. This is because this account as b well as respondent’s three accounts are not in the same right and are for different business or character. The appellant claim that (sic) to an assent in the nature of Exhibit “K” which was in place before Tecnicana Nigeria Ltd appeared on the scene is invalid. Firstly, could the respondent assent c to the debt or indebtedness of a party which it did not know at the time Exhibit “K” was purportedly executed on 9 Janu- ary, 1991? Certainly not. Secondly, Exhibit “K” is inchoate. It claims to be sealed in the presence of a Director and a sec- d retary. It bears no evidence, on examination, of sealing nor signature of the secretary in whose presence it was alleged to have been sealed. In the absence of the seal and significa- tion of the secretary, in my respectful view, renders it void. e Having failed to answer to the description it professes to on its face; it cannot be considered as an act of respondent who can conveniently raise a defence of non est factum against it. The authenticity of Exhibit “K” was further put in doubt f by Exhibit “X” in respect of which the appellant observed in its brief as follows:– “. . . It had become apparent that Mr Damiani had acted without the knowledge of his principal (the respondent) in entering into the g Ministry of Defence contract, hence his reference to his ‘problem’ in exhibit X. He had probably wanted to seize the opportunity, whilst alone in Nigeria, to ‘make a buck or two for himself’ ”. A careful reading of Exhibit “X” clearly shows that the ap- h pellant particularly their Senior Manager, Eguh, DW1, co- operated with and assisted the respondent’s attorney in defrauding the respondent. The cock and bull story of Mr Eguh to the effect that the respondent used Tecnicana Nigeria Ltd, i a local company; to enable it as, a foreign company, trade in Nigeria is not admissible. The appellant failed to call Jean Pierrot Damiani, his alleged source of the pieces of information. See Spasco Vehicle & Plant Hire Company Ltd v j Alraine Nigeria Ltd (1995) 8 NWLR (Part 416) 655. The

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA 454 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) assent respectfully does not avail the appellant. Assuming, a without so deciding, the appellant could combine accounts of the respondent in its name and that of a third party such as Tecnicana Nigeria Ltd, it is respectfully my view that it is b two accounts existing with a banker that could be combined. The purported debit account and the credit account must co- exist with the same banker. Right of set-off or combination of two or more accounts is c not exercisable where the credit account is with a banker and the debt is owed to another person or institution such as a finance house. It is not within the contemplation of the principle that a banker could combine accounts of its two cus- d tomers. A bank can only combine one or more accounts of its customer in the same right to liquidate the customer’s indebtedness to the bank. The right is not exercisable to assist a third party such as I B Finance Ltd to recover money it lent e to Tecnicana Nigeria Ltd. I mean the power to set-off or combine accounts by a bank respectfully can be invoked to transfer money from one customer’s account to its other account or accounts which are in debit. Certainly, there is no f power to combine two accounts of two separate and distinct customers such as the respondent’s accounts and that of I B Finance Ltd as the appellant did. Appellant did not exhibit the account of Tecnicana Nigeria Ltd to which the loan of N1,800,000 it took from I B Finance Ltd was credited. Nei- g ther did it produce account of Tecnicana Nigeria Ltd carrying a debit balance of N2,025,716.77 which was blended with the respondent’s account no. 1004530. Indeed, Tecni- cana Nigeria Ltd did not have account which was in debit h with the appellant’s bank. In fact, account of Tecnicana Ni- geria Ltd was in credit. It had a credit balance of N49,991.44 to date. It is settled that it is one or more accounts which are in debit that can be blended with an account or more which i are in credit. It is not the law to blend or combine two or more accounts which are in credit. In the instant case, the Tecnicana Nigeria Ltd purportedly sought and obtained loan of N1,800,000 from I B Finance j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA City Express Bank Ltd v. Trade and Financial Services 455 a Ltd, in that company’s books that was surreptitiously combined with respondent’s account with appellant. I am respectfully of the view that the account of Tecnicana Nigeria b Ltd with I B Finance Ltd cannot be combined under any pretext with respondent’s account in the appellant’s books irrespective of the subterfuge employed by appellant. The conduct of appellant in attempting to assist I B Finance Ltd to collect the debt allegedly owed it by Tecnicana Nigeria Ltd c through respondent’s account is to say the least fraudulent. Court should not lend its machinery to the appellant to defraud the respondent. To further compound appellant’s problem, Exhibit “T”, Tecnicana Nigeria Ltd statement of ac- d count, which is said to be in debit is in credit it did not show debit. The appellant was on notice that Damiani was defrauding the respondent. All the respondent’s three accounts includ- e ing its general account 1003917, were in credit. The respondent in addition to trading as its name suggests was also a financier to the knowledge of appellant. It was unthinkable that it would go out borrowing. If appellant had sought for f and obtained the article and memorandum of association of Tecnicana Nigeria Ltd, it would have been clear to it that a third party including its agent could not obtain loan on that company’s behalf. g Exhibit “DD” is the Memorandum and Article of Associa- tion of Tecnicana Nigeria Ltd. Article 81 provides for that company’s borrowing power:– “The Directors may exercise all the powers of the company to bor- h row money and to mortgage or change its undertaking.” The appellant who introduced the issue of Tecnicana Nigeria Ltd failed to produce a resolution authorizing the loan. The appellant did not produce any resolution of the Board of i Tecnicana Nigeria Ltd authorizing the loan nor a power of attorney granted by the Board of Tecnicana Nigeria Ltd under Article 82 of its Articles of Association. All the appellant relied upon was Exhibit “D”, the power of attorney re- j spondent granted to Damiani. It is elementary principle of

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Salami JCA 456 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) law that a power of attorney granted by one company cannot a be used to commit another company. It stood to reason that while Damiani was respondent’s attorney he was not attorney of Tecnicana Nigeria Ltd, who then purportedly took the b loan on behalf of the latter company? It will be recalled that the loan was purportedly granted to Tecnicana Nigeria Ltd on a mere tax clearance without reference to its lists of Di- rectors. It can be inferred from the appellant’s conduct that it c had notice that Damiani was defrauding its principal nevertheless actively encouraged or goaded him on. The appellant can, for the various reasons I have stated, not combine or set off against respondent’s account vide Midland Bank v Reckitt (supra). d The appeal fails and is dismissed. The decision of the trial Judge Akinsanya J, is affirmed. I make order as to costs which is assessed at N10,000 to the respondent and against e the appellant.

