FENTON KEYNES FINANCE LTD & ANOR V. TRANSPLY NIGERIA LIMITED (2010)

FENTON KEYNES FINANCE LTD & ANOR V. TRANSPLY NIGERIA LIMITED

(2010)LCN/3549(CA)

In The Court of Appeal of Nigeria

On Wednesday, the 27th day of January, 2010

CA/L/510/05

RATIO

PLEADINGS: WHETHER PARTIES ARE BOUND TO LEAD EVIDENCE TO ESTABLISH AVERMENTS IN PLEADINGS

The law is elementary that parties in civil suits are not bound to lead evidence to establish averments in their pleadings. But where a party fails to call evidence at the trial to prove the averments in his pleading as the appellants did, then such party’s pleading will be deemed to have been abandoned and the court will consider the averments in the other party’s pleading as having been established on minimal of proof. Thus the respondent was entitled to judgment by leading evidence to establish averments in the statement of claim on minimal of proof unless such evidence is some how discredited. See Balogun v U.B.A. Ltd (1992) 6 NWLR (pt. 247) 336 at 351-352. PER HUSSEIN MUKHTAR, J.C.A

APPEAL: EFFECT OF AN ISSUE RAISED BUT NOT ARGUED

An issue raised but not argued is deemed to have been abandoned. PER HUSSEIN MUKHTAR, J.C.A

APPEAL: PURPOSE OF A CROSS APPEAL

AGENCY: EFFECT OF AN AGENT ACTING ON BEHALF OF A DISCLOSED PRINCIPAL

it is well settled that he who acts through another acts for himself. This is expressed in the Latin maxim – quid facit per alium facit per se. When an agent (the 2nd appellant) acts on behalf of a disclosed principal (the 1st appellant), it is only the latter that is liable. See U.B.N Ltd v Edet (1993) 4 NWLR pt 287 p.288. Niger Progress Ltd v North East Line Corporation (1989) 3 NWLR pt 107 p.68. PER BODE RHODES VIVOUR, J.C.A

JUSTICES

BODE RHODES- VIVOUR Justice of The Court of Appeal of Nigeria

PAUL ADAMU GALINJE Justice of The Court of Appeal of Nigeria

HUSSEIN MUKHTAR Justice of The Court of Appeal of Nigeria

Between

1. FENTON KEYNES FINANCE LTD

2. AREMU OMOKA YODE ANJORIN – Appellant(s)

AND

TRANSPLY NIGERIA LIMITED – Respondent(s)

HUSSEIN MUKHTAR, J.C.A (Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of Lagos State (the court below) delivered by I. O. Kusali, J on the 5th of October, 2005.

The suit in the court below was instituted by the respondent (plaintiff) against the appellants (defendants) in 1996 claiming jointly and severally or in the alternative the sum of N8,505,574.00 being the aggregate sums and interest due to the plaintiff/respondent as at 30th September, 1996 under Fund Management Contract Notes issued by the defendants/appellants to the plaintiff/respondent from 28th May, 1993 with interest at the rate of 21% per annum until final amortization of the loan subject to any variation thereon by any fiscal legislation.

The court below delivered judgment In favour of the plaintiff/respondent granting all the reliefs sought for. The defendants/appellants were aggrieved by the said judgment and thus appealed against it. The Notice of Appeal was dated 3rd December 2004 and filed on the 14th December, 2004, premised on the following nine grounds less the particulars thereof:

1.”The learned trial Judge erred in law in holding that the 2nd defendant is liable as guarantor of Fund Management Contract No. 443 dated 28th May, 1993 (exh P2) to tune of N1,000,000.00 when no evidence was adduced to support the averment in paragraph 4 of the Statement of Claim.

2. The learned trial Judge erred in law when he entered judgment against the 1st and 2nd defendants jointly and severally in the sum of N7,570,574.00 plus interest at the rate of 21% per annum from October 1st 1996 until this day and thereafter at the rate of 6% per annum until the whole debt is liquidated.

3. The learned trial Judge erred in law when he gave judgment against the 2nd defendant twice in that the N1 million of the placements which the learned trial judge held was guaranteed by the 2nd defendant was included and was part of the N7,505,574.00 adjudged against the 1st and 2nd defendants jointly and severally in favour of the claimant.

