Nigerian Banking Law Reports

NIGERIAN BANKING LAW REPORTS

[2002 – 2004]

VOLUME 11 (PART II)

To be cited as: [2002 – 2004] 11 N.B.L.R. (PART II)

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

Members of the LexisNexis Group worldwide South Africa LexisNexis Durban 215 Peter Mokaba Road (North Ridge Road), Morningside, 4001 Johannesburg First Floor, 25 Fredman Drive, Sandton, 2196 Cape Town Office Floor 2, North Lobby, Boulevard Place, Heron Close, Century City, 7114 www.lexisnexis.co.za Australia LexisNexis, CHATSWOOD, New South Wales Austria LexisNexis Verlag ARD Orac GmbH & Co KG, VIENNA Benelux LexisNexis Benelux, AMSTERDAM China LexisNexis, BEIJING Canada LexisNexis Butterworths, MARKHAM, Ontario France LexisNexis SA, PARIS Germany LexisNexis Germany, MÜNSTER Hong Kong LexisNexis, HONG KONG Hungary HVG-Orac, BUDAPEST India LexisNexis Butterworths Wadhwa Nagpur, NEW DELHI Ireland Butterworths (Ireland) Ltd, DUBLIN Italy Giuffrè Editore, MILAN Japan LexisNexis, TOKYO Korea LexisNexis, SEOUL Malaysia LexisNexis, KUALA LUMPUR New Zealand LexisNexis, WELLINGTON Poland LexisNexis Poland, WARSAW Singapore LexisNexis, SINGAPORE United Kingdom LexisNexis Butterworths, LONDON USA LexisNexis, DAYTON, Ohio

© 2009 Nigeria Deposit Insurance Corporation, published by LexisNexis (Pty) Ltd under licence ISSN 1595-1030 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including electronic, mechanical, photocopying and recording, without the written permission of the copyright holder, application for which should be addressed to the publisher. Such written permission must also be obtained before any part of this publication is stored in a retrieval system of any nature. Whilst every effort has been made to ensure that the information published in this work is accurate, the editors, publishers and printers take no responsibility for any loss or damage suffered by any person as a result of the reliance upon the information contained therein.

Printed and bound by Interpak Books Pietermaritzburg

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. Ahmed Almustapha Member Registrar-General Corporate Affairs Commission 5. Gabriel Olukayode Kembi Member Legal Practitioner 6. Adekunle Oladapo Omowole Member Legal Practitioner Corporate Affairs Commission 7. Nasiru Tijani Member Legal Practitioner Senior Lecturer, Nigerian Law School 8. Belema A. Taribo Member Legal Practitioner N.D.I.C.

9. Moses Ter-llumun Adaguusu Member Legal Practitioner Corporate Affairs Commission 10. Dan Ike Agwu Secretary Legal Practitioner N.D.I.C. iii LIST OF JUSTICES OF THE SUPREME COURT OF NIGERIA AS AT 30TH NOVEMBER, 2007

1. HON. JUSTICE IDRIS LEGBO KUTIGI, CON (Chief Justice of Nigeria) 2. HON. JUSTICE SYLVESTER UMARU ONU, CON 3. HON. JUSTICE ALOYSIUS IYORGYER KATSINA ALU, CON 4. HON. JUSTICE NIKI TOBI, CON 5. HON. JUSTICE DAHIRU MUSDAPHER, CON 6. HON. JUSTICE GEORGE ADESOLA OGUNTADE, CON 7. HON. JUSTICE SUNDAY AKINOLA AKIN- TAN, CON 8. HON. JUSTICE ALOMA MARIAM MUKHTAR, CON 9. HON. JUSTICE MAHMUD MOHAMMED, CON 10. HON. JUSTICE WALTER SAMUEL NKANU ONNOGHEN, CON 11. HON. JUSTICE IKECHI FRANCIS OGBUAGU, CON 12. HON. JUSTICE FRANCIS FEDODE TABAI, CON 13. HON. JUSTICE IBRAHIM TANKO MUHAM- MAD, CON 14. HON. JUSTICE PIUS OLAYIWOLA ADEREMI, CON 15. HON. JUSTICE CHRISTOPHER MITCHELL CHUKWUMA-ENEH, CON

SENIORITY LIST OF JUSTICES OF THE COURT OF APPEAL AS AT 30TH NOVEMBER, 2007

1. HON. JUSTICE UMARU ABDULLAHI, CON (President) 2. HON. JUSTICE ISA AYO SALAMI, (OFR) 3. HON. JUSTICE JAMES OGENYI OGEBE, (OFR) 4. HON. JUSTICE RABIU DANLAMI MUHAM- MAD, (OFR) 5. HON. JUSTICE RAPHAEL OLUFEMI ROW- LAND, (OFR) 6. HON. JUSTICE MUHAMMAD S. MUNTAKA COOMASSIE 7. HON. JUSTICE DALHATU ADAMU, (OFR) 8. HON. JUSTICE BABA ALKALI BA’ABA 9. HON. JUSTICE SAKA ADEYEMI IBIYEYE 10. HON. JUSTICE ZAINAB ADAMU BUL- KACHUWA 11. HON. JUSTICE SULEIMAN GALADIMA 12. HON. JUSTICE VICTOR AIMEPOMO O. OM- AGE 13. HON. JUSTICE JOHN AFOLABI FABIYI 14. HON. JUSTICE KUMAI BAYANG AKAAHS 15. HON. JUSTICE OLUFUNLOLA OYEOLA ADEKEYE 16. HON. JUSTICE M. DATTIJO MUHAMMAD 17. HON. JUSTICE AMIRU SANUSI 18. HON. JUSTICE CLARA BATA OGUNBIYI 19. HON. JUSTICE ISTIFANUS THOMAS 20. HON. JUSTICE JAFARU MIKA’ILU 21. HON. JUSTICE AMINAT ADAMU AUGIE 22. HON. JUSTICE ABUBAKAR ABDULKADIR JEGA 23. HON. JUSTICE STANLEY SHENKO ALAGOA

v [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

24. HON. JUSTICE MONICA DONGBAN- MENSEM 25. HON. JUSTICE NWALE SYLVESTER NGWUTA 26. HON. JUSTICE MOHAMMED LAWAL GARBA 27. HON. JUSTICE JEAN OMOKRI 28. HON. JUSTICE TIJANI ABDULLAHI 29. HON. JUSTICE UWANI M. ABBA AJI 30. HON. JUSTICE MARY PETER ODILI 31. HON. JUSTICE KUDIRAT M.O. KEKERE- EKUN 32. HON. JUSTICE MOHAMMED LADAN TSAMIYA 33. HON. JUSTICE RAPHAEL CHIKWE AGBO

SENIORITY LIST OF JUSTICES OF THE FEDERAL HIGH COURT OF NIGERIA AS AT 30TH NOVEMBER, 2007

1. HON. JUSTICE R.N. UKEJE (Chief Judge) 2. HON. JUSTICE A. MUSTAPHA 3. HON. JUSTICE D.D. ABUTU 4. HON. JUSTICE I.N. AUTA 5. HON. JUSTICE M.A. EDET 6. HON. JUSTICE A.A. ABDU-KAFARATI 7. HON. JUSTICE SOBA 8. HON. JUSTICE O.J. OKEKE 9. HON. JUSTICE S. YAHAYA 10. HON. JUSTICE A. BELLO 11. HON. JUSTICE A.O. AJAKAIYE 12. HON. JUSTICE F.F. OLAYIWOLA 13. HON. JUSTICE ADAMU HOBON 14. HON. JUSTICE J.T. TSOHO 15. HON. JUSTICE S.J. ADAH 16. HON. JUSTICE CHUKWURA NNAMANI 17. HON. JUSTICE R.O. NWODO 18. HON. JUSTICE G.C. OKEKE 19. HON. JUSTICE G.K. OLOTU 20. HON. JUSTICE J.E. SHAKARHO 21. HON. JUSTICE L. AKANBI 22. HON. JUSTICE C.M. OLATOREGUN 23. HON. JUSTICE BINTA F.M. NYAKO 24. HON. JUSTICE A. LIMAN 25. HON. JUSTICE S. YAHUZA 26. HON. JUSTICE C. ARCHIBONG 27. HON. JUSTICE I. EJIOFOR 28. HON. JUSTICE A.I. CHIKERE 29. HON. JUSTICE M.L. SHUAIBU 30. HON. JUSTICE SALIU SAIDU vii [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

31. HON. JUSTICE G.O. KOLAWOLE 32. HON. JUSTICE A.O. FAJI 33. HON. JUSTICE B. BELLO ALIYU 34. HON. JUSTICE B.I. MOLOKWU 35. HON. JUSTICE A.F. ADETOKUNBO- ADEMOLA 36. HON. JUSTICE CHUDI NWOKORIE 37. HON. JUSTICE M.I. AWOKULEHIN 38. HON. JUSTICE R.N. OFILI-AJUMOGOBIA 39. HON. JUSTICE L. ALLAGOA 40. HON. JUSTICE A.O. OGIE 41. HON. JUSTICE BABS KUEWUMI 42. HON. JUSTICE UMAR M. GARBA 43. HON. JUSTICE NYAURE BABA 44. HON. JUSTICE A.R. MOHAMMED 45. HON. JUSTICE T. ABUBAKAR

viii

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 partici- pating 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 by the CBN and other relevant authorities to promote the ix [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports 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 x [2002 – 2004] 11 N.B.L.R. (PART II)

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 imperative. 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 xi [2002 – 2004] 11 N.B.L.R. (PART II)

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 (“NBLR”). Nigeria Deposit Insurance Corporation November, 2005

xii

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 (“NBLR”), I did not hesitate in giving my consent. The NBLR 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

xiii [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports invaluable to users who would not have to wade through different law reports when conducting research on Nigerian banking case law. The publication of the NBLR is one reliable means of dis- seminating 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 NBLR 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

xiv

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 suspected 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. xv [2002 – 2004] 11 N.B.L.R. (PART II)

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 dispensation, 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 NBLR 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 NBLR. They left no stone unturned in bringing the Corporation’s dream of making this worthy contribution to legal knowledge and xvi [2002 – 2004] 11 N.B.L.R. (PART II)

Preface to the Nigerian Banking Law Reports research a reality. Their commitment in ensuring the completion of the project is highly commendable. Management will on its part do everything possible to ensure that publication of the Nigerian Banking Law Reports (NBLR) is sustained. G.A. Ogunleye, OFR Managing Director/Chief Executive November, 2005

xvii

TABLE OF CONTENTS 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...... xlix Index of Nigerian Statutes referred to...... lv Index of Nigerian Rules of Court referred to...... lxi Index of Foreign Statutes referred to...... lxiii Index of Books referred to ...... lxv

xix

EDITORIAL NOTE

The underlisted Rulings/Judgments were inadvertently omitted in our selection of judgments between 13th February, 1976–19th June, 1987. They are included in Volume 11 (Part II) at pages 431–593 1. Metalimpex v. A.G. Leventis and Co – 13th February, 1976 2. Enzewor v. C.B.N. – 19th March, 1976 3. Bronik Motors Ltd v. Wema Bank Ltd – 10th June, 1983 4. Abusonwan v. Mercantile Bank of Nig. Ltd – 19th June, 1987

xxi

TABLE OF CASES REPORTED

Page 1. Abusomwan v. Mercantile Bank of Nig. Ltd ...... 567 2. Afribank Nig. Plc v. Onyima ...... 26 3. African Ind. Bank Ltd v. Craine Int’l Trading Co Ltd ...... 272 4. Akano v. F.B.N. Plc ...... 88 5. Arewa Paper Converters Ltd v. NDIC ...... 59 6. Baladec Tech. Co Ltd v. Intercity Bank Plc ...... 411 7. B.O.N. Ltd v. Gana ...... 388 8. Bronik Motors Ltd v. Wema Bank Ltd ...... 469 9. Enzewor v. C.B.N...... 456 10. F.A.T.B. Ltd v. Partnership Investment Co Ltd ..... 214 11. F.M.B. Ltd v. Engr. B.O. Oche ...... 373 12. Fortune Int. Bank Plc v. Pegasus Trading Office (Gmbh) ...... 253 13. Lingo Nig. Ltd v. Nwodo ...... 75 14. Metalimpex v. A.G. Leventis and Co (Nig.) Ltd .... 431 15. NDIC v. Okem Enterprises Ltd ...... 289 16. Owoniboys Tech. Services Ltd v. U.B.N. Ltd ...... 173 17. Purification Techniques (Nig.) Ltd v. A.G. of Lagos State ...... 594 18. Remalo Ltd v. N.B.N. Ltd ...... 1 19. Trade Bank Plc v. Benilux (Nig.) Ltd ...... 13 20. U.B.A. Plc v. Mustapha ...... 103 21. U.B.A. Plc v. Okeke ...... 150

xxiii

INDEX OF SUBJECT MATTER

BANKING Bank – Meaning of Lingo Nig. Ltd v. Nwodo [2002 – 2004] 11 N.B.L.R. (PART II) 75 “Bank draft” – Meaning of F.A.T.B. Ltd v. Partnership Investment Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 214 Bank draft – Where consideration failed – Whether bank can stop payment F.A.T.B. Ltd v. Partnership Investment Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 214 Bank guarantee – Whether yields interest – Distinction thereof with judgment sum Lingo Nig. Ltd v. Nwodo [2002 – 2004] 11 N.B.L.R. (PART II) 75 Bank in receivership – Whether can still charge interest on loans Remalo Ltd v. N.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 1 Banker and customer relationship – Contractual one Puri- fication Techniques (Nig.) Ltd v. A.G. of Lagos State [2002 – 2004] 11 N.B.L.R. (PART II) 594 Banker/customer relationship – Customer drawing in excess of his account – Effect Afribank Nig. Plc v. Ony- ima [2002 – 2004] 11 N.B.L.R. (PART II) 26 Banker/customer relationship – Jurisdiction of Federal High Court – Whether any – Section 7(1)(b)(iii) of the Federal High Court Act Bronik Motors Ltd v. Wema Bank Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 469 Bill of exchange – Failure of consideration – Effect F.A.T.B. Ltd v. Partnership Investment Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 214 Bill of exchange – What amounts to fraudulent dealing thereof F.A.T.B. Ltd v. Partnership Investment Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 214 xxv [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

Cheque – Duty on paying bank to pay the drawee – Where payment made to a person other than the drawee – Implication thereof Trade Bank Plc v. Benilux (Nig.) Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 13 Cheque drawn on a banker – Consideration given by a party thereto – Presumption thereof – Whether rebuttable – Section 30(1) of the Bill of Exchange Act, Cap 35 Laws of the Federation of Nigeria, 1990 considered F.A.T.B. Ltd v. Partnership Investment Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 214 Cheques – Extent of banker’s obligation to honour customer’s cheque – Where customer has sufficient funds in his account – Effect thereof F.A.T.B. Ltd v. Part- nership Investment Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 214 Cheques – Payment made to a person not entitled – Whether constitutes tort of conversion Trade Bank Plc v. Benilux (Nig.) Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 13 Customer overdrawing his account – Whether imputes criminal liability Afribank Nig. Plc v. Onyima [2002 – 2004] 11 N.B.L.R. (PART II) 26 Debt – Collection of – Whether the Nigeria Police should be used to collect debt owed to bank Afribank Nig. Ltd v. Onyima [2002 – 2004] 11 N.B.L.R. (PART II) 26 Dispute between bank and customer – Whether Federal High Court has jurisdiction – Section 251(1)(d) of Constitution of the Federal Republic of Nigeria, 1999 – Proviso to section interpreted NDIC v. Okem Enterprises Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 289 Jurisdiction of Federal High Court – Dispute between customer and bank – Section 251(1)(d) of Constitu- tion of the Federal Republic of Nigeria, 1999 – xxvi [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Subject Matter

Proviso to section – Whether Federal High Court has any or exclusive jurisdiction NDIC v. Okem Enter- prises Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 289 Loan – Interest chargeable thereon – Payment of interest at the rate prescribed – Presumption of Remalo Ltd v. N.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 1 Loan – Interest thereon – Rate chargeable by banks – De- termination thereof – Power of Central Bank of Nige- ria Remalo Ltd v. N.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 1 Negligence – Bank failing to carry out instruction of customer – Liability of bank to third party injured by its negligence Abusomwan v. Mercantile Bank of Nig. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 567 Negotiable instrument – Where consideration failed – Whether nominee can claim value of the instrument F.A.T.B. Ltd v. Partnership Investment Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 214 Promissory note – Whether a payee for value can maintain an action F.A.T.B. Ltd v. Partnership Investment Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 214 Sale of mortgaged property below reserved price – Effect on validity of sale – Whether an action for specific performance can be sustained? U.B.A. Plc v. Musta- pha [2002 – 2004] 11 N.B.L.R. (PART II) 103

BILL OF EXCHANGE Indorser of – Liability of Metalimpex v. A.G. Leventis and Co (Nig.) Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 431 Notice of dishonour – When not necessary – Section 50(2)(d)(ii) Bills of Exchange Act Metalimpex v. A.G. Leventis and Co (Nig.) Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 431 Presentment for payment and notice of dishonour – Con- ditions precedent for bringing of any action on bill of xxvii [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

exchange Metalimpex v. A.G. Leventis and Co (Nig.) Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 431 Presumption of consideration Metalimpex v. A.G. Lev- entis and Co (Nig.) Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 431 Signing of by company – Principles governing Metalim- pex v. A.G. Leventis and Co (Nig.) Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 431

COMPANY LAW Contract entered into by a company – When binding – Rule in Turquand’s case Metalimpex v. A.G. Leventis and Co (Nig.) Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 431 Receivership – Liquidation – Distinction between Remalo Ltd v. N.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 1

CONTRACT Action commenced after six years of accrual – Whether statute barred – Effect on action B.O.N. Ltd v. Gana [2002 – 2004] 11 N.B.L.R. (PART II) 388 Breach of contract – When time begins to run B.O.N. Ltd v. Gana [2002 – 2004] 11 N.B.L.R. (PART II) 388 Fraud – Effect thereof on a contract F.A.T.B. Ltd v. Part- nership Investment Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 214

CURRENCY Conversion – Plaintiff claiming thereunder – What to prove – Decree No. 11 of 1968 Enzewor v. C.B.N. [2002 – 2004] 11 N.B.L.R. (PART II) 456

EVIDENCE Documentary evidence – Importance of in banking transactions F.A.T.B. Ltd v. Partnership Investment Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 214 xxviii [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Subject Matter

Illiterate – Evaluation of the evidence of – Weight to be attached thereto U.B.A. Plc v. Mustapha [2002 – 2004] 11 N.B.L.R. (PART II) 103 Section 132(1) of the Evidence Act, Cap 112 Laws of the Federation of Nigeria, 1990 – Principles governing Fortune Int. Bank Plc v. Pegasus Trading Office (GMBH) [2002 – 2004] 11 N.B.L.R. (PART II) 253

EXECUTION Immovable property of judgment debtor – Sale of – Sec- tion 44 of the Sheriffs and Civil Process Law of Lagos State – Principles applicable African Ind. Bank Ltd v. Craine Int’l Trading Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 272

FAILED BANKS TRIBUNAL Decision of – When not appealable Arewa Paper Con- verters Ltd v. N.D.I.C. [2002 – 2004] 11 N.B.L.R. (PART II) 59 Proceedings of – When could Federal High Court adopt Arewa Paper Converters Ltd v. N.D.I.C. [2002 – 2004] 11 N.B.L.R. (PART II) 59

GARNISHEE Money of State Government in a bank – Whether money in custody of public officer – Section 84 of the Sher- iffs and Civil Process Act, Cap 407 Laws of the Fed- eration of Nigeria, 1990 Purification Techniques (Nig.) Ltd v. A.G. of Lagos State [2002 – 2004] 11 N.B.L.R. (PART II) 594 Principles applicable Fortune Int. Bank Plc v. Pegasus Trading Office (GMBH) [2002 – 2004] 11 N.B.L.R. (PART II) 253

GUARANTEE Meaning of Lingo Nig. Ltd v. Nwodo [2002 – 2004] 11 N.B.L.R. (PART II) 75 xxix [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

Principles applicable Fortune Int. Bank Plc v. Pegasus Trading Office (GMBH) [2002 – 2004] 11 N.B.L.R. (PART II) 253

INJUNCTION Perpetual – To restrain sale of mortgaged property – Mortgage deed valid – Improper U.B.A. Plc v. Okeke [2002 – 2004] 11 N.B.L.R. (PART II) 150

INTERPRETATION OF STATUTE Section 132(2) of the Evidence Act, Cap 112 Laws of the Federation of Nigeria, 1990 – Principles governing Fortune Int. Bank Plc v. Pegasus Trading Office (GMBH) [2002 – 2004] 11 N.B.L.R. (PART II) 253

JURISDICTION Federal High Court – Extent of jurisdiction conferred by section 230(1)(d) of Decree No. 107 of 1993 where there is no banker/customer relationship Trade Bank Plc v. Benilux (Nig.) Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 13

LAND LAW Consent of Governor – Alienation of land by holder of statutory certificate of occupancy – Who to seek Owoniboys Tech. Services Ltd v. U.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 173 Merger of estates – How created – When does it arise Owoniboys Tech Services Ltd v. U.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 173

LAND USE ACT Alienation of land – Principles governing – Section 22 of the Land Use Act, 1978 Owoniboys Tech Services Ltd v. U.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 173 xxx [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Subject Matter

LIMITATION OF ACTION Statute of limitation – Determining factors thereto B.O.N. Ltd v. Gana [2002 – 2004] 11 N.B.L.R. (PART II) 388

MORTGAGE Consent of Governor – Mortgage of property to bank – Consent of Governor received – Bank granting more advances and executing deeds in respect of them and on the same property but not seeking the consent of Governor to these subsequent deeds – Whether the deeds are a nullity Owoniboys Tech. Services Ltd v. U.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 173 Equitable mortgage – Principles governing African Ind. Bank Ltd v. Craine Int’l Trading Co Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 272 Interest rate in mortgage deed – Clause empowering mortgagee to charge interest rate as deemed necessary – At- titude of court Owoniboys Tech. Services Ltd v. U.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 173 Merger of estates – How created – When does it arise Owoniboys Tech. Services Ltd v. U.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 173 Mortgaged property – Auction sale – Notice – Length – Notice required – Failure to give notice – Effect on sale – Sections 19 and 20 of the Auctioneers’ Laws of Northern Nigeria, 1963 F.M.B. Ltd v. Engr. B.O. Oche [2002 – 2004] 11 N.B.L.R. (PART II) 373 Original deed of – Further loans – Up-stamping – Whether separate deed required for subsequent loans on the same property Owoniboys Tech. Services Ltd v. U.B.N. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 173 Power of sale – Exercise of – When it arises – Duty of mortgagee in relation to mortgaged property – Whether a trustee of mortgagor – When sale will be xxxi [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

vitiated Akano v. F.B.N. Plc [2002 – 2004] 11 N.B.L.R. (PART II) 88 Sale of mortgaged property by auction subject to condition – Effect when sale did not follow condition precedent to the sale – Principle of reserved price – How it operates U.B.A. Plc v. Mustapha [2002 – 2004] 11 N.B.L.R. (PART II) 103 Sale of property – Non-compliance with section 19 Auc- tioneers’ Law, Anambra State – Sale invalid U.B.A. Plc v. Okeke [2002 – 2004] 11 N.B.L.R. (PART II) 150 Sale of property – Perpetual injunction to restrain sale of mortgaged property – Mortgage deed valid – Im- proper U.B.A. Plc v. Okeke [2002 – 2004] 11 N.B.L.R. (PART II) 150 Sale of property – Purchaser of mortgaged property – Whether bound to enquire if power of sale has arisen Akano v. F.B.N. Plc [2002 – 2004] 11 N.B.L.R. (PART II) 88 Sale of property at undervalue – Fraud and collusion – Sale invalid U.B.A. Plc v. Okeke [2002 – 2004] 11 N.B.L.R. (PART II) 150

NEGLIGENCE Action for – Can arise de hors contract of the parties Abusomwan v. Mercantile Bank of Nig. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 567 Proximity or neighbourhood theory Abusomwan v. Mer- cantile Bank of Nig. Ltd [2002 – 2004] 11 N.B.L.R. (PART II) 567

PRACTICE AND PROCEDURE Service of process – Object of Baladec Tech. Co Ltd v. Intercity Bank Plc [2002 – 2004] 11 N.B.L.R. (PART II) 411 xxxii [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Subject Matter

Stay of execution – Whether court will allow judgment debtor to retain judgment sum – Essence of Lingo Nig. Ltd v. Nwodo [2002 – 2004] 11 N.B.L.R. (PART II) 75 Undefendend list – When to transfer from undefended list to general cause list Baladec Tech. Co Ltd v. Intercity Bank Plc [2002 – 2004] 11 N.B.L.R. (PART II) 411

xxxiii

INDEX OF NIGERIAN CASES REFERRED TO

A 7up Bottling Co Ltd v. Abiola and Sons Bot- tling Co Ltd (2001) NWLR (Part 730) 469 13 A.C.B. Ltd v. Egbunike (1988) 4 NWLR (Part 88) 350 26 A.C.B. Plc v. Losada Nig. Ltd (1995) 7 NWLR (Part 405) 26 272 A.G., Bendel State v. A.G. Federation (1982) 3 NCLR 1; (1981) 10 SC 1 289 A.G., Bendel State v. A.G., Federation (1983) 6 SC 8 469 Abasi v. State (1992) 8 NWLR (Part 260) 383 289 Abdullahi v. Raji (1998) 1 NWLR (Part 534) 481 26 Abbey v. Alex (1999) 14 NWLR (Part 637) 148 253 Adegoke Motors Ltd v. Adesanya (1989) 3 NWLR (Part 109) 250 411 Adejumo v. Governor of Lagos State (1972) 3 SC 47 289 Adeyemi v. Bamidele (1968) 1 All NLR 31 103 Aderounmu v. Olowu (2000) 4 NWLR (Part 652) 253 173 Adesanya v. President of Federal Republic of Nigeria (1981) 5 SC 112 469 Adio v. State (1986) 2 NWLR (Part 24) 581 88 Adisa v. Oyinwola (2000) 10 NWLR (Part 674) 116 13 Adonri v. Ojo-Osagie (1994) 6 SCNJ (Part 11) 192 103 Afribank (Nig.) Plc. v. K.C.G. (Nig.) Ltd (2001) 8 NWLR (Part 714) 87 289

xxxv [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

Africa Insurance Development Corporation v. Nigeria Liquified Natural Gas Ltd (2000) 4 NWLR (Part 653) 494 253 Agbaka v. Amadi (1998) 11 NWLR (Part 572) 16 289 Agbanifo v. Aiwereoba (1988) 1 NWLR (Part 70) 325 373 Agidigbi v. Agidigbi (1996) 6 NWLR (Part 454) 300 103 Aja v. Okoro (1991) 7 NWLR (Part 203) 260 26 Ajuwon v. Adeoti (1990) 2 NWLR (Part 132) 271 88 Akeredolu v. Akinremi (1989) 3 NWLR (Part 108) 164 214 Akibu v. Opaleye (1974) 11 SC 189 103 Akinbinu v. Oseni (1992) 1 NWLR (Part 215) 97 373 Alli v. Ikusebiala (1985) 1 NWLR (Part 4) 630 253 Amao v. Onire (1964) NNLR 130 26 Amida v. Oshoboja (1984) 7 SC 68 214 Amokomowo v. Andu (1985) 5 SC 28 103 Anyanwu v. Mbara (1992) 5 NWLR (Part 242) 386 103 Anyaoku v. Adi (1986) 6 SC 75; (1986) 17 NSCC (Part II) 799; (1986) 3 NWLR (Part 31) 103 Aqua Ltd v. Ondo State Sports Council (1988) 4 NWLR (Part 91) 622 289 Arewa Textile Plc. v. Abdullahi and Bros. Musawa Ltd (1998) 6 NWLR (Part 554) 508 88 Awojugbagbe Light Industries Ltd v. Chinukwe (1995) 4 NWLR (Part 390) 379 173 Awolowo v. Shagari (1979) 6–9 SC 51 289 B B.O.N. Ltd v. Saleh (1999) 9 NWLR (Part 618) 331 214

xxxvi [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

Bakare v. L.S.C.S.C. (1992) 8 NWLR (Part 262) 641 388 Balogun v. N.B.N. (1978) 12 NSCC 36 594 Bank of the North Ltd v. Aliyu (1999) 7 NWLR (Part 612) 622 88 Bank of the North v. Muri (1998) 2 NWLR (Part 536) 153 26 Bank of West Africa Ltd v. Odiatu (1956) LLR 48 26 Barclays Bank D.C.O. v. Olofintuyi (1961) All NLR 229 150 Bi Zee Bee Hotels Ltd v. Allied Bank (Nig.) Ltd (1996) 8 NWLR (Part 465) 176 289 Bronik Motors Ltd v. Wema Bank Ltd (1983) 1 SCNLR 296 289 Bucknor-MacLean and another v. Inlaks Ltd (1980) 8–11 SC 1 469 C Coker v. Olusola (1968) NMLR 79 272 Coker v. U.B.A. Plc (1997) 2 NWLR (Part 490) 641; (1997) 2 SCNJ 130 289 Commissioner for Works, Benue State v. Devcon Ltd (1988) 3 NWLR (Part 83) 407 388 Construzioni Generali Farsura Cogefar SPA v. N.P.A. (1972) 1 All NLR 509 59 D Diamond Bank Ltd v. P.I. Co Ltd (2001) 4 NWLR (Part 703) 259 59 E Ebadan v. Uso (1976) UILR (Part II) 205 103 Ebba v. Ogodo (1984) 4 SC 84 567 Edokpayi v. Oke (1964) NMLR 52 103 Egbunike v. African Continental Bank Ltd (1995) 2 NWLR (Part 375) 34 1 Egonu v. Egonu (1978) 11–12 SC 111 373 Ejikeme v. Okonkwo (1994) 8 NWLR (Part 362) 266 150

xxxvii [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

Ejoh v. Inspector General of Police 1963 1 All NLR 250 469 Eka-Etah v. Nigerian Housing Development Society Ltd (1973) All NLR (2ed) 555 150 Ekpenyong v. Ayi (1973) 1 NMLR 372 103 Ekwunife v. Wayne (W.A.) Ltd (1989) 5 NWLR (Part 122) 422 253 Elendu v. Ekwoaba (1998) 10 SCNJ 51 103 Erikitola v. Alli 16 NLR 56 150 Ezeoke v. Nwagbo (1988) 1 NWLR (Part 72) 616 103 F F.M.B.N. v. NDIC (1999) 2 NWLR (Part 591) 333 289 Faagol Inst. Ltd v. National Bank of Nigeria Ltd (1993) 1 NWLR (Part 271) 586 1 Fadlallah v. Arewa Textiles Ltd (1997) 8 NWLR (Part 518) 546 103, 214 Famuyiwa v. Folawiyo (1973) 1 All NLR (Part 2) 11 103 Fatoyinbo v. Williams (1956) 1 FSC 87; (1956) SCNLR 274 214 Fawehinmi v. Akilu (1990) 1 NWLR (Part 127) 450 59 Federal Mortgage Bank v. Babatunde (1999) 12 NWLR (Part 632) 683 150 Federal Republic of Nigeria v. Eze (1982) 3 NCLR 251 469 Finnih v. Imade (1992) 1 NWLR (Part 219) 511 214 First Bank of Nig. v. Doyin Investment Nig. Ltd (1989) 1 NWLR (Part 99) 634 59 Fojule v. Federal Mortgage Bank (2001) 2 NWLR (Part 697) 384 150 G G.B. Ollivant Ltd v. Lawal (1972) 3 SC 125 103 Gbadamosi v. Kabo Travels Ltd (2000) 8 NWLR (Part 668) 243 150 xxxviii [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

George v. Dominion Flour Mills Ltd (1963) 1 SCNLR 242 103 Geronimo v. Janonuzelli (1924) 5 NLR 77 59 Globe Fishing Industries Ltd v. Coker (1990) 7 NWLR (Part 162) 265 150 H H.M.S. Ltd v. F.B.N. Ltd (1991) 1 NWLR (Part 167) 290 214 Henry Stephens Eng. Ltd v. Complete Homes Ent. Ltd (1987) 1 NWLR (Part 47) 40 150 Highgrade Maritime Services Ltd v. F.B.N. Ltd (1991) 1 NWLR (Part 167) 290 173 Honika Sawmill (Nig.) Ltd v. Hoff (1994) 2 NWLR (Part 326) 252 289 I I.B.W.A. Ltd v. Pavex Int. (Nig.) Ltd (2000) 7 NWLR (Part 663) 105 594 Ibeanu v. Ogbeide (1998) 9 SCNJ 5 103 Ibrahim v. Mohammed (1996) 3 NWLR (Part 453) 437 26 Idehen v. Idehen (1991) 6 NWLR (Part 198) 382 289 Ifediorah v. Ume (1988) 2 NWLR (Part 74) 5 88 Igwe v. A.C.B. Plc (1999) 6 NWLR (Part 605) 1 214 Iheanacho v. Ejiogu (1995) 4 NWLR (Part 389) 324 103 Ihekwoaba v. A.C.B. Ltd (1998) 10 NWLR (Part 571) 590 150 Ike v. Ugboaja (1993) 6 NWLR (Part 301) 539 173 Ikeanyi v. A.C.B. Ltd (1997) 2 SCNJ 93 150 Iloabuchi v. Ebigbo (2000) 4 SC (Part II) 124 411 Ilori v. Benson (2000) 9 NWLR (Part 673) 570 1 Imana v. Robinson (1979) 3 and 4 SC 1 567

xxxix [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

International Agricultural Industries (Nig.) Ltd v. Chika Bros. Ltd (1990) 1 NWLR (Part 124) 70 173 International Merchant Bank v. Samba Petro- leum Co Ltd (2000) 5 NWLR (Part 690) 232 150 International Textile Ind. (Nig.) Ltd v. Ad- eremi (1999) 8 NWLR (Part 614) 268 173 Iweka v. SCOA (2000) 7 NWLR (Part 664) 325 388 Iwunwah v. Iwunwah (1999) 13 NWLR (Part 635) 425 26 J Jammal Steel Structures Ltd v. A.C.B. Ltd (1973) 1 All NLR (Part 2) 208 289, 469 Jegede v. Giwa (1977) 4 SC 121 103 Jiboso v. Obadina (1962) WNLR (Parts I– IV) 305 103 K Kalio v. Kalio (1977) 2 SC 15 103 Klifco Ltd v. Holzmann A.G. (1996) 3 NWLR (Part 436) 276 1 Koya v. Kolaja Zawan (1958) NRNLR 1 272 L L.S.D.P.C. v. City Bank (W.A.) Ltd (1998) 8 NWLR (Part 563) 681 59 L.S.D.P.C. v. Foreign Finance Corp. (1987) 1 NWLR (Part 50) 413 289 Labiyi v. Anretiola (1992) 8 NWLR (Part 258) 139 26, 88, 289 Ladipo v. Aminike Investment Co Ltd (1998) 4 NWLR (Part 546) 496 59 Lagricom Co Ltd v. U.B.N. Ltd (1996) 4 NWLR (Part 441) 185 214 Larbi v. Kwabena 14 WACA 299 150 Lawal v. G.B. Ollivant (Nig.) Ltd Vol. 1 (1971) UILR 37 103 xl [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

Leedo Presidential Motel Ltd v. Bank of North Ltd (1998) 10 NWLR (Part 570) 353 272 List v. Barltt 4 WACA 56 150 M Mabawonku v. Sodimu (1975) 2 All NLR 214 103 Macaulay v. NAL Merchant Bank Ltd (1990) 4 NWLR (Part 144) 283 253 Maina v. U.B.A. (1985) HCNLR 828 150 Management Enterprises Ltd v. Kano Confec- tionery Ltd (1966) NNLR 68 150 Management Enterprises v. Otusanya (1987) 2 NWLR (Part 55) 179 103 Mandillas and Karaberis Ltd v. Apena (1969) 1 All NLR 390 26 Mercantile Bank of Nig. Ltd v. Adalma Tanker and Bunkering Services Ltd (1990) 5 NWLR (Part 153) 747 103 Mercantile Bank of (Nig.) Plc v. Feteco (Nig.) Ltd (1998) 2 NWLR (Part 540) 143 388 Metal Construction (W.A.) Ltd v. Meridien Trade Corporation Ltd (1990) 5 NWLR (Part 149) 144 103 Metalimpex v. A.G. Leventis and Co Ltd (1976) 2 SC 91 103 Military Gov. of Western State v. Laniga (1974) 1 All NLR (Part 2) 179 567 Minister of Internal Affairs v. Darman (1982) 3 NCLR 915 469 Mogaji v. Odofin (1978) 3 SC 91 103 Momodu v. Momoh (1991) 1 NWLR (Part 169) 608; (1991) 2 SCNJ 15 103 Mutual Aid Society Ltd v. Ogunade (1957) NRNLR 118 272 N NDIC v. Federal Mortgage Bank of Nigeria (1997) 2 NWLR (Part 490) 735 13, 289

xli [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

N.I.D.B. v. Fembo (Nig.) Ltd (1997) 2 NWLR (Part 489) 543 289 Nasir v. Bouari (1969) 1 NMLR 38 469 National Investment and Properties Co Ltd v. Thompson Organisation Ltd and others (1969) 1 All NLR 138 214 Nigeria Advertising Services Ltd v. U.B.A. Plc (1999) 8 NWLR (Part 616) 546 88, 150 Nigerian Maritime Services Ltd v. Afolabi (1978) 2 SC 79 173 Nigerian Supplies Manufacturing Co Ltd v. Nigerian Broadcasting Corporation (1967) 1 All NLR 35 103 Nneji v. Chukwu (1996) 12 SCNJ 388 103 Ntiashagwo v. Amodu (1959) WRNLR (Part IV) 273 103 Nwadike v. Ibekwe (1987) 4 NWLR (Part 67) 718 173 Nwangwa v. Ubani (1997) 10 NWLR (Part 526) 559 103 Nwobodo v. Onoh (1984) 1 SCNLR 1 150 O Obioha v. Duru (1994) 8 NWLR (Part 365) 631; (1994) 10 SCNJ 48 88 Odiba v. Azege (1998) 9 NWLR (Part 566) 370 26 Odubeko v. Fowler (1993) 7 NWLR (Part 308) 637 289 Oduola v. Coker (1981) 5 SC 197 469 Odutola v. Aileru (1985) 1 NWLR (Part 1) 92 103 Oforkire v. Maduike (2003) 5 NWLR (Part 812) 166 88 Oguchi v. F.M.B. (Nig.) Ltd (1990) 6 NWLR (Part 156) 330 150 Ogunbadejo v. Owoyemi (1993) 1 NWLR (Part 271) 517 26 Ogunbiyi v. Ishola (1996) 6 NWLR (Part 452) 12; (1996) 9 SCNJ 143 289 xlii [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

Ogunlowo v. Ogundare (1993) 7 NWLR (Part 307) 610 103 Ojeme v. Momodu (1994) 1 NWLR (Part 323) 685 26 Ojikutu v. Demuren (1957) 2 FSC 72 103 Ojini v. Ogo Oluwa Motors (1998) 1 NWLR (Part 534) 353 13 Okafor v. A.G. Anambra (1991) 6 NWLR (Part 200) 649 594 Okafor v. Idigo (1984) 6 SC 1 103 Okafor v. Ikeanyi (1979) 3–4 SC 99 26 Okafor v. Nnaife (1987) 4 NWLR (Part 64) 129 59 Oke v. Oke (1974) 1 All NLR (Part 1) 443 289 Okeke v. State (2000) 10 NWLR (Part 675) 423 150 Okolo v. U.B.N. Ltd (1998) 2 NWLR (Part 539) 618 88 Okonkwo v. C.C. Bank (Nig.) Plc (1997) 6 NWLR (Part 507) 48 150 Okonkwo v. Ogbogu (1996) 5 NWLR (Part 449) 420; (1996) 37 LRCN 580 26 Okubule v. Oyagbola (1990) 4 NWLR (Part 147) 723 173, 214 Okwunakwe v. Opara (2000) 14 NWLR (Part 687) 334 150 Oloriode v. Oyebi (1984) 1 SCNLR 390 1 Olorunfemi v. Asho (2000) 2 NWLR (Part 643) 143 1 Olubode v. Salami (1985) 4 SC 41 103 Omoboriola v. Military Governor Ondo State (1998) 14 NWLR (Part 584) 89; (1992) 9 NWLR (Part 265) 335 88 Omoregbe v. Edo (1971) 1 All NLR (Part 1) 282 103 Oniah v. Onyia (1989) 1 NWLR (Part 99) 514 26 Onifade v. Olayiwola (1991) 7 NWLR (Part 161) 130 26

xliii [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

Onyedinma v. Nnite (1997) 3 NWLR (Part 493) 333 26 Onyesoh v. Nnebedun (1992) 3 NWLR (Part 229) 315 26 Onyioha v. Ayashe (1996) 2 NWLR (Part 432) 567 26 Opubor v. Demiruru (1961) All NLR 436 272 Oseni v. American International Insurance Co (1985) 3 NWLR (Part 11) 229 150 Oshodi v. Eyifu (2000) FNLR (Part 8) 1271 150 Osinupebi v. Saibu (1982) 7 SC 104 26 Osunkwo v. Ugbogbo (1966) NMLR 18 272 Otitoju v. Governor of Ondo State (1994) 4 NWLR (Part 340) 514 103 Owena Bank Ltd v. N.S.E. Ltd (1997) 8 NWLR (Part 515) 1 289 Owodunni v. Celestial Church of Christ (2000) 10 NWLR (Partt 675) 315 1 Oyenuga v. Provisional Council, University of Ile Ife (1965) NMLR 9 173 P Paico (Press and Books) Ltd v. CBN (2001) 3 NWLR (Part 700) 347 289 Paterson Zochonics and Co Ltd v. Gusau (1962) 1 All NLR (Part 2) 242 103 Pavin v. Aliuah (1953) 14 WACA 267 26 R Rabiu v. State (1980) 8–11 SC 130 289, 469 Rastico (Nig.) Ltd v. Societe Generale de Surveillance (1990) 6 NWLR (Part 158) 608 59 S S.C.O.A. v. Okon (1959) 4 FSC 220; (1960) NRNLR 34 103 S.C.E.I. v. Odenewu (1965) 2 All NLR 135 103 Salzgitter Stahl Gmbh v. Aridi Ind. Ltd (1996) 7 NWLR (Part 459) 192 26 xliv [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

Sanusi v. Ayoola (1992) 9 NWLR (Part 268) 275 594 Sanusi v. Daniel (1956) NSCC 85 150 Saraki v. Kunini (2001) 6 NWLR (Part 708) 212 411 Saude v. Abdullahi (1989) 7 NWLR (Part 116) 387 289 Savannah Bank of Nigeria Ltd v. Pan Atlantic Shipping and Transport Agencies Ltd (1987) 1 NWLR (Part 49) 212; (1987) 18 NSCC (Part 1) 67 289 Senate of the National Assembly v. Momoh unreported, Federal Court of Appeal 19th July, 1982 469 Sentinel Assurance Co Ltd v. S.G.B.N. Ltd (1992) 2 NWLR (Part 224) 495 59 Shell BP Development Co of Nigeria Ltd v. Cole (1978) 3 SC 183 567 State v. Aibangbee (1988) 3 NWLR (Part 84) 548 103 Surakatu v. Nigeria Housing Development Society Ltd (1981) 4 SC 26 469 T Taiwo v. Adegboro (1997) 11 NWLR (Part 528) 244 150 The M.V. “Caroline Maersk” v. Nokoy Invest- ment Ltd (2002) 12 NWLR (Part 782) 472 103 Thor Ltd v. F.C.M.B. Ltd (1997) 1 NWLR (Part 479) 35 173 Total Nigeria Ltd v. Electrical and Mechani- cal Construction Co Ltd (1972) 8–9 SC 64 150 Trade Bank Plc. v. Benilux (Nig.) Ltd (2003) 9 NWLR (Part 825) 416 289 Tukur v. Govt. Gongola State (1989) 4 NWLR (Part 825) 416 289 U U.B.A. Ltd v. Ibhafidon (1994) 1 NWLR (Part 318) 90 214

xlv [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

U.B.N. Ltd v. Emole (1991) 9 NWLR (Part 213) 74 59 U.B.N. Ltd v. Nwoye (1996) 3 NWLR (Part 435) 135 214, 272 U.B.N. Ltd v. Odusote Bookstore Ltd (1994) 3 NWLR (Part 331) 129 59 U.B.N. Ltd v. Ozigi (1994) 3 NWLR (Part 333) 385 1, 173 U.B.N. Ltd v. Penny Mart Ltd (1992) 5 NWLR (Part 240) 228 103 U.B.N. Plc v. Ayo Dare and Sons (2000) 11 NWLR (Part 679) 664 150 U.B.N. Plc. v. Integrated Timber and Plywood Producers Ltd (2000) 12 NWLR (Part 680) 99 289 U.B.N. v. Nwoye (1990) 3 NWLR (Part 130) 69 59 Udenta v. Chukwunta (1959) 111 ENLR 45 469 Udeze v. Chidebe (1990) 1 NWLR (Part 125) 141 103 United Nigeria Co Ltd v. Nahman (2000) 9 NWLR (Part 671) 177 1 University of Lagos v. Olaniyan (1985) 1 NWLR (Part 1) 156 150 Uwaifo v. A.G. Bendel State (1983) 4 NCLR 1 13 W Western Steel Works Ltd v. Iron and Steel Workers Union of Nigeria (1987) 1 NWLR (Part 49) 284 26 Williams v. Busari (1973) 1 NMLR 265 59 Woherem v. Emereuwa (2000) 3 NWLR (Part 650) 529 388 Woluchem v. Gudi (1981) 5 SC 291 103, 567 Y Yassin v. Barclays Bank D.C.O. (1968) NMLR 380 103 Yesufu v. A.C.B. (1981) 12 NSCC 36 214, 594 xlvi [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Nigerian Cases referred to

Yesufu v. Kupper International N.V. (1996) 4 SCNJ 40 103, 150 Yusuf v. U.B.N. Ltd (1996) 6 NWLR (Part 457) 632 289

xlvii

INDEX OF FOREIGN CASES REFERRED TO

A A.L. Underwood Ltd v. Bank of Liverpool and Martins (1924) 1 KB 775 13 Anisminic Ltd v. The Foreign Compensation Commission and another (1967) 3 WLP 382 469 Ann v. Merton London Borough Council (1978) AC 728 567 Archbishop of Canterbury’s Case (1596) 2 Co. Rep. 46 469 Attorney-General of Gambia v. N’Jie (1961) AC 617 469 Attorney-General v. Chelsea Waterworks Co (1731) Fitzg. 195 289 B Balfour v. Sea Fire Assurance Co (1857) 3 CB (NS) 300 431 Bank of England v. Vagliano Brothers (1891) AC 107 289 Biggerstaff v. Rowatts Wharf Ltd (1896) 2 Ch. 3 102 431 Birkmyr v. Darnell (1704) 91 ER 27 253 Boaler v. Mayor (1865) 144 ER 714 173 Bute (Marquess) v. Barclays Bank (1955) 1 QB 202 13 C Candler v. Crane Christmas and Co (1951) 2 KB 164 567 Capital and Counties Bank v. Henry (1982) 7 AC 741 26 Carew v. Duckworth (1869) LR 4 Exch. 313 214 Clay v. A.J. Crump and Sons Ltd (1964) 1 QB 533 567

xlix [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

Clerical Medical and General Life Assurance Society v. Carter (1889) 22 QBD 444 469 Colehill and District Investment Co Ltd v. Minister of Local Government (1968) 1 WLR 600 469 Collins v. Jones (1955) 1 QB 564 26 Cripps v. Davis (1873) 12 M. and W. 159 ER 1152 431 Cuckmere Bricks Co Ltd v. Mutual Finance (1971) 2 All ER 633 88 D Danby v. Beardsley (1880) 43 LJR 603 26 Degi v. Francis (1999) 3 NWLR (Part 596) 576 411 Dey v. Pullinger Engineering Co (1920) All ER 591 431 Donoghue v. Stevenson (1932) AC 563 567 Dorset Yacht Co Ltd v. Home Office (1970) AC 465 567 E Eastwood v. Kenyon (1840) 11 3 ER 482 253 Ex parte Fernandez (1861) 6 B and N 717 469 F Federal Military Government of Nigeria v. Sani (1990) 4 NWLR (Part 147) 688 411 Felix v. Thomas (1967) 1 AC 292 469 Fine Art Society v. Union Bank of London (1886–87) 17 QBD 705 13 Foey v. Hill (1882) 2 HL Cas. 28 594 G Gates v. W.A. and R. Jacobs (1920) 1 Ch. 567 431 Gibbons v. Ogden 6 U.S. Sup. Ct. Reports 23, L. Ed. 1st Series 469 Groves v. Slaughter 10 U.S. Sup. Ct. Report 800, L. Ed. 1st Series 469

l [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Foreign Cases referred to

H Hedley Byrne and Co Ltd Heller and Partners Ltd (1964) AC 465 567 Hirschorn v. Evans (1938) 3 All ER 491 594 Hoke v. United States 227 US 308 469 Holmes v. Guy (1877) 5 Ch.D. 901 469 Holmes v. Jennison 14 Pet. 540 10 US Sup. Ct. Reports 579, L.Ed. 1st Series 469 Huddart Parker and Co Property Ltd v. Moorehead (1909) 9 CLR 330 469 Hunter v. Bowyer (1850) 15 LTOS 281 214

I In Re Wellstead Will Trusts (1949) Ch. 296 469

J Joachimson v. Swiss Bank Corporation (1921) 3 KB 110 214, 594 Jones v. Secretary of State for Social Services; Hudson v. Secretary of State for Social Ser- vices ( 1972) All ER 145 469

K Kleinwort v. Comptoir d’ Escompte de Paris (1984) 2 QB 167 13 Knowlton v. Moore 178 US 41, 20 S.Ct. 747 469

L Langton v. Waite (1863) LR 6 Eq. 165 567 Letang v. Cooper (1965) 1 QB 232 469 Lloyds and Scottish Finance Ltd v. Modern Cars and Caravans (Kingston) Ltd (1964) 2 All ER 732; (1966) 1 QB 764 289 London Joint Stock Bank v. Macmillan and Arthur (1918) AC 777 214

M MacKenzie v. Hare 239 US 299, 36 S. Ct. 106 469

li [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

McManus v. Fortescue (1907) 2 KB 1 103 Minister of Home Affairs v. Fisher (1979) 2 WLR 899; 1980 AC 319 469 Munroe v. Bordier (1850) 8 CB 862 214 O Oscar Harrisson and Co v. Vallarman and Co (1940) 1 All ER 185 214 Owners of Steamship Hontestroom v. Owners of Steamship Sagaporack (1927) AC 37 103 P Pengelly v. Bell Punch Co Ltd (1964) 1 WLR 1055 469 Pinne v. Everret (1969) 2 All ER 257 469 Prigg v. Pennsylvania 16 Pet 539; US Sup. Ct. Reports 1060, L. Ed. 1st Series 469 R R v. Harris (1836) 7C and 446 469 Rainbow v. Hawkins (1904) 2 KB 322 103 Re Tabrisky Ex parte Board of Trade (1947) 2 All ER 182 253, 289 Re Whitaker (1889) 42 Ch.D. 119 214 Rola Co (Australia) (Pty) Ltd v. Common- wealth (1944) 69 CLR 185 469 Rookes v. Barnard (1964) AC 1129 26 Royal British Bank v. Turquand (1856) 6 E and B 327 431 S Saginaw County Tp. Officers Association v. City of Saginaw 373 Mich. 477, 130, 130 N.W. 2nd 30, 32 289 Sharpe v. Wakefield (1888) 22 QBD 239 469 Shell Co of Australia Ltd v. Federal Commis- sioner of Taxation (1981) AC 275 469 Smith v. Great Western Railway (1877) 3 App. Cas. 166 469 Stephens v. Cuckfield R.D.C. (1960) 2 QB 373 469 lii [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Foreign Cases referred to

Stoler v. State 171 Neb. 93, 105 NW 2nd 852 289 Stone v. Yeovil Corporation (1876) (1) CPD 691 469 Sub nom British Imperial Oil Co Ltd v. Fed- eral Commissioner of Taxation (1926) 38 CLR 153 469 T The Why Not (1868) LR 2A and E 265 456 Twopenny v. Young (1824) 107 ER 711 173 V Vaughan v. Vanderstegen (1854) 61 ER 730 173 Vestey v. Inland Revenue Commissioners (Consolidated) (1979) 3 WLR 915 469 Virginia v. Tennessee 148 US 503, 135 S. Ct. 728; 37 L. Ed. 337 469

W Walters v. W.H. Smith and Son Ltd (1914) 1 KB 595 26 West Derby Union v. Metropolitan Life As- surance Society (1897) AC 647 253, 289 Winterbottom v. Wright (1842) 10 M. and W. 109, 114 567

liii

INDEX OF NIGERIAN STATUTES REFERRED TO

Applicable Laws (Miscellaneous Provisions) of Benue State Edict No. 6 of 1988 s 4...... [2002 – 2004] 11 N.B.L.R. (PART II) 373

Auctioneers’ Law, Cap 12 Laws of Anambra State, 1963 s 19...... [2002 – 2004] 11 N.B.L.R. (PART II) 150

Auctioneers’ Law, Cap 10 Laws of Northern Nigeria, 1963 s 19...... [2002 – 2004] 11 N.B.L.R. (PART II) 373 s 20...... [2002 – 2004] 11 N.B.L.R. (PART II) 373

Auctioneers Law of Benue State, 1963 s 19...... [2002 – 2004] 11 N.B.L.R. (PART II) 373 s 20...... [2002 – 2004] 11 N.B.L.R. (PART II) 373

Banking Act, Cap 28 Laws of the Federation of Nigeria, 1990 s 15...... [2002 – 2004] 11 N.B.L.R. (PART II) 1

Bankruptcy Act No. 16 of 1979 generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Bills of Exchange Act, Cap 21 Laws of the Federation of Nigeria, 1958 s 30(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 431 s 50(2)(a) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 431 s 50(2)(d)(ii) ... [2002 – 2004] 11 N.B.L.R. (PART II) 431 s 55(2)(a) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 431 s 55(2)(c)...... [2002 – 2004] 11 N.B.L.R. (PART II) 431 lv [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

Bills of Exchange Act, Cap 35 Laws of the Federation of Nigeria, 1990 s 30(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 214 s 73...... [2002 – 2004] 11 N.B.L.R. (PART II) 13

Central Bank (Currency Conversion) Decree No. 51 of 1967 s 1(1)(a) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 456 s 1(1)(b) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 456 Companies and Allied Matters Act, Cap 59 Laws of the Federation of Nigeria, 1990 generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 Constitution (Suspension and Modification) Decree No. 107 of 1993 s 230(1)(d).....[2002 – 2004] 11 N.B.L.R. (PART II) 13, 289 Constitution of the Federal Republic of Nigeria, 1963 s 78(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 78(2)...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 Constitution of the Federal Republic of Nigeria, 1979 s 4(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 4(6)...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 5(1)(a) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 5(2)(a) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 6...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 6(5)(a)–(f)..... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 42...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 212...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 213...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 219...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 220...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 220(1)(b) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 s 221(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 s 222(b)...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 s 230(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 lvi [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Nigerian Statutes referred to

Constitution of the Federal Republic of Nigeria, 1979 – continued s 230(1)(a) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 230(1)(b)...[2002 – 2004] 11 N.B.L.R. (PART II) 289, 469 s 230(1)(d) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 236...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 236(1)..... [2002 – 2004] 11 N.B.L.R. (PART II) 13, 289 s 237(2)(a) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 237(2)(c)...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 250...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 250(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Constitution of the Federal Republic of Nigeria, 1999 s 1(3)...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 43...... [2002 – 2004] 11 N.B.L.R. (PART II) 150 s 44...... [2002 – 2004] 11 N.B.L.R. (PART II) 150 s 241(1)(a) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 s 251...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 251(1)(d) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 272(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 315...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 315(3)(d) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 289

Constitution of the Federation (Consequential Repeals) Act No. 105 of 1979 generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Counterfeit Currency (Special Provisions) Act No. 22 of 1974 s 8(3)...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Court of Appeal Act, Cap 75 Laws of the Federation of Nigeria, 1990 s16...... [2002 – 2004] 11 N.B.L.R. (PART II) 59 s 25(2)...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 s 25(3)...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 s 25(4)...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 lvii [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

Currency Conversion (South Eastern and Other States) Decree No. 11 of 1968 as amended by Decree No. 40 of 1968 s 2...... [2002 – 2004] 11 N.B.L.R. (PART II) 456

Evidence Act, Cap 112 Laws of the Federation of Nige- ria, 1990 s 132(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 253

Failed Banks (Recovery of Debts) and Financial Mal- practices in Banks Decree No. 18 of 1994 s 3(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 3(1)(a) ...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 9...... [2002 – 2004] 11 N.B.L.R. (PART II) 289

Failed Banks (Recovery of Debts) and Financial Mal- practice in Banks (Amendment) Decree No. 62 of 1999 generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 289

Federal High Court Act, Cap 134 Laws of the Federation of Nigeria, 1990 s 64(4)...... [2002 – 2004] 11 N.B.L.R. (PART II) 289

Federal Revenue Court Decree No. 13 of 1973 s 7...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 7(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 s 7(1)(b)(iii)...[2002 – 2004] 11 N.B.L.R. (PART II) 289, 469 s 63(4)...... [2002 – 2004] 11 N.B.L.R. (PART II) 289

High Court Laws of Northern Nigeria, Cap 49 Laws of Northern Nigeria, 1963 s 28...... [2002 – 2004] 11 N.B.L.R. (PART II) 388 s 29...... [2002 – 2004] 11 N.B.L.R. (PART II) 373

Illiterate Protection Act generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 103 lviii [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Nigerian Statutes referred to

Insurance Act No. 59 of 1976 s 21(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 49(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 62...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Interpretation Act No. 1 of 1964 s 1...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 s 3(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Land Registration Law, Cap 58 Laws of Northern Nige- ria, 1963 s 18(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 Land Tenure Law, Cap 59 Laws of the Federation of Nigeria, 1990 s 27...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 Land Use Act, 1978 generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 88 s 22...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 s 26...... [2002 – 2004] 11 N.B.L.R. (PART II) 173 Limitation Decree No. 88 of 1996 s 7(4)...... [2002 – 2004] 11 N.B.L.R. (PART II) 388 Nigeria Deposit Insurance Corporation Act, Cap 301 Laws of the Federation of Nigeria, 1990 s 28...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 Property and Conveyance Law, 1959 generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 88 Regional Courts (Federal Jurisdiction) Act, Cap 177 Laws of the Federation of Nigeria and Lagos, 1958 s 3...... [2002 – 2004] 11 N.B.L.R. (PART II) 289 Sales by Auction Ordinance, Cap 203 Laws of Nigeria, 1948 s 19(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 150 lix [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

Sheriffs and Civil Process Act, Cap 407 Laws of the Fed- eration of Nigeria, 1990 s 19...... [2002 – 2004] 11 N.B.L.R. (PART II) 594 s 84...... [2002 – 2004] 11 N.B.L.R. (PART II) 594 Sheriffs and Civil Process Law of Lagos State, 1994 s 44...... [2002 – 2004] 11 N.B.L.R. (PART II) 150, 272 Tribunals (Certain Consequential Amendments etc.) Decree No. 62 of 1999 generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 289

INDEX OF NIGERIAN RULES OF COURT REFERRED TO

Court of Appeal Rules, 1981 (as amended) Order 3 rule 3(3) .[2002 – 2004] 11 N.B.L.R. (PART II) 59 Order 3 rule 23.. [2002 – 2004] 11 N.B.L.R. (PART II) 59

Court of Appeal Rules, 2000 Order 3 rule 15.. [2002 – 2004] 11 N.B.L.R. (PART II) 88 Order 6 rule 9(5)....[2002 – 2004] 11 N.B.L.R. (PART II) 103

Court of Appeal Rules, 2002 Order 6 rule 9(5)...[2002 – 2004] 11 N.B.L.R. (PART II) 26

High Court (Civil Procedure) Rules of Kaduna State, 1987 Order 22 rule 1....[2002 – 2004] 11 N.B.L.R. (PART II) 411 Order 22 rule 3....[2002 – 2004] 11 N.B.L.R. (PART II) 411 Order 12 rule 5....[2002 – 2004] 11 N.B.L.R. (PART II) 411

High Court (Civil Procedure) Rules of Kano State, 1988 Order 23 rule 3(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 411

High Court (Civil Procedure) Rules of Lagos State, 1972 Order 16 rule 10..[2002 – 2004] 11 N.B.L.R. (PART II) 431 Order 16 rule 11..[2002 – 2004] 11 N.B.L.R. (PART II) 431 Order 36 rule 8....[2002 – 2004] 11 N.B.L.R. (PART II) 289

Judgment Enforcement Rules, Laws of Lagos State, 1994 rule 10...... [2002 – 2004] 11 N.B.L.R. (PART II) 272 rule 15...... [2002 – 2004] 11 N.B.L.R. (PART II) 272 lxi

INDEX OF FOREIGN STATUTES REFERRED TO

Conveyancing Act, 1881 s 21(2)..... [2002 – 2004] 11 N.B.L.R. (PART II) 150, 373

Offences Against the Person Act, 1837 generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Sale of Goods Act, 1893 s 26(1)...... [2002 – 2004] 11 N.B.L.R. (PART II) 289

Statute of Limitation Act, 1623 generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 388

lxiii

INDEX OF BOOKS REFERRED TO

Andrew and Millet Law of Guarantees (1ed) pages 162–163 ..[2002 – 2004] 11 N.B.L.R. (PART II) 253

Atkins Court Forms (2ed) Volume 19 page 47 Paragraph 21... [2002 – 2004] 11 N.B.L.R. (PART II) 594

Black’s Law Dictionary generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 173

Black’s Law Dictionary (6ed) page 1425...... [2002 – 2004] 11 N.B.L.R. (PART II) 289

Black’s Law Dictionary (7ed) generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 59

Bullen Leakes and Jacob’s Precedents of Pleadings (12ed) page 429...... [2002 – 2004] 11 N.B.L.R. (PART II) 26

Civil Procedure in Nigeria (2ed) pages 100–101 ..[2002 – 2004] 11 N.B.L.R. (PART II) 272

Clerk and Lindsell on Torts (13ed) page 377 paragraph 748 ... [2002 – 2004] 11 N.B.L.R. (PART II) 26

Clerk and Lindsell on Torts (15ed) page 1020 paragraph 21–05...[2002 – 2004] 11 N.B.L.R. (PART II) 13

Cross Statutory Interpretation (1981) (1ed) page 74...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

De Smith Judicial Review of Administrative Action (2ed) page 96...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 lxv [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian Banking Law Reports

Halsbury’s Laws of England (1961) Volume 36 paragraph 549 . [2002 – 2004] 11 N.B.L.R. (PART II) 469

Halsbury’s Laws of England (3ed) page 764 paragraphs 1266–1267 ..[2002 – 2004] 11 N.B.L.R. (PART II) 26

Halsbury’s Laws of England (3ed) Volume 36 paragraph 583 . [2002 – 2004] 11 N.B.L.R. (PART II) 469

Halsbury’s Laws of England (4ed) Volume 4 paragraph 379 page 164...... [2002 – 2004] 11 N.B.L.R. (PART II) 214 paragraph 429 page 190...... [2002 – 2004] 11 N.B.L.R. (PART II) 431

Halsbury’s Laws of England (4ed) Volume 7 paragraph 743 page 444...... [2002 – 2004] 11 N.B.L.R. (PART II) 431

Halsbury’s Laws of England (4ed) Volume 16 paragraph 882 . [2002 – 2004] 11 N.B.L.R. (PART II) 173

Halsbury’s Laws of England (4ed) Volume 26 page 279 paragraph 556 . [2002 – 2004] 11 N.B.L.R. (PART II) 594

Halsbury’s Laws of England (4ed) Volume 32 paragraph 884 . [2002 – 2004] 11 N.B.L.R. (PART II) 173 paragraph 886 . [2002 – 2004] 11 N.B.L.R. (PART II) 173 paragraph 887 . [2002 – 2004] 11 N.B.L.R. (PART II) 173

Justice Miller The Constitution page 314...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Lord Chorley Law of Banking (5ed) page 50...... [2002 – 2004] 11 N.B.L.R. (PART II) 13 lxvi [2002 – 2004] 11 N.B.L.R. (PART II)

Index of Books referred to

Maxwell Interpretation of Statutes (1961) (5ed) pages 13–14 .... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Maxwell Interpretation of Statutes (10ed) pages 128–129 ..[2002 – 2004] 11 N.B.L.R. (PART II) 469

Maxwell Interpretation of Statutes (12ed) page 12...... [2002 – 2004] 11 N.B.L.R. (PART II) 469 pages 105–106 ..[2002 – 2004] 11 N.B.L.R. (PART II) 469 page 289...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Meggary and Wade Law of Property (4ed) pages 892–893 [2002 – 2004] 11 N.B.L.R. (PART II) 173

Nwabueze Judicialism in Commonwealth Africa chapter 1 ...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Nwabueze The Presidential Constitution of Nigeria generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 469

Paget’s Law of Banking (8ed) page 132...... [2002 – 2004] 11 N.B.L.R. (PART II) 26

Practice and Procedure of the Supreme Court, the Court of Appeal and High Courts of Nigeria by T.A. Aguda generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 59

R. Burrows Words and Phrases Judicially Defined Volume 2 page 133...... [2002 – 2004] 11 N.B.L.R. (PART II) 214

Venkataramaiya’s Law Lexicon with Legal Maxims (2ed) Volume 2, 1989 reprint generally ...... [2002 – 2004] 11 N.B.L.R. (PART II) 59 lxvii

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION)

Remalo Ltd v. National Bank of Nigeria Ltd 1 a Remalo Limited and others v National Bank of Nigeria Limited b COURT OF APPEAL, IBADAN DIVISION OMAGE, ADEKEYE, IBIYEYE JJCA Date of Judgment: 30 APRIL, 2003 Suit No.: CA/I/245/99 c Banking – Bank in receivership – Whether can still charge interest on loans Banking – Loan – Interest chargeable thereon – Payment of d interest at the rate prescribed – Presumption of Banking – Loan – Interest thereon – Rate chargeable by banks – Determination thereof – Power of Central Bank of Nigeria e Company law – Receivership – Liquidation – Distinction between f Facts Between February, 1979 and November, 1980, the first appellant applied for and was granted overdraft facilities of N150,000 at first and subsequently of N50,000 and N20,000 g on account no. 400, at the Oshogbo branch of the respondent in this appeal, the National Bank of Nigeria. The account was a current account and the account was secured by the third and fourth appellants. The first appellant is a limited h liability company, the second appellant is the proprietor of the first appellant, Mr Aderemi Alo. At the trial in the court below, that is the Failed Banks (Recovery of Debts) and Fi- nancial Malpractices in Banks Tribunal, Lagos Zone (VII) Lagos, hereinafter referred to as the court below, presided i over by the Honourable Justice I.M.J. Evuti, the first appellant tendered exhibit B, which is the agreement between the first appellant and the bank. The bank and the NDIC are hereafter referred to as the respondents. The appellant j tendered exhibit G, which is evidence of the existence of

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION)

2 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) account no. 664 which the appellant pleaded was opened for a the purpose of servicing account no. 400. The respondent denied this. The respondent testified that the appellant failed to pay the debt and took advantage of the shabbiness in the b bank and had defaulted. The appellant also averred in his pleadings and evidence by default that, in exhibit B, the first appellant agreed with the bank that only interest of 9.5% would be charged on the sum borrowed by the appellant and the respondent is in breach of same. Though the appellant c tendered exhibit G through the respondent’s witness, the appellant did not offer any evidence during the trial. The appellant relied on the evidence of the respondent. d Held – 1. Under section 15 of the Banking Act, Cap 28 Laws of the Federation of Nigeria, 1990, the Central Bank of Ni- geria is endowed with powers to regulate and control e banking activities in Nigeria. In the exercise of these powers, the Central Bank of Nigeria alone controls by law the rate of interest chargeable by any bank. In the instant case, the appellants cannot successfully f challenge the rate of interest charged on the loan by relying on a ceiling on interest which conflicts with that prescribed by the Central Bank. 2. A borrower from a bank must be presumed to repay the g loan at the rate of interest prescribed by the bank on facilities he has obtained. 3. A bank in receivership is still in existence and can continue to charge interest on its advanced loans. As long as h a receiver acts within the limits of his receivership he has a right to represent the company as a manager of an establishment. 4. The distinction has been made that a company, in this i case a bank in receivership, is still in existence and can continue to charge interest on its advanced loans while a company in liquidation cannot. Appeal dismissed. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION)

Remalo Ltd v. National Bank of Nigeria Ltd 3 a Cases referred to in the judgment Nigerian Egbunike v African Continental Bank Ltd (1995) 2 NWLR b (Part 375) 34 Faagol Inst. Ltd v National Bank of Nigeria Ltd (1993) 1 NWLR (Part 271) 586 c Ilori v Benson (2000) 9 NWLR (Part 673) 570 Klifco Ltd v Holzmann A.G. (1996) 3 NWLR (Part 436) 276 Oloriode v Oyebi (1984) 1 SCNLR 390 Olorunfemi v Asho (2000) 2 NWLR (Part 643) 143 d Owodunni v Celestial Church of Christ (2000) 10 NWLR (Part 675) 315 U.B.N. Ltd v Ozigi (1994) 3 NWLR (Part 333) 385 e United Nigeria Co Ltd v Nahman (2000) 9 NWLR (Part 671) 177

Nigerian statute referred to in the judgment f Banking Act, Cap 28 Laws of the Federation of Nigeria, 1990, section 15

Counsel g For the respondent: Fabode Judgment OMAGE JCA: (Delivering the lead judgment) Between Feb- h ruary, 1979 and November, 1980, the first appellant applied for and was granted overdraft facilities of N150,000 at first and subsequently of N50,000 and N20,000 on account no. 400, at the Oshogbo branch of the respondent in this appeal, the National Bank of Nigeria. The account was a current i account and the account was secured by the third and fourth appellants. The first appellant is a limited liability company, the second appellant is the proprietor of the first appellant, Mr Aderemi Alo. At the trial in the court below, j that is the Failed Banks (Recovery of Debts) and Financial

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA 4 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Malpractices in Banks Tribunal, Lagos Zone (VII), Lagos, a hereinafter referred to as the court below, presided over by the Hon. Justice I.M.J. Evuti, the first appellant tendered exhibit B, which is the agreement between the first appellant b and the bank. The bank and the NDIC are hereafter referred to as the respondent. The appellant tendered exhibit G, which is evidence of the existence of account no. 664 which the appellant pleaded was opened for the purpose of servic- c ing account no. 400. The respondent denied this. The respondent testified that the appellant failed to pay the debt and took advantage of the shabbiness in the bank and had defaulted. The appellant also averred in his pleadings and d evidence by default that in exhibit B, the first appellant agreed with the bank that only interest of 9.5% would be charged on the sum borrowed by the appellant and the respondent was in breach of same. Though the appellant ten- e dered exhibit G through the respondent’s witness, the appellant did not offer any evidence during the trial. The appellant relied on the evidence of the respondent. On 3 November, 1998, the court below ruled thus:– f “On the whole I find the applicant to have thoroughly and sufficiently established their claims against the respondent jointly and severally in the sum of N3,548,656.59 plus interest at the rate of 21% per annum from 1 March, 1997 until the whole amount is fully liquidated. I order that the judgment sum be paid within two g weeks from the date of delivery of this judgment, failing which order for the sale of the mortgaged property offered as security for the loan covered by a deed of conveyance No. 53/532096 shall be made.” h It is against the above decision that the appellant herein, who in the court below was cited as the respondent, has appealed on six grounds and on these formulated three issues, viz:– i “(1) Whether the learned Tribunal Chairman is right to hold that the respondent/applicant is in receivership and thereby has locus standi to institute the action for recovery of debt against the appellant as contemplated under the provision of the Failed Banks Decree. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA Remalo Ltd v. National Bank of Nigeria Ltd 5 a (2) Whether the mode and manner in which the respondent/applicant charged interest on the first appellant account No. 400 up till March, 1997, notwithstanding the agreement between the parties and the respondent liquidation since b 1991 is justified as held by the learned Tribunal Chairman.” Issue 3, “Whether the learned tribunal chairman can be said to be right in holding that the respondent has established its claim of N3,548,656.59 or for any sum at all against the ap- c pellant in view of various lacunae, inconsistencies in the respondent’s case, and the clear evidence of intermeddling with the first appellant’s statement of account nos. 400 and 664.” d The respondent in this appeal, that is the bank, formulated four issues as follows:– (1) Whether the respondent has sufficient interest in the claim brought before the Failed Bank Tribunal; e (2) Whether the respondent is entitled to judgment awarded it by the lower tribunal; (3) Whether the proper parties were before the lower tri- f bunal; (4) Whether the respondent herein is entitled to vary the rate of interest chargeable on the facilities granted the first appellant. g In their brief, the appellants argued the three issues seriatim and the respondent argued issues 1 and 3 together, because they are of the same theme. In this judgment I will consider issue 1 of the appellants, and issues 1 and 3 of the respon- h dent together because they are of the same content and theme. I will consider together also issues 2 and 3 of the appellant, with issues 2 and 4 of the respondent as the issues deal also with the same issues in the appeal. i The appellant’s issue 1 asks if the trial court was right when it held that the respondent in receivership can sue for recovery of debts. And in the same breath asked whether the respondent had locus standi to institute action for recovery j of debt against the appellants. The respondent in the issue

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA 6 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) impliedly denied that the respondent was in receivership, a and that the respondent was only in distress at the time of the action. The respondent submitted that the respondent had sufficient interest to have locus standi to institute the action b before the court. The respondent submitted that the proper parties were before the court. In the appellant’s issue 1, there are contained two questions. Is the respondent in liquidation and if it is, is it pos- c sessed of a right to institute the proceedings under the Failed Banks Tribunal in which the NDIC instructed it and therefore a receiver? Consequently is the receiver possessed of locus standi to institute the action. The submission in the d court below was made on the basis that the respondent was in receivership. The learned trial court remarked in its judgment that the respondent was “in receivership of NDIC and never liquidated” consequently the denial of the respon- e dent’s Counsel that the respondent was in receivership does not change the fact of the status of the respondent at the time of the proceedings in the court below. However, two issues arise from the status of the respondent at the time of the pro- f ceedings in the court below. They are:– Whether as receiver the bank can institute an action to recover the debt owed to it ie to the bank. Whether interest on the loan granted will continue to ac- g crue to the bank in receivership. The distinction has been made that a company in a bank in receivership is still in existence and can continue to charge h interest on its advanced loans while a company in liquidation cannot. As long as a receiver acts within the limits of his receivership he has a right to represent the company as a manager of an establishment can. It is to that extent that the submission of the respondent is correct that the receiver of i the respondent may claim on behalf of the bank any accrued interest on the facility granted by the bank to its customer. The issue therefore turns on the right of the respondent to appear to claim before the tribunal. It is a fact that the NNB, j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA Remalo Ltd v. National Bank of Nigeria Ltd 7 a even without the NDIC, has sufficient and valid interest to protect and to claim the sum advanced to the appellant. In pursuit of this it has a locus standi before the court below to b institute the action. The court below observed that the appellant did not in that court contradict the status of the respondent, as the receiver appointed by the NDIC. It is therefore treated here simply as an academic issue. There is no deny- c ing the fact that the action instituted by the respondent conferred on it a great deal of benefit because by it its interest is protected (see Owodunni v Celestial Church of Christ (2000) 10 NWLR (Part 675) 315; (2000) 6 SC (Part 3) 60– d 77; Oloriode v Oyebi (1984) 1 SCNLR 390). I resolve issue 1 of the appellant and issues 1 and 3 of the respondent against the appellant, in favour of the respondent. I go now to the substance of issues 1 and 2 of the ap- e pellant and rephrase the question in this way: Whether the respondent was entitled to charge interest on the sum advanced at a rate more than the agreed interest rate of 9.5% as contained in exhibit B, before the court below when the re- f spondent has been in liquidation since 1991. If the court is not right to adjudge that interest of more than 9.5% rate may be charged, can it be said that the respondent has established its claim of N3,548,656.59k, in the face of several lacunae, g and inconsistencies in the respondent’s case? The respondent in issue 2 asks whether the respondent is entitled to judgment awarded by the lower tribunal, and in h issue 4 whether the respondent is entitled to vary the rate of interest chargeable on the facilities granted to appellant. I take first, the issue 2 of the appellant and issue 4 of the respondent together as the two sets of issues are on the charge i of interest, whether it is properly charged. In the court below, the following issues are not in dispute, and are not controverted:– (a) That the appellant received banking facilities of j about N200,000 from the respondents;

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA 8 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(b) that payment of the said sum was due for payment at a the time that exhibit C was issued; (c) that the rate of interest stipulated to be paid by the appellant was 9.5% that the said sum should have b been repaid since 31 December, 1981; (d) that the respondent charged severally at various times, interest on the facilities. The testimony of the respondent witness shows clear dis- c crepancy in what should or should not attend a mortgage transaction. For instance, there was no written approval for the loan granted by the bank to the appellant, and except for some small sum paid into the loan account, the appellant had d stopped servicing the account since 1982. Indeed, the appellant had opened another account no. 664 in the same branch in which some money was paid, and the appellant said the money was paid to service the account no. 400. e The respondent denied this. The relevant issue is the explanation given by the respondent for increasing the interest rate from 9.5% to 18% or sometimes to 21%. The respondent explained that the rate of interest charged by commer- f cial banks in Nigeria are regulated by the Central Bank of Nigeria. The learned trial Judge in the court below wrote that it took judicial notice of the power of the Central Bank to regulate interest rates. Although no documentary evidence g to this effect was tendered in the court below, it is an established fact that the legislation under the Central Bank Amendment Decree No. 3, now section 15 Banking Act, Cap 28 Laws of the Federation of Nigeria, 1990, the Central h Bank of Nigeria is endowed with powers to regulate and control banking activities in Nigeria. In the exercise of this power, the Central Bank of Nigeria alone controls by law the rate of interest chargeable by any bank (see U.B.N. v Ozigi i (1994) 3 NWLR (Part 333) 385 at 404). In the face of the legislation, it is futile to enter into an agreement with a bank to put a ceiling on the interest chargeable on public money advanced as a loan to the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA Remalo Ltd v. National Bank of Nigeria Ltd 9 a customer of the bank. In the instant appeal, the provision in exhibit B, which limits the interest chargeable on a loan to the appellant to 9.5% per annum, is of no effect as the provi- b sion conflicts with the Central Bank regulation. In any case, the appellant cannot be heard to complain of a breach of the provision in exhibit B, as he failed to repay the facility by 31 December, 1982 as provided in the agreement with the re- c spondents. On the authority of Faagol Inst. Ltd v National Bank of Nigeria Ltd (1993) 1 NWLR (Part 271) 586, it is safe to conclude that the borrower from a bank must be presumed to repay the loan at the rate of interest prescribed by d the bank on facilities he has obtained. I resolve issue 2 of the appellant and issue 4 of the respondent against the appellant. The appellants’ issue 3 reads thus: Whether the chairman of the tribunal was right when he held that the respondent e has established its claim of N3,548,656.59k or for any sum at all against the appellants, in view of various lacunae and inconsistencies in the respondent’s case and the clear evidence of its intermeddling with the first appellant’s state- f ment of accounts no. 400 and 664. The respondent’s issue 2 reads: Whether the respondent is entitled to judgment awarded it by the lower tribunal. g The two issues raise the question of the eligibility and pro- priety of the judgment of N3,548,656.59k in favour of the respondent in the court below. At the hearing in the court below the record shows that the h appellant filed pleadings, but tendered no evidence before the court below. It is settled practice and the rule of litigation that pleadings which are not supported by evidence go to no issue, and the pleading is deemed to be abandoned (see i Olorunfemi v Asho (2000) 2 NWLR (Part 643) 143, (2000) 1 SC 15 at 21; Egbunike v African Continental Bank Ltd (1995) 2 NWLR (Part 375) 34). There is therefore no testimony or averments at the trial j made by the appellant in the court below against the

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA 10 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) respondent. The statement of defence complained of lacu- a nae, intermeddling mentioned in the issue by the appellant was not evidence given by the appellant at the trial and the respondent clearly did not give any evidence against itself. b The statement or complaint is in the general imagination of the appellant. The appellant did not testify at the trial. Its submission through its Counsel does not constitute evidence. The submission therefore that the appellant will rely on the c evidence and claim of the respondent in the court below, is of no value. The effect of reliance by the appellant on the case of the respondent in the court below presents no defence whatso- d ever to the claim of the respondent. The situation therefore entitles the respondent to judgment. I am of the view therefore that the respondent had proved its claim in the court below and is entitled to judgment. In the absence of any con- e tradiction thereto, the respondent was rightly held to be entitled to judgment. I resolve the said issue 3 of the appellant and issue 3 of the respondent against the appellant. In sum, I find no substance in the appeal, and dismiss it in its entirety. f The appeal fails. It is dismissed. The judgment of the court below is affirmed. I order costs of N4,000 against the appellant. g IBIYEYE JCA: I was privileged to have read in advance the judgment just delivered by my learned brother, Omage JCA, and I agree entirely that the appeal lacks merit. I abide by the consequential orders, including costs. h ADEKEYE JCA: I had read in advance the judgment just delivered by my learned brother, V.A.O. Omage JCA. I agree that the three issues formulated for determination of this Court by the parties are similar. On the first issue which relates to the locus standi of the respondent being in receiver- i ship to appear before the tribunal. It is well established that a bank in receivership is still in existence and can continue to charge interest on its advanced loans. As long as a receiver keeps within the terms of his receivership he can represent j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Adekeye JCA Remalo Ltd v. National Bank of Nigeria Ltd 11 a the company as a manager. In this matter on hand, the receiver of the respondent may claim on behalf of the National Bank any accrued interest on the facility granted by the bank b to its customer. The National Bank not being in liquidation and without the NDIC has locus standi to appear before the court below to institute the action as it has sufficient interest to protect and demand a refund of the loan advanced to the c appellants (Ilori v Benson (2000) 9 NWLR (Part 673) 570; United Nigeria Co Ltd v Nahman (2000) 9 NWLR (Part 671) 177; Klifco Ltd v Phillip Holzmann A.G. (1996) 3 NWLR (Part 436) 276). d The crucial aspect for consideration in issue 2 is that the rate of interest stipulated to be paid by the appellant in the loan agreement was 9.5% and that the sum should have been repaid by 31 December, 1981 whereas the respondent charged e severally at various times, interest over and above the 9.5% stipulated on the facilities. The respondent increased the rate of interest from 9.5% to 18% or sometimes to 21%. The respondent found refuge in taking this step and explained that f the rate of interest charged by commercial banks in Nigeria are regulated by the Central Bank of Nigeria. Under the Central Bank Amendment Decrees No. 3, now section 15 of the Banking Act, Cap 28 Laws of the Federation of Nigeria, g 1990, the Central Bank of Nigeria has the power to regulate and control banking activities in Nigeria. By so doing, the Central Bank alone controls by law the rate of interest chargeable by any bank. h Though in the exercise of its power in charging interest rates, the decision to increase interest rates have been taken by the banks unilaterally without the consent of the borrow- ers, and so many business concerns had collapsed under the i burden of arbitrary interest rates imposed by the Central Bank. The position still remains the same, the Central Bank of Nigeria alone controls by law the interest rates chargeable by any bank. As observed in the leading judgment, the pro- j vision of exhibit B which puts the interest chargeable on a

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Adekeye JCA 12 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) loan to the appellant as 9.5% per annum obviously conflicts a with the Central Bank regulation. It is not unlikely that the 9.5% stipulated was the current interest charged and imposed by the Central Bank when par- b ties enter into the loan agreement. I finally agree that the appellants did not put up a cogent defence to this suit before the trial court. It is too late in the day to improve on the situation before an appellate court which relies on the evi- c dence on printed record for its decision. In the final analysis, I agree with the leading judgment that this appeal lacks substance and it is dismissed in its entirety. Judgment of the court is affirmed. I abide the order on d costs. Appeal dismissed.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Trade Bank Plc v. Benilux (Nigeria) Ltd 13 a Trade Bank Plc v Benilux (Nigeria) Limited SUPREME COURT OF NIGERIA b MOHAMMED, EDOZIE, KATSINA-ALU, KUTIGI, TOBI JJSC Date of Judgment: 2nd MAY 2003 Suit No.: SC.186/2000

Banking – Cheque – Duty on paying bank to pay the drawee – Where payment made to a person other than the drawee – c Implication thereof Banking – Cheques – Payment made to a person not entitled – Whether constitutes tort of conversion d Jurisdiction – Federal High Court – Extent of jurisdiction conferred by section 230(1)(d) of Decree No. 107 of 1993 where there is no banker/customer relationship e Facts The respondent had a business transaction with Messrs Ac- countable Finance and Investment Company. As a result of the business transaction, Messrs Accountable Finance and f Investment Company Limited issued cheque no. 03370031150013 A/C No. 120/37201510195 dated 27 Janu- ary, 1993, in the sum of N1,000,000 (One Million naira) payable to the respondent. The cheque was marked “A/C payee only” and “Not negotiable”. It was to be drawn on the g account of the company at Martins Street Branch of the Trade Bank Plc. Trade Bank Plc is the appellant in this appeal. In the cheque the appellant was mandated to pay the sum of N1,000,000 to the respondent. Instead of paying the h amount to the respondent the appellant paid the N1,000,000 to a stranger. When the respondent found out what had happened it challenged the appellant on the wrongful payment. The appellant i accepted responsibility, but pleaded for time to enable it to rectify the situation and make payment properly to the respondent. When the waiting was too long and the payment was not forthcoming the respondent went to the Lagos High j Court.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

14 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Soon after the action had been filed, learned Counsel for a the respondent, Professor Adesanya, S.A.N., filed and argued an ex parte motion with the following prayer:– “An order of interim injunction (Mareva) restraining the Defen- b dants, their servants and/or agents from removing from the jurisdiction, disposing of and/or dealing with their assets within the jurisdiction in so far as the same do not exceed the sum of N 2,000,000 and in particular its bank balance with the Central c Bank of Nigeria or their claims thereto until the determination of the Motion on Notice.” The application was granted. The order was served on the Central Bank which attached the sum of N2,000,000 in the d account of the appellant kept with the Central Bank. In response to this order the appellant by way of motion on notice dated 14 December, 1994, prayed for striking out the suit for lack of jurisdiction of the trial court. Alternatively, e the appellant prayed for the vacation of the Mareva injunction. In a considered ruling, the trial High Court Judge held that the State High Court had jurisdiction to hear the suit. Secondly, he declined to vacate the Mareva injunction f which he granted earlier. Dissatisfied with the said ruling, the appellant filed an appeal to the Court of Appeal. g Before the hearing of the appeal at the Court of Appeal, the appellant filed a motion and prayed for an order substituting the order granted by the High Court attaching the appellant’s N2,000,000 with the Central Bank of Nigeria with a bank guarantee from any reputable bank in Nigeria. The applica- h tion was granted. The Court of Appeal ordered the appellant to provide a bank guarantee in the sum of N2,000,000 from Afribank Plc. The bank guarantee was lodged in Afribank Plc on 26 November, 1996. The Court of Appeal thereafter i heard the appeal and delivered its judgment on 29 May, 2000. The appeal filed by the appellant was dismissed. It is against the said judgment that the appellant further appealed to the Supreme Court. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Trade Bank Plc v. Benilux (Nigeria) Ltd 15 a Held – 1. It is settled law by a long string of authorities that bankers who collect cheques and pay them to those not enti- b tled to the proceeds in the cheques are guilty of the tort of conversion. 2. In banking parlance, the mandate of the drawer of a cheque was that the paying bank should pay the cheque c to the person whose name appears upon it and nobody else. In the instant case, the respondent can sue the appellant in conversion for the proceeds of the cheque which the appellant paid to a stranger who is not the d payee of the cheque. 3. For the exclusive jurisdiction of the Federal High Court to be sustained under section 230(1)(d) of Decree No. 107 of 1993, the civil cause or matter must arise from e “banking” banks and other financial institutions. 4. In the instant case, though there was no banker/customer relationship between the appellant and the respondent, the respondent’s grouse was that his cheque was dealt f with by the appellant in a manner inconsistent with his right. Since the action is grounded on the tort of conversion, the State High Court also has jurisdiction. Appeal dismissed. g Cases referred to in the judgment Nigerian h 7Up Bottling Co Ltd v Abiola and Sons Bottling Co Ltd (2001) NWLR (Part 730) 469; (2001) FWLR (Part 70) 1650 Adisa v Oyinwola (2000) 10 NWLR (Part 674) 116; (2000) i 6 SC (Part 11) 47 NDIC v Federal Mortgage Bank of Nigeria (1997) 2 NWLR (Part 490) 735 Ojini v Ogo Oluwa Motors (1998) 1 NWLR (Part 534) 353 j Uwaifo v A.-G., Bendel State (1983) 4 NCLR 1

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

16 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Foreign a A.L. Underwood Ltd v Bank of Liverpool and Martins (1924) 1 K.B. 775 Bute (Marquess) v Barclays Bank (1955) 1 Q.B. 202 b Fine Art Society v Union Bank of London (1886–87) 17 Q.B.D. 705 Kleinwort v Comptoir d’ Escompte de Paris (1984) 2 Q.B. c 167

Nigerian statutes referred to in the judgment Bills of Exchange Act, Cap 35 Laws of the Federation of d Nigeria, 1990, section 73 Constitution (Suspension and Modification) Decree No. 107 of 1993, section 230(1)(d) Constitution of the Federal Republic of Nigeria, 1979, sec- e tion 236(1)

Books referred to in the judgment Clerk and Lindsell on Torts (15ed) page 1020, paragraph f 21–05 Lord Chorley Law of Banking (5ed) page 50

Counsel g For the appellant: Babatunde For the respondent: Adesanya, S.A.N. (with him Kasali)

Judgment h MOHAMMED JSC: (Delivering the lead judgment) Benilux (Nigeria) Limited, who hereinafter shall be referred to as the respondent, had business transaction with Messrs Account- able Finance and Investment Company. As a result of the i business transaction Messrs Accountable Finance and In- vestment Company Limited issued cheque no. 03370 031150013 A/C No. 120/37201510195, dated 27 January, 1993, in the sum of N1,000,000 (One Million Naira) payable j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC Trade Bank Plc v. Benilux (Nigeria) Ltd 17 a to the respondent. The cheque was marked “A/C payee only” and “Not negotiable”. It was to be drawn on the account of the company at Martins Street Branch of the Trade b Bank Plc. Trade Bank Plc is the appellant in this appeal. In the cheque the appellant was mandated to pay the sum of N1,000,000 to the respondent. Instead of paying the amount to the respondent, the appellant paid the N1,000,000 to a c stranger. When the respondent found out what had happened it challenged the appellant on the wrongful payment. The appellant accepted responsibility, but pleaded for time to enable it to d rectify the situation and make payment properly to the respondent. When the waiting was too long and the payment was not forthcoming the respondent went to the Lagos High Court and filed the following claims:– e “(i) A declaration that the Defendant acted unlawfully and improperly in paying cheque No.03370-031150013 ‘A/C Payee only’ ‘Not Negotiable’ drawn on the Defendants, by Accountable Finance and Investment Co Ltd in favour of f the Plaintiffs to a person or persons other than the Plaintiffs at the Defendants’ Martins Street Branch, and otherwise than through a collecting banker acting for the Plaintiffs. (ii) A declaration that the Plaintiffs are entitled to be credited N g with the value of the cheque (ie 1,000,000) referred to in paragraph 1 hereof on the expiration of 5 working days from the presentation of the same to the Defendants on 28 January, 1993 and that the Defendants have wrongfully and improperly deprived the Plaintiffs of the use and enjoyment h of the said sum of N1,000,000 from 3 February, 1993. (iv) An order that the Defendants shall pay the Plaintiffs the said sum of N1,000,000 with interest at 50% per annum from 3 February, 1993 to 31 December, 1993 and further interest at i 15% per annum from 1 January, 1994 until judgment and thereafter at 15% per annum until the judgment shall have been satisfied.” Soon after the action had been filed, learned Counsel for the j respondent, Professor Adesanya, S.A.N., filed and argued an

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC 18 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) ex parte motion with the following prayer:– a “An order of interim injunction (Mareva) restraining the Defen- dants, their servants and/or agents from removing from the jurisdiction, disposing of and/or dealing with their assets within the ju- b risdiction in so far as the same do not exceed the sum of N2,000,000 and in particular its bank balance with the Central Bank of Nigeria or their claims thereto until the determination of the Motion on Notice.” The application was granted. The order was served on the c Central Bank which attached the sum of N2,000,000 in the account of the appellant kept with the Central Bank. In response to this order the appellant by way of motion on notice dated 14 December, 1994, prayed for striking out the d suit for lack of jurisdiction of the trial court. Alternatively, the appellant prayed for the vacation of the Mareva injunction. In a considered ruling, the trial High Court Judge held that the State High Court had jurisdiction to hear the suit. e Secondly, he declined to vacate the Mareva injunction which he granted earlier. Dissatisfied with the said ruling, the appellant filed an appeal to the Court of Appeal. Before the hearing of the ap- f peal, at the Court of Appeal, the appellant filed a motion and prayed for an order substituting the order granted by the High Court attaching the appellant’s N2,000,000 with the Central Bank of Nigeria with a bank guarantee from any g reputable bank in Nigeria. The application was granted. The Court of Appeal ordered the appellant to provide a bank guarantee in the sum of N2,000,000 from Afribank Plc. The bank guarantee was lodged in Afribank Plc on 26 Novem- h ber, 1996. The Court of Appeal thereafter heard the appeal and delivered its judgment on 29 May, 2000. The appeal filed by the appellant was dismissed. It is against the said judgment that the appellant has filed this appeal. i The appellant identified the following two issues for the determination of the appeal:– “(i) Whether the High Court of Lagos State is vested with jurisdiction to hear and determine the Plaintiff’s claim and j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC Trade Bank Plc v. Benilux (Nigeria) Ltd 19 a (ii) Whether the ex parte order of Mareva Injunction ought not to have been discharged in the circumstances.” The respondent adopts the issues as formulated by the appel- b lant. The only issue pertinent for the determination of this appeal, in my view, is the issue questioning the jurisdiction of Lagos State High Court to decide the suit filed by the respondent. The issue about the ex parte order of Mareva in- c junction has been overtaken by events before the hearing of the appeal at the court below. The application to substitute the Mareva injunction with a bank guarantee which the court granted had removed the Mareva injunction from being an d issue in dispute between the parties. An issue in dispute is the subject of litigation. It is a matter for which a suit is brought and parties join issues for the determination of the dispute. Courts will only consider a justifiable controversy e upon an existing state of facts and not upon hypothetical dispute or academic moot. The issue of Mareva injunction is no more pertinent as a dispute between the parties. I therefore strike out issue II being an incompetent issue. f On jurisdiction, learned Counsel for the appellant, Layi Babatunde, maintained the submission he made both at the High Court and the Court of Appeal that a State High Court has no jurisdiction to determine the respondent’s claims as g endorsed on the writ of summons. Learned Counsel submitted that there is no doubt that the respondent’s claim had arisen because of a banking transaction which the company alleged had occasioned a loss to it. But, Counsel further ar- h gued, the Federal High Court has exclusive jurisdiction to the exclusion of any other court in civil causes and matters arising from banking, save those transactions between banker and customer. He referred to section 230(1)(d) of the i Constitution (Suspension and Modification) Decree No. 107 of 1993 which was the law applicable at the time at which cause of action arose. To buttress his argument the learned Counsel referred to the case of Uwaifo v A.-G. Bendel State j (1982) 7 SC 124. Let me refer to the provision of section

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC 20 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

230(1)(d) of the Constitution (Suspension and Modification) a Decree No. 107 of 1993. It provides as follows:– “230(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction b as may be conferred upon it by an Act of the National Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters arising from . . . (d) banking, banks, other financial institutions, includ- c ing any action between one bank and other, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letter of credit, promis- d sory note and other fiscal measures. Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.” e Mr Layi Babatunde argued that the dispute between the respondent and the appellant would not fit in the proviso to section 230(1)(d) of Decree No. 107 of 1993 because the re- f spondent had no account with the appellant and there is no banker/customer relationship between them. In Karimu Adisa v Emmanuel Oyinwola (2000) 10 NWLR (Part 674) 116; (2000) 6 SC (Part 11) 47 at 65 this Court held that the unlimited jurisdiction of the High Court of a state may be g limited as provided for by the Constitution. The State High Court has no jurisdiction in matters provided under section 230(1)(d) of Decree No. 107 of 1993 except disputes between an individual customer and his bank in respect of a h transaction between the individual customer and the bank. In other words, section 230(1)(d) of Decree No. 107 of 1993 provides a limitation to the general rule and all-embracing jurisdiction of a State High Court. Items listed under section i 230(1)(d) of Decree No. 107 of 1993 can be determined exclusively only by the Federal High Court. Mr Layi Babatunde further submitted that under section 73 of the Bills of Exchange Act, Cap 35 Laws of the Federation j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC Trade Bank Plc v. Benilux (Nigeria) Ltd 21 a of Nigeria, 1990 a cheque is defined as “a bill of exchange” and as such a cheque cannot therefore be a chattel for it to be converted to the use of someone else. b Since the respondent is not a customer of the appellant’s bank the case of the appellant falls within the exclusive jurisdiction of the Federal High Court. In his reply to the above submission, learned Counsel for c the respondent pointed out that the respondent’s statement of claim stated that the appellant unlawfully and improperly paid over to a person other than the plaintiff/respondent a crossed cheque, marked “A/C payee only” and “not negotia- d ble”. And it is the act of paying such cheque to a person other than the plaintiff/respondent that brought about the claim of the plaintiff in the first relief. The relief of the plaintiff/respondent is founded in the tort of conversion. e This is clear, because the appellant dealt with the respondent’s cheque in a manner inconsistent with the respondent’s rights whereby the respondent has been deprived of the use and possession of the same. The tort of conversion is com- f mitted when the person entitled to the possession of a chattel is permanently deprived of that possession and the chattel is converted to the use of someone else (see Clerk and Lindsell on Torts (15ed) at page 1020 paragraph 21–05 and Ojini v g Ogo Oluwa Motors (1996) 1 NWLR (Part 534) 353). Now, it is settled law by a long string of authorities that bankers who collect cheques and pay them to those not entitled to the proceeds in the cheques are guilty of the tort of h conversion (see Kleinwort v Comptoir National d’ Escompte de Paris (1984) 2 Q.B. 167 and Fine Art Society v Union Bank of London (1886–87) 17 Q.B.D. 705). In A.L. Under- wood Ltd v Bank of Liverpool and Martins (1924) 1 K.B. i 775 Bankes LJ opened his judgment with the following statement:– “The facts in this case are not seriously in dispute. The real issue between the parties is as to the true inference to be drawn from j those facts, and the fate of this appeal depends, in my opinion,

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC 22 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

upon what the true inference are. The material facts are as follows: a (His Lordship then stated the facts as above set out, and proceeded as follows): One defence relied on by the appellants was that on those facts there was no evidence of any conversion of the cheques. Unless the appellants can justify their action upon one or b other of the defences upon which they rely they appear to me quite clearly to have been guilty of conversion of all the cheques.” In Bute (Marquess) v Barclay Bank (1955) 1 Q.B. 202 one McGaw was appointed manager of three farms in Scotland c belonging to the plaintiff. His duties included the making of applications to the Department of Agriculture for Scotland for Hill sheep subsidies in respect of the farms. In January, 1949 he forwarded three such applications. Before the sub- d sidies were paid, McGaw left the plaintiff’s employment. In September, 1949, the department, in accordance with their usual practice, sent to McGaw, in satisfaction of the applications, three warrants crossed “Not negotiable” and stated e that the warrants were presented within one month through a bank. Mr McGaw should be paid £133.10s (in one case) in respect of Hill Sheep subsidy, 1949. Mr McGaw opened a personal account with the warrants. He was later permitted f by the bank to withdraw the proceeds of the warrants. The bank (Barclays Bank) was sued for conversion and it was held that the plaintiff was entitled to recover the amount payable under the warrants. g 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 the appellant paid to a stranger who is not the payee of the cheque. The plaintiff/respondent’s case is simply a tort of conversion and the action filed by the plaintiff/ h respondent against the appellant can be entertained by any State High Court (see 7up Bottling Co Ltd and others v Abiola and Sons Bottling Co (2001) 13 NWLR (Part 730) 469; (2001) F.W.L.R. (Part 70) 1650). Having failed to have i this issue resolved in its favour this appeal has accordingly failed and it is dismissed. The judgment of the Court of Appeal is hereby affirmed. I award N10,000 costs in favour of the respondent. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Trade Bank Plc v. Benilux (Nigeria) Ltd 23 a KUTIGI JSC: I read in advance the judgment just delivered by my learned brother Mohammed JSC. I agree with him that there is no merit in the appeal. The plaintiff’s action is clearly founded on the tort of conversion and it is not caught b by the provisions of section 230(1)(d) of Decree No. 107 of 1993. The appeal therefore fails and it is dismissed with N10,000 costs in favour of the respondent against the appellant. The judgments of the lower courts are affirmed. c KATSINA-ALU JSC: I have had the advantage of reading in draft the judgment of my learned brother, Mohammed JSC. I agree with it and, for the reasons which he has given, I too dismiss the appeal. I also abide by the order for costs. d TOBI JSC: I have read the judgment of my learned brother, Mohammed JSC, and I agree that this appeal should be dismissed. Section 230(1)(d) of the 1979 Constitution as e amended by the Constitution (Suspension and Modification) Decree No. 107 of 1993 vests exclusive original jurisdiction on the Federal High Court “in respect of banking, banks, other financial institutions including any action between one f bank and other, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange coinage, legal tender, bills of exchange, letter of credit, promissory note and other fiscal measures”. The provision can only be invoked on banking transactions in respect of bank inter se g including the Central Bank. By the proviso, the subsection will not apply to any dispute between an individual customer and his bank in respect of transaction between an individual customer and a bank. h For the purposes of determining the exclusive jurisdiction of the Federal High Court in respect of section 230(l)(d), the court must carefully examine the facts of the case to see whether they justify the application of the subsection. In the i instant appeal, though the appellant was mandated to pay the cheque valued at N1,000,000 to the respondent, it paid it to a third party who is entirely a stranger to the transaction. That does not qualify as a bank transaction in which section j 230(l)(d) applies. It is clearly a case of conversion which has

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Tobi JSC 24 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) nothing to do with the exclusive jurisdiction of the Federal a High Court. Conversion is a tort which is actionable in the State High Court. That is exactly what the plaintiff/respondent did and I b cannot fault the commencement of the action in that court. The Court of Appeal was right in dismissing the appeal. I too will dismiss the appeal and I hereby dismiss it. I also c award N10,000 costs in favour of the respondent.

EDOZIE JSC: I had a preview of the judgment just delivered by my learned brother, Mohammed JSC, and I agree with him that the appeal should be dismissed. d The short facts of the case that gave rise to this appeal are undisputed and have been admirably recounted in the lead judgment. Shortly put, they are that the appellant paying e bank wrongly paid to a stranger the sum of N1,000,000, being the sum or proceeds of a crossed cheque marked “A/C payee only and not negotiable” drawn on the appellant bank in favour of the respondent company. In banking parlance, f the mandate of the drawer of a cheque was that the paying bank should pay the cheque to the person whose name appears upon it and nobody else (see Law of Banking (5ed) page 50 by Lord Chorley). It is on the foregoing premises g that the respondent sued the appellant in the Lagos State High Court for the reliefs set out in the lead judgment. In this Court, as in the two lower courts, the main issue in controversy is a jurisdictional one. The contention of the ap- h pellant is that the matter falls within the exclusive jurisdiction of the Federal High Court by virtue of section 230(1)(d) of Decree No. 107 of 1993 which enacts thus:– i “230(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the Na- tional Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion of j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Edozie JSC Trade Bank Plc v. Benilux (Nigeria) Ltd 25 a any other court in civil causes and matters arising from:– (d) banking, banks, other financial institutions, including any action between one bank and other, any ac- b tion by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letter of credit, promissory note and other fiscal measures. c Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.” d It is not disputed that there was no relationship of banker and customer between the appellant bank and the respondent company to bring the matter under the proviso of section 230(1)(d) of Decree No. 107 of 1993 so as to confer juris- e diction to a State High Court (see NDIC v Federal Mortgage Bank of Nigeria (1997) 2 NWLR (Part 490) 735). Be that as it may for the exclusive jurisdiction of the Federal High Court to be sustained under the aforesaid section, the civil cause or matter must arise from “banking, banks, other fi- f nancial institutions”. In the instant case the respondent’s grouse was simply that his cheque was dealt with by the appellant in a manner inconsistent with his right. In my humble view it can hardly be said that the respondent’s cause of ac- g tion falls within the exclusive jurisdiction of the Federal High Court. On the contrary, the action is grounded on the tort of conversion, an action well within the jurisdiction of the State High Court pursuant to section 236(1) of the then h 1979 Constitution. The appeal is groundless and is accordingly dismissed with the consequential orders made in the lead judgment. Appeal dismissed.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

26 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

a Afribank Nigeria Plc v Silvester Onyima and another COURT OF APPEAL, JOS DIVISION b NZEAKO, MUKHTAR, SANUSI JJCA Date of Judgment: 15 MAY, 2003 Suit No.: CA/J/197/99

Banking – Banker and customer relationship – Customer c drawing in excess of his account – Effect Banking – Customer overdrawing his account – Whether imputes criminal liability d Banking – Debt – Collection of – Whether the Nigeria Po- lice should be used to collect debt owed to bank

Facts e The first respondent, a business man and his wife, the second respondent herein, were residing at Dadin Kowa. The said first respondent had been a current account customer of the appellant/bank at its Dadin Kowa branch for about 10 f years. The second respondent, a housewife, had no account or any relationship with the appellant/bank. The said first respondent had been enjoying some overdraft facilities approved by the bank manager of the appellant’s g Dadin Kowa branch. He testified he was repaying from the proceeds of his business on account of which he had secured the facilities. Sometime in September 1995, the first respondent received a letter, which surprised and disturbed him. It h was dated 14 September, 1995 and addressed to him by the appellant/bank. In the letter, the appellant bank alleged that the first respondent had fraudulently overdrawn his account in the sum of N815,008.10 beyond his approved limit of i N40,000. The letter was tendered at the trial and admitted in evidence as exhibit A. According to the first respondent, the contents of the letter terribly disturbed him. For he had not fraudulently over j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

Afribank Nigeria Plc v. Silvester Onyima 27 a drawn his account. He was not a staff of the bank. On 20 September, 1995 the Dadin Kowa branch manager of the appellant bank came to the home of the respondents, b bringing some people, some of whom were later identified as policemen. They saw the second respondent, the wife of the first respondent and enquired about him. When she informed them that her husband who had gone to Jos was not c at home, the bank manager asked the policemen to arrest her. When she enquired the reason, they told her that her husband had collected their money and that they were looking for him and she must be arrested and taken to the police d station for detention since her husband could not be found. The second respondent, in spite of pleas, was whisked off to the Dadin Kowa station and detained for hours in their cell. She was later released on bail as evidenced by the bail e bond, exhibit B, requiring her to report at the station the next day. The first respondent came home later that day. As the second respondent was intimating her husband, the first respon- f dent of her ordeal, the same persons who had arrested her, were again led to their house by the same branch manager. They were driven there in the manager’s official car. The policemen showed the first respondent a copy of the letter of g 14 September, 1995 written to him by the appellant bank. They whisked him away to the same police station. They detained him there till the next day, then they took him with them in search of other debtors of the bank, driven also by h the driver of the manager of the bank. The policemen also took the first respondent to some of his friends from whom he was able to raise N152,000 which they then carried with him to the bank to lodge into his account. The two police- i men who took him from place to place as aforesaid were driven with him in the car of the appellant bank by the bank’s driver. After lodging the money, first respondent was moved to j Gombe Police Station in the same car and detained for one

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

28 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) night. The next day, he was again driven to the S.I.I.B. Po- a lice Headquarters in Bauchi, Bauchi State and detained. While in Bauchi, the appellant’s area manager, Bauchi, came to the police station and the first respondent was b brought out of the cell where he had been detained. The manager questioned him as to how he was going to pay the debt, and when he told him, the area manager asked him to put it in writing. This he did. c The first respondent was thereafter released on bail. This was on 29 September, 1995. The first respondent had been imprisoned altogether for about nine days, in cells in Dadin Kowa, in Gombe and in Bauchi. The first respondent was d never charged in court.

Held – 1. By a customer overdrawing his account, he had only re- e quested for an overdraft from the bank and by honouring the cheques of the customer the bank had agreed to give it to him. All that arises is the relationship of debtor and creditor. f 2. The overdrawing of his account simpliciter by a customer comes with no criminal liability without evidence of fraud or some other criminal act. 3. The police force, a respectable institution entrusted with g the security of our nation and people, is no “debt collector” and should never be involved in such services. Appeal allowed in part. h Cases referred to in the judgment Nigerian A.C.B. Ltd v Egbunike (1988) 4 NWLR (Part 88) 350 i Abdullahi v Raji (1998) 1 NWLR (Part 534) 481 Aja v Okoro (1991) 7 NWLR (Part 203) 260 Amao v Onure (1964) NNLR 130 Bank of the North v Muri (1998) 2 NWLR (Part 536) 153 j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

Afribank Nigeria Plc v. Silvester Onyima 29 a Bank of West Africa Ltd v Odiatu (1956) LLR 48 Ibrahim v Mohammed (1996) 3 NWLR (Part 453) 437 Iwunwah v Iwunwah (1999) 13 NWLR (Part 635) 425 b Labiyi v Anretiola (1992) 8 NWLR (Part 258) 139 Mandillas and Karaberis Ltd v Apena (1969) 1 All NLR 390 Ningi v F.B.N. Plc (1996) 3 NWLR (Part 435) 220 c Odiba v Azege (1998) 9 NWLR (Part 566) 370 Ogunhadejo v Owoyemi (1993) 1 NWLR (Part 271) 517 Ojeme v Momodu (1994) 1 NWLR (Part 323) 685 d Okafor v Ikeanyi (1979) 3–4 SC 99 Okonkwo v Ogbogu (1996) 5 NWLR (Part 449) 420; (1996) 37 L.R.C.N. 580 e Oniah v Onyia (1989) 1 NWLR (Part 99) 514 Onifade v Olayiwola (1991) 7 NWLR (Part 161) 130 Onyedinma v Nnite (1997) 3 NWLR (Part 493) 333 f Onyesoh v Nnebedum (1992) 3 NWLR (Part 229) 315 Onyioha v Ayashe (1996) 2 NWLR (Part 432) 567 Osinupebi v Saibu (1982) 7 SC 104 Pavin v Aliuah (1953) 14 WACA 267 g Salzgitter Stahl Gmbh v Aridi Ind. Ltd (1996) 7 NWLR (Part 459) 192 Western Steel Works Ltd v Iron and Steel Workers Union of h Nigeria (1987) 1 NWLR (Part 49) 284

Foreign Capital and Counties Bank v Henry (1882) 7 AC 741 i Collins v Jones (1955) 1 QB 564 Danby v Beardsley (1880) 43 LJR 603 Rookes v Barnard (1964) AC 1129 j Walters v W.H. Smith and Son Ltd (1914) 1 KB 595

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

30 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian rules of court referred to in the judgment a Court of Appeal Rules, 2002, Order 6 rule 9(5)

Books referred to in the judgment b Clerk and Lindsell on Torts (13ed) page 377 paragraph 748 Bullen Leakes and Jacob’s Precedents of Pleadings (12ed) page 429 c Halsbury’s Laws of England (3ed) page 764 paragraphs 1266–1267 Paget’s Law of Banking (8ed) page 132 d Counsel For the appellant: Wurno For the respondents: Ogbuchi e Judgment NZEAKO JCA: (Delivering the lead judgment) On 13 De- cember, 1996, Heman J sitting at the High Court of Justice Bauchi in Bauchi State, Nigeria, delivered judgment in a suit f filed by the plaintiffs. In the suit, the plaintiffs, who are now respondents in this appeal, claimed from two defendants, viz., the Commissioner of Police, Bauchi State, and the appellant herein, a banking institution, N5 million, being ag- g gravated general damages for unlawful arrest and detention of the respondents and the sum of N2 million being general damages for defamation of the character of the first respondent, arising from the letter of the appellant dated 14 Sep- h tember, 1995, alleging that the first respondent had fraudulently overdrawn his account with the appellant bank. The claim was made against the defendants jointly and severally. The first defendant/bank filed and exchanged i pleadings with the plaintiffs, but the second defendant, the Commissioner of Police, though duly served, neither entered an appearance, nor filed a defence to the suit and never participated in the trial. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 31 a At the trial, the two plaintiffs testified on their own behalf and, after cross examination, closed their case. The first defendant/bank did not lead evidence. They rested their case b on the plaintiffs’ case. The learned trial Judge delivered a considered judgment, finding the defendants liable jointly and severally. He awarded N250,000 for aggravated general damages for c unlawful arrest and detention of the two plaintiffs and N50,000 general damages against the first defendant/bank for defamation of the character of the first plaintiff. The first defendant/bank, dissatisfied, has appealed against d the judgment on four grounds. The bank is the only appellant in this appeal. For the appeal, learned Counsel for both parties have filed e and exchanged briefs of argument as required by the rules of this Court. For the appellant/bank, the following five issues were formulated for determination in this appeal:– f “(a) Whether by merely giving information to the police of suspected fraud, the appellant’s/bank area manager could be held responsible for the consequent arrest and imprisonment of the plaintiffs (respondents) by the police. g (b) Whether there was any evidence of malice, or of an inter- ference by any staff of the appellant with the discretion to arrest and detain the plaintiffs, to warrant the finding that the appellant was jointly and severally responsible for the h arrest and imprisonment of the plaintiffs. (c) Whether there was any evidence of aggravation of damages to warrant the award of N250,000 aggravated damages for wrongful arrest and detention. i (d) Whether without setting out the full text of the alleged publication of the offensive part verbatim, the court could proceed to award general damages for the alleged libel contained in the publication. (e) Whether considering the totality of evidence led, the j N300,000 general damages awarded by the court is not

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 32 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

excessive and reasonably disproportionate to the alleged a injury suffered by the plaintiffs.” The respondents’ issues formulated by their Counsel are as follows:– b “(i) Whether the High Court was justified in finding that the arrest and detention of the respondents by the police was through the instigation and instrumentality of the appellant/bank and that the bank did more than merely reporting c a crime to the police. (ii) Whether the award of N250,000 aggravated general damages against the appellant/bank and the Commissioner of Police Bauchi State jointly and severally for wrongful arrest d and detention was justifiably and reasonably made. (iii) Whether the High Court was justified in awarding N50,000 general damages against the appellant/bank for libel having regard to the pleading and evidence produced before the e court.” At the hearing of the appeal, neither the parties nor their Counsel were in court. As briefs had been filed and exchanged, the appeal was deemed argued based on the briefs. f This accords with Order 6 rule 9(5) of the Court of Appeal Rules, 2002. I deem it appropriate to state here that I had discovered g two briefs of argument in the file, for the appellant, one filed on 22 July, 1999 by Suleiman Wurno, Esq., and the other filed on 8 November, 2002 by Mashood Sanusi, Esq. There is absolutely nothing in the file to explain the duplication. h There is no application withdrawing the earlier brief or for leave to file an amended brief or a new one out of time by another Counsel, three years after the first one was filed. The respondents’ brief was filed on 17 March, 2000 in re- i sponse to the 22 July, 1999 appellant’s brief. I have in the circumstances decided to determine this appeal, based on the earlier brief filed on 22 July, 1999 by the appellant/bank. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 33 a The facts which set off the action at the court below, derived from the records can be summarised as follows:– The 1st respondent, a business man and his wife, the sec- b ond respondent herein, were residing at Dadin Kowa. The said first respondent had been a current account customer of the appellant/bank at its Dadin Kowa branch for about 10 years. The second respondent, a housewife had no account c or any relationship with the appellant/bank. The said first respondent had been enjoying some overdraft facilities approved by the bank manager of the appellant’s Dadin Kowa branch. This he testified he was repaying from d the proceeds of his business on account of which he had secured the facilities. Sometime in September 1995, the first respondent received a letter, which surprised and disturbed him. It was dated 14 September, 1995 and addressed to him e by the appellant/bank. In the letter, the appellant bank alleged that the first respondent had fraudulently overdrawn his account in the sum of N815,008.10 beyond his approved limit of N40,000. The letter was tendered at the trial and f admitted in evidence as exhibit A. According to the first respondent, the contents of the letter terribly disturbed him. For he had not fraudulently overdrawn his account. He was not a staff of the bank. g On 20 September, 1995 the Dadin Kowa branch manager of the appellant bank came to the home of the respondents, bringing some people, some of whom were later identified as policemen. They saw the second respondent, the wife of h the first respondent and enquired about him. When she informed them that her husband, who had gone to Jos was not at home, the bank manager asked the policemen to arrest her. When she enquired the reason, they told her that her i husband had collected their money and that they were looking for him and she must be arrested and taken to the police station for detention since her husband could not be found. The second respondent, in spite of pleas, was whisked off j to the Dadin Kowa station and detained for hours in their

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 34 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) cell. She was later released on bail as evidenced by the bail a bond exhibit B, requiring her to report at the station the next day. The first respondent came home later that day. As the sec- b ond respondent was intimating her husband, the first respondent, of her ordeal, the same persons who had arrested her, were again led to their house by the same branch manager. They were driven there in the manager’s official car. The c policemen showed the first respondent a copy of the letter of 14 September, 1995 written to him by the appellant bank. They whisked him away to the same police station. They detained him there till the next day, then they took him with d them in search of other debtors of the bank, driven also by the driver of the manager of the bank. The policemen also took the first respondent to some of his friends from whom he was able to raise N152,000 which they then carried with e him to the bank to lodge into his account. The two policemen who took him from place to place as aforesaid were driven with him in the car of the appellant bank by the bank’s driver. f After lodging the money, first respondent was moved to Gombe police station in the same car and detained for one night. The next day, he was again driven to the S.I.I.B. Po- g lice Headquarters in Bauchi, Bauchi State and detained. While in Bauchi, the appellant’s area manager Bauchi, came to the police station and the first respondent was brought out of the cell where he had been detained. The h manager questioned him as to how he was going to pay the debt, and when he told him, the area manager asked him to put it in writing. This he did. The first respondent was thereafter released on bail. This i was on 29 September, 1995. The first respondent had been imprisoned altogether for about nine days, in cells in Dadin Kowa, in Gombe and in Bauchi. The first respondent was never charged to court. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 35 a Before addressing the substance of the issues, I will first deal with some procedural matters observed relating to the issues and grounds of appeal. The appellant’s issues are one b too many. They have framed five issues out of four grounds of appeal. It is well established that it is undesirable for issues for determination to exceed the number of the grounds of appeal. c It is more in keeping with practice for issues to be fewer than the grounds, or for both to be the same (Osinupebi v Saibu (1982) 7 SC 104 at 110–111; Onyesoh v Nnebedum (1992) 3 NWLR (Part 229) 315; Onifade v Olayiwola (1990) d 7 NWLR (Part 161) 130 at 157; Salzgitter Stahl Gmbh v Aridi Ind. Ltd (1996) 7 NWLR (Part 459) 192 at 200 paragraph D). A single issue should admit of points raised in one or more e grounds of appeal. A number of grounds may raise a single issue, not the other way round (Onyioha v Ayashe (1996) 2 NWLR (Part 432) 567 (C.A.); Labiyi v Anretiola (1992) 8 NWLR (Part 258) 139; Aja v Okoro (1991) 7 NWLR (Part f 203) 260). It is therefore not right for the appellant herein to formulate five issues out of four grounds of appeal. g It has been observed that issues (a) and (b) seem to ema- nate from ground 1 of the grounds of appeal. Issue (b) has emerged from paragraph 3 of the particulars of ground (a). This ought not to be, and I am of the view that issue (b) is h only a subsidiary issue, which can be addressed under issue (a) and should not become a substantial issue obscuring the major matter in issue. In any event, particulars of error to a ground of appeal cannot support an issue for determination. i For the law is well settled that the issue for determination in an appeal must relate to the grounds of appeal themselves not to the particulars thereof (see Ibrahim v Mohammed (1996) 3 NWLR (Part 437) at 453; Oniah v Onyia (1989) 1 j NWLR (Part 99) 514 at 529; Western Steel Works Ltd v Iron

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 36 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) and Steel Workers Union of Nigeria (1987) 1 NWLR (Part a 49) 284). Where an issue formulated suffers from one or the other of the defects referred to above, such as that it is not related to b any grounds of appeal, it must be regarded as incompetent and be struck out. In these premises, issue (b) of the appellant is hereby struck out. This leaves four issues (a), (c), (d) and (e), for determination. c It is also observed that the appellant has not aligned his issues to the grounds of appeal. The exercise of aligning issues with grounds of appeal has, among other things, the d merit of enabling the court to identify which ground of appeal succeeds or fails, as the case may be, when an issue is resolved. I will proceed now to align them thus:– Ground 1 – Issue (a) e Ground 2 – Issue (c) Ground 3 – Issue (d)

Ground 4 – Issue (e). f The contents of the respondents’ issues are virtually the same in substance as the appellant’s but are more terse. I prefer them for this judgment. They too, have not entirely aligned their issues with the grounds of appeal. However, g the position is that Ground 1 goes with – issue (i) Grounds 2 and 4 – issue (ii) h Ground 3 – issue (iii) Issue No. 1 of the respondents is the same in substance as issue (a) of the appellant. It questions the decision of the trial court that the first defendant, who is the appellant i herein, instigated the arrest and detention of the plaintiffs/ respondents, and did more than merely report a crime. Regarding this question, which determines whether the appellant was liable for false imprisonment, the learned trial j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 37 a Judge in his judgment stated his findings as follows:– “It was contended on behalf of the first defendant by their Counsel S. Wurno, Esq. that the first defendant could not be liable for false b imprisonment because all that the area manager of the first defendant did was to merely write to the police to report a criminal offence. He further submitted that to prove unlawful arrest and detention, the plaintiff must prove that the defendant made a report which to his knowledge was false, and without reasonable and c probable cause, and that the defendant acted with malice. He referred to Okechukwu v Nnamani (1985) H.C.N.L.R. 555. I have considered this submission. I find it most misconceived and not a reflection of the evidence from the contents of exhibit P1, the personal involvement of the first defendant’s Dadin Kowa Branch d manager in leading the Police to the plaintiff’s house, the use of first defendant’s car for the arrest and movement of the plaintiffs and the first defendant area manager’s visit to the first plaintiff at the S.I.I.B. Bauchi while he was in custody. I am satisfied that the e first defendant did more than merely report a crime, and that they indeed instigated the arrest and detention of the plaintiffs. I am also satisfied that the defendant knew their report to be false hence the failure to prosecute the plaintiffs in court. As the plaintiffs testified, since their release, they were neither re-arrested nor taken to f court for alleged crime. Payin v Aliuah (1953) 14 W.A.C.A. 267 it was held that as there was considerable evidence that it was the appellant who was responsible for putting the law in motion against the respondents the fact that an officer of the police had g proffered the charges did not prevent a conclusion that the appellant had instigated the prosecution. See also Okonkwo v Ogbogu and Anor (1996) 37 L.R.C.N. 580.” Regarding this issue, the appellant’s learned Counsel made h the following submissions:– He contended that the appellant was not liable with the police for any wrongful arrest of the respondents. That all the area manager of the appellant did was to report a suspected i case of fraud involving the first respondent and that the discretion to arrest and detain was entirely that of the police. Learned Counsel pointed out that every citizen has a duty to report a suspected offence to the police for investigation j and apprehension and unless it is shown that the appellant

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 38 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) directly interfered with police discretion, an action cannot lie a against a citizen for false imprisonment (Esther Adefunmi- layo v Omolara Oduntan (1958) WRNLR 31 relied upon; also Bank of West Africa Ltd v Peter Ernest Odiatu (1956) b L.L.R. 48). It was finally submitted that the trial court made no specific finding that appellant’s staff interfered with or unduly influenced the police in making the arrest and detention. c Invigorated by a plethora of judicial pronouncements of this Court and the Supreme Court is that an action for unlawful arrest and detention does not lie only against a d party who physically commits the tort, but also against he who directly or actively instigates or is instrumental to the commission of the tort. On the submission of the appellant that they merely re- e ported a crime to the police who acted on their initiative, Counsel for the respondents asked why the appellant/bank did not stay away after their report to the police and allow the police to do their work, and decide on their own whether f it was necessary to arrest and detain the respondents, husband and wife, for simply drawing money from appellant bank beyond the overdraft limit approved for the first respondent (see Onyedinma v Nnite (1997) 3 NWLR (Part g 493) 333 at 346 (C.A.)). Counsel referred to the abundant and uncontroverted evidence before the court, that the appellant’s manager led the police to the home of the respondents to arrest him over an h alleged overdrawing of his account, but when they did not meet him at home, the manager directed and instructed them to arrest and take the wife to the police station and detain her. He referred to the evidence of PW2 detailing what tran- i spired, amounting to invasion of her right when she was in no way involved in the alleged offence, citing A.C.B. v Ok- onkwo (1997) 1 NWLR (Part 480) 194 at 205 where the Court of Appeal condemned a similar action. Counsel j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 39 a concluded that it is obvious that the High Court was justified in holding that the appellant was liable for arresting and detaining the second respondent, the wife of the first respon- b dent. Counsel referred us to the uncontroverted evidence of the first and second respondents who were PW1 and PW2 in the court below who testified and showed how the appellant’s area manager masterminded the act and instructed the c police to arrest and detain them. He submitted that, in view of the evidence, the High Court was justified in its finding, relying on Okonkwo v Ogbogu (1996) 5 NWLR (Part 449) 420; (1996) 37 L.R.C.N. 580 at 600; Mandillas and Karaberis Ltd v Apena (1969) N.M.L.R. 199 and Abdullahi d v Raji (1998) 1 NWLR (Part 534) 481. Counsel added that the respondents were entitled to judgment on minimal of proof which the court can rely and e act on in the absence of discrediting evidence or any in contradiction of their evidence (Nwabuoku v Ottih (1961) All NLR (Part 2) 489; Obmiami Bricks and Stone Nig. Ltd v A.C.B. Ltd (1992) 3 NWLR (Part 229) 260 at 294–303; f Audu v Ndubuisi (1997) 3 NWLR (Part 493) 306 at 313 relied on). I will now address the law applicable to an action in false imprisonment. g A claim in false imprisonment lies at the suit of the person unlawfully imprisoned against the person who causes the imprisonment (Halsbury’s Laws of England (3ed) page 764 h paragraphs 1266–1267; Iwunwah v Iwunwah (1999) 13 NWLR (Part 635) 425). What a party who claims to have suffered false imprisonment must prove to succeed has become well established by i the courts over the years. One of the well-known principles is that in order to succeed in an action for false imprisonment, the plaintiff must show that it was the defendant who was actively instrumental in setting the law in motion j against him (Mandillas and Karaberis Ltd v Apena (1969) 1

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 40 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

N.M.L.R. 199 at 203 per Lewis JSC (relying on Danby v a Beardsley (1880) 43 L.J.R. 603); Okonkwo v Ogbogu (1996) 5 NWLR (Part 449) 420 at 433 (SC) also reported in (1996) 37 L.R.C.N. 580 at 600). Such an action lies, not only b against the party who physically does the arrest and detention, but also the person who directly and actively instigates or is instrumental to the commission of the tort of false imprisonment (Onyedinma v Nnite (1997) 3 NWLR (Part 493) c 333 at 346D–E; Abdullahi v Raji (1998) 1 NWLR (Part 534) 481 at 492 paragraphs D–F). If a person orders a policeman to arrest another person, it is an imprisonment by the person ordering the imprisonment as d well as by the policeman. This will ground an action of false imprisonment (see Walters v W.H. Smith and Son Ltd (1914) 1 K.B. 595). Merely making a report to the policeman who on his own responsibility takes the plaintiff into custody is e no imprisonment by the person who made the report. There is no doubt that a person who merely gives information without more, which leads to the arrest of a suspect by the police acting within their own mandate and responsibility, f cannot be liable in an action for false imprisonment. It is against the foregoing principles, the issue in this appeal must be examined to determine the issue, whether the police, in arresting the respondents, were acting on the direc- g tion of the appellants or their own initiative. The pleadings and evidence on record must be examined against these principles, to see if the High Court was justified when it found for the respondents, that their arrest and h detention were through the instigation and instrumentality of the appellant/bank and that the appellant did more than merely reporting a suspect to the police. Let us start with the second respondent, Mrs Stella Onyim, i the wife of the first respondent whom the pleading and uncontroverted evidence show was not a customer of the appellant/bank and had nothing whatsoever to do with the alleged overdraft, the subject matter of the alleged fraud j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 41 a against the first respondent. The respondents’ pleadings and evidence show that no report was made against her to the police. Yet, the branch manager of the Dadin Kowa branch b of the bank led the police to her husband’s residence and instructed her to be arrested and detained. She was arrested, marched to the police station by the police and detained as was ordered. She did not commit any offence and was not c associated with any. Her only “offence” is that she is the wife of the first respondent against whom some allegation was being made and who was not at home when the bank manager brought the police in search of him. d As PW2 she had testified thus:– “On 20/9/95 some people came into our house and asked me about my husband. I told them that my husband was not around as he travelled to Jos. I recognized one of the people that came to our house. I recognized the Afribank Manager, Dadin Kowa Branch. e When I told them that my husband travelled to Jos the Afribank manager told them that they should arrest me. I asked them what the problem was and they said that my husband collected their money and they were looking for him. They said they would arrest f me and take me to the police station and detain me as they could not get my husband, until he arrives. They arrested me and detained me at the police station Dadin Kowa. They detained me from 9.00am till 4.00pm. When I was arrested, there were many people within the premises. Even when one man pleaded with g them to leave me as it was my husband they were looking for, but the Afribank manager said they should arrest me. When they arrested me, I was kept in the police cell. Many people visited me at the station. It was when my children started crying that the police h asked me to go and find someone to bail me.” Under cross-examination, she further testified:– “When the manager came to our house, he asked me where my husband was and I said he travelled. It was the manager that told i the police to arrest me and take me to the police station. At the station I was released the same day I was detained. The Police did not ask me to make any statement at the station. Immediately we reached the police station the manager went away.” It must be noted that the foregoing evidence was never con- j troverted as the appellant/bank led no evidence and indeed

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 42 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) elicited in cross examination, the evidence which further a hammered in the testimony of the second respondent that there was the active involvement and instruction of the appellant’s/bank manager which caused her arrest and deten- b tion. There is no way the appellant/bank can escape liability in the light of this proof. Not only the act of the police but also that of the appellant/bank grounds this action against them in c false imprisonment (see Walters v W.H. Smith and Sons Ltd (supra)). In respect of the second respondent the contention for the appellant/bank that it merely made a report to the police and was not liable is, to say the least, totally unsupport- d able and preposterous, in the light of the overwhelming and uncontradicted evidence. As to the first respondent, again, it was the bank manager who led the police to his residence in order to arrest him on e an allegation that he had overdrawn his account beyond the overdraft sum approved for him. The uncontroverted evidence on record shows that the branch manager of the appellant bank had again personally led the policemen, armed f with the bank’s letter of 14 September, 1995. They were all driven in his car by a staff of the appellant bank. They showed the respondent a copy of the letter, arrested and took him away in the said car to the police station at Dadin Kowa g and detained him. The evidence of the first respondent who is PW1 regarding the role of the appellant is relevant to determining this issue. He continues thus at 24 of the records:– “After I was taken to Dadin Kowa Police Station, they detained h me. The following day they carried me out to go and look for other people indebted to the bank. They told me to look for money and pay. I was taken to a number of my friends and I was able to raise N152,000. They followed me to the bank where I lodged some into my account. As at the time I was being moved up and down in i search of the money I was in company of two policemen with the first defendant’s driver using the first defendant’s car. After I paid the N152,000 into my account, I was not released. Rather I was carried to Gombe police station using the first defendant’s car, where I was detained for one night. The following day I was j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 43 a carried to the S.I.I.B., Police Headquarters Bauchi. At S.I.I.B., I was detained for 3 nights. While I was there, the first defendant’s area manager Bauchi came and I was brought out from cell and he started asking me how I was going to pay their money. I told him I b was going to pay the money and that before coming here I had paid in some amount. He told me to put it in writing how I was going to pay and I did.” It was after the visit of the area manager of the appellant/ c bank that the first respondent was released. There can be no doubt, therefore, that the appellant’s machinery was used; the staff and vehicle. They actively directed and were instrumental in setting in motion the acts of the police who ar- d rested and detained the first respondent and indeed supervised this from the beginning to the end as the evidence is proof of the averments in this pleadings, which has not been controverted, clearly shows. e As it has been shown that the imprisonment of the first respondent had been caused by the appellant bank and they can be said to have actively and directly instigated it, the tort of false imprisonment would be against them. For it has f been shown that there was no probable cause for even reporting the matter to the police. There is no evidence led by the appellant/bank to show what offence they suspected and on what reasonable grounds or that they were justified in the g action which they took in arresting and detaining the first respondent in what clearly looked like an attempt by the bank to recover by unlawful means a debt arising from an overdraft approved by the then manager of the branch for a h regular, long standing bank customer. How being indebted to the bank turned into a criminal offence. Justifying the action of the bank and its staff, this Court cannot find evidence of on the records. By a customer over- i drawing his account and the bank paying him the sum drawn on his cheque, all that arises is the relationship of debtor and creditor. I see a new contract between the banker and customer different from what might have been, if there is proof j that this sum drawn and paid exceeds the approved limit of

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 44 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) overdraft previously granted the customer. Failure to repay a an overdraft can only lead to a civil claim for recovery of debt. To every banking institution, this is not a complicated legal proposition. It must be crystal clear to every banker. b A.C.B. Ltd v Egbunike (1988) 4 NWLR (Part 88) 350 at 365 is a case which comes handy herein. It was there held that a customer, by overdrawing his account, had only requested for an overdraft from the bank and by honouring the cheques c of the customer the bank had agreed to give it to him. The learned author of Paget’s Law of Banking (8ed) page 132, while discussing the status of an overdraft has lent a hand to appreciating the nature of the relationship, created where a d bank customer overdraws his account and the bank honours his cheque:– “. . . A banker is not obliged to let his customer overdraw unless he has agreed to do so; or, such agreement can be inferred from e course of business (Citing Brooks and Co v Blackburn Benefit Society (1884) 9 App. Case 857 at 864); borrowing and lending are a matter of contract, not necessarily premeditated but possible spontaneous as where a customer; without previous arrangement draws a cheque, payment of which overdraws his account” (italics f mine, to underscore the meaning and legal effect of the overdrawing by a customer like the first respondent, of his account in his bank as was previously stated). No matter how this matter is viewed, the overdrawing of his g account simpliciter by a customer comes with no criminal liability without evidence of fraud or some other criminal act. It would seem that the appellant appreciates this, its pre- occupation being to shake the first respondent to recover the h debt he owed them and knowing that the second respondent committed no offence; they were neither re-arrested nor charged in court by them. The respondents in their evidence had named the then i branch manager Mr Samuel Buala who approved the overdraft, and this piece of evidence and all others proffered by the respondents were not challenged nor controverted. It was not therefore as if the first respondent went into the cash j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 45 a vault of the bank and personally helped himself to or stole the bank’s funds. No evidence of the suspected offence was proffered before the trial court. b The claim of the appellant that they merely reported a crime to the police who acted on their own is not supported by the evidence. The testimony of PW1 and PW2, unchallenged as they stand, debunk this defence and the court be- c low did well not to place premium on that claim by the appellants. I am able to hold in the light of the foregoing, that without giving any evidence or shaking the two respondents, PW1 d and PW2, under cross examination, the evidence of the respondents remain unchallenged and the appellants have not shown any probable cause for reporting the first respondent to the police. On the other hand, the respondents have e clearly shown want of reasonable and probable cause on the part of the appellant as required by law, and that the appellant actively instigated, and supervised their arrest and detention without just cause or excuse. This is entirely unlaw- f ful. The submission of the learned Counsel for the appellants that the trial High Court made no finding that the report to the police was made with full knowledge that it was false g nor that it was without reasonable and probable cause is entirely incorrect. For at 33 lines 29–35 the learned trial Judge made findings which are appropriate to the matter. He said:– “I am satisfied that the first defendant did more than merely report h a crime, and that indeed instigated the arrest and detention of the plaintiffs. I am also satisfied that the defendants knew their report to be false hence the failure to prosecute the plaintiffs in court. As the plaintiffs testified since their release, they were neither re- arrested nor taken to court for the alleged crime.” i It remains to add that malice in the context of the tort of unlawful imprisonment or its related tort of malicious prosecution is not considered by the law in the sense of hatred or spite against the victim, but in the sense of the perpetrator j being actuated by improper motive or animus malus, or in

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 46 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the sense of a wrongful act intentionally done (see Pavin v a Aliuah (1953) 14 W.A.C.A. 267 at 268 (per Foster-Sutton P). Also Okonkwo v Ogbogu (supra) at 435 (per Ogwuegbu JSC)). b There is indeed considerable evidence, totally unchallenged, in this case, before the court below from which animus malus is manifest. For, in my respectful view, this is a situation where the appellant ought to have been heading for c a simple civil action in debt but rather it went for the arrest and detention of a husband who might have been the debtor, and his wife, who was neither their debtor nor ever had any transaction with them. d There cannot have been any honest and proper motive, but rather a manifestation of spite in the action of the appellant. The learned trial Judge was perfectly justified in drawing e the conclusions which he did. It is not in doubt that every citizen has a duty to report a suspected criminal offence to the police for investigation and apprehension and that an action for false imprisonment f does not lie against a person who merely gives information which leads the police on their own initiative to arrest a suspect (see Bank of West Africa Ltd v Odiatu (1956) L.L.R. 48). This is as correctly submitted by learned Counsel for g the appellants. For reasons quite clearly set out in this judgment upholding the findings of the learned trial Judge, this does not apply to this case and I am unable to uphold the submission h that all that the area manager of the appellant did was to report a suspected case of fraud involving the first respondent and that the discretion to arrest and detain was that of the police. i I must conclude this issue, firmly reasserting that the rule of law must remain the guide and protector of all persons in this great country, never the rule of arbitrariness and oppres- sion of the citizen. In our court of justice, the arrest and j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 47 a detention, particularly that of the second respondent in this matter, a housewife who was neither the customer of the bank nor involved in any transaction which might have b prompted the bank to seek to arrest and detain her husband, are deprecated. The police force, a respectable institution entrusted with the security of our nation and people is no “debt collector” and should never be involved in such ser- c vices. On the whole, issue 1 is determined against the appellants. Issue 2 challenges the award of N250,000 as aggravated d general damages jointly and severally against the Commis- sioner of Police, Bauchi State, and the appellant in this appeal for the arrest and detention of the two respondents. In his argument, learned Counsel for the appellants con- e tended that it ought not to have been awarded by the court below for the reason that:– (1) The respondents did not ask for aggravated damages in their evidence but only general damages; f (2) no evidence and proof of aggravation to warrant its award; and (3) no finding was made regarding the conduct by appel- g lant’s officers aggravating the condition of respondents. On his part, learned Counsel for the respondents tried to justify the award by the court below for the reasons that:– h (1) The respondents claimed N5 million for aggravated damages and led evidence in proof which was not controverted. i (2) It is misleading to say that the respondents merely asked for general damages, which were the words used in evidence of PW1 and PW2 and failure to use there aggravated general damages does not prejudice j respondents. Nor was the court or the appellant left

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 48 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

in doubt as to the claim of the respondents in the a pleadings, citing Eliochin (Nig.) Ltd v Mbadiwe (1986) 1 NWLR (Part 14) 47 at 49 paragraphs 4 and 7, at 50 paragraphs 16 and 17. b Counsel added that aggravated damages are to compensate a person injured by the conduct of another which may be awarded where the damages are at large and the conduct of the defendant is such as to injure the plaintiff’s proper feel- c ing of dignity and pride. He referred to the ordeal of the second respondent and the detention of the first respondent in three stations as the unchallenged evidence shows. All of the above, it has been submitted, are sufficient reprehensible d conduct justifying the award of aggravated damages, citing Ogoja LGA v Offoboche (1996) 7 NWLR (Part 458) 48 at 91; Odiba v Muemue (1999) 10 NWLR (Part 622) 174 at 184–190; Williams v Daily Times (1990) 1 NWLR (Part e 124) 1. Learned Counsel finally submitted that the trial Judge, contrary to the submission of the appellant, that no finding f was made as to the conduct of the bank’s officers, in a clear and succinct manner found their conduct reprehensible. The evidence before the lower court, examined against the applicable law, shows that the learned trial Judge cannot be g faulted, not only in his treatment of the evidence before him but in applying the law, with regard to the award of aggravated general damages against the appellant/bank. h I would also uphold the submission of learned Counsel for the respondents. The law allows the award of aggravated damages when pleaded and proved (see Rookes v Barnard (1964) A.C. 1129. See also Bullen Leakes and Jacob’s i Precedents of Pleadings (12ed) page 429). In the recent case of Odiba v Azege (1998) 9 NWLR (Part 566) 370 (SC), the Supreme Court of Nigeria once more re- iterated the object of the award of damages and the various j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 49 a categories of damages which may be awarded, including aggravated damages. At 388 of the report, paragraphs C–E, Iguh JSC had this to b say:– “In Eliochin (Nig.) Ltd v Mbadiwe, Obaseki, JSC had cause to observe as follows:– c ‘The primary object of an award of damages is to compensate the plaintiff for the harm done to him or a possible secondary object is to punish the defendant for his conduct in inflicting that harm. Such a secondary object can be achieved by awarding, in addition to the normal compensa- d tory damages, damages which go by various names, to wit: exemplary damages, punitive damages, vindictive damages, even retributory damages and comes into play whenever the defendant’s conduct is sufficiently outrageous to merit punishment as where it discloses malice, fraud, cruelty, inso- e lence, flagrant disregard of the law and the like.’ I entertain no doubt that the above observation of Obaseki, JSC represents the true position of the law.” f I have no doubt therefore that where there is evidence of conduct on the part of a defendant, which is arbitrary, oppressive and even unconstitutional, the court ought to award aggravated or exemplary damages. In other words, if apart g from showing that the defendant has committed the tort complained of, there is evidence that, in committing the tort, a defendant’s conduct has been high handed, outrageous etc, the plaintiff would be entitled to the award of aggravated h damages. A catalogue of the kind of conduct meriting such an award is provided by the Supreme Court in Odiba v Azege (supra) at 382, 384 and 386 is illuminating. At 382 paragraph C, Mohammed JSC described the conduct as “reprehensible and oppressive”. Onu JSC at 384 describes it i as one exhibiting “a high degree of recklessness and insensi- tivity to the social and legal norms of the society”, also, “a conduct sufficiently outrageous and reprehensible to drag down a heavy toll of damages”. Iguh JSC at 386 had this to j say on the conduct of the appellant complained of in that

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 50 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) case, having regard to the findings of the two lower courts, a that it was:– “. . . as aggravated in nature as they were reckless vindictive, high handed and utterly oppressive. b . . . Gross abuse of official power . . . reprehensible . . . gross disregard of the rule of law.” I hold the view, having regard to the sad and obvious facts of this matter earlier set out, and the unchallenged evidence c believed by the court below, that everyone of the above epi- taphs or descriptions properly fits the conduct of the manag- ers of the appellant/bank responsible for the inexcusable arrest and incarceration of the respondents in the circum- d stances of this case for no liability near in anyway whatsoever to any criminal offence.

