FUNTAJI INT’L SCH. LTD v. GTB PLC
(2022)LCN/16702(CA)
In The Court Of Appeal
(ABUJA JUDICIAL DIVISION)
On Friday, June 17, 2022
CA/ABJ/CV/254/2019
Before Our Lordships:
Peter Olabisi Ige Justice of the Court of Appeal
Biobele Abraham Georgewill Justice of the Court of Appeal
Danlami Zama Senchi Justice of the Court of Appeal
Between
FUNTAJI INTERNATIONAL SCHOOL LIMITED APPELANT(S)
And
GUARANTY TRUST BANK PLC RESPONDENT(S)
RATIO
THE POSITION OF LAW ON OFFER AND ACCEPTANCE
Thus, by the pleadings and evidence of parties on record, it is crystal clear that there was an offer and there was an acceptance. As to what amounts to a valid offer and acceptance, this Court in the case of GUARANTY TRUST BANK PLC & ANOR V UDOKA ANYANWU ESQ, (2011) LPELR-4220, AUGIE, JCA (as he then was now JSC) held thus:-
“It is settled that an offer is a proposal that emanates from the offeror to the offeree to enter into an agreement to do or not to do a particular thing. See MITIBAIYE V NARELLILAT LTD (supra) where ABOKI JCA (now JSC) explained:- ” A valid offer must be precise and unequivocal giving no room for speculation or conjecture as to its real content in the mind of the offeree. An offer capable of being converted into an agreement by acceptance must consist of a definite promise to be bound provided certain specific terms are accepted.” An acceptance is the reciprocal act or action of the offeree to an offer as conveyed to him by the offer or an acceptance of an offer may be demonstrated:-
(a) By conduct of the parties; or
(b) By their words; or
(c) By documents that have passed between them. As ABOKI JCA (now JSC) further explained in MITIBAIYE V NARELLILAT LTD (supra) “The conduct of the parties must be unequivocally traceable to the transaction to constitute acceptance. Where there is a missing link between the conduct of the parties and the transaction, a Court of law will not be prepared to hold that a valid contract exists between them.”
The Supreme Court of Nigeria in the case of TSOKWA OIL MARKETING CO. NIGERIA LIMITED V BANK OF THE NORTH LIMITED, (2002) LPELR 3268, held:-
“It must be remembered that for a contract to come into being in law there must have been a definite offer by the offeror and a definite acceptance by the offeree” see AJAYI-OBE V EXECUTIVE SECRETARY, (1975) 3 SC 1 at 6-7.” PER SENCHI, J.C.A.
THE POSITION OF LAW ON WHERE THERE IS A DISPUTE CONCERNING AN AGREEMENT BETWEEN PARTIES
I have gone through or perused the terms and conditions contained in exhibit 1. The terms are clear and unambiguous and therefore must be construed in its plain and ordinary language in order to give effect to the intention of the parties. Thus, where there is a dispute, as in the instant appeal, it is the terms of the agreement that have to be looked into and interpreted to arrive at the intention of the parties. See EZEONWU OSITA V NANKA MICRO-FINANCE BANK LTD (2016) LPELR 42119 (CA) IHEZUKWU V UNIVERSITY OF JOS (1990)7 SCNJ 9 SCNJI. In other words, as a general rule, where the parties have embodied the terms of their contract in a written agreement (as in this case exhibit 1) extrinsic evidence is not admissible to add to, vary, subtract from or contradict the terms of the written contract or instrument. See Section 132(1) of the Evidence Act and the case of OLALOYE V BALOGUN, (1990) 5 NWLR (pt 148) 24. PER SENCHI, J.C.A.
WHETHER OR NOT PARTIES ARE BOUND BY THEIR TERMS OF AGREEMENT
I agree with the position of the learned trial Judge above. This is because, parties are bound by their terms of agreement, in this case exhibit 1. See the cases of KAYDEE VENTURES LTD V HON. MINISTER OF FCT & ORS (2010) 7 NWLR (PT1192) 175-176 CHRISTABEN GROUP LTD V ONI (supra). In the case of MTN COMMS LTD V SIDNEY C. AMADI, ESQ (supra). This Court held:-
“It is correct as stated by the Appellant that parties are bound by the terms and conditions of the agreement they have freely entered into. It is the law that in matters of contract in which the terms and conditions are embodied in a written document, neither of the parties nor the Court is permitted to introduce extraneous terms on which they are not in agreement. In other words, where parties are ad idem on the terms of contract, the role of the Court is to give effect to the terms without move.” PER SENCHI, J.C.A.
THE POSITION OF LAW WHERE A PERSON IS SEEKING TO ENFORCE A CONTRACT
I agree with the position of the law that where a contract agreement makes certain conditions precedent, then as I said earlier, the person seeking to enforce the contract must show that all the conditions precedent have been fulfilled or that he is ready and willing to perform all the terms of the contract which ought to have been performed by him. The cases of OGUNDALU V MACJOB (2015) LPELR-24458 (SC), F.B.D FINANCIAL SERVICE LIMITED V ADESOLA (2000) 8 NWLR (PT. 668) 170 at 182 etc cited by the Respondent’s Counsel is the true position of the law that a party cannot enforce a contract agreement wherein the conditions precedent to its performance has not been fulfilled. It appears however that learned Counsel to the Respondent has not addressed the fact that where conditions precedent to the performance of a contract has not been fulfilled, then neither party to the contract is bound by that contract. See TSOKWA OIL MARKETING CO. NIGERIA LTD V BANK OF THE NORTH LTD (SUPRA) (SC) NIGERIA BANK FOR COMMERCE & INDUSTRY V INTEGRATED GAS (NIG) LTD (SUPRA) ETC. The effect of non-fulfillment of the conditions precedent by the Appellant makes the facility contract, exhibit 1 inchoate. PER SENCHI, J.C.A.
