INTERCONTINENTAL BANK PLC. v. HILMAN & BROS WATER ENGINEERING SERVICES NIGERIA LIMITED
(2013)LCN/6024(CA)
In The Court of Appeal of Nigeria
On Friday, the 15th day of March, 2013
CA/OW/220/2010
RATIO
“Now, the general principle of law which runs through the entire corpus of our jurisprudence is that, the general burden of proof in civil cases rests on the party who asserts the affirmative of the issue. This principle is captured by the Latin matim ei qui affirmat non ei, qui negat incumbit probatio. That principle postulates that the burden or onus of proof rests upon the party who would fail, either Plaintiff or Defendant, if no evidence at all were adduced on the issue. In other words, the legal or ultimate burden of proof in a case lies on the person who asserts the affirmative of the issue. Generally this legal burden lies with the plaintiff in that he is the party who would fail, if on the totality of the evidence adduced before the Court the scales of justice based on the imaginary scale weighs against him. In that respect where facts are pleaded by a Plaintiff but no evidence was led to prove them or the evidence led thereon is unsatisfactory, the Plaintiff’s case would fail and there will be no onus on the adversary or Defendant to disprove those facts not proved or established. This legal position is statutorily provided by Section 131(1) & (2) and 132 of the Evidence Act, 2011 which stipulate that: “131. (1) Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts shall prove that those facts exist. (2) When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person. 132. The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.” The above stated provisions of the Evidence Act, 2011 have been judicially interpreted in earlier provisions of the Evidence Act, in pari material with it. See Section 135 (1) & (2) and 136 of the Evidence Act reproduced in cap. E14 Laws of the Federation of Nigeria, 1990. See also EJIMIYI v. ADIO (1993) 7 NWLR (Pt. 305) p.320; JACK v. WHYTE (2001) 6 NWLR (Pt.709) p.266 AT 277; MECHANIC V. OMISESIN (1998) 2 NWLR (Pt.538) p.446 at 453; EDOSOMWAN v. OGBEYFUN (1996) 4 NWLR (Pt. 442) p. 266; DURU v. NWOSU (1989) 20 N.S.C.C (Pt. 111) p.1; N.N.B. PLC v. EGUN (2001) 22 W.R.N. p. 29 and MOTANYA v. ELINWAA (1994) 7 NWLR (Pt. 356) p.252 at 259.” Per TSAMMANI, J.C.A.
“As I stated earlier in the course of this judgment, the burden of adducing evidence is on the person who would fail if no further evidence is adduced on the issue. In another sense, though the legal or ultimate burden of prove of a case is on the Plaintiff who desires the judgment of the court, in the course of pleadings, issues may arise either in the case of the Plaintiff or the defendant. In that sense, the issues arising in the case may be fixed by the pleadings. Since the law is that he who asserts must prove, the onus of proof of the issues does not remain static but may shift from the Plaintiff to the defendant, and vice-versa, depending on the state of the issues raised in the pleadings. Perhaps it is necessary for me to point out that, the onus is on a party to proof a positive assertion and not a negative assertion. It therefore means that, the burden of proof lies upon him who asserts the affirmative of an issue, and not upon him who denies, since from the nature of things he who denies a fact can hardly produce any proof. See UNION BANK (NIG) LTD. v. AJAGUN (1990) 1 NWLR (Pt. 126) p.328 at 342; ADEGOKE v. ADIBI (1992) 5 NWLR (Pt. 242) p.410; KOKORO-OWO v. OGUNBAMBI (1993) 8 NWLR (Pt.313) p. 627; IKE v. UGBOAJA (1993) 6 NWLR (Pt.301) p. 539; INSURANCE BROKERS OF NIG. V. A.T.M. CO. LTD (1996) 8 NWLR (Pt.466) p.316 and OGBUANYINYA v. OKUDO (NO. 2) (1990) 4 NWLR (pt. 146) P.551.” Per TSAMMANI, J.C.A.
CONTRACT: PRIVITY OF CONTRACT: IMPLICATION
“It is trite law that a contract is only binding on the parties to the contract. This is so because, a contract is always effectual between the contracting parties who must stand or fall, benefit or lose by virtue of the provisions or terms of the contract. Their contract cannot therefore bind third parties nor can third parties take or accept any liability or benefit under it, save in very exceptional circumstances. In other words, as a general rule, a contract affects only the parties thereto and cannot therefore be enforced by or against a person who is not a party to it. It therefore means that, only parties to a contract can sue or be sued on the contract. A stranger to a contract can neither sue or be sued on the contract, even if the contract was made for his benefit and purports to give him the right to sue or make him liable upon it See K.S.O & ALLIED PRODUCTS LTD. v. KOFA TRADING CO. LTD (1996) 3 NWLR (pt. 436) p.244; OGUNDARE v. OGUNLAWO (1997) 6 NWLR (Pt.509) at p.14; ALADE v. A.I.C. (NIG.) LTD (2020)sic 19 NWLR (Pt.1226) p.111; MAKWE v. NWUKOR (2001) 14 NWLR (Pt.733) p.356; A.I.D.C. v. NIGERIA L.N.G. LTD. (2000) 4 NWLR (Pt. 653) p.494; C.B. LTD v. INTERCITY BANK PLC (2009) 15 NWLR (pt. 1165) P.445 and CAMEROON AIRLINES v. OTUTUIZU (2005) 9 NWLR (Pt.929) p.202.” Per TSAMMANI, J.C.A.