Learned Counsel for the appellant has given one of his rea- e sons for attacking the lower court’s award of aggravated damages as being that the plaintiffs gave evidence but none of them asked aggravated damages but merely asked for general damages. Aggravated general damages, it is noted, f was pleaded in paragraph 20(1) of the amended statement of claim. The sum of N5 million was claimed “for the unlawful arrest and detention of the plaintiff by the defendants at the instance of the first defendant’s area manager between 20th g and 28 September, 1995”. Having admitted that the respondents in their evidence asked for general damages, could the appellant be suggesting that the omission of the adjective “aggravated” is fatal? I h should think that would only be begging the issue, considering the pleadings and the overwhelming evidence before the court and the state of the law. It has become well established that an action for false im- i prisonment is said to be one for injuria sine damno. There- fore, it is not even necessary for the plaintiffs to give evidence of damage to establish his cause of action or to claim any specific amount of damages (see Kadiri Amao v Amodu j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 51 a Onure (1964) All NLR 130; Okonkwo v Ogbogu (1996) 5 NWLR (Part 449) 420 at 435). In this later case Ogwuegbu JSC stated the principles b thus:– “Any trespass to the person, however slight, gives a right of action to recover at any rate nominal damages. Even where there has been no physical injury, substantial damages may be awarded for the injury to the man’s dignity or for discomfort or inconvenience. c Where liberty has been interfered with damages are given to vin- dicate the plaintiff’s rights even though he has not suffered any pecuniary damage. It is also not necessary for the plaintiff to give evidence of damage to establish his cause of action or to claim any d specific amount of damage.” In the present case, the respondents did discharge the onus on them in an action for false imprisonment which was to show that it was the appellants who were actively instrumen- e tal to, if not entirely responsible for setting in motion the machinery for the unlawful arrest and detention (see Mandi- las and Karaberis Ltd v Apena (supra) and Okonkwo v Og- bogu (supra)). f The manner of trespass and the conduct of the defendants are matters given in evidence; taken into account by the court which may award aggravated damages on those grounds (see Clerk and Lindsell on Torts (13ed) at 377 g paragraph 748). The submission of learned Counsel for the appellants may very well have arisen from a misconception of the foregoing principles. What other evidence is required in proof of ag- h gravation than that which appears on the records? The arrest and detention of a poor housewife, totally unconnected with the matter in issue, merely because her husband whom the appellants came to apprehend, and that i unlawfully, was not at home, not because she had anything to do with them, her being marched through the streets in her neighbourhood to the police station, her detention, requirement to secure a surety to effect her release hours later j on bail, with her children left watching weeping, are bad

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 52 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) enough. So also is the arrest of the first respondent when no a offence whatsoever was committed, carting him away in the bank’s official vehicle and his detention from one police cell to another in various distant cities over a period of eight b days, in the circumstances shown in evidence. These do constitute clear evidence of conduct which are entirely unjust, illegal and in gross disregard of the rule of law. I have carefully looked into the submission of learned c Counsel for the appellants and the judgment of the court below. The learned trial Judge in my view had carefully listened to the testimony of the two respondents who were PW1 and PW2 and noted that these were witnesses whose d evidence was not challenged or controverted or even shaken by cross examination.

Regarding this issue of aggravated damages he said:– e “I accept the evidence and believe it. Their testimony was clear, corroborative and credible. It was not shaken under cross- examination. The second plaintiff, an ordinary housewife, who has no banking relationship whatsoever with the first defendant bank, f for no cause whatsoever had her privacy, liberty and freedom of movement invaded and curtailed. I am satisfied from the evidence that her arrest and detention on 20/9/95 on the only basis that her husband was being sought for and was not found was most reprehensible, illegal, unlawful and flagrant abuse of her constitutional g right to liberty. And, I so hold. I am also satisfied and so hold that the arrest and detention of the first plaintiff by the defendants from 21/9/95 to 29/9/95 on account of his having overdrawn his account with the first defendant is illegal, unlawful, and an abuse of his h constitutional right to liberty. For the law is clear that if a customer to a bank draws a cheque for a sum in excess of the amount standing to the credit of his current account, it is really a request that the customer has borrowed money from the bank. It does not give rise to a criminal liability, see A.C.B. Ltd v Egbunike (1988) 4 NWLR i (Part 88) 350. Thus in the instant case, the first defendant had the remedy of instituting a civil action, against the first plaintiff to recover whatever debt he is owing, and not to cause the arrest and detention of both their customer the first plaintiff and his wife for purely civil claim” (see pages 32–33 of the records). j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 53 a The learned trial Judge further added:– “. . . in an action for damages for false imprisonment, all the plaintiff needs to prove is that his freedom was restrained. Ateze v b Momo (1958) NRNLR 127. This the plaintiffs have proved in the present case” (see the bottom of page 33 of the records). I cannot see what could be clearer than the finding of the learned trial Judge. c I would determine this issue against the appellant together with its supporting grounds of appeal. Issue 3 of the respondents and issue (d) of the appellant relate to the question of general damages awarded for libel by d the court below in the sum of N50,000. The appellant’s issue (e) questioning the quantum of damages relating to N250,000 for aggravated damages and N50,000 for libel will be addressed along with this issue. e In his brief of argument, learned Counsel for the appellants has contended that the award was made notwithstanding the fact that, in the statement of claim, the full text or the offensive part of the publication was not set out contrary to the f requirement in a claim in libel (S.O.N. Okafor v Ikeanyi (1979) 3–4 SC 99). For the respondents, it has been submitted that their plead- g ings in paragraph 8 at page 14 of the records are sufficient and backed with unassailable testimony, they had done all the law requires of them, citing Chief Emmanuel Ogun- badejo v Otunba Owoyemi (1993) 1 NWLR (Part 271) 517; h (1993) 1 SCNJ 148 at 153–154. Learned Counsel proceeded to distinguish this case from Okafor v Ikeanyi (supra) also reported in (1979) All NLR (reprint) 65 showing that the facts therein are different. i I must state immediately that the case of Ogunhadejo v Owoyemi (supra) is not an authority for the issue raised herein by the appellant. The appellant raised the issue that the respondents have not properly pleaded the words com- j plained of as required by law. It is not that proper evidence

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 54 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) has not been led which is the issue that arose and was de- a termined by the Supreme Court in the Ogunbadejo’s case (supra). Learned Counsel’s effort at distinguishing Okafor v b Ikeanyi (supra) is not entirely helpful. It is without merit therefore. What must be ascertained herein is whether the respon- c dents properly pleaded in their statement of claim, the offensive part of the publication, that is to say, the letter exhibit A, or the part thereof complained of, as required in a claim for libel. d The learned trial Judge had in his judgment regarding the claim for libel, determined it thus:– “On the first plaintiff’s claim for defamation of character, learned Counsel to the first defendant contended that the exact words com- e plained of were not set out in the statement of claim. I have however observed that the plaintiffs in paragraph 8 of their pleadings pleaded said letter and the fact that it alleges that the first plaintiff had fraudulently overdrawn his account. I am satisfied that the said defamatory words were duly pleaded. In any case, there was no f denial by the defendants. I am satisfied that the said letter, duly published to the police is defamatory of the plaintiff’s character. In Gidando v Chief Imam of Odo-Ado (1962) WNLR 122 it was held that an imputation of dishonesty to a person is a reflection on his g character and thereof defamatory.” With respect, I am firmly of the view that the learned trial Judge has not correctly answered that contention of the defendants which they now raise again in this appeal. h It has often been held by the courts that in an action for libel, complained of should be set out verbatim in the statement of claim, not just its substance or effect. In Okafor v Ikeanyi (supra), the Supreme Court stated the law (see at i 103–104 of the report). It is to be noted that this arises from the principles that such pleading must be in line with the rules of procedure which require a party to set forth in his pleadings all the material facts on which he relies. It is j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 55 a indeed a basic requirement of the law that a plaintiff must set out the exact words which he alleges are defamatory (see Ningi v First Bank of Nigeria Plc (1996) 3 NWLR (Part b 435) 220 at 235; Bank of the North v Muri (1998) 2 NWLR (Part 536) 153 (SC); Ojeme v Momodu (1994) 1 NWLR (Part 323) 685 at 698). It is the actual words which is mandatory to set out. c The case of Collins v Jones (1955) 1 Q.B. 564 at 571 has been followed by our courts. Therein Denning LJ (as he then was) stated that the plaintiff must in his pleadings set out the words with reasonable certainty (see Okafor v Ikeanyi (su- d pra)). In the older English case of Capital and Counties Bank v Henry (1882) 7 Appeal Cas. 741 at 771, 772 the principles and the justification for them are enunciated in the following terms:– e “The law requires that every word of the libel be set out in order that the court may judge whether they constitute a ground of action.” In the case of libel contained in a letter, not the whole letter, f needs to be set out but the libellous part of the letter (see Ningi v First Bank (supra)). If however there are other parts of the letter which by g themselves are not libellous but tend to qualify the libellous part in a manner that they become relevant and expound the libel, those other parts need to be set out. It is against the foregoing principles that the pleadings of h the respondents and the letter, exhibit A, have been examined. In the respondents’ pleadings, they averred as follows at paragraph 8 of the amended statement of claim:– i “Sometime in September, 1995, about the 14th thereof, the first defendant wrote to the first plaintiff claiming in that letter that the first plaintiff had fraudulently overdrawn his account with the branch demanding in turn that the account be regularized forth- j with, failing which the matter would be reported to the appropriate

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 56 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

authority for action. The plaintiff will at the trial of this suit tender a and rely on the said letter of 14 September, 1995.” Paragraph 19(iii):– “That the publication of the letter of 14/9/95, wherein the first b plaintiff was tagged a fraudster after which a copy of the letter was delivered to the police for action is defamatory of the plaintiff . . .” In paragraph 20(u) he claimed:– “The sum of N2,000,000 . . . being general damages for defama- c tion of first plaintiff’s character arising from the publication of the first defendant’s letter of 14/9/95 wherein it was alleged that the plaintiff had fraudulently overdrawn his account with the first defendant.” d I have examined the above averments of the respondents with the letter of 14 September, 1995, which bears the libel complained of. Verbatim, the letter conveys the following words after the title:– e “FRAUDULENT WITHDRAWALS IN YOUR ACCOUNT NO. 35000625 “We have noticed with dismay that your above account with our Dadin Kowa branch had been fraudulently, overdrawn to the tune f of N815,068.10DR as against the approved limit of N40,000 which has already expired. You are therefore requested to regularize the account immediately failure of which there will be no other alternative than to report observed malpractice to the appropriate authorities. g Please be reminded of the Decree No. 18 of 1994 (Recovery of Debts and Financial Malpractice) which is applicable to this situation. The above debit was as at close of business on 8 September, 1995. h Treat this with the urgency it requires. Yours faithfully, AFRIBANK NIGERIA PLC S.S. KILAWA i AREA LEGAL OFFICER CC: THE MANAGER, DADIN KOWA BRANCH.” It is crystal clear from the foregoing that the respondents have not in paragraphs 18 or 20(ii) or any other paragraph of j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA Afribank Nigeria Plc v. Silvester Onyima 57 a their statement of claim pleaded the actual or very words complained of as is mandatory in an action for libel. The law is that the plaintiff’s action for libel must fail unless he so sets out the words verbatim. The respondents’ claim for libel b in this matter must therefore fail. Issue 3 is therefore determined in appellant’s favour and ground 3 of the grounds of appeal succeeds. c Let me in a few words further address the question raised by the appellant in his issue (e), whether the award of N300,000 by the court below is not excessive and dispropor- d tionate to the alleged injury. It arises from ground 4 of the grounds of appeal. The sum of N300,000 is the total sum awarded, for aggravated general damages, N250,000 and damages for libel, e N50,000. The answer to the question has emerged from our determination of issues 2 and 3 above. It is that the N250,000 is not excessive. If anything it looks inadequate having regard to the evidence before the court. The N50,000 f for libel does not accrue, having regard to the finding that the libel complained of has not properly been pleaded and that claim fails. g The end result is that the appeal fails with respect to grounds 1, 2 and part of ground 4 and succeeds in ground 3 and part of ground 4. h The judgment of Heman J of the High Court of Justice, Bauchi State, delivered on 13 December, 1996 is affirmed with respect to the claim for false imprisonment of the respondents and the award of N250,000 aggravated damages. i The judgment is set aside with respect to the claim for libel and the award of N50,000 damages therefore. In proportion to the success or failure of the appeal. I award only N5,000 costs to the respondents, against the ap- j pellant/bank.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

58 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

MUKHTAR JCA: I have had the opportunity of reading the a lead judgment delivered by my learned brother, Nzeako JCA. I agree entirely with the reasoning and conclusion reached in the judgment. I am also of the view that the claim b of damages for libel cannot be sustained. I abide by all the consequential orders made in the judgment. SANUSI JCA: I agree. Appeal allowed in part. c

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

Arewa Paper Converters Ltd v. Nigeria Deposit Insurance Corp 59 a Arewa Paper Converters Limited v Nigeria Deposit Insurance Corporation b COURT OF APPEAL, KADUNA DIVISION UMOREN, ADAMU, BA’ABA JJCA

Date of Judgment: 22 MAY, 2003 Suit No.: CA/K/103/01 c Failed Banks Tribunal – Decision of – When not appealable Failed Banks Tribunal – Proceedings of – When could Fed- eral High Court adopt d Facts This is an appeal against the decision of the Federal High Court sitting at Kaduna, refusing appellant’s application to e set aside the judgment of the Failed Banks (Recovery of Debts) and Financial Malpractices in Bank Tribunal, Kano Zone (Failed Banks Tribunal) delivered on 24 April, 1998. The action in the Failed Banks Tribunal was brought on f the undefended list for the sum of N969,572.01 on 1 April, 1998. Judgment was, as stated above, delivered on 24 April, 1998 in favour of applicant, now respondent. Dissatisfied with the decision of the Failed Banks Tribunal, the respon- g dent, now appellant, filed an application on 22 October, 1999 in the Federal High Court to set aside the judgment of the Failed Banks Tribunal. On 7 March, 2000 the Federal High Court delivered a considered ruling dismissing the ap- h plicant’s application. Dissatisfied still, the applicant/ appellant brought this appeal. Section 5(1) and (2) states inter alia as follows:– i “5(1) A person convicted or against whom judgment is given under this Decree may, within 21 days of the conviction or judgment, appeal to the Special Appeal Tribunal established under the Recovery of Public Property (Special Military Tribunal) Decree, 1984, as amended, in accor- j dance with the provisions of that Decree.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

60 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

5(2) The decision of the Special Appeal Tribunal shall be final a and, where there is no appeal, the decision of the Tribu- nal shall be final.”

Held – b 1. By the provisions of this Decree, only in pending civil matters, by agreement of the parties, could the Federal High Court adopt the proceedings of the Tribunal. Mat- c ters concluded by the Tribunal where no appeal was brought in time was not saved. 2. Section 5(2) of the Failed Banks Decree, 1994 makes the decision of the Failed Banks Tribunal and the Special d Appeal Tribunal final and, once such a decision is final, it cannot be the subject of an appeal to any court. 3. Whereas in this appeal, the substance of the appeal is actually in respect of the decision of the Failed Banks Tri- e bunal, whatever errors of a procedural nature or of a procedural vice as to jurisdiction or competence, cannot be corrected by this Court or the Federal High Court. They can only be corrected by the Failed Banks Tribunal f or the Special Appeal Tribunal itself or else they will remain uncorrected and unresolved as this Court cannot intervene since it has no appellate or supervisory jurisdiction over the Failed Banks Tribunal or the Special g Appeal Tribunal. 4. By virtue of section 5(1) and (2) of the Failed Banks Tribunal, the ruling and judgment delivered by the Failed Banks Tribunal on 1 April and 24 April, 1998 for h which there was no appeal within 21 days, the right of appeal in any form was extinguished. Appeal dismissed. i Case referred to in the judgment Nigerian Onuaguluchi v Ndu (2001) 7 NWLR (Part 712) 309 j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

Arewa Paper Converters Ltd v. Nigeria Deposit Insurance Corp 61 a Nigerian statutes referred to in the judgment Failed Banks (Recovery of Debts) and Financial Malprac- tices in Banks Decree No. 18 of 1994, section 5(1), (2) b Tribunal (Certain Consequential Amendments etc) Decree No. 62 of 1999, sections 2(4), 3(1) and (2)

Counsel c For the appellant: Daudu, S.A.N. For the respondent: Yahusa d Judgment UMOREN JCA: (Delivering the lead judgment) This is an appeal against the decision of the Federal High Court sitting at Kaduna, refusing appellant’s application to set aside the e judgment of the Failed Banks (Recovery of Debts) and Fi- nancial Malpractices in Banks Tribunal, Kano zone (Failed Banks Tribunal) delivered on 24 April, 1998. The action in the Failed Banks Tribunal was brought on f the undefended list for the sum of N969,572.01 on 1 April, 1998. Judgment was, as stated above, delivered on 24 April, 1998 in favour of applicant, now respondent. Dissatisfied with the decision of the Failed Banks Tribunal, the respon- g dent, now appellant, filed an application on 22 October, 1999 in the Federal High Court to set aside the judgment of the Failed Banks Tribunal. On 7 March, 2000 the Federal High Court delivered a considered ruling dismissing the ap- h plicant’s application. Dissatisfied still, the applicant/ appellant brought this appeal on two grounds of appeal which, without particulars, are as follows:– “(1) The Federal High Court Kaduna per Honourable Adeniji, J i erred fundamentally in law when he refused to grant the appellant’s application to set aside the judgment of the De- funct Failed Banks Tribunal purportedly delivered on 24 April, 1998 in the face of undisputed and indeed admitted evidence to wit: the affidavit of service which showed crys- j tal clear and indeed conclusively that the address that was to

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA 62 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

be served the said writ of summons and other documents by a pasting was not indicated thereon and to that extent there was no service known to law on the Appellant/Applicant. (2) The learned trial Judge erred in law when in considering the application before him, he held inter alia, that the applica- b tion lacked merit on account of the fact that the affidavit in support did not disclose a defence on the merit and by taking that position completely misapprehended the scope and fundamental nature of the relief sought before him which c thus led him to a failure of justice.” With the leave of the court an additional ground of appeal was filed which without particulars read as follows:– “(3) The Federal High Court erred in law in failing to set aside d the judgment of Failed Banks Tribunal which it was apparent from the materials presented before it that the order of substituted service was made by the said predecessor court without jurisdiction to wit: non fulfilment of conditions e precedent to the grant of substituted service on a corporate body and the existence of such a state of affairs rendered all proceedings subsequent to the grant of substituted service a nullity.” f Briefs of arguments were filed and exchanged in accordance with Order 6 rules 2 and 4 of the Court of Appeal Rules. The applicant also filed a reply brief in answer to the preliminary objection filed by the respondent. From the three grounds of appeal, the appellant distilled three issues for determination g as follows:– “2.1. Having regard to the circumstances of this case, particularly the non-fulfilment of the conditions precedent before an application for substituted service could have h been considered and granted by the Failed Banks Tribu- nal, whether the Federal High Court (a court of coordi- nate jurisdiction and successor to the Failed Banks Tri- bunal) in considering an application to set aside the i judgment of the said Tribunal ought to have considered all the legal conditions necessary to be fulfilled before an application for substituted service is granted? 2.2. When considered in its limited sense, whether the affidavit of service sworn to by the bailiff of the Failed Banks j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA Arewa Paper Converters Ltd v. Nigeria Deposit Insurance Corp 63 a Tribunal in proof of service by substituted means in this case satisfied the order for substituted service made by the said Tribunal and if answered affirmatively, whether the entire proceedings subsequent therefore are not void? b 2.3. If the 2 questions posed above are resolved in favour of the appellant, whether the pronouncement by the Federal High Court that the suit being one on the undefended list could only be reversed on appeal or by a subsequent ac- c tion or an application showing good grounds and a defence on the merits could be allowed”? Issue 1 was related to additional ground 1 number 3: Issue 2 was related to ground 1 in the notice of appeal while issue 3 d was related to ground 2 of the grounds of appeal. The respondent, in turn, identified three issues as follows:– “(a) Whether the non-fulfilment of conditions for the grant of substituted service on a corporate body oust the jurisdic- e tion of the Failed Banks Tribunal and renders the proceedings a nullity? (b) Whether the affidavit of service sworn to by the bailiff of the Failed Banks Tribunal complied with the order for substituted service? f (c) Whether the appellant’s application to set aside the judgment of the Failed Banks Tribunal on the ground that it was obtained in default of appearance ought to show good ground and/or a defence on the merit?” g At the hearing of the appeal, the appellant adopted his brief and reply brief while the respondent adopted his brief together with the preliminary objection therein and relied on them. h The brief facts of the case are that the respondent as receiver and manager of Nigeria Universal Bank Ltd presented an application for the recovery of debt on the undefended list to the defunct Failed Banks Tribunal in accordance with i the provisions of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended). The respondent applied for an order for substituted service which was granted and the bailiff of the Failed j Banks Tribunal effected service of process and hearing

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA 64 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) notice. The Failed Banks Tribunal was satisfied that its a processes were served by substituted means as ordered by it and entertained the application for the recovery of debts and entered judgment on 24 April, 1998 in favour of the appli- b cant for the sum claimed plus interest. This is not in dispute in this appeal. On 22 October, 1999 (18 months after the judgment was rendered), the appellant filed an application to set aside the c judgment of the Failed Banks Tribunal at the Federal High Court, Kaduna, following the abolition of the Failed Banks Tribunal with the coming into force of the 1999 Constitution of the Federal Republic of Nigeria. The Federal High Court, d Kaduna in a reserved ruling dated 7 March, 1999 dismissed the application. Dissatisfied with the ruling of the Federal High Court Kaduna, the appellant has come to this Court on appeal. e The respondent filed a notice of preliminary objection. The grounds are based on lack of jurisdiction of this Court to entertain the appeal based on the decision of the Failed Banks Tribunal dated 24 April, 1998. The ruling of the Failed f Banks Tribunal ordering substituted service dated 1 April, 1998, and the service effected by the bailiff of the Failed Banks Tribunal on 6 April, 1998 were the main basis for the attack on the judgment of the Failed Banks Tribunal. g I shall attempt briefly to paraphrase together the pith and substance of the submission ably made by each Counsel on the preliminary objection to the appeal. h The respondent in his preliminary objection complains that the original grounds of appeal together with the additional ground complain against the order of the Failed Banks Tri- bunal made on 1 April, 1998 for ordering substituted ser- i vice, and the service effected by the bailiff of the Failed Banks Tribunal on 6 April, 1998. By the provisions of section 5(1) of the Failed Banks (Re- covery of Debts) and Financial Malpractices in Banks j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA Arewa Paper Converters Ltd v. Nigeria Deposit Insurance Corp 65 a Decree No. 18 of 1994 (as amended), hereinafter referred to as the Failed Banks Decree, right of appeal against the decision of the Failed Banks Tribunal is 21 days after the deci- b sion. Learned Counsel reproduced the provision of section 5(1) of the Failed Banks Decree No. 18 of 1994 (as amended). I shall reproduce these provisions in due course. This appeal was filed in the court below on 13 March, c 2002 as per the notice of appeal at 33–36 of the record of appeal. The grounds of appeal and the issues distilled from them all question the decision of the Failed Banks Tribunal in making an order for substituted service and the effect of d such service. The notice of appeal was filed four years after the Failed Banks Tribunal’s decision ordering substituted service. This is clearly outside the 21 days allowed for an appeal against the decision of the Failed Banks Tribunal. By e virtue of section 5(2) of the Failed Banks Decree the decision of the Failed Banks Tribunal had become final. Counsel submits that the notice and grounds of appeal in the instant appeal which question the decision of the Failed f Banks Tribunal is incompetent, having been filed outside the statutory 21 days for appeals from the decision of the Failed Banks Tribunal. Counsel submits further that this Court lacks jurisdiction to g entertain and determine this appeal on the grounds that:– (a) The notice and grounds of appeal in as much as it questions the decision of the Failed Banks Tribunal h and filed after the statutory 21 days, is null and void. (b) Failure to appeal against the decision of the Failed Banks Tribunal within 21 days to the Special Appeal Tribunal renders the Failed Banks Tribunal’s deci- i sion final. Counsel cites the case of Onuaguluchi v Ndu (2001) 7 NWLR (Part 712) 309 at 321 paragraphs C–H. Learned Counsel urges this Court to strike out the notice and j grounds of appeal for lack of jurisdiction.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA 66 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

In the alternative, learned Counsel questions the compe- a tence of the three grounds of appeal one by one and urges the court to strike out all the three grounds of appeal for incompetence. He cites the case of NDIC v Afro Continental b (Nig.) Ltd (1997) 1 Failed Banks Tribunal Law Reports (F.B.T.L.R.) 125 at 128. The respondent’s Counsel in his reply refers to the objection as being “hypothetical and almost imaginary on the is- c sue of nullity of the appeal”. Learned Counsel then went into the reply to the preliminary objection. He contends that the preliminary objection was not directed against the decision of 24 April, 1998 but against the order for substituted ser- d vice made ex parte. Whatever the case, the argument advanced by the respondent, the objection, would not operate as a bar to the present appeal. In this appeal, what is contended is the absence of the fulfilment of the mandatory condition precedent relating to service of process and substi- e tuted service. If it is a nullity, ie one made without jurisdiction, then it is settled law that a judgment that is alleged to be void can be set aside by the court which gave the judgment without the necessity of an appeal. The remedy is for f an application to be made to the court that created the nullity situation to set aside the null proceedings. Counsels submits that only a judgment that is valid and made within the jurisdiction of the court is subject to appeal. He cites African g Continental Bank Plc v Losada Nig. Ltd (1995) 7 NWLR (Part 405) 2 at 44, 45 and 49. Learned Counsel goes into the issue of service or non- service of process and the judgment being made in default of h appearance which are the main issues in the appeal. However, learned Counsel argues that the only worthy point for consideration is whether Decree No. 18 of 1994 as amended permits the setting aside of defective proceedings i and judgments based thereon. Counsel submits that a court of law is competent to set aside its own decision in a number of circumstances including where judgment obtained is a nullity, ie obtained without jurisdiction. He went back to the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA Arewa Paper Converters Ltd v. Nigeria Deposit Insurance Corp 67 a question of failure to serve process or properly serve same and fair hearing which are the main planks of the appellant’s appeal. It arises because of the refusal of the Federal High b Court, Kaduna, to set aside the proceedings of the Failed Banks Tribunal. He argued that the ruling, the subject-matter of this appeal, is dated 7 March, 2000 in the Federal High Court. The notice of appeal was filed on 13 March, 2000 and that the appellant had a right, by section 241(1) of the 1999 c Constitution, to appeal against the said ruling. Learned Counsel observed that the provisions of Decree No. 18 had been amended by the Tribunal (Certain Consequential Amendments etc) Decree No. 62 of 1999 to vest all the d powers of the Defunct Failed Banks Tribunal in the Federal High Court. He emphasised that there is no time limit set by Decree No. 18 of 1994 or any relevant legislation as to when an application for setting aside a defective judgment can be e brought. That can be done when the defective judgment is brought to the notice of the party affected. Counsel submits that the decision in Onuaguluichi v Ndu (2001) 7 NWLR (Part 721) 309 relied upon by the respondent is of no assis- f tance to his case. Learned Counsel argued that in the case the provisions of section 81(3) of Decree No. 5 of 1999 made the decision of the Court of Appeal on any matter arising from elections to the National Assembly final. Conse- g quently there could be no further appeal to the Supreme Court. In this case the substance of the appeal is not from the judgment over which the Special Appeal Tribunal had been conferred with finality by section 5(1) of Decree No. 18 of h 1994 (as amended). The learned Counsel submitted finally on this arm of the objection that the substance of the appeal is the refusal to set aside the judgment of the Failed Banks Tribunal, which is an i appealable decision on its own, the appeal is not against a judgment covered by section 5(1) of Decree No. 18 of 1994 and therefore it is competent (see Ndu’s case at 321). The objection, submits learned Counsel, though superficially j substantial is misconceived and ought to be dismissed.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA 68 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

I would like to confine myself to the facts of the objection a and the reply and if need be the other part of the objection and/or the whole appeal can be considered. There was an ex parte application to serve the writ at the b Failed Banks Tribunal, Kano Zone, by substituted service. This application was heard and granted on 1 April, 1998 by the Failed Banks Tribunal. The judgment of the Failed Banks Tribunal, the suit on the undefended list, was deliv- c ered on 24 April, 1998. On the coming into force of the Constitution of the Federal Republic of Nigeria on 29 May, 1999, the Failed Banks Tribunal became extinct and by the provisions of Tribunals (Certain Consequential Amendments d etc) Decree, 1999 which came into force on 28 May, 1999 the jurisdiction of the Failed Banks Tribunal was transferred to the Federal High Court in respect of new cause and pending cause and matter. To this extent, the Decree provides as e follows:– “2(4) Any order, remand, decision or judgment made by a Tri- bunal before the commencement of this Decree is hereby preserved.” “3(1) Where any part heard matter is pending before any Tri- f bunal on the date of the making of this Decree the Judge:– (a) May, if the parties to the proceedings agree in a civil cause, adopt the proceedings of the Tribunal con- g cerned; . . . (2) All new proceedings shall be brought before the court in accordance with the rules of procedure of the court concerned.” h By the provisions of this Decree, it appears to me that only in pending civil matters, by agreement of parties, the Federal High Court could adopt the proceedings of the Tribunal. I do not think matters concluded by the Tribunal where no appeal i was brought in time was saved. To fully comprehend the dimension of the objection, it is necessary to have recourse to certain sections of the Failed Banks Tribunal Decree No. 18 of 1994. In addition to those j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA Arewa Paper Converters Ltd v. Nigeria Deposit Insurance Corp 69 a cited above, the Failed Banks Decree No. 18 of 1994 has section 5(1) and (2) on the right of appeal. Section 5(1) states inter alia as follows:– b “Section 5(1) A person convicted or against whom judgment is given under this Decree may, within 21 days of the conviction or judgment, appeal to the Special Appeal Tribunal established under the Recovery of Public Property (Special Military) Tribunal c Decree, 1984, as amended, in accordance with the provisions of that Decree. Section 5(2) The decision of the Special Appeal Tribunal shall be final and, where there is no appeal, the deci- d sion of the Tribunal shall be final.” From the briefs of arguments filed by both Counsel, my attention has not been drawn to any appeal filed before the Failed Banks Tribunal 21 days after from 1 April, 1998 e when the ruling was on the motion ex parte for substituted service or after the 21 days after 24 April, 1998 when judgment was delivered. That is to say, no right of appeal enured any longer in favour of any prospective appellant either f against the order for substituted service or the main judgment. The learned appellant’s Counsel’s main argument was that he was not appealing against either the ruling or the main g judgment but was asking the Federal High Court to set aside the decision of the Failed Banks Tribunal, 18 months after the ruling on the application to set aside the judgment of the Failed Banks Tribunal delivered on 1 April, 1998. h By virtue of section 5(1) and (2) of the Failed Banks Tri- bunal, the ruling and judgment delivered by the Failed Banks Tribunal on 1 April, and 24 April, 1998 for which there was no appeal for 21 days, the right of appeal in any i form was extinguished. The appellant argues that his application of 22 October, 1999 was not an appeal but an application to set aside the said judgment. By arguing that he was not appealing but was applying for setting aside the judg- j ment, the learned Counsel was by implication admitting that

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA 70 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) he had lost his right of appeal in the Failed Banks Tribunal a in respect of this cause or matter. Even though the present grounds of appeal in this present appeal are couched and expressed to be against the decision of the Federal High Court, b Kaduna, refusing to set aside its judgment, the purport of the same in this Court is still being asked to review the decision of the Failed Banks Tribunal, a request which the Court of Appeal has no jurisdiction to grant by virtue of the said section 5(1) and (2) of the Failed Banks Decree which makes c the decision of the Failed Banks Tribunal or the Special Ap- peal Tribunal final, where there was no appeal within 21 days (italics is for emphasis). Once such decision is final, it cannot be the subject of an appeal to this Court. The word d “final” in this regard means that the journey of the case is concluded, terminated, completed and is without further appeal. I can say that a prayer addressed to the Federal High Court in such matters to set aside the decision of the Failed e Banks Tribunal, when refused, is treated exactly like the decision in the appeal; it is not appealable, it is final. The important question to ask is which decision was the appellant seeking to set aside? One does not need to go far f to find the answer. The decision it sought to set aside is the decision of the Failed Banks Tribunal which by operation of section 5(1) and (2) was no longer appealable after 21 days. I am having in mind the pith and substance of the submis- g sions so ably made by each Counsel in this appeal. Section 5(2) of the Failed Banks Decree No. 18 of 1994 makes the decision of the Failed Banks Tribunal and the Special Ap- peal Tribunal final and, once such a decision is final, it can- h not be the subject of an appeal to any court. I have already indicated elsewhere in this judgment that the word “final” in this regard means that the journey of the case is concluded, terminated, completed and is without any further appeal. i The intention of the said Decree was to make the Special Appeal Tribunal, where there is an appeal and the Failed Banks Tribunal, where no appeal was brought for 21 days, a court of last resort in matters over which the Tribunal had j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA Arewa Paper Converters Ltd v. Nigeria Deposit Insurance Corp 71 a jurisdiction. A prayer addressed to the Federal High Court in such matters to set aside its decision when refused is treated exactly like the decision in the appeal; it is not appealable; it is final. Whereas in this appeal, the substance of the appeal b is actually in respect of the decision of the Failed Banks Tri- bunal, whatever errors of a procedural nature or of a procedural vice as to jurisdiction or competence cannot be corrected by this Court or the Federal High Court. They can c only be corrected by the Failed Banks Tribunal or the Spe- cial Appeal Tribunal itself or else they will remain uncorrected and unresolved as this Court cannot intervene since it has no appellate or supervisory jurisdiction over the Failed d Banks Tribunal or the Special Appeal Tribunal. It is my respectful view that this Court will not permit or encourage any subterfuge under which it may assume jurisdiction to hear an appeal in respect of which the Failed Banks Decree e has in clear and unambiguous language made the Failed Banks Tribunal or the Special Appeal Tribunal the final court. It follows that an appeal in respect of a decision of the Tribunal cannot be taken on appeal to the Federal High f Court or this Court but is final for all purposes. If I may add, I am unable to appreciate the difference between “setting aside” a judgment or appealing against a judgment as both are aimed at reviewing the decision of the Tribunal which g has become final. I may as well note the ingenious device by the learned Counsel for the appellant who has endeavoured to bring an appeal in a decision that was made final by the Decree h which created the Tribunal through the back door. When the law says a decision of a Tribunal is final, it is final and no legal gymnastics, however couched, can resurrect it. It is final and dead. i It will be recalled that the appellant in this case had applied to the Federal High Court to set aside the decision of the Failed Banks Tribunal dated 24 April, 1998. The motion to set aside the decision of the Failed Banks Tribunal was filed j on 22 October, 1999 (18 months after the judgment)

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Umoren JCA 72 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) following the extinction of the Failed Banks Tribunal on the a coming into force of the 1999 Constitution. The Federal High Court in a reserved ruling dismissed the application. That is what gave rise to this appeal. The scheme, to me, ap- b pears to be that if the judgment of the Failed Banks Tribunal is set aside, then section 5(1) and (2) of the Failed Banks Decree is circumvented and rendered inoperative. Assuming that the complaints that brought about the application and this appeal were not satisfactorily resolved, that decision of c the Failed Flanks Tribunal given on 24 April, 1998 marked the final resolution of the complaint arising from the decision of the Failed Banks Tribunal. I, with humility, see nothing improper with the decision of the Federal High Court d which was in the cause of laying to rest the decision of the Failed Banks Tribunal. The decision of the Federal High Court can hardly be faulted because it presaged the end of the present appellant’s right of appeal. This Court, in my e humble view, is without jurisdiction to entertain an appeal whether directly or indirectly from the decision of the Failed Banks Tribunal given on 24 April, 1998 or before 29 May, 1999. f The learned appellant’s Counsel tries to distinguish the case of Onuaguluchi v Ndu (2001) 7 NWLR (Part 712) 309 from this appeal by submitting that that was a case from the election petition Tribunal and not the Failed Banks Tribunal. g I feel, however, ill at ease to agree with the appellant’s distinction. Facts of two cases need not be the same, what is important is the principle. The principles in the two cases were the same and that is the “finality” of the judgment. h I am unable to hold otherwise than that there is merit in the preliminary objection challenging the competency of appeal lodged in respect thereof to this Court. Accordingly, I up- i hold the objection and strike out the appeal as being incompetent. I assess costs at N5,000 in favour of the respondent. Since the first leg of the objection succeeds, there is no need to go into other aspects of the objection or the appeal. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

Arewa Paper Converters Ltd v. Nigeria Deposit Insurance Corp 73 a ADAMU JCA: I have had a preview of the leading judgment of my learned brother, Umoren JCA, just delivered in this appeal. It is a situation in which the appellant against whom b a summary judgment under the undefended list was given by the Failed Banks Tribunal, Kano Zone, on 24 April, 1998 did not appeal against the said judgment to the appropriate appeal tribunal but slept over it. It also failed to apply to the said Failed Banks Tribunal, Kano Zone, to set aside the c judgment against it timeously or immediately it was delivered on the ground of its complaint that there was no proper service on it by a substituted means or contrary to what the tribunal held. Instead, the appellant, knowing that it had lost d both its right of appeal and its right to apply to the trial tribunal which was defunct, waited until the coming into force of the 1999 Constitution on 29 May, 1999, a period of about 18 months, before bringing his application to the Federal e High Court to set aside the judgment obtained at the tribunal since 24 April, 1998. It is my humble view that the appellant’s application before the Federal High Court was an after-thought and an attempt to take undue advantage of the f 1999 Constitution and of section 4 of the Tribunal (Certain Consequential Amendment etc) Decree or Act which makes transitional provision for the continuation of a pending case of the defunct tribunals in the Federal High Court. It is clear g from the said provision as reproduced in the leading judgment that they are intended for the continuation of pending cases or the institution of new cases rather than for the re- vival of the old and dead cases which were duly decided and h disposed of in a final judgment by the defunct tribunal. In the instant case, the appellant is only attempting to revive an old case decided by the defunct tribunal. It is therefore my humble view that it cannot do that either by way of appeal or i by its application to set aside the judgment as presented at the lower court. The Lower Court – the Federal High Court Kaduna was therefore right in its ruling refusing and dismissing the appellant’s application before it. It also follows j that if the Federal High Court lacks jurisdiction to entertain

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Adamu JCA 74 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the appellant’s application, this Court also lacks the required a jurisdiction to entertain the appeal on the said application. By sleeping over his right to appeal or to take appropriate action against the decision of the Failed Banks Tribunal until b the time limited for doing so had expired, the appellant has slept over its right and can be seen as very indolent in the circumstances of the case. His subsequent action at the Fed- eral High Court is therefore caught or is within the purview c of the equitable maxim that equity helps the vigilant. From my above consideration and for the reason contained in the leading judgment which I adopt, I also uphold the preliminary objection and hereby strike out the appeal. I abide by d the order on costs as made in the leading judgment. BA’ABA JCA: I agree with the judgment of my learned brother, Umoren JCA, just delivered. He has covered the relevant issue raised in the preliminary objection. It is clear e from the provision of section 5(1) and (2) of the Failed Banks Tribunal that the period for filing an appeal either against the ruling or judgment is 21 days; consequently, the time allowed had expired at the time of filing the application f to set aside the judgment before the Federal High Court. I have nothing more useful to add to his reasonings which I hereby adopt as mine. I also uphold the preliminary objection and strike out the appeal. g Appeal dismissed.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION)

Lingo Nigeria Ltd v. Julius Nwodo, Esq. 75 a Lingo Nigeria Limited and another v Julius Nwodo, Esq. b COURT OF APPEAL, ABUJA DIVISION MUHAMMAD, BULKACHUWA, ODUYEMI JJCA Date of Judgment: 22 MAY, 2003 Suit No.: CA/A/25/M/2003 c Banking – “Bank” – Meaning of Banking – Bank guarantee – Whether yields interest – Dis- tinction thereof with judgment sum d Guarantee – Meaning of Practice and procedure – Stay of execution – Whether court will allow judgment debtor to retain judgment sum – Es- sence of e Facts Judgment was given against the appellant at the High Court f of Abuja. Being dissatisfied, the appellant appealed to the Court of Appeal. Upon the appeal, the appellant applied for a stay of execution and same was granted on grounds that the judgment sum of N1,590,468.17k be paid to the Regis- trar of the Court into an interest-yielding account. g Consequent upon this order, the appellant then applied to the Court of Appeal for the variation of the stay of execution by depositing a bank guarantee. h Held – 1. A bank is a financial establishment for the deposit, loan, exchange or issue of money for the transmission of i funds. 2. A guarantee is the assurance that a contract or legal act will be duly carried out. It is something given or existing as security, such as to fulfil a future engagement or a j condition subsequent.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION)

76 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

3. A bank guarantee is a security or undertaking given by a a bank in respect of a transaction in which the bank shall be bound to fulfil its undertaking on demand. Per curiam b “It is a financial establishment for the deposit, loan, exchange or issue of money and for the transmission of funds. A guarantee, on the other hand, is the assurance that a contract or legal act will be duly carried out. It is something c given or existing as security, such as to fulfil a future engagement or a condition subsequent. Thus, a bank guarantee is a security or undertaking given by a bank in respect of a transaction in which the bank shall be bound to fulfil its undertaking on demand (see Black’s Law Dictionary (7ed); d Venkataramaiya’s Law Lexicon with Legal Maxims (2ed) Volume 1, 1986 reprint). It is a promise by the bank to answer for the payment of some debt, or the performance of a duty in case of the failure of another who is liable in the first instance.” e 4. A bank guarantee does not generate interest. It will remain dormant. It is not the same with a judgment sum. If a judgment sum, as a fruit of judgment, is handed over to f the judgment creditor, he can utilise it and draw benefit from it, but a bank guarantee cannot be so utilised. A bank guarantee favours the applicant as the possession and utilisation of the physical money rest with the judgment debtor. g 5. The whole essence of granting a stay of execution is the preservation of the res. If the court will allow a judgment debtor to be in possession of the res and retain its h enjoyment, then the whole essence of the stay of execution is defeated. Application refused. i Cases referred to in the judgment Nigerian Construzioni Generali Farsura Cogefar SPA v N.P.A. (1972) 1 All NLR 509 j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION)

Lingo Nigeria Ltd v. Julius Nwodo, Esq. 77 a Diamond Bank Ltd v P.I. Co Ltd (2001) 4 NWLR (Part 703) 259 Fawehinmi v Akilu (1990) 1 NWLR (Part 127) 450 b Geronimo v Janonuzelli (1924) 5 NLR 77 First Bank of Nig. v Doyin Investment Nig. Ltd (1989) 1 NWLR (Part 99) 634 c LSDPC v City Bank (W.A.) Ltd (1998) 8 NWLR (Part 563) 681 Ladipo v Aminike Investment Co Ltd (1998) 4 NWLR (Part 546) 496 d Okafor v Nnaife (1987) 4 NWLR (Part 64) 129 Rastico (Nig.) Ltd v Societe Generale de Surveillance (1990) 6 NWLR (Part 158) 608 e Sentinel Assurance Co Ltd v S.G.B.N. Ltd (1992) 2 NWLR (Part 224) 495 U.B.N. Ltd v Emole (1991) 9 NWLR (Part 213) 74 U.B.N. Ltd v Odusote Bookstore Ltd (1994) 3 NWLR (Part f 331) 129 U.B.N. v Nwoye (1990) 3 NWLR (Part 130) 69 Williams v Busari (1973) 1 NMLR 265 g Nigerian statute referred to in the judgment Court of Appeal Act, Cap 75 Laws of the Federation of Ni- geria, 1990, section 16 h Nigerian rules of court referred to in the judgment Court of Appeal Rules, 1981 (as amended), Order 3 rules 3(3), 23 i Books referred to in the judgment Black’s Law Dictionary (7ed) T.A. Aguda Practice and Procedure of the Supreme Court, j the Court of Appeal and High Courts of Nigeria

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION)

78 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Venkataramaiya’s Law Lexicon with Legal Maxims (2ed) a Volume 2, 1989 reprint Judgment b MUHAMMAD JCA: (Delivering the lead judgment) In an application filed on 13 February, 2003, the applicants prayed for the following reliefs:– “1. AN ORDER of the Honourable Court staying execution of c the judgment of Honourable Justice I.U. Bello delivered on 18 November, 2003 (sic) by way of variation of his consequential order for stay of execution. 2. AN ORDER of the Honourable Court varying the order of the said Justice, I.U. Bello ordering that the judgment sum d be paid into court until the final determination of the appeal. 3. AN ORDER of the Honourable Court directing the appellants/applicants to deposit with the said court banker’s guarantee to cover the judgment sum in lieu of depositing e the judgment sum before the lower court.” The following three grounds were set out in the application in support of the reliefs:– “1. The High Court of the Federal Capital Territory Judiciary f has in the time past experienced cases of exhibits in court being sold and money paid into court either being embezzled by officials of the court or disappearing mysteriously. 2. That if the judgment sum is deposited into the court, there is g the danger of same not getting to the appellants/applicants in the event of their succeeding in the appeal. 3. That a banker’s guarantee on the judgment sum is as good as the money itself.” h Also, a five-paragraph affidavit and some exhibits supported the application. While moving the motion on 12 May, 2003, learned Coun- sel for the applicant applied to abandon prayer 1 of the mo- i tion. There was no objection from the respondent. Prayer 1 was accordingly struck out. Learned Counsel for the applicant submitted that his application was brought pursuant to section 18 of Court of Appeal Act; Order 3 rule 3(3) and (23) j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION) Muhammad JCA Lingo Nigeria Ltd v. Julius Nwodo, Esq. 79 a of the Court of Appeal Rules, 2002 and the inherent powers of the court. The rules of this Court empower the court to grant the orders being sought. It was deposed to in the affi- b davit that the alternative remedy, ie bank guarantee is as good as money and the respondent stands to lose nothing if bank guarantee is given. Learned Counsel cited and relied on the case of DTN Plc v Kusamotu (2002) 15 NWLR (Part c 790) 401 at 407 paragraph 12. Learned Counsel argued that they ask for a variation of the conditions of the order granted by the trial court because paying the judgment sum into the trial court’s registry may lead to the danger of non-return of d same in case the appeal succeeds. Learned Counsel stated that the position of the law is that an application for the variation of a court’s order is always at the instance of the party who applied for a stay at the lower court and it is erroneous to suggest that they have to appeal against the order. e He cited the case of Construzioni General Farsura Cogefar SPA and another v N.P.A. and others (1972) 1 All NLR 509. He also referred this Court to Aguda’s Practice and Proce- dure of the Supreme Court, the Court of Appeal and High f Court of Nigeria. He urged the court to grant the application.

In opposing the motion, learned Counsel for the respondent filed a counter-affidavit of 14 paragraphs sworn to by g the respondent. It is accompanied by one exhibit. Learned Counsel for the respondent placed reliance on all the paragraphs of the counter-affidavit, especially paragraphs 6, 9, 10 and 12. Learned Counsel stated that the general rule is h that a judgment creditor is entitled to the fruits of its judgment. He cited the case of LSDPC v City Mark (W.A.) Ltd (1998) 8 NWLR (Part 563) 681. For the court to depart from the general rule it is for the applicant to show special cir- i cumstances. Reliance was placed on the LSDPC case cited (supra). The applicant he argued, has failed to show such special circumstances in this case. It did not contend that it could not pay the judgment sum or that if it paid it it cannot j prosecute the appeal or that same, if paid to the respondent,

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION) Muhammad JCA 80 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) cannot be retrieved. Again, learned Counsel urged this Court a to hold that the contention that exhibits get missing from the lower court is spurious, without even making the registry of the lower court to be a party to the application there are no b facts to back up that allegation. Exhibits C and C1 annexed are strange documents which cannot confirm that exhibits deposited with the lower court’s registry go missing. There is nothing wrong with the order that the judgment sum be paid into an interest-yielding account in a bank. By produc- c ing a bank guarantee, the judgment debtors will keep on holding the judgment sum in their possession. Learned Counsel referred to Diamond Bank’s case (supra). He urged this Court to exercise its powers to order that the judgment d sum be paid directly to the judgment creditor. Learned Counsel cited and relied on the case of LSDPC v City Bank (W.A.) (supra) at 693–696. Finally, learned Counsel argued that the right thing for the applicant was to appeal on that e order before seeking for variation. That the applicant did not do. He urged us to hold that the authorities cited by the applicant’s Counsel are irrelevant and that the application lacks merit and should be dismissed. f In his reply on points of law Mr Zibiri for the applicant tried to draw a distinction between the case of Diamond Bank v P.I. Co Ltd (2001) 4 NWLR (Part 703) 259 and the application on hand and that the facts of the two cases are g dissimilar and that there is nothing inequitable in producing a bank guarantee. In answer put to him by the court on whether a bank guarantee yields any interest, Mr Zibiri said that it does not draw interest but the interest is included in h the guarantee itself. Let it be noted from the outset that a conditional stay of execution of the lower court’s judgment was granted by the learned trial Judge of the lower court. It is the terms of the i stay that the applicants are not happy with and are asking for a variation of those terms. Yes! The Court of Appeal has jurisdiction and discretion under section 16 of the Court’s Act and Order 3 rule 23 of its Rules, 1981 as amended, to vary j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION) Muhammad JCA Lingo Nigeria Ltd v. Julius Nwodo, Esq. 81 a an order earlier made by a trial court for a stay of execution under certain circumstances at the instance of the applicant who initially applied for an order of stay at the trial court (see Okafor v Nnaife (1987) 4 NWLR (Part 64) 129; First b Bank of Nig. Ltd v Doyin Investment Nig. Ltd (1989) 1 NWLR (Part 99) 634). In as much as the law allows an applicant who applies for and was granted a stay of execution by the trial court to apply for better and more favourable c terms or conditions, he must, however, show very compelling exceptional circumstance why the terms or conditions must be varied and improved in his favour (Sentinel Assur- ance Co Ltd v S.G.B.N. Ltd (1992) 2 NWLR (Part 224) 495). d In this case, Tobi JCA (as he then was) did rightly, in my view, at 501–502 of the report, observe as follows:– “The applicant has so much rough and turbulent storms to break through or meander. I dare say that the burden placed on an appli- e cant for better and more favourable terms or conditions is heavier than that on a first application for stay. After all, he asked for a stay and stay the court granted. Therefore, when he wants a variation of the terms or conditions in his favour, he has a big hurdle to cross, applying all gymnastic feats with all dexterity. He must cer- f tainly improve upon his first race to have a second bite at the cherry to his taste and therefore to the distaste of the respondent.” Such an applicant can only show the appeal court having jurisdiction and discretion to vary the conditional stay granted g by the trial court by deposing to facts in an affidavit spelling out the reasons why the conditions are onerous for him to fulfil or unfair to him and why they should be varied (Fawe- hinmi v Akilu (1990) 1 NWLR (Part 127) 450 at 469; Ladipo h v Aminike Investment Co Ltd (1998) 4 NWLR (Part 546) 496 at 501, 502 paragraphs G–A; Construzioni’s case (supra); Defendant Geronimo v Janonuzelli (1924) 5 NLR 77; LSDPC v City Bank (W.A.) Ltd (supra); Okafor v Nnaife i (supra)). Looking at the affidavit in support of the motion on hand, sworn to by Mr Friday Ocholi, the following depositions relevant to the reliefs sought have been made:– j “4(d) That the lower court had on 29 January, 2003 granted the

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION) Muhammad JCA 82 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

applicants application (sic) for stay of execution of the a judgment but consequently ordered that that judgment sum be deposited with the court. Attached and marked exhibit ‘B1’ is the said ruling/order of the said court. (e) That to deposit the money with the court will be to the dis- b advantage of the applicants. (f) That there has been reported cases of exhibits in court being removed from court’s custody and sold and even money paid to court disappearing mysteriously in court c thereby putting the appellant upon success on appeal in a state of hopelessness. (Attached and marked exhibits ‘C’ and ‘C’ are documents showing instances where exhibits in court were removed and sold and money paid into court embezzled by court staff. d (g) That the appellants/applicants undertake to procure a Banker’s Guarantee from a reputable Bank to cover the judgment sum. (k) That this application will in no way prejudice the respon- e dents as it will serve the course of justice. (l) That the judgment sum if deposited into court faces the risk of being tampered with and even given to the respondents before the hearing and determination of the appeal.” f In a counter-affidavit filed and sworn to by the respondent, applicant’s depositions in paragraphs 4(c), (e), (f), (j), (k) and (l) were denied. The respondent further deposed:– “4. On the 29/01/03 the High Court of FCT, Coram Honourable g Justice I.U. Bello after granting the applicant’s application for stay of execution, in the interest of justice made a consequential order for the judgment sum to be paid into the registry of the High Court FCT by the applicant herein in the following terms:– h ‘However and consequential to the order so granted it is hereby ordered that the judgment sum of N1,590,468.97 be deposited in the registry of this Court pending the outcome of the appeal now being pursued by the appel- i lants at the Court of Appeal.’ 5. On the same 29/01/03 the Honourable Justice I.U. Bello ordered that the judgment sum to be deposited by the applicants herein be paid into an interest yielding account by the registrar of the High Court of FCT. This latter part of the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION) Muhammad JCA Lingo Nigeria Ltd v. Julius Nwodo, Esq. 83 a order could be seen on page 48 applicants exhibit B1 thus:– ‘plaintiff/respondent: we urge the court to order that the judgment sum be deposited in an interest yielding account. b Court: The judgment sum be deposited by the Registrar of this Court in an interest yielding account.’ 6. The applicants herein have chosen to defy and utterly disregard the above order of court even though they have the c means and ability to obey the order. 7. I know as a fact that the applicants neither applied to the court below to vary the order of 29/01/03 nor have they appealed against same to this Court. d 10. The applicants intend to keep being in possession of the judgment sum in this suit even in utter disregard of the order of the court below that same be paid into the registry of the court below for the purposes of being paid into an inter- e est yielding account in the interest of justice. 12. It is not true that judgment sums are being stolen in the registry of the court below. At any event the judgment sum in this suit shall be paid into an interest yielding account by f the registrar of the court below. 13. I verily believe that it is not in the interest of justice to permit the applicants as judgment debtors to keep being in possession of the judgment sum to the detriment of the judg- g ment creditor.” It is true that the lower court made an order for the payment of the judgment sum into an interest yielding account (see page 48 from the bottom of exhibit B1). This order was h made on 29 January, 2003. I observe as well that there is no appeal against the said order as the notice of appeal exhibited (exhibit B) is in respect of the lower court’s decision delivered on 18 November, 2002. Let me at this juncture i make it clear that, for an applicant for an order for variation of terms or conditions made in an order of conditional stay of judgment granted by a trial court, the applicant need not file an appeal against that order. In Rastico (Nig.) Ltd v So- j ciete Generale de Surveillance (1990) 6 NWLR (Part 158)

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION) Muhammad JCA 84 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

608 at 615 paragraph F, Babalakin JCA (as he then was) a stated the law as follows:– “It is settled law that a person who is not satisfied with the conditions of a stay of execution of a judgment granted him in the lower b court can apply to a Court of Appeal for the variation of that order without lodging an appeal against that order itself. See the case of Oyeti v Soremekun (1963) 2 SCNLR 320; (1963) 1 All NLR 349 Particularly at Pages 350–351.” c This debunks the contention of the learned Counsel for the respondent that no appeal was filed on the order sought to be varied by the applicants. After having scanned the depositions in the applicant’s affidavit in support, I fail to find any d compelling exceptional circumstances as required by law that will warrant varying the conditional stay granted by the lower court. Reasons advanced and supported by affidavit that a bank guarantee is the same as the judgment debt and that depositing the money with the trial court will be to the e disadvantage of the applicant and as there were reported cases of exhibits in court getting missing from the court’s custody, appear to me to be mere tales with no concrete facts in support thereof. It is the responsibility of the applicant to f show how depositing the money in the court’s custody or rather with an interest-yielding bank account will be to the disadvantage of the applicant. On exhibits getting missing at the lower court’s registry, I am inclined to agree with the g submission of learned Counsel for the respondent that such allegations are spurious. I agree the documents exhibited as exhibits C and C1 cannot establish the allegation levied against the registry of the lower court, moreso when the reg- h istry has not been joined to defend itself against such allegations. Granted that such allegations thrive at the registry of the lower court, I do not think they are weighty and authoritative enough to defeat a court’s order. I am sure if that issue i is raised for the attention of the lower court’s administration, the administration is competent enough to deal with the issue decisively. I say no more on that as I have not been convinced through evidence to hold otherwise. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION) Muhammad JCA Lingo Nigeria Ltd v. Julius Nwodo, Esq. 85 a Turning now to the issue of offering a bank guarantee in lieu of depositing the judgment sum in an interest-yielding account in a bank, I grow so curious to know what a bank b guarantee is in law. It is granted that every enlightened person knows what a bank is. It is a financial establishment for the deposit, loan, exchange or issue of money and for the transmission of funds. A guarantee, on the other hand, is the c assurance that a contract or legal act will be duly carried. It is something given or existing as security, such as to fulfil a future engagement or a condition subsequent. Thus, a bank guarantee is security or an undertaking given by a bank in d respect of a transaction in which the bank shall be bound to fulfil its undertaking on demand (see Black’s Law Diction- ary (7ed); Venkataramaiya’s Law Lexicon with Legal Max- ims (2ed) Volume 1, 1986 reprint). It is a promise by the e bank to answer for the payment of some debt, or the performance of a duty in case of the failure of another who is liable in the first instance. Thus, a bank guarantee does not generate interest, it will remain dormant. It is not same with f a judgment sum (see UBN v Nwoye (1990) 2 NWLR (Part 130) 69). If a judgment sum, as a fruit of the judgment is handed over to the judgment creditor, he can utilise it and draw benefit from it; a bank guarantee cannot be so utilised. g A bank guarantee favours the applicant as the possession and utilisation of the physical money, ie the judgment sum rests with the applicant/judgment debtor. The whole essence of granting a stay of execution is the preservation of the res. h If the court will allow a judgment debtor to be in possession of the res and retain its enjoyment, then the whole essence of a stay of execution is defeated. Conversely, the courts have always frowned at the proposition that a judgment sum i should be in the hands of the judgment debtor, be it a bank, a financial institution or an individual, notwithstanding his financial base. It will certainly smack of an unfair advantage being given to the judgment debtor (see UBN Ltd v Emole j (1991) 9 NWLR (Part 213) 74; UBN Ltd v Odusote

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION) Muhammad JCA 86 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Bookstore Ltd (1994) 3 NWLR (Part 331) 129; Diamond a Bank Ltd v P.I. Co Ltd (2001) 4 NWLR (Part 703) 259). In this application, learned Counsel for the applicants fails to show this Court how the deposit of the judgment sum in b an interest-yielding account with a bank will adversely affect the applicant. He has also failed to show that the applicant opted for a bank guarantee because it would be unable to deposit the judgment sum as ordered by the lower court. I c think it is reasonable that the respondent in such application is entitled to see a copy of the undertaking offered by the bank in its guarantee. That has not been exhibited by the applicant. The applicant’s Counsel has also failed to show that payment of the judgment sum to the respondent, as is di- d rectly now being (orally) applied for by the respondent’s Counsel would constitute a herculean task when it comes to recovering same from the respondent in the event of their appeal succeeding (Williams v Busari (1973) 1 N.M.L.R. e 265). In view of all these, I find myself unable to agree with the submissions made by learned Counsel for the applicant that it is entitled to more favourable conditions of conditional stay of judgment order granted by the lower court. I f do not think there will be more favourable, assuring and certain conditions than the ones granted by the lower court. And in balancing the competing interests of the parties in this application, I think maintaining the status quo, ie main- g taining the order made by the lower court, will equitably meet the justice of this case. Finally, I find no merit in this application and same is refused and dismissed hereby. I affirm the order of the lower h court. N5,000 costs in favour of the respondent to be paid by the applicant. BULKACHUWA JCA: I agree with my learned brother, I.T. Muhammad JCA, that this application lacks merit. I hereby i dismiss it with costs of N5,000 to the respondent. ODUYEMI JCA: I had the privilege of reading in advance a copy of the ruling just delivered by my learned brother, I.T. Muhammad JCA. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ABUJA DIVISION) Oduyemi JCA Lingo Nigeria Ltd v. Julius Nwodo, Esq. 87 a I am in entire agreement with the reasoning contained therein and the conclusion that the application for variation of the conditions upon which the lower court granted a stay b of execution of its judgment in the first instance lacks merit and should be dismissed. I too dismiss the application. I award costs of N5,000 in favour of the respondent. c Application dismissed.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION)

88 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

a Rasaq Oluwafemi Akano v First Bank of Nigeria Plc and another

COURT OF APPEAL, IBADAN DIVISION b OMAGE, IBIYEYE, TABAI JJCA

Date of Judgment: 2 JUNE, 2003 Suit No.: CA/I/249/01

Mortgage – Power of sale – Exercise of – When it arises – c Duty of mortgagee in relation to mortgaged property – Whether a trustee of mortgagor – When sale will be vitiated

Mortgage – Sale of property – Purchaser of mortgaged d property – Whether bound to enquire if power of sale has arisen

Facts e Late Nurudeen Akano, a proprietor of an unregistered company, obtained a loan of N19,560 from the first Bank of Ni- geria Plc (the first respondent) sometime in 1987. f As security for the loan, he entered into a mortgage agreement with the bank, by which he conferred on it a right to sell the building property at E9/2066 Kumapayi Avenue, if there was default in repayment of the loan on the due date. g In 1995, the appellant had not repaid the debt despite repeated demands. The bank in exercise of its power of sale sold the property to one Yetunde Olunloyo (second respondent). h After the purchase of the house and receiving the instrument of transfer from the first respondent, the second respondent could not get possession. She thereupon com- i menced this action against the appellant seeking declaratory reliefs and an order for possession of the property. The High Court gave judgment in favour of the respondents, hence this appeal. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION)

Rasaq Oluwafemi Akano v. First Bank of Nigeria Plc 89 a Held – 1. The Property and Conveyancing Law, 1959, regulates the operation of a mortgage transaction made in Ibadan, b Oyo State. Under the law, a legal mortgage may be created by assignment of the term of years in deed of conveyance or on a certificate of occupancy, since that is the quantum of interest in the occupier of land, under the c provisions of the Land Use Act, 1978. In a legal mortgage deed, as in the instant appeal, the unexpired interest in the mortgaged property is assigned or deemed to be assigned by law to the mortgagee with a covenant for reassignment upon liquidation of the debt to the mortga- d gor. 2. Where the mortgagor failed to pay the loan within time and the mortgagee forwarded a notice of demand of the e loan to the mortgagor who failed to pay the loan within the time specified, the mortgagee was entitled to foreclose the equity of redemption of the mortgage and sell the mortgaged property. f 3. It is not the duty of the mortgagee to protect the interest of the mortgagor in the exercise of his right of sale. The mortgagee is therefore not a trustee of the power of sale for the mortgagor. g 4. Unless it can be shown that the mortgagee has acted in bad faith, nothing else done in the exercise of the power of sale will vitiate the sale. Once therefore the preconditions of (1) notice of sale is h given to the mortgagor by the mortgagee or his agent, preceded by a notice of demand of repayment of money lent to the mortgagor; and (2) the mortgagee proceeds to sell in good faith, the subsequent purchaser in good faith i gets a good title, and the court of law will not intervene in the sale only because the sale did not meet with the satisfaction of the mortgagor. 5. An innocent purchaser is not bound to enquire whether j the right to sell the mortgaged property has arisen, there

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION)

90 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

is therefore no particular need to tender in court the a mortgage deed, when a purchaser in good faith seeks possession of the said property. Appeal dismissed. b

Cases referred to in the judgment Nigerian c Adio v State (1986) 2 NWLR (Part 24) 581 Ajuwon v Adeoti (1990) 2 NWLR (Part 132) 271 Arewa Textile Plc. v Abdullahi and Bros. Musawa Ltd d (1998) 6 NWLR (Part 554) 508 Bank of the North Ltd v Aliyu (1999) 7 NWLR (Part 612) 622 Ifediorah v Ume (1988) 2 NWLR (Part 74) 5 e Labiyi v Anretiola (1992) 8 NWLR (Part 258) 139 Nigeria Advertising Services Ltd v U.B.A. Plc (1999) 8 NWLR (Part 616) 546 f Obioha v Duru (1994) 8 NWLR (Part 365) 631; (1994) 10 SCNJ 48

Oforkire v Maduike (2003) 5 NWLR (Part 812) 166 g Okolo v U.B.N. Ltd (1998) 2 NWLR (Part 539) 618 Omoboriola v Military Governor Ondo State (1998) 14 NWLR (Part 584) 89; (1992) 9 NWLR (Part 265) 335 h Foreign Cuckmere Bricks Co Ltd v Mutual Finance (1971) 2 All ER 633 i Nigerian statutes referred to in the judgment Land Use Act, 1978 Property and Conveyance Law, 1959 j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION)

Rasaq Oluwafemi Akano v. First Bank of Nigeria Plc 91 a Nigerian rules of court referred to in the judgment Court of Appeal Rules, 2000, Order 3 rule 15 b Counsel For the appellant: Lajide For the respondent: Balogun (with him Daramola) c Judgment OMAGE JCA: (Delivering the lead judgment) This is the background facts of this appeal. The predecessor of the ap- d pellant in the court below was the defendant at the hearing which held at the High Court Oyo State, it held in Ibadan in 1998. The present named appellant was substituted by the order of court on 5 February, 2002. The predecessor of the e appellant was the late Nurudeen Akano. Akano entered into a mortgage agreement with the First Bank of Nigeria Plc. By the mortgage deed he was advanced the sum of N19,560 as a loan. The mortgage agreement is registered as No. 36 at 36 f in Volume 2775 in the Land Registry, Ibadan, dated 12 Oc- tober, 1987. By or around 1995, the appellant as defendant in the court below had not repaid his debt to the bank, whereupon the g bank sold the building property at No. E9/2066 Kumapayi Avenue, Ibadan to one Yetunde Olunloyo. The said house was the collateral for the loan granted by the First Bank to Akano. After the purchase of the said house by Olunloyo h and after receiving an instrument of transfer from the bank, of the title to the property of the house which is registered as No. 16, page 16 in Volume 3166, at the lands office at Ibadan, the said purchaser did not get possession of the said i house. Incidentally, Akano was living in the said house. As Olunloyo, the purchaser, did not get possession of the house she commenced action, whereupon the said Olunloyo suing by her father as next-of-kin, issued a writ of summons j against Akano in which the First Bank was cited as the first

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA 92 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) plaintiff and Olunloyo the second plaintiff. In the suit, Ol- a unloyo sought the following declarations:– “(a) A declaration that under and by virtue of a deed of legal mortgage dated 12 October, 1987, and registered as number b 36/36/2775 of the Land Registry in the office at Ibadan, the first plaintiff has the power as mortgagee to sell by public auction or otherwise the property covered by the said legal mortgage. c (b) A declaration that the first plaintiff having validly exercised its statutory powers under the legal mortgage, passed good title to the second plaintiff. (c) A declaration that by virtue of the deed of transfer dated 26 May, 1995 and registered as number 16/16/3166 of the land d registry in the office at Ibadan, the first plaintiff had validly transferred its interest in the property covered by the deed of legal mortgage registered as Number 36/36/2775 in Ibadan to the second plaintiff. e (d) An order granting possession of the storey building lying, situate and being at E.9/2066 Kumapayi Avenue, Off Iwo Road, Ibadan, covered by a deed of transfer dated 26/5/95 and registered as No.16/16/3166 Ibadan presently being oc- cupied by the defendant to the second plaintiff. f (e) An order that the defendant as a tenant in possession should pay rent to the second defendant from the date of transfer to the date when possession is given.” g Pleadings were exchanged in the court below. In conclusion the court gave judgment against the defendant when he granted all but one of the declarations sought. The fifth relief sought by the plaintiff was modified and allowed. The de- h fendant was aggrieved and dissatisfied with the decision, he filed 23 grounds of appeal and formulated five issues. The appellant abandoned grounds 9 and 11 when he did not formulate any issue on them. The five issues are rather lengthy, it will not do to paraphrase them and they need to be stated i in full in order to have a comprehension of the issues, and complaints of the appellant. Thus issue one is:– “1. Whether the learned trial Judge was right and properly evaluated the evidence before the court in finding that the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA Rasaq Oluwafemi Akano v. First Bank of Nigeria Plc 93 a plaintiffs actually adequately and properly exercised their alleged power of sale on 7/11/94 by selling the defendant’s property particularly when there was credible and probable oral and documentary evidence before him, which indicated b the contrary position. 2. Whether the learned trial Judge was right and exercised his discretion judiciously and judicially in granting declaratory and other related reliefs sought by the plaintiffs particularly c when it was not reasonably and adequately proved before him that the plaintiffs had complied with the relevant and applicable statutes including (The Evidence Act, The Land Instrument Registration Law, The Auctioneers Law, The Property and Conveyancing Law, The Natives Lands Ac- d quisition Law and The Land Use Act, 1978) with respect to the transaction circumstances placed before the court? 3. Whether the learned trial Judge has by his judgment declar- ing the alleged auction sale of 7/11/94 and the alleged sub- e sequent transfer of property by the deed of transfer (exhibit P11) valid and sustainable, adequately satisfied, conformed to and upheld the constitutional provision forbidding and leasing against the peremptory and arbitration and forfeiture f of a citizen’s proprietary interest legal and equitable in immovable property. 4. Whether the learned trial Judge was right in not holding that the plaintiffs were sufficiently estopped precluded by re- g ceipts of payments from the defendant on 11 and 28 No- vember, 1994, and 9 December, 1994 in respect of the loan/mortgage transactions between them from asserting or contending at the trial that the defendant’s mortgaged property had been sold/auctioned on 7/11/94, pursuant to their h power of sale under the alleged mortgage transaction? 5. Whether the learned trial Judge was right in holding that the plaintiffs had adequately discharged the burden of proof which lay upon them having particular regard to the reliefs i sought by them and the thrust tenor of the pleadings and all the oral and documentary evidence offered and adduced before the court by the plaintiff and defendant? ie Whether the plaintiffs had adduced sufficient evidence before the court to entitle them to a grant of declaration of title to land and j the ancillary reliefs thereto.”

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA 94 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

In the brief of the second respondent, there is contained a a notice of preliminary objections to the hearing of the appeal. The objections are founded on four issues viz:– (1) That the subject matter of the appeal is personal to b the original appellant Nurudeen Olayiwola Akano and therefore did not survive him. (2) That Rasaq Olufemi Akano cannot lawfully be substituted for Nurudeen Olayiwola Akano to prosecute c this appeal without a valid letter of administration, Nurudeen Olayiwola Akano having died intestate. (3) Additional grounds of appeal filed by the appellant cannot be lawfully argued in the brief of argument d without the leave of the Court of Appeal. (4) That the appeal is incompetent because more than one issue is raised in each of the issues raised from e the grounds of appeal. Subject to, and in addition to the preliminary objection raised by the respondent to the hearing of the appeal the respondent formulated the following issues:– f “(1) Whether the first respondent by the legal mortgage exhibit P1 has the power to sell the property of the appellant at E.9/2066 Kumapayi Avenue, Off Iwo Road, Ibadan by public auction. g (2) Whether the power under the said legal mortgage was validly exercised on 7/11/94. (3) Whether the respondents were entitled to judgment having regard to the evidence adduced at the trial and documents tendered. h (4) Whether valid title has been passed to the second respondent who was the bona fide purchaser.” There is no record of the brief of the First Bank of Nigeria Plc who was the first plaintiff in the court below. The appel- i lant filed a reply brief. I will refer and relate to its contents as the occasion arises. The preliminary objection raised by the respondent does not comply with the provisions of the Rules of the Court of Appeal Order 3 rule 15, but the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA Rasaq Oluwafemi Akano v. First Bank of Nigeria Plc 95 a objection raised issues of law and the jurisdiction of the court that it can be said that it depletes the judgment of this Court to ignore the issues raised in the preliminary objection. I will comment on the preliminary objection after I b have considered the issues formulated by the appellant. In the appellant’s brief, issues 2 and 4 allegedly founded on grounds 1, 2, 7, 17 and 18 are not founded on issues arising c from the judgment of the court. The entire issues formulated by the appellant in this appeal are wordy, inelegant and woolly. Issues 2 and 4 contain several issues, most of which did not derive from the judgment of the court below. Just as d the court below is bound by the evidence tendered before it so an appellant is, and should be bound to base the grounds of appeal and issues on matters on which the court below has ruled (see Bennet Ifediorah and 4 others v Ben Ume and e others (1988) 2 NWLR (Part 74) 5 at 16; Labiyi v Anretiola and 4 others (1992) 8 NWLR (Part 258) 139). Issues 2 and 4 in the appellant’s brief contain issues which did not derive from the judgment of the court. In fact, issue 2 contains de- f fences on law which the appellant could have raised in the court below, but which now cannot be raised on appeal. The printed record shows that leave of court was granted to the appellant to file additional grounds of appeal but no leave was granted to the appellant to raise a fresh issue as con- g tained in issues 2 and 4 of the appellant. The appellant failed to obtain the leave of the court to argue fresh grounds of appeal not canvassed as a defence in the court below. It is settled law, that an appellant who seeks to argue additional evi- h dence in his grounds of appeal must ask for leave of the court to so argue it specifically (see Obioha v Duru (1994) 8 NWLR (Part 365) 631; (1994) 10 SCNJ 48). In this case there is not only a failure to ask specifically for leave to ar- i gue additional evidence contained in the grounds of appeal, there is a failure to seek the leave of the court to adduce additional and fresh evidence in the defence made in the appellant’s brief, which defence were not made in the court be- j low, even where the evidence in the grounds are of law. The

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA 96 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) grounds and issue are therefore incompetent (see Amusa a Opoola Adio v The State (1986) 2 NWLR (Part 24) 581; Al- haji Ajuwon and others v Madam A. Adeoti (1990) 2 NWLR (Part 132) 271 at 283). Issues 2 and 4 of the appellant’s brief b are struck out for incompetence. I now proceed to comment on the preliminary objection raised by the respondent in grounds 1–4. The said preliminary objection failed to comply with the Court of Appeal c Rules. Order 3 rule 15 of the Court of Appeal Rules, other rules made in 2000, prescribes thus: “A respondent intend- ing to rely upon a preliminary objection to the hearing of the appeal shall give the appellant three clear days notice thereof d before the hearing, setting out the ground of objection, and shall file such notice together with 20 copies thereof with the Registrar within the same time.” Sub-rule 15 of the Rules provides thus: “If the respondent fails to comply with e this rule, the court may refuse to entertain the objection or may adjourn the hearing thereof at the cost of the respondent.” At the hearing of the appeal the respondent made no reference to or made a move to argue the notice of prelimi- f nary objection even as it is contained in the brief only. I have not seen in the file any requisite notice as directed in the provisions of Order 3 rule 15. The Rules of Court are made to be observed and honoured in observation. There- g fore, where notice of such preliminary objection has not been given, attractive as the grounds of objections are, in the instant appeal, they will not be entertained (see Osuji Okoro Oforkire and another (for and on behalf of the family of Awo h Omamma) v John Maduike and 5 others (2003) 5 NWLR (Part 812) 166; Okolo v U.B.N. Ltd (1998) 2 NWLR (Part 539) 618). The preliminary objection was responded to by the appellant in his reply brief. Can that reply be deemed to be a waiver of a right to be served notice of the preliminary i objection within three days? My view is that there is a failure to comply with a fundamental provision of the Rules of Court which cannot be compromised upon by the parties. In the result the notice of preliminary objection of the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA Rasaq Oluwafemi Akano v. First Bank of Nigeria Plc 97 a respondent is refused, and it is struck out (see Arewa Textile Plc v Abdullahi and Brothers Musawa Ltd (1998) 6 NWLR (Part 554) 508). b There are two issues to be considered in the appellant’s brief: issues 1 and 4. The two issues deal with complaints that the trial court did not properly evaluate the evidence of the witnesses before it and that the learned trial Judge failed c to give proper construction to the documents tendered. In conclusion the appellant in issue 1 asked the court to hold that the conclusion reached by the trial court from the totality of evidence, oral and written, did not derive from the d evidence. He urged the court to intervene and arrive at a different conclusion. The receipt of evidence, evaluation of the evidence and the ascription of weight to the evidence tendered in the High Court is the function of the court below, e which falls within the jurisdiction of the said court, it is not the function of the Court of Appeal to take up the duty of evaluation of evidence tendered in the court below. Except the conclusions reached by the court below do not derive or f flow from the evidence received, an appellate court will not intervene in the findings of fact made by the lower court (see Omoborinola v Military Governor Ondo State (1998) 14 NWLR (Part 584) 89; (1998) 12 SCNJ 11–12 SCNJ at 105– 106 and also (1992) 9 NWLR (Part 265) 335). The com- g plaints made by the appellant in issue 1 are on the pleadings of the parties in the court below. The appellant quoted paragraphs 22 and 23 of the respondent’s statement of claim in the court below, and paragraphs 12, 13, 19 of the defen- h dant’s statement of defence, the evidence in support of the said pleadings were not stated by the appellant to support the quoted pleadings. This renders the aspect of the appeal unarguable because pleadings do not constitute evidence. In i the submission on the evidence made by the appellant on the facts of the case before the court since it is in substance founded on the same facts as in the respondents’ brief, I deem it expedient in this event to consider the appellant’s j issues 1, 3 and 5 with the issues formulated by the

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA 98 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) respondent. The issues formulated in this appeal by the re- a spondent are in my view cogent precise and directly relevant to the grounds of appeal filed by the appellant which reflect the issues determined in the judgment of the court below. I b prefer it, and will now proceed to determine this appeal on the combination of the two sets of issues of the appellant and of the respondent. Besides the foibles in the appellant’s issue 1 which I re- c corded above, the appellant questioned in his issue 1 the decision of the court below to hold that exhibit 1, the legal mortgage, gave to the first plaintiff the power of sale of the property at E9/2066 Kumapayi Avenue, Iwo Road, Ibadan. d In his issue 1, the respondent also presented the question and argued it in the positive. In considering the issue, and the issue whether the power of sale of the said property under the legal mortgage, exhibit P1, it is inevitable to go into the e facts of the case. It is not in dispute that one Nurudeen Akano, the proprietor of an unregistered company, obtained a loan of N19,560 from the First Bank of Nigeria Plc, sometime in 1987. To secure the loan, the said Nurudeen Akano, f the defendant in the court below, entered into a mortgage agreement with the said bank, by which he conferred on the said bank a right to sell the building property at E9/2066 Kumapayi Avenue, if the borrower failed to repay the bor- g rowed sum within a stipulated time. It is the respondents’ evidence in the court below, that the sum borrowed accumu- lated interest. That the respondent wrote several letters to the appellant to go and pay its debt, but no reply was received h from the appellant. The respondent said, in particular, the First Bank Plc wrote to inform the defendant that it would foreclose the legal mortgage and sell the property used as security. The now appellant did not deny receipt of the letter. i The respondent averred that the First Bank Plc employed the services of an auctioneer who deposed that he went to see the defendant in the court below, and informed the late predecessor in interest of the appellant that unless the said j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA Rasaq Oluwafemi Akano v. First Bank of Nigeria Plc 99 a defendant paid the mortgage sum and interest his said house would be sold. The said defendant in the court below did not deny this. The evidence of PW2, the auctioneer in the court b below, showed that the sale of the said property was advertised in the Vanguard Newspaper. With the set of facts produced as evidence in the court below, did the mortgagee not have a right to foreclose the legal mortgage, and was the sale c of the property of the appellant not properly done? The Property and Conveyancing Law, 1959, regulates the operation of a mortgage transaction made in Ibadan, Oyo State. Under the law, a legal mortgage may be created by assign- d ment of the term of years in deed of conveyance or on a certificate of occupancy, since that is the quantum of interest in the occupier of land, under the provisions of the Land Use Act, 1978. In a legal mortgage deed, as in the instant appeal, e the unexpired interest in the mortgaged property is assigned or deemed to be assigned by law to the mortgagee with a covenant for reassignment upon liquidation of the debt to the mortgagor. In the instant appeal, the evidence in the court f below shows that the covenant above is inserted in the mortgage deed, exhibit P1, tendered in court. In any case, the provisions in the mortgage deed entitle the mortgagor to a right of redemption upon payment of the mortgage loan. In g the face of the existence of the above conditions where the mortgagor failed to pay the loan in time and the mortgagee forwarded a notice of demand of the loan from the mortgagor who fails to pay the loan within the time specified, the h mortgagee is entitled to foreclose the equity of redemption of the mortgage and sell the mortgaged property. In the instant appeal, the evidence in the court below is that the mortgagor, now the appellant, received several letters of i demand from the mortgagee, the First Bank of Nigeria Plc., to go and pay the loan but the appellant did not respond. The auctioneer employed to effect the sale of the property con- tacted the defendant/appellant to inform him of the decision j of the mortgagee to sell the mortgaged property, within 31

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA 100 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) days. The proposed sale of the house was advertised, in the a Vanguard Newspaper, and the appellant still did not react. The position of the law is that the sale of the mortgaged house was properly done under the law after due notices b have been issued to the mortgagor, now the appellant. It is settled law that it is not the duty of the mortgagee to protect the interests of the mortgagor in the exercise of his right of sale. The mortgagee is therefore not a trustee of the power of c sale for the mortgagor. Per Lord Salmon in Cuckmere Bricks Co Ltd v Mutual Finance (1971) 2 All ER at 633 and 643. The issue to be considered is whether the power to sell has accrued. In the instant appeal, the evidence tendered in the d court below is that the loan of N19,500 with interest granted to the appellant in 1987 had become due for full payment in 1998. Particularly when the borrower refused to respond to the notices of demand of payment. In the circumstance of e the above, the right to foreclose is properly exercised. Unless it can be shown that the mortgagee has acted in bad faith, nothing else done in the exercise of the power of sale will vitiate the sale (see Bank of the North Ltd and another v f Haruna Aliyu (1999) 7 NWLR (Part 612) 622 at 634–635; Nigerian Advertising Services Ltd v U.B.A. Plc (1999) 8 NWLR (Part 616) 546). Once, therefore, the preconditions of (1) the notice of sale is given to the mortgagor by the g mortgagee or his agent, preceded by a notice of demand of repayment of money lent to the mortgagor; and (2) the mortgagee proceeds to sell in good faith, the subsequent purchaser in good faith gets a good title, and the court of law h will not intervene in the sale only because the sale did not meet with the satisfaction of the mortgagor. In the instant appeal, the various complaints of the mortgagor on which he filed grounds of appeal, and formulated is- i sues in diverse ways in his brief include, dissatisfaction with the price received for the house and the sum of N300,000 that the house was sold for. The allegation of the tendering in the court below of the photocopy of the mortgage deed, j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Omage JCA Rasaq Oluwafemi Akano v. First Bank of Nigeria Plc 101 a and the alleged failure of the auctioneer to conduct the sale of the said house at the scene, are issues which the appellant should have sought the leave of court to argue, since they b constitute fresh evidence in the Court of Appeal. I have dealt with these above, but it is pertinent to record that an innocent purchaser is not bound to enquire whether the right to sell the mortgage property has arisen (see Nigerian Advertis- c ing Services Ltd v U.B.A. Plc supra). There is therefore no particular need to tender in court the mortgage deed, when a purchaser in good faith seeks possession of the sold property. d In answer therefore to the issues contained in the respondent’s brief, I say that the mortgagee had a power of sale in the mortgage deed between the First Bank Plc, and the appellant. The right to sell had accrued to the First Bank Plc, e due and credible notices were issued by the First Bank Plc, and its agents to the appellant. The sale was conducted, in a proper manner by a public auction about which evidence shows the defendant/appellant had advance notice. In the f event the purchaser had transferred to her a good title. The respondent was therefore entitled to the declaration ordered by the court below. In conclusion, I resolve the entire viable issues against the g appellant and dismiss the appeal. I therefore affirm the judgment of the court below and the declaration made. There will be costs to the respondent against the appellant in the sum of N10,000. h IBIYEYE JCA: I have had the privilege of reading in draft the judgment just delivered by my learned brother, Omage JCA. I entirely agree with his reasoning and conclusion, with particular regard to the fact that the sale of the mort- i gaged property situate at E.9/2066 Kumapayi Avenue, Off Iwo Road, Ibadan, effected by the mortgagee (the first respondent) to the purchaser (the second respondent) on the basis that the mortgagor (the appellant) failed to meet his j contractual obligation to repay the loan sourced from the

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, IBADAN DIVISION) Ibiyeye JCA 102 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) mortgagee within a specified period. From the available cir- a cumstances, I too could hardly find any vitiating trait such as bad faith in the manner in which the first respondent exercised its power of foreclosure of the legal mortgage and the b eventual sale of the said mortgaged property. The power of foreclosure and eventual sale of the property in issue are indeed well set out in the legal mortgage (exhibit P1). It is therein stated, inter alia, that, in the event of the mortgagor c failing to pay up the loan or the remaining part of the loan, recourse would be made to disposing of the mortgaged property. That was, indeed, what the first respondent did and the appellant could hardly fault its exercise of the power of d sale. In these circumstances the first respondent transferred a good title to the second respondent. I too find no merit in the appeal and I dismiss it. I abide by the further consequential orders made in the leading judgment including costs. e TABAI JCA: I agree. Appeal dismissed.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 103 a United Bank for Africa Plc v Alhaji Ibrahim Mustapha b COURT OF APPEAL, JOS DIVISION NZEAKO, OBADINA, OGBUAGU JJCA Date of Judgment: 4 JUNE, 2003 Suit No.: CA/J/39/2000 c Banking – Sale of mortgaged property below reserved price – Effect on validity of sale – Whether an action for specific performance can be sustained? Evidence – Illiterate – Evaluation of the evidence of – d Weight to be attached thereto Mortgage – Sale of mortgaged property by auction subject to condition – Effect when sale did not follow condition precedent to the sale – Principle of reserved price – How it e operates

Facts f The claims arose from an auction sale of mortgaged property conducted by an auctioneer appointed by the defendant, now the appellant. The mortgagor, one Alhaji Inuwa Ali, was alleged to have g defaulted in the payment of the mortgage sum. The bank/ mortgagee, ie the appellants, instructed the auctioneer to sell at a reserved price of N199,000 the sale being subject to approval by the appellants. The auctioneer sold to the plain- h tiff/respondent said to be the highest bidder at N35,000 instead of N199,000 as instructed by the appellant. The auctioneer collected the sale price and deposited same in the Maiduguri branch of the bank. The defendant/appellant state i that the auctioneer had not sold at the price he was instructed and did not approve the sale. The bank refused to deliver possession of the certificate of occupancy (C of O) of the property of the plaintiff/ j respondent.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

104 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

The plaintiff commenced an action at the High Court, a Borno State of Nigeria, for specific performance and release of the certificate of occupancy or in the alternative a refund of the sale price together with damages and interest. The de- b fendant denied all the averments of the plaintiff and filed a counter-claim in the sum of N150,000 for wrongful use or abuse of legal process against the defendant. In his judgment delivered on 27 February, 1998 the learned c trial Judge found for the plaintiff and ordered specific performance of the contract of auction sale, and also awarded the alternative claim for the refund of the purchase price, damages and interest. The court also dismissed the counter- d claim of the defendant. Being dissatisfied with the judgment of the lower court the defendant appealed to the Court of Appeal. e The appellant contended that failure to evaluate the evidence had led the trial court to the finding that it was an established fact that the plaintiff was an illiterate and not aware of any condition of sale and none brought to his no- f tice, when that was not supported by the evidence before the court. The appellant identified that there was evidence, and that the respondent admitted under cross-examination signing exhibit B, and submitted that the fact that he signed ex- g hibit B erased any presumption of illiteracy. The respondent on his part had argued that the trial court was justified in holding that the plaintiff was an illiterate. It was submitted that since it was a matter of evidence whether h any person is an illiterate, and that the burden of proof is on the person who claims to be an illiterate to prove it, that the respondent had discharged that burden. He further argued that there was evidence before the court which justified the i court’s decision in that the respondent was not informed about any reserve price or any condition precedent, and that exhibit K only contained a condition that the sale was subject to approval by the mortgagee. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 105 a Held – 1. It is not every slip in a judgment which will lead to the judgment being upturned. Rather, to be fatal, it is only b such slip as is so substantial, occasioning a miscarriage of justice or leading to the decision that, had the lower court properly or correctly directed itself, it would have reached a different decision. c 2. Where there has been proper appraisal of the evidence by the trial court, an appeal court does not embark on a fresh appraisal. On the other hand, where the issue does not involve credibility of witnesses, the Appeal Court is d in as much a good position as the trial court to evaluate the evidence. 3. Parties are bound by their pleadings. A defendant is not in law entitled to rely upon a defence based on facts not e stated in his statement of defence, without alleging them, for the opposite party is entitled to know what case he is coming to court to meet. 4. The question whether a person is an illiterate or not is a f question of fact, which cannot be presumed. It must be established by evidence, the burden of proof being on the party who asserts it. 5. Where an alternative claim is made in addition to a main g or principal claim, it is only where the main claim has not been granted that the consideration and the granting of the alternative claim can arise. Both the main and the alternative claim cannot at the same time be granted. h 6. At a sale by auction, subject to a reserve price, and where the fact that there is a reserve price which is known, the offer of the auctioneer to sell, the bidding, and the knocking down of the hammer to the highest i bidder, are held all to be subject to the condition that the reserve price should be reached, and the fact that the auctioneer knocked down the subject matter of the auction sale to a bidder who has bid a lesser price than the j reserve price gives the bidder no right of action against

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

106 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

the auctioneer either for breach of duty in refusing to a sign a memorandum of conveyance or otherwise complete the contract, or for breach of warranty of authority to accept the bid. b 7. Surely and certainly, a conditional offer cannot be treated as a general and unconditional sale. A fall of the hammer cannot do away with the condition expressly stipulated for the condition of sale. So any question that c an auctioneer is an agent of the bidder and therefore, to complete the contract on his behalf is therefore completely misconceived. However, an auctioneer has an implied authority to sell without reserve and if he does d so, the vendor cannot set up as against the buyer a limitation of that authority not made known to the buyer. Therefore, the principal was bound by the auctioneer’s action as if he had made the bargain himself. In other words, since the hammer had fallen, and as between the e highest bidder and the auctioneer’s principal, the right of the highest bidder cannot be defeated by the principal showing that the auctioneer was authorised by him to sell only subject to a reserve price. That the auctioneer f had an apparent authority which his principal, if he had been sued by the highest bidder, would not have been allowed in point of law to repudiate, after a sale had been concluded by the hammer being knocked down upon the g ground that his private instruction had been contravened by the auctioneer in selling without or below the reserve price. Per curiam h “It is beyond any doubt or controversy that an auction sale actually took place and the respondent was the highest bidder who also paid the amount that led to the falling of the hammer. If the auctioneer sold below the reserve price, i surely and certainly it had nothing to do with the respondent. That the appellant’s Biu branch returned the respondents money to the auctioneer who later informed the respondent about the appellant’s decision, is neither here nor there. It was like bringing out a bucket/container to collect j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 107 a water, after the rain had stopped falling. In law and in fact and as admitted by the DW1 the contract of sale had been completed! The appellant is bound by the content of exhibit A. It cannot be heard to resile from it. In fact, it is the end of b the controversy about reserve price.” Appeal dismissed in part and allowed in part.

Cases referred to in the judgment c Nigerian Adeyemi v Bamidele (1968) 1 All NLR 31 Adonri v Ojo-Osagie (1994) 6 SCNJ (Part 11) 192 d Agidigbi v Agidigbi (1996) 6 NWLR (Part 454) 300 Akibu v Opaleye (1974) 11 SC 189 Amokomowo v Andu (1985) 5 SC 28 e Anyanwu v Mbara (1992) 5 NWLR (Part 242) 386 Anyaoku v Adi (1986) 6 SC 75; (1986) 17 NSCC (Part II) 799; (1986) 3 NWLR (Part 31) Ebadan v Uso (1976) UILR (Part II) 205 f Edokpayi v Oke (1964) MNLR 52 Eigbajale v Oke and 6 others (1996) 5 SCNJ 49 Ekpenyong v Ayi (1973) 1 NMLR 372 g Elendu v Ekwoaba (1998) 10 SCNJ 51 Ezeoke v Nwagbo (1988) 1 NWLR (Part 72) 616 Fadlallah v Arewa Textiles Ltd (1997) 8 NWLR (Part 518) h 546 at 559 Famuyiwa v Folawiyo (1973) 1 ANLR (Part 2) 11 G.B. Ollivant Ltd v Lawal (1972) 3 SC 125 George v Dominion Flour Mills Ltd (1963) 1 SCNLR 242 i Ibeanu v Ogbeide (1998) 9 SCNJ 5 Iheanacho v Ejiogu (1995) 4 NWLR (Part 389) 324 Jiboso v Obadina (1962) WNLR (Parts I–IV) 305 j Jegede v Giwa (1977) 4 SC 121

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

108 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Kalio v Kalio (1977) 2 SC 15 a Lawal v G.B. Ollivant (Nig.) Ltd Vol.1 (1971) UILR 37 Mabawonku v Sodimu (1975) 2 ALR 214 Management Enterprises v Otusanya (1987) 2 NWLR (Part b 55) 179 Mercantile Bank of Nig. Ltd v Adalma Tanker and Bunker- ing Services Ltd (1990) 5 NWLR (Part 153) 747 c Metal Construction (W.A.) Ltd v Meridien Trade Corpora- tion Ltd (1990) 5 NWLR (Part 149) 144 Metalimpex v A.G. Leventis and Co Ltd (1976) 2 SC 91 Mogaji v Odofin (1978) 3 SC 91 d Momodu v Momoh (1991) 1 NWLR (Part 169) 608; (1991) 2 SCNJ 15 Nigerian Supplies Manufacturing Co Ltd v Nigerian Broad- e casting Corporation (1967) 1 ANLR 35 Nneji v Chukwu (1996) 12 SCNJ 388 Ntiashagwo v Amodu (1959) WRNLR (Part IV) 273 f Nwangwa v Ubani (1997) 10 NWLR (Part 526) 559 Odutola v Aileru (1985) 1 NWLR (Part 1) 92 Ogunlowo v Ogundare (1993) 7 NWLR (Part 307) 610 Ojikutu v Demuren (1957) 2 FSC 72 g Okafor v Idigo (1984) 6 SC 1 Olubode v Salami (1985) 4 SC 41 Omoregbe v Edo (1971) 1 All NLR (Part 1) 282 h Otitoju v Governor of Ondo State (1994) 4 NWLR (Part 340) 514 Paterson Zochonis and Co Ltd v Gusau (1962) 1 All NLR i (Part 2) 242 S.C.A.O. v Okon (1959) 4 FSC 220; (1960) NRNLR 34 S.C.E.I. v Odenewu (1965) 2 All NLR 135 State v Aibangbee (1988) 3 NWLR (Part 84) 548 j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 109 a The M.V. “Caroline Maersk” v Nokoy Investment Ltd (2002) 12 NWLR (Part 782) 472 U.B.N. Ltd v Penny Mart Ltd (1992) 5 NWLR (Part 240) b 228 Udeze v Chidebe (1990) 1 NWLR (Part 125) 141 Woluchem v Gudi (1981) 5 SC 319; (1979–81) 1 NSCC 214 Yassin v Barclays Bank D.C.O. (1968) NMLR 380 c Yesufu v Kupper International N.V. (1996) 4 SCNJ 40

Foreign d McManus v Fortescue (1907) 2 KB 1 Owners of Steamship Hontestroom v Owners of Steamship Sagaporack (1927) A.C. 37 Rainbow v Hawkins (1904) 2 KB 322 e Nigerian statute referred to in the judgment Illiterate Protection Act f Nigerian rules of court referred to in the judgment Court of Appeal Rules, 2002, Order 6 rule 9(5)

Counsel g For the appellant: Ogenyi For the respondent: Atijegbe

Judgment h NZEAKO JCA: (Delivering the lead judgment) On 27 Feb- ruary, 1998, Bdliya J, sitting at the High Court of Justice, Borno State of Nigeria, delivered judgment in an action for specific performance of a contract of auction sale in favour i of the plaintiff in the court below. He also awarded the alternative claim, being of the purchase price, damages and interest. The defendant has appealed to this Court on three grounds. It is the appellant herein and the plaintiff is the re- j spondent.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 110 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

The parties to the appeal exchanged briefs of argument. a The appellant’s brief was filed on 23 October, 2000. The respondent, having obtained leave of this Court on 7 February, 2001 to file his brief of argument out of time, and within b seven days from that date, did file the same on 8 February, 2001. At the hearing of the appeal, learned Counsel for the appellant adopted its brief of argument and urged the court to al- c low the appeal. The respondent was not represented, however, and this Court deemed him to have argued the appeal relying on his brief of argument. A brief statement of the facts of this matter will be helpful d at this stage. The claim at the court below filed by the respondent as appears in paragraph 21 of the statement of claim is as fol- e lows:– “(a) Specific performance of the sale by the public auction, by delivery to the plaintiff all documents of title to the said property and preparing a deed of assignment and taking such other steps necessary to perfect the plaintiff’s title to f the property. (b) In the alternative the plaintiff claims:– N (i) Refund of the purchase price 35,000. g (ii) 27% interest from the date of payment of the purchase price. (iii) Refund of amount expended to repair the property N 60,000. h (iv) 27% interest on the amount of repairs.” The appellant filed a defence denying the claim together with a counter-claim. The counter-claim reads as follows:– “9. The defendant’s counterclaim from the plaintiff, the sum of i N150,000 for wrongful use or abuse of legal process against the defendant.” The respondent filed a reply to the statement of defence and defence to the counter-claim. Three witnesses, PW1, PW2 j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 111 a and PW3 having testified for the respondent, and two, DW1 and DW2, for the appellant, Counsel for both parties addressed the court, which thereafter delivered a considered judgment. b In his judgment the learned trial Judge found for the respondent and ordered as follows:– “The defendants are hereby ordered to prepare all documents re- c quired for the transfer of the interest in the said house to the plaintiff and hand over to him all title deeds in respect of the said house immediately, or in the alternative as claimed by the plaintiff:– (i) refund the purchase price of N35,000. d (ii) pay interest of the amount of 27% on the sum of N35,000 from the date the said sum was paid to the defendant up to the date of this judgment. (iii) refund the sum of N60,000 money expended by the plaintiff e per exhibit E1–E5. The contention of learned Counsel for the defendant that the said exhibit E1–E5 are inadmissible and of no evidential value is not tenable. The evidence on the said expenses incurred in renovating the house are based f on paragraph 18 of the Statement of Claim. They are not irrelevant as submitted by learned Counsel. (iv) 27% interest on the said sum contained on exhibit E1–E5 from the date of incurring the expense to the date of this g judgment. The alternative order is at the option of the plaintiff.” The court dismissed the counter-claim of the appellant as misconceived. h What gave rise to the claim in the first instance was an auction sale of mortgaged property conducted by an auctioneer appointed by the appellant. The mortgagor was alleged to have defaulted in the payment of the mortgage sum. i The bank/mortgagee, ie the appellant, instructed its auctioneer to sell at a reserved price of N199,000, the sale being subject also to approval by the appellant. The auctioneer sold to the respondent, said to be the highest bidder, at j N35,000 instead of N199,000 as instructed by the appellant.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 112 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

This he collected and deposited in the Maiduguri branch of a the bank. The appellant stated that the auctioneer had not sold at the price he was instructed and did not approve the sale. They refused to deliver possession of the certificate of b occupancy (C of O) of the property to the respondent. The action at the court below was to enable the respondent to obtain possession of the C of O from the appellant or, in the alternative, a refund of the sale price together with dam- c ages and interest. The brief of argument filed by learned Counsel for each party to the appeal has exhibited various issues for determination, distilled from the three grounds of appeal. d The appellant’s issues formulated from grounds 1, 2 and 3 respectively are set out thus:– “(1) Whether the trial Judge evaluated the evidence before the e court before he took as established, as a fact that the plaintiff was an illiterate in English Language and to reserve price. (2) Whether the trial Judge rightly considered and awarded the alternative claim having earlier granted the relief of specific f performance. Whether the trial court’s award in the alternative claim with 27% interests is justified by law.” g On his part, the respondent formulated three issues num- bered 1, 2 and 3 stated to arise from grounds 1, 2 and 3 of the grounds of appeal respectively, thus:– “1. Whether on the evidence before the court. The trial court was justified in holding:– h (a) That the plaintiff was an illiterate? (b) That the plaintiff was not informed of the reserved price? i 2. Whether the consideration of the alternative claim in this suit resulted in any miscarriage of justice or occasioned any injury to the plaintiff? 3. Whether the 27% interest awarded by the trial court in the alternative claim is not supportable.” j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 113 a The issues distilled by the appellant will be used for this judgment, merging however issues 2 and 3 and treating them together as they both relate to the alternative claim which the appellant contends ought not to have been awarded the b respondent by the court below. Issue no. 1: The appellant raises an issue which seem important. c The question whether the respondent was an illiterate or not, and whether he was aware or knew of the conditions of sale outlined by the appellant to its auctioneer or his attention was drawn thereto, is vital to the just determination of d this matter. The case of both parties is woven around those conditions precedent for the sale by auction of the property in question. This is evident from their pleadings and evidence in court. e In his statement of claim, the respondent averred in paragraphs 3, 4, 7, 10 and 12 as follows:– “Paragraph 3. The plaintiff who could not read or write was f made to understand that a public auction sale of property No. 14 Adamawa Road, Bolori Layout, Maiduguri by United Bank for Africa Plc as an unpaid mortgagee, would take place on 28 Febru- ary, 1991. g Paragraph 4. The plaintiff states that on 28 February, 1991 at 9am be went to the property and met a large number of people waiting for the public auction. Paragraph 7. The plaintiff states further that he made a final bid h of Thirty-Five Thousand Naira (N35,000) which was the highest bid and was accepted by the auctioneer. Paragraph 10. The plaintiff states that after the payment and the i completion of the above formalities the auctioneer and the bank official took him back to the property opened the door and put him into possession as the purchaser and new owner of the property. Paragraph 11. The plaintiff further states that on the same date j 28 February, 1991, the auctioneer gave him a

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 114 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

copy of a letter he wrote to United Bank for Af- a rica Biu Branch to release to him the Original Certificate of Occupancy No. BO/635 which covers the property. The plaintiff will rely on the auctioneer’s letter at the trial of this suit. b Paragraph 12. The plaintiff avers that he personally or by his Agent went to the Biu Branch of the Bank to demand the release of the Certificate of Occupancy several times but was given one lame excuse or c another for the bank’s failure to hand over the original documents.” The appellant in its statement of defence averred in relevant paragraphs as follows:– d Paragraph 3. The defendant denies paragraphs 3, 4, 5, 6, 7, 8 and 9 of the statement of claim and in answer to the paragraphs the defendant avers as follows:– (a) That the property located at plot No. 14 e Adamawa Road, Bolori Area, Maiduguri was mortgaged to the defendant’s Branch at Biu as collateral for loan granted on Alhaji Inuwa Ali. f (b) That when the loan became repayable the said Alhaji Inuwa Ali defaulted and the defendant Head office, Lagos instructed a licensed auctioneer Alhaji Lawan Aliyu of g Dutsenma Street, Tudun-wada, Kaduna to sell the property. The instruction as given by the defendant’s Head office was contained in a letter of instruction with reference number LRU/90/ABOM dated 12 November, 1990 h with condition guiding the sale of the property clearly stated from A to H, and one of these conditions include the defendant’s re- N serve price of 199,000 in which the said i property would be auctioned. (c) That on 24 January, 1991 Alhaji Lawan Aliyu instructed Alhaji Mohammed Salihu to act as his agent to execute the said auction which he also instructed him to strictly abide j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 115 a with condition guiding the sale of the property as contained in the defendant’s letter with Reference No. LRU/90/ABOM dated 12 November, 1990, which clearly explains b that the sale of the property is subject to the consideration and approval of the defendant’s head office and at their absolute discretion which was also clearly written on the c notice of sale by public auction pasted on the said property on 28 February, 1991. The defendant shall rely on the letter of instruction with reference No. IRU/90/ABOM dated 12 November, 1990 and also notice of sale by d Public Auction printed and pasted on 28 Feb- ruary, 1991 during the trial of this suit. (d) That on 28 February, 1991 Alhaji Moham- med Salihu, the auctioneer, wrote a letter to e defendant head office with a copy of the letter sent to defendant’s Branch office Biu for information informing the defendant the highest bidder was in person of Alhaji Ibra- N f him Mustapha who bidded ( 35,000) and paid same for the property. Meanwhile the auctioneer had collected the said N35,000 and pay in the amount to the defendant’s Branch office Maiduguri for onward trans- g mission or remittance to the defendant’s Branch at Biu. (e) The defendant head office having received the auctioneer’s letter immediately replied h [to] him on the 20 March, 1991 that the consideration of N35,000 has been rejected and therefore not acceptable by the defendant. The head office advised further in the letter i to the auctioneer that he should note that the reserve price of the said property is N199,000 as contained in the letter of the instruction and that he should sell the property at the reserve price given to him by the de- j fendant.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 116 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(f) The defendant head office instructed the de- a fendant Branch at Biu to return the sum of N35,000. Deposited to the auctioneer and the said amount has since then been returned to the auctioneer and he has acknowledged re- b ceipt. The defendant shall rely on the ac- knowledgment paper or receipt given to the defendant by the auctioneer for the return of the N35,000 during the trial of this suit. The c defendant will also rely on all the documents referred to in this statement of defence and also on all other documents relating to and in any way connected with the defendant’s defence against the plaintiff at the trial of the d suit. (g) The defendant says that at time the bidding and payment of the N35,000 was made to the auctioneer by the plaintiff, no staff of the de- e fendant was present. The instruction to auction the property was direct from head office of the defendant to the auctioneer and the defendant Branch at Maiduguri and Biu had no f business in the sale of the property. Paragraph 4. The defendant denies paragraph 10 of the statement of claim. In answer to the said paragraph 10 says if at all the plaintiff was given possession of g the property by the auctioneer, it was done contrary to the laid down instruction given to the auctioneer by the defendant concerning the sale of the property. Furthermore, the defendant states that no official of the defendant was mandated or h nominated to assist the auctioneer in the sale exercise and therefore put the plaintiff to strictest proof of the allegation in paragraph 10. Paragraph 5. The defendant denies receiving any letter from the i auctioneer instructing the defendant’s branch at Biu to release to plaintiff the original Certificate of Occupancy No. BO/635 which covers the property. The Biu Branch of the defendant did not instruct the auctioneer to sell the property the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 117 a subject matter and therefore has no connection with the auctioneer as to warrant the auctioneer demanding for the release of the original certificate of occupancy to the plaintiff. b Paragraph 6. The defendant denies paragraphs 12, 13, 14, 15, 16, 17, 18, 19 and 20 of the plaintiff’s statement of claim and thereby put the plaintiff to strictest proof thereon. Furthermore, the plaintiff was not c put into possession of the said property by the defendant or its official, and so whatever alleged expenses made on the property to improve it was done at the plaintiff’s peril as he was not authorised either in written form for by consent to carry d on any improvement on the said property. The defendant says that the sale of the property was subject to approval from the head office and until such approval was conveyed, the defendant e Branch at Biu, has no right to release the original certificate of occupancy No. BO/635 to the plaintiff.” The respondent joined issues with the appellant upon its f statement of defence. He averred in his reply to the statement of defence thus:– “Paragraph 4. The plaintiff avers that he is an illiterate that he can neither read in English nor in any other lan- g guage and avers further that he neither saw any notice nor were any conditions of sale brought to his attention nor explained to him by any person, and such he was not bound by the alleged conditions of sale (if any). h Paragraph 6. The plaintiff states that to date neither the bank nor anyone else has ever informed him that his purchase of the property was rejected nor was the purchase price ever refunded to him (nor was he i ever informed such refund would be made). Paragraph 7. The plaintiff says that his Solicitor’s letter to the defendant in 1991 and 1996 were not replied to and his personal visits (or those of his representatives) to the Biu Branch of the defendant between j 1991 to 1996 never elicited such information.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 118 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Paragraph 8. The plaintiff avers that the defendant has slept on a its rights and the plaintiff pleads the maxim that equity aids the vigilant and not the indolent or alternatively the maxim that he who comes to equity must come with clean hands. b Paragraph 9. The plaintiff avers that to date the purchase price is with the defendant and has been making use of it.” Apart from the pleadings of the parties, the thrust of the evi- c dence led by the parties also demonstrates the relevance of this question relating to the condition precedent for the auction sale and the issue whether the respondent was made aware of it and formed a major base on which the plaintiff d built his case. The appellant claims that there are conditions precedent, while the respondent denies knowledge of the same. The evidence of the appellant’s DW1 is to the effect that e the appellant had instructed the auctioneer to sell the property and there were conditions for the sale conveyed to him in a letter now, exhibit I. The conditions set out a reserve price of N190,000, and the sale was subject to approval by f the appellant bank. The auctioneer, pursuant to the instructions before the auction sale forwarded to the appellant, particulars of the auc- g tion sale set out on a poster under cover of a letter dated 30 January, 1992 tendered in evidence as exhibit K. DW2 Damboa testified that he represented the bank at the auction sale, that before the sale, they arrived at the place of h sale and at 10am, he ordered the sale to commence. They, the people, came around and were briefed by the auctioneer. He said:– “Most of them could not speak English. I covered (sic) the auc- i tioneer to read out and interpreted to them in Hausa. I was satisfied that the people knew what was taking place. The auction commenced. It was the poster that was pasted on the property to be auctioned was read out to the people. The poster is a printed document containing the conditions of sale.” j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 119 a DW2 then identified exhibit K, the poster. In his evidence, the respondent testified that he learnt about the auction sale from someone the same day it took b place, being on 28 February, 1991. He went there at 9am and joined others who were waiting to take part and the sale took place. He was the highest bidder. He paid the price of N35,000 through the auctioneer and the bank staff Damboa c who issued him a receipt. He stated:– “I cannot read and write in English Language. I did not see any . . . at the scene of the auction. I did not see any other notice. No notice was read to me or brought to my notice at the auction sale.” d Under cross-examination, the respondent insisted that he could not read and write in English. He admitted signing exhibit B. He said:– “It is true I signed exhibit B. The house was sold to me. I just e signed exhibit B. I cannot read and write.” Exhibit B is the public auction sales record sheet dated 28 February, 1991, tendered by the respondent as a document given to him by the auctioneer and the appellant’s represen- f tative after the auction sale in which he was the highest bidder. It was signed by the auctioneer, the appellant’s representative Damboa who is DW2 and the respondent, attesting to the sale by auction of the property in issue, being Plot 14, g Adamawa Road, to the respondent, Alhaji Ibrahim Musta- pha, and his payment of the price of N35,000. From the judgment of the court examined against the relevant averments in the pleadings of the parties and their tes- h timony set out above, it is observed that the learned trial Judge did not in fact review the evidence of both parties nor evaluate them before deciding to accept the facts “as enumerated” by learned Counsel for the respondent in his final i address to the court. The sequence of the judgment clearly bears this out. It started with a narrative of plaintiff’s case concerning the auction sale at which he was the highest bidder who paid j N35,000 and the failure of the defendant to deliver the C of

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 120 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

O. This was followed by a short narrative of the defendant’s a defence repudiating the sale for not being in accordance with its conditions of sale; then a reproduction of the plaintiff’s claim, and all of his averments in his statement of claim, four b paragraphs of the statement of defence, and seven paragraphs of the reply of the plaintiff to the statement of defence and counter-claim, Counsel’s address reproduced. Then followed the court’s decision to accept the facts as enumerated by c Counsel for the plaintiff. The applicable law was considered, finally followed by the court’s decision and orders. The form taken by the findings of the court from line 30 at 37 of the records, a sudden descent to findings of fact with- d out appraisal of the evidence, sparked off the complaint of the appellant that the learned trial Judge did not evaluate the evidence led on the issue of the respondent being an illiterate or not or was not aware of the conditions precedent to e the auction sale. Counsel has submitted that the learned trial Judge had a duty to evaluate the evidence adduced, relying on Olufosoye v Olorunfemi (1989) 1 NWLR (Part 95) 26 at 32, per Oputa JSC. f There is some force in this argument. For, immediately after reproducing the final address of Counsel for both parties, the learned trial Judge, without more, proceeded to state and find thus:– g “At this juncture, let me say that I am in full agreement with the issue formulated by Mr K.U. Ogenyi, Esq. of learned Counsel to the defendant. In my view, the determination of the issue would dispose of the action either in favour of the plaintiff or the defen- h dant. Also there is no doubt, the established facts enumerated by Mr Atijegbe Esq., for the plaintiff, cannot be faulted. I agree in toto with him. So, having regard to what I have just said on the issue; formulated and the facts accepted as having been established, I will consider the said issues together with the facts established i and see if the case of the plaintiff can succeed or not.” There was no review or appraisal of the evidence led by both parties nor any statement of his basis for accepting the facts as was stated. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 121 a The learned trial Judge also found thus:– “The auctioneer I hold was an agent of the defendant. Did the auctioneer conduct the public auction as instructed. There are conditions stated on exhibit I but the auctioneer sold . . . below the price b stated by the defendant. Can the failure of the auctioneer to sell at the reserved price affect the validity of the sale to the plaintiff. The answer can be found in . . . Adebaje v Cooau . . . In this instant case, the auctioneer did not inform the plaintiff that there was a re- c served price. As pointed out by Mr Atigegbe the reserve price was only known to the defendant and the auctioneer. For the plaintiff was not aware of such reserved price, he cannot be bound by it. See . . . So, in answer to the issue, I would say that the auctioneer was the defendant’s agent and though he did not strictly comply d with the vendor’s instructions to sell the property to the plaintiff below the reserved price cannot invalidate (sic) the sale in view of the authority of Rainbow v Hawkins supra.” That the court below failed to consider the evidence of the e respondent on this issue together with that of the appellant, is quite evident from the part of the judgment set out above. In particular, the learned trial Judge ought to have referred to and considered and weighed with the respondent’s evidence, f the evidence of DW2, set out above, testifying to the explanation of the conditions of sale before the auction sale commenced. The evidence showed that what was explained was on the poster, exhibit K, explained in Hausa language, to the g people, most of whom, he testified, did not understand Eng- lish. Failure of the court to consider the evidence is in breach of the duty which the law places on the trial court. The point at this stage is that the learned trial Judge, in h coming to the conclusion on this issue, ought to have considered exhibit K and the evidence of DW2 whose presence at the auction sale the respondent relied heavily on. He gave evidence in rebuttal of the respondent’s assertion that he was i an illiterate and that the conditions precedent for the sale were not brought to his attention. The trial Judge never even mentioned the evidence, not to talk of considering it. Learned Counsel for the respondent j has not in his brief properly addressed this issue of failure by

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 122 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the trial court to evaluate the evidence by both parties. This a is significant. All that Counsel did was justify at 8–10 of his brief of argument, the finding of the court, which is another matter to be considered hereafter. b It is trite law that a court of trial has a duty after hearing evidence from parties to a suit and their witnesses, to evaluate relevant and material evidence before it having regard to the pleadings of the parties (Akibu v Opaleye (1974) 11 SC c 189). Proper appraisal of evidence is the function of a trial court which cannot ignore or gloss over it. Again, civil suits are decided on the balance of probabilities, on the preponderance of evidence. This presupposes that the trial court has d had a consideration of all the evidence before it, led by both parties. This connotes that the totality of the evidence, that is to say, the evidence of both parties is bound to be taken into account, and appraised so as to determine which evidence e has weight and which has none. The credible evidence led by both parties weighed in an imaginary scale by the trial court leads it to determine which party’s evidence has more weight and it is the side which has more weight that suc- f ceeds (Woluchem v Gudi (1981) 5 SC 319 also reported in (1979–81) 1 NSCC 214). Where there are two competing assertions by parties before a court of trial, it is the duty of such a court to consider both g assertions carefully and to decide on the balance or probabilities which of the assertions the court will accept (Odutola v Aileru (1985) 1 NWLR (Part 1) 92 at 96 (per Kawu JSC); Omoregbe v Edo (1971) 1 All NLR (Part 1) h 282). In this case, the learned trial Judge if I am to state, with respect, has not even identified and/or given any consideration i to the evidence adduced by the parties before him as required by law. I hold the view that the complaint of the appellant is well founded. The effect of this will now be considered, for it is j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 123 a trite law that it is not every slip in a judgment which will lead to the judgment being upturned. Rather, to be fatal, it is only such slip as is so substantial, occasioning a miscarriage b of justice, or leading to the decision that had the lower court properly or correctly directed itself, it would have reached a different decision (see Udeze v Chidebe (1990) 1 NWLR (Part 125) 141 at 162 per Nnaemeka-Agu JSC; Fadlallah v c Arewa Textiles Ltd (1997) 8 NWLR (Part 518) 546 at 559; Ezeoke v Nwagbo (1988) 1 NWLR (Part 72) 616; Anyanwu v Mbara (1992) 5 NWLR (Part 242) 386 at 400–401 paragraphs E–B (SC)). d Learned Counsel for the appellant has contended that failure to evaluate the evidence had led the trial court to the finding that it was an established fact that the plaintiff was an illiterate and not aware of any condition of sale and none e was brought to his notice, when this was not supported by the evidence before the court. In particular, he identified that there was evidence, and the respondent admitted under cross-examination signing ex- f hibit B. He then submitted that the fact that he signed exhibit B erases any presumption of illiteracy. He relied on Alimi Lawal v G.B. Ollivant (Nig.) Ltd Vol.1 (1971) UILR 37 at 38; Garuba Mediba v Dorsu (1974) African Law Report g (Commercial) 78 at 82; P.Z. and Co Ltd v Gusau and another (1962) 1 All NLR 242 at 243. Counsel concluded that, having signed exhibit B in English language, the plaintiff could not be said to be illiterate and had the trial court h evaluated the evidence, he would not have found it established that the plaintiff was an illiterate. He argued that this was a proper case for the Court of Ap- i peal to intervene, and re-evaluate the evidence adduced by the parties. He relied on Adeoke v Adibi (1992) 5 NWLR (Part 242) 410 at 427 paragraphs G–H per Wali JSC. He urged that the error of the learned trial Judge in the case j being substantial, it is a proper case for the intervention of

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 124 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) this Court. He cited Anyanwu v Mbara (1992) 5 NWLR a (Part 242) 386 at 400–401, and finally urged us to hold that the respondent is not an illiterate. For the respondent, his issue no. 1 addressed this matter b extensively, urging that the trial court was justified in holding that the plaintiff was an illiterate. He submitted that it is a matter of evidence whether any person is an illiterate, citing Edokpayi v Oke (1964) c N.M.L.R. 53 at 56; Otitoju v Governor of Ondo State (1994) 4 NWLR (Part 340) 518 at 529; S.C.O.A. Zaria v Okon (1960) NRNLR 34; UAC (Nig.) Ltd v Edems and Ajayi (1958) NRNLR 33. d He submitted that the burden of proof is on the person who claims to be an illiterate to prove it and that the respondent discharged the onus, copiously pleading that he was illiterate e and the fact that he neither saw any notice nor his attention drawn to one or any conditions of sale and led evidence of the same. Counsel submitted that the appellant proffered no evidence f on this. I must state at once at this point, before proceeding further and get over one matter. This last submission is incorrect. The evidence of DW2 set out and referred to above is on g this. This is what had been pointed out above as evidence not appraised, considered and evaluated alongside the respondent’s evidence before the learned trial Judge proceeded to accept as a fact, the illiteracy of the respondent and that h he neither saw any notice nor was one brought to his attention regarding the conditions of sale. It is incorrect that the evidence was not challenged. Having disposed of this I now return to the argument of i Counsel for the respondent. On the issue of the respondent signing exhibit B, he submitted that Otitoju v Governor Ondo State (supra) sets out the correct position of the law which is that the mere fact that a person is able to write or j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 125 a sign his name on a document does not mean that he is literate and the question of any one being literate or not cannot be presumed, it being a matter to be established by evidence. b Counsel further submitted that in civil cases the onus of proof is discharged on the balance or probabilities or the preponderance of evidence (Mogaji v Odofin (1978) 4 SC 91 at 93, Woluchem v Gudi (1981) 5 SC 291 at 306–310). He c concluded that the respondent’s evidence was positive and direct, credible and unchallenged and the court was right to hold that the respondent was illiterate. So also, he further submitted, there was evidence before d the court which justified the court’s decision that the respondent was not informed of any reserve price or any condition and exhibit K only contained a condition that the sale was subject to approval by the mortgagee. On the call by e learned Counsel for the appellant to this Court to intervene and re-evaluate the evidence, Counsel for the respondent has submitted that no circumstance has arisen to justify that in this matter or because the appellant desired it. Counsel cited f Ebba v Ogodo (1984) 4 SC 84, Okafor v Idigo (1984) 1 SCNLR 481; Okpiri v Jonah (1961) 1 SCNLR 174 at 176– 177; Woluchem v Gudi (supra); Balogun v Agboola (1974) 10 SC 111 at 118–119. g He urged us not to interfere with the findings of the court below. It is trite law that, where there has been proper appraisal of the evidence by the trial court, an appeal court does not em- h bark on a fresh appraisal. On the other hand, where the complaint involves non-evaluation or improper evaluation or appraisal of evidence where the issue does not involve credibility of witnesses, the Appeal Court is in as much a good i position as the trial court to evaluate the evidence (State v Aibangbee (1988) 3 NWLR (Part 84) 548; Okafor v Idigo (1984) 6 SC 1). When parties in an appeal complain about non-evaluation or improper evaluation or appraisal of evi- j dence by the trial court, the Appeal Court is often mindful of

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 126 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the rather strict limitations to its powers to reverse the trial a court’s decision on issues of fact, particularly when the decision is one based on the quality and credibility of witnesses (see Woluchem v Gudi (supra). See also Owners of Steam- b ship Hontestroom v Owners of Steamship Sagaporack (1927) A.C. 37 per Lord Sumner at 47–48). What emerges from all the foregoing is that if the trial Judge considers only the case of the plaintiff without con- c sidering that of the defendant, or vice versa, he would be in grave error. For he ought to consider the totality of the evidence and base his decision on his consideration of the same (see Mogaji v Odofin (1978) 3 SC 91). d Applying the foregoing principles to this matter, it is my view that this is an appropriate case for this Court to evaluate the evidence led by the parties in the absence of evaluation of their evidence by the trial court. e The pleadings of the parties and their evidence set out earlier in this judgment, reverted to, show that the respondent clearly and unequivocally averred in his statement of claim f and his reply to the statement of defence that he was an illiterate and that the conditions of sale were not brought to his notice. There is however the denial of the averment in the appel- g lant’s statement of defence, which it must be pointed out, was only general in form. Then there is the evidence of DW2 earlier referred to. I hold the view that the learned trial Judge should have considered it to see if it would neutralise h the respondent’s evidence that he was an illiterate and could not read the conditions. Significantly, this witness was not cross-examined. Upon close examination of the pleadings of the parties, it i is correct to state that the respondent copiously pleaded the relevant facts. On the part of the appellant, no facts were pleaded. There was only a mere traverse, a denial of paragraph 3 and other paragraphs of the statement of claim in j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 127 a paragraph 3 of the appellant’s statement of defence. No facts were pleaded therein giving rise to the facts which DW2 testified to. The effect in my view is that, there being no plead- b ings in respect thereof, the evidence goes to no issue. It looks like an after-thought. Parties are bound by their pleadings. A defendant is not in law entitled to rely upon a defence based on facts not stated in his statement of defence, c without alleging them. For the opposite party is entitled to know what case he is coming to court to meet (see Yassin v Barclays Bank D.C.O. (1968) N.M.L.R. 380; Famuyiwa v Folawiyo (1972) 1 All NLR (Part 2) 11; Ekpenyong v Ayi (1973) 1 N.M.L.R. 372 (SC)). The respondent’s Counsel d cleverly did not bother to cross-examine DW2. One other significant point is that the appellant had in its statement of defence denied the presence of any bank’s rep- e resentative at the auction sale. They have not as they ought to amend their statement of defence nor explained the contradiction occasioned by their production of DW2 to testify to the contrary and the fact that his signature appeared in ex- f hibit B (see Ekpenyong v Ayi (supra)). The effect of the foregoing is that the pleadings and evidence of the respondent that he was an illiterate and had no notice or knowledge of the pre-conditions for the auction sale remain unrebutted. g Let me state, however, that, if the foregoing might have op- erated in the mind of the learned trial Judge, leading him to his decision, it does not justify his failure to examine and appraise the pleadings and evidence before him. For a trial h court must set out its appraisal and thoughts in its judgment, in order to show how and why it came to its findings of fact and final determination of the issue before it. Be that as it may, the question whether a person is an illit- i erate or not is a question of fact, which cannot be presumed. It must be established by evidence, the burden of proof being on the party who asserts it (see Otitoju v Governor of Ondo State (1994) 4 NWLR (Part 340) 518 at 529 (SC); j Edokpayi v Oke (1964) N.M.L.R. 52 (SC)).