AKAAHS JCA: I was privileged to read the draft of the judgment of my learned brother, Salami, JCA with which I f am in complete agreement. The principles governing agency and privity of contract have been well discussed. The lead judgment also highlighted the loopholes which Mr Jean Pi- errot Damiani, an international con man exploited, by con- g spiring with Mr Eguh, to fleece the respondent of its money. It is unthinkable that Mr Jean Pierrot Damiani could open account no. 1004174 for Tecnicana Nigeria Ltd with only a tax clearance certificate, without forms CO2 and CO7 if of- h ficials of the bank represented by Mr Eguh were not crimi- nally negligent. Forms CO2 and CO7 would have disclosed the names of the subscribers to the memorandum and articles of association as well as the Directors of the company. It was this account which Mr Damiani, who described him- i self as General Manager of Tecnicana Nigeria Ltd, used to secure the loan from I B Finance Ltd to execute the Ministry of Defence contract to which the appellant and respondent are strangers. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Akaahs JCA City Express Bank Ltd v. Trade and Financial Services 457 a Unless Tecnicana Nigeria Ltd was shown to be a subsidiary of Trade and Financial Services at the time Mr Damiani negotiated the loan, there is no way that the monies standing b to the credit of Trade & Financial Services would be debited to offset the loan granted by I B Finance limited which had fallen due. The appeal therefore lacks merit and it is accordingly dis- c missed. I also assess costs at N10,000 in favour of the respondent and against theappellant.

OGUNBIYI JCA: I have read before now the judgment just d delivered by my brother, Salami, JCA and I agree with him that this appeal lacks merit. For purpose of emphasis, I would however wish to reiterate that both the appellant and the respondent were strangers to the Ministry of Defence contract, with them not being parties thereto. It is also perti- e nent to restate that even though the Exhibit “D” was given to Mr Jean Damiani by the respondent, it was apparent on the existing documents before the lower court that he acted on behalf of Tecnicana Nigeria Ltd as its General Manager and f not for the respondent. In the decided authority of the case of Oyegun v Igbinedion (1992) 2 NWLR (Part 226) 747 at page 761, on the issue of limitation of agency. In delivering the lead judgment, Nasir, PCA at page 761 had the follow- g ing to say:– “. . . It is settled from the authorities referred to above that a person can be an agent for a particular purpose and not for other purposes. So even if exhibit 10(5) has been put in evidence to show h Chief Isekhire as agent at a collation centre that does not authorise him to be an agent for all purposes in any event, exhibit 10(5) was not shown to any witness in respect of the signature of Chief Isekhire. I am in agreement with Dr Mowoe that it cannot be used without reference to the reasons why it was put in particularly as i there was no examination or cross-examination on the particular point.” The Power of Attorney, Exhibit “D” was not shown to have authorised Mr Jean Damiani or given him the power to j borrow the money given. In the absence of such express

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA 458 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) power, he cannot as an attorney do so. As rightly argued and a submitted by the learned Counsel for the respondent, the Ministry of Defence contract and the loan agreement were not made on behalf of the respondent. This is more so espe- b cially where the appellant had failed to produce a resolution authorizing the loan. It was insufficient for it to have relied upon the power of attorney. Having regard to the deductive conclusions and reasonings on the lead judgment by my c learned brother therefore, I entirely agree that this appeal fails and is accordingly dismissed while the decision of the trial Judge is affirmed. I also abide by the consequential orders made as to costs.

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Ahmed v. Crown Merchant Bank Ltd 459 a Ahmed v Crown Merchant Bank Ltd

COURT OF APPEAL, LAGOS DIVISION b MUHAMMAD, OGUNBIYI , GARBA JJCA Date of Judgment: 16 MAY, 2005 Suit No.: CA/L/132/2000

Banking – NDIC – Power to present petition for winding-up c of bank – Section 38 Banks and Other Financial Institutions Decree No. 25 of 1991 and sections 410(1) and 425 Compa- nies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990 d Banking – Revocation of licence of bank – Whether signifies death of bank Nigerian Deposit Insurance Corporation – Revocation of licence of bank – Power to present petition for winding-up e of bank – Section 38 Banks and Other Financial Institutions Decree No. 25 of 1991 and sections 410(1) and 425 Compa- nies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990 f Facts Crown Merchant Bank Ltd, the respondent, was an ailing bank. Pursuant to the powers conferred on him by law, the g Governor of the Central Bank of Nigeria revoked the banking licences of some banks including the respondent with effect from 16 January, 1998. The Governor further appointed the Nigeria Deposit Insurance Corporation (NDIC) h as the official receiver/provisional liquidator to the said banks. The official receiver/liquidator commenced a petition dated 28 January, 1998 in the name of the respondent for the affairs of the latter to be wound up. The appellants did not, as required by law, give the necessary notice of their inten- i tion to support or oppose the petition. Instead, they prayed the lower court by way of preliminary objection dated 20 July, 1998 thus:– “That the petition be struck out/dismissed on the grounds that the j petitioner has no locus standi to institute the petition.”

