ISOKO COMMUNITY BANK LIMITED v. EDOFREN NIGERIA LIMITED & ORS
(2018)LCN/11852(CA)
In The Court of Appeal of Nigeria
On Thursday, the 5th day of July, 2018
CA/B/273/2014
RATIO
COMPANY: WHERE A COMPANY IS REGISTERED
“From the above cited authorities, it is now settled law in Nigeria that a company duly registered under the Companies and Allied Matters Act must be regarded and sustained as a separate legal entity and distinct from each and every shareholder or member thereof, no matter the extent or number of shareholdings or quantum of interest he may have in the company. In other words a Registered Company is in law a separate entity from any of its shareholders, no matter how many shares a member may hold and such company cannot be an agent of its subscribers under the circumstance. See MARINA NOMINEES LTD VS FBIR supra. In GIMSER COMMODITIES LTD VS FCMB PLC & ORS (2017) 1 LPELR 43095 (CA) this Court held at pages 13 to 14 of the Report that:-
‘The law is that a company is a distinct entity from its shareholders or Directors.” PER SAMUEL CHUKWUDUMEBI OSEJI, J.C.A.
COURT AND PROCEDURE: THE PURPOSE OF INTER-PLEADER PROCEEDINGS
“No doubt, the purpose of inter-pleader proceedings is to seek relief by initiating an action to determine the ownership of the property or goods seized or attached by the sherrif or intend to seize or attach in the Court against a judgment debtor. The third party who claims ownership of such property or goods in question has the onus under the law to establish title to the property or goods wrongly attached. See BULUS VS OKPALA & ANOR (2017) LPELR 43423 (CA).
In OLATUNDE VS OAU & ANOR (1998) 5 NWLR (PT. 549) 178 the Supreme Court held that in inter-pleader proceedings, the claimant is deemed to be the plaintiff and the judgment creditor, the defendant.” PER SAMUEL CHUKWUDUMEBI OSEJI, J.C.A.
EVIDENCE: WHERE EVIDENCE REMAINS UNCHALLEGED
“The law is settled that where evidence including affidavit evidence is unchallenged, uncontroverted and credible, the trial Court is bound to accept it. Such averments should be accepted and acted upon. See LONG-JOHN VS. BLAKK (1998) 6 NWLR (PT. 555) 524 and NWOBODO VS M.O. NYIAM & ASSOCIATES (2014) LPELR 22668 CA. In OMOREGBE VS LAWANI (1980) 3-4 SC 108, the Supreme Court held that where evidence given by a party to any proceedings was not challenged by the opposite party who had the opportunity to do so, it is always open to the Court based on the proceedings to act on the unchallenged evidence before it. See also ODULAJA VS HADDAD (1973) 11 SC page 35.” PER SAMUEL CHUKWUDUMEBI OSEJI, J.C.A.
JUSTICES
SAMUEL CHUKWUDUMEBI OSEJI Justice of The Court of Appeal of Nigeria
MOORE ASEIMO ABRAHAM ADUMEIN Justice of The Court of Appeal of Nigeria
MUDASHIRU NASIRU ONIYANGI Justice of The Court of Appeal of Nigeria
Between
ISOKO COMMUNITY BANK LIMITED Appellant(s)
AND
1. EDOFREN (NIG) LIMITED
2. MRS. HANNAH FRENCH
3. CHRISTIANA EDORE UMUKORO Respondent(s)
SAMUEL CHUKWUDUMEBI OSEJI, J.C.A. (Delivering the Leading Judgment):
This appeal is against the Ruling of the High Court of Delta State sitting in Oleh and delivered on the 18th day of March, 2014 in favour of the 1st Respondent herein. The facts leading to this appeal is that on the 17/6/2013 judgment was delivered by the lower Court in Suit No. HCO/11/2005 in favour of the claimant (now the Appellant) against the Defendants including the 7th Defendant who guaranteed the loan facility to the 1st Defendant. The said 7th Defendant (Ebore French) is a majority shareholder and Director of the 1st Respondent.
As a judgment creditor, the Appellant herein caused the judgment to be executed on the properties of the 1st Defendant, London Obuzor (now late) as well as attached the goods of the 1st Respondent.
This prompted the 1st Respondent to initiate an inter pleader process by filing an application in the lower Court on the 4/7/2013 seeking the following orders:-
1. An order of this Honourable Court staying further execution of the judgment delivered in this suit on Monday, the 17th day of June, 2013 pending the hearing and determination of this Interpleader Summons.