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 128 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

In this case, the respondent did discharge that onus, having a regard to his evidence before the court: In his evidence at 14 of the records he asserted:– “I cannot read and write in English language. I did not see any no- b tice at the scene of the auction, I did not see any other notice. No notice was read to me or brought at the auction sale.” He reaffirmed that in cross-examination when confronted with exhibit B which he signed. He said:– c “I cannot read and write in English. I just signed exhibit B, I cannot read and write.” This is in line with his pleadings. On the part of the appellant, there were no averments of facts on this issue and, hav- d ing regard to what has been stated about the evidence of DW2, they have not countered the respondent’s pleadings and evidence. What the court below found regarding this issue is dis- e cernible from its finding that:– “. . . There is no doubt, the established facts enumerated by Mr Atijegbe, Esq., for the plaintiff cannot be faulted. I agree in toto with him” (see page 37 of the records), and from the facts enumerated by the learned Counsel which includes this that:– f (iv) The plaintiff is an illiterate in the English language, he was therefore not aware of any condition nor was his knowledge brought to any such conditions” (see page 36 of the records). The pleadings and the evidence considered above prove the g court below right after all, in spite of its failure in its duty to evaluate them in its judgment, before it decided that the respondent has been established to be an illiterate who had no knowledge of the conditions of sale and was not made aware h of them. On the contention of the appellant’s Counsel that the respondent who signed exhibit B is presumed to be literate, that is not supported by the state of the law (see Otitoju v i Governor Ondo State (supra)). That Supreme Court decision has firmly established that the fact that a person has signed or written his name on a document does not prove him literate (see at 529 of the report paragraph C–D per Kutigi JSC). j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 129 a The learned Justice of the Supreme Court there stated the law thus:– “The fact that the exhibit was signed in places and thumb printed b in other places are not sufficient in my view to have rendered same null and void as contended by the appellants. In the first place, there was no evidence on record to show that the makers (appellants herein) were illiterates since there is nothing in law which prevents a literate person from affixing his thumb impression to a c document, so also the mere fact that one is able to write or sign one’s name on a document does not mean that one is literate.” In the light of all the foregoing, I am unable to agree with learned Counsel for the appellant, Mr Ogenyi’s latter sub- d mission that the fact that the respondent who signed exhibit B can be presumed literate. The authority of Lawal v G.B. Ollivant Ltd reported in 1971 U.I.L.R. (supra) which he relied on for that submission is not good law in view of the e Supreme Court decision in the appeal arising from that judgment under the name G.B. Ollivant v Lawal reported in (1972) 3 SC 125 at 135–136, and also Otitoju’s case (supra). f The submission of learned Counsel for the respondent, Mr Atijegbe, in that regard is more in line with the state of the law and it is upheld. What becomes clear and incontrovertible in the light of the g foregoing and upon a detailed examination of the pleadings of the parties, their evidence and the judgment of the court below, is that, although the learned trial Judge failed in his duty to evaluate the case of both parties before making his h finding on this, no miscarriage of justice has been found upon my own appraisal of the pleadings and the evidence of both parties. i This issue must be determined against the appellant and it is so determined. Ground 1 of the grounds of appeal is also dismissed. Issues 2 and 3 are being considered together as they both j relate to the alternative claim which the court below

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 130 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) awarded, despite the fact that the learned trial Judge had a awarded the claim of specific performance to the respondent earlier. Learned Counsel for the appellant has contended that it b was wrong for the court below to award both claims made in the alternative. He relies on the case of Mercantile Bank Ltd v Adalma Tanker Ltd (1990) 5 NWLR (Part 153) 747 at 768 and 769; also, Yesufu v Kupper International (1996) 4 SCNJ c 40 at 50. Learned Counsel for the appellant has pointed out that that case is authority for the proposition that where a claim is in d the alternative, the court should first consider if the principal claim succeeded and it is only if it found that the principal claim did not succeed that it would need to consider the alternative claim. e For the respondent, it has been conceded as submitted for the appellant, that where an alternative claim is made in addition to a main claim, it is only when the main claim has not been granted that the alternative claim can arise (U.B.N. f Ltd v Penny Mart Ltd (1992) 5 NWLR (Part 240) 228 at 241E–F cited). Other authorities cited in support include Mercantile Bank of Nig. Ltd v Adalma (supra), earlier cited for the appellant. g Learned Counsel for the respondent further conceded that, by considering and granting the main and alternative claim, the trial court erred. Had learned Counsel’s submissions ended at this point, this Court would have, giving effect to h the principles enunciated over the years by our highest courts on the treatment of alternative claims, set out in the authorities cited above and others to be set out presently, simply determined the issue at this point, without further i ado. He did not stop there. He made other submissions, which will be dealt with later. Here, let me interrupt his submission to outline the law from binding authorities on this matter. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 131 a It is indeed settled law that in an action where an alternative claim is made in addition to a main or principal claim, it is only where the main claim has not been granted that the b consideration and the granting of the alternative claim can arise. Both the main and the alternative claim cannot at the same time be granted (italics supplied for emphasis) (see U.B.N. Ltd v Penny Mart Ltd (1992) 5 NWLR (Part 240) c 228 (C.A.) at 241). In this case, Adio JCA clearly and succinctly put the principles thus:– “Another thing, which was an error of law, about the relief granted in item (5), of the reliefs granted in the judgment, is that it related d to the alternative claim in the respondent’s amended writ of summons or amended statement of claim. Where an alternative claim is made in addition to a main claim, it is only where the main claim has not been granted that the consideration and the granting of the alternative claim can arise. Both the main claim and the al- e ternative claim cannot at the same time be granted. See Nigerian Supplies Manufacturing Co Ltd v Nigerian Broadcasting Corpora- tion (1967) 1 All NLR 35; and Mercantile Bank of Nigeria Ltd v Adalma Tanker and Bunkering Services Ltd (1990) 5 N.W.L.R. (Part 153) 747. It was, therefore, an error, in law, for the learned f trial Judge to make the order in item (5) of the orders in his judgment in addition to the orders in items (1), (2), (3) and (4) of the said judgment. In any case, if the learned trial Judge was right (which is not conceded) in granting a perpetual injunction restrain- g ing the appellants from selling the property in question then the question of their selling it below a particular price could not arise.” See also Mercantile Bank of Nig. Ltd v Adalma (supra) at 768 paragraphs A–B and 769 paragraph C–D (per Oguntade h JCA); Nwangwa v Ubani (1997) 10 NWLR (Part 526) 559 at 574. In the case of Agidigbi v Agidigbi (1996) 6 NWLR (Part 454) 300 (SC) the Supreme Court held that where the main i claim of a party to a suit succeeds and is granted by the court, there will be no need for the court to consider any alternative claim (per Kutigi JSC at 313 paragraphs G–H). It is important to realise that, once the main claim succeeds, the j consideration of the alternative claim no longer arises.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 132 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Counsel for the respondent did not stop at conceding that a the learned trial Judge had erred. Rather, he further submitted that the error was a mere technicality. He said that the court did not intend to give double benefit to the plaintiff. b He affirmed that the respondent for his part was content with the main relief. Learned Counsel further argued that the breach by the learned trial Judge did not in any way damnify the appellant c nor result in a miscarriage of justice. He submitted that the consideration and granting of the alternative claim is a precautionary measure by the trial court by way of expressing its opinion in the alternative claim in d case the Court of Appeal allows the appeal on the main claim and to avoid the necessity of sending the case back for retrial (Iheanacho v Ejiogu (1995) 4 NWLR (Part 389) 324 at 340 cited and also Adeyemi v Bamidele (1968) 1 All NLR e 31 at 38). It seems to me that learned Counsel for the respondent in this later part of his submission, smart as it is, failed to take f into account the full import of the principles in the authorities which he himself cited In U.B.N. Ltd v Penny Mart Ltd (supra). The dictum of Adio JCA above quoted did not mince words in describing the error in that case as “an error g in law” where the court below granted item 5 of the claim, which was an alternative claim. In this case, it is not, in my view, a matter of mere technicality as submitted for the respondent. It is a matter of an h error in law. With respect, learned Counsel in his submission stopped short of the full text of the principles in the dictum of Adio JCA (supra). He left out the words “in law”, when he conceded thus in his brief of argument:– i “By considering and granting the main claim and the alternative claim the trial Court erred.” The decisions in Agidigbi v Agidigbi (supra) and U.B.N. v Penny Mart Ltd (supra) have put to rest any argument and j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 133 a reason which Counsel may devise to justify a trial Judge who, after the main claim before the court succeeds and he grants it, proceeds to consider and also grant the alternative b claim. After granting the main claim, it is no longer open to the trial court to consider the alternative claim, not to mention granting it. It is even more fatal for a trial court, not only to consider c the alternative claim after granting the principal or main claim, but also to grant it and then to leave it to the plaintiff to pick and choose afterwards which of the alternative grants the court has made he wishes to accept, as the learned trial d Judge did in this case. The justification which learned Counsel for the respondent puts forward for the decision of the learned trial Judge that it is a precautionary measure is not acceptable and supported e by the authorities above and those which he himself cited. Neither in the case of Adeyemi v Bamidele nor Iheanacho v Ejiogu did the courts decide the same issues as arose in this case in the court below. Those were claims in negligence f and damages arising out of fatal accident. In none of them did the issue of an alternative claim arise. I would in the premises determine issue no. 2 in the appellant’s favour. g This decision has also taken case of issue no. 3 which challenges the award of interest by the court below which is part of the alternative claim. h As the learned trial Judge ought not to have considered and determined the alternative claim after granting the main claim, the award of interest under the alternative claim also constitutes an error in law. i Issue no. 3 is also in favour of the appellant. In conclusion, this appeal fails in part and succeeds in part. That part of judgment of the learned trial Judge, Bdliya J, granting the respondent’s claim for specific performance is j hereby affirmed.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Nzeako JCA 134 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

The other part of the said judgment awarding the alterna- a tive claim for refund of purchase price with interest and N60,000 special damages for expenses for repairs of the property in dispute is hereby set aside. b There will be N5,000 costs to the respondent against the appellant. OBADINA JCA: I have had the opportunity of reading in draft the judgment of my learned brother, Nzeako JCA, just c delivered. I agree with the reasoning and conclusion therein. Where a plaintiff on a set of facts asks for a relief and a second relief “in the alternative” to the first, it is for the d court to decide on the facts and in principle whether the grant of the second relief as a further relief will not amount to double compensation for the same cause of action, in which case the further or alternative relief should not be e granted. Where the first and principal relief is exhaustive of his remedy, there would be no need to grant the subsequent relief claimed as a “further” or “alternative relief”. In other words, where a claim by a party to a suit succeeds and the f court grants same, there will be no need to consider any “alternative” claim thereto (see The M.V. “Caroline Maersk” Sister Vessel to M.V. “Christian Maersk” and 2 others v No- koy Investment Ltd (2002) 12 NWLR (Part 782) 472 at 509. g See also Agidigbi v Agidigbi (1996) 6 NWLR (Part 454) 300 at 313). In that regard, since the claim of the plaintiff/respondent for the main claim of specific performance succeeded and h the trial court granted same, it should not have granted the alternative claims for refund of the purchase price and the interest thereon etc For that reason and the fuller reasons contained in the lead judgment, I too affirm the judgment as i it relates to the order of specific performance. I set aside the judgment in respect of the award of the alternative claim. I also abide by the order as to costs. OGBUAGU JCA: I had the advantage of reading before now, j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 135 a the judgment of my learned brother, Nzeako JCA, just delivered. I respectfully, agree with him that the appeal succeeds in part. b However, hereunder, are my own contributions. On 7 April, 2003, when this appeal came up for hearing, the learned Counsel for the respondent was absent and there was no reason for his absence. The court noted that there is c proof of service of the hearing notice on him on 7 January, 2003. Longe, G.L., Esq., learned Counsel for the appellant, told d the court that they filed their brief of argument on 23 Octo- ber, 2000. He adopted the same and urged the court to allow the appeal. Pursuant to Order 6 rule 9(5) of the Court of Appeal Rules, e 2002, the appeal was deemed argued and judgment was reserved till to today. The plaintiff/respondent in paragraph 21 of his statement f of claim claimed from the appellant, as follows:– “(a) Specific performance of the sale of Public Auction, by delivery to the plaintiff all documents of title to the said property and preparing a deed of assignment and taking such g other steps necessary to perfect the plaintiff’s title to the property. (b) He then claimed in the alternative as follows:– (i) Refund of the purchase price N35,000. h (ii) 27% interest from the date of payment of the purchase price. (iii) Refund of amount expended to repair the property N i 60,000. (iv) 27% interest of the amount of repairs.” The facts of the case, the grounds of appeal and the issues formulated by the parties have been clearly stated in the lead j judgment.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA 136 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

In my respectful but firm view, the appellants’ appeal is a grossly misconceived, most frivolous and indeed vexatious. The appellant would not obey or comply with the clear order of the trial court as regards the grant of the order of specific b performance. They would not and have refused, as regards the alternative claim of the respondent, to refund the respondent his money which he paid to them and they are still re- taining the same and making use of it up till now. They want c to eat their cake and have it at the same time. The learned trial Judge, in his well and painstaking considered judgment, made specific findings of fact. The attitude of an appellate court as regards such findings, are now well d settled in a string of decided authorities. Issue no. 1 of the appellant and the respondent The law in respect of an illiterate as regards the signing of a document is now firmly established. The learned Counsel e for the appellant has relied on the case of Lawal v G.B. Olli- vant (Nig.) Ltd which he cited as Volume 1 (1971) U.I.L.R. 37 at 38. I wish to state that apart from the fact that there is no such Report (it is reported in U.I.L.R. – (University of Ife f Law Report) which was decided by the former Western Court of Appeal, the said decision was overruled by the Su- preme Court and it is reported in (1972) 3 SC 124 at 133– 136. g It was held in that case by the WCA that when a person has executed a document by affixing his signature thereon, the law presumes, that he is literate and that he understands h the document to which he put his signature. I notice, however, that Mr Atijegbe in reproducing the dictum stated, “the law presumes that he is ‘illiterate’ ”. I wish to state that the question as who is an illiterate is a i matter of fact that cannot be presumed by the court but is one which has to be established by evidence. I will deal with a few decided authorities as regards an illiterate. In the case of Paterson Zochonis and Co Ltd v j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 137 a Gusau and another; In Re: Mallam Kantoma (1962) 1 All NLR (Part 2) 242, it was held, that an “illiterate” within the meaning of the Illiterate Protection Act, is a person who is b unable to read or write in any language, ie a person who is totally illiterate. That a person who is unable to read or write the language in which a particular document is written, but who can read and write in some other language, is not an il- c literate within the meaning of the Act. In Ntiashagwo v Amodu and another (1959) WRNLR (Part IV) 273, per Charles J, it was held that:– (i) documents to which the Illiterate Protection Ordi- d nance applies, and which has not been signed in the prescribed manner, is a nullity and it is inadmissible; (ii) the onus is on the person who objects to the docu- e ment, to prove that the maker was an illiterate; (iii) an illiterate person is a person who is unable to read with understanding and to express his thoughts by writing in the language used in the document made f or prepared on his behalf. But in the case of Sobola Jiboso v O. Obadina (1962) WNLR (Parts I–IV) 303 the same learned Judge, Charles J, admitted being wrong in the first (i) holding as stated here- g inabove. In Edokpayi v Oke (1964) MNLR 53 not N.M.L.R. as stated by (Mr Atijegbe) it was held by Begho J (obiter) that the mere fact that one is able to write his name on a docu- h ment, does not mean that one is literate. That the question of any one being illiterate cannot be presumed by the court, but is a matter to be established by evidence. See S.C.O.A. v Okon (1959) 4 FSC 220 at 223 and Otitoju v Governor of i Ondo State (1994) 4 NWLR (Part 340) 518 at 529 (C.A.), also cited and relied on by Atijegbe, Esq., and where it was also held as in Edokpayi’s case (supra) that there is nothing in law which prevents a literate person from affixing his j thumb impression to/on a document.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA 138 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Now, coming to the said issue, the respondent in paragraph a 3 of his statement of claim averred as follows:– “The plaintiff who could not read and write was made to understand that a public auction sale (sic) (meaning sale) of property b No. 14 Adamawa Road, Bolori Layout, Maiduguri, by United Bank for Africa Plc as an unpaid mortgagee, would take place on 28 February, 1991.” In paragraph 4 of his “Reply and defence to counter-claim”, c he pleaded as follows:– “The plaintiff avers that he is an illiterate that he can neither read in English nor in any other language and avers further that he neither saw any notice nor were any conditions of sale brought to his d attention nor explained to him by any person, and as such he was not bound by the alleged conditions of sale (if any)” (italics mine). Then, since the onus was on him to prove that he was an illiterate, he testified on oath in chief, inter alia, thus:– e “I cannot read and write in English language. I did not see any at the scene of the auction. I did not see any other notice. No notice was read to me or brought to my notice at the auction sale” (italics mine). f Under cross-examination, he testified, inter alia, as follows:– “It is true I signed exhibit ‘B’. The house was sold to me. I just signed exhibit B. I cannot read and write.” g It is to be noted firstly, that the contents of exhibit B, the public auction sales record sheet dated 28 February, 1991, is in the English language. Secondly, in paragraph 3 of the h statement of defence, the said paragraph 3 of the statement of claim was merely denied. Significantly, it is not therein averred that the plaintiff/respondent would be put to the strictest proof of his said averment. It is now firmly settled that a mere denial of a pleading is not a sufficient traverse of i the averment in the statement of claim (see Metal Construc- tion (W.A.) Ltd v Meridien Trade Corporation Ltd (1990) 5 NWLR (Part 149) 144 at 152 (C.A.); Ibeanu and another v Ogbeide and another (1998) 9 SCNJ 77 at 86 and Elendu j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 139 a and 5 others v Ekwoaba and 4 others (1998) 10 SCNJ 51 at 62, and many others). Thirdly, the said evidence of PW1, the plaintiff/ b respondent, was never controverted in evidence by the appellant. The effect in law is trite. As rightly submitted by the learned Counsel for the respondent, it is now firmly settled that when evidence is unchallenged and I will add, uncon- c troverted, the onus of proof is discharged on a minimal of evidence. He has cited the cases of Olujinle v Adeagbo (1988) 2 NWLR (Part 75) 238 at 245; (1988) 4 SCNJ 1; Nwabuoku (not Nwaboku) v Ottih (1961) 1 All NLR 487 at d 490; Odulaja v Haddad (1973) 11 SC 34 at 57 and Omorog- bee (not Omorogbe) v Lawane (1980) 3–4 SC 108 at 117. With respect, I do not agree with the submission of the e learned Counsel for the appellant, that the respondent, having signed exhibit B which he says is English language, the respondent cannot be said to be an illiterate. On the authorities, this submission is not in accord with the decided au- f thorities hereinabove referred to. As regards exhibit K, and as rightly submitted by the learned Counsel for the respondent, what was explained in Hausa, according to DW2 surely, is the condition as to the g approval by the appellant. But there is no evidence that the respondent was then present at the venue. I agree with the settled law that in order to fix an illiterate person without knowledge of a contractual condition contained in a public h notice, there must be evidence that reasonable steps were taken to bring the condition to his knowledge (see the case of Mabawonku v Sodimu (l975) 2 A.L.R. 214 at 225 cited and relied on by Mr Atijegbe). i Let me, at this stage, briefly deal with the principle or law as regards reserve price at least for purposes of clarity. The case of the appellant is that it had a reserve price j which they specifically communicated to the auctioneer in

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA 140 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) writing. In other words, that there was a written and clear a instruction to the auctioneer in respect of the reserve price which they state was N199,000 (One Hundred and Ninety- nine Thousand Naira). b So, what will be the consequence, if an auctioneer sells below the reserve price? One, or I may ask, firstly and this is settled, at a sale by auction, subject to a reserve price and where the fact that there is a reserve price which is known, c the offer of the auctioneer to sell, the bidding, and the knocking down of the hammer to the highest bidder, are held all to be subject to the condition that the reserve price should be reached, and the fact that the auctioneer knocked down d the subject matter of the auction sale to a bidder who has bid a lesser price than the reserve price gives the bidder no right of action against the auctioneer, either for breach of duty in refusing to sign a memorandum, of conveyance or otherwise e complete the contract, or for breach of warranty of authority to accept the bid (see McManus v Fortescue (1907) 2 K.B. 1 also referred to in the judgment). It is beyond doubt that if land or property is sold without f any reserve by auction, and knocked down to the highest bidder, such bidder is entitled to have his contract of purchase completed. To be emphasised is that the effect of a no- tification of a sale subject to a reserve is that the auctioneer g may withdraw the offer/lot if no bid reaches the reserve. But the existence of a reserve does not affect the position of a bidder to whom the offer/lot is knocked down, or operate as a limit which prevents the auctioneer from making an effec- h tual sale. Surely and certainly, a conditional offer cannot be treated as a general and unconditional one. A fall of the hammer cannot do away with the condition expressly stipulated for i the condition of sale (per Collins MR in McManus v Fortes- cue (supra) at 5). So, any question that an auctioneer is an agent of the bidder and therefore, to complete the contract on his behalf, is therefore completely misconceived. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 141 a However, in the case of Rainbow v Hawkins (1904) 2 K.B. 322 at 326, also referred to in the said judgment and also noted by the learned trial Judge, it was held that an auctioneer has an implied authority to sell without reserve, and if he b does so, the vendor cannot set up as against the buyer, a limitation of that authority not made known to the buyer. Therefore, the principal was bound by the auctioneer’s action as if he had made the bargain himself. In order words, c since the hammer had fallen, and as between the highest bidder and the auctioneer’s principal, the right of the highest bidder cannot be defeated by the principal showing that the auctioneer was authorised by him to sell only subject to a d reserve price. That the auctioneer had an apparent authority, which his principal, if he had been sued by the highest bidder, would not have been allowed in point of law to repudiate, after a sale had been concluded by the hammer being e knocked down, upon the ground that his private instructions had been contravened by the auctioneer in selling without or below the reserved price. Now, I have already referred to the pleading of the respon- f dent in paragraph 4 of his reply to the statement of defence and counter-claim. Under cross examination at 16 of the records, he swore, inter alia, as follows:– “. . . I went there when the auction had begun. I did not know what g was said before I got to the venue of the sale. There was no reserve price. I heard the auctioneer saying the price. I then started my own above the amount. He announced I had no relationship with the Bank. I did not know it was the defendant that was auctioning the property. I only heard there was auction sale and I proceeded h to the place.” What I understood or can discern or infer from this evidence, is that the process of the auction sale had begun even before he arrived at the venue. Bidding offers were already i being made before he started bidding his own price over and above what some other bidded. This evidence about his not being present when anybody read the auction notice or of the reserve price was neither challenged nor controverted by j DW2 in his evidence.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA 142 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

He went on thus:– a “At the time I had no cash on me. Bank officials accompanied me to my house. I gave the money to my son. They went to the bank and paid. One of the officials was Mr Damboa. He was witness to the Bank. . . . The properties were handed over to me. I took pos- b session of same. I do not know if exhibit C was written to the bank manager. I cannot read and write in English.” It is important to note that in exhibit A, the bank’s teller, it is stated under “Details” in respect of the N35,000 thus:– c “Money realized in respect of Public Auction Sales of mortgaged property of Aihaji Inuwa Ali (Biu Branch).” PW2, a civil servant in the Ministry of Education, gave evidence substantially in support of the above averment, ie d Mallam Damboa being an official of the bank and he was among the three persons who came to their house. That he, PW2, went to the appellant’s bank and paid in the money to Mallam Damboa. PW2 further swore that he was at the e counter and that he filled/completed the bank teller given to him by the said bank. Under cross examination, he testified that both the auctioneer and Mallam Damboa went with him to the bank. f In re-examination he maintained that Mallam Damboa collected the money from him and paid the same and gave him, the witness, the bank teller, probably his own counter-part or copy. g It must be noted or pointed out by me that exhibit K, the notice of auction sale, does not contain a reserve price and as rightly submitted by Mr Atijegbe. h Now, DW1, a staff of the appellant in his evidence-in-chief testified, inter alia, at 19 and 20, swore, inter alia, as follows:– “After reading exhibit K the auction was carried out in February, i 1991. The representative of the defendant told me there was an auction sale. Later the Biu Branch received N35,000 through Maiduguri Branch. The Bank Teller was sent to Biu Branch. By the Biu letter, the highest bidder paved (sic) (paid) the amount at the Maiduguri Branch for transfer to Biu Branch. When the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 143 a amount was received the Biu Branch wrote a letter to the auctioneer that the amount was not acceptable to the bank. There was a reserve price of N199,000” (italics mine). b See also the last paragraph of exhibit H which speaks vol- umes. From the above evidence and exhibits A and B, “Public Auction Sales Sheet”, it is beyond any doubt or controversy c that an auction sale actually took place and that the respondent was the highest bidder who also paid the amount that led to the falling of the hammer. If the auctioneer sold below the reserve price, surely and certainly, it had nothing to do d with the respondent. That the appellant’s Biu branch returned the respondent’s money to the auctioneer who later informed the respondent about the appellant’s decision, is neither here nor there. It was like bringing out a bucket/ e container to collect water, after the rain had stopped falling. In law and in fact and as admitted by DW1 the contract of sale had been completed. The appellant is bound by the contents of exhibit A. It cannot be heard to resile from f it. In fact, it is the end of the controversy about reserve price. Any quarrel or dispute between the appellant and the said auctioneer had nothing to do with the respondent since the g contract of sale in respect of the auction had been completed and done with. DW1 swore at 21, thus: “The N35,000 is with the defendant.” At 22, he swore: “It is not true that the defendant had made use of the N35,000.” Surely, that is a h matter of law since it was admitted by the witness that the appellant still have custody of the said money. Only parties to a document/agreement can enforce it. i DW1 then swore that he does not know whether or not the respondent was in possession of the property after the sale. The evidence of DW1, Mallam Dambo or Damboa, at 23 and 24, are very clear. He wrote exhibit D the contents of j which are unambiguous. He also confirmed the auction sale

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA 144 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) in clear language. He swore earlier that he does not know a the respondent. He, however, swore that the auctioneer, the respondent and himself signed the document evidencing the fact of the auction sale and the respondent being the highest b bidder and the payment of the N35,000 (Thirty-five Thousand Naira) to his bank. In exhibit D he stated that the amount paid is reasonable. He denied the putting of the respondent into possession after the auction sale. He never stated, however, c that the respondent forcibly put himself into possession of the property or how come the respondent entered into possession. But one thing is clear, and that is, that there was an auction sale in which the respondent was the highest bidder and his d money was taken by the appellant. DW2 significantly signed exhibit B. I wonder what other inference that the person who bought the property and paid for it, would surely be entitled to the possession of the same. Significantly, this witness who e swore that he did not know the respondent, did not say or could not say that the respondent was present before the auction sale started at 10 am or at the time he denied he made the explanations in Hausa language. f The learned trial Judge carefully and thoroughly reviewed the case, the evidence before him, properly evaluated the same in my humble but firm view, made findings of fact and came to the right decision. He dealt with all the issues g raised/formulated and canvassed by the learned Counsel for the parties. He even preferred the issues formulated by the appellant’s Counsel. The function of an appellate court in respect of the above have been stated and restated in a pleth- h ora of decided authorities (see Adonri v Madam Ojo-Osagie (1994) 6 SCNJ (Part II) 192 at 205; Eigbajale v Oke and 6 others (1996) 5 SCNJ 49 at 64, 71; Nneji and 3 others v Chief Chukwu and 7 others (1996) 12 SCNJ 388 to mention i but a few). I suppose, and this is settled, that the purpose of an appeal is to find out whether on that evidence and the applicable law the trial court came to a right decision. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 145 a As a matter of fact, where a trial Judge fails to first review evidence of both sides in accordance with the decision in Mogaji v Odofin and another (1978) 3 SC 91 but his find- b ings are based on due consideration of both parties’ case as supported by the evidence adduced before him, the findings will be upheld by the Appellate Court (see Alhaji Amoko- mowo v Alhaji Andu (1985) 5 SC 28; Olubode and others v Alhaji Salami (1985) 4 SC 41 at 42). c I have no doubt in my mind that this matter is a very simple one. This is because the appellant is not willing to let the respondent have/possess what he legitimately and lawfully d purchased at the said auction sale. It does not want to honour/comply with/accept the order of specific performance. I suppose that it is settled law that where a vendor fails to put a purchaser, say, of unencumbered land or the property e he legitimately purchased, that amounts to a failure of consideration which entitles the purchaser to a refund of the money he paid for the purchase (see Ebadan v Uso (1976) U.I.L.R. (Part II) 205 (H/CT) and Jegede v Giwa and others f (1977) 4 SC 121 129–131 referring to Ojikutu v Demuren (1957) 2 FSC 72 at 73 per Foster Sutton FCJ). I have gone this long hog, because, firstly, the learned Counsel for the appellant in their no. 4.08, has submitted, g rightly in my view, that the attitude of an appellate court is to, by way of re-hearing, to evaluate the evidence that has been adduced. Secondly in their no. 4.13, it is also submitted that the Court of Appeal is urged to evaluate the evidence h and hold that the respondent is not an illiterate and allow the appeal. I am therefore obliged to answer issue no. 2.01 of the ap- i pellant in the affirmative. As regards issue no. 2.01(A) and (B) of the respondent which is couched in a negative form, my answer is that he was justified in so holding. Issue nos. 2.02(2) and 2.03(3) of the appellant and nos. 2.02 j and 2.03 of the respondent and issue No. 3

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA 146 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

How is an alternative claim regarded/treated by the courts? a One may ask. It is now firmly settled that where a claim is in the alternative, the court should first consider whether the principal or main claim ought to have succeeded. It is only b after the court may have found that it could not, for any reason, grant the principal claim, that it would consider the alternative claim (Mercantile Bank of Nig. Ltd v Adalma Tanker and Bunkering Services Ltd (1990) 5 NWLR (Part c 153) 747 at 768, also cited and relied on by both learned Counsel). In other words, upon the grant of the main claim, no need arises for granting the alternative claim (see Chief Yesufu and another v Kupper International N.V. (1996) 4 d SCNJ 40 at 50 also cited and relied on by Mr Ogenyi and Agidigbi v Agidigbi and 2 others (1996) 6 SCNJ 105; (1996) NWLR (Part 454) 303 at 313. See also Nigerian Supplies Manufacturing Co Ltd v Nigerian Broadcasting Corporation e (1967) 1 All NLR 35 and U.B.N. Ltd v Penny Mart Ltd (1992) 5 NWLR (Part 240) 228 at 241E–F cited and relied on by the learned Counsel for the respondent). It is settled that an alternative award is an award that can f also be made instead of another. It is not an additional award. Thus, where a plaintiff sets up two or more inconsistent sets of material facts and claims relief on each of them in the alternative, he will be granted such relief as the set of g facts he established would entitle him to. So, only one of two or more alternative reliefs will be granted. So said the Supreme Court in the recent case of The M.V. “Caroline Maersk” etc and 2 others v Nokoy Investment Ltd (2002) 6 h SCNJ 208 at 224–225; (2002) 12 NWLR (Part 782) 472 at 507–509, per Ayoola JSC. In other words, where a plaintiff on a set of facts, asks for a relief and a second relief “further or in the alternative” to i the first and on principle whether the grant of the second relief as a further (additional) relief, will not amount to double compensation for the same cause of action, in which case the second relief should not be granted. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 147 a So, where a plaintiff is uncertain whether the facts he relies on would entitle him to a relief either in addition to a first relief or merely as an alternative he can claim the subse- b quent relief, as a further or alternative relief. Therefore, where the first or principal relief is exhaustive of his remedy, there would be no need to grant the subsequent relief claimed as a “further or alternative relief”. c It is important to note, and this is also settled, that if a trial court thinks he is wrong in considering the alternative relief, he may do so. In such a case, it is said to be desirable practice that he does so. That the advantage is that should the de- d fendant appeal on the question of damages, the Appellate Court will have on record the finding or opinion of the trial court on the alternative relief thus making it unnecessary to remit the case to the trial court for the consideration of the e alternative relief. Finally, it is proper for a party, in an action, to include in his pleadings two or more inconsistent sets of facts and claim relief thereunder in the alternative (see S.C.E.I. v Od- f enewu and another (1965) 2 All NLR 135). In the instant case, and as noted in this judgment, the respondent claimed in the alternative. The learned trial Judge held that there is/was a valid contract of the sale of the prop- g erty, the subject-matter of the suit between the plaintiff/respondent and the appellant. Therefore, the respondent was entitled to an order of specific performance. So, he proceeded to make the said order in the following words:– h “The defendants are hereby ordered to prepare all documents required for the transfer of the interest in the said house to the plaintiff and hand over to him the title deeds in respect of the said house immediately, or in the alternative as claimed by the plain- i tiff.” He then itemised the said alternative claims of the respondent. As to the counter-claim, he dismissed the same. Said he:– j “The plaintiff’s claims have been granted. In other words, he had

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA 148 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

succeeded against the defendant. If the action of the plaintiff is a a wrongful use of legal process or an abuse of legal process; the court would not have granted same to him. The success of the plaintiff’s case demolishes the claim of the defendant. So in my view the counter-claim is misconceived. Same cannot succeed, b Same is dismissed in toto.” Surprisingly, the learned trial Judge did not award any costs in favour of the respondent as costs follow the event. I con- cede that he has a discretion in respect thereof. But since c there is no appeal by the respondent in respect of the failure of the trial court to award any costs to him as a successful litigant, I am not entitled or this Court is not entitled to say anything more about this. d I therefore, agree with the reasoning and conclusion of my learned brother, Nzeako JCA, in respect of these issues. In concluding this judgment, I am aware and conscious of e the fact that a court, including this Court, must confine itself to the issues properly raised and canvassed by the parties (see Metalimpex v A.G. Leventis and Co Ltd (1976) 2 SC 91; George v Dominion Flour Mills Ltd (1963) 1 SCNLR 242; f Kalio v Kalio (1977) 2 SC 15; Management Enterprises and another v Otusanya (1987) 2 NWLR (Part 55) 179; (1987) 4 SCNJ 110; Alhaji Chief Momodu and 60 others v H. High- ness Alhaji Momoh (1991) 1 NWLR (Part 169) 608, 620– g 621; (1991) 2 SCNJ 15 and Alhaji Ogunlowo v Prince Ogundare (1993) 7 NWLR (Part 307) 610 at 624 and many others). I observe that, in this appeal, there is no omnibus ground h of appeal which in effect encompasses a complaint of improper evaluation of evidence by the trial court (see Anyaoku and others v Dr. Felix Adi and others (1986) 6 S.C. 75 at 89, 95; (1986) 17 NSCC (Part II) 799; (1986) 3 NWLR (Part 31) i 731). The complaint about any evaluation of evidence by the trial court is only limited to the fact of whether or not the plaintiff/respondent is an illiterate and whether or not he was aware of any condition as to reserve price. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Ogbuagu JCA United Bank of Africa Plc v. Alhaji Ibrahim Mustapha 149 a It is from the foregoing, and the more detailed judgment of my learned brother, Nzeako JCA, that I too allow the appeal, in part. I abide by the consequential orders including costs. b Appeal dismissed in part and allowed in part.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION)

150 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

a United Bank for Africa Plc v Fidelia O. Okeke and another

COURT OF APPEAL, ENUGU DIVISION b FABIYI, MOHAMMED, OLAGUNJU JJCA

Date of Judgment: 12 JUNE, 2003 Suit No.: CA/E/135/2002

Injunction – Perpetual – To restrain sale of mortgaged c property – Mortgage deed valid – Improper Mortgage – Sale of property – Non-compliance with section 19 of the Auctioneers’ Law, Anambra State – Sale invalid d Mortgage – Sale of property – Perpetual injunction to restrain sale of mortgaged property – Mortgage deed valid – Improper e Mortgage – Sale of property at undervalue – Fraud and Collusion – Sale invalid

Facts f This is an appeal against the judgment handed out by M.U. Edozie J while sitting at the High Court of Justice, Enugu, on 15 September, 1998. g In the suit before the trial court, the plaintiffs who are respondents herein claimed against the appellant herein and two others jointly and severally in paragraph 26 of the statement of claim as follows:– h “26(a) A declaration that the aforesaid deed of mortgage registered as No. 9 at page 9 in Vol. 1103 of the Lands Reg- istry in the office at Enugu is null and void and in any event, not enforceable against the plaintiffs; i (b) A declaration that the sale of the mortgaged property registered as No. 4 at page 4 in Vol. 1032 of the Lands Registry at Enugu otherwise known as and called No. 2 Kenyatta Street, Uwani, Enugu to the third defendant by the second defendant as agent of the first defendant is j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION)

United Bank of Africa Plc v. Fidelia O. Okeke 151 a irregular, unlawful, null and void and a fraud on the first plaintiff; (c) An order of court setting aside the purported sale of the b mortgaged property by public auction on 25 September, 1989; and (d) An order of perpetual injunction restraining the first defendant by itself, servant or agents from selling, alienating or otherwise dealing with the rights, title or interest c of the first plaintiff in the mortgaged property.” The original first plaintiff, the late Godwin C. Okeke, was the mortgagor of his property at No. 2 Kenyatta Street, d Uwani, Enugu. During the pendency of the suit at the trial court, he passed on and was substituted by his wife, the first respondent in this appeal. The second plaintiff/respondent took a loan of N30,000 from the appellant herein. Late e Godwin C. Okeke mortgaged his stated property to the appellant as security. The deed of legal mortgage dated 17 March, 1983 is exhibit B. The second plaintiff defaulted in the repayment of the loan. After due demands for payment were made to no avail, the appellant employed the ser- f vices of the second defendant, an auctioneer, to sell the mortgaged property. The third defendant was the “purchaser” of the mortgaged property at a “public auction”. g The property was advertised for sale by public auction on 24 September, 1989 in the Sunday edition of the Statesman Newspaper published in Owerri, Imo State. Sale was slated for 7.00 am prompt on 25 September, 1989. h After completion of pleadings, the first plaintiff and two other witnesses who resided at the said property said that there was no auction sale on 25 September, 1989 and no notice of sale was posted on the mortgaged property prior to i the alleged sale. The first plaintiff maintained that the sale price of N150,000 was fraudulent because it was far below the true value of the 1989 professional assessment put at N565,500. There was the evidence that the property was j sold at a gross under-value to an in-law of the appellant’s

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION)

152 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) area manager. The auctioneer, the “purchaser”, as well as a the area manager did not testify at the trial court. DW1, the witness called by the defendants, said at least two weeks before the auction sale of 25 September, 1989, b the auctioneer, the second defendant, posted the notice of sale on the mortgaged property. He did not accompany the auctioneer to post the notice of sale. He said the professional valuation of the property as at 1984 was N100,000 while an c in-house valuation of 1988 put the value at N120,000. He said the third defendant’s bid of N150,000 was the highest at the auction. He could not say whether the third defendant was present in person at the auction sale or was represented d by an agent. He agreed that there was a complaint by the first plaintiff to their head office about the sale. The area manager at the time was retired in a subsequent general exercise when he had not reached the retiring age. e The first defendant contended that as the legal mortgage was the basis for the banking facility granted to the second plaintiff, they could not, in law and equity, take benefit of f the loan and at the same time be heard to say that the instrument is invalid. It argued that there was adequate notice of the auction sale and that fraud was not proved. After reviewing the evidence and addresses by learned g Counsel on both sides of the divide, the learned trial Judge held that the deed of legal mortgage, exhibit B, was valid and enforceable. Learned trial Judge found that there was no sale by public auction. In the alternative, she found that, if h there was one, same did not comply with the mandatory requirement of section 19 of the Auctioneers’ Law, 1963. She found the transaction relating to sale by public auction tainted with fraud. She set aside the sale and decreed an or- i der of injunction restraining the sale of the mortgaged property. The appellant, as mortgagee, felt unhappy and has appealed to this Court. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION)

United Bank of Africa Plc v. Fidelia O. Okeke 153 a Held – 1. Where the provision of section 19 of the Auctioneers’ Law is not complied with as in this appeal, the purported b sale is rendered invalid. 2. It is indeed the law that in a dispute between a mortgagee and a mortgagor over the sale of the mortgagor’s property in the exercise of a power of sale under a deed c of mortgage, the complaint of the sale of the mortgaged property at under-value alone is not enough to vitiate the exercise of the mortgagee’s power of sale. That complaint must also be supported by credible evidence that d the sale was made at a gross under-value or that fraud can be inferred from the sale. In addition, the conduct of the mortgagee in the exercise of his power of sale can be impeached where, apart from fraud, collusion and bad faith are also established. e 3. In the present case, there is ample evidence on record as correctly found by the learned trial Judge establishing all these requirements in law justifying the setting aside of the sale of the mortgaged property. f 4. The trial court having held that the mortgage deed still remains valid and enforceable, granting the relief of perpetual injunction to the plaintiffs/respondents is tanta- mount to abolishing their right of redemption which un- g der the law is so inseparable an incident of a mortgage that it cannot be taken away even by express agreement of the parties. The right continues unless and until the mortgagor’s title is extinguished or his interest is de- h stroyed by a valid sale either under the process of the court or of a power in the mortgage deed incident to the security. Appeal allowed in part. i Cases referred to in the judgment

Nigerian j Barclays Bank D.C.O. v Olofintuyi (1961) All NLR 229

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION)

154 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Ejikeme v Okonkwo (1994) 8 NWLR (Part 362) 266 a Eka-Etah v Nigerian Housing Development Society Ltd (1973) All NLR (2ed) 555 b Erikitola v Alli 16 NLR 56 Federal Mortgage Bank v Babatunde (1999) 12 NWLR (Part 632) 683 c Fojule v Federal Mortgage Bank (2001) 2 NWLR (Part 697) 384 Gbadamosi v Kabo Travels Ltd (2000) 8 NWLR (Part 668) 243 d Globe Fishing Industries Ltd v Coker (1990) 7 NWLR (Part 162) 265 Henry Stephens Eng. Ltd v Complete Homes Ent. Ltd (1987) e 1 NWLR (Part 47) 40 Ihekwoaba v A.C.B. Ltd (1998) 10 NWLR (Part 571) 590 Ikeanyi v A.C.B. Ltd (1997) 2 SCNJ 93 f International Merchant Bank v Samba Petroleum Co Ltd (2000) 5 NWLR (Part 690) 232 Larbi v Kwabena 14 W.A.C.A. 299 g List v Barltt 4 W.A.C.A. 56 Maina v U.B.A. (1985) H.C.N.L.R 828 Management Enterprises Ltd v Kano Confectionery Ltd h (1966) NNLR 68 Nigerian Advertising Services Ltd v U.B.A. Plc (1999) 8 NWLR (Part 616) 546 i Nwobodo v Onoh (1984) 1 SCNLR 1 Oguchi v F.M.B. (Nig.) Ltd (1990) 6 NWLR (Part 156) 330 Okeke v State (2000) 10 NWLR (Part 675) 423 j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION)

United Bank of Africa Plc v. Fidelia O. Okeke 155 a Okonkwo v C.C. Bank (Nig.) Plc (1997) 6 NWLR (Part 507) 48 Okwunakwe v Opara (2000) 14 NWLR (Part 687) 334 b Oseni v American International Insurance Co (1985) 3 NWLR (Part 11) 229 Oshodi v Eyifu (2000) FNLR (Part 8) 1271 c Sanusi v Daniel (1956) NSCC 85 Taiwo v Adegboro (1997) 11 NWLR (Part 528) 224 Total Nigeria Ltd v Electrical and Mechanical Construction Co Ltd (1972) 8–9 SC 64 d U.B.N. Plc v Ayo Dare and Sons (2000) 11 NWLR (Part 679) 664 University of Lagos v Olaniyan (1985) 1 NWLR (Part 1) e 156 Yesufu v Kupper International NV (1996) 5 NWLR (Part 446) 17 f Nigerian statutes referred to in the judgment Auctioneers’ Law, Cap 12 Laws of Anambra State, 1963, section 19 g Constitution of the Federal Republic of Nigeria, 1999, sections 43, 44 Sales by Auction Ordinance, Cap 203 Laws of Nigeria, 1948, section 19(1) h Sheriffs and Civil Process Act, section 44

Foreign statute referred to in the judgment i Conveyancing Act, 1881, section 21(2) Counsel For the appellant: Mogbana j For the respondent: Ezekwem

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION)

156 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Judgment a FABIYI JCA: (Delivering the lead judgment) This is an appeal against the judgment handed out by M.U. Edozie J while sitting at the High Court of Justice, Enugu, on 15 Sep- b tember, 1998. In the suit before the trial court, the plaintiffs who are respondents herein claimed against the appellant herein and two others jointly and severally in paragraph 26 of the c statement of claim as follows:– “26(a) A declaration that the aforesaid deed of mortgage registered as No. 9 at page 9 in Vol. 1103 of the Lands Reg- istry in the office at Enugu is null and void and in any d event, not enforceable against the plaintiffs; (b) A declaration that the sale of the mortgaged property registered as No. 4 at page 4 in Vol. 1032 of the Lands Registry at Enugu otherwise known as and called No. 2 Kenyatta Street, Uwani, Enugu to the third defendant by e the second defendant as agent of the first defendant is irregular, unlawful, null and void and a fraud on the first plaintiff; (c) An order of court setting aside the purported sale of the f mortgaged property by public auction on 25 September, 1989; and (d) An order of perpetual injunction restraining the first defendant by itself, servant or agents from selling, alienat- g ing or otherwise dealing with the rights, title or interest of the first plaintiff in the mortgaged property.” The original first plaintiff, the late Godwin C. Okeke, was the mortgagor of his property at No. 2 Kenyatta Street, h Uwani, Enugu. During the pendency of the suit at the trial court, he passed on and was substituted by his wife, the respondent in this appeal. The second plaintiff/respondent took a loan of N30,000 from the appellant herein. Late Godwin C. Okeke mortgaged his stated property to the ap- i pellant as security. The deed of legal mortgage, dated 17 March, 1983, is exhibit B. The second plaintiff defaulted in the repayment of the loan. After due demands for payment were made to no avail, the appellant employed the services j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Fabiyi JCA United Bank of Africa Plc v. Fidelia O. Okeke 157 a of the second defendant, an auctioneer, to sell the mortgaged property. The third defendant was the “purchaser” of the mortgaged property at a “public auction”. b The property was advertised for sale by public auction on 24 September, 1989 in the Sunday edition of the Statesman Newspaper published in Owerri, Imo State. Sale was slated for 7.00 am prompt on 25 September, 1989. c After completion of the pleadings, the first plaintiff and two other witnesses who reside at the said property said that there was no auction sale on 25 September, 1989 and no notice of sale was posted on the mortgaged property prior to d the alleged sale. The first plaintiff maintained that the sale price of N150,000 was fraudulent because it was far below the true value of the 1989 professional assessment put at N565,500. There is the evidence that the property was sold e at a gross under-value to an in-law of appellant’s area manager. The auctioneer, the “purchaser”, as well as the area manager did not testify at the trial court. DW1, the witness called by the defendants, said at least f two weeks before the auction sale of 25 September, 1989, the auctioneer, second defendant, posted the notice of sale on the mortgaged property. He did not accompany the auctioneer to post the notice of sale. He said the professional g valuation of the property as at 1984 was N100,000 while an in-house valuation of 1988 put the value at N120,000. He said the third defendant’s bid of N150,000 was the highest at the auction. He could not say whether the third defendant h was present in person at the auction sale or was represented by an agent. He agreed that there was a complaint by the first plaintiff to their head office about the sale. The area manager at the time was retired in a subsequent general ex- i ercise when he had not reached the retiring age. The first defendant contended that, as the legal mortgage was the basis for the banking facility granted to the second plaintiff, they could not, in law and equity, take benefit of j the loan and at the same time be heard to say that the

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Fabiyi JCA 158 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) instrument is invalid. It argued that there was adequate no- a tice of the auction sale and that fraud was not proved. After reviewing the evidence and addresses by learned Counsel on both sides of the divide, the learned trial Judge b held that the deed of legal mortgage, exhibit B, was valid and enforceable. Learned trial Judge found that there was no sale by public auction. In the alternative, she found that if there was one, same did not comply with the mandatory re- c quirement of section 19 of the Auctioneers’ Law, 1963. She found the transaction relating to sale by public auction tainted with fraud. She set aside the sale and decreed an order of injunction restraining the sale of the mortgaged d property. The appellant, as mortgagee, felt unhappy and has appealed to this Court. Five grounds of appeal accompanied its e notice of appeal. On page 2 of the appellant’s brief of argument, three issues for determination read as follows:– “1. Whether the trial Judge was correct in setting aside the sale of the mortgaged property. f 2. Whether the trial Judge should not have compensated the plaintiffs in damages since she found, as a fact, the true value of the mortgaged property and that it was sold by private contract, howbeit at undervalue; and g 3. Was the trial Judge right in making an order of perpetual injunction restraining the sale of the mortgaged property?”

The learned Counsel for the respondents was at one with the h appellant’s Counsel only in respect of the first issue distilled on behalf of the appellant as reproduced above. The learned Counsel for the appellant observed that the sale of the property is impeached on the main ground that i the auction sale was not properly conducted, especially regarding the notice of sale and the price obtained for the property. The trial Judge held that it was too low to suggest that the sale was fraudulent. Learned Counsel referred to the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Fabiyi JCA United Bank of Africa Plc v. Fidelia O. Okeke 159 a case of Eka-Eteh v Nigerian Housing Development Society Ltd (1973) All NLR (2ed) 555. An auction sale at under-value alone is not enough to viti- b ate the exercise of a mortgagee’s power of sale unless same was made at gross under-value or fraud can be inferred. The conduct of a mortgagee in his exercise of a power of sale can be impeached where fraud, collusion or bad faith is es- c tablished (refer to Gbadamosi v Kabo Travels Ltd (2000) 8 NWLR (Part 668) 243 at 274; Nigerian Advertising Services Ltd v U.B.A. Plc and another (1999) 8 NWLR (Part 616) 546; Okwunakwe v Opara (2000) 14 NWLR (Part 687) d 334; Ihekwoaba v A.C.B. Ltd (1998) 10 NWLR (Part 571) 590 at 609–610). Learned Counsel felt that the learned trial Judge wrongly applied the provision of section 19 of the Auctioneers’ Law e of Eastern Nigeria, 1963 which she felt was mandatory and failure to comply with same by the auctioneer vitiated the sale. He observed that the view is supported by the decisions of this Court in Taiwo v Adegboro (1997) 11 NWLR (Part f 528) 224 at 235–236 and Ihekwoaba v A.C.B. Ltd (supra). He felt that the decisions in these cases conflict with the views in Sanusi v Daniel (1956) NSCC 85 and Momodu Raji v Williams (1941) 16 NLR at 16–17. g I wish to stress the point here that issues joined by the parties at the trial court which are relevant to the appeal relate to whether a sale by public auction of the mortgaged prop- h erty actually took place and, if it did, was the sale a valid one? The last point that is of moment is whether an order of injunction is appropriate to restrain the legal right of the appellant as mortgagee from exercising his undoubted power i of right of sale. The learned trial Judge made many salient findings of fact that are difficult to impugn by any one. Indeed, the appellant’s Counsel did not attempt to impeach or even cast any j form of aspersion on the findings of fact. It is pertinent to

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Fabiyi JCA 160 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) recollect same at this juncture. It was found that no notice of a sale was posted at the premises of No. 2 Kenyatta Street, Uwani, the subject-matter of the suit. The notice of sale given in the Sunday Statesman was in contravention of sec- b tion 19 of the Auctioneers’ Law which requires at least seven days’ notice prior to sale. No sale by public auction ever took place as claimed by the defendants. The third defendant was not a purchaser for value without notice. The c learned trial Judge found that the transaction regarding the sale was fraught with fraud, collusion and bad faith on the part of the defendants. It is clear that the transaction by which the property d was sold by the auctioneer, second defendant, to the third defendant, a close person to the first defendant/appellant’s manager at the material time, at a gross under-value of N150,000 instead of N565,500 – a pragmatic assessment at e the material time is indicative of collusion. I agree with the learned trial Judge that such smells of fraud and bad faith. The findings are extant in the judgment under attack. They are supportable and arrived at after a proper and dispassion- f ate review of the evidence before her. The findings are not perverse or against the current or flow of evidence. I cannot interfere with same. The learned trial Judge was thus right in nullifying the purported sale and setting same aside. g There is no appeal against those salient findings of fact. They are serious enough to lead to the setting aside of the purported sale. Findings of fact not appealed against remain binding on the appellant herein and its cohorts. It is not for h the appellant to pick and choose the point on which to appeal and leave out a vital determinant point as done in this appeal. Once a vital ground upon which a judgment is predicated is not appealed against, the judgment remains intact i (refer to U.B.N. Plc v Ayo Dare and Sons (2000) 11 NWLR (Part 679) 664 at 649; Oshodi v Eyifu (2000) FNLR (Part 8) 1271 at 1278; Yesufu v Kupper International NV (1996) 5 NWLR (Part 446) 17). j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Fabiyi JCA United Bank of Africa Plc v. Fidelia O. Okeke 161 a The next point relates to the application of section 19 of the Auctioneers’ Law of Eastern Nigeria, 1963. It provides that a notice of sale by auction be given seven clear days be- b fore same is carried out. The sale was advertised in the Sun- day Statesman issue of 24 September, 1989. It is not in dispute that the purported sale was carried out on 25 Septem- ber, 1989. The appellant attempted to sidetrack the potency c of the law by referring to the decisions in Sanusi v Daniel (supra) and Raji v Williams (supra). The decision in Sanusi v Daniel was based on the principle relating to “bona fide purchaser for value without notice”. The Federal Supreme Court upheld the title of the purchaser based on the finding d that he was a purchaser for value without notice of the defect in the title of the vendor. The opposite is the prevalent position in this appeal as the third defendant has been found not to be a bona fide purchaser for value. He, indeed, was a e mala fide purchaser for gross under-value as has been shown earlier in this judgment. Apart from the above, the decisions in the two cases were f based on section 21(2) of the Conveyancing Act, 1881. It is doubtful whether the provision of this Act of 1881 can modify the express provision of section 19 of the Auctioneers’ Law, 1963. It is of moment here to refer to the case of Henry g Stephens Eng. Ltd v Complete Home Ent. Ltd (1987) 1 NWLR (Part 47) 40 at 50. Obaseki JSC pronounced with force that it is not permissible to apply foreign received law which has been supplanted by local law in any state in h Nigeria. Let me make the point that should section 21(2) of the Conveyancing Act, 1881 apply, such will only relate to a bona fide purchaser for value without notice of any irregu- i larity (see List v Barltt (1938) 4 W.A.C.A. 56; Erikitola v Alli 16 NLR 56; Barclays Bank D.C.O. v Olofintuyi (1961) All NLR 229). I strongly feel that the sale was rightly held to be invalid. j In similar circumstances as herein, this Court in its many

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Fabiyi JCA 162 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Divisions held that where the provision of section 19 of the a Auctioneers’ Law is not complied with, as in this appeal, the purported sale is rendered invalid (refer to Chief F.B. Oseni v American International Insurance Co (1985) 3 NWLR b (Part 11) 229; Sunday Adegbite Taiwo v Sarah Adegboro and others (1997) 7 NWLR (Part 528) 224; Fojule v Federal Mortgage Bank (2001) 2 NWLR (Part 697) 384 at 393). I have no atom of hesitation in saying that the purported c sale of the mortgaged property to the third defendant is invalid because of the non-compliance with the provisions of section 19 of the Auctioneers’ Law. It has become a truism that an invalid act is as if nothing has happened. It is a for- d mality to declare same as null and void as well as get it set aside as done by the learned trial Judge. I affirm same. The last point that is worthy of note and consideration is e whether the trial Judge was right in making an order of injunction restraining the sale of the mortgaged property. The appellant’s Counsel conceded that the trial Judge is within her jurisdiction and competence to set aside a sale that is ir- f regularly or otherwise improperly conducted. But the court has no power or authority to restrain the enforcement of a legal right conferred on the mortgagee by the legal mortgage. He referred to the case of Akibu v Oduntan (1991) 2 NWLR (Part 171) 1 at 10. Therein, the Supreme Court pro- g nounced that 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. It should be said with more force that a perpetual injunction should not be granted h to restrain the lawful enjoyment of a legal right as found by the learned trial Judge. The injunction order which was dished out precludes the appellant from enjoying its legal right, to wit: the power of sale provided for in the legal i mortgage. The power of sale exists once the learned trial Judge found in favour of the legal mortgage as binding between the parties. The respondents did not say that the power does not exist. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Fabiyi JCA United Bank of Africa Plc v. Fidelia O. Okeke 163 a In sum, the order of injunction restraining the appellant from selling the mortgaged property, with respect, was totally out of place. It should not have been made in the first instance. I agree that the order of injunction made is unjust b in the circumstance; being an equitable remedy. The order of injunction stands discharged. From all that I have discussed above, the purported sale of c the mortgaged property remains set aside. The appeal succeeds partially as the order of injunction made to restrain the appropriate sale of the mortgaged property is hereby discharged. I feel each party should bear its or her costs. I order accordingly. d MOHAMMED JCA: My learned brother, Fabiyi JCA, had permitted me before today to read his judgment which he has just delivered in this appeal. I completely agree with him that this appeal should partially succeed. e On the first issue for determination in this appeal, it is indeed the law that, in a dispute between a mortgagee and a mortgagor over the sale of the mortgagor’s property in exer- f cise of a power of sale under a deed of mortgage, the complaint of the sale of the mortgaged property at under-value alone is not enough to vitiate the exercise of the mortgagee’s power of sale. That complaint must also be supported by credible evidence that the sale was made at gross under- g value or that fraud can be inferred from the sale. In addition, the conduct of the mortgagee in exercise of his power of sale can be impeached where, apart from fraud, collusion and bad faith are also established (see Oguchi v Federal Mort- h gage Bank (Nigeria) Ltd (1990) 6 NWLR (Part 156) 330 at 343 and Okonkwo v Co-operative and Commerce Bank (Ni- geria) Plc (1997) 6 NWLR (Part 507) 48 at 60). In the present case, here is ample evidence on record, as correctly i found by the learned trial Judge, establishing all these requirements in law justifying the setting aside of the sale of the mortgaged property. However, with regard to the third issue for determination j in this appeal as to whether or not the learned trial Judge

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Mohammed JCA 164 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) was right in making an order of perpetual injunction re- a straining the sale of the mortgaged property, the answer is certainly in the negative. This is because a relief of perpetual injunction can only be granted after a full trial and where the b plaintiff/applicant has established his right and an actual or threatened infringement of that right (see Globe Fishing In- dustries Ltd and others v Coker (1990) 7 NWLR (Part 162) 265 at 293). In the instant case, there is no actual or threat- c ened infringement of the respondent’s right. The plaintiffs/respondents claim in their first relief for a declaration that the mortgage deed registered as No. 9 at 9 in Vol. 1103 of the Lands Registry in the office at Enugu was null and d void and in any event not enforceable against them, having failed and rightly refused by the learned trial Judge, their claim for perpetual injunction in the fourth relief which was derived from the first relief ought to have also failed. This is e because with the failure of the plaintiffs’ first relief, their fourth relief for perpetual injunction automatically goes with it. In any case the trial court having held that the mortgage deed still remains valid and enforceable, granting the relief f of perpetual injunction to the plaintiffs/respondents is tanta- mount to abolishing their right of redemption which under the law is so inseparable an incident of a mortgage that it cannot be taken away even by express agreement of the par- g ties. The right continues unless and until the mortgagor’s title is extinguished or his interest is destroyed by a valid sale either under the process of the court or of a power in the mortgage deed incident to the security (see Ejikeme v Ok- h onkwo (1994) 8 NWLR (Part 362) 266 at 278). With these few comments, I also partly allow this appeal without any order on costs. i OLAGUNJU JCA: I have had the opportunity of reading in advance the judgment just delivered by my learned brother, Fabiyi JCA. I associate myself with his view that the sale of the first respondent’s mortgaged property by the mortgagee/ appellant in exercise of her power of sale under the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Olagunju JCA United Bank of Africa Plc v. Fidelia O. Okeke 165 a mortgage deed is riddled with irregularities that vitiate the sale. For one thing, there was no adequate notice of the sale publicised by the auctioneer as prescribed by the law and for another the sale was made at a ridiculous under-value that b gave rise to the inference of collusion between the appellant’s agents and the purchaser. Admittedly, the general principle is that the sale of mort- c gaged property at a low price alone is not enough to vitiate the exercise of the power of sale under a mortgage agreement. To impeach a sale it must be established that the sale was made at a fraudulent or gross undervalue because the d seller “is expected to obtain ‘not the best price’ but ‘a proper

price’ ” (see Eka-Etah v Nigerian Housing Development So- ciety Ltd (1973) 6 SC 183 at 198). There was, nevertheless, overwhelming evidence of collusion that led the learned trial e Judge to conclude that the sale of the first respondent’s property was unscrupulous and one which in all conscience must not be allowed to stand. What with the fact that the sale of the property was made to an in-law to the appellant’s area f manager at the material time and that the sale was made at a gross under-value of N150,000 of the property which market value was assessed to be N565,500 shortly before the sale. These are facts from which the learned trial Judge drew the g inference of collusion and fraud that coloured the sale of the first respondent’s property. The inference is justified by the overwhelming evidence which was not denied and could not have been rebutted by the appellant where the principal ac- h tors in the saga, the auctioneer and the purchaser who were also the second and third defendants, did not testify at the trial and where the appellant’s area manager who was the linchpin of “the wheeler dealing” also failed to testify at the i trial in the face of the serious allegation of nepotism and trickery levelled against him. Indeed, the facts of this case are on all fours with the facts of the decision in Alhaji Has- san Maina v United Bank for Africa Ltd (1985) H.C.N.L.R. j 828 at 843–846, to justify setting aside the sale for alarming

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Olagunju JCA 166 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) irregularities that undermined candour and reduced the a whole sale to a stage-managed transaction that put fairness and equity to flight. But no less a fatal error that goes into the root of the sale is b the failure of the auctioneer to publish in due order the statutory notice of the sale which the court below held to be in violation of section 19 of the Auctioneers’ Law of Eastern Nigeria, 1963, the correct citation of which is “Cap 12 of the c Laws of Anambra State” (see Ikeanyi v A.C.B. Ltd (1997) 2 SCNJ 93) applicable also in Enugu State. For a brief survey of the historical development of legislation in Anambra and Enugu States in recent times, see Gozie Okeke v The State d (2000) 10 NWLR (Part 675) 423 at 442–444. The section stipulated in material part that “no sale by auction of any land shall take place until after at least seven days public notice made thereof at the principal town of the district in e which the land is situated . . .” This is a point that has been particularly controverted and one on which I feel at liberty to comment at large. f The argument of learned Counsel for the appellant that section 19 of the Auctioneers’ Law cannot be applied to invalidate the sale on the ground that the requisite length of notice prescribed by the Law was not given by the auctioneer before the sale was made was based on the knotty point g of whether the decisions of this Court in Taiwo v Adegboro (1997) 11 NWLR (Part 528) 224 at 235–236 and Ihekwoaba v A.C.B. Ltd (1998) 10 NWLR (Part 571) 590 at 609, 610 were rightly decided. He argued that the two decisions are in h conflict with the decision of the Supreme Court in Sanusi v Daniel (1956) 1 FSC 93, which held that by operation of section 21(2) of the English Conveyancing Act, 1881, which is a statute of general application the title of a bona fide pur- i chaser for value to whom a property is sold by a mortgagee in exercise of his powers of sale under a mortgage agreement cannot be defeated by failure to give adequate notice of sale under section 19(1) of the Sales by Auction j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Olagunju JCA United Bank of Africa Plc v. Fidelia O. Okeke 167 a Ordinance. The relief of an aggrieved mortgagor, if any, is in damages against the seller the learned Counsel contended. I am of the same view with my learned brother, Fabiyi b JCA, that, firstly, on the facts of this case, the decision in Sanusi v Daniel (supra) is distinguishable on facts because the duplicity and fraud in which the sale is shrouded are a negation of acting in good faith. Secondly, I share the view c of this Court in Fojule v Federal Mortgage Bank of Nigeria (2001) 2 NWLR (Part 697) 384 at 392, per Amaizu JCA, on the authority of Henry Stephens Engineering Co Ltd v Com- plete Home Enterprises Nigeria Ltd (1987) 1 NWLR (Part d 47) 40, that where there is a comprehensive or complete local law on a particular matter or field such that there is no lacuna to be filled by reference to the provision of any other law, the local law is to be regarded as self-sufficient in the e sense of replacing any “received law” such as a Statute of General Application. In this regard, the English Convey- ancing Act of 1881 with its impact on the Sales by Auction Ordinance (Cap 203) of the Laws of Nigeria, 1948, a precur- f sor of the current Auctioneers’ Law, has become spent or obsolete, at any rate, for the purpose of the effect of notice of sale of land by an auctioneer. With that the decision in Sanusi v Daniel (supra) was a decision based on an obsolete legislation and, therefore, inapplicable to the point at issue. g In any case, section 19 of the Auctioneers’ Law of Enugu Suite is substantially similar in scope to section 19 of the Auctioneers’ Law (Cap 10) of the Laws of the former h Northern Nigeria, 1963, which is applicable in both Kwara and Niger States of Nigeria. The operative words of the material part are identical prescribing publication of notice of sale of land for at least seven days before a proposed sale i takes effect. In Federal Mortgage Bank of Nigeria v Babatunde (1999) 12 NWLR (Part 632) 683 at 691–692, section 19 of the Kwara State Auctioneers’ Law came for interpretation by j this Court where an auctioneer sold by auction a piece of

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Olagunju JCA 168 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) land in Ilorin, Kwara State, after giving only a day’s notice a of the sale. This Court held that as the period of notice given fell short of the seven days laid down by section 19 of the Law the notice was ineffective and, therefore, invalidated b the sale made pursuant to the ineffective notice. Similarly, the same provision of section 19 of the Auctioneers’ Law was considered by this Court in International Merchant Bank Plc v Samba Petroleum Co Ltd (2000) 5 NWLR (Part 690) 232 at 246, to determine whether the requirement of the c section was satisfied where an auctioneer also sold by auction a piece of land at Suleja in Niger State after publication of the sale only once in a national newspaper. It was also held that the requirement of section 19 of the Law was not d met where a sale of land was conducted without giving a minimum of seven days’ notice stipulated by section 19 of the Law and, therefore, failure to give the statutorily prescribed notice rendered the sale as one done without a valid e notice and, therefore, null and void. There followed the decision of this Court in Fojule v FMBN (supra), in which, after a searching review of the authorities on the point at issue, at 392–393, it was held that under the Auctioneers’ Law of f the former Northern Nigeria applicable in Kwara State failure to give the seven days’ public notice of the sale by an auctioneer rendered the sale conducted in default of the prescribed length of notice to be null and void relying on the g earlier decision of this Court in Oseni v American Interna- tional Insurance Co Ltd (1985) 3 NWLR (Part 11) 229, rendered on a similar legislation of the Lagos State. The operative part of section 19 of the Auctioneers’ Law h of Enugu State having been shown to be identical with the corresponding provision of the Auctioneers’ Law of the former Northern Nigeria, 1963, applicable in Kwara and Ni- ger States of Nigeria the provisions of the two sets of law i are in pari materia. The result is that the interpretation of section 19 of the Auctioneers’ Law of Kwara and Niger States in FMBN v Babatunde (supra); International Mer- chant Bank Plc v Samba Petroleum Co Ltd (supra) and j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Olagunju JCA United Bank of Africa Plc v. Fidelia O. Okeke 169 a Fojule v FMBN (supra) applies to the provision of section 19 of the Auctioneers’ Law of Enugu State (see Nwobodo v Onoh (1984) 1 SCNLR 1 at 25; and University of Lagos v b Olaniyan (1985) 1 NWLR (Part 1) 156). Therefore, the learned trial Judge came to the correct decision that, going by the second defendant, the auctioneer, only a day’s notice of the sale of the first respondent’s property is erroneous as c in conflict with section 19 of the Auctioneers’ Law of Enugu State that provides for at least seven days’ public notice of the sale; that the sale was thereby rendered void as one conducted without the requisite statutory notice. It is cadit quaestio. d However, it is proper to express as an epilogue to the controversy over the effect of a pre-sale notice a general view on the rationale for the constraints imposed by section 19 of e the Auctioneers’ Law on auction sale of land from two standpoints, namely, as a corollary of the constitutional right of the citizenry and the need to secure a balance between sale as an incident a quasi private arrangement vis-à-vis a f sale in furtherance of the execution of a judgment of the court. The restriction that statutory notice of sale for a specific period must be given before selling the property of a mort- g gagor in exercise of the power of sale by the mortgagee is not a mere formality, it is a necessity that arose from the right of the mortgagor as a citizen of this country “to acquire and own immovable property anywhere in Nigeria” guaran- h teed by section 43 of the Constitution of the Federal Repub- lic of Nigeria, 1999, and the imperative by section 44 thereof that he cannot be deprived of such property compul- sorily except on occurrence of any of the contingencies i therein enumerated which must be established. Thus, if he must be deprived of his proprietary right over his land, the person seeking to deprive him of the right must fulfil the conditions laid down before such a deprivation can be al- j lowed to take effect.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Olagunju JCA 170 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

The restriction on deprivation is common whether, as in a this case, it is by a quasi private agreement between two citizens or whether the deprivation is done pursuant to execution of judgment as provided by the Sheriffs and Civil b Process Act or Law. As regards sale of immovable property, the restriction imposed on sale by auction by section 19 of the various State Auctioneers’ Laws as regards the statutory notice of sale of land is comparable to the constraints im- c posed on levying execution on immovable property of a judgment debtor by the combined provisions of section 44 of the Sheriffs and Civil Process Act and rules 6 and 7 of Order VII coupled with rules 9 and 10 of Order V of the Judg- d ments (Enforcement) Rules made under the Act and the par- allel provisions of the various State Laws and Rules on enforcement of judgments. As regards failure to fulfil the conditions precedent to the e sale of immovable properly in execution of judgment of the court including dereliction of duty on the part of the court officials leading to setting aside the sale made as a result of the error the decisions in Larbi v Kwabena (1953) 14 f W.A.C.A. 299; Management Enterprises Ltd v Kano Con- fectionery Ltd (1966) NNLR 68 and Total Nigeria Ltd v Electrical and Mechanical Construction Co Ltd (1972) 8–9 SC 64 (with the lower court’s decision reported as (1971) g NNLR 38), bring out in bold relief the gravity and consequence of such lapses which, more often than not, tilts heavily against the purchaser. It is obvious from the comparison drawn between execu- h tion of sale of landed property arising from the power of sale under a mortgage agreement (a quasi private arrangement) and one made pursuant to the execution of judgment that has passed between the upper and nether millstone of judicial i sifting that sales under the two processes are subject to control as to date, time, place and notice. It will sound absurd, lopsided and unfair if the conditions for sale of landed property under a mortgage agreement can be treated with j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Olagunju JCA United Bank of Africa Plc v. Fidelia O. Okeke 171 a indulgence not enjoyed by a sale made pursuant to the execution of judgment of the court as regards publication of notice to sell made mandatory as a matter of policy. There lies b the inequity of diving for cover under subsection 21(2) of the English Conveyancing Act of 1881 to stifle the restriction imposed on sale by auction under section 19 of the Auc- tioneers’ Law. c In any case, on the condition precedent to the sale of the mortgaged property, failure to give the length of the notice prescribed by section 19 of the Auctioneers’ Law has dealt, in limine, a fatal blow to the purported sale of the property d by the appellant’s auctioneer on 25 September, 1989, a blunder which cannot be saved by a resort to an artifice woven round subsection 21(2) of the English Conveyancing Act of 1881 which has been superseded by its home-grown e counterpart in section 19 of the Auctioneers’ Law that is more direct to the point at issue. But more deadly is the coup de grace dealt to the appeal on the merits for the conclusion is inescapable that the sale of the mortgaged property that is f steeped in collusion and outright fraud ought not to be allowed to stand. The learned trial Judge was, therefore, right in setting aside the sale. g In consequence, I agree with the leading judgment that the appeal against setting aside the sale by the learned trial Judge fails and should be dismissed. I also dismiss it. As regards the order of injunction restraining the appellant from h selling the respondent’s mortgaged property, the order is putting in shackles the appellant’s right of sale under the mortgage deed. This the trial court cannot do as that will amount to re-writing the parties’ agreement and contracting i the appellant’s rights thereunder. I also set aside the injunc- tive order as being ultra vires the powers of the learned trial Judge. In the result, the appeal against the decision setting aside j the sale of the first respondent’s mortgaged property is

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, ENUGU DIVISION) Olagunju JCA 172 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) dismissed. The order of injunction restraining the appellant a from selling the mortgaged property is discharged. I abide by the order for costs made in the leading judgment. Appeal allowed in part. b

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 173 a Owoniboys Tech. Services Limited v Union Bank of Nigeria Limited b SUPREME COURT OF NIGERIA EJIWUNMI, KALGO, KATSINA-ALU, MOHAMMED, UWAIFO JJSC Date of Judgment: 11 JULY, 2003 Suit No.: SC.168/1999 c Land law – Consent of Governor – Alienation of land by holder of statutory certificate of occupancy – Who to seek Land law – Merger of estates – How created – When does it arise d Land Use Act – Alienation of land – Principles governing – Section 22 of the Land Use Act, 1978 Mortgage – Consent of Governor – Mortgage of property to e bank – Consent of Governor received – Bank granting more advances and executing deeds in respect of them and on the same property but not seeking the consent of Governor to these subsequent deeds – Whether the deeds are a nullity f Mortgage – Interest rate in mortgage deed – Clause empowering mortgagee to charge interest rate as deemed necessary – Attitude of court g Mortgage – Merger of estates – How created – When does it arise Mortgage – Original deed of – Further loans – Upstamping h – Whether separate deed required for subsequent loans on the same property

Facts i The facts of the case were that the appellant applied for a secured loan of N50,000. It used its landed property at Oja Iya, Taiwo Road, Ilorin, as collateral. A deed of mortgage was executed for this purpose with the Governor’s consent. j That is exhibit 4. Later the loan was increased to N100,000

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

174 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) and another deed of mortgage was executed to reflect this a amount, which deed was accordingly upstamped. It is exhibit D1. Still later, the loan was increased to N200,000. The same procedure was followed. The deed is exhibit 5. The b Governor’s consent was not sought in respect of exhibits D1 and 5. The respondent alleged that the appellant failed to repay the loan together with the accrued interest in accordance c with the terms of the agreement. It decided to exercise its power of sale of the property as provided under the deed of mortgage. The appellant on the other hand disputed it was owing. It alleged that it discovered several multiple debits of d particular cheques which when sorted out would leave it with an enormous credit balance. It also contended that the Governor’s consent was not obtained for exhibits D1 and 5 and that they were null and void as a result. It then argued e that since exhibit 4 has ceased to exist on the principle of merger, there was no valid mortgage upon which the power to sell its property could be exercised by the respondent. Fi- nally, it contended that even if there was a subsisting deed of f mortgage, the originally agreed interest rate could not be increased by the respondent and used to calculate its liability without both parties agreeing upon such an increase. It was on the basis of these contentions that the appellant g brought action at the High Court, Ilorin, for the following reliefs in paragraph 32 of the further amended statement of claim:– “(i) Declaration that the mortgages between the plaintiff and the h defendant covering the plaintiff’s property situate, lying and being at Taiwo Road, Ilorin are illegal, unlawful, unenforceable and irregular. (ii) An order setting aside the mortgages. i (iii) Alternatively, declaration that the defendant is not entitled to sell any property of the plaintiff without complying with the Land Use Act and the Auctioneers Law applicable to Kwara State. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 175 a (iv) Declaration that the defendant is only entitled to charge on the plaintiff account interest at the rate prevailing when facility was granted to the plaintiff. (v) Declaration that the debit balance in the account of the b plaintiff is not a true and accurate reflection of the indebtedness of the plaintiff, if any, to the defendant. (vi) Injunction restraining the defendant by themselves, their agents, servants and or privies or otherwise howsoever from c selling the plaintiff’s property pursuant to the said mortgages. (vii) Declaration that the deeds of mortgage registered as No. 122/122/1 and 45/45/6 respectively have been discharged d by their incorporation in the Deed registered as No. 94/94/8. (viii) An order directing the defendant to pay to the plaintiff the sum of N500,000 or any amount the court may find the plaintiff entitled to recover from the defendant.” e On 14 April, 1994 the trial court (per Gbadeyan J) gave judgment for the appellant in respect of all the reliefs claimed in the said paragraph 32 when the judgment was concluded thus:– f “The bank has been shown by both PW1 and PW2 to have wrongfully debited N550,000 against the plaintiff. There is no evidence to contradict that the debit entry of N550,000 was wrongful. On the preponderance of evidence the plaintiff’s case for its award is established. g Consequently, the plaintiff’s case which is in the alternative, succeeds in its entirety and the defence fails. All the reliefs claimed in paragraph 32 of the further amended statement of claim are hereby granted.” h The Court of Appeal, Kaduna Division, on 25 November, 1996 set aside the judgment and dismissed the claim. The appellant, however, appealed to the Supreme Court. i Held – 1. The position of section 22 of the Land Use Act is clearly this: A holder of a right of occupancy may enter into an agreement or contract, with a view to alienating his said j right of occupancy. To enter into such an agreement or

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

176 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

contract, he does not need the consent of the Governor. a He merely operates within the first stage of a “transfer on sale of an estate in land” which stage ends with the formation of a binding contract for a sale constituting an b estate contract at best. But when he comes to embark on the next stage of alienating or transferring his right of occupancy which is done by a conveyance or deed, culminating in vesting the said right in the “purchaser”, he must obtain the consent of the Governor to make the c transaction valid. If he fails to, then the transaction is null and void under section 26 of the Act. It is necessary to bear these two stages clearly in mind. d 2. The holder of a statutory right of occupancy is certainly not prohibited by section 22(1) of the Act from entering into some form of negotiations which may end with a written agreement for presentation to the Governor for his necessary consent or approval. This is because the e Land Use Act does not prohibit a written agreement to transfer or alienate land. So long as such a written agreement is understood and entered into subject to the consent of the Governor, there will be no contravention f of section 22(1) of the Land Use Act by the mere fact that such a written agreement is executed before it is forwarded to the Governor for his consent. 3. It is the owner of a statutory certificate of occupancy that g is obliged to obtain the consent of the Governor of the State where the land in respect of which he wishes to sell, transfer or mortgage etc by virtue of section 22 of the Land Use Act, and the relevant provisions of the h Land Tenure Law of Northern Nigeria. 4. The appellant in the instant appeal sought and obtained the consent of the Governor when it sets out to obtain the first loan for the sum N50,000 in 1973. By that i transaction, it effectively transferred its interest in the land to the respondent as clearly spelt out in the mortgage deed. True enough, he obtained further overdrafts and deeds of mortgages were executed to effect the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 177 a transaction upon the same property upon which the first loan of N50,000 was obtained. 5. For a merger to be created in such transactions, such an b intention must be evinced in the document from the documents executed by the parties, or such evidence as would indicate the intention of the parties that they envisaged a merger of the mortgages with one another. c 6. If the parties have agreed between themselves upon the conditions for the formation of a contract and, as in this case, those conditions were embodied in documents as in exhibits 4, D1 and 5, then they are bound by the terms d and conditions set down in the documents, and which was duly executed as was done in this case. Having so bound themselves, it is not the function of the court to make a contract for the parties. e 7. Per curiam “In the instant case, each of the exhibits 4, D1 and 5 the mortgage deeds has as their terms and conditions a clause 3 which reads thus:– f ‘All interest payable on the moneys hereby secured shall accrue due from day to day at the rate from time to time stipulated by the bank and may be capitalised at such intervals as the bank may from time to time prescribe but g not more often than monthly and added to the moneys hereby secured and shall thereupon bear interest accordingly at the rate aforesaid.’ It is interesting that in the case of U.B.N. v Ozigi (1994) 3 h NWLR (Part 333) 385, a clause similar in material terms was inserted in the mortgage deed that had to be considered in determining the merits of that appeal. In the course of the consideration of the meaning and effect of that clause, it was observed as I have done above that the court cannot i make a contract for the parties or to rewrite the one they have made for themselves.” 8. Per curiam “Adio JSC in that case then went on to make the following j observation:

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

178 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

‘In other words, the words in a document must first be a given their simple and ordinary meaning and under no circumstances may new or additional words be imported into the text unless the document would in absence of that which is imported impossible to understand. The b presumption is that the parties have intended what they have in fact said so that their words must be construed as they stand. See Solicitor General, Western Nigeria v Adebonojo (1971) 1 All NLR 178.’ c And further on at 405, His Lordship said thus:– ‘The provision of clause 3 of the mortgage agreements is clear and unambiguous. It is possible to understand and apply it as it stands. There was, therefore no necessity to d import new or additional words into it to require prior consultation with, or the giving of prior notice of increase in rates of interest on the loan in question to the respondent. Therefore, failure of the appellant to hold prior consultation with or to give prior notice to the re- e spondent about increase in rates of interest on the loan could not, as the Court of Appeal held, result in the nullification of the interest rates stipulated under the provi-

sion of clause 3 of the mortgage agreements.’ ” f 9. If there is a debt which is supported by a mere simple contract, when this is replaced by a bond or covenant, or a judgment in respect of the simple contract debt, there is no need to rely on the simple contract. It would have g been replaced by either the judgment or by a bond or covenant which is obviously a higher security of better dependability. Neither of them extinguishes the debt (it indeed protects the debt) but the simple contract which it h replaces. 10. Per curiam “In my view, it was a misconception, with due respect, to rely on the passage in question from Halsbury’s as authority i for saying that exhibits D1 and 5 extinguished exhibit 4 and with it the Governor’s consent. The said exhibit 4 represents the actual mortgage of the property concerned for which the Governor’s consent was obtained. That exhibit, as rightly argued by Mr Ali, S.A.N., might have sufficed by j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 179 a upstamping it to reflect the increase in loan. Mr Ali’s contention of upstamping an original mortgage deed in case of an increase in the loan first agreed, is right as I said, but purely on principle. To make it practical, the conveyancing b procedure of drawing up such a deed must make provision for that contingency, so that by the mere endorsement of the deed with the amount of the increase in the loan, it can be upstamped for the increase. This can be done as often as oc- c casion demands without having to execute a new deed.” 11. Per curiam “But there is nothing wrong with the way exhibits D1 and 5 came to be executed in the circumstances of exhibit 4. Ac- d tually, with the draftsmanship of exhibit 4, I do not see how it could have been upstamped for the increased loans. That made exhibits D1 and 5 inevitable but they certainly did not call for the Governor’s consent to be able to increase the e loan which both parties agreed on. The Governor’s consent as indicated in exhibit 4 has nothing to do with the amount of the loan; the consent is for the alienation of the legal title in the property to the respondent (the mortgagee) in compliance with sections 22 and 26 of the Land Use Act, 1978, for f the period of the mortgage transaction. So, no further consent was necessary just because further loans had been obtained upon the same collateral. If exhibit 4 had been an equitable mortgage and exhibits D1 and 5 deeds of mortgage, g it would be in accordance with the principle for the latter to extinguish the former because they are both securities of a higher nature in legal valuation than an equitable mortgage.” h 12. A mere charge or equitable mortgage is extinguished by the taking of a formal mortgage, even though the mortgage does not confer a legal estate, and the sum from then on secured is the sum mentioned in the mortgage i notwithstanding that other sums were covered by the deposit. 13. A mortgage is not merged by the taking of a new mortgage on the same property to cover the original debt and j further advances.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

180 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

14. The consent of the Governor for the mortgage transac- a tion covers all the deeds of mortgage. Those deeds are in respect of one transaction, namely a mortgage to secure money-lending although the lending came to involve a b first advance and further advances. It does not matter whether the Governor’s consent came before or after negotiation for the lending was concluded. 15. The argument of the appellant that the interest rate of c 10% stipulated in the mortgage deed cannot be varied in line with clause 3 has failed to take account of the wording of the clause and the statement of principle in this regard in Union Bank of Nigeria Ltd v Ozigi. d Appeal dismissed.

Cases referred to in the judgment Nigerian e Aderounmu v Olowu (2000) 4 NWLR (Part 652) 253 Awojugbagbe Light Industries Ltd v Chinukwe (1995) 4 NWLR (Part 390) 379 f Highgrade Maritime Services Ltd v F.B.N. Ltd (1991) 1 NWLR (Part 167) 290 Ike v Ugboaja (1993) 6 NWLR (Part 301) 539 International Agricultural Industries (Nig.) Ltd v Chika g Bros. Ltd (1990) 1 NWLR (Part 124) 70 International Textile Ind. (Nig.) Ltd v Aderemi (1999) 8 NWLR (Part 614) 268 h Nigerian Maritime Services Ltd v Afolabi (1978) 2 SC 79 Nwadike v Ibekwe (1987) 4 NWLR (Part 67) 718 Okubule v Oyagbola (1990) 4 NWLR (Part 147) 723 i Oyenuga v Provisional Council, University of Ife (1965) NWLR 9 Thor Ltd v F.C.M.B. Ltd (1997) 1 NWLR (Part 479) 35 U.B.N. v Ozigi (1994) 3 NWLR (Part 333) 385 j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 181 a Foreign Boaler v Mayor (1865) 144 ER 714; (1865) 19 C.B. (N.S.) 76 b Twopenny v Young (1824) 107 ER 711 Vaughan v Vanderstegen (1854) 61 ER 730 c Nigerian statutes referred to in the judgment Constitution of the Federal Republic of Nigeria, 1979, sections 220(1)(b), 221(1), 222(b) d Constitution of the Federal Republic of Nigeria, 1999, section 241(1)(a) Court of Appeal Act, Cap 75 Laws of the Federation of Ni- geria, 1990, section 25(2), (3), (4) e Land Registration Law, Cap 58 Laws of Northern Nigeria, 1963, section 18(1) Land Tenure Law, Cap 59 Laws of the Federation of Nige- f ria, 1990, section 27 Land Use Act, 1978, sections 22, 26

Books referred to in the judgment g Black’s Law Dictionary Halsbury’s Laws of England (4ed) Volume 16 paragraph 882 h Halsbury’s Laws of England (4ed) Volume 32 paragraphs 884, 886 and 887 Meggary and Wade Law of Property (4ed) pages 892–893 i Counsel For the appellant: Ali, S.A.N. (with him Oke and Ayodele (Mrs.)) j For the respondent: Salman, S.A.N. (with him Salman)

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

182 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Judgment a EJIWUNMI JSC: (Delivering the lead judgment) The thrust of this appeal filed against the judgment of the Court of Ap- peal (Kaduna Division – coram, Ogebe, M. Mohammed and b Muhammad JJCA) was for the purpose of overturning the judgment of that court which had reversed the judgment of the trial court. In that court, the appellant had commenced this action against the respondent for the following claims as c per paragraph 32 of its further amended statement of claim:– “(i) Declaration that the mortgages between the plaintiff and the defendant covering the plaintiff’s property situate, lying and being at Taiwo Road, Ilorin are illegal, unlawful, unen- d forceable and irregular. (ii) An order setting aside the mortgages. (iii) Alternatively, declaration that the defendant is not entitled to sell any property of the plaintiff without complying with e the Land Use Act and Auctioneers Law applicable to Kwara State. (iv) Declaration that the defendant is only entitled to charge on the plaintiff’s account interest at the rate prevailing when f facility was granted to the plaintiff. (v) Declaration that the debit balance in the account of the plaintiff is not a true and accurate reflection of the indebtedness of the plaintiff if any, to the defendant. g (vi) Injunction restraining the defendant by themselves their agents, servants and or privies or otherwise howsoever from selling the plaintiff’s property pursuant to the said mortgages. (vii) Declaration that the deeds of mortgage registered as No. h 122/122/1 and 45/45/6 respectively have been discharged by their incorporation in the deed registered as No. 94/94/8. (viii) An order directing the defendant to pay to the plaintiff the sum of N500,000 or any amount the court may find the i plaintiff entitled to recover from the defendant.” Following a further amended statement of claim filed by the appellant, the respondent also sought the leave of the court to file a further amended statement of defence, but that j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 183 a application was refused by the learned trial Judge. That refusal by the learned trial Judge to grant the prayer of the respondent became one of the grounds of appeal in the appeal b filed against the judgment of the trial court. The decision of the court below in that regard has also been the question in this appeal. It will be considered later in this judgment under the appropriate issue raised thereon. c I will now refer briefly to what transpired during the trial of this matter in the High Court. The appellant called two witnesses, namely Isaiah Adeoti Adeniran, a charted accountant who gave evidence as PW1, and the PW2 was Alhaji d (Dr) Aminu Ishola who described himself as the managing director of the appellant company. The respondent, as defendant, called one witness in the person of Mr Remi Oku- laja, a staff of the respondent company. During the course of e the evidence of these witnesses, a number of documents were admitted as exhibits. The evidence given by these witnesses disclosed that the appellant has been the customer of the respondent for some time. In 1973, the respondent f granted through the appellant an overdraft facility in the sum of N50,000. The facility was increased in 1976 to N100,000 and subsequently to N200,000. As collateral to the loan facility, the appellant mortgaged its property situate at Oja Iya, g Taiwo Road, Ilorin. Before then, when the first loan facility was made available to the appellant, it duly obtained the consent of the Kwara State Governor to mortgage the property to the respondent. There was, however, a failure of re- h payment by the appellant of the facility granted. The respondent sometime in 1988 made a demand for the repayment. As the appellant did not comply, the respondent then advertised for the sale of the mortgaged property. As a result of that action taken by the respondent, the appellant sought i to restrain the respondent from selling the said property through a motion ex parte. This was granted by the learned trial Judge on 22 April, 1992. This was followed by the present action, which is now the subject of this appeal. Upon j those facts, the learned trial Judge, after hearing addresses of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 184 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Counsel appearing for the parties, delivered a considered a judgment by which he granted all the claims of the appellant. As the respondent was dissatisfied with the judgment of the trial court, it appealed to the court below. Pursuant there- b to, several grounds of appeal were filed. Following the hearing of the appeal, the court below allowed the appeal and the judgment of the trial court was set aside. This appeal is from that judgment of the court below. Briefs of argument were thereafter filed and exchanged. In the brief filed on behalf of c the appellant, the following seven issues were identified for the determination of the appeal. The respondent did not set down issues on its own, but adopted the issues set down in the appellant’s brief. These are:– d “1. Whether the court below was right to hold that additional grounds of appeal Nos. 10, 11, 12, 13 and 14 filed before it were competent and arguable when the grounds were filed in contravention of the rules of the court below. e 8. Whether the court below was right to have held that additional ground no. 13 filed before it was competent when the ground concerned an interlocutory ruling delivered more than 2 years before the ground was filed and no leave was f sought nor obtained to argue same. 9. Whether the court below was right to have held that the principles of merger, of mortgages was inapplicable to exhibits 4, 5 and D1 and whether the further holding that the g said exhibits were validly upstamped was not perverse. 10. Whether the court below was right to have held that the respondent could exercise the right of an unpaid mortgagee when it did not file a counterclaim nor made out a case on h the point. 11. Whether the court below was right to have held that the respondent was entitled to vary the rate of interest chargeable and whether without evidence the court could take judicial i notice of the Central Bank monetary policy on which the parties did not join issue. 12. Whether the court below was right to have found that appellant was indebted to the respondent when there was no j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 185 a counter-claim by the respondent and when the amount awarded to the respondent was never part of its claim at the trial. 13. Whether the court below was right to have set aside the well b considered judgment of the trial court on all the issues agitated and in particular the issue of multiple entries in the appellant’s account when there was no credible evidence from the respondent on the point and whether the cost c awarded was not excessive.” Issue 1 I no longer need to consider this issue as learned Counsel for d the appellant withdrew the issue in the course of the hearing of the appeal. Issue 2 This issue raises the question as to whether the additional e ground 13 was competent when the ground concerned an interlocutory ruling for which leave was not first sought and obtained to argue same. Briefly stated, the facts that led to this ground arose from the refusal of the trial court to f allow the respondent, who was the defendant at the trial to file a further amended statement of defence after it had granted a similar application to the plaintiff to file a further amended statement of claim. The trial court duly delivered a g ruling disallowing the application of the defendant/ respondent. It is common ground that the defendant/ respondent did not appeal against that ruling immediately, but did so in the appeal filed against the judgment of the trial h court. It is therefore contended for the appellant that the court below was wrong to have overruled that aspect of the objection raised to that ground of appeal that the failure to obtain the i leave of the trial court or the court below to argue the appeal was a mere technicality. The premise of the argument of learned Counsel for the appellant that the court below was wrong lies in the provisions of section 221(i) of the 1979 j Constitution and section 25(2) of the Court of Appeal Act.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 186 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

In his reply for the respondent, learned Senior Counsel con- a tends that an appellant should not upon a mere technicality be denied the right to appeal against a decision which the party appealing considered to be against his interest. He b therefore urged that the court below was right to have concluded that that appeal was properly before it. I think the question for consideration is not whether the right to appeal to the court below was denied to the appellant but whether c the appeal was properly before the court in consonance with the provisions of sections 220 and 221(10) of the Constitu- tion and section 25(2) of the Court of Appeal Act, 1976. Section 220(1)(b) of the Constitution of 1979 provides for a d right of appeal as of right against an interlocutory decision of the High Court. It provides thus:– “An appeal shall be from a decision of a High Court to the Court of Appeal as of right in the following cases:– e (a) . . . . . (b) where the ground of appeal involves a question of law alone decision in any civil or criminal proceedings.” But where the ground of appeal is of fact or mixed law and f fact, there can be no appeal as of right. The appellant can only appeal with the leave of either the Court of Appeal or the High Court as the Constitution in section 221(1) provides thus:– g “Subject to the provisions of section 220 of this Constitution, an appeal shall lie from a decision of a High Court to the Court of Appeal with the leave of that High Court or the Court of Appeal.” The right to appeal from a High Court to the Court of Ap- peal is also governed by section 222(b) of the Constitution, h which says that the right:– “shall be exercised in accordance with any Act of National As- sembly and rules of court for the time being in force regulating the powers, practice and procedure of the Court of Appeal.” i Now, it is manifest that whether the appeal is based on grounds of law which enables the appellant to appeal as of right or the grounds are mixed law and fact, the appeal must be filed within the time stipulated in the above provisions to j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 187 a ground the appeal. This means that if the appeal is against an interlocutory decision in a civil cause or matter, it must be filed within 14 days from the date of the decision. This is b also subject to the provisions of section 25 where it is against a final decision of the court, then the appeal must be filed within three months from the date of the decision. It is also manifest that by virtue of subsection (4) of section 25 of c the Court of Appeal Act, the Court of Appeal may extend the periods prescribed in subsections (2) and (3) of section 25 of the Act. In respect of the issue as raised in this appeal, it is common d ground that the appeal was against an interlocutory decision of the High Court. It is also common ground that the appeal was not filed in compliance with the above quoted provisions of the Constitution and subsections (2), (3) and (4) of section e 25 of the Court of Appeal Act, 1976. The argument of Sen- ior Advocate of Nigeria, that this Court had in a number of cases observed that the expeditious trial of cases should not be delayed on account of interlocutory appeals is well taken. f But that is not to say that if such appeals are to be heard with the main appeal in respect of the case, the provisions of the Constitution and the law with regard to interlocutory appeals should not be complied with. It is therefore my view that the g observance of the law and the rules designated for appeals in respect of interlocutory appeals is not to be disregarded as a mere technicality. As it is not in dispute that the appeal against the interlocutory decision of the High Court to the h court below was not in accordance with the above quoted provisions of the Constitution and the law, the question raised in this issue is hereby resolved in favour of the appellant. i Issues 3, 4 and 5 would be considered together in this judgment. This is because the arguments of Counsel in respect of this matter are concerned with exhibits 4, D1 and 5, the deeds of legal mortgages executed by the appellant with j the respondent which led to this action. On this third issue,

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 188 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) learned Counsel for the appellant admitted that exhibit 4 is a the deed of legal mortgage that was used to secure the first loan of N50,000 from the respondent in 1973, and the consent of the Governor was duly obtained in respect of that b transaction. In 1976, the appellant’s overdraft facility was increased to the sum of N100,000 and it was further increased to the sum of N200,000 upon the same property with which the loan facility was first granted in 1973. The c subsequent facilities, though secured on the same property, deeds of legal mortgages were executed between the parties and marked as exhibits D1 and 5 respectively. It is also common ground that no consent was received from the Gov- d ernor in respect of the last two transactions that resulted in exhibits D1 and 5. Before I consider what learned Counsel conceives as the resultant effects of these transactions, it must be stated that the appellant commenced this action after e the mortgaged property situate and lying at Oja Iya Taiwo Road, Ilorin was advertised for sale by the respondent. Be- fore the property was so advertised, the respondent had written a letter dated 12 January, 1988 demanding the payment f of the sum of N118,052.38 from the appellant. It was after the appellant had failed to respond to the letter of demand, that the property was advertised for sale. g Now upon those admitted facts, it is contended for the appellant that there was a resultant merger of the legal mortgage, exhibit D, with exhibit 4 as it was executed in respect of the same property. And that exhibit 5 also became merged h with the earlier exhibits 4 and D1 was also secured upon the same property with which exhibit 4 was secured. Upon this, the learned Counsel for the appellant, Y.O. Alli, S.A.N., submits in the appellant’s brief thus:– i “That under the equitable doctrine of merger, once an earlier deed of legal mortgage is incorporated into a later one, the former ceases to exist on its own and it is in fact discharged. This rule is commonsensical and logical. If this is not so, there arises the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 189 a incongruous position that there will exist on the same property between the same parties more than one valid deed of legal mortgage. The law disavows this. On this point we pray this Court to be persuaded by the statement b of claim on this point in paragraph 979 of Halsbury’s Laws of England (4ed) to the effect that:– ‘by taking or acquiring a security of higher nature in legal valuation than one he already possesses, a person merges c and extinguishes his legal remedies upon the inferior security or cause of action . . .’ This statement of the law should be preferred over the statement contained in paragraph 982 of the same work which suggests the contrary of the above.” d Now, before commenting on the above submissions made for the appellant, I deem it necessary to observe that I have searched in vain for where in Halsbury’s Laws of England e (4ed) from where the above paragraphs were quoted. It would have been far more helpful if the references had included the relevant volume of Halsbury’s. I will however examine the principle of merger, as I deem pertinent later in this judgment. Further support for the position envisaged for f the appellant by reference to the Property and Conveyance Act of 1881, but again no reference was made to the particular section of the Act that is in support of the proposition being made for the appellant by his learned Senior Advocate, g Y.O. Alli, Esq. Reference was also made to Black’s Law Dictionary for the definition of “merger” and also to Meg- gary and Wade Law of Property (4ed) pages 892–893. Basing himself on the above submissions with regard to h his perception about the “principles of merger”, learned Counsel for the appellant therefore argued that since exhibits 4 and D1 have been merged into exhibit 5, they are no more effectual nor effective. The quantum of the right of the re- i spondent, he further argues, is only traceable to exhibit 5. And as exhibit D which was executed in 1976 was not made with the consent of the Governor, it is unenforceable. Simi- larly also, exhibit 5 is not also enforceable against the appel- j lant as it did not receive the consent of the Governor as they

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 190 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) are in breach of the provisions of section 22 of the Land Use a Act, 1978 or section 27 of the Land Tenure Law. Exhibit 4 is not also enforceable having been merged with exhibits D1 and 5. b In conclusion, it is argued for the appellant that the court below was wrong to have held that it was the appellant who had the duty to ensure that exhibits D1 and 5 received the consent of the Governor. The following cases were cited: c Ibidapo v Lufthansa Airlines (1997) 4 NWLR (Part 498) 124; Lawal Osula v Lawal Osula (1993) 2 NWLR (Part 274) 158 at 175, 176; Savannah Bank (Nig.) Ltd v Ajilo (1989) 1 NWLR (Part 97) 305 at 326–327; Paul Dickson and another d v Solicitor-General of Benue Plateau State (1974) 5 SC 21; Alhaji Labaran Nakyauta v Alhaji Maikima (1977) 6 SC 51. In the respondent’s brief, the first contention made for the e respondent is that there is no provision in the Land Tenure Law and the Land Use Act which requires that subsequent increases of overdraft facilities in favour of a customer of a bank in the position of the appellant must be with the con- f sent of the Governor. It is his contention also that the consent given by the Governor in respect of exhibit 4 remains valid and enforceable and that exhibits D1 and 5 are also valid by virtue of the fact that the further overdraft facilities granted to the appellant was made upon the same property g for which the Governor had granted consent in exhibit 4. It is his further contention that the appellant who had the onus to prove that the lack of consent of the Governor in respect of exhibits D1 and 5 vitiated the enforceability of the docu- h ments in respect of loan transactions failed to discharge that onus. In support of that submission, he cited, Are v Adisa (1967) 1 All NLR 148; Aladegbemi v Fasanmade (1988) 3 NWLR (Part 81) 129; (1988) 6 SCNJ 103. The learned Sen- i ior Counsel for the respondent also urged the court to hold that the cases cited by the appellant in support of the proposition that exhibits 4, D1 and 5 are not enforceable due to lack of the Governor’s consent do not support that j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 191 a contention. These cases are Ibidapo v Lufthansa (supra); Lawal-Osula v Lawal Osula (supra); Paul Dickson v Solici- tor-General State (supra); Alhaji Labaran Nakyauta v Mai- b kima (supra). In his final submission on this issue it is argued for the respondent that equity will not aid an appellant as in this case who has derived benefit from a transaction and that it is un- c conscionable for him to now seek to avoid the liability that flowed from it. And he cited the following cases: Adimora v Ajufo (1988) 3 NWLR (Part 80) 1; (1988) 6 SCNJ 18; AP Ltd v Owodunni (1991) 8 NWLR (Part 210) 391; Owosho v d Dada (1984) 7 SC 149 at 174; Awojugbagbe Light Indus- tries Ltd v Chinukwe (1995) 4 NWLR (Part 390) 379. I think that the question that should first be considered in respect of this issue is with regard to what is expected of a e holder of a statutory right of occupancy in terms of the provisions of section 27 of the Land Tenure Law Cap 59 and section 18(1) of the Land Registration Law Cap 58 Laws of Northern Nigeria, 1963 applicable at the time of transactions f in Kwara State in respect of exhibit 4. In the course of this judgment, the court below, per Muhammad JCA, after referring to the above laws, then said thus:– g “The respondent, therefore, in my view validly alienated and mortgaged the entire property held by it under the said Certificate of Occupancy to the appellant. Exhibit 4 (the first legal mortgage between the parties), in paragraph 2 thereof states:– ‘The mortgagor as BENEFICIAL OWNER and with the h consent required by and subject to the provisions of the Land Tenure Law hereby demises unto the Bank ALL THAT the land and premises of which particulars are given in the schedule hereto TO HOLD to the Bank for all the un- i expired residue (except the last THREE (3) days thereof) of the term of years granted therein by the Certificate of Occu- pancy of which particulars are given in the schedule hereto subject to the proviso for redemption following namely that if all moneys herein before covenanted to be paid shall be j paid accordingly then the term hereby created shall cease.’

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 192 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

The schedule referred to in the above paragraph is Annexed a to the exhibit. It reads in part as follows:– ‘THE SCHEDULE above referred to: All that piece or parcel of landed property of OWONIBOYS TECHNI- CAL SERVICES LTD with the improvements and b buildings erected thereon situate and lying at Oja-Iya Oyo Bye Pass, Ilorin, Kwara State, more particularly described in the title deed registered as follows:– Both exhibits D1 and 5 which were respectively exe- c cuted on 8 December, 1976 and 22 June, 1978 were clearly related in their preambles to exhibit 4. It is stated in exhibit D1 as follows:– WHEREAS the mortgagor had by a deed of legal d mortgage described in the Second Schedule hereto charged by way of legal mortgage the property described in the First Schedule to secure an overdraft of N50,000 (Nigerian currency) from the bank . . . e AND WHEREAS the mortgagor and the bank have agreed to increase the said overdraft of N50,000 to the sum of One Hundred Thousand Naira (N100,000 Nigerian Currency) on the same security of landed property but with increased im- f provements and on the same terms and conditions, mutatis mutandis, and in addition as hereby agreed.’ This is what is exactly contained in exhibit 5 except for the g increase in the overdraft sum which was raised from N100,000 to N200,000. The legal mortgage and property described in the various schedules thereto, in my understanding, could refer to no others than the legal mortgage contained in exhibit 4 and that piece or parcel of land prop- h erty of OWONIBOYS TECHNICAL SERVICES LTD referred to in the schedule to that Deed of Legal Mortgage. It is also my understanding that exhibits D1 and 5 were executed for the purposes of subsequent increase in the original i amount of overdraft of N50,000 secured by appellant’s Cer- tificate of Occupancy No. 540. This Certificate of Occu- pancy, as earlier on stated in respect of the said piece or parcel of land held by the appellant OWONIBOYS TECH- NICAL SERVICES LTD, ILORIN, with all the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 193 a improvements and buildings erected thereon, situate and lying at Oja Iya, Oyo Bye Pass, Ilorin.” And later in that judgment, his Lordship, in holding that it b was the appellant who had the duty of seeking the consent of the Governor in the subsequent transactions that led to exhibits D1 and 5, said at 311 of the judgment thus:– “The transactions referred to in all the exhibits it related to same c property which is covered by Certificate of Occupancy No. 540. That Certificate of Occupancy was, with the consent of the Gover- nor, mortgaged to the appellant. I think it was not the business of the Governor to insist to know the value for which the respondent d had wanted to mortgage the said property or that his consent was made a pre-condition in the event of an increase in the value of the property. That would have been too much of a demand and would have engaged the Governor into making of agreements as between parties which offends the doctrine of freedom of contract. The e Governor did all he was required to do by section 27 of the Land Tenure Law. The two later documents exhibits D1 and 5 were validly in my view, upstamped and registered by the Lands Registry, Ilorin. f They were an extension of the first Deed of Legal Mortgage. ‘A mortgage’, in any event, has been defined by section 51(1) of the Land Use Act Cap 202 Laws of the Federation of Nigeria, 1990 to include, ‘a second and subsequent mortgage and equitable mort- g gage’.” The view held by the court below with regard to the question as to who has the duty of obtaining the consent of the gover- nor in transactions of the kind that occurred in the instant h case was considered in this Court in International Textile Industries (Nigeria) Ltd v Dr. Ademola Oyekanmi Aderemi and others (1999) 8 NWLR (Part 614) 268, where the hold- ers of the right of a statutory right of occupancy sought to i avoid the consequences of the contract to sell the piece of land which is the subject matter of the statutory right of occupancy. Before I refer to the pertinent parts of the judgment, I need to quote section 22 of the Land Use Act. His j Lordship Uwaifo JSC who delivered the lead judgment then

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 194 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) observed on the above provisions of section 22 of the Act, a thus:– “The position of section 22 of the Act is clearly this: A holder of a right of occupancy may enter into an agreement or contract, with a b view to alienating his said right of occupancy. To enter into such an agreement or contract, he does not need the consent of the Gov- ernor. He merely operates within the first stage of a ‘transfer on sale of an estate in land’ which stage ends with the formation of a binding contract for a sale constituting an estate contract at best. c But when he comes to embark on the next stage of alienating or transferring his right of occupancy which is done by a conveyance or deed, culminating in vesting the said right in the ‘purchaser’, he must obtain the consent of the Governor to make the transaction d valid. If he fails to, then the transaction is null and void under section 26 of the Act. In my view, it is necessary to bear these two stages clearly in mind.”

And continued by quoting with approval what this Court e said in Awojugbagbe Light Industries Ltd v Chinukwe (supra) where Igu JSC at 435–436 said:– “I think it ought to be stressed that the holder of a statutory right of occupancy is certainly not prohibited by section 22(1) of the Act f from entering into some form of negotiations which may end with a written agreement for presentation to the Governor for his necessary consent or approval. This is because the Land Use Act does not prohibit a written agreement to transfer or alienate land. So long as such a written agreement is understood and entered into g subject to the consent of the Governor, there will be no contravention of section 22(1) of the Land Use Act by the mere fact that such a written agreement is executed before it is forwarded to the Governor for his consent. I agree entirely with Chief Williams, h S.A.N. that section 22(1) prohibits transactions or instruments whereby the holder of statutory right of occupancy purports to alienate as a complete action, his right of occupancy by assignment, mortgage, transfer of possession, sublease or otherwise, the absence of the relevant consent of the Governor first had and ob- i tained notwithstanding.” From all I have referred to above, it is, I think, clear that it is the owner of a statutory certificate of occupancy that is obliged to obtain the consent of the Governor of the State j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 195 a where the land in respect of which he wishes to sell, transfer or mortgage etc by virtue of section 22 of the Land Use Act, and the relevant provisions of the Land Tenure Law of b Northern Nigeria. The appellant in the instant appeal sought and obtained the consent of the Governor when it sets out to obtain the first loan for the sum N50,000 in 1973. By that transaction, it effectively transferred its interest in the land to the respondent as clearly spelt out in the mortgage deed. c True enough, he obtained further overdrafts and deeds of mortgages were executed to effect the transaction upon the same property upon which the first loan of N50,000 was obtained. The first observation that must be made is that it is d the respondent to whom the appellant had transferred its legal interest that had deliberately taken the risk of granting more overdrafts in respect of the property in question. That will be the position even if no legal mortgages were exe- e cuted as was done in the instant case. The basis of this being that the respondent would have taken its decision to lend more money to the appellant as it was satisfied that the value of the appellant’s property would be sufficient, if sold, to f recover the loans made to the appellant. I do not however, agree with the contention of the appellant that a merger had occurred as a result of these transactions. In the instant case, what is under consideration is a simple process of borrowing g money on a property made available by the appellant for that purpose. It is clear, as was found by the court below that the only beneficiary of the loans was the appellant and no one else. Even if as argued by the appellant, it is not as auto- h matic as the appellant had submitted. For a merger to be created in such transactions, such an intention must be evinced in the document from the documents executed by the parties, or such evidence as would indicate the intention of the par- i ties that they envisaged a merger of the mortgages with one another. See Halsbury’s Laws of England (4ed) Volume 16 at paragraph 882 where the learned authors said:– “Equity is not guided by rules of law as to merger, both as regards j the merger of a lesser estate in a greater, and a merger of a charge

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 196 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

in the land, the question depends upon the intention, actual or pre- a sumed, of the person in whom the interests become united.” Having regard to the views expressed above in respect of the questions raised in this issue, I am clearly of the opinion that b the court below was right to have concluded that the appellant had the duty to obtain consents in respect of the mortgaged deeds, and that in any event there was no question of merger as canvassed for the appellant by its learned Coun- c sel. In my humble opinion, the argument concerning the merger of the mortgaged deeds is a mere ruse to avoid the liability incurred by the appellant on the mortgaged property. There is nothing proved to lead to the conclusion that d exhibits 4, D1 and 5 are void and unenforceable. Accord- ingly this issue is resolved against the appellant. I will now consider issues 4 and 5 together. In respect of issue 4, the appellant is contending that, apart from the e deeds of mortgage exhibits 4, D1 and 5, no further evidence was led by either party. Particularly, it is argued for the appellant that the respondent ought to have called evidence in respect of the clauses in the mortgage agreements. It is in f my view difficult to understand the purport of the contention being made for the appellant by learned Counsel. In the first place, it is expected that the onus is on the appellant who initiated this claim to prove its case. That has always been the g guiding principle in our law (see Okubule v Oyagbola (1990) 4 NWLR (Part 147) 723; Ike v Ugboaja (1993) 6 NWLR (Part 301) 539). I therefore do not see what evidence is required of the respondent when the appellant has not h been shown to have led evidence of a kind which shifted the onus of proof of a particular point to the respondent (see Ni- gerian Maritime Services Ltd v Afolabi (1978) 2 SC 79 at 84; Highgrade Maritime Services Ltd v First Bank of Nige- ria Ltd (1991) 1 NWLR (Part 167) 290). It must be remem- i bered that it was the appellant who initiated this case when its property was about to be sold for its failure to pay the debt owed to the respondent. The pleadings and evidence led at the trial were directed at showing that the debt was not j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 197 a established. Though the trial court upheld that position of the appellant, the court below has quite rightly rejected that finding of the trial court. The argument of learned Counsel in this Court has not, with due respect, persuaded me to hold b a contrary view as I do not need to comment any further on the validity of exhibits 4 and D1 in view of what I have already said about their validity and enforceability in resolving issue 3 against the appellant. c The next point that now falls to be considered is that raised in issue 5. It is the submission of learned Counsel for the appellant that the only universal custom of bankers is that a bank only has the right to charge simple interest and that this d can only be varied by agreement of the parties. In support of that submission, he made reference to Crosskill v Bower Bower Turner (1863) 32 L.J.Ch. 540 at 544. And then went on to argue that the onus of proving that the respondent has e the unqualified right to charge “any prevailing” interest. And further submits that as the evidence led by the respondent in this regard is unreliable and was deservedly rejected by the trial court, there exists no basis upon which the respondent f could have resisted the appellant’s claim. For the resolution of the question raised by this issue, recourse must be had to exhibits 4, D1 and 5, the mortgage deeds, which no doubt formed the basis of the loan and overdraft facilities entered g into by the parties. Now if the parties have agreed between themselves upon the conditions for the formation of a contract and, as in this case, those conditions were embodied in documents as in exhibits 4, D1 and 5, then they are bound h by the terms and conditions set down in the documents, and which was duly executed as was done in this case. Having so bound themselves, it is not the function of the court to make a contract for the parties, see Oyenuga v Provisional Council of the University of Ife (1965) N.M.L.R. 9. In the i instant case, each of the exhibits 4, D1 and 5, the mortgage deeds, has as their terms and conditions a clause 3 which reads thus:– “All interest payable on the moneys hereby secured shall accrue j due from day to day at the rate from time to time stipulated by the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 198 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

bank and may be capitalised at such intervals as the bank may a from time to time prescribe but not more often than monthly and added to the moneys hereby secured and shall thereupon bear interest accordingly at the rate aforesaid.” b It is interesting that in the case of U.B.N. v Ozigi (1994) 3 NWLR (Part 333) 385, a clause similar in material terms was inserted in the mortgage deed that had to be considered in determining the merits of that appeal. In the course of the c consideration of the meaning and effect of that clause, it was observed, as I have done above, that the court cannot make a contract for the parties or rewrite the one they have made for themselves. Adio JSC in that case then went on to make the following observation:– d “In other words, the words in a document must first be given their simple and ordinary meaning and under no circumstances may new or additional words be imported into the text unless the document would be by the absence of that which is imported im- e possible to understand. The presumption is that the parties have intended what they have in fact said so that their words must be construed as they stand. See Solicitor-General, Western Nigeria v Adebonojo (1971) 1 All NLR 178.” f And further on at 405, His Lordship said thus:– “The provision of clause 3 of the mortgage agreements is clear and unambiguous. It is possible to understand and apply it as it stands. There was, therefore no necessity to import new or additional g words into it to require prior consultation with, or the giving of prior notice of increase in rates of interest on the loan in question to the respondent. Therefore, failure of the appellant to hold prior consultation with or to give prior notice to the respondent about increase in rates of interest on the loan could not, as the Court of h Appeal held, result in the nullification of the interest rates stipulated under the provision of clause 3 of the mortgage agreements.” In the instant case the complaint of the appellant is that the only interest payable by the respondent is that which he i claimed was established by custom. It is ascertained that loans granted to customers of the bank should be at simple interest. That may well be but that is not the case. That cannot be the position in respect of this matter. This is because, j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 199 a as I have earlier stated, the parties entered into agreement as evidenced by exhibits 4, D1 and 5. In those documents, clause 3 featured prominently and as has been explained in b the case of U.B.N. v Ozigi (supra), the wordings of this clause 3 are clear and unambiguous. There is nothing which makes it imperative for the respondent to charge interest on the loan as simple interest as argued by the appellant. The c respondent quite clearly from the wording of the said clause 3 are entirely free to charge interest that is deemed necessary upon the loan granted to the appellant. It is clear to me that the court below properly dismissed the contention of the ap- d pellant that the respondent had no right to have charged interest as was done on the loan granted to the appellant. With the greatest respect to the learned Counsel for the appellant, he has not advanced any reason for me to depart from the judgment of the court below. It follows that this issue must e be resolved against the appellant. I think it is also necessary to add that the further argument with the respondent should not have been allowed to suc- f ceed in this appeal by reason of the facts that the respondent has no right to succeed as it has not made a counter-claim to be deserving of a judgment in its favour. It is not a matter of having not filed a counter claim. As I have said earlier in g this judgment, the appellant had to commence this action against the respondent wanting to act pursuant to the mortgage deed with the failure of the appellant to pay what was adjudged as debt to the respondent. Having failed to estab- h lish that he was not indebted to the respondent as he claimed, the respondent is entitled to the judgment in its favour simply for the fact that the appellant was unable to establish what it set out to prove. I therefore see no merit in i this contention which is the subject of the appellant’s issue 6. From what I have said above in this judgment, I do not see any need to consider specially issue 7. This appeal from all I have said above lacks merit and it is j hereby dismissed by me. The judgment of the court below is

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 200 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) hereby affirmed and I award costs in the sum of N10,000 in a favour of the respondent.

MOHAMMED JSC: I have read the lead judgment of my learned brother, Ejiwunmi JSC, and the concurring judgment b of my brother, learned Uwaifo JSC, and I agree with both of them that this appeal has failed and ought to be dismissed. The two main issues for the determination of this appeal, in my view, are as follows:– c “3. whether the court below was right to have held that the principles of merger of mortgages was inapplicable to exhibits 4, 5 and D1 and whether the further holding that the d said exhibits were validly upstamped was not perverse. 5. whether the court below was right to have held that the respondent was entitled to vary the rate of interest chargeable and whether without evidence the court could take judicial e notice of the Central Bank monetary policy on which the parties did not join issues.” The issues are the core issues identified for the determination of this appeal. In the two judgments of my learned f brothers which I mentioned above, the two issues have been adequately considered. I do not find it necessary to add anything of my own to those decisions. For the reasons disclosed therein, I dismiss this appeal. I award N10,000 costs g in favour of the respondent.