DANLAMI ZAMA SENCHI, J.C.A. (Delivering the Leading Judgment): This appeal is against the decision of the High Court of the Federal Capital Territory, Abuja in suit No FCT/HC/CV/1274/2017 delivered on the 11th of December, 2018 by Honourable Justice Y. Halilu. The Appellant (as Plaintiff before the lower Court) by a statement of claim dated 24th March, 2017 but filed on 10th May, 2017, claims against the Respondent (Defendant at the lower Court) as follows:-
a. A declaration that the Defendant’s letter of offer to the Plaintiff, dated 1st February, 2016 and the Plaintiff’s “memorandum of acceptance” dated 16th February, 2016 represent the contract between the Defendant and the Plaintiff.
b. A declaration that the Defendant’s demand on the Plaintiff to furnish a letter from First City Monument Bank (FCMB) was an extraneous condition to the loan agreement between the parties, which was not an agreed condition precedent to draw down on the agreed loan facility of N500,000,000.00.
c. A declaration that the Defendant’s debit of the Plaintiff’s account with fee and charges of N6,662,500.00 without availing the Plaintiff the requisite loan facility of N500,000,000.00 or any loan whatsoever was wrongful.
d. A declaration that the Defendant’s exposure of the Plaintiff to sundry incidental expenses of N1,590,063.65 for property valuation and insurance policies on the properties and without availing the Plaintiff the said facility was wrongful.
e. A declaration that the Defendant’s initial detention of the Plaintiff’s original title documents until 29th July, 2016 and denying it the use of same for several months, was wrongful.
f. An order of this Honourable Court directing the Defendant to refund to the Plaintiff’s account No. 0022406742 the sundry fees and charges of N6,662,500.00 which it had debited from the Plaintiff’s said account, for a loan facility of N500,000,000.00 or any loan whatsoever which it did not avail to the Plaintiff.
g. An order of this Honourable Court directing the defendant to indemnify the Plaintiff with the sum of N1,590,063.65, being incidental expenses incurred by the Plaintiff on sundry valuation reports and insurance policies on the loan documentation of N500,000,000.00 which the Defendant subsequently failed to avail the Plaintiff.
h. An aggravated damages of N20,000,000.00 against the Defendant for withholding the Plaintiffs original title documents for several months until 29th July, 2016 thus, frustrating the Plaintiff from using same to source for loan facility from other banks
i. General damages of N100,000,000.00 against the Plaintiff for breach of contract.
j. An order of this Honourable Court that the Defendant pay the Plaintiff an interest of 20% per annum on N8,252,563.63 (i.e fee and charges of N6,662,500.00 and property valuation and insurance N1,590,063.65) from 16th February, 2016 till judgment and subsequently interest at the rate of 25% per annum from the date of judgment until the entire debt is liquidated.
k. N1,000,000.00 (One Million Naira) only being cost of instituting this action.
Upon service of the originating process on the Respondent, the Respondent filed its statement of defence on 9th April, 2018. The Appellant thereafter filed a reply to the Respondent’s statement of defence. Pleading having been duly filed and exchanged between the parties, on the 7th March, 2018 the Appellant commenced trial by calling one witness, Engineer T.O Ibrahim who testified as PW1. PW1 adopted his two witness statements on oath he deposed to on 24th March, 2017 and 24th April, 2018 respectively as his evidence in the case documents were tendered and admitted in evidence and marked as exhibits on behalf of the Appellant. PW1 was cross-examined and later discharged by the lower Court.
On the 4th of June, 2018 the Respondent opened its defence by calling one witness, Abiodum Oloyede as DW1. DW1 adopted his witness statement on oath deposed to on the 9th April, 2018 as his evidence on behalf of the Respondent. Exhibit D1 was admitted in evidence on behalf of the Respondent at the lower Court. At the conclusion of DW1’s evidence in-chief he was cross-examined by the Appellant’s Counsel and later discharged by the lower Court.
The brief facts of the Appellant’s case at the lower Court is that the Appellant is a customer of the Respondent and it maintains a current account No. 0022406742 at the Respondent’s Area 3 Garki, Abuja Branch. Then sometime in January, 2016, the Appellant entered into negotiations with the Respondent for a loan facility. The Respondent granted the Appellant a loan facility of N500,000,000.00 vide a letter of offer dated 1st February, 2016 under certain terms and condition. The Appellant accepted the said loan facility vide its memorandum of acceptance dated the 16th February, 2016.
The Appellant avers that it offered as security for loan facility:-
(a) Plot 474, Cadastral Zone A04, Asokoro District, Abuja with an open market value of N700,000,000.00 and a force value sale of N490,000,000.00.
(b) Plot 1868, Cadastral Zone A04, Asokoro District, Abuja with an open market value of N400,000,000.00 and a force sale value of N280,000,000.00 that all the valuation reports were carried out by the Appellant at the instance of the Respondent and it incurred sundry costs including cost for insurance policies on the properties.
The Appellant avers further in its statement of claim at the lower Court that after the Respondent had collected the original title documents and debited the Appellant’s account with the sundry fees and charges mentioned earlier, the Respondent failed to avail the Appellant with the agreed loan facility of N500,000,000.00 or any other facility.
On the 11th December, 2018, the learned trial Judge delivered its judgment and held as follows:-
“From the evidence before me, I am not convinced that the Plaintiff played his game satisfactorily well. This situation would have been different had Plaintiff obliged Defendant evidence of payment of N1,000,000,000.00 into the said account with First City Monument Bank (FCMB) for refinancing Defendants would clearly be acting very carelessly and without prudence, if they had paid N500,000,000.00 without evidencing of Plaintiff’s payment of N1,000,000,000.00.
The conduct of the Defendant does not in – law amount to a breach of contract. Plaintiff is at liberty to return back to the table with the Defendant on the issue or in the alternative withdraw its request and ask for the withdrawal of all debits unto his account. Plaintiff’s case being hastily instituted and unmeritorious is dismissed.
(See pages 260-261 of the Record of Appeal)
Aggrieved by the decision of the lower Court, the Appellant filed a notice of appeal on 5th March, 2019 by raising two grounds of appeal as follows:-
(see pages 263-266 of the Record of Appeal).
The record of appeal was transmitted to this Court within time on 28th March, 2019. The Appellant’s brief of argument was filed on 30th April, 2019 while the Respondent’s brief argument was filed on 17th May, 2019. On 20th March, 2022, both the Appellant and the Respondent adopted their respective briefs of argument and the appeal was reserved for judgment.
ISSUES FOR DETERMINATION
The Appellant’s learned Counsel submitted two issues for the determination of this appeal as follows:-
i. Whether having regard to the facts, evidence and circumstances of this matter, the learned trial Court was right when it held that the Respondent was in breach of the contract between it and the Appellant.
ii. Whether the learned trial Court was right when it concluded that the Appellant hastily instituted the matter regard being had to the facts and evidence before it.