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The grounds upon which the objection was sought are:– a “(a) Crown Merchant Bank is not the proper party to present the petition. (b) Assuming without conceding that Crown Merchant Bank b may present the said petition, no special resolution was passed giving the bank the mandate to institute the proceedings as required by the provisions of the Companies and Al- lied Matters Act, 1990.” c Arguments for and against the preliminary objection were heard and the lower court in a considered ruling dated 25 October, 1999, dismissed the objection. The objectors being dissatisfied have appealed to this Court. d Section 38(1)–(4) of Banks and Other Financial Institu- tions Decree No. 25 of 1991 provides as follows:– “(1) Where the Governor makes an order revoking the licence of a bank and requiring the business of that bank to be wound e up, the bank shall within 14 days of the date of the order apply to the Federal High Court for an order winding-up the affairs of that bank and the Federal High Court shall hear the application in priority to all other matters. f (2) If the bank fails to apply to the Federal High Court within the period specified in subsection (1) of this section, the Gover- nor may apply to the Federal High Court for the winding-up of the bank. g (3) If the Governor is satisfied that it is in the public interest to do so, he may, without waiting for the period mentioned in subsection (1) of this section to elapse, appoint the Nigerian Deposit Insurance Corporation or any other person as the official receiver or as a provisional liquidator and the corpora- h tion or such other person shall have the power conferred by or under the Companies and Allied Matters Decree 1990 and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for the purpose of that Decree. i (4) This section shall have effect and Section 408 of the Compa- nies and Allied Matters Decree, 1990 shall be construed as if the revocation of the licence of a bank under this Decree had been included as a ground for winding-up by the Federal High Court under that section.” j

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Ahmed v. Crown Merchant Bank Ltd 461 a Section 425(1) of the Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990 provides:– “The liquidator in a winding-up by the court shall have power, b with the sanction either of the court or of the committee of inspection to:– (a) bring or defend any action or other legal proceedings in the name and on behalf of the company; (b) carry on the business of the company so far as may be neces- c sary for its beneficial winding-up; (c) appoint a legal practitioner or any other relevant professional to assist him in the performance of these duties; (d) pay any classes of creditors in full; d (e) make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging themselves to have any claim, present or future, certain or contingent, ascertained or sounding only in damages against the company, or whereby the company may be rendered liable; e (f ) compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, ascertained or sounding only in damages, subsisting or supposed to subsist between the com- f pany and a contributory or alleged contributory or other debtor or person apprehending liability to the company, and all questions in anyway relating to or affecting the assets or the winding-up of the company, on such terms as may be agreed, and take any security for the discharge of any such g call, debt, liability or claim and give a complete discharge in respect thereof.”

Held – h 1. Section 38(4) of BOFID in particular authorises NDIC having been so appointed to exercise all such powers “conferred by or under the Companies and Allied Mat- ters Decree, 1990” that are exercisable by any provisional liquidator appointed by the Federal High Court. i One of such powers, as contained in section 425(1) of Companies and Allied Matters Act, 1990 is to “bring or defend any action or other legal proceedings in the name and on behalf of the company” in our context, the re- j spondent. The suit that brought about the instant appeal

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was instituted by the NDIC in the exercise of its un- a doubted powers under section 425(1) of Companies and Allied Matters Act, 1990 having been appointed a liquidator/official receiver by the operation of the law as con- b tained in section 38 of Banks and Other Financial Insti- tutions Decree, 1991. 2. A company ceases to be alive and more legalistically, loses its personality on the basis of which it can sue or c be sued, if all the conditions stipulated under section 454(1) and (2) of the Companies and Allied Matters Act, 1990 manifest themselves. 3. A company ceases to live only when it is fully wound up d and dissolved. 4. Having been appointed an official receiver/provisional liquidator under section 38(3) Banks and Other Financial Institutions Decree, 1991 the NDIC was empowered to e institute and maintain a petition for the winding-up of the respondent and in the latter’s name given the combined effect of section 410(1) and section 425 of CAMA. f 5. The respondent is the proper party to present the petition since the appointment of the Nigerian Deposit Insurance Corporation as the provisional liquidator of Crown Bank Ltd has by operation of the provisions of section 38(3) of g the Banks and Other Financial Institutions Decree No. 25 of 1991 been deemed to have been made by the Fed- eral High Court can exercise the powers of a liquidator contained in section 425 of the Companies and Allied h Matters Decree, 1990. The powers include the power to bring or defend any action or other legal proceedings in the name and on behalf of the company. Appeal dismissed. i Cases referred to in the judgment Nigerian Adesola v Abidoye (1999) 14 NWLR (Part 637) 28 j

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Ahmed v. Crown Merchant Bank Ltd 463 a Amokeodo v IGP (1999) 6 NWLR (Part 609) 467 Baroda v Iyalabani Ltd 40 WRN 53 b CCB (Nig) Ltd v Onwuchekwa (2000) 2 NWLR (Part 647) 65 Egbo v Agbara (1997) 1 NWLR (Part 481) 293 Eguamwense v Amaghizemwen (1993) 9 NWLR (Part 315) 1 c Emecheta v Ogueri (1996) 5 NWLR (Part 447) 227 Ephraim Okeke and Others v A-G, Anambra State (1997) 9 NWLR (Part 519) 123 d Idugboe v Oil Field (1979) NCLR 30 Katto v Central Bank of Nigeria (1991) 9 NWLR (Part 214) 126 e Macaulay v RZB Austria (2003) 18 NWLR (Part 852) 282 SC; (2004) FWLR (Part 192) 135 Madukolu v Nkemdilim (1962) 1 SCNLR 341 Maja and Others v Johnson (1951) 13 WACA 194 f NDIC v FMB Ltd (1997) 4 NWLR (Part 501) 519 Nnonye v Anyichie (2005) All FWLR (Part 253) 604 Oloko v Arogbo (1968) NMLR 68 g Onyema v Oputa (1987) 3 NWLR (Part 60) 259 Thomas v Olufosoye (1986) 1 NWLR (Part 18) 669 h Yinka Folawiyo & Sons v T A Hammond Projects Ltd (1977) NCLR 465

