V. T. KWAGA & ANOR v. FRANK AMUGA & ANOR
(2014)LCN/7001(CA)
In The Court of Appeal of Nigeria
On Wednesday, the 9th day of March, 2016
CA/K/239/14
RATIO
WHETHER A CONTRACTUAL AGREEMENT CAN BE ENFORCED BY THIRD PARTIES
The law is that agreements only bind parties and not 3rd parties. See the case of Agbareh v Mimra (2008) 2 NWLR Part 1071 Page 378 SC at 412 Para G per Ogbuagu JSC.
In Makwe v Nwakor (2001) 14 NWLR Part 733 Page 356 at Page 372 Paras B-F the Supreme Court, per Iguh JSC held that a contract affects only the parties thereto and cannot be enforced by or against a person who is not a party to it. Per OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, J.C.A.
JUSTICE
UWANI MUSA ABBA AJI Justice of The Court of Appeal of Nigeria
IBRAHIM SHATA BDLIYA Justice of The Court of Appeal of Nigeria
OLUDOTUN ADEBOLA ADEFOPE-OKOJIE Justice of The Court of Appeal of Nigeria
Between
1. V. T. KWAGA
2. D. S. STEPHEN Appellant(s)
AND
1. FRANK AMUGA
2. MAXWEL AMUGA Respondent(s)
OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, J.C.A. (Delivering the Leading Judgment): This is an appeal against the Judgment of the High Court of Kaduna State delivered by Hon. Justice H.T.D. Gwadah on the 28th day of January 2014. The Appellants herein were the Plaintiffs before the Lower Court.
The facts leading to the present appeal, by the Amended Statement of Claim of the Appellants, dated 1st February 2013, and the evidence of their sole witness (2nd Appellant), are that sometime in 2012 the 2nd Appellant met the 2nd Respondent in an office, trying to raise money on behalf of the 1st Respondent, to send to the 1st Respondent’s wife. The 2nd Appellant informed the 2nd Respondent that though he had no money of his own he had some belonging to the 1st Appellant who had given him a Power of Attorney. He (2nd?Appellant) requested that the Respondents surrender their Certificate of Occupancy (C of O) as collateral for the loan. In agreement, the 1st Respondent, who was in Abuja, sent down a C of O.
An agreement dated 7/9/12 was consequently signed by the 2nd Respondent, with the knowledge and consent of the 1st Respondent, by which the sum of
N200,000 was loaned to the Respondents with a clause that the sum to be repaid would be N250,000. The C of O was surrendered to the 1st Appellant but was unfortunately stolen from the 1st Appellant’s office, causing him to report the loss and make publications in respect thereof. Following this, he obtained a Certified Copy from the Ministry of Lands. By the agreement entered into, the 1st Appellant was at liberty to take over the property belonging to the Respondents as his personal property, in the event of default of payment. In spite of oral demands, the Respondents failed to make payment and persisted in this default despite several demands.
They thereupon filed the claim at the Lower Court seeking the following reliefs against the Respondents jointly and severally, as follows:
1. A DECLARATION that pursuant to the agreement dated 1/9/2012 between V.T. Kwaga and the Defendants in respect of property No. 4/5 Ja’maa Road, Kaduna, V. T. Kwaga is entitled to the ownership and possession of the aforesaid property.
2. AN ORDER directing the Defendants, their agents, and or representatives to hand over vacant possession of NB 4/5 Ja’maa Road,
Kaduna to the Plaintiff.
3. Cost.
At trial, they tendered 6 exhibits, as follows:
– Exhibit 1 – Power of Attorney
– Exhibit 2 -Certificate of Occupancy
– Exhibit 3 – Affidavit of Loss of Certificate of Occupancy
– Exhibit 4 – New Nigerian Publication of Loss of C of O
– Exhibit 5 – Letter from 1st Appellant to Ministry of Lands, Kaduna State reporting loss of C of O and requesting for Certified Copy
– Agreement for Loan
The Respondents neither entered appearance, filed a Statement of Defence nor attended Court. Following the Appellants’ adoption of their written address, the trial Judge gave judgment, refusing the declarative reliefs sought by the Appellants but ordering the Respondents to pay to the Appellants the sum of N200,000, with costs. Dissatisfied with the judgment, the Appellants filed an 11 ground Notice of Appeal dated the 3rd day of February 2014.
