AFRIBANK NIGERIA PLC. v. BARRISTER SUNNY A. ANUEBUNWA
(2011)LCN/4640(CA)
In The Court of Appeal of Nigeria
On Tuesday, the 21st day of June, 2011
CA/OW/113/2010
RATIO
BANKER AND CUSTOMER RELATIONSHIP: NATURE OF THE RELATIONSHIP BETWEEN BANKER AND A CUSTOMER WHERE THE BANK ACCEPTS MONEY EITHER IN CURRENT OR DEPOSIT ACCOUNT FROM ITS CUSTOMER
In WEMA BANK v. OSILARU (2008) WRN (Vol. 4) Pg. 160 at 165, 177 this court held that the relationship between a banker and a customer where a Bank accepts money either in current or deposit account from its customer is a relationship of debtor and creditor and is essentially contractual. See also BALOGUN v. NATIONAL BANK OF NIGERIA LTD (1978) 11 NSCC 35; AFRIBANK NIG. PLC v. A. INVESTMENT LTD (2002) 7 NWLR Pt. 40; ALLIED BANK v. AKUBUEZE (1997) 6 NWLR Pt. 509 Pg. (1997) 6 SCNJ 116. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.
ESTOPPEL: MEANING OF ESTOPPEL BY CONDUCT
What is estoppel by conduct? One of the earliest locus classicus on this issue is S. NASSAR & SONS NIG. LTD. v. LAGOS EXECUTIVE DEVELOPMENT BOARD. Therein the nature of estoppel by conduct was defined to mean that if a person is led to act to his own peril or detriment as a result of the conduct of another person who knew and intended it to be so, this other person is estopped from denying that the peril or detriment was intended. In CHUKWUMA v. IFELOYE (2008) 12 SC Pt. 11 g. 291, the Supreme Court reiterated the principle that an estoppel arises against a person who made it and he will not be allowed to say that the representation is not what he presented it to be. This is known as estoppel by conduct or estoppel in pais. See also OYEROGBA v. OLAOPA (1998) 13 NWLR Pt. 583 Pg. 509 at 519; (1998) 12 SCNJ 115 at 123. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.
ESTOPPEL BY CONDUCT: WHAT THE DOCTRINE OF ESTOPPEL ENTAILS;
In OKONKWO v. KPAJIE (1992) NWLR Pt. 226 Pg.226 Pg. (1992) 2 SCNJ 290, the Supreme Court held that S. 151 of the Evidence Act is applicable. This position was recently enshrined in ATTORNEY-GENERAL, RIVERS STATE v. ATTORNEY-GENERAL, AKWA IBOM STATE where the Supreme Court held that the doctrine of estoppel though a common law principle has been enacted into our body of laws as S. 151 of the Evidence Act as follows: “When one person has by his declaration act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative in interest shall be allowed in any proceedings between himself and such person or such person’s representative in interest to deny the truth of that thing.” In UDE v. OSUJI (1998) 10 SCNJ 75 at 22 the Supreme Court held thus: “The principle of estoppel by conduct is that if one party has by his word or conduct made to the other a promise or assurance which was intended to affect the legal relation between them and to be acted upon accordingly, then once the other party has taken him at his word, and acted on it, then the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance has been made by him. He must accept their legal relation as modified by himself even though it is not supported in point of law by any consideration, but only by his word or conduct. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.
CONFIRMATION: MEANING OF THE WORD “CONFIRMATION”
The word “confirmation” as defined by Black’s Dictionary 6th Edition Pg. 298 means: “A contract, or written memorandum thereof by which that which was infirm, difficult of proof, imperfect, or subject to be avoided is ratified, rendered valid and binding, made firm and unavoidable. To give formal approval Act or process of confirming.” The implication of the above definition is that the Appellant must prove that the Respondent must by all means and all situations ratify any cheque before it becomes valid. This is clearly outside the legal agreement – the mandate (the authority) between the parties.” Per OGUNWUMIJU, J.C.A. (Pp. 21-22, paras. G-C) PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.
BANK/CUSTOMER RELATIONSHIP: NATURE OF THE LEGAL RELATIONSHIP BETWEEN A BANK AND A CUSTOMER
In STB LTD v. ANUMNU supra, this court per Adekeye JCA (as she then was) held as follows: “The legal relationship between a bank and a customer based on contract is that of creditor and debtor, or principal and agent. The creditor/principal being the customer and debtor/agent being the bank. The contractual relationship imposed a duty of care on the bank, the breach of which will impose liability for negligence. The role of bankers and their predominant business is the receipt of monies on current or deposit account and the payment of cheques drawn by as well as the collection of cheques paid by a customer. The receipt of money from and on account of its customer by a bank constitute the banker the debtor of the customer and the banker undertakes to pay only part of the money thus due from him to the customer against written orders of the customer. The relationship is equally that of principal and agent so that a cheque drawn on the banker by the customer represents the order of the principal to his agent to pay out to the principal, money in his hands, the amount stated on the cheque to the payee endorsed on the cheque. See AFRIBANK NIG. PLC. v. A. I. INVESTMENT (2003) FWLR Pt. 141 Pg. 184; (2002) 7 NWLR Pt.765 pg.40; ACCESS BANK V. MARYLAND FINANCE COMPANY AND CONSULTANCY SERVICE (2005) 3 NWLR PT.913 PG.460; BALOGUN V. NBM (1978) 3 SC 155; (1978) 12 NSCC 36; (1978) ALL NLR 63. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.
DRAWER’S CONFIRMING REQUIRED: WHAT THE WORDS “DRAWER’S CONFIRMATION REQUIRED” ENTAIL
The words “Drawer’s Confirmation Required” DCR had been interpreted to mean that the customer did not have enough money in his account. That is clearly libelous. See DIKE v. ACB (2000) 5 NWLR Pt.657 Pg.458. PER HELEN MORONKEJI OGUNWUMIJU, J.C.A.
JUSTICES:
ABUBAKAR JEGA ABDUL-KADIR Justice of The Court of Appeal of Nigeria
HELEN MORONKEJI OGUNWUMIJU Justice of The Court of Appeal of Nigeria
MOJEED ADEKUNLE OWOADE Justice of The Court of Appeal of Nigeria
Between
AFRIBANK NIGERIA PLC Appellant(s)
AND
BARRISTER SUNNY A. ANUEBUNWA Respondent(s)
HELEN MORONKEJI OGUNWUMIJU, J.C.A. (Delivering the Leading Judgment): This is an appeal against the decision of Hon. Justice L. Abai delivered at the Aba Judicial Division of the Abia State High court on the 12th of March 2009. The facts that led to this appeal are as follows:
The Plaintiff now Respondent is a lawyer with his office at Aba while the Defendant now Appellant is a limited liability company with branch office all over Nigeria particularly Aba. The Respondent was a customer of the Appellant operating a current account No. 0961533812511 with the Appellant at its Jubilee Road Branch, which to the knowledge of the Appellant was for the purpose of and in connection with his trade and profession. On 23rd May, 2006, the Respondent issued an Afribank Nigeria Plc cheque in favour of Messrs Ania Motors Limited for the sum of N573,300.00. When Messrs