KATSINA-ALU JSC: I have had the benefit of reading in draft the judgments of my learned brothers, Ejiwunmi JSC h and Uwaifo JSC. I agree with them and for the reasons which they give I would dismiss the appeal. I shall, however, say a few words on issues 2 and 3. Issue 2 is whether the ruling by the trial court refusing an amend- i ment of the statement of defence should have been appealed within 14 days as of right or appealed thereafter only with leave of this Court along with an appeal against the final judgment. In this connection the Court of Appeal per j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Katsina-Alu JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 201 a Muhammad JCA stated in the course of its judgment as follows:– “In the instant appeal, ground no. 13, to my understanding, ques- b tions the refusal by the trial Judge to grant the appellant further amendment to its statement of defence. The refusal, in my view, predetermined the appeal (the case) one way or the other as it shut out completely the appellant from presenting its case properly. That certainly affects the whole case and I think the appellant had c every right to challenge the decision after the whole case was over at the trial. That is exactly what the appellant did.” I think the Court of Appeal stated the position correctly. To raise the appeal on such a ruling as of right along with an d appeal against the final judgment of the trial High Court would, in my view, depend entirely on the overall effect of such a ruling on the merit of the case (see International Ag- ricultural Industries (Nig.) Ltd v Chika Brothers Ltd (1990) e 1 NWLR (Part 124) 70). The amendment sought for was meant to put the pleading in line with the evidence already led. It cannot be denied that the amendment sought forms an integral part of the structure of the case presented by the ap- f pellant. I think the Court of Appeal was right to hold that it was unnecessary to obtain leave to raise a ground of appeal on the facts of this case. Issue 3 raises the question of the principle of merger in re- g gard to the mortgage transaction created by exhibits 4, D1 and 5. Exhibit 4 was the deed of mortgage to secure the first loan of N50,000. The Governor’s consent was obtained. The amount of the loan was later raised to N100,000. A new h deed of mortgage was executed (this is exhibit D1). Again the amount was raised to N200,000. Another deed of mortgage was executed, exhibit 5. It must be borne in mind that exhibits 4, D1 and 5 were concerned with one property i which, by exhibit 4 the Governor’s consent was obtained for the use of the property as a collateral for the loan transaction. What this means is that the Governor’s consent is not required for the additional deeds of mortgage executed in j exhibits D1 and 5.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Katsina-Alu JSC 202 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

For the above reasons and for the fuller reasons given by my a learned brothers, Ejiwunmi JSC and Uwaifo JSC, I too dismiss the appeal with N10,000 costs to the respondent. KALGO JSC: I have had the opportunity of reading in draft b the judgment of my learned brother, Ejiwunmi JSC, just delivered in this appeal. I agree with him entirely that there is no merit at all in this appeal and it ought to be dismissed. For the reasons which were given in the said judgment, c which I adopt as mine, I also dismiss this appeal and affirm the decision of the Court of Appeal. I award the costs of N10,000 in favour of the respondent. UWAIFO JSC: I had the advantage of reading in advance the d judgment of my learned brother, Ejiwunmi JSC. I agree with him that this appeal be dismissed. The short facts of the case are that the appellant applied for a secured loan of N50,000. It used its landed property at e Oja-Iya, Taiwo Road, Ilorin, as collateral. A deed of mortgage was executed for this purpose with the Governor’s consent. That is exhibit 4. Later the loan was increased to N100,000 and another deed of mortgage was executed to f reflect this amount, which deed was accordingly upstamped. It is exhibit D1. Still later, the loan was increased to N200,000. The same procedure was followed. The deed is exhibit 5. The Governor’s consent was not sought in respect g of exhibits D1 and 5. The respondent alleged that the appellant failed to repay the loan together with the accrued interest in accordance with the terms of the agreement. It decided to exercise its h power of sale of the property as provided under the deed of mortgage. The appellant on the other hand disputed it was owing. It alleged that it discovered several multiple debits of particular cheques which when sorted out would leave it i with an enormous credit balance. It also contended that the Governor’s consent was not obtained for exhibits D1 and 5 and that they were null and void as a result. It then argued that, since exhibit 4 has ceased to exist on the principle of j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 203 a merger, there was no valid mortgage upon which the power to sell its property could be exercised by the respondent. Fi- nally, it contended that, even if there was a subsisting deed b of mortgage, the originally agreed interest rate could not be increased by the respondent and used to calculate its liability without both parties agreeing upon such an increase. It was on the basis of these contentions that the appellant c brought action at the High Court, Ilorin, for the following reliefs in paragraph 32 of the further amended statement of claim:– “(i) Declaration that the mortgages between the plaintiff and the d defendant covering the plaintiff’s property situate, lying and being at Taiwo Road, Ilorin are illegal, unlawful, unenforceable and irregular. (ii) An order setting aside the mortgages. e (iii) Alternatively, declaration that the defendant is not entitled to sell any property of the plaintiff without complying with the Land Use Act and the Auctioneers Law applicable to Kwara State. f (iv) Declaration that the defendant is only entitled to charge on the plaintiff account interest at the rate prevailing when facility was granted to the plaintiff. (v) Declaration that the debit balance in the account of the plaintiff is not a true and accurate reflection of the indebt- g edness of the plaintiff, if any, to the defendant. (vi) Injunction restraining the defendant by themselves, their agents, servants and or privies or otherwise howsoever from selling the plaintiff’s property pursuant to the said mort- h gages. (vii) Declaration that the deeds of mortgage registered as No. 122/122/1 and 45/45/6 respectively have been discharged by their incorporation in the Deed registered as No. 94/94/8. i (viii) An order directing the defendant to pay to the plaintiff the sum of N500,000 or any amount the court may find the plaintiff entitled to recover from the defendant.” On 14 April, 1994 the trial court (per Gbadeyan J) gave j judgment for the appellant in respect of all the reliefs

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 204 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) claimed in the said paragraph 32 when the judgment was a concluded thus:– “The bank has been shown by both PW1 and PW2 to have wrong- N fully debited 550,000 against the plaintiff. There is no evidence b to contradict that the debit entry of N550,000 was wrongful. On the preponderance of evidence the plaintiff’s case for its award is established. Consequently, the plaintiff’s case which is in the alternative, succeeds in its entirety and the defence fails. All the reliefs claimed in c paragraph 32 of the further amended statement of claim are hereby granted.” The Court of Appeal, Kaduna Division, on 25 November, 1996 set aside the judgment and dismissed the claim. The d appellant in his appeal to this Court has raised a number of issues. Further details of the facts of the case and the entire issues for determination have been stated in the judgment of my learned brother, Ejiwunmi JSC. I need not reproduce e those issues nor delve into those further facts. I shall briefly touch on and discuss some of the issues raised in this appeal as set out in the leading judgment. Issue 1 is about the competence of some grounds of appeal per- f mitted to be argued by the court below. They were couched as a misdirection of law (or error in law) and error of facts at the same time. This issue was abandoned by the learned Senior Advocate for the appellant in view of the fact that it g had been settled in some recent cases that such framing of grounds of appeal does not necessarily make them incompetent (see Aderounmu v Olowu (2000) 4 NWLR (Part 652) 253, a decision of this Court; see also Thor Ltd v First City h Merchant Bank Ltd (1997) 1 NWLR (Part 479) 35). Inciden- tally, it was the obiter dictum of Nnaemeka-Agu JSC in Nwadike v Ibekwe (1987) 4 NWLR (Part 67) 718 at 744 which was applied in many decisions of the court below up- i holding this kind of objection to such ground of appeal that appellant had relied on. Issue 2 is whether the ruling by the trial court refusing an amendment of the statement of defence should have been j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 205 a appealed within 14 days as of right or appealed thereafter only with leave along with an appeal against the final judgment. I think whether it is permissible to raise the appeal on b such a ruling as of right along with an appeal against the final judgment of a High Court sitting at first instance depends entirely on the overall effect of such a ruling on the merit of the case. The court below per Muhammad JCA stated the position correctly, in my view, when the following c observation was made:– “In the instant appeal, ground no. 13, to my understanding, questions the refusal by the trial Judge to grant the appellant further amendment to its statement of defence. The refusal, in my view, d predetermined the appeal (sic: the case) one way or the other as it shut out completely the appellant from presenting its case properly. That certainly affects the whole case and I think the appellant had every right to challenge that decision after the whole case was e over at the trial. That is exactly what the appellant did.” It seems to me that there could be several rulings in the course of a trial which, in effect, would be seen as forming an incident of the proceedings as whole. Some of such rul- f ings, for example on admissibility of a document, may not need to be pursued on appeal as and when they are given but where necessary may become matters to be included in the appeal against the final judgment (see International Agricul- g tural Industries (Nig.) Ltd v Chika Brothers Ltd (1990) 1 NWLR (Part 124) 70 at 81 per Obaseki JSC). Whether this is a proper course depends entirely on the matters ruled upon as to whether they form an integral part of the structure of h the case presented by the party in the sense that any complaint about any particular ruling is likely to reflect on the result of the case. For instance, a refusal to allow an amendment to a pleading may tend to affect the outcome of the case and present itself in consequence as an issue of a denial i of a fair opportunity to present a proper case. In my opinion, the court below was right to hold that it was unnecessary to obtain leave to raise a ground of appeal on a ruling com- plaining of such denial since the amendment was meant j to put the pleading in line with the evidence already led. I

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 206 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) believe this could be seen as an appeal as of right against a the final decision under section 241(1)(a) of the 1999 Con- stitution. Issue 3 raises the question of the principle of merger in re- b gard to the mortgage transaction created by exhibits 4, D1 and 5. Exhibit 4 was the deed of mortgage to secure the first loan of N50,000. When the amount of loan or credit facilities was raised to N100,000, a new deed of mortgage was c executed. This is exhibit D1. Again, when the amount was raised to N200,000, another deed of mortgage was executed, exhibit 5. But it must be recognised that all three were in respect of the same and only property used as collateral. d Learned Senior Advocate for the appellant has argued that, once an earlier deed of legal mortgage is incorporated into a later one, the former ceases to exist on its own and is in fact extinguished. The whole purpose of this argument is further e carried forward that because it was in respect of exhibit 4 that the Governor’s consent was obtained exhibits D1 and 5 which, as argued, extinguished exhibit 4 are themselves not enforceable (or are indeed null and void) since the Gover- f nor’s consent was not given in respect of them. The authority cited for the proposition is contained in paragraph 884 of Halsbury’s Laws of England (4ed) Volume 32 (Reissue) though Counsel referred to paragraph 979 of the original is- g sue which is verbatim, but which he quoted partially. I shall reproduce the entire paragraph. Thus:– “884. General rule. As a general rule, by taking or acquiring, a h security of a higher nature in legal valuation than one he already possesses, a person merges and extinguishes his legal remedies upon the inferior security or cause of action; thus the taking of a bond or covenant, or the obtaining of a judgment for a simple contract debt, merges and i extinguishes the simple contract debt. For this purpose, however, the superior security must be co-extensive with the inferior security and between the same parties. A security given by one of two co-debtors to secure a simple contract debt does not merge the simple contract debt.” j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 207 a The learned Senior Advocate for the respondent has on the other hand submitted that it was unnecessary to have a fresh consent of the Governor for exhibits D1 and 5 otherwise b they would not have been registered, citing Odubeko v Fowler (1993) 7 NWLR (Part 308) 637; (1993) 9 SCNJ (Part 2) 185 at 195. The further submission that, in any case, it was the duty of the appellant (the mortgagor to obtain the c necessary consent, citing Awojugbagbe Light Ind. Ltd v Chinukwe (1995) 4 NWLR (Part 390) 379 and International Textile Ltd v Aderemi (1999) 8 NWLR (Part 614) 268, (1999) 6 SC (Part 1) 1. d A proper understanding of the passage from Halsbury’s Laws of England (supra) is important. What is considered there is a security of a higher nature in legal valuation sub- suming an inferior security. This has nothing to do with a e security for a higher amount of money or loan. It is concerned only with the strength of one security over another in terms of legal superiority. The passage gives a simple and clear example. If there is a debt which is supported by a f mere simple contract, when this is replaced by a bond or covenant, or a judgment in respect of the simple contract debt, there is no need to rely on the simple contract. It would have been replaced by either the judgment or by a bond or g covenant which is obviously a higher security of better dependability. Neither of them extinguishes the debt (it indeed protects the debt) but the simple contract which it replaces. In Twopenny v Young (1824) 107 ER 711 at 712 it was laid h down by Bayley J that “where a simple contract security for a debt is given, it is extinguished by a specialty, if the remedy given by the latter is co-extensive with that which the creditor had upon the former”. This was followed by Byles J i in Boaler v Mayor (1865) 19 C.B. (N.S.) 76 at 83; (1865) 144 ER 714 at 717. In my view, it was a misconception, with due respect, to rely on the passage in question from Halsbury’s as authority j for saying that exhibits D1 and 5 extinguished exhibit 4 and

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 208 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) with it the Governor’s consent. The said exhibit 4 represents a the actual mortgage of the property concerned for which the Governor’s consent was obtained. That exhibit, as rightly argued by Mr Ali, S.A.N., might have sufficed by upstamp- b ing it to reflect the increase in loan. Mr Ali’s contention of upstamping an original mortgage deed in case of increase in the loan first agreed, is right as I said, but purely on principle. To make it practical, the conveyancing procedure of c drawing up such a deed must make provision for that contingency, so that by the mere endorsement of the deed with the amount of increase in the loan it can be upstamped for the increase. This can be done as often as occasion demands d without having to execute a new deed. But there is nothing wrong with the way exhibits D1 and 5 came to be executed in the circumstances of exhibit 4. Actu- ally, with the draftsmanship of exhibit 4, I do not see how it e could have been upstamped for the increased loans. That made exhibits D1 and 5 inevitable but they certainly did not call for the Governor’s consent to be able to increase the loan which both parties agreed on. The Governor’s consent f as indicated in exhibit 4 has nothing to do with the amount of the loan; the consent is for the alienation of the legal title in the property to the respondent (the mortgagee) in compliance with sections 22 and 26 of the Land Use Act, 1978, for g the period of the mortgage transaction. So, no further consent was necessary just because further loans had been obtained upon the same collateral. If exhibit 4 had been an equitable mortgage and exhibits D1 and 5 deeds of mortgage, h it would be in accordance with the principle for the latter to extinguish the former because they are both securities of a higher nature in legal valuation than an equitable mortgage. Paragraph 886 of Halsbury’s Laws of England (supra) sup- i ports this analysis. It reads:– “A mere charge or equitable mortgage is extinguished by the taking of a formal mortgage, even though the mortgage does not confer a legal estate, and the sum from then on secured is the sum j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 209 a mentioned in the mortgage notwithstanding that other sums were covered by the deposit.” The authority in support is Vaughan v Vanderstegen (1854) b 61 ER 730 where, at 732, Sir R.T. Kindersley V.C. in discussing the principle of merger, said, inter alia:– “In November, 1844 Mr Annesley, finding that Lady Dunboyne owed him considerable costs, became desirous of having a security for them. At the same time Lady Dunboyne applied to him to ad- c vance her 30, and the policy was then deposited by Lady Dun- boyne with Annesley, by way of securing the costs and the 30. A few weeks after, another occasion arose for an advance of money by Annesley, viz., for paying a premium on the policy, and d then he required some better security than a mere deposit, and the mortgage was agreed upon. . . . When a mortgage is given to go as near as possible to the conveyance of a legal estate, you must look to that deed alone to see what security was intended, that is, to e what contract the property was intended to be subject . . . The policy is, I think, in the hands of Mr Annesley, not by virtue of the deposit, but of the mortgage, and when that is satisfied he has no further right to hold it (the deposit). The possession by the deposit is merged in the possession under mortgage.” f What is referred to here as “the deposit” is the equitable mortgage by way of deposit of the deed of conveyance to secure a loan. It should be understood that merger may take the form of a merger of estates or of a merger of a charge in g the land. It is the merger of an equitable mortgage with the legal mortgage in land that paragraph 886 quoted above and Vaughan’s case (supra) reflect. In the present case, there was no question of the principle h of merger operating because all the said exhibits, 4, D1 and 5, are deeds of mortgage which are securities of the same nature in legal valuation. They were not intended to merge in the sense that takes place between lower and higher legal i securities except that it is necessary to say that exhibits D1 and 5 complement exhibit 4 in regard to the amount of money secured. Other than that, it must be recognised that they are concerned with one property which, by exhibit 4, j the Governor’s consent has permitted the said property to be

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 210 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) used as a collateral for the loan transaction. It is said that a a mortgage is not merged by the taking of a new mortgage on the same property to cover the original debt and further advances (see paragraph 887 of Halsbury’s Laws of England b (supra)). In the circumstances it was, in my view, proper to upstamp the relevant exhibits to reflect the further advances or loans made to the appellant in consequence of the authorised mortgage transaction. The court below took the correct c view in this regard. As regards issues 4, 5 and 6, the appellant has conceded, quite rightly, in its brief of argument that if exhibits 4, D1 and 5 are valid, the respondent can exercise the power of d sale conferred on it by those exhibits. I have reached the conclusion that the exhibits are valid. The consent of the Governor for the mortgage transaction covers all the deeds of mortgage. Those deeds are in respect of one transaction, e namely a mortgage to secure money-lending although the lending came to involve a first advance and further advances. It does not matter whether the Governor’s consent came before or after negotiation for the lending was con- f cluded (see Awojugbagbe Light Ind. Ltd v Chinukwe (supra); International Textile Ltd v Aderemi (supra)). An aspect of the argument of the appellant is that, since the respondent did not counter-claim, “it is a moot point whether g it can exercise a right of sale or not as an unpaid mortgagee”. The argument then went further as to the conditions to be fulfilled before a power of sale can be exercised as contained in clause 6 of exhibit 4 which conditions include h proof of the indebtedness of the mortgagor, notice given by the mortgagee for payment and failure of the mortgagor to pay within one month of the letter of demand. I think the argument has to be considered on the basis of what was placed i before the two courts below for a decision and what they actually decided. The claim on this point by the appellant was for a declaration that the respondent is not entitled to sell any property of the appellant without complying with the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 211 a Land Use Act and the Auctioneers’ Law applicable in Kwara State. The trial court made the declaration sought on the ground that it was not proved that the appellant was ow- b ing the respondent. The Court of Appeal found that conclusion to be wrong. Consequently, it expressed the view that the respondent is entitled to exercise its power of sale. That of course implies that this may be done upon compliance with all necessary conditions. I do not think the said view c can only be expressed upon a counter-claim by the respondent. It follows from the consequences of the dismissal of the said claim of the appellant. It was not an order made which was intended to be carried out by virtue of these pro- d ceedings. There is the issue of the amount and nature of interest the respondent was entitled to having regard to clause 3 of the e deed of mortgage (per exhibits 4, D1 and 5) which reads:– “All interest payable on the moneys hereby secured shall accrue due from day to day at the rate from time to time stipulated by the bank and may be capitalized at such intervals as the bank may from time to time prescribe but not more often than monthly and f added to the moneys hereby secured and shall thereupon bear interest accordingly at the rate aforesaid.” This implies compound interest made to operate upon monthly not more often than monthly interest. The appel- g lant’s argument is that 10% interest per annum was stated or agreed as per exhibit 4 and that the Central Bank of Nige- ria’s directive pleaded by the respondent was not tendered by the respondent. The said clause 3 was interpreted by this h Court in Union Bank of Nigeria Ltd v Ozigi (1994) 3 NWLR (Part 333) 385. This court considered the terms thereof unambiguous as then observed thus, inter alia, per Adio JSC at 403–404:– i “If the prevailing interest rates (prime rates) fixed by the Central Bank vary from time to time, then the interest rates stipulated by the appellant, that was under obligation as a bank to comply with the Central Bank guidelines in the matter, could not be fixed: it had to vary from time to time in response to the Central Bank j guidelines . . . The provision of clause 3 of the mortgage

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 212 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

agreements can be relied upon to stipulate rates of interest in re- a sponse to the CBN’s guidelines on the matter.” The argument of the appellant that the interest rate of 10% stipulated in the mortgage deed cannot be varied in line with b clause 3 has failed to take account of the wording of the clause and the statement of principle in this regard in Union Bank of Nigeria Ltd v Ozigi (supra). The appellant’s Counsel argued further that the Central c Bank’s directive pleaded by the respondent was not tendered to support its entitlement to a higher rate of interest. I think, with due respect, the argument does not arise having regard to the nature of the claim before the court in this suit. The d appellant’s claim is that the 10% interest is fixed and cannot be varied. That is what the court was called upon to decide. The Central Bank’s directive is not needed to interpret clause 3 of the mortgage deed. It will only be needed to as- e certain what the variation is from time to time when there is a claim to a particular quantum of interest based on an alleged higher interest rate as directed by the Central Bank. Such a claim was not an issue in this action. f The contention of the appellant about multiple debits of some of its cheques is not convincing. The evidence it relied on is that the respondent fraudulently debited the appellant with cheques issued by it in several ledgers rather than just g once a paid cheque should be reflected in the ledger. The chartered accountants commissioned by the appellant to check the bank statement carried out two specific assign- ments, namely (a) the differential in interest charged by the h respondent above the 10% stated in the mortgage deed; and (b) the debiting of the account more than once in respect of some cheques. One of the chartered accountants who testified as PW1, Isaiah Adeoti Adeniran, worked the interest i due on 10% throughout. He said that he relied on the figure of the 10% given to him by the appellant and admitted thus: “If there is another agreed interest rate between the parties not supplied to me my finding will then be wrong.” This j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Owoniboys Tech. Services Ltd v. Union Bank of Nigeria Ltd 213 a shows the witness was not given the increased interest rate to work on. In respect of the alleged double debiting of cheques, b the witness was not helpful to the appellant. He referred to different entries from the compilation made by him in which he quoted shortened cheque numbers, usually the three last figures on a cheque leaf. Those cheques appeared in more c than one entry. But the witness himself said that the real figure in a cheque leaf is more than three digits and that what and he stated in his compilation was the shortened form not the digits quoted in full. He then admitted thus: “It is not possible to have more than one entry in respect of one d cheque.” The sole witness for the defence, DW1, Remi Oku- laja who works for the respondent bank, explained in detail the entries in the statement of account. The court below gave adequate consideration to the evidence led and came, in my e view, to the correct decision that the statement of account reflected genuine entries and the indebtedness of the appellant to the respondent. It is very strange that the trial court awarded the sum of N550,000 to the appellant as the total f amount arising from multiple debiting when even PW1 admitted that if his calculation had been correct the appellant would be owing N3,438,944 as overdraft. On the whole, the evidence as to alleged multiple wrong entries or withdrawals g does not at all prove the allegation. In all the circumstances, I too find no merit in this appeal and accordingly dismiss it with N10,000 costs. h Appeal dismissed.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

214 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

a First African Trust Bank Limited v Partnership Investment Company Limited

SUPREME COURT OF NIGERIA b EJIWUNMI, IGUH, KUTIGI, MOHAMMED, MUSDAPHER JJSC Date of Judgment: 12 DECEMBER, 2003 Suit No.: SC.293/2001

Banking – “Bank draft” – Meaning of c Banking – Bank draft – Where consideration failed – Whether bank can stop payment

Banking – Bill of exchange – Failure of consideration – Ef- d fect Banking – Bill of exchange – What amounts to fraudulent dealing thereof e Banking – Cheque drawn on a banker – Consideration given by a party thereto – Presumption thereof – Whether rebuttable – Section 30(1) of the Bill of Exchange Act, Cap 35 Laws of the Federation of Nigeria, 1990 considered f Banking – Cheques – Extent of banker’s obligation to honour customer’s cheque – Where customer has sufficient funds in his account – Effect thereof g Banking – Negotiable instrument – Where consideration failed – Whether nominee can claim value of the instrument Banking – Promissory note – Whether a payee for value can maintain an action h Contract – Fraud – Effect thereof on a contract Evidence – Documentary evidence – Importance of in banking transactions i

Facts The plaintiff’s/respondent’s claim was for the sum of N7,100,000 (Seven Million, One Hundred Thousand Naira) j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

First African Trust Bank Ltd v. Partnership Investment Co Ltd 215 a being the value of a bank draft issued by the appellant in favour of the respondent on 8 February, 1995 as per First African Trust Bank cheque no. 40622-0621500 and which b cheque was returned unpaid despite repeated demands. The respondent also claimed interest at the rate of 2l% per annum from 8 February, 1995 to the date of judgment and 10% per annum thereafter until judgment debt was finally paid. c The appellant filed a statement of defence where it denied that the respondent rendered any services. The appellant also averred that contrary to the agreement between it and Alhaji Ladan, the bank draft was presented for clearing and it d threatened to stop payment but was prevailed upon by Alhaji Ladan and Alhaji Abubakar to return the bank draft marked “represent” to enable the respondent to receive value for the foreign currency purchased and that the bank draft was rep- e resented without receipt of the foreign currency and at that stage the appellant stopped payment to prevent loss of the sum of N7,100,000 and a fraud on it. The appellant further averred that neither Alhaji Ladan nor the respondent had an f account with it and that it did not receive any value for the bank draft from them or anyone else and that it reported the attempted fraud to the police which arrested some people in connection therewith. The appellant also denied that the re- g spondent gave any value for the bank draft or suffered any loss at all or suffered any loss attributable to the appellant. At the trial, the respondent called a sole witness who testified that the bank draft was given to the respondent by Al- h haji Abubakar to settle an amount owed in respect of some transactions with the respondent. Under cross examination, the witness said in one breath that the transaction was for the purchase of some shares of the respondent by Alhaji i Abubakar, while in another breath, he said the bank draft was for settlement of credit facilities of N26 million granted by the respondent to Alhaji Abubakar. The witness however did not tender any documentary evidence in respect of the j transactions he testified about.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

216 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

The appellant, on the other hand, called two witnesses a who testified that after the appellant agreed to purchase the foreign currency offered for sale by Alhaji Ladan, the bank draft was issued by the appellant in favour of the respondent b at the request of Alhaji Ladan on condition that Alhaji Ladan will not hand over the bank draft to the respondent for presentation for payment until Alhaji Ladan had transferred foreign currency and that this condition is a standard condi- c tion applicable to autonomous foreign exchange transactions. The witnesses further testified that the appellant was surprised that the bank draft was presented for payment when the appellant had not received the foreign currency d from Alhaji Ladan and that, despite marking the bank draft “represent” on the plea of Alhaji Ladan, he did not pay the foreign currency into the appellant’s account. Consequently, the appellant stopped payment on the bank draft to prevent a e fraud on itself. Judgment was given in favour of the respondent. Being dissatisfied, the appellant appealed to the Court of Appeal which again upheld the judgment of the trial court. The ap- f pellant has now appealed to the Supreme Court. Held – 1. A banker, without doubt, is bound to pay cheques drawn g on him by a customer in legal form provided he has in his hands at the time sufficient and available funds for the purpose, or provided the cheques are within the limits of an agreed overdraft. h There must be sufficient funds to cover the whole amount of the cheque presented for payment in the absence of special arrangement. There is, as a general rule, no obligation on the banker to pay any part of a cheque i for an amount exceeding the available balance. The banker only contracts with the customer to honour cheques when he has “sufficient” and “available” funds in hand. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

First African Trust Bank Ltd v. Partnership Investment Co Ltd 217 a 2. The word “draft” has been defined in law to include a bill of exchange as well as a cheque. It is said to be a nomen generale which embraces every request by the drawer upon the drawee to pay money. b 3. Where the consideration for which a party signed a bill or note consists of a definite sum of money or of something the value of which is definitely ascertained in c money, and it was either originally absent or has subsequently failed, whether totally or in part, the sum, if any, which a holder standing in immediate relation to such party is entitled to receive from him is naturally reduced pro tanto. d However, a remote party who has given value for the instrument may be entitled to receive payment in full. In the instant case it was clearly not established that the re- e spondent gave any value for the draft. Consequently, the respondent will remain a volunteer who cannot claim upon the draft against the appellant. 4. By the provisions of section 30(1) of the Bills of Ex- f change Act, Cap 35 Laws of the Federation of Nigeria, 1990, every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value. Accordingly, bills of exchange and promissory g notes, unlike other forms of simple contract, are presumed to stand upon the basis of a valuable consideration pursuant to the provisions of section 30(1) of the Bills of Exchange Act, hereinafter also referred to as the h Act. The effect of the presumption, therefore, is that it shifts the burden of proof from the shoulders of the plaintiff who relies upon the instrument to those of the defendant who impugns it. It is, however, necessary to stress that this presumption of value provided under sec- i tion 30(1) of the Act is not an irrebuttable presumption. It is only a prima facie presumption which may therefore be rebutted in appropriate cases. Once successfully rebutted, the presumption under the said section 30(1) of j the Act is dislodged and ceases to operate.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

218 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

5. Where the principal has no claim to the draft as a result a of the total absence of consideration by way of his failure to supply the agreed foreign exchange to the appellant the respondent cannot claim a better right to the draft in b the absence of evidence of a separate and distinct value it gave for the draft. 6. The principle is well established at law that there cannot possibly be any claim by way of action on a promissory c note by the original person to whom the promissory note was given if he never gave any consideration for it. Nei- ther in law nor in equity can the payee under a promissory note, which appears on the facts before the court to d be voluntary, have any claim as a creditor. 7. A banker is entitled to stop payment on a draft to prevent fraud against itself. In the instant case, it is not even clear how Alhaji Abubakar came into the picture. It is e therefore manifest that the appellant was entitled to stop the payment of the draft to prevent fraud against itself by its customer. 8. Fraudulent dealing relating to an instrument may consist f of negotiating an instrument in breach of faith, as when the bill is indorsed to a party for a special purpose of having it discounted by him and the latter instead of doing so negotiates it to another person. g 9. Fraud vitiates every contract into which it enters, and an instrument the consideration of which is fraudulent even in part is voidable at the option of the party defrauded except against a holder in due course. h 10. It cannot be disputed that bank loan transactions and/or the purchase of company shares are readily provable by documentary evidence and, where this is relevant, ought to be produced and tendered as they speak for them- i selves as against the ipse dixit of a witness in respect of such transactions which cannot be readily accepted by the court. Appeal upheld. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

First African Trust Bank Ltd v. Partnership Investment Co Ltd 219 a Cases referred to in the judgment Nigerian Akeredolu v Akinremi (1989) 3 NWLR (Part 108) 164 b Amida v Oshoboja (1984) 7 SC 68 B.O.N. Ltd v Saleh (1999) 9 NWLR (Part 618) 331 Fadlallah v Arewa Textiles Ltd (1997) 8 NWLR (Part 518) c 546 Fatoyinbo v Williams (1956) 1 FSC 87; (1956) SCNLR 274 Finnih v Imade (1992) 1 NWLR (Part 219) 511 d H.M.S. Ltd v F.B.N. Ltd (1991) 1 NWLR (Part 167) 290 Igwe v A.C.B. Plc. (1999) 6 NWLR (Part 605) 1 National Investment and Properties Co Ltd v Thompson Or- e ganisation Ltd and others (1969) 1 All NLR 138 Lagricom Co Ltd v U.B.N. Ltd (1996) 4 NWLR (Part 441) 185 Okubule v Oyagbola (1990) 4 NWLR (Part 147) 723 f U.B.A. Ltd v Ibhafidon (1994) 1 NWLR (Part 318) 90 U.B.N. Ltd v Nwoye (1996) 3 NWLR (Part 435) 135 Yesufu v A.C.B. 1 SC 74 g Foreign Carew v Duckworth (1869) L.R. 4 Exch. 313 h Hunter v Bowyer (1850) 15 L.T.O.S. 281 Joachimson v Swiss Bank Corporation (1921) 3 K.B. 110 London Joint Stock Bank v Macmillan and Arthur (1918) A.C. 777 i Munroe v Bordier (1850) 8 Ch. 862 Oscar Harrisson and Co v Vallarman and Co (1940) 1 All ER 185 j Re Whitaker (1889) 42 Ch.D. 119

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

220 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian statutes referred to in the judgment a Bills of Exchange Act, Cap 35 Laws of the Federation of Nigeria, 1990, section 30(1) Evidence Act, Cap 112 Laws of the Federation of Nigeria, b 1990, section 150

Books referred to in the judgment Halsbury’s Laws of England (4ed) Volume 4 paragraph 379, c page 164 R. Burrows Words and Phrases Judicially Defined Volume 2 page 133 d Judgment EJIWUNMI JSC: (Delivering the lead judgment) The claim that eventually led to this appeal was commenced by the e plaintiff/respondent before the High Court of Lagos State in Suit No. LD/1395/95. In that suit the plaintiff’s/respondent’s claim was for the sum of N7,100,000 (Seven Million, One Hundred Thousand Naira) being the value of a bank draft issued by the appellant in favour of the respondent on 8 Feb- f ruary, 1995 as per First African Trust Bank cheque no. 40622-0621500 and which cheque was returned unpaid despite repeated demands. The respondent also claimed interest at the rate of 2l% per annum from 8 February, 1995 to g the date of judgment and 10% per annum thereafter until judgment debt was finally paid. The writ of summons in respect of this claim was followed by a statement of claim. Thereafter, the respondent by a mo- h tion on notice, applied to the trial court for leave to enter judgment against the appellant. That move was received by the appellant who eventually got the leave of the trial court to file its statement of defence in order to defend the action. i The case was then heard on the pleadings filed by the parties. For the respondent, one witness gave evidence while the appellant proffered evidence in support of its own case by calling two witnesses. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 221 a In view of the comments that will be made later in this judgment the pleadings of the parties would be set out in this judgment. For the plaintiff/respondent, the statement of b claim filed on its behalf by its learned Counsel reads thus:– “1. The plaintiff is a registered company with its office at 37 Ademola Street, S.W. Ikoyi, Lagos and carrying on the business of financial consultants and suppliers. c 2. The defendant is a registered company carrying on banking services at Afribank Street, Victoria Island, Lagos. 3. On 8 February, 1995 the defendant issued a bank draft no. 40622-062150011 for N7,100,000 in favour of the plaintiff d for services rendered. 4. That on presentation the cheque was first returned and marked ‘represent’ ‘value not received’. 5. That when the cheque was again represented it was returned e and marked ‘payment stopped’. 6. That payment could not be stopped because it was the bank self that issue (sic) the cheque. 7. That the plaintiff had already given value on receipt on the f bank draft.” And for the appellant, its statement of defence reads thus:– “SAVE AND EXCEPT as hereinafter expressly admitted the de- g fendant denies each and every allegation contained in the statement of claim as if the same were specifically set out and traversed seriatim. (1) That the defendant admits paragraphs 1 and 2 of the statement of claim. h (2) The defendant denies paragraphs 3, 4, 5, 6 and 7 of the statement of claim. (3) The defendant in particular response to paragraphs 3 and 7 i of the statement of claim denies ever receiving value or consideration for the banker’s cheque; the subject matter of this suit, and avers that it stopped payment of the same to prevent fraud on itself. (4) Further to the immediately preceding paragraph the defen- j dant states that sometime in February 1995, while in the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 222 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

course of trading, a man called Alhaji Tijani Ladan offered a to sell US$500,000 to the defendant in the presence of one Alhaji Ahubakar of Damco Bureau de Change and another. (5) The defendant further states that part of the conditions b precedent to concluding and transferring the money was that part-payment must be made in draft as evidence of the defendant’s ability to pay before the transfer can be effected. c (6) The defendant states that based on the aforesaid agreement in paragraph 5 it issued two cheques for N15 million Naira as follows:– N (a) Nigeria Universal Bank 7,900,000.00 d (b) Partnership Investment N 7,100,000.00 TOTAL – N15,000,000.00

(7) Contrary to the said agreement the banker’s cheque subject e matter of this suit came in through clearing. The defendant immediately threatened to stop payment, but was prevailed upon by the aforesaid persons to return the cheque marked ‘represent’ to enable the defendant [to] receive value for the foreign exchange purchased. f (8) However, the said cheque was represented without receipt of the foreign exchange and at this stage the defendant stopped payment to prevent loss of the naira sum of N7,100,000. g (9) The defendant states that the said attempted fraud was reported to the Police Authorities, and some of the said persons involved were arrested. (10) The defendant avers that neither the said Alhaji Tijani h Ladan nor the plaintiff has an account with it and denies receiving any value for the said banker’s cheque from them or anyone else. (11) The defendant denies that the plaintiff gave it any value for i the said cheque nor has the plaintiff suffered any loss at all. ALTERNATIVELY, if the plaintiff suffered any loss at all (which is denied) the same is not attributable to the fault of the defendant. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 223 a (12) The defendant further states that only the outcome of police investigations can reveal what role (if any) the plaintiff played in the entire transaction as the plaintiff’s name was given to the defendant as beneficiary of the said cheque. b (13) That even with the endorsement on the cheque (ie ‘represent’ ‘value not received’) the plaintiff did not contact the defendant for confirmation of the cheque until after same had been stopped. c (14) The defendant further states that had it not stopped payment of the said cheque; it would have suffered a complete loss of the value of the cheque. (15) Whereupon the defendant states that the plaintiff’s claim is d speculative and unfounded and should be dismissed with costs to the defendant.” At the trial, the case for the respondent as given by the only witness called appears to be that one Alhaji Abubakar e brought a bank draft of N7.l million which was part payment of an amount owed by him to the respondent. Following the presentation of the cheque for payment to the appellant, claimed by the respondent to be its bankers, the bank draft f no. 013922 dated 8 February, 1995 was returned and that it should be represented. The respondent duly represented the bank draft, exhibit P1, at a future date. When it was so represented to the appellant, it was returned unpaid with this g remark: “Value not received”. Since the bank draft has remained unpaid, the respondent commenced this action. Un- der cross examination, the witness said about Alhaji Abubakar who gave the bank draft to the respondent as fol- h lows, and I quote:– “Alhaji Abubakar was interested in investing in the plaintiff’s company by purchase of shares on the company. The plaintiff company made some payments to Alhaji Abubakar in terms of fa- i cilities granted to him. He was given credit facilities by the plaintiff company. He was given credit facilities up to Twenty-six Mil- lion Naira N26,000,000. The credit facilities was given to Alhaji in January 1995. The draft was given to the plaintiff by Alhaji Abubakar in part settlement of the credit facilities granted to him. j When the draft was dishonoured we made contract (sic) with

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 224 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Alhaji Abubakar about it, he did not make any effort to repay the a returned draft even after several meetings . . .” For the appellant, evidence was given by its first witness, inter alia, that the respondent was not a customer of the ap- b pellant. That apart from the bank draft, exhibit P1, appellant had no relationship whatsoever with the respondent. He said that around 8 February, 1995, one Alhaji Tijani Ladan came with Alhaji Abubakar of Damco Bureau de Change to the c appellant where they had a meeting with the officials of the appellant. During that meeting the visitors offered to sell on the autonomous market a sum of $500,000. As the representatives of the appellant became interested in the offer, it was agreed with the offerors that the said sum would be bought d by the appellant for the sum of N15,000,000 (Fifteen Mil- lion Naira). At the request of Alhaji Tijani, the appellant also agreed that it would issue two cheques (bank drafts) for the sum of N15,000,000 as follows:– e (1) for the sum of N7.9 million in favour of Nigeria Universal Bank; and (2) the second cheque (bank draft) for the sum of N7.1 f million in favour of the appellant. The witness further added that it was a term of the agreement that the two bank drafts to be issued by the appellant g would not be presented for payment until the sum of $500,000 had been transferred and received into the foreign account of the appellant bank. The appellant was, however, N surprised that the relevant bank draft, in this case for 7.1 h million, was presented for payment before the $500,000 (dollars) was paid into the foreign account of the appellant. As this action was contrary to the agreement reached between the appellant and Alhaji Ladan, the bank draft was not paid. It was returned and marked “represent”. The other i bank draft for N7.9 million was similarly treated. Despite that treatment of the cheques, the sum of $500,000 (dollars) that was promised by the offerors, namely, Alhaji Abubakar and Alhaji Ladan, remained unpaid into the account of the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 225 a appellant. The bank draft of N7.l million relevant to this case had to be stopped by the appellant to prevent a fraud on itself. The appellant subsequently explained to the managing director of the respondent its reasons for stopping the bank b draft, exhibit P1. The evidence of the second witness for the appellant, one Rufus Adeosun, who described himself as a banker and in c the employment of the appellant, confirmed the transaction as stated by the first witness, a Mrs Solomon Osita Mbamalu, a legal practitioner and the legal adviser of the appellant. Following addresses at the close of the oral evidence given d by the parties, the learned trial Judge delivered a considered judgment. By the said judgment, the respondent was awarded judgment in terms of its claim. Accordingly, the respondent was awarded its claim for the sum of N7,100,000 e being the value of the bank draft issued by the appellant in favour of the respondent with interest at the rate of 21% per annum from 8 February, 1995 until the date of the judgment, and thereafter at the rate of 10% per annum until the judgment debt was fully paid. f Being dissatisfied with the judgment of the trial court, the appellant appealed to the Court of Appeal (Lagos Division). In that court, the appellant was also unsuccessful and has g therefore appealed to this Court. Pursuant to its appeal to this Court, the appellant was granted leave to appeal to this Court. The appellant in compliance with the rules of this Court filed a brief for the appellant. Upon being served, the h respondent also filed a respondent’s brief. For the appellant, the following issues were identified in the appellant’s brief for the determination of the appeal:– “(a) Whether in the circumstances of this case the appellant is i obliged to pay the respondent on exhibit P1 when the Court of Appeal had found that the pleadings and evidence of the appellant on want of value had not been controverted nor seriously challenged by the respondent (Ground 1). (b) Whether the learned Justices of the Court of Appeal were j right in holding that the appellant had not sufficiently

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 226 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

pleaded nor proved the fraud which the appellant alleged in a this case (Grounds 2 and 3). (c) Whether in the absence of a written endorsement of the condition precedent on the draft, the appellant is not permitted by law to prove that the delivery of the draft was subject to b a condition precedent and whether the condition ought not to bind the respondent who is a nominee of Alhaji Ladan with whom the appellant entered into an agreement for the supply of forex (ground 4).” c In the respondent’s brief, the following are the two issues set down for the determination of the appeal:– “(1) Whether the respondent was required by law to show that it had given consideration for the draft before it could be paid. d (2) Whether the alleged fraud had been particularised as required by law and proved.” As I have carefully considered the issues raised by the parties for the determination of the appeal and, although my e judgment would be guided by the issues raised in the appellant’s brief, I would also advert to the two issues proffered for the respondent, as they are also germane to the determination of the appeal. f Now, a careful reading of the facts of this case, the pleadings of the parties and the judgments of the courts below would reveal that the core question raised in this appeal is whether the court below was right to have upheld the con- g clusion reached by the trial court that the draft, exhibit P1, was payable at sight to the respondent. It is, however, argued for the appellant in the appellant’s brief and in the oral argument before this Court that the h court below was wholly wrong to have upheld the judgment of the trial court. In support of that submission, learned Counsel for the appellant has argued that the court below properly adverted to the pleadings of the parties and rightly i observed that, having regard to the state of the pleadings, the respondent ought to have filed a reply to the statement of defence of the appellant. The court below, it is argued, without considering this aspect of the appeal before it, wrongly, j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 227 a in the view of learned Counsel for the appellant, went on to hold that if the appellant had not received value, it would not have issued the draft, as it is the practice of banks to receive b value before drafts are issued. He went on further to submit that the court below wrongly placed reliance on the decisions in U.B.A. Ltd v Ibhafidon (1994) 1 NWLR (Part 318) 90 and Lagricom Co Ltd v U.B.N. Ltd (1996) 4 NWLR (Part c 441) 185. It is also argued in support of the above submission that the court below misconceived the evidence of the appellant or did not sufficiently relate the evidence of the appellant in support of its pleadings before reaching the con- d clusion that the respondent was entitled to be paid the sum claimed in exhibit P1. In the view of learned Counsel for the appellant, had the court below considered such evidence as was on record, it would have reached the conclusion that the e decision in U.B.A. Ltd v Ibhafidon (supra) was not applicable to the case under consideration. He then referred to the case of U.B.N. v Nwoye (1996) 3 NWLR (Part 435) 135 as more apposite to the determination of the question raised in f respect of this issue. He also invited the attention of the Court to Halsbury’s Laws of England Volume 4 (4ed) paragraph 379 at 164, and to the following cases: Re Whitaker (1889) 42 Ch. D. 119 at 124 and R.E. Jones Ltd v Waring g and Gillow Ltd (1926) A.C. 670 at 680, 687 and 699. On this main question, the contention made for the respondent in the respondent’s brief and in the oral argument at the hearing of the appeal, is that the court below was right to h have upheld the respondent’s claim. Learned Counsel for the respondent urged the court to apply the decision in U.B.A. Ltd v Ibhafidon (supra), for the appellant, before issuing the draft, exhibit 1A, must have satisfied himself that the trans- i actions leading to its issuance were in order. In the view of learned Counsel for the respondent, the bank cannot rely on a mistake of the bank and another third party to repudiate the payment of the draft. It is the further submission of learned j Counsel that the appellant, once it has issued the draft, is

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 228 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) estopped under section 150 of the Evidence Act from deny- a ing that it was not issued for valuable consideration. Before the consideration of the arguments proffered by learned Counsel for the parties in respect of this issue, I b think it is desirable to advert first to the pleadings filed in this matter. In this respect, it is pertinent to note that the court below in the course of the lead judgment delivered by Chukwuma-Eneh JCA adverted to the state of the pleadings c when he had referred to the pleadings and said at 345 of the records, thus:– “The foregoing represents the state of the pleadings of both parties upon which issues were joined in the lower court. No reply was d filed by the respondent (ie the plaintiff in the court below) on the new issues of want of consideration and allegation of fraud. Per- haps it did not feel obliged in the circumstances that one was necessary. I do not intend to expatiate on the point.” e Then he went on to make the following observation with regard to the position:– “The respondent (as plaintiff) had strenuously argued that the appellant was estopped from denying that it had received value for f exhibit P1. Besides that as a holder in due course he was not obliged to give value. It went on to assert that the draft was for shares taken in the respondent’s company, in another breath that it was given to meet the credit facilities of N26m given to Alhaji Ladan. The trial court upheld the respondent’s case that value was g given.” After making the above observation, the court below then went on to consider what both that court and the trial court perceived to be the case for the appellant as opposed to that h of the respondent. In that regard the court below had this to say at 346 of the printed record:– i “The crux of the appellant’s case on the pleading and evidence in the court below is that exhibit P1 was issued and delivered to the (sic) Alhaji Ladan on condition that the draft would not be presented for payment unless and until the foreign exchange was paid into the appellant’s account. The foreign exchange was not paid j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 229 a before exhibit P1 was presented for payment hence it was dishonoured. The witnesses were called to support the averments in the pleadings. It was suggested that the respondent prevaricated as to the nature of the transaction it alleges between it and Alhaji Ladan. b And also that neither could serve as consideration for the draft.” It is pertinent to observe that the pieces of evidence attrib- uted to the respondent concerning the purchase of shares from it by Alhaji Ladan would not have been considered by c the trial court and the court below as nowhere in its pleadings did the respondent make such averments. This is because it is settled law that as parties are bound by their pleadings, evidence not pleaded cannot be allowed at the d trial. And if such evidence was admitted, then an appellate court is duty bound to strike out such evidence, and must not consider it in the determination of the appeal (see National Investment and Properties Co Ltd v Thompson Organisation e Ltd and others (1969) 1 All NLR 138; Akeredolu v Akinremi (1989) 3 NWLR (Part 108) 164 at 173). Therefore, the court below should not have alluded to the unpleaded evidence led by the respondent. Be that as it may, it is in my view clear f that the pleadings of the respondent show quite clearly that their claim was based solely on the fact that exhibit P1 was issued by the appellant. Now with that as the position of the respondent, the court below then accepted the formulation g made by the trial court as to what the appellant need to prove in order to avoid the payment of exhibit P1 to the respondent. h The court below, in accepting that formulation, then opined as follows:– “I am therefore compelled to hold the opinion that on the particular facts of this matter that for the appellant to succeed in this ap- i peal it was obliged to prove want of consideration together with fraud on the part of Alhaji Ladan so as to establish that there was no contract at all, ie ab initio. If I may further observe, ‘as the issues of’ want of consideration and fraud appear founded on the same substratum it is beyond conjecture that failing to establish ei- j ther would completely collapse appellant’s case. The question that

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 230 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

naturally follows is; whether the appellant succeeded in this exer- a cise.” The court below, per Chukwumah-Eneh JCA, then proceeded to consider United Bank of Africa Ltd v Ibhafidon b (1994) 1 NWLR (Part 318) 90 and Lagricom Co Ltd v Union Bank of Nigeria Ltd (1996) 4 NWLR (Part 441) 185, to answer the question. And at the end of the consideration of these cases, the court below upheld the conclusion reached c by the trial court that the draft, exhibit P1, was otherwise payable at sight since, as found by the trial court, the alleged fraud had not negatived the presumption of value as per section 30 of the Act. d Now, as the lower court depended so much on the decision reached in the cases referred to above, namely, U.B.A. v Ib- hafidon (supra) and Lagricom v U.B.N. (supra), it is necessary to examine the cases, though they happen to have been e judgments of the court below. The close examination of the decisions in the cases should help to decide whether the court below was right to have placed reliance on them in the determination of the question raised before it in the instant f appeal. For this purpose, I will begin with the case of U.B.A. v Ibhafidon (1994) 1 NWLR (Part 318) 90 where I delivered the lead judgment. The pertinent facts of this case are that. “One Mr Ehinola who was introduced to the respondent in this ap- g peal claimed to have a large sum of money in dollars in his domiciliary accounts with the appellant herein. He offered to sell to the respondent at the rate of N4 to one US dollar. The respondent was not willing to take advantage of the offer unless he was able to confirm the claim of Mr Ehinola to ascertain the liquidity position h of the account. Mr Ehinola and the respondent together went to the appellant’s central branch office in Lagos where the said Mr Ehi- nola applied to withdraw the sum of $33,643 from his account. The bank official told them to come back the following day. On getting there the following day the respondent was informed by i the bank official that he could proceed with the foreign exchange transaction as Mr Ehinola has sufficient funds to accommodate the amount applied for by Mr Ehinola. The respondent claimed he handed over N134,572, the Naira equivalent of US$33,643 to Mr Ehinola in the presence of the bank official concerned and that j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 231 a thereafter the appellant, through one of its officials drew up a bank draft no. 031069 for US$33,643 in his (respondent’s) favour and handed it over to him (respondent). The respondent went with the draft to the appellant’s branch in Benin and was informed that he b will be able to encash the sum on the draft. He was advised to open an account with the draft which advice the respondent complied with on 18/11/86 and he was allocated with an account no. FCA/0003 with a teller with which he paid the draft into his account with the bank. The respondent was asked to call back at the c bank after 21 days to collect the proceeds of the draft. At the expiration of the 21 days, the respondent was not given any money but was informed that nothing had been heard from the appellant’s head office in Lagos. The appellant bank later wrote a letter to the respondent repudiating the payment on the draft. The respondent d as plaintiff therefore commenced this action and claimed in his writ of summons the sum of US $33,613 (sic) interest at 15% on the said sum. The case for the appellant was that the domiciliary account of e Mr Ehinola was funded from a forged cheque. It is also contended that the respondent is not entitled to recover the proceeds of the draft as the transaction or arrangement he made with Mr Ehinola is illegal being in contravention of the Foreign Currency (Domicili- ary Accounts) Decrees No. 18 of 1986 which forbids transaction in f foreign exchange other than with an unauthorised (sic) dealer which the appellant claimed Mr Ehinola was not. The defendant, not satisfied with the judgment of the trial court appealed to the Court of Appeal.” And upon the facts revealed in that case after referring to g pertinent cases on the question raised, namely Yesufu v A.C.B. 1 SC 74 at 92 and Balogun v National Bank of Nige- ria Ltd, I said at 120–121:– “It follows, having regard to the principles enunciated above that h where as in the instant case that a customer who had deposited a cheque with the appellant banker and upon the authority of the customer who had deposited money standing in his name with the banker is instructed to pay a certain sum from that account to an- i other person and acting on that authority the banker issued a draft accordingly, the payee of the draft or the person to whose favour it was issued is entitled to the proceeds of that draft. In such circumstances as it is clear that when the appellant/ bank issued the draft to the respondent as authorised by the depositor, its customer, the j appellant did so because it was satisfied that the account of the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 232 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

depositor is sufficiently in funds to meet the amount for which the a draft was issued. In my view the time when the draft was issued could well be described as the moment of truth for the appellant. It seems to me that the officials of the appellant who issued the draft ought to have been familiar with the effect of issuing a draft in re- b spect of money standing to the credit of its customer. Secondly, it is not in evidence that the procedure for dealing with funds of this kind as laid down in the Enabling Acts was followed before the draft was issued. The appellant cannot be heard to refuse the payment of the draft that was issued to the respondent because of a c further development that had nothing to do with him. The appellant is obliged to pay the proceeds of the draft to the respondent and should seek relief against its depositor, Mr Ehinola. It follows therefore that the appellant was wrong to have refused to pay the d proceeds of the draft to the respondent and I therefore would uphold the expressed views of the lower court that the appellant is obliged to pay the respondent the value of exhibit 1A.” It must be noted that the respondent in that case was suc- e cessful in that when the appellant received the bank draft issued from the headquarters branch of the respondent, the respondent had previously ascertained from his enquiries that there was enough funds to pay the proceeds of the bank draft at the Benin branch of the appellant bank. f I now turn to the case of Lagricom Co Ltd v U.B.N. Ltd (supra), where the facts are as follows:– “The appellant sued the third and fourth respondents jointly and g severally for the sum of N3,205,000 being the value of cocoa supplied to them for which they failed to pay; against the first respondent the sum of N2,400,000 and an injunction prohibiting the first, fifth and sixth respondents from paying the said sum of N2,400,000 to the second respondent as well as general damages h of N5,000,000 against the first, third and fourth respondents for breach of their obligations The appellant is a cocoa merchant and the third and fourth respondents were his customers. It transpired that the third and fourth respondents were agents of the second re- i spondent. Over time, the third and fourth respondents were buying cocoa on a regular basis from the appellant and at times on credit. According to the appellant, some time in December, 1988, after settling their previous indebtedness, the third and fourth respondents started evacuating cocoa with a promise to pay later. They j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 233 a evacuated cocoa amounting to N13,950,000 and that they paid a total sum N11,475,000 leaving a balance of N2,475,000 still owing. Thereafter the third respondent issued a draft for N2,400,000 to the appellant made by the first respondent in favour of the ap- b pellant. The said draft was lodged in the appellant’s account with the first respondent’s branch at Ife. Following the appellant’s refusal to allow further evacuation of cocoa until he was paid the balance outstanding, the third respondent took steps and prevailed c on the first respondent to stop the draft and it was stopped. Ac- cording to the third respondent the draft represented upfront payment for the cocoa and that it was the failure of the appellant to deliver to him what he paid for that made him to stop the draft. It was for this that the appellant sued and made various claims d against the respondents. The third respondent also counter- claimed. The High Court dismissed the appellant’s claims and granted the third respondent’s counter-claim against the appellant with costs. The appellant appealed to the Court of Appeal.” e The court below, after hearing the appeal case argument of Counsel, upheld and ordered that the draft issued in favour of the appellant be paid by the respondent. f Again, it must also be noted from the accepted facts in that case that there had been transactions concerning the sale and evacuation of cocoa between the third respondent and the appellant and which on the facts showed that the third respondent was in debt in the sum of N2,475,000 to the appel- g lant. That the third respondent then issued a bank draft on the first respondent for N2,400,000 in favour of the appellant. It was this bank draft which was not honoured by the first respondent and which the Court of Appeal ordered by h its judgment to pay to the appellant. While it is clear from the judgment that that order was made in keeping with a similar order that was made in U.B.A. Ltd v Ibhafidon (supra), it must be emphasised that in that case the order to pay i was made because it was apparent that, when the bank draft was issued to the respondent, there was evidence that the money was sufficient to cover the amount on the bank draft in the account of the respondent with the appellant bank at j its headquarters office in Lagos. I have earlier quoted what I

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 234 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) said in this connection in U.B.A. v Ibhafidon (supra). I there- a fore need not repeat it here. However, it suffices to refer to a portion from the above quoted passage from the said judgment for the sake of emphasis. It reads:– b “. . . as it is clear that when the appellant bank issued the draft to the respondent as authorised by the depositor, its customer, the appellant did so because it was satisfied that the account of depositor is sufficiently in funds to meet the amount for which the draft was issued.” c I think that learned Counsel for the appellant was right in his argument in his brief when he contended that the facts in U.B.A. v Ibhafidon and the Lagricom v CBN cases (supra) d could properly be distinguished from the facts in the instant appeal. From what I have said above, it is a common feature between the earlier cases that the bank drafts were issued against accounts that were sufficiently funded to accommo- e date the drafts issued by the appellant banks. In my humble view, the orders to compel the payment of the bank drafts so issued was clearly because there was no positive evidence to show why the bank drafts should not be paid over to the f recipients. But with regard to the instant appeal, the facts in my humble view did not show that the respondent had any funds in the account of the appellant or that any money was proved to have been deposited in the account of the appel- g lant bank by its procurers, namely, Alhaji Ladan and Alhaji Abubakar. It is pertinent to refer also to the case of U.B.N. v Nwoye (1996) 3 NWLR (Part 435) 135. The facts of this case stated briefly are as follows: The respondent who was h the plaintiff in the High Court maintained a current account with the Asaba branch of the Union Bank Ltd, the appellant. On 2 July, 1984, the respondent issued a cheque for N15,000 to a trading partner, but it was dishonoured because, as at that time, the respondent had only N7,621.24 i standing as balance in his current account. The respondent who believed that at the time he had enough money in his account to meet the said cheque felt greatly injured as to his credit and trade and then instituted the present action against j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 235 a the appellant claiming the sum of N100,000 as special and general damages for wrongful dishonour of his cheque or, in the alternative, he claimed the N100,000 as special and gen- b eral damages for negligence. At the hearing, the respondent gave evidence to the effect that he had deposited over N19,000 in his account. The appellant through its witness, admitted this but contended that most of the lodgements c made by the respondent were made through drafts which had not been cleared. At the High Court the respondent succeeded and the appellant appealed unsuccessfully to the court below. In this Court, the further appeal by the appel- d lant succeeded. It is, I think, apposite to quote in part the reasons given by some of the Justices of this Court for allowing the appeal. Mohammed JSC, who wrote the leading judgment, said thus e at 143:– “There is evidence from both the plaintiff’s and defendant’s witnesses, who were bankers, on the banking procedure in respect of clearance of draft cheques. In this case A.C.B. did not clear draft f cheque of N8,000 which was sent to it by the appellant. As I mentioned earlier, the bank sent to the Union Bank Asaba, the appellant, a draft cheque for N86,285.46 drawn on A.C.B. Ring Road, Benin. The correct banking procedure, as has been explained by g the bankers, is that the amount in the draft cheque, even if credited to a customer’s account, is not equivalent to cash lodgment. The customer has to wait until after the cheque has been cleared in the clearing house within the Central Bank before it could be regarded as cash.” h Iguh JSC at 144–145 had this to say:– “The main issue that has arisen for determination in this appeal is whether the plaintiff had sufficient funds in his account as at 11 i July, 1984 to cover his cheque for N15,000 drawn on exhibit 35 which was returned unpaid. If the answer is in the affirmative, his action succeeds, otherwise it will be liable to dismissal. The parties appeared agreed that the key to resolving this issue lies with whether the plaintiff’s A.C.B. Ltd, Asaba draft for N8,000, exhibit j 51, was cleared as at 11 July, 1984. On the undisputed evidence

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 236 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

before the trial court, the said A.C.B. Ltd, Asaba draft was for- a warded to the defendant bank, namely, the Union Bank of Nigeria Ltd, Asaba in the afternoon of Friday, 6 July, 1984. On Monday, 9 July, 1984, being the next working day, it was forwarded by the defendant to its head office, Benin City for clearance by the Cen- b tral Bank of Nigeria, Benin City. There can be no doubt that the said draft, exhibit 51, as between A.C.B. Asaba and A.C.B. Benin City was, on the evidence cash but, certainly, not as between the defendant bank and A.C.B. Asaba until the draft was cleared at the Central Bank of Nigeria, Benin City. The facts of this case are not c such as involves the credibility of witnesses it is plain to me, on the uncontroverted evidence before the court, that the plaintiff failed to establish that exhibit 51 was cleared as at 11 July, 1984. In my view, the findings of both courts below to the contrary, be- d ing totally unsupported by evidence led at the trial must be regarded as perverse. See Sebastian S. Yongo and Another v Com- missioner of Police (1992) 8 NWLR (Part 257) 36 and Paul O. Omoregbe v Ehigiator Edo (1971) 1 All NLR 282 at 289. A bank will ordinarily not honour a customer’s cheque if funds in his ac- e count are insufficient to meet the cheque. It seems to me that the defendant/appellant on the facts of this case, was entitled to dishonour the plaintiff’s cheque, exhibit 35 as it was not established that he had sufficient funds in his account to satisfy the said cheque.” f From a careful study of the judgment in U.B.N. v Nwoye (supra), it cannot be in doubt that the appeal was allowed because the court was satisfied that a bank draft could not be allowed to be paid upon uncleared effects. This in effect g means that at the time the bank draft/cheque was issued at the behest of the respondent in favour of his partner/payee, the respondent did not have that sum of money in raw cash standing to his name in the bank. The reasoning in Nwoye’s h case that resulted in the order that the respondent was not entitled to the proceeds of the bank draft cheque that he caused to be issued to his partner/payee, is not, in my respectful view, dissimilar to that which in the Ibhafidon case i (supra) and the Lagricom case (supra), resulted in the order of the court below that the bank draft/cheque be paid in favour of those in whose favour the bank drafts were respectively issued. In other words, it can be unequivocal that the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 237 a common factor that is evident in respect of these three cases, namely, U.B.A. v Ibhafidon (supra); Lagricom v U.B.N. and others (supra) and U.B.A. v Nwoye (supra) is this: Each of b the accounts involved in respect of these cases had sufficient physical cash to meet the draft cheques issued by the respective banks. The orders to pay/or not to pay the various drafts/cheques were therefore not made simply because they c were issued by the respective banks. Let me now return to the instant appeal. I have earlier in this judgment quoted from the printed record the pleadings of the parties to this suit. It is clearly discernible from the d said pleadings that it is the defence of the appellant that it did not pay the bank draft to the respondent, because the procurer of the bank draft, Alhaji Abubakar and Alhaji Ladan, failed to honour the promise made to the appellant e that it would pay to the appellant the total sum of US $500,000 (Five Hundred Thousand US dollars) being the equivalent of the sum of N15,000,000 (Fifteen Million Naira). This case is however concerned with the sum of f N7,100,000 on the bank draft, exhibit I, which was issued in favour of the respondent as agreed with Alhaji Abubakar and Alhaji Ladan. There is no doubt that they did not fulfil their own side of the bargain by paying the agreed sum of g $500,000 or any part of it into the account of the appellant. It is therefore plain from the pleadings the position taken by the respondent was based on the footing that it is claiming payment from the appellant as if it was indebted to the re- h spondent on the sum claimed. However, having regard to the statement of defence of the appellant and the evidence led thereon, I do not think that that position was sustainable to uphold the claim of the respondent. The bank draft cheque is i obviously without any consideration, as it was not established that the respondent or anyone else connected with the respondent had any money of any kind in any account within the system of the appellant at any time relevant to the j issuance of the bank draft.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 238 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Now, it is settled law that an appellate court would not or- a dinarily interfere with the judgment of the court, but where the judgment of the court below was reached either upon erroneous inference drawn from a finding of facts or that its b application of the law to properly found facts is perverse and/or erroneous, then the appellate court has a duty to intervene to correct the injustice so caused (see Fatoyinbo v Williams (1956) 1 FSC 87; (1956) SCNLR 274; Sarakatu J. c Amida v Oshoboja (1984) 7 SC 68 and Finnih v Imade (1992) 1 NWLR (Part 219) 511). Bearing this principle above in mind, it is clearly my duty, having regard to what I have said above, to interfere with the judgment of the court below. I must therefore allow this appeal for the reasons d given above. To do otherwise would be to open wide the door for swindlers and all kinds of fraudulent and other ma- nipulative characters to obtain funds, which they are not legally entitled to receive from banks, by claiming a right to e such funds merely upon the presentation of bank drafts to the bank. In the event, this appeal is hereby allowed, the judgment and orders of the courts below are accordingly set aside. As f the appellant is entitled to its costs in the courts below and in this Court, the following orders are made against the respondent: a refund of the judgment sum together with accrued interest deposited by it with the Deputy Chief Regis- g trar of the court below in fulfilment of the conditional stay of execution granted by that court. I also order that the said judgment sum of N7,100,000 be refunded immediately to the appellant accordingly with all the accrued interest on that h sum. Secondly, it is also manifest from the appellant’s brief that costs in the sum of N15,000 had been paid by the appellant to the respondent as awarded by the courts below. The cost i of N4,000 ordered in favour of the respondent by the trial court and by the court below for the sum of N3,000 are hereby also awarded in favour of the appellant. As the appellant is also entitled to its cost in this Court for its success in j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 239 a this appeal, the sum of N10,000 is hereby awarded in its favour. For the avoidance of doubt, the judgment sum with accrued interest and the cost paid as adumbrated above are to b be paid immediately by the Deputy Chief Registrar, the Court of Appeal, Lagos and the respondent in terms of the costs awarded. In the result, the claim of the respondent is dismissed in its entirety. c KUTIGI JSC: I have read in advance the judgment just delivered by my learned brother, Ejiwunmi JSC. I agree with his reasoning and conclusions. The defendant/appellant have conclusively established that it never received any value or d consideration for the banker’s cheque from the dubious one Alhaji Tijani Ladan or one Alhaji Abubakar and both the trial High Court and the Court of Appeal having so found, the appellant is perfectly entitled to have refused to honour the bank draft or cheque. In other words the plaintiff/ e respondent herein is not entitled to the proceeds or value of the cheque. The appeal accordingly succeeds and it is hereby allowed. f The judgments of both the trial High Court and that of the Court of Appeal are set aside. In their place an order dismissing plaintiff’s/respondent’s claim is substituted. I endorse the orders made in the lead judgment. g MOHAMMED JSC: I have had a preview of the judgment of my learned brother, Ejiwunmi JSC, in draft, and I agree with him that this appeal has merit and ought to be allowed. I have tried to find the ground upon which the respondent N h hinged its claim for the payment of the 7,100,000 (Seven Million, One Hundred Thousand Naira) being the value of a bank draft issued by the appellant in the company’s favour. The facts are clear and cannot be interpreted in any other way. The appellant issued a draft/cheque of N7,100,000 in i anticipation of the payment of US$500,000 (Five Hundred Thousand Dollars) which Alhaji Abubakar and Alhaji Ladan promised to pay to the bank. And when the two foreign exchange dealers failed to fulfil their side of the agreement, the j appellant was left with no alternative but to decline to

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Mohammed JSC 240 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) honour the draft cheque. It is simple common sense. There is a no consideration from the respondent for the payment of the amount in draft cheque. The two courts below are clearly wrong to order for the b honouring of a bank draft when the respondent had given no consideration for such payment. This appeal is therefore allowed. I set aside the judgments of the two courts below. I dismiss the claim of the respon- c dent. I abide by all the consequential orders made in the lead judgment. IGUH JSC: I have had the privilege of reading in draft the judgment just delivered by my learned brother, Ejiwunmi d JSC, and I agree entirely that there is merit in this appeal and that the same should be allowed. This appeal by the defendant/appellant is against the judgment of the Court of Appeal, Lagos Division, delivered e on 14 November, 2000. The court below by that judgment upheld the decision of Ade-Alabi J sitting at the High Court of Lagos State in favour of the plaintiff/respondent in the suit. The respondent had instituted an action against the f appellant at the High Court of Lagos State claiming, inter alia, the sum of N7,100,000 being the value of a bank draft, exhibit P1, issued by the appellant in favour of the respondent on 8 February, 1995 as per cheque no. A40622- g 06662150011 which cheque on presentation by the respondent was returned unpaid by the appellant despite repeated demands. h The full facts that culminated in this action are fully set out in the lead judgment and no useful purpose will be served by my recounting them in any detail all over again. It is sufficient to reproduce hereunder paragraphs 3–7 of the respondent’s short seven-point paragraph statement of claim as fol- i lows:– “3. On 8 February, 1995 the defendant issued a bank draft no. 40622-062150011 for N7,100,000 in favour of the plaintiff for services rendered. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 241 a 4. That on presentation, the cheque was first returned and marked ‘represent’, ‘value not received’. 5. That when the cheque was again represented, it was returned and marked ‘payment stopped’. b 6. That payment could not be stopped because it was the bank itself that issued the cheque. 7. That the plaintiff had already given value on receipt of the bank draft. c Whereof the plaintiff claims as per its writ of summons.” The appellant by paragraphs 2–11 of its statement of defence and in reply to the above averments in the respondent’s d statement of claim answered thus:– “2. The defendant denies paragraphs 3, 4, 5, 6 and 7 of the statement of claim. 3. The defendant in particular response to paragraphs 3 and 7 e of the statement of claim denies ever receiving value or consideration for the banker’s cheque; the subject matter of this suit, and avers that it stopped payment of the same to prevent fraud on itself. f 4. Further to the immediately preceding paragraph the defendant states that some time in February while in the course of trading, a man called Alhaji Tijani Ladan offered to sell US$500,000 to the defendant in the presence of one Alhaji Abubakar of Damco Bureau de Change and another. g 5. The defendant further states that part of the conditions precedent to concluding and transferring the money was that part-payment must be made in draft as evidence of the defendant’s ability to pay before the transfer can be ef- h fected. It was further agreed that the draft will not be presented for clearing until transfer had been effected. 6. The defendant states that based on the aforesaid agreement in paragraph 5 it issued two cheques for N15 million naira i as follows:– 1. Nigeria Universal Bank – N 7,900,000.00 2. Partnership Investment – N 7,100,000.00 j TOTAL – N15,000,000.00

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC 242 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

7. Contrary to the said agreement the banker’s cheque subject a matter of this suit came in through clearing. The defendant immediately threatened to stop payment, but was prevailed upon by the aforesaid persons to return the cheque marked ‘represent’ to enable the defendant [to] receive value for the b foreign exchange purchased. 8. However, the said cheque was represented without receipt of the foreign exchange and at this stage the defendant stopped payment to prevent loss of the naira sum of c N7,100,000.

9. The defendant states that the said attempted fraud was reported to the Police Authorities, and some of the said per- d sons involved were arrested. 10. The defendant avers that neither the said Alhaji Tijani Ladan nor the plaintiff has an account with it and denies receiving any value for the said banker’s cheque from them or e anyone else. 11. The defendant denies that the plaintiff gave it any value for the said cheque nor has the plaintiff suffered any loss at all. ALTERNATIVELY, if the plaintiff suffered any loss at all f (which is denied) the same is not attributable to the fault of the defendant.”

I think I need to mention that, although the appellant in g paragraph 3.03 of its brief of argument asserted that the un- derlined last sentence in paragraph 5 of its statement of defence was inadvertently omitted from the record of proceedings, the respondent in its own brief of argument did not h deny or controvert this important averment of fact. On the contrary, the respondent in paragraph 3.01 of its brief of argument affirmed thus:– “Appellant admitted issuing the draft but claimed that it was is- i sued on the condition that the sum of US$500,000 would be paid by the customer, namely, Alhaji Ladan into the appellant’s account and as this was not done, appellant was entitled to refuse payment of the draft. It was also admitted that the draft was presented for payment and refused.” j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 243 a It went on in paragraph 4.04 of its said brief:– “The allegation that the condition for the issue of the draft was not fulfilled, even if accepted by the court, will not rebut the presump- b tion that value was given.” I am, therefore, prepared to accept the above correction pointed out in the appellant’s brief of argument as well founded. c It is crystal dear that two main defences were raised by the appellant to the respondent’s claim. The first is that the appellant never received any value or consideration from d Alhaji Tijani Ladan in respect of the draft in issue, exhibit P1, and that the agreement between them is that the draft would not be presented for payment until the US$500,000 purportedly being sold by Alhaji Ladan to the appellant had e been transferred to the appellant. The second defence is that the appellant, in the face of failure by the said Alhaji Ladan to give value for exhibit P1, had no option but to stop payment of the cheque/draft to prevent fraud on itself. The ap- f pellant stressed that it would have been defrauded of the value of the draft if it did not stop its payment as the draft was presented for payment in breach of the condition precedent to the presentation of the draft for payment. g Dismissing the appellant’s first defence, the trial court had this to say:– “The intention of the parties to the contract in this case is for Al- haji Tijani Ladan to give value of $500,000 to the defendant. It h was not at any stage contemplated for the plaintiff to give value for the cheque of N7.1 million. It is wrong and apparently too late for the defendant to suddenly wake up and expect the plaintiff to give them value. The defence of failure to give value, for the draft N i of 7.1million is not available to the defendant.” It went on:– “If the defendant in this case was careless enough to have drawn a bank draft and hand it over to Alhaji Tijani Ladan without it hav- j ing been paid for, it has itself to blame.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC 244 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Having issued it in favour of the plaintiff the defendant must be a held to their responsibility . . . It is my judgment that the defendant is not entitled to stop the draft the way it did in this case. I hold that the defendant is liable to the plaintiff as claimed. Accordingly, judgment is hereby entered in favour of the plaintiff b in the sum of N7,100,000 being the value of a bank draft issued by the defendant in favour of the plaintiff which draft was returned unpaid.” The above findings of the trial court were affirmed by the c Court of Appeal when in its judgment it concluded as follows:– “On the whole, having, as it were, dealt with all the issues raised in this appeal I uphold the conclusion reached by the court below d that the draft exhibit P1 was otherwise payable at sight since as found by the court below and confirmed by this Court the alleged fraud had not negatived the presumption of value as per section 30(1) of the Act. In the result the appeal fails excepting as to the e post judgment rate of interest and it is hereby dismissed with N3,000 costs to the respondent. The trial court’s decision is hereby affirmed.” With profound respect to both courts below, the word f “draft” has been defined in law to include a bill of exchange as well as a cheque. It is said to be a nomen generale which embraces every request by the drawer upon the drawee to pay money (see Hunter v Bowyer (1850) 15 L.T.O.S. 281 per Pollock CB. See too Words and Phrases Judicially De- g fined Volume 2 edited by Roland Burrows at 133). Now, a banker, without doubt, is bound to pay cheques drawn on him by a customer in legal form provided he has h in his hands at the time sufficient and available funds for the purpose, or provided the cheques are within the limits of an agreed overdraft (see London Joint Stock Bank v Macmillan and Arthur (1918) A.C. 777 at 789 (H.L.); Joachimson v Swiss Bank Corporation (1921) 3 K.B. 110 at 127; Union i Bank of Nigeria Plc v Nwoye (l996) 3 NWLR (Part 435) 135). It needs be emphasised that there must be sufficient funds to cover the whole amount of the cheque presented for, in the absence of a special arrangement, there is, as a j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 245 a general rule, no obligation on the banker to pay any part of a cheque for an amount exceeding the available balance. The banker only contracts with the customer to honour cheques b when he has “sufficient” and “available” funds in hand (see Carew v Duckworth (1869) L.R. 4 Exch. 313; Joachimson v Swiss Bank Corporation (supra)). In the present case, the major defence of the appellant as c per paragraph 3 of its statement of defence is that it never received any value for the draft, exhibit P1, and that it stopped payment to prevent a fraud on itself. The onus to prove value for the draft would ordinarily have been on the d respondent to establish but the same, by law, is shifted to the appellant by virtue of the provisions of section 30(1) of the Bills of Exchange Act, Cap 35 Laws of the Federation of Nigeria, 1990. That section of the Act provides as follows:– e “30(1) Every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value.” There is under the above section of the law a presumption with regard to value in favour of the respondent in so far as the issuance of exhibit P1 is concerned. Accordingly, bills of f exchange and promissory notes, unlike other forms of simple contract, are presumed to stand upon the basis of a valuable consideration pursuant to the provisions of section 30(1) of the Bills of Exchange Act, hereinafter also referred g to as the Act. The effect of the presumption, therefore, is that it shifts the burden of proof from the shoulders of the plaintiff who relies upon the instrument to those of the defendant who impugns it. It is, however, necessary to stress h that this presumption of value provided under section 30(1) of the Act is not an irrebuttable presumption. It is only a prima facie presumption which may therefore be rebutted in appropriate cases. Once successfully rebutted, the presump- i tion under the said section 30(1) of the Act is dislodged and ceases to operate. In the present case, the appellant led positive and direct uncontroverted evidence in support of its pleadings to the j effect that exhibit P1 was issued by the appellant as

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC 246 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) consideration for the purchase of foreign currency valued a US$5,000,000 to be supplied to it by Alhaji Ladan. The appellant also led unchallenged evidence that the draft, exhibit P1, was issued subject to the condition precedent that it b would not be presented for payment until its value or consideration for its issuance had been furnished to the appellant. It is also not denied that the presentation of the draft for payment was in breach of the said condition precedent as no c forex had been supplied to the appellant by Alhaji Ladan or anyone else, including the respondent. It cannot be disputed that the prima facie presumption of value in favour of exhibit P1 was conclusively rebutted by d the appellant as a result of which the onus to prove value or alleged “service” averred in the statement of claim squarely fell upon the respondent. This position is trite law under the Evidence Act, as in civil cases, the burden of proving a par- e ticular fact is upon the party who asserts it and who will fail if no evidence is called upon the issue, regard being had to any presumption which may arise from the pleadings of the parties. This onus of proof is, however, not static. It continu- f ally shifts from side to side in respect of a fact in issue until it finally rests on a party against whom judgment will be given if no further evidence is proffered before the court (see Igwe v African Continental Bank Plc (1990) 6 NWLR (Part 605) 1; Faddlallah v Arewa Textiles Ltd (1997) 8 g NWLR (Part 518) 546; Okubule v Oyagbola (1990) 4 NWLR (Part 147) 723; H.M.S. Ltd v First Bank of Nigeria Ltd (1991) 1 NWLR (Part 167) 290). In my view, the court below was perfectly right when it observed as follows:– h “I must confess that the averment in paragraphs 3 to 8 of the statement of defence were not traversed by way of a reply nor was the evidence tendered in support seriously challenged.” It is plain to me that the appellant conclusively established i that it never received value or consideration for the draft, exhibit P1, and that there was an agreement between the appellant and Alhaji Ladan that the draft would not be presented for clearing until its value in foreign exchange was j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 247 a paid over to the appellant. It is evident that there was an attempt to defraud the appellant by the presentation of the draft for payment even though the appellant, contrary to the b aforesaid agreement, had not received any consideration for its issuance. In the absence or subsequent failure of consideration, the instrument, exhibit P1, is invalid, at least, as between the parties in immediate relationship, that is to say, the appellant and Alhaji Ladan but not necessarily as be- c tween remote parties when the holder is a holder for value. In the present case, however, the respondent was unable to establish that he is a holder of the draft, exhibit P1, for d value. The evidence of the respondent before the court on the issue of value was patently vague, speculative and lacked probative value. Neither share certificate nor a single document evidencing the alleged staggering loan of N26 e million by the respondent to Alhaji Abubakar was tendered before the court. It cannot be disputed that bank loan transactions and/or the purchase of company shares are readily provable by documentary evidence, share certificates or f other documents in proof of such transactions which ought to be pleaded and tendered before the court. Documentary evidence, where this is relevant, ought to be produced and tendered as they speak for themselves as against the ipse g dixit of a witness in respect of such transactions which may not be readily accepted by the court (see Bank of the North Ltd v Alhaji Abba Saleh (1999) 9 NWLR (Part 618) 331 at 346F–G). It is clear to me in the present case that the re- h spondent failed to establish that he gave any value for the draft, exhibit P1. Indeed, on the finding of the trial court, as affirmed by the court below, there was even no need for the respondent to give a value whatsoever for the draft because i the contract between the appellant and Alhaji Ladan did not contemplate that the respondent should give any value for the draft. Where, as in the present case, the consideration for which a j party signed a bill or note consists of a definite sum of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC 248 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) money or of something the value of which is definitely as- a certained in money, and it was either originally absent or has subsequently failed, whether totally or in part, the sum, if any, which a holder standing in immediate relation to such b party is entitled to receive from him is naturally reduced pro tanto (see Oscar Harrison and Co v Vallarman and Co (1940) 1 All ER 185 (C.A.)). However, a remote party who has given value for the instrument may be entitled to receive c payment in full (see Munroe v Bordier (1850) 8 Ch. 862). But as I have already indicated, it was clearly not established in the present case that the respondent gave any value for the draft, exhibit P1. In the circumstance, it seems to me difficult to hold that the respondent is entitled to receive the d value of the instrument. It is my view that in the absence of any credible evidence of value in respect of exhibit P1, the respondent will remain a volunteer who cannot claim upon the draft against the appellant. e It is beyond dispute that the respondent is a nominee of the named Alhaji Ladan for the collection of payment on the draft. In my view, where the principal, Alhaji Ladan, has no f claim to the draft as a result of the total absence of consideration by way of his failure to supply the agreed foreign exchange to the appellant, the respondent cannot claim a better right to the draft in the absence of evidence of a separate and g distinct value it gave for the draft. This evidence of value the respondent failed to establish. The principle is well established at law that there cannot possibly be any claim by way of action on a promissory note h by the original person to whom the promissory note was given if he never gave any consideration for it. Neither in law nor in equity can the payee under a promissory note, which appears on the facts before the court to be voluntary, i have any claim as a creditor (see Re Whitaker (1889) 42 Ch.D. 119 at 124 per Cotton LJ). The appellant, in its defence, admitted that it stopped payment of the draft to prevent itself from being defrauded with j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 249 a exhibit P1. In this regard, it must be recalled that the gist of the fraud relied upon by the appellant is that it would be defrauded of the value of the draft if either Alhaji Ladan or his b nominee, the respondent, is able to collect payment by presenting the draft in breach of the condition precedent agreed upon by the parties as aforementioned. This is to the effect that the draft was being issued to Alhaji Ladan on the strict condition that the equivalent foreign exchange must be paid c by the said Alhaji Ladan to the appellant before the presentation of the draft to the appellant, for payment. Fraud vitiates every contract into which it enters, and an instrument, the consideration for which is fraudulent even in part, is d voidable at the option of the party defrauded except against a holder in due course. It ought also to be pointed out that fraud may consist of negotiating an instrument in breach of faith, as when the bill is indorsed to a party for a special e purpose of having it discounted by him, and the latter instead holding so negotiates it to another person. It is immaterial that the fraud is that of a third party. f There is no doubt that the fraud relied on by the appellant is sufficiently pleaded in paragraphs 3–8 of its statement of defence already set out earlier on in this judgment. Positive evidence in line with these averments was copiously led by g the appellant at the trial and was in no way challenged or controverted. I think in all the circumstances of this case the court below was in error to have held that the appellant had failed to establish its defence to the respondent’s action. h It is for the above and the more detailed reasons contained in the lead judgment of my learned brother, Ejiwunmi JSC, that I, too, allow this appeal and dismiss the plaintiff’s/ respondent’s claims in their entirety. Accordingly, it is or- i dered that the judgment sum together with the accrued interest thereon deposited by the appellant with the deputy registrar of the court below in fulfilment of a conditional stay of execution granted by that court should be refunded forth- j with to the appellant. The costs awarded by both the trial

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Iguh JSC 250 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) court and the court below against the defendant/appellant if a already paid shall be refunded to the appellant. There will be costs to the appellant against the respondent which I assess N N and fix at 4,000 in the trial court, 3,000 in the court be- b low and N10,000 in this Court. MUSDAPHER JSC: I have had the honour to read before now the judgment of my Lord Ejiwunmi JSC just delivered and I agree with him that this appeal deserves to succeed. c The main question for consideration in this matter is whether a bank who issued its cheque in favour of a third party on the instructions of a customer who undertook to make funds available before the bank honours its obligation, will be li- d able to the third party even though the customer fails to make good its promise to make the funds available. There is no doubt that the appellant bank issued its own cheque in the N sum of 7,100,000 in favour of the respondent on the condi- e tion that its customer, Alhaji Ladan, would pay into the bank the sum of US$500,000. It is not disputed that the customer, Alhaji Ladan, did not pay the dollars to the appellant bank. The trial court held that the appellant was duty bound in law to honour its cheque irrespective of the failure of its cus- f tomer to make good its pledge to make funds available. The lower court on appeal affirmed the decision of the trial court. Now, in the pleadings before the trial court, the appellant g specially pleaded that neither its customer, Alhaji Ladan, nor the respondent, gave any consideration for the issuance of the cheque and most significantly by paragraph 5 of its statement of defence, it was stated that “it was further agreed h that the draft will not be presented for clearing until transfer has been effected”. That is to say, Alhaji Ladan will not hand over the draft to the respondent until Alhaji Ladan has paid into the appellant the sum of US$500,000 dollars. How the lower court came to the conclusion that the condition i precedent to the handing over of the draft to the respondent by the appellant’s customer was a “ruse and clearly an afterthought” was not borne out by the pleadings and the evidence led. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Musdapher JSC First African Trust Bank Ltd v. Partnership Investment Co Ltd 251 a In my view, it is not even clear that the respondent had in fact any consideration for the draft. The only witness called by the respondent stated that the bank draft was given to the respondent by Alhaji Abubakar to settle an amount owed in b respect “of some transaction” with the respondent. Under cross examination regarding this vague transaction, the witness said in one breath that the transaction was for the purchase of some shares of the respondent by Alhaji Abubakar c and at the same time that the draft was for the settlement of credit facilities of N26 million. Against these inconsistent statements, the appellant called d two witnesses who gave positive and consistent evidence in support of the appellant’s case. Viz, exhibit P1, the bank draft was issued by the appellant in favour of the respondent at the request of Alhaji Ladan on the condition that Alhaji e Ladan would not hand over the draft to the respondent until he, Alhaji Ladan, had transferred or paid to the appellant the sum of US$500,000. This condition is a standard condition applicable to autonomous foreign exchange transactions. It f is not even clear how Alhaji Abubakar came into the picture. It is manifest that the appellant was entitled to stop the payment of the draft in order to prevent fraud against itself by its customer. g Now, section 30(1) of the Bill of Exchange Act reads:– “Every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value.” h In the first place, the question for consideration imported under the above section is clearly a rebuttable presumption of fact. Since appellant pleaded and led evidence to the fact that no consideration was given by the respondent nor by Alhaji Ladan and respondent did not prove otherwise, it i seems to me the presumption could no longer apply. Sec- ondly, it is the “party whose signature appears” on the bill that is deemed to have given value. There is no evidence whatever that the respondent had “signed” the cheque or its j signature “appears”.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Musdapher JSC 252 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Further to the above, it cannot be said that the respondent a was made to alter its position by the receipt of the draft because it is clear that the liability of either Alhaji Abubakar or Alhaji Ladan to the respondent arose long before the issu- b ance of the draft by the appellant. In other words, the respondent was not in any way misled by the appellant when the respondent became engaged to Alhaji Abubakar. There is no doubt under the circumstances, the appellant c has the right to protect itself against any fraud against it by its customer Alhaji Ladan. The appellant had the undoubted right to stop the cheque until funds were made available as promised by its customer. It is for these reasons and the d fuller reasons contained in the lead judgment aforesaid, that I too, allow the appeal and set aside the decisions of the lower courts, in place of which, I order the claims of the respondent before the trial court be and hereby dismissed. I e abide by the order for costs contained in the lead judgment aforesaid. Appeal allowed.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Fortune International Bank Plc v. Pegasus Trading Office (Gmbh) 253 a Fortune International Bank Plc v Pegasus Trading Office (Gmbh) and others b SUPREME COURT OF NIGERIA UWAIFO, EDOZIE, KALGO, KATSINA-ALU, KUTIGI JJSC Date of Judgment: 30 JANUARY, 2004 Suit No.: SC./144/2001

Evidence – Section 132(1) of the Evidence Act, Cap 112 c Laws of the Federation of Nigeria, 1990 – Principles governing Guarantee – Principles applicable d Interpretation of statute – Section 132(2) of the Evidence Act, Cap 112 Laws of the Federation of Nigeria, 1990 – Principles governing e Facts The plaintiffs (two German companies) sued the defendants for breach of contract arising from two letters of credits (LCs) opened by the first defendant bank at the instance of f the second defendant in favour of the plaintiffs for the importation of a dairy product known as “Royal Evaporated Milk”. The LCs were confirmed irrevocable up to 35% of their value. This meant that the amount involved was to be g paid at sight. As to that, there was no dispute; the 35% cost of the goods was accordingly paid. The difficulty was with the 65% of the LCs which by description was unconfirmed irrevocable. The amount involved was to be paid by the first h defendant/bank 90 days after presentation of documents to it. That amount was not paid, hence the plaintiffs (the sellers of the goods sued the defendant/bank (the issuing bank) and the second defendant (the buyer) claiming as follows:– i (a) Cost and value of goods supplied ...... DM 540,000 (b) Legal action in Germany...... DM 11,663 (c) Transportation from Germany to Nigeria and total expenses for seven trips ...... DM 25,000 j Total DM 576,663

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

254 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

In addition, interest was claimed thus: 11.5% per annum on a DM540,000 from 1 May, 1992 to 30 April, 1995 (DM186,300); 11.5% per annum from 1 May, 1995 up to date of judgment and 10% per annum from date of judgment b until the settlement of the judgment debt. On 12 October, 1998, the learned trial Judge dismissed the action against the first defendant/bank but found against the second defendant and entered judgment as follows:– c (i) Principal debt DM540,000 (ii) Transport expenses 25,000 (iii) Interest up to 30/4/1995 at 11.5% p.a. 186,300 d DM751,300 (iv) 10% p.a. on judgment debt till liquidated. (v) Costs against second defendant DM5,000 The plaintiffs appealed against the judgment. On 16 Febru- e ary, 2001, the Court of Appeal, Abuja Division, allowed the appeal, set aside the judgment and entered judgment in favour of the plaintiffs against both defendants jointly and severally for the sum of DM540,000 and costs of N2,000. f The first defendant/bank and the plaintiffs appealed from that judgment to the Supreme Court, the first defendant/bank being the appellant while the plaintiffs were the cross appellants. g Section 132(1) of the Evidence Act governs how written documents may be interpreted, particularly as regards the restriction against varying their contents with extrinsic oral evidence. It provides thus:– h “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 i may be given of such judgment or proceedings, or of the 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 admis- sible under the provisions hereinbefore contained; nor j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Fortune International Bank Plc v. Pegasus Trading Office (Gmbh) 255 a 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:– b (a) fraud, intimidation, illegality, want of due execution, the fact that it is wrongly dated, existence or want or failure of consideration mistake in fact or law, want of capacity in any contracting party or c the capacity in which a contracting party acted when it is not inconsistent with the terms of the contract, or any other matter which, if proved, would produce any effect upon the validity of any d document, or of any part of it, or which would entitle any person to any judgment, decree, or order relating thereto; (b) the existence of any separate oral agreement as to any matter on which a document is silent, and e which is not inconsistent with its terms, if from the circumstances of the case the court infers that the parties did not intend the document to be a complete and final statement of the whole of the trans- f action between them; (c) the existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or g disposition of property; (d) the existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property; h (e) any usage or custom by which incidents not expressly mentioned in any contract are annexed to contracts of that description; unless the annexing of such incident to such contract would be repugnant to or inconsistent with the express terms of the con- i tract.”

Held – 1. Having regard to the provisions of section 132(1) of the j Evidence Act, oral evidence cannot be admitted to

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

256 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

contradict, alter, add to or vary a contract or document a unless such evidence falls within any of the matters that may be proved by such oral evidence by virtue of the provisos thereto. The provisos only permit evidence b which will not be inconsistent with the terms of the relevant contract or document. 2. A proviso of necessity serves to cut down or qualify the general provisions in the body of a section. But it would c be contrary to the ordinary operation of a proviso to give it an effect which would cut down those provisions beyond what compliance with the proviso renders necessary. A proviso does not therefore set out to do other d than create exceptions or relax limitations or throw light on any ambiguous aspect of an enactment. It certainly does not aim at completely neutralising the general provisions it has created exceptions to. e 3. In the present case oral evidence is inadmissible to neutralise the commitment of the appellant as recorded in exhibit P13. Therefore DW1’s evidence to the effect that the commitment was subject to funds to be provided by f the second defendant is in contradiction of the plain agreement. 4. Per curiam “I think the proper view of the evidence which DW1 tried g to introduce to explain why the appellant executed exhibit P13 is to discountenance it, or at best regard the appellant’s reliance on the second defendant’s ability to provide financial backing for the post-dated cheques given to the appel- h lant as nothing more than the result of the private arrangement between both of them. That has nothing to do with the appellant’s obligation and liability towards the cross appellants on exhibit P13. Exhibit P13 binds the appellant. It was a document made by the appellant as an agreement by way i of settlement of the dispute that arose between it and the cross appellants, and the cross appellants are entitled in law to found their cause of action on it (see Abbey v Alex (1999) 14 NWLR (Part 637) 148 at 159). Again, exhibit P13 is in the form of a guarantee given by the appellant to the cross j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Fortune International Bank Plc v. Pegasus Trading Office (Gmbh) 257 a appellants to pay the debt owed them by the second defendant. It was in writing; it was a promise made to persons to whom another was answerable and the promise was to pay the liability of a third party. That is what Eastwood v Ken- b yon (1840) 11 Ad. and E.L. 438 at 446, (1840) 113 ER 482 per Lord Denman CJ established. This clearly supports a cause of action in the cross appellants against the appellant without recourse to the original liability of the second de- c fendant.” 5. In matters of guarantee like in the instant case there is sometimes the need to recognise the three parties, namely, the creditor, the principal debtor and the secon- d dary debtor or guarantor. Either of two situations could thus arise. One is that the guarantor may not primarily undertake to discharge the liability but only if the principal debtor failed in his obligation. There is the other e situation where a person by his undertaking makes himself the real debtor: In the first case, the principal debtor has to default before the liability of the guarantor would arise. In the second case, the principal debtor simply f drops out so that the guarantor becomes solely liable. Exhibit P13 unequivocally represents this scenario. The tendency is that the law appears to have moved to the centre to make the right of the creditor less conditional. g The creditor is now entitled to proceed against the guarantor without or independent of the incident of the default of the principal debtor. Appeal dismissed but cross appeal allowed in part. h Cases referred to in the judgment Nigerian i Abbey v Alex (1999) 14 NWLR (Part 637) 148 Africa Insurance Development Corporation v Nigeria Liqui- fied Natural Gas Ltd (2000) 4 NWLR (Part 653) 494 j Alli v Ikusebiala (1985) 1 NWLR (Part 4) 630

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

258 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Ekwunife v Wayne (W.A.) Ltd (1989) 5 NWLR (Part 122) a 422 Macaulay v NAL Merchant Bank Ltd (1990) 4 NWLR (Part 144) 283 b Foreign Birkmyr v Darnell (1704) 1 Salkeld 27; (1704) 91 ER 27 Eastwood v Kenyon (1840) 11 Ad. and E.L. 438; (1840) 113 c ER 482 Re Tabrisky Ex parte Board of Trade (1947) 2 All ER 182 West Derby Union v Metropolitan Life Assurance Co (1897) A.C. 647 d

Nigerian statute referred to in the judgment Evidence Act, Cap 112 Laws of the Federation of Nigeria, 1990, section 132(1) e

Book referred to in the judgment Andrew and Millet Law of Guarantees (1ed) pages 162–163 f Counsel For the appellant/cross-respondent: Eke (with him Adejo- Andrew (Mrs)) g For the first and second respondents/cross-appellants: Kayode, S.A.N. (with him Adesina (Mrs), Sanni (Miss) and Duru (Miss))

Judgment h UWAIFO JSC: (Delivering the lead judgment) The plaintiffs (two German companies) sued the defendants for breach of contract arising from two letters of credit (LCs) opened by the first defendant bank at the instance of the second defen- i dant in favour of the plaintiffs for the importation of a dairy product known as “Royal Evaporated Milk”. The LCs were confirmed irrevocable up to 35% of their value. This meant that the amount involved was to be paid at sight. As to that, j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Fortune International Bank Plc v. Pegasus Trading Office (Gmbh) 259 a there is no dispute; the 35% cost of the goods was accordingly paid. The difficulty was with the 65% of the LCs which by description was unconfirmed irrevocable. The b amount involved was to be paid by the first defendant/bank 90 days after presentation of documents to it. That amount was not paid, hence the plaintiffs (the sellers of the goods sued the first defendant/bank (the issuing bank) and the second defendant (the buyer), claiming as follows:– c 1. Cost and value of goods supplied...... DM 540,000 2. Legal action in Germany...... DM 11,663 3. Transportation from Germany to Nigeria d and total expenses for seven trips...... DM 25,000 Total DM576,663 In addition, interest was claimed thus: 11.5% per annum on DM540,000 from 1 May, 1992 to 30 April, 1995 e (DM186,300); 11.5% per annum from 1 May, 1995 up to date of judgment and 10% per annum from date of judgment until the settlement of the judgment debt. f On 12 October, 1998, the learned trial Judge dismissed the action against the first defendant/bank but found against the second defendant and entered judgment as follows:– (i) Principal debt DM540,000 g (ii) Transport expenses 25,000 (iii) Interest up to 30/4/1995 at 11.5% p.a. 186,300 DM751,300 (iv) 10% p.a. on judgment debt till liquidated. h (v) Costs against second defendant DM 5,000. The plaintiffs appealed against the judgment. On 16 Febru- ary, 2001, the Court of Appeal, Abuja Division, allowed the appeal, set aside the judgment and entered judgment in fa- i vour of the plaintiffs against both defendants jointly and severally for the sum of DM540,000 and costs of N2,000. The first defendant/bank and the plaintiffs have appealed from that judgment to this Court; the first defendant/bank j being the appellant while the plaintiffs are the cross

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 260 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) appellants. I shall hereafter refer to the parties as appellant a and cross appellants respectively. The appellant is contending that it is free from liability in the circumstances of this case and has raised three issues for b determination thus:– “(1) Whether the Court of Appeal was right in setting aside the judgment of the trial court and holding the appellant liable to the first and second respondents for breach of contract c under the two (2) Letters of Credit. (2) If the answer to (1) above is in the affirmative, whether exhibit D2 did not relieve the appellant of all/any liability and/or liabilities under the two (2) Letters of Credit. d (3) Was the appellant obliged under exhibit P13 to pay any money to the first and second respondents without further reference to the buyer third respondent?” The cross appellants, in support of their cross appeal, have e raised one issue thus:– “Whether the Court of Appeal was right to dismiss the claims for the transport expenses and the 11.5% annum interest on the principal sum of DM540,000 claimed from 1/5/92 up to date of judgment on the outstanding sum of DM540,000.” f I shall deal with the main appeal first. In doing so I intend to take all three issues together. It must be pointed out that the liability of the appellant in this transaction no longer depended stricto sensu on the obligation under the LCs. g Learned Senior Advocate, Prince Kayode, abundantly made this clear in his argument in reference to exhibit P13. In fact, the learned trial Judge based his judgment as to whether the appellant was liable to the claim on his understanding of the h said exhibit P13 and the circumstances in which it was made. Exhibit D2 which was issued some time in February, 1992 was clearly overshadowed by exhibit P13 which came into being in July, 1992. i The goods in question had been cleared by the second defendant and kept in warehouses. The managing director and chief executive of the second cross appellant, Engineer Eyo Ita, came down from Germany where he lives to pursue the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Fortune International Bank Plc v. Pegasus Trading Office (Gmbh) 261 a outstanding payment for the goods. He saw the goods in the warehouses. He had been told that the goods were stored in the warehouses by Mr Giwa (DW1) and that was why he b went to verify for himself. He testified as PW7. His evidence is vital. First he said:– “Later, I went to the warehouses mentioned by Mr Giwa and I saw that the goods had been cleared and stored in those warehouses. c After that I returned to the bank and harassed Mr Giwa to pay us for the value of the goods. He pleaded that we should hold on. On the expiration of the 90-day period the first defendant did not pay us and I threatened to report the matter to the Interpol and the Cen- tral Bank of Nigeria. Mr Giwa then begged me to hold on and to d invite the Germany manufacturers for a meeting to pacify them and to discuss how they will pay.” He went on to say that a meeting was fixed for 24 July, 1992 e but that on 20 July the appellant rushed in a part payment of N80,000 by telex message. The meeting did take place as scheduled. It was held in the appellant’s managing director’s office where compromises were made and decisions f reached. Exhibit P13 is the evidence of the agreement concluded to settle the indebtedness which Mr Akintunde A. Giwa (DW1) signed on behalf of the appellant. The witness (PW7) said, inter alia:– g “At that meeting interest was taken into account and it was agreed that the first defendant was to pay in additional sum of DM35,000 as interest. Instead of DM541,700 we rounded it up to DM540,000. The first defendant gave us copies of the papers showing ‘that they had remitted DM80,000 into our account in h Germany . . . We eventually received the DM80,000 but the first defendant did not comply with exhibit 13. They did not pay us anything in either August or September, 1992. On the 17/8/92, a day to the due date we received a letter from the first defendant i that there was a court injunction stopping them from making the payment.” Mr Giwa (DW1) in his testimony did not deny the transaction and the agreement as per exhibit P13. I will say that in j the face of exhibit P13 which is not ambiguous, DW1 tended

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 262 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) to give his testimony in respect thereof in a rather clumsy a manner. He said in examination-in-chief:– “Yes, I see exhibit P13. On 24/7/92 a meeting was held in our bank where we made it clear to the parties that the matter was not b our business. At the meeting the second plaintiff and second defendant agreed that money should be released by second defendant which will be subsequently remitted to second plaintiff at certain date. The money was to come from second defendant who then had the goods. There was no money available on that date but the c second defendant issued two post dated cheques to us so that once he makes money available we can debit his account and make that money available to second plaintiff. I was present at that meeting. We wrote exhibit P13 as an intermediary to assure second plaintiff that if second defendant provides money we will remit same [to] d them. The second defendant did not provide the money for remittance to second plaintiff. The post-dated cheques issued to us were countermanded by second defendant a day before the first one became due. The second defendant wrote us a letter asking us to stop e payment on both cheques.” When cross examined, he said:– “Yes, I signed P13. Yes, I was at the meeting that led to exhibit P13. Yes, I believe second defendant when they promised that f money will be made available for remittance to second plaintiff hence exhibit P13. Second defendant had said they were expecting payment with which they will use to release the money to us. I did not ask the second defendant where the money will come from. We did not ask him how much he was expecting.” g It is important to recognise the effect of exhibit P13 upon a proper interpretation. The learned trial Judge seemed to have taken a correct view at the outset although, with due respect, h he later contradicted that view. In regard to how to assess the said exhibit, he said:– “The first defendant admitted writing exhibit P13 but explained that at the meeting held on 24/7/92 they made it clear that the mat- i ter of payment to the plaintiffs was not their business and that the money was to come from the second defendant who then had the goods. Testifying on the issue DW1 stated in evidence-in-chief that there was no money available on the date but the second defendant issued two post-dated cheques to them so that once money j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Fortune International Bank Plc v. Pegasus Trading Office (Gmbh) 263 a is available the second defendant can be debited and the money thus debited made available to the second plaintiff. He explained further that exhibit P13 was written by them as intermediaries to assure the second plaintiff that if second defendant provides b money same will be remitted to second plaintiff. It is hardly necessary to point out that oral evidence will not be allowed to vary or add anything to a written document. See Nwokedi v Orakposim (1992) 4 NWLR (Part 233) at 120. Exhibit P13 speaks for itself. The writer of that document did not state that their commitment to c remit the balance of the debt owed the second plaintiffs was subject to the provision of money by second defendants.” At this juncture reference must be made to the contents of the said exhibit P13 and for this purpose I shall reproduce d them in full as follows:– “24 July, 1992. The Managing Director, Apt Anlagen Import and Export, e Feuerbachstrasse 39, W – 4530 Ibbenburen, Germany. f Attention: Engineer Ita Dear Sir LETTER OF INTENT RE: FIMSENOD HOLDINGS NIGERIA LTD. g Sequel to the meeting held today with your officials from Ger- many in respect of the outstanding indebtedness of Fimsenod Holdings Nigeria Limited, we (CBA) write to confirm our commitment to remit the balance of debt owed to yourselves as stated h below:– A. Latest August 18, 1992 DM200,000 B. Latest September 30, 1992 DM340,000 DM540,000 i The last remittance includes DM35,000 interest payment refund to APT. The above stated commitment is however subjected to the ruling foreign exchange regulations of the Federal Republic of Nigeria. j Yours faithfully,

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 264 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

For: COMMERCIAL BANK OF AFRICA LTD. a A.A. GIWA Principal Manager (Credit and Marketing).” The only reservation stated in the undertaking, as rightly b pointed out by the learned Senior Advocate, is that it is subject to the Nigerian foreign exchange regulations, otherwise the commitment is total. Section 132(1) of the Evidence Act governs how written c documents may be interpreted particularly as regards the restriction against varying their contents with extrinsic oral evidence. It provides thus:– “132(1) When any judgment of any court or any other judicial or d 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 e 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 admis- sible under the provisions hereinbefore contained; nor may the contents of any such document be contradicted, f altered, added to or varied by oral evidence: Provided that any of the following matters may be proved:– (a) fraud, intimidation, illegality, want of due execu- g tion, the fact that it is wrongly dated, existence or want or failure, of consideration mistake in fact or law, want of capacity in any contracting party or the capacity in which a contracting party acted when it is not inconsistent with the terms of the h contract, or any other matter which, if proved, would produce any effect upon the validity of any document, or of any part of it, or which would entitle any person to any judgment, decree, or order re- i lating thereto; (b) the existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, if from the circumstances of the case the court infers that the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Fortune International Bank Plc v. Pegasus Trading Office (Gmbh) 265 a parties did not intend the document to be a complete and final statement of the whole of the transaction between them; (c) the existence of any separate oral agreement, con- b stituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property; (d) the existence of any distinct subsequent oral c agreement to rescind or modify any such contract, grant or disposition of property; (e) any usage or custom by which incidents not expressly mentioned in any contract are annexed to d contracts of that description; unless the annexing of such incident to such contract would be repugnant to or inconsistent with the express terms of the contract.” Having regard to the provisions of section 132(1) of the e Evidence Act, oral evidence cannot be admitted to contradict, alter, add to or vary a contract or document unless such evidence falls within any of the matters that may be proved by such oral evidence by virtue of the provisos thereto. The f provisos only permit evidence which will not be inconsistent with the terms of the relevant contract or document (see Alli v Ikusebiala (1985) 1 NWLR (Part 4) 630 at 641; Ekwunife v Wayne (W.A.) Ltd (1989) 5 NWLR (Part 122) 422 at 440– g 441; Macaulay v NAL Merchant Bank Ltd (1990) 4 NWLR (Part 144) 283 at 311). It should be realised that a proviso of necessity serves to cut down or qualify the general provisions in the body of a section. But it would be contrary to h the ordinary operation of a proviso to give it an effect which would cut down those provisions beyond what compliance with the proviso renders necessary. A proviso does not therefore set out to do other than create exceptions or relax i limitations or throw light on any ambiguous aspect of an enactment. It certainly does not aim at completely neutralising the general provisions it has created exceptions to etc (see Re Tabrisky Ex parte Board of Trade (1947) 2 All ER 182 at j 183, 184; West Derby Union v Metropolitan Life Assurance

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 266 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Co (1897) AC 647 at 652). In the present case oral evidence a is inadmissible to neutralise the commitment of the appellant as recorded in exhibit P13. Therefore DW1’s evidence to the effect that the commitment was subject to funds to be pro- b vided by the second defendant is in contradiction of the plain agreement. I think the proper view of the evidence which DW1 tried to introduce to explain why the appellant executed exhibit P13 c is to discountenance it or at best regard the appellant’s reliance on the second defendant’s ability to provide financial backing for the post-dated cheques given to the appellant as nothing more than the result of the private arrangement be- d tween both of them. That has nothing to do with the appellant’s obligation and liability towards the cross-appellants on exhibit P13. Exhibit P13 binds the appellant. It was a document made by the appellant as an agreement by way of set- e tlement of the dispute that arose between it and the cross appellants, and the cross appellants are entitled in law to found their cause of action on it (see Abbey v Alex (1999) 14 NWLR (Part 637) 148 at 159). Again, exhibit P13 is in the f form of a guarantee given by the appellant to the cross appellants to pay the debt owed them by the second defendant. It was in writing; it was a promise made to persons to whom another was answerable and the promise was to pay the li- g ability of a third party. That is what Eastwood v Kenyon (1840) 11 Ad. and E.L. 438 at 446; (1840) 113 ER 482 per Lord Denman CJ established. This clearly supports a cause of action in the cross appellants against the appellant without h recourse to the original liability of the second defendant. In matters of guarantee of this nature, there is sometimes the need to recognise the three parties, namely, the creditor, the principal debtor and the secondary debtor or guarantor. i Either of two situations could thus arise. One is that the guarantor may not primarily undertake to discharge the liability but only if the principal debtor failed in his obligation. There is the other situation where a person by his j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Fortune International Bank Plc v. Pegasus Trading Office (Gmbh) 267 a undertaking makes himself the real debtor (see Birkmyr v Darnell (1704) 1 Salkeld 27; (1704) 91 ER 27). In the first case, the principal debtor has to default before the liability of b the guarantor would arise. In the second case, the principal debtor simply drops out so that the guarantor becomes solely liable. Exhibit P13 unequivocally represents this scenario. The tendency is that the law appears to have moved to the centre to make the right of the creditor less conditional. The c creditor is now entitled to proceed against the guarantor without or independent of the incident of the default of the principal debtor. This view is expressed in Andrew and Mil- let Law of Guarantees (1ed) at 162–163 thus:– d “The fact that the obligations of the guarantor arise only when the principal has defaulted in his obligations to the creditor does not mean that the creditor has to demand payment from the principal or from the surety, or give notice to the surety, before the creditor e can proceed against the surety. Nor does he have to commence proceedings against the principal, whether criminal or civil, unless there is an express term in the contract requiring him to do so.” This principle thus stated, which I endorse, was recently ap- f proved by this Court in the lead judgment of Ayoola JSC in Africa Insurance Development Corporation v Nigeria Liqui- fied Natural Gas Ltd (2000) 4 NWLR (Part 653) 494 at 505, 506. I find no merit in the appeal. g The cross appeal is on the question of transport expenses and interest on the amount owing before judgment. The cross appellants have submitted one issue for the determination of the cross appeal as follows:– h “Whether the Court of Appeal was right to dismiss the claims for the transport expenses and the 11.5% per annum interest on the principal sum of DM540,000 claimed from 1/5/92 up to date of judgment on the outstanding sum of DM540,000.” i Although the above is stated as one issue, it has two aspects to it. I shall deal first with the aspect of payment of interest. There was an admission before the court below by Counsel for the appellant (the first respondent in the court below) j that the LCs provided for 11% interest per annum. I have

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 268 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) examined the said LCs and cannot find that figure. I think it a was a mere concession that LCs bear that interest rate. The court below, however, referred to the 11.5% pleaded by the cross appellants and observed:– b “Which of the rates this Court will believe? Is it the prevailing bank rate or the 11.5% as pleaded; or the 11% per annum stated in the appellants’ brief of argument?” The court eventually failed to accept any. I do not think that c can be right. The 11.5% per annum can safely be used as the relevant interest rate. Entitlement to interest was pleaded by the cross appellants in paragraph 13 of their further amended statement of claim as follows:– d “The plaintiffs in line with the customs and usages of International Trade claim interest from maturity date at the rate of:– (a) 11.5% percent per annum on the principal sum of DM540,000 from date of maturity being 1 May, 1992 to 31 (sic) April, 1995 = DM186,300. e (b) 11.5% percent per annum from 1 May, 1995 up to date of judgment or settlement of the claim: (c) 10 percent per annum from the date of judgment until settlement of the judgment debt.” f The above averments were not specifically denied in the statement of defence. Ordinarily, since the averments already referred to were not traversed, no evidence would have been necessary. However, in the cross respondent’s g brief, the following argument is advanced:– “The court below found the evidence led unsatisfactory especially as no evidence was led to prove how the interest accrued and how it was calculated. The available evidence was also in conflict with h the facts pleaded hence the question by the court: ‘Which of these rates this Court will believe? Is it the prevailing bank rate, or 11.5% as pleaded . . .? Of course, it is trite (law) that where evidence is led on facts which are not pleaded, or which are in conflict with the pleadings, the i court must not act on such evidence.” I do not see any merit in the above argument in the circumstances of the present case. There is an admission by appellant’s Counsel that 11% is payable on the LC but there is no j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Fortune International Bank Plc v. Pegasus Trading Office (Gmbh) 269 a evidence of that in the LCs tendered in the present case. It is clear on the undenied averment in the statement of claim that interest of 11.5% was pleaded and claimed. It would simply have been a matter of course for the court below to b accept 11.5% which is the rate admitted on the pleadings. That is what conforms with justice and not a total rejection of interest rate just because the court below found difficulty, when really there was none, with the interest rate in the cir- c cumstances. There was never any dispute that the cross appellants were entitled to interest. This was clearly admitted in the evidence of DW1 and stated in exhibit P13. I therefore hold that the cross appellants are entitled to interest of d 11.5% per annum which was admitted upon the rules of pleadings and this is to be calculated on DM540,000 as claimed in paragraph 13 of the further amended statement of claim up to the day judgment ought to have been given to e the cross appellants (as plaintiffs) in the trial court, ie from 1 May, 1992 to 12 October, 1998. They are also entitled to interest of 10% per annum on the total judgment debt until it is settled. f Now, the aspect of transport costs of DM25,000 claimed by the cross appellant must be viewed against the legal effect of exhibit P13. That document, as I have earlier indicated, was meant to settle the indebtedness arising from this g transaction to the cross appellants. That indebtedness was that of Fimsenod Holdings Nigeria Limited, namely the second defendant/respondent in this appeal. The opening part of exhibit P13 put it thus:– h “Sequel to the meeting held today with your officials from Ger- many in respect of the outstanding indebtedness of Fimsenod Holdings Nigeria Limited, we (CBA) write to confirm our commitment to remit the balance of debt owed to yourselves . . .” i The balance of debt did not include DM25,000. In other words, the present appellant cannot be made liable to pay this money. However, the learned trial Judge gave judgment against the j second defendant for a sum of money which included

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 270 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

DM25,000. The second defendant did not appeal against the a judgment. In the appeal filed by the plaintiffs (now cross appellants) against that judgment, the reliefs sought were for:– “1. Order allowing the appeal and setting aside the order of b dismissal of the appellants’ claims against the first respondent. 2. Judgment against the first respondent as claimed.” The Court of Appeal allowed the appeal to include the first c respondent (ie present appellant) in the liability but excluding the DM25,000. But the second defendant/respondent is still liable for that amount by virtue of the judgment of the trial court which second defendant did not appeal. In effect, d therefore, the second defendant/respondent is still bound by the judgment of the trial court in respect of the sum of DM25,000. e In the result, I dismiss the appeal and allow the cross appeal as indicated. It is ordered that all the amounts stated in these proceedings in DM shall be calculated in US Dollars value as at the date of judgment by the trial court as sought f by the cross appellants since DM has now ceased to be legal tender. The cross appellants are awarded N10,000 costs against the appellant.

KUTIGI JSC: I read in advance the judgment just delivered g by my learned brother, Uwaifo JSC. I agree with his reasoning and conclusions. Consequently the appeal is dismissed while the cross appeal is allowed. I endorse the orders made in the judgment. h

KATSINA-ALU JSC: I have had the advantage of reading in draft the judgment delivered by my learned brother, Uwaifo JSC. I agree with it, and for the reasons which he gives I too i would dismiss the appeal and allow the cross appeal with N10,000 costs to the cross appellants.

KALGO JSC: I read in draft before now the judgment just delivered by Uwaifo JSC in this appeal. I entirely agree with j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kalgo JSC Fortune International Bank Plc v. Pegasus Trading Office (Gmbh) 271 a his reasoning and conclusions which I adopt as mine. I agree the main appeal is devoid of merit and ought to be dismissed, and the cross appeal is meritorious and should be allowed. Accordingly, the main appeal is hereby dismissed b and the cross appeal is allowed. I abide by the order of costs made in the lead judgment. EDOZIE JSC: I was privileged to read in advance the draft c of the lead judgment of my learned brother, Uwaifo JSC, just delivered. I agree entirely with his reasoning and conclusions in dismissing the appeal and allowing the cross appeal with costs of N10,000 to the cross appellant against the d appellant. Appeal dismissed, cross appeal allowed in part.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

272 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

a African Industrial Bank Limited v Craine International Trading Company Limited and others COURT OF APPEAL, LAGOS DIVISION b CHUKWUMA-ENEH, ADAMU, GALADIMA JJCA Date of Judgment: 23 MARCH, 2004 Suit No.: CA/L/66/2002

Execution – Immovable property of judgment debtor – Sale of – Section 44 of the Sheriffs and Civil Process Law of La- c gos State – Principles applicable Mortgage – Equitable mortgage – Principles governing d Facts The plaintiff (appellant) by a writ of summons and statement of claim sued the respondent at the Lagos High Court claiming as follows:– e “(1) Against the first and second defendants jointly and severally, the sum of N10,044,657.02 being sum owed to the plaintiff by the first defendant as at March 31, 1995 on a loan facility of N5,000,099 granted by the plaintiff to the first defendant, at the request of the first defendant in the f ordinary course of the plaintiff’s business as a banker and guaranteed by the second defendant, and which sum the first and second defendants have failed, refuse and or neglected to repay despite repeated demands; g (2) Interest on the said sum of N10,044,657.02 at 21% from April 1, 1995 until the first and second defendants satisfy the judgment which may be entered herein and costs; and (3) Against the third defendant, an order of sale of the 3.5 acre h plot of land with all the buildings and fixtures thereon situated at Plot 23 Maiyegun Tourism Zone, Lekki Pennisula Scheme II in Lagos State contained in the Certificate of Oc- cupancy dated May 10, 1989 and registered at No. 27 at page 27 in Vol. 1989F of the Lagos State Lands Registry, i Ikeja.” The first defendant, having defaulted in filing its statement of defence and upon an application by the plaintiff in which the second and third defendants (second and third j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

African Industrial Bank Ltd v. Craine International Trading Co Ltd 273 a respondents) have been deleted as parties at the hearing (ie have not been put on notice) as they have filed their defence and counter-claim, the court below has entertained no diffi- b culty in entering judgment in default of pleading against the first defendant (respondent) only, in the sum as per the claim. The plaintiff has now followed it up by applying by way of motion on notice to attach and sell the third defen- c dant’s (third respondent) property situate at Plot 23, Mai- yegun Tourism Zone, Lekki Pennisula Scheme II, Lagos used to secure the loan in satisfaction of the said judgment debt against the first respondent. The court below (coram d Akinsanya J) in refusing the application has held inter alia thus:– “From these cases, it is abundantly clear that it is as a matter of last resort that the court will allow immovable property be at- e tached to satisfy a judgment debt. It is only when the court is satisfied that there are no movable asset available that leave to attach will be granted. Two cogent issues do arise. 1. There must be a judgment debtor. f 2. The property over which the judgment creditor is applying for leave to attach must belong to the judgment debtor. The facts of this suit do not appear to me to be apposite. Judg- ment by default was obtained against the first defendant, the g primary debtor. The second and third defendants were sued as guarantor and owner of property pledged by deposit. These defendants have raised a defence and a counter-claim against the plaintiff and the h case is yet to be heard on the merits. The rules under which the applicant has come to the court do not apply to the third defendant who has not been declared a judgment debtor. I hold therefore that there are serious issues to be tried between the i parties. The application of the plaintiff is inappropriate and it is dismissed with N1,000 cost to the second and third defendants.” Being dissatisfied with the judgment at the Lagos High Court the plaintiff, the appellant in this case, has appealed to j the Court of Appeal.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

274 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Held – a 1. The matters of practice and procedure relating to the provision of section 44 are:– (1) That there must be a judgment debtor against whom b a final judgment has been obtained; (2) That the immovable property of the judgment debtor are not made the first object in satisfaction of the judgment debt; c (3) That it is the function of the courts and not the sheriffs to decide whether reasonable diligence has been proved by evidence that no movable property of the d judgment debtor or sufficient to satisfy the judgment debt can be found; (4) That the immovable property sought to be attached and sold is that of the judgment debtor; e (5) That all interested parties to the application to attach and sell the judgment debtor’s immovable property must be put on due notice of the application. 2. The instant transaction between the parties has given rise f to an equitable mortgage not only by the fact of depositing of the title documents of the third respondent with the appellant but also by the informal document, otherwise known as the memorandum of deposit having been g executed by the first respondent herein (being the party to be charged) thus setting out the terms and conditions of the loan and the security thereof. 3. An equitable mortgage could also arise by mortgage of h an equitable interest and by equitable charge. 4. One of the incidences of equitable mortgage established by a line of authorities is that the mortgagee is empowered to sell the landed security although he requires an i order of court as any sale otherwise is a nullity. This apart, an equitable mortgagee’s primary remedy lies in foreclosure as it is settled that he has no right of possession. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

African Industrial Bank Ltd v. Craine International Trading Co Ltd 275 a 5. It is not tenable to contend that the application to attach to sell the third respondent’s immovable property in satisfaction of the first respondent’s judgment debt in this case comes within the context and meaning of section 44 b of the Sheriffs and Civil Process Law of Lagos State, 1994. Appeal dismissed. c Cases referred to in the judgment Nigerian A.C.B. Plc v Losada Nig. Ltd (1995) 7 NWLR (Part 405) 26 d Coker v Olusola (1968) N.M.L.R. 79 Koya v Kolaja Zawan (1958) NRNLR 1 Leedo Presidential Motel Ltd v Bank of North Ltd (1998) 10 e NWLR (Part 570) 353 Mutual Aid Society Ltd v Ogunade (1957) NRNLR 118 Opubor v Demiruru (1961) ANLR 436 f Osunkwo v Ugbogbo (1966) N.M.L.R. 184 U.B.N. Ltd v Ozigi (1994) 2 NWLR (Part 333) 385

Nigerian statute referred to in the judgment g Sheriffs and Civil Process, Laws of Lagos State, 1994, section 44

Nigerian rules of court referred to in the judgment h Judgment Enforcement Rules, Laws of Lagos State, 1994, rules 10, 15

Book referred to in the judgment i Civil Procedure in Nigeria (2ed) pages 100–101

Counsel For the appellant first respondent absent: Elias j For the second and third respondents: Olufon

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

276 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Judgment a CHUKWUMA-ENEH JCA: (Delivering the lead judgment) The plaintiff (appellant) by a writ of summons and statement of claim has sued the respondent at the Lagos High Court b claiming as follows:– “(1) Against the first and second defendants jointly and severally, the sum N10,044,657.02 being sum owed to the plaintiff by the first defendant as at March 31, 1995 on a loan fa- c cility of N5,000,099 granted by the plaintiff to the first defendant, at the request of the first defendant in the ordinary course of the plaintiff’s business as a banker and guaranteed by the second defendant, and which sum the first and second defendants have failed, refused and or neglected to re- d pay despite repeated demands; (2) Interest on the said sum of N10,044,657.02 at 21% from April 1, 1995 until the first and second defendants satisfy the judgment which may be entered herein and costs; and e (3) Against the third defendant, an order of sale of the 3.5 acre plot of land with all the building and fixtures thereon situated at Plot 23 Maiyegun Tourism Zone, Lekki Pennisula Scheme II in Lagos State contained in the Certificate of Oc- f cupancy dated May 10, 1989 and registered at No. 27 at page 27 in Vol. 1989F of the Lagos State Lands Registry, Ikeja.” The first defendant, having defaulted in filing its statement g of defence and upon an application by the plaintiff in which the second and third defendants (second and third respondents) have been deleted as parties at the hearing (ie have not been put on notice) as they have filed their defence and h counter-claim, the court below has entertained no difficulty in entering judgment in default of pleading against the first defendant (respondent) only, in the sum as per the claim. The plaintiff has now followed it up by applying by way of motion on notice to attach and sell the third defendant’s i (third respondent) property situate at Plot 23, Maiyegun Tourism Zone, Lekki Pennisula Scheme II, Lagos used to secure the loan in satisfaction of the said judgment debt against the first respondent. The court below (coram j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA African Industrial Bank Ltd v. Craine International Trading Co Ltd 277 a Akinsanya J) in refusing the application has held, inter alia, thus:– “From these cases, it is abundantly clear that it is as a matter of b last resort that the court will allow immovable property be attached to satisfy a judgment debt. It is only when the court is satisfied that there are no movable asset available that leave to attach will be granted. Two cogent issues do arise. c 1. There must be a judgment debtor. 2. The property over which the judgment creditor is applying for leave to attach must belong to the judgment debtor. The facts of this suit do not appear to me to be apposite. Judg- ment by default was obtained against the first defendant, the d primary debtor. The second and third defendants were sued as guarantor and owner of property pledged by deposit. These defendants have raised a defence and a counter-claim against the plaintiff and the e case is yet to be heard on the merit. The rules under which the applicant has come to the court do not apply to the third defendant who has not been declared a judgment debtor. I hold therefore that there are serious issues to be tried between the f parties. The application of the plaintiff is inappropriate and it is dismissed with N1,000 cost to the second and third defendants.” The plaintiff (appellant) has appealed the said decision to the Court of Appeal and filed a notice of appeal containing two g grounds of appeal. The parties have filed and exchanged their briefs of argument in the appeal. The appellant also has filed a reply brief. Two issues have been distilled for determination in the matter by the appellants and they are as fol- h lows:– “1. Whether or not the appellant (a judgment creditor) is entitled by virtue of section 44 of the Sheriffs and Civil Process Law of Lagos State, 1994 and Order 1 rule 2 and Order 2 i rules 10 and 15 of the Judgment Enforcement Rules, Laws of Lagos State, 1994 to seek the attachment and sale of the immovable property of the judgment debtor, once its establishment (as it has done by affidavit evidence) that there are no movable assets of the judgment debtor from which the j judgment debt can be satisfied.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA 278 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

2. Assuming but not conceding that both the appellant and the a third respondent had joined issues in their pleadings with respect to the immovable property, whether it was premature (as Akinsanya, J pronounced) for the appellant (being a judgment creditor) to have sought the order of the High b Court to attach and sell the immovable property in satisfaction of the judgment debt.” Even though the respondents (second and third) have not raised any eyebrow to the manner of framing the foregoing c issue 2 and so, I have not discountenanced it in considering this appeal for what it’s worth, I must, however, comment that the manner by which the said issue has been couched, the appellant, with respect, has resorted to weak persuasive d argument in its formulation as against expository defining of the issue, hence the said issue is clearly and intrinsically speculative as has not been objectively defined. The danger here is that it exposes the court to speculation and conse- e quent misconception of the issue. The second and third respondents for their part have filed a joint brief of argument and therein have raised as the sole issue for determination to wit:– f “WHETHER THE TRIAL COURT WAS JUSTIFIED IN RE- FUSING LEAVE FOR THE APPELLANT TO SELL THE PROPERTY OF THIRD RESPONDENTS IN THIS MATTER.” On issue 1: The appellant’s case, in this regard, is that it has g come properly before the court below under section 44 of the Sheriffs and Civil Process Law and rules 10 and 15 of the Judgment Enforcement Rules, Laws of Lagos State, 1994 to seek to attach and sell the judgment debtor’s im- h movable properties and even that he is entitled ex debito justitiae to have the immovable properties of the judgment debtor attached, and that the court below has erred to hold that as the said property deposited as security does not belong to the appellant, it is not subject to be so attached under i section 44 (supra). And moreso as no issue has been joined in the pleading on that point, that is to say, on the question of ownership of the immovable property (see Coker v Olu- sola (1968) N.M.L.R. 79 and Civil Procedure in Nigeria j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA African Industrial Bank Ltd v. Craine International Trading Co Ltd 279 a (2ed) at 100–101 and Osunkwo v Ugbogbo (1966) N.M.L.R. 184). On the second issue: The appellant has challenged the trial b court’s finding that the application to attach and sell the immovable property is premature based on the flawed ground that there are on the pleadings serious issues to be tried between the parties on the said question. He has submitted that c the court below has in that respect misapplied the clear provisions of section 44 (supra) in coming to that conclusion. The court is urged to allow the appeal, set aside the said ruling and order an attachment and sale of the immovable d property in satisfaction of the said judgment debt. From an overview of the matter, the respondent has argued that before the said section 44 of the Sheriffs and Civil Proc- ess Law and Order 1 rule 2 and Order 2 rules 10 and 15 of e the Judgment Enforcement Rules, 1994 can effectively be applied to this matter the appellant has to show the existence of a valid and final judgment against a named debtor in favour of the judgment creditor and that the immovable prop- f erty to be attached belongs to the said judgment debtor (italics for emphasis). It is submitted the appellant has not discharged the said onus placed on it by the abovementioned pre-conditions and that the cases relied upon by the appel- g lant in this respect have been overruled in Leedo Presiden- tial Motel Ltd v Bank of the North Ltd (1998) 10 NWLR (Part 570) 353 at 389. And also that the property right of a company is protected against attachment except in respect of h final judgment as per section 44 of the 1999 Constitution. With respect, this impression allegedly founded on section 44 (with many subsections) of the 1999 Constitution is inapplicable as it deals with compulsory acquisition. However, i even then in respect of the said section 44 of the 1999 Con- stitution, it is not for the court to speculate in what respects, if so, the respondent has intended to apply the various subsections. In any event, I do not find the relevance of the pro- j visions of the said section 44 to this matter.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA 280 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

On the second issue: The respondent has observed that as a the third respondent’s statement of defence and the counter- claim relied upon by the appellant in canvassing issue 2 have not formed part of the record of appeal that arguments b based on those premises ought to be discarded. In that case, that the appellant cannot argue that issues have not been joined in the pleadings between it and the third respondent. They have also argued that issue 2 has raised the issue of c facts requiring leave which has not been sought and obtained and so making the issue otherwise incompetent. On the sole issue raised by the respondents it is submitted that the court below has rightly interpreted and applied the d law and the authorities pertaining thereto. They have also submitted that not having been joined in the motion for default judgment, the appellant is estopped from enforcing the default judgment against them. And that having sued the e third respondent as well as having sought relief 3 against it, it (the said property) could only be attached after a final judgment in favour of the plaintiff against it (ie third defendant/third respondent) as the said default judgment has been f obtained against only the first respondent as the primary debtor (see Odomeru v Adenuga (2000) 12 NWLR (Part 682) 466 and David Itauma v Friday Jackson Akpe Ime (2000) 12 NWLR (Part 680) 156 at 177A–B). They urge the g court to dismiss the appeal as lacking in merit with costs. The appellant has filed a reply brief in which it had contended to have raised grounds of law in the notice of appeal and so does not require leave. It has relied on London Joint h Stock Bank v Simmons (1892) A.C. 201; Bentinck v London Joint Stock Bank (1893) 2 Ch. 720 and Deverges v Sande- man, Clark and Co (1902) 1 Ch. 579 to submit that the first respondent having defaulted in repayment of the debt that i the security for the advances to it have to be fully redeemed in order to entitle the third respondent to the said property. In the light of the appellant’s claim of being empowered by section 44 of the Sheriffs and Civil Process Law to attach j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA African Industrial Bank Ltd v. Craine International Trading Co Ltd 281 a and sell the third respondent’s immovable property used in securing the instant loan facility, it is my view that the bottom line in deciding this matter lies within the very small b compass of the implication of the said relevant enactments and Judgment Enforcement Rules upon which such assertions have been founded. It will be recalled as set out above and as found by the court below that the second and third c respondents have filed their defence and a counter-claim to the appellant’s claim in this matter. And again, as found by the trial court they have raised serious issues to be tried and so requiring that the case be heard on the merit. The appel- d lant has not challenged this aspect of the trial court’s decision. It cannot, therefore, be right for the appellant to urge the court to pre-emptorily dispose of the respondent, the subject matter in controversy between the appellant and the second and third respondent, even before giving the said e parties the opportunity of being heard in the matter. It does too clear sound absurd with respect. The second and third respondents are entitled to be heard. f The crucial enactment for determining the questions at issue in this matter is principally section 44 of the Sheriffs and Civil Process Law Lagos State, Cap 407, 1998. And it is reproduced for ease of reference as follows:– g “44. If sufficient movable property of the judgment debtor can be found in the Federal Capital Territory, Abuja or the State as the case may be to satisfy the judgment and costs and the costs of execution, execution shall not issue against his immovable property, but if no movable property of the judg- h ment debtor can with reasonable diligence be found or if such property is insufficient to satisfy the judgment and costs and the costs of execution, and the judgment debtor is the owner of any immovable property, the judgment credi- i tor may apply to the court for a writ of execution against the immovable property of the judgment debtor, and execution may issue from the court against the immovable property of the judgment debtor in accordance with the provisions of this Act . . .” j The instant section 44 of the Sheriffs and Civil Process Law

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA 282 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) of Lagos State is in pari materia with section 43 of the Sher- a iffs and Civil Process Ordinance, Cap 205 as well as section 44 of the Sheriffs and Civil Process Law, Cap 123 both of them similar and to the same effect and have at various b times been part of the Laws of Northern Nigeria. These other enactments, that is sections 44 and 43 of the Laws of Northern Nigeria, have been construed and widely applied to a number of cases, namely Mutual Aid Society Ltd v F.A. c Ogunade per Hurley J (1957) NRNLR 118; S.A. Koya v Ko- laja Zawan (1958) NRNLR 1 per Red J and in Opubor v Demiruru (1961) ANLR 436. Idigbe J (as he then was) considered the case of Ogunade. I adopt the reasoning in these cases and uphold their conclusions as regards construing of d the provisions in question. The immovable properties used to secure the loan facilities in all the above cited cases have been in the ownership of the respective judgment debtors as against here, where the immovable property for attachment e belongs to a third party, ie the third respondent. The point that the judgment debtor has to be the owner of the immovable property to be attached has been borne out by the decision in the case of Leedo Presidential Motel Ltd v Bank of f North (supra) per Ogundare JSC which decision is binding on the court. I therefore agree with the court below that to bring the provisions of the said section 44 into play in a matter of this nature two basic factors among others have to be g met, namely: (1) that there must be a judgment debtor so found in a final judgment; and (2) the immovable property to be attached must belong to the judgment debtor, as clearly provided in the enactment, the judgment debtor has to be h owner of property to be attached. The other factors are mentioned hereunder. It has to be noted that the clause, “. . . the judgment creditor may apply to the court for a writ of execution against the immovable property of the judgment debtor” i abstracted from the above provisions of the said section 44, clearly bears out the contention here. However, having read the said cited cases, the following deductions seem to me to flow from the conclusions reached j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA African Industrial Bank Ltd v. Craine International Trading Co Ltd 283 a in those cases as regards the construction as well as the matters of practice and procedure relating to the provision of section 44:– b (1) that there must be a judgment debtor against whom a final judgment has been obtained; (2) that the immovable property of the judgment debtor are not made the first object in satisfaction of the c judgment debt; (3) that it is the function of the courts and not the sheriffs to decide whether reasonable diligence has been proved by evidence that no movable property of the d judgment debtor or sufficient to satisfy the judgment debt can be found; (4) that the immovable property sought to be attached and sold is that of the judgment debtor; e (5) that all interested parties to the application to attach and sell the judgment debtor’s immovable property must be put on due notice of the application. f In immediate terms, the provisions of the said section 44 of the Sheriffs and Civil Process Law of Lagos State, 1994 being considered here, if I may reiterate, are free from any am- biguity and need not be further construed. In other words, g the only task left for the court to perform is to apply their literary or grammatical meanings to the facts of this matter. Guided by the factors outlined above I find that the appellant’s instant application may have complied with only two h of the foregoing conditions. That is to say, the appellant has not satisfied the condition that the judgment debtor is the owner of the immovable property earmarked for attachment; indeed it has argued that it is a flawed argument to so reason and that all interested parties to the application have been i put on due notice of it. The point has to be noted that there has never been any contest to the effect that the instant immovable property belongs to the third respondent and not the first respondent. It is on record that the second and third re- j spondents are not parties to the application for the said

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA 284 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) default judgment. I will come back shortly to deal with their a implication to this matter. I have to acknowledge the foregoing conditions, as it were, as the combined deductions from the aforesaid cited cases. b In this respect, I must remark that section 44 of the Sheriffs and Civil Process Law of Lagos State, 1994 as construed in the Leedo case binds this Court. c I need, however, to emphasise that the instant transaction between the parties has given rise to on equitable mortgage not only by the fact of depositing of the title documents of the third respondent with the appellant but also by the in- d formal document otherwise known as the memorandum of deposit having been executed by the first respondent herein (being the party to be charged) thus setting out the terms and conditions of the loan and the security thereof. An equitable e mortgage could also arise by mortgage of an equitable interest and by equitable charge. In this matter, it has come to this that the appellant has to all appearances acquired an equitable interest in the immovable property comprised in the f said memorandum of deposit. One of the incidences of equitable mortgage established by a line of authorities is that the mortgagee is empowered to sell the landed security although he requires an order of court as any sale otherwise is a nullity. This apart, an equitable mortgagee’s primary remedy g lies in foreclosure as it is settled that he has no right of possession. By the procedure adopted here between the appellant and first respondent, the appellant has not attempted to exercise his right to foreclose or power of sale. And yet an- h other incidence of the instant equitable mortgage on the facts of this case is that the first respondent, having failed to repay the principal sum with the interest thereon at the agreed rate on the appointed day named in the memorandum or docu- i ment, the appellant has thus acquired the right to sue the first respondent personally as provided in the memorandum of document for the recovery of the principal sum and any accrued interest. The instant action is predicated upon relief 1 j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA African Industrial Bank Ltd v. Craine International Trading Co Ltd 285 a and is founded on this head of claim. In this respect, it is settled that the judgment creditor can attach and sell any property belonging to the judgment debtor in satisfaction of the b judgment debt even though not comprised in the mortgage. If the implications of the foregoing dispositions particularly as regard settled principles on how the first respondent’s right of redemption could be lost, have been appreciated by c the appellant, I think it will not be stoutly pressing the question of being empowered under section 44 of the Sheriffs and Civil Process Law of Lagos State, 1994 to attach to sell the third party’s (ie third respondent) immovable property. d With respect, the appellant has appeared not to appreciate the distinction between the instant procedure ordinarily used by judgment creditors to recover their judgment debt in which the mortgagor is sued personally and the consequent e application to attach and sell any property belonging to the judgment debtor (ie mortgagor) whether or not comprised in the mortgage as contemplated under section 44 of the Sher- iffs and Civil Process Law, Cap 123 of the Laws of Lagos f and the exercise of the mortgagee’s power of sale under an equitable mortgage although exercised upon an application to the court for the same, from foreclosure proceedings culminating in orders nisi and absolute, if reached. Hence, the g present confusion giving rise to the instant application to attach and sell the third respondents’ immovable property. The next important question for consideration is whether the appellant’s application to attach and sell the third re- h spondent’s immovable property used to secure the judgment debt in this matter is premature. This poser, so to speak, has arisen due to the appellant’s contention as per paragraph 3.2 of its brief of argument to the effect that the “denial of leave i . . . to attach and sell the immovable property . . . is based on the flawed reasoning that the immovable property belongs to the third defendant (third respondent) who is not the judgment debtor”. I do not think that it is in dispute here that as j between the appellant and the second and third respondents

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA 286 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) there is still pending in this matter serious issues to be re- a solved between them based on their pleadings and essentially pertaining to the instant immovable property. The appellant has made the third respondent’s immovable property b used to secure the principal sum in this matter the subject matter of its claim as per relief 3 against the third respondent. And the second and third respondents have in response to the said claim filed their defence and a counter-claim and c this have joined issues on that point and this is as found by the trial court and not challenged on appeal. In other words, the claim in relief 3 of the statement of claim and the subject matter of the relief being sought in the application, that is, d for attachment and sale of the said immovable property have the same substratum, so that granting the instant application will completely dispose of the substratum of the subject- matter and thus render nugatory any successful decision in e favour of the third respondent as regards the claim in relief 3. This Court is minded not to do anything to prejudice the outcome of the matter between the appellant and the second and third respondents. f It is rather amazing that the appellant has seen it fit on the materials placed before the court below in this matter to contend that the said court unilaterally raised the issue of ownership of the said immovable property thus leading it to the g unfounded holding that the said immovable property belongs to the third respondent and not the respondent. I think, with respect, that the contention is totally misconceived. Para- graph 5 of the supporting affidavit has laid bare by exhibits h A1B2, A1B3 and A1B4 annexed to the said affidavit the owner of the said immovable property, that is to say, the third respondent. Besides, it is one of the important stipula- tions in the provisions of section 44 of the Sheriffs and Civil i Process Law of Lagos State, 1994 to the effect that the property for attachment must necessarily be that of the judgment debtor (ie the first respondent in this case); in other words, construing the provisions according to their strict, plain and j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Chukwuma-Eneh JCA African Industrial Bank Ltd v. Craine International Trading Co Ltd 287 a ordinary meaning (see U.B.N. Ltd v Ozigi (1994) 2 NWLR (Part 333) 385 and A.C.B. Plc v Losada Nig. Ltd (1995) 7 NWLR (Part 405) 26). b Given all I have been saying so far, it is not tenable to contend that the application to attach to sell the third respondent’s immovable property in satisfaction of the first respondent’s judgment debt in this case comes within the con- c text and meaning of section 44 of the Sheriffs and Civil Process Law of Lagos State, 1994. In this regard, I agree and uphold the trial court’s finding on the issue. Perhaps, I should also state that as the default judgment between the d appellant and the first respondent is not on appeal before the court I have no competence to express any opinion on any aspect of the decision moreso on the failure to put the second and third respondents on due notice of the said applica- e tion for the default judgment. On the whole, I find the appeal as lacking in merit deserving to be dismissed. I dismiss it in its entirety. I affirm the ruling of the court below. The matter is hereby remitted to f the trial court for continuation of hearing on the substantive matter. The respondents are entitled to the costs of this appeal assessed and fixed at N7,500. ADAMU JCA: I have had the privilege of reading in ad- g vance, the lead judgment of my learned brother, Chukwuma- Eneh JCA, in this appeal. The salient facts and the legal issues involved in the appeal are well set out and satisfactorily thrashed out in the said judgment that I am left with no op- h tion than to agree with and accept the reasoning canvassed and the conclusion reached thereat by my learned brother. I accordingly hereby adopt the judgment as mine. It is not in dispute that the default judgment obtained by the appellant i in the present case was against the first respondent and not against the second and third respondents. From the clear and unambiguous wording of section 44 of the Sheriffs and Civil Processes Law (reproduced in the lead judgment), it is clear j that only the immovable property of the judgment debtor

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Adamu JCA 288 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) and no one else can be levied in satisfaction of the judgment a debt as rightly decided in Leedo Presidential Motels Ltd v Bank of the North Ltd (1998) 10 NWLR (Part 570) 353 at 389. It would therefore not be proper to allow the appellant b to levy execution on the property of the third respondent who is not the judgment debtor even though his property was used as a security to secure the loan. It must be pointed out that the substantive case between the appellant and the second and third respondents is still pending at the lower c court. Moreover, the case between the appellant and the third respondent (owner of the property) involves the property sought to be attached. To allow the appellant to attach the said landed property would destroy the subject matter d (the res) in the substantive case between him and the third respondent. In the circumstances, it is only fair and right for the learned trial Judge to refuse the order of attachment of the landed property as he did in the present case. e On my above conclusion and the further consideration of the two issues in the appeal as per the lead judgment, I also find no merit in this appeal which I hereby dismiss. I abide by the consequential orders made in the lead judgment, in- f cluding the order on costs. GALADIMA JCA: I have had the privilege of reading in draft the lead judgment of my learned brother, Chukwuma- Eneh JCA, just delivered. The issues have been exhaustively g exposed and carefully discussed. I entirely agree with his reasoning and conclusion that this appeal is lacking in merit and should be dismissed in its entirety and the matter be remitted to the trial court for continuation of hearing. I abide h by the order for costs. Appeal dismissed.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 289 a Nigeria Deposit Insurance Corporation v Okem Enterprises Limited and another b SUPREME COURT OF NIGERIA UWAIFO, EJIWUNMI, KALGO, KATSINA-ALU, KUTIGI, MUSDAPHER, PATS-ACHOLONU JJSC Date of Judgment: 23 APRIL, 2004 Suit No.: SC/92/2003 c Banking – Dispute between bank and customer – Whether Federal High Court has jurisdiction – Section 251(1)(d) of Constitution of the Federal Republic of Nigeria, 1999 – Proviso to section interpreted d Banking – Jurisdiction of Federal High Court – Dispute between customer and bank – Section 251(1)(d) of Constitu- tion of the Federal Republic of Nigeria, 1999 – Proviso to e section – Whether Federal High Court has any or exclusive jurisdiction

Facts f The Nigeria Deposit Insurance Corporation (the NDIC) was the liquidator of Allied Bank of Nigeria, Plc. It acted in that capacity in furtherance of its duties under section 28 of the Nigeria Deposit Insurance Corporation Act (“the Act”), Cap 301 Laws of the Federation of Nigeria, 1990 and under other g laws, and as may be relevant under the Companies and Al- lied Matters Act, 1990 (“the CAMA”). The first respondent, Okem Enterprises Nigeria Limited, was said to be a valued customer of the said Allied Bank of Nigeria Plc (the bank). h It maintained various accounts with different branches of the bank. The first respondent obtained credit facilities or loans from the bank. It was alleged that as at 31 January, 1999, the total amount outstanding against the first respondent was i N284,109,459.59. The bank’s licence had been revoked by the Central Bank of Nigeria and this led to the NDIC being appointed the liquidator of the bank. The NDIC filed an application for the recovery of debt j in the Failed Banks (Recovery of Debts) and Financial

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

290 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Malpractices in Banks Tribunal (“the tribunal”), Lagos a Zone, on 29 March, 1999 against the first respondent and the second to sixth respondents who, at all times material to the action, were the directors of the first respondent. This was b done by virtue of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (Decree No. 18 of 1994). That Decree was amended by De- cree No. 62 of 1999, substituting the Federal High Court for c the tribunal. This suit was accordingly taken over by the Federal High Court, Lagos, after the inception of the present democratic dispensation, trial by tribunal having been dis- continued. d On 16 April, 2000, the respondents filed a notice of objection to the jurisdiction of the Federal High Court to entertain the suit and sought to have the suit struck out. There were four grounds relied on for the objection, namely, that:– e 1. The proviso to section 251(1)(d) of the Constitution of the Federal Republic of Nigeria, 1999 repeats the terms of section 230(1)(d) of the 1979 Constitution (as amended by Decree No. 107 of 1993) and did not f vest in the Federal High Court the jurisdiction to determine causes and matters relating to transactions between an individual customer and his bank. 2. The reliefs sought in this suit are matters within the g exclusive jurisdiction of the State High Court. 3. All claims made or intended to be made by the plaintiff are a nullity since they are all claims and matters h over which the Federal High Court has no jurisdiction. 4. Accordingly, the Federal High Court is devoid of jurisdiction to entertain this suit and the same should i therefore be struck out. In a short but well considered ruling given on 18 December, 2000, Abutu J came to the conclusion that in causes and matters between a bank and its individual customer, the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 291 a Federal High Court and State High Courts have concurrent jurisdiction. The learned Judge overruled the objection. An appeal was lodged by the defendants against that deci- b sion to the Court of Appeal, Lagos Division, which allowed the appeal. The NDIC therefore appealed to the Supreme Court contesting the issue of jurisdiction. The proviso to section 251(1)(d) of the 1999 Constitution c reads thus:– “251(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the Na- d tional Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters:– (a.) . . . (omitted) e (b.) . . . (omitted) (c.) . . . (omitted) (d.) connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or f against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures: g Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.” h Held – 1. In considering the effect of the proviso in question, the import of the exclusive jurisdiction conferred on the Federal High Court under section 251(1)(d) of the 1999 i Constitution should not be lost sight of. The section begins with: “Notwithstanding anything to the contrary contained in this Constitution . . .”. This takes account of the jurisdiction of the High Court of a State in section j 272(1) of the 1999 Constitution which says: “Subject to

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

292 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

the provisions of section 251 and other provisions of the a Constitution, the High Court of a State shall have jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal right, power, b duty, liability, privilege, interest, obligation or claim is in issue.” This is not a provision conferring exclusive jurisdiction on the State High Courts. Section 251(1)(d) confers exclusive jurisdiction on the Federal High Court in specified matters notwithstanding section 272(1). c 2. As has been observed, section 251(1) of the 1999 Con- stitution begins with, “Notwithstanding anything to the contrary contained in this Constitution”, while section d 272(1) is specifically made subject to the provisions of section 251. When the term “notwithstanding” is used in a section of a statute, it is meant to exclude an impinging or impeding effect of any other provision of the statute e or other subordinate legislation so that the said section may fulfil itself. It follows that, as used in section 251(1) of the 1999 Constitution, no provision of that Constitu- tion shall be capable of undermining the said section. In f regard to section 272 of the Constitution, section 251 is directly relevant in that the former is made subject to it. The expression “subject to” means liable, subordinate, subservient, or inferior to; governed or affected by; pro- g vided that or provided; answerable for. 3. It must therefore be understood that “subject to” introduces a condition, a restriction, a limitation, a proviso. 4. It subordinates the provisions of the subject section to h the section empowered by reference thereto and which is intended not to be diminished by the subject section. 5. The expression generally implies that what the section is subject to shall govern, control and prevail over what i follows in that subject section of the enactment, so that it renders the provision to which it is subject to conditional upon compliance with or adherence to what is prescribed in the provision referred to. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 293 a 6. The proviso in question in section 251(1)(d), to put it in simple analysis, says that the Federal High Court will have exclusive jurisdiction in banking matters but when what is involved is an individual customer and bank b transaction, the Federal High Court shall not have exclusive jurisdiction. Understandably, that was to recognise the jurisdiction of the State High Courts had been exercising in such matters which section 272(1) of the Con- c stitution impliedly preserves. The High Court of a State can only exercise jurisdiction in any aspect of such specified matters to the extent that the proviso in section 251(1)(d) permits. The said proviso cannot be inter- d preted to have the effect of conferring exclusive jurisdiction on the State High Courts and completely taking away the jurisdiction of the Federal High Court to entertain causes and matters relating to individual customer e and bank transactions. 7. As a general rule, a proviso has a limited operation in qualifying the ambit of the section to which it is related. f 8. It follows that where a section with a proviso appended to it confers powers, it would be contrary to the ordinary operation of the proviso to give that section an effect which would neutralise those powers in a way that it goes beyond what compliance with the proviso itself g renders necessary. The object of a proviso is normally to cut down or qualify or create exceptions to or relax in a defined sense the limitations imposed or powers conferred by a section of an enactment or document; or to h exclude some possible ground of misinterpretation of its extent, or to modify the main part of a section of a statute to which it relates or to restrain its absoluteness or generality. i 9. Therefore, the proper view of the proviso in section 251(1)(d) of the 1999 Constitution is that the main provision having used the language of exclusive jurisdiction, the proviso then relaxes that exclusiveness given to j the Federal High Court therein in a situation in which the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

294 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

issue is a dispute between an individual customer and his a bank in respect of transactions between an individual and the bank. In that regard, a State High Court will also have or continue to exercise jurisdiction and this it does b concurrently with the Federal High Court. 10. If a proviso cannot reasonably be construed otherwise than as contradicting the main enactment, then the proviso will prevail on the principle that it speaks the last c intention of the law makers. In the present case, the exclusiveness in the vesting of powers of adjudication conferred on the Federal High Court in older Acts has been diluted to include and confer jurisdiction on the State d High Court in this sort of case. 11. Per curiam “It must be admitted and this Court takes judicial notice of the fact that banks and State courts are spread all over the e country. It is possible that the framers of the Constitution might have conceived and contended in their collective wisdom that the Federal Courts mostly located in urban areas are not as extended as the State High Courts. Therefore to meet the needs of litigants in regard to the intention of f cases of the nature under consideration, it shall be considered more practicable or pragmatic to spread the jurisdiction more widely to deal with banking matters arising in the less fanciful locations. The sum total of what I am saying is that by the proviso both the Federal High Court and the State g High Court exercise concurrent jurisdiction in this area.” Appeal allowed.