Consequent upon leave granted to the Appellants by this Court to compile and transmit their Record of Appeal out of time, the Record of Appeal transmitted on 13/5/2014 was deemed properly compiled and transmitted on 16/3/15.
?While the Appellant filed
a Brief of Arguments, the Respondents, in spite of substituted service on them by pasting of the Appellants processes and notification of hearing, as ordered by the Court on 24/6/14, filed no Brief of Arguments. In consequence, the Appellant sought and was granted leave on 10/7/15 for hearing of their appeal based on the Appellant’s Brief alone.
?The Appellants in their Brief of Argument dated 18/3/15 and filed on 24/3/15, settled by Kimi Appah of Deus Advocate Solicitors, formulated 5 issues for determination, namely.
1. Whether the Appellants were denied their rights to fair hearing as the trial Court raised issues suo motu, to wit; money lending, lack of capacity of the Respondents to enter a valid legal contract, failure of an independent witness to collaborate evidence of P.W.1, and why is the Certificate of Occupancy not in the name of either of the Respondents without giving the Appellants the opportunity to address the trial Court on the aforementioned issues?
2. Whether the trial Court was not judicially biased by entering a defence for the Respondents?
3. Whether the trial Court was right in enforcing part of the contractual rights
as contained in Exhibit 6?
4. Whether the Appellants were denied fair hearing when the trial Court raised issues suo motu and did not give the Appellants the opportunity to address it on them?
5. Whether the trial Court was right in refusing to enforce the contract entered between the parties?
The singular issue that I consider arises for determination in this matter, from the pleadings and reliefs sought by the Appellants, is:
Whether the trial Court was right in refusing to grant the reliefs sought in the Appellants Statement of Claim.
As aforesaid, the claim before the Lower Court, was for declarations that the Appellants are entitled to the ownership and possession of the property in dispute and that an order be granted for them to hand over vacant possession to the Appellants.
?The trial Judge, in his judgment, acknowledged the failure of the Respondents to file their defence, enter appearance or be present in Court, in spite of proof of hearing notice. He set out the issues for determination formulated by the Appellants, as follow:
1. Whether or not there was a valid contract between the Plaintiffs and the Defendants.
2.
Whether parties to a contract are bound by the contract.
3. Whether the Court has inherent powers to enforce the terms of contract as contained in Exhibit 6.
?The trial Judge set out the facts of the case and the submissions of Counsel. He observed that the evidence of the Appellants was unchallenged. This, notwithstanding, the law, he held, is that for the evidence to be accepted and relied upon, it has to be in line with the pleadings and must be cogent and credible. He set out Exhibit 6, the agreement, and observed that the loan itself was for the sum of N200,000.00 but that by the terms, the Respondents were expected to repay an additional N50,000.00 as the cost of facilitating the loan. He alleged there to be a conflict between the pleadings and Exhibit 6, as in the pleadings, it was averred that the 2nd Appellant being moved with pity at the request of the 2nd Respondent, offered him the loan, yet Exhibit 6 shows that it was a pure business arrangement. He held the transaction to be a money lending transaction and unlawful, since the Appellants are not registered money lenders nor a bank which is legally registered for such transactions. The
surrender of Exhibit 6 by the Respondents, he held, was clearly a mortgage transaction which only a bank or building society can undertake. Neither the demand letter nor the “7 days notice” averred in the Statement of Claim were tendered in Court, he said, nor was the witness to Exhibit 6 called. He further observed that the 1st Applicant whose name appears in Exhibit 6 is conspicuously missing from the document.
He thereupon held:
“Also a perusal of the Certificate of Occupancy Exhibit 2 does show that the name thereon is that of one Chike C. Amuga which is clearly not the same with either of the Defendants’ names. This shows that the said Exhibit ‘2’ does not belong to either of the Defendants. There is no power of attorney authorizing either of them most particularly the 2nd Defendant to use it as security for the loan he got from the Plaintiffs. It is trite that one cannot give or rely upon what he does not have. It is therefore for the foregoing reason that I am incline (sic) to hold that the said Exhibit’6′ has little or no weight for which this Court can rely upon and I so hold.
The above observation not withstanding since there is no
dispute to the fact that the Defendants were given the loan of N200,000 being that there is no defence to that; this means that the Plaintiffs have proved their case to that extent only. It is in the light of this that the Court will enter judgment in favour of the Plaintiffs and against the Defendants in the said sum and cost only and not as per the reliefs being claimed before the Court.