Nigerian statutes referred to in the judgment i Banks and Other Financial Institution Decree No. 25 of 1991, sections 38; 38(1)-(4); 338(1) Companies and Allied Matters Act Cap 59 Laws of the Fed- eration of Nigeria, 1990, sections 22; 25; 408; 410(1); 415 j and 425

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Book referred to in the judgment a

Palmer’s Company Law (12ed), page 1356 b Counsel For the appellants: Eghobamien (with him Okorie) For the respondent: Gana c Judgment MUHAMMAD JCA: (Delivering the lead judgment) This is yet another interlocutory appeal from the decision of the Federal High Court, sitting in Lagos. Such appeals, sadly, d are a common feature on our judicial landscape, particularly in the Lagos Area. They impact very negatively on the justice delivery system. The constitutional right to such appeals accounts in substantial measure for avoidable delays which e wantonly characterise the terrain. Suit No. FHC/L/C/P/103/98 commenced in the name of the respondent herein, by the Nigeria Deposit Insurance Corporation (NDIC for short and henceforth so referred to) f seven years ago, is yet to be heard on the merits. It would not be surprising if it remains unheard for a further decade. Whoever is not satisfied with the decision of this Court in the instant appeal has a further right of appeal to the Su- g preme Court. It is only after the apex court’s decision that parties would settle down to the real issue in controversy between them! For now, the system continues to survive in spite of the clear injustice particularly inherent in it!!! h The facts of the case upon which the instant appeal arose are:– “Crown Merchant Bank Ltd., the respondent, is an ailing bank. Pursuant to the powers conferred on him by law, the Governor of i the Central Bank of Nigeria revoked the banking licences of some banks including the respondent with effect from 16 January, 1998. The Governor further appointed the Nigerian Deposit Insurance Corporation (NDIC) as the official receiver/provisional liquidator to the said banks. The official receiver/liquidator commenced a j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA Ahmed v. Crown Merchant Bank Ltd 465 a petition dated 28 January, 1998 in the name of the respondent for the affairs of the latter to be wound up. The appellants did not, as required by law, give the necessary notice of their intention to support or oppose the petition. Instead, they prayed the lower court by b way of preliminary objection dated 20 July, 1998 thus:– ‘That the petition be struck out/dismissed on the grounds that the petitioner has no locus standi to institute the petition’.” The grounds upon which the objection was sought are:– c “(a) Crown Merchant Bank is not the proper party to present the petition. (b) Assuming without conceding that Crown Merchant Bank may present the said petition, no special resolution was d passed giving the bank the mandate to institute the proceedings as required by the provisions of the Companies and Al- lied Matters Act, 1990.” Arguments for and against the preliminary objection were e heard and the lower court in a considered ruling dated 25 October, 1999, dismissed the objection. The objectors being dissatisfied have appealed to this Court on an amended notice of appeal containing four grounds. They pray that the f lower court’s ruling dismissing their objection be set aside. The appellants consider the three issues hereunder reproduced as having arisen for the determination of the appeal:– “i. Whether a provisional liquidator has locus standi to institute g winding-up proceedings in the name of the company sought to be wound up in the absence of a special resolution by the shareholders. ii. Whether the applicants failed to comply with the Compa- nies Winding-up Rules, 1990 and if so whether that was a h sufficient reason to dismiss the preliminaryobjection. iii. Whether the petitioner had waived its right to complain about the non-compliance of the appellants with the Com- panies Winding-up Rules, 1990.” i The respondent has adopted the three issues formulated by the appellants. In arguing their first issue, the appellants’ Counsel referred to section 408 of the Companies and Allied Matters j Act, 1990 and section 38(1)–(3) of the Banks and Other