JUSTICES
UWANI MUSA ABBA AJI Justice of The Court of Appeal of Nigeria
PHILOMENA MBUA EKPE Justice of The Court of Appeal of Nigeria
HARUNA SIMON TSAMMANI Justice of The Court of Appeal of Nigeria
Between
INTERCONTINENTAL BANK PLC. Appellant(s)
AND
HILMAN & BROS WATER ENGINEERING SERVICES NIGERIA LIMITED Respondent(s)
HARUNA SIMON TSAMMANI, J.C.A. (Delivering the Leading Judgment): This appeal is against the judgment of the Abia State High Court, Ukwa Judicial Division, presided over by Hon. Justice C.O Onyeabo. The judgment was delivered on the 13th day of May, 2010, wherein judgment was entered in favour of the Respondent against the Appellant for the sum of thirteen Million, seven hundred and thirty-four thousand Naira (N13,734,000.00) only plus interest, being the amount said to have been guaranteed by the Appellant in favour of the 1st and 2nd Defendants in the court below, but who are not parties to this appeal.
The Respondent as Plaintiff at the trial Court had taken out a writ of summons against the Appellant (who was 3rd Defendant on the writ), and Bau Consult & Producing Nig. Ltd. & Engineer Chris Sowa (who were (1st and 2nd Defendants), on the un-defended list pursuant to Order 23 rule 1 of the Abia State High Court (Civil Procedure) Rules, 2001. The Suit which was commenced before Hon. Justice I.N. Akomas was later transferred to Hon. Justice C.O. Onyeabo. The 1st and 2nd Defendants entered appearance through Eva Ozioko; Esq. of A. O. Arulogun & Co, vide Memorandum of Appearance dated the 16/7/2007. They then filed a Preliminary Objection dated 16/7/2007. The 3rd Defendant (now Appellant’s) Memorandum of appearance is dated the 09/7/2007 and filed the 26/7/2007.
On the return date, the 1st and 2nd Defendants did not put up any appearance but there was evidence that they were served through Counsel who refused to accept service on grounds that he was no longer in the matter. However, there was no formal withdrawal of appearance by counsel nor was there any notice of change of counsel by the 1st and 2nd Defendants, but there was evidence that the said 1st and 2nd Defendants were subsequently served by substituted means. Consequently, the Notice of Preliminary objection filed by them was struck out. The 3rd Defendant/Appellant was then granted an extension of time to file a Notice of intention to file a defence. Upon a consideration of the affidavit of the Plaintiff/Respondent and that of the 3rd Defendant/Appellant, the learned trial Judge transferred the matter to the general cause list for hearing. The Plaintiff/Respondent and the 3rd Defendant/Appellant filed pleadings, save for the 1st and 2nd Defendants who ceased appearance in the matter. By the Plaintiff/Respondent’s statement of claim, the claim against the Defendants jointly and severally was as follows:
(a) AN ORDER for the sum of N13,734,000.00 (Thirteen Million, Seven Hundred and thirty-four Thousand Naira) to be paid mandatorily to the Plaintiff being the value of the job executed for the 1st and 2nd Defendants at the Obohia, Umunteke-Mkporobe Asa Project site at the Ukwa West Local Government Area, Abia State.
(b) 10% INTEREST on the said sum calculated from 10th December, 2005 that is 60 days from July 15, 2005 when the job was certified due for payment.
(c) 5% INTEREST on the judgment debt above the Central Bank of Nigeria lending rate from the date of judgment until full payment.
It is obvious therefore that issues were only joined as between the Plaintiff/Respondent and the 3rd Defendant/Appellant before the trial court. The 1st and 2nd Defendants did not therefore answer to the Plaintiff/Respondent’s claims against them despite prove of service on them. At the hearing, a witness each testified for the Appellant and the Respondent. The Plaintiff/Respondent’s sole witness is Mr. Boniface Njoku, the Managing Director, while that of the 3rd Defendant/Appellant’s witness who testified as the D.W.1 is one Uchenna Iwueke, the Relationship Manager of the Bank.
The Plaintiff/Respondent’s case at the lower Court as stated by P.W.1 is that, the 1st and 2nd Defendants offered the Respondent a contract for the construction of 3,000 metres of drainage or drain line at a site in Aba, Obohia-Umunteke, Mkporobe. That in order to compel the Respondent to move to site, the 3rd Defendant/Appellant issued her a Letter of Comfort which is equivalent in the industry as guaranteed payment ability of the 1st and 2nd Defendants upon performance by the contractor (Respondent). He stated that the Original Letter of Comfort was missing, so he tendered a photo copy which was admitted in evidence as exhibit “A”. A copy of the Contract Agreement was also tendered and admitted in evidence as Exhibit “B”. That she was not mobilized for the job for which the contract was awarded, so she borrowed from the Central Bank of Nigeria, Ilorin Branch, Staff Welfare Fund on a friendly revolving loan which attracted a very high interest rate. The Respondent stated further that he completed the job one hundred percent; thus performing its own obligation under the contract, and a certificate of completion to the tune of 1,962 metres of completed drain was issued to him by the 1st and 2nd Defendants, and which certificate is in evidence as Exhibit “C.” That the Certificate was for the payment of N13, 734,000.00 being the value of the job completed.