The learned Counsel to the Respondent, on the other hand formulated the following issues for determination of this appeal thus:-
(i) Whether in view of the circumstances of this case, the purpose of the facility, conditions precedent to draw down and clause 7 under other conditions as specifically contained in the conditions as specifically contained in the faculty agreement (exhibit P1), the learned trial Judge arrived at a just decision that respondent’s conduct did not amount to breach of contract. (Culled from ground 1 of the notice of appeal)
(ii) Whether in view of the chronological facts of this case before its commencement at the trial Court, the decision of the learned trial Judge that the Appellant ought to have refused to the negotiating did not mean that there was still an obligation to be performed by the Appellant in view of the powers conferred on the respondent under clause 7 of the sub-heading; other conditions as contained in exhibit P1. (Culled from ground 2 of the notice of Appeal)
Alternatively:-
(iii) Whether the learned trial Judge’s decision was right when it concluded that the Appellant hastily instituted the action regard being heard to facts and evidence of it.
ARGUMENTS OF APPELLANT’S COUNSEL
ISSUES ONE
At paragraphs 4.1-4.12 the learned Counsel to the Appellant submits to the effect that there exist a contract between the Appellant and the Respondent for a loan facility of N500,000,000.00 by virtue of the offer of the loan facility by the Respondent and the acceptance by the Appellant. He relies on exhibit 1 the offer of the loan facility and memorandum of acceptance dated 16th February, 2016 (see pages 180-184 of the Record of Appeal) and that by the memorandum of acceptance, which embodied terms and conditions. He relies on the cases of CHRISTABEN GROUP LTD V ONI (2008)11 NWLR (pt1097) 88, KAYDEE VENTURES LTD V HON. MINISTER OF FCT & ORS, (2010) 7 NWLR (pt 1192) 175-176.
Learned Counsel to the Appellant therefore contends that the Respondent introduced a new condition which was not a condition in the original contract of the loan facility, exhibit 1 to the extent that payment of N1,000,000,000.00 is a condition to the Respondent allowing drawdown of the loan facility. According to Counsel that the offer of loan facility dated 1st February, 2016, exhibit 1 stated that the purpose of the loan is to refinance a portion of the BORROWER’S N1,500,000,000.00 term loan facility with First City Monument Bank (FCMB). He further submits that the letter of the Respondent, exhibit 8 is extraneous to the contract, exhibit 1 signed by the parties.
Learned Counsel therefore submits that the lower Court erred in law occasioning miscarriage of justice when it held that the conduct of the Respondent does not amount to a breach of contract in spite of the evidence before it.
ISSUE TWO
At paragraphs 5.1- 5.7 of the Appellant’s brief of argument, learned Counsel submits to the effect that a logical inference from the judgment of the trial Court where the trial Court concluded that the Appellant hastily instituted the matter could be said to mean that the cause of action had not arisen. On what constitute a cause of action, he relies on the case of CHARLES V. GOVERNOR ONDO STATE (2013)3 NWLR (pt1338) 294 to the effect that a cause of action is a factual situation that entitles one person to obtain a remedy from another person.
In the instant case of the Appellant, learned Counsel refers to paragraphs 4-22 of the statement of claim at pages 5-7 of the Record of Appeal and contends that the averments therein disclose accrual of cause of action. He relies on the case of OKAFOR V B.D.U, JOS BRANCH, (2017) 5 NWLR (pt1559) 390. He then contends on behalf of the Appellant that the Appellant duly complied with the Respondent’s conditions and after collecting the Appellant’s original titles documents and debiting the Appellant’s account with sundry fees and charges the respondent refused to avail the Appellant with the agreed loan facility. He submits that the Respondent failed to contact the Appellant not until the Appellant wrote a letter of complaint dated 9th March, 2016 and her solicitor’s letter of 3rd May, 2016 demanding for a refund of the total sundry debit of N8,632,407.65.
Learned Counsel to the Appellant submits that these letters caused the Respondent to intentionally introduce the extraneous conditions to frustrate the contract on 16th May, 2016. According to learned Counsel, the Respondent after several months, returned the Appellant’s title documents but refused to refund the sundry charges and this prompted the Appellant to institute this action against the Respondent.
In conclusion, learned Counsel to the Appellant urge the Court to resolve the two issues in favour of the Appellant and against the Respondent.
RESPONDENT’S ARGUMENTS
ISSUE ONE
Learned Counsel to the Respondent submits at paragraphs 4.1-4.30 of their brief of argument to the effect that the learned trial Judge arrived at the right decision when he held that the Respondent’s conduct did not amount to breach of contract. The reasons being that the Appellant failed to comply with the terms and conditions of exhibit P1 on page 180-184 of the Record of Appeal. Learned Counsel to the Respondent submits that the issues before the Court border more on the construction of the relevant clauses in exhibit P1. He submits that a careful and dispassionate examination and consideration of the Appellant’s claims and the Respondent’s defence at the Court below reveals that the crux of all the reliefs before the Court bother on application of exhibit P1 upon which the judgment was entered in favour of the Respondent. Learned Counsel then submits that where parties used unambiguous language in their agreement, the Court must apply it. He states that the terms used in exhibit P1 ought to be given their ordinary meaning. He relies on the cases of P.M LTD V THE M. V DANCING SISTER, (2012) 4 NWLR (pt 1289) 169 at 197 paragraph C-D, LARMIE V D.P.M.S LTD (2005) 18 NWLR (pt 958) 438 at 459 and BFI GROUP CORP V B.P.E, (2012) 18 NWLR (pt 1332) 209.
Learned Counsel to the Respondent submits that at the Court below the Appellant failed to observe the terms and conditions set out in exhibit P1 on pages 180-184 of the record of appeal especially conditions 1-6 under the sub-head conditions precedent to drawn down/amendment and finally the terms contained in clause 7 under the sub-head “other condition”
ISSUE TWO
Whether in view of the chronological facts of this case before its commencement at the trial Court, the decision of the learned trial Judge that the Appellant ought to have returned to the negotiating table did not mean that there was still an obligation to be performed by the Appellant in view of the powers conferred on the Respondent under clause 7 of the sub-heading “other conditions” as contained in exhibit P1.