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Financial Institutions Decree No. 25 of 1991 and submitted a that the two pieces of legislation specify the grounds upon which a court may be prayed for a company to be wound up. Counsel contended that being an artificial person created by b statute, the respondent’s life would only be brought to an end in a manner provided for by the statute. The fact that the Governor of the Central Bank had withdrawn the respondent’s licence did not mean it had ceased to exist. Respon- c dent is alive with its name still on the company’s register. Counsel relied on Palmer’s Company Law (12ed), page 1356 thereof and Idugboe v Oil Field (1979) NCLR 30. In further argument, learned Counsel contended that by d the relevant provisions of the Companies and Allied Matters Act, 1990 and all laws in that regard, since the respondent was still alive, a special resolution of its shareholders was required for it to institute a competent action for its being e wound up. The purported exercise by NDIC, the official receiver/provisional liquidator, of its powers pursuant to section 38 of the Banks and Other Financial Institutions Decree No. 25 of 1991, Counsel submitted, did not legalize the commencement of a winding-up action in the name of the f respondent. The section, it was argued, only increased the grounds upon which a company may be wound up. Learned Counsel conceded, though, that given section 22 of the Companies and Allied Matters Act, 1990, the appointment g of the NDIC as an official receiver/provisional liquidator was in order. NDIC submitted learned appellants’ Counsel, could only exercise such powers as conferred on it by virtue of section 25 of the Companies and Allied Matters Act, h 1990 subject to sections 408, 410 and 338(1) Banks and Other Financial Institutions Decree No. 25 of 1991, and such other sections of the two statutes or even other pieces of legislation other than these two. Counsel alluded to the i decision in NDIC v FMB Ltd (1997) 4 NWLR (Part 501) 519 at 529. Under their second issue, learned appellants’ Counsel has argued that failure of the appellants to file notice of intention j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA Ahmed v. Crown Merchant Bank Ltd 467 a to support or oppose the petition filed in respondent’s name was not fatal. The lower court was wrong to have held otherwise. The rules on the winding-up of companies require b notice from persons who intend to appear at the hearing of a petition and not from persons who seek to challenge the assumption of jurisdiction by the court on the premises articulated by the appellants. The lower court was wrong in not asking parties to lead evidence after issues had been joined c on whether or not the appellants had filed notice to appear at the hearing of the winding-up petition filed by the respondent. Counsel relied on Baroda v Iyalabani Ltd 40 WRN 53. In conclusion, Counsel argued that given Rule 24 of the d Companies Winding-up Rules, 1990, it was respondent’s burden rather than the appellants’ to file the list of persons who had given notice to appear at the hearing of the petition. The court, given the decision in Thomas v Olufosoye (1986) e 1 NWLR (Part 18) 669, was wrong to have held against the appellants, for failure to file a supporting affidavit to the notice of preliminary objection. An objection that cannot be resolved unless by reference to evidence, submitted learned f Counsel, ceases to be preliminary as held in Emecheta v Ogueri (1996) 5 NWLR (Part 447) 227. For their third issue, appellants’ Counsel referred to Order 23 Rule 5 of the Companies Winding-up Rules, 1990 and g submitted repetitively that it does not automatically follow that once notice of intention to attend the hearing of a petition had not been filed by an intending party thereto, he would be automatically foreclosed from participating in such h proceedings. Non-compliance with the winding-up rules was a mere irregularity which respondent endorsed and was in the circumstances, as held in Katto v Central Bank of Nige- ria (1991) 9 NWLR (Part 214) 126 at 147, incapable of il- i legalising the objection raised by the appellants. Counsel further relied on Egbo v Agbara (1997) 1 NWLR (Part 481) 293 at 312 on this limb of his submissions. For all the foregoing arguments and submissions, appel- j lants’ Counsel has urged us to allow the appeal.

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In arguing the first issue for the determination of the ap- a peal, learned respondent’s Counsel relied heavily on section 38(1) and (4) of the Decree No. 25 of 1991. Banks and Other Financial Institutions Decree No. 25 1991 and con- b tended that appellants’ Counsel’s submission that because respondent was still alive, it could only institute a competent action after resolution of its shareholders to that effect had been passed is misconceived. By the relevant law, once the c licence of the respondent had been withdrawn, respondent was duty bound to apply within fourteen days to the Federal High Court for an order to wind-up its affairs. The court in such circumstances would have no option than to entertain the suit. The revocation of the licence of the bank shall d form one of the grounds for the winding-up as provided by section 408 of the Companies and Allied Matters Act, 1990. The respondent needed no resolution, special or otherwise, submitted learned Counsel. Once the petition had, e as in the instant case, proceeded on the basis of the withdrawal of the respondent bank’s licence by the Central Bank, the petitioner needed not to further comply with the provision of section 410 of Companies and Allied Matters f Act, 1990. Under the second issue, learned respondent’s Counsel submitted that the trial court was right to have held that with appellants’ failure to comply with Rules 23 and 25 of the g Companies Winding-up Rules, 1990 their preliminary objection was in the first place incompetent. Indeed, it was contended, nowhere had Counsel referred to appellants in the course of arguing the objection as parties to the petition. h Since appellants were not parties to the proceedings at the lower court, they have no locus standi to appeal against the decision of the court. The winding-up rules, emphasized learned respondent’s counsel, are mandatory provisions and i failure to comply with them vitiated the proceedings initiated by the appellants. Counsel relied on the case of Yinka Folawiyo & Sons v T A Hammond Projects Ltd (1977) NCLR 465. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA Ahmed v. Crown Merchant Bank Ltd 469 a In further argument of the issue, learned respondent’s Counsel contended that although the appellants had asserted filing their notice of intention to oppose the respondent’s pe- b tition by a notice dated 16 July, 1998 and that same was served on the Nigerian Deposit Insurance Corporation, appellants should have stated so in the preliminary objection dated 20 July, 1998 allegedly filed on their behalf. Appel- c lants did not. For the third issue, learned respondent’s Counsel argued that the respondent could not be said to have waived its right to complain about appellants’ non-compliance with the rules d of court simply because it had taken part in the hearing of the preliminary objection. In any event, appellants have not successfully linked themselves with the proceedings that gave rise to the instant appeal and to that extent the present e appeal is incompetent. Counsel relied on section 43 of the 1999 Constitution of the Federal Republic of Nigeria and the decision in Maja and Others v Johnson (1951) 13 WACA 194 and Oloko v Arogbo (1968) NMLR 68. f It is urged, based on the foregoing submissions, that the appeal be dismissed. The determination of the instant appeal rests squarely on the interpretations given to the pieces of legislation which g govern the issues in controversy. Parties are agreed upon these pieces of legislation and the relevant sections thereof section 38(1)–(4) of the Banks and Other Financial Institu- tions Decree (BOFID) No. 25 of 1991 and section 425 of the h Companies and Allied Matters Act (CAMA), 1990 and Rules 23–25 of the Companies Winding-up Rules, 1990, learned appellants’ Counsel contended, have wrongly been applied to the facts of the instant case. Counsel’s arguments, i inter alia, include the fact that since the respondent was yet to be wound up all actions regarding the said respondent necessarily, by virtue of section 415 of the Companies and Allied Matters Act, 1990, have to be initiated by and in the j respondent’s name after a resolution by its shareholders had