It is also the case of the Respondent that, by the terms of the contract, she was to be paid 60 (sixty) days from the date the Certificate was issued, but that he was not paid within the 60 days or any date thereafter. That when the 1st and 2nd Defendants refused to pay, he went to the 3rd Defendant/Appellant and met their representative, one Mr. Thomas, but Mr. Thomas rebuffed him with ignominy. That the attitude of the 1st and 2nd Defendants made him to petition the Economic and Financial Crimes Commission for assistance, but he was advised to either report to the police or go to court. That he again Petitioned the police at the Zonal police Headquarters, Zone 9, Umuahia, where of the 1st and 2nd Defendants were arrested, and they pleaded to be allowed time to pay on or before the 15/2/2001, but they failed to honour their promise. He went on to state that, realizing that the 1st and 2nd Defendants were not going to pay, he approached the 3rd Defendant/Appellant with the Letter of Comfort for payment in accordance with the terms of the contract, but the Appellant failed to honour the contract on the ground that the Respondent had rejected the Letter of Comfort and returned same. The Respondent denied rejecting the Letter of Comfort in place of a letter of Guarantee, and insisted that the Appellant pay the sum claimed in accordance with the terms of the contract.
The Appellant stated its case through the D.W.1. In his written deposition at p.120 of the record of appeal, the D.W.1 stated that, the 3rd Defendant/Appellant initially issued a Letter of Comfort to the Respondent with respect to the contract between it (Respondent) and the 1st and 2nd Defendant, but that it later retrieved and cancelled same, when the Respondent rejected it, on the ground that it preferred a letter of guarantee. In all, the Appellant had denied liability on the ground that she was neither a party to the contract between the Respondent and 1st & 2nd Defendants, nor did it enter into a contract with the Respondent to pay the Respondent for any services rendered to the 1st & 2nd Defendants. That the Respondent having rejected and returned the original copy of the letter of comfort, the Appellant is absolved of any liability thereon as it never provided the Respondent with any Advance Bank Guarantee.
After reviewing and appraising the evidence led by the Respondent and the Appellant, the learned trial Judge believed the Respondent’s case, and entered judgment granting all the claims made by the Respondent. The Appellant being dissatisfied with the judgment filed this appeal. The Notice of Appeal which is contained at page 160 of the records was dated the 17/5/2010 and filed the 18/5/2010. It consists of only one ground of appeal as follows:
1. The lower Court misdirected itself in law and in facts when it held that there was a subsisting letter of comfort between the Claimant and the 3rd Defendant/Appellant thus creating a privity of contract between them.
Particulars of Misdirection:
(i) There was evidence showing that the letter of comfort dated 24th October, 2004 issued to the Claimant/Respondent was rejected by it and consequently withdrawn by the 3rd Defendant/Appellant and cancelled.
(ii) There was evidence showing that the Claimant/Respondent did not have the original of the document it claimed it was issued with and therefore could not tender the original, but rather tendered its copy without good foundation, as exhibit A.
(iii) The Appellant not only had the original letter of comfort it took back from the Claimant/Respondent and cancelled but also tendered same in evidence as exhibit E.
(iv) Exhibit 4 when compared with Exhibit A is exactly a copy of E.
It was stated in the said Notice of Appeal that further grounds of appeal will be filed upon the receipt of the Records of proceedings in the matter, but no such further ground(s) of appeal was filed.
As required by the rules of this Court, the parties filed and exchanged briefs of arguments. The Appellant’s Brief of arguments is undated but filed on the 13/4/2012. It was deemed filed the 10/5/2012. Therein the Appellant nominated one issue from the sole ground of appeal, for determination, as follows:-
“Whether or not the letter of comfort issued to the Claimant/Respondent was rejected by it and returned to the Appellant.”
The Respondent’s Brief of Arguments is dated the 16/05/2012 and filed the 17/5/2012. Therein, the Respondent adopted the sole issue formulated for determination by the Appellant. That being so, this appeal will be determined on the sole issue nominated for determination by the Appellant.
In arguing the lone issue for determination in this appeal, Learned Appellant’s Counsel relied on the cases of DOTUN FATILEWA & ANOR v. THE STATE (2007) ALL FWLR (Pt. 347) p.693 at 710 to urge us to expunge exhibit A from the record on the ground that proper foundation was not laid before it was admitted that it is the case of the Appellant that it was the Respondent who rejected the letter of comfort and returned to the Appellant in preference for a Letter of Guarantee, and that the Respondent who could not produce the original which he claimed was lost either by him or his lawyer, but did not state the name of the lawyer and in circumstances tendered a mere photocopy which was wrongly admitted in evidence as Exhibit A. That this exhibit which was wrongly admitted ought to have been expunged during judgment, and that as it was not so, we should expunge same. Learned Counsel then drew our attention to Section 251 of the Evidence Act.