4. The learned trial Judge erred in law and has no jurisdiction to give judgment on matter not claimed in either the writ of summon or statement of claim when he ordered the claimant to return the defendants’ mercedez benz (jeep) that is in his premises as the document in respect of the landed property to the defendants, a claim which was not before him.

5. The learned trial Judge erred in law when he held that resting of defendants’ case on the claimants’ case is only available for criminal matters.

6. The learned trial Judge erred in law in failing to hold that the 2nd defendant is a separate and distinct person from the 1st defendant, a limited liability company and that a Director cannot be jointly and severally liable for the debt of the company.

7. The learned trial Judge erred in law in failing to apply the decision in Bello Akanbi & Ors vs Mamadu Alao & Anr (1989) 3 NWLR (pt 108) pg 118 at 140 paras A-B.

8. The learned trial Judge erred in law when he gave judgment in a lump sum comprising principal and interests.

9. The learned trial Judge erred in law when in giving his judgment he relied on letters purportedly assigning debts Exhibit p9 and p 11 to the claimant.”

From these nine grounds the appellants distilled six issues for determination as follows:

1. “Whether the 2nd appellant can be held liable for the debt, if any, of the 1st appellant;

2. Whether 2nd appellant guaranteed the Funds Management Contract Note 443 Exhibit P2;

3. Whether the respondent proved its case against the 1st and 2nd appellant in the sum of N8,570,574.00.

4. Whether the respondent was entitled to judgment at the lower court just because the appellant elected not to call evidence.

5. Whether the lower court has jurisdiction to grant a relief not claimed by the respondent.

6. Whether particulars of interest claimed by the respondent must be specifically pleaded and strictly proved.”

The respondent inturn raised four similar issues skipping the appellants’ issue 4 and marrying issues 5 and 6 as follows:

1.”Whether, aside the Funds Management Contract Note No. 443 which the 2nd appellant specifically guaranteed, he could be held further liable for the other transactions of the 1st appellants.

2. Whether the respondents proved their claims for which judgment was entered in their favour in accordance with the pleadings.

3. Whether, on the finding that the appellants had not proved the allegation in their pleadings that they had discharged their indebtedness by barter of a Mercedes benz and land, these items ought to have been returned to the appellants as ordered by the lower court.

4. Whether the award of interest on the vanous transactions pleaded by the respondents met the yardsticks required by judicial authorities on the subject.”

The issues raised by the appellant are broader and more comprehensive and will therefore, be adopted for the determination of this appeal. The 1st and 2nd issues are inter related and will be treated together.

The learned counsel for the appellants argued that the 2nd appellant cannot be liable for the 1st appellant’s debts. The 2nd appellant, he said, is a separate and distinct person from the 1st appellant which is a limited liability company and cannot be jointly and severally liable for the debt of a company. See University of Calabar v. Ephraim (1993) 1 NWLR (pt. 271) 551. He further submitted that where the principal of an agent is disclosed, the correct party to sue for anything done or omitted to be done by the agent is the principal. The appellant being a director of the 1st appellant acted only as an agent and cannot incur liability jointly or severally on transactions done on the 1st appellant’s behalf. Section 65 of the Companies and Allied Matters Act (CAMA) was also relied upon. It provides thus:

“Any act of the members in general meeting, the board of directors, or of managing director while carrying on in the usual way the business of the company shall be treated as the act of the company itself and the company shall be criminally and civilly liable therefore to the same extent as if it were a natural person.”

The learned counsel for the respondent also made a similar submission in respect of all the Funds Management Contract Notes other than No. 443 (Exhibit P.2) to the tune of N1,000,000.00 which was personally guaranteed by the 2nd appellant. It was argued that although the 2nd appellant cannot be liable for executing other Funds Contracts Notes in his capacity as a director of the 1st appellant, the Funds Contract Note number 443 was personally guaranteed by the 2nd appellant and the two appellants are therefore jointly and severally liable for the Fund Management Contract Note No 443 for the sum of N1,000,000.00 including interest at the rate of 21% per annum. For the avoidance of doubt the said guarantee Exhibit P 27 (p. 85 of the record) is reproduced hereunder less the signatures, hand writing and stamps thereon:

“PERSONAL GUARANTEE

IN CONSIDERATION OF JOINT KOMPUTER LIMITED, A COMPANY registered in Nigeria and having its principal place of business at Fadeyi, Lagos (hereinafter called ‘the Investor’ which expression shall where the con so admits include its assigns and successors-in-title) granting credit facility of one million Naira only on terms and conditions contained in the investor’s offer letter dated 15th January, 1993 to Fenton Keynes Finance Ltd (hereinafter called ‘the beneficiary’) which expression shall where the con so admits include her personal representative and assigns.