ALTERNATIVELY
Whether the learned trial Judge’s decision was right when it concludes that the Appellant hastily instituted the action regards being had to facts and evidence of it.
In arguing the above issue, learned Counsel at paragraphs 5.2- 5.6 of the Respondent’s brief of argument submits to the effect that the decision of the trial Court at pages 200-203 of the Record of Appeal was right and that the submission of the Appellant’s Counsel that ground two (2) of the notice of appeal bothers on cause of action is unfounded. He submits that the ratio decidendi or the decision of the trial Court bothers on Appellant’s failure to fulfill the conditions precedent to drawn down and the failure of the Appellant to furnish the Respondent with its updated CHC7 in line with exhibit P11 showing the new Directors appointed by the Appellant.
In adopting paragraphs 4.1 to 4.29 of the Respondent’s brief of argument in arguing issue 2, learned Counsel to the Respondent submits that the proper interpretation to be given to the findings of the lower Court below is that contract obligations are those duties that each party is legally responsible for in the contract agreement. According to learned Counsel to the Respondent that in a contract, each party exchanges something of value, whether it is product, services, money etc and that each party has various obligations connected with this exchange and that if either party fails to perform their contractual obligations according to terms, the result is a breach of contract.
RESPONDENT’S NOTICE OF INTENTION TO CONTEND THAT THE JUDGMENT OF THE COURT BELOW BE AFFIRMED ON GROUNDS OTHER THAN THOSE RELIED ON BY THE COURT BELOW
The Grounds upon which the notice is predicated are as follows:-
(1) Offer of banking facility (exhibit P1) provides conditions precedent to draw down
The facility shall become available to the borrower upon receipt by the bank of the following:
1. Accepted offer signed by authorized signatories of Funtaj International School.
2. A Board Resolution of Funtaj International School Limited accepting the facility and naming those authorized to accept same on its behalf.
3. Duly executed Guaranty trust bank term Load Agreement.
4. All documents necessary to perform a Legal Mortgage over the pledged properties.
5. Duly executed personal guarantee of Engr. Tajudeen Ibrahim, the Chairman of the School, supported by his notarized statement of his financial net worth.
6. Letter of domiciliation from the School domiciling all school fees and other dues payable to the School, to Guaranty Trust Bank Plc throughout the tenor the loan” (italics is ours)
2. The Appellant failed to fulfill conditions 4, 5 and 6 above: the Appellant failed to comply with the requirement of executing a legal Mortgage by furnishing the Respondent with an updated FORM CAC 7 required for a legal mortgage and no duly execution personal guarantee of Engr. Tajudeen Ibrahim, the Chairman of the school, supported by his notarized statement of his financial net worth was submitted to the Appellant.
3. under cross-examination, the PW1 admitted that there was no evidence before the Court below to show that the updated FORM CAC 7 (CTC of CAC7 filed on the 26th April, 2016 Exhibit P11) showing the updated particulars of the Appellant’s Directors, was ever submitted to the Respondent.
4. The Appellant tendered 11 exhibits at trial. There was no evidence of conditions precedent 5 and 6, duly executed personal guarantee of Engr. Tajudeen Ibrahim, the Chairman of the school and letter of domiciliation from the school domiciling all school fees and other dues payable to the school to Guaranty Trust Bank Plc. Throughout the tenor the loan before the Court.
5. Exhibit P11 which was a vital document in executing a legal mortgage although admitted in evidence by the Court below, was discredited, revealed and proved under cross- examination not to have been submitted to, and duly acknowledged by the Respondent. There was no evidence that it was submitted to Respondent and acknowledged by it thereby making clause 4 not fulfilled.
6. Exhibit P1 clearly stipulates that the purpose of the facility N500,000,000.00 (Five Hundred Million Naira) was to finance a portion of the borrower’s account with First City Monument Bank (FCMB). The respondent’s request for a letter from First City Monument Bank (FCMB) was not extraneous as it was agreed in exhibit 1 under clause 7 of the subhead- “other conditions” that the Respondent may use any information relating to the borrower for evaluating the credit application… At its sole discretion as it shall consider it appropriate to give and receive from credit bureaus and reference agencies, other financial institutions, regulatory and law enforcement agencies and relevant third parties information about the borrower, include information on the borrower’s directors and other personnel, transactions and conducts on the borrower’s account together with details of any no-payment or delayed payments for the purpose of assisting them and/or the bank in making, lending or rating decisions about the borrower.
7. The Appellant did not lead any evidence at all to show the fulfillment of the conditions precedent.
8. The Court below ought to have relied on the non-fulfillment of these conditions in its judgment dismissing the Applicant’s suit.
RESOLUTION OF ISSUES
This appeal will be determined on the two issues submitted for determination by the Appellant as follows:-
(1) Whether having regards to the facts, evidence, and circumstances of this matter, the learned trial Court was right when it held that the Respondent was not in breach of the contract between it and the Appellant.
(2) Whether the learned trial Court was right when it concluded that the Appellant hastily instituted the matter regards being had to the facts and evidence before it.
The two issues distilled for determination by the respondent in its brief of argument including the alternative issue are basically the same with the two issues formulated by the Appellant. I will therefore consider both issues together including the grounds of the notice of intention to contend.
ISSUES ONE AND TWO
The Appellant’s Counsel by paragraphs 4.1-4.3 of its brief of argument submits that to establish an agreement as in the case before the lower Court, there must be an offer and acceptance, there must be evidence of consensus ad idem between the parties.
In order to ascertain the existence of a contract i.e loan facility agreement between the Appellant and the Respondent, I have perused both the statement of claim of the Plaintiff now Appellant and the statement of defence of the Defendant now Respondent filed at the lower Court. By virtue of paragraphs 5, 6, 7, 8 and 9 of the statement of claim, the Plaintiff entered into negotiations with the Defendant sometimes in January, 2016 for a loan facility.
The Defendant eventually offered the Plaintiff a loan facility of N500,000,000.00 vide a letter dated 1st day of February, 2016, exhibit 1. The Plaintiff accepted the offer vide a memorandum of acceptance dated 16th day of February, 2016. (see pages 5-6 and 13-17 of the Record of Appeal). The Defendant by paragraphs 8, 9 and 10 of its statement of defence did not deny the existence of such contract as embodied by the terms and conditions contained in exhibit 1.