Learned Appellant’s Counsel contended that in determining whether or not the letter of comfort was rejected, the circumstances and the facts of the case should be looked at. That since the Respondent was able to produce the original copies of all the other documents, it can be safely presumed that all the documents relating to the Respondent’s contract will be in one bag or envelop, and therefore, any loss will affect all other documents. That the fact that only the Letter of Comfort was affected supports the Appellant’s claim that it was lost, rather that the Respondent by its hand rejected it and returned it to the Appellant who received and cancelled same. Learned Counsel then contended that, the Court below erred when it concluded that the letter was not returned and that there was privity of contract between the Appellant and the Respondent by falling to errors of opinion and conclusions not supported by evidence.
Learned Counsel for the Appellant went on to submit that the learned trial judge erred when he held that the Letter of Comfort was unilaterally cancelled without informing the Respondent, as the unchallenged facts show that it was the Respondent who cancelled or rejected it by returning the letter of comfort to the Appellant. That the DW1 stated clearly that it is the Respondent who returned the letter of comfort to it, and the fact that he did not have the original confirms that fact. He then submitted that the misunderstanding of the facts by the trial Court led to serious error of judgment.
It is the further submission contention of Learned Counsel for the Appellant that, from the evidence before the lower court, the sub-contract of constructing 3000 linear metres of concrete drain was between the Respondent and the 1st and 2nd Defendants. That the Appellant was not part of the sub-contract, but the only allegation against the Appellant was whether or not it issued a Letter of Comfort to the Respondent, which was to assure the Respondent that once the 1st and 2nd Defendants are paid for the contract, the contract sum will be paid the Respondent, as against an outright guarantee for payment whether or not the contractors are paid. That the Appellant strongly joined issues thereon, when it pleaded that the Letter of Comfort dated 27/10/2004 was issued by it in favour of the Respondent but that the Respondent rejected it, claiming that it prefers a letter of Guarantee. Learned Counsel then contended that the Respondent has the onus to produce the original Letter of Comfort in proof of its claim that it never rejected the letter. Section 131 of the Evidence Act and the case of MRS R.O. LAMBO v. MRS MODUPE ADETUNJI (1998) ALL FWLR (Pt. 419) p.566 at 573 para. G and JOHNSON & ORS v. WILBROS (NIG) LTD. (2005) ALL FWLR (Pt. 289) p.1406 at 1410 para. H were cited in support. It was therefore submitted that the Respondent having rejected the Letter of Comfort, there was no more any relationship that existed between the Respondent and the Appellant at the time the matter came to Court. That the only proper parties were the 1st and 2nd Defendants but the Respondent made no serious effort to pursue them preferring to zero in on the Appellant. The case of AKINDELE v. KAYODE ABIODUN (2010) ALL FWLR (pt.518) p.894 at 922 paras. E-F was cited to further submit that the Appellant is therefore not a proper party to be sued, having nothing any more connecting it to the Respondent.
Submitting further on the issue of rejection of the Letter of Comfort, Learned Appellant’s Counsel contended that the Respondent did not discharge the burden of proving that it did not reject the Letter of Comfort. That the only evidence adduced by the Respondent is a photocopy of the Letter of Comfort, which was tendered without foundation, and that the only reason why it did not tender the original of the Letter of Comfort, is because it had rejected same and returned it to the Appellant. It was further contended that the D.W.1. testified that the Respondent rejected the Letter of Comfort which was then retrieved by the Appellant who cancelled and kept same. That the original that bore the mark of cancellation in red ink was tendered by the Appellant and admitted as exhibit “E”. We were then urged to look at exhibit E and to compare same with Exhibit A, and that if that is done, it would be observed that both are the same, the only difference being that one is original while the other is a photocopy. We were then urged to hold that, it was dishonest of the Respondent to have rejected the letter, made a copy out of it and claim that the original was lost, and to also hold that Exhibit E was the original of the Letter of Comfort which was rejected by the Respondent. We were further urged to hold that, there is therefore nothing connecting the Respondent with the Appellant on the contract between it and the 1st & 2nd Respondents, and to hold that there is no privity of contract between the Appellant and the Respondent. The cases of U.B.A PLC & ANOR v. JARGABA (1997) ALL FWLR (Pt.380) p. 1419 at 1433; TANKO v. NONGHA (2005) ALL FWLR (Pt. 286) p.774 AND Nigerian RE-INSURANCE CORP. v. CUDJOE & ANOR (2008) ALL FWLR (Pt. 414) p. 1532 at 1553 were cited in support.
Learned Counsel for the Appellant also submitted that the trial Court had a duty to look at the conduct of the parties so as to determine whether or not the Letter of Comfort was returned. That before this matter came to court, the Respondent had petitioned both the E.F.C.C and the Police against the 1st and 2nd Defendants, but no mention of the Appellant was made therein. That there was also no demand, either oral or written for payment on the Appellant, but that it was only at the institution of this case that the issue of liability of the Appellant was raised for the first time. It was therefore submitted with reliance on the case of OKEREKE & SONS LTD v. USIFOR (2008) ALL FWLR (pt. 428) p.290 that, from the totality of evidence on record, it is obvious that the Respondent had failed to prove its case against the Appellant. We were accordingly urged to allow the appeal and set aside the decision of the Court below.