1, Aremu Omokaode Anjorin of 25 Sanusi Fafunwa Street, Victoria Island. Lagos

HEREBY GUARANTEE re-payment of the above credit facility and interest to the Investor in the event of default by the beneficiary at any time after the initial tenor of 90 days.

AS WITNESS the hand of the GUARANTOR (signed)

IN PRESENCE OF

Name Shade Odukale

Address 25 Sanusi Fafunwa Street, V/Island

Designation D. G.M

Signature signed

Date 15th January, 1993.”

The 2nd appellant has clearly made a personal guarantee in respect of the Funds Management Contract Note No 443 (exh p. 2) for the sum of N1,000,000.00 at an interest rate of 8.25% monthly payable up front, and maturing in 90 days from 28th May, 1993 to 25th August, 1993. This has not been denied by the appellants at the lower court. The learned trial Judge was therefore, perfectly justified in holding both appellants jointly and severally liable as far as the Funds Contract Agreement No 443 is concern. Once the loan guaranteed remains unpaid, the 2nd appellant as the guarantor will be held jointly and severally liable for the loan for which he stands as surety in his personal capacity. His position in the 1st appellant company as a director is completely irrelevant. After all the loan must be guaranteed by a person other than the borrower or debtor. The 2nd appellant, in this case, rightly stood in a personal capacity to guarantee the Funds Management Contract number 443 (exh p. 2) and the court below was right in finding the two appellants jointly and severally liable for the redemption thereof It is immaterial that the 2nd appellant had acted in dual capacity in the same transaction. I am of the firm view that both the 1st and 2nd appellant were rightly held to be jointly and severally liable to redeem the Funds Management Contract Note Number 443. Issues 1 and 2 are therefore answered in the affirmative. The said issues 1st and 2nd and the related ground of appeal have failed.

On the 3rd issue, both counsel for the appellants and the respondent have argued that the respondent is not entitled to claim jointly and severally against the 1st and 2nd appellants for any Fund Management Contract Note other than Number 443 (exh. P 2) which was personally guaranteed by the 2nd appellant who is not responsible for other transactions which have not been similarly guaranteed by him. Thus, liability for the redemption of exhs p3, p4, p5, p6, p7 and p8 is not attributable to the 2nd respondent who only acted as agent for the 1st respondent. When an agent contracts on behalf of a disclosed principal, only the latter will be sued but not the former. The learned trial Judge therefore, was in error by holding both appellants jointly and severally liable for transactions to which only the 1st appellant was singularly responsible. The third issue is resolved in favour of the appellants, and the related ground 2 of the appeal succeeds accordingly.

The fourth issue questions the propriety of entering judgment by the court below for the respondent simply because the appellants have elected not to call evidence. The learned trial Judge observed as follows:

“It is my view that the practice of resting defendant’s case on that of the claimant is exclusively reserved for criminal trial and does not apply to civil cases.”

This view tantanmounts to a serious misconception of the law. The law is elementary that parties in civil suits are not bound to lead evidence to establish averments in their pleadings. But where a party fails to call evidence at the trial to prove the averments in his pleading as the appellants did, then such party’s pleading will be deemed to have been abandoned and the court will consider the averments in the other party’s pleading as having been established on minimal of proof. Thus the respondent was entitled to judgment by leading evidence to establish averments in the statement of claim on minimal of proof unless such evidence is some how discredited. See Balogun v U.B.A. Ltd (1992) 6 NWLR (pt. 247) 336 at 351-352. In the instant case the respondent led evidence establishing its claims against the 1st appellant in respect of Funds Management Contract Notes Numbers 453, 454, 455, 456, 457 and 458 by Exhibits p3, p4, p5, p6, p7 and p8 respectively. The court below therefore acted in error by attributing the liabilities for these transactions to both the 1st and the 2nd appellants jointly and severally. Those claims were only established against the 1st appellant. As noted earlier, the only joint and several liability established against both appellants was in respect of the Funds Management Contract Notes number 443 (Exhibit p2) to which both the 1st and 2nd appellants are jointly and severally liable as debtor and guarantor respectively to redeem the said loans.