Cases referred to in the judgment h Nigerian A.-G., Bendel State v A.-G. Federation (1982) 3 NCLR 1; (1981) 10 SC 1 i Abasi v State (1992) 8 NWLR (Part 260) 383 Adejumo v Governor of Lagos State (1972) 3 SC 47 Afribank (Nig.) Plc v K.C.G. (Nig.) Ltd (2001) 8 NWLR (Part 714) 87 j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 295 a Agbaka v Amadi (1998) 11 NWLR (Part 572) 16 Aqua Ltd v Ondo State Sports Council (1988) 4 NWLR (Part 91) 622 b Awolowo v Shagari (1979) 6–9 SC 51 Bi Zee Bee Hotels Ltd v Allied Bank (Nig.) Ltd (1996) 8 NWLR (Part 465) 176 Bronik Motors Ltd v Wema Bank Ltd (1983) 1 SCNLR 296 c Coker v U.B.A. Plc (1997) 2 NWLR (Part 490) 641; (1997) 2 SCNJ 130 F.M.B.N v NDIC (1999) 2 NWLR (Part 591) 333 d Honika Sawmill (Nig.) Ltd v Hoff (1994) 2 NWLR (Part 326) 252 Idehen v Idehen (1991) 6 NWLR (Part 198) 382 e Jammal Steel Structures Ltd v A.C.B. Ltd (1973) 1 All NLR (Part 2) 208 Labiyi v Anretiola (1992) 8 NWLR (Part 258) 139 L.S.D.P.C. v Foreign Finance Corp. (1987) 1 NWLR (Part f 50) 413 NDIC v F.M.B. (1997) 2 NWLR (Part 490) 735 N.I.D.B. v Fembo (Nig.) Ltd (1997) 2 NWLR (Part 489) 453 g Odubeko v Fowler (1993) 7 NWLR (Part 308) 637 Ogunbiyi v Ishola (1996) 6 NWLR (Part 452) 12; (1996) 9 SCNJ 143 Oke v Oke (1974) 1 All NLR (Part 1) 443 h Owena Bank Ltd v N.S.E. Ltd (1997) 8 NWLR (Part 515) 1 Paico (Press and Books) Ltd v CBN (2001) 3 NWLR (Part 700) 347 i Rabiu v State (1980) 8–11 SC 130 Savannah Bank of Nigeria Ltd v Pan Atlantic Shipping and Transport Agencies Ltd (1987) 1 NWLR (Part 49) 212; (1987) 18 NSCC (Part 1) 67 j Saude v Abdullahi (1989) 7 NWLR (Part 116) 387

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

296 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Trade Bank Plc v Benilux (Nig.) Ltd (2003) 9 NWLR (Part a 825) 416 Tukur v Govt. Gongola State (1989) 4 NWLR (Part 117) 517 U.B.N. Plc. v Integrated Timber and Plywood Producers Ltd b (2000) 12 NWLR (Part 680) 99 Yusuf v U.B.N. Ltd (1996) 6 NWLR (Part 457) 632

Foreign c Attorney-General v Chelsea Waterworks Co (1731) Fitzg. 195 Bank of England v Vagliano Brothers (1891) AC 107 d Lloyds and Scottish Finance Ltd v Modern Cars and Cara- vans (Kingston) Ltd (1964) 2 All ER 732; (1966) 1 QB 764 Re Tabrisky Ex parte Board of Trade (1947) 2 All ER 182 Saginaw County Tp. Officers Association v City of Saginaw e 373 Mich. 477, 130, 130 N.W. 2nd 30, 32 Stoler v State 171 Neb. 93, 105 N.W. 2nd 852 West Derby Union v Metropolitan Life Assurance Co (1897) AC 647 f

Nigerian statutes referred to in the judgment Companies and Allied Matters Act, Cap 59 Laws of the Federation of Nigeria, 1990 g Constitution of the Federal Republic of Nigeria, 1963, section 78(1), (2) Constitution of the Federal Republic of Nigeria, 1979, sec- h tions 230(1)(a), (b), (d), 236(1) Constitution of the Federal Republic of Nigeria, 1999, sections 1(3), 251, 251(1)(d), 272(1), 315, 315(3)(d) Constitution (Suspension and Modification) Decree No. 107 i of 1993, section 230(1)(d) Failed Banks (Recovery of Debts) and Financial Malprac- tices in Banks Decree No. 18 of 1994, sections 3(1), 3(1)(a), 9 j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 297 a Failed Banks (Recovery of Debts) and Financial Malprac- tices in Banks (Amendment) Decree No. 62 of 1999 Federal High Court Act, Cap 134 Laws of the Federation of b Nigeria, 1990, section 64(4) Federal Revenue Court Decree No. 13 of 1973, sections 7(1), 7(1)(b)(iii), 63(4) Nigeria Deposit Insurance Corporation Act, Cap 301 Laws c of the Federation of Nigeria, 1990, section 28 Regional Courts (Federal Jurisdiction) Act, Cap 177 Laws of the Federation of Nigeria and Lagos, 1958, section 3 Tribunals (Certain Consequential Amendments etc) Decree d No. 62 of 1999

Foreign statute referred to in the judgment Sale of Goods Act, 1893, section 26(1) e Nigerian rules of court referred to in the judgment High Court (Civil Procedure) Rules of Lagos State, 1972, Order 36 rule 8 f Book referred to in the judgment Black’s Law Dictionary (6ed) page 1425 g Counsel For the appellant: Ibrahim, S.A.N. (with him Tarfa, S.A.N., Ama, Soyebo (Mrs), Jolaawo, Oguneso, Tarfa (Miss), Uk- peke and Olowookere) h For the respondent: Clarke (with him Eke and Obayi) Judgment UWAIFO JSC: (Delivering the lead judgment) The Nigeria Deposit Insurance Corporation (“the NDIC”) is the liquidator i of Allied Bank of Nigeria, Plc. It acts in that capacity in furtherance of its duties under section 28 of the Nigeria Deposit Insurance Corporation Act (“the Act”), Cap 301 Laws of the Federation of Nigeria, 1990 and under other laws, and j as may be relevant under the Companies and Allied

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 298 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Matters Act, Cap 59 Laws of the Federation of Nigeria, a 1990 (the CAMA). The first respondent, Okem Enterprises Nigeria Limited, was said to be a valued customer of the said Allied Bank of Nigeria Plc (the bank). It maintained b various accounts with different branches of the bank. The first respondent obtained credit facilities or loans from the bank. It is alleged that as at 31 January, 1999, the total amount outstanding against the first respondent was c N284,109,459.59. The bank’s licence has been revoked by the Central Bank of Nigeria and this led to the NDIC being appointed the liquidator of the bank. The NDIC filed an application for the recovery of debt in d the Failed Banks (Recovery of Debts) and Financial Mal- practices in Banks Tribunal (“the tribunal”), Lagos Zone, on 29 March, 1999 against the first respondent and the second to sixth respondents who, at all times material to the action, e were the directors of the first respondent. This was done by virtue of the Failed Banks (Recovery of Debts) and Finan- cial Malpractices in Banks Decree No. 18 of 1994 (Decree No. 18 of 1994). That Decree was amended by Decree No. f 62 of 1999, substituting the Federal High Court for the tribunal. This suit was accordingly taken over by the Federal High Court, Lagos, after the inception of the present democratic dispensation, trial by tribunal having been discontin- g ued. On 16 April, 2000, the respondents filed a notice of objection to the jurisdiction of the Federal High Court to entertain the suit and sought to have the suit struck out. There were h four grounds relied on for the objection, namely, that:– 1. The proviso to section 251(1)(d) of the Constitution of the Federal Republic of Nigeria, 1999 repeats the terms of section 230(1)(d) of the 1979 Constitution i (as amended by Decree No. 107 of 1993) and did not vest in the Federal High Court the jurisdiction to determine causes and matters relating to transactions between an individual customer and his bank. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 299 a 2. The reliefs sought in this suit are matters within the exclusive jurisdiction of the State High Court. 3. All claims made or intended to be made by the plain- b tiff are a nullity since they are all claims and matters over which the Federal High Court has no jurisdiction. 4. Accordingly, the Federal High Court is devoid of ju- c risdiction to entertain this suit and the same should therefore be struck out. In a short but well considered ruling given on 18 December, 2000, Abutu J came to the conclusion that in causes and d matters between a bank and its individual customer, the Federal High Court and State High Courts have concurrent jurisdiction. The learned Judge overruled the objection. e An appeal was lodged by the defendants against that decision to the Court of Appeal, Lagos Division. Two issues were raised before that court for determination, namely:– “(i) Whether the learned trial Judge was right in holding that the f present state of the law is that the Federal Court has concurrent jurisdiction with State High Court to entertain disputes between banks and their individual customers and thereby assumed jurisdiction to entertain the suit herein. (ii) Whether the learned trial Judge was correct in the decision g that the Federal High Court is vested with jurisdiction to entertain the suit by virtue of provisions of the Failed Banks Decree as amended the Tribunals (Certain Consequential Amendments etc) Decree No. 62 of 1999.” h The Court of Appeal on 4 February, 2003, allowed the appeal. It held that the Federal High Court has no jurisdiction to entertain causes and matters about an individual customer and bank relationship. i This is an appeal against that decision. The appellant has set down four issues for determination as follows:– “1. Whether the court below was right when it restricted itself to the provisions of Decree No. 107 of 1993 and section j 251(1)(d) of the 1999 Constitution in considering whether

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 300 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

the position of the law as regards the jurisdiction of the a Federal High Court and State High Court in respect of transaction between individual customers and their bank had been altered since the time of the 1979 Constitution. b 2. Whether sections 3(1) and 9 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended by Decree No. 62 of 1999) are inconsistent with section 251(1)(d) of the 1999 of the Federal Republic of Nigeria and are therefore unconstitutional, null c and void. 3. Whether the 1999 Constitution of the Federal Republic of Nigeria conferred exclusive jurisdiction in ‘disputes between an individual customer and his bank’ on the State d High Courts. 4. Whether the suit instituted by the appellant against the respondents herein does not qualify as a Suit involving ‘other fiscal measures’ (within the meaning of section 251(1)(d) of e the 1999 Constitution) in which the Federal Government is interested as considered in previous decisions of this Hon- ourable Court.” The respondents have put the issues for determination rather f slightly differently as follows:– “(i) Whether the court below restricted itself to the provisions of section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993 and section 251(1)(d) of the 1999 Constitution in considering whether the position of the law g as regards the jurisdiction of the Federal High Court and State High Courts in respect of transactions between individual customers and their banks had been altered since the time of the 1979 Constitution. h (ii) Whether the court below was right in its decision that in disputes between an individual customer and his bank, only a State High Court has jurisdiction by virtue of the proviso to section 251(1)(d) of the 1999 Constitution. i (iii) Whether the court below was right in its decision that in so far as jurisdiction between an individual customer and his bank has been vested in State High Courts, sections 3(1) and 9 of the Failed Banks Decree purports to vest jurisdiction on same matters in the Federal High Court are j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 301 a inconsistent with the proviso to section 251(1)(d) of the 1999 Constitution. (iv) Whether the suit instituted by the appellant respondents herein qualified as a suit involving ‘other fiscal measures’ b within the meaning of section 251(1)(d) of the 1999 Consti- tution.” The respondents have, in any case, raised objection to c ground 4 of the appellant’s grounds of appeal in the notice of appeal dated 16 April, 2003. I do not find it necessary to reproduce the said ground 4 but I shall later pronounce on the preliminary objection which concerns issue 4. d In my respectful view, the first three issues as stated by both parties may be considered as one issue thus:– “Whether the Court of Appeal was right in its interpretation of the proviso to section 251(1)(d) of the 1999 Constitution and the ef- e fect to be given to Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 in reaching the conclusion that the State High Courts have exclusive jurisdiction in disputes between an individual customer and his bank.” f I think it is possible that in the process of resolving this issue, arguments proffered by the parties in the consideration of the issues set down by them will be usefully taken into account as may be relevant and appropriate. g Before the court below embarked on the interpretation of section 251(1)(d) together with the proviso therein, it found it necessary to examine the jurisdiction of the Federal High Court prior to the coming into effect of the provisions of the h said section 251 of the 1999 Constitution [section 230 of the 1979 Constitution as amended by Decree No. 107 of 1993]. This, in fact, involved a reference to section 7(1) of the Fed- eral Revenue Court Decree, 1973 (later to be known as the i Federal High Court Act) whose provisions read thus:– “7(1) The Federal Revenue Court shall have and exercise jurisdiction in civil causes and matters:– (a) relating to the revenue of the government of the j Federation in which the said government or any

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 302 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

organ thereof or a person suing or being sued on be- a half of the said government is a party: (b) connected with or pertaining to:– (i) the taxation of companies and of other bodies b established or carrying on business in Nigeria and all other persons subject to Federal taxation, (ii) customs and excise duties, c (iii) banking, foreign exchange, currency or other fiscal measures; (c) arising from:– (i) the operation of the Companies Decree, 1968 d or any other enactment regulating the operation of companies incorporated under the Companies Decree, 1968; (ii) any enactment relating to copyright, patents, designs, trade marks and merchandise marks; e (d) of admiralty jurisdiction.” After reproducing the above provisions, the court below cited the decision of this Court in Jammal Steel Structures f Ltd v African Continental Bank Ltd (1973) 1 All NLR (Part 2) 208, and quoted a passage therefrom at 220; (1973) ANLR (Green Cover) 852 at 862–863. Other passages were quoted from the said Jammal’s case and from Bronik Motors Ltd v Wema Bank Ltd (1983) 1 SCNLR 296. The court then, g per Oguntade JCA, observed as follows:– “The Supreme Court held that the Federal High Court has limited jurisdiction in the sense that it has only so much of the jurisdiction conferred expressly by ‘existing laws’ which are Acts of National h Assembly under section 230 subsection (2) and also under specific section of the 1979 Constitution as well as such other jurisdiction as may be conferred on it by future enactments of the National As- sembly under section 230 of the 1979 Constitution. i It is noteworthy that the case of Bronik Motors Ltd (supra) was considered on the basis of the 1979 Constitution and the jurisdiction conferred thereunder on the Federal High Court. Under section 230(1) of the 1979 Constitution, the jurisdiction of the Federal Revenue Court as granted under the Federal Revenue Court j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 303 a Decree, 1973 was preserved; and the Federal Revenue Court was re-christened as Federal High Court. Now the 1979 Constitution in relation to the jurisdiction of the Federal High Court was amended by Decree No. 107 of 1993. Sec- b tion 230(1)(d) of Decree No. 107 of 1993 is in ipssissma (sic) verba with section 251(1)(d) of the 1999 Constitution reproduced above. It is correct to say that prior to the coming into force of De- cree No. 107 of 1993, the position was that Federal High Court c had a limited jurisdiction and the State High Court an unlimited jurisdiction. It is also the position that civil causes and matters arising from any dispute between the individual customer and his bank in respect of transaction between the individual customer and the bank were under the jurisdiction of the State High Court. The d question that then arises is – Have Decree No. 107 of 1993 and section 251(1)(d) of the 1999 Constitution altered the position with regard to the jurisdiction of the Federal High Court and State High Court in such matters?” e The learned Justice of Appeal discussed other more recent cases, particularly of the Court of Appeal (some of which I shall consider in the course of this judgment) and said inter alia as follows:– f “It is my view that the Federal High Court only has exclusive jurisdiction in matters specifically stated under the paragraph in section 230(1)(d) before the proviso. To have stated that the Federal High Court has exclusive jurisdiction in the areas listed in section g 230(1)(d) cannot without more mean that it has a concurrent jurisdiction in the area stated under the proviso.” He went further to state at a later stage of the judgment:– “It seems to me that in so far as jurisdiction in dispute between an h individual customer and his bank has been vested in State High Courts, sections 3(1) and 9 of the Failed Banks Decree (as amended) which vests jurisdiction on the same matters in the Fed- eral High Court must be seen as inconsistent with section 251(l)(d) of the 1999 Constitution. In that case, section 1(3) of the 1999 i Constitution makes it void to the extent of the inconsistency.” Reference was made by Oguntade JCA to the decision of the Court of Appeal Lagos Division in N.D.I.C. v Federal Mort- gage Bank of Nigeria (1997) 2 NWLR (Part 490) 735 which j had considered section 230(1)(d) of the 1979 Constitution as

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 304 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) amended by Decree No. 107 of 1993 and pronounced that it a gave the Federal High Court and State High Courts concurrent jurisdiction. But he came to the conclusion that that pronouncement was obiter because, in his understanding the b issues before the court did not call for a determination whether or not the Federal High Court and the State High Courts have concurrent jurisdiction in disputes between an individual customer and his bank. He set out the said issues. c He referred to two other decisions of the Court of Appeal where a contrary view was expressed and said:– “As was held by the Court of Appeal in the two cases, I hold the view that in the dispute between a customer and his bank only a d State High Court has jurisdiction. In holding this view, I bear in mind that before the promulgation of Decree No. 107 of 1993, the Federal High Court did not have jurisdiction in such matters. It seems to me that if it was the intention of the draftsman in Decree No. 107 of 1993 to grant the Federal High Court a jurisdiction e which it did not previously enjoy, it would have done so in clear, direct and explicit language. It is my view that the Federal High Court only has exclusive jurisdiction in matters specifically stated under the paragraph in section 230(1)(d) before the proviso. To f have stated that the Federal High Court has exclusive jurisdiction in the areas listed in section 230(1)(d) cannot without more mean that it has a concurrent jurisdiction in the area stated under the proviso.” g Although the learned Justice proceeded to say: “Appellant’s Counsel has submitted that enactments conferring (exclusive) jurisdiction on the Federal High Court are existing laws which must be brought in conformity with the 1999 h Constitution pursuant to section 315 of the 1999 Constitu- tion. I entirely agree with him”, yet he reached the final conclusion to allow the appeal without conceding any right of jurisdiction to the Federal High Court to hear disputes be- i tween individual customer and his bank. With due respect to the learned Justice of Appeal, I have to say that he fell into fundamental misconceptions, namely, about (1) the proper import of the decisions in Jammal’s j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 305 a case and Bronik’s case which he discussed and relied on; (2) the correct interpretation of section 251(l)(d) of the 1999 Constitution which he attempted, having regard to the essen- b tial function of a proviso in an enactment; and (3) the effect of sections 1(3) and 315 of the 1999 Constitution on sections 3(1) and 9 of the Failed Banks Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 in regard to the resolu- c tion of the issue of inconsistency. I think a combination of these vital matters was responsible for the grave error committed by the court below in reversing the decision of the Federal High Court per Abutu J. d It is important to understand what Jammal’s case decided, why it was so decided and what arguments led to it. Before the Federal Revenue Court Decree No. 13 of 1973 which established the Federal Revenue Court was enacted, State e High Courts had jurisdiction (and I shall explain presently what circumstances directly permitted that jurisdiction) over “banking” matters and other matters like admiralty, customs and excise duties, exchange and currency, taxation of com- f panies etc. The operative Constitution then was the 1963 Constitution of the Federation. In particular, section 78(1) thereof gave Parliament the sole power to make laws for banks and banking as follows:– g “78(1) Parliament may make laws for Nigeria or any part thereof with respect to banks and banking.” However, subsection (2) of section 78 made provision thus:– “(2) Nothing in this section shall preclude the legislature of a h State from establishing an authority for the ‘purpose of carrying on (subject to and in compliance with any Act of Parliament for the time being in force and in particular any Act relating to banks and banking) the business of banking in Nigeria or elsewhere or from making such i provision for the constitution of that authority and regulating the performance by that authority of its functions as is consistent with any Act of Parliament.” Ordinarily in a federal system of government Federal Courts j would adjudicate over matters in which the Central Parliament

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 306 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) has exclusive legislative competence. But because there a were no Federal Courts before Decree No. 13 of 1973 to adjudicate in matters (of banks and banking etc) which were within the exclusive legislative competence of the Parlia- b ment, the High Courts of the then regions were given authority which enabled them to adjudicate in respect of matters within the exclusive legislative competence of the Parlia- ment by virtue of section 3 of the Regional Courts (Federal c Jurisdiction) Act (formerly Ordinance), Cap 177 Volume V Laws of the Federation Nigeria and Lagos, 1958 which provided as follows:– “Where by the law of a region jurisdiction is conferred upon a d High Court or a Magistrates’ Court for the hearing and determination of civil causes relating to matters with respect to which the Legislature of the region may make laws, and of appeals arising out of such causes, the court shall, except in so far as other provision is made by any law in force in the region, have the like juris- e diction with respect to the hearing and determination of civil causes relating to matters within the exclusive legislative competence of the Federal Legislature, and of appeals arising out of such causes.” f Those were the circumstances I earlier hinted at in which Regional High Courts were given jurisdiction (by the said Ordinance) to adjudicate in matters of banks and banking etc which, had there been Federal Courts, such Ordinance g would have been most probably unwarranted. On the promulgation of Decree No. 13 of 1973, section 7(1)(b)(iii) of the said Decree, which is germane to the pre- h sent case, gave or “transferred” jurisdiction to the Federal Revenue Court in civil causes and matters connected with or pertaining to “banking, foreign exchange, currency or other fiscal measures”. i What really happened by the intervention of Decree No. 13 of 1973 was that the jurisdiction permitted to Regional High Courts relating to some of the matters within the exclusive legislative competence of the Federal Legislature was j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 307 a withdrawn and exclusive jurisdiction in those matters was then conferred on the Federal Revenue Court. Those matters included the ones just enumerated above as b contained in the provision of section 7(1)(b)(iii). But it is essential to note, because it is of great relevance, how the above provision is worded. It is also pertinent to consider the effect of what section 63(4) of the said Decree (now section c 64(4) of the Federal High Court Act, Cap 134 Laws of the Federation of Nigeria, 1990) provided that for the avoidance of doubt, the Regional Courts (Federal Jurisdiction) Act, inter alia, shall be construed with such modifications as may d be necessary to bring it into conformity with the provisions of the Decree. The said Decree was thus the dominant statute with which the Regional Courts (Federal Jurisdiction) Act must be consistent through modifications as may be e necessary in interpretation. This would seem to be of some moment as to what extent the Regional (or State) High Courts would be accommodated to adjudicate in respect of matters the said Decree had “transferred” jurisdiction to the f Federal Revenue Court. The relevant matter of jurisdiction as it relates to the present case is “banking”. One may ask, which aspect of banking had then been given to the Federal Revenue Court exclusively from the wording of section g 7(1)(b)(iii) of the Decree? Is it “banking” in the broad sense or “banking” in its limited interpretation which became an issue in Jammal’s case? In Jammal’s case, questions of real concern arose. The h Federal Revenue Court had recently been conferred with jurisdiction in banking, a matter within the exclusive legislative competence of the Federal Legislature. The jurisdiction of the State High Courts in that same subject of banking, as I i have said, had been directly derived from the Regional Courts (Federal Jurisdiction) Act. It was that same Act (and other specified enactments, eg Admiralty Jurisdiction Act, 1962) which allowed Regional (State) High Courts to have j jurisdiction over other Federal matters relating to revenue,

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 308 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) taxation of companies, customs and excise, foreign ex- a change, currency, copyright, patents, designs, trade marks, admiralty etc. That was when there was no Federal Court to adjudicate over those matters. Now Decree No. 13 of 1973 b transferred to, and conferred exclusive jurisdiction on, the Federal Revenue Court in respect of those matters and section 63(4) of the said Decree would not permit State High Courts to exercise jurisdiction in respect of matters over c which jurisdiction was now conferred on the Federal Reve- nue Court unless to the extent that the Regional Courts (Federal Jurisdiction) Act was construed with necessary modifications to bring it in line with the Decree. d The question then arose whether there was still jurisdiction in the State High Courts in banking matters. This question had to be resolved in a suit then pending in the High Court of Lagos State, for “the balance due to the plaintiffs for an e overdraft granted by the plaintiffs to the defendants at their Idumota Branch, Lagos, in the normal course of their business as bankers to the defendants and for money paid by the plaintiffs to the defendants as bankers at the latter’s request, which said sum the defendants have refused and/or ne- f glected to pay in spite of repeated demands”. That was the case of the African Continental Bank Limited, as plaintiffs, against Jammal Steel Structures Limited, as defendants. It was a case of an individual customer and its bank relation- g ship over an alleged debt owing from banking transactions which eventually got to the Supreme Court as Jammal’s case (supra). Chief Williams appeared for the defendants/appellants h while Mr Evan Enwerem appeared for the plaintiffs/ respondents. Dr. N.B. Graham Douglas, the Attorney- General of the Federation appeared as amicus curiae. Chief Williams’s submission, in short, was that since the action i was filed after the Federal Revenue Court has assumed jurisdiction in banking matters and had started to work, the High Court of Lagos State no longer had any jurisdiction. Mr Enwerem submitted that “banking” in the context in j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 309 a which it was used in section 7(1)(b)(iii) of the Decree could only be in reference to a transaction in which the Federal Government was interested and not a simple contractual b relationship such as that between banker and customer. Dr. Graham Douglas had also submitted in line with Chief Williams’s contention that “all banking transactions” were included within section 7(1)(b)(iii) with the result that the c Lagos State High Court had ceased to have jurisdiction in the case brought against Jammal by the African Continental Bank. Now, the interpretation whether section 7(1)(b)(iii) con- d ferred exclusive jurisdiction on the Federal Revenue Court in all banking matters depended on the controlling effect of “or other fiscal measures” on the word “banking” in the said section 7(1)(b)(iii). e This court adopted the ejusdem generis rule of interpretation to reach the conclusion that the section placed a limited meaning on “banking” so that what it really connotes is f “banking measures”. Banking measures were considered by this Court in Jammal’s case to be policy matters of the Fed- eral Government. That meant that it was only in respect of banking measures that the interest of the Federal Govern- g ment would be affected and, therefore, the Federal Revenue Court would have exclusive jurisdiction only in causes or matters concerning banking measures. In the majority decision of this Court delivered by Elias CJN he observed inter h alia at [(1973) 1 All NLR (Part 2); (1973) All NLR (Green Cover)] 219 and 861–862 respectively that:– “After a very careful consideration of all arguments put before us, we think that the ejusdem generis rule applies to the interpretation i of section 7(1)(b)(iii) with the result that the word ‘measures’ must be taken to qualify each of the preceding specifically enumerated subjects, including ‘banking’. This means that the natural and ordinary meaning to be given to the subsection is that it should be as ‘banking measures, foreign exchange measures, currency meas- j ures or other fiscal measures’.”

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 310 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

And then, at 220–222 and 862–864 respectively, the learned a Chief Justice observed further, and I shall quote him in ex- tenso as follows inter alia:– “We are accordingly of the opinion that in section 7(1)(b)(iii) of b the Decree, the word ‘other measures’ must be construed ejusdem generis with the words ‘banking’, ‘foreign exchange’, and ‘currency’. Thus construed, banking measures would cover such pieces of legislation, orders and regulations of the Federal Gov- c ernment as relate to banking for example, the Banking Decree 1969, Central Bank of Nigeria Act (Cap 30 of 1958 Edition), and ancillary enactments. Where any dispute relates to breach of or non-compliance with certain formalities required by law for the lawful operations of banking business, it is a matter for the Federal d Revenue Court because it involves a government measure and the government is a necessary party. Thus in Merchants Bank Ltd v Federal Minister of Finance (1961) All NLR 598 the question at issue was the revocation of the licence of the plaintiff bank by the e defendant under the Banking Act, 1958 Edition. Such a case must go to the Federal Revenue Court. But where there is involved only a dispute between a bank and one or more of its customers in the ordinary course of banking business or transaction, as is the case with the subject matter of the present case, because the govern- f ment is not really interested in the outcome of the dispute, apart of course from its interest in the general maintenance of law and order. (sic) . . . It was argued by the learned Attorney-General that the inclusion of g subsection (d) in section 7(1) of the Decree in respect of admiralty case is an indication that the Federal Revenue Court was intended to have jurisdiction in other cases than revenue matters. This may be so, but we observe that the original jurisdiction in admiralty h cases in respect of which the Supreme Court formerly had a mo- nopoly was taken away from it and expressly given to the High Courts of the States by the Admiralty Jurisdiction Act, 1962, which is also referred to in section 63(4) of the Federal Revenue Court Decree. 1973. This last provision seems to say that, for the i avoidance of doubt, the Admiralty Jurisdiction Act, 1962 shall be construed with such modifications as may be necessary to bring it into conformity with the provisions of the Federal Revenue Court Decree. We do not understand this to mean that the Admiralty Ju- risdiction Act, 1962 is thereby repealed, leaving jurisdiction in j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 311 a admiralty cases only to the Federal Revenue Court. It seems to us that only such causes or matters of admiralty as pertain to Federal Government vessel or property or revenue are within the jurisdiction of the Federal Revenue Court. If the true intention had been to b take all admiralty jurisdiction out of the hand of all State High Courts, express provision would have been made for such a contingency in the Federal Revenue Court Decree . . . We also think that another reason for giving section 7(1)(b)(iii) of c the Decree the construction we have adopted above is that the true object and purpose of the Federal Revenue Court Decree, as can be gathered from the four corners of it, is the more expeditious despatch of revenue cases, particularly those relating to personal income tax, company tax, customs and excise duties, illegal cur- d rency deals, exchange control measures and the like, which the State High Courts were supposed to have been too tardy to dispose of especially in recent years. It does not seem to us that the legislative intention behind the Decree was to clutter up the new Revenue e Court with ordinary cases involving banker-customer relationship, such as disputes in respect of an over draft or the negligent dishonouring of a customer’s cheques all ‘banking transactions’ having nothing to do with Federal revenue concern. All the State High Courts and other appropriate courts must continue to exercise their f jurisdiction in these and similar matters if the Federal Revenue Court must be allowed to concentrate on its essential revenue protection functions. In any case, we would require a clearer and more definitive provision than that in section 7(1)(b)(iii) of the Decree g before we should be disposed to assent to the submission of both Chief Williams for the appellants and the learned Attorney- General that jurisdiction in ‘all banking matters’ throughout the Federation and whatever their nature has in fact been exclusively vested in the Federal Revenue Court.” h It can be easily seen that the interpretation of “banking” in section 7(1)(b)(iii) of the Decree to mean “banking measures” denied it of the wide meaning of banking in its ordinary sense, as given in Black’s Law Dictionary (6ed) at 146 i as follows:– “The business of banking, as defined by law and custom, consists in the issue of notes payable on demand intended to circulate as money when the banks are banks of issue: in receiving deposits j payable on demand; in discounting commercial paper; making

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 312 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

loans of money on collateral security buying and selling bills of a exchange: negotiating loans, and dealing in negotiable securities issued by the government, state and national, and municipal and other corporations” (italics mine). b The implication of appreciating the meaning of the word “banking” in the ordinary sense, without its being restricted as a fiscal measure of the Federal Government by the ejusdem generis rule of interpretation as done by the majority c decision in regard to section 7(1)(b)(iii) of the Decree, can be noted in the minority view expressed by Fatayi-Williams JSC (later CJN). I find myself referring to his minority view merely to elicit the ordinary meaning of “banking”. The d learned Justice observed at 237–238 and 877 respectively:– “. . . would interpret ‘banking’ in its ordinary sense and hold that the expression is wide enough to embrace every transaction coming within the legitimate business of a banker. The nature of the e claim in the case in hand shows clearly that the transaction which formed the basis of it is that of banking. The learned trial Judge is also of the same view. It will be recalled that in the course of his judgment he said that he had ‘no difficulty whatsoever in coming to the view that the transaction in the case was a banking transac- f tion’. As all that we are concerned with is the meaning of the word ‘banking’ and as I have formed the view that the word stands alone, I am also of the view that the ejusdem generis rule does not apply.” g The learned Justice was of the view that the word “banking” stood uncontrolled by the phrase “fiscal measures” and, upon that wide meaning, held that the Federal Revenue Court had exclusive jurisdiction over banking in its broad h meaning. It is no surprise that the view of Fatayi-Williams JSC contrasts with the conclusion reached by the majority at 224 and 866 respectively thus:– i “In the view we have taken of section 7(1)(b)(iii) of the Decree that only ‘banking measures’ are contemplated therein and not ‘all banking transactions’ whatsoever. We hold that the subject matter of this appeal which is a simple dispute between banker and customer in respect of an overdraft account, is within the jurisdiction j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 313 a of the High Court of Lagos State, and not the Federal Revenue Court.” The majority decision in Jammal’s case was approved in b Bronik Motors Ltd v Wema Bank Ltd (1983) 1 SCNLR 296 where it was discussed at length in regard to the applicability of the ejusdem generis rule. Bronik’s case was decided after the Federal Revenue Court had been changed to the Federal High Court. Just as in the majority decision in c Jammal’s case, where Elias CJN made some relevant re- marks, Nnamani JSC who gave the lead judgment in Bronik’s case said at 316:– d “Having held that the majority judgment is right in construing section 7(1)(b)(iii) such that the Federal Revenue Court is restricted to its essentially revenue protection functions while the State High Courts deal with such matters in which no issue of the Revenue of the Government of the Federation arises, I would agree that there e has to be express provision and a more definitive provision than section 7(1)(b)(iii) before one can accept the contention that ‘all banking matters’ must fall within the jurisdiction of the Federal High Court.” f It is plain to me that the court below missed the essence of the judgment of this Court in the Jammal’s case. The ratio decidendi of it was the result of the canon of interpretation adopted in respect of section 7(1)(b)(iii) of the Decree. It g construed “banking” as meaning “banking measures” by the application of the ejusdem generis rule. This was a restricted meaning bringing it within the Federal Government fiscal measures on banking a pure concept of the Federal Govern- h ment revenue policy considered in Jammal and Bronik to be in line with the Federal Revenue Court objective. While it gave exclusive jurisdiction in such fiscal measures to the Federal Revenue Court, the interpretation excluded banker i and individual customer relationship. Matters and causes concerning that remained under the jurisdiction of State High Courts. Now, it is well to recall that when the Federal Revenue j Court Decree, 1973 was enacted, the relevant provision of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 314 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the 1963 Constitution of the Federation on banking was sec- a tion 78(1) which provided that Parliament may make laws for Nigeria or any part thereof with respect to banks and banking. By virtue of items 44 and 45 of the Exclusive Leg- b islative List in the Schedule to the Constitution of the Fed- eration and Part III of the said Schedule, the Federal Gov- ernment had authority to provide for “the jurisdiction, powers, practice and procedure of courts of law” established to c carry out the provisions of any enactment passed by virtue of that authority. The Federal Revenue Court Decree, 1973 was enacted, in virtue of the relevant Laws and, of course, by the overriding authority of the Federal Military Government. d However, even under section 230 of the 1979 Constitution before it was amended, the jurisdiction of the Federal High Court was simply thus:– “230(1) Subject to the provisions of this Constitution and in e addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Fed- eral High Court shall have jurisdiction:– (a) in such matters connected with or pertaining to the revenue of the Government of the Federation f as may be prescribed by the National Assembly; and (b) in such other matters as may be prescribed as respects which the National Assembly has power to g make laws. (2) Notwithstanding subsection (1) of this section, where by law any court established before the date when this section comes into force is empowered to exercise ju- h risdiction for the hearing and determination of any of the matters to which subsection (1) of this section relates, such court shall as from the date when this section comes into force be restyled Federal High Court and shall continue to have all the powers and exercise i the jurisdiction conferred upon it by any law.” Section 7(1)(b)(iii) of Decree No. 13 of 1973 as interpreted and section 230(1)(d) of the 1979 Constitution as it then stood, admittedly, restricted the jurisdiction of the Federal j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 315 a High Court. Mr Clarke, learned Counsel for the respondents, referring to section 7(1)(b)(iii) and upon his own understanding of Jammal’s case has in his brief of argument that:– b “Under the above provision, jurisdiction in civil causes and matters connected with or pertaining to banking was vested in the Federal High Court. Despite the fact that the provision did not expressly exclude disputes between an individual customer and his bank, this Honourable Court still held that it was not the legislative c intent to vest the Federal High Court with jurisdiction in such matters. This was in Jammal Steel Structures Ltd v A.C.B. (1973) 1 All NLR (Part 11) 208” (italics mine). d The fatal flaw in this submission, as evident from the itali- cised text, has been spotlighted in what I pointed out to be the ratio decidendi of Jammal’s case. Mr Clarke either overlooked or misconceived the critical role played in the application of the ejusdem generis rule in Jammal’s case. e I need to draw attention here to section 236(1) of the Con- stitution. The provisions read:– “236(1) Subject to the provisions of this Constitution and in f addition to such other jurisdiction as may be conferred upon it by law, the High Court of a State shall have unlimited jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal g right, power, duty, liability, privilege, interest, obligat- ing or claim is in issue or to hear and determine any criminal proceedings involving or relating to any penalty, forfeiture, punishment or other liability in respect of an offence committed by any person.” h These provisions were considered both in Bronik’s case and Savannah Bank of Nigeria Ltd v Pan Atlantic Shipping and Transport Agencies Ltd (1987) 1 NWLR (Part 49) 212; (1987) 18 NSCC (Part 1) 67. Obviously, the said provisions i made no distinction between matters within Federal legislative competence and States’ legislative competence. But the decision in the Savannah Bank case in the interpretation of section 236(1), as it tended to allow State courts to make an j inroad into the jurisdiction of the Federal Court, became

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 316 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) quite controversial. a Chief Clarke has argued on behalf of the respondents in reliance on the Savannah Bank case that this Court “held that section 8(l) of the Federal High Court Act, 1973 which gave b the court exclusive jurisdiction in admiralty matters was inconsistent with section 236 of the 1979 Constitution under which the State High Court was vested with unlimited jurisdiction and was therefore void to the extent of its inconsis- c tency with the Constitution”. That may well be so. But I think, with due respect, Chief Clarke would seem to fail to take cognisance of the fact that section 236 of the 1979 Con- stitution has now been replaced by section 272(1) of the d 1999 Constitution with the word “unlimited” dropped from “jurisdiction”; and the said section 272(1) is made subject to section 251. Section 251 was meant to put an end to the controversy generated by the Savannah Bank case. This has created a lot of difference in the legal situation, rendering Chief e Clarke’s said submission completely off the point and therefore untenable. I think Alhaji Ibrahim, S.A.N., on behalf of the appellant, made a significant point both in his brief and in his oral argument before this Court. He said that from the f various provisions of the law more recently conferring jurisdiction on the Federal High Court, that court has virtually gone beyond the original intention of making it just a revenue court and that the decisions in Jammal’s case, Bronik’s g case and the Savannah Bank case have to that extent spent their force. I am in complete agreement with that submission. By the Constitution (Suspension and Modification) Decree h No. 107 of 1993 (the Decree No. 107 of 1993), section 230 of the 1979 Constitution was amended to confer on the Fed- eral High Court jurisdiction to hear and determine civil causes and matters arising from a long list of items. The ju- i risdiction was far beyond what was contemplated under the Federal Revenue Court Act, 1973. I am particular about section 230(1)(d) [in pari materia with section 251(1)(d) of the 1999 Constitution] which is relevant to this case. It provided j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 317 a as follows:– “230(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdic- b tion as may be conferred upon it by an Act of the Na- tional Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters arising from:– c (d) 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, d coinage, legal tender, bills of exchange, letter of credit, promissory note and other fiscal measures: Provided that this paragraph shall not apply to any dis- e pute between an individual, customer and his bank in respect of transactions between the individual customer and the bank.” Notable in this provision is the absence of any phrase which f will necessitate the application of the ejusdem generis rule that prevailed in section 7(1)(b)(iii) of Decree No. 13 of 1973 when it was interpreted in Jammal’s case. Exclusive jurisdiction has been given the Federal High Court in all the g items mentioned therein, including “banking” in its wide sense as must now be recognised since it is not limited to “banking measures”. Attention must, therefore, be drawn now to the effect which the proviso has on that exclusive ju- h risdiction in regard to banking in order that it would receive appropriate consideration. This is so because in the absence of that proviso, the jurisdiction of the State High Courts would be completely removed. i The said provision in section 251(1)(d) together with the proviso has been interpreted in some decisions of the Court of Appeal. It would appear that two conflicting views have been expressed in those cases as to which court has jurisdic- j tion as between the Federal High Court and the State High

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 318 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Courts in disputes between individual customer and his a bank. In the following cases it was held that it is the State High Courts which have exclusive jurisdiction: Bi Zee Bee Hotels Ltd v Allied Bank (Nig.) Ltd (1996) 8 NWLR 465) b 176; N.I.D.B. v Fembo (Nig.) Ltd (1997) 2 NWLR (Part 489) 453; U.B.N. Plc v Integrated Timber and Ply Producers Ltd (2000) 12 NWLR (Part 680) 99; Paico (Press and Books) Ltd v CBN (2001) 3 NWLR (Part 700) 347. On the other c hand, in the following cases it was held that both the Federal High Court and the State High Courts have concurrent jurisdiction: NDIC v Federal Mortgage Bank of Nigeria (1997) 2 NWLR (Part 490) 735; Afribank (Nig.) Plc v K.C.G. (Nig.) d Ltd (2001) 8 NWLR (Part 714) 87. This last case came to that view relying on the decision of the Supreme Court in Federal Mortgage Bank of Nigeria v NDIC (1999) 2 NWLR (Part 591) 333 which heard the appeal from the Court of e Appeal in NDIC v Federal Mortgage Bank of Nigeria (supra). In the said NDIC v Federal Mortgage Bank of Nigeria (1997) 2 NWLR (Part 490) 735 in which I wrote the lead f judgment in the Court of Appeal, the earlier Court of Appeal decisions, namely Bi Zee Bee Hotels and Fembo Nigeria were not cited to the court. If they had been cited they would have been considered whether in fact they had decided the g matter in issue by which the Court of Appeal ought to be bound. Mr Clarke, on behalf of the respondent, submits that the pronouncement on the proviso in section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993 in h NDIC v Federal Mortgage Bank of Nigeria (supra) was obiter. Mr Clarke did not explain why he made that submission in his brief of argument in response to this appeal. I think, however, he simply echoed the view expressed by the court below. The court below held the view that the pronounce- i ment I made in that case was an obiter dictum because, according to Oguntade JCA, the issues before the Court of Appeal in that case “did not include a determination of whether or not the Federal High Court has a concurrent j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 319 a jurisdiction with a State High Court in a dispute between an individual customer and his bank”. He set out the three issues considered in that case, the first which reads:– b “Whether by virtue of section 230(1)(d) of the Constitution (Sus- pension and Modification) Decree No. 107 of 1993, a State High Court has any jurisdiction left to entertain in any dispute between two banks relating to banking transactions” (italics mine). c He observed and concluded thus:– “As I stated earlier the issue did not properly arise in the Court of Appeal case NDIC v F.M.B.N. The judicial authorities which remain binding on this Court in the matter are Bi Zee Bee Hotels Ltd d v Allied Bank (Nig.) Ltd (supra) and NIDB v Fembo (Nig.) Ltd (supra). As was held by the Court of Appeal in the two cases I hold the view that in disputes between an individual customer and his bank only a State High Court has jurisdiction.” e Looking at the above issue, I should have thought it elementary that the nature of the dispute between the two banks and the respective capacities in which they acted in the banking transaction as revealed in the case would have to be ascer- f tained in order to understand the phrase whether “a State High Court has any jurisdiction left to entertain any dispute between two banks relating to banking transactions”, so as to answer the issue arising from the arguments of Counsel. g In so deciding what jurisdiction was left to the State High Courts, one may come to whether it is exclusive or concurrent. But certainly, the question suggests that there was a dispute over the jurisdiction exercisable by the State High h Court in the subject matter. The action itself arose from a customer and bank relationship. A sum of money had been deposited by the Federal Mortgage Bank of Nigeria with a commercial bank (United Commerce Bank Limited) which later went into liquidation. An action had been commenced i at the Lagos State High Court before the liquidator (NDIC) came in and objected at a stage that by virtue of section 230(1)(d) (as amended), only the Federal High Court had jurisdiction. The Lagos State High Court overruled the ob- j jection. The matter eventually got to the Court of Appeal

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 320 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) and the issue in question was raised. In fact, the arguments a of Counsel for both parties raised the question as to the meaning of section 230(1)(d), and they were on diametri- cally opposite directions. One contended that the Federal b High Court had exclusive jurisdiction; the other that the State High Courts had exclusive jurisdiction. The two parties were banks and the transaction was that one had lodged money with the other on an interest basis. The arguments touched on whether that was a customer and bank relation- c ship and the effect under section 230(1)(d) in regard to the dispute. This was recorded thus at 754:– “But it appears a controversy still remains as to what the proviso to section 230(1)(d) means. Professor Olawoyin on behalf of the d appellant argues that when one bank invests money in another bank upon interest and a dispute later ensues, any civil cause arising from that transaction (referred to by him as ‘inter-bank placements’) is in respect of an action between one bank and an- e other which must be heard by the Federal High Court to the exclusion of a State High Court by virtue of section 230(1)(d) of Decree No. 107 of 1993. On the other hand, Mr Fagbohungbe on behalf of the respondent submits that the respondent was created by the Federal Mortgage f Bank of Nigeria Decree No. 7 of 1977 and not licensed under the Banks and Other Financial Institutions Decree No. 25 of 1991 (the BOFID). He says that under section 61 of the BOFID, ‘bank’ means a bank licensed under the said BOFID. He therefore boldly g argues that the respondent is not a bank as defined under section 61 of the BOFID. He contends further that the respondent was merely ‘investor’ with the United Commercial Bank Limited (now appellant) and not a ‘customer’, and that therefore the Lagos State High Court has jurisdiction to hear the action.” h The argument of Professor Olawoyin that when one bank invested money in another bank upon interest that amounted to “inter bank placements” and did not constitute a customer and bank relationship, was rejected. Also, the argument of i Mr Fagbohungbe that the Federal Mortgage Bank of Nigeria was not a bank but an investor and not a customer of the United Commercial Bank Limited, was similarly rejected. The facts that clearly and eventually emerged before the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 321 a court were those of customer and bank relationship and the question which arose therefrom was which court had jurisdiction. The issue that was raised whether a State High b Court still has any jurisdiction left by virtue of the said section 230(1)(d) must, I think, be taken along with the argument of the appellant that the Federal High Court had exclusive jurisdiction and that of the respondent that it was the c Lagos State High Court that had jurisdiction. I should have thought when that was done, one could not avoid taking a decision, upon a rational approach, to support one of the parties, or rule against both and state where indeed jurisdiction d lay, namely, in both courts as appropriate. But a convoluted approach the court below engaged in the present case is bound to miss the merit and inevitability of resolving that issue the way it was. I think, therefore, it is idle to reason or submit that the issue leading to the pronouncement that both e the Federal High Court and the State High Courts have concurrent jurisdiction did not arise for consideration and decision in that judgment. f Before going to what the Supreme Court held on appeal in that case, let me return to whether the Court of Appeal had earlier considered section 230(1)(d) and given a decision on it. In Bi Zee Hotels Ltd (supra), although one of the issues g was: “Assuming the appeal is competent whether the Fed- eral High Court had jurisdiction to entertain the action which bothers (sic) on banker and customer relationship”, the Court of Appeal came to the conclusion that the appeal was h incompetent and struck it out. It was thereafter that it was said at 185 thus:– “Even if I consider the appeal on its merit, I would have dismissed it as lacking in merit. i I say this because having regard to the material placed before the learned trial Judge and the state of the law, that is the proviso to section 230(1)(d) set out above, I quite agree with the learned trial Judge that the jurisdiction of his court is ousted from determining the complaint of the appellant as formulated from the statement of j claim.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 322 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

The fanciful but misconceived arguments advanced by the Coun- a sel for the appellant in trying to draw a distinction between individual banker and non individual banker as he put it is a non- starter and with all due respect, I do not buy it. This is because the state of the law as it is now makes or even suggest no such a dis- b tinction.” It is obvious that section 230(1)(d) was not considered as part of the case before the court and a decision reached on it in the Bi Zee Bee Hotels case. What was said was a com- c ment in passing after the appeal before the court had been struck out for being incompetent. That cannot constitute a binding authority. As for Fembo Nigeria Ltd (supra), only three issues were d before the court, one of which was: “Whether or not the lower court has jurisdiction to adjudicate on the plaintiffs’ case.” The other two had no relevance remotely with section 230(1)(d). The contention as reported at 563 of the e report was in regard to whether a company whose shares are wholly owned by the Federal Government was a Federal Government agency under section 230(1)(q), (r) and (s). The pronouncement at 564 on section 230(1)(d) was simply by f the way in reliance on Bi Zee Bee Hotels Ltd (supra). It had no bearing with the issue and no argument had been proffered on it. I would leave it at that. I have dealt with these cases because the respondent’s Counsel strongly relied on g them and the court below said it was bound by them. Obvi- ously, those decisions, in any event, wrongly interpreted section 230(1)(d). As I have already indicated, NDIC v Federal Mortgage h Bank of Nigeria (supra) came on appeal to this Court as Federal Mortgage Bank of Nigeria v NDIC (1999) 2 NWLR (Part 591) 333. What I said there in connection with section 230(1)(d) was copiously reproduced by Ogundare JSC in his i lead judgment at 361–362 when considering question 4 raised by the cross appellant which was stated thus:– “4. Does Lagos State High Court share a concurrent jurisdiction with the Federal High Court in respect of banker customer j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 323 a disputes/transactions as provided in the proviso to section 230(1)(d) of Decree No. 107 of 1993?” This was obviously a direct question arising from issue 1 b which had been raised in the court below and decided as already shown. I do not intend to reproduce all what Ogundare JSC culled from my observation in that case in the court below. It is fairly long. But part of what I said, which the c learned Justice set out and considered, reads thus:– “A bank is an individual legal entity. It can be an individual customer to any other person when not acting as a bank. So it is that it can be an individual customer to a bank in any particular transaction depending on the type of transaction . . . But if one bank as an d individual is interested in earning interest from another bank through deposit, then the relationship of individual customer and bank is established as in the present case. Any dispute arising from that transaction is triable in the State High Court as well as in the e Federal High Court” (italics mine). This was after I had given full consideration to the effect of a proviso in an enactment and as it applied to section 230(1)(d) and the said case. Reacting to the above along f with the argument of Counsel, Ogundare JSC at 362 said:– “The respondent was unhappy with this conclusion and this forms the kernel of its cross-appeal. It is contended that by virtue of the provisions of section 230(1)(d) of the Constitution the High Court g of Lagos State lacked competence and jurisdiction to entertain the action brought by the plaintiff against another bank, the defendant in this case. It is the further contention of the respondent that any action between one bank and another falls within the exclusive ju- h risdiction of the Federal High Court. It is the contention of the plaintiff that the transaction between the plaintiff and the defendant leading to the action in the High Court of Lagos State was a dispute between an individual customer and i his bank which is exempted from the exclusive jurisdiction of the Federal High Court by the proviso in section 230(l)(d). It is submitted that the plaintiff, in relation to that transaction, was an individual customer to the defendant. I have considered the arguments advanced by the parties. I agree j entirely with the reasoning of the court below. With respect to the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 324 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

learned Counsel for the respondent, I do not share the view that the a proviso in section 230(l)(d) would not apply where in a customer banker relationship the customer is a bank. To say that where there is a dispute between two banks, the forum for the resolution of the dispute is the Federal High Court is to read into section 230(1)(d) b what is not there. A lot depends on the nature of the transaction between the two banks. The facts show that plaintiff, like any other customer, placed a short term deposit with the defendant on agreed interest. After some roll overs, plaintiff sought to retrieve c its deposit and interest but defendant defaulted. In the absence of any evidence to the contrary about the custom in the industry I must hold that it is a simple customer/banker relationship which the proviso in section 230(1)(d) exempts from the exclusive jurisdiction of the Federal High Court” (italics mine). d In the face of the above, the court below, per Oguntade JCA, said: “It is apparent that the Supreme Court did not discuss the issue of concurrent jurisdiction in relation to the matter”, e even though it was question 4 which the court fully considered. The respondents’ Counsel also cited and relied on this Court’s decision in Trade Bank Plc. v Benilux (Nig.) Ltd f (2003) 9 NWLR (Part 825) 416. There, the sole issue was whether the High Court of Lagos State is vested with jurisdiction to hear and determine the respondent’s claim against his banker for improperly paying a cheque marked “Not ne- g gotiable” in favour of the plaintiffs to a third party. It was a case of conversion arising from a customer and bank relationship. It was held that the High Court of Lagos State had jurisdiction to entertain the claim. The lead judgment by h Mohammed JSC was supported in this regard by all the other four learned Justices. But respondents’ Counsel quoted the observation of Tobi JSC in his supporting judgment in that case and relied on it to argue that the proviso in section i 230(1)(d) is not merely to relax the exclusive jurisdiction conferred on the Federal High Court in matters stated in the proviso but that rather, “the purport is to wholly, totally and absolutely deprive the Federal High Court of jurisdiction in j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 325 a respect of matters coming thereunder”. At 432, Tobi JSC said:– “Section 230(1)(d) of the 1979 Constitution as amended by the b Constitution (Suspension and Modification) Decree No. 107 of 1993 vests exclusive original jurisdiction on the Federal High Court ‘in respect of banking, banks, other financial institutions including any action between one bank and other, any action by or against the Central Bank of Nigeria arising from banking, foreign c exchange, coinage, legal tender, bills of exchange, letter of credit, promissory note and other fiscal measures’. The provision can only be invoked on banking transactions in respect of bank inter se including the Central Bank. By the proviso, the subsection will not apply to any dispute between an individual customer and his bank d in respect of transaction between an individual customer and a bank.” What I understand was implied from the judgment along with the observation of Tobi JSC is that the Federal High e Court has no exclusive jurisdiction in such a cause or matter because of the proviso. That is the true legal position. I cannot understand why learned Counsel for the respondent relied on the said observation unless, as it seems, he clearly f misconceived it. I must now proceed formally to analyse section 251(1)(d) of the 1999 Constitution [same as section 230(1)(d) of the 1979 Constitution]. I have already set the provision out in g this judgment. It provides that the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters arising from:– h “(d) 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, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal meas- i ures.” It will be seen that this provision is differently worded from the provision of section 7(1)(b)(iii) of the 1973 Decree which dealt with “banking, foreign exchange, currency or j other fiscal measures”. It was this wording that led this

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 326 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Court in Jammal’s case to interpret the word “banking” as a used therein to mean “banking measures” under the ejusdem generis rule. It would appear that the lawgiver reacted to that interpretation in the majority decision and also the b opinion of the minority decision and, if I may say, as well as the concerns expressed in both Jammal’s case and Bronik’s case where specifically it was said in Jammal’s case that:– c “We would require a clearer and more definitive provision than that in section 7(1)(b)(iii) of the Decree before submission of both Chief Williams for the appellants and the learned Attorney- General that jurisdiction in ‘all banking matters’ throughout the Federation and whatever their nature has in fact been exclusively d vested in the Federal Revenue Court.” It can be seen that section 251(1)(d) was meant to give the Federal High Court exclusive jurisdiction in “banking” in the wide sense to involve all banking transactions (see the e definition given in the Black’s Law Dictionary (supra)). That conclusion cannot be resisted in view of the open- ended text of that provision. But having contemplated conferring exclusive jurisdiction on the Federal High Court f in all the items stipulated in paragraph (d), which by the language used was indeed conferred, the lawgiver then introduced a proviso thus:– “Provided that this paragraph shall not apply to any dispute be- g tween an individual customer and his bank in respect of transactions between the individual customer and the bank.” In considering the effect of the proviso in question, the import of the exclusive jurisdiction conferred on the Federal h High Court under section 251(l)(d) of the 1999 Constitution should not be lost sight of. The section begins with, “Not- withstanding anything to the contrary contained in this Con- stitution . . .”. This takes account of the jurisdiction of the i High Court of a State in section 272(1) of the 1999 Constitu- tion which says:– “Subject to the provisions of section 251 and other provisions of the Constitution, the High Court of a State shall have jurisdiction to hear and determine any civil proceedings in which the existence j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 327 a or extent of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue.” This is not a provision conferring exclusive jurisdiction on b the State High Courts. Section 251(1)(d) confers exclusive jurisdiction on the Federal High Court in specified matters notwithstanding section 272(1). As has been observed, section 251(1) of the 1999 Constitu- c tion begins with, “Notwithstanding anything to the contrary contained in this Constitution”, while section 272(1) is specifically made “subject to the provisions of section 251”. When the term “notwithstanding” is used in a section of a d statute, it is meant to exclude an impinging or impeding effect of any other provision of the statute or other subordinate legislation so that the said section may fulfil itself. It follows that, as used in section 251(1) of the 1999 Constitution, no e provision of that Constitution shall be capable of undermining the said section. In regard to section 272 of the Constitu- tion, section 251 is directly relevant in that the former is made subject to it. The expression “subject to” means liable, f subordinate, subservient, or inferior to; governed or affected by; provided that or provided; answerable for (see Black’s Law Dictionary (6ed) at 1425). It must therefore be understood that “subject to” introduces g a condition, a restriction, a limitation, a proviso (see Oke v Oke (1974) 1 All NLR (Part 1) 443 at 450). It subordinates the provisions of the subject section to the section empowered by reference thereto and which is intended not to be h diminished by the subject section (see LSDPC v Foreign Fi- nance Corporation (1987) 1 NWLR (Part 50) 413 at 461; Aqua Ltd v Ondo State Sports Council (1988) 4 NWLR (Part 91) 622 at 655). The expression generally implies that what i the section is subject to shall govern, control and prevail over what follows in that subject section of the enactment, so that it renders the provision to which it is subject to conditional upon compliance with or adherence to what is pre- j scribed in the provision referred to (see Tukur v Government

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 328 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) of Gongola State (1989) 4 NWLR (Part 117) 517 at 542, a 565, 580; Idehen v Idehen (1991) 6 NWLR (Part 198) 382 at 448; Labiyi v Anretiola (1992) 8 NWLR (Part 258) 139 at 163–164). b Plainly, the proviso in question in section 251(l)(d), to put it in simple analysis, says that the Federal High Court will have exclusive jurisdiction in banking matters but when what is involved is an individual customer and his bank c transaction, the Federal High Court shall not have exclusive jurisdiction. Understandably, that was to recognise the jurisdiction of the State High Courts had been exercising in such matters which section 272(1) of the Constitution impliedly d preserves. The High Court of a State can only exercise jurisdiction in any aspect of such specified matters to the extent that the proviso in section 251(1)(d) permits. The said proviso cannot be interpreted to have the effect of conferring e exclusive jurisdiction on the State High Courts and completely taking away the jurisdiction of the Federal High Court to entertain causes and matters relating to individual customer and bank transactions as was erroneously decided f by the court below and unsuccessfully argued before this Court by Chief Clarke. Alhaji Ibrahim, S.A.N., has proffered clear argument in the appellant’s brief in this regard. I think I have sufficiently explained the rationale behind g the interpretation adopted in Jammal’s case. I have also shown that the provision of section 251(1)(d) is not liable to the ejusdem generis rule of interpretation. The words of section 251(1)(d) are plain enough. It is the proviso that efforts h must be made to understand. Therefore, one should be wary, in embarking on the interpretation of the proviso, not to be carried away by the history behind jurisdiction of the Fed- eral Revenue Court, later Federal High Court. The first ap- i proach is to try to construe the plain words of section 251(1)(d). I must confess that because of the way the court below dealt with this matter and the arguments of Counsel in this Court, I was compelled to forage into the past to explain j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 329 a the decisions in Jammal’s case and Bronik’s case with much profit. That is why, although I could have done without that history in this particular case where I regard the language of b section 251(1)(d) unambiguous, I consider it still valid that I must feel guided in this regard by the observation of Lord Herschell as to the proper approach when interpreting the plain words of a statute which he made in the House of c Lords case of The Bank of England v Vagliano Brothers (1891) A.C. 107 at 144–145 as follows:– “I think the proper course in the first instance is to examine the language of the statute and to ask what is the natural meaning, un- d influenced by any considerations derived from the previous state of the law, and not to start with inquiring how the law previously stood, and then, assuming that it was probably intended to leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view.” e The learned Law Lord then proceeded to make further expa- tiation thus:– “If a statute, intended to embody in a code a particular branch of f the law, is to be treated in this fashion, it appears to me that its utility will be almost entirely destroyed, and the very object with which it was enacted will be frustrated. The purpose of such a statute surely was that on any point specifically dealt with by it, the law should be ascertained by interpreting the language used in- g stead of, as before, by roaming over a vast number of authorities in order to discover what the law was, extracting it by a minute critical examination of the prior decisions. . . . I am of course far from asserting that resort may never be had to the previous state of the law for the purpose of aiding in the construction of the provi- h sions of the code. If, for example, a provision be of doubtful import, such resort would be perfectly legitimate. Or, again, if in a code of the law of negotiable instruments words be found which have previously acquired a technical meaning, or been used in a i sense other than their ordinary one, in relation to such instruments, the same interpretation might well be put upon them in the code. . . . What, however, I am venturing to insist upon is, that the first step taken should be to interpret the language of the statute, and that an appeal to earlier decisions can only be justified on some j special ground.”

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 330 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

The Court of Appeal fell into the error of adopting the con- a trary approach. Instead of construing section 251(1)(d) from the words used in the first instance, it rather sought the help of earlier authorities in a manner that distorted a true inter- b pretation necessary in this case. That was why I found myself compelled to revisit those authorities, Jammal and Bronik’s case, to show that they were both misunderstood and misapplied by that court. c As a general rule, a proviso has a limited operation in qualifying the ambit of the section to which it is related (see Lloyds and Scottish Finance Ltd v Modern Cars and Cara- vans (Kingston) Ltd (1964) 2 All ER 732 at 740). It follows d that where a section with a proviso appended to it confers powers, it would be contrary to the ordinary operation of the proviso to give that section an effect which would neutralise those powers in a way that it goes beyond what compliance e with the proviso itself renders necessary. The object of a proviso is normally to cut down or qualify or create exceptions to or relax in a defined sense the limitations imposed or powers conferred by a section of an enactment or document; f or to exclude some possible ground of misinterpretation of its extent, or to modify the main part of a section of a statute to which it relates or to restrain its absoluteness or generality (see Re Tabrisky Ex parte Board of Trade (1947) 2 All ER 182 at 183–184 per Lord Greene MR; West Derby Union v g Metropolitan Life Assurance Co (1897) A.C. 647 at 652 per Lord Watson). Therefore, the proper view of the proviso in section 251(1)(d) of the 1999 Constitution is that the main provision having used the language of exclusive jurisdiction, h the proviso then relaxes that exclusiveness given to the Fed- eral High Court therein in a situation in which the issue is a dispute between an individual customer and his bank in respect of transactions between an individual and the bank. In i that regard, a State High Court will also have or continue to exercise jurisdiction and this it does concurrently with the Federal High Court. There should be no difficulty in appreciating this. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 331 a A further argument was made in connection with the provisions of sections 3(1)(a) and 9 of Decree No. 18 of 1994 and Part 1 of the Schedule to the Decree No. 62 of 1999 b which amended Decree No. 18 of 1994. The court below received arguments in respect of those provisions and expressed its opinion thereon per Oguntade JCA as follows:– “It seems to me that in so far as jurisdiction in disputes between c individual customer and the bank has been vested in State High Courts, sections 3(1) and 9 of the Failed Banks Decree as amended which vests jurisdiction on the same matters in the Federal High Court must be inconsistent with section 251(1)(d) of the 1999 Constitution makes it void to the extent of the inconsistency. Ap- d pellant’s Counsel has submitted that enactments conferring jurisdiction on the Federal High Court are existing laws which must be brought in conformity with the 1999 Constitution pursuant to section 315 of the 1999 Constitution. I entirely agree with him.” e He did not indicate what the effect would be if the said sections 3(1) and 9 of the Failed Banks Decree as amended by Decree No. 62 of 1999 were to be brought in conformity with the 1999 Constitution pursuant to section 315. But what f followed from the conclusion he arrived at to allow the appeal meant that he regarded those provisions void entirely because he said only the State High Courts have jurisdiction. g The appellant’s argument in this regard falls under issues 2 and 3 set down in the appellant’s brief. It was Decree No. 18 of 1994 under which the tribunals were set up. Sections 3(1)(a) and 9 provided thus:– h “3(1) The tribunal shall have power to:– (a) recover, in accordance with the provisions of this Decree, the debts owed to a failed bank arising in the ordinary course of business and which remain out- i standing as at the date the bank is closed or declared a failed bank by the Central Bank of Nigeria. 9. Notwithstanding anything to the contrary in any law, deed, agreement or memorandum of understanding, the tribunal shall have exclusive jurisdiction to hear and de- j termine all matters brought before it concerning the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 332 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

recovery from any person of any debt owed to a failed a bank, which remains outstanding as at the date of closure of the business of the failed bank.” Paragraph 7 of Part 1 of the Schedule to Decree No. 62 of b 1999 which amended Decree No. 18 of 1994 reads, inter alia:– “For the word ‘tribunal’ wherever it appears in the Decree substitute the words ‘Federal High Court.” c This enabled pending cases which the tribunals did not conclude before they were abolished to be taken over by the Federal High Court. d The question that arose in the court below was whether the foregoing provisions were inconsistent with section 251(1)(d) of the 1999 Constitution and therefore unconstitutional, null and void. The opinion of that court and the final decision it reached have been stated above. It is necessary to add that e Oguntade JCA had earlier said: “I hold the view that in dispute between an individual customer and his bank only a State High Court has jurisdiction.” It is plain that from the whole tenor of the judgment of the court below, the above f stated pronouncements were made upon a faulty premise and are inevitably wrong. One could recall how by the Re- gional Courts (Federation Jurisdiction) Act and related Acts jurisdiction was given to Regional High Courts (in the ab- g sence of a Federal Court) to adjudicate on matters within the exclusive competence of the Parliament. That arrangement was never intended to give exclusive jurisdiction to the Re- gional High Courts. It was, in my view, a desirable stopgap h pending the establishment of a Federal Court. Decree No. 13 of 1973 which established the Federal Revenue Court conferred it with exclusive jurisdiction over some of the matters, but banking became one such matter which turned out i to be contentious even after Decree No. 107 of 1993 which amended section 230 of the 1979 Constitution was promulgated, curious claims were still being made by some that the State High Courts have exclusive jurisdiction to entertain an j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 333 a aspect of banking which involves an individual customer and bank relationship. There is no rational basis, as has been shown, for holding that under section 251(1)(d) of the 1999 b Constitution, State High Courts have exclusive jurisdiction to determine disputes between an individual customer and his bank in respect of transactions between the individual customer and the bank. It has been demonstrated that in such c matters the Federal High Court and State High Courts have concurrent jurisdiction. There can be no doubt that the intention of enacting Decree No. 18 of 1994 was to place all matters arising from failed d banks, including an individual customer and bank relationship, within the exclusive jurisdiction of the tribunals set up by the Federal Military Government. This was to ensure, I believe, that the “crusade” of Federal Military Government e to sanitise banking activities maintained the momentum it could monitor and assess. There is also no doubt that Decree No. 62 of 1999 was intended to keep it that way. It can be seen, therefore, that the Federal High Court by the said De- f crees had been directly conferred with exclusive jurisdiction over all failed banks matters. But the ultimate position in this connection is that, although by Decree No. 18 of 1994 and Decree No. 62 of 1999, the Federal High Court was g given exclusive jurisdiction in such matters, that provision of exclusivity has turned out to be inconsistent with the effect of the proviso to section 251(1)(d) when the 1999 Con- stitution came into force. That does not mean that the effect h of the inconsistency was to deprive the Federal High Court of any jurisdiction at all in matters of customer and bank. By virtue of section 315 of the Constitution, those provisions in the said Decrees which are now regarded as existing Acts of i the National Assembly, must be brought in line with the said proviso which extends jurisdiction to State High Courts. This must be done with due reference to subsection (3) of section 1 of the Constitution which provides that:– j “(3) If any other law is inconsistent with the provisions of this

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC 334 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Constitution, this Constitution shall prevail, and that other a law shall to the extent of the inconsistency be void.” The relevant provision of section 315 is subsection (3)(d). It provides:– b “(3) Nothing in this Constitution shall be construed as affecting the power of a court of law or any tribunal established by law to declare invalid any provision of an existing law on the ground of inconsistency with the provision of any other law, that is to say:– c (d) any provision of this Constitution.” 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 Federal High d Court exclusive jurisdiction in the Failed Banks Recovery of Debts vis-à-vis customer and bank transactions, it is inconsistent with the proviso in paragraph (d) of section 251(1) which says the Federal High Court shall not have exclusive e jurisdiction in such matters. The said Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 will simply be read in the light that the Federal High Court shall have jurisdiction in matters of dispute between an individual customer and his f bank in respect of transactions between the individual customer and the bank. This will be consistent with the proviso in paragraph (d) of section 251(1) of the 1999 Constitution. The court below was therefore in error to have declared sec- g tions 3(1) and 9 of Decree No. 18 of 1994 amended by De- cree No. 62 of 1999 paragraph 7 of Part 1 of the Schedule thereto void. I have considered the preliminary objection to ground 4 in h the notice of appeal filed on 6 January, 2004 relied on by the appellant and issue 4 formulated therefrom. The said ground complains that the court below erred in law when it failed to consider the relevance of the legal status of the appellant, its i statutory duties and its role in management of failed banks. Issue 4 raised therefrom asks whether the suit instituted by the appellant against the respondents does not qualify as a suit involving “other fiscal measures” within the meaning of j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwaifo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 335 a section 251(1)(d) in which the Federal Government is interested. The whole purpose was to urge this Court to hold that the failed banks policy which became a major socio- b economic issue under the auspices of the Federal Military Government are matters in which the NDIC, regarded as a Federal Government agency, has taken a decision and therefore should remain within the exclusive jurisdiction of the c Federal High Court by virtue of section 251(1)(r). I think there is merit in that objection. The said ground of appeal does not arise from the decision of the court below. The issue was never canvassed in that court and no leave was obtained to raise it as a new issue here. I accordingly hold that d ground 4 is incompetent. I strike it out together with the said issue 4 formulated from it and the argument based on the said issue (see Honika Sawmill (Nig.) Ltd v Hoff (1994) 2 NWLR (Part 326) 252 at 260; Yusuf v Union Bank of (Nig.) e Ltd (1996) 6 NWLR (Part 457) 632 at 642). There is, however, much merit in the appeal and I allow it. I set aside the judgment of the court below together with the f order for costs. I restore the decision of the Federal High Court which assumes jurisdiction to entertain this suit. I award N6,000 as costs in the court below and N10,000 as costs in this Court in favour of the plaintiff/appellant. g KUTIGI JSC: I have had the privilege of reading in advance the judgment just rendered by my learned brother, Uwaifo JSC. I agree with his reasoning and conclusions. I will, however, comment briefly. h Starting with the respondents’ preliminary objection, I will also uphold the objection to ground 4 of the appellant’s grounds of appeal, because the ground does not relate to any matter decided in the judgment of the Court of Appeal. i Clearly the legal status of the appellant, its statutory duties and its roles in the management of failed banks which ground 4 alleges that the Court of Appeal failed to consider were never issues before that court nor were they canvassed j by any of the parties in that court. Ground 4 and issue 4

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kutigi JSC 336 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) founded on it are therefore incompetent and they are hereby a struck out (see for example Odubeko v Fowler (1993) 7 NWLR (Part 308) 637; Agbaka v Amadi (1998) 11 NWLR (Part 572) 16). Now, back to the appeal proper. b This appeal is only concerned with the construction or interpretation of the proviso to section 251(1)(d) of the 1999 Constitution which reads thus:– “251(1). Notwithstanding anything to the contrary contained in c this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the Na- tional Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other d court in civil causes and matters:– (a) . . . (omitted) (b) . . . (omitted) (c) . . . (omitted) e (d) 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 f banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures, Provided that this paragraph shall not apply to any dis- g pute between an individual customer and his bank in respect of transactions between the individual customer and the bank” (italics is mine).

It is a cardinal principle of interpretation that where in their h ordinary meaning the provisions are clear and unambiguous, effect should be given to them as such (see for example Awolowo v Shagari (1976) 6–9 SC 51; Nafiu Rabiu v State (1980) 8–11 SC 130; A.-G. of Bendel State v A.-G. of the Federation (1981) 3 NCLR 1; (1981) 10 SC 1). A careful i reading of section 251(1)(d) above shows the Federal High Court has exclusive jurisdiction in all matters specifically enumerated therein before the proviso. The problem here is therefore that of the construction of the proviso as it relates j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kutigi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 337 a to the other jurisdiction of the Federal High Court in respect of the item or area stated in the proviso that is, the provision:– b “any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.” The question which easily comes to mind is: Does the pro- c viso exclude the Federal High Court from exercising jurisdiction in the area contained therein? Or is the Federal High Court simply not allowed to exercise exclusive jurisdiction in the area, and in which case it shares that jurisdiction con- d currently with other courts, in this case the State High Courts? The proviso to my mind is intended not to deny the Federal High Court of jurisdiction in the matter or area stated e therein. The proviso is an exception to the “exclusively”, rule embodied in section 251(1)(d). In other words, it is a proviso to the provision of paragraph (d) of section 251 subsection (1) only. f Now, it should be appreciated that the words or provision:– “any dispute between an individual customer and his bank in respect of transactions between individual customer and the bank” g covered by the proviso, is an area already covered by the main paragraph (d) itself before the proviso. It will therefore be unreasonable to read the proviso as totally denying jurisdiction in an area where the main paragraph (d) has already h conferred jurisdiction. What the proviso has done in my view, therefore, is simply to remove “exclusively” of jurisdiction in the area stated in the proviso of paragraph (d). In other words, the Federal High Court can exercise concurrent i jurisdiction in the area stated or mentioned in the proviso. To have stated, as did the Court of Appeal, that the Federal High Court has no jurisdiction at all, would have made the proviso superfluous or unnecessary because there are count- j less other cases in which the Federal High Court has no

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kutigi JSC 338 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) jurisdiction. We must in addition also avoid a construction a which would have the effect of rendering the proviso otiose. The appeal therefore succeeds and it is allowed. It is for the above reasons and those ably stated in the b judgment of my learned brother, Uwaifo JSC, that I also allow the appeal. For the avoidance of doubt the conclusion is that under the proviso of section 251(1)(d) of the 1999 Con- stitution, the Federal High Court has concurrent jurisdiction c with State High Courts in the matter stated in the proviso (see Federal Mortgage Bank of Nigeria v NDIC (1999) 2 NWLR (Part 591) 333; Afribank Nigeria Plc v K.C.G. Nige- ria Ltd (2001) 8 NWLR (Part 714) 87. d The judgment of the Court of Appeal is set aside while the ruling delivered by the Federal High Court on 18 October, 2000 is restored. I endorse the order for costs. e KATSINA-ALU JSC: I have had the advantage of reading in draft the judgment delivered by my learned brother, Uwaifo JSC, in this appeal. I entirely agree with his reasoning and conclusion and I, also, would allow the appeal. I only wish f to make a few observations of my own on sections 251(1)(d) and 272(1) of the 1999 Constitution. The main issue in this appeal is whether the State High Court has been conferred with exclusive jurisdiction in “disputes between an individ- g ual customer and his bank” by the 1999 Constitution of this country. The starting point is section 272(1) of the 1999 Constitution which confers jurisdiction on the State High Courts. It provides as follows:– h “272(1) Subject to the provisions of section 251 and other provisions of the Constitution, the High Court of a State shall have jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal i right, power, duty, liability, privilege, interest, obligation or claim is in issue or to hear and determine any criminal proceeding involving or relating to any penalty, forfeiture, punishment or other liability in respect of an offence committed by any person.” j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Katsina-Alu JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 339 a So what does section 251 provide? It states thus:– “251(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the Na- b tional Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters:– (a) . . . (omitted) c (b) . . . (omitted) (c) . . . (omitted) (e) connected with or pertaining to banking, banks, other financial institutions, including any action d between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory e 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 transactions between the individual customer and the bank” (italics mine). f There are two things that I would like to observe from the above quoted provision of section 272. The first is that whatever jurisdiction is vested in the State High Court by section 272 is made subject to the jurisdiction vested in the g Federal High Court by or pursuant to section 251 of the 1999 Constitution. The second thing to note is the absence of the adjective “exclusive”. Thus, it is necessary to bear in mind the provisions of section 251 in construing the jurisdic- h tion vested in the State High Court. In other words, section 251 of the Constitution which confers jurisdiction on the Federal High Court restricts, limits, governs and indeed prevails over section 272 of the Constitution which confers ju- i risdiction on the State High Court. It is a cardinal principle of interpretation of statutes that where the words of the statute are clear and unambiguous, they must be given their plain and ordinary meaning (see j Owena Bank (Nig.) Plc v N.S.E. Ltd (1997) 8 NWLR (Part

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Katsina-Alu JSC 340 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

515) 1; A.-G., Bendel v A.-G., Federation (supra); Awolowo a v Shagari (1979) All NLR 12). It will be seen clearly that section 251(1)(d) confers exclusive jurisdiction on the Federal High Court in specified mat- b ters notwithstanding section 272(1). What this means is that the jurisdiction conferred upon and exercised by the State High court hitherto in regard to those specified matters has been removed. The proviso to section 251(1)(d) however c exempts any dispute between an individual customer and his bank from the exclusive jurisdiction of the Federal High Court. What this means is this. The proviso had done two things. First, the jurisdiction of the State High Court in d transactions involving an individual customer and his bank has been preserved. In the second place, although the Fed- eral High Court has jurisdiction in such disputes, it is not to the exclusion of the State High Court. In other words both e courts have concurrent jurisdiction. That is to say that under the proviso to section 251(1)(d) of the 1999 Constitution, the Federal High Court has concurrent jurisdiction with the State High Court in transactions involving an individual cus- f tomer and his bank (see Federal Mortgage Bank of Nigeria v NDIC (1999) 2 NWLR (Part 591) 333).

As I stated earlier on in this judgment, I entirely agree with g the reasoning and conclusion of my learned brother, Uwaifo JSC. In the result, I, too, allow the appeal and set aside the judgment of the Court of Appeal together with the order for costs. I restore the judgment of the Federal High Court and h also award N6,000 costs in the Court of Appeal and N10,000 as costs in this Court in favour of the plaintiff/appellant.

KALGO JSC: I have had the opportunity of reading in draft i the judgment just delivered by my learned brother, Uwaifo JSC, in this appeal. I entirely agree with the judgment and the treatment of the issues raised therein. I adopt his reasoning and conclusions as mine and find that the appeal is j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kalgo JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 341 a meritorious. I therefore allow it but add a few words of mine by way of emphasis. I have considered the preliminary objection raised by the b learned Counsel for the respondents in his brief pertaining to ground of appeal number 4 and issue 4 distilled from it and I agree with Uwaifo JSC that it did not arise in the court below and no leave was obtained before it was filed in this c Court. It is therefore incompetent and is accordingly struck out together with the issue raised from it and the arguments relating thereto. The substantive issue in controversy between the parties in d this appeal is whether the Federal High Court has jurisdiction to hear and determine “disputes between an individual customer and his bank”. In considering this issue, it is my respectful view that the provisions of Decree No. 107 of e 1993, Decree No. 18 of 1994; Decree No. 62 of 1999 and most importantly section 251(1)(d) of the 1999 Constitution, among others must be considered. f Decree No. 107 of 1993 amended the 1979 Constitution and in section 230(1)(d) provides:– “(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assem- g bly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters arising from:– . . .; h (d) banking, banks, other financial institutions, including any action between one bank and other, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills i of exchange, letter of credit, promissory note and other fiscal measures: Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank” j (italics mine).

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kalgo JSC 342 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Sections 3(1) and 9 of Decree No. 18 of 1994 (popularly a called the Failed Banks Decree) as amended by Decree No. 62 of 1999 also provide as follows:– “3(1) The Federal High Court shall have power to:– b (a) recover in accordance with the provisions of this De- cree, the debts owed a failed bank, arising in the ordinary course of business and which remain outstanding as at date the bank was closed or declared a failed bank by the Central Bank of Nigeria.” c “9. Notwithstanding anything to the contrary in any law, deed, agreement or memorandum of understanding, the Federal High Court shall have exclusive jurisdiction to hear and determine all matters brought before it concern- d ing the recovery from any person of debt owed to a failed bank which remains outstanding as at the date of closure of business of the failed bank.” From these provisions of Decree No. 107 of 1993 and De- e cree No. 18 of 1994 as amended by Decree No. 62 of 1999, it is very clear that in both provisions, the Federal High Court was given exclusive jurisdiction to hear and determine civil causes and matters arising from banking and other fis- f cal measures. It is also clear, however, that in respect of De- cree No. 107 of 1993, the exclusivity was limited or curtailed by removing a dispute between an individual customer and his bank. g It is trite law that the general principles of interpretation of statutes is that, where the words of the statute are clear and unambiguous, they must be given their plain and ordinary meaning unless it would be absurd to do so having regard to h the nature and circumstances of the case (see Awolowo v Shagari (1979) All NLR 12; (1979) 6–9 SC 51; Adejumo v Governor of Lagos State (1972) 3 SC 47; A.-G. Bendel v A.- G. Federation (1982) 3 NCLR 1; (1981) 10 SC 1; Owena i (Nig.) Plc. v N.S.E. Ltd (1997) 8 NWLR (Part 515) 1). Section 251(1)(d) of the 1999 Constitution of the Federal Republic of Nigeria also provides:– “Notwithstanding anything to the contrary contained in this j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 343 a Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters:– b . . . (d) connected with or pertaining to banking, banks, other financial institutions, including any action by or against the Cen- tral Bank of Nigeria arising from banking, foreign ex- c change, coinage, legal tender, bills of exchange, letters of 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 d transactions between the individual customer and the bank” (italics mine). Once again this provision also gives the Federal High Court exclusive jurisdiction in civil causes and matters pertaining e to banking and other fiscal matters but, like section 230(1)(d) of Decree No. 107 of 1993, it limits the exclusivity by removing from that jurisdiction disputes between an individual customer and his bank. f The removal of exclusivity from the jurisdiction of the Federal High Court in respect of disputes between an individual customer and his bank by the provisos in section g 230(1)(d) of Decree No. 107 of 1993 and section 251(1)(d) of 1999 Constitution does not mean that the Federal High Court ceased to have jurisdiction in respect of those disputes but it only means that the jurisdiction is not exclusive to the h Federal High Court. It is pertinent to observe that Decree No. 107 of 1993 ceased to have effect and was repealed by Decree No. 63 of 1999 with effect from 29 May, 1999. This means that section 251 of the 1999 Constitution now deals i with jurisdiction and powers of the Federal High Court in banking matters. The Court of Appeal found that sections 3(1) and 9 of the Decree No. 18 of 1994 were inconsistent with the provisions j of section 251(1)(d) of the 1999 Constitution and therefore

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kalgo JSC 344 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) null and void. It said in its judgment on page 114 of the re- a cord:– “It seems to me that in so far as jurisdiction in disputes between individual customer and the bank has been vested in the State High b Courts, sections 3(1) and 9 of the Failed Banks Decree as amended which vests jurisdiction on the same matters in the Federal High Court must be inconsistent with section 251(1)(d) of the 1999 Constitution. In that case section 1(3) of the 1999 Constitution makes it void to the extent of the inconsistency.” c With due respect to the Court of Appeal, section 251(1)(d) of the 1999 Constitution does not confer exclusive jurisdiction in disputes between an individual customer and the d bank on the State High Courts. All it did was to remove the exclusivity in dealing with those kinds of disputes from the Federal High Court; which means that the High Court of a State by virtue of section 272(1) of 1999 Constitution also shares the jurisdiction with the Federal High Court. e The phrase “this paragraph shall not apply” in the proviso to section 251(1)(d) means what it says, and that is that the exclusive jurisdiction on matters listed in subsection (1) of f section 251, does not apply to disputes between an individual customer and his bank. It does not mean that the Federal High Court shall have no jurisdiction in the simple customer/bank relationship at all. If that was the intention of the g lawmaker it would have said so expressly by simply providing that the Federal High Court shall have no jurisdiction to hear and determine any such dispute. Section 272(1) provides:– h “(1) Subject to the provisions of section 251 and other provisions of this Constitution, the High Court of a State shall have jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal right, power, i duty, liability, privilege, interest, obligation or claim is in issue or to hear or determine any criminal proceedings involving or relating to any penalty, forfeiture, punishment or other liability in respect of an offence committed by any person” (italics mine). j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 345 a Section 272(1) of the 1999 Constitution, inter alia, vested jurisdiction on the State High Courts to hear and determine civil matters in which the existence or extent of a legal right, duty, power, duty, liability, privilege, interest, obligation or b claim is in issue. But section 272(1) is “subject to the provisions of section 251 and other provisions of the Constitu- tion”. This means that the jurisdiction to hear and determine civil matters mentioned in section 272(1) is limited, re- c stricted, regulated, controlled and subordinated by the provisions of section 251. This further means that, since the Fed- eral High Court has no exclusive jurisdiction over “any dispute between an individual customer and his bank”, in ac- d cordance with the proviso to section 251, the jurisdiction will now be shared between the Federal High Court and the State High Courts by virtue of the provisions of section 272(1) above. My conclusion therefore is that the Federal e High Court and the State High Court have concurrent jurisdiction to hear and determine any disputes between an individual customer and his bank and I so hold. I find it useful and worthwhile to consider cases decided f by this Court on the construction of section 230(1)(d) of De- cree No. 107 of 1993 whose provisions are in pari materia with those of section 251(1)(d) of 1999 Constitution. In Federal Mortgage Bank of Nigeria Ltd v N.D.I.C. (1999) 2 g NWLR (Part 591) 333 at 362–363 Ogundare JSC in his lead judgment said:– “With respect to the learned Counsel for the respondent, I do not share the view that the proviso in section 230(1)(d) would not ap- h ply where in a customer/banker relationship, the customer is a bank. To say that where there is dispute between two banks, the forum for resolution of the dispute is the Federal High Court is to read into section 230(1)(d) what is not there . . . In the absence of any evidence to the contrary about the custom in the industry, I i must hold that it is a simple customer/banker relationship which the proviso in section 230(1)(d) exempts from the exclusive jurisdiction of the Federal High Court” (italics mine). I entirely agree with Ogundare JSC that the proviso to sec- j tion 230(1)(d) did not provide that it would not apply where

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kalgo JSC 346 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) two banks are involved in the dispute or that only the Fed- a eral High Court has jurisdiction in such disputes. To say so is to read or add what is not in the proviso and this cannot be done. He only ended, quite properly in my view, by saying b that in a simple customer/banker relationship, like in the present case, the proviso only exempts the application of the exclusive jurisdiction of the Federal High Court. This means in my respectful view, that the Federal High Court will still have the ordinary, as opposed to the exclusive jurisdiction in c banker/customer disputes. He did not say that the Federal High Court lacks such jurisdiction. Also in Trade Bank Plc v Benilux (Nig.) Ltd (2003) 9 d NWLR (Part 825) 416 at 430 Mohammed JSC in the lead judgment had this to say:– “The State High Court has no jurisdiction in matters provided under section 230(1)(d) of Decree No. 107 except disputes between an individual customer and his bank in respect of a transaction be- e tween the individual customer and the bank.” I cannot agree more with this. What the learned Justice is saying is that, except as to disputes between an individual customer and his bank, all other matters pertaining to bank- f ing in section 230(1)(d) of Decree No. 107 of 1993 are within the exclusive jurisdiction of the Federal High Court. He is not saying that the Federal High Court cannot exercise jurisdiction over disputes between the individual customer g and his bank. It is true that in these two cases of this Court considered by me the mind of the learned Justices did not avert to concurrent jurisdiction between the Federal High Court and the h State High Court under the proviso to section 230(1)(d). That does not stop this Court from clearing the issue when the opportunity occurs like in the instant appeal where the construction or interpretation of the similar provisions as in i section 230(1)(d) arises. I have also carefully studied the cases of Jammal Steel Structures Ltd v A.C.B. Ltd (1973) 1 All NLR (Part 11) 208 and Bronik Motors Ltd v Wema Bank (1983) 1 SCNLR 296 j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 347 a and it appears to me that they are not relevant to this case. Jammal’s case was considering the jurisdiction of the then Federal Revenue Court, now Federal High Court, under sec- b tion 7(1)(b)(iii) of the Federal Revenue Court Act, 1973. This Court was of the opinion that the Federal Revenue Court, as the name implies, was established to essentially take care of the revenue of the Federal Government and, c since section 7(1)(b)(iii) of the Act did not specifically give exclusive jurisdiction to the Federal Revenue Court in all banking transactions, it held in a majority decision per Elias CJN at 222–223 of the report that:– d “It does not seem to us that the legislative intention behind the De- cree was to clutter up the new Revenue Court with ordinary cases involving banker-customer relationships, such as disputes in respect of an overdraft or the negligent payment of a forged cheque or negligent dishonouring of a customer’s cheques all ‘banking e transactions’ having nothing to do with Federal Revenue concern. All the State High Courts and other appropriate courts must continue to exercise their jurisdiction in these and similar matters if the Federal Revenue Court must be allowed to concentrate on its f essentially revenue protection functions.” By this decision, both the Federal High Courts and the State High Courts can exercise jurisdiction in all banking transactions involving a banker/customer relationship by virtue of g the 1979 Constitution. Their jurisdiction in such banking transactions shall therefore be concurrent even though section 7(1)(b)(iii) did not say so expressly. In the Bronik Motors case the provisions of section 230 of h the 1979 Constitution were considered by this Court. The section provides:– “230 (1) Subject to the provisions of this Constitution and in addition to such other jurisdiction as may be conferred i upon it by an Act of the National Assembly, the Fed- eral High Court shall have jurisdiction – (a) in such matters connected with or pertaining to the revenue of the Government of the Federation j as may be prescribed by the National Assembly;

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kalgo JSC 348 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(b) in such other matters as may be prescribed as re- a spects which the National Assembly has power to make laws. (2) Notwithstanding subsection (1) of this section, where by law any court established before the date when this b section comes into force is empowered to exercise jurisdiction for the hearing and determination of any of the matters to which subsection (1) of this section relates, such court shall as from the date when this sec- c tion comes into force be restyled ‘Federal High Court’, and shall continue to have all the powers and exercise the jurisdiction conferred upon it by any law.” This Court held that the words “as may be prescribed” in section 230(a) and (b) can only refer to the future, ie the Na- d tional Assembly may prescribe at a future date additional jurisdiction on the Federal High Court in matters connected with or pertaining to the revenue of Government and in other matters contained in the Exclusive Legislative List. e Nnamani JSC in the lead judgment had this to say:– “As regards the proper meaning of ‘as may be prescribed’ which occur in section 230(1)(a) and (b) of the Constitution it is my view that those words should be given their ordinary, plain meaning . . . f I cannot see how ‘as may be prescribed’ can refer to anything else but the future ie as the National Assembly may prescribe at the future date subsequent to the coming into operation of the 1979 Con- stitution.” g At the time of the decision, that jurisdiction has not been conferred. And although section 7(1)(b)(iii) of the Federal Revenue Act, 1973 has conferred certain jurisdiction in the Exclusive Legislative List on the Federal High Court, there are still left other matters connected with “banking” in the h said List which was not conferred on that court. Therefore by virtue of the provisions of section 236 of the 1979 Con- stitution, the State High Courts would necessarily have jurisdiction on matters not listed under section 7(1)(b)(iii) of i the said Act. Although the decisions of this Court in the Jammal and Bronik Motors cases deal with the jurisdiction of the Federal Revenue Court and Federal High Court, the relevant laws or j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 349 a constitutional provisions considered and interpreted therein are completely dissimilar and different from the constitutional provisions being considered in the instant appeal. b It appears to me that these two decisions agree that the Federal High Court does not have exclusive jurisdiction in banking and customer/banker relationships. It is also very clear to me that section 251(1)(d) of the 1999 Constitution is c very clear and not in pari materia with the provisions and section 7(1)(b)(iii) of the Federal High Court Act, 1973 or section 230(1)(a) and (b) of the 1979 Constitution. To that extent the decisions in the two cases above are irrelevant in d the consideration of the instant appeal and I agree with the learned appellant’s Counsel, for saying so in his brief. Decree No. 18 of 1994 as amended by Decree No. 62 of 1999 is an existing law and under section 315 of the 1999 e Constitution it takes effect with such modifications as may be necessary to bring it into conformity with the 1999 Con- stitution. It appears to me that the provisions of sections 3(1)(a) and 9 of Decree No. 18 of 1994 are inconsistent with f the provisions of section 251(1)(d) of the 1999 Constitution and in that they do not attune to the proviso to section 251 which removes the exclusive jurisdiction of the Federal High Court in customer-bank transactions. They are to that g extent in conflict with the provisions of section 251(1)(d) and therefore inconsistent with it. From what I have said above, I agree with the submissions of Alhaji Abdullahi Ibrahim, S.A.N., both in his brief and in h oral argument in court that the two decisions discussed above relied upon by the Court of Appeal in reaching its decision are no authorities for saying that the Federal High Court has no jurisdiction in disputes between individual cus- i tomer and his bank. I also find that the interpretation of the jurisdiction conferred on the Federal High Court under section 230(1)(d) of the 1979 Constitution as amended by De- cree No. 107 of 1993 and/or section 251(1)(d) of the 1999 j Constitution, by the Court of Appeal, was wrong in that the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kalgo JSC 350 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) proviso to each of these sections did not take away, as it a were, the whole jurisdiction of the Federal High Court in disputes between an individual customer and his bank. All it did was to remove the exclusive nature of that jurisdiction. b In that case, both the Federal High Court and the State High Courts by virtue of section 272(1) of the 1999 Constitution have concurrent jurisdiction in the matter as held by the trial court. c For all what I have said above and the more detailed reasons contained in the judgment of my learned brother, Uwaifo JSC, I too find merit in this appeal. This appeal therefore succeeds and is hereby allowed. I set aside the de- d cision of the Court of Appeal and restore that of the trial court. I abide by the order of costs made in the lead judgment of Uwaifo JSC. EJIWUNMI JSC: I have had the privilege of reading before e now the draft of the judgment just delivered by my learned brother, Uwaifo JSC. Though I am in entire agreement with his reasoning and the conclusion reached thereon upholding the appeal, yet I do intend to add a few words of my own by f this judgment. The genesis of this case lies in the fact that the first respondent, who was a customer of the now defunct Allied Bank of Nigeria Plc, had with the said bank several accounts g and was the beneficiary of credit facilities and or loans from the bank. By 31 January, 1999, the first respondent was indebted to the bank in the sum of N284,108,459.49. Fol- lowing the revocation of the licence by the Central h Bank, the Nigeria Deposit Insurance Corporation, the appellant, was appointed as the liquidator of the bank. Pursuant to the appointment, the appellant then filed an application for the recovery of the debt against the respondents under the i provisions of the Failed Banks (Recovery of Debts) and Fi- nancial Malpractices Decree No. 18 of 1994. And by Decree No. 62 of 1999, Decree No. 18 of 1994 was amended, by substituting the Federal High Court for the tribunal. The suit j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 351 a was therefore, accordingly, taken before the Federal High Court. At the commencement of the hearing in that court, the re- b spondents filed a notice of objection to the jurisdiction of the Federal High Court to hear the suit upon the following grounds. These are:– “(1) The proviso to section 251(1)(d) of the Constitution of Fed- c eral Republic of Nigeria, 1999 repeats the terms of section 230(l)(d) of the 1979 Constitution (as amended by Decree No. 107 of 1993) and did not vest in the Federal High Court the jurisdiction to determine causes and matters relating to transactions between an individual customer and his bank. d (2) The reliefs sought in this suit are matters within the exclusive jurisdiction of the State High Court. (3) All claims made or intended to be made by the plaintiff are a nullity since they are all claims and matters which the e Federal High Court has no jurisdiction. (4) Accordingly, the Federal High Court is devoid of jurisdiction to entertain the suit and the same should therefore be struck out.” f The Federal High Court, per Abutu J, after receiving addresses by learned Counsel in respect of the preliminary objection, then delivered a considered ruling. By this ruling, he came to the conclusion that in causes and matters between a g bank and its individual customers, the Federal High Court and the State High Courts have concurrent jurisdiction to hear and determine such suits. Accordingly, the preliminary objection was overruled by the learned trial Judge. h As the respondents whose preliminary objection was so overruled, they appealed to the court below. The questions raised in that court were:– “(i) Whether the learned trial Judge was right in holding that the i present state of the law is that the Federal High Court has concurrent jurisdiction with State High Court to entertain disputes between banks and their individual customers and thereby assumed jurisdiction to entertain the suit herein. (ii) Whether the learned trial Judge was correct in the decision j that the Federal High Court is vested with jurisdiction to

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 352 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

entertain the suit by virtue of the provisions of the Failed a Banks Decree as amended by the Tribunals (Certain Conse- quential Amendments etc) Decree No. 62 of 1999.”

The court below, following arguments by learned Counsel b for the parties, delivered a considered ruling and concluded that the court below was wrong to have held that the Federal High Court and State High Court enjoy concurrent jurisdiction in respect of matters that form the subject-matter of this suit. In effect, the court below took the view that the Federal c High Court has no jurisdiction to hear and determine causes and matters arising from “customer and bank relationship”, particularly as disclosed upon the facts of the instant case. Not satisfied with that decision, the appellant has appealed d against it. Pursuant thereto, the appellant in the brief filed in its behalf has set out the following issues for the determination of this appeal. They read thus:– “(1) Whether the court below was right when it restricted itself e to the provisions of Decree No. 107 of 1993 and section 251(1)(d) of the 1999 Constitution in considering whether the position of the law as regards the jurisdiction of the Federal High Court and State High Court in respect of f transaction between individual customers and their bank had been altered since the time of the 1979 Constitution. (2) Whether sections 3(1) and 9 of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended by Decree No. 62 of 1999) are in- g consistent with section 251(1)(d) of the 1999 (sic) of the Federal Republic of Nigeria and are therefore unconstitutional, null and void. (3) Whether the 1999 Constitution of the Federal Republic of h Nigeria conferred exclusive jurisdiction in disputes between an individual customer and his bank on the State High Courts. (4) Whether the suit instituted by the appellant against the re- i spondents herein does not qualify as a suit involving ‘other fiscal measures’ (within the meaning of section 251(1)(d) of the 1999 Constitution) in which the Federal Government is interested as considered in previous decisions of this Hon- ourable Court.” j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 353 a Although the respondents, also in their brief, identified issues for the determination of the appeal, it is in my view unnecessary to set them out in this judgment as they would be considered with the arguments advanced in their brief in b support of their case. It is, however, pertinent to refer to the preliminary objection they have raised against the fourth issue identified above for the appellant for the determination of this appeal. By this preliminary objection, the respondents c are urging that the said ground of appeal as well as the fourth issue and arguments thereon in the appellant’s brief be struck out or discountenanced on the ground that the said ground of appeal did not arise from the decision of the court d below. However, before considering the arguments advanced in respect of these issues including those proffered with regard to the preliminary objection, I think it is desirable to set out e the relevant parts of the judgment of the court below that provoked this appeal. It is clear from a careful reading of the judgment of the court per Oguntade JCA, who read the lead judgment, that in determining this controversy as he did, he f referred to the Federal Revenue Court Act, 1973, by which the Federal High Court was created and which was later changed by legislation to the Federal High Court. He also referred to some of the cases that were decided with regard g to the jurisdiction of that Court, viz: Jammal Steel Structures v A.C.B. Bank (1973) 1 All NLR (Part 11) 208 at 220; Bronik Motors Ltd v Wema Bank (1983) 1 SCNLR 296. And also the provisions of section of the 1979 Constitution, De- h cree No. 107 of 1993 and section 251 of the Constitution. The court below therefore upon the basis of the aforementioned cases and the provisions of the Constitution, then said with regard to the jurisdiction of the Federal High Court in i the context of the matter under consideration, as follows:– “Now the 1979 Constitution in relation to the jurisdiction of the Federal High Court was amended by Decree No. 107 of 1993. Sec- tion 230(1)(d) of Decree No. 107 of 1993 is in ipsissima verba j with section 251(1)(d) of the 1999 Constitution reproduced above.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 354 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

It is correct to say that prior to the coming into force of Decree No. a 107 of 1993, the position was that the Federal High Court had a limited Jurisdiction and the State High Court an unlimited jurisdiction. It is also the position that civil causes and matters arising from any dispute between an individual customer and his bank b were under the jurisdiction of the State High Court.” The court below, per Oguntade JCA, then raised the question as to whether Decree No. 107 of 1993 and section 251(1)(d) of the 1999 Constitution have altered the position c with regard to the jurisdiction of the Federal High Court and State High Court in such matters. And in order to answer the question so posed, the following cases were considered: Bi Zee Bee Hotels Ltd v Allied Bank (Nig.) Ltd (1996) 8 NWLR d (Part 465) 176; N.I.D.B. v F.E.M.B.O.L. (Nig.) (1997) 2 NWLR (Part 439) 543; where the court below had held that in disputes between an individual customer and his bank, the State High Court has jurisdiction. But in N.D.I.C. v Federal e Mortgage Bank Nigeria (1997) 2 NWLR (Part 490) 735, the court below per Uwaifo JCA (as he then was), took the view, inter alia, that in disputes between an individual customer and his bank, both the Federal High Court and the f State High Court have and can exercise concurrent jurisdiction in such circumstances. Meanwhile, this case went on appeal to this Court as F.M.B.N. v NDIC (1999) 2 NWLR (Part 591) 333. And the opinion of Uwaifo JCA, as reiter- ated above, was upheld. This decision of this Court was g brought to the attention of the court below. It does seem to me that ordinarily the court below ought to have followed the decision of this Court without much ado. The court below, however, declined to follow that path endorsed by the h settled principle of stare decisis. But the court below sought to show that this Court should not have affirmed the decision of the court below. The premise for this position of that court was because the i judgment of the court below, per Uwaifo JCA, did not include a determination or whether or not the Federal High Court has a concurrent jurisdiction with a State High Court in a dispute between an individual customer and his bank. In j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 355 a other words, it is being contended that the judgment did not proceed from the decision of the High Court. It is undoubtedly settled law that an appeal is usually against a ratio and not against an obiter except in cases where the obiter is so b closely linked with the ratio as to be deemed to have radi- cally influenced the ratio. But even there, the appeal is against the ratio (see Saude v Abdullahi (1989) 7 NWLR (Part 116) 387 at 431; Ogunbiyi v Ishola (1996) 6 NWLR c (Part 452) 12; (1996) 9 SCNJ 143 at 153; Coker v United Bank for Africa (1997) 2 NWLR (Part 490) 641; (1997) 2 SCNJ 130 at 145). Bearing in mind this settled principle, I will now consider d the facts in that case and the issues raised thereon from the High Court to the Court of Appeal and also whether any of the issues so raised and considered by the appellate courts arose from any of the issues that fell for determination in the e High Court of Lagos. I will deal with this question briefly. And in order to appreciate the purport of the action that went before the Court of Appeal and this Court, it is necessary to state some of the facts as are pertinent to resolve the ques- f tion raised above. It does appear that the plaintiff in N.D.I.C. v F.M.B.N. (supra), took out a writ of summons against the United Commercial Bank Ltd, as defendant claiming repayment of the sum of N5,000,000 it deposited for 90 days g period in 1992 and interests thereon. Also filed was a statement of claim. The appellant did not enter appearance. And judgment was entered in favour of the respondent pursuant to Order 36 rule 8 of the High Court (Civil Procedure) Rules h of Lagos State, 1972. This procedure called “registry judgment” was how the respondent got judgment in its favour. Meanwhile, the liquidator who had taken control of the United Commercial Bank Ltd filed an appeal challenging i the jurisdiction of the Lagos State High Court to entertain the matter by virtue of section 230(1)(d) of the 1979 Consti- tution as amended by Decree No. 107 of 1993 which vests exclusive jurisdiction in the Federal High Court to entertain j certain actions between one bank and another.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 356 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

It is sufficient on those facts to say that the action was a commenced in the High Court of Lagos State, and that the jurisdiction of the State High Court was challenged by the appellant as the contention of the appellant was that it was b only the Federal High Court that had jurisdiction to entertain the issue. And as the appellant lost in that challenge at the High Court, an appeal was lodged against the decision among others to the court below. The issue raised before the c court below on this point reads thus:– “Whether by virtue of section 230(1)(d) of Constitution (Suspen- sion and Modification Decree No. 107 of 1993) a State High Court has any jurisdiction left to entertain any dispute between two banks relating the (sic) banking transactions.” d In my humble view, a careful reading of that issue was clearly meant by the appellant as an invitation to the court below to decide whether the Federal High Court was vested e with the exclusive jurisdiction to determine causes and matters with regard to a bank and its customers in the context of the case under consideration. The Court of Appeal rightly took up the invitation and arrived at its decision on the question. Uwaifo JCA in the course of his judgment said thus:– f “The mere fact that a bank takes an action against another bank does not make such action triable exclusively by the Federal High Court under section 230(1)(d). It must depend on the nature of the transaction and the capacity in which one of the banks dealt with g the other. There is therefore the need to examine such transaction and to look at the proviso which talks of transactions between an individual customer and his bank to ascertain its applicability. The point must be made that a section of a statute which contains a h proviso must not be construed in such a way as to render the proviso unnecessary: see R. v Leeds Prison (Governor) ex parte Staf- ford (1964) 1 All ER 610 at 612 per Lord Parker, C.J. But as a general rule, a proviso is of necessity limited in its operation to the ambit of the section which it qualifies: see Lloyds and Scottish Fi- i nance Ltd v Modern Cars and Caravans (Kingston) Ltd (1964) 2 All ER 732 at 740. So where a section confers powers, it would be contrary to the ordinary operation of the proviso to give it an effect which would cut down those powers beyond what compliance with the proviso renders necessary. The object of a proviso is j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 357 a normally to cut down or qualify what has been stated before in a section. A proviso does not set out to allocate powers or jurisdiction or to impose limitations or restrictions. Its function is to create exceptions or relax limitations in a defined sense, or to throw light b on any ambiguous import in an enactment: see Re Tabrisky Ex parte Board of Trade (1947) 2 All ER 182 at 183 184 per Lord Green, M.R. in West Derby Union v Metropolitan Life Assurance Co (1897) AC 647 at 652 per Lord Watson. Section 230(1) of De- c cree No. 107 of 1993 must first be viewed from its import as I earlier pointed out, namely, to give exclusive jurisdiction to the Fed- eral High Court over causes affecting the vital interests of the Fed- eral Government as regards revenue, fiscal measures, financial institutions, such as banks, the running of the Federal Government d and its agencies and in matters within its exclusive list. A dispute between an individual customer and his bank in respect of transactions between them can hardly affect the vital interests of the Fed- eral Government. So the proviso in section 230(1)(d) relaxes in that regard the exclusive jurisdiction given to the Federal High e Court.” And later in his judgment at 756 he said:– “It must however be realised that the horizon left for the State f High Court under the proviso must not be shrunken into absurdity, or perhaps undue insignificance, by a restrictive interpretation to oust its jurisdiction, whenever two banks are involved, simply because they are banks. A bank is an individual legal entity. It can be an individual customer to any other person when not acting as a g bank. So it is that it can be individual customer to a bank in any particular transaction depending on the type of transaction. There- fore, a possible scenario where one bank as an individual legal entity plays the part of an individual customer to another bank in a h given transaction must be appreciated and not ruled out. For instance, when one bank (say a merchant bank) renders service to another bank as an ‘issuing house’, any dispute arising from that transaction between the two banks must be heard in the Federal High Court. But if one bank as an individual is interested in earn- i ing interest from another bank through deposit, then the relationship of individual customer and bank is established as in the present case. Any dispute arising from that transaction is triable in the State High Court as well as in the Federal High Court.” j Now earlier in this judgment, I had stated that this matters

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 358 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) came before this Court as F.M.B.N. v N.D.I.C. (supra). And a in the course of the judgment delivered by Ogundare JSC (with which others agreed) said thus:– “It is contended for the plaintiff that the transaction between the b plaintiff and the defendant leading to the action in the High Court of Lagos State was a dispute between an individual customer and his bank which is exempted from the exclusive jurisdiction of the Federal High Court by the proviso in section 230(1)(d). It is submitted that the plaintiff, in relation to that transaction, was an c individual customer to the defendant. Reliance on Bi Zee Bee Ho- tels Ltd v Allied Bank (Nig.) Ltd (1996) 8 NWLR (Part 465) 176 at 185–186 G.A. I have considered the arguments advanced by the parties, I agree entirely with the reasoning of the court below. d With respect to the learned Counsel for the respondent, I do not share the view that the proviso in section 230(1)(d) would not apply where in a customer/banker relationship the customer is a bank. To say that where there is a dispute between two banks, the forum for the resolution of the dispute is the Federal High Court is e to read into section 230(1)(d) what is not there. A lot depends on the nature of the transaction between the two banks. The facts show that plaintiff, like any other customer, placed a short term deposit with the defendant on agreed interest. After some roll f overs, plaintiff sought to retrieve its deposit and interest but defendant defaulted. In the absence of any evidence to the contrary about the custom in the industry I must hold that it is a simple customer/banker relationship which the proviso in, section 230(1)(d) exempts from the exclusive jurisdiction of the Federal High g Court.” From what I have said above, I think it must respectfully be said that the judgment of the Supreme Court in this matter properly upheld the judgment of the court below in that case h per Uwaifo JCA. It is manifest that the question that fell for consideration in the court below, which was further agitated in this Court arose directly from the question raised. Having said this much, I must add, however, that the court below in i the present case ought to have followed and applied the decision of this Court in F.M.B.N. v N.D.I.C. (supra). I will therefore set aside the decision of the court below as it was a wrong appraisal of the facts before it which led to the wrong j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 359 a conclusion reached by it with regard to the jurisdiction of the Federal High Court and the High Court of a State to entertain suits arising from transactions between a bank and its individual customers. For the avoidance of any doubt, I need b to say that any dispute arising from that transaction is triable in the State High Court as well as the Federal High Court. Before concluding, it is pertinent to refer to the view held c by the court below on the jurisdiction of the Federal High Court vis-à-vis the State High Court with regard to the provisions of sections 3 and 9 of Decree No. 18 of 1994 and Part 1 of the Schedule to Decree No. 62 of 1999 which d amended Decree No. 18 of 1994. Construing these several provisions, Oguntade JCA said thus:– “It seems to me that in so far as jurisdiction in disputes between e individual customer and the bank has been vested in State High Court, sections 3(1) and 9 of the Failed Banks Decree as amended which vests jurisdiction on the same matters in the Federal High Court must be inconsistent with section 251(1)(d) the f 1999 Constitution which makes it void to the extent of the inconsistency. Appellant’s Counsel has submitted that enactments conferring jurisdiction on the Federal High Court are existing laws which must be brought in conformity with the 1999 Constitution pursuant to section 315 of the 1999 Constitution. I entirely agree g with him.” The question that therefore falls for consideration is, whether the court below was right to have declared void the provisions of sections 3(1) and 9 of Decree No. 18 of 1994 h as amended by Decree No. 62 of 1999, paragraph 7 of the Schedule thereto. Now sections 3(1)(a) and 9 of Decree No. 18 of 1994 read thus:– i “3(1) The tribunal shall have power to:– (a) recover, in accordance with the provisions of this Decree, the debts owed to a failed bank, arising in the ordinary course of business and which j remain outstanding as at the date the bank is closed

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC 360 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

or declared a failed bank by the Central Bank of a Nigeria.” “9. Notwithstanding anything to the contrary in any law, deed, agreement or memorandum of understanding, the tribunal shall have exclusive jurisdiction to hear and de- b termine all matters brought before it concerning the recovery from any person of any debt owed to a failed bank, which remains outstanding as at the date of closure of the business of the failed bank.” c By paragraph 7 of Part 1 of the Schedule to Decree No. 62 of 1999, Decree No. 18 of 1994 was amended, inter alia, thus:– “For the word ‘tribunal’ wherever it appears in Decree substitute d the words ‘Federal High Court’.” By this piece of legislation, it is manifest that the Federal High Court was vested with the exclusive jurisdiction hitherto enjoyed by the Failed Bank Tribunals. That being the e position, there is the further question as to whether that exclusive jurisdiction granted to the Federal High Court is inconsistent to the extent of its being void with proviso to section 251(1)(d) of the 1999 Constitution and which read:– f “251(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the Na- tional Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other g court in civil causes and matters:– (a) . . . (b) . . . (c) . . . h (d) connected with or pertaining to banking, banks, other financial institutions, any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, i foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures: Provided that this paragraph shall not apply to dispute between an individual customer and his bank in respect j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Ejiwunmi JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 361 a of transactions between the individual customer and the bank.” In order to determine the question raised above, it is no doubt settled law that in order to interpret the provisions of b any enactment, the court seized of this duty must first begin with the literal meaning of the said provisions. And where the intention of the legislature was clear and unambiguous from the words used in the enactment, then the Act or the c particular provisions must be interpreted accordingly (see Awolowo v Shagari (1979) 6–9 SC 73; Nafiu Rabiu v State (1980) 8–11 SC 130; Attorney-General of Bendel State v At- torney-General of the Federation (1982) 3 NCLR 1; (1981) d 10 SC 1). With regard to the provisions of section 251(l)(d) reproduced above, and which forms only a part of the provisions of the jurisdiction granted to the Federal High Court, it seems clear that the intention of the lawmakers was to vest e the Federal High Court with exclusive jurisdiction in respect of matters which were considered within the purview of the Federal Government. But it is also clear that, although by virtue of the proviso to f section 251(1)(d), the lawmakers delimited the exclusive jurisdiction of the Federal High Court to hear and determine matters connected with or pertaining to banking, banks and other financial institutions, including any action between g one bank and another. In my view the said proviso referred to above did not affect the jurisdiction of the Federal High Court to continue hearing the matters identified in section 251(1)(d). In the result, it is my view that the court below h was wrong to have declared as void the provisions of Decree No. 18 of 1994 as amended by Decree No. 62 of 1999. It is therefore my view that this appeal has merit and I will allow it for the above reasons and the fuller reasons given in i the judgment of my learned brother, Uwaifo JSC. I also abide by the orders made as to costs. MUSDAPHER JSC: I had the opportunity to read in draft the judgment of my learned brother, Uwaifo JSC, and I am in j entire agreement with it for the reasons he has set out in

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Musdapher JSC 362 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) detail. While I respectfully adopt those reasons as mine, I a wish to briefly express my views in my own words. The relevant facts have been briefly and succinctly stated in the lead judgment and I have no need to go over them. b The important constitutional issue that has been addressed and in respect of which I wish to state my opinion is the interpretation to be given to section 251(1)(d) of the 1999 Constitution. c First, let me refer to N.D.I.C. v Federal Mortgage Bank of Nigeria (1997) 2 NWLR (Part 490) 735, a decision of the Court of Appeal. That case interpreted section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of d 1993. By the said amendment, the Federal High Court was given in clear language exclusive jurisdiction in a number of items with a proviso. It provided thus:– “230(1) Notwithstanding anything to the contrary contained in e this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the Na- tional Assembly or a Decree, the Federal High Court shall have and exercise jurisdiction to the exclusion of f any other court in civil causes and matters arising from (d) banking, banks, other financial institutions including any action between one bank and another, any action by or against the Central Bank of Nigeria g arising from foreign exchange, coinage, legal tender, bills of exchange, letter of credit, promissory note and other fiscal measures: provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of h transactions between the individual customer and the bank.” This provision has now been inserted in section 251(1)(d) of the Constitution of the Federal Republic of Nigeria, 1999. i Going by the issues that arose for a decision in the Court of Appeal in that case of N.D.I.C. v Federal Mortgage Bank of Nigeria (supra), the court over which I presided came to the conclusion that the proviso was not intended to deprive the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Musdapher JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 363 a Federal High Court of jurisdiction but only of exclusive jurisdiction in disputes between the individual customer and his bank in respect of transactions between the individual b customer and the bank. That naturally meant that the State High Courts would exercise concurrent jurisdiction in such disputes. Put in other words, both the Federal High Court and the State High Courts would exercise concurrent juris- c diction as may be appropriate. The Court of Appeal in the present case referred to that case and came to the conclusion per Oguntade JCA that the pronouncement that there was concurrent jurisdiction both in d the Federal High Court and the State High Courts was obiter. Mr Clarke on his part has now also submitted before us on behalf of the respondent that the pronouncement was an obiter dictum. I am convinced that neither the court below e nor Mr Clarke, with utmost respect, took pains to study that judgment in order to appreciate what led to the pronouncement. The relevant issue that was canvassed by both Coun- sel in that case was, in essence, whether a State High Court f still had any jurisdiction to exercise relating to banking transactions having regard to the provision of the said section 230(1)(d). This called for a proper understanding and interpretation of the effect of the proviso in that section. The g bank transaction in question happened to be that of individual customer and his bank. But the submissions were polar- ised. One party argued that only the Federal High Court had jurisdiction; the other party argued it was only the State h High Court. It was after a careful consideration that the court reached the decision that the Lagos State High Court in which the matter was indeed already pending had jurisdiction to proceed with it. It was then also relevant, in order to meet both arguments, to pronounce that the interpretation to i be given to the provision was that the Federal High Court also could exercise jurisdiction if such a matter was brought before it. I must hold that the court below was in grave error to have failed to regard that pronouncement as a ratio deci- j dendi in that case rather than as obiter.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Musdapher JSC 364 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Secondly, it is plain to me that the court below completely a misconceived the rationale behind the decisions of this Court in Jammal Steel Structures Ltd v African Continental Bank Ltd (1973) 1 All NLR (Part 2) 208 and Bronik Motors b Ltd v Wema Bank (1983) 1 SCNLR 296. As has been explained in the lead judgment, those decisions were arrived at upon the ejusdem generis interpretation of the word “banking” in section 7(1)(b)(iii) of the Federal Revenue Court De- c cree, 1973/Federal High Court Act having regard to the wording in that section which gave the Federal High Court jurisdiction in civil causes and matters connected with or pertaining to “banking, foreign exchange, currency or other fiscal measures”. This court interpreted “banking” as used to d mean, “banking fiscal measures”. It was this interpretation, which was not without controversy, that limited the jurisdiction the Federal High Court could exercise in banking matters related to or connected with or involving in some way e the Federal Government banking policy measures. But that has been altered by the wide and clear wording of section 251(1)(d) which gives exclusive jurisdiction to the Federal High Court in “banking” except where it involves an indi- f vidual customer and his bank transactions, in which case the exclusiveness will not operate. This conclusion can be derived from an appreciation of the functions of a proviso and the application of the one that is reasonably appropriate. In g the case of section 251(1)(d), the proviso does no more than relax the exclusive jurisdiction in banking that the section, to which the proviso is appended, is understood to have conferred on the Federal High Court. h Finally, having regard to the manner in which section 251(1)(d) should be interpreted, particularly in respect of the effect of the proviso, Decree No. 18 of 1994 as amended by Decree No. 62 of 1999, by which exclusive jurisdiction was i conferred on the Federal High Court on failed banks matters, must be brought into line with the 1999 Constitution. It must be realised that the original intention was to confine the jurisdiction over the said matters to the tribunals set up by the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Musdapher JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 365 a Federal Military Government for that purpose. That same intention was carried to the transfer of pending failed banks matters to the Federal High Court. Ordinarily, that intention b would been given effect had the 1999 Constitution made allowance for treating failed banks matters as special. But no such allowance has been made. Accordingly, the supremacy of the Constitution must hold sway over the Decrees in question which now have only the force of Acts of the Na- c tional Assembly. The exclusive jurisdiction which the Fed- eral High Court might have otherwise exercised in failed banks matters in regard to individual customers and their banks transactions will now not be exclusive. It will simply d exercise jurisdiction in deference to the proviso in section 251(1)(d). The result is that the State High Courts are also conferred with jurisdiction. e For the above reasons and those more fully stated by my learned brother, Uwaifo JSC, I allow this appeal and set aside the judgment of the court below. I abide by the orders, including the order for costs, in the lead judgment. f PATS-ACHOLONU JSC: I have read the lead judgment of my learned brother, Uwaifo JSC, and I agree with him. I will, however, add a few comments of mine. Prior to the coming into effect of the present Nigerian Constitution in g 1999, the appellant had instituted an action against the respondents pursuant to the provision of Failed Banks (Recov- ery of Debts) and Financial Malpractice in Banks Decree No. 18 of 1994 as amended by the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Amended h Decree No. 18 of 1994 in the Financial Malpractice in Banks Tribunal claiming from them as follows:– “(i) The sum of N284,109,459.59 being the outstanding balance on the loan/overdraft facilities granted by the bank to the re- i spondents as at 31 January, 1999. (ii) Interest at the rate of 21% per annum from 1 February, 1999 until final liquidation.” To the claim for the recovery of the alleged indebtedness the j respondents denied any debt to the appellant. However,

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC 366 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) before the commencement of the trial, a new law described a as Tribunals (Certain Consequential Amendments etc) De- cree No. 62 of 1999 came into effect and the jurisdiction of the Failed Banks Tribunals was transferred to the Federal b High Court. The new Constitution which came into force on 29 May, 1999 made provision for the jurisdiction of the Federal High Court in this regard. The respondents contended that the Federal High Court by c the provision of section 251(1)(d) of the Constitution had no jurisdiction to adjudicate on the matter before it on the transaction arguing that the contract was no more than on of customer and bank relationship. They urged the court to d strike out the matter. The trial court dismissed the objection and the respondents appealed to the Court of Appeal which, after examining the case thoroughly, allowed the appeal. In- censed or irked by the stand of the Court of Appeal the ap- e pellant appealed to this Court. Meanwhile the respondents further filed a notice of preliminary objection urging the court to strike out ground 4 of the notice of appeal and the issue based on it. The appellant f framed four issues for determination by this Court and they are as follows:– “1. Whether the court below was right when it restricted itself to the provisions of Decree No. 107 of 1993 and section g 251(1)(d) of the 1999 Constitution in considering whether the position of the law as regards the jurisdiction of the Federal High Court and State High Court in respect of transaction between individual customers and their bank h had been altered since the time of the 1979 Constitution. 2. Whether sections 3(1) and 9 of the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Decree No. 18 of 1994 (as amended) by Decree No. 62 of 1999) are in- i consistent with section 251(1)(d) of the 1999 Constitution of the Federal Republic of Nigeria and are therefore unconstitutional, null and void. 3. Whether the 1999 Constitution of the Federal Republic of Nigeria conferred exclusive jurisdiction in ‘disputes j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 367 a between an individual customer and his bank’ on State High Courts. 4. Whether the suit instituted by the appellant against the respondents herein does not qualify as a suit involving ‘other b fiscal measures’ (within the meaning of section 251(1)(d) of the 1999 Constitution) in which the Federal Government is interested as considered in previous decision of this Hon- ourable Court.” c The reply brief of the appellants is really no answer to the objection of the respondents in the preliminary objection. The respondents however framed 4 issues for consideration by this Court. I hereby set them down as follows:– d “(i) Whether the court below restricted itself to the provisions of section 230(1)(d) of the 1979 Constitution as amended by Decree No. 107 of 1993 and section 251(1)(d) of the 1999 Constitution in considering whether the position of the law e as regards the jurisdiction of the Federal High Court and State Courts in respect of transactions between individual customers and their banks had been altered since the time of the 1979 Constitution. (ii) Whether the court below was right in its decision that in f disputes between an individual customer and his bank, only a State High Court has jurisdiction by virtue of the proviso to section 251(1)(d) of the Constitution. (iii) Whether the court below was right in its decision that in so g far as jurisdiction between an individual customer and his bank has been vested in State High Courts, sections 3(1) and 9 of the Failed Banks Decree which purports to vest jurisdiction on same matters in the Federal High Court are inconsistent with the proviso to section 251(1)(d) of the 1999 h Constitution. (iv) Whether the suit instituted by the appellant against the respondents herein qualified as a suit involving ‘other fiscal measures’ within the meaning of section 251(1)(d) of the i 1999 Constitution.” The parties’ contention in the case before this Court is essentially built on the ramification of section 251(1)(d) of the 1999 Constitution. In the argument to the contents of the is- j sues framed, the appellant submitted that it could not be the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC 368 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) correct interpretation of section 230(1)(d) of the 1979 Con- a stitution as amended by Decree No. 107 of 1993 when com- pared with section 251(1)(d) of the 1999 Constitution in respect of the jurisdiction of the Federal High Court that the b Constitution had divested the Federal High Court of the jurisdiction it hitherto enjoyed in the nature of the case before this Court arguing that the correct interpretation of sections 3(1) and 9 of the Failed Banks (Recovery of Debts) and Fi- c nancial Malpractices in Banks Decree (as amended by the Decree No. 62 of 1999) is that the Decree vested exclusive jurisdiction to hear and determine its claims against the respondents in the Federal High Court. Now the approach of d the lower court to this seemingly naughty and intractable problem as to where the jurisdiction of the court lies is to have a historical overview or perspective of the powers of the Federal High Court before the present Constitution. For e this the court below sought to show the historical sequence of events which predated both the original Failed Bank De- cree No. 18 of 1994 and the amendments made in 1999 to wit Decree No. 62 of 1999 and also the Constitution by go- f ing back to the provision of the law in respect of vesting of powers of adjudication in Federal High Court in a subject- matter relating to banking. Strictly speaking, notwithstanding any provision contained in sections 3(1) and 9 of the g Failed Banks Decree (as amended by Decree No. 62 of 1999), section 251(1)(d) of the Constitution shall be the operative law for this Court to rely on to discover and understand to which court the subject matter in this case would h have the jurisdiction. The appellant is of the view that relying on the case of Ibrahim v J.S.C. (1998) 12 SC at 35; Rheinmass v Ruvway Lines Ltd (1998) 4 SC 73 at 82 83 and also Savannah Bank v Ajilo (1998) 14 NWLR (Part 584) 1; i (1989) 1 NWLR (Part 97) 305; (1989) 1 SC (Part 11) 90 at 106 it is incontestable that a careful consideration of Decree No. 107 of 1993 read along with Decree No. 62 of 1999 can be said to have vested the Federal High Court with the same j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 369 a powers. A holistic approach to the controversy would readily show that this Court is being called upon to determine whether by reason of section 251(1)(d) of the Constitution of the Federal Republic of Nigeria the proviso contained in that b section can be said to have made any significant alteration to the jurisdictional preserve of the Federal High Court. In other words which court has the jurisdiction in a matter relating to Failed Banks (Recovery of Debts Act), the Federal c High Court exercising an exclusive jurisdiction or, a State High Court only exercising exclusive jurisdiction or both having regard to the proviso attached to section 251(1)(d). The nature of this case reminds one that a mere simplistic d approach to what is obviously a complex issue would definitely mire the quest to give a well-considered juridical approach to a matter of great importance in the realms of the jurisprudence in relation to the recovery of debts. What in- e deed are the ramifications of the contents and intendment of section 251(1)(d) (supra). Before delving into the nuances of this matter let me first set down the provision of that section:– f “251(1) Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the Na- tional Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other g court in civil causes and matters:– (d) connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or h against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures: i Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.” By the provision in this section the primary law is stating j that the preserve of the Federal High Court in respect of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC 370 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) matters contained in subsection (d) above vests squarely and a unadulterated in the Federal High Court before the proviso. The proviso to the law then, however, can be interpreted to say that the exclusiveness of the power so stated above shall b not apply in a dispute between an individual customer and his bank in respect of any banking transaction. Who is a customer of a bank? Black’s Law Dictionary defines the term in relation to banking as any person having an account with a bank or for whom a bank has agreed to collect items and in- c cludes a bank carrying an account with another bank. The learned Counsel for the appellant argued that it would seem that the exclusivity intended by section 251(1)(d) has by virtue of the ubiquitous proviso clause been whittled down. To d the respondents obviously basking on the judgment of the Court of Appeal and construing the proviso to mean that only the State High Court can exercise jurisdiction in such a matter they argued that the proviso should be construed to e mean that the Federal High Court has been divested of its power hitherto vested on it first by Decree No. 107 of 1993, and by the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) f and by the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Amendment Decree No. 18 of 1994. It is important for us to understand the underbelly of the term “proviso” when used in a statute. In Abasi v The State g (1992) 8 NWLR (Part 260) 383 at 403 this Court held that:– “It is a well recognised principle of the interpretation of statutes that a proviso is an exception to the main rule. The object of a proviso in a statutory enactment is to qualify or cut down the enacting h clause which precedes it. In reality it is used as an exception to the main rule See Eme v State (1964) 1 All NLR 416. Where the words of a section are capable of showing more than one meaning the proviso will show the proper meaning to be attached to it. See Anyah v State (1965) N.M.L.R. 62.” i To my mind the approach of the respondents, id est, their understanding and construction of the intendment by the proviso is skewed and constricted. Provisos in enactments are meant to serve as a special exemption from the general j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd 371 a run of things. In other words the essence of a proviso in an enactment is to remove or isolate, limit or modify certain matters from the general operation of the law vesting some powers or enacting or establishing some features intended to b be provided or prescribed by the enactment (see Saginaw County Tp. Officers Association v City of Saginaw 373 Mich. 477, 130, 130 N.W. 2nd 30, 32). It was held in Stoler v State 171 Neb. 93, 105 N.W. 2nd 852 at 856 that a c proviso is a clause engrafted on a preceding enactment for the purpose of restraining or modifying the enacting clause or of excepting something from its operation which would otherwise have been within it. In effect, the proviso in d section 251(1)(d) is to limit the operationality of the foregoing provision to show that applicability is not general but it does not destroy or divest the Federal High Court of this power. It should therefore be understood to mean that the e exclusivity it enjoyed has been broken and in this case can only mean that the Federal High Court enjoys equal power with the State High Court in banking cases involving bank and customer. In Lloyds and Scottish Finance Ltd v Cars f and Caravans (Kingston) Ltd (1966) 1 Q.B. 764 at 781 the court had to consider the import of provisos in a statute. By section 26(1) of the Sale of Goods Act, 1893, it was provided that a writ of execution against goods:– g “bind the property in the goods of the execution debtor as from the time when the writ is delivered to sheriff to be executed; . . . Pro- vided that no such writ shall prejudice the title to such goods acquired by any person in good faith and for valuable consideration, unless such person had at the time when he acquired his title no- h ticed that such writ or any other writ by virtue of which the goods of the execution debtor might be seized or attached had been delivered to and remained unexecuted in the hands of the sheriff.” In its construction of the tenor and intendment of the proviso i the court held that:– “The proviso, accordingly, does no more than protect a purchaser of the goods against that right of seizure if the stated conditions are fulfilled. . . . It has no scope for operation where an actual sei- j zure of the debtor’s goods has already been effected; and where

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Pats-Acholonu JSC 372 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

this has occurred, it is immaterial whether or not the purchaser a from the debtor had notice of the seizure, or even of the writ.” In the old case of Attorney-General v Chelsea Waterworks Co (1731) Fitzg. 195 it was held that if a proviso cannot rea- b sonably be construed otherwise than as contradicting the main enactment, then the proviso will prevail on the principle that it speaks the last intention of the law makers. In the present case, the exclusiveness in the vesting of powers of adjudication conferred on the Federal High Court in older c Acts has been diluted to include and confer jurisdiction on the State High Court in this sort of case. It must be admitted and this Court takes judicial notice of the fact that banks and State Courts are spread all over the country. It is possible d that the framers of the Constitution might have conceived and contended in their collective wisdom that the Federal Courts mostly located in urban areas are not as extended as the State High Courts. Therefore, to meet the needs of liti- e gants in regard to intention of cases of the nature under consideration, it shall be considered more practicable or pragmatic to spread the jurisdiction more widely to deal with banking matters arising in the less fanciful locations. The f sum total of what I am saying is that by the proviso both the Federal High Court and the State High Court exercise concurrent jurisdiction in this area. Accordingly, I allow the appeal and set aside the judgment g of the court below and restore the judgment of the High Court. I abide by the consequential orders made in the lead judgment. Appeal allowed. h

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

Federal Mortgage Bank Ltd v. Engr. B.O. Oche 373 a Federal Mortgage Bank Limited and another v Engr. B.O. Oche b COURT OF APPEAL, JOS DIVISION OBADINA, MUKHTAR, SANUSI JJCA

Date of Judgment: 26 OCTOBER, 2004 Suit No.: CA/J/298/98 c Mortgage – Mortgaged property – Auction sale – Notice – Length – Notice required – Failure to give notice – Effect on sale – Sections 19 and 20 of the Auctioneers’ Laws of Northern Nigeria, 1963 d Facts The first defendant in the case, ie Lawrence Okoh, pur- e chased the property in question, namely, the property covered by Benue State Certificate of Occupancy No. B.P. 2603 through an auction sale conducted by an accredited agent of the Federal Mortgage Bank Limited, the second defendant/ N f appellant, on 21 August, 1990 at a cost of 150,000 (One Hundred and Fifty Thousand Naira). The plaintiff/ respondent, ie Engr. B.O. Oche, then filed a suit challenging the said auction sale of his property covered by Certificate of Occupancy No. B.P. 2603 aforesaid, which was mort- g gaged to the second defendant/appellant as security for a loan he took sometime in 1981. “(i) A declaration that the buildings and premises situate at h G.R.A., Mukurdi and covered by Certificate of Occupancy No. B.P. 2603 are owned by the plaintiff. (ii) An order of perpetual injunction restraining the defendants, by themselves, or their servants, agents and/or representatives from further illegal occupation or possession or from i interfering with the plaintiff’s quiet enjoyment of the buildings and premises covered by Certificate of Occupancy No. B.P. 2603. (iii) The plaintiff claims against the defendants the sum of j N200,000 as special and general damages for trespass.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

374 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

PARTICULARS a (a) The sum of N10,000 as rent per annum for the premises from August, 1990 till judgment or until possession is given up. b (b) The sum of N5,000 being the keys destroyed and replaced by the first defendant. (iv) N175,000 as general damages for trespass.” The trial Judge held that the sale of the plaintiff’s property c by auction sale was illegal. Dissatisfied, the appellant appealed to the Court of Appeal. Sections 19 and 20 of the Auctioneers’ Law of Benue State provides:– “19 No sale by auction of any land shall take place until after d at least seven days’ public notice thereof made at the principal town of the district in which the land is situated, and also at the place of the intended sale. The notice shall be made not only by printed or written documents, but also by beat of drum or such other method intelligible to e educated persons as may be prescribed, or if not prescribed, as the Secretary of the Local Government of the area where such sale is to take place may direct, and shall state the name and place of residence of the seller. f 20 Two days before any sale by auction shall take place, or within such shorter time as the Secretary to the Local Government of the area where such sale is to take place, may in special circumstances, authorise in his discretion, notice thereof in writing together with a catalogue of the g goods or lands to be sold shall be delivered by the auctioneer to such Secretary, specifying the place and time at which such sale begins, and within sixty hours after such sale shall have terminated a complete account of the sale h verified by oath or affirmation of the auctioneer shall be delivered to such Secretary, specifying the price at which each lot shall have been sold.” Held – i 1. The sale of properties by auction are regulated by law. Section 19 of the Auctioneers’ Law of Benue State specify a notice of seven days before auction sale can be made. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

Federal Mortgage Bank Ltd v. Engr. B.O. Oche 375 a 2. Any sale by auction that fails to meet the requirement of notice shall be null and void and cannot pass a valid title to a third party. b Appeal dismissed. Cases referred to in the judgment Nigerian c Agbanifo v Aiwereoba (1988) 1 NWLR (Part 70) 325 Akinbinu v Oseni (1992) 1 NWLR (Part 215) 97 Egonu v Egonu (1978) 11–12 SC 111 d Nigerian statute referred to in the judgment Applicable Laws (Miscellaneous Provisions) of Benue State Edict No. 6 of 1988, section 4 e Auctioneers’ Law, Cap 10 Laws of Northern Nigeria, 1963, sections 19 and 20 Auctioneers’ Law of Benue State, 1963, sections 19 and 20 High Court Law, Cap 49 Laws of Northern Nigeria, 1963, f section 29

Foreign statute referred to in the judgment English Conveyancing Act of 1888, section 21(2) g Judgment OBADINA JCA: (Delivering the lead judgment) When the appeal was called for hearing, Counsel and parties on both h sides were not in court. The parties have filed and exchanged briefs. It is a 1998 appeal and since the parties have filed and exchanged their briefs, and there is evidence that they have been duly served with the notice of hearing, the i appeal was treated as having been duly argued. The appeal is against the decision of the Benue State High Court contained in the judgment of Ikongbe J (as he then was) delivered on 26 September, 1995. At the trial, the ap- j pellant, ie Federal Mortgage Bank Limited, was the second

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 376 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) defendant, while the respondent, Engr. B.O. Oche, was the a plaintiff. The first defendant in the case, ie Lawrence Okoh, did not appeal against the judgment of 26 September, 1995. The facts of the case leading to this appeal are briefly as b follows. The first defendant in the case, ie Lawrence Okoh, purchased the property in question, namely, the property covered by Benue State Certificate of Occupancy No. B.P. 2603 through an auction sale conducted by an accredited c agent of the Federal Mortgage Bank Limited, the second defendant/appellant, on 21 August, 1990 at a cost of N150,000 (One Hundred and Fifty Thousand Naira). The plaintiff/respondent, ie Engr. B.O. Oche, then filed a suit chal- d lenging the said auction sale of his property covered by Cer- tificate of Occupancy No. B.P. 2603 aforesaid, which was mortgaged to the second defendant/appellant as security for a loan he took sometime in 1981. e In paragraph 14 of the amended statement of claim, the plaintiff/respondent claimed as follows:– “(i) A declaration that the buildings and premises situate at f G.R.A., Mukurdi and covered by Certificate of Occupancy No. B.P. 2603 are owned by the plaintiff. (ii) An order of perpetual injunction restraining the defendants, by themselves, or their servants, agents and/or representa- g tives from further illegal occupation or possession or from interfering with the plaintiff’s quiet enjoyment of the buildings and premises covered by Certificate of Occupancy No. B.P. 2603. h (iii) The plaintiff claims against the defendants the sum of N200,000 as special and general damages for trespass. PARTICULARS (a) The sum of N10,000 as rent per annum for the prem- i ises from August, 1990 till judgment or until possession is given up. (b) The sum of N5,000 being the keys destroyed and replaced by the first defendant. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Federal Mortgage Bank Ltd v. Engr. B.O. Oche 377 a (iv) N175,000 as general damages for trespass.” Pleadings were filed and exchanged by the parties, and the case was fixed for trial. At the trial, the respondent as plain- b tiff, gave evidence and called one witness and tendered some documents as exhibits, and closed his case. The second defendant/appellant, ie Federal Mortgage Bank Ltd, also called evidence, tendered some exhibits and closed its case. c The first defendant, Lawrence Okoh, did not give evidence and was absent in court. On 26 September, 1995, the learned trial Judge delivered d his judgment in the absence of the first defendant, Lawrence Okoh, and declared the said sale by auction of the property of the plaintiff/respondent covered by Certificate of Occu- pancy No. B.P 2603, illegal (see pages 94–104 of the record e of appeal). Dissatisfied with the said judgment, the second defendant/ appellant appealed to this Court by a notice of appeal filed on 1 October, 1995. The notice of appeal contained only two f grounds of appeal in the following terms:– “The learned trial Judge erred in law when he held that the sale by the appellant was illegal and this error in law has greatly occasioned a miscarriage of justice. g PARTICULARS OF ERROR (i) The learned trial Judge held that the provisions of the law (Auctioneer’s Law) were not complied with; h (ii) The learned trial Judge held that the event on which the appellant’s power of sale was to arise had not occurred; (iii) The learned trial Judge held that the appellant did not i pass a good title to the second defendant; (iv) There was no evidence that the sale was by public auction. (2) The entire decision of the learned trial Judge is against the j weight of evidence.”