Learned Counsel for the Respondent contended that to resolve the issue, it would be necessary to understand what rejection means in the law of contract. He then referred to the definition of rejection in the Black’s Law Dictionary (6th.ed.) at p. 1288, to submit that rejection is a communication by an Offeree to the Offeror that it refuses to accept the terms of the offer or proposal made by the Offeror. That when the Appellant as offeror made its offer as contained in the Letter of Comfort, the terms were written, and which term guaranteeing to pay the Respondent the value of the content executed by it upon completion was in writing, and that it was on the basis of that guarantorship that the Respondent did the job with its own money. That the allegation of rejection of the Letter of Comfort was not made in writing. He then submitted that the Appellant who had the burden to prove that the Letter of Comfort was rejected, did not prove or tender a formal document accepting the rejecting the Letter of Comfort. That the DW1 did explain that exhibit “A” created a contractual relationship between the Appellant and the Respondent, the implication being that the Appellant who held funds of the 1st Appellant contracted to pay the Respondent upon completion of the job.
Learned Counsel for the Respondent contended that when the D.W.1 was asked whether the Appellant informed the Respondent that it had cancelled the Letter of Comfort, in writing, his answer was in the negative. That there is no dispute that the Letter of Comfort was in writing and the terms contained therein were binding on the Appellant, and therefore, a variation of the terms can only be effected in writing. The cases of A.G; RIVERS STATE v. A.G; AKWA IBOM STATE (2011) ALL FWLR (Pt.519) p. 1023 at 1057; NNEJI v. ZAKHEM CONST. (NIG) LTD (2006) ALL FWLLR (Pt.330) p.1021 at 1039 paras. F-G; AUTO IMPORT EXPORT v. ADEBAYO (2006) ALL FWLR (Pt. 296) p.912 at 925 ratio 9 and AGBAKOBA v. I.N.E.C (2009) ALL FWLR (Pt.462) p.1037 at 1074 were cited to submit that the arguments of the Appellant lack foundation because, there was no evidence of rejection of the Letter of Comfort by the Respondent. That there was also no evidence of cancellation, as the Letter of Comfort was in writing and same was formally communicated to the Respondent, but the purported rejection and cancellation was an attempt by the Appellant to use oral evidence to alter, contradict or vary a written contract.
Learned Counsel for the Respondent contended that it is not helpful to join issues with the Appellant on whether or not the Respondent laid good foundation in tendering the Letter of Comfort because, facts admitted need no further proof. That even without tendering same, the Appellant in its statement of defence and evidence in court admitted that it issued same, and therefore the Respondent has no further burden to prove that exhibit “A” was made by the Appellant in its favour. The case of GABARI v. ILORI (2003) ALL FWLR (Pt. 177) p.901 was relied upon. That what the Appellant tendered as evidence of the rejection of the Letter of Comfort was the original copy in its possession and not the one given to the Respondent. That the Appellant who alleged the rejection had the onus of proving same. That the Appellant did not show the trial Court two original copies of the Letter of Comfort to support the allegation that it had its own copy and that of the Respondent allegedly returned to it, but only one original copy in its possession as a party to the contract was tendered. It was thus submitted that, having admitted issuing the Letter of Comfort, the Respondent had no burden to prove any other thing with respect to the contract. We were therefore urged to dismiss the appeal and to affirm the judgment of the trial Court.
Now, the general principle of law which runs through the entire corpus of our jurisprudence is that, the general burden of proof in civil cases rests on the party who asserts the affirmative of the issue. This principle is captured by the Latin matim ei qui affirmat non ei, qui negat incumbit probatio. That principle postulates that the burden or onus of proof rests upon the party who would fail, either Plaintiff or Defendant, if no evidence at all were adduced on the issue. In other words, the legal or ultimate burden of proof in a case lies on the person who asserts the affirmative of the issue. Generally this legal burden lies with the plaintiff in that he is the party who would fail, if on the totality of the evidence adduced before the Court the scales of justice based on the imaginary scale weighs against him. In that respect where facts are pleaded by a Plaintiff but no evidence was led to prove them or the evidence led thereon is unsatisfactory, the Plaintiff’s case would fail and there will be no onus on the adversary or Defendant to disprove those facts not proved or established. This legal position is statutorily provided by Section 131(1) & (2) and 132 of the Evidence Act, 2011 which stipulate that:
“131. (1) Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts shall prove that those facts exist.
(2) When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person.
132. The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.”
The above stated provisions of the Evidence Act, 2011 have been judicially interpreted in earlier provisions of the Evidence Act, in pari material with it. See Section 135 (1) & (2) and 136 of the Evidence Act reproduced in cap. E14 Laws of the Federation of Nigeria, 1990. See also EJIMIYI v. ADIO (1993) 7 NWLR (Pt. 305) p.320; JACK v. WHYTE (2001) 6 NWLR (Pt.709) p.266 AT 277; MECHANIC V. OMISESIN (1998) 2 NWLR (Pt.538) p.446 at 453; EDOSOMWAN v. OGBEYFUN (1996) 4 NWLR (Pt. 442) p. 266; DURU v. NWOSU (1989) 20 N.S.C.C (Pt. 111) p.1; N.N.B. PLC v. EGUN (2001) 22 W.R.N. p. 29 and MOTANYA v. ELINWAA (1994) 7 NWLR (Pt. 356) p.252 at 259. That being so, the legal or ultimate burden of proof rested on the Respondent to establish by credible evidence that he is entitled to his claims against the Appellant.