The respondent was not entitled to judgment automatically simply because the appellants did not lead evidence on their statement of defence.

The worst that happens to the statement of defence is that it is deemed to have been abandoned and therefore reduced to absolute insignificance. It does not, however, automatically entitle the respondent to a judgment otherwise than on the basis of the evidence adduced at the trial, on minimal of proof. The forth issue is resolved in favour of the appellants, and the related ground five succeeds.

The law is well established on the 5th issue that a court of law has no competence to grant that which has not been asked for. The court below in its absolute wisdom held thus:

“In the result, judgment is hereby entered in favour of the claimant against the 1st and 2nd defendant jointly and severally in the sum of N7,570,574.00 (seven million, five hundred and seventy thousand, five hundred and seventy four naira) plus interest at the rate of 21% per annum from October 1st 1996 until this day, and thereafter at the rate of 6% per annum until the whole debt is liquidated.

2. Judgment is also entered against the 2nd defendant in favour of the claimant in the sum of N1 million in which he personally guaranteed plus interest at the rate of 21% per annum from October 1st, 1996 until this day and thereafter at the rate of 6% per annum until final liquidation of the whole debt.

3. Claimant to return the defendants Mercedes Benz (Jeep) that is in his premises as well as the document in respect of the landed property to the defendant within 7 days from today.”

As rightly submitted by the learned counsel for the appellants, the respondent did not ask for return of the Mercedes Benz jeep and the title deeds for the landed property. The respondent have, in their letter to the appellants dated 31st July, 1996 (Exhibit p.29), accepted both the vehicle and the land in question at a value of N1,500,000.00 as part settlement of the 1st appellant’s indebtedness. For the avoidance of doubt the said respondent’s letter stated as follows:

“We have referred your indebtedness on all the contract notes involved in your indebtedness to our solicitors with a brief on both your vehicle and the land valued N1,500,000.00 which we agree to accept in part settlement of your indebtedness. After advising us that the original interest rates on these contract notes have to take cognizance of the interest introduced by the Federal Military Government with effect from the fiscal year 1994, we have arrived at an outstanding sum of N6,692,574.63 as at October 1, 1995. This aggregate sum has taken account of your land swap as conceded in this letter. The balance continues to attract interest at the rate of 21% per annum until amortized.”

The pronouncement made by the court below on a case different from the one put before it by the parties is perverse. The court below lacks the competence to make a case for any party or grant a relief which has not been asked for. The 5th issue is also resolved in favour of the appellants and the related grounds of appeal succeed. See Inyang v Ebong (2002) 25 W.R.N. 138 at 173.

The last issue for determination is whether an interest claimed at a particular rate needs to be specifically pleaded and strictly proved. This issue was not argued in the appellants’ brief. An issue raised but not argued is deemed to have been abandoned. Having been effectively abandoned the sixth issue is hereby struck out.

On the whole, issues 3, 4 and 5 have been resolved in favour of the appellants and the related grounds of appeal succeed accordingly on the resolution of those issues in favour of the appeal. However the appeal fails on the 1st and 2nd issues and their related grounds. In the final analysis the appeal succeeds partly on issues 3, 4, and 5 and the grounds of appeal related to those issues.

The purported cross appeal allegedly filed by the respondent/cross appellant is a clear non starter. Firstly, the notice of cross appeal is not contained in the record of appeal and there is no additional or supplementary record was filed by the respondent containing any such notice of cross appeal. Secondly, the appellants/respondents to the cross appeal have never been served with the notice of cross appeal. Thirdly, the grounds of cross appeal are the same with some of the grounds of appeal.

The purpose of a cross appeal is to enable a respondent in an appeal to appeal against the same judgment that has already been appealed against or part thereof for which he felt aggrieved by bringing a cross appeal instead of filing a separate notice of appeal. A cross appeal cannot therefore be based on the same grounds as the main appeal. If the grounds for cross appealing are already contained in the Notice of Appeal, the respondent need not cross appeal but may argue those grounds in the respondent’s brief even if the appellant has failed to argue them. Issues for determination may be raised from the grounds of appeal and must be tied thereto. In this case the respondent whose grounds of appeal are already part of the grounds for the main appeal cannot cross appeal on those same grounds. If the respondent merely intends to have the judgment affirmed on grounds other than those relied upon by the trial court he should only file a respondent’s notice instead of cross appeal.