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 470 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) been passed sanctioning the institution of the action; that ap- a pellants’ failure to file a notice of intention to oppose the petition for the winding-up of the respondent, is not fatal to appellants’ bid to challenge the competence of the petition; b and that the lower court’s application of section 38(1)–(4) of Bank sand Other Financial Institutions Decree, 1991 was misconceived. The relevant sections of the two pieces of legislation and c the Companies Winding-up Rules, 1990 are hereunder reproduced.

Section 38(1)–(4) Banks and Other Financial Institutions d Decree No. 25 of 1991 provides as follows:– “(1) Where the Governor makes an order revoking the licence of a bank and requiring the business of that bank to be wound up, the bank shall within 14 days of the date of the order ap- e ply to the Federal High Court for an order winding-up the affairs of that bank and the Federal High Court shall hear the application in priority to all other matters.

(2) If the bank fails to apply to the Federal High Court within the f period specified in subsection (1) of this section, the Gover- nor may apply to the Federal High Court for the winding-up of the bank. (3) If the Governor is satisfied that it is in the public interest to do so, he may, without waiting for the period mentioned in g subsection (1) of this section to elapse, appoint the Nigerian Deposit Insurance Corporation or any other person as the official receiver or as a provisional liquidator and the corporation or such other person shall have the power con- h ferred by or under the Companies and Allied Matters Decree, 1990 and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for the purpose of that Decree. i (4) This section shall have effect and section 408 of the Compa- nies and Allied Matters Decree, 1990 shall be construed as if the revocation of the licence of a bank under this Decree had been included as a ground for winding-up by the Federal High Court under that section.” j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA Ahmed v. Crown Merchant Bank Ltd 471 a Section 425(1) of the Companies and Allied Matters Act, 1990 provides:– “The liquidator in a winding-up by the court shall have power, b with the sanction either of the court or of the committee of inspection, to:– (a) bring or defend any action or other legal proceedings in the name and on behalf of the company; c (b) carry on the business of the company so far as may be necessary for its beneficial winding-up; (c) appoint a legal practitioner or any other relevant professional to assist him in the performance of these duties; (d) pay any classes of creditors in full; d (e) make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging themselves to have any claim, present or future, certain or contingent, ascertained or sounding only in damages against the e company, or whereby the company may be rendered liable; (f) compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, ascertained or sounding only in f damages, subsisting or supposed to subsist between the company and a contributory or alleged contributory or other debtor or person apprehending liability to the company, and all questions in any way relating to or affecting the assets or the winding-up of the company, on such terms as may be g agreed, and take any security for the discharge of any such call, debt, liability or claim and give a complete discharge in respect thereof.” Rule 23 of the Companies Winding-up Rules, 1990 reads:– h “(1) Every person who intends to appear at the hearing of a petition shall give, to the petitioner, notice of his intention in accordance with this rule. (2) The notice shall contain the address of the person intending i to appear, shall be signed by him (or by his solicitor) and shall otherwise be in form 12 with such variations as circumstances may require. (3) The notice shall be served or sent by post to the petitioner or his solicitor, at the address stated in the advertisement of the j petition.

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(4) The notice shall be served (or if sent by post, shall be posted a in such time as in the ordinary course of post to reach the address) not later than five days before the hearing. (5) A person who has failed to comply with this rule shall not, b without file special leave of the court, be allowed to appear at the hearing of the petition”. (Italics supplied for emphasis.) In applying the foregoing provisions to the facts of the instant case, a holistic and community reading of the various c statutes appears necessary. Again, since the words constituting the various pieces of legislation are ordinary words which are clear and unambiguous, in discovering the meaning of the statutes, resort must be had to the “golden” rule of d interpretation. Thereby, the words are assigned their ordinary literal meaning. See Macaulay v RZB Austria (2003) 18 NWLR (Part 852) 282 SC; (2004) FWLR (Part 192) 135 and Amokeodo v IGP (1999) 6 NWLR (Part 609) 467. e Let us embark upon this interpretative effort. The power of the Governor of the Central Bank to make/ appoint a liquidator and the fact of the appointment of the f NDIC as the provisional liquidator/official receiver of the respondent pursuant to the revocation of the banking licence of the respondent has not been disputed. Indeed, the two naturally draw from section 38(1) and (4) of the Banks and g Other Financial Institutions Decree, 1991. The latter subsection in particular authorises NDIC having been so appointed to exercise all such powers “conferred by or under the Com- panies and Allied Matters Decree, 1990” that are exercisable h by any provisional liquidator appointed by the Federal High Court. One such power, as contained in section 425(1) of Companies and Allied Matters Act, 1990 is to “bring or defend any action or other legal proceedings in the name and on behalf of the company” in our context, the respondent. i The suit that brought about the instant appeal was instituted by the NDIC in the exercise of its undoubted powers as under section 425(1) of Companies and Allied Matters Act, 1990 having been appointed a liquidator/official receiver by j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA Ahmed v. Crown Merchant Bank Ltd 473 a the operation of the law as contained in section 38 of Banks and Other Financial Institutions Decree, 1991. The learned appellants’ Counsel has argued that since the b respondent was still alive, the petition to wind it up could only be instituted by the respondent itself after its shareholders had passed a resolution to that effect. I agree with learned Counsel to some extent. It is certainly a puerile c argument to advance that mere revocation of the banking licence of the respondent did convey the fact of the dissolution or “death” and accordingly the nonexistence of the respondent. In CCB (Nig) Ltd v Onwuchekwa (2000) d 3 NWLR (Part 647) 65, I did hold that a company ceases to be alive and more legalistically, loses its personality on the basis of which it can sue or be sued, if all the conditions stipulated under section 454(1) and (2) of the Companies e and Allied Matters Act, 1990 manifests themselves. The section states:– “Section 454 (1) If the affairs of a company have been fully wound up and the liquidator makes an application in that behalf, the court shall order the f dissolution of the company and the company shall be dissolved accordingly from the date of the order. (2) A copy of the order shall within fourteen days g from the date when made be forwarded by the liquidator to the commission who shall make in its books a minute of the dissolution of the company.” h The foregoing law is clear and provides in no mistaken terms that a company ceases to live only when it is fully wound up and dissolved. CCB v Onwuchekwu (supra) continues to be good law. One has no cause to deviate from it. i The fact that the respondent was alive when the petition for its winding-up was commenced does not necessarily sustain the arguments of appellants’ Counsel that only the respondent was in the lawful position to commence the j petition in its own name and pursuant to the necessary