In the instant case the Respondent’s claim as Plaintiff in the Court below against the Appellant who was 3rd Defendant thereat is that he was given a sub-contract by the 1st and 2nd Defendants for the construction of 3,000 metres of drainage or drain line at a site in Aba, Obohia Umunteke, Mkporobe in Abia State. That in order to compel it to move to site, the Appellant who is banker to the 1st and 2nd Defendants, issued it a Letter of Comfort which is equivalent in the industry as a guarantee. That the purpose of the Letter of Comfort issued by the Appellant was to guarantee the payment ability of the 1st and 2nd Defendants upon due performance by the Respondent. The Respondent tendered the Letter of Comfort and the Contract Agreement between it and the 1st and 2nd Defendants which were admitted in evidence as exhibits “A” and “B” respectively.
The P.W.1 who testified for the Respondent stated that, in accordance with the terms of the contract, and encouraged by the Letter of Comfort issued to it by the Appellant, it was able to mobilize to site by borrowing extensively from the Central Bank of Nigeria, Ilorin Branch Staff Welfare Fund. That it was therefore able to perform his own part of the contract, whereof it was issued a Certificate of Completion by the 1st and 2nd Defendants, and which Certificate he tendered and was admitted in evidence as Exhibit C. That by virtue of the contract agreement, the Respondent was to be paid within 60 days from the date the Certificate of Completion was issued, but the 1st and 2nd Defendants refused to pay and it went to the Appellant but it was ignored. The P.W.1 who is the Managing Director of the Respondent stated that, he was made to understand that the Letter of Comfort is a guarantee that the money would be paid, and that it was honoured by the Central Bank of Nigeria when it was presented for the loan.
The Appellant did not dispute those facts as shown by the evidence. However, its defence is that it was not a privy to the contract between the Respondent and the 1st and 2nd Defendants. It is trite law that a contract is only binding on the parties to the contract. This is so because, a contract is always effectual between the contracting parties who must stand or fall, benefit or lose by virtue of the provisions or terms of the contract. Their contract cannot therefore bind third parties nor can third parties take or accept any liability or benefit under it, save in very exceptional circumstances. In other words, as a general rule, a contract affects only the parties thereto and cannot therefore be enforced by or against a person who is not a party to it. It therefore means that, only parties to a contract can sue or be sued on the contract. A stranger to a contract can neither sue or be sued on the contract, even if the contract was made for his benefit and purports to give him the right to sue or make him liable upon it See K.S.O & ALLIED PRODUCTS LTD. v. KOFA TRADING CO. LTD (1996) 3 NWLR (pt. 436) p.244; OGUNDARE v. OGUNLAWO (1997) 6 NWLR (Pt.509) at p.14; ALADE v. A.I.C. (NIG.) LTD (2020)sic 19 NWLR (Pt.1226) p.111; MAKWE v. NWUKOR (2001) 14 NWLR (Pt.733) p.356; A.I.D.C. v. NIGERIA L.N.G. LTD. (2000) 4 NWLR (Pt. 653) p.494; C.B. LTD v. INTERCITY BANK PLC (2009) 15 NWLR (pt. 1165) P.445 and CAMEROON AIRLINES v. OTUTUIZU (2005) 9 NWLR (Pt.929) p.202.
It is manifest from the authorities cited above therefore that in law, a written agreement or contract entered into by the parties thereto is binding on them. Accordingly, where there is any disagreement between the parties on a particular point, the only reliable evidence for the resolution of the disagreement or conflict is the written contract document of the parties. The Court will then construe the document in order to find out the intention of the parties as stated in the terms of the contract. In the resolution of the dispute between the parties, the court is not allowed to go outside the contract document in search for an answer, but must give effect to the intention of the parties clearly expressed in the written agreement or contract. See UNION BANK OF NIG. PLC v. AJABULE (2012) ALL FWLR (Pt. 611) p. 1413 at 1438.
From the record of appeal, A is clear that the contract agreement in issue is exhibit B as contained at page 16 of the records. The nearest item in the said Contract Agreement between the Respondent and 1st & 2nd Defendants is Paragraph 5 which stipulates:
“That the major Contractor shall cause a Letter of Comfort to be forwarded from her banker “Intercontinental Bank” to the sub-contractors Bankers “Oceanic Bank.”
After perusing the contents thereof, I am unable to see where the Appellant is directly made a party to the document which the Respondent contends is the contract document between it and the 1st and 2nd Defendants. It is therefore obvious that the Appellant is not a party to the contract between the Respondent and the 1st and 2nd Defendants. I accordingly agree with Learned Counsel for the Appellant that the Appellant is not a party to the contract between the Respondent and the 1st and 2nd Defendants.