Thus, by the pleadings and evidence of parties on record, it is crystal clear that there was an offer and there was an acceptance. As to what amounts to a valid offer and acceptance, this Court in the case of GUARANTY TRUST BANK PLC & ANOR V UDOKA ANYANWU ESQ, (2011) LPELR-4220, AUGIE, JCA (as he then was now JSC) held thus:-
“It is settled that an offer is a proposal that emanates from the offeror to the offeree to enter into an agreement to do or not to do a particular thing. See MITIBAIYE V NARELLILAT LTD (supra) where ABOKI JCA (now JSC) explained:- ” A valid offer must be precise and unequivocal giving no room for speculation or conjecture as to its real content in the mind of the offeree. An offer capable of being converted into an agreement by acceptance must consist of a definite promise to be bound provided certain specific terms are accepted.” An acceptance is the reciprocal act or action of the offeree to an offer as conveyed to him by the offer or an acceptance of an offer may be demonstrated:-
(a) By conduct of the parties; or
(b) By their words; or
(c) By documents that have passed between them. As ABOKI JCA (now JSC) further explained in MITIBAIYE V NARELLILAT LTD (supra) “The conduct of the parties must be unequivocally traceable to the transaction to constitute acceptance. Where there is a missing link between the conduct of the parties and the transaction, a Court of law will not be prepared to hold that a valid contract exists between them.”
The Supreme Court of Nigeria in the case of TSOKWA OIL MARKETING CO. NIGERIA LIMITED V BANK OF THE NORTH LIMITED, (2002) LPELR 3268, held:-
“It must be remembered that for a contract to come into being in law there must have been a definite offer by the offeror and a definite acceptance by the offeree” see AJAYI-OBE V EXECUTIVE SECRETARY, (1975) 3 SC 1 at 6-7.”
In the instant case, there is no doubt that the Defendant, arising from negotiations with the Plaintiff made an offer of a loan facility of N500,000,000.00 vide a letter dated 1st February, 2016 and the Plaintiff vide a memorandum of acceptance dated 16th, February, 2016 accepted the offer under certain terms and conditions contained in exhibit 1.
I have gone through or perused the terms and conditions contained in exhibit 1. The terms are clear and unambiguous and therefore must be construed in its plain and ordinary language in order to give effect to the intention of the parties. Thus, where there is a dispute, as in the instant appeal, it is the terms of the agreement that have to be looked into and interpreted to arrive at the intention of the parties. See EZEONWU OSITA V NANKA MICRO-FINANCE BANK LTD (2016) LPELR 42119 (CA) IHEZUKWU V UNIVERSITY OF JOS (1990)7 SCNJ 9 SCNJI. In other words, as a general rule, where the parties have embodied the terms of their contract in a written agreement (as in this case exhibit 1) extrinsic evidence is not admissible to add to, vary, subtract from or contradict the terms of the written contract or instrument. See Section 132(1) of the Evidence Act and the case of OLALOYE V BALOGUN, (1990) 5 NWLR (pt 148) 24.
In the instant case, between the Appellant and the Respondent, the relevant written instrument is exhibit 1.
Now having established that the written instrument exhibit 1 is the document that regulates the loan facility transaction between the parties, the Appellant’s complaint as contained in ground one of the notice of appeal and issue one for determination is that the Appellant by exhibit 7 dated May 3rd 2016 to the Respondent titled:-
“Re- Demand for payment of damages of N8,632,407.65k plus interest- aborted credit facility of N500,000,000.00.
Paragraph 3 of the Appellant’s letter, exhibit 7 dated 3rd May, 2016 states:-
“That not only had it fulfilled all the conditions precedent to draw down but you have not availed it the said facility up to date, acting under extraneous issue whereas you had debited its account with sundry charges and fees and made it to incur much incidental expenses when you know you would not avail it of the said facility and thus exposing it too much loses and pain”.
(See pages 29 of the record of appeal).
Then the Respondent by its letter of May 16th, 2017 exhibit 8 responded by saying at paragraph 2 and 3 as follows:-
“An offer for a N500,000,000.00 term loan facility was granted to your client, Funtaji International School Limited, however, all conditions precedent to draw down on the facility were not met hence our inability to disburse/conclude on the transaction.
Below are the list of conditions yet to be met by your client
– CAC7 of Funtaj Nigeria Limited to verify the signature of the Director, Adefunke Ibrahim or a sworn affidavit of the Director’s signature registered at Corporate Affairs Commission (CAC)
– Letter of consent of company secretary accepting the appointment for both Funtaj International School Limited and Funtaj Nigeria Limited.
– Letter from First City Monument Bank (FCMB) indicating that your client has liquidated their current obligations by N1,000,000,000.00”
(See pages 31 and 206 of the Record of Appeal)
In response to the Respondent’s letter of 16th May, 2016, the Appellant by a letter dated 18th May, 2016, exhibit 7(a) after stating at items 1-3 that all the conditions raised in the respondent’s letter, exhibit 8 had been met except item 4 where it reads thus:-
“(4) That the issue of our client’s obligation of N1,000,000,000.00 to First City Monument Bank Plc (FCMB) was never part of the contract and thus did not feature in your letter of offer to our client dated 1st February, 2016 which was duly accepted by our client on 16th February, 2016 nor on the documentation check list from which you furnished to our client.”
(See page 32 of the Record of Appeal).
However, under cross-examination by the Respondent’s Counsel PW1 testified that documents pertaining to conditions 2 and 3 are not before the Court. PW1 testified under cross-examination that he did not fulfill conditions 5 and 7 of exhibit 1. The elicited evidence of PW1 under cross-examination and its effect thereof shall be considered later in the course of the judgment.
The Appellant’s Counsel at paragraphs 4.7-4.11 of the Appellant’s brief of argument argues to the effect that the Respondent introduced extraneous conditions requesting the Appellant to furnish it with a letter from First City Monument Bank (FCMB) indicating that it has liquidated its obligation of N1,000,000,000.00 and on this issue the trial Court held pages 256-257 of the Record of Appeal as follows:-
” The clause “purpose” the loan was to refinance a portion of the borrower’s N1,500,000,000.00 term loan facility with First City Monument Bank (FCMB) from the above, it is obvious that there is nowhere in exhibit 1 where there is condition precedent to draw down that the Plaintiff would produce evidence of payment of N1,000,000,000.00 Naira to First City Monument Bank (FCMB) as conditions as canvassed by the Defendant.