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 474 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) resolution of its shareholders. Section 410 of the Companies a and Allied Matters Act, 1990 specifies categories of persons who can make application to a court by way of a petition for the winding-up of a company. The section provides:– b “Section 410(1) An application to the court for the winding-up of a company shall by petition be presented subject to the provisions of this section either by:– c (a) the company; (b) a creditor, including a contigent or prospective creditor of the company; (c) the official receiver; d (d) a contributory; (e) a trustee in bankruptcy to, or a personal representative of a creditor or contributory; e (f) the Commission under Section 323 of this Act; (g) a receiver if authorised by the instrument under which he was appointed; or (h) by all or any of those parties, together f or separately”. (Italics supplied for emphasis.) A combined application of section 410(1)(a), (c) and (h) of the Companies and Allied Matters Act, 1990 to the facts of g the instant case is in order. Having been appointed an official receiver/provisional liquidator under section 38(3) Banks and Other Financial Institutions Decree, 1991 the NDIC was empowered to institute and maintain a petition h for the winding-up of the respondent and in the latter’s name given the combined effect of section 410(1) and section 425 of CAMA, it did. Lastly, section 23 of the Companies Winding-up Rules, i 1990 is equally clear, it speaks for itself. If appellants must participate in the petition validly filed in the name of the respondent, the rules of court required that appellants give notice to that effect. The entire records of proceedings in j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA Ahmed v. Crown Merchant Bank Ltd 475 a respect of the petition was available to the Court which by the operation of section 74 of the Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990 must take judicial b notice of all such records. See Ephraim Okeke and Others v Attorney-General, Anambra State and Others (1997) 9 NWLR (Part 519) 123. Appellants did not give the notice which Rule 23 of the Companies Winding-up Rules, 1990 c required them to give. Appellants’ objection to the competence of the petition was, in the absence of the mandatory notice the rules of court required of them, incompetent. The lower court was without the necessary jurisdiction to entertain same and rightly stated so in its ruling. d Where a piece of legislation provides a precondition to be fulfilled by a party seeking to participate in a particular proceedings in court, non-fulfilment of the stipulated precondi- e tion would disentitle the intending party an otherwise statutorily available access. Courts only assume jurisdiction over matters if such matters had come before them in the manner prescribed by the law. Their jurisdiction over these matters is accordingly extinguished if the matter sought to be adju- f dicated upon had been commenced through procedure other than that for which the law provided that proceedings into the given matter should be commenced. See Eguamwense v Amaghizemwen (1993) 9 NWLR (Part 315) 1; Adesola v g Abidoye (1999) 14 NWLR (Part 637) 28 and Madukolu v Nkemdilim (1962) 1 SCNLR 341. The appellants in the instant case remind one of an invaluable saying of one of my teachers in my early school h days: all games have their rules and for one to be a player he must abide by the rules. I was to discover later that one of the rules in football, for example, is that the game is in play only when within and not outside the pitch. Anything out- i side the playground is something other than the game at play. The referee, an umpire just like the court, takes coun- tenance of only what occurs on the pitch. The appellants in the instant case insist that such an umpire recognises them as j players without their being on the pitch! The Court refused

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 476 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) to take note of their being players when they chose to stay a out of the pitch and out of play. Appellants needed to serve notice of intention to either support or oppose the petition in the instant case. They did not. If they had, they would have b been entitled to participate in the petition proceedings. Their non-compliance with the rules of court had made appellants’ preliminary objection a false bid, a conduct outside the playground, an incompetent maneuver incapable of being coun- c tenanced by the court.