2. An order of this Honourable Court staying the sale and or auction of items, articles, wares, goods and properties removed from the shop/store situate at 16, Irri road, Oleh in recovery or satisfaction of the judgment sum in this suit the aforesaid items, articles, wares, goods and properties being property of EDOFREN (NIG) LTD.
3. An order of this Honourable Court directing the Sheriff, Bailiff, Officers and servants of this Honourable Court to return the items, articles, wares, goods and properties removed from the shop/store situate at 16, Irri Road, Oleh back to the said shop/store.
4. An order of this Honourable Court unsealing the shop/store and its appurtenances situate at 16, Irri Road, Oleh the said shop/store and its appurtenances being the office of EDOFREN (NIG) LTD.
5. An order of this Honourable Court restraining the plaintiff/judgment Creditor/Respondent, its agents, the Sheriff, Bailiff, Officers and Servants of this Honourable Court from interfering with, trespassing on and encroaching on the properties of EDOFREN (NIG) LTD.
6. AND for such further or other orders as this Honourable Court may deem fit to make in the interest of justice.
The said application was supported by a 20 paragraph affidavit and some documents attached therewith as exhibits.
The Appellant in opposing the application filed a counter affidavit on 27/1/2014.
Upon the adoption of the written addresses filed by the parties, the lower Court delivered a Ruling on the 18/3/2014 in favour of the 1st Respondent as the inter pleader wherein an order was made for the immediate release of the attached goods belonging to the 1st Respondent.
Being dissatisfied with the said Ruling, the Appellant filed a Notice of Appeal on the 10/4/2014. Amended Notice of Appeal containing three grounds of appeal was subsequently filed on 5/10/2017.
Pursuant to the relevant rules of this Court, the parties filed and exchanged their briefs of argument which they also adopted and relied on at the hearing of the Appeal on 2/5/2018.
In the Appellant’s Amended brief of argument filed on 30/6/2017 but deemed properly filed on 5/10/2017, the following three issues were formulated for determination:-
1. Whether the 7th Defendant’s share of 86.66% or quantum of interest in the inter pleader applicant can be used in the satisfaction of the judgment debt.
2. Whether the trial Court was right to have entertained and grant the reliefs sought in the inter-pleader summons after it has identified a fundamental defect in the processes filed.
3. Whether the 1st Respondent proved his entire ownership in the goods attached in the execution.
The amended Respondent’s brief of argument was filed on 19/2/2018. Therein, the Respondents adopted the three issues as formulated by the Appellant.
A notice of preliminary objection with the argument in support are embedded in pages 4 to 11 of the said amended Respondent’s brief of argument. However the said preliminary objection was not moved or argued by the Respondent’s counsel before the hearing of the appeal and the resultant effect of such omission is that the said preliminary objection is deemed abandoned. See MAGIT VS FEDERAL UNIVERSITY OF AGRICULTURE, MAKURDI (2006) ALL FWLR (PT.298) 1315; TIZA VS BEGHA (2005) ALL FWLR (PT. 272) 200; OKOLO VS UBN LTD (1998) 2 NWLR (PT. 539) 618; AJIDE VS KELANI (1985) 3 NWLR (PT. 12) 248; SALAMI VS MOHAMMED (2000) 9 NWLR (PT. 673) 469.
I will now address the main appeal as per the three issues raised in the Appellant?s brief and adopted by the Respondents.
ISSUE ONE
Herein, learned counsel for the Appellant submitted that from the totality of the processes filed before the trial Court and the annexed documents, the learned trial judge erred in law to have held that the 7th defendant’s share of 86.66% or quantum of interest in the inter-pleader applicant cannot be used in satisfaction of the judgment debt.
Referring to the case of AFRICAN DEVELOPMENT INSURANCE COMPANY LTD VS NLNG LTD (2000) FWLR (PT 3) 431 at 442 it was submitted that the right of action against a guarantor arises on a default by the principal debtor and not on a finding of liability against such debtor. He added that the 1st Respondent was incorporated by the 7th defendant, his wife and child and the 7th defendant owns the majority share in the company and by Section 115 of the Companies and Allied Matters Act (CAMA) 1990 shares are personal property of the subscriber and are transferrable and it is wrong for the 1st Respondent to claim total ownership of the goods attached to the exclusion of the 7th Defendant who owns 86.66% shares or quantum of interest in the company.