In this case, the cross appeal is a complete non starter and without much ado the cross appeal is incompetent and is hereby struck out.

Finally, the appeal fails on issues I and 2 but succeeds on issues 3, 4 and 5 and is to that extent allowed. The part of the judgment of the court below entering judgment against the 2nd appellant jointly with the 1st appellant in the sum of N8,570,574 is hereby set aside. In its stead the sum of N7,570,574.00 less N1,000,000.00for which both appellant have a duty to redeem and further less N1,500,000 for the Mercedes Benz jeep and land taken by the respondents amounting to N5,070,574 is hereby entered for the respondent against the 1st appellant and a further sum of N1,000,000.00 against the 1st and 2nd appellants jointly and severally with interest at the rate of 21% per annum until the judgment sum is liquidated.

Also the finding of the court below returning the Mercedes Benz jeep and landed property already settled by the parties at a value of N1,500,000.00 is hereby set aside. The said sum of N1,500,000.00 shall be reckoned with in off setting the judgment debt and no interest shall accrue on that sum from the date it was accepted by the respondent by Exhibit p. 29, that was from 31st July, 1996.

There shall be no order as to costs.

BODE RHODES VIVOUR, J.C.A: I have had the advantage of reading in draft the leading judgment prepared by my learned brother Hon. Justice H. Mukhtar, JCA. I agree with the judgment. I wish though to comment on the real issues in the judgment.

The respondent granted advances to the 1st appellant (Exhibits P2, P3, P4, P5, P6, P7 and P8). The 2nd appellant personally guaranteed P2 while he acted as agent for the 1st respondent in respect of P3 – P8.

The learned trial Judge found both appellants jointly and severally liable for the sums advanced. This is wrong. The correct position is that the 2nd appellant is liable for the sum he personally guaranteed in P2. Exhibit P27 is a document signed by the 2nd respondent, it reads in part:

“I Aremu Omokaode Anjorin of 255 Sanusi Fafunwa Street, Victoria Island, Lagos hereby guarantees repayment of the above facility and interest to the investor in the event of default by the beneficiary at any time after the initial tenor of 90 days. As witness the hand of the guarantor”.

The above was signed by the 2nd appellant. Exhibit P27 binds the 2nd appellant. See Abey v Alex (1999) 12 SC (pt. 11) p71.

As regards the sums in P3 – P8, it is well settled that he who acts through another acts for himself. This is expressed in the Latin maxim – quid facit per alium facit per se. When an agent (the 2nd appellant) acts on behalf of a disclosed principal (the 1st appellant), it is only the latter that is liable. See U.B.N Ltd v Edet (1993) 4 NWLR pt 287 p.288. Niger Progress Ltd v North East Line Corporation (1989) 3 NWLR pt 107 p.68.

The 2nd appellant acted on behalf of the 1st appellant. The 2nd appellant was not personally liable on the contracts (P3 – P8) he procured between the respondent and his principal (the 1st appellant). The 1st appellant is solely liable for the advances in P3 – P8. The 2nd appellant is not jointly or personally liable on the contract between the respondent and the 1st respondent (a legal person). But (though not the case here) the 2nd appellant could sue and be sued if as agent he makes a contract in his own name without disclosing the fact that he is acting on behalf of another. He, as agent can sue and be sued in his own name because it would be obvious that he is the real contracting party.

I would also allow the appeal in part and make all the findings/orders Justice Mukhtar, JCA proposes.

PAUL ADAMU GALINJE, J.C.A: I read in draft the judgment just delivered by my learned brother, Mukhtar, JCA and I agree with the reasoning contained therein and the conclusion arrived there at.

For the same reasons in the lead judgment, I resolve issues 3, 4, and 5 in favour of both Appellants, while issues 1 and 2 are resolved in favour of the 2nd Appellant, but fails against the 1st Appellant.

Finally, the failure of the cross Appellant to produce the notice of cross appeal has rendered the claims therein incompetent and same are hereby struck out.

I make no order as to cost.

Appearances

O. Opanubi

With Seyi OdugunwaFor Appellant

AND

J. D. Oloyede

With O. YonwurenFor Respondent