It is appellants’ Counsel’s further lusty argument that respondent having taken steps on appellants’ preliminary objection, the non-service of pre-participation notice being an d irregularity had been waived. Respond cannot subsequently shut out appellants on the basis of the non-service. Respon- dent had two options and was free to elect either of the two in dealing with the competence of appellants’ preliminary e objection. It either that (sic) respondent’s counsel formally move the lower court or in reply to counsel’s arguments on the preliminary objection, submit on ground of law that since appellants had not filed the mandatory pre- f participation notice, the preliminary objection as to the competence of respondent’s suit could not be taken by the court. Respondent elected the latter. Having insisted that appellants had failed to file the mandatory pre-participation notice, it g was no longer possible to view the non-service of the notice as an irregularity that had been waived. In the instant case, the appellants even before being on the playground complained to the referee about respondent’s infractions. Re- h spondent remained on the pitch and insisted that appellants’ complaint could only be entertained if appellants were players in a game that could only be played on and never outside the pitch. It was not that respondent had followed the appellants and consented to play the game outside the pitch. i Respondent’s objection had successfully put the jurisdiction of the lower court to determine appellants’ preliminary objection on hold such that it could only be activated if the necessary rules of court had been complied with. j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA Ahmed v. Crown Merchant Bank Ltd 477 a Appellants’ preliminary objection being non-justiceable, could not be proceeded upon. See Onyema v Oputa (1987) 3 NWLR (Part 60) 259 and Nnonye v Anyichie (2005) All b FWLR (Part 253) 604. The lower court’s ruling regarding appellants’ preliminary objection is at pages 50–54 of the record. The court’s findings started from page 52. The court firstly found that:– c “the respondent is the proper party to present the petition since the appointment of the Nigerian Deposit Insurance Corporation as the provisional liquidator of Crown Bank Ltd has by operation of the provisions of Section 38(3) of the Banks and Other Financial Insti- tutions Decree No. 25 of 1991 been deemed to have been made by d the Federal High Court can exercise the powers of a liquidator contained in Section 425 of the Companies and Allied Matters De- cree, 1990. The powers include the power to bring or defend any action or other legal proceedings in the name and on behalf of the e company.” On the effect of non-compliance with Rule 23 of the Com- panies Winding-up Rules, 1990, the court found that appellants had not filed the mandatory notice and that non- f compliance with Rules 23 and 25 of the relevant rules made the objection raised by them incompetent. I find these profound findings of the lower court though terse, significantly loaded and unassailable. They are in con- g sonance with what the law is on the issues raised for the determination of this appeal. Finally, the non-consideration of the competence or otherwise of the instant appeal as raised by counsel in respon- h dents brief is deliberate. We must operate within the con- fines of the adjectival rules of this Court. Order 3 Rule 15(1) of the Court of Appeal Rules, 2004 provides that such objection be preceded by a notice that same would be raised and i argued. One’s search for such notice by the respondent remains futile and thus the resort to ignore the arguments on an objection so unlawfully advanced! All the three issues of the appellants have in variably j failed. The lots are resolved in favour of the respondent. The

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 478 Nigerian Banking Law Reports [2004 – 2006] 13 N.B.L.R. (PART I) appeal being without merit is hereby dismissed with costs in a favour of the respondent assessed at ten thousand Naira (N10,000). b OGUNBIYI JCA: I have had the opportunity of reading in advance the judgment just delivered by my learned brother, M D Muhammad, JCA and I entirely agree with his consideration and treatment of the issues raised by the appellant and consequent to the conclusion arrived at thereon. I would c however and just for purpose of emphasis wish to restate the trite law to the effect that withdrawal of respondent’s licence did not amount to its discontinued existence or end its live wire. The answer to the question; when does a company be- d comes extinct or cease to exist has been well restated in the case of Idugboe v Oil Field (1979) NCLR 30. In that case, it was held that for the life of a company to be legally brought to an end, it has to be wound up or struck out from the com- e panies register. As rightly also submitted and argued by the learned appellant’s Counsel, with a company being a creation of statute and therefore an artificial person, its life can only be brought to an end by the procedure stated in the f statute establishing it or any other relevant law as laid down. The counsel referred to the learned authors of Palmer’s Company Law (12ed) at page 1356, paragraphs 88–01 wherein it was firmly restated that:– g “The existence of a company incorporated under the Company’s Act cannot be terminated except through the machinery of winding-up or by removal from the register as a defunct company under Section 652 of the English Company Act.” h With its continued existence in principle therefore, the respondent did not need any resolution, special or not to bring a petition before the Federal High Court to get itself wound up. The provisions of sections 38(1)–(4) of Banks and Other Financial Institutions Decree, 1991 (BOFID) and 425 of i Companies and Allied Matters Act, 1990 (CAMA) reproduced in the lead judgment are very explicit. Consequently therefore, I agree with the learned counsel for the respondent on his submission that the court below was not in error j

[2004 – 2006] 13 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ogunbiyi JCA Ahmed v. Crown Merchant Bank Ltd 479 a either in law or in fact when it held that the respondent was the proper person to bring the petition acting through its provisional liquidator, the Nigeria Deposit Insurance Corpo- b ration (NDIC). In other words and contrary to the submission by the appellant’s Counsel, the initiation by the respondent of its winding-up was not wrongful and conceived outside the c contemplation of the law. The learned trial Judge at page 54 of the record of appeal for instance reiterated the appropriate position taken by the respondents, and which same in my humble opinion is accordingly upheld. d On the issue relating to Rules 23 and 25 of the Companies Winding-up Rules, 1990 with same being mandatory, the failure or absence of compliance therewith ought to put the appellants at a disadvantage as rightly arrived at therefore by e the trial court. In the result and having regard to the conclusion arrived at in the lead judgment, there is no merit in this appeal and same is hereby dismissed and I abide by the consequential f order made as to costs.

GARBA JCA: I have had the opportunity before now, of reading the judgment delivered by my learned brother, Mu- hammad, JCA. g He has adequately considered and resolved all the issues raised in this appeal. I agree entirely with his conclusions and the reasons given for them that the appeal, for want of h merit, deserves to be dismissed. It is dismissed by me with same order for costs as contained in the lead judgment. Appeal dismissed.