However, that is not the end of the matter as it is clear that the Respondent’s claim against the Appellant is not based on Exhibit “B” per se but the Letter of Comfort which is in evidence as Exhibit “A.” I had also found that by paragraph 5 of the Agreement, the 1st Defendant, referred to as the major contractor, was mandated to cause a Letter of Comfort to be written and forwarded by her banker “Intercontinental Bank” (Appellant herein) to the sub-contractors’ bankers “Oceanic Bank.” It is in pursuance of that provision in the contract document that the Appellant wrote the Letter of Comfort (Exhibit A). See pages 12-14 of the record of appeal. It is therefore to that document (Exhibit A) that the liability or otherwise of the Appellant to the Respondent will be determined. To do that, I find it convenient to reproduce the contents of the said Exhibit “A” as contained in page 15 of the record of appeal. It states as follows:
Intercontinental Bank Plc
October 27, 2004
The Managing Director
Hillman Water & Engr. Nig. Ltd
No. 41, Aba/PH Expressway
Oyigbo
Rivers State.
Dear Sir,
LETTER OF COMFORT.
We write at the instance of our customer BAU CONSULT & PRODUCTION NIGERIA LIMITED and undertake to make a payment of N40,500,000.00 (Forty Million, Five Hundred Thousand Naira Only) to your goodself in respect of the execution of the priming and construction jobs.
This payment of N40, 500,000.00 (Forty Million, Five Hundred Thousand Naira Only) shall however be dependent on the successful execution of the priming and construction jobs at their project site at Asa in Abia State and our receipt of the next payment of about N160 Million into the Account of BAU CONSULT & PRODUCTION NIGERIA LIMITED from the Niger Delta Development Commission, which should be sufficient to accommodate your payment.
This next payment from Niger Delta Development Commission is expected within the next 90 (Ninety) days after the successful execution of the priming and construction jobs at their project site at Asa in Abia State as mentioned in your letters of award from BAU CONSULT & PRODUCTION NIGERIA LIMITED.
Please note that this letter of comfort is subject to the successful execution of the priming and construction jobs in line with the terms and conditions as spelt out in your letters of award from our customer.
Yours Faithfully,
For: INTERCONTINENTAL BANK PLC
AUTHORISED SIGNATORY AUTHORISED SIGNATORY
It should be noted that the authorised signatory, at paragraphs 2 and 3 thereof, specifically referred to the Letter of award of the contract from the 1st Defendant (BAU CONSULT & PRODUCTION NIGERIA LIMITED) who is referred to as the customer of the Appellant, to the Respondent. Furthermore, by the Letter of Comfort, the Appellant undertook to pay to the Respondent the value of the job done by the Respondent as stipulated in the letter of award (Exhibit B). In any case, the Appellant did not deny issuing (Exhibit A) (the letter of comfort). By the tenor of the Letter of Comfort, it is clear that it is an undertaking by the Appellant to pay the Respondent in the event that the Respondent successfully executed the contract. The evidence on record shows that the Respondent duly executed the contract and was issued a Certificate of Completion by the 1st and 2nd Defendants, as evidenced by Exhibit “C.”
The defence of the Appellant is that, though it issued the Respondent the Letter of Comfort, the Respondent rejected same and returned the original copy to the Appellant who then marked it as cancelled. The Appellant tendered the said letter which it contends the Respondent returned, and it was admitted in evidence as Exhibit E. The Respondent contended that it never rejected nor returned to the Appellant the Letter of Comfort, but duly used same to source for funds which it used in executing the contract. That its own original copy was lost, so he tendered a photo copy of same which is in evidence as Exhibit “C.”
In the resolution of this issue, the learned trial judge, erroneously held that the issue of rejection of the Letter of Comfort was raised for the first time by the Appellant. That issue having been raised at paragraph 4 of the Appellant’s Statement of Defence and in the testimony of the D.W.1, it cannot be said to have been raised for the first time. The Learned trial judge then held at page 156 lines 5-26 of the record as follows:
“The DW1, a Relationship Manager of the 3rd Defendant told the court that the original copy of the said letter of comfort was returned to them, on the basis that the Claimant had rejected it in preference for a Bank Guarantee… The law is trite that he who asserts must prove. No facts were adduced in evidence by the DW1 to state the circumstances of the purported refusal or rejection of the document by the Claimant. For instance the DW1 did not state that the Claimant or his Counsel had returned the said letter to the Bank. The court therefore has no evidence of what had transpired by the parties at that stage to know whether or not the claimant understood that the rejection was the end of the terms of payment for the job to be executed by it and yet went on to execute the job, or whether there was a promise of bank guarantee in the alternative or even a mere assurance that he would be paid regardless. No such facts before this court, but the DW1 unequivocally told the Court that when the 3rd Defendant received the said letter of comfort it had written to the Claimant, the 3rd Defendant cancelled same. It is also in evidence that the 3rd Defendant neither wrote nor otherwise informed either the Claimant or the 1st Defendant of the said cancellation of the letter of comfort.
The Claimant on its part, through the PW1, has denied returning the said letter of comfort. In view of the absence of any evidence to substantiate the assertion by the 3rd Defendant on how the letter was returned to it, and the assertion by the Claimant without more that the original copy was lost, I shall proceed to consider the matter in the light of what is just and lawful in the circumstances.”