While conceding that upon registration, the 1st Respondent becomes a separate legal entity from its subscribers, but the 7th Defendant being a share holder has a stake in the company’s assets which the Appellant is entitled to attach in satisfaction of the judgment obtained against the 7th defendant.
On issue 2, it was submitted that the learned trial Judge was wrong in law to have entertained the inter-pleader summons after identifying the fundamental defects on the processes/application. He added that the failure of the processes filed by the inter-pleader/1st Respondent to comply with the Rules of Court makes is incompetent and robs the Court of the jurisdiction to entertain same and it was erroneous for the learned trial Judge to grant the reliefs sought on the ground that the Appellant?s counsel did not raise objection to the fundamental defect on the process. References was also made to the provisions of Order 43 Rule 3 (1) of the Delta State High Court (Civil Procedure) Rules 2009 to submit that the operational word ‘shall’ is mandatory which makes compliance a condition precedent, therefore the non commencement of the proceedings by way of Originating Summons but by way of a motion on notice when the matter was no longer pending before the Court renders the process incompetent and the fact that counsel for the Appellant did not object to the defective process is immaterial because the trial Court is already aware of the defect.
Learned counsel also referred to Section 27 of the Sheriff and Civil Process Law Cap. 53 Vol. 4 Laws of Delta State 2008 and Order IV Rule 4 (1) & (2) of the same law to point out that the inter-pleader summons filed by the 1st Respondent is defective because it was not commenced by an Originating Summons, and it was not issued by the Registrar of Court as held in the case of OKWOCHE VS DIBIA (1994) 2 NWLR (PT. 325) 125 and SIMISOLA TRADING CO. VS CHEMICAL AND ALLIED PRODUCTS PLC (2010) ALL FWLR (PT. 501) 991 at 999.
It was then contended that the learned trial Judge having identified the defects in the process which goes to the root of the application ought to strike it out.
On issue 3, learned counsel referred to the case of SIMISOLA TRADING CO. VS CHEMICAL AND ALLIED PRODUCTS PLC supra to submit that the object of an inter-pleader proceedings is to determine the ownership of the goods/properties attached while enforcing the judgment of a Court. In this regard, an inter-pleader can only succeed if he can adduce enough evidence to convince the Court that the goods attached are owned by him and not the judgment debtor.
It was further contended that the 1st Respondent did not prove before the Court that the attached goods belong to it to warrant the grant of the application having regard to the receipts/invoices tendered in evidence which showed that they did not cover all the goods listed in the inventory of the attached goods as was taken on the 4/7/2013 by the Court bailiff. Also that from the said receipts and invoices the 1st Respondent could not show that some items like the PVC ceiling and water storage tank belong to it but only sought to mislead the Court which ended up granting the application.
It was then urged on this Court to allow the Appeal.
In their reply, learned counsel for the Respondents took up issue 2 first.
He therein submitted that where a party has consented to a wrong procedure at the trial Court, and suffers no injustice, it will be too late to complain on appeal that the wrong procedure was followed. He cited the case of AYANWALE VS ATANDA (1988) 1 NWLR (PT. 68) 22 and V.M. OKWECHIME VS PHILIP IGBINADOLOR (1964) NMLR 132. It was then contended that the appropriate time for a party to a proceeding to make any objection based on a procedural irregularity is at the commencement of the proceedings or at the time when the irregularity arose, but in the instant case the Appellant slept on its right and allowed the proceeding to continue till finality only to now complain on appeal.
Learned counsel also referred to Order 5 Rule 2 (1) of the High Court of Delta State (Civil Procedure) Rules 2009 to submit that by its provision the Appellant has 14 days from the date of the service of the processes to apply to strike out such process for irregularity and this the Appellant did not do but acquiesced to the hearing and determination of the application during which the learned trial Judge made an observation with regard to the mode of commencement of the proceedings in the Ruling delivered and which observation did not occasion a miscarriage of justice.
This Court was therefore urged to hold that the Appellant waived his right to complain during the trial having submitted to the jurisdiction of the Court and participated in the whole proceedings. He relied on the case of EZOMO VS OYAKHIRE (1985) 1 NWLR (PT. 2) 195 and ARIORI VS ELEMO & ORS (1983) 1 SC 13.