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 378 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

From the two grounds of appeal, the second defendant/ a appellant formulated four issues for determination as follows:– “(a) Whether the learned trial Judge was right to hold that the b auction sale was illegal. (b) Whether by virtue of the State’s Applicable Laws (Miscel- laneous Provisions), Edict No. 6, 1988 of Benue State, the English Conveyancing Act, 1888 ceased to apply to the mortgage transaction entered between the plaintiff and the c appellant and so rendered invalid the auction sale. (c) Whether the trial Judge was right to hold that the appellant did not pass a good title to the first defendant who bought the property by auction. d (d) Whether the judgment can be supported having regard to the weight of evidence.” The respondent adopted issues (a), (c) and (d) formulated by the appellant as the issued that call for determination in the e appeal. The respondent gave a notice that the respondent would raise a preliminary objection against issue no. (b) formulated by the appellant that the issue was not covered by any of the two grounds of appeal. I will first of all con- f sider the preliminary objection raised by the respondent. In arguing the objection, the respondent referred to the grounds of appeal filed by the second defendant/appellant on 17 October, 1995, wherein two grounds of appeal were filed g (see pages 57 and 58 of the record of appeal). He also referred to the appellant’s brief of argument in which the appellant formulated four issues for determination. He submitted that issue 1(b) thereof was not covered by any of the two h grounds of appeal. He argued that the fact of the applicability or otherwise of the Conveyancing Act of 1888 was not raised in the grounds of appeal and, therefore, the appellant could not formulate an issue on it. He submitted that any is- i sue not derived from any ground of appeal was irrelevant. He referred to Oseni v Akinbinu (1992) 1 SCNJ at 1 and Adigun v Ayinde and others (1993) 11 SCNJ 1. He urged the court to expunge issue 1(b) formulated by the appellant. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Federal Mortgage Bank Ltd v. Engr. B.O. Oche 379 a The law is well settled that issues for determination must be formulated on the basis of grounds of appeal filed. The issues formulated must therefore relate to the grounds of ap- b peal challenging the correctness of the judgment appealed. Any issue formulated outside the grounds is irrelevant should not be approved. In Juliana Ibiyemi Akinbinu v Yisa Eyifunmi Oseni and others (1992) 1 NWLR (Part 215) 97 at c 118 119, the Supreme Court, per Karibi-Whyte JSC, stated the law as follows:– “No grounds of appeal has raised the issue. It is well settled that issues for determination are formulated on the basis of grounds of appeal filed. See Ugo v Obieke (1989) 1 NWLR (Part 89) 566. The d issue formulated must therefore relate to the ground or grounds of appeal challenging the correctness of the judgment appealed. See Modupe v The State (1988) 4 NWLR (Part 97) 130. Hence any issue formulated aliunde, cannot but be obviously irrelevant. Such e issue ought not be countenanced” (see also Samuel A. Adigun v I.O. Ayinde and others (1993) 8 NWLR (Part 312) 516 at 538). In the instant case, issue (b) raised by the appellant against which the respondent raised an objection questions the ap- f plicability of the English Conveyancing Act of 1888 to a mortgage transaction between the parties after the promulgation of the Benue State Applicable Laws (Miscellaneous Provisions) Edict No. 6 of 1988. g Ground 1 of the grounds of appeal where issue of law is raised reads as follows:– “(1) The learned trial Judge erred in law when he held that the sale by the appellant was illegal and this error in law has h greatly occasioned a miscarriage of justice. PARTICULARS OF ERROR (i) The learned trial Judge held that the provisions of the law (Auctioneers’ Law) were not complied with. i (ii) The learned trial Judge held that the event on which the appellant’s power of sale was to arise had not occurred. (iii) The learned trial Judge held that the appellant did not j pass a good title to the second defendant.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 380 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(iv) There was no evidence that the sale was by public auc- a tion.” A cursory look at ground 1 of the grounds of appeal shows that the appellant raises a point of law in ground 1. I think b issues (a), (b) and (c) formulated by the appellant are all raising one issue, namely, whether the learned trial Judge was right to hold that the auction sale was illegal. The Eng- lish Conveyancing Act, 1888 may be one of the statutes c which the appellant intends to rely on to say that the sale was legal. I think the appellant only proliferated the issues by making the applicability of the Conveyancing Act, 1888 an issue. I think issues (a), (b) and (c) formulated by the appellant are just one issue derivable from ground 1 of the grounds d of appeal. In that regard, the objection is hereby overruled. As indicated earlier, issues (a), (b) and (c) formulated by the appellant deal with one and the same issue of law and e therefore can be reframed as follows:– “Whether the learned trial Judge was right when he held that the auction sale was illegal and the appellant did not pass a good title to the first defendant in respect of the said property.” f In arguing the appeal, the learned Counsel for the appellant indeed argued his so-called issues (a), (b) and (c), which has now been compressed into one together. He referred to page 102 of the record of appeal, wherein the learned trial Judge g held that the appellant had not complied with the provisions of the law before carrying out the auction sale, and that section 21(2) of the English Conveyancing Act, 1888 has, by virtue of the Benue State Edict No. 6 of 1988, ceased to apply in Benue State. He referred to section 21(2) of the Eng- h lish Conveyancing Act, 1888. He argued that the Act was applicable in Northern States at the time the mortgage transaction was entered into by the parties and that the defendants were therefore protected from any irregularity in the auction i sale. He said that the Conveyancing Act, 1888 did not cease to apply by virtue of section 4(1) of Edict No. 6 of 1988 of Benue State. He submitted that section 4(2)(b) and (c) of Edict No. 6 of 1988 of Benue State excluded the operation j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Federal Mortgage Bank Ltd v. Engr. B.O. Oche 381 a of the Edict where there had been an existing privilege, right, obligation or liability under any imperial Law prior to the coming into force of the Edict. He submitted that the b trial Judge was wrong and urged the court to allow the appeal. In arguing the issue, the learned Counsel to the respondent referred to the English Conveyancing Act, 1888 and stated c that it was applicable in Benue State until the promulgation of Edict No. 6 of 1988 of Benue State. He referred to sections 28 and 29 of the High Court Law, Cap 49 Laws of Northern Nigeria, 1963 and submitted that the application of d the English Conveyancing Act, 1888 was subject to local legislations including the Auctioneers’ Law, Cap 10 Laws of Northern Nigeria, 1963. He referred to sections 19 and 20 of the Auctioneers’ Law and submitted that the appellant did e not comply with the mandatory provisions of the Law. He submitted that the purported sale by auction by the appellant was illegal. He urged the court to dismiss the appeal. The issue in controversy is whether or not the respondent f was given notice before his mortgaged property was sold by public auction. In his evidence under cross examination, DW1 stated that the respondent was served by advertisement on the radio. These were the questions and answers between g the learned Counsel to the respondent, Mr Adah and DW1:– Mr Adah – Did you yourself hear the advertisement on the radio? DW1 – Yes, I did. I assumed the office I presently hold in h 1990, precisely in May. I heard the advertisement over the PM. Apart from exhibits 4 and 5 there were no other adverts. I now say I am not sure. Mr Adah – How many houses apart from that of the plaintiff i did you sell? DW1 – There was no other. Mr Adah – Apart from exhibits 4 and 5 is there any other evidence that you advertised the sale of the plaintiff’s j house?

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 382 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

DW1 – I will find out from the auctioneer. I see exhibits 4 a and 5. Mr Adah – Is there any place in them where it was mentioned that the plaintiff’s house would be auctioned on any particular date? b DW1 – (After studying exhibits 4 and 5) There is none. Mr Adah – Do the exhibits not merely say that should the debtors not pay up, the matter would be referred to an auctioneer? c DW1 – Yes, they do . . . Mr Adah – Does exhibit 2 not provide in paragraph 10 that notice should be served in writing on the mortgagee before his property is sold? d DW1 – (After reading exhibit 2 paragraph 10) Yes, it does. I have many of such notices in my file here. Mr Adah – Did you give any notice of the sale of plaintiff’s property in August, 1990? e DW1 – (After going through the file) Yes, we did. Mr Adah – When did you give the notice? DW1 – By the time he wrote his letter to us on 25/9/84 (exhibit 3) we replied on 12/10/84, telling him that f unless he repaid the loan within 14 days we would foreclose. Mr Adah – When was exhibit 2 executed? DW1 – It was executed on 28/12/84. See Page 6 of exhibit 2. g Mr Adah – Did you give plaintiff any notice that his house would be sold in August, 1990? DW1 – Yes, we did so in October, 1987 by letter. Mr Adah – Were you present at the auction sale? h DW1 – No. I was on annual leave.” The sales of properties by auction are regulated by law. Sec- tions 19 and 20 of the Auctioneers’ Law, Cap 10 of the Laws of Northern Nigeria, 1963 as well as sections 19 and i 20 of the Auctioneers’ Laws of Benue State specify the period of notice of sale of land by auction. Sections 19 and 20 of the Auctioneers’ Law, Cap 10 of the Laws of Northern Nigeria, 1963 and sections 19 and 20 of the Auctioneers’ j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Federal Mortgage Bank Ltd v. Engr. B.O. Oche 383 a Law of Benue State, 1988 are in pari materia. Sections 19 and 20 of the Laws read as follows:– “19 No sale by auction of any land shall take place until after at least seven days’ public notice thereof made at the b principal town of the district in which the land is situated, and also at the place of the intended sale. The notice shall be made not only by printed or written documents, but also by beat of drum or such other method intelligible to c educated persons as may be prescribed, or if not prescribed, as the Secretary of the Local Government of the area where such sale is to take place may direct, and shall state the name and place of residence of the seller. 20 Two days before any sale by auction shall take place, or d within such shorter time as the Secretary to the Local Government of the area where such sale is to take place, may in special circumstances, authorise in his discretion, notice thereof in writing together with a catalogue of the e goods or lands to be sold shall be delivered by the auctioneer to such Secretary, specifying the place and time at which such sale begins, and within sixty hours after such sale shall have terminated a complete account of the sale verified by oath or affirmation of the auctioneer shall be f delivered to such Secretary, specifying the price at which each lot shall have been sold.” From the evidence of DW1 under cross examination there can be no doubt that the auction sale of the respondent prop- g erty, ie property covered by Certificate of Occupancy No. B.P. 2603, by the appellant was not in conformity with the provisions of the Auctioneers’ Law. However, the contention of the appellant is that under sec- h tion 4(2)(b) and (c) of the Applicable Law (Miscellaneous Provisions) Edict No. 6 of 1988 of Benue State, the existing privilege, right, obligation or liability vested in a person under the imperial Law before the Edict came into force would i not be affected. In other words, it is the contention of learned Counsel to the appellant that Edict No. 6 of 1988 would not affect the protection given to the appellant, ie a mortgagee under the provision of the Conveyancing Act, j 1888.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 384 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

I do not think the learned Counsel to the appellant can be a right in his submission. Section 4 of the Applicable Laws (Miscellaneous Provisions) Edict No. 6 of 1988 provides as follows:– b “4(1) Subject to the provisions of this Edict, no imperial Act hitherto in force in, and within the legislative competence of the state shall have any force or effect in the state. (2) Subject to the express provisions of any written law, sub- c section I shall not:– (a) revive anything not in force or existing at the commencement of this Edict; or (b) affect the previous operation of any imperial Act to d which this section applies or anything duly done or suffered under any such act; or (c) affect any right, privilege, obligation or liability accrued or incurred under any such Act; or (d) affect any penalty, forfeiture or punishment incurred e in respect of any offence committed against any such Act; or (e) affect any investigation, legal proceedings or remedy in respect of any such right, privilege, obligation, li- f ability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be g imposed as if this Edict had not been passed.” A cursory reading of section 4(2) above shows that the subsection opens with the phrase:– “Subject to the express provisions of any written law . . .” h The phrase within the context and tenor of the Edict means that where there is an express provision of any written law in conflict with the provision of subsection (1) of section 4 of the Edict, the provisions of the said written law shall prevail. i Section 19 of the Auctioneers’ Law, Cap 10 of the Laws of Northern Nigeria, 1963 as well as section 1 of the Auction- eers’ Law of Benue State, 1988 makes express provisions as to the period of notice to be given in a sale by auction in j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Federal Mortgage Bank Ltd v. Engr. B.O. Oche 385 a Benue State. In that regard, the protection afforded a mortgagee under section 21(2) of the Conveyancing Act, l888 for irregularity in the conduct of an auction sale of the property b of a mortgagor is in conflict with the express provisions of sections 19 and 20 of the Auctioneers’ Law. Therefore, by virtue of section 29 of the High Court Law, Cap 49 of the Laws of Northern Nigeria, 1963, the conflict shall be re- c solved in favour of the Auctioneers’ Law and the purported auction sale shall be null and void. In that regard, I am of the view that the learned trial Judge was right when he held that the auction sale of the respondent’s property by the appellant was illegal and void and could not pass a good title to the d first defendant in the circumstances. The remaining issue formulated by the appellant is:– “Whether the judgment can be supported having regard to the e weight of evidence.” In arguing the issue, the learned Counsel to the appellant referred to pages 69–70 of the record of appeal, wherein, according to the learned Counsel, the appellant admitted that f he was in arrears of repayment of the mortgage loan and interest. He argued that the appellant had breached the provisions of the mortgage deed and the appellant was entitled to sell the property in question, as he did. He also referred to g the evidence of the respondent wherein the respondent stated that his last tenant in the said property, the National Steel Council used to pay N10,000 (Ten Thousand Naira) per annum as rent. He submitted that the claim was in the nature h of special damages and must be proved strictly. He submitted that the judgment of the learned trial Judge could not be supported by evidence. He urged the court to allow the appeal. i The learned Counsel to the respondent in his brief submitted that the appellant has not shown that the findings of the trial Judge were perverse or against the weight of evidence. He stated that the findings of the trial Judge were un- j assailable. He further argued that the appellant did not

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 386 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) controvert or challenge the respondent’s evidence on the is- a sue of payment of N10,000 (Ten Thousand Naira) per annum as rent. He submitted that the respondent has proved his claim and that the award of N50,000 (Fifty Thousand Naira) b to the respondent was proper. He urged the court to dismiss the appeal. The law is well settled that where a judgment is attacked on the ground of being against the weight of evidence, as in c this appeal, or where the finding or non-finding of facts is questioned, the Court of Appeal in its primary role in considering a judgment on appeal in a civil case in which the finding or non-finding of facts is questioned will seek to d know the following, namely:– (a) the evidence before the trial court; (b) whether it accepted or rejected any evidence upon the correct perception; e (c) whether it correctly approached the assessment of the value on it; (d) whether it used the imaginary scale of justice to weigh the evidence on either side; f (e) whether it appreciated upon the preponderance of evidence which side the scale weighed having regard to the burden of proof (see Agbanifo v Aiwereoba g (1988) 1 NWLR (Part 70) 325 at 339; Egonu v Egonu (1978) 11–12 SC 111 at 129). Based on these authorities, I have carefully considered the pleadings and evidence of the parties before the trial court. h There is nowhere in the evidence of the plaintiff/respondent before the trial court that the respondent admitted that he was in arrears of repayment of the mortgage loan and interest as alleged by the appellant’s Counsel in his brief of ar- i gument. What the respondent clearly indicated in his evidence before the trial court was that the interest rate payable on the mortgage was reviewed upwards without his notice and that it took the appellant a long time after the upwards j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Federal Mortgage Bank Ltd v. Engr. B.O. Oche 387 a review of the interest rate before the appellant informed him (respondent). Generally I am of the view that the findings of the trial b Judge are supported by evidence and that the judgment is not against the weight of evidence. In the final analysis, I see no merit in the appeal and it is accordingly dismissed. c MUKHTAR JCA: I have read in advance the lead judgment delivered by my learned brother, Obadina JCA. I am in full agreement with the reasoning and conclusion reached in the lead judgment that the appeal has no merit and must be dis- d missed. I abide by the consequential orders made in the lead judgment. SANUSI JCA: I agree. Appeal dismissed. e

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

388 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

a Bank of the North Limited v Alhaji Haruna Garba Gana

COURT OF APPEAL, JOS DIVISION b OBADINA, MUKHTAR, SANUSI JJCA

Date of Judgment: 8 NOVEMBER, 2004 Suit No.: CA/J/194/2001 c Contract – Action commenced after six years of accrual – Whether statute barred – Effect on action

Contract – Breach of contract – When time begins to run d Limitation of action – Statute of limitation – Determining factors thereto

Facts e The respondent who was the plaintiff at the trial court was the owner of plot No. TII covered by Certificate of Occu- pancy No. 0445 and Plot No. F7T covered by Certificate of f Occupancy No. 0306, both properties situate at Dadin Kowa. In 1978, the plaintiff/respondent commenced the construction of a building of 64 rooms. While developing the properties, the plaintiff/respondent ran short of money and ap- g proached the defendant/appellant for a loan facility of N300,000 (Three Hundred Thousand Naira). The defendant/ appellant requested for the valuation of the plaintiff’s/ respondent’s property proposed as the collaterals for the h loan. The defendant/appellant arranged for a valuer who carried out the exercise and was paid by the defendant/ appellant. The plaintiff/respondent also deposited the certificate of occupancy of the property with the defendant/ i appellant. According to the plaintiff/respondent, the defendant/appellant promised to insure the property. For a start, the appellant gave the respondent the sum of N22,000 (Twenty two Thousand Naira) which, according to j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

Bank of the North Limited v. Alhaji Haruna Garba Gana 389 a the respondent was secured by property No. F7T covered by Certificate of Occupancy No. 0306. The parties executed a deed of legal mortgage tendered as exhibit 12 to cover the N b transaction. According to the respondent the 22,000 was not sufficient to complete the project and therefore the respondent approached the appellant for additional funds. The appellant agreed to give more funds provided the respondent c deposited title documents in respect of another property to the appellant. According to the respondent, the respondent then deposited Certificate of Occupancy No. 0445 in respect of Plot No. TII with the appellant. After the whole transac- d tion between the parties, a third party in 1982 who claimed the ownership of the property, demolished the property erected on plot No. TII. After the demolition of the property, the plaintiff/respondent discovered that the defendant/ appellant did not insure the property and claimed inter alia e for N437,603, the value for improvement on plot No. TII. Dadin Kowa Jose, N200,000 general damages and a declaration that interest chargeable on N22,000 as overdraft be the interest rate at 1982. f The defendant/appellant brought a notice of preliminary objection that the action is statute barred having commenced same after six years of the accrual of the cause of action. g The objection was dismissed and judgment entered for the plaintiff/respondent. It is against this ruling and the judgment of the trial court that this appeal was brought.

Held – h 1. In determining whether a particular statute is statute barred the court will seek to know the following:– (1) When did the cause of action arise? i (2) When did the plaintiff file the action? In other words, how is period of limitation determined? 2. No action founded on contract or tort shall be brought after the expiration of six years from the date on which j the cause of action accrued.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

390 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

In the instant case, the plaintiff/respondent having filed a an action on 24 January, 1991 in a cause of action that arose in 1982 is statute barred by virtue of the Limitation Act of 1623. b 3. It is settled law that in actions for breach of contract, the cause of action accrues for the plaintiff’s benefit from the time the breach is committed and not when the damage is suffered. c 4. The general principle of law is that where the law provides for the bringing of an action within a prescribed period in respect of a cause of action accruing to the plaintiff, proceedings shall not be brought after the time d prescribed by the statute. An action brought outside the prescribed period offends against the provision of the section and does not give rise to a cause of action. e 5. Once an action is statute barred and is so declared by the court of competent jurisdiction, that is the end of that action. That cause of action is incapable of re-litigation and should therefore be dismissed. In that regard, having found and held that the action of the plaintiff/respondent f in this case is statute barred, the proper order is one of dismissal.

Appeal allowed. g Cases referred to in the judgment Nigerian h Bakare v L.S.C.S.C. (1992) 8 NWLR (Part 262) 641 Commissioner for Works, Benue State v Devcon Ltd (1988) 3 NWLR (Part 83) 407 i Iweka v SCOA (2000) 7 NWLR (Part 664) 325 Mercantile Bank of (Nig.) Plc v Feteco (Nig.) Ltd (1998) 2 NWLR (Part 540) 143 Woherem v Emereuwa (2000) 3 NWLR (Part 650) 529 j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION)

Bank of the North Limited v. Alhaji Haruna Garba Gana 391 a Nigerian statutes referred to in the judgment High Court Laws of Northern Nigeria, Cap 49 of 1963, section 28 b Limitation Decree No. 88 of 1996, section 7(4)

Foreign statute referred to in the judgment Statute of Limitation Act, 1623 c Counsel For the appellant: Obishai d For the respondent: Gopep

Judgment OBADINA JCA: (Delivering the lead judgment) This is an e appeal against the decisions of the High Court of Plateau State sitting at Jos, contained in the ruling delivered by Ahinche J on 28 February, 1995 and the final judgment delivered on 8 December, 1995. At the trial court, the appellant f was the defendant while the respondent was the plaintiff. The facts that led to the appeal are briefly as follows. The respondent who was the plaintiff at the trial court was the owner of plot No. TII covered by Certificate of Occu- g pancy No. 0445 and plot No. F7T covered by Certificate of Occupancy No. 0306. Both properties are situate at Dadin Kowa. In 1978, the plaintiff/respondent commenced the construction of a building of 64 rooms. While developing h the properties, the plaintiff/respondent ran short of money and approached the defendant/appellant for a loan facility of N300,000 (Three Hundred Thousand Naira). The defendant/ appellant requested for the valuation of the plaintiff’s/ i respondent’s property proposed as the collateral for the loan. The defendant/appellant arranged for a valuer who carried out the exercise and was paid by the defendant/appellant. The plaintiff/respondent also deposited the certificate of oc- j cupancy of the property with the defendant/appellant.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 392 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

According to the plaintiff/respondent, the defendant/| a appellant promised to insure the property. For a start, the appellant gave the respondent the sum of N22,000 (Twenty two Thousand Naira) which, according to b the respondent, was secured by property No. F7T covered by Certificate of Occupancy No. 0306. The parties executed a deed of legal mortgage tendered as exhibit 12 to cover the transaction. According to the respondent the N22,000 c (Twenty two Thousand Naira) was not sufficient to complete the project and therefore the respondent approached the appellant for additional funds. The appellant agreed to give more funds provided the respondent deposited title d documents in respect of another property to the appellant. According to the respondent, the respondent then deposited Certificate of Occupancy No. 0445 in respect of Plot No. TII with the appellant. After the whole transaction between the e parties, a third party in 1982, who claimed the ownership of the property, demolished the property erected on plot No. TII. After the demolition of the property, the plaintiff/ respondent discovered that the defendant/appellant did not f insure the property. The plaintiff/respondent then claimed in paragraph 22 of the amended statement of claim in the following terms:– “(22) By reason of the above premise the plaintiff has suffered g loss and damage and he claims from the defendant as follows:– (i) N437,803 being the value of the improvement on plot TII Dadin Kowa, Jos which the defendant neglected to h insure. (ii) N200,000 being general damages for breach of contract. (iii) A declaration that the interest rate chargeable on the i sum – N22,000 advanced to the plaintiff in 1982 as overdraft is the rate prevailing as at February, 1982 and that the defendant cannot unilaterally vary the said rate without the knowledge and consent of the plaintiff.” j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Bank of the North Limited v. Alhaji Haruna Garba Gana 393 a The parties filed and exchanged pleadings. The defendant/ appellant in his further amended statement of defence raised a preliminary objection to the suit to the effect that the action of the plaintiff/respondent was statute barred. The ob- b jection was heard and considered by the trial court and in its considered ruling dated 28 February, 1995, the learned trial court overruled the objection and held that the action was not statute barred. It dismissed the objection. The appellant c was not happy with the ruling aforesaid, and with the leave of this Court granted on 10 July, 1995, the appellant filed an appeal on 14 July, 1995 in this Court against the ruling delivered on 28 February, 1995. d The substantive case then went to trial. Both parties called witnesses and tendered some exhibits at the trial. In its final judgment delivered on 8 December, 1995, the learned trial court found for the plaintiff/respondent against the defen- e dant/appellant. Dissatisfied with the said judgment, the appellant appealed to this Court on 20 December, 1995. The two appeals, namely:– f (i) appeal filed on 14 July, 1995 against the ruling delivered on 28 February, 1995; and (ii) appeal filed against the final judgment delivered on 8 December, 1995 g were consolidated by the order of this Court granted on 29 January, 2002. By a further amended notice of appeal filed on 13 Febru- h ary, 2002, the appellant based its appeal on eight grounds of appeal. From the eight grounds of appeal, the appellant formulated seven issues for determination. The issues are as follows:– i “(1) Whether the learned trial Judge was right in framing a different case for the plaintiff when he held in his interlocutory ruling that the plaintiff’s case is not based on simple contract and tort but on plaintiff’s title on the mortgaged property. j (2) Whether the plaintiff’s claim is statute barred.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 394 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(3) Whether exhibit 12 is in issue between the parties as to a make it relevant to this case. (4) Whether the learned trial Judge was right when he held that the plaintiff’s certificate of occupancy in respect of the property in dispute was handed over to the defendant. b (5) Whether the learned trial Judge was right when he held that the defendant owed the plaintiff a duty to insure the latter’s property. (6) Whether the plaintiff is entitled to the damages awarded in c his favour. (7) Was the learned trial Judge right when he declared that the interest rate chargeable on the loan of N22,000 as at February, 1982 by the defendant is fixed at all times for the d plaintiff?” The respondent also raised two issues from the grounds of appeal filed by the appellant. The two issues run as follows:– e “(1) Whether Suit No. PLD/J.l8/91 as filed by the respondent then plaintiff is statute barred. (2) Whether the plaintiff proved his case on the balance of probability and is therefore entitled to judgment as per the judgment of the trial court.” f In arguing issue 1 raised by the appellant the learned Coun- sel to the appellant referred to the ruling of the trial court delivered on 28 February, 1995, and in particular the findings g of the trial court, wherein the court held as follows:– “It is clear that from the writ of summons and the amended statement of claim, the plaintiff’s claim is based on mortgage loan which he obtained from the defendant and developed his property which was demolished and he now wants the defendant to pay him h the value of his development which is N437,803. This is the main claim. The claim of N200,000 being general damages is not the cause of action because general damages must be attached to a cause of action. In this case what is the contract? The contract is i the agreement for the mortgage loan. The issue of insurance raised in paragraph 14 of the amended claim is just one of the conditions or terms of the mortgage agreement to be fulfilled. The defendant is not insurance institution and therefore the plaintiff is not claiming on insurance contract. The insurance aspect is a collateral j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Bank of the North Limited v. Alhaji Haruna Garba Gana 395 a agreement to the mortgage agreement which is the substance of the claim. The plaintiff is not suing for damages simpliciter and to stretch the use of the word damages and into the statute of limitation will be absurd. We cannot sever the issue of damages from the b issue of title since the defendant has the title documents of the plaintiff as part of the conditions for providing the loan facility. I therefore hold that the application that the action is based on damages is misconceived” (see pages 80–81 of the record of appeal). c The learned Counsel also referred to paragraphs 15, 16, 17, 18, 19, 20 and 24 of the further amended statement of claim and testimony of the plaintiff/respondent at the trial and submitted that it was clear that the learned trial Judge devi- d ated from the plaintiff’s case. He argued that the plaintiff’s case was limited to breach of an alleged contract which the plaintiff entered with the defendant to insure his property in 1982. He submitted that the trial Judge’s reference to “title” e was not relevant as the plaintiff did not claim for declaration of title. He submitted that the trial Judge was wrong in framing a different case for the plaintiff when he held in his ruling that the plaintiff’s case was not on contract and tort f which could be affected by statute of limitation. He urged the court to allow the appeal. As indicated earlier, the respondent formulated two issues on which he proffered argument. None of the two issues re- g lated to issue 1 formulated by the appellant, namely whether the learned trial Judge was right in framing a different case for the plaintiff when he held in his interlocutory ruling that the plaintiff’s case was not based on simple contract and tort h but on the plaintiff’s title on the mortgage property. A careful examination of the argument of the respondent clearly shows that the respondent did not proffer any argument on issue 1 raised by the appellant. i Authorities abound that in order to determine or ascertain the claim of a plaintiff, one only needs to examine the writ of summons and the statement of claim. In the instant case, paragraphs 7, 8, 15, 16, 19, 20 and 24(i) and (ii) of the fur- j ther amended statement of claim clearly show the nature of

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 396 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) claim of the plaintiff/respondent before the trial court. Para- a graphs 7, 8, 15, 16, 19, 20 and 24(i) and (ii) of the further amended statement of claim read as follows:– “(7) The plaintiff did not have enough money to complete the b houses within the time limited as required by his prospective tenants, the Nigeria Police. The plaintiff then approached his bankers, Bank of the North Plc for a loan facility of N300,000. Based on the above, the manager of the defendant’s branch office in Jos informed the plaintiff that c there are certain conditions which he has to fulfil before the loan is granted. They are:– (a) To submit a Valuation Report of the said property ie TII Dadin Kowa Street, Jos. d (b) Sign an application for consent to mortgage the property and pay the consent fee. (c) To surrender his certificate of occupancy for the property. The plaintiff avers that he had earlier been in- e formed by the manager of the defendant Jos branch that upon fulfilment of the above conditions his request will be granted. (8) That he fulfilled all the above conditions as demanded by f the Bank. . . . (15) The plaintiff avers that at the time he handed over the documents mentioned in paragraph 8 above to the defen- g dant’s branch office in Jos it was orally agreed that the defendant would case (sic) the property ie No. TII Dadin Kowa, Jos to be insured with a reputable firm of insurers against any loss, damage or damages and then debit the h plaintiffs account. The account (sic) for which the property was to be insured was as per the valuation Report. (16) Having delivered all the required documents to the defendant as demanded the plaintiff honestly believed that the de- i fendant would insure the property as per their earlier agreement. (19) The plaintiff avers that by reason of the defendant’s negligence to insure his property aforesaid the damage he has suffered and which is continuing is very high in that the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Bank of the North Limited v. Alhaji Haruna Garba Gana 397 a present value of building materials have skyrocketed almost ten times over and above what it was when he built the house. PARTICULARS OF NEGLIGENCE b Failure to insure the property. (24) By reason of the above premise the plaintiff has suffered loss and damage and claims from the defendant as follows:– c (i) N437,803. being the value of the improvement on Plot TII Dadin Kowa, Jos, which the defendant neglected to insure. (ii) N2.5million being general damages for breach of con- d tract and/or negligence. (iii) A declaration that the interest rate chargeable. On the sum of N22,000 advanced to the plaintiff in 1982 as overdraft is the rate prevailing as at February, 1982 e and that the defendant cannot unilaterally vary the said rate without the knowledge and consent of the plaintiff.” Clearly from the combined provisions of the paragraphs of f the statement of claim quoted above, the plaintiff/respondent was claiming in contract and in tort. He was claiming for breach of contract to insure the property and in tort for failure or negligence of the defendant/appellant to insure the g said property. In his evidence the plaintiff/respondent stated inter alia as follows:– h “The bank promised to ensure (sic) the property but they did not do so. I am claiming as per my statement of claim. I gave the bank my certificate of occupancy. The bank did not inform me that they will not insure my property. In fact they said they will deduct from my accounts and pay the legal fees as well as insurance.” i It is clear beyond doubt from the pleadings and evidence of the plaintiff before the trial court that the plaintiff was claiming for breach of contract by or negligence of the defendant for failing to insure the said property. In that regard, j I am of the view that the learned trial Judge did not

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 398 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) appreciate rightly the case of the plaintiff/respondent when a he said in his judgment that:– “The plaintiff is not suing for damages simpliciter and to stretch the use of the word damages into the statute of limitation will be b absurd. We cannot sever the issue of damages from the mortgage agreement, and in any case you cannot run away from the issue of title since the defendant has the title documents of the plaintiff as part of the conditions for providing the loan facility.” c The claim of the plaintiff/respondent is damages for breach of contract and/or negligence for failure of the defendant to insure the property in question. Certainly, the learned trial Judge has made out a case different from the case of the d plaintiff/respondent for the plaintiff/respondent, which I think was wrong for the trial court to do. In Commissioner for Works, Benue State v Devcon Ltd (1988) 3 NWLR (Part 83) 407 at 420 the Supreme Court, e per Karibi-Whyte JSC, held as follows:– “It is an elementary and fundamental principle for the determination of disputes between parties that the judgment must be con- fined to the issues raised by the parties. It is clearly not competent f for the Judge suo motu to make a case for either or both of the parties and then proceed to give judgment on the case of the parties before him. It is settled that a plaintiff is bound by the case put forward in the writ of summons.” g Also in Bakare v L.S.C.S.C. (1992) 8 NWLR (Part 262) 641 at 693, Karibi-Whyte JSC again stated as follows:–

“Respondents did not plead that appellant was dismissed from the h service of the first respondent. This court cannot by inference on the facts so hold. The finding by the learned trial Judge is tanta- mount to making a new case for the respondent which the respondent did not himself make. In the instant case, it is inconsistent with the evidence before him. By this action the trial Judge has i abandoned his role of an unbiased umpire between the parties and constituted himself a party to the litigation. Our adversary procedure and judicial oath not lightly frown at such conduct, but unequivocally and decisively rejects in its entirety every proceeding so tainted.” j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Bank of the North Limited v. Alhaji Haruna Garba Gana 399 a On the above authorities it is very clear that the court, no matter how vigilant or generous, cannot by its overzealous- ness or fastidiousness, surreptitiously steal, as it were, the legal barrel from the combatant (ie the parties) by arbitrarily b imposing proof of matters not within the contemplation of the case already made out by the parties. In the instant case, it is my view that the learned trial Judge failed to address himself to the issue raised on the pleadings and the evidence c led by the plaintiff/respondent before the trial court. I think he had no right to frame a different case for the plaintiff as he did in his ruling. d Issue 2 formulated by the appellant and issue 1 in the respondent’s brief are similar and the same in substance. They both question whether or not the plaintiff’s claim in Suit No. PLD/J/18/91 was statute barred. e In arguing the issue the learned Counsel to the appellant referred to paragraph 17 of the further amended statement of claim and paragraph 23 of the further amended statement of defence. He also referred to the evidence given by the plain- f tiff/respondent and the motion filed by the defendant/ appellant challenging the action and submitted that the suit of the plaintiff/respondent was statute barred. He referred to the English Limitation Act of 1623, a statute of general ap- g plication. He also referred to the case of Woherem v Em- ereuwa (2000) 3 NWLR (Part 650) 529 at 538; Iweka v Scoa (2000) 7 NWLR (Part 664) 325 at 342. He argued that, in the instant case, time started to run in October, 1982 when h the plaintiff’s/respondent’s property was demolished. He submitted that, since the writ of summons in this case was not issued and/or filed until 24 January, 1991, the action was statute barred. He urged the court to allow the appeal. i The learned Counsel to the plaintiff/respondent argued to the contrary. He referred to the objection raised by the defendant/appellant to the effect that the action of the plaintiff/respondent was statute barred by virtue of the Limitation j Act, 1623. He argued that to determine whether the action

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 400 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) was statute barred, the court would have to consider the na- a ture of the claim and also when the cause of action arose. He argued that, in the instant case, the cause of action did not arise when the building on Plot No. TII was demolished but b when the respondent became aware of the fact that the property was not insured. He said that there was no evidence before the court as to when exactly the respondent became aware of the fact that the property was not insured. The c learned Counsel argued in the alternative, that assuming, which was not conceded, that the time when the cause of action arose was determined, the court still have to consider carefully the nature of the claim. He argued that in the in- d stant case, the main claim was for the sum of N437,803 (Four Hundred and Thirty-seven Thousand, Eight Hundred and Three Naira), being the value of the improvement on Plot No. TII Dadin Kowa, Jos. He said that the second claim e in the statement of claim for damages was ancillary to the main claim. He stated that the main claim was a claim for improvement on land related to interest in land. He argued that by the provisions of the Statute of Limitation, 1623, a f claim which bothered on interest to land had a limitation period of 12 years. He contended that, even if the cause of action arose in 1982, the action was not statute barred since it was . . . on 24 January, 1991. He urged the court to dismiss g the appeal. The Statute of Limitation is not a recent invention of modern civilisation. It was applied to the state of education and h civilisation which existed in England as early as 1623. The aim and object of a statute of limitation were clearly stated by Tobi JCA (as he then was) in Mercantile Bank of (Nig.) Plc v Feteco (Nig.) Ltd (1998) 2 NWLR (Part 540) 143 at i 156–157. He said:– “A statute on limitation of action is designed to stop or avoid situations where a plaintiff can commence action any time he feels like doing so, even when human memory would have normally faded and therefore failed. Putting it in another language, by the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Bank of the North Limited v. Alhaji Haruna Garba Gana 401 a statutes of limitation, a plaintiff has not the freedom of the air to sleep or slumber and wake up at his own time to commence an action against a defendant. The different statutes of Limitation which are essentially founded on the principles of equity and fair play, b will not avail such a sleeping or slumbering plaintiff. He will be estopped from commencing the action and that is a just and fair situation. A plaintiff who suddenly wakes up from a very deep sleep only to remember that the defendant has wronged him, can, I think, be rightly ‘greeted’ by the defendant with the appropriate c limitation statute, waving same at him as basis for redress. That was what the respondent did and I think the law allows it to do so. A plaintiff has no right to give the impression to a defendant by his sleep or slumber that he is no more interested in pursuing is legal d right, only to wake up suddenly and quite late in the day to do so. That cannot be justice. A law which is designed to Police such a situation cannot, with respect to learned Counsel for the appellant, be called technical justice.” e The above dictum is precisely the rationale behind the principle of limitation of action. In actualising the above principle, section 28 of the High Court Law, Cap 49 of the Laws of Northern Nigeria, 1963 which is in pari materia with section 28 of the High Court Law of Plateau State brings into f force in Plateau State, the provisions of the Limitation Act, 1623 in England in the following terms:– “28 Subject to the provisions of any written law and in par- g ticular of this section and of sections 26, 33 and 35 of this Law:– (a) the common law; (b) the doctrine of equity; and h (c) the statutes of general application which were in force in England on 1 January, 1900, shall, in so far as they relate to any matter with respect to which the Legislature of the state is for the time being compe- i tent to make laws be in force within the jurisdiction of the court.” From the above provisions of section 28 of the High Court Laws of Northern Nigeria, 1963 and section 28 of the Pla- j teau State High Court Law it is indisputable that the English

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 402 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Limitation Act, 1623 which was in force in England on 1 a January, 1900, is also applicable in Plateau State. In the instant case, the plaintiff/respondent made it very clear in paragraphs 19, 20 and 24 of the further amended b statement of claim that he was claiming in contract and/or in tort. Paragraphs 19, 20 and 24(i) and (ii) of the further amended statement of claim read as follows:– “19 By reason of the defendant’s refusal or neglect to insure c the plaintiff’s property No. TII as agreed the plaintiff has suffered an entire loss for which he is entitled to be compensated by the defendant who shall still has custody of his Certificate of Occupancy over the plot. d 20 The plaintiff avers that by reason of the defendant’s negligence to insure his property aforesaid the damage he has suffered and which is continuing is very high in that the present value of the building materials have skyrocketed almost ten times over and above what it was when e he built the house. PARTICULARS OF NEGLIGENCE Failure to insure the property. 24 By reason of the above premises the plaintiff suffered f loss and damage and he claims from the defendant as follows:– (i) N437,803 being the value of the improvement on Plot No. TII Dadin Kowa, Jos which the defendant g neglected to insure. (ii) N2.5million being general damages for breach of contract and/or negligence . . .” h From the above paragraphs of the further amended statement of claim filed by the plaintiff, there can be no doubt that the plaintiff was claiming damages for breach of contract and/or tort. The contention of the learned Counsel for the plaintiff/ respondent to the effect that the plaintiff/respondent was i claiming the value of the land and therefore his claim related to interest in land which could only be statute barred after a period of 12 years does not seem to hold any water. The plaintiff was not claiming for declaration of title or trespass j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Bank of the North Limited v. Alhaji Haruna Garba Gana 403 a to land. His claim is clearly for damages for breach of contract to insure the property as agreed or for negligence in failing to insure the said property. In that regard, the period of limitation applicable is only six years. The plaintiff stated b in his evidence before the trial court inter alia as follows:– “The bank did not tell me that I should insure the property or they will insure it. The bank said they will insure the house but they did not do so.” c In the circumstance, I am of the view that the claim of the plaintiff/respondent is for damages for breach of contract and/or in tort. It is also not based on mortgage as claimed by the learned trial Judge in his ruling. d The learned Counsel to the appellant submitted in his brief that the applicable Law in this case was the English Limita- tion Act of 1623, a statute of general application in force on e 1 January, 1900 in England (see section 28 of High Court Laws of Northern Nigeria, 1963 and section 28 of High Court Laws of Plateau State, 1987). In determining whether a particular statute is statute barred f the court will seek to know the followings:– (1) When did the cause of action arise? (2) When did the plaintiff file the action? In other words, how is period of limitation determined? g The answers to the above questions were provided by Pat Acholonu JCA (as he then was) in Woherem v Emereuwa (2000) 3 NWLR (Part 650) 529 at 538 as follows:– h “When did the cause of action arise? A cause of action arises at the date or time when a breach or any act that would warrant the person ie the victim who is adversely affected by the act of another to take action in court. Such legal right conferred is not expected to last for eternity. It is limited and after the date in which the statute i says no such legal proceedings may be taken, then the affected person cannot competently institute an action in court. A cause of action is thus said to be statute barred if in respect of it, proceedings cannot be brought because the period laid down by the Limi- tation Law or Act had elapsed. How does one determine the period j of limitation? The answer is simple – by looking at the writ of

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 404 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

summons and the statement of claim alleging when the wrong was a committed which gave the plaintiff a cause of action and by com- paring that date with the date on which the writ of summons was filed. This can be done without taking oral evidence from witnesses. If the time on the writ is beyond the period allowed by the b Limitation Law, then the action is statute barred.” On when time starts to run, the Supreme Court, per Onu JSC, in Iweka v Scoa (2000) 7 NWLR (Part 664) 325 at 342, stated the law as follows:– c “It is settled law that in actions for breach of contract, the cause of action accrues for the plaintiff’s benefit from the time the breach is committed and not when the damage is suffered.” In the instant case, the plaintiff/respondent stated the time d when the cause of action accrued in paragraph 17 of the further amended statement of claim as follows:– “(17) Sometime in October, 1982, one Maimako Oumur Shit- tien, a legal practitioner, used a bull dozer machine to e demolish the entire building on Plot No. TII aforesaid. The plaintiff immediately reported the matter to the Po- lice and also wrote several letters to the defendant informing them of same . . .” f From the wordings of paragraph 17 of the further amended statement of claim, the alleged property of the plaintiff/ respondent was demolished in October, 1982. The plaintiff stated that he even informed the defendant and the police g about the demolition. Since the plaintiff informed the defendant about the demolition of the said property, I would assume that the plaintiff knew or believed that he had a cause of action against the defendant. With the averments in para- h graph 17 of the further amended statement of claim, namely, that the said property was demolished by one legal practitioner, Mr Maimako Oumar Shittien in October, 1982, and the evidence of the plaintiff/respondent before the trial court to the effect that the plaintiff/respondent discovered that the i defendant did not insure the property in question when the property was demolished; and that the plaintiff/respondent wrote and went personally to the defendant/appellant and he was informed by the defendant/appellant that the matter did j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Bank of the North Limited v. Alhaji Haruna Garba Gana 405 a not concern the defendant/appellant, it is my view and I so hold that the cause of action in this case accrued for the benefit of the plaintiff/respondent from October, 1982 when the property was demolished and the defendant/appellant b told the plaintiff/respondent that the matter did not concern the defendant/appellant. As could be seen on pages 1 and 2 of the record of appeal, c the writ of summons was filed by the plaintiff/respondent against the defendant/appellant on 24 January, 1991, ie a period of eight years after the cause of action arose. In Robert Koney v Union Trading Co Ltd (1934) 2 d W.A.C.A. 188 at 194, the West African Court of Appeal, per Graham Paul J, had the following to say on the Statute of Limitation, 1623:– “He issued his writ in September, 1933, claiming £500 damages e for breach of contract which he alleges took place in October, 1924 – practically nine years before . . . This Statute of Limitation is not a recent invention of modern civilization. It was applied to the state of education and civilization which existed in England in 1623, and I find nothing at all startling f in applying it to an educated African today. For the reason I have given I think the statute of limitation applied in this case and the claim is statute barred – the cause of action having arisen in October, 1924 and the action not issued till Sep- g tember, 1933. I cannot accept the argument of Counsel for the respondent that this is a specialty debt and therefore unaffected by the 1623 Act.” From the averment in paragraph 17 of the further amended h statement of claim and the evidence given by the plaintiff/ respondent before the trial court in the case and the authorities earlier referred to, I have no difficulty in coming to a conclusion that the action of the plaintiff/respondent in this case, commenced on 24 January, 1991, is statute barred by i virtue of the provisions of the English Limitation Act of 1623, which under the provisions of section 28 of the High Court of Northern Nigeria Law, Cap 49 of 1963, was applicable in Plateau State in 1982 when the cause of action ac- j crued. Under the English Limitation Act of 1623, no action

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA 406 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) founded on contract or tort shall be brought after the expira- a tion of six years from the date on which the cause of action accrued. Having found and held that the action of the plaintiff/ b respondent is statute barred, the next question that calls for an answer is the order to be made. In Lamina v Ikeja Local Government (1993) 8 NWLR (Part 314) 758 at 771 this Court, per Ubaezonu JCA, stated c the law as follows:– “Where a court finds that an action is statute barred, such findings is an end to the action. As at that stage, that cause of action is not capable of re litigation. The proper order is one of dismissal. A d successful plea of a statute of limitation is a complete answer to the action.” Similarly, in Egbe v Adefarasin (1985) 1 NWLR (Part 3) 549 at 568 and 570, the Supreme Court, per Karibi-Whyte e JSC, stated as follows:– “The general principle of law is that where the law provides for the bringing of action within a prescribed period in respect of a cause of action accruing to the plaintiff, proceeding shall not be f brought after the time prescribed by the statute . . . An action brought outside the prescribed period offends against the provision of the section and does not give rise to a cause of action. . . . The Court of appeal was in my opinion right to have endorsed the g dismissal of this claim by the learned trial Judge. For the reasons I have stated above, the claim is dismissed.” Once an action is statute barred and is so declared by the court of competent jurisdiction, that is the end of that action. h That cause of action is incapable of re-litigation and should therefore be dismissed. In that regard, having found and held that the action of the plaintiff/respondent in this case is statute barred, the proper order is one of dismissal. Accordingly, i the claim of the plaintiff/respondent before the trial court is hereby dismissed. Having come to the conclusion that the claim of the plaintiff/respondent is statute barred and should be dismissed, and j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Obadina JCA Bank of the North Limited v. Alhaji Haruna Garba Gana 407 a having dismissed same, I do not see the need to go into consideration of the other issues raised by the appellant. To consider the other issues raised is to embark on an academic ex- b ercise which I am not prepared to undergo. In the final analysis, there is merit in the appeal. The appeal therefore succeeds and it is accordingly hereby allowed. The decisions of the learned trial Judge contained in the rul- c ing delivered on 28 February, 1995 and the final judgment delivered on 8 December, 1995 are hereby set aside. In their place I enter a judgment dismissing the entire claim of the plaintiff/respondent in Suit No. PLD/J/18/91. d The plaintiff/respondent shall pay the costs of the appeal assessed at N10,000 (Ten Thousand Naira) to the defendant/appellant. e MUKHTAR JCA: I have had the privilege of reading the judgment of my learned brother, Obadina JCA, before it was delivered. I would, however, want to elaborate on the issue raised by learned Counsel for the appellant which I consider to be primary in the treatment of this appeal, for if the issue f is resolved in favour of the appellant then the appeal may be laid to rest even on the issue alone. This issue is issue 2 in the appellant’s brief of argument, which is, whether the plaintiff’s claim is statute barred? To commence the treat- g ment of this issue I find it pertinent to reproduce the relevant averments in the plaintiff/respondent’s amended statement of claim which read:– “(14) The plaintiff avers that as at the time he handed over the h documents mentioned in paragraph 8 above to the defendant’s branch office in Jos it was orally agreed that the defendant would cause the property ie No. TII Dadin Kowa, Jos to be insured with a reputable firm of Insurers against i any loss or damage and then debit the plaintiff’s account. The amount for which the property was to be insured was as per the Valuation Report. (16) Sometimes in October, 1982, one Maimako Oumar Shit- tien a Legal Practitioner, used a bull dozer machine to de- j molish the entire building on Plot TII aforesaid. The

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Mukhtar JCA 408 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

plaintiff immediately reported the matter to the police and a also wrote several letters to the defendant informing them of same. The plaintiff hereby pleads the said letters and shall rely on them at the hearing of this case. Defendant is given notice to produce the original copies in its posses- b sion. (18) By reason of the defendant’s refusal or neglect to insure the plaintiff’s property No. TII as agreed the plaintiff has suffered an entire loss for which he is entitled to be com- c pensated by the defendant who still has custody of his Cer- tificate of Occupancy over the plot. (22) By reason of the above premise the plaintiff has suffered loss and damage and he claims from the defendant as fol- d lows:– (i) N437,803, being the value of the improvement on plot TII Dadin Kowa, Jos which the defendant neglected to insure. e (ii) N200,000 being general damages for breach of contract.” It is clear from the above averments that the loss incurred by the plaintiff/respondent arose from the demolition of his f house which occurred in October, 1982, and it was the said demolition that led to the institution of the action that is the subject of this appeal. The cause of action thus arose in the said October, 1982. On the other hand, if the refusal of the g defendant/appellant to insure the property is the cause of action then we don’t know the date of the accrual of the cause of action, as the date of the supposed insurance of the property is not known. I can only deduce that it was in 1981, h from paragraph (8) of the amended statement of claim. I will take the former position first, ie that the cause of action arose in October, 1982. As can he seen from the writ of summons on page 3 of the record of proceedings, the suit i was commenced in March, 1991, which when the years in between are counted are nine years apart. Perhaps it is instructive to note that, even though the demolition occurred in 1982, it took plaintiff a period of nine years before he j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Mukhtar JCA Bank of the North Limited v. Alhaji Haruna Garba Gana 409 a woke up from his slumber. In other words, he dragged his feet throughout this period thinking that he can at his own pace and leisure institute an action when he is ready or dis- b posed to doing so, without any inkling of whether he has the whole time in the world to do so, or that the law places certain constraint on him as to limit the period within which a civil action can be commenced. Of course there are limita- c tions prescribed by law for the institution of actions, and the present action was caught by such law. When such actions are caught by the law, then such actions become statute barred, and become lifeless. By virtue of the Limitation Act, d 1623, which is a statute of general application, the instant suit cannot be heard and determined as the law forbids it. So also section 7(4) of the Limitation Decree No. 88 of 1996 which provides that a suit cannot be instituted after the expi- e ration of six years. So whether the present action is predicated on breach of contract or tort the plaintiff is disallowed from commencing litigation over six years after the cause of action has accrued. The case from which this appeal ema- f nated was definitely commenced after the six year-period allowed, which ever way one looks at it, and it is statute barred (see Texaco Panama Inc. v Shell P.D.C.N. Ltd (2002) 5 NWLR (Part 759) 209 and Gulf Oil Co (Nig.) Ltd v Oluba g (2002) 12 NWLR (Part 780) 92). The suit is statute barred and should not have been heard and determined by the trial court. In this wise, I agree with the reasoning and conclusion reached in the lead judgment h that the appeal succeeds and is allowed. I abide by the consequential orders made in the lead judgment. SANUSI JCA: The judgment of my learned brother, Obadina JCA, was made available to me and I read the same in ad- i vance. I agree with him that there is merit in the appeal. I therefore set aside both the ruling of the lower court delivered on 8 February, 1995 and the judgment of the court delivered on 8 December, 1995. I also substitute them by dis- j missing the reliefs sought by the respondent (plaintiff) in the

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, JOS DIVISION) Sanusi JCA 410 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) suit filed and fought at the lower court. I endorse the costs of a N10,000 awarded to the defendant (appellant). Appeal allowed.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

Baladec Tech. Company Limited v. Intercity Bank Plc 411 a Baladec Tech. Company Limited and 5 others v Intercity Bank Plc b COURT OF APPEAL, KADUNA DIVISION JEGA, ALAGOA, BA’ABA JJCA Date of Judgment: 16 DECEMBER, 2004 Suit No.: CA/K/281/03 c Practice and procedure – Service of process – Object of Practice and procedure – Undefendend list – When to transfer from undefended list to general cause list d Facts The first appellant/defendants applied to the respondent/ plaintiff for a finance/facility of N4,000,000 (Four Million e Naira only) to enable the appellants to partly finance a contract awarded by the National Electric Power Authority (NEPA) for repairs of high voltage electric transformers. The respondent approved the facility. The first appellant f accepted the terms and conditions stated in the letter of approval of the respondent and endorsed the approval letter. The first appellant deposited as security the original Certifi- cate of Occupancy No. LKN/RES/9/2505 issued in the name g of Alkali Abdullahi Shettima together with the original deed of assignment. The second to sixth appellants, respectively, personally guaranteed the facility. The first appellant drew down the N4 million and agreed to liquidate same within 60 h days, but failed or omitted to repay the outstanding sum of N6,104,450.55. The facility expired on 9 December, 2001. The first appellant, by a letter dated 4 December, 2001, requested for an i extension of time of eight weeks and the respondent approved the application for extension. Thereafter, several demands both oral and written were made to the appellants but the appellants refused to liquidate the amount out- j standing against them. The first appellant in replying to the

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

412 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) respondent’s letter of demand admitted their indebtedness to a the respondent, promising to pay the debt. The appellants refused to liquidate the amount and the respondent through their solicitors caused a letter of demand to be written to the b first appellant. Till the time of institution of the suit, the appellants refused to liquidate the outstanding sum of N6,104,450.35 as at the close of business on 31 January, 2003. c The appellants/defendants filed a motion and notice of intention to defend the suit on 24 March, 2003, whereupon the trial court listened to the arguments of Counsel and refused the prayers in the motion, and on 31 March, 2003 the court d entered judgment for the respondent against the appellants. The appellants being dissatisfied with the decision of the learned trial Judge of the Kaduna State High Court lodged e an appeal to the Court of Appeal. The appellants contended that only one copy of the writ of summons and the drawn-up order was served on one of the six defendants, and that no attempts were made to prepare f copies for the other five defendants, talk less of serving them. It was argued that the provisions of the rules were clear to the effect that a writ of summons meant for each and every other defendant has to be delivered to each of them. It g was submitted that there having been no services on the said defendants, the proceedings, judgment and orders against them by the trial court were done without competence and jurisdiction and therefore a nullity. h The respondent on the other hand argued that by a motion ex parte dated 24 February, 2003 and brought pursuant to Order 22 rule 1; Order 12 rule 5(b) of the High Court (Civil Procedure) Rules of Kaduna, ordered service on the defen- i dant by substituted means. That on 24 March, 2003 the parties were represented by Counsel and the appellants’ Coun- sel never appeared on protest or conditionally and never raised the issue of service on the first, third to sixth j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

Baladec Tech. Company Limited v. Intercity Bank Plc 413 a appellants of the trial court, hence he submitted to the jurisdiction at the trial court on behalf at all the appellants. That for the Counsel to raise the issue of service after the judg- b ment against the appellants was an afterthought and misconceived.

Held – c 1. The object of all types of service of process, whether personal or by substituted means, is to give notice to the other party to whom service is to be effected so that he may be aware of the case against him and resist, if he d may, that which is sought against him. 2. To secure the transfer of the action from the undefended to general cause list, the appellant must disclose or raise e on the affidavit accompanying the notice of intention to defend, a defence on the merit. The triable issue envisaged should not be at large but related to the defendant’s defence. Defence are facts which, if proved, would exonerate the defendant from the plaintiff’s claim. The af- f fidavit is required to set up a defence against the plaintiff’s claim and not to make up fresh suit or cause of action against the plaintiff. g Per curiam “It is glaring that from the evidence before the trial court, that is the exhibits, letters of request, letter of approval, equitable mortgage, personal guarantee of the second to sixth h appellants all go to secure the facility, to secure the repayment of the facility which the appellants are not denying and to further show that the appellants are indebted to the respondent. All the exhibits mentioned are not contrary to the facility nor do they deny the appellants’ indebtedness to i the respondent in any way. It is crystal clear, from the nature of the case and evidence adduced before the trial court, all the conditions precedent to the institution of the suit has been complied with.” j Appeal dismissed.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

414 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Cases referred to in the judgment a Nigerian Adegoke Motors Ltd v Adesanya (1989) 3 NWLR (Part 109) 250 b Degi v Francis (1999) 3 NWLR (Part 596) 576 Federal Military Government of Nigeria v Sani (1990) 4 NWLR (Part 147) 688 c Iloabuchi v Ebigbo (2000) 4 SC (Part II) 124 Saraki v Kunini (2001) 6 NWLR (Part 708) 212

Nigerian rules of court referred to in the judgment d High Court (Civil Procedure) Rules of Kaduna State, 1987, Order 22 rules 1 and 3, Order 12 rule 5 High Court (Civil Procedure) Rules of Kano State, 1988, Order 23 rule 3(1) e

Counsel For the appellants: Ekhasemomhe (with him Kyaga) f For the respondent: Ibinola (Mrs)

Judgment JEGA JCA: (Delivering the lead judgment) This is an appeal g against the judgment of the Honourable Justice Gwadah of Kaduna State High Court of Justice delivered on 31 March, 2003 in Suit No. KDH/KAD/120/03 wherein the learned trial Judge entered judgment on the undefended list against h the defendants/appellants in favour of the plaintiff/ respondent for N6,104,450.38 (Six Million, One Hundred and Four Thousand, Four Hundred and Fifty Naira, Thirty- eight Kobo only) being the balance outstanding against the appellants’ account at the respondent’s bank and which in- i debtedness arose from a corporate advance facility granted to the appellants at their request, the balance of which the appellants refused, omitted or neglected to liquidate in spite of several numerous demands. The judgment also includes j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA Baladec Tech. Company Limited v. Intercity Bank Plc 415 a interest at 29% from 1 February, 2003 until judgment is delivered and thereafter at 10% until the amount is liquidated. The facts of this case as can be gathered from the record of b proceedings before the court are as follows: The first appellant in this appeal is a limited liability company registered in Nigeria and doing business at H.H. 44 Western By Pass, opposite Nation House Press Limited, Nassarawa, Kaduna. c The second to the sixth appellants are all directors of the first appellant with the second appellant as the chairman/ CEO of the first appellant. The respondent is a company carrying on the business of banking with its head office at d Mogadishu City Centre at Ahmadu Bello Way, Kaduna and it has branches in several parts of Nigeria amongst which is the Kaduna South Branch. The first appellant, a customer of the respondent, operates e account no. 160200013161 which is heavily indebted by reason of facility granted the first appellant by the respondent at the appellants’ request. The first appellant applied to the respondent for the facility N4,000,000 (Four Million f Naira only) to enable the appellants to partly finance a contract awarded by National Electric Power Authority (NEPA) for repairs of high voltage electric transformers. The respondents in response to the application for the facility by the g appellants approved the facility. The first appellant accepted the terms and conditions stated in the letter of approval of the respondent and endorsed the approval letter. The first appellant deposited the original Certificate of Occupancy h No. LKN/RES/93/2565, issued in the name of Alkali Abdul- lahi Shettima, together with the original deed of assignment. The second to sixth appellants respectively personally guaranteed the grant of the facility to the first appellant. The first i appellant withdrew the N4,000,000 (Four Million Naira) and agreed to liquidate same within 60 days but failed or omitted to repay the amount outstanding against their account. The facility expired on 9 December, 2001. The first appellant by j a letter dated 4 December, 2001 requested for an extension

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA 416 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) of time of eight weeks and the respondent approved the ap- a plication for an extension of time of eight weeks. Thereafter several numerous demands both oral and written were made to the appellants after the expiration of the extension, but the b appellants refused to liquidate the amount outstanding against them. The first appellant in reply to the respondent’s letter of demand admitted their indebtedness to the respondent, promising to pay the debt. The appellant refused to c liquidate the amount and the respondent, through its solicitors, A.T. Usman, Ibinola and Co, who in turn caused a letter of demand to be written to the first appellant. Till the time of institution of the suit on the undefended list, the ap- d pellants refused to liquidate the sum of N6,104,450.38 (Six Million, One Hundred and Four Thousand, Four Hundred and Fifty Naira, Thirty-eight Kobo) which sum is outstanding against the appellants as at the close of business on e 31 January, 2003. The respondent’s interest rate at the time of institution of the suit was 29%. The appellants filed a motion and notice of intention to defend on 24 March, 2003, the trial court listened to arguments f of Counsel and refused the prayers in the motion and on 31 March, 2003 the court entered judgment in favour of the respondent against the appellants. The appellants, being dissatisfied with the decision of the learned trial Judge, lodged an g appeal against same (vide notice of appeal dated 31 March, 2003 containing four grounds of appeal). We took the appeal on the 27 September, 2004, the learned h Counsel to the appellants adopted and relied on the appellants’ joint brief of argument dated 12 November, 2003 and filed on 4 December, 2003 and urged us to allow the appeal. Learned Counsel to the respondent adopted and relied on his i brief of argument dated 31 December, 2003 and filed 16 January, 2004 and urged us to dismiss the appeal. This appeal is predicated upon four grounds of appeal and, from the four grounds of appeal, learned Counsel to the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA Baladec Tech. Company Limited v. Intercity Bank Plc 417 a appellants formulated two issues for determination. The two issues are as follows:– “1. Whether or not the Honourable trial Judge was competent b to proceed to hearing and entering judgment in a suit in which the writ of summons was not served on five out of the six defendants. 2. Whether or not the Honourable Trial Judge had jurisdiction to entertain a Suit relating to a transaction in which several c conditions precedent had not been complied with.” Learned Counsel to the respondent formulated one issue for determination which read thus:– d “Whether based on the facts before the trial court, the learned trial Judge properly exercised his jurisdiction in issuing the writ on the undefended list and subsequently after hearing both parties delivering judgment on the undefended list in favour of the respondent.” e The two issues formulated by the learned Counsel to the appellants and the lone issue formulated by the learned Coun- sel to the respondent are one and the same but couched in different words. As such, for the purpose of this appeal, the f issues as formulated by the appellants would serve in the treatment of this appeal. Issue 1: “Whether or not the Honourable Trial Judge was competent to proceed to hearing and entering judgment in a g suit in which the writ of summons was not served on five out of the six defendants.” Learned Counsel to the appellants submitted that it is trite law that without a writ of summons or any other form of commencement of a suit prescribed by h the rules of court having been served on a defendant in a suit it cannot be said that there is a claim against any such defendant before the court, that any proceedings, rulings, judgments or orders made against such a defendant is of no i effect whatsoever (reference made to Skenconsult Nig. Ltd v Godwin Sekondy Ukey (1981) 1 SC 6; Order 12 rules 2 and 5 of the High Court (Civil Procedure) Rules, 1987 of Ka- duna State). Counsel for the appellants contends that the re- j spondent made an application by an ex parte motion seeking

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA 418 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the following orders:– a “(i) An order granting leave to the applicant to serve the writ of summons and all other court processes on the 2 defendant at Marverick Consults Limited NIDB Building, 5th Floor, Ka- duna. b (ii) An order deeming the service of the writ of summons and all other court processes on the second defendant as good and proper service on all the defendants. (iii) And for such further order or orders as the Honourable c Court may deem fit to make in the circumstances of this Suit.” On 3 March, 2003 the court heard the motion ex parte and ruled as follows:– d “The application as brought and moved is granted. The matter is adjourned to 23/3/2003 for hearing and the defendants are to be served with the court order and all other processes accordingly.” That in line with the order of the court, the bailiff served one e copy of the writ of summons with the supporting affidavit and all the documents attached and a copy of the drawn-up order of court on the second defendant at Marverick Con- sults Ltd NIDB Kaduna and he signed for the service him- f self. Learned Counsel for the appellants contends that only one writ of summons with all the necessary documents and only one copy of the drawn-up order was served on one of the six g defendants, unarguably for himself. That no attempts were made to prepare copies of the writ of summons for the other five defendants, talk less of serving them. Learned Counsel for the appellants argues that the provisions of the rules are h clear: if there has to be substituted service say by way of serving several defendants through one of them, the writ of summons meant for each and every other defendant has to be delivered to the one through who substituted service is i being made. That the rule requires that the document served through an agent shall come to the person for whom it is meant. The second defendant in this cause is not reasonably expected to carry his own writ from house to house even if it j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA Baladec Tech. Company Limited v. Intercity Bank Plc 419 a could be reasonably expected that he knew all the other guarantors. Learned Counsel for the appellants submits that there having been no services on the said defendants, b the proceedings, judgments and orders against them by the honourable trial court were done without competence and jurisdiction and they were total nullity. Further, learned Counsel for the appellants contends that the proceeding and c judgment against the second defendant who was served was carried on jointly with the proceedings against those not served without the suit against those not served having been first withdrawn. It follows that the proceedings against second defendant was also a nullity. Learned Counsel for the d appellants urged us to allow this appeal and set aside the judgment of the trial court contained in the ruling of 31 March, 2003. e In his reply to the submissions on issue 1, learned Counsel to the respondent submits that by a motion ex parte dated 24 February, 2003 brought pursuant to Order 22 rule 1, Order 12 rule 5(b) of the High Court (Civil Procedure) Rules of f Kaduna State, 1987 seeking:– “1. An order granting leave for the applicant to issue the writ of summons in this Suit on ‘UNDEFENDED LIST’ on the defendants. g 2. An order granting leave to the applicant to serve the writ of summons and all Other court processes on the second defendant at MARVERICK CONSULTS LIMITED, NIDB Building Kaduna, 5th Floor. 3. An order deeming the service of the writ of summons and h all other court processes on the second defendant as good and proper service on all the defendants. 4. And for such further order or orders as the Honourable Court may deem fit to make in the circumstances of this i Suit.” That on 3 March, 2003, the court listened to the Counsel’s application, granted the prayers as sought by the respondent and ordered service on the defendants accordingly by substi- j tuted means as provided for under Order 12 rule 5(b) of the

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA 420 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

High Court (Civil procedure) Rules, Kaduna State, 1987 a (reference made to Stmcs v Emene (2002) F.W.L.R. (Part 99) 1103 at 1109). That on 24 March, 2003, the parties were absent at the trial court both of them were represented by b Counsel. The appellants’ Counsel never appeared on protest or conditionally and he never raised the issue of service on the first, third to sixth appellants at the trial court, hence he submitted to the jurisdiction of the trial court (reference made to Kisari Investment Ltd v La Terminal Co Ltd (2001) c F.W.L.R. (Part 66) 766 at 786). Learned Counsel for the respondent submits that when the Counsel for the appellants appeared at the trial court, he appeared for all the appellants; that Counsel did not at any time at the trial court raise the d issue of service on the first, third to sixth appellants, he went ahead to announce appearance for and acted for all of the defendants/appellants until judgment was delivered. Learned Counsel for the respondent contends that all the due proc- e esses of law and according to the High Court (Civil Proce- dure) Rules of Kaduna State, 1987 had been followed. It is only when judgment was delivered in the suit against the appellants, that their Counsel turned round as an after- f thought to raise the issue of service which is misconceived. Issue 1 under consideration revolves on the issue of service of the writ of summons and all other court processes at the court below on the second appellant as good and proper ser- g vice on all the appellants. The respondent by a motion ex parte dated 2 February, 2003 brought pursuant to Order 22 rule 1, Order 12 rule 5(b) h of the High Court (Civil Procedure) Rules of Kaduna State, 1987 sought among other the following orders:– “1. An order granting leave to the applicant to serve the writ of summons and all other court processes on the second de- i fendant at Marverick Consults Limited, NIDB building, Kaduna, 5th Floor. 2. An order deeming the service of the writ of summons and all other court processes on the second defendant as good and proper service on all the defendants.” j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA Baladec Tech. Company Limited v. Intercity Bank Plc 421 a Order 12 rule 5(b) of the Kaduna State High Court (Civil Procedure) Rules, 1987 states:– “Where it appears to the court (either after or without an attempt at b personal service) that for any reason, personal service cannot be conveniently effected, the court may order that services be effected either:– 5(b) by delivery thereof to some person being an agent of the c person to be served, or to some other person, on it being proved that there is reasonable probability that the document in the ordinary course through that agent or other person come to the knowledge of the person to be served.” In the instant appeal, the first, third to sixth appellants were d served in accordance with the provisions of Order 12 rule 5(b) of the Kaduna State High Court (Civil Procedure) Rules, 1987. On 24 March, 2003 a Counsel by name Pat Aigbogun appeared for the first, third to sixth appellants (page 89 of e the printed record). The Counsel that appeared for the first, third to sixth appellants did not state that he was appearing on protest or conditionally and he never raised the issue of service on the first, third to sixth appellants. In fact, from the f printed record, the Counsel that appeared for the first, third to sixth appellants participated in the trial on behalf of the first, third to sixth appellants until judgment was delivered on 31 March, 2003. g The object of all types of service of process whether personal or by substituted means is to give notice to the other party to whom service is to be effected so that he may be aware of the case against him and resist, if he may, that h which is sought against him. In this particular appeal the first, third to sixth appellants were served by substituted means through the second appellant. They became aware of the suit against them and instructed a Counsel by name Pat i Aigbogun to represent them which he did until judgment was delivered at the court below. It is therefore an afterthought for the first, third to sixth appellants to now turn around and complain that they were not served with the writ j of summons and other processes in this matter.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA 422 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Another issue is that the issue of service was never raised a at the court below. As such the appellants cannot raise it at this Court without leave of this Court. In the light of all I have said above, issue 1 is resolved against the appellants in b favour of the respondent. Issue 2: “Whether or not the Honourable trial Judge had jurisdiction to entertain a suit relating to a transaction in which several conditions precedent had not been complied with.” c In his submission on this issue, Counsel to the appellants referred to the documentary evidence before the lower court, particularly paragraphs 20, 21 and 22 of the various letters of guarantee executed between the respondent and the appel- d lants, in which it was agreed among other things that:– “Notice by way of demand or request shall be given to each guarantor by the respondent. Demand may be made by respondent or solicitor on its behalf. e Disputes that could not be settled will be referred to an arbitrator mutually agreed to failing which an arbitrator to be appointed by the Chief Judge of the State High Court. Liability of guarantors was limited to N4 Million jointly and sev- f erally.” Further, Counsel for the appellants contends that the transactions between the parties were covered by the security of an g equitable mortgage by the deposit of landed property, and that the enabling bond executed between the first appellant and the respondent shows that the purpose of the loan was to finance the NEPA contract. That the security was by way of equitable mortgage over a property located at Gidado Road, h GRA Nassarawa Quarters, Kano valued at N6 million and that the repayment was to be from payment from NEPA and the alternative source of repayment was the realisation of the security. Counsel argues that from the totality of the very i elaborate and far-reaching issues agreed to by the respondent and the first appellant on one score and between the respondent and the second to sixth appellants on another score indicate that the parties quite freely dealt with each other in j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA Baladec Tech. Company Limited v. Intercity Bank Plc 423 a very clear and unmistakable terms, that there is nothing to indicate that resort to court action was anticipated at any stage by any of the parties. That the respondent has not b shown why, without the slightest effort to explore any of the various options available, it rushed to court. That is a gross abuse of the court process which ought not to be encour- aged. The parties are bound by the terms of their own written agreement freely and willingly entered into (reference c made to Union Bank of Nigeria Limited v Sax Nigeria Lim- ited and Others (1994) 9 SCNJ 1; Madukolu and others v Nkemdilim (1962) 1 All NLR (Part 2) 581). Learned Coun- sel to the appellants contends that in view of his submis- d sions, it is clear that there were several conditions that were to be fulfilled between the parties before any party could reasonably contemplate resorting to the use of court action, that these are all jointly and severally conditions precedent e to initiation of a court action. Counsel urged us to hold that the failure by the respondent to exhaust these conditions precedent jointly and severally deprive the trial court of jurisdiction to entertain the suit by the respondent. He further f contends that the total failure by the respondent to even attempt to explore even one of the options amplifies the gravity of its abuse of court process. Counsel therefore urged us to resolve issue 2 in favour of the appellants, allow the ap- g peal and quash the judgment of the trial court contained in the said ruling of 31 March, 2003. In his reply on issue 2 learned Counsel to the respondent referred us to exhibits A1, A2 and A4 which are letters of h request by the appellants and letter of approval granted by the respondent respectively and submits that this reveals offer and acceptance by the appellants and the respondent. Further, the basis and core of the contract between both par- i ties can be seen in these exhibits. Exhibits A1, A2 and A4 all specify duration/tenure of the facility to be 60 days as such the facility expired 60 days after the first appellant drew the sum of N4,000,000 (Four Million Naira) as facility j granted by the respondent to the first appellant at the

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA 424 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) appellants’ request. Exhibit A12 is a letter of request for an a extension of eight weeks by the first appellant. The facility expired originally on 9 December, 2001 and at the request of the first appellant an extension of another 60 days was b granted to the first appellant which also expired on 9 Febru- ary, 2002. He submits that the trial court had jurisdiction to entertain the suit as the issue before the Honourable Court is a facility of a definite sum of N6,104,450.38 (Six Million, c One Hundred and Four Thousand, Four Hundred and Fifty Naira, Thirty-eight Kobo) with interest which is outstanding against the first appellant in favour of the respondent and which was guaranteed by the second to the sixth appellants d and which facility has expired originally since 9 December, 2001. Learned Counsel for the respondent argues further that assuming without conceding that some conditions precedent had not been complied with by the respondent before the in- e stitution of the suit, exhibit A4, under the head “other conditions” paragraph 2. The first appellant and the respondent have both agreed that the respondent reserves the right to alter any of the term(s) and/or condition(s) attached to the f appellant. Hence both parties endorsed exhibit A4 as a binding agreement between them. He further submits that the letters of request, letter of approval, equitable mortgage, personal guarantee of the second to the sixth appellants all go to g secure the facility which the appellants are not denying and to further show that the appellants are indebted to the respondent. Learned Counsel for the respondent therefore submits that from the totality of all the facts of this suit be- h fore this Honourable Court the trial court was right to have heard and determined the case on the undefended list, the requirement of the law having been met. Further, learned Counsel to the respondent contends that the respondent have i written several letters of demand to the first appellant (exhibits A14, A15, A16, A17 and A18). The first appellant responded to the letters of demand (exhibits A19, A20 and A21). The respondent’s solicitor also wrote to the first j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA Baladec Tech. Company Limited v. Intercity Bank Plc 425 a appellant a letter of demand on behalf of the respondent. Counsel argues that there is nothing to indicate that resort to court action was not anticipated at any stage by any of the parties. Further on the appellants’ argument that the respon- b dent has not shown why without the slightest effort to explore any of the various options available, the respondent rushed to court, Counsel contends that this submission is unfounded as the respondent had indulged the appellants since c 19 December, 2001 till after the expiration of its demand notice of 16 January, 2003. Further Counsel argues that the parties cannot by agreement oust the jurisdiction of the court (reference made to Amadi v NNPC (2000) F.W.L.R. (Part 9) d 1527 and section 33(1) of the 1979 Constitution). That parties are bound by the terms of their own written agreement freely and willingly entered into. Exhibit A4 referred to where both parties agreed that the respondent can alter the e term(s) and/or condition(s) attached to the facility granted. Counsel submits that all the conditions precedent to the institution of the instant suit have been met. Finally learned Counsel for the respondent submits that on the whole this f appeal lacks merit and should be dismissed with costs in favour of the respondent. The appellants’ issue 2 relates to the question whether or not the Honourable Court had jurisdiction to entertain a suit g relating to a transaction in which several conditions precedent had not been complied with. In the instant appeal, the respondent’s claim before the trial court is for a liquidated money demand of N6,104,450.38k (Six Million, One Hun- h dred and Four Thousand, Four Hundred and Fifty Naira, Thirty eight kobo) being the balance outstanding against the appellants’ account at the respondent’s bank and which indebtedness arose from a corporate advance facility granted i to the appellants at their request with interest at 29% from 1 February, 2003 until judgment thereafter at 10%. This claim of the respondent was initiated under Order 22 rule 1 of the Kaduna State High Court (Civil Procedure) Rules, 1987. j The appellants filed their notice of intention to defend under

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA 426 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Order 22 rule 3 of the same Kaduna State High Court (Civil a Procedure) Rules, 1987. In their notice of intention to defend the appellants did not deny their indebtedness to the respondent, rather they admitted the indebtedness in their affidavit b in support of the notice of intention to defend. This can clearly be seen in paragraph 4(c), (e) and (h). The appellants did not deny collecting the facility, neither did they deny the interest charge and the outstanding balance against them nor c did they bring before the trial court any document showing that they have paid any money to the respondent to offset their indebtedness. The only reason given by the appellants why the trial court should decline jurisdiction in this suit is d that various conditions precedent were not complied with before the case was brought to court, and the conditions that were not complied with are thus:– “1. Notice by way of demand or request shall be given to each e guarantor by the respondent. 2. Demand may be made by the respondent or solicitor on its behalf. 3. Disputes that could not be settled will be referred to an arbi- f trator to be appointed by the Chief Judge of the State High Court. 4. Liability of guarantors was limited to N4 Million jointly and severally.” g The evidence before the trial court shows that most of the conditions that the appellants alleged were not complied with were addressed and complied with. The basis and core h of the contract between both parties can be seen in exhibits A1, A2 and A4. These exhibits all specify the duration and tenure of the facility to be 60 days after the first appellant drew the sum of N4,000,000. The facility expired originally on 9 December, 2001 by exhibit A12. The first appellant re- i quested for an extension of eight weeks which was granted which also expired on 9 February, 2002. The respondent have written several letters of demand to the first appellant and these are exhibits A14, A15, A16, A17 and A18. Also j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Jega JCA Baladec Tech. Company Limited v. Intercity Bank Plc 427 a the respondent’s solicitors also wrote to the first appellant a letter of demand on behalf of the respondent (exhibit A22). It is glaring that from the evidence before the trial court, that b is the exhibits, letters of request, letter of approval, equitable mortgage, personal guarantee of the second to sixth appellants all go to secure the facility, to secure the repayment of the facility which the appellants are not denying and to fur- c ther show that the appellants are indebted to the respondent. All the exhibits mentioned are not contrary to the facility nor do they deny the appellants’ indebtedness to the respondent in any way. It is crystal clear from the nature of the case and d evidence adduced before the trial court that all the conditions precedent to the institution of the suit have been complied with. Besides exhibit A4, which is the main agreement between the parties, gave the respondent the right to alter e any of the term(s) and/or condition(s) attached to the appellants. In view of the foregoing it is obvious and beyond dispute that the trial court had jurisdiction to entertain the suit as the issue before the Honourable Court is a facility of defi- f nite sum of N6,104,450.38 (Six Million, One Hundred and Four Thousand and Fifty Naira, Thirty eight kobo) with interest which is outstanding against the first appellant in favour of the respondent and which was guaranteed by the g second to the sixth appellants and which facility has expired originally since 9 December, 2001. With the foregoing, issue 2 is resolved against the appellants in favour of the respondent. h In conclusion, both the two issues for determination formulated by the appellants in this appeal have been dealt with. Both of them have been resolved against them. The appeal is therefore adjudged unmeritorious and is hereby i dismissed. I therefore affirm the judgment of the learned trial Judge Gwadah contained in a ruling delivered on 31 March, 2003 in Suit No. KDH/KAD/120/03 with costs assessed at N6,000 in favour of the respondent against the ap- j pellants.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION)

428 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

BA’ABA JCA: I was privileged to have read in advance the a judgment just delivered by my learned brother, Jega JCA. In that judgment he has carefully reviewed the facts of this appeal and considered the issues raised therein in order to con- b sider whether the appeal is meritorious. I agree entirely with his reasoning and conclusion that the appeal lacks merit and must be dismissed. I am unable to agree with the submission of the learned c Counsel for the appellants that the affidavit in support of the notice of intention to defend discloses a defence on the merit justifying the suit being transferred from the undefended list to the general cause list. To secure the transfer of the action d from the undefended to the general cause list, the appellant must disclose or raise in the affidavit accompanying notice of intention to defend a defence on the merit. Order 23 rule 3(1) of the Kano State High Court (Civil Procedure) Rules, e 1988 provides as follows:– “3(1) If the defendant served with the writ of summons and affidavit delivers to the Registrar a notice in writing that he intends to defend the suit together with an affidavit dis- f closing a defence on the merit, the court may give him leave to defend upon such terms as the court may think just” (italics mine).

The provisions of Order 22 rule 3(1) of the Kaduna State g High Court (Civil Procedure) Rules, 1987, Cap 68, Laws of the Kaduna State of Nigeria is in pari materia with Order 23 rule 3(1) of the Kano State High Court (Civil Procedure) Rules. It reads:– h “3(1) If the party served with writ of summons and affidavit as provided in Rules 1 and 2 hereof delivers to the Registrar not less than 5 days before the date fixed for hearing a notice in writing that he intends to defend the suit, together with an affidavit disclosing a defence on the merit, the i court may give him leave to defend upon such terms as the court may think just” (italics mine). The governing words in the provisions set out are “a defence on the merit” which have been construed by the Supreme j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Ba’aba JCA Baladec Tech. Company Limited v. Intercity Bank Plc 429 a Court per Uwais JSC (as he then was) in the case of The Federal Military Government of Nigeria and others v Abache Malam Sani (1990) 4 NWLR (Part 147) 688 at 699 follows:– b “What is required is simply to look at the fact deposed to in the counter affidavit or indeed the facts averred in the statement of defence, where applicable, and see if they can prima facie afford a defence to the action. In that regard a complete defence need not c be shown. It will suffice if the defence set up shows that there is a triable issue or question or that for some other reason there ought to be a trial.” It is clear from the passage just set out from the judgment of d the Supreme Court, the affidavit accompanying the application by the defendant to defend must disclose a defence showing that there is a triable issue. In other words, the triable issue envisaged should not be at large but related to the e defendant’s defence. Defence, in my respectful opinion, are facts, which, if proved, would exonerate the defendant from the plaintiff’s claim. The affidavit is required to set up a defence against the plaintiff’s claim and not to rake up fresh f suit or cause or causes of action against the plaintiff. In fact, in the instant appeal, the appellants by paragraphs 4(c), (e) and (h) of their affidavit in support of the notice of intention to defend admitted the indebtedness. g For these and more fuller reasons contained in the leading judgment, I, too dismiss the appeal. I abide by the consequential orders contained in the leading judgment. ALAGOA JCA: I have had the advantage of reading before h now, the judgment of my learned brother, Jega JCA, and I agree with his reasoning and conclusions. I, however, wish to add this little bit of mine with respect to issue 1 formulated by the appellant from the four grounds of appeal. This i is with respect to the alleged non-service of the writ of summons and all other court processes on the first and third to sixth appellants. It is trite that this cannot be made an issue on appeal if it was not raised in the High Court below j except with leave of the court. There is a plethora of cases

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, KADUNA DIVISION) Alagoa JCA 430 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) on this point. See Adegoke Motors Ltd v Dr. Babatunde a Adesanya and another (1989) 3 NWLR (Part 109) 250 at 272 where the defendants did not attack the writ of summons or its service in the High Court and the High Court b gave its judgment without the validity or otherwise of the writ and/or its service being raised as an issue, the question was whether the issue could properly be raised for the first time on appeal to the Court of Appeal. The Supreme Court held that to constitute an appeal to that court on the issue of c the writ that issue should have been argued and ruled upon by the High Court (see Saraki v Kunini (2001) 6 NWLR (Part 708) 212 at 221; Degi v Francis (1999) 3 NWLR (Part 596) 576. See also the case of Isaac Iloabuchi v Cosmas d Ebigbo and 2 others (2000) 4 SC (Part II) 124 and more particularly the dictum of Ogundare JSC at 144). It is for this and the fuller reasons given by my learned brother, Jega JCA, in the lead judgment that I also dismiss e the appeal. I also abide by the orders made in the lead judgment including the order as to costs. Appeal dismissed. f

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Metalimpex v. A.G. Leventis and Co (Nig.) Limited 431 a Metalimpex v A.G. Leventis and Co (Nig.) Limited SUPREME COURT OF NIGERIA b IDIGBE, ALEXANDER, MADARIKAN JJSC Date of Judgment: 13 FEBRUARY, 1976 Suit No.: SC.297/1974

Bill of exchange – Indorser of – Liability of c Bill of exchange – Notice of dishonour – When not necessary – Section 50(2)(d)(ii) of the Bills of Exchange Act Bill of exchange – Presentment for payment and notice of dishonour – Conditions precedent for bringing of any action d on bill of exchange Bill of exchange – Presumption of consideration Bill of exchange – Signing of by company – Principles gov- e erning Company law – Contract entered into by a company – When binding – Rule in Turquand’s case f Facts This action was started by a writ on 19 January, 1973, in which the appellant (a corporation in the Hungarian People’s Republic) claims against the respondent (a trading company g incorporated in Nigeria), the sum of N102,702.73 as indors- ers of a bill of exchange dated 1 March, 1972, and payable on 30 April,1972 and in the alternative as guarantors of a contractual undertaking made to the appellants by Messrs. h West Africa Steel and Wire Company Ltd (hereinafter referred to as “WASCO”), a trading company incorporated in Nigeria. This amount (ie N102,702.73) was made up of the principal sum of N97,798 due under the bill, the sum of i N4,890.13 being interest thereon and the cost of noting protest on the said bill being the sum of N14.60 and 10% interest per annum until judgment is delivered. Briefly, the following facts constitute the background to this j action. WASCO had, prior to March, 1971, been importing

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

432 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) various goods on a credit basis from the appellants and as a a result was, on 1 April, 1971, indebted to the appellant in the sum of £673,511 sterling (the naira equivalent of which was N given by the appellants in the sum of 1,347,022). Unable b to pay this debt and being also desirous of continuing its trading activities with the appellant, WASCO proposed to them alternative arrangements for settlement of the debt. The appellant was requested by a letter of 18 February, c 1972, from WASCO (exhibit A) to agree to a schedule of deferred payments, spread over a period commencing from March, 1972 to February, 1973, of equal monthly instalments of £56,126. Monthly payments of the said sum (ie £56,126) were to be made by respondent directly into a spe- d cial account to be established for that purpose in the United Bank for West Africa Ltd, Lagos (U.B.A. Lagos) and it was also added that the respondents would guarantee payments under the proposed monthly instalments. A copy of a written e undertaking dated 8 February, 1972, guaranteeing monthly payments as proposed (exhibit A1) addressed to WASCO by the respondents was also attached to the letter (exhibit A). f It was also proposed in exhibit A by WASCO “in the interest of continuity of our hitherto pleasant and satisfactory business relationship” that they be allowed to place orders with the appellant for rolled steel products to the tune of g (£25,001) per month, “which will also be secured by Messrs A.G. Leventis (Nigeria) Ltd” (the respondents). A letter of confirmation of this second proposal by the respondent (exhibit D) was also enclosed in exhibit A. Exhibit D (also h dated 8 February, 1972) signed on behalf of the respondent was addressed to the appellant at its address in Hungary. The appellant, however, did not consider the undertaking in respect of “deferred payments” sufficient and in lieu of a banker’s guarantee which they asked for from WASCO, i they informed WASCO that they would be disposed to accept in addition to respondent’s written undertaking to WASCO (exhibit A1), bills of exchange to cover the deferred monthly instalment payment of £56,126 each. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Metalimpex v. A.G. Leventis and Co (Nig.) Limited 433 a Accordingly, 12 bills of exchange each payable to the order of the appellant, accepted by WASCO and indorsed by the respondent were delivered to the appellant and they were b to mature and become payable at the end of each consecutive month (from March, 1972 to February, 1973) beginning from 31 March, 1972. The negotiations relating to the above matter were, in the main, carried out by three individuals, viz: Mr Summ, the managing director of c WASCO for WASCO, Mr P. Myrianthousis, a director of A.G. Leventis (Nigeria) Ltd for the respondent and Dr. A Hontvari, the chief legal adviser to the appellant for the appellant. d On receipt of the 12 bills of exchange issued to guarantee the deferred monthly instalment payments proposed in exhibit A, the appellant’s chief legal adviser, Dr. Hontvari, e noted that the bills were indorsed, in each case, by P. Myri- anthousis, as director of the respondent. Testifying in the trial court on behalf of the appellant, Dr Hontvari said he came to Nigeria in March, 1972 to cross-check from the f bankers of the respondent and WASCO “as to the genuineness of the signature of Mr Myrianthousis” and was satisfied with the genuineness of the signature. He negotiated for the first bill which matured on 31 March, 1972 and the bill was g honoured, and all the remaining bills were left with the U.B.A. Lagos to collect on maturity. When, however, on the due date in respect of exhibit E (a bill for £65,190 due to be paid on 30 April, 1972) the bank re-presented the same for h payment it was dishonoured. Later it was protested (as per exhibit F) by a notary public. According to Hontvari, the appellant stopped business dealings with WASCO because the bill of exchange (exhibit E) was not met. Consequently, the i appellant filed in court the present claim. The defence of the respondent was, in the main, a denial of the authority of Mr Myrianthousis to bind them in this particular transaction. According to the respondent, Myri- j anthousis had no authority or approval of respondent either

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

434 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) to sign the undertaking in exhibits A1 and D or to indorse a the bills of exchange of which exhibit E was one.

Held – b 1. The presentment for payment of a bill of exchange and the giving of notice of dishonour for non-payment to the party liable to be charged are, generally, conditions precedent to the bringing of any action on the bill by the c holder of the same. However, it is generally unnecessary for a plaintiff to plead in his statement of claim the fulfilment of all conditions precedent, and this is because the due performance or happening of all conditions d precedent is usually implied in every pleading. 2. Where the indorser (in the instant case, the respondents) is the person to whom the bill is presented for payment, e it is not necessary to serve him (the indorser) with a notice of dishonour for non-payment (see section 50(2)(d)(ii) of the Bills of Exchange Act, Cap 21 Laws of the Fed- eration of Nigeria, 1958. f 3. The liability of an indorser of a bill of exchange to the holder and/or his indorsee are clearly set out in the Bills of Exchange Act, Cap 21 aforesaid. In the first place by indorsing the same, the indorser of the bill undertakes g that on due presentment it will be “accepted and paid according to its tenor, and that if it be dishonoured he will compensate the holder or a subsequent indorser who is compelled to pay it provided that the requisite proceed- h ings on dishonour are duly taken” (see section 50(2)(a) of the Bills of Exchange Act, Cap 21. 4. In regard to his immediate or subsequent indorsee the indorser is estopped or precluded from denying that at i the time of his indorsement the instrument (ie the bill) was a valid and subsisting one and that he had good title to it (see section 55(2)(c) of the Bills of Exchange Act, Cap 21). j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Metalimpex v. A.G. Leventis and Co (Nig.) Limited 435 a 5. Every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value (see section 30(1) of the Bills of Exchange Act, Cap 21). b 6. Hence, unlike other forms of simple contract, bills of exchange (and promissory notes) are presumed to stand on the basis of a valuable consideration. On the basis of this presumption, therefore, the burden is on the party who c alleges want of consideration (and in the instant case, this will be the respondent) to prove the same. 7. A subsisting debt from a third person is good considera- d tion for a bill of exchange, at least if the instrument is (as in the case in hand) payable at a future date (because it amounts to an implied agreement as it clearly does in the case in hand to give time to the original debtor, and this indulgence to the original debtor is, indeed, considera- e tion to the maker or indorser of the bill. 8. Where a contract is entered into on behalf of a company, the question which arises is whether such a contract is f binding on the company and can be enforced by or against it. The answer depends, inter alia, on whether the contract is (1) ultra vires the company; or (2) intra vires the company but ultra vires its directors. If the con- g tract is ultra vires the company neither the company nor the opposite party to it can generally sue on it. If, however, the contract is intra vires the company but ultra vires its directors the opposite party to it can, in certain h circumstances, sue the company. 9. The memorandum and articles of a company are registered with the Registrar of Companies and may be inspected by any member of the public. Consequently, any i member of the public who deals with a company is deemed to have notice of its memorandum and articles and therefore the powers and limitations of its directors. If a member of the public, therefore, deals with the com- j pany in matters inconsistent with the powers given in the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

436 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

memorandum and articles and the consequences are un- a pleasant he must abide by such consequences. 10. However, a person may hold a company liable on any contract between them, although ultra vires the directors b of the company if:– (a) the company has held out the director as having the necessary authority; or (b) the circumstances fall within the well-known rule in c Royal British Bank v Turquand (1856) 6 E. and B. 327 which put shortly is this: A person dealing with a company is assumed to be aware of the powers of the company which are set out in its public docu- d ments (ie the memorandum and articles of association) filed with the Registrar since he has access to these documents and, although it is his duty to see that any contracts he proposes to enter into with e the company are within its powers, he is not bound to do more. He need not inquire into the internal working of the company and he is entitled to assume that everything is being done properly or constitu- f tionally. 11. There are of course limitations to the above rule and it does not apply in the following cases:– g (a) cases of forgery or non-genuine transactions; (b) where the person seeking to rely on the rule is himself aware or has knowledge of irregularities; or (c) where the transaction is of such an unusual nature h that a person dealing with the officers of a company might reasonably be expected to make inquiries to assure himself that those with whom he is dealing are acting regularly and within the authority of the i company; or (d) where the person seeking to rely on it was not aware of the contents of the memorandum and articles of association of the company. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Metalimpex v. A.G. Leventis and Co (Nig.) Limited 437 a 12. From the memorandum and articles of association of the respondent, it was empowered by their constitution, to endorse bills of exchange and that in doing so it may act by their directors who are themselves empowered by the b said constitution to appoint, for this purpose, from among their body a managing director (article 76 refers). In other words, the respondent’s constitution, without doubt, anticipates that one or more of its directors or a c managing director may exercise the powers set down in Clause H of exhibit L (which include the endorsement of a bill of exchange). 13. Where in the case of an individual a bill or note is re- d quired to be signed, it is sufficient, in the case of a company if it is signed on behalf of the company by any person acting on its authority. A bill of exchange is deemed to have been indorsed on behalf of the company by any e person acting under its authority. It is not necessary that a formal resolution of the directors should be passed that bills should be accepted; and where a director without authority accepts bills on behalf of a company whose ar- f ticles give power to delegate the duty of accepting bills to one director, the company is liable to a holder in due course even though the delegation has not in fact taken place. g Appeal allowed.

Cases referred to in the judgment h Foreign Balfour v Sea Fire Life Assurance Co (1857) 3 C.B. (N.S.) 300 Biggerstaff v Rowatts Wharf Ltd (1896) 2 Ch. 3 i Cripps v Davis (1873) 12 M. and W. 159 ER 1152 Dey v Pullinger Engineering Co (1920) All ER 591 Gates v W.A. and R. Jacobs (1920) 1 Ch. 567 j Royal British Bank v Turquand (1856) 6 E. and B. 327

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

438 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Nigerian statute referred to in the judgment a Bills of Exchange Act, Cap 21 Laws of the Federation of Nigeria, 1958, sections 30(1), 50(2)(a), 50(2)(d)(ii), 55(2)(a), 55(2)(c) b

Nigerian rules of court referred to in the judgment High Court of Lagos State Civil Procedure Rules, Order 16 rules 10 and 11 c

Books referred to in the judgment Halsbury’s Laws of England (4ed) Volume 4 paragraph 429 d page 190 Halsbury’s Laws of England (4ed) Volume 7 paragraph 743 page 444 e Counsel For the appellants: Sowemimo (Odunsi and Alatishe with him) f For the respondent: Awolowo (Ajayi and Opanubi with him)

Judgment IDIGBE JSC: (Delivering the lead judgment) This action g was started by a writ on 19 January, 1973, in which the appellant (a State corporation in the Hungarian People’s Re- public) claims against the respondent (a trading company N incorporated in Nigeria), the sum of 102,702.73 as indors- h ers of a bill of exchange dated 1 March, 1972, and payable on 30 April,1972 and in the alternative as guarantors of a contractual undertaking made to the appellant by Messrs. West Africa Steel and Wire Company Ltd (hereinafter referred to as “WASCO”), a trading company incorporated in i Nigeria. This amount (ie N102,702.73) is made up of the principal sum of N97,798 due under the bill, the sum of N4,890.13 being interest thereon and the cost of noting protest on the said bill being the sum of N14.60. The appellant j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Metalimpex v. A.G. Leventis and Co (Nig.) Limited 439 a also claims interest on the total sum claimed (ie N102,702.73) at 10% per annum until judgment is delivered. Briefly, the following facts constitute the background to b this action. WASCO had, prior to March, 1971, been importing various goods on a credit basis from the appellant and as a result was, on 1 April, 1971, indebted to the appellant in the sum of £673,511 sterling (the naira equivalent of which c was given by the appellant in the sum of N1,347,022). Un- able to pay this debt and being also desirous of continuing its trading activities with the appellant, WASCO proposed to it alternative arrangements for settlement of the debt. The d appellant was requested in a letter of 18 February, 1972, from WASCO (exhibit A) to agree to a schedule of deferred payments, spread over a period commencing from March, 1972 to February, 1973, of equal monthly instalments of e £56,126. Monthly payments of the said sum (ie £56,126) were to be made by the respondent directly into a special account to be established for that purpose in the United Bank for Africa Ltd, Lagos (U.B.A. Lagos) and it was also added f that the respondent would guarantee payments under the proposed monthly instalments. A copy of a written undertaking, dated 8 February, 1972, guaranteeing monthly payments as proposed (exhibit A1) addressed to WASCO by the re- g spondent was also attached to the letter, exhibit A. It was also proposed in exhibit A by WASCO “in the interest of continuity of our hitherto pleasant and satisfactory business relationship” that it be allowed to place orders with h the appellant for rolled steel products to the tune of (£25,000) per month, “which will also be secured by Messrs A.G. Leventis (Nigeria) Ltd” (the respondent). A letter of confirmation of this second proposal by the respondent (ex- i hibit D) was also enclosed in exhibit A. Exhibit D (also dated 8 February, 19/72) signed on behalf of the respondent was addressed to the appellant at its address in Hungary. The appellant, however, did not consider the undertaking in re- j spect of “deferred payments” sufficient and in lieu of a

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 440 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) banker’s guarantee which it asked for from WASCO, it in- a formed WASCO that it would be disposed to accept in addition to respondent’s written undertaking to WASCO (exhibit A1), bills of exchange to cover the deferred monthly instal- b ment payment of £56,126 each. Accordingly, 12 bills of exchange each payable to the order of the appellant, accepted by WASCO and indorsed by the respondent were delivered to the appellant and they were to mature and become pay- c able at the end of each consecutive month (from March, 1972 to February, 1973) beginning from 31 March, 1972. The negotiations relating to the above matter were, in the main, carried out by three individuals, viz: Mr Summ, the d managing director of WASCO for WASCO, Mr P. Myri- anthousis, a director of A.G. Leventis (Nigeria) Ltd for the respondent and Dr. A Hontvari, the chief legal adviser to the appellant for the appellant. e On receipt of the 12 bills of exchange issued to guarantee the deferred monthly instalment payments proposed in exhibit A, the appellant’s chief legal adviser, Dr. Hontvari, noted that the bills were indorsed, in each case, by P. Myri- f anthousis, as director of the respondent. Testifying in the trial court on behalf of the appellant, Dr Hontvari said he came to Nigeria in March, 1972 to cross-check from the bankers of the respondent and WASCO “as to the genuine- g ness of the signature of Mr Myrianthousis” and was satisfied with the genuineness of the signature. He negotiated for the first bill which matured on 31 March, 1972 and the bill was honoured, and all the remaining bills were left with the h U.B.A. Lagos to collect on maturity. When, however, on the due date in respect of exhibit E (a bill for £65,190 due to be paid on 30 April, 1972) the bank represented the same for payment it was dishonoured. Later it was protested (as per i exhibit F) by a notary public. According to Hontvari, the appellant stopped business dealings with WASCO because the bill of exchange (exhibit E) was not met. Consequently, the appellant filed in court the present claim. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Metalimpex v. A.G. Leventis and Co (Nig.) Limited 441 a The defence of the respondent was, in the main, a denial of the authority of Mr Myrianthousis to bind them in this particular transaction. According to the respondent, Myri- b anthousis had no authority or approval of respondent either to sign the undertaking in exhibits A1 and D or to indorse the bills of exchange of which exhibit E is one. It was even alleged – although not the slightest evidence was adduced in c support of it – that Mr Summ, Mr Myrianthousis and one Mr Louvaris at all times material to the transactions referred to above had conspired to defraud the respondent. The respondent did not call evidence at the trial and we, therefore, think it is desirable, at this stage, to set out some of the sali- d ent paragraphs of the statement of defence, and these are:– “(6) In further answer to paragraphs 3, 5, 6, 7, 8, 9 and 12 of the amended statement of claim, the defendants (ie respondents) aver that the transactions referred to in the said para- e graphs result from a conspiracy between the plaintiffs (ie appellants) one Mr H. Summ, one Mr C.P. Louvaris, and others connected with West African Steel and Wire (Co) Ltd on the one hand and one Mr P. Myrianthousis (a former f director of the defendants) on the other, for the purpose of defrauding the defendants. PARTICULARS OF THE SAID FRAUD (a) . . . g (b) The said Myrianthousis colluded with Messrs H. Summ and C.P. Louvaris to help West African Steel and Wire (Co) Ltd and other companies in the Group (ie WASCO/WAMAC Group) in their financial diffi- culties. h (c) In furtherance of the said conspiracy and with the knowledge of the plaintiffs it was arranged that the said Myrianthousis was to give an undertaken in the name of the defendants, and without any consideration i to pay the sum of £56,126 monthly for a period of twelve months into an account to be opened at the United Bank for Africa Limited, in the name of the plaintiff when, to the knowledge of the plaintiffs, the defendants had no indebtedness whatsoever to the j plaintiffs.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 442 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(d) In spite of the foregoing the plaintiffs further re- a quested, and obtained from Messrs. H. Summ and C.P. Louvaris and from the said Mr Myrianthousis, signed bills of exchange in favour of the plaintiffs purporting to be signed by the said Mr Myrianthousis as a director b of the defendants. (7) . . . (8) The defendants further aver that by the conduct of the plaintiffs, and particularly of their Chief Legal Adviser, one c Dr. Hontvari, and by the inquiries made on behalf of the plaintiffs by other persons the plaintiffs knew that the said Mr Ph. Myrianthousis was not authorised to enter into the said transactions or sign the said bills of exchange at all or d alone. (9) The defendants will contend at the trial of this suit that any loss occasioned to the plaintiffs by the circumstances referred to . . . is due to the fraudulent and illegal acts of the e plaintiffs, or in the alternative is due to their negligence. (10) The defendant further aver that the transactions referred to . . . were without consideration.” As can readily be observed from the foregoing paragraphs of f the statement of defence, the respondent set up a three- pronged defence alleging (1) fraud and illegality; (2) want of authority on the part of Myrianthousis; and, finally (3) want of consideration for the alleged transaction between it and g the appellant. No iota of evidence was proffered by the respondent in support of its allegation of fraud and or illegality and we need hardly dwell on that aspect of the defence. In order that the full significance of the defence of want of au- h thority on the part of Myrianthousis may be appreciated it is, in our view, necessary to set out the important aspects of exhibits A, A1 and D. Parts of exhibit A, a letter from H. Summ, managing director of WASCO to the Director- General of Metalimpex, read:– i “We regret very much the further delay which has occurred in settling the overdue balance against a number of bills from your company which have fallen due for payment in the course of the year 1971. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Metalimpex v. A.G. Leventis and Co (Nig.) Limited 443 a In spite of all efforts on our part the external loan has not been released and consequently alternative arrangement had to he made in this country to procure the necessary finance. b On account of the very tight credit squeeze prevailing in Nigeria since last year there is no chance to raise the money . . . and we have no choice but to ask very kindly for your consent to a schedule of deferred payments as set out in the attached summary. It is proposed that payments are made to a special account to be estab- c lished for this purpose with the United bank for Africa Ltd, Lagos direct by Messrs A.G. Leventis and Co (Nigeria) Ltd. A written undertaking has been obtained from this company and a copy is enclosed herewith for your information . . . d Moreover, in the interest of continuity of an hitherto pleasant and satisfactory business relationship we are ready to place orders for rolled steel products with your company to the tune of £25,000 per month which will also be secured by Messrs A.G. Leventis and Co e (Nigeria) Ltd. A letter of confirmation is enclosed in this connection . . .” (italics supplied). As already stated, exhibit A is dated 18 February, 1972, and parts of exhibit A1 (dated 8 February, 1972) signed by Ph. f Myrianthousis, director for A.G. Leventis and Co (Nigeria) Ltd and addressed to WASCO, read:– “Referring to our various discussions concerning your request for payments to be made direct to an account in Nigeria in favour of g your overseas suppliers view wish to give our undertaking herewith for the following:– Our company will pay with effect from March, 1972, the amount of £56,126.00 monthly, for a period of twelve (12) months to on h account of Messrs. Metalimpex, Budapest, Hungary, United Bank for Africa Ltd Lagos. Interest if approved and at a rate to be fixed by the Central Bank, will be added on the reducing balances. i Yours faithfully, FOR: A.G. LEVENTIS and CO (NIG.) LTD.” Exhibit D, however, was addressed directly to Metalimpex j in Budapest, Hungary and was signed, for and on behalf of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 444 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

A.G. Leventis and Co (Nigeria) Ltd by “Ph. Myrianthousis a Director” and parts of it read:– “We wish to give our undertaking herewith to purchase from your company on behalf of West African Steel and Wire Co Ltd/West b Africa Metal and Chemicals Ltd/WAMAC products Ltd, and their associated companies rolled steel products, particularly wire rods, steel strip . . . to the tune of £25,000 per month. If the business is negotiated direct between the WASCO/WAMAC Group and your company, we are ready to confirm the business transaction . . .” c As stated earlier on, the appellant, in spite of those “under- takings (exhibits A1 and D) requested and obtained as additional or confirmatory” guarantee from WASCO 12 bills of exchange each for £56,126 payable to the order of the appel- d lant accepted by WASCO and indorsed by the respondent. One of these bills (exhibit E) when presented to the respondent at the due date, 30 April, 1972, was not paid by it (ie the respondent) mainly on the ground, according to the re- e spondent, that Ph. Myrianthousis had in fact no authority to draw the same and/or to bind the respondent. It has also been contended before us by the respondent:– (1) that it cannot be liable to the appellant because no f consideration moved from the appellant to the respondent in respect of the transaction leading to the indorsement by the respondent of the said bills of exchange; g (2) in any event, the bill in question (ie in the case in hand), exhibit B, was never properly presented to them and the appellant never gave to it (the respondent) any “notice of dishonour” of the said bill, ac- h cordingly, the appellant cannot, in the circumstances, maintain the present action; and (3) finally, the appellant ought not to succeed on a plea of estoppel by conduct, which it raised in the lower i court relying on the fact of payment to it of the amount due on the first bill which was due on 31 March, 1972 and negotiated in Lagos as earlier on stated by Dr. Hontvari. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Metalimpex v. A.G. Leventis and Co (Nig.) Limited 445 a We think we ought to deal with the plea by the respondent of want of authority on the part of Ph. Myrianthousis and also on the question of consideration, since we are satisfied b that, in the circumstances of this case, the appellant can rely on the said signature (ie of Myrianthousis) and are not precluded from recovering on the bill (exhibit E) on the ground of want of consideration then, unless the plea of lack of due presentment of the bill and notice of dishonour can avail the c respondent, the claim must succeed. The appellant has also pleaded that the respondent is now estopped from denying the authority of Myrianthousis in signing exhibit E since the first bill of exchange (due to mature at the end of March, d 1972) signed on behalf of the respondent by Myrianthousis was negotiated and duly honoured by the respondent. On the issue of estoppel we do not consider the appellant to be on firm ground. The bill of exchange in question is not in evi- e dence although both parties admit that it was made for the sum of £56,126 and signed on behalf of the respondent by Ph. Myrianthousis. There is no evidence that it was presented directly to the respondent for payment. Exhibit K, a f cheque for £56,125 (instead of £56,126), duly signed for and on behalf of the respondent by Myrianthousis and one other member of the respondent’s company issued to WASCO (not Metalimpex) was used by WASCO in settling the g amount due on the first bill of exchange on 4 April, 1972. Exhibit K itself is dated 6 March, 1972, a date much earlier in time to the “due date” of the first bill of exchange, and there is no evidence that it was drawn by the respondent h specifically for the purpose of settling the amount due on the said bill (ie the first bill of exchange). It is, therefore, our view that in the circumstances the plea of estoppel in pais raised by the appellants cannot avail them. i On the issue of presentment and notice of dishonour learned Counsel for the respondent, Chief Obafemi Awolowo, contended that the bill of exchange in question (exhibit E) was not duly presented to the respondent nor was j the respondent given notice of dishonour as prescribed by

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 446 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the Bills of Exchange Act, Cap 21 of the 1958 edition of the a Laws of the Federation Volume 1. He therefore submitted that the claim was incompetent. The bill (exhibit E) which matured on 30 April, 1972, when presented on 20 May, b 1972, was, as he submitted, overdue for presentment (and he referred to section 45(2)(a) and (b) of Cap 21 aforesaid). He pointed out that no evidence was proffered to bring the lack of “due presentment of the said Bill within the ambit of sub- c section (2) of section 46 of the Bills of Exchange Act aforesaid”. Chief Awolowo then submitted that, in the circumstance, no question of dishonour by non-acceptance of the bill could properly arise under section 47 of Cap 21 aforesaid since the same was never duly presented. Finally, he d submitted that the appellant’s claim is incompetent since it failed to give to the respondent notice of dishonour by non- payment of exhibit E as required by section 48 of Cap 21. There is, in our view, no merit in the contention of learned e Counsel for the respondent on the issue of “due presentment” and lack of notice of dishonour. It is a settled rule of practice that parties to a case are bound by their own pleadings and cannot be allowed to set up in court a case which is f at variance with their pleadings. Paragraph 10 of the amended statement of claim reads:– “(10) . . . The second bill was due for payment on the 30 April, g 1972 and when it was presented to defendants on 20 May, 1972 the defendants refused to make the said payment on the grounds that the acceptance of the bill was not authorised” (italics supplied) and paragraph (4) of the amended statement of defence h reads:– “With reference to the amended statement of claim, the defendants say that the said bill of exchange was brought to them for payment on or about 20 May, but this was refused on the ground stated in i the said paragraph 10” (again italics supplied). There is no doubt that the presentment for payment of a bill of exchange and the giving of notice of dishonour for non- payment to the party liable to be charged are, generally, j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Metalimpex v. A.G. Leventis and Co (Nig.) Limited 447 a conditions precedent to the bringing of any action on the bill by the holder of the same. However, it is generally unnecessary for a plaintiff to plead in his statement of claim the fulfilment of all conditions precedent, and this is because the b due performance or happening of all conditions precedent is usually implied in every pleading:– “It will be for the defendant if he thinks any condition precedent c has not been performed or fulfilled, to take this objection in his defence by specifically pleading what that condition was and the fact that it has not been performed or fulfilled” (see Bullen and Leake and Jacob’s Precedents of Pleadings, 12th Edition, p. 334). “In practice, however, the pleader frequently waits to see whether the d non-performance is set up in the defence: if it is, the fulfilment or the excuse for non performance is pleaded in the reply” (Bullen and Leake and Jacob’s ibid) and in an old case, the defendant was required to set up in e his pleading his special defence that a promissory note was “overdue” (See Cripps v Davis (1843) 12 M. and W. 159, 152 ER 1152. See also Lawrence J in Gates v W.A. and R. Jacobs (1920) 1 Ch 567, an action for recovery of posses- f sion). Undoubtedly the above principles of pleadings en- shrined in the cases earlier cited are preserved by the Rules of the Supreme Court, England. They are also preserved by the High Court of Lagos State Civil Procedure Rules g (H.C.R. Lagos State) which came into force on 1 September, 1973, and were in operation when this case went to trial in the lower court and we refer particularly to Order 16 rules 10 and 11 of the said High Court Rules (i e. H.C.R. Lagos h State). In the case in hand, it was clear from the state of the pleadings that the principal issues in the case when the matter went to trial were:– i (1) the alleged want of authority on the part of Myri- anthousis to indorse the bill; and (2) the alleged want of consideration for issue of the j same.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 448 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

We are, therefore, of the view that in the circumstances it a was not now open to the respondent to raise the issue of (1) lack of due presentment; and (2) lack of “notice of dishonour” for non-payment. However, on the question of lack of b “notice of dishonour” for non-payment the respondent by its pleadings have admitted that the bill of exchange (exhibit E) which was dishonoured by it was presented to them on 20 May, 1972 and it is the law that where the indorser (in the instant case, the respondent) is the person to whom c the bill is presented for payment, it is not necessary to serve him (the indorser) with a notice of dishonour for non- payment (see section 50(2)(d)(ii) of the Bills of Exchange Act, Cap 21 Laws of the Federation of Nigeria, 1958; also d Halsbury’s Laws of England (4ed) Volume 4 paragraph 429 page 190). We will now deal with the issue of consideration. Lack of e consideration was raised in regard to two aspects of the claim in this suit, viz – (a) in relation to the guarantee; and (b) in relation to the indorsement of the bill of exchange. Since we consider that this appeal can be disposed of on the f aspect of the claim relating to the indorsement of the bill of exchange, we consider it unnecessary to deal with that aspect of the claim relating to the liability of the respondent (if any) arising, under the guarantee hereinbefore mentioned. The liability of an indorser of a bill of exchange to the g holder and/or his indorsee are clearly set out in the Bills of Exchange Act, Cap 21 aforesaid. In the first place by indorsing the same, the indorser of the bill undertakes that, on due presentment, it will be “accepted and paid according to its h tenor, and that if it be dishonoured he will compensate the holder or a subsequent indorser who is compelled to pay it provided that the requisite proceedings on dishonour are duly taken” (see section 50(2)(a) of the Bills of Exchange i Act, Cap 21 aforesaid); and in regard to his immediate or subsequent indorsee the indorser is estopped or precluded from denying that at the time of his indorsement the instrument (ie the bill) was a valid and subsisting one and that he j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Metalimpex v. A.G. Leventis and Co (Nig.) Limited 449 a had good title to it (see section 55(2)(c), Cap 21 aforesaid). And again every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value b (see section 30(1) of the Bills of Exchange Act Cap 21 aforesaid). Hence, unlike other forms of simple contract, bills of exchange (and promissory notes) are presumed to stand on the basis of a valuable consideration. On the basis of this presumption therefore the burden is on the party who c alleges want of consideration (and in the instant case, this will be the respondents) to prove the same. The respondents gave no evidence in the court below. The evidence on record, however – that of the appellants – establishes that the d subsisting debt of WASCO was the consideration for the bill (exhibit E) and the case of Balfour v Sea Fire Life Assurance Co (1857) 3 C.B. (N.S.) 300 is authority for the view and proposition that a subsisting debt from a third person is good e consideration for a bill of exchange, at least if the instrument is (as in the case in hand) payable at a future date (because it amounts to an implied agreement as it clearly does in the case in hand to give time to the original debtor), and this in- f dulgence to the original debtor is, indeed, consideration to the maker or indorser of the bill. This disposes of the argument so strenuously urged upon us by learned Counsel for the respondent – Chief Obafemi Awolowo – that (1) there g was no express request from the respondents for appellants to forbear to sue WASCO; and (2) there was no evidence of such forbearance in fact and, therefore, consideration for the making of or indorsement of exhibit E did not move from h the appellants (qua promisee). What more evidence of forbearance can anyone require? It is clear that the appellant had to “be patient” (i.e. forbear) with WASCO and refrain from any steps toward recovery of the debt between March, i 1972, when exhibit E was issued and January, 1973 when the present claim was filed. As stated by Crowder J in Bal- four’s case (supra):– “The contract between the plaintiffs and the defendants was j merely the giving of a bill by the latter in discharge of a debt due,

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 450 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

from third parties . . . the consideration being the forbearance of a the plaintiffs during the currency of the bill” (see 140 ER at 758). There was, therefore, in our view, sufficient consideration de facto for the indorsement of exhibit E by the respondents b against whom the principles of liability of, and estoppel against, the indorser of a bill (as provided by subsections (a) and (c) of section 55(2) of the Bills of Exchange Act, Cap 21 aforesaid) must operate. c We are now left with the principal question in this appeal and it is whether the respondent is right in its contention that it is not liable in this action on the signature of Mr Ph Myri- d anthousis which they claim to be unauthorised? Now, where a contract is entered into on behalf of a company the question which arises is whether such a contract is binding on the company and can be enforced by or against it. The answer e depends inter alia on whether the contract is (1) ultra vires the company; or (2) intra vires the company but ultra vires its directors. If the contract is ultra vires the company neither the company nor the opposite party to it can generally f sue on it. If, however, the contract is intra vires the company but ultra vires its directors the opposite party to it can, in certain circumstances, sue the company. The memorandum and articles of a company are registered with the Registrar g of Companies and may be inspected by any member of the public; consequently, any member of the public who deals with a company is deemed to have notice of its memorandum and articles and therefore the powers and limitations of h its directors. If a member of the public, therefore, deals with the company in matters inconsistent with the powers given in the memorandum and articles and the consequences are unpleasant he must abide by such consequences. However, a i person may hold a company liable on any contract between them although ultra vires the directors of the company if:– (a) the company has held out the director as having the necessary authority; or j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Metalimpex v. A.G. Leventis and Co (Nig.) Limited 451 a (b) the circumstances fall within the well-known rule in Royal British Bank v Turquand (1856) 6 E. and B. 327 which put shortly is this: A person dealing with b a company is assumed to be aware of the powers of the company which are set out in its public documents (ie the memorandum and articles of association) filed with the Registrar since he has access to c these documents and although it is his duty to see that any contracts he proposes to enter with the company are within its powers he is not bound to do more. He need not inquire into the internal working of the company; and he is entitled to assume that d everything is being done properly or constitutionally. There are of course limitations to the above rule and it does not apply in the following cases; e (a) cases of forgery or non-genuine transactions; (b) where the person seeking to rely on the rule is himself aware or has knowledge of irregularities; or f (c) where the transaction is of such an unusual nature that a person dealing with the officers of a company might reasonably be expected to make inquiries to assure himself that those with whom he is dealing g are acting regularly and within the authority of the company; or (d) where the person seeking to rely on it was not aware of the contents of the memorandum and articles of h association of the company. We think it is desirable to refer to one or two sections of the respondent’s memorandum and articles of association which were received in evidence at the trial, as exhibit L:– i (1) Clause K of the Memorandum of Association (exhibit L) empowers the respondents:– “to draw, make, accept, endorse, negotiate, discount and execute promissory notes, Bills of Exchange and other j negotiable instruments.”