It is clear from the passage of the judgment reproduce above, that the learned trial Judge found and correctly so that, the Appellant who asserted that the Respondent had rejected the Letter of Comfort in preference for a Bank Guarantee had the burden of proof to show that his assertion is true. As I stated earlier in the course of this judgment, the burden of adducing evidence is on the person who would fail if no further evidence is adduced on the issue. In another sense, though the legal or ultimate burden of prove of a case is on the Plaintiff who desires the judgment of the court, in the course of pleadings, issues may arise either in the case of the Plaintiff or the defendant. In that sense, the issues arising in the case may be fixed by the pleadings. Since the law is that he who asserts must prove, the onus of proof of the issues does not remain static but may shift from the Plaintiff to the defendant, and vice-versa, depending on the state of the issues raised in the pleadings. Perhaps it is necessary for me to point out that, the onus is on a party to proof a positive assertion and not a negative assertion. It therefore means that, the burden of proof lies upon him who asserts the affirmative of an issue, and not upon him who denies, since from the nature of things he who denies a fact can hardly produce any proof. See UNION BANK (NIG) LTD. v. AJAGUN (1990) 1 NWLR (Pt. 126) p.328 at 342; ADEGOKE v. ADIBI (1992) 5 NWLR (Pt. 242) p.410; KOKORO-OWO v. OGUNBAMBI (1993) 8 NWLR (Pt.313) p. 627; IKE v. UGBOAJA (1993) 6 NWLR (Pt.301) p. 539; INSURANCE BROKERS OF NIG. V. A.T.M. CO. LTD (1996) 8 NWLR (Pt.466) p.316 and OGBUANYINYA v. OKUDO (NO. 2) (1990) 4 NWLR (pt. 146) P.551. In the instant case, the Appellant having admitted that it issued the Respondent a Letter of Comfort has the burden to prove the assertion that the Respondent rejected the Letter of Comfort.
Apart from the bare assertion of the Appellant that the Respondent rejected the Letter of Comfort and returned the original copy of the letter, there was no other evidence from the Appellant in that regard. Instead of proffering credible evidence in proof of its assertion, the Appellant resorted to making insinuations that the Respondent must have photo copied the letter before returning same. This is despite the fact that it stated clearly and under oath of its Managing Director that, its own copy of the original of the Letter of Comfort was lost. This testimony of the Respondent’s witness was never challenged nor discredited by way of cross-examination or otherwise. Indeed there is no evidence that there was only one original copy of the Letter of Comfort. I say so because, in business dealings it is to be expected that parties to any agreement should have their own copies of the agreement. It would be presumed that, that is so in the instant case, in view of Section 167 of the Evidence Act, 2011, which permits a court to presume the existence of any fact which it deems likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relationship to the facts of the particular case, and in particular the court may presume that (c) the common course of business has been followed in particular cases. It would therefore not be far-fetched to presume that the parties each had a copy of the Letter of Comfort. Indeed it would be unbelievable to imagine that the Appellant, an experienced commercial bank would enter into a transaction without keeping its own copy of the transaction. That is what the Appellant sought to portray in this case. The Learned trial judge disbelieved the Appellant, and I see no reason to hold otherwise. It is also erroneous for the Appellant to submit as it did, that the Respondent has the onus to produce the original Letter of Comfort in proof of its claim that it never rejected the Letter of Comfort.
The Appellant had also contended that exhibit “A” was wrongly admitted in evidence, because, being a photo copy proper foundation was not laid before it was admitted. My simple answer to that is that, this issue was never raised in the address of the Appellant’s Counsel in the Court below. Indeed the Appellant had urged the court at page 2 of its Written Address (page 135 of the records) paragraph 4, to utilize the photo copy (Exhibit A) of the Letter of comfort tendered by the Respondent, by comparing same with the original copy tendered by it as Exhibit E. In any case the document was properly pleaded and admitted by virtue of Section 98 (a) of the Evidence Act (now Section 91(a) of the Evidence Act, 2011).
On the whole therefore, the lone issue in this appeal is hereby resolved against the Appellant.
Having resolved the sole issue in this appeal against the Appellant, the only conclusion I have arrived at is that this appeal is devoid of any merit. It has failed and is hereby dismissed. Accordingly, the judgment of C.O. Onyeabo; J in the Court below in Suit No. HUK/11/2007 delivered on the 13th day of May, 2010 is hereby affirmed.
I award fifty thousand Naira (N50, 000.00) only as cost against the Appellant in favour of the Respondent.
UWANI MUSA ABBA AJI, J.C.A.: I have had the privilege of reading in draft the lead judgment of my learned brother, H. S. Tsammani, JCA just delivered.
I agree with his reasoning and conclusion that the appeal is devoid of any merit. I also dismiss the appeal and endorse the consequential order as to costs.
PHILOMENA MBUA EKPE, J.C.A.: I have been privileged to read in advance the lead judgment prepared by my learned brother HARUNA S. TSAMMANI, JCA. And I agree entirely with the reasoning and conclusions therein. I also agree that this appeal lacks merit and is hereby dismissed. I abide by his Lordship’s order as to costs.
Appearances
N.H. NWANKWO; Esq. (U. Obinwanne; Esq. with him)For Appellant
AND
O.O. IGWENYI; Esq. (Yemi George; Esq. with him)For Respondent