Accordingly judgment is hereby entered in favour of the Plaintiffs and against the Defendant in the sum of N200,000.00 and cost.”
Learned Counsel to the Appellants has complained under his issues formulated, that, thought the Respondents never denied the Appellants’ pleadings, the trial Court raised the issue suo motu and without allowing the Appellants to address it, gave judgment, thereby descending into the arena, resulting in the deprivation of the Appellants’ right to fair hearing as enshrined in the Constitution. It is the duty on trial Courts to limit themselves to the issues raised by the parties in their pleadings. And a Court cannot give a decision on a fact not pleaded. Furthermore, the decision of the Court is contrary to the law that evidence which is
not challenged or contradicted is binding. He cited Bayol v Ahemba (1999) 10 NWLR Part 623 Page 381; Adebayor v Oja-Iya Community Bank Nig Ltd (2004) All FWLR Part 231 Page 1360; Duke v Governor Cross River State (2013) All FWLR Part 692 Page 1731.
Counsel also asked the Court to reject the reasoning of the trial judge which conferred the status of unlicensed “Money Lender” on the Appellants. He accused the trial Judge of entering a defence on behalf of the Respondents who never denied the Appellants’ claims. The Appellants had thus proved their case by preponderance of evidence. He cited Chabasanya v Anwasi (2010) 10 NWLR Part 1201 Page 178; Elias v Omo-Bare (1982) 5 SC 25.
Responding to the Court’s impugning of Exhibit 6, he contended that the Respondents never denied that they were the owners of the property covered by Exhibit 2, the C of O. A party, he said, can purchase a property while the title document can remain in the name of the seller until the purchaser applies for a conversion of the title document in his name, which fact was not considered by the trial Judge. He denied that interest was charged, as implied in the judgment, thus coming
under the exception to the Money Lenders Law of Kaduna State. The money was for the 1st Appellant, a lawyer, to cover his legal fees for facilitating the transaction.
The agreement, he contended, is legally binding. A document giving rise to a contract cannot be amended by the Court, once such has been voluntarily entered into. He urged this Court, based on the uncontradicted evidence of ownership of the property, to grant the declarations sought.
On the award to the Appellants of only N200,000.00, he submitted that a document cannot stand in part and fall in part and that the trial Judge cannot grant the claims in part. Exhibit 6 either stands or falls. The option open to the trial Court was either to give a declaratory judgment in favour of the 1st Appellant or dismiss the claim. Instead, the Court, contrarily entered judgment in the sum of N200,000.00 in favour of the 1st Appellant.
To recapitulate, the issue for determination is whether the trial Court was right in refusing to grant the reliefs sought in the Appellants Statement of Claim.
The Lower Court, I agree, went on an unsolicited journey in deciding whether the 1st Appellant was a
Money Lender or not and whether the pity shown by him in his pleadings was a contradiction of the N50,000 charged by him in Exhibit 6 as cost of facilitation of the loan. A Court, in its judgment, is limited, I hold, to the issues culled from the pleadings of the parties and cannot go outside in the determination of the case.
It was held by the Supreme Court in the case of Odom v PDP (2015) 6 NWLR Part 1556 Page 527 at 565 Para D-E per M.D. Muhammad JSC that Courts and parties are bound by the pleadings and cannot go outside the pleadings either to introduce evidence or decide the issues in controversy.
Similarly, the Court, per Onnoghen JSC held in Fagbenro v Arobadi (2006) 7 NWLR Part 978 Page 172 at 19th 195 Para H-B that it is trite law that parties and the Court are bound by their pleadings and the issues joined therein. That being the case, the Court must always be on its guard so as not to deviate from the case made by each party in the pleadings otherwise it will unwittingly be making for parties, an entirely new case.
?In the instant case, as pointed out by the Appellants’ Counsel, the issue, from the reliefs sought by the Appellants, is
whether they were entitled to the declarations sought. It was thus for the Judge to grant the claims or dismiss them, not for the trial Judge to enter into a discourse on who a money lender is and whether the Appellant is a money lender.
The Agreement in question is Exhibit 6 and states as follows:
Exhibit 6
AGREEMENT
I, Maxwell Amuga of (business & Home Address & phone number) NB4/5 Jamaa Road Kaduna & Kubani Crescent Bamawa Kaduna, 08103327442
With the consent and knowledge of Frank Amuga, (Phone Number 07037885796) and on behalf of the Amuga Family have today collected the total sum of N200,000.00k (Two Hundred Thousand Naira) only from V.T Kwaga, Esq. to enable me send money to my brothels wife.
I undertake to repay the sum of N 250,000. (Two Hundred and Fifty Thousand Naira) only through Sekav, Stephen, Dzever Esq. (i.e. additional N50,000 as cost of facilitating this transaction to Sekav Stephen, Dzever) in two instalments of N100,000 (One Hundred Thousand Naira) only on or before 6th October, 2012 and N150,000 (One Hundred and Fifty Thousand Naira) only on or before the 6th November, 2012.
I also agree
that upon our failure to pay the money on 6th November, 2012, V.T. Kwaga, Esg. is at liberty to take over our property at NB 5-5 Ja’maa Road, with Kaduna Ceftificate of Occupancy No. KD 683 as his property.
Original of the said Kaduna Certificate of Occupancy No. KD 693 would be delivered to Sekav Stephen Dzever, Esq on 7th September, 2012.
Dated this 7 of September, 2012.
Signed by me: xxx
Maxwell Amuga date 7/9/2012
In presence of: xxx
Name: xxx
Sign: xxx
It is not in doubt that by Exhibit 6, the Respondents had agreed that upon their default in payment, the 2nd Appellant is at liberty to take over their property at NB 4-5 Ja’maa Road covered by C of O No. KD 683.The question that agitated the mind of the trial Judge, and which is a cogent one, is whether an order can be made for possession of property which is in a name different from the contracting Respondents. In other words, whether the judge can order possession in favour of the Appellants in respect of property pledged by the Respondents but which has not been shown to belong to them. It was his response in the negative that undoubtedly swayed him into granting
to the Appellants the refund of the amount paid and refusing the declarations sought.
I must, unfortunately, agree with the Lower Court. The name on the Certificate of Occupancy is Chike C. Amuga, while the name of the 1st Respondent is Frank Amuga and the 2nd Respondent, Maxwell Amuga. There is no document that shows that any of them bears the name Chike C. Amuga.
It is not for the Court to go into conjecture, as Appellants’ Counsel requests, that the property may have been purchased while the title documents remain in the name of the seller, pending application by the purchaser for conversion of title. Doing this will be entering into the realm of speculation, which this Court cannot do.
The law is that agreements only bind parties and not 3rd parties. See the case of Agbareh v Mimra (2008) 2 NWLR Part 1071 Page 378 SC at 412 Para G per Ogbuagu JSC.
In Makwe v Nwakor (2001) 14 NWLR Part 733 Page 356 at Page 372 Paras B-F the Supreme Court, per Iguh JSC held that a contract affects only the parties thereto and cannot be enforced by or against a person who is not a party to it.
The holder of the Certificate of Occupancy, Chika C.
Amuga, not having been shown to be a party to the agreement, cannot have enforced against him the said agreement, I hold. The Lower Court was thus right in dismissing the claim for the declarations sought.
Since there is no appeal by the Respondents against the award of N200,000, the same will be affirmed, however, with a slight variation, that is by the addition of the sum of N50,000, which is the sum the parties agreed would be paid in the event of default. There has been no contest by the Respondents to the agreement, neither has it been contended by them nor shown that the 2nd Appellant is a Money Lender as contemplated by the Money Lenders Law Cap 100 Laws of Kaduna State 1991.
The conclusion is that this appeal succeeds in part. While the judgment of the Lower Court dismissing the declarations sought by the Appellants is affirmed, the award of N200,000 in favour of the Appellants is substituted by the sum of N250,000. Costs of N100,000 are awarded in favour of the Appellants.
UWANI MUSA ABBA AJI, J.C.A.: I have had the privilege of reading in draft the judgment just delivered by my learned brother Oludotun A.
Adefope-Okojie, JCA. I agree that the appeal succeeds in part to the extent that the award of N200,000.00 in favour of the Appellant is substituted for N250,000.00 as per Exhibit 6. The claim for declaration is hereby dismissed. I abide by the consequential order made including orders as to costs.
IBRAHIM SHATA BDULIYA, J.C.A.: I have been privileged to read in draft the leading judgment just delivered by my learned brother OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, J.C.A.?I am in total agreement with the reasonings and conclusions arrived at in allowing the appeal in part and affirming the dismissal of the declaration sought by the appellants. I abide by the orders made, including that of costs.
>
Appearances
K. L. Appah with him, J. S. KureFor Appellant
AND
No appearance for Respondents.For Respondent