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 452 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(2) Clause H of exhibit L empowers the respondents:– a “to receive money on deposit or loan upon such terms as the company may approve, and to guarantee the obligations and contracts of customers and others.” b (3) Article 78 of the articles of association (exhibit L) reads:– “The business of the company shall be managed by the directors who may pay all such expenses of and . . . may c exercise all such powers of the company all and do on behalf of the company such acts as may be exercised and done by the company . . .” (4) Article 95 of exhibit L reads:– d “The directors may delegate any of their powers to Committees consisting of such member or members of their body as they think fit . . .” (5) Article 76 of exhibit L reads:– e “The directors may from time to time appoint any one or more of their body to be Managing Director of Managing Directors, for such period and upon such terms as they may think fit and may vest in such Managing Director or Managing Directors such of their powers hereby vested f in the directors generally as they may think fit and such powers may be made exercisable for such period or periods . . .” And, finally:– g (6) Article 2 of exhibit L – the interpretation clause – provides that words importing the singular number only shall include the plural number and vice versa (italics supplied). h We are satisfied that from the above provisions the respondent is empowered by its constitution, to endorse bills of exchange and that in doing so it may act by its directors who are themselves empowered by the said constitution to ap- i point, for this purpose, from among their body a managing director (article 76 refers). In other words, the respondent’s constitution, without doubt, anticipates that one or more of their directors or a managing director may exercise the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Metalimpex v. A.G. Leventis and Co (Nig.) Limited 453 a powers set down in Clause H of exhibit L (which include the endorsement of a bill of exchange). Now, dealing with the subject of signature on bills of ex- b change the learned authors of Halsbury’s Laws of England (4ed) Volume 7 at paragraph 743 page 444 observe:– “Where in the case of an individual a bill or note is required to be signed, it is sufficient, in the case of a company if it is signed on c behalf of the company by any person acting on its authority . . . A Bill of Exchange . . . is deemed to have been . . . indorsed . . . on behalf of the company by any person acting under its authority. It is not necessary that a formal resolution of the directors should be d passed that bills should be passed that bills should be accepted; and where a director without authority accepts bills on behalf of a company whose articles give power to delegate the duty of accepting bills to one director, the company is liable to a holder in due course even though the delegation has not in fact taken place” e (italics supplied). In the case of Dey v Pullinger Engineering Co (1920) All ER Rep. 591 which is cited in support of the statement f quoted above by the learned Authors of Halsbury’s Laws of England Volume 4 aforesaid. Sankey J cited with approval the statement of Lindley LJ in Biggerstaff v Rowatts Wharf Ltd (1896) 2 Ch. 3 at 102:– g “Here the articles enabled the directors to give to the managing director all the powers of the directors except as to drawing, accepting or indorsing bills of exchange and promissory notes. The persons dealings with him must look at the articles, and see that the managing director might have power to do what he purports to do, h and that is enough for a person dealing with him bona fide. It is settled by a long string of authorities that, where directors give a security which according to the articles they might have power to give, the person taking it is entitled to assume that they had the i power” (see (1920) All ER Rep. at 596). We are satisfied that, in the case in hand, the articles enable the directors or the managing director, or a committee of one or more of their body to exercise on its behalf all the powers j of the company (and these, by virtue of article 78 and

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 454 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Clauses H and K of exhibit L include the power to indorse a a bill of exchange and to guarantee the obligation of another, in this case, WASCO). It is sufficient for the appellant to look at exhibit L and come to the conclusion that Ph. Myri- b anthousis, a member of the body of directors of the respondent’s company might have the power to endorse exhibit E. In this context the significance of the failure of the respondent to adduce this vital evidence of want of authority on the c part of Myrianthousis should not be overlooked. We think it should be mentioned, in passing that, while the company “note paper” of WASCO on which exhibit A was written (and directed to the appellant) lists its directors, and show Mr H. Summ as the managing director, none of the note pa- d per on which the letters from the respondent to the appellant were written (exhibits D, G and J refer) indicate that the respondent had a “managing director”; on the contrary, each of the exhibits was signed by Myrianthousis qua director e and his name is listed at the foot of each note paper as one of the six directors of the respondent. We are unable to accept the rather belated argument of respondent that Dr. Hontvari of the appellant’s company came to Nigeria in March, 1972, f because he was suspicious of the validity and authority of Myrianthousis to indorse the bill, his explanation that he did so out of a desire to be more cautious and to confirm his impression that Myrianthousis was authorised to indorse all g 12 the bills of exchange was justified by the facts given in evidence. We are unable, in the circumstances, to accept the contention of learned Counsel for the respondent that the third exception (exception (c) supra) to the rule in h Turquand’s case (supra) can be invoked against the appellant. Accordingly, we are satisfied that the plea of want of authority on the part of Myrianthousis to indorse the bill, ex- i hibit E, must fail and the argument in support of it cannot therefore succeed, particularly in view of the lack of evidence to support the said plea. As we stated earlier on, this appeal can be disposed of on the issue of the respondent’s j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Metalimpex v. A.G. Leventis and Co (Nig.) Limited 455 a liability as indorser of the bill, exhibit E, and we, therefore, find it unnecessary to consider the second arm of the claim (ie respondent’s liability under the guarantee). b This appeal, therefore, succeeds and the judgment of the learned judge of the High Court of Lagos in Suit LD 66/73 dated 10 December, 1975, together with the order awarding costs of N1,000 to the respondent must be, and are, hereby c set aside and in substitution therefor it is hereby ordered that judgment entered in favour of appellant (plaintiff in the court below) for the sum of N117,156.73 together with interest thereon at 10% from 19 January, 1973 until 10 De- d cember, 1973. The appellants are entitled to costs of this appeal assessed at N380, whereof N130 represents their out- of-pocket expenses and in the court below assessed at N150. Costs of N1,000 awarded by the court below to the respon- e dent, it being already paid, must be refunded to the appellant. Appeal allowed.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

456 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

a Chief J.J. Enzewor v Central Bank of Nigeria SUPREME COURT OF NIGERIA MADARIKAN, ALEXANDER, IDIGBE JJSC b Date of Judgment: 19 MARCH, 1976 Suit No.: SC.167/74

Currency – Conversion – Plaintiff claiming thereunder – What to prove – Decree No. 11 of 1968 c Facts The plaintiff’s claim against the defendant was for the sum of £26,659 being money paid by the plaintiff to the defendant in old Nigerian currency notes to be exchanged by the d defendant into new Nigerian currency notes and which the defendant has failed to exchange for the plaintiff. In the alternative, the plaintiff claimed the said sum as money had and received by the defendant to the suit of the e plaintiff. In his statement of claim, the plaintiff averred as follows:– “STATEMENT OF CLAIM:– f (1) The plaintiff is a Nigerian citizen ordinarily resident at Onitsha in the East Central State of Nigeria and the defendants are a bank established and incorporated by and under the Central Bank of Nigeria Act. (2) The defendants were at all times material to this action duly g charged inter alia with the duty of exchanging in the East Central State old Nigerian currency notes for new notes circulating at the present time in all parts of the country. (3) On or about 7 April, 1970 the plaintiff deposited with the h defendants the sum of £26,659 (sic) old Nigerian currency notes for purposes of exchange and obtained receipt No. ES005055 dated 7/4/70. WHEREUPON the plaintiff claims as per the writ of summons.” In answer to these averments, the defendant pleaded as fol- i lows:– “STATEMENT OF DEFENCE:– (1) The defendant admits that it is a bank statutorily incorporated by and under the provisions of the Central Bank of j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Chief J.J. Enzewor v. Central Bank of Nigeria 457 a Nigeria Act but otherwise does not admit any other part of paragraph 1 of the statement of claim. (2) The defendant admits it was charged with the duty of exchanging in the East Central State old Nigerian currency b notes into new ones circulating in the Federation of Nigeria but states that such exchanges were and are carried out only in accordance with the laws governing them whenever such exchange is operative. c (3) The said sum of £26,659 old Nigerian currency notes allegedly deposited by the plaintiff on or about 7/4/70 had ceased to be legal tender in the Federation of Nigeria and had no value in Nigeria. d (4) The said old Nigerian currency notes or each of them, have nil value as currency within the Federation of Nigeria and in consequence the plaintiff is not entitled to receive from the defendant any sum of money whatsoever as claimed in his writ of summons. e (5) The defendant will contend that the plaintiff’s action should be dismissed.” In a reserved judgment, the learned Judge (Savage J) considered the Decrees and subsidiary legislation governing ex- f change or conversion of old currency notes to new ones, and came to the conclusion that the action was misconceived because the Governor of the Central Bank had not exercised certain discretionary powers vested in him under the law. g The action was accordingly dismissed. The plaintiff has appealed against the decision of the High Court on the following grounds:– “(1) The learned trial judge erred in law and on the facts in fail- h ing to give judgment in favour of the plaintiff when the material facts alleged in the statement of claim have been established and there is no valid defence or answer to the said claim. i (2) The learned trial judge misdirected himself in law in holding that by the letter exhibit C the Governor of the defendant bank has exercised some statutory discretionary power to decide how much of the plaintiff’s £26,659 in old Nige- rian currency is payable to him in the (then) new Nigerian j currency.”

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

458 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Held – a 1. Where a plaintiff bases his claim on currency conversion or exchange, the onus is on him to establish that the conversion or exchange is authorised by law and, in this par- b ticular case, the onus is on the plaintiff to prove that the conversion or exchange is authorised by Decree No. 11 1968 on which he relies. 2. The onus was on the plaintiff, who was seeking to rely c on Decree No. 11 of 1968 as authority for the exchange of old currency at Onitsha, to prove that the Decree was applicable to the former East Central State. This he has failed to do. His claim was therefore rightly dismissed d by the lower court. Appeal dismissed. e Case referred to in the judgment Foreign The Why Not (1868) L.R. 2A. and E. 265 f Nigerian statutes referred to in the judgment Central Bank (Currency Conversion) Decree No. 51 of 1967, section 1(1)(a) and (b) g Currency Conversion (South Eastern and Other States) De- cree No. 11 of 1968 as amended by Decree No. 49 of 1968, section 2 h Counsel For the appellant: Williams (Okwesa with him) For the respondent: Odofin i

Judgment MADARIKAN JSC: (Delivering the lead judgment) The appellant was the plaintiff, and the respondent the defendant, j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Madarikan JSC Chief J.J. Enzewor v. Central Bank of Nigeria 459 a in an action (suit no. LD/836/1971) in which the writ was endorsed as follows:– “The plaintiff’s claim against the defendant is for the sum of b £26,659 being money paid by the plaintiff to the defendant in old Nigerian currency notes to be exchanged by the defendant into new Nigerian currency notes and which the defendant has failed to exchange for the plaintiff. In the alternative, the plaintiff claims the said sum as money had c and received by the defendant to the suit of the plaintiff.” Pleadings were ordered and they were duly filed and delivered. In view of the observations we propose to make later in this judgment, it is convenient to set out the pleadings in d full now. In his statement of claim, the plaintiff averred as follows:– “STATEMENT OF CLAIM:– (1) The plaintiff is a Nigerian citizen ordinarily resident at e Onitsha in the East Central State of Nigeria and the defendants are a bank established and incorporated by and under the Central Bank of Nigeria Act. (2) The defendants were at all times material to this action duly f charged inter alia with the duty of exchanging in the East Central State old Nigerian currency notes for new notes circulating at the present time in all parts of the country. (3) On or about 7 April, 1970 the plaintiff deposited with the defendants the sum of £26,659 (sic) old Nigerian currency g notes for purposes of exchange and obtained receipt No. ES005055 dated 7/4/70.” WHEREUPON the plaintiff claims as per the writ of summons.” In answer to these averments, the defendant pleaded as fol- h lows:– “STATEMENT OF DEFENCE:– (1) The defendant admits that it is a bank statutorily incorporated by and under the provisions of the Central Bank of i Nigeria Act but otherwise does not admit any other part of paragraph 1 of the statement of claim. (2) The defendant admits it was charged with the duty of exchanging in the East Central State old Nigerian currency notes into new ones circulating in the Federation of Nigeria j but states that such exchanges were and are carried out only

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Madarikan JSC 460 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

in accordance with the laws governing them whenever such a exchange is operative. (3) The said sum of £26,659 old Nigerian currency notes allegedly deposited by the plaintiff on or about 7/4/70 had ceased to be legal tender in the Federation of Nigeria and b had no value in Nigeria. (4) The said old Nigerian currency notes or each of them, have nil value as currency within the Federation of Nigeria and in consequence the plaintiff is not entitled to receive from the defendant any sum of money whatsoever as claimed in his c writ of summons. (5) The defendant will contend that the plaintiff’s action should be dismissed.” At the trial the plaintiff testified on his own behalf and d called no other witness. He stated that, after the civil war, the defendant asked those who had not exchanged their old currency notes for new ones to come forward and exchange them. It appears that it was in response to this call that the e plaintiff deposited £26,659 old currency notes with the defendant on 7 April, 1970 and obtained a receipt, exhibit A. The plaintiff tendered in evidence a letter dated 8 October, 1971 addressed by his solicitor to the defendant. The letter f (exhibit B) reads:– “The Governor, Central Bank of Nigeria, Tinubu Square, Lagos. Dear Sir, I act for Chief J.J. Enwezor of Onitsha. My client states that g on 7 April, 1970 he paid to your bank the sum of £26,659 (Twenty-six Thousand, Six Hundred and Fifty-nine pounds) as per Receipt No. ES005055 of 7/4/70 in old Nigerian currency notes. (2) Up till this date, my client has not been paid the h equivalent sum in the present currency. (3) I shall be glad if you will kindly let me know the reasons for the delay in making payment. Yours faithfully, i F.R.A. WILLIAMS.” He also tendered as exhibit C the defendant’s reply to exhibit B. We now reproduce exhibit C:– “20 October, 1971 j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Madarikan JSC Chief J.J. Enzewor v. Central Bank of Nigeria 461 a CENTRAL BANK OF NIGERIA Tinubu Square Lagos. b PRIVATE MAIL BAG 12194: CABLES: CENBANK: TELEPHONE ...... 18 October, 1971. c Chief F.R.A. Williams, 26, Moloney Street, P.O. Box 3426, d Lagos. Dear Sir, I write with reference to your letter (Ref. FRAW/AO/CB/11/71 of 8 October, 1971 to inform you that your client’s entitlement as a e depositor was £20 ex gratia award authorised by the Federal Gov- ernment. Authority to pay the award to him has been given to the East Cen- tral State Government whom he had earlier been advised to contact for payment. f Yours faithfully, (Sgd.) E.N. Isong Governor.” g The only witness called by the defence was Sule Okponubi, an Assistant Chief of Banking Operations. He testified that:– “The Federal Government requested the people from the East Cen- tral State to exchange their currencies, both Biafran and Nigerian. h We sent out teams to accept the deposits. This was in 1969/1970. After all the deposits [had] been accepted, the Government directed that the defendant should make an ex gratia payment of £20 each to all of them. As a result of this direction, the defendant was not able to exchange the deposited amounts, whether Biafran or i Nigerian. The Government has so far not given any direction to the contrary. CROSS-EXAMINED BY CHIEF WILLIAMS: The direction from the Government was in writing. j RE-EXAMINED BY DR. WILLIAM: No questions.”

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Madarikan JSC 462 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

In a reserved judgment, the learned Judge (Savage J) con- a sidered the Decrees and subsidiary legislation governing exchange or conversion of old currency notes to new ones, and came to the conclusion that the action was misconceived be- b cause the Governor of the Central Bank had not exercised certain discretionary powers vested in him under the law. The action was accordingly dismissed. The plaintiff has appealed against the decision of the High c Court on the following grounds:– “(1) The learned trial Judge erred in law and on the facts in failing to give judgment in favour of the plaintiff when the material facts alleged in the statement of claim have been es- d tablished and there is no valid defence or answer to the said claim. (2) The learned trial Judge misdirected himself in law in holding that by the letter exhibit C the Governor of the defendant bank has exercised some statutory discretionary power e to decide how much of the plaintiff’s £26,659 in old Nige- rian currency is payable to him in the (then) new Nigerian currency. PARTICULARS OF MISDIRECTION f (i) There was no plea in the defence that the Governor of the defendant made any determination as alleged or at all. (ii) The Governor of the defendant bank has not the statutory power which the learned trial Judge assumed that g he has. (3) The learned trial Judge erred in law in holding that the provisions of the Decrees and Regulations to which he referred in his judgment precluded him from giving judgment in favour of the plaintiff when there is absolutely nothing in the h said Decrees and Regulations capable of depriving the plaintiff of his remedy.” Before us on appeal, learned Counsel for the appellant, Chief F.R.A. Williams, argued the grounds of appeal to- i gether. At the forefront of his argument, it was Chief Wil- liams’s contention that the plaintiff was entitled to succeed as the allegations in the statement of claim were either admitted in the statement of defence or not expressly denied. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Madarikan JSC Chief J.J. Enzewor v. Central Bank of Nigeria 463 a Counsel further contended that, in those circumstances, the plaintiff was relieved of the burden of establishing any facts. Chief Williams next referred to the evidence adduced by b the defence to the effect that the Government had directed that each depositor of old currency notes should be given £20 (N40) as ex gratia payment and submitted that inas- much as the direction was not pleaded, the evidence pertain- c ing to it did not go to any issue raised in the pleadings. The pith of Chief Williams’s argument was that as there has been no dispute that the plaintiff deposited old currency d notes with the defendant and as the defendant has failed to exchange them for new notes, there was, in Chief Williams’s submission, no defence to the action. Put in a nutshell, Mr Odofin’s reply was that paragraph 2 e of the statement of defence which contained the kernel of the defence to the action was worded in such a manner that the defendant could, in establishing its defence, pray in aid any laws governing exchange of currency. Counsel referred f to the Central Bank (Currency Conversion) Decree, 1967 (hereinafter referred to as Decree No. 51 of 1967) and contended that, though it charged the defendant with the duty of exchanging old currency notes for new ones, the conversion g exercise under that Decree had ceased long before the transaction giving rise to the present action. Counsel further contended that the Currency Conversion (South Eastern and Other States) Decree, 1968 (hereinafter referred to as Decree h No. 11 of 1968) did not alter the position as the application of that Decree had not been extended to the former East Central State by the direction of the Head of the Federal Military Government as required by section 2 of the Decree. i Summing up his submission, Counsel stressed that the transaction on which the action was based was not a currency conversion or exchange under the law; that the sum of (N40) which the Federal Government promised to pay each deposi- j tor was in the nature of an ex gratia award and finally

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Madarikan JSC 464 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) submitted that, in the circumstances, the action was rightly a dismissed. Chief Williams then sought and was granted an adjourn- ment to enable him to find out whether there had been publi- b cation in the Gazette of any direction under section 2 of De- cree No. 11 of 1968 which, as we have earlier indicated, was referred to and relied upon by Mr Odofin in his reply. c When hearing was resumed, Chief Williams indicated that he was unable to find such publication. He, however, argued that as the law permits the Head of the Federal Military Government to give a direction under section 2 of Decree d No. 11 of 1968 “in such manner as he may think fit”, the direction need not be in writing. Further, it was his submission that where such discretion has in fact been given, the law confers a discretion on the Governor of the Central Bank to e publish it in the Gazette at the time the direction was given or at any time thereafter. Whilst still dwelling on this point, Chief Williams stressed that it was within the discretion of the Governor of the Central Bank to decide whether to pub- f lish the direction in the Gazette or not and, what was more, the time of publication was also within his discretion. Re- garding onus of proof of the existence or non-existence of a direction under section 2, Chief Williams argued that:– g (1) the fact that it was the defendant/bank that invited the plaintiff to deposit old currency notes was sufficient to raise a presumption that a direction had been given under section 2; h (2) as it was within the peculiar knowledge of the defendant whether the Head of the Federal Military Gov- ernment had given a direction under section 2 or not; i and (3) having regard to the state of the pleadings at the close of pleadings the onus was on the defendant to establish that no direction was given under section 2 j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Madarikan JSC Chief J.J. Enzewor v. Central Bank of Nigeria 465 a to extend the application of Decree No. 11 of 1968 to the former East Central State. Firstly, we propose to make some observations about the b pleadings in this case. Paragraph 1 of the statement of claim (already reproduced in this judgment) is introductory in that it alleges that the plaintiff is a Nigerian citizen ordinarily resident at Onitsha in the former East Central State; and that c the defendant/bank is established and incorporated by and under the Central Bank of Nigeria Act. The allegations in paragraphs 2 and 3 are:– (1) that the defendant/bank was charged with the duty of d exchanging in the former East Central State old Ni- gerian currency notes for new ones; and (2) that the plaintiff deposited £26,659 (sic) old Nigerian e currency notes with the defendant on or about 7 April, 1970 for purposes of exchange. The statement of defence was just as brief as the statement of claim. Paragraph 1 admits that the defendant/bank is in- f corporated by and under the Central Bank of Nigeria Act but otherwise makes no further admission. Paragraphs 3–5 contain averments that the sum of old Nigerian currency notes allegedly deposited by the plaintiff with the defendant had g ceased to be legal tender; that they had no value and the defendant contended therein that the plaintiff’s action should be dismissed as he was not entitled to succeed. The bedrock of the defence appears to be the averments in paragraph 2 h which, even at the risk of repetition, we shall reproduce again:– “The defendant admits it was charged with the duty of exchanging in the East Central State of old Nigerian currency notes into new i ones circulating in the Federation of Nigeria but states that such exchanges were and are carried out only in accordance with the laws governing them whenever such exchange is operative.” Due to the paucity of facts alleged by each party in the j pleadings, it does not appear to us that, at the close of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Madarikan JSC 466 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) pleadings, the issues between the parties were clearly and a precisely defined. In settling pleadings, it is essential for Counsel to always bear in mind that pleadings:– “are not to be considered as constituting a game of skill between b the advocates. They ought to be so framed as not only to assist the party in the statement of his case but the court in its investigation of the truth between the litigants” (per Phillimore J in The Why Not (1868) L.R. 2A. and E. 265). c We shall now proceed to consider the extensive arguments skilfully canvassed before us in this appeal by Counsel on both sides from whom we have derived considerable assistance. Our consideration of the appeal, in so far as the plead- d ings are concerned, must necessarily be on the basis that each party is assumed to have put forward the best case he has in the best way he can in his pleading. Where a plaintiff bases his claim on currency conversion e or exchange, the onus is on him to establish that the conversion or exchange is authorised by law and, in this particular case, the onus is on the plaintiff to prove that the conversion or exchange is authorised by Decree No. 11 of 1968 on f which he relies. The Central Bank (Currency Conversion) Decree, 1967 (hereinafter referred to as Decree No. 51 of 1967) came into g operation on 30 December, 1967. It provides that when an existing currency is altered, the conversion date shall be fixed and all currency affected shall cease to be legal tender but shall be replaced by new currency to the equivalent h value if presented within the dates specified in section 1(1)(a) and (b). Upon the alteration of the currency which was then in circulation, 30 December, 1967 was duly fixed as the conversion date (see the Currency Conversion Date i Notice, 1967). The currency conversion under Decree No. 51 of 1967 had long ceased before the transaction which formed the basis of the present action. We are therefore not surprised that the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Madarikan JSC Chief J.J. Enzewor v. Central Bank of Nigeria 467 a parties are not relying on Decree No. 51 of 1967. It is clear from the arguments of Counsel on both sides that the relevant law applicable to the facts of this case is con- b tained in the Currency Conversion (South Eastern and Other States) Decree, 1968 (hereinafter referred to as Decree No. 11 of 1968). We propose to start off our consideration of the arguments by examining whether, at all times material to c this case, Decree No. 11 of 1968 was applicable to the former East Central State. Section 2 of the Decree provides that the Decree:– “shall supply to all States of the Federation, so however that noth- d ing in this Decree shall extend its application to . . . East Central State . . . until a direction of the Head of the Federal Military Gov- ernment given in such manner as he may think fit, and in the discretion of the Governor of the Central Bank of Nigeria published in the Gazette at any time any such direction is given, or at any e time thereafter.” There was no evidence that a direction had either been given under section 2 or that it had been given and published in the Gazette. We must therefore conclude that it has not been es- f tablished by evidence that Decree No. 11 of 1968 was applicable to the former East Central State. We have carefully considered the nature of the claim before the court and the pleadings. We are in no doubt that the onus was on the g plaintiff, who was seeking to rely on Decree No. 11 of 1968 as authority for the exchange of old currency at Onitsha, to prove that the Decree was applicable to the former East Cen- tral State. This he has failed to do. His claim was therefore h rightly dismissed by the lower court. Although it is not necessary for us to base our decision on other points raised in this appeal, we feel that it is necessary i to point out that the mischief aimed at by the stringent provisions of Decree No. 11 of 1968 – as amended by Decree No. 49 of 1968 – and the object of the Decree which was the surrender of all former notes which had ceased to be legal j tender in exchange (but only where so authorised by law) for

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Madarikan JSC 468 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) new currency notes, are brought out clearly under section 1B a which creates the following offences:– “1B(1) It shall be an offence for any person – (a) to have in his possession in Nigeria or under his apparent b control, any note issued which, immediately before the conversion date was in circulation in Nigeria as legitimate currency of Nigeria (in this section hereafter referred to as ‘former currency’), after the time or extended time, as the case may be, fixed under this Decree c for its conversion in the area where the offender at the time is, elapsed; or (b) by any means to bring into or take out of Nigeria any former currency or any new currency issued pursuant to the Central Bank (Currency Conversion) Decree 1967; or d (c) by any means or to move or cause to be moved from a part of Nigeria where currency conversion under this Decree has not been commenced or as the case may be, completed, any former currency with intent to procure its e conversion under this Decree in a part of Nigeria where the time or extended time, as the case may be, for such conversion has elapsed; or (d) by any means to move or cause to be moved from a part of Nigeria where the time or extended time for conver- f sion of former currency under this Decree has elapsed, into any part of Nigeria where former currency has not been converted, or as the case may be, action to convert has not commenced, or if commenced, has not been completed, under this Decree; or g (e) in any other case in circumstances calculated or likely to prejudice the economic stability or welfare of Nigeria, to tender for conversion or convert or attempt to convert any former currency” h For the foregoing reasons, this appeal must fail and it is hereby dismissed with N168 costs to the respondent. Appeal dismissed.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Bronik Motors Limited v. Wema Bank Limited 469 a Bronik Motors Limited v Wema Bank Limited SUPREME COURT OF NIGERIA b NNAMANI, BELLO, ESO, IDIGBE, IRIKEFE, OBASEKI, UWAIS JJSC Date of Judgment: 10 JUNE, 1983 Suit No.: SC.110/1982

Banking – Banker/customer relationship – Jurisdiction of Federal High Court – Whether any – Section 7(1)(b)(iii) of c the Federal High Court Act

Facts In this suit which commenced in the High Court of Lagos d State as Suit No. LD/40/80, the plaintiff (ie respondent herein) brought a claim against the defendant (appellants herein) in the following terms:– “1. Specific performance of an agreement between the parties e and evidenced in letters dated 10/1/76, 28/1/76 and 2/2/76 whereby the defendants promised to execute legal mortgage of the defendants’ properties lying and situate at (a) 400 Herbert Macaulay street, Yaba Lagos (b) Adekunle Fajuyi f Street, Ibadan (c) Ijebu Bye Pass, Oke Ado, Ibadan (d) 21 Barrack Road, Calabar and (e) Mile 3 Aba/Port Harcourt Road, Aba; in favour of the plaintiff to secure various overdrafts amount to over N2,000,000 made to the defendants in Lagos between 1976 and 1978. g 2. The sum of N2,135,092.57k (Two Million One Hundred and Thirty five Thousand Ninety Two Naira and Fifty Seven Kobo) being balance due to the plaintiff for overdrafts granted by the plaintiff to the first defendant at the plaintiff’s Mushin and Ebute Metta Branches, in the normal h course of their business as bankers to first defendant at their request and for bank charges, incidental expenses upon money due from the defendants to the plaintiffs which money the defendants have refused and/or neglected to pay i in spite of repeated demands. Plaintiff also claims interest on the said sum of N2,135,092.57k at the rate of 8% per annum from 1 October, 1979 until final liquidation of the whole debt or part thereof.” Pleadings were ordered and were duly filed and exchanged j by the parties. After a protracted trial in which 28 exhibits

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

470 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) were tendered and received in evidence, Onalaja J, in a de- a tailed and painstaking judgment delivered on 24 April, 1981, found in favour of the plaintiff bank. The appellants herein being dissatisfied with that judgment b appealed to the Federal Court of Appeal (hereinafter referred to as the Court of Appeal). The Court of Appeal dismissed the appellants’ appeal and confirmed the judgment of the High Court in part. c It is against this judgment that the appellants have appealed to this Court. By leave of this Court, an amended notice of appeal con- d taining 13 grounds of appeal was filed by the appellants. As this appeal will turn on the proper interpretation of section 7 of the Federal Revenue Court Act, 1973 (No. 13 of 1973) and section 230 of the Constitution of the Federal Republic e of Nigeria, 1979 (hereinafter referred to as the 1979 Constitution on which learned Counsel for both parties address the court extensively, I do not propose to set down all the grounds. In ground 13 the appellants complained f that:– “The Federal Court of Appeal and the Lagos High Court erred in law in failing to observe that jurisdiction over the claim in this action is vested in the Federal High Court and not in the High Court g of Lagos State.”

Held – 1. With this interpretation placed on section 7(1)(b)(iii) of h the Federal High Court Act it follows that the jurisdiction of the Federal High Court in so far as this case is concerned is limited to banking (fiscal) measures and not to everything pertaining to banking. It definitely does i not include the ordinary day-to-day banking activities between the bank and its customers. It follows that the State High Court still has jurisdiction in the matter. Appeal dismissed. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Bronik Motors Limited v. Wema Bank Limited 471 a Cases referred to in the judgment Nigerian Adesanya v President of Federal Republic of Nigeria (1981) b 5 SC 112 Attorney-General Bendel State v Attorney-General Federa- tion (1983) 6 SC 8 c Bucknor-MacLean and another v Inlaks Ltd (1980) 8–11 SC 1 Ejoh v Inspector General of Police 1963 1 All NLR 250 Federal Republic of Nigeria v Eze (1982) 3 NCLR 251 d Jammal Steel Structures Ltd v African Continental Bank Ltd (1973) 1 All NLR (Part II) 208 Minister of Internal Affairs v Darman (1982) 2 NCLR 915 e Nasir v Bouari (1969) 1 NMLR 38 Oduola v Coker (1981) 5 SC 197 Rabiu v The State (1980) 8–11 SC 130 f Senate of the National Assembly v Momoh unreported, Fed- eral Court of Appeal 19 July, 1982 Surakatu v Nigeria Housing Development Society Ltd (1981) 4 SC 26 g Udenta v Chukwunta (1959) 111 ENLR 45

Foreign Anisminic Ltd v The Foreign Compensation Commission h and another (1967) 3 W.L.P. 382 Archbishop of Canterbury’s Case (1596) 2 Co. Rep. 46 Attorney-General of Gambia v N’Jie (1961) A.C. 617 i Clerical Medical and General Life Assurance Society v Carter (1889) 22 Q.B.D. 444 Colehill and District Investment Co Ltd v Minister of Local Government (1968) 1 W.L.R. 600 j Ex parte Fernandez (1861) 6 B. and N. 717

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

472 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Felix v Thomas (1967) 1 A.C. 292 a Gibbons v Ogden 6 U.S. Sup. Ct. Reports 23, L. Ed. 1st Se- ries Groves v Slaughter 10 U.S. Sup. Ct. Report 800, L. Ed. 1st b Series Hoke v United States 227 U.S. 308 Holmes v Guy (1877) 5 Ch.D. 901 c Holmes v Jennison 14 Pet. 540 10 U.S. Sup. Ct. Reports 579, L.Ed. 1st Series Huddart Parker and Co Property Ltd v Moorehead (1909) 9 C.L.R. 330 d In Re Wellstead Will Trusts (1949) Ch. 296 Jones v Secretary of State for Social Services; Hudson v Secretary of State for Social Services ( 1972) All ER 145 e Knowlton v Moore 178 U.S. 41, 20 S. Ct. 747 Letang v Cooper (1965) 1 Q.B. 232 MacKenzie v Hare 239 U.S. 299, 36 S. Ct. 106 Minister of Home Affairs v Fisher (1979) 2 W.L.R. 899; f 1980 A.C. 319 Pengelly v Bell Punch Co Ltd (1964) 1 W.L.R. 1055 Pinne v Everret (1969) 2 All ER 257 g Prigg v Pennsylvania 16 Pet 539; U.S. Sup. Ct. Reports 1060, L. Ed 1st Series R v Harris (1836) 7C and 446 Rola Co (Australia) (Pty) Ltd v Commonwealth (1944) 69 h C.L.R. 185 Sharpe v Wakefield (1888) 22 Q.B.D. 239 Shell Co of Australia Ltd v Federal Commissioner of Taxa- i tion (1981) A.C. 275 Smith v Great Western Railway (1877) 3 App. Cas. 166 Stephens v Cuckfield R.D.C. (1960) 2 Q.B. 373 Stone v Yeovil Corporation (1876) (1) C.P.D. 691 j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Bronik Motors Limited v. Wema Bank Limited 473 a Sub nom British Imperial Oil Co Ltd v Federal Commis- sioner of Taxation (1926) 38 C.L.R. 153 Vestey v Inland Revenue Commissioners (Consolidated) b (1979) 3 W.L.R. 915 Virginia v Tennessee 148 U.S. 503, 135 S. Ct. 728; 37 L. Ed. 337 c Nigerian statutes referred to in the judgment Bankruptcy Act No. 16 of 1979 Constitution of the Federal Republic of Nigeria, 1979, sections 4(1), 4(6), 5(1)(a), 5(2)(a), 6, 6(5)(a)–(f), 42, 212, 213, d 219, 220, 230(1), 230(1)(b), 236, 237(2)(a), 237(2)(c), 250, 250(1) Constitution of the Federation (Consequential Repeals) Act No. 105 of 1979 e Counterfeit Currency (Special Provisions) Act No. 22 of 1974, section 8(3) Federal Revenue Court Act No. 13 of 1973, section 7, f 7(1)(b)(iii) Insurance Act No. 59 of 1976, sections 21(1), 49(1), 62 Interpretation Act No. 1 of 1964, sections 1, 3(1) g Foreign statute referred to in the judgment Offences Against the Person Act, 1837

Books referred to in the judgment h Cross Statutory Interpretation (1981) (1ed) page 74 De Smith Judicial Review of Administrative Action (2ed) page 96 i Halsbury’s Laws of England (1961) Volume 36 at paragraph 549 Halsbury’s Laws of England (3ed) Volume 36 paragraph 583 j Justice Miller The Constitution page 314

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

474 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Maxwell Interpretation of Statutes (1961) (5ed) pages 13 a and 14 Maxwell Interpretation of Statutes (10ed) pages 128–129 Maxwell Interpretation of Statutes (12ed) pages 12, 105– b 106, 289 Nwabueze Judicialism in Commonwealth Africa Chapter 1 Nwabueze The Presidential Constitution of Nigeria c Counsel For the appellants: Williams, S.A.N. (with him Williams and Aderinokun (Mrs)) d For the respondent: Ladapo (with him Aderemi and Eme- julu)

Judgment e NNAMANI JSC: (Delivering the lead judgment) In this suit which commenced in the High Court of Lagos State as Suit No. LD/40/80, the plaintiff (ie respondent herein) brought a claim against the defendant (appellants herein) in the follow- f ing terms:– “1. Specific performance of an agreement between the parties and evidenced in letters dated 10/1/76, 28/1/76 and 2/2/76 whereby the defendants promised to execute legal mortgage g of the defendants’ properties lying and situate at (a) 400 Herbert Macaulay street, Yaba Lagos (b) Adekunle Fajuyi Street, Ibadan (c) Ijebu Bye Pass, Oke Ado, Ibadan (d) 21 Barrack Road, Calabar and (e) Mile 3 Aba/Port Harcourt Road, Aba; in favour of the plaintiff to secure various over- h drafts amount to over N2,000,000 made to the defendants in Lagos between 1976 and 1978. 2. The sum of N2,135,092.57k (Two Million, One Hundred and Thirty-five Thousand, Ninety-two Naira and Fifty- i seven Kobo) being balance due to the plaintiff for overdrafts granted by the plaintiff to the first defendant at the plaintiff’s Mushin and Ebute Metta Branches, in the normal course of their business as bankers to first defendant at their request and for bank charges, incidental expenses upon j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 475 a money due from the defendants to the plaintiffs which money the defendants have refused and/or neglected to pay in spite of repeated demands. Plaintiff also claims interest on the said sum of N2,135,092.57k at the rate of 8% per an- b num from 1 October, 1979 until final liquidation of the whole debt or part thereof.” Pleadings were ordered and were duly filed and exchanged by the parties. After a protracted trial in which 28 exhibits c were tendered and received in evidence, Onalaja J, in a detailed and painstaking judgment delivered on 24 April, 1981, found in favour of the plaintiff bank. His judgment was in the following terms:– d “(a) An order of specific performance against the defendants to execute legal mortgage of their properties situate, lying, designated, described as (i) 400 Herbert Macaulay Street, Yaba, Lagos and (ii) 21 Barracks Road, Calabar in favour e of the plaintiff. (b) The total sum of N2,135,092.57k plus interest at the rate of 8% before this judgment and 4% thereafter this judgment until final liquidation of the judgment debt. f (c) The sum of N500,000 against the second defendant as a guarantor of the first defendant with interest at the rate of 8% per annum before judgment and 4% thereafter.” g The appellants herein being dissatisfied with that judgment appealed to the Federal Court of Appeal (hereinafter referred to as the Court of Appeal). I may just in passing mention that in the course of the proceedings before that court a third h party intervened in relation to the ownership of 400 Herbert Macaulay Street, Yaba, one of the properties in respect of which the learned trial Judge had granted an order of specific performance. It may also be pertinent to mention, particularly as it is one of the grounds on which the appellants i has complained to this Court, that the Court of Appeal allowed the respondent to amend paragraphs 3, 4, 6, 7, 8 and 9 of the statement of claim by substituting the words “Bronik Motors Incorporated” for the words “the first defendant”. It j also allowed additional words to paragraph 39 of the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 476 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) statement of claim to indicate that the sum claimed included a payment made in respect of letters of credit it opened at the request of the first appellant. The Court of Appeal exercised this power pursuant to Order 1 rule 20 of the Rules of that b Court and section 16 of the Federal Court of Appeal Act, 1976. The amendments, the court ruled in its judgment dated 6 July, 1982 (Ademola, Nnaemeka-Agu and Mohammed JJCA), were to prevent any substantial injustice. They did not, it further said, introduce any new matters but rather c made “evidence already given and exhibits tendered more intelligible to follow and under stand”. In the said judgment, the Court of Appeal dismissed the appellants’ appeal and confirmed the judgment of the High Court in part. The order d for specific performance by the High Court in respect of 400 Herbert Macaulay Street, Yaba, and 21 Barracks Road, Calabar was set aside as null and void. It is against this judgment that the appellants have appealed to this Court. e By leave of this Court, an amended notice of appeal containing 13 grounds of appeal was filed by the appellants. As this appeal will turn on the proper interpretation of section 7 of the Federal Revenue Court Act, 1973 (No. 13 of 1973) f and section 230 of the Constitution of the Federal Republic of Nigeria, 1979 (hereinafter referred to as the 1979 Consti- tution) on which learned Counsel for both parties address us extensively, I do not propose to set down all the grounds. In g ground 13 the appellant complained that:– “The Federal Court of Appeal and the Lagos High Court erred in law in failing to observe that jurisdiction over the claim in this action is vested in the Federal High Court and not in the High Court h of Lagos State. Particulars of Error (a) Section 230(1)of the Constitution of the Federal Republic of Nigeria confers jurisdiction in respect of all matters in i the Exclusive Legislative List on the Federal High Court. (b) In the alternative section 7 of the Federal High Court Act (sic) confers jurisdiction in respect of ‘civil causes and matters . . . connected with or pertaining to . . . banking’ on the Federal High Court. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 477 a (c) Section 8(1) of the said Act prohibits the High Court or any other court of a State from exercising jurisdiction. (d) More than three months having expired since final addresses, the Federal Court of Appeal had no jurisdiction to b pronounce any judgment.” It is necessary to point out at this stage that the issue of jurisdiction was never taken before the High Court and the c Court of Appeal. There really can be no objection to this since it is well settled that jurisdiction can be raised at any stage of the proceedings (see Nnaka Udenta and others v Ani Chukwunta and others (1959) 111 ENLR 45). Besides, I agree with Chief Williams, S.A.N., learned Counsel to the d appellants, that the point being taken in this Court could not have been taken in the two lower courts since they were bound by the decision of this Court in Jammal Steel Struc- ture Ltd v African Continental Bank Ltd (1973) 1 All NLR e (Part II) 208 discussed in more detail infra in this judgment. Having regard too to the importance which a proper interpretation of section 230 of the 1979 Constitution has assumed, it is just as well that this point was raised now. f The appellants argued this appeal in the alternative and it may be more convenient to follow that pattern in this judgment. Chief Williams, S.A.N., for the appellants, first argued on the proper interpretation of section 7(1)(b)(iii) of the g Federal Revenue Court Act, 1973. This provision had been constructed by this Court in Jammal Steel Structures Limited v African Continental Bank (supra) and a majority of this Court held that the banking transaction which was in issue in h that case fell within the jurisdiction of the State High Court and not the Federal Revenue Court (as it then was). Put in a nutshell, for I propose later to advert to the full arguments of Counsel on this point, Chief Williams contended that that i decision was wrong and urged this Court to overrule it. He contended that all matters pertaining to banking, including the banker/customer relationship which was in issue in this suit, fell within the jurisdiction of the Federal High Court j and not the State High Court which actually disposed of the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 478 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) case. His later argument on section 230 of the 1979 Consti- a tution was therefore in the alternative for if his arguments on section 7(1)(b)(iii) of the Federal Revenue Court Act, 1973 were accepted that would be sufficient to dispose of the ap- b peal in appellants’ favour. I propose now to return to Jammal’s case and section 7(1)(b)(iii) of the Federal Revenue Court Act, 1973. In that suit, the claim was not unlike that in the present suit. It was a c claim for “N641,328.39k from the defendants/appellants being the balance due to the plaintiffs for an overdraft granted by the plaintiffs to the defendants at their Idumota branch, Lagos, in the normal course of their business as banker to d the defendants and money paid by the plaintiffs to the defendants as banker at the latter’s request, which said sum the defendants have refused and/or neglected to pay in spite of repeated demands”. The learned trial Judge before whom the e matter was first taken having ruled that his court had jurisdiction an appeal was lodged to this Court. Section 7 of the Federal Revenue Court Act, 1973 provides as follows:– “7(1) The Federal Revenue Court shall have and exercise juris- f diction in civil causes and matters:– (a) relating to the revenue of the Government of the Fed- eration in which the said Government or any organ thereof or a person suing or being sued on behalf of g the said Government is a party; (b) connected with or pertaining to:– (i) the taxation of companies and of other bodies established or carrying on business in Nigeria h and all other persons subject to Federal taxation; (ii) customs and excise duties; (iii) banking, foreign exchange currency or other measures; i (c) arising from:– (i) the operation of the Companies Decree, 1968 or any other enactment regulating the operation of companies incorporated under the Companies Decree, 1968; j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 479 a (ii) any enactment relating to copy right, patents, designs, trade marks and merchandise marks; (d) of admiralty jurisdiction.” b In construing section 7(1)(b)(iii) of Act No. 13 of 1973 the majority of the court, Eilas CJN and Ibekwe JSC (Fatayi- Williams JSC, as he then was, dissenting) came to the following conclusions:– c “(a) That the ejusdem generis rule applies to the interpretation of that section such that the word ‘measures’ must be taken to qualify each of the preceding specifically enumerated subjects including banking. This would mean that the ordinary meaning to be given to the sub-section is that it should read, d banking measures, foreign exchange measures, currency measures and other fiscal measures; (b) That the words ‘or’ and ‘other’ in that subsection are not disjunctive within the meaning of section 13(3) of the Inter- e pretation Act, 1964 but by virtue of section 1(4) of the same Act imply similarity as between the preceding specifically enumerated subjects-banking, foreign exchange and currency and the generic words ‘other fiscal measures’. (c) That if the words other measures are construed ejusdem f generis with banking, foreign exchange etc, banking measures would cover such pieces of legislation, orders and regulations of the Federal Government as relate to banking eg the Banking Decree, 1969, Central Bank of Nigeria Act g (Cap 30 of 1958 Edition) and ancillary enactments. (d) That where there is involved only a dispute between a bank and one or more of its customers in the ordinary course of banking business or transaction as in the case with the subject matter of the present case (as is also the case with the h present appeal) any State High Court is competent to entertain the case because the Government is not really interested in the outcome of the dispute. (e) That the true object and purpose of the Federal Revenue i Court Decree as can be gathered from the four corners of it is the more expeditious despatch of revenue cases particularly those relating to personal income tax, company tax, customs and excise duties, illegal currency deals, exchange control measures and the like which State High Courts were j supposed to have been too tardy to dispose of.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 480 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(f) That it does not seem that the legislative intention behind a the Decree was to clutter up the new Revenue Court with ordinary cases involving banker/customer relationship such as disputes in respect of overdraft . . . all banking transactions having nothing to do with Federal Revenue concern.” b In attacking these conclusions, Chief Williams submitted that section 7 of Act No. 13 of 1973 appeared plain and clear. He thought that the construction put on it by the majority leads to uncertainty. He contended that he had never c been able to understand what is meant by fiscal measures. He further submitted that the ejusdem generis rule results in narrowing down general words so that they do not go beyond the scope of the specifically enumerated words which d would suit them. If the ejusdem generis rule applies, it will merely operate to limit the scope of the phrase “other fiscal measures”. It will not affect the meaning or scope of the specifically enumerated words such as banking. He argued e that “other fiscal measures” must be construed ejusdem generis with banking, foreign exchange, and currency. He contended that what the majority had done was to apply the generis rule in reverse (which he thought was never done) f for it was the ejusdem generic words “other measures” which were now giving colour to the specifically enumerated words instead of the other way round. g Chief Williams further submitted that under the Interpreta- tion Act, 1964, which applies, effect must be given to punctuation unlike the position in English law. He relied on section 3(1) of the Interpretation Act, 1964 and section 18(3) thereof pursuant to which “or” and “other” would be con- h strued disjunctively. He thought there were two possible ways of reading section 7(1)(b)(iii) but preferred the second which was also in accord with the view of the minority of the court. By this that subsection in issue would read “. . . i connected with (a) banking (b) foreign exchange (c) currency (d) fiscal measures”. This, he said, gave an independent meaning to the words “currency”, “foreign exchange”, “banking”, “fiscal measures”. No word is wasted. He prayed j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 481 a in aid the principle that the legislature cannot be taken to have used any word in vain (Hill v William Hill Parklane Ltd (1949) A.C. 530 at 546). He preferred the interpretation b in the minority judgment which he argued construed banking in its ordinary sense wide enough to include every banking transaction. In urging this Court to overrule itself in the Jammal case Chief Williams referred to the attitude of this c Court as exemplified in its decision in Bucknor McLean and another v Inlaks Ltd (1980) 8–11 SC 1 at 23 line 28. In supporting the majority judgment in Jammal’s case (supra), Mr Ladosu Ladapo, learned Counsel to the respondent, d thought the majority judgment was right in holding that the ejusdem generis rule applied. He thought that it also applied in reverse. He relied on three precedents to which the majority judgment had made reference. These were Nasr v Bouri e (1969) 1 N.M.L.R. 38 at 40 and 42 where, in ascertaining the meaning of “premises” in the Rent Control (Lagos) Amendment Act, 1965, this Court held that the words “or other lawful purposes” in section 1(4) of the Act must be f construed as lawful purposes similar to “living or sleeping”. Second was the House of Lords decision in Inland Revenue Commissioners v Frere (1965) A.C. 402 that the word “interest” in the phrase “interest, annuities or other annual payments” in the Income Tax Act, 1952 meant “annual in- g terest”. The third was Colehill and District Investment Co Ltd v Minister of Local Government and another (1968) 1 W.L.R. 600 at 605 where the Court of Appeal in England held that in determining the meaning to be given to the h phrase “building, engineering, mining or other operations” in section 12(1) of the Town and Country Planning Act, 1947, the words “other operations” must be construed ejusdem generis with “building”, “engineering” and “mining”. i Mr Ladapo submitted that the majority judgment dealt with the meaning of banking measures and gave two examples: orders or regulations of the Federal Government as relate to the Banking Act, 1969 and the Central Bank of Nigeria Act. j On the contention that the majority did not give reasons for

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 482 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) their decision, he submitted that they in fact gave which in- a cluded expeditious despatch of revenue cases and the fact that it was never intended to clutter up the Federal Revenue Court with disputes arising from banker/customer relation- b ships. He further submitted that the legislature will not grant jurisdiction to a new court without expressly stating so. If the intention of the Federal Military Government was to exclude jurisdiction from other courts in all banking matters it c would have been easy to say so, he contended. He referred to section 7(1)(c) of the Act which mentions the Company Act and argued that the Act would have mentioned the Banking Act specifically too. He further submitted that, if d banking was included in section 7(1)(c)(ii) of the Act, there would have been no argument as to its full meaning. He also referred to that part of the majority judgment in e which it was observed that Act No. 13 of 1973 was not elegantly drafted and needed some retouching to avoid uncer- tainties and argued that if the intention of the legislature had been other than as found by the majority, some amendments f would have been made to the Act since then. Finally, Mr Ladapo urged that as the highest Court in the land this Court should be cautious in overruling itself. He submitted that before the highest court overrules a judgment which has g set up a finality in the law it ought to be on very high principles of law. He prayed in aid Jones v Secretary of State (1972) 1 All ER 146 at 149. He thought that the decision in Jammal was right. He submitted that, even if the Court h thought otherwise, the proper order to be made in the present case would be remission of the case to the Federal High Court and not striking it out. This, he said, is pursuant to the Revenue Court (Amendment) Act No. 36 of 1973. i I do not myself think that one can arrive at a correct interpretation of section 7 of Act No. 13 of 1973 without constantly bearing in mind the object for which the Federal Revenue Court (as it then was) was set up. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 483 a It was essentially to deal expeditiously with matters pertaining to the revenue of the Government of the Federation which it felt at the time were not being so handled by the b State High Courts. I would place emphasis on that part of the judgment of the majority in which Elias CJ said:– “It does not seem to us that the legislative intention behind the De- cree was to clutter up the new Revenue Court with ordinary cases c involving banker/customer relationship such as disputes in respect of an overdraft or the negligent payment of a forged cheque or negligent dishonouring of a customer’s cheques – all ‘banking transactions’ having nothing to do with Federal Revenue Concern.” d Admittedly what is being construed here is a statute and not a constitutional document but I believe that the principle of considering the object and scope of the provision is equally applicable (see Groves v Slaughter 10 U.S. Sup. Ct. Report e 800, L. Ed. 1st Series; Gibbons v Ogden 6 U.S. Sup. Ct. Re- ports 23, L. Ed. 1st Series). In my view the principal part of section 7 is really section 7(1)(a) which provides as follows:– f “The Federal Revenue Court shall have and exercise jurisdiction in civil causes and matters:– (a) relating to the revenue of the Government of the Federation in which the said Government or any organ thereof or a per- g son suing or being sued on behalf of the said Government is a party.” It is the semi-colon used before sub-sections (b), (c) and (d), h which have introduced the uncertainty as to the legislative intent of the legislature. I have no doubt that the intention was to vest jurisdiction in the Federal Revenue Court to deal with civil matters relating to the matters enumerated in subsections (b) and (c) in so far as they relate to the revenue of i the Government of the Federation. That would colour the meaning to be attached to all those enumerated subjects, eg banking. There has to be a revenue element which involves the Federal Government. Although the explanatory note in- j serted at the end of the Act is neither a part of it nor intended

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 484 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) as a sure guide to the interpretation of the provisions, para- a graph 3 is instructive. It states as follows:– “The Federal Revenue Court shall have original jurisdiction in certain specified matters including taxation of companies, customs b and excise duties, banking, foreign exchange, currency and fiscal measures of the Government of the Federation, and priority is to be given to all such revenue cases . . .”

The minority judgment, and Chief Williams has urged us to c accept it, had argued that “banking”, “foreign exchange” and “currency” should each stand alone and be construed as such because of the commas which separate them and that banking was used as a noun in section 7(1)(b)(iii) of the Act. With the greatest respect, in my view, this rendering d would only be possible if the text of the Act had indeed read thus:– “(b) connected with or pertaining to:– e (iii) banking; (iv) foreign exchange; (v) currency; or (vi) other fiscal measures.” f On the contrary the text was “(iii) banking, foreign exchange, currency or other fiscal measures”. This led to the conclusion of the majority that the proper interpretation of the subsection and the natural and ordinary meaning must be g banking measures, “foreign exchange measures”, “currency measures” and “other fiscal measures”. As regards the commas to which reference has been made above, punctuations are really not quite relevant in the con- h struction of statutes (see Maxwell on Interpretation of Stat- utes (12ed) at 12). This, however, it must be conceded, may be the position in English law. Section 3(1) of our own In- terpretation Act, 1964 No. 1 of 1964 states that: “Punctua- i tion forms part of an enactment and regard shall be had to it accordingly in construing the enactment.” But section 1 thereof provides that “this Act shall apply to the provisions of any enactment except in so far as the contrary intention j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 485 a appears in this Act or the enactment”. Again with the greatest respect, I think that with all that has been said above about the proper import of section 7(1)(b)(iii) there was b clearly a contrary intention to its being given the meaning ascribed to it by the use of the commas. As regards the decision of the majority that the ejusdem generis rule applies in construing section 7(1)(b)(iii), I do c not think that this can be justly supported by claiming that the rule applies in reverse. If the ejusdem generis rule applied, the generic words “other fiscal measures” would have taken their colour from the specifically enumerated subjects, d banking, foreign exchange and currency, and not the other way round as indeed happened here. Nor, do I think, as indeed the minority judgment did not, that the cases Nasir v Bouari (1969) 1 N.M.L.R. 38, 40 and 42 and Colehill and e District Investment Co Ltd v Minister of Local Government and another (1968) 1 W.L.R. 600 at 605 support the position of the majority judgment since it is clear to me that the generic terms “or other lawful purposes” and “other opera- f tions” which occurred in both cases were construed ejusdem generis with the specifically enumerated subjects in those two cases, which were “living and sleeping” in one and “building”, “engineering” and “mining” in the other. Rather g than argue that the ejusdem generis rule was applied to section 7(1)(b)(iii) in reverse, I think that the basis of the decision was that associated words could be understood in a common sense. h “Where two or more words which are susceptible of analogous meaning are coupled together, noscitur a sociis. They are understood to be used in their cognate sense. They take, as it were, their colour from each other, the meaning of the more general being restricted to a sense analogous to that of the less general” (see Max- i well Interpretation of Statutes (12ed) page 289). The noscitur a sociis rule was applied to the construction of the Offences Against the Person Act, 1837 (ie of England) which made it a felony to shoot at or to “stab, cut or wound” j any person. The word “wound” was held to be restricted by

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 486 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the words which preceded it to injuries inflicted by an in- a strument and consequently to bite off a finger or a nose, or to burn the face with vitriol, was not wound within the meaning of the Act (see R v Harris (1836) 7C and 446. See b also Pengelly v Bell Punch Co Ltd (1964) 1 W.L.R. 1055 per Diplock LJ at 1099). As was said in Virginia v Tennessee 148 US 503, 135 S. Ct. 728; 37 L. Ed. 337:– “Noscitur a sociis is a rule of construction applied to all written in- c struments. The obscurity or doubt of any particular word may be removed by reference to associated words. And the meaning of a term may be enlarged or restricted by referring to the object of the whole clause in which it is used.” d It seems to me that taken in this context and having regard to section 1 of the Interpretation Act, 1964 the words “or” and “other” in section 7(1)(b)(iii) of the Act would appear to imply similarity and ought not to be construed disjunctively. e Having held that the majority judgment is right in construing section 7(1)(b)(iii) such that the Federal Revenue Court is restricted to its essential revenue protection functions while the State High Courts deal with such matters in which f no issue of the revenue of the Government of the Federation arises, I would agree that there has to be express provision and a more definitive provision than section 7(1)(b)(iii) before one can accept the contention that “all banking matters” g must fall within the jurisdiction of the Federal High Court. I would in this connection gratefully adopt the passage in Maxwell Interpretation of Statutes (10ed) pages 128–129 referred to in the majority judgment to the effect that:– h “It is supposed that the legislature would not make any important innovation without a very explicit expression of its intention; especially since in recent years such an intention has often been very explicitly expressed. It would not be inferred, for instance, from i the grant of a jurisdiction to a new tribunal over certain cases, that the legislature intended to deprive the Superior Court of the jurisdiction which it already possessed over the same cases. Thus, an Act which provided that if any question arose upon taking a distress it should be determined by a commissioner of taxes would j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 487 a not thereby take away the jurisdiction of the High Court to try an action for an illegal distress.” Following the same reasoning I would agree with the sub- b mission of Mr Ladapo that, if the legislature intended to vest such a wide jurisdiction on the Federal Revenue Court “in all banking matters” nothing could have stopped it from specifically mentioning the Banking Act. Also nothing would c have stopped it from including banking in section 7(1)(c)(ii) of the Act. I have therefore come to the conclusion that the decision of the majority was right and ought to be allowed to Stand. d There is just one other matter I would wish to deal with before leaving this part of the appeal. Learned Counsel to the respondent urged this Court, as a court of last resort, to be wary about overruling its decisions when such decisions e had stated the finality of the law on the relevant subject. He referred to the practice in the House of Lords in England. In Jones v Secretary of State for Social Services, Hudson v Sec- retary of State for Social Services ( 1972) All ER 145 Lord f Reid said at 149:– “My understanding of the position when this resolution was adopted was and is that there were a comparatively small number of reported decisions of this House which were generally thought g to be impeding the proper development of the law or to have led to results which were unjust or contrary to public policy and that such decisions should be reconsidered as opportunities arose. The old view was that any departure from rigid adherence to precedent would weaken that certainty. I did not and do not accept that view. h It is notorious that where an existing decision is disapproved but cannot be overruled courts tend to distinguish it on inadequate grounds. I do not think that they act wrongly in so doing; they are adopting i the less bad of the only alternative open to them. But this is bound to lead to uncertainty for no one can say in advance whether in a particular case the court will or will not feel bound to follow the old unsatisfactory decision. On balance it seems to me that overruling such a decision will promote and not impair the certainty of j the law.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 488 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

But that certainty will be impaired unless this practice is used spar- a ingly. I would not seek to categorise cases in which it should not be used. As time passes experience will supply some guide. But I would venture the opinion that the typical case for reconsidering an old decision is where some broad issue is involved and that it b should only be in rare cases that we should reconsider questions of construction of statutes or other documents.” The House expressed similar views in Vestey v Inland Reve- nue Commissioners (Consolidated) (1979) 3 W.L.R. 915 c where their Lordships again said:– “The discretion conferred on the House of Lords by Practice Statement (Judicial Precedent) (1966) 1 W.L.R. 1234 should be exercised sparingly particularly in relation to questions of the con- d struction of statutes, and the House should try to keep it governed by stated principles but the fact that the circumstances of a particular case cannot be brought precisely within the formulae used in others of a different character should not be fatal to its exercise.” e I believe that this Court is not unconcerned with the principle of stare decisis and the need to maintain certainty of the law. But it would not feel obliged to perpetuate a decision if it is satisfied that such a decision is manifestly wrong or was f given per incuriam some relevant statutory or constitutional provisions. In Mrs Bucknor-MacLean and another v Inlaks Ltd (1980) 8–11 SC 1 at 23–25 where a submission similar to that made here by learned Counsel to the respondent was g urged on the court (ie to overrule its decisions in very rare cases) Idigbe JSC put the principle in these words:–

“I have no doubt that this Court will, and I do, treat this pro- h nouncement of the House of Lords (ie in 1966 3 All ER 77) with considerable respect. All the same I share the view of Lord Morris in Conway v Rimmer that ‘though precedent is an indispensable foundation on which to decide what is the law there may be times when a departure from precedent is in the interest of justice and i the proper development of the law’ (See (1968) 1 All ER 874 at 892). With particular reference to the recent cases of Jammal (ie Shell B.P. etc v Jammal Engineering Nigeria Limited (1974) All NLR 542 and Owumi based as they are in part on some of the statements in another recent case of Jaffer v Ladipo (supra), I see j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 489 a no more justification for perpetuating recent error than for retain- ing uncorrected any error in much older decisions of this Court.” Indeed in recent times this Court had overruled several of its b decisions (see Nofiu Surakatu v Nigeria Housing Develop- ment Society Ltd (1981) 4 SC 26; Mrs Bucknor-MacLean and another v Inlaks Ltd (supra) and Alhaji Raji Oduola and others v John Gbadebo Coker and others (1981) 5 SC 197). c However, I do not think that the present case falls into one of those decisions that deserve overruling. For the reasons I have given I do accept the contention of learned Counsel to the appellants that the decision of the majority in Jammal’s d case was wrong. The Lagos State High Court had jurisdiction to entertain the suit. That part of the appellants’ ground 13 must therefore fail. e I will now move to the constitutional issue which concerned the proper interpretation of section 230 of the 1979 Constitution. Section 230 of the Constitution provides as follows:– f “230(1) Subject to the provisions of this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Fed- eral High Court shall have jurisdiction:– g (a) in such matters connected with or pertaining to the revenue of the Government of the Federation as may be prescribed by the National Assembly; and h (b) in such other matters as may be prescribed as respects which the National Assembly has power to make laws. (2) Notwithstanding subsection (1) of this section, where by i law any court established before the date when this section comes into force is empowered to exercise jurisdiction for the hearing and determination of any of the matters to which subsection (1) of this section relates, such court shall as from the date when this section comes into force be re- j styled ‘Federal High Court’, and shall continue to have all

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 490 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

the powers and exercise the jurisdiction conferred upon it a by any law.” On this part of the case, Chief Williams submitted that the interpretation should be approached from the true meaning b and intent of the Constitution. The argument he said should start from section 6 of the Constitution which deals with judicial power. He submitted that judicial power constitutes one of the c three major attributes of a sovereign. It referred to the power of the supreme authority to decide disputes among its subjects, including strangers within its gates. He further submitted that in any federation where sovereign power is shared, judi- d cial power would also be shared between the Federation and its component parts. He submitted that section 6 of the 1979 Constitution read with Chapter 7 of the same Constitution – which deals with the Judicature – clearly intend a division of e judicial power between the Federation on one hand and the States on the other. He referred to section 6 subsections (1) and (2) of the 1979 Constitution. He said that, prior to 1979, the Constitution had been silent on the vesting of judicial f power but in 1979 there was distinct vesting of judicial power of the Federation and distinct vesting of judicial power of the States. Section 6 of the 1979 Constitution, he pointed out, did not show what courts were established for g the Federation and those established for the States. This has been done by Chapter 7 of the Constitution. Part I sections A, B and C deal with the Supreme Court, the Federal Court of Appeal and the Federal High Court, while Part 2 sections h A, B, C deal with the High Court of the State, Sharia Court of Appeal of a State and Customary Court of Appeal of a State, these being the State Courts. These courts established for the Federation and those established for the States, he said, are different. There is even difference in the manner in i which vesting of judicial power is made. As regards the Su- preme Court and the Federal Court of Appeal, he submitted that they can exercise judicial power of the States, but in respect of the Federal High Court it was his contention that j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 491 a that court will exercise jurisdiction of the Federation which in his opinion relates to the legislative subjects within the competence of the National Assembly. He submitted further b that, unless the Constitution expressly says so, State courts do not have federal jurisdiction. He referred to section 250(1)(a) of the 1979 Constitution. As regards section 230 of the Constitution, he said that the c particularly relevant paragraph was 230(1)(b). The question, he thought, was whether “prescribed” therein intended to apply in the present or the future. He referred to the definition of “prescribed” under section 277 of the 1979 Constitu- d tion – “prescribed by or under this Constitution or any other law” – and concluded that the jurisdiction of the Federal High Court is as prescribed by the Constitution and such other law as may be prescribed by the National Assembly. He said that “as prescribed” in section 230 ought to be read e as relating to the present and prayed in aid section 275(4) of the Constitution and the decisions of the Federal Court of Appeal in Federal Republic of Nigeria v Eze (1982) 3 NCLR 259; Minister of Internal Affairs v Shugaba (1982) 3 f NCLR 915 and Senate of the National Assembly v Tony Momoh (unreported).”Banking”, he said, was in the Exclu- sive Legislative List in the 1979 Constitution and it encom- passed all matters including banker/customer relationship. In g Chief Williams’s view, under section 230(1)(b), the Federal High Court would have jurisdiction in such other matters prescribed under the Constitution in respect of which the National Assembly has power to make laws, which he thinks h refers to the Exclusive Legislative List. Chief Williams concluded by arguing that, although the judicial power of the Federation relates to all matters in the Legislative List, it does not mean that the jurisdiction of the i Federal High Court can include all the matters in respect of which the National Assembly has power to make law. He excluded item 34 in the Exclusive Legislative List which is a matter in respect of which the Supreme Court has exclusive j jurisdiction.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 492 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

For his part Mr Ladapo also dealt with the concept of judi- a cial power and jurisdiction. He agreed with Chief Williams that section 6 of the 1979 Constitution did not deal with jurisdiction. The specific allocation of judicial power is the b thing that gives jurisdiction to the individual courts under the Constitution. As regards the contention that there was federal judicial power and State judicial power, he submitted that, while it is clear under the Constitution what the execu- c tive power of the Federation and the States are, it is not clear what the federal and State judicial powers are. He submitted that one cannot talk of federal judicial power and State judicial power. The States courts, he contended, have been given d federal judicial power and, besides, the Supreme Court and the Federal Court of Appeal which are federal courts but which he would rather redesignate national courts exercised some State judicial power. e Mr Ladapo did not agree that the jurisdiction of the Fed- eral High Court is co-extensive with federal legislative power. As regards section 230, it is his submission that subsection (2) therein restates the jurisdiction given to the Fed- f eral High Court by section 7 of Act No. 13 of 1973. Section 230(1)(a), he submitted, is not self-executing. The National Assembly, he argued, has to prescribe and this would relate to telephone bills etc. The National Assembly was yet to g prescribe but has stopped at the content of section 7 of Act No. 13 of 1973. As regards section 230(1)(b), he submitted that it gives power to the National Assembly in relation to the future. The Assembly has as yet not prescribed. He said h that such an interpretation was not absurd having regard to the unlimited jurisdiction given to the State High Courts under section 236 of the Constitution, nor would it lead to tau- tology since the section (ie 230) was made “subject to the provisions of the Constitution” and one had therefore to look i at other provisions that conferred jurisdiction on the courts, eg sections 236 and 250. He thought that section 230(1)(b) deals with such other matters other than the revenue of the Federal Government. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 493 a He contended that the only sections under the 1979 Consti- tution which confer jurisdiction on the Federal High Court are 230, 237 and 42 and this was to be contrasted with the b unlimited jurisdiction conferred on the State High Courts under section 236 as well as the extra jurisdiction conferred on them by section 237(2)(c) and section 250 of the 1979 Constitution. It was his view that the decisions of the Fed- eral Court of Appeal in Eze (supra); Sugaba (supra) and c Tony Momoh’s case in so far as they decided that section 230(1)(a) and (b) were self-executing provisions were wrong. He pointed out that the views expressed by the learned Justices of the Federal Court of Appeal were in any d case obiter. He concluded by submitting that, although the subject of the dispute in the suit in hand – banking – was in the Exclu- e sive Legislative List, it did not mean that the State High Courts had no jurisdiction. He prayed in said section 275(1) of the 1979 Constitution as well as the Regional Courts (Federal Jurisdiction Act), 1958 and sections 10 and 11 of the High Court Law, Cap 52 of Lagos State. f In approaching this constitutional problem, it might be useful to reiterate some of the principles of construction of Constitutions as laid down in decisions of our courts. A g Constitution is a living document (not just a statute), providing a framework for the governance of a country not only for now but for generations yet unborn. In construing it, undue regard must not be paid to merely technical rules for other- h wise the objects of its provisions as well as the intention of the framers of the Constitution would be frustrated. As was stated in Minister of Home Affairs v Fisher (1979) 2 W.L.R. 899; 1980 A.C. 319 at 328 a constitutional instru- i ment should not necessarily be construed in a manner and according to rules which apply to Acts of Parliament. Al- though the manner of interpretation of a constitutional instrument should give effect to the language used, recognition j should also be given to the character and origins of the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 494 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) instrument. Such an instrument should be treated as sui a generis calling for principles of interpretation of its own suitable to its character without necessary acceptance of all the presumptions that are relevant to legislation of private b law. It has also been accepted by all our courts that a broad and liberal spirit should prevail in interpreting the provisions of our Constitution although one has constantly to bear in mind c the objects which such provisions were intended to serve. This was very aptly stated by Sir Udo-Udoma JSC in Nafiu Rabiu v The State (1980) 8–11 SC 130 at 148 where the learned Justice said:– d “My Lords, it is my view that the approach of this Court to the construction of the Constitution should be and so it has been, one of liberalism, probably a variation of the theme of the general maxim Ut res magis valeat quam pereat. I do not conceive it to be the duty of this Court so to construe any of the provisions of the e Constitution as to defeat the obvious ends the Constitution was designed to serve where another construction equally in accord and consistent with the words and sense of such provisions will serve to enforce and protect such ends. f See also Prigg v Pennsylvania 16 Pet 539; U.S. Sup. Ct. Reports 1060, L. Ed 1st Series. It is also important for the exercise in hand to remember that the provisions of a Constitution ought to be interpreted as a whole ie related sections ought to be interpreted to- g gether. See Senator Abraham Adesanya v President of the Federal Republic of Nigeria and Anor (1981) 5 SC 112 at 134; Reid v Cov- ert 354 U.S. 1, 77 S. Ct. 1222.” Having referred to the guiding principles, I will now return to the contentions of the parties. It would seem to me that h the submissions of Chief Williams, S.A.N., for the appellants can fairly be summed up this way. Ours is a federation and the 1979 Constitution has distributed executive, legislative and judicial powers between the federation and its compo- i nent parts. Judicial power has been so vested in the courts under the Constitution that the Federal Courts (contained in sections A, B and C of Part I of Chapter 7) and State courts (contained in sections A, B and C of Part II of Chapter 7) j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 495 a exercise federal judicial power and State judicial power respectively. Federal judicial power is co-extensive with federal legislative power (which of course extends to the sub- b jects in respect of which the National Assembly can make laws). Federal courts (with perhaps the exception of the Su- preme Court and the Federal Court of Appeal which are in a peculiar position) exercise federal jurisdiction, jurisdiction being no more than allocation of judicial power to the indi- c vidual courts in respect of specified subjects. The concepts of judicial power and jurisdiction have been adequately dealt with by Diplock LJ in Anisminic Ltd v The Foreign Com- pensation Commission and another (1967) 3 W.L.P. 382 at d 394. See also Shell Co of Australia Ltd v Federal Commis- sioner of Taxation (1981) A.C. 275; Sub nom British Impe- rial Oil Co Ltd v Federal Commissioner of Taxation (1926) 38 C.L.R. 153; De Smith Judicial Review of Administrative e Action (2ed) at 96; Nwabueze Judicialism in Commonwealth Africa Chapter 1 and this relates to subjects in the Exclusive Legislative List. “Prescribed” under section 230(1)(b) of the Constitution means “prescribed under the Constitution” and f since the Federal High Court exercises the totality of federal judicial power at first instance, the jurisdiction conferred on it in such other matters “prescribed under the Constitution” as respects which the National Assembly has power to make g laws relates to matters within the Exclusive Legislative List, including banking. This line of reasoning also draws support from the strong views expressed by Nnaemeka-Agu JCA in Senate of the h National Assembly v Tony Momoh decided by the Federal Court of Appeal on 19 July, 1982 and as yet unreported. There the learned Justice put it this way in his lead judgment:– i “I am satisfied that the combined effect of sections 6(1) and 230, items 34 and 67 of the Exclusive Legislative List, and paragraph 2(a) and (b) of Part III to the Second Schedule to the Constitution is to vest in the Federal High Court full jurisdiction over Federal j causes and matters at first instance. It is supposed to fulfil for the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 496 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Federal Government similar jurisdiction and powers therefore as a the High Court of a State. Any lingering doubts I might have entertained about the plenitude of its powers is dispelled by a glance at section 231 which provides that for the purpose of exercising any jurisdiction conferred upon it by the Constitution or the Na- b tional Assembly, that Court shall have all the powers of the High Court of a State. Reading together sections 6(1), 230 and 231; items 34, 67, and paragraph 2(a) and (b) of Part III to the Second Schedule to the Constitution the fallacy of Mr Momoh’s attempt to c equate that court to the defunct Federal Revenue Court becomes only too palpable. Incidentally, Mr Momoh is not alone among lawyers who still see the Federal High Court from the coloured glass of the drastically reduced jurisdiction of the defunct Federal Revenue Court. They ignore its inherent powers as a superior court d of record now given to it by a combination of section 6(3) and 6(6)(a) and its powers being equated to those of State High Courts by section 231(1) of the Constitution. They overlook the wide provisions of section 230, particularly section 230(1)(b). In spite of the above provisions some say it has no inherent power to grant e bail to a convicted person. In my view, the whole attitude needs be changed. In my opinion we must reconcile ourselves to the reality that by a deliberate choice we have elected federalism with all its implications; that the raison d’ etre is avoidance of internal con- f flicts by constitutionally recognising our internal diversity by having States which are sovereign within their spheres of authority and a Federal Government which is not only equally supreme but also independent of State Government in its own sphere – each in the legislative, executive and judicial arms of government” (italics g mine). That our constitution has embraced the principle of federalism is not in doubt. From it follows the share-out of executive, legislative and judicial powers between the component h parts. But we must not make too much of this principle of federalism for it is quite obvious that the spirit of federalism in a Constitution cannot override the actual words used in the Constitution. In the same vein, I cannot help but feel that i the appellants and other protagonists of their view on this point have overplayed the difference between federal judicial power as vested by section 6(1) of the Constitution and State judicial power as vested by section 6(2). I will now set j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 497 a down the provision of section 6 of the Constitution. They are as follows:– “6(1) The judicial power of the Federation shall be vested in b the courts to which this section relates being courts established for the Federation; (2) The judicial power of a State shall be vested in the courts to which this section relates, being courts established, subject as provided by this Constitution, for a c State; (3) The courts to which this section relates established by this Constitution for the Federation and for States specified in subsection (5)(a) to (f) of this section shall be the d only superior courts of record in Nigeria; (4) . . . (5) This section relates to:– (a) The Supreme Court of Nigeria; e (b) The Federal Court of Appeal; (c) The Federal High Court; (d) A High Court of a State; f (e) A Sharia Court of Appeal of a State; (f) A Customary Court of Appeal of a State; (g) . . .; and (h) . . . g (6) The judicial powers vested in accordance with the foregoing provisions of this section:– (a) shall extend, notwithstanding anything to the con- h trary in this Constitution, to all inherent powers and sanctions of a court of law; (b) shall extend to all matters between persons, or between government or authority and any person in Nigeria and to all actions and proceedings re- i lating thereto, for the determination of any question as to the civil rights and obligations of that person” (italics mine). This provision clearly shows that the line between federal j judicial power and State judicial power is not so precise and

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 498 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) certainly not so rigid. The courts, that is those vested with a judicial power in section 6(1) and 6(2) of the 1979 Constitu- tion and enumerated in section 6(3) are to enjoy “inherent powers and sanctions of a court of law” and their power is b to extend to “all matters . . . and to all actions and proceedings relating thereto”. As Professor Ben Nwabueze observes in his book The Presidential Constitution of Nigeria, it is not a delimitation of the extent of federal or State judicial c power. It is rather definition of the nature of judicial power.

As will appear later in this judgment as other evidence of the obscure line, State courts, particularly the State High Courts, have been given, by the Constitution, not the Na- d tional Assembly, jurisdiction in federal causes and matters (see sections 250 and 237(2)(c) of the Constitution). Equally, jurisdiction has been given to two Federal Courts – the Supreme Court and the Federal Court of Appeal – in ap- e peals from State courts in respect of subjects within the competence of the State House of Assembly. Appeals go to the Federal Court of Appeal and thence to the Supreme Court from the State High Courts, the Federal High Courts, f the Sharia Court of Appeal and the Customary Court of Ap- peal in respect of matters which originate from both Federal and State Law (see sections 212, 213, 220 of the 1979 Con- stitution and item 34 of the Exclusive Legislative List). The g Supreme Court and the Federal Court of Appeal far from supporting the rigid and precise line being drawn between federal judicial power and State judicial power are in a peculiar position and might well be redesignated national courts h as urged by Mr Ladapo, learned Counsel for the respondent. While under our Constitution the lines between federal executive and legislative power and State executive and legislative power appear precise and well set down (see sections 4(1), 4(6), 5(1)(a) and 5(2)(a) of the Constitution), the same i cannot be said of the federal and State judicial power. This to my mind undermines to a substantial extent the platform on which much of the submission of learned Senior Counsel to the appellants was constructed. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 499 a Learned Senior Counsel to the appellants , as stated earlier in this judgment, prayed in aid three judgments of the Fed- eral Court of Appeal: Federal Republic of Nigeria v Eze b (supra); Minister of Internal Affairs v Shugaba (supra) and Senate of the National Assembly v Momoh (supra). None of these cases has come on appeal to this Court. It is correct to say that it is only in Eze’s case that the question of jurisdiction of the Federal High Court and the proper meaning of c section 230(1)(b) of the Constitution was considered. In Shugaba’s case, although two of the learned Justices of the Court of Appeal agreed with the interpretation of section 230(1)(b) being urged on this Court, the case was in fact d concerned with enforcement of fundamental rights and turned on the proper meaning of section 42 of the 1979 Con- stitution. In the Momoh case, although four of the learned Justices of the Court of Appeal upheld Chief Williams’s in- e terpretation of section 230(1)(b), the case was concerned with the scope of sections 36 and 82 of the 1979 Constitu- tion. The views expressed in these two cases are, to my mind, obiter. As regards Shugaba’s case, the position is f even more confounded by the fact that the decision of the Court of Appeal given by a majority of four Justices to one appears to have been disapproved in Momoh’s case (again by a majority of four to one by another panel of the Court of g Appeal on the ground that as the court in Shugaba’s case did not advert its mind to section 42(2) of the Constitution its decision was given per incuriam. I propose therefore to look more closely only at Eze’s case. h In that case the charge was in relation to offences under the Firearms Act, 1966 and the Customs and Excise Manage- ment Act, 1958. The learned Chief Judge of the Federal High Court declined jurisdiction in respect of the offences i under the Firearms Act and the matter went on appeal to the Court of Appeal (Kazeem, Nnaemeka-Agu and Mohammed JJCA).The Court of Appeal held that the Federal High Court had jurisdiction. More important, their Lordships held that j “as may be prescribed” under section 230(1)(a) and

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 500 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

230(1)(b) of the Constitution means as are “prescribed” un- a der the Constitution. They also held that the Federal High Court has exclusive jurisdiction in respect of matters contained in the Exclusive Legislative List. b The reasoning by which the Court of Appeal arrived at these conclusions can best be seen from some passages from the lead judgment of Kazeem JCA. He said:– “The expression ‘as may be prescribed’ appears in subsection 1(a) c and (b) and it is that expression that requires interpretation in order to resolve this issue of jurisdiction. It is said that a statute is always speaking and future forms used in ordinary writing are not necessary in statutes. Hence futurity can also be construed as pre- d sent tense. For instance in sentence (a) ‘If any person shall give notice’ can be construed as if any person gives notice. Similarly, a sentence (b) ‘Where any balance shall have been found’ can also be construed as ‘where any balance has been found’. But it does not follow that only the present tense must be used or that the fu- e ture must never be used. See Emer A. Diredger on ‘The Composi- tion of Legislation’ at page 77 on the subject of use of ‘Tense in Legislative Drafting’. Having regard to this use of tense in legislative drafting, I am of the view that the expression as may be prescribed used in section 230(1)(a) and (b) of the 1979 Constitution f can also mean ‘as are prescribed. Again the word ‘prescribed’ has also been defined in section 277 of the said Constitution as meaning ‘prescribed by or under the Constitution or other law’. The same word is also defined in section 18(1) of the Interpretation Act g 1964 (No. 1 of 1964) which is applicable to the interpretation of the said Constitution to mean ‘prescribed by or under the enactment in which the expression occurs’ that is in relation to this matter the 1979 Constitution. On the basis of these two definitions, the expression ‘as may be prescribed’ will then mean ‘as are pre- h scribed by or under this Constitution or any other law’ . . . It is not disputed that the National Assembly has power to make laws with respect to matters referred to in the Exclusive Legisla- tive List which is Part I of the second Schedule of the 1979 Consti- i tution and item 2 of that list deals with arms, ammunition and explosives. Also item 67 of the said list deals with any matter in or supplementary to any matter mentioned elsewhere in the list and supplementary to any matters according to paragraph 2 of Part III of the said second Schedule include ‘offences’. In the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 501 a circumstances, I am satisfied that section 230(1)(b) of the 1979 Constitution confers jurisdiction on the Federal High Court to try cases with respect to all matters in the Exclusive Legislative List which includes Arms, ammunition and explosives.” b First of all with due respect I cannot improve on the observation of Omo JCA in Shugaba’s case when, commenting on this decision of the Court of Appeal in Eze, he said:– c “It must be difficult to find a clearer case of using technical rules of interpretation to obscure the plain meaning of the words of a Constitution. At the time the Constitution passed into law the Na- tional Assembly had not begun functioning and the plain meaning of the words ‘as may be prescribed’ obviously refers to its role in d future.” Secondly, apart from the meaning ascribed to the words “as may be prescribed”, the Court of Appeal, once it decided that “on such other matters as may be prescribed as respects e which the National Assembly has power to make laws” as contained in section 230(1)(b) of the Constitution means “on such other matters as are prescribed by or under the constitution as respects which the National Assembly has power to f make laws”, immediately imported matters within the Ex- clusive Legislative List. That was probably in answer to the question of the learned Director of Public Prosecutions of the Federation who had asked: “What are those things pre- g scribed in the Constitution as respects which the National Assembly has power to make laws within the intendment of section 230(1)(b) of the 1979 Constitution?” Nowhere in the 1979 Constitution was jurisdiction ex- h pressly conferred on the Federal High Court with respect to matters within the Exclusive Legislative List. This was not a matter that could have been dealt with by implication, for as was held in Prigg v Pennsylvania 16 Pet 539; U.S. Sup. Ct. i Reports 1060, L. Ed 1st Series a court has no right to insert any clause in the Constitution which is not expressed and cannot be fairly implied. Implied powers also have to be necessary or incidental to expressed powers (see MacKenzie j v Hare 239 U.S. 299, 36 S. Ct 106). It seems clear to me that

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 502 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the only jurisdiction expressly conferred on the Federal High a Court by the 1979 Constitution are contained in sections 42 and 237(2)(a). It would also appear to me that the effect of the decisions b of the Court of Appeal on the meaning of section 230(1)(a) and (b) is to hold that they are self-executing in the sense that they are constitutional provisions complete in themselves and which need no further legislation such as an Act c of the National Assembly to bring them into force. For the reasons I shall give below, I would say with due respect, that to that extent those decisions of the Court of Appeal are wrong. d There does not appear to be controversy as to the proper meaning of section 230(2) of the 1979 Constitution. In my view that section not only restyles the old “Federal Revenue Court” “Federal High Court” but vests in the Federal High e Court all the powers and jurisdiction enjoyed by the old Revenue Court. Accordingly, in my view pursuant to section 274 of the 1979 Constitution, the Federal High Court will continue to enjoy such jurisdiction and powers as were con- f ferred on the Federal Revenue Court by the Federal Revenue Court Act No. 13 of 1973, section 8(3) of the Counterfeit Currency (Special Provisions) Act No. 22 of 1974 as amended by the Constitution of the Federation (Consequen- g tial Repeals) Act No. 105 of 1979, sections 21(1), 49(1), 62 of the Insurance Act, 1976 No. 59 of 1976, and the Bank- ruptcy Act, 1979 No. 16 of 1979. As regards the proper meaning of “as may be prescribed” h which occur in section 230(1)(a) and (b) of the Constitution, it is my view that those words should be given their ordinary, plain meaning. It is indeed one of the first rules of interpretation of statutes (and this applies to Constitutions) i that words must be given their ordinary, plain, natural meaning (see Felix v Thomas (1967) 1 A.C. 292 per Lord Morris at 306; also Virginia v Tennessee 148 U.S. 503, 13 S.CT. 728). Applying this principle, I cannot see how “as may be j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 503 a prescribed” can refer to anything else but the future, ie as the National Assembly may prescribe at a future date subsequent to the coming into operation of the 1979 Constitution. b On this interpretation the National Assembly which was not functioning at the time the Constitution came into force on 1 October, 1979, would in future confer jurisdiction on the Federal High Court in matters connected with or pertaining c to the Revenue of the Government of the Federation (see section 230(1)(a) and in such other matters contained in the Exclusive Legislative List (section 230(1)(b)). Acting under section 230(1)(b), the National Assembly could increase the d jurisdiction of the Federal High Court as it were on a piece- meal basis. I would say with all respect that it seems to me any other interpretation such as has been urged on us by the appellants will not only lead to absurdity but will mean that several parts of section 230 would have to discarded. To il- e lustrate the point being made here, apart from the jurisdiction conferred on the Federal High Court by section 230(1)(a) and (b), section 230 contemplates a further jurisdiction conferred on that Court by the National Assembly. f Subsection (1) of section 230 contains the words “and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly”. The question which then arises is this. If under section 230(1)(b) jurisdiction in g respect of matters in the Exclusive Legislative List (and as is shown hereunder the Concurrent Legislative List) has already been conferred on the Federal High Court what other subjects are available on which the National Assembly can h act? Those words would have to be abandoned as they would serve no useful purpose. Further along the same lines, it may be asked, in following the interpretation being advanced to us, what would be the purpose of inserting section i 230(2) and 230(1)(a) into the Constitution? The provision of section 230(1)(b) would be comprehensive enough to cover all the subjects dealt with in the subsections referred to above. One further problem which would follow is this. Item j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 504 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

66 in the Exclusive Legislative List. Part I of the Second a Schedule to the Constitution reads:– “Any other matter with respect to which the National Assembly has power to make laws in accordance with the provisions of this b Constitution.” There is no doubt that the National Assembly has power to make laws in respect of the matters in the Concurrent Legis- lative List in Part II of the same Second Schedule to the c Constitution. If section 230(1)(b) has the extensive jurisdiction being canvassed it would cover both the Exclusive and Concurrent Legislative Lists and so exclude the State High Courts. d I do not think that the framers of the Constitution could have intended that it be beset by these problems, indeed I think that the problems and absurdities listed above to which there are really no answers ought to settle the issue. It has e always to be remembered that it is principle of interpretation of statutes (and I dare say Constitutions) that, where the language of the legislature admits of two possible constructions and, if construed in one way, would lead to absurdity or in- f justice, the courts act upon the view that such a result could not have been intended, unless the intention to bring it about has been manifested in plain words (see Smith v Great West- ern Railway (1877) 3 App. Cas. 166). It is also relevant here g to remember that there is another presumption in interpretation by which the legislature is held not to use words in vain or to waste words (see A.O. Ejoh v Inspector General of Po- lice 1963 1 All NLR 250 at 260. See also Holmes v Jennison h 14 Pet. 540 10 U.S. Sup. Ct. Reports 579, L.Ed. 1st Series). Should there still be any lingering doubts as to the proper meaning of section 230(1)(b), I would suggest that it is legitimate to look back at the history of the processes which i brought the 1979 Constitution, and particularly section 230, into being. “The Court” said Sir George Jessel MR:– “is not to be oblivious of the history of law and legislation. Al- though the Court is not at liberty to construe an Act of Parliament j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 505 a by the motives which influenced the legislature, yet when the history of law and legislation tells the Court, and prior judgments tell this present Court, what the object of the legislature was, the Court is to see whether the terms of the section are such as fairly to carry b out that object and no other, and to read the section with a view to find out what it means, and not with a view to extending it to something that was not intended” (see Holmes v Guy (1877) 5 Ch.D. 901 at 905). c In Knowlton v Moore 178 U.S. 41, 20 S.Ct. 747 at 768 Jus- tice White, while delivering the opinion of the Supreme Court of the United States, used these words which I find apposite:– d “The necessities which gave birth to the Constitution, the controversies which preceded its formation, and the conflicts of opinion which were settled by its adoption, may properly be taken into view for the purpose of tracing to its source any particular provi- e sion of the Constitution in order thereby to be enabled to correctly interpret its meaning.” To advert to the case in hand, the argument in support of such extensive jurisdiction for the Federal High Court must f be set against the fact that the establishment of that Court was a decision of the Constituent Assembly. The Constitu- tion Drafting Committee did not recommend it in its draft rather it recommended State High Courts as the only High g Courts in the Federation. In its Report (Reports of the Con- stitution Drafting Committee Volume 1 at page xxxv) the Committee said:– “Consistent with our desire to simplify the judicial system, we h have not made provision for the continuation of the Federal Reve- nue Court which was set up in 1973. Since its inception, that Court has given rise to disputes relating to its jurisdiction. . . . We were informed that one of the reasons for setting up the Fed- i eral Revenue Court was because of delays in dealing with revenue causes and matters and the need to deal expeditiously with commercial and other cases . . . There may be need for having commercial and revenue divisions in some of the State High Courts so that the authorities can moni- j tor the rate at which such cases are being disposed of and to ensure

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 506 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

that where required more adequate arrangements are made for a their disposal . . . The Federal Revenue Courts have to deal with all matters within their jurisdiction including matters which can be dealt with by magistrates and other subordinate courts.” b It is pertinent to add that the provisions of section 185 in the Draft Constitution submitted by the Constitution Drafting Committee does not differ substantially from the present c section 236 of the 1979 Constitution. The proviso which was included in the original draft of that section (which excluded appellate or supervisory jurisdiction from the High Court in respect of a Sharia Court of d Appeal administering Islamic law) was removed. Also removed was subsection (2) of the draft section dealing with the competent High Court in relation to elective offices. That draft subsection (2) is in substance what has become e section 237 of the 1979 Constitution and followed the establishment of the Federal High Court by the Constituent As- sembly. Those historical facts leave me in no doubt that it was the f intention of the framers of the Constitution to confer unlimited jurisdiction on the State High Courts. It was deliberate. Accordingly, section 236(1) of the Constitution provides as follows:– g “(1) Subject to the provisions of the Constitution and in addition to such other jurisdiction as may be conferred upon it by law, the High Court of a State shall have unlimited jurisdiction to hear and determine any civil proceedings in which the h existence or extent of a legal right, power, duty, ability, privilege, interest, obligation or claim is in issue or to hear and determine any criminal proceedings involving or relating to any penalty, forfeiture, punishment or other liability in respect of an offence committed by any person.” i In my view that jurisdiction will diminish with time as in addition to the jurisdiction which I have conceded in this judgment it already has under sections 230, 237 and 42 of the Constitution, the Federal High Court is conferred by the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC Bronik Motors Limited v. Wema Bank Limited 507 a National Assembly with more jurisdiction in relation to other matters in the Exclusive and Concurrent Legislative Lists. b I would finally on this point wish to suggest that, far from supporting the contention of the appellants on the issue of Federal and State judicial power, sections 250 and 231 of the 1979 Constitution are put in their proper perspective by the c historical facts to which I made reference above. Since the newly created Federal High Court (ie in the Constituent As- sembly) had no federal subordinate courts, it seemed logical to confer jurisdiction in federal causes which may arise at d such level on State courts. Appeal in such matters would go to the State High Courts. I am afraid that for these reasons I am unable to accept the submissions of the learned Senior Counsel to the appellants e on the proper meaning of section 230(1)(b). This ground of appeal also fails. As regards the other matters in this appeal, Ademola JCA f in his lead judgment had set them down at 176. I had earlier on in this judgment indicated the matters I propose to deal with and set down appellants’ ground of appeal relating to those matters. I would only wish to deal with the guarantee, g admitted in the proceedings as exhibit 2, given by the second appellant to the respondent. The Court of Appeal affirmed the decision of the learned trial Judge on that point. As regards the liability of the second appellant, Chief Williams had submitted that, even if he was liable, the liability cannot h exceed N500,000. In fact, the order of the learned trial Judge was for judgment against the defendant for:– i “(3) the sum of N500,000 against the second defendant as a guarantor of the first defendant with interest at the rate of 8% per annum before judgment and 4% thereafter.” I agree that the terms of the order should be varied such that j the judgment is against the second defendant (ie second

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Nnamani JSC 508 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) appellant herein) for N500,000 at the rates of interest men- a tioned above. As for the merits of the appellants’ case on the guarantee, the argument on exhibit 2 had been that the guarantee given b by the second appellant was on behalf of Bronik Motors (a division of A. Obikoya and Sons Limited) and not on behalf of Bronik Motors Limited) (first appellant) which had not been incorporated at the time the guarantee was given. c I agree with the Court of Appeal that paragraph 3 of exhibit 2 which reads as follows:– “(3) The guarantee shall be continuing security binding on the d Guarantor or on each of the Guarantors and his/their executors administrators and legal representatives until the expiry of three calendar months after the receipt by the Bank of notice in writing to discontinue same from Guarantor to any of the guarantors or from his/their executors administrators e or legal representatives and notwithstanding any change in the name style or constitution of the Principal” certainly disposed of that contention. Paragraph 4 of the guarantee was also in these terms:– f “(4) if the Principal be a Committee or other unincorporated body which has no legal existence or which is under no legal liability to discharge obligations undertaken or purported to be undertaken by it or on its behalf this guarantee shall be valid and binding upon the Guarantor or Guarantors g notwithstanding that fact and as though the Guarantor was the principal debtor or if there be more than one Guarantor as though the Guarantors were joint and several principal debtors.” h The terms of paragraphs 5, 13 and 18 of exhibit 2 also leave me in no doubt as to the liability of the guarantor to the limit agreed by the parties in exhibit 2. For all the foregoing reasons this appeal must fail and it i does fail. It is accordingly dismissed. I affirm the judgment of the Federal Court of Appeal dated 6 July, 1982. I also award N300 costs against the appellants and in favour of respondent. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Bronik Motors Limited v. Wema Bank Limited 509 a IRIKEFE JSC: I was privileged to have a preview of the judgment just read by my learned brother, Nnamani JSC, and I agree that, for the reasons so lucidly set out in the said judgment, the word “banking” within the intendment of sec- b tion 7(1)(b)(iii) of the Federal High Court Act, 1973 does not exhaust all banking relationships so as to inhibit the prosecution of a claim arising from a banking transaction between a banker and a customer on such matters as over- c draft, dishonoured cheques and the like, in a State High Court. This was the main plank in the submission of Chief Williams, S.A.N., on behalf of the appellant in this case. In making this proposition, Counsel invited us to rule, as a mat- d ter of constitutional law, that Jammal Steel Structures Ltd v African Continental Bank Ltd (1973) 1 All NLR (Part II) 208 had been wrongly decided and should now be overruled. In a word, Counsel was of the view that the minority deci- e sion in the said case delivered by Fatayi-Williams JSC (as he then was) was more in accord with the correct legal position. Mr Ladapo for the respondent argued that no circumstances had arisen since that case was decided to warrant its f being reviewed and overruled by this Court. He added that not only was the case correctly decided, but that it had been rightly followed by this Court in the case of American Inter- national Insurance Co v Ceekay Traders Ltd (1981) 5 SC 81 g at 82 (per Bello JSC). It is indisputable that, before Jammal’s case, as also the case in hand, the claim in which is similar to that in the earlier case, the State High Court would have been the ap- h propriate venue for prosecution. The argument here, as has been copiously adverted to in the lead judgment of Nnamani JSC, is that with the promulgation of Act No. 13 of 1973 (establishing the then Federal Revenue Court) and under i section 7(1)(b)(iii) thereof, all banking cases, as opposed to those set out in the said Act had been put beyond the reach of State High Courts. If the true intention had been to achieve the above end, the wording of section 7 would have j been more explicit and Elias CJN at 222 of the report in

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Irikefe JSC 510 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Jammal’s case must have had this situation in mind when he a stated thus:– “It does not seem to us that the legislative intention behind the De- cree was to clutter up the new Revenue Court with ordinary cases b involving banker-customer relationships, such as disputes in respect of an overdraft, or the negligent payment of a forged cheque or negligent dishonouring of a customer’s cheques – all ‘banking transactions’ having nothing to do with Federal Revenue concern. All the State High Courts and other appropriate courts must con- c tinue to exercise their jurisdiction in these and similar matters if the Federal Revenue Court must be allowed to concentrate on its essentially revenue protection functions.” I must add that the Federal Revenue Court and its successor, d the Federal High Court, derive existence from the need to have a court for the more effective and expeditious “garner- ing in” of federal revenue. In this regard the Federal High Court differs from the State High Court, which, under sec- e tion 236 of the 1979 Constitution, enjoys unlimited jurisdiction, unless such jurisdiction is expressly excluded by statute or the Constitution itself. I am of the view that, until the National Assembly vests the f Federal High Court with unlimited jurisdiction, its jurisdiction would be limited as spelt out under section 7 of Act No. 13 of 1973 and section 230 of the Constitution. I also agree that the Federal High Court enjoys concurrent jurisdiction g with the State High Courts under section 42 of the Constitu- tion to grant redress for any infringement of a fundamental right and, pending the constitutional establishment of Abuja as the Federal Capital Territory, exclusive jurisdiction under h section 237 of the Constitution to determine any question as to whether any person has been validly elected to the office of President or Vice-President or whether the term of office of President or Vice-President has ceased. i On the whole, I would need greater persuasion than has been the case here, to shift from the view I hold that a case for overruling Jammal has not been made. To do so, as was held in Jones v Secretary of State (1972) 1 All ER 145 – j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Irikefe JSC Bronik Motors Limited v. Wema Bank Limited 511 a three pre-requisite conditions must be prayed in aid and satisfied namely:– a. a broad issue of justice; or b b. policy; and c. a question of legal principal – such that the retention of the decision would amount to a perpetuation of in- c justice. One unique feature of the 1979 Constitution is the flexibility in the apportionment and exercise of powers as between the federal and State tiers of government. Although adequate d provisions are made for separation of powers so that one government, as it were, does not encroach upon the sover- eignty of the other, cases abound where the National As- sembly can by legislation impose functions on the State e House of Assembly and vice versa. The various situations are clearly enumerated in the lead judgment aforesaid (see also Attorney-General Bendel State v Attorney-General Federation and 18 others SC108/82 (as yet unreported deci- f sion of this Court)). For the foregoing reasons, I also would dismiss this appeal and adopt the orders contained in the lead judgment inclusive of the order as to costs. g BELLO JSC: I had the privilege of reading in advance the judgment delivered by my learned brother, Nnamani JSC. For reasons stated by him, I agree that the word “banking” h does not include a claim arising from a banking transaction between a banker and his customer within the purview of section 7(1)(b)(iii) of the Federal High Court Act, 1973. I endorse the view that the decision of the majority in Jammal Steel Structures Ltd v African Continental Bank (1973) 1 All i NLR (Part II) 208 was correct. Consequently, the Federal High Court has no jurisdiction by virtue of the provisions of the Act to entertain a claim by a banker against his customer for a balance of overdraft granted by the banker in the nor- j mal course of banking business to the customer. The appeal

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Bello JSC 512 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) must therefore fail in so far as it relates to the interpretation a of section 7(1)(b)(iii) of the Act. My learned brother, Nnamani JSC, has also considered exhaustively all the constitutional issues on the jurisdiction of b the Federal High Court. I entirely agree with his conclusions. I would only add a few words because of the constitutional importance of the case. In my view, the Constitution has not vested in the Federal c High Court general and unlimited jurisdiction in all matters with respect to which the National Assembly has power to make laws. The contention that such jurisdiction may be inferred from the provisions of section 6 of the Constitution d cannot stand on a careful perusal of the other relevant provisions of the Constitution. The division of judicial powers of Nigeria between the courts established for the Federation and the courts established for the component States under e section 6 of the Constitution, wherein the judicial powers of the Federation are vested in the federal courts and the judicial powers of the State in the State courts, is not exclusive. Other provisions of the Constitution permit some Federal f courts to exercise jurisdiction on matters that are within the judicial powers of the States. Thus, in the exercise of their appellate jurisdictions under sections 213 and 219 of the Constitution, the Supreme Court and the Federal Court of g Appeal, which are both federal courts, are endowed with the judicial powers of the State in the determination of appeals from the State courts. In the same vein, in addition to the general jurisdiction of State High Courts under section 236, h the State courts are empowered by section 250 of the Consti- tution subject to the qualifications stated therein to exercise jurisdiction over the judicial powers of the Federation. It appears from the foregoing that there are express provi- i sions in the Constitution which invalidate the proposition that may be implied from the provisions of section 6 of the Constitution to the effect that the Federal High Court, being a court established for the Federation, has jurisdiction to the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Bello JSC Bronik Motors Limited v. Wema Bank Limited 513 a exclusion of State courts over all matters with respect to which the National Assembly has power to make laws. I now deal with section 230 of the Constitution. b It reads:– “230(1) Subject to the provisions of this Constitution and in addition to such other jurisdiction as may be conferred c upon it by an act of the National Assembly, the Federal High Court shall have jurisdiction:– (a) in such matters connected with or pertaining to the revenue of the Government of the Federation d as may be prescribed by the National Assembly; and (b) in such other matters as may be prescribed as respect which the National Assembly has power to e make laws. (2) Notwithstanding subsection (1) of this section, where by law any court established before the date when this section comes into force is empowered to exercise ju- f risdiction for the hearing and determination of any of the matters to which subsection (1) of this section relates, such court shall as from the date when this section comes into force be restyled ‘Federal High Court’, and shall continue to have all the powers and exercise g the jurisdiction conferred upon it by any law.” There is no gainsaying the section lacks precision and ele- gance. Nevertheless, having read the section together with the other relevant provisions of the Constitution, I would not h hesitate to conclude that, upon the proper construction of section 230 in its ordinary and plain meaning, the jurisdiction of the Federal High Court is limited to:– i (1) such matters connected with or pertaining to the revenue of the Government of the Federation as may be prescribed (see section 230(1)(a)); (2) such other matters than those specified in (1) above j as may be prescribed (see section 230(1)(b)); and

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Bello JSC 514 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(3) such jurisdiction as was vested in the former Federal a Revenue Court established under the provisions of the Federal Revenue Court Act 1973 (section 230(2)). It is pertinent, I think, to, emphasise that the jurisdiction b conferred on the Federal High Court which I have set out in categories (1) and (2) above is not self-executing. There must be in existence an Act of the National Assembly authorising the exercise of such jurisdiction on a matter c within the legislative competence of the National Assembly. Finally, I may point out that the only jurisdiction which the Constitution specifically conferred on the Federal High Court is as follows:– d (1) under section 42 the court has concurrent jurisdiction with the State High Courts to grant redress for an infringement of a fundamental right; and e (2) under section 237 it has a temporary jurisdiction pending the constitutional establishment of Abuja as the Federal Capital Territory to determine any question whether any person has been validly elected to f the office of President or Vice-President or whether the term of office of President or Vice-president has ceased. IDIGBE JSC: In this appeal the main challenge is to the ju- g risdiction of the High Court of Lagos State to deal with claims in these proceedings and, although I have had the opportunity of reading, before now, the draft of the judgment just read by my learned brother, Nnamani JSC, with which I h am in entire agreement, I consider that I ought to add some short comments of my own on the questions of law calling for our consideration, one of which derives from the conflicting decisions of the Federal Court of Appeal (hereafter referred to as “the Court of Appeal”) on section 230 of the i 1979 Constitution of the Federal Republic of Nigeria (hereafter referred to as “the 1979 Constitution”), while the other relates to the correct interpretation of section 7(1)(b)(iii) of the Federal Revenue Act No. 13 of 1973, now Federal High j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Bronik Motors Limited v. Wema Bank Limited 515 a Court Act, 1973. I would like to confine any comments to only one of the grounds of appeal filed in this Court which reads:– b “Ground 13: The Federal Court of Appeal and the Lagos High Court erred in law in failing to observe that jurisdiction over the claim in this action is vested in the Federal High Court and not in the High Court of Lagos State. c Particulars of Error (a) Section 230(1) of the Constitution of the Federal Republic of Nigeria confers jurisdiction in respect of all matters in the Ex- d clusive Legislative List in the Federal High Court. (b) In the alternative, section 7 of the Federal High Court Act confers jurisdiction in re- e spect of civil causes and matters connected with or pertaining to banking on the Federal High Court. (c) Section 8(1) of the said Act prohibits the High Court or any other court of a State f from exercising jurisdiction in the matters referred to in (b) above” (brackets and contents supplied by me). The background to the submissions of Chief Williams, g learned Senior Advocate, on behalf of the appellants in support of the foregoing grounds of appeal is to be found in his contention that section 6 of the 1979 Constitution clearly manifests an intention, by the framers of that Constitution to h divide “Judicial powers” between the Federation and the States in such manner that federal jurisdiction can only be exercised by a State court in this country if it is expressly vested with such jurisdiction by the Constitution or by a law i enacted by the National Assembly or having effect as if so enacted. Learned Senior Advocate further contends on behalf of the appellants that “the term ‘judicial power’ as used in section 6 j of the Constitution is the totality of the power or jurisdiction

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 516 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) of court of law established by a Sovereign Nation for the de- a termination of disputes . . . among its subjects . . . or between itself and any of such subjects. Jurisdiction may be defined as the power or authority of a particular court . . . to b entertain and determine the disputes placed before it . . .” (italics of the word “or” in the quotation by me). Learned Senior Advocate for the appellants therefore contends that the object of section 230(1)(b) of the 1979 Consti- c tution is “to spell out in detail the jurisdiction of the Federal High Court” and he further contends that the provisions thereof “have to be read against the background of the conferment of the judicial powers of the Federation on [Federal d courts i.e.] the Supreme Court, the Federal Court of Appeal and the Federal High Court by section 6(1) of the Constitu- tion as well as the conferment of jurisdiction on State courts over ‘Federal Causes’ and ‘Federal offences’ under section e 250” (square brackets and contents by me). The foregoing contentions are intended as a prop to his main submission that the effect of section 230(1)(b) of the 1979 Constitution is to invest the Federal High Court to the exclusion of State f High Courts with jurisdiction in respect of all matters in the Exclusive Legislative List in the Schedule to the said Consti- tution. I find myself, however, in agreement with the submissions g in reply of learned Counsel for the respondent that “although the terms ‘judicial power’ and ‘jurisdiction’ are frequently used interchangeably and jurisdiction is defined as the power to hear and determine the subject matter in contro- h versy between parties to a suit” there is a clear distinction between the two concepts; and that “jurisdiction is the authority of a court to exercise judicial power which is the totality of powers a court exercises when it assumes jurisdic- i tion and hears a case” (italics by me). Judicial power, as is well known, is, indeed, a very wide expression; for apart from its meaning as the power which every sovereign authority must of necessity possess to j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Bronik Motors Limited v. Wema Bank Limited 517 a enable it to settle and decide controversies between its subjects and also between its subjects and itself (see Griffith CJ in Huddart, Parker and Co Ltd v Moorehead (1909) 8 b C.L.R. 330 at 357 in which is to be found the definition), of the subject, universally acknowledged as adequate. It is also co-extensive with the power of the State to administer public justice and, again, with the power of the State to make laws, c in other words, “judicial power” is co-extensive with the power of the State to make laws and execute them as well (see also Isaacs J in Huddart Parker and Co Property Ltd v Moorehead (supra) at 383). d Again to borrow the language of Griffith CJ in the passage in which he defines “judicial power” (and which definition has also been adopted without reserve by the Judicial Com- mittee of the Privy Council in the Australian case of Shell e Co of Australia v Federal Commissioner of Taxation (1931) A.C. 275 at 295 and 297), “the exercise of this power [[ie judicial power] does not begin until some tribunal which has power jurisdiction to give a binding and authoritative deci- f sion (whether subject to appeal or not) is called upon to take action” (square brackets together with contents as well as italics by me for emphasis). In other words “judicial power” is also co-extensive with the authority of the court (ie power g of the court) “to decide and pronounce a judgment and carry it into effect between person and parties who bring a case before it” (see Justice Miller The Constitution page 314; also my observations in Senator Adesanya v The President of the h Federal Republic of Nigeria (1981) 5 SC 112 at 163–164). In this context therefore, the expression is co-extensive with the term jurisdiction. Although sections 4 and 5 of the 1979 Constitution clearly i set out the extent of federal and State legislative, as well as executive powers, there is no such clear and precise bound- ary or delimitation of federal and State judicial powers. The provisions in section 6(6) of the Constitution aforesaid, in j my view, are not in any way intended to delimit the extent of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 518 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) federal and State judicial powers, rather they tend to define a the nature of judicial power as authority for the determination of the rights of parties in suits before the courts. I, therefore, do not consider it necessary and appropriate to b interpret and decide the issue of jurisdiction of a court against the background of the jurisprudential doctrine of “judicial power” of the State in its wider concept as has been put to us in the course of argument in support of the thir- c teenth ground of appeal in the case in hand; and with very great respect, to learned Senior Advocate on behalf of the appellants, I do not find the valiant very powerful and learned submissions in support of much of the contentions d on this issue very helpful. I will proceed anon to consider the plain language of the provisions of section 230 aforesaid. Section 230 of the Constitution In the case of Senate of the National Assembly and another e v Tony Momoh (yet unreported) decided on 19 July, 1982 in FCA/L/45/81 (hereinafter referred to “as the case of Tony Momoh”), Nnaemeka-Agu JCA in the lead judgment in which Nasir P, Kazeem and Uthman Mohammed JJCA con- f curred and Adenekan Ademola dissentient; observed:– “I am satisfied that the combined effect of sections 6(1) and 230, Items 34 and 67 of the Exclusive Legislative List, and paragraph 2(a) and (b) of Part III to the Second Schedule to the Constitution g is to vest in the Federal High Court full jurisdiction over Federal causes and matters at first instance. It is supposed to fulfil for the Federal Government similar functions and is thereby enabled to exercise similar jurisdiction and powers therefor as the High Court h of a State . . .” (italics by me, particularly the expressions “Items 34” and “Federal causes”). In the 1979 Constitution, the expression “federal causes” is defined thus: “civil or criminal cause relating to any matter with respect to which the National Assembly has power to i make laws” (section 250(3) refers) and “item 34” in the Ex- clusive Legislative List in Part I of the Second Schedule thereof reads: “Legal proceedings between Governments of States or between the Government of the Federation and j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Bronik Motors Limited v. Wema Bank Limited 519 a the Government of any State . . .” (italics by me). Pressed therefore, to its logical conclusion, that portion of the decision in the case of Tony Momoh (supra) in quotation in the immediately foregoing paragraph would appear to vest ju- b risdiction, in the Federal High Court in a suit, cause or matter in which a State disputes the right of the Federal Gov- ernment which the latter claims by virtue of a provision in any enactment of the National Assembly made pursuant to c the provisions of item 34 aforesaid which seeks to govern legal proceedings between the two tiers of government; and this, notwithstanding the plain language of the provisions of section 212(1) of the said Constitution. However, if effect d must be given to the opinion phrase, “Subject to the provisions of this Constitution” – to section 230(1) aforesaid then it must follow that either the portion of the decision in Tony Momoh’s case (supra) under consideration needs to be re- e considered or the phrase aforesaid cannot in the context of the said section 230(1) have any legal context. Further down in the said judgment and immediately following the end of the quotation in the preceding paragraph the Federal Court f of Appeal, per Nnaemeka-Agu JCA, observed:– “It (the Federal High Court) is supposed to fulfil for the Federal Government similar functions and is thereby enabled to exercise similar jurisdiction and powers therefore as the High Court of a g State. Any lingering doubts I might have entertained about the plenitude of its powers is dispelled by a glance at section 231 which provides that for the purpose of exercising any jurisdiction conferred upon it by the Constitution of the National Assembly, that court shall have all the powers NOTE, NOT jurisdiction of the h High Court of a State. Reading together sections 6(1), 230, 231, items 34, 67 and paragraph 2(a) and (b) of Part III to the Second Schedule to the Constitution, the fallacy of Mr Momoh’s attempt to equate that court to the defunct Federal Revenue Court becomes i only too palpable. Incidentally, Mr Momoh is not alone among lawyers who still see the Federal High Court from the coloured glass of the drastically restricted jurisdiction of the defunct Fed- eral Revenue Court. They ignore its inherent powers [again Note: NOT jurisdictions] as a Superior Court of record now given to it j by a combination of section 6(3) and 6(6)(a) of the Constitution

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 520 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

and its powers being equated to those of State High Courts by sec- a tion 231(1) of the Constitution. They overlook the wide provisions of section 230, particularly section 230(1)(b) . . .” (square brackets together with their contents as well as italics by me for emphasis). b Again, with very great respect to their Lordships of the Court of Appeal, section 231 aforesaid dealt with the power (not jurisdiction) of the Federal High Court; section 230 deals with the jurisdiction (not powers in the wider jurisprudential concept) of that court. In my respectful view, their c Lordships seem to miss this point of distinction and it has led them to a conclusion in the case of Tony Momoh (supra) in respect of which I find considerable difficulty in agreeing with. Obviously, section 231 invests the Federal High Court d (“for the purpose of exercising any JURISDICTION conferred upon it by this Constitution”) with all the “power” in the wider jurisprudential concept (and this must exclude the concept of “jurisdiction” which the expression “power” also e implies, because of the earlier specific provisions of section 230 of a State High Court or (to borrow the language of their Lordships in the passage just quoted above) all the “inherent powers as a Superior Court” which primarily relates to pow- f ers inter alia (a) of a Superior Court to deal with contempt (see Ex parte Fernandez (1861) 6 B. and N. 717 per curiam, at 725, 726 and also Willes J in the same case in (1861) 10 C.B.N.S. 3 and (b) to carry its judgment and/or decision into g execution). Delivering the lead judgement of the Federal Court of Ap- peal in Federal Republic of Nigeria v Jonathan Onyebuchi Eze (1982) 3 N.C.L.R. 259 hereinafter referred to simply as h “Eze’s case” in which Nnaemeka-Agu and Uthman Mo- hammed JJCA concurred, Kazeem JCA observed with respect to section 230 of the 1979 Constitution as follows:– “Having regard to the use of tense in legislative drafting I am of i the view that the expression ‘as may be prescribed’ used in section 230(1)(a) and (b) of the 1979 Constitution can also mean ‘as are prescribed’. Again, the word ‘prescribed’ has also been defined in section 277 . . . as meaning ‘prescribed by or under this Constitu- tion or any other law’. The same word is also defined in section j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Bronik Motors Limited v. Wema Bank Limited 521 a 18(1) of the Interpretation Act, to mean ‘prescribed by or under the enactment in which the expression occurs’, that is in relation to this matter, the 1979 Constitution. ‘AA’ On the basis of these two definitions, the expression ‘as b may be prescribed’ will then mean ‘as are prescribed by or under this Constitution or any other law. Hence the whole of Sub-section (1)(b) will read:– ‘Subject to the provisions of this Constitution and in c addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court, shall have jurisdiction:– (a) . . . . . (b) in such other matters as are prescribed by or d under this Constitution as respects which the National Assembly has power to make laws’. ‘BB’ It is not disputed that the National Assembly has power to make laws with respect to matters referring to the Ex- e clusive Legislative List. . . . I am satisfied that section 230(b) . . . confers jurisdiction on the Federal High Court to try cases with respect to ALL MATTERS in the Ex- clusive Legislative List which includes . . . For these reasons I am therefore in agreement with the submissions of f the Learned Director of Public Prosecutions . . . But Mr Ajayi, SAN, learned Counsel for the respondent submitted that if the ‘CC’ interpretation of section 230(1)(b) . . . that, it confers ju- g risdiction on the Federal High Court in respect of matter. As respect which the National Assembly has powers to make laws is right, it will make non-sense of subsection (1) of the section. That is because once the Court already has jurisdiction with respect to matters in the Exclusive h Legislative List, it will be unnecessary to give jurisdiction again to the said Court by the National Assembly as was provided in subsection (1)(a). It was also pointed out that section 250 . . . has even conferred jurisdiction on all i State High Courts to exercise powers in respect of Fed- eral causes, that is, matters in which the National Assem- bly has powers to make law; and if that is so, the Federal High Court could not have been conferred with the same jurisdiction exclusively . . .” italics by me (see (1982) 3 j NCLR at 267–268).