It was also contended that the complaint about the defective nature of the inter-pleader application was not an issue before the trial Court and it is not the duty of the Court to raise it on behalf of the Appellant. On this, reliance was placed on the case of KRAUS THOMPSON ORGANISATION VS UNIVERSITY OF CALABAR (2004) ALL FWLR (PT. 209) 1148 and TRADE BANK PLC VS CHAMI (2004) FWLR (PT. 235) 118 at 129 ratio 14.
Replying on issues 1 and 2 together, learned counsel submitted that the 1st Respondent is a Registered company and as such it is clothed with its own corporate and distinct entity separate from that of any of its shareholders no matter the percentage of shares held by any of them. On this, he cited the case of SALOMON VS SALOMON CO. LTD (1897) AC 22 and also referred to Section 37 of the Companies and Allied Matters Act, Cap C 20 Laws of the Federation of Nigeria. He added that having been so incorporated, the 1st Respondent (EDOFREN) NIGERIA LTD is not synonymous with (EDORE FRENCH) the 7th Defendant himself who personally guaranteed the loan, subject matter of the suit in the trial Court.
It was also submitted that the 1st Respondent as the 1st inter-pleader in the trial Court was able to prove ownership of the attached goods by tendering the relevant receipts and invoices reading various dates as proof of when and how the attached goods were acquired in its corporate name and not that of the 7th Defendant as a person.
On the Appellant’s contention that the 7th Defendant’s share or quantum of interest in the 1st Respondent’s company can be attached for the purpose of satisfying the judgment debt, it was submitted that the attached goods having been shown to belong to the 1st Respondent, it cannot be used to satisfy the debts owed by the 7th defendant because he is a majority shareholder in the 1st Respondent’s company given that the latter is a distinct legal entity from the 7th Defendant.
On the whole, it was urged on this Court to resolve the issues in favour of the Respondents and dismiss the Appeal.
Given the peculiar nature of issue 2 which deals with the competence of the processes filed in the trial Court and jurisdiction of the said Court to entertain same, I will address issue 2 first before I will venture into issues 1 and 3.
ISSUE 2
That is whether the trial Court was right to have entertained and grant the reliefs sought in the inter-pleader summons after it has identified a fundamental defect in the process filed. Now the learned trial Judge had in the Ruling as set out in pages 77 to 78 of the record of appeal held as follows:-
”Let me begin by saying that, from what I consider irregularities in this application and the misconception as to inter-pleader proceedings on both sides, I think it is incumbent on me to say a few words about an inter-pleader summons and the proper procedure for its issue and adjudication on it to guide the Bar and registry.”
Inter-pleader proceedings are of two types – stakeholders inter-pleader and sheriff?s inter-pleader.
The instant application is a sheriff’s inter-pleader summons. Where the sheriff or other officer of the Court has taken possession of goods in execution of a judgment to recover a judgment debt and a person who is not the judgment debtor claims ownership or interest in the goods seized and the judgment creditor disputes that claim, the sheriff, bailiff or other office of Court causes the Court to issue and inter-pleader summons to be served on all the parties in the suit. Where it is issued during the pendency of a suit, it may be made by way of motion. But where it is issued in a concluded matter, it must be by way of originating summons (Order 43, Rule 3 (1) of the Rules of this Court) or alternatively by summons as in forms 7, 8, 9 and 10 of the judgment Enforcement Rules summoning the parties and the claimant to appear in Court on a given date for adjudication upon the claim. See Section 27 of the Sheriff and Civil Process Law, Cap S.83, Vol. 4, Laws of Delta State, 2006 and Order 6, Rule 4 (1) and (2) of the judgment Enforcement Rules made there under; Simisola Trading Co. Vs Chemical and Allied Products PLC (2010) All FWLR (pt. 501) 991, at 999.
In this application, the claimants describe themselves as inter-pleaders/claimants and describe the bailiff of this Court as respondent. That is very wrong. The claimants who assert ownership of an interest in the attached goods are the claimants/applicants and the bailiff, who took possession of the goods and is now caught in between the rival claims of the claimants and the judgment creditor and at whose instance the inter-pleader summons ought to resolve whether he should release the goods to the claimants or to proceed to sell them to satisfy the judgment debt.
The claimants properly filed a notice of claim on 27/9/2013 through their lawyer and thereafter filed what they styled ‘inter-pleader summons’ dated 2/10/2013 signed by their lawyer, M.O. Odiedi Esq. This again, with respect to counsel, is very wrong. An inter pleader summons, like other summonses of the court, is not meant to be signed by counsel but by the Judge/Magistrate or the Registrar, being a process issued by the Court. The Rules of the Court, the Sheriffs and Civil Process Law and the judgment Enforcement Rules do not contemplate an inter-pleader summons issued by counsel.
There is therefore a huge question mark hanging over the validity of the inter-pleader summons issued by Mr. Odiedi instead of the Court. However, since the other parties did not make any issue out of it, I shall shut my eyes to this major if not fundamental irregularity.”
From the above set out portion of the ruling of the lower Court, it is glaring that the issue of a defective process was not in dispute as between the parties, but was raised by way of observation and education by the learned trial Judge who deemed it necessary to intimate the parties about the wrong procedure adopted by the 1st Respondent in commencing the inter-pleader proceedings and ended up with the conclusion that since the other parties did not make any issue out of it, the Court shall shut its eyes in the major if not fundamental irregularity.
However, for the Appellant, it was wrong for the learned trial Judge to have proceeded to entertain the inter-pleader summons after identifying the fundamental defects on the processes filed by the 1st Respondent because failure by a party to file processes in compliance with the Rules of Court, laws or statutory provisions makes the application incompetent and robs the trial Court of the jurisdiction to entertain the action.
The learned counsel for the Respondents is however of the stance that the appropriate time when a party to a proceeding should raise an objection based on procedural irregularity is at the commencement of the proceedings or when the irregularity arose and in this case, the Appellant slept on that right of objection having allowed the proceedings to continue to finality only to now complain on appeal.
A perusal of the record of appeal shows that the issue of a defect in the processes filed by the 1st Respondent was nowhere raised by the Appellant throughout the entire proceedings relating to the hearing of the inter-pleader summons. It was only brought up by way of an observation and admonition to the parties by the learned trial Judge. In other words, he raised the issue suo motu but pursued it no further because the Appellant did not raise any objection to the said defect.
The stance taken by the learned trial Judge seem to have the support of some authorities.
In IPINLAIYE VS OLUKOTUN (1996) 6 SCNJ 74 the Supreme Court held that where a party in a civil proceeding has consented to a procedure at the trial, which is neither unconstitutional nor a nullity but merely wrong or irregular and infact suffers no injustice and no miscarriage of justice is thereby occasioned, it would be too late to complain on appeal that the wrong procedure was adopted simply because he lost the case in the trial Court.
Thus when a party has adopted a procedure by consent, he will not be heard on appeal that the procedure he adopted is prejudicial to him or had occasioned a miscarriage of justice. See ELEMCHUKWU IBATOR & ORS VS CHIEF BELI BAKAKURO & ORS (2007) 4 SCNJ 27.
In the instant case, there is evidence on record that upon being served with the inter-pleader summons, the Appellant without any objection to any defect thereon, filed a counter affidavit and a further and better counter affidavit. This was followed with the Appellant’s written address which was duly adopted and relied upon at the hearing of the 1st Respondent’s application and at no point was any complaint made with regard to the competence of the inter-pleader summons filed by the 1st Respondent and this is notwithstanding the clear provisions of Order 5 Rule 2 (1) of the High Court of Delta State (Civil Procedure) Rules 2009 which requires a party seeking to set aside any process on grounds of irregularity to make such application within 14 days from the date of service of such process on him and before such party has taken any fresh step after becoming aware of such irregularity.
It is trite that equity helps the vigilant and not the indolent and he who seeks equity must do equity. The Appellant who seeks to now rely on the provisions of Order 43 Rule 3 (1) of the Delta State High Court Rules and Section 27 of the Sheriff and Civil Process Law however failed to comply with the provision of Order 5 Rule 2 (1) by bringing the application within the time prescribed and not only, it waited for the Court to raise it by way of observation in its ruling before coming by way of an appeal to cry over spilt milk. This unfortunately will not help having gone through the whole hog of hearing at the lower Court without any qualms raised, and presently in this appeal, it has not been shown that there was any miscarriage of justice.
In the circumstance, the only conclusion that can be reached given the history of the proceedings at the lower Court that gave rise to this appeal is that the Appellant is deemed to have waived its right to set aside the irregularity if any. See EZOMO VS OYAKHIRE (1985) 1 NWLR (PT 2) 195 also relied on by the Respondent?s counsel; ARIORI & ORS VS ELEMO & ORS (1983) 1 SC 13; ADEGOKE MOTORS LTD VS DR. ADESANYA & ANOR (1989) 3 NWLR (PT. 109) 250 at 292; ADEBAYO VS JOHNSON (1969) 1 ANLR 176; in DUKE VS AKPABUYO LOCAL GOVERNMENT (2005) LPELR 963 (SC); it was held that where a beneficiary of a Rule failed to challenge the correctness of the procedure at the commencement of the proceedings, the adoption of a wrong procedure will be no more than an irregularity and would not render the entire proceedings a nullity.
In the light of the above reason, this issue is resolved against the Appellant.
ISSUES 1 AND 2
The Appellant’s contention is that the learned trial Judge erred in law in his finding that the 7th defendant’s share of 86.66% or quantum of interest in the 1st Respondent cannot be used to satisfy judgment debt, when the said shares or quantum of interest of 86.66% are the personal property of the 7th Defendant and as such can be transferred.
For the Respondent’s counsel, the 1st Respondent is a registered company and as a company incorporated under the Companies and Allied Matters Act, it is clothed with its own corporate and distinct entity separate from that of any of its shareholders, no matter the percentage of shareholding.
The status of an incorporated company vis-a-vis its shareholders has been subjected to series of judicial pronouncements. In the often cited English case of SALOMON VS SALOMON & CO. (1887) AC 22, the House of Lords held that the company is in the eyes of the law a person distinct from Salomon who formed the company with his wife and five children. This principle of distinct corporate identity is also applicable to the Nigerian Legal System. See OKOLO AND ANOR VS UNION BANK OF NIGERIA LTD (2004) 3 NWLR (PT. 859) 87 or (2004) 1 SC (PT 1) page 1; UNION BANK (NIG) LTD VS PENNY MART LTD (1992) NWLR (PT. 240) 228; MARINA NOMINEES LTD VS FEDERAL BOARD OF INLAND REVENUE (1986) 2 NWLR (PT. 20) 48; OKOMU OIL PALM CO. LTD VS ISERHIENRHIEN (2001) 3 SC 140; WILLIAMS ESQ & ANOR VS ADOLD STAMM INT. (NIG) LTD & ANOR (2013) LPELR 20356 (CA).
From the above cited authorities, it is now settled law in Nigeria that a company duly registered under the Companies and Allied Matters Act must be regarded and sustained as a separate legal entity and distinct from each and every shareholder or member thereof, no matter the extent or number of shareholdings or quantum of interest he may have in the company. In other words a Registered Company is in law a separate entity from any of its shareholders, no matter how many shares a member may hold and such company cannot be an agent of its subscribers under the circumstance. See MARINA NOMINEES LTD VS FBIR supra. In GIMSER COMMODITIES LTD VS FCMB PLC & ORS (2017) 1 LPELR 43095 (CA) this Court held at pages 13 to 14 of the Report that:-
?The law is that a company is a distinct entity from its shareholders or Directors.
Upon incorporation, it becomes distinct from its members. The effect of incorporation was given by the Supreme Court in the case of Onuekwusi & ors. Vs The Registered Trustees of the Christ Methodist Zion Church (2011) 6 NWLR (PT 1243) page 347 at 364-365 paragraphs G-D per
I.T. Mohammed JSC, as follows:-
”The effect of incorporation or registration of a company, firm etc is to confer on it legal entity as a person separate and distinct from its members. It is a legal person with personality of its own. It is more than a mere association of individuals. It becomes an artificial entity once the formal procedure of registration or incorporation has been complied with. This is what underlies the concept of corporate personality which became finally established at common law in the Locus Classicus case of Salomon vs. Salomon & Co. Ltd. (1887) AC 22 where Lord Macnaghten stated the position as follows: ‘when the memorandum is duly signed and registered though there be only seven shares taken, the subscribers are a body corporate ‘capable forthwith’, to use the words of the enactment, of enactment, of exercising all the functions of an incorporated company… The company is a different person altogether. From the subscribers to the memorandum and, although it may be that after incorporation the business is precisely the same, as it was before, and the same persons are managers, and the same hands received the profits, the company is not in law the agent of the subscribers or trustee for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by the Act.”
In ASHIBUOGWU VS A.G. BENDEL STATE (1988) NWLR (PT. 69) 138, It was held that a government owned Limited Liability Company possess a legal personality of its own. It can sue and be sued by its name. Its shareholders, even if the major or sole shareholder is the Federal Government, it cannot be sued for debt incurred by the company. See also ABACHA & ANOR VS A.G. FEDERATION & ORS (2013) LPELR 21479 (CA).
Furthermore, Section 37 of the Companies and Allied Matters Act provides for the effect of Registration of a company as follows:-
”As from the date of incorporation mentioned in the certificate of the incorporation, the subscribers of the memorandum together with such other persons as may from time to time, become members of the company, shall be a body corporate by name contained in the memorandum, capable forthwith of exercising all the powers and functions of an incorporated company including the power to hold land and having perpetual succession and a common seal.”
In the instant case, the 1st Respondent is an incorporated company, with the name ‘EDOFREN NIGERIA LIMITED’. The 7th Defendant is known as EDORE FRENCH and holds a majority share in the 1st Respondent’s company. However, in his personal capacity he guaranteed a loan facility for one London Obuzor which default in payment resulted in the suit and eventual judgment against the 7th Defendant and others, but not the 1st Respondent. In other words the loan guaranteed by Mr. Edore French has nothing to do with the 1st Respondent and by the authorities referred to above, any liability accruable to Mr. Edore French cannot rub off on the 1st Respondent, being an independent legal personality notwithstanding the fact that the 7th Defendant Mr. Edore French holds a majority share or quantum of interest in the 1st Respondent Company.
I therefore agree entirely with the conclusion of the learned trial Judge wherein he held at page 83 of the Record that:-
”On the whole, on the facts before me and on the law there is no legal basis or justification for the goods of the 1st claimant/applicant to be attached and sold for the debts of the 7th defendant/judgment debtor. The fact that the 7th defendant/judgment debtor is the majority shareholder and a Director of the 1st Claimant/is inconsequential.”
Indeed, there is no legal basis to attach the properties/goods of the 1st Respondent who was not a party to the suit to satisfy the judgment debt owed by the 7th defendant for a transaction entered into in his personal capacity.
In the circumstance, this issue is resolved against the Appellant.
ISSUE 3
That is whether the 1st Respondent proved his entire ownership in the goods attached in the execution.
The Appellant has argued that the receipts/invoices presented by the 1st Respondent did not prove ownership to all the goods/items executed.
A perusal of the record of appeal shows that the 1st Respondent in proof of ownership of the attached goods annexed the following documents to the affidavit in support of the inter-pleader summons:-
a) Delivery note No. 00905935001 dated 25/5/2013.
b) Invoice No. 000729 dated 29/6/2013.
c) Invoice No. 0012542 dated 1/7/2013.
d) Invoice No. 001484 dated 1/7/2013.
e) Invoice No. 002103 dated 1/7/2013.
f) Voucher No. 0000442 dated 31/5/13.
g) Receipt No. 178731 dated 3/5/2013.
h) Invoice No. 000464 dated 28/6/2013.
i) Receipt No. 178910 dated 24/5/2013.
See pages 30-38 of the Record).
The above listed documents were claimed by the 1st Respondent as evidence of purchase and supply of the goods stated therein to the company at No. 16 Irri Road, Oleh, Delta State as part of its business activities.
No doubt, the purpose of inter-pleader proceedings is to seek relief by initiating an action to determine the ownership of the property or goods seized or attached by the sherrif or intend to seize or attach in the Court against a judgment debtor. The third party who claims ownership of such property or goods in question has the onus under the law to establish title to the property or goods wrongly attached. See BULUS VS OKPALA & ANOR (2017) LPELR 43423 (CA).
In OLATUNDE VS OAU & ANOR (1998) 5 NWLR (PT. 549) 178 the Supreme Court held that in inter-pleader proceedings, the claimant is deemed to be the plaintiff and the judgment creditor, the defendant.
Accordingly, the onus is generally on the claimant, to establish title to the property he claims to be his.
In evaluating the affidavit evidence of the parties, learned trial Judge made the following findings at page 81 of the Record of appeal:-
”By paragraph 4, 8, 11 and 14 of the supporting affidavit, it is deposed that goods attached belong to the 1st claimant and that they were removed from its shop/store at No. 16, Irri Road, Oleh. Nine receipts and invoices issued in the name of the 1st claimant with address shown as No. 16, Irri Road, Oleh were exhibited collectively as Exhibit ‘D’. Ex facie the goods belong to the 1st claimant and it was in possession of them at the time of their seizure and removal from its store/shop at No. 16 Irri Road, Oleh.
Did the judgment creditor discharge the burden of establishing that the goods seized from the possession of the 1st claimant were not its own but those of the 7th defendant/judgment debtor? In paragraphs 13 and 15 of the judgment creditor’s further and better affidavit it deposed that the goods attached ‘are not the properties of the 1st claimant’ and that the applicants failed to show proof of exclusive ownership of the attached goods. The judgment creditor did not produce any document to show the goods belong to the 7th defendant/judgment debtor. It did not question the authenticity and genuineness of the nine documents which make up Exhibit ‘D’. I accept Exhibit ?D? as sufficient proof that the wares seized belong to the 1st claimant and not the 7th Defendant/judgment debtor.”
I am inclined to agree with the above set out findings of the learned trial Judge having found it to be in tandem with the evidence on record as per the affidavits and counter affidavit as well as the documents annexed thereto as exhibits.
The 1st Respondent in proof of ownership of the attached goods tendered nine invoices, vouchers and receipts of purchase.
This was not discredited or contradicted by the Appellant either by way of showing that the goods attached does not tally with those in the invoices or receipts or that they belong to someone else. The only attempt at challenging the 1st Respondent’s claim is found in paragraphs 13 and 15 of the Appellant’s further and better affidavit where it was deposed that the goods attached are not the properties of the 1st Respondent and that the 1st Respondent failed to show proof of exclusive ownership of the attached goods. This to my mind is a weak challenge to the 1st Respondent’s claim given the proof of same by documentary evidence which was not rebutted or discredited as either not being genuine or inconsistent with the goods attached.
From the records, and to all intents and purposes, the Appellant’s focus was on the premise, that the 7th Defendant, (Edore French) being a majority shareholder in the 1st Respondent, the appellant was justified in attaching the 1st Respondent’s goods to satisfy the judgment debt owed by the 7th Defendant. In other words, there is no difference between the 1st Respondent and the 7th Defendant. Unfortunately, this as earlier stated, is contrary to the established principle of corporate legal personality.
The law is settled that where evidence including affidavit evidence is unchallenged, uncontroverted and credible, the trial Court is bound to accept it. Such averments should be accepted and acted upon. See LONG-JOHN VS. BLAKK (1998) 6 NWLR (PT. 555) 524 and NWOBODO VS M.O. NYIAM & ASSOCIATES (2014) LPELR 22668 CA. In OMOREGBE VS LAWANI (1980) 3-4 SC 108, the Supreme Court held that where evidence given by a party to any proceedings was not challenged by the opposite party who had the opportunity to do so, it is always open to the Court based on the proceedings to act on the unchallenged evidence before it. See also ODULAJA VS HADDAD (1973) 11 SC page 35.
The learned trial Judge in the instant case rightly acted on the unchallenged evidence before him to hold that the 1st Respondent proved ownership of the attached goods and I cannot but endorse same as proper and justifiable.
Accordingly, this issue is also resolved against the Appellant.
On the whole, I find this appeal to be unmeritorious and it is hereby dismissed.
The Ruling of the High Court of Delta State delivered by A.A. Onojovwo J. On the 18th day of March, 2014 is hereby affirmed.
N50,000.00 cost is awarded against the Appellant in favour of the 1st Respondent.
MOORE ASEIMO ABRAHAM ADUMEIN, J.C.A.: My learned brother, Samuel Chukwudumebi Oseji, JCA, has just delivered the leading judgment which I had the opportunity of reading before now.
I agree that this appeal lacks merit and I also dismiss it with N50,000.00 costs in favour of the 1st respondent and against the appellant.
MUDASHIRU NASIRU ONIYANGI, J.C.A.: I have had a preview of the judgment just delivered by my learned brother, SAMUEL CHUKWUDUMEBI OSEJI, JCA. I agree with the reasons therein adumbrated to arrive at the conclusion that the appeal is unmeritorious and should be dismissed.
I also dismiss the appeal and abide by the consequential orders herein including the order of cost.
Appearances:
P.O. ATIKUEKE (MRS)For Appellant(s)
E.H. UMUZEFor Respondent(s)