Curiously, the defendant had vide a letter dated 16th May, 2016 (exhibit 8) introduced a condition by asking the Plaintiff to furnish a letter from First City Monument Bank (FCMB) indicating that the Plaintiff has liquidated their current obligation by N1,000,000,000.00 whereas the offer letter clearly stated and recognized the purpose of the loan. The request of the Defendant as contained in exhibit 8 is afterthought and therefore cannot stand”
I agree with the position of the learned trial Judge above. This is because, parties are bound by their terms of agreement, in this case exhibit 1. See the cases of KAYDEE VENTURES LTD V HON. MINISTER OF FCT & ORS (2010) 7 NWLR (PT1192) 175-176 CHRISTABEN GROUP LTD V ONI (supra). In the case of MTN COMMS LTD V SIDNEY C. AMADI, ESQ (supra). This Court held:-
“It is correct as stated by the Appellant that parties are bound by the terms and conditions of the agreement they have freely entered into. It is the law that in matters of contract in which the terms and conditions are embodied in a written document, neither of the parties nor the Court is permitted to introduce extraneous terms on which they are not in agreement. In other words, where parties are ad idem on the terms of contract, the role of the Court is to give effect to the terms without move.”
Furthermore, I have once again perused exhibit 1, the loan facility of N500,000,000.00 to the Appellant. A close look at the item “Disbursement” it says: the facility shall be disbursed into the borrower’s account with the bank upon fulfilling all conditions precedent to drawdown.” Also, exhibit 1, contains the heading thus:
‘Conditions precedent to draw down/amendment”
The implication of these terms in exhibit 1 is that a contract is formed in law if the condition precedent or an event occurs before its performance. In other words, contractual duty would only exist with the performance of these conditions precedent. In the case of TSOKWA OIL MARKETING CO. NIGERIA LTD V BANK OF THE NORTH LTD (supra), the Supreme Court held as follows:-
“It is trite law that once a condition precedent is incorporated into an agreement that condition precedent must be fulfilled before the effect can flow”
In NIGERIA BANK FOR COMMERCE & INDUSTRY V INTEGRATED GAS (NIG) LTD (1999) 8 NWLR (PT613) 119 at 127 paragraphs G-H ADEREMI, JCA (as he then was) held
“By exhibits F and G, the parties have entered into what in law is a conditional contract, the condition precedent must happen before either party becomes bound by the contract. A condition must be fulfilled before the effect can follow”
The evidence on record in this appeal also show that there was a legal mortgage wherein the Appellant carried out valuation of its two properties for the purpose of securing the loan facility. The properties are listed at paragraph 9 of the Appellant’s statement of claim. (See page 6 of the record and paragraph 8 of the witness statement on oath).
Also at page 14 of the record of appeal under the heading of exhibit 1 is titled “SECURITY” the Respondent and the Appellant agreed over the listed properties as legal mortgage for the loan facility and two certificates of occupancy and two valuation reports were handed over to the respondent to secure the loan facility.
Now by the legal mortgage and submission of title documents of properties listed therein, the Respondent proceeded to debit the account of the Appellant with various sums of money as sundry charges which the Respondent never deny. And the Appellant by exhibit 1 as rightly held by the trial Court, the loan facility was to refinance a portion of the borrower’s N1,500,000,000.00 loan facility with First City Monument Bank (FCMB). Thus, at the stage of the Appellant securing the loan facility by a legal mortgage and submitting title documents to the Respondent as security for the loan, and the Respondent debiting the account of the Appellant with various charges to its advantage, I am of the humble opinion that the Respondent ought to have allowed draw down in respect of the loan facility to the Appellant, the Appellant having already secured the facility by the legal mortgage over its properties and two certificates of occupancy and valuation reports were handed over to the Respondent. I am fortified by this view or position with the case of ATIBA IYALAMU SAVINGS & LOANS LTD V MR. SIDKU SUBERU & ANOR (2018) LPELR-44069, where the Supreme Court held as follows:- “The nature of a legal mortgage and its legal consequence was correctly stated by the Court of Appeal in BANK OF THE NORTH VS BELLO (2000) 7 NWLR (pt664) 244 at 257D where it was held that “A mortgage is defined as the creation of an interest in a property defeasible (i.e annullable) upon performing the condition of paying a given sum of money with interest at certain time. The legal consequence of the above definition is that the owner of the mortgage property becomes divested of the right to dispose of it until he has secured a release of the property from the mortgagee. ” Thus, in a legal mortgage, title to the property is transferred to the mortgagee subject to the provision that the mortgaged property would be re-conveyed by the mortgagor to the mortgagee upon the performance of the conditions stimulated in the mortgage deed and upon payment of the debt at the time stipulated therein. The mortgagor is liable to repay the loan as stipulated otherwise the mortgaged property is foreclosed. See PRINCE ABDUL RASHEED ADETONO & ANOR V ZENITH INTERNATIONALS BANK PLC, (2010) LPELR-8237 (SC) 1 AT 21 paragraphs A -C”
I have carefully and painstakingly gone through the facts of ATIBA IYALAMU SAVINGS & LOAN LIMITED V SUBERU (supra) and the facts of this case and I hold the view that by the Appellant submitting title documents, valuation reports and account statement with the Respondent and received by the Respondent as shown on pages 18-25 of the record of appeal, the Appellant did not enter into negotiations with the Respondent to be exposed to more pain by debiting its account on submission of security for the loan facility but to rescue it in the refinancing of its facility with First City Monument Bank (FCMB). And as at that stage of the Respondent accepting the title documents of the properties of the Appellant as security for the loan, the Appellant is entitled to draw down of the loan facility.
The Respondent fully aware of the purpose of the facility however somersaulted by evoking clause 7 of the offer letter.