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 522 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Earlier in his judgment to which reference is made the a learned Justice of the Court of Appeal observed:– “There is no doubt that section 7 of the Federal High Court Act, 1973 already confers jurisdiction in respect of certain matters on the b Federal High Court; and being ‘an existing law – sub-section (1)(a) of section 230 seems to confirm the conferment of that jurisdiction with respect to all matters connected with or pertaining to revenue of the Government of the Federation but the said section 7 confers more powers than that on the Federal High Court. But sub-section c (1)(b) of that section 230 seems to extend the scope of that jurisdiction beyond those already provided for in section 7 . . . ‘DD’ It may also well be that since that the general jurisdiction was conferred on the Federal High Court by section 7 of d the Federal High Court Act, 1973, jurisdiction had again been specifically conferred on that Court under other legislations. See section 8(3) of the Counterfeit Currency (Special Provisions) Act, 1974 section 21(1), 49(1), 62 of the Insurance Act the definition of the word ‘Court’ in e bankruptcy matters under section 142 of the Bankruptcy Act 1979” (italics by me) (see (1982) 3 NCLR at 267). I have given considerable thought to this matter and I am of the firm view that the contentions of learned Senior Advo- f cate, Mr Ajayi, S.A.N., in Eze’s case (supra) (in that part of the quotation set out earlier and against which I endorsed the letters “CC” in capitals at the margin) are in line with what seems to me to be the correct approach in interpreting the g section under consideration. If the view advocated before the Court of Appeal in Eze (supra) by the learned Director of Public Prosecutions and now before us by learned Senior Advocate on behalf of the appellants in the matter in hand, is h correct there will be no need for the enactment contained in section 230(1)(a); nor would there be any need for the additional provisions of subsection (2) of section 230, particularly the portion thereof which reads: “and shall continue to have all the powers and exercise the jurisdiction conferred i on it by any law”. Although I share the views of the Court of Appeal that the word “prescribed” also means “prescribed” under the enactment in which it is used, or any other enactment, I find it difficult to understand the reasoning which j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Bronik Motors Limited v. Wema Bank Limited 523 a has led to the conclusions in that part of the quotation against which I endorsed at the margin the letters “BB” in capitals. I share the views of Uche Omo JCA in that portion of his judgment in Minister of Internal Affairs v Shugaba b Abdurrahman Darman (1982) 2 NCLR 915 at 963–964 where, after referring to the interpretation given to section 230 aforesaid by the decision of the Court of Appeal in the case of Eze (supra) he said:– c “It must be difficult to find a clearer case of using technical rules of interpretation to obscure the plain meaning of the words of a Constitution” (italics by me). It seems to me that the expression “as may be prescribed” in d section 230 can only mean “as may be prescribed in the future”. I will deal with this aspect of the matter later in this judgment. It is interesting to note, in passing, that the indi- rect effect of the decisions in Eze (supra) and Tony Momoh e (supra), ie the interpretation given to section 230(1)(b) of the 1979 Constitution by the Federal Court of Appeal is, al- beit unintentional, to overturn the decision of the Supreme Court in Jammal Steel Structures Ltd v African Continental f Bank Ltd (1973) 1 All NLR (Part 2) 208, so far as concerns claims relating to banking (an item in the Exclusive Legisla- tive List). State High Courts g Now, under section 236 of the Constitution the jurisdiction of the State High Court is unlimited in all the matters set out in subsection (1) of section 236. The question in issue in this appeal is whether a State High Court has jurisdiction in all h matters, ie including those in respect of which the National Assembly alone has powers to make laws (in other matters which may be regarded as “federal causes”)? The 1963 Con- stitution made no specific or special provision for confer- i ment of jurisdiction in respect of “federal causes” on the State or Regional Courts (High Courts inclusive). It was the Interpretation Act (then in force), ie Cap 89 in Volume III of the Laws of Nigeria, 1958 edition which by section 44 in- j serted in our law books by L.N. 47 of 1955, and which

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 524 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) section was not repealed in 1963, and has still not yet been a repealed; but preserved by section 28(2) of the Interpretation Act, 1964 under the new title of The Law (Miscellaneous) Provisions Act made it possible for Regional Courts to en- b tertain jurisdiction in criminal proceedings in such matters. That section provides:– “44(1) Where jurisdiction is conferred by any law upon a High Court or a magistrate’s court established for a Region c with respect to:– (a) the summary trial and conviction or (b) the examination and commitment for trial on indictment; or d (c) the trial and conviction on indictment. of offenders or persons charged with offences against the laws of the Region and with respect to the hearing and determination of appeals arising out of any such trial or conviction or out of any proceedings connected e therewith, such court shall, except in so far as other provision is made by law in force in the Region have the like jurisdiction with respect to offenders or persons charged with offences against Federal law committed in f the Region or who may lawfully be tried for offences committed elsewhere. (2) In this section, ‘Federal law’ means any law enacted by the Federal Legislature or having effect as if so enacted, g which relates to a matter within the exclusive legislative competence of the Federal Legislature. (3) . . .” Again, the provisions of Regional Courts (Federal Jurisdic- h tion) Act, Cap 177 in the 1958 edition of the Laws of Nige- ria also made it possible for Regional Courts to have jurisdiction with respect to the hearing and determination thereof in civil causes relating to matters within the legislative competence of the Federal Legislature and of appeals arising out i of such causes (section 3 of Cap 177 aforesaid refers). Sec- tion 4 of Criminal Procedure (Northern Region Act No. 20 of 1960 is also to the like effect. As is obvious from the pre- amble to Cap 177 aforesaid it is provided in the Constitution j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Bronik Motors Limited v. Wema Bank Limited 525 a current in 1958 the year in which Cap 177 was enacted that the “Courts of a Region shall have such jurisdiction in respect of matters of exclusive Federal Legislative competence as may be conferred upon them by the Federal Legislature”. b See section 152(1), Chapter V of the Nigerian (Constitution) Order in Council 1954: Statutory Instrument No. 1146 of 1954 which reads:– “Subject to the provisions of this Order, the courts established for c a Region shall have such jurisdiction:– (a) with respect to any matter that is included in the Exclusive Legislative List as may be conferred upon them by any law enacted by the Federal Legislature; d (b) with respect to any matter that is included in the Concurrent Legislative List as may be conferred upon them by any law enacted by the Federal Legislature or the Legislature of that Region; e (c) with respect to any matter that is not included in the Exclu- sive Legislative List or the Concurrent Legislative List as may be conferred upon them by any law enacted by the Legislature of that Region or having effect under section 52 of this Order as if it has been so enacted” (italics by me). f The position then was that, until the enactment of Cap 177 aforesaid, Regional Courts were precluded by the 1954 Con- stitution from having jurisdiction in civil suits and criminal causes relating to enactments then within the Legislative g competence of the Federal Legislature; in other words, their jurisdictions were prima facie strictly limited to causes or matters arising under and relating to regional laws which appertain to matters not in the Exclusive Legislative List h unless supplemented as provided under section 152 aforesaid (ie of the 1954 Constitution). The position did not really improve under the 1963 Constitution. Is the position the same under the 1979 Constitution? I should think not. The i Constitution should be read as a whole, and the provisions of related sections read together. When read as a whole, it will be seen that there are built into the present Constitution (ie 1979 Constitution) provisions similar to those of section 44 j of the Interpretation Act, Cap 89 aforesaid and section 3 of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 526 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the Regional Courts (Federal Jurisdiction) Act, Cap 177 a aforesaid. In other words, there is no need (as there was with regard to the previous Constitutions) to seek the aid of enactments de hors the current Constitution in order to estab- b lish jurisdiction in State High Courts in criminal and civil causes arising from Federal Laws (ie laws made by the Fed- eral Legislature by virtue of its legislative competence under both the Exclusive and Concurrent Legislative Lists). These c built-in provisions of the 1979 Constitution are to be found in section 250 thereof. Now, the State High Courts under the 1979 Constitution are provided with unlimited jurisdiction in matters set out in section 236 thereof, ie “to hear and determine civil proceedings in which the existence or extent of a d legal right, power or duty, liability, privilege, interest, obligation or claim is in issue or to hear and determine any criminal proceedings involving or relating to any penalty, forfeiture, punishment or other liability in respect of an of- e fence committed by any person” (italics mine). The issue of the existence or extent of a legal right, power liability, privilege, obligation or claim in any legal proceed- f ings before a court when not based on the common law is always based on the provisions of an enactment; this may be a State or federal enactment and, sometimes, in the latter case, on a matter within the exclusive competence of the Na- g tional Assembly (ie in the Exclusive Legislative List) and also within its competence in the Concurrent List. Whatever the basis, it is my view, that it is in the intendment of the present Constitution that the resolution of such an issue must h be within the competence or jurisdiction of State High Courts except in so far as the Constitution itself (or some other enactment) specifically places the resolution of such an issue outside the competence or jurisdiction of these courts; hence the “Supplemental provisions” in section 250 of the i 1979 Constitution. These supplemental provisions being within the framework of the organic law aforesaid and relating to State High Courts must, in my view, be read together with the provisions of section 236 which they are intended j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Bronik Motors Limited v. Wema Bank Limited 527 a to supplement; and, read as a whole, they constitute the totality of jurisdiction invested, under the present Constitution in State High Courts. This, indeed, is intentional and it is b designed to avoid the situation which existed under the previous Constitutions. I am, therefore, of the view that a State High Court has trial and appellate jurisdiction in respect of issues which are, by law (ie the Constitution and the State High Court Law), ordinarily within its competence although c arising under State Laws or Federal Laws (ie Laws relating to matters within the legislative competence of the National Assembly in the Exclusive and Concurrent Legislative Lists) unless specifically precluded by the Constitution or any d other lawful enactment from exercising such jurisdiction. Two examples of such specific preclusion under the Consti- tution aforesaid are to be found in sections 237(2)(a) and 212(1). In passing, attention may be drawn to the language e of section 8 of the Federal High Court Act, 1973; which, by implication is intended to kill or remove the jurisdiction which until its coming into force existed in the State High Courts in respect of issues arising not only under State but f also Federal laws. That section reads:– “8(1) In so far as jurisdiction is conferred upon the Federal High Court in respect of the causes or matters mentioned in the foregoing provisions of this Part the High Court or any g other court of a State shall, to the extent that jurisdiction is so conferred upon the Federal High Court, CEASE to have jurisdiction in relation to such causes or matters” (capitals and italics by me). h It is to be remembered that although the supplemental provisions of section 250 of the 1979 Constitution did not exist in the 1963 Constitution and (as amended by the Military Re- gime) current at the time of the promulgation of the Federal i Revenue Court Decree (now Federal High Court Act), both sections 44(1) and (2) of the Interpretation Act, Cap 89 of Volume III of the 1958 edition of the Laws of Nigeria as preserved by section 28 of the Interpretation Act, 1964 and j designated Law (Miscellaneous Provisions) Act, 1964 as

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 528 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) well as section 3 of Regional Courts (Federal Jurisdiction) a Act, Cap 177 of Volume V of the 1958 edition of the Laws of Nigeria, were then in existence; and so, they conferred adequate jurisdiction (NOT under the then existing Constitu- b tion, as does the 1979 Constitution but by enactments de hors the 1963 Constitution) on State High Courts on matters and issues of law arising not only from State laws but also from Federal Laws (and this included matters referred to in section 8 of Act No. 13 of 1973 as “mentioned in the forego- c ing provisions”). In conclusion, it is my view that it is the Federal High Court that has limited jurisdiction, limited in the sense that it d has only so much of the jurisdiction conferred expressly by existing laws (see section 274(1) of the Constitution) which exist as Acts of National Assembly under subsection (2) of section 230 aforesaid, and also under specific sections of the e 1979 Constitution (ie expressly prescribed thereunder), viz sections 42 and 237(a) as well as such other jurisdiction as may be conferred on it by future enactments of the National Assembly under section 230 of the 1979 Constitution. f With respect to section 230(1)(b) of the 1979 Constitution I have this to say. I take the view that the expression as “may be prescribed by the National Assembly” wherever it occurs in section 230 relates plainly to the future and I can- g not agree with the interpretation which the Court of Appeal seeks to place on it by the judgments already referred to. Subject to the foregoing view, section 230(1)(a) as I see it, relates only to revenue matters of the Government of the h Federation “as may be prescribed by the National Assem- bly” in the future. Section 230(l)(b) aforesaid deals with “matters as respects which the National Assembly has power to make laws”; but i it is to be noted that it speaks of “such other matters”. The principal question which arises in the construction of this subsection of section 230 is: Does the entire sub-paragraph relate to the present enactment (ie in this instance, the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Bronik Motors Limited v. Wema Bank Limited 529 a Constitution) as well as to future enactments as it has been construed by the Court of Appeal, and also urged on us in this appeal? The question arises because of the secondary or b extended meaning ascribed to the word “prescribed” under both section 277 of the 1979 Constitution and section 18(1) of the Interpretation Act No. 1 of 1964 and applied to the sub-paragraph by the Court of Appeal in Eze (supra) and Tony Momoh (supra). It is my view that the expression re- c lates only to future enactments of the National Assembly; and subsection (2) must be so construed. The enactments envisaged under section 230(1)(b) must relate to items in both the Exclusive and Concurrent Legislative Lists within d the competence of the National Assembly, other than revenue matters within the contemplation of section 230(1)(a). Any other interpretation of section 230(1)(b) will, in my view, not only make the earlier provisions of section 230(1) e and the latter provisions of section 230(2) unnecessary, it will lead to absurdity. I am not unmindful of the rule of construction of statutes f that words are not used in a statute without meaning; nor are they used tautologously or superfluous (see also Halsbury’s Laws of England (3ed) Volume 36 paragraph 583). But, there is the other rule of construction of statutes that words g in an enactment are primarily used in their ordinary meaning or common or popular sense and generally are used as they would have been ordinarily understood “the day after the statute was passed” (see also Sharpe v Wakefield (1888) 22 h Q.B.D. 239 at 241 and 242), unless such interpretation and/or construction would lead to manifest absurdity (see also Clerical Medical and General Life Assurance Society v Carter (1889) 22 Q.B.D. 444 at 448), or unless the context requires some special or particular meaning to be given to i the words (see also Stephens v Cuckfield R.D.C. (1960) 2 Q.B. 373 at 382). Therefore, where a judge is of the opinion that the application of the words of an enactment in their ordinary meaning “would produce an absurd result which can- j not reasonably be supposed to have been the intention of the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 530 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Legislature, he may apply the words in any secondary mean- a ing which they are capable of bearing” (see Cross Statutory Interpretation (1981) (1ed) page 74 citing, in support, Lord Reid in Pinne v Everret (1969) 2 All ER 257 at 258). b Such being the principles of construction of statutes I now turn to apply them to section 230(1) aforesaid. I see nothing in the expression, “as may be prescribed”, in section 230 with which we are concerned which leads me to think that c the application of the ordinary meaning of “may be prescribed” in relation to matters which do not come within the embrace of subsection (2) of section 230, will lead to absurdity; rather, it is the unbridled or unrestrained application d of the secondary meaning of the expression (ie as may be prescribed) in relation to all matters “as respects which the National Assembly has power to make laws” that is bound to lead to absurdity. In the event, I arrive at the conclusion e that the expression “in such other matters as may be prescribed as respects which the National Assembly has powers to make laws in section 230(1)(b)” can only mean that the Federal High Court will have additional jurisdiction in rela- f tion to issues or causes arising from such legislation as the National Assembly may at a future date enact “as respects matters” in the Concurrent and Exclusive Legislative Lists. g The question which I have to consider next is whether the State High Court is precluded from exercising jurisdiction in respect of claims arising under banking transaction? And this is the second arm of the challenge to the decision of the h Court of Appeal in the case in hand. The Federal High Court Act No. 13 of 1973 In order to answer effectively the last question I have posed in the preceding paragraph, it is necessary to examine i the provisions of section 7(1)(b)(iii) of Part II of the Federal High Court Act No. 13 of 1973. Do provisions of that sub- paragraph mean that the Federal High Court has jurisdiction to entertain all claims pertaining to banking, ie claims j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Bronik Motors Limited v. Wema Bank Limited 531 a relating to all banking transactions? If this is so, then the jurisdiction of State High Courts to deal with such matters must be ousted by virtue of the provisions of section 8(1) of b the Federal High Court Act. This Court by a majority judgment decided in Jammal Steel Structures Ltd v African Con- tinental Bank Ltd (1973) 1 All NLR (Part 2) 208 that the provisions in question have no such meaning. Learned Sen- c ior Advocate for the appellant has urged upon us that the minority and dissenting judgment in Jammal (supra) has a meaning more in keeping with the law relating to the construction and interpretation of statutes. The text of section d 7(1)(b)(iii) of the Federal High Court Act has already been set out in the lead judgment and I see no point in having the text repeated. There is a rule of construction of statutes – the rule of noscitur a sociis – the full meaning of which is that a e word is known by the company it keeps; in other words, the meaning of particular terms in a statute may be, and are quite often, ascertained by reference to the words associated with them in the statute. This rule, however, has no applica- f tion to a statute the terms of which are too plain to admit of construction. It only applies where (as here, with reference to the word “banking” in section 7 aforesaid) any particular word is obscure or of doubtful meaning, so that taken by it- g self the obscurity or doubtful meaning of the word may be removed by reference to associated words. The reason for adopting this rule is that, unless the rule is applied, unin- tended breadth may well be given to an enactment by as- h cribing to the word, whose meaning is doubtful, a meaning out of context with those with which it is associated. In this particular sub-paragraph, and in the context of the appeal in hand, the word with a doubtful meaning is, as already i pointed out, “banking”. Has it been used in that sub- paragraph as a noun or as an adjective? The majority decision in Jammal (supra) is that, in the context of the sub- paragraph, “banking” is used as an adjective; the minority j judgment regarded the word as a noun.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 532 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

It was submitted to us by learned Senior Advocate on be- a half of the appellants that, in view of section 18(3) of the In- terpretation Act, 1964, the words “or other fiscal measures” in the sub-paragraph should be construed disjunctively and b not as implying similarity so that the word “banking” should be given a wider construction. It was further urged that the use of the punctuation comma after the word banking lends support to this view. Any other construction would, it was c urged, lead to the inference that the separate words “banking, foreign exchange,” in the sub-paragraph have been unnecessarily used. Effect, it further submitted, must be given to the punctuation. As regards the submission that the nouns “banking” and “foreign exchange” could not have been d used unnecessarily in the way they have been set out in the sub-paragraph, it is well known to use the language of Lord Diplock LJ that “economy of language is not invariably the badge of parliamentary draftsmanship” per Diplock LJ (as e he then was) in Letang v Cooper (1965) 1 Q.B. 232 at 247; and as regards the submission in respect of punctuation it is well to remember that at common law, “in the interpretation of statutes, the punctuation thereof is not seriously regarded. f It is a minor not a decisive or controlling element in the interpretation of a statute. Where the true meaning of the legislature is manifested, the courts will not permit punctuation to control, but will disregard the punctuation of a statute or g (even) re-punctuate, if need be, to give effect to what otherwise appears to be its true meaning”. See 50 American Ju- risprudence (1ed) (1962) section 253, pages 249–250 (brackets and italics by me) and see also Jammal (supra) at h 219 where in the majority decision – “the comma” in the clause in the section concerned was nationally replaced with “or”. On the same issue, Halsbury’s Laws of England (1961) Volume 36 at paragraph 549 observes that “it appears to be i established that punctuation marks are not to be treated as forming part of statute, and they must therefore be disregarded for the purpose of construing”. It is well known that in old statutes engrossed on the Parliament Roll there was j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC Bronik Motors Limited v. Wema Bank Limited 533 a generally no punctuation and not “all the modern vellum prints of statutes are punctuated”, and accordingly, “punctuation is disregarded in the construction of statutes” and b provisions which appear were read as though the punctuations was omitted (see Maxwell Interpretation of Statutes (1961) (5ed) pages 13 and 14). However, it must be remembered that, although section c 3(1) of our Interpretation Act No. 1 of 1964, for the first time provides a contrary view the previous Interpretation Act Cap 89 of the 1958 edition of the Laws of Nigeria, which updates all statutes which prior to 1958 relate to in- d terpretation of enactments, not having any similar provisions – for it says “punctuation forms part of an enactment and regard shall be had to it in construing the enactment” – the effect of the provisions of section 1 of the 1964 Act which e specifically ordains that “the Act shall apply to the provisions of any enactment except in so far as the contrary intention appears in the enactment in question” is that the rule at common law relating to punctuation in the construction of f statutory enactments prevails in circumstances where on a proper reading of the provisions of any particular enactment it is clear that regard to punctuation therein will defeat the intention of the Legislature. Even where, by application of g section 3(1) of the Interpretation Act, 1964, regard is had to the use of punctuation in the construction of the provisions of an enactment, such punctuation does not (as at common law) necessarily have a decisive effect on the interpretation h thereof. The principal question and governing factor always still is: “What is the true meaning of the Legislature” as manifest in the provisions under consideration? It is my view that what applies in the construction of the i sub-paragraph in question (ie sub-paragraph (iii) of section 7(1)(b) of the 1973 Act aforesaid) is the rule of noscitur a sociis and that in the context of the paragraph the societas to which the socii (in the particular clause of the said sub- j paragraph) belong are “fiscal measures” or “Revenue

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Idigbe JSC 534 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) measures”, ie “Revenue Enactments”. Accordingly, the mat- a ters in respect of which jurisdiction has, by the sub- paragraph in question, been assigned to the Federa1 High Court are those pertaining to banking (fiscal) measures, for- b eign exchange (fiscal) measures, currency (fiscal) measures, and not (repeat, not) matters pertaining to the ordinary banking transactions as has been claimed on behalf of the appellants in this appeal. I am of the settled opinion that not only c has the Lagos State High Court jurisdiction to entertain the claims in the matter in hand, the Federal High Court has no jurisdiction whatsoever to entertain them. For the reasons stated above and additional reasons so lu- d cidly and ably stated in the judgment of my learned brother, Nnamani JSC, I would dismiss this appeal and I endorse all the orders in the said judgment of my learned brother. OBASEKI JSC: I have had the privilege of reading in draft, e the judgment just delivered by my learned brother, Nnamani JSC, and as I find myself of the same opinion on all the issues raised before us in the appeal, I hereby express my concurrence in the judgment. The appeal fails and must be dis- f missed. The issues of the extent of judicial power and the limit of the jurisdiction conferred on the Federal High Court by section 6(1) and section 230(1) of the 1979 Constitution raised g by the appellants’ Counsel being of great moment and having regard to the current of opinions that has flowed in the Federal Court of Appeal, I deem it a pressing duty to add the following comments of mine to evince our oneness of mind h on the issues and add to the weight of opinion expressed on the issues raised particularly the issues of the limit of jurisdiction of the Federal High Court under the 1979 Constitu- tion. I shall deal first with judicial powers. i The submission of learned Counsel to the appellant equating the jurisdictions of courts, particularly the High Courts (the Federal High Court and State High Court) with the judicial powers of the Federation and the judicial powers of the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Obaseki JSC Bronik Motors Limited v. Wema Bank Limited 535 a States respectively, resourceful and ingenious as it is, is a non sequitur and does not in my view have constitutional support. This is because section 6(6) of the 1979 Constitu- b tion made no distinction between the extent of the judicial powers of the Federation and the judicial powers of the State vested in the courts listed in section 6(5)(a)–(f) of the 1979 Constitution. It appears to me that within the limits of the jurisdiction of each court, the judicial powers vested by the c Constitution is the same whether it be the judicial power of the Federation or the judicial power of the State. There may be situations where judicial powers are made to appear syn- onymous with jurisdictions granted to the courts, but it is not d so (in this case) under the 1979 Constitution. The contents of judicial powers have been examined by Lord Denning (delivering the judgment of the Privy Coun- e cil) in the case of Attorney-General of Gambia v N’Jie (1961) A.C. 617 in relation to the judicial powers of a judge, in Australia by Griffiths CJ in Huddart Parker and Co Pty Ltd v Moorehead (1909) 8 C.L.R. 330 in relation to the judi- f cial powers of the Commonwealth, by the Privy Council in Shell Company of Australia Ltd v Federal Commissioners of Taxation (1931) A.C. 275 at 295; 47 T.L.R. 115 and by Latham CJ in the Australian case of Rola Co (Australia) g (Pty) Ltd v Commonwealth (1944) 69 C.L.R. 185 at 198. In Attorney-General of Gambia v N’Jie (supra), Lord Denning said at 630 (on the subject of the judicial powers of a Judge):– h “It is quite apparent that the deputy judge can only represent the Chief Justice in the exercise of his judicial powers. He cannot represent the Chief Justice in the exercise of his administrative powers. Some of the powers of the Chief Justice are clearly judicial as i when he sits in court to decide civil or criminal cases others are equally clearly administrative powers, as when he directs the times at which the offices of the court shall open; or appoints notaries public or makes rules of court (sic). Into which of these categories do we place the power of the Chief Justice to suspend legal practi- j tioners or strike them off the role of court. Is this a judicial power

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Obaseki JSC 536 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

or an administrative power; this necessitates an analysis of the na- a ture of the power. By the common law of England, the judges have the right to determine who shall be admitted to practise as barristers and solicitors; and as incidental thereto the judges have the right to suspend b or prohibit them from practice. In England, this power has for a very long time been delegated, so far as barristers are concerned, to the Inns of Court: and, for a much shorter time, so far as solicitors are concerned, to the Law Society. c In the colonies, the judges have retained the power in their own hands at any rate in those colonies where the profession is fused . . . Their Lordships recognise that in some contexts ‘judicial powers’ d do signify the powers of a court which sits to decide controversies between parties: as, for instance, the judicial powers of the Com- monwealth see Shell Company of Australia Ltd v Federal Com- missioner of Taxation (1931) A.C. 275, 295; 47 T.L.R. 115. But in this Ordinance, the phrase is ‘The judicial powers of the Judge’. e And it appears to their Lordships that in this context a judge exercises judicial powers, not only when he sits deciding suits between parties, but also when he exercises disciplinary powers appurtenant to the office of a judge. Suppose, for instance, that a judge, finding f that a legal practitioner has been guilty of professional misconduct in the course of a case, orders him to pay the costs, as he has undoubtedly power to do so see Myers v Elman (1940) A.C. 282, 318; 56 T.L.R. 1771; (1939) 4 All ER 484 HL. That would be an exercise of the judicial powers of the judge as much as if he com- g mitted contempt of court. Yet there is no difference in quality between the power to order him to pay costs and the power to suspend him or strike him off. And suppose that the judges of a col- ony do suspend a practitioner or strike him off, it is undoubtedly h open to the practitioner to appeal to Her Majesty in Council and this necessarily imports that it is the exercise by the judges of a judicial power. For there is no right of appeal to their Lordships from exercise of administrative power.” Lord Sankey LC (delivering the judgment of the Privy i Council) in the case of Shell Co Australia v Federal Com- missioner of Taxation said at 275:– “. . . What is judicial power? Their Lordships are of the opinion that one of the best definitions is that given by Griffiths, C.J. in j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Obaseki JSC Bronik Motors Limited v. Wema Bank Limited 537 a Huddart, Parker and Co v Moorehead (1909) 8 C.L.R. 330, 357 where he says:– ‘I am of opinion that the words judicial power as used in b section 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribu- c nal which has power to give a binding or binding and authoritative decision (whether subject to appeal or not) is called upon to take action’.” Latham CJ in Rola Co (Aus.) (Pty) Ltd v Commonwealth d (1944) 69 C.L.R. 185 dealing with judicial power of a court said at 198:– “I am not satisfied that the words of Griffiths, C.J. (in Huddart Parker and Co Pty Ltd v Moorehead (1909) 8 C.L.R. 330) are e properly interpreted when it is said that they mean that a power to make binding and authoritative decision as to facts is necessarily judicial power. I direct attention to the concluding words ‘is called upon to take action’. In my opinion these words are directed to action to be taken by a tribunal which has power to give a binding f and authoritative decision. The mere giving of the decision is not the action to which the learned Chief Justice referred. If a body which has power to give a binding and authoritative decision is able to take action so as to enforce that decision, then but only g then according to the definition quoted all the attributes of judicial are plainly present. I refer to what I say more in detail hereafter, that the Privy Council in the Shell case (1931) A.C. 275 at 295 in which approval was given to the definition quoted, expressly held that a tribunal was not necessarily a court because it gave deci- h sions (even final decisions) between contending parties which affect their rights.” The judicial powers vested in the courts listed in section 6(5)(a–f) of the 1979 Constitution by subsections (1) and (2) i of section 6 of the 1979 Constitution must, in my view, mean the powers of the courts to give binding and authoritative decision in matters in controversy litigated before them and to take action to enforce the decision. The constitutional j provisions to be found in section 251 for the enforcement of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Obaseki JSC 538 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) the decisions of the courts established by the Constitution is a unique see subsections (1), (2) and (3) of section 251 of the 1979 Constitution. It is unique in that it makes enforcement mandatory and is directed to be carried out by all persons b and authorities. It is expressed in clear and unmistakable language and makes the decisions of the courts enforceable in all parts of the Federation by all persons and authorities and by courts c with subordinate jurisdiction to each court down the ladder. The argument that the courts established by the Constitu- tion for the Federation and for the States must have their jurisdiction limited to the matters over which the legislative d powers of the legislatures for the Federation and for the States can be exercised cannot find support in the Constitu- tion. If that argument is accepted, it would mean that jurisdiction of federal courts exercising the judicial powers of the e Federation is co-extensive with the matters in respect of which the National Assembly exercises legislative powers (see sections 4(2), 4(4)(a) and (b)) as prescribed in the Ex- clusive and Concurrent Legislative Lists while the jurisdiction f of the State courts exercising the judicial powers of the State is co-extensive with matters in respect of which the House of Assembly exercises legislative powers (see section 4(7)(a), (b) and (c) of the 1979 Constitution). The judicial g power vested in the courts, be they Federal or State Courts, being the same in content the logical basis for that contention disappears. The 1979 Constitution was not ordained by the National h Assembly and the Houses of Assembly of the States but of the people of the Federal Republic of Nigeria. The unlimited jurisdiction expressly conferred upon the States’ High Court in exercise of their sovereign powers cannot therefore be i limited other than as provided by the Constitution. The people of the Federal Republic being sovereign could invest the State courts with whatever jurisdiction exercisable within the territorial limit of the State they desired and thought fit j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Obaseki JSC Bronik Motors Limited v. Wema Bank Limited 539 a to grant within which the judicial powers can be exercised and that is exactly what they have done. Jurisdiction in the judicial sense, in my view, means the power of the court to b hear (or try) a case. A court may exercise judicial power only within the authorised jurisdiction. Jurisdiction c With respect to the issue of jurisdiction, I entirely agree with my learned brother that the invitation of learned Coun- sel for the appellants to overrule the majority decision in the case of Jammal v African Continental Bank (1973) 1 All d NLR (Part II) 208 should be rejected as none of the arguments advanced by learned Counsel to the appellants has been able to convince me that the reasoning of the majority decision holding that cases dealing with overdrafts granted by banks are within the jurisdiction of State High Courts e was erroneous. Their construction of section 7(1)(b)(iii) of the Federal High Court Act (formerly the Federal Revenue Court Decree, 1973) was that the jurisdiction conferred by that section in respect of banking is limited to banking f measures. That construction, in my view, properly derives from the application of the rule of construction known as noscitur a sociis, ie the meaning of a doubtful word may be ascertained by reference to the words associated with it. g As regards the jurisdiction conferred on the Federal High Court by section 230(1)(a) and (b) of the 1979 Constitution, I agree with my learned brother, Nnamani JSC, as regards h his construction of the section and the limits of the jurisdiction conferred by the section. An examination of the provisions of the 1979 Constitution reveals that the Constitution has been positive and clear, and i loud, not silent or secretive, in the language used in granting jurisdiction to the courts it has created and the courts to be created by law passed by a State House of Assembly. The clear intention of the people of the Federal Republic of Ni- j geria does not warrant any circuitous reasoning to ascertain.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Obaseki JSC 540 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

This is clear from the various sections, namely, sections a 4(8), 42(2), 236, 237, 242, 247(1) and (2) and 250 of the 1979 Constitution. It is the people of the Federal Republic of Nigeria who granted unlimited jurisdiction to the High Court b they established for the State and not the people of the State. Section 230(1)(a) and section 230(1)(b) mean expressly what they say and, in my view, contemplate the express conferment of jurisdiction by the National Assembly (a) in such c matters connected with or pertaining to the revenue of the Government of the Federation; and (b) in such other matters as the National Assembly may prescribe as respects which the National Assembly has power to make laws. In other d words, the discretion as to the jurisdiction the Federal High Court shall exercise is left to the National Assembly. Sub- section (2) of section 230 and section 231 appear to provide the bright lights by which the intention expressed in para- e graphs (a) and (b) of subsection (1) of section 230 can be seen. The restyling of the Federal Revenue Court as Federal High Court was dependent on the fact that the Federal Revenue Court Decree, 1973 established the Federal Reve- f nue Court and empowered it to exercise jurisdiction to which subsection (1) of this section 230 relates. Further, it puts a constitutional stamp on the jurisdiction conferred on the court by that Decree and any other law, by its expressed g provision that “it shall continue to have all the powers and exercise the jurisdiction conferred upon it by any law”. It envisages that the jurisdiction for the hearing of any of the matters to which subsection (1) of section 230 refers h must have been conferred by law. Every word of subsection (2) of section 230 is therefore, in my view, very important and meaningful. If subsection (1)(b) gave the Federal High Court the jurisdiction the Federal Court of Appeal in Eze’s i case (1982) 3 NCLR 259 (per Kazeem JCA) says it gave, subsection (1)(a) would be unnecessary and subsection (2) would have been limited in its operation to restyling the Federal Revenue Court, the Federal High Court only, with j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Obaseki JSC Bronik Motors Limited v. Wema Bank Limited 541 a out proceeding to confer upon it the powers and jurisdiction conferred on the Federal Revenue Court by any law. Section 231(1) is even more illuminating. It conferred on it b the powers of the High Court of State for the purpose of exercising any jurisdiction conferred on it by this Constitution or as may be conferred by an Act of the National Assembly. The Exclusive Legislative List and the Concurrent Legisla- c tive List set out in Part I and 2 respectively of the Second Schedule to the 1979 Constitution are prescribed by the Constitution and not by any law passed by the National As- sembly to warrant the inference that the matters stated d therein have been prescribed by the National Assembly. The lists are lists of matters as respects which the National As- sembly has power to make laws and not lists of matters prescribed by the National Assembly in respect of which the e Federal High Court shall have and exercise jurisdiction. The Constitution in sections 42, 230(2) and 237(1) expressly conferred jurisdiction on the Federal High Court for the hearing and determination of certain specific matters but f an Act of the National Assembly conferring jurisdiction in accordance with the powers granted the Assembly in subsection (1)(a) and (b) of section 230 is yet to be passed. g In conclusion, I agree with my learned brother, Nnamani JSC, that the jurisdiction of the Federal High Court as of today is limited to the jurisdiction granted in sections 42, 230(2) and 237(1) and not co-extensive with all the matters h itemised in the Exclusive and Concurrent Legislative Lists as regards which the National Assembly has power to make laws. The appeal fails and I hereby dismiss it with costs to the i respondents assessed at N300 in concurrence with my learned brother ESO JSC: The issue of the jurisdiction of the Federal High Court vis-à-vis the State High Court, which this appeal has j raised, is, no doubt, of considerable importance. The Federal

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 542 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Court of Appeal has, for some time now, given conflicting a decisions on the issue and this has left the State High Court which should, in lieu of the decision of this Court on the matter, have been guided by the Federal Court of Appeal, b without any real guidance. The State High Court has, as a result thereof, been at large on the issue, each judge therein taking his own decision on which of the conflicting decisions of the Federal Court of c Appeal to follow. The position has been rather unsatisfactory and it is necessary for this Court, at the earliest opportunity, to make a definite pronouncement on this burning issue of the scope of the jurisdiction of the Federal High Court d and of the State High Court and lay the matter to rest. For this reason I am in full agreement with the view of Chief Williams, learned Senior Advocate representing the appellants, who in his brief has said that it is desirable, in the e public interest, to make an early authoritative declaration on the scope of the jurisdiction of the State High Court and the Federal High Court. This case has afforded such opportunity. f My learned brother, Nnamani JSC, has kindly given me a preview of the judgment which he has just delivered and I am in complete agreement with him in his conclusion. The facts of the case are simple and really without controversy. g They have been adequately stated by my learned brother in the lead judgment. The real issue there is whether the Lagos State High Court, which determined the issue, had jurisdiction in the matter or if it is a matter for the Federal High h Court. It is necessary to examine the scope of sections 6, 230, 236, 237 and 250 of the Constitution of the Federal Republic of Nigeria 1979, which will be referred to subsequently in i this judgment as “the 1979 Constitution” or simply as “the Constitution”, for a proper resolution of the extent of the jurisdiction that has been granted by the Constitution to the Federal High Court and also the decision of this Court in the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 543 a case of Jammal Steel Structures Ltd v African Continental Bank (1973) 1 All NLR (Part II) 208, when one considers the scope of jurisdiction that has been granted to that court b by legislation. However, I will like to state at this stage that in regard to the legislation aforesaid, if the provisions of subsection (1) of section 230 of the Constitution are self-executing, then c section 7 of the Federal High Court Act No. 13 of 1973 (which before adaptation following the coming into operation of the Constitution was known as the Federal Revenue Decree No. 13 of 1973) which spells out the jurisdiction d conferred by the Act on the Federal High Court would be unnecessary. In such a situation, that is where the provisions of section 230(1) of the 1979 Constitution are self- executing, the jurisdiction of the Federal High Court will e only be derivable from the Constitution and no legislation would be necessary for the conferment of such jurisdiction. For this reason, I will start with an examination of the constitutional provisions. The relevant subsections of section 6 f of the 1979 Constitution provide:– “6(1) The judicial powers of the Federation shall be vested in the courts to which this section relates, being courts established for the Federation g (2) The judicial powers of a State shall be vested in the courts to which this section relates, being courts established, subject as provided by this Constitution, for a State . . .” Section 230 provides:– h “230(1) Subject to the provisions of this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Fed- eral High Court shall have jurisdiction – i (a) in such matters connected with or pertaining to the revenue of the Government of the Federation as may be prescribed by the National Assembly; and (b) in such other matters as may be prescribed as respects which the National Assembly has power to j make laws.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 544 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(2) Notwithstanding sub-section (1) of this section where by a law any court established before the date when this section comes into force is empowered to exercise jurisdiction for the hearing and determination of any of the matters to which sub-section (1) of this section relates, such court shall b as from the date when this section comes into force be restyled ‘Federal High Court’ and shall continue to have all the powers and exercise the jurisdiction conferred upon it by any law.” c Section 236 provides:– “236(1) Subject to the provisions of this Constitution and in addition to such other jurisdiction as may be conferred upon it by law, the High Court of a State shall have unlimited jurisdiction to hear and determine any civil d proceedings in which the existence or extent of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue or to hear and determine any criminal proceedings involving or relating to any penalty, forfeiture, punishment or other liability in respect e of an offence committed by any person. (2) The reference to civil or criminal proceedings in this section includes a reference to the proceedings which originate in the High Court of a State and those which f are brought before the High Court to be dealt with by the court in the exercise of its appellate or supervisory jurisdiction.” Section 250(1) provides:– g “250(1) Subject to the provisions of this Constitution:– (a) where by the Law of a State jurisdiction is conferred upon any court for the hearing and determination of civil causes and of appeals arising out of such causes, the court shall have like jurisdiction with h respect to the hearing and determination of Fed- eral causes and of appeals arising out of such causes; (b) where by the Law of a State jurisdiction is con- i ferred upon any court for the investigation, inquiry into, or trial of persons accused of offences against, the Laws of the State and with respect to the hearing and determination of appeal as arising out of any such trial or out of any proceedings j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 545 a connected therewith, the court shall have like jurisdiction with respect to the investigation, inquiry into, or trial of persons for Federal offences and the hearing and determination of the trial or pro- b ceedings.” While section 274 defines “existing law”, section 277 deals with the interpretation of the Constitution. c Though my learned brother has referred extensively to the submission of learned Counsel in this case, it will be necessary to make reference to some of such submissions to bring out the points I am discussing in this concurring judgment d more succinctly. The contention of Chief Williams was that the purport of section 6 of the 1979 Constitution is to divide judicial powers between the Federation and the States. He said in a most e copious brief presented to us that only courts established for the Federation can, in exercise of the judicial powers of the Federation, possess federal jurisdiction while courts established for a State will possess, in exercise of the judicial f powers of the State, non-federal jurisdiction. Learned Senior Advocate submitted further that a Nigerian court which is called upon to determine a dispute or controversy on the basis of a federal law or laws would be exercising federal ju- g risdiction. Mr Ladosu Ladabo, learned Counsel representing the respondents contended, for his part, in his own brief, equally copious, that judicial powers represent a totality which embraces separate jurisdictions and powers which the h courts exercise in the administration of justice. What Chief Williams has said is no doubt an attractive proposition. It will, however, be necessary to determine what judicial powers are and what jurisdiction is, to see if i one could be interchanged with the other under the provision of section 6 of the Constitution. Judicial powers, said Isaacs J in Huddart Parker and Co (Pty) Ltd v Moorhead (1909) C.L.R. 330 at 382, is essentially a British phrase. Looking j into the use this British phrase has been put under the

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 546 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

English common law, Blackstone in his Commentaries was a of the view that judicial power is, by constitutional usage and law, vested in the judicature. And as this relates it back to the judicature, I am in full agreement with Isaacs J when b in Huddart Parker’s case (supra) he said further that the expression “judicial power” should be understood as the power which the State exerts in the administration of public justice in contra-distinction from the power the State possesses to c make law (that is, legislative power) and the power to execute them (that is, executive power). In other words, when talking about the three arms of government in a federal constitution and their powers, one talks of judicial power in re- d lation to the judicature, legislative powers in relation to the legislature, and executive powers in relation to the executive. However, when a court is said to have jurisdiction, it means it has authority to determine a particular case. e This Court took that view in Senator Abraham Adesanya v The President of Nigeria (1981) 2 NCLR 358 as per Obaseki JSC at 358 (see also Nnamani JSC at 397). Idigbe JSC (at 386) in considering the issue of the jurisdiction of a court f put it very pointedly, and I agree, by regarding it as the power of the court to decide and pronounce a judgment and also carry it into effect between and parties who bring a case before the court for decision. In my respectful view, and on g the authorities, the expression “judicial power” is not coter- minous with “jurisdiction”, though the former, that is, “judicial power”, embraces the latter. Where the judicature has been vested with judicial power to deal with an issue it does not necessarily mean that every court constituting the judica- h ture must have jurisdiction in causes or matters. What it means is that the courts cannot be divested of such judicial powers except by a constitutional amendment. Further, and this is important, it means that vesting of such judicial pow- i ers in the courts precludes them from being conferred with non-judicial functions. Whereas where jurisdiction of the court in a matter is established, then the matter which is within the court’s jurisdiction must necessarily be within the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 547 a judicial power of the court. Because that court has jurisdiction to exercise judicial powers in the strict constitutional sense of the term. b And now, to apply all these principles of law to section 6 of the 1979 Constitution under which the judicial powers of the Federation are vested in the “Federal courts” and the judicial powers of a State are vested in the “State courts”, it c seems to me that what this section has done, is, in the process of sharing the powers of the Federal Republic among the three establishments – the Legislature, the Executive and the Judiciary to vest judicial powers, that is the power to admin- d ister public justice in two sets of courts, Federal and State, just as section 4 of the 1979 Constitution has vested legislative powers in the National Assembly and the State Legisla- tures and section 5, the executive powers in the President e and the State Governors respectively. Subsection (6) of section 6 of the Constitution which deals with the extent of the judicial power should not be interpreted as a delimitation, as such, of the extent of Federal or State judicial power but a f definition of the nature of that power, as one for the determination of the civil rights and obligations of persons in justiciable matters which have been brought before the courts in the normally recognised and acceptable judicial proceedings. g Having made provisions for the judicial powers of the Federation and the States, the Constitution proceeds to make adequate provisions for the jurisdiction of each of the courts established for the federation, to wit:– h The Supreme Court; The Federal Court of Appeal; and The Federal High Court i while adequate provisions are also made for the jurisdiction of the State courts. If “judicial power” had been interchangeable with “jurisdiction” then, apart from the Supreme Court, which is essentially an Appellate Court (that is, ap- j pellate, safe for the original jurisdiction conferred upon it by

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 548 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) section 212 of the Constitution), the Federal Court of Appeal a which is also essentially an Appellate Court, there would have been no need to spell out the jurisdiction of the State High Court, as is done under section 236 of the Federal High b Court as set out under section 230 of the Constitution, for then section 6 would have been sufficient to give jurisdiction in all federal causes to the Federal High Court and jurisdiction in all non-federal causes to the State courts. c That not being the case, therefore, I am of the firm view that one cannot look up to section 6 of the Constitution for the jurisdiction of the federal or State courts. Indeed one has to look elsewhere and that is sections 230, 236, 237 and 250 d as the case may be. And to this extent there must be deep examination of the submission of Chief Williams that unless the Constitution otherwise provides or empowers the legislature to so provide, “only courts established for the Federa- e tion can (in exercise of the judicial powers of the federation) possess federal jurisdiction”. And that “only courts established for a State can (in exercise of the judicial powers of the State) possess non-federal jurisdiction”. I think I should f say it again, if only for emphasis that it would be wrong to read section 6(6) of the Constitution as a delimitation of the extent of federal or State judicial powers and equate those powers with jurisdiction. g I have already, in this judgment, set out the provisions of the 1979 Constitution which deal with the jurisdiction of federal courts and State courts. To appreciate the scope of section 230 of the Constitution which sets out the jurisdic- h tion of the Federal High Court in its proper perspective, I think one should first deal with section 236 which sets out the jurisdiction of the State High Courts. Section 236 is to be read “subject to the Constitution”. That means, in effect, that i the provisions of the section are subject to section 6 and indeed section 230 of the Constitution. I form the view therefore that it is necessary to read all the provisions together – indeed all the provisions dealing with jurisdiction – before j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 549 a the proper interpretation could be placed on each of those provisions. As a result of section 236 of the Constitution, the High b Court of a State (which obviously is a State court in which is vested the judicial powers of the State) has unquestionably, in that State, unlimited jurisdiction to hear and determine any civil proceedings in the State whenever there exists a c legal right, power, duty, liability, privilege, interest, obligation or claim. It also has in that State jurisdiction to hear and determine any criminal proceedings involving or relating to any penalty, forfeiture, punishment or other liability in re- d spect of an offence committed by any person in that State. This means that the original jurisdiction of the State High Court extends, without any question whatsoever, to all matters within the judicial power of the State Government. e The intriguing question is whether by virtue of the provision, the State High Court has jurisdiction not only in State causes but also authority to determine Federal causes. One powerful argument against interpreting the provision to f cover Federal causes is the general principle of federalism. In true federation the authority of each Government that is, the State Government and the Federal Government, is recognised. Indeed this is the basis of a true federation. A forti- g ori it could be inferred prima facie that the jurisdiction of the State High Court will be limited to State causes while the jurisdiction of the Federal High Court will be limited to federal causes. It seems to me therefore that, unless there is an h express provision in the Constitution, or a positive implication could be read into the Constitution, giving jurisdiction in the federal causes to State courts, this fundamental principle of autonomy of the Governments in the Federation can- i not be dislodged (see the judgment of the court in Attorney- General of Bendel State v Attorney-General of the Federation SC108/1982 delivered on 3 June, 1983 when I had cause to refer to the interdependence of the various Governments in j the Federation notwithstanding the autonomy of each

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 550 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Government. See also the American decision in Hoke v a United States 227 U.S. 308). What then could be interpreted in section 236 of the Con- stitution to amount to vesting the State courts with jurisdic- b tion in federal causes? For this, one has to accept that the original jurisdiction of the State High Court before the 1979 Constitution was never prescribed in the Constitution. The 1963 Constitution prescribed only the appellate jurisdiction c of the State High Court (see the Constitution of the Federa- tion No. 20 of 1963, sections 122, 123, 124 and 125). The 1979 Constitution, for the first time in an innovative stance, has prescribed the original jurisdiction of the State High d Court. This was probably due to the fact that the original promulgators of the Constitution, the Constitution Drafting Committee, never contemplated a Federal High Court. But be that as it may, it is the provisions of the Constitu- e tion that must be examined, in this case the combination of sections 230, 236 and 250, for a revelation of the intention of the makers of the Constitution. Section 236 gives the State High Court an unlimited jurisdiction to hear and de- f termine any civil proceedings in which the existence or extent of a legal right etc is in issue and “to hear and determine any criminal proceedings . . . in respect of an offence committed by any person”. As the section is subject to the provi- g sions of the Constitution, section 230 which gives jurisdiction to the Federal High Court will act as a limitation on the wide powers resultant from the language used in the section. Section 236 talks of any civil proceedings and any criminal h proceedings without limiting these to State causes. It is section 230 that could delimit these wide area of jurisdiction therefore. The extent of the jurisdiction of the State High Court, i when section 236 of the Constitution is read with the provisions of the Constitution, in particular sections 230, 237 and 250 (and the effect of section 250 will be discussed anon) is so wide that it covers, to my mind, jurisdiction in both j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 551 a Federal and State causes. The provisions have, by a positive implication, created an unlimited jurisdiction in all matters, be they civil or criminal in the State High Courts once it is a b matter within the State except as limited by section 230. The next point is to the extent and scope of the limitation placed by section 230 of the Constitution on this very wide jurisdiction of the State High Court. Section 230 forms the c basis of the jurisdiction of the Federal High Court. This section cannot, with respect, pretend to excellent legislative drafting. Howbeit, I think the intention is clear. I think the provision means that the Federal High Court (which is a d Federal Court) possessing the judicial powers of the Federa- tion (section 6) has jurisdiction:– (a) in revenue matters of the Government of the Federa- tion, as may be prescribed by the National Assembly; e (b) in matters other than (a) above, that is, matters other than such revenue of the Government of the Federa- tion, as may be prescribed, in respect of which the National Assembly has power to legislate. f It is to be observed that in paragraph (a) of subsection (1) of section 230, that is in matters pertaining to the revenue of the Government of the Federation, the “prescription” is left g only to the National Assembly while paragraph (b) talks about prescription “as respects which the National Assembly has power to make laws.” It seems to me that in interpreting the word “prescribed” in paragraph (b) one would have to h turn to the interpretation clause of the Constitution especially as the prescription in that paragraph has not been specifically limited to the National Assembly. The only limitation to this paragraph is that the “prescription” which is done by the National Assembly must be as respects which the Na- i tional Assembly has power to make laws. But what does this mean? The paragraph which must be read in full talks of “other matters as may be prescribed”. Surely “other matters” herein which are matters other than revenue matters cannot j refer to subject matters of legislative powers as prescribed in

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 552 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) section 4 of the Constitution and the legislative lists. I am of a the view that the expression must refer to causes. The jurisdiction thus conferred is not in respect of items in the legislative lists but over civil or criminal matters arising from en- b actments made pursuant to the said items. What is being done by the National Assembly in pursuance of its constitutional power to “prescribe” is prescribing within the field of its legislative competence the types of justiciable matters over which the Federal High Court is to exercise jurisdiction c whether civil or criminal or both. What other body may prescribe? “Prescribed” as defined under section 277 of the Constitution, means:– d (1) prescribed by or under the 1979 Constitution itself; and (2) by any legislation made by the National Assembly. e Apart from the prescription which may be made by the Na- tional Assembly as already discussed, one should look for prescription made by the Constitution itself in determining the jurisdiction of the Federal High Court. Before doing that, f however, I would like to emphasise at this stage that, in my respectful opinion, the phrase “as may be prescribed” as used in paragraphs (a) and (b) of subsection (1) of section 230 refers to the future. The words “may be” have been used g and will be taken to have been used in their ordinary sense. The revenue matters that may be prescribed under paragraph (a) of subsection (1) of section 230 would refer to such revenue matters prescribed by the National Assembly h after the coming into force of the Constitution, the same is also as respects non-revenue matters under paragraph (b) thereof. Now, to deal with provisions in the Constitution to which i section 230 is subject, I am aware of only two sections of the Constitution dealing with such reservation. They are (1) section 42 of the Constitution which prescribes that a High Court in a State may deal with matters under Chapter IV of j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 553 a the Constitution; and (2) section 237 which gives the Federal High Court jurisdiction in certain matters. A High Court in a State will include both the Federal High b Court and the State High Court in that State. It seems to me that what section 42 of the Constitution has done is to give concurrent jurisdiction to both the Federal High Court and the State High Court in a State in regard to matters pertain- c ing to fundamental rights, that is, as contained in Chapter IV of the 1979 Constitution. In effect, the unlimited jurisdiction, conferred by section 236 of the Constitution of the State High Court is to continue by virtue of the provision of d section 42(1) of the Constitution even in matters pertaining to fundamental rights. The only addendum – not limitation – is that the Federal High Court in the State has equivalent jurisdiction in such case with the State High Court. e It would appear therefore that, where both a State High Court and a Federal High Court exist in a State, both have concurrent jurisdiction in matters pertaining to fundamental rights, and, as the Federal Court of Appeal has, in their ma- f jority decision held in the case of the Minister of Internal Affairs v Shugaba Abdulrahaman Darman (1982) 3 NCLR 915 (as per Coker, Uche Omo, Wali and Karibi-Whyte JJCA), the citizen whose fundamental right has been in- g fringed, even by the Federal Government, has a choice of court. With respect to the President of the Federal Court of Appeal, Nasir P, his interpretation in that case of section 42 of the Constitution which makes it mandatory for a citizen, h who complains of a breach of his fundamental right by the Federal Government to seek redress only in the Federal High Court cannot be right. Equally, the Federal Court of Appeal in its majority judgment in The Senate of the National As- i sembly v Tony Momoh F.C.A./L/45/85 of 19 July (as per Na- sir P, Kazeem, Nnaemeka-Agu and Mohammed JJCA, Ad- enekan Ademola JCA dissenting) cannot be right when it took the line of the minority decision of the court in the j Shugaba Abdulrahaman Darman’s case.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 554 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Section 237 of the Constitution which gives the “compe- a tent High Court” jurisdiction – original jurisdiction – to hear and determine any question whether any person has been validly elected to any office or to the membership of any b legislative house, or whether the term of office of any person has ceased or the seat of a person in a legislative house has become vacant, is the other provision contemplated by section 230 of the Constitution. Subsection (2) of section 237 c prescribes the Federal High Court as the competent High Court when the question of validity of the election of the President or Vice-President or the termination of the office of either of them arises. But the Federal High Court is to d have such jurisdiction only up until the coming into force of section 262 of the Constitution which sets up the Federal Capital Territory and the High Court of the Federal Capital Territory is established. It means, therefore, that, once there e is the High Court of the Federal Capital Territory, that court becomes the competent court under section 237 in regard to the validity of the election and the ceasing of the term of office of both the President and the Vice-President. In all other f offices, whether Federal or State, the High Court of the State has jurisdiction. I think that the indication of all these provisions of the Constitution, when read together, is one of a clear pointer to g the intention of the Constitution not to equate “judicial powers” with “jurisdiction”. And one last point to make before I leave this issue of prescription by the Constitution. Section 6 of the 1979 Constitution is not made subject to any provi- h sions of the Constitution. If one accepts the submission of Chief Williams and equates jurisdiction with judicial powers, it seems to me that there will be an obvious conflict between section 6 and section 237 of the Constitution. i It would appear that section 7 of the Federal High Court Act No. 13 of 1973 is saved by subsection (2) of section 230. It confers the jurisdiction of the defunct Federal Reve- nue Court on the newly created Federal High Court. I will j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 555 a examine this legislation later but meanwhile, to round up my discussion of the constitutional issues which I have discussed so far herein, I will like to discuss the scope of sec- b tion 250 of the 1979 Constitution which provides for the jurisdiction of the State courts in respect of federal causes and which I think must be read with section 236 to get the full import of the jurisdiction of the State High Court. c Section 250(1) of the Constitution is a supplemental provision and indeed this is indicated by the heading of the Part in the Constitution. The provision is for State courts which possess both original and appellate jurisdictions. They must d be State courts upon which jurisdiction has been conferred by the Law of the State. Section 250 must definitely refer among others to the State High Court. It has both original and appellate jurisdiction e and jurisdiction has been conferred upon it (apart from the provision of the Constitution which gives it jurisdiction) by the Law of the State, that is, the High Court Law which, by virtue of section 274 of the Constitution, must be existing f law. Section 250 of the Constitution supplements the provision of section 236 by positively conferring jurisdiction in respect of federal causes on the State High Court. It is seen, therefore, from the examination of all these con- g stitutional provisions, that, notwithstanding the provision of section 6 of the Constitution which vests judicial powers of the Federation and of the States in the courts established for the Federation and for the States respectively, detailed pro- h visions are still contained in the Constitution with regard to the jurisdiction of these courts (see sections 42, 230, 236, 237 and 250 of the Constitution which I have already discussed). It follows therefore that, if learned Senior Advocate i is right in his submission that following the provision of section 6 of the Constitution “Federal courts”, are to deal exclusively with matters in the legislative lists while “State courts” are restricted to matters within the Concurrent List, j other residual matters, it would be pointless for the framers

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 556 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) of the Constitution to have gone to such lengths of providing a the provisions aforesaid, dealing with jurisdiction as respects the various courts. Coker JCA is right, and I agree with his views, when in the b Minister of Internal Affairs v Shugaba Abdulrahaman Dar- man (supra) he said that there can be no justification for determining the jurisdiction of the court by reference to the constituent element of the right alleged infringed with the c competent legislative arm, State or Federal, and that the concept is completely extraneous to the very letter and the spirit of the rights contained in Chapter IV of the Constitu- tion. But I think, with respect, it is even more than that. It is d my considered view that the concept of reference to the judicial powers of the court in determining the jurisdiction of the various courts vis-à-vis their power over State or Federal causes is completely extraneous to the spirit of the whole e Constitution, having regard to the various provisions which I have so far considered. I think Nasir P was, with great respect, wrong when he declared in the same case that, because the judicial powers of the Federation have been vested f in the courts established for the Federation and likewise the judicial powers of the State have been vested, subject as provided by the Constitution, in the courts established for the State, it follows that unless the Constitution specifically g authorises a Federal court it cannot exercise the judicial powers of a State and likewise a State court cannot exercise the judicial powers of the Federation. The learned President was thus equating judicial powers with jurisdiction. I think h he came to this erroneous conclusion by his premises (see at 1024 of the report) that in many respects the terms “judicial power” and “jurisdiction” are used interchangeably. The jurisdiction of the Federal High Court is certainly not i contained in section 6 of the Constitution. It is as spelt out in section 230 of the Constitution which has to be read together with other provisions of the Constitution, particularly sections 42, 236, 237 and 250. There is no jurisdiction in the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 557 a Federal High Court except as enabled by section 230 of the Constitution and that is, in regard to:– (a) in such matters connected with or pertaining to the b revenue of the Government of the Federation, as may be prescribed by the National Assembly; and (b) matters (not connected with the revenue of the Fed- eration) which are prescribed either by the Constitu- c tion or the National Assembly. I have already said that section 230 of the Constitution is far from being elegantly drafted. That the jurisdiction of the Federal High Court is apart from the constitutional provi- d sions enabled by paragraph (b) above, in essence, left to legislation by the National Assembly is quite understandable when one looks at the court’s historical background and evolution. In 1973, by the Federal Revenue Court Decree e No. 13 of 1973, the Federal Revenue Court was established to have original jurisdiction in certain specific revenue matters such as taxation of companies, customs and excise duties, banking, foreign exchange, currency and fiscal meas- f ures of the Government. The purpose of the Decree is, as its title connotes, to provide a separate court to deal with revenue matters. The problem at that time was that it was felt that there was a delay by the courts in dealing with the reve- g nue matters of the Federal Government and as there was a necessity to provide expeditious handling by the courts, the Federal Revenue Court provided the answer. However, with the promulgation of the 1979 Constitution, the Revenue h Court ceased to have any place in the scheme of things. But the Federal High Court was established by the Constitution, following the decision of the Constituent Assembly which was against the recommendation of the Constitution Draft- i ing Committee whose intention was that only State High Courts should exist. Indeed, it was the jurisdiction of the Federal Revenue Court therefore that the Federal High Court inherited on its j inception and this is what accounts for the provision of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 558 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) subsection (2) of section 230 of the Constitution. The theory a that has been propounded by the minority judgment of the Federal Court of Appeal (Nasir P) in Shugaba’s case and also in the majority judgment of that court in Senate of the b National Assembly v Tony Momoh (supra) that the expression “judicial powers” is interchangeable with jurisdiction has, in so far as the Federal High Court is concerned, neither historical nor legal backing. c If one seeks to know the jurisdiction of the Federal High Court, therefore, it is my considered view that, having regard to the constitutional provisions so far considered, once the jurisdiction is not prescribed by the Constitution itself as d has been done by sections 42 and 237 thereof, one must seek the jurisdiction in the prescription of the National Assembly either in matters pertaining to the revenue of the Govern- ment of the Federation (section 230(1)(a)) or other matters e (section 230(1)(b)). So far for constitutional provisions. I will now deal with section 7 of the Federal High Court Act which is the relevant provision to determine in this case whether the jurisdiction lies in the Federal High Court or the f State High Court especially as “banking” which is the subject in issue in the case has not been prescribed by the Con- stitution. The section provides:– g “7(1) The Federal High Court shall have and exercise jurisdiction in civil causes and matters:– (a) relating to the revenue of the Government of the Fed- eration in which the said Government or any organ thereof or a person suing or being sued on behalf of h the said Government is a party; (b) connected with or pertaining to:– (i) the taxation of companies and of other bodies established or carrying on business in Nigeria i and all other persons subject to Federal Taxation; (ii) customs and excise duties; (iii) banking, foreign exchange, currency or other fiscal measures; j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 559 a (c) arising from:– (i) the operation of Companies Decree, 1968 or any other enactment regulating the operation of companies incorporated under the Companies b Decree, 1968; (ii) any enactment relating to copyright, patent, designs, trade marks and merchandise marks; (d) of admiralty jurisdiction.” c As I have earlier indicated, the facts of this case have been well set out in the judgment of my learned brother, Nnamani JSC, and I do not intend to repeat them here. The question is whether or not the Lagos State High Court has jurisdiction d in regard to the claim before it which is an ordinary banking transaction. Is an ordinary banking transaction within the provision of sub-paragraph (iii) of paragraph (b) of subsection (1) of section 7, in which case the jurisdiction of the e Federal High Court conferred by the provision will extend to ordinary day-to-day transactions in the bank or will the jurisdiction of the Federal High Court in this case be invoked, only if the transaction had dealt with the revenue of the f Government of the Federation or banking as a measure? The question was answered by this Court in Jammal Steel Struc- tures Ltd v African Continental Bank Ltd (1973) 1 All NLR (Part II) 208 where the majority decision (Elias CJN and g Ibekwe JSC) answered the question by construing the provision as one giving jurisdiction to the Federal High Court only if it relates to fiscal measures of the Government of the Federation. However, Fatayi-Williams JSC (as he then was) h in a dissenting judgment, felt that jurisdiction of the Federal High Court should extend, by virtue of the provision, to ordinary banking transactions, in which case the jurisdiction of the State High Court in respect thereof would be ousted, for i section 8(1) of the Federal High Court provides:– “8(1) In so far as jurisdiction is conferred upon the Federal Revenue Court in respect of the causes or matters mentioned in the foregoing provisions of this Part the High Court or any other court of a State shall, to the extent that j jurisdiction is so conferred upon the Federal High Court,

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 560 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

cease to have jurisdiction in relation to such causes or mat- a ters.” To decide whether the Lagos State High Court has jurisdiction or not in this matter it would be sufficient to determine b (and that is what this Court has been called upon to do in this case) which of the two views held in Jammal’s case is legally tenable. I will adopt the reasoning of my learned brother, Nnamani JSC, in regard to the treatment this Court c should give to precedents and its previous decisions. My learned brother has admirably covered this point. I will therefore concern myself only, with a determination of which of the two views expressed in Jammal’s case I am inclined to accept. If we hold that the majority decision (Elias d CJN and Ibekwe JSC) is the correct one, then the Lagos State High Court has jurisdiction but if Fatayi-Williams JSC (as he then was) is right in the minority decision which he gave, then jurisdiction would be in the Federal High Court e and the jurisdiction of the Lagos State High Court will be ousted. Elias CJN, delivering the opinion of the majority, held:– f “After a careful consideration of all arguments put before us, we think that the ejusdem generis rule applies to the interpretation of section 7(1)(b)(iii) with the result that the word ‘measures’ must be taken to qualify each of the preceding specifically enumerated subjects, including ‘banking’. This means that the natural and or- g dinary meaning to be given to the sub-section is that it should be read as ‘banking measures, foreign exchange measures, currency measures or other fiscal measures’. The words ‘or’ and ‘other’ in this context are not disjunctive within the meaning of section 18(3) h of the Interpretation Act 1964 but, by virtue of section 1(4) of the same Act, they imply similarity as the preceding specifically enumerated subjects – banking, foreign exchange and currency and the generic words ‘other fiscal measures’.” i However in his dissenting opinion, Fatayi-Williams JSC (as he then was) said:– “It seems to me that the use of the comma after the word ‘banking’ and the insertion of the word ‘or’ before the phrase ‘other fiscal measures’ show clearly that the intention of those who j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 561 a promulgated the Decree is that the word as well as the word ‘foreign exchange’ and ‘currency’ for that matter, should stand alone and be construed as such.” b The learned Justice of the Supreme Court then said that the word “banking” is used as a noun in the section and “banking” in its ordinary sense is wide enough to embrace every transaction coming within the legitimate business of a c banker. With respect, I do not agree with Fatayi-Williams JSC that the words “banking”, “foreign exchange” and “currency” stand alone to be construed as such in the light of the com- d mas which separate them nor do I think that “banking” is used as a noun in the subsection. The words “banking”, “foreign exchange” and “currency” are used as adjectival nouns and they each qualify the word “measures”. It would e have been a different matter if the text had run thus:– (iii) civil causes and matters; (iv) connected with or pertaining to banking; f (v) foreign exchange; (vi) currency; or other fiscal measures. But there is no semi-colon after the word “banking” nor are g each or the other words dealt with as separate items so as to tend to separate them completely from “other fiscal measures”. On the contrary, the text of the legislation runs the words together and the commas separating the words have h not treated each one as a separate entity. Again, with the use of the word “other” preceding “fiscal measures”, it seems to me that “banking”, “foreign exchange”, “currency” are all regarded as fiscal measures. i This, at the least, with respect, accords with ordinary Eng- lish usage. If Fatayi-Williams JSC (as he then was) had seen those words as adjectival nouns, that they are, and not nouns that they are not, there would hardly have been any differ- j ence between the majority and minority judgments.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 562 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

It seems to me that the most powerful argument in the mi- a nority judgment of Fatayi-Williams JSC (as he then was) was that even if the ejusdem generis rule were to apply to the construction of the words “other fiscal measures” in sec- b tion 7(1)(b)(iii) of the Federal High Court Act, having regard to the scope of the rule which does not operate in reverse, the general words “or other fiscal measures” will be restricted to things of the same nature as those which have c been mentioned already that is “banking”, “foreign exchange” and “currency”. In In Re Wellstead Will Trusts (1949) Ch. 296 which the learned Justice of the Supreme Court referred to in his mi- d nority judgment under reference, Cohen LJ did say:– “I have never heard before of an inverse application of the ejusdem generis rule.” With respect, I do not consider the decision of the majority e in Jammal’s case as an inverse application of the ejusdem generis rule. The first important thing is that the passage must be given a sensible interpretation – the ordinary Eng- lish usage which is not to be strained. f After all, the ejusdem generis rule is a rule of construction and not a rule of law. It is in giving a passage a sensible interpretation following ordinary English usage in the process g of construction, that it would be discovered whether some words are mere surplusage which should be rejected or part of the passage that should be construed. “It is a canon of construction”, said Brett J in Stone v Ye- h ovil Corporation (1876) (1) C.P.D. 691 at 701 “that, if it be possible, effect must be given to every word of an Act of Parliament . . . but that, if there be a word or a phrase therein to which no sensible meaning can be given, it must be i eliminated”. The general words in this legislation – that is section 7(1)(b)(iii) – “or other fiscal measures” when read with the preceding specific words “banking”, “foreign exchange” and j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC Bronik Motors Limited v. Wema Bank Limited 563 a “currency” would appear to me to give sensible meaning. Applying the ejusdem generis rule, particularly when the words “banking”, “foreign exchange” and “currency” are b not read as nouns but as adjectival nouns that they are, the expression “measures” become the noun which the adjec- tives qualify and we have, again in ordinary English usage, “banking (fiscal) measures,” “foreign exchange (fiscal) c measures” and “currency (fiscal) measures”. The words “banking”, “foreign exchange” and “currency” in the sub- paragraph obviously take their colour a sociis from the expression, “other fiscal measures”. It means that, whatever d the other measures might be, they could only be within the category of fiscal measures. All that is necessary in applying the ejusdem generis rule to general words following particular words, is that the general words will not include anything of a class superior to the preceding particular words. Coke in e his Reports in the case of Archbishop of Canterbury’s Case (1596) 2 Co. Rep. 46 has since the 16th century made this point which, though valid, does not prevent the application of the ejusdem generis rule to general words following spe- f cific words. With this interpretation placed on section 7(1)(b)(iii) of the Federal High Court Act it follows that the jurisdiction of the g Federal High Court in so far as this case is concerned is limited to banking (fiscal) measures and not to everything pertaining to banking. It definitely does not include the ordinary day-to-day banking activities between the bank and its cus- h tomers. It follows that the State High Court still has jurisdiction in the matter. It is for all these reasons and the reasons so well stated in i the judgment of my learned brother, Nnamani JSC, that I also agree that the appeal be dismissed and it is hereby dismissed. I abide also by the order as to costs contained in the judg- j ment.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

564 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

UWAIS JSC: I have had the opportunity of reading in draft a the judgment read by my learned brother, Nnamani JSC. I agree with the reasons and conclusion therein. There can be no doubt that the provisions of section 7 sub- b section (1)(b)(iii) of the Federal Revenue Court Act, 1973 (No. 13 of 1973) are ambiguous. Hence the majority and minority judgments in Jammal Steel Structures Ltd v African Continental Bank Ltd (1973) 1 All NLR (Part II) 208. Con- c sequently the subsection is open to more than one meaning. As a result, whichever meaning one attaches to the word “banking” under the subsection, depends on the result or effect that is intended to be achieved – see pages 105–106 of d Maxwell on the Interpretation of Statutes (12ed). It seems to me that the intention of the makers of the Fed- eral Revenue Court Act, 1973 was not to give absolute jurisdiction to the Federal Revenue Court in banking causes and e matters to the exclusion of State High Courts. If the intention were otherwise, a specific provision to that effect would have been made in the Act. I am therefore of the opinion that the jurisdiction vested in the Federal Revenue Court was f limited to causes or matters connected with or pertaining to the revenue of the Federal Government, as was held by the majority decision in Jammal’s case. I hold that the jurisdiction relating to a simple dispute between a banker and his g customer remained with State High Courts and the Lagos State High Court was competent to have heard this case. On the second limb of the appeal I am with respect unable to agree with the contention of Chief Williams that the Fed- h eral High Court has, by virtue of the provisions of sections 6 and 7 (section 230 in particular) of the Constitution, the exclusive power to exercise jurisdiction in causes and matters pertaining to all the subject matter listed under the Exclusive i Legislative List of the Constitution. Although it is true that section 6 draws a distinction between the judicial powers of the Federation and those of States, I do not think that the provisions of section 230 or any other provisions of the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais JSC Bronik Motors Limited v. Wema Bank Limited 565 a Constitution are wide enough to confer jurisdiction on the Federal High Court in respect of all federal causes. The section provides:– b “230(1) Subject to the provisions of this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Fed- eral High Court shall have jurisdiction:– (a) in such matters connected with or pertaining to c the revenue of the Government of the Federation as may be prescribed by the National Assembly; and (b) in such other matters as may be prescribed as respects which the National Assembly has power to d make laws. (2) Notwithstanding subsection (1) of this section where by law any court established before the date when this section comes into force is empowered to exercise ju- e risdiction for the hearing and determination of any of the matters to which subsection (1) of this section relates, such court shall as from the date when this section comes into force be restyled ‘Federal High Court’, and shall continue to have all the powers and exercise f the jurisdiction conferred upon it by any law.” It appears to me that the provisions of subsection (2) of section 230 give to the Federal High Court all the powers and jurisdiction enjoyed by the defunct Federal Revenue Court. g But a careful study of the Federal Revenue Court Act, 1973 will show that the subjects enumerated by it do not cover all the items contained in the Exclusive Legislative List. The question then is: Do the provisions of subsection h (1)(a) and (b) of section 230 or any other provisions of the Constitution apply to the remaining items under the Exclu- sive Legislative List? The provisions of subsection (1)(a) and (b) of section 230 contemplate that the National Assem- i bly will make enactments which will vest the Federal High Court with jurisdiction in matters connected with the revenue of the Federal Government and, secondly, other matters unconnected with such revenue. However, the National As- j sembly is yet to make any such legislation.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Uwais JSC 566 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Section 42 subsections (1) and (2) and section 237 subsec- a tions (1) and (2)(a) of the Constitution confer on the Federal High Court the jurisdiction to deal with cases of fundamental rights and election petitions involving the office of the b President or the Vice-President. It is noteworthy that the former is a jurisdiction concurrently exercised by the Fed- eral High Court and the State High Courts, while the latter is a temporary jurisdiction given to the Federal High Court c pending the creation of a High Court of the Federal Capital Territory upon the movement of the seat of the Federal Gov- ernment to the Federal Capital Territory. From the foregoing I am of the opinion that the jurisdiction d that is presently vested in the Federal High Court does not extend to all federal causes or matters with regard to which the National Assembly is competent to make law. It is pertinent to mention that, by virtue of the provision of e sections 236 and 250 of the Constitution any other jurisdiction in federal causes which is not vested in the Federal High Court lies for the time being with State High Courts and other State courts subordinate to them. I am again of the f firm view that the jurisdiction to deal with cases connected with the relationship of banker and customer rests with State High Courts. For these reasons and those expressed in the judgment of g my learned brother, Nnamani JSC, I too will dismiss the appeal. Accordingly the appeal is dismissed with N300 costs to the respondent. Appeal dismissed. h

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 567 a Chief Patrick A. Abusomwan v Mercantile Bank of Nigeria Limited b SUPREME COURT OF NIGERIA KARIBI-WHYTE, ANIAGOLU, BELGORE, ESO, KAZEEM JJSC Date of Judgment: 19 JUNE, 1987 Suit No.: SC.71/1986 c Banking – Negligence – Bank failing to carry out instruction of customer – Liability of bank to third party injured by its negligence Negligence – Action for – Can arise de hors contract of the d parties Negligence – Proximity or neighbourhood theory

Facts e This appeal was by the plaintiff against the judgment of the Court of Appeal Division, Benin City. On 21 January, 1986, the Court of Appeal in a unanimous judgment set aside the f judgment of the High Court, Benin City, granting the plaintiff’s claim against the defendant for N127,273 (One Hun- dred and Twenty-seven Thousand, Two Hundred and Sev- enty-three Naira) being loss of profits as a result of the de- g fendant’s negligence arising from a guarantee dated 30 January, 1978 for the importation of cement. The facts of the case were fairly simple. The plaintiff was a businessman who dealt in the importa- h tion of cement. In the ordinary course of his business he entered into an arrangement for the importation of cement from Lime International Corporation, New York, through one Mr Bassey and Mr E.R. Tucker. The arrangement was i that cement was to be imported on a regular basis on the terms and conditions specified in the agreement dated 22 December, 1977. This agreement was tendered in evidence as exhibit 7. The arrangement was that the cement was to be j shipped to the plaintiff by Lime International Corporation of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

568 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

New York. It was a term of the agreement that the appellant a was to obtain a guarantee from his bankers for the payment referred to in the memorandum. The plaintiff duly obtained the required guarantee dated 30 January, 1978 from his b bankers, the New Nigeria Bank Ltd of Mission Road, Benin City in favour of Mr Bassey at the defendant’s bank. This was exhibit 9 in the proceedings. On the strength of the guarantee, exhibit 9, and a pro forma invoice, the defendant c opened a letter of credit in favour of Lime International Corporation of New York. The pro forma invoice No. LT. 2472 was dated 4 January, 1978 and was exhibit 12 in the proceedings. It was clearly stated in exhibit 9, ie, the d bank guarantee provided by the New Nigeria Bank Ltd, on behalf of the plaintiff, but in favour of Mr Bassey, that all documents, drafts, bills of lading and invoices consequent upon the letter of credit should be drawn in favour of P.A. e Abusomwan, ie the plaintiff, and shall he endorsed to New Nigeria Bank Limited, Head Office, Mission Road, Benin City. But in opening the letter of credit, which was exhibit 4 f in the proceedings, the defendant bank directed that the documents be drawn in favour of Heilit (Nigeria) Ltd and endorsed to itself. The disregard of the instructions in the banker’s guarantee, exhibit 9, resulted in the defendant g notifying the arrival of the consignment to Heilit (Nigeria) Ltd and the endorsement to itself. As a consequence neither plaintiff nor his bankers were informed of the arrival of the cement. Before plaintiff became aware of the arrival of the h cement which, as endorsed in the pro forma invoice, have been shipped to him, Mr E.R. Tucker, managing director of Heilit (Nigeria) Ltd had taken delivery. It was important to observe that the importation of the cement was financed i by the plaintiff’s banker’s guarantee, exhibit 9. Before the plaintiff could do anything Mr Tucker had sold 2,260 metric tons (45,200 bags) of the 4,200 metric tons of cement (84,000 bags) shipped to the plaintiff. The plaintiff’s j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 569 a intervention in time only resulted in 38,800 bags of the cement from not being sold by Mr Tucker. The plaintiff therefore brought an action claiming from the b respondent the loss suffered as a result of the negligence of defendant in their failure to adhere to the instructions in the banker’s guarantee, exhibit 9. The defendant denied liability. It contended in its statements of defence that, because the c appellant had no account with the defendant bank and that the banker’s guarantee relied upon by the plaintiff was issued in favour of Mr Bassey E. Ekpo Bassey who had no account with the defendant branch in Lagos, the guarantee d was not binding on the defendant. The defendant’s defence was that it did not know the plaintiff at all times material to this action and that the said letter of credit was opened by Heilit (Nigeria) Ltd of which Mr e E.R. Tucker is the chairman and managing director and that the defendant recovered from Heilit (Nigeria) Ltd and Mr E.R. Tucker jointly and severally the sum of N163,806.55 in Suit No. FRC/L/49/7B being the value of the letter of credit f plus bank charges and costs. Although defendant denied in its pleading that it was negligent, it admitted that the letter of credit was opened by it in favour of Heilit (Nigeria) Ltd. They also contended that, since Heilit (Nigeria) Ltd was g named in the pro forma invoice LT. 2472 of 4 January, 1978 as having been sold the consignment, and that there was no mention of the plaintiff in the original invoice and bill of lading, it was not in any way negligent to have advised h Heilit (Nigeria) Ltd by letter dated 27 April, 1978 to collect from it the shipping documents in respect of the said consignment. In other words, the contention of the defendant at the trial was that, although it opened a letter of credit on the i authority of a banker’s guarantee provided by the appellant’s bank, the letter of credit was opened on behalf of Heilit (Ni- geria) Ltd who was its customers; there was no relationship of banker and customer between plaintiff and itself because j neither plaintiff nor Bassey E. Ekpo Bassey was its

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

570 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) customer. Secondly, since the pro forma invoice indicated a Heilit (Nigeria) Ltd as the person to whom the cement was to be sold and there was no mention of the name of the plaintiff, the defendants did not owe the plaintiff any duty of b care with respect to the consignment, and the defendant was within its legal rights to deal with Mr Tucker who at all material times was the managing director of Heilit (Nigeria) Ltd. The plaintiff was a total stranger to the transaction. c The learned trial Judge held the defendant liable on the claim before him and entered judgment for the sum of N124,729.40k and costs of the action assessed at N500. The learned trial Judge found that: “Defendant accepted exhibit 9 d as per memorandum in exhibit 2 and acted on it as per exhibit 4 but failed to comply with the condition that all documents, drafts, bills of lading and invoices shall be drawn in favour of Mr P.A. Abusomwan and shall be endorsed to e New Nigeria Bank Limited, Head Office, Mission Road, Benin City.” The learned Judge held that on the requirement of the conditions in exhibit 9, the defendant owed a duty of care to the plaintiff and was negligent in failing to observe f those conditions. The learned trial Judge rejected the defence of res judicata pleaded by the defendant. The defendant appealed to the Court of Appeal. The Court of Appeal set aside the judgment of the learned g trial Judge on the ground that the respondent owed no duty to the appellant and had not acted negligently towards him.

Held – h 1. An action in tort for negligence can arise de hors contract of the parties. 2. The effect of Donoghue v Stevenson (1932) A.C. 563 is that, where a person is injured from a transaction arising i from the contract of two persons, the third party is not precluded from bringing action on the grounds that he was not a party to the contract the misperformance or non-performance of which has resulted in the damage. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 571 a The duty imposed here is not because there was a contract but because the defendant had impliedly undertaken not to injure the plaintiff. The rationale in truth is that, even though not so expressed, the obligations towards b the contracting party extended to all such persons who were likely to be injured by the acts or omissions of the defendant. They are the neighbours in contemplation or ought to be in contemplation of the defendant. c 3. In order to establish that duty of care arises in a particular situation, it is not necessary to bring the fact of that situation within those of previous situations in which a duty of care has been held to exist. First one d has ask as between the alleged wrongdoer and the one who has suffered damage if there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on e his part may be likely to cause damage to the latter, in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considera- f tions which ought to negative, or to reduce or limit the scope of the duty or the class of persons to whom it is owed or the damages to which a breach of it may give rise. g 4. Duty arising from proximity in law or fact, and not contract, is a condition precedent for liability in negligence. 5. When the respondent bank issued exhibit 4, the letter of h credit relying on exhibits 9 and 12, it was raised in favour of Heilit (Nigeria) Ltd instead of Mr P.A. Abu- somwan, on whose behalf exhibit 9 was made. This was despite the fact that exhibit 12 clearly indicated the appellant as the shipper of the consignment. The respon- i dent bank owed a duty to the New Nigeria Bank Limited to carry out the instructions on exhibit 9. The appellant is such a person whose relationship with exhibit 9 is so proximate that there is a duty to ensure that he was not j injured by any acts of misperformance or

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

572 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

non-performance. The failure on the part of the respon- a dent to adhere to the instructions in exhibit 9 is a misperformance and is a breach of the duty to take care not to injure the appellant. The appellant was injured by this b negligence. 6. Per curiam “The appellant cannot approbate and reprobate at the same time. Having accepted the banker’s guarantee (exhibit 9) c and having utilised it in financing the importation of the cement as a banker and deriving all the banker’s benefits (a notorious fact) accruing to the respondent/bank such as commissions and other handling charges, the respondent cannot be heard to reprobate the document by ignoring the d conditions requiring it to draw up ‘all documents, drafts, bills of lading and invoices in favour of Mr P.A. Abusom- wan’ and to endorse them to New Nigeria Bank Limited. Having ignored the document, resulting in damage or loss e to Mr Abusomwan (the appellant), the respondent must be held to have been in breach of the duty of care it owed to Mr Abusomwan, by its negligence in drawing up the documents etc in favour of Heilit (Nigeria) Limited, enabling the chairman of the said Heilit (Nigeria) Limited, Mr Tucker, f instead of Mr Abusomwan, to collect the goods.” Appeal allowed.

Cases referred to in the judgment g Nigerian Ebba v Ogodo (1984) 4 SC 84 Imana v Robinson (1979) 3 and 4 SC 1 h Military Gov of Western State v Laniga (1974) 1 All NLR (Part 2) 179 Shell BP Development Co of Nigeria Ltd v Cole (1978) 3 SC 1832 i Woluchem v Gudi (1981) 5 SC 291

Foreign Ann v Merton London Borough Council (1978) A.C. 728 j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA)

Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 573 a Candler v Crane Christmas and Co (1951) 2 K.B. 164 Clay v A.J. Crump and Sons Ltd (1964) 1 Q.B. 533 Donoghue v Stevenson (1932) A.C. 562 b Dorset Yacht Co Ltd v Home Office (1970) A.C. 1004 Hedley Byrne and Co Ltd Heller and Partners Ltd (1964) A.C. 465 c Langton v Waite (1863) L.R. 6 Eq. 165 Winterbottom v Wright (1842) 10 M. and W. 109

Counsel d For the appellant: Okpoko, S.A.N. (with him Saidu (Miss)) For the respondent: Ineneji

Judgment e KARIBI-WHYTE JSC: (Delivering the lead judgment) This appeal is by plaintiff against the judgment of the Court of Appeal Division, Benin City. On the 21 January, 1986, the Court of Appeal in a unanimous judgment set aside the f judgment of the High Court, Benin City, granting the plaintiff’s claim against the defendant for N127,273 (One Hun- dred and Twenty-seven Thousand, Two Hundred and Sev- enty-three Naira) being loss of profits as a result of the de- g fendant’s negligence arising from a guarantee dated 30 January, 1978 for the importation of cement. The facts of the case are fairly simple. The plaintiff is a businessman who deals in the importation h of cement. In the ordinary course of his business he entered into an arrangement for the importation of cement from Lime International Corporation, New York through one Mr Bassey and Mr E.R. Tucker. The arrangement was that i cement was to be imported on a regular basis on the terms and conditions specified in the agreement dated 22 Decem- ber, 1977. This agreement was tendered in evidence as exhibit 7. The arrangement was that the cement was to be j shipped to the plaintiff by Lime International Corporation of

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC 574 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

New York. It was a term of the agreement that the appellant a was to obtain a guarantee from his bankers for the payment referred to in the memorandum. The plaintiff duly obtained the required guarantee dated 30 January, 1978 from his b bankers, the New Nigeria Bank Ltd of Mission Road, Benin City in favour of Mr Bassey at the defendant’s bank. This is exhibit 9 in these proceedings. On the strength of the guarantee, exhibit 9, and a pro forma invoice, the defendant c opened a letter of credit in favour of Lime International Corporation of New York. The pro forma invoice No. LT. 2472 was dated 4 January, 1978 and is exhibit 12 in these proceedings. It was clearly stated in exhibit 9, ie the bank d guarantee provided by the New Nigeria Bank Ltd, on behalf of the plaintiff, but in favour of Mr Bassey, that all documents, drafts, bills of lading and invoices consequent upon the letter of credit shall be drawn in favour of P.A. Abusom- e wan, ie the plaintiff, and shall be endorsed to New Nigeria Bank Limited, Head Office, Mission Road, Benin City. But in opening the letter of credit, which is exhibit 4 in these f proceedings, the defendant bank directed that the documents be drawn in favour of Heilit (Nigeria) Ltd and endorsed to itself. The disregard of the instructions in the bankers guarantee, exhibit 9, resulted in the defendant notifying the arri- g val of the consignment to Heilit (Nigeria) Ltd and the endorsement to itself. As a consequence neither plaintiff nor his bankers were informed of the arrival of the cement. Be- fore plaintiff became aware of the arrival of the cement h which as endorsed in the pro forma invoice have been shipped to him, Mr E.R. Tucker, managing director of Heilit (Nigeria) Ltd had taken delivery. It is important to observe that the importation of the cement was financed by the plain- i tiff’s banker’s guarantee, exhibit 9. Before the plaintiff could do anything, Mr Tucker had sold 2,260 metric tons (45,200 bags) of the 4,200 metric tons of cement (84,000 bags) shipped to the plaintiff. The plaintiff’s intervention in j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 575 a time only resulted in 38,800 bags of the cement from not being sold by Mr Tucker. The plaintiff therefore brought an action claiming from the b respondent the loss suffered as a result of the negligence of the defendant in its failure to adhere to the instructions in the banker’s guarantee, exhibit 9. The defendant denied liability. It contended in its statements of defence that, because the c appellant had no account with the defendant bank and that the banker’s guarantee relied upon by the plaintiff was issued in favour of Mr Bassey E. Ekpo Bassey who had no account with the defendant branch in Lagos, the guarantee d was not binding on the defendant. The defendant’s defence was that it did not know the plaintiff at all times material to this action and that the said letter of credit was opened by Heilit (Nigeria) Ltd of which Mr e E.R. Tucker is the chairman and managing director and that the defendant recovered from Heilit (Nigeria) Ltd and Mr E.R. Tucker jointly and severally the sum of N163,806.55 in suit no. FRC/L/49/7B being the value of the letter of credit f plus bank charges and costs. Although the defendant denied in its pleading that it was negligent, it admitted that the letter of credit was opened by it in favour of Heilit (Nigeria) Ltd. The defendant also contended that, since Heilit (Nigeria) Ltd g was named in the pro forma invoice LT. 2472 of 4 January, 1978 as having been sold the consignment, and that there was no mention of the plaintiff in the original invoice and bill of lading, the defendant was not in any way negligent to h have advised Heilit (Nigeria) Ltd by letter dated 27 April, 1978 to collect from them the shipping documents in respect of the said consignment. In other words, the contention of the defendant at the trial was that although it opened a letter i of credit on the authority of a banker’s guarantee provided by the appellant’s bank, the letter of credit was opened on behalf of Heilit (Nigeria) Ltd who was its customer; there was no relationship of banker and customer between the j plaintiff and itself because neither plaintiff nor Bassey E.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC 576 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Ekpo Bassey was its customer. Secondly, since the pro a forma invoice indicated Heilit (Nigeria) Ltd as the person to whom the cement was to be sold and there was no mention of the name of the plaintiff, defendants did not owe him any b duty of care with respect to the consignment, and was within its legal rights to deal with Mr Tucker who at all material times was the managing director of Heilit (Nigeria) Ltd. The plaintiff was a total stranger to the transaction. The plaintiff c gave oral testimony and called one witness. Exhibits 1–11 were admitted in evidence by consent of Counsel. Eight more exhibits were tendered making a total of 19. The defendant tendered two exhibits: 20 and 21. The defendant did d not give any oral testimony and rested on the case of the plaintiff. The learned trial Judge held the defendant liable on the claim before him and entered judgment for the sum of e N124,729.40k and costs of the action assessed at N500. The learned trial Judge found that “Defendant accepted exhibit 9 as per memorandum in exhibit 2 and acted on it as per exhibit 4 but failed to comply with the condition that all docu- f ments, drafts, bills of lading and invoices shall be drawn in favour of Mr P.A. Abusomwan and shall be endorsed to New Nigeria Bank Limited, Head Office, Mission Road, Benin City.” The learned Judge held that on the requirement g of the conditions in exhibit 9, the defendant owed a duty of care to the plaintiff and was negligent in failing to observe those conditions. The learned trial Judge rejected the defence of res judicata pleaded by the defendant. The defen- h dant appealed to the Court of Appeal. The defendant and plaintiff shall hereafter be referred to as the respondent and the appellant respectively. The Court of Appeal set aside the judgment of the learned i trial Judge on the ground that the respondent owed no duty to the appellant and had not acted negligently towards him. The appellant has accordingly filed seven grounds of appeal against that judgment. j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 577 a The grounds of appeal excluding the particulars are as follows:– “1. The learned Justices of the Court of Appeal misdirected b themselves in law when they held:– ‘I am of the firm view that the Respondent cannot sue on account of any failure to observe any stipulation in this exhibit 9.’ c 2. The learned Justices of the Court of Appeal misdirected themselves in law when they held:– ‘There is therefore no basis for holding the appellant liable on a charge of negligence in its dealing with exhibit 9.’ d 3. The learned Justices of the Court of Appeal misdirected themselves in law when they held:– ‘To hold that the appellant was negligent for he owed a duty of care to the plaintiff in respect of the observation e (sic) of the above conditions in exhibit 9 is to make the appellant a party to this said exhibit 9 which is a document that binds only the donor New Nigerian Bank Lim- ited and the donee Bassey E. Ekpo Bassey and no one else.’ f 4. The learned Justices of the Court of Appeal misdirected themselves in law when they held:– ‘The appellant accepted the bank guarantee for the benefit of Bassey and/or Tucker, and used it to get the cement g into Nigeria as purchased by Heilit Nigeria Limited, and Tucker would seem to have access to any goods obtained by Heilit Nigeria Limited. And he would have been in a position to satisfy the agreement with the respondent, but his greed overcame him, and he went to sell some of the h cement clandestinely. That does not mean that Mercan- tile Bank of Nigeria Limited was negligent in dealing with the shipping documents in relation to this importation of cement; for one thing, the evidence shows that i Tucker took delivery of the cement in the ship while the appellant bank had custody of the documents. Tucker used none of the shipping documents to get hold of the cement and sell part of it. If he had reached and used those documents, these bills and invoices would have j been established against the bank, and she would have

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC 578 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

been said to have made it possible by such negligence a for Tucker to have taken delivery of the cement.’ 5. The learned Justices of the Court of Appeal misdirected themselves in law when they held:– b ‘This exhibit 9 is only an undertaking to make the respondent satisfy the terms he had accepted under the exhibit 7. It was not contract between either the respondent or the New Nigeria Bank Limited and the appellant, the Mercantile Bank of Nigeria Limited, Lagos. That the ap- c pellant is mentioned in the exhibit 9 is immaterial, as it is only a side issue, the main concern being that Mr Bassey E. Ekpo Bassey is to be paid. Mr Bassey appeared to have an account with the appellant bank. The d appellant dealt with Mr Bassey and not with the respondent or the New Nigeria Bank which might make conditions for the respondents but not for Mr Bassey.’ 6. The learned Justices of the Court of Appeal erred in law in e placing so much premium on exhibit 7 when the case made by the appellant on the pleading was on exhibit 9 and exhibit 4. 7. The judgment of the Court of Appeal is against the weight of evidence.” f Counsel have differently formulated the issues for determination. The appellant’s Counsel’s formulation is prolix requiring eight issues to be determined. I prefer the more g compact formulation of the issues by Counsel for the respondent, which limits the issues to be determined to the ratio of the Court of Appeal. In the lead judgment of Ikwechegh JCA to which Eboh and Jacks JJCA concurred, the reason for the judgment was stated as follows:– h “In my view this appeal succeeds on the ground that it was faulty deduction from the evidence before the court, to wit the documents in evidence at the trial, to hold appellant liable in damages for negligence. The proper evaluation of these documents would lead to i the conclusion that the appellant was a total stranger to the respondent, owed him no duty, and did not act negligently.” The issues to be determined in this appeal which covers all the grounds of appeal therefore are limited to the question of j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 579 a the negligence vel non of the respondent towards the appellant. They are as follows:– “1. Whether exhibit 9, the guarantee by the New Nigeria Bank b can create, or impose in law a duty of care on the respondent so as to make it liable in negligence to the appellant. 2. Whether appellant established by evidence before the court any special relationship or nexus in law between him and the respondent such that can create a duty of care as re- c quired to sustain an action under the law of negligence? 3. Was the Court of Appeal right, to hold that appellant whose banker’s guarantee (exhibit 9) accepted and utilised by the respondent in financing the importation of cement, resulting d in the loss of him, was such a total stranger to the respondent that no duty of care was and could be owed to him in respect of respondent’s non compliance with the instructions in the banker’s guarantee. e 4. Was the Court of Appeal right in importing into the case facts not in evidence and deciding the appeal on the basis of such facts.” Concisely stated, all that these issues attempt to say is that f the appellant’s action being in negligence, the Court of Ap- peal ought not to set it aside by importing into the case facts not in evidence before the trial court. It is common ground and not disputed that the action is g founded on negligence. This is clear on the writ of summons and the statement of claim. The particulars of negligence alleged are clearly set out in the statement of claim. Counsel to the appellant in his brief stressed this fact, and referred to h paragraphs 8 and 11 in the statement of claim, where it was pleaded as follows:– “8. The defendant in opening the letter of credit acted contrary to the instructions referred to in the preceding paragraph i and or negligently carried out the instructions in that:– (a) the defendant failed and neglected to direct all documents, drafts, bills of lading and invoices to be drawn in favour of P.A. Abusomwan and be endorsed to the New Nigeria Bank Limited as provided in the banker’s j guarantee.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC 580 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

(b) directed all such document and other bills of lading to a be drawn in favour of and to be endorsed by Heilit Ni- geria Limited, a third party which did not provide the banker’s guarantee on which basis the letter of credit was opened. b “11. . . . out of gross negligence, the defendant failed, refused and or neglected to notify the plaintiff or the New Nigeria Bank Limited of the receipt of the shipping documents in respect of the receipt of the consignment of cement to the c plaintiff on board the vessel M/V ‘Fast Bird’.” Counsel referred to the testimony of the appellant in proof of negligence at the trial which was uncontradicted, and that d the respondent did not give evidence. He referred to the endorsement in exhibit 9 directing the respondent bank that all documents, bills of lading and invoices shall be drawn in favour of the appellant and endorsed to the New Nigeria Bank Limited, Head Office, Mission Road, Benin City. Counsel e also referred to the finding of fact of the trial Judge that respondent bank was negligent since they owed a duty to the appellant to observe the conditions in exhibit 9. f In his reply Dr. Ineneji for the respondent submitted that, although the action appeared to be founded on the tort of negligence, not contract, all the arguments in support of the brief of argument filed by the appellant and the particulars g of the grounds of appeal suggested a contractual relationship. The appellant failed to prove such a relationship with the respondent. Counsel referred to the particulars of the grounds of appeal in 1, 2, 3 and 4. Counsel submitted in his h brief that on the evidence as a whole there was no contractual relationship between the appellant and the respondent bank and the trial Judge also so found. Counsel submitted that the finding in the Court of Appeal that no contractual i relationship existed between the appellant and the respondent amounted to a concurrent finding of fact on the issue. It seems to me the issue stressed by Dr. Ineneji is not material to the determination of this appeal. This is because the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 581 a Court of Appeal did not consider it an important issue having observed as follows:– “Now, the question that is all important is how did the appellant b bank help Tucker to cheat the respondent? How did such negligence if there was any, enable Tucker to take possession of what cement was meant for the respondent? These questions are the very foundation and backbone of this appeal.” Thus the all important question to the Court of Appeal in c this case was whether the respondent was negligent towards the appellant, and whether the appellant’s loss arose from such negligence. As the Court of Appeal correctly pointed out, to appreciate the evidence upon which the trial Judge d gave judgment one has to refer to exhibits 2, 4, 8, 9 and 12 to find evidence of duty on the part of the respondent towards the appellant. It is in these documents that one can discover the relationship, if any, between the appellant and e the respondent. In his consideration of these documents, the learned trial Judge arrived at the conclusion that exhibit 7 created no contractual relationship between the plaintiff and the defendant f bank. He, however, went on to hold that exhibit 9, the guarantee worth N100,000 by the New Nigeria Bank Ltd on behalf of the plaintiff to the defendant and accepted by them for Mr Bassey, created a fiduciary relationship between the g parties, thus subjecting the defendant bank to a duty of care to the plaintiff in respect thereof. The trial Judge particularly relied on the endorsement in exhibit 9 to the effect that:– “All documents, drafts, bills of lading and invoices shall be drawn h in favour of Mr P.A. Abusomwan and shall be endorsed to New Nigeria Bank Ltd, Head Office, Mission Road, Benin City.” He also came to the conclusion, which has not been disputed before us, that the irrevocable letter of credit, exhibit 4, was i raised on the strength of exhibit 9 and exhibit 12, the pro forma invoice. He also concluded that, although the plaintiff kept no account with the defendant bank, the fact that exhibit 9 with specific instructions endorsed was deposited j with the defendant bank, on behalf of the plaintiff and in

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC 582 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) favour of Mr Bassey and was accepted by the defendant a bank made the plaintiff to become a customer of the defendant bank. In determining the question of negligence, the trial Judge found as a fact that the defendant bank raised the b letter of credit, exhibit 4, on the basis of exhibit 9, but in favour of Heilit (Nigeria) Ltd instead of Mr P.A. Abusomwan who provided the bank guarantee, and to whom the consignment of cement was being sent. He held that it was this negligence that enabled the consignment of cement to fall c into the hand of Mr Tucker, chairman of Heilit (Nigeria) Limited. The learned trial Judge concluded as follows at 31 lines 8–19:– d “I find that the defendant accepted exhibit 9 as per memorandum in exhibit 12 and acted on it as per exhibit 4 but failed to comply with the condition ‘all documents, drafts, bills of lading and invoices shall be drawn in favour of Mr P.A. Abusomwan and shall be endorsed to New Nigeria Bank Limited, Head Office, Mission e Road, Benin City’. I hold that the defendant was negligent for he owed a duty of care to the plaintiff in respect of the observation of the above conditions in exhibit 9. The defendant is liable to the plaintiff for the loss he suffered as a result of this negligence.” f In setting aside the judgment of the High Court, the Court of Appeal proceeded on the basis that there was no contractual relationship between the plaintiff and the defendant bank, and that exhibits 7 and 9 created no contractual relationship g between them. In their consideration of exhibits 2, 4, 7, 8, 9 and 12, the Court of Appeal said:– h “The operative agreement is the exhibit 7 which is between Bassey/Tucker and the respondent. Neither the New Nigeria Bank Limited Benin City, nor Mercantile Bank Limited, Lagos was a party to this agreement. Neither of these banks could take any benefit directly from this exhibit 7, and neither could in law qual- i ify, modify or alter this agreement. The exhibit 9 could therefore, in my view, not modify or alter the exhibit 7. The exhibit 9 was not any agreement entered into between the respondent and the appellant. It was the New Nigeria Bank Limited, Benin City that issued the exhibit 9, and if any liability arose from it, only the said j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 583 a bank could sue on the strength of this exhibit 9, but certainly not the respondent for the respondent did not give this guarantee. It was given for his benefit, in his favour. It was given to Mr Bassey or Mr Tucker. Bassey and/or Tucker received it for their use and b accepted it for payment. They became liable to supply the cement to the respondent . . .” The Court of Appeal completely relied on the view that the relationship of the parties was entirely contractual and noth- c ing else, and no rights could arise between the parties except under such relationship. The court said:– “The only agreement or arrangement the breach of which would give the parties right to sue or be sued is the agreement in exhibit 7 d the parties thereto being Bassey, Tucker and the respondent. In so far as exhibit 9 created rights or duties, or obligations its force lay with the New Nigeria Bank Limited, Mission Road, Benin City and Mr Bassey E. Ekpo Bassey. The appellant is not concerned in e it and cannot be held to be answered for anything done amiss in regard to it. The only person who could be sued on this exhibit 9 even then only by the New Nigerian Bank Limited, Mission Road, Benin City is Mr Bassey E. Ekpo Bassey who accepted it for payment for the cement he undertook to supply to the respondent, and f that only in the event of his failure to so supply the cement. I am of the firm view that the respondent cannot sue on account of any failure to observe any stipulation on this exhibit 9.” Finally on this the Court of Appeal held:– g “To hold that the appellant was negligent for he owed a duty of care to the plaintiff in respect of the observation (sic) of the above conditions in exhibit 9 is to make the appellant a party to this said exhibit 9 which is a document that binds only the donor, New Ni- h geria Bank Limited, and the donee, Mr Bassey E. Ekpo Bassey, and nobody else.” The court went on to hold that:– “. . . Exhibit 9 could not alter exhibit 7, and the New Nigeria Bank i Limited, not being a party to exhibit 7 could not alter it in any manner and so widen its scope of operation so as to give the respondent the right to sue non parties under his agreement. There is therefore no basis for holding the appellant liable on a charge of negligence in its dealings with the exhibit 9. Mr Bassey probably j may sue the appellant on the strength of exhibit 9 for a proper

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC 584 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

cause; and so also could the New Nigeria Bank Limited sue Mr a Bassey if the latter failed to supply the cement after getting exhibit 9. The respondent could only sue Bassey/Tucker on the strength of the agreement, exhibit 7, but not on the strength of this exhibit 9 which would be only the evidence of his payment for the cement.” b Still relying on the privity of contract fallacy which has long disappeared, the Court of Appeal concluded as follows:– “The proper evaluation of these documents would lead to the con- c clusion that the appellant was a total stranger to the respondent, owed him no duty, and did not act negligently.” It seems to me pertinent and necessary to observe that there appears to be a crucial misunderstanding of the issue before d the court. The claim before the court is clearly one for an action for damages for negligence. The statement of claim in support of the writ of summons distinctly at paragraphs 6, 7, 8, 11 and 12 pleaded the particulars of alleged negligence. e The defendant at paragraphs 9, 10 and 13, denied the allegations of negligence. It was therefore unarguable that the question of negligence was an issue between the parties to be resolved at the trial. At the trial the plaintiff led evidence f in support of his pleading. The defendant relied on the case of the plaintiff and did not lead any evidence. The trial Judge accordingly on the evidence before him found the allegations of negligence established. The trial Judge was right g as to his findings of fact of negligence. In J.O.O. Imana v Madam Jarin Robinson (1979) 3 and 4 SC 1 at 9–10, Ani- agolu JSC stated the position:– h “It is clear to us that once pleadings have been settled, and issues joined, the duty of the Court is to proceed to the trial of the issues (see The Gold Coast and Ashanti Electric Power Development Corporation Ltd v The Attorney General of the Gold Coast (1937) 3 W.A.C.A. 215) and if one party fails or refuses to submit the is- i sues he has raised in his pleadings for trial or refuses to submit the issues he has raised in his pleadings for trial by giving or calling evidence in their support, the trial Judge must, unless there are other legal reasons dictating to the contrary, resolve the case against the defaulting party.” j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 585 a The Court of Appeal proceeded to reverse the finding of fact of learned trial Judge that the respondent bank by failing to adhere to the instructions in exhibit 9 with respect to opening of letters of credit was negligent in the discharge of its b duties and was therefore liable to the plaintiff in damages. It is important to appreciate the fact that the question whether the defendant bank observed the instruction en- c dorsed on exhibit 9 is a question of fact, the finding of which was made by the trial Judge. Findings of fact are matters pe- culiarly within the province and reserved for the trial court (see Military Governor Western State v Afolabi Laniga and d another (1974) 1 All NLR (Part 2) 179. See Ebba v Ogodo (1984) 4 SC 84; Woluchem v Gudi (1981) 5 SC 291). The presumption is that such findings of facts are correct. In this case the findings of fact were not challenged. It was only e contended that there is no contractual relationship between the parties. The Court of Appeal appears to be relying on the evaluation of the documents involved in the transaction. It was the view of the Court of Appeal that, on the evaluation f of the documents as a whole, the plaintiff was a total stranger to the respondent, and to whom no duty was owed, and accordingly did not act negligently. The Court of Ap- peal appears to be of the view that no action for negligence g can arise in a contract on behalf of a person not a party to the contract. It is our law that, where there is ample evidence and the trial Judge failed to evaluate it and make correct findings, h the Court of Appeal is at liberty to evaluate such evidence and make proper findings, unless the findings rest on the credibility of witnesses (see Shell BP Development Co of Nigeria Ltd v His Highness Pere Cole and others (1978) 3 i SC 1832). The question now is whether, if it is conceded that there is no contractual relationship between the appellant and the respondent that is the end of the matter, quaestio cadit. The j matter does not end there. Since the 1920s the trend has

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC 586 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) developed of discarding the 19th century . . . that a tort can- a not arise from the breach of contract. It is now the law that an action in tort for negligence can arise de hors contract of the parties. The former view was that if a person undertook a b contractual obligation towards another and his misperformance or non-performance resulted in damage to a third party, the third party so injured could not sue unless he could show that the obligation of the contracting parties ex- c tended to him. For instance in Winterbottom v Wright (1842) 10 M. and W. 109 at 114, Lord Arbinger said:– “Unless we confine the operation of such contracts as this to the parties who entered into them, the most absurd and outrageous d consequences, to which I can see no limit would ensue.” The fog over remedies arising from breach of contractual obligations introduced into the law by what was regarded as the “privity of contract fallacy” was cleared by the bright- e ness brought in the lucidity of the arguments of Lord Atkin in Donoghue v Stevenson (1932) AC 562. The effect of Donoghue v Stevenson (supra) is that where a person is injured from a transaction arising from the contract of two persons, the third party is not precluded from bringing action f on the grounds that he was not a party to the contract the misperformance or non-performance of which has resulted in the damage. The duty imposed here is not because there was a contract but because the defendant had impliedly un- g dertaken not to injure the plaintiff. The rationale in truth is that, even though not so expressed, the obligations towards the contracting party extended to all such persons who were likely to be injured by the acts or omissions of the defen- h dant. They are the neighbours in contemplation or ought to be in contemplation of the defendant. The recent decision of the English House of Lords has summed up the law admirably in Ann v Merton London i Borough Council (1978) A.C. 728, where Lord Wilberforce stated as follows:– “Through the trilogy of cases in this House – Donoghue v Steven- son (1932) A.C. 562; Hedley Byrne and Co Ltd v Heller and j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 587 a Partners Ltd (1964) A.C. 465; Dorset Yacht Co v Home Office (1970) A.C. 1004, the position has now been reached that in order to establish that duty of care arises in a particular situation, it is not necessary to bring the fact of that situation within those of previ- b ous situations in which a duty of care has been held to exist. First one has to ask as between the alleged wrong doer and the one who has suffered damage if there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation c of the former, carelessness on his part may be likely to cause damage to the latter, in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the d class of person to whom it is owed or the damages to which a breach of it may give rise.” Surely, duty arising from proximity in law or fact, and not contract, is a condition precedent for liability in negligence. e This was emphasised by the cases decided since after Donoghue v Stevenson (supra) (see Clay v A.J. Crump and Sons Ltd (1964) 1 Q.B. 533; Candler v Crane, Christmas and Co (1951) 2 K.B. 164). I think the doctrine of proximity f as the foundation of duty of care in tort is now firmly established. It has replaced the erstwhile “privity contract” fallacy. I now turn to the facts of the case before us and apply the principles enunciated above. The facts are that exhibit 9, the g guarantee, was made by the New Nigeria Ltd on behalf of the appellant with the respondent bank in favour of Mr Bassey. The endorsement on exhibit 9 clearly provided that:– h “All documents, bills of lading and invoices shall be drawn in favour of Mr P.A. Abusomwan and shall be endorsed to New Nige- ria Bank Limited, Head Office, Mission Road, Benin City.” However, when the respondent bank issued exhibit 4, the i letter of credit relying on exhibit 9 and 12, it was raised in favour of Heilit (Nigeria) Ltd instead of Mr P.A. Abusom- wan, on whose behalf exhibit 9 was made. This was despite a fact that exhibit 12 clearly indicated the appellant as the j shipper of the consignment. The respondent bank owed a

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC 588 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) duty to the New Nigeria Bank Limited to carry out the in- a structions on exhibit 9. The appellant is such a person whose relationship with exhibit 9 is so proximate that there is a duty to ensure that he was not injured by any acts of misper- b formance or non-performance. The failure on the part of the respondent to adhere to the instructions in exhibit 9 is a misperformance and is a breach of the duty to take care not to injure the appellant. The appellant was injured by this negligence. c The error in the view adopted by the Court of Appeal was that it relied on the privity of contract fallacy to hold that the appellant, not being a party to the contract, could not sue. d The appellant was the person on whose behalf exhibit 9 was made and the specific instructions endorsed therein was intended to protect the interest of the appellant. Since the respondent bank ignored the instructions in ex- e hibit 9, and this resulted in the loss claimed by the appellant it was the breach of the duty of care owed to the appellant and which is an actionable wrong. It is interesting to observe that, even proceeding on the privity of contract principle, f and having accepted that exhibit 9, the guarantee was made by the New Nigeria Bank Limited, Mission Road, Benin City, with the respondent bank on behalf of the plaintiff in favour of Mr Bassey it should have been clear to the court g below that the New Nigeria Bank Limited was the agent of the plaintiff, who was disclosed in exhibit 9. A disclosed principal may sue or be sued on any contract made on his behalf by an agent acting within the scope of his authority h (see Langton v Waite (1868) L.R. 6 Eq. 165). Since the plaintiff did not bring his action in contract, but in tort, the above consideration does not arise. The Court of Appeal was clearly wrong in their evaluation of the documents. They i were clearly also wrong in setting aside the findings of fact of the trial Judge without showing that it was perverse. All the grounds of appeal argued succeed. The appeal is accordingly allowed. The judgment of the Court of Appeal and j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Karibi-Whyte JSC Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 589 a costs awarded are hereby set aside. Judgment of the High Court is restored. The respondent shall pay to the appellant’s costs assessed at N300 in this Court and N150 in the court b below. ESO JSC: I had the privilege of a preview in draft of the judgment of my learned brother, Karibi-Whyte JSC. I am in complete agreement that the appeal should be allowed. c There are two important exhibits in this case. The first being the pro forma invoice which indicated ex facie that the shipment of the cement was to the appellant, Abusomwan. That was exhibit 12. Exhibit 9 provides, inter alia, that:– d “All documents, drafts, bills of lading and invoices shall be drawn in favour of Mr P.A. Abusomwan and shall be endorsed to New Nigeria Bank Limited, Head Office, Mission Road, Benin City.” e Now in pursuance of these clear statements in the exhibits what did the respondent do? For that is the question, the answer to which would determine the proprietary or otherwise of the defendant/respondent. f From the facts so well stated in the judgment of my learned brother, Karibi-Whyte JSC, it is obvious that the defendant failed to observe these conditions. There was the name of Mr Tucker that pervaded the scene. Mr Tucker was g the principal of a company known as Heilit (Nig.) Limited. Mr Tucker was mentioned in dispatches as being connected with Lime International Corporation. This company prepared exhibit 12, the pro forma invoice. Mr Tucker took de- h livery of the consignment of the cement. So, it does not take much imagination to visualise what happened. A colossal fraud was hatched and executed by Tucker. The respondent who could have prevented this fraud by following the terms i of exhibit 9 failed in its duty of care. A simple case of negligence has arisen and the appellant has brought the present action in court. The trial court was right in the detailed examination of law and fact. The Court of Appeal was wrong j in upsetting the judgment of the High Court.

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Eso JSC 590 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

This appeal succeeds and it is hereby allowed. I abide by a all the orders contained in the judgment of my learned brother, Karibi-Whyte JSC. ANIAGOLU JSC: The judgment just read by my learned b brother, Karibi-Whyte JSC, was made available to me in draft. I agree that this appeal should be allowed, the judgment of the Court of Appeal set aside, and the judgment of the High Court (Gbemudu J) restored. c I agree that the crux of this appeal hinges upon whether the respondent having accepted exhibit 9 was bound to comply with its terms or, in default, bear the consequences of non- compliance. The learned trial Judge was entirely right when d he held:– “I find that the defendant accepted exhibit 9 per memorandum in exhibit 12 and acted on it as per exhibit 4 but failed to comply with the conditions that all documents, drafts, bills of lading and e invoices shall be drawn in favour of Mr P.A. Abusomwan and shall be endorsed to New Nigeria Bank Limited, Head Office, Mission Road, Benin City. I hold that the defendant was negligent for he owed a duty of care to the plaintiff in respect of the observation of the above conditions in exhibit 9. The defendant is liable to f the plaintiff for the loss he suffered as a result of this negligence.” The respondent cannot approbate and reprobate at the same time. Having accepted the banker’s guarantee (exhibit 9) and having utilised it in financing the importation of the cement g as a banker and deriving all the banker’s benefits (a notorious fact) accruing to the respondent/bank such as commissions and other handling charges, the respondent cannot be heard to reprobate the document by ignoring the conditions h requiring it to draw up “all documents, drafts, bills of lading and invoices in favour of Mr P.A. Abusomwan” and to endorse them to New Nigeria Bank Limited. Having ignored the document, resulting in damage or loss i to Mr Abusomwan (the appellant), the respondent must be held to have been in breach of the duty of care it owed to Mr Abusomwan, by its negligence in drawing up the documents etc in favour of Heilit (Nigeria) Limited, enabling the j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Aniagolu JSC Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 591 a chairman of the said Heilit (Nigeria) Limited, Mr Tucker, instead of Mr Abusomwan, to collect the goods. The claim of the appellant was made in negligence, a spe- b cies of tort, and not in contract. And so, for the Court of Ap- peal to drag in the principle of privity of contract was to be- cloud the issue at stake. It could neither be argued that the loss to Mr Abusomwan was too remote as not to be cognisa- c ble by law, nor could it be successfully contended that the respondent bank did not owe a duty of care to Mr Abusom- wan to conduct the transaction in question in such a way as not to occasion him a loss. d I abide by the order for costs made in the lead judgment of my brother, Karibi-Whyte JSC. KAZEEM JSC: I have had the privilege of reading in draft the judgment just delivered by my learned brother, Karibi- e Whyte JSC. It has set out very clearly the facts of this appeal as well as the submissions made before us. I am completely in agreement with the reasons and the conclusions arrived at therein. It is only by way of emphasis that I am making these f few points. It was never disputed throughout (and that was confirmed by the pro forma invoice, exhibit 12) that the consignment of cement was to be shipped to the appellant. It was also not g disputed that the bank guarantee, exhibit 9, provided by the New Nigeria Bank on behalf of the appellant for the transaction clearly contained an endorsement that:– “All documents, bills of lading and invoices shall be drawn in fa- h vour of Mr P.A. Abusomwan and shall be endorsed to New Nige- ria Bank Limited, Head Office, Mission Road, Benin City.” If the direction contained in that endorsement had been strictly observed, there would therefore have been no cause i for this action for negligence. But that was not so. Contrary to that direction and the contents of the pro forma invoice, exhibit 12, the irrevocable letter of credit, exhibit 4, which was prepared by the respondent bank for financing the con- j signment, was issued in favour of Heilit (Nig.) Ltd, a

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Kazeem JSC 592 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) company owned and controlled by Mr Tucker. It is to be a noted that exhibit 12, the pro forma invoice, was prepared by Lime International Corporation of New York, a company which, on the evidence adduced at the trial, Mr Tucker was b said to be connected with and it was the same Mr Tucker who eventually fraudulently took delivery of the bulk of the consignment to the detriment of the appellant. Moreover, the bill of lading, exhibit 8, prepared by Lime International Cor- poration of New York, and which was based on the irrevo- c cable letter of credit (exhibit 4), made Heilit (Nig.) Limited (Mr Tucker’s company) the consignee of the consignment. That, in my view, aided and abetted Mr Tucker to perpetrate his fraud. How then could the respondent bank be heard to d say that it was not liable to the appellant in an action for negligence? In my view, the respondent bank owed the appellant a duty of care to see that the direction contained in the endorsement on the banker’s guarantee, exhibit 9, was e strictly carried out and failure to do so made it possible for Mr Tucker to fraudulently take delivery of the consignment of cement. Consequently, in my view, the respondent bank was liable to the appellant in an action for negligence) (see f Donoghue v Stevenson (1932) A.C. 563; Dorset Yacht Co Ltd v Home Office (1970) A.C. 1004; Ann v Merton London Borough (1978) A.C. 728 per Lord Wilberforce at 757). In the circumstances, I will also allow the appeal, set aside g the decision of the Court of Appeal and restore the judgment of the High Court with costs. I also agree with the costs awarded against the respondent in the lead judgment. BELGORE JSC: The learned justices of the Court of Appeal h were in error in construing into this special banking transaction the principle of privity of contract. While in few remaining cases, privity is still good law, the banking law and transactions are so vital to international maritime and com- i mercial business that to apply principles of privity of contract would destroy initiative and sometimes make transactions impossible, The special endorsement on the bank guarantee, exhibit 9, is so clear that any banker receiving it and j

[2002 – 2004] 11 N.B.L.R. (PART II) (SUPREME COURT OF NIGERIA) Belgore JSC Chief Patrick A. Abusomwan v. Mercantile Bank of Nigeria Limited 593 a using it must make sure that the terms and conditions so endorsed are fully complied with. To do the contrary renders the bank open to an action for negligence and such a bank will be liable for the direct loss arising from such non- b compliance. It is to be noted that without the guarantee the letter of credit would not have been opened by the respondent bank and the fact that the appellant has no account with them is immaterial because the appellant has committed c himself to a bank in obtaining the guarantee. The principle of privity of contract has been so watered down over the years by remoteness principle and practices of banking and international commerce, that our courts must hesitate before d applying them. I agree with the lead judgment that the decisions in Ann v Merton London Borough Council (1978) A.C. 728 which assessed the situation in privity cases as a result of decisions e in Donoghue v Stevenson (1932) A.C. 562; Hedley Byrne and Co Ltd v Heller and Partners Ltd (1964); Dorset Yacht Co Ltd v Home Office (1970) A.C. 1004, ought to guide the courts. I hereby allow the appeal, set aside the decision of f the Court of Appeal and restore the decisions of the trial High Court with costs. I also award N300 as costs in this Court and N150 as costs in the court below against the respondent. g Appeal allowed.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

594 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

a Purification Techniques (Nig.) Limited v Attorney- General of Lagos State and others COURT OF APPEAL, LAGOS DIVISION b GALADIMA, ADEREMI, JEGA JJCA Date of Judgment: 20 JANUARY, 2004 Suit No.: CA/L/470/2001

Banking – Banker and customer relationship – Contractual one c Garnishee – Money of State Government in a bank – Whether money in custody of public officer – Section 84 of the Sheriffs and Civil Process Act, Cap 407 Laws of the d Federation of Nigeria, 1990

Facts The judgment creditor got judgment against the Lagos State e Government and proceeded to file garnishee application against it. The High Court ruled that the money of the government in the bank was money in the hand of a public officer and f hence not garnishable. The judgment creditor appealed against this decision.

Held – g 1. The relationship of a banker to customer is contractual. It is essentially that of a debtor to a creditor, in the case of credit balances. The classic description of the contractual relationship that exists between banker and cus- h tomer is aptly given by Atkin LJ in Joachimson v Swiss Bank Corporation (1921) 3 K.B. 110 at 121 which was in the following terms:– “The bank undertakes to receive money and to collect bills i for its customer’s account. The proceeds so received are not to be held in trust for the customer, but the bank borrows the proceeds and undertakes to repay them. The promise to repay is to repay at the branch of the bank where the account is kept, and during banking hours. It includes a j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

Purification Tech. (Nig.) Ltd v. Attorney-General of Lagos State 595 a promise to repay any part of the amount due against the written order of the customer addressed to the bank at the branch, and as such written orders may be outstanding in the ordinary course of business for two or three days, it is a b term of the contract that the Bank will not cease to do business with the customer except upon reasonable notice. The customer on his part undertakes to exercise reasonable care in executing his written orders so as not to mislead the bank c or to facilitate forgery. I think it is necessarily a term of such a contract that the bank is not liable to pay the customer the full amount of his balance until he demands payment from the bank at the branch at which the current account is kept.” d 2. Given the nature of the relationship between banker and customer and of the contract that exists between them, the customer has neither the “custody” nor “the control” of monies standing in his credit in an account with the e banker. What the customer possesses is a contractual right to demand repayment of such monies. 3. Monies in the hands of the garnishee banker are not “in custody or under the control” of the judgment debtor f customer. Such monies remain the property in the custody and control of the banker and payable to the judgment debtor until a demand is made. Hence, Order VIII rule 2(b) of the Judgments (Enforcement) Rules takes g care of this by providing that “Garnishee proceedings may be taken . . . where the debt is not yet payable . . . in any court in which the judgment debtor could have sued the garnishee as aforesaid if the debt had been immedi- h ately payable”. Appeal allowed.

Cases referred to in the judgment i Nigerian Balogun v N.B.N. (1978) 12 NSCC 36 I.B.W.A. Ltd v Pavex Int. (Nig.) Ltd (2000) 7 NWLR (Part j 663) 105

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION)

596 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Okafor v A-G Anambra (1991) 6 NWLR (Part 200) 649 a Sanusi v Ayoola (1992) 9 NWLR (Part 268) 275 Yesufu v A.C.B. (1981) 12 NSCC 36 b Foreign Foey v Hill (1882) 2 H.L. Cas. 28 Hirschorn v Evans (1938) 3 All ER 491 c Joachimson v Swiss Bank Corporation (1921) 3 K.B. 110

Nigerian statute referred to in the judgment Sheriffs and Civil Process Act, Cap 407 Laws of the Federa- d tion of Nigeria, 1990, sections 19, 84

Books referred to in the judgment e Atkins Court Forms Volume 19 (2ed) page 47 paragraph 21 Halsbury’s Laws of England Volume 26 (4ed) page 279 paragraph 556 f Counsel For the appellant: Pedro (DCL) For the respondent: Ogundipe (with him Akpata) g Judgment GALADIMA JCA: (Delivering the lead judgment) The appeal made herein by the judgment creditor is against the rul- h ing of the Lagos State High Court delivered by Ade-Alabi J on 31 January, 2001, wherein a garnishee order nisi made on 18 January, 2001 was set aside upon an application made by the judgment debtor, the Lagos State Government. The garnishee order nisi was sought by the said judgment creditor as i part of efforts to enforce the judgment it had obtained in this matter on 2 June, 1999 in Suit No. LD/835/99 in which the Lagos State Government was adjudged liable to pay the judgment creditor the sum of US166,353,090.19. j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Galadima JCA Purification Tech. (Nig.) Ltd v. Attorney-General of Lagos State 597 a By motion on notice dated 26 January, 2001 and heard by the lower court on 31 January, 2001 the Lagos State Gov- ernment sought to set aside the order nisi. After hearing de- b tailed argument from respective Counsel for the parties, the learned trial Judge in his ruling set aside the garnishee order nisi. Being dissatisfied with the decision, the judgment creditor has appealed therefrom to this Court. The notice of c appeal filed on 1 February, 2001 carried two grounds of appeal. Distilled from the said two grounds for determination of this Court are these two issues set out in the appellant’s brief of argument in the following terms:– d “1. (a) Did the learned trial Judge of the High Court, upon the evidence before him possess the jurisdiction and power to set aside the garnishee order nisi? (b) What effect, if any, does the fact that a judgment debtor has sought to stay the execution of a judgment e have upon the judgment creditor’s right under the Sheriffs and Process Act Cap 407 Laws of Federation of Nigeria, 1990 to seek a garnishee order? 2. What is the true nature of monies held by a judgment debtor f in a bank, and does the judgment debtor have the ‘custody’ or the ‘control’ of such monies, within the meaning of section 84(1) of the Sheriffs and Civil Process Act?” For their part, the respondents also identified two issues con- g tained in their brief of argument as follows:– “(i) Whether the learned trial Judge has the power and was right to have set aside the garnishee order nisi made on the 18 January, 2001. h (ii) Whether the monies held by a State Government/judgment debtor in a bank is in custody or under the control of a public officer and therefore subject to the provisions of section 84 of the Sheriffs and Civil Process Act Cap 407 Laws of the Federation of Nigeria, 1990.” i After a careful study of the issues formulated by the parties, I find that issues 1(a) and (b) on the appellant’s brief can be subsumed into issue 1 on the respondents’ brief of argument whilst issue 2 on the appellant’s brief is substantially the j same as issue 2 formulated by the respondent in their brief.

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Galadima JCA 598 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

It is my considered view that the two issues formulated by a the respondents will adequately determine this appeal. On 3 November, 2003, this appeal came before us for argument. Mr B.O. Ogundipe leading Mrs. O.U. Akpata b adopted the brief of the appellant filed on 15 July, 2002 and the reply brief filed on 11 November, 2002. On issue 1 learned Counsel for the appellant submitted that the learned trial Judge lacked jurisdiction and power to set aside the c garnishee order nisi previously made on 18 January, 2001. It is also contended that, given the distinction that exists between execution and garnishee proceedings for the enforcement of a judgment, the existence of an order (or of an ap- d plication seeking an order) staying execution of a judgment does not preclude a judgment creditor from seeking to use some other legal means of enforcing the judgment. It is also further submitted that the monies held by a garnishee banker e are neither in the custody nor under the control of the judgment debtor. Consequently, the provisions of section 84(1) of the Sheriffs and Civil Process Act do not apply to the garnishee bankers. Mr Lawal Pedro, Director of Civil Liti- f gation, Lagos State Ministry of Justice, adopted the brief of the respondent filed on 1 November, 2002. He submitted that the appeal lacks any merit and should be dismissed on the grounds that the learned trial Judge has the power and g was right to have set aside the garnishee order nisi made on 18 January, 2001 being a nullity. It was also further submitted that monies held by a State Government judgment debtor in a bank is in custody or under the control of a public offi- h cer and therefore subject to the provisions of section 84 of the Sheriffs and Civil Process Act which requires the consent of the Attorney-General before they can be attached in satisfaction of a judgment debt. i I shall now consider this appeal by taking the two issues separately. The first issue is whether the learned trial Judge has the power and was right to have set aside the garnishee order nisi made on 8 January, 2001. As a general principle j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Galadima JCA Purification Tech. (Nig.) Ltd v. Attorney-General of Lagos State 599 a of law, a court has no legal competence to reverse itself or set aside its previous order or judgment except where such order or judgment is a nullity. A court order can be regarded b as a nullity where, for instance, the court has acted without jurisdiction or judgment or order was obtained by fraud or where there has been non-compliance with a fundamental procedural rule and this has led to breach of fundamental right to fair hearing (see Okafor v Attorney-General Anam- c bra (1991) 6 NWLR (Part 200) 649; Sanusi v Ayoola (1992) 9 NWLR (Part 268) 275). In the instant case the respondent has contended that as at 18 January, 2001 when the lower court made the order of garnishee order nisi against it for the d sum at US$166,353,090.19 it lacked the jurisdiction to make such order because there was an application for stay of execution of the judgment filed on 12 January, 2001 and the consent of the State Attorney-General was not obtained con- e trary to the provision of sections 83 and 84 of the Sheriffs and Civil Process Act. And therefore that the learned trial Judge was right to have set aside the garnishee order nisi. f With due respect to the learned trial Judge, upon the evidence before him, I do not think he has jurisdiction to set aside the garnishee order nisi. The general principle of law I have earlier set out above as to when a court has legal competence to reverse itself or set aside its previous order or g judgment finds support in the statement of the learned authors of Volume 26 of Halsbury’s Laws of England (4ed) at paragraph 556 on page 279 thus:– h “As a general rule, except by way of appeal, no court, Judge or master has power to rehear, review, alter or vary any judgment or order after it has been entered either in an application made in the original action or matter or in a fresh action brought to review the judgment or order. The object of the rule is to bring litigation to i finality, but it is subject to a number of exceptions. For example, a clerical error or an error arising from an accidental slip or omission may be corrected under rules of court or the court’s inherent jurisdiction. The court has inherent jurisdiction to vary or clarify an order so as to carry out the court’s meaning or make the j language plain or to amend it where a party has been wrongly

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Galadima JCA 600 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

named or described unless this would change the substance of the a judgment. The court will treat as a nullity and set aside, of its own motion if necessary, a judgment entered against a person who was in fact dead or a non-existent company or, in certain circumstances, a judgment in default, or a consent judgment. Where there b has been some procedural irregularity in the proceedings leading up to the judgment or order which is so serious that the judgment or order ought to be treated as a nullity, the court will set it aside . . .” c I am of the opinion that the only possible ground upon which the lower court could have entertained the application of the judgment debtor, and set aside the garnishee order nisi was that there had been some procedural irregularity in the d proceeding of such serious nature that the order ought to be treated as a nullity. The factual basis of any such contention on the part of the appellant could only be the pendency of an application for stay of execution of the judgment. The com- e plaint about the breach of provisions of section 84 of the Sheriffs and Civil Process Act, Cap 407 Laws the Federation of Nigeria, 1990 can only be addressed by way of appeal. Could it be said that upon the material before the learned f trial Judge there had been some procedural irregularity so serious that the order of a garnishee order nisi ought to be treated as a nullity and be set aside? It has been observed that the premise upon which the judgment debtor ap- g proached the court for an order setting aside the garnishee order nisi was twofold:–

“Firstly, it was contended that an application for stay of execution h of the judgment of the lower court was pending at the time the garnishee order nisi was granted. This being so, and based on a number of reported cases starting with the classicus case of Vas- wani v Savalakh Trading Company (1972) 12 SC 77, the judgment creditor ought not to have proceeded to seek and obtain the gar- i nishee order nisi with the express knowledge of the pendency of the application for stay of execution. Secondly, that under the provisions of section 84(1) of the Sheriffs and Civil Process Act, monies in accounts in the name of the Lagos State Government were under the Control of the Accountant General of Lagos State, j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Galadima JCA Purification Tech. (Nig.) Ltd v. Attorney-General of Lagos State 601 a a public officer and therefore such monies cannot be attached under a garnishee.” I must say that the basis for the exercise by the court of its b inherent jurisdiction to set aside its own order in the circumstances of this case, is that the appellant has, with the knowledge of the pendency of the respondent’s application to stay execution of judgment, yet proceeded to execute the c judgment. It is clear that the basis for the exercise of the lower court’s jurisdiction is the fact of the knowledge on the part of the respondent. It is my respectful view that in this case there was no evidence, other than of the fact that notice of the pending application had been served on the office of d the judgment creditor’s Counsel. Curiously enough, the lower court was not aware of the pending application. In I.B.W.A. Ltd v Pavex Int. (Nig.) Ltd (2000) 7 NWLR (Part 663) 105, a case cited by the learned Counsel for the appel- e lant, the Supreme Court in a unanimous decision upheld the decision of the Court of Appeal that in a similar circumstance such as in the instant case that there had been no abuse of court process and therefore there was no basis for f the exercise of the lower court’s inherent jurisdiction to set aside the execution that had taken place in that case. It is my respectful view that at the time the learned trial Judge lacked the jurisdiction and power to set aside the gar- g nishee order nisi previously made on 18 January, 2001. Again, given the distinction that exists between execution and garnishee proceedings for the enforcement of a judg- h ment, I do not think the existence of an application seeking for an order staying execution of a judgment does preclude a judgment creditor from seeking to use some other legal method to enforce judgment. i There is a clear distinction between execution of judgments and other methods of enforcing judgments, such as garnishee proceedings. The distinction is brought out by the definition of “writ of execution” in section 19 of the Sheriffs j and Civil Process Acts, Cap 407 Laws of the Federation of

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Galadima JCA 602 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II)

Nigeria, 1990: “Writ of execution includes writ of attach- a ment and sale, writ of delivery, writ of possession and writ of sequestration. It excludes a garnishee proceedings.” The distinction is further made clear by the learned authors b of Atkin’s Court Forms Volume 19 (2ed) paragraph 21 at page 47 thus:– “Garnishee proceedings or attachment of debts is a method auxil- iary to that of execution for the enforcement of a judgment or or- c der for the payment of money which is not for payment of money into court enabling the judgment creditor to attach money due to the judgment debtor from a third person called the garnishee, who must be within jurisdiction.” d In the respondent’s brief, reference is made to Order VIII rule 7(1) of the Judgment (Enforcement) Rules. The rule demonstrates the clear difference and distinction between the two modes of enforcement. This rule clearly provides for e garnishee proceedings. Rule 7(1) of the Order makes specific provisions for writs of execution to issue against the garnishee. It makes it clear that in the scheme of enforcement of judgments established under the Judgment (En- f forcement) Rules of the Sheriffs and Civil Process Act, enforcement by execution is not the same thing as enforcement by garnishee proceedings. Were that to be the position, then there would be no need for express provision that execution g could issue against a garnishee. If the submission of the learned Counsel for the respondent were correct, the provision enabling execution to issue against a garnishee would be superfluous. It means that once a garnishee order is made h absolute then execution would follow automatically, if the respondent were correct. The provision therefore not being superfluous, there is need for enforcement by writ of execution against the garnishee. Execution of a judgment entails the seizure and sale of chattels of the judgment debtor under i warrant of court. This is different from attachment of debt owed to a judgment debtor by a third party, who is indebted to the judgment debtor and not proceedings against the judgment debtor directly. It is my view therefore that the j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Galadima JCA Purification Tech. (Nig.) Ltd v. Attorney-General of Lagos State 603 a arguments proffered by the learned Counsel for the respondent on this issue lack merit. The second issue is whether monies held by a State Gov- b ernment/judgment debtor in a bank is in custody or under the control of a public officer and therefore subject to the provisions of section 84 of the Sheriffs and Civil Process Act, Cap 407 Laws of Federation of Nigeria, 1990. c In his ruling on the motion for stay of execution learned trial Judge held that the monies in the hands of the garnish- ees were “in the custody or under the control” of the Lagos State Government through the Accountant-General of the d State, who is the public officer constitutionally entrusted with the control of monies belonging to the State. In the respondent’s brief learned Counsel has submitted that, before a party can be entitled to attach by garnishee proceedings e money of the Government in any bank, the provision of section 84 of the Sheriffs and Civil Process Act must be complied with because such money is part of public funds of the State under the control of a public officer in the State. Ref- f erence was further made to section 120 of the 1999 Consti- tution of the Federation by the learned Counsel for the respondent who then submitted that only the Accountant- General of the State being a signatory to a Government bank g account could have power to issue cheques drawn on any public fund of the State kept with a commercial bank on such authorisation or approval. I must say, with due respect to the learned Counsel for the respondent, that he has made a h simplistic approach to the issue at stake by submitting that monies held in bank accounts in the name of Lagos State Government are “in the custody or under the control of a public officer” or are otherwise in custodia legis. There is i absolutely no basis for treating Government bank accounts any differently from bank accounts of every other juristic personality or customers. The relationship of a banker to a customer is contractual. It is essentially that of a debtor to a j creditor, in the case of credit balances. The classic

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Galadima JCA 604 Nigerian Banking Law Reports [2002 – 2004] 11 N.B.L.R. (PART II) description of the contractual relationship that exists be- a tween a banker and customer is aptly given by Atkin LJ in Joachimson v Swiss Bank Corporation (1921) 3 K.B. 110 at 121 which was in the following terms:– b “The bank undertakes to receive money and to collect bills for its customer’s account. The proceeds so received are not to be held in trust for the customer, but the bank borrows the proceeds and undertakes to repay them. The promise to repay is to repay at the c branch of the bank where the account is kept, and during banking hours. It includes a promise to repay any part of the amount due against the written order of the customer addressed to the bank at the branch, and as such written orders may be outstanding in the ordinary course of business for two or three days, it is a term of the d contract that the bank will not cease to do business with the customer except upon reasonable notice. The customer on his part undertakes to exercise reasonable care in executing his written orders so as not to mislead the bank or to facilitate forgery. I think it is e necessarily a term of such a contract that the bank is not liable to pay the customer the full amount of his balance until he demands payment from the bank at the branch at which the current account is kept.” f The decisions in Joachimson v Swiss Bank Corporation (supra), as well as that in the leading case of Foey v Hill (1882) 2 H.L. Cas. 28, have been cited and followed by the apex court of this country in Yesufu v A.C.B. (1981) 12 NSCC 36 g and Balogun v N.B.N. (1978) 12 NSCC 36. Therefore, given the nature of the relationship between banker and customer and of the contract that exists between them, the customer has neither the “custody” nor “the control” of monies stand- h ing in his credit in an account with the banker. What the customer possesses is a contractual right to demand repayment of such monies. In the case of Hirschorn v Evans (1938) 3 All ER 491 cited with approval by the Supreme Court in Ye- i sufu v A.C.B. (supra) Mackinnon LJ had this to say:–

“There is, of course; never any question of property in the credit balance of a bank account. The relation of banker and customer is simply that of debtor and creditor . . .” j

[2002 – 2004] 11 N.B.L.R. (PART II) (COURT OF APPEAL, LAGOS DIVISION) Galadima JCA Purification Tech. (Nig.) Ltd v. Attorney-General of Lagos State 605 a In my respectful view I can say that monies in the hands of a garnishee banker are not “in custody or under the control” of the judgment debtor customer. Such monies remain the property in the custody and control of the banker and pay- b able to the judgment debtor until a demand is made hence, Order VIII rule 2(b) of the Judgments (Enforcement) Rules takes care of this by providing that: “Garnishee proceedings may be taken . . . where the debt is not yet payable . . . in c any Court in which the judgment debtor could have sued the garnishee as aforesaid if the debt had been immediately payable.” In conclusion, I find merit in this appeal. It is allowed. The d decision of Ade-Alabi J contained in the ruling delivered on 31 January, 2001 is hereby set aside. Consequently, I make an order dismissing the respondents’ application dated 26 January, 2001. I award no costs. e ADEREMI JCA: I agree. JEGA JCA: I agree. Appeal allowed.