Clause 7 of exhibit 1 states:-
“The bank may use any information relating to the borrower for evaluating the credit application. The bank may at its sole discretion as it shall consider appropriate give to and receive from credit bureaus and reference agencies whether based locally or abroad, other financial institutions, regulatory and law enforcement agencies and relevant third parties information about the borrower, including information on the borrower’s directors and other personnel, transactions and conduct on the borrower’s account together with details or any non-payment or delayed payments for the purpose of assisting them and/or the bank in making lending or rating decisions about the borrower”
I have seen the arguments of learned counsel at paragraphs 4.10-4.15 of the Respondent’s brief of arguments to the effect that exhibit 8 at page 206 of the record of appeal is not extraneous by virtue of clause 7 of exhibit 1. The Respondent’s Counsel further submits that the Appellant failed to fulfill conditions precedent to draw down and on this note he submits that the consequence is that he puts the other party in position of non-performance and compliance. He cannot enforce such contract where he has failed to fulfill the conditions precedent thereto”
I agree with the position of the law that where a contract agreement makes certain conditions precedent, then as I said earlier, the person seeking to enforce the contract must show that all the conditions precedent have been fulfilled or that he is ready and willing to perform all the terms of the contract which ought to have been performed by him. The cases of OGUNDALU V MACJOB (2015) LPELR-24458 (SC), F.B.D FINANCIAL SERVICE LIMITED V ADESOLA (2000) 8 NWLR (PT. 668) 170 at 182 etc cited by the Respondent’s Counsel is the true position of the law that a party cannot enforce a contract agreement wherein the conditions precedent to its performance has not been fulfilled. It appears however that learned Counsel to the Respondent has not addressed the fact that where conditions precedent to the performance of a contract has not been fulfilled, then neither party to the contract is bound by that contract. See TSOKWA OIL MARKETING CO. NIGERIA LTD V BANK OF THE NORTH LTD (SUPRA) (SC) NIGERIA BANK FOR COMMERCE & INDUSTRY V INTEGRATED GAS (NIG) LTD (SUPRA) ETC. The effect of non-fulfillment of the conditions precedent by the Appellant makes the facility contract, exhibit 1 inchoate.
Now if the case of the Respondent is that conditions 4, 5 and 6 were not fulfilled being part of the conditions precedent to draw down. There is no need to over flog this issue that either party is not bound by exhibit 1. The question that arises now is why should the Respondent debit the account of the Appellant with such horrendous sundry charges? More importantly, the lower Court held that ” exhibit 8, letter dated 16th May, 2016 introducing a new condition by asking the Plaintiff to furnish a letter from First City Monument Bank (FCMB) indicating that the Plaintiff has liquidated their current obligations by N1,000,000,000.00 whereas the offer letter clearly stated and recognized the purpose of the loan. The request of the Defendant as contained in exhibit 8 is an afterthought and therefore cannot stand”
Clearly, by exhibit 8, the Respondent has introduced another condition which it is now hiding under clause 7 of exhibit 1. The lower Court has already ruled out “exhibit 8 as an afterthought and it cannot stand” and there is no appeal against the finding of the lower Court. The effect therefore is that the finding of the lower Court stands. See HON. ALPHONSUS AVINE AGBOMA & ANOR V HON. & MARTAINS AZA & ORS, (2015) LPELR-40534 (CA), DABUP V KOLO (1993) 12 SCNJ P1, AKINLAGUN V OSHOBOJA (2006) 5 SC (PT 11) 100, NBC V INTERGRATED GAS (NIG) LTD (2005) 4 NWLR (PT 916) 617. The effect of the decisions in the above cases is that the findings or order of the lower Court not appealed against remain valid and subsisting, and without a ground of appeal challenging the finding and order of the lower Court, this Court would lack the jurisdiction to interfere with the said findings or order, see ONAFOWOKAN V WEMA BANK PLC, (2011) 5 SC (PT11)1.
The Respondent, in his notice of contention pursuant to Order 9 Rule 2 (2016) now Order 9 (1) and (2) of the Court of Appeal Rules, 2021, challenging exhibit 11, Form CAC7. Exhibit 11 is a CTC of Form CAC7 filed on 26th April, 2016 showing particulars of the Appellant’s Directors. Exhibit 11 was admitted in evidence without objection from the Respondent.
Thus, the questions put to the Appellant’s witness, PW1 under cross-examination after the document had been admitted in evidence without objection from the Respondent is not helpful to the Respondent. At page 225 of the record of appeal, PW1 testified under cross-examination that form CAC 7 was submitted to the bank (Respondent). And it is not shown on record in this appeal that exhibit 1 was shown to PW1 as a demonstration to show that conditions 5 and 7 of the exhibit and the questions asked PW1 that he understands the questions put forward to him.
In any event, a document duly admitted in evidence by a Court below without objection, the Respondent cannot at this stage rack up an argument on the same document. In the case of BLESSING V FRN (2015) LPELR 24 689, the Supreme Court of Nigeria held thus:-
“The mere facts that the Appellant admitted exhibit 4 in the evidence without objection has rendered the document admissible in evidence and therefore unchallenged. it can be acted upon. It follows in the result that the procedure of admission even if irregular, has been waived and cannot now be made subject of complaint. See OBISI V CHIEF OF NAVAL STAFF, (2004) 11 NWLR (pt885) 482.”
Further exhibit 11, form CAC7 being a certified true copy the presumption in law is that it is the correct document issued by Corporate Affairs Commission except the contrary is proved.
Thus, the Respondent, by its letter of July, 29th 2016 releasing the security documents of the loan due to its inability to allow the Appellant drawn down of the facility, the Respondent, I hold the view, has no right to impose or debit the account of the Appellant with such sundry charges amounting to N8,632,407.65, and I so hold.
Now having considered the facts and evidence on Record in this appeal, the holding of the lower Court at page 261 of the record of appeal as follows:-
“From the evidence before me, I am not convinced that plaintiff played his game satisfactorily well. This situation would have been different had plaintiff obliged Defendant evidence of payment of N1,000,000,000.00 (One Billion Naira) into the said account with First City Monument Bank (FCMB) for the re-financing.”
The lower Court had earlier held at pages 256-257 of the Record of Appeal that Exhibit 8 introduced a new condition to the offer letter Exhibit 1 and therefore Exhibit 8 is an afterthought and cannot stand cannot at this stage hold otherwise. The position of the lower Court is not akin to the settled principle of law that a Court cannot approbate and reprobate at the same time. See FRN V IWEKA, (2011) LPELR-9350 (SC) In the case of ADDO V STATE, the Supreme Court held as per Eko JSC as follows:-
“A party is expected to be consistent always on his position. He cannot blow hot and cold at the same time, nor can he approbate and reprobate on the same issue. See SUBERU v STATE, (2010) 8 NWLR pt 1197 585.”
In the instant case therefore the lower Court having held that Exhibit 8 cannot stand because it is extraneous to the contract agreement, it cannot in its conclusion speaks at same time or same moment from the two sides of its mouth that the Appellant failed to produce evidence of payment of N1,000,000,000.00 (One Billion Naira) into the account of FCMB. This finding of the trial Court is perverse and wrong in law and it is accordingly set aside. Thus, because the trial Court wrongly gave credence to Exhibit 8, by approbating and reprobating, it came to a wrong finding that the Defendant is not in breach of the contract and thereby dismissing the case of the Appellant. See (pages 261-262 of the Record). The decision of the trial Court is perverse and not in line with the evidence before it and it is accordingly set aside. Consequently, the two issues for determination are hereby resolved in favour of the Appellant and against the Respondent. The appeal succeeds and the judgment of the High Court of the Federal Capital Territory, Abuja delivered on 11th day of December, 2018 in suit No. FCT/HC/CV/1274/2017 by JUSTICE Y. HALILU is hereby set aside and instead reliefs A, B, C, D, F, G and J contained at paragraph 24 of the statement of claim at page 8 of the Record of Appeal are hereby granted with 10% interest as per relief J of the statement of claim.
A cost of N300,000.00 is hereby awarded to the Appellant against the Respondent.
PETER OLABISI IGE, J.C.A.: I had the opportunity of reading in advance, the draft judgment of my learned brother, DANLAMI ZAMA SENCHI, JCA.
I agree with his reasoning and conclusion that the appeal succeeds and it is accordingly allowed.
I also agree with the reliefs granted to the Appellant in the leading judgment and abide with the consequential order as to cost.
BIOBELE ABRAHAM GEORGEWILL, J.C.A.: My learned brother, Danlami Zama Senchi JCA., had kindly made available to me in advance a draft copy of the leading judgment just delivered. In it, all the issues arising determination in this appeal have been admirably put into their proper perspective and brilliantly considered and impeccably resolved.
My lords, just one or two words as by way of my contribution to the rich analysis in the leading judgment. Now, looking at Exhibits 1, 7 and 8 holistically, it would readily be seen that the lower Court was in grave error when it used Exhibit 8, which is not part of Exhibit 1 and without any ad idem between the parties to make the implementation and/or operation of Exhibit 1 to be subject to Exhibit 8, requiring payment or liquidation of the Appellant’s earlier indebtedness to FCMB as a condition precedent to draw down on the loan facility of N500,000,000.00 offered to the Appellant by the Respondent, to arrive at the perverse conclusion that it was the Appellant, when indeed it was the Respondent, whose default was responsible for the failure of the Respondent to disburse the loan facility granted to the Appellant.
In law, a term which is not part of the conditions agreed upon by the parties cannot be surreptitiously be made to become a condition in a contract and to be so perversely recognized and given effect by the Court. It would appear that had the lower Court taken the pains to read through and consider the terms of Exhibit 1 holistically in the light of the contents of Exhibits 7 and 8, which were mere correspondences between the parties with no intention of making them a part of their contract in Exhibit 1, it would not have fallen into the grave error it fell into in hastily dismissing the claims of the Appellant, which ironically it rather considered was hastily commenced. Indeed, documents, particularly contract documents are to be construed holistically and not merely in piecemeal. Therefore, to understand the real purport of Exhibit 1, and give effect to the intention of the parties therein, it must be construed holistically, and not in piece meal.
It follows therefore, that in construing Exhibit 1, the lower Court should not and cannot extend its searchlight to documents, such as Exhibits 7 and 8 which are extrinsic to it, but rather to consider holistically all the clauses of Exhibit 1 to discover the real intention of the parties in the contract and the give effect to that intention. The Court can neither re-write nor introduce any new terms into the contract of the parties under the guise of construing the terms of their contract, which was what regrettably the lower Court succeeded in doing. A document must therefore, be given a complete and holistic construction so as to discover the intention of the parties. In other words, in the construction of a document the entire content of the document must be construed as a single whole. See Cornet & Cubbit Ltd & Anor V. FHA & Ors (2022) LPELR-57507 (CA) per Sir Biobele Abraham Georgewill JCA. See also Chiaghana & Anor V. Govt of Anambra State & Ors (2016) LPELR-42096 (CA). See also Odugbemi & Anor V. Shanusi & Ors (2018) LPELR-44868 (CA).
My lords, if the lower Court had taken time to dispassionately consider the evidence led before it and construed Exhibit 1 holistically it would have seen that there was no condition as stated in Exhibit 8 within the terms as agreed upon by the parties in Exhibit 1. It then would have become obvious to the lower Court that the Respondent who was at fault, having failed to release the loan facility for utilisation by the Appellant, was not in any position, legally and/or even morally to keep the monies paid by the Appellant to it whilst not releasing even a kobo of the N500,000,000.00 facility granted to the Respondent. The Respondent cannot eat its cake and still have it. It cannot whilst on the one hand refuse to release the loan amount to the Appellant, and on the other hand, keeping for itself the monies paid to it by the Appellant solely for the purposes of facilitating the loan. It is both immoral and unjustifiable! I shall say no more!!
It is clear that the Respondent failed to keep its side of the bargain it had with the Appellant and cannot therefore, be allowed to reap from its own wrong by keeping the monies of the Appellant paid to it for a consideration, that appears, to have wholly failed. It is more honourable for men, women and institutions of honour to keep to the terms of their contract voluntarily and willingly entered into by them. It is more dignifying so to do. See Stanbic IBTC Bank V. Longterm Global Capital Ltd & Ors (2018) LPELR-44053 (CA) per Sir Biobele Abraham Georgewill JCA. See also Cornet & Cubbit Ltd & Anor V. FHA & Ors (2022) LPELR-57507 (CA) per Sir Biobele Abraharn Georgewill JCA; Salbodi Group Ltd & Anor V. Doyin Nigeria Ltd & Ors (2022) LPELR-57458 (CA) per Sir Biobele Abraham Georgewill JCA.
It is for the above few words of mine but for the fuller reasons admirably set out in great details in the leading judgment that I too hold that the appeal has merit and ought to be allowed. I too hereby allow the appeal. I shall abide by the consequential orders made in the leading judgment, including the order as to cost.
Appearances:
…For Appellant(s)
…For Respondent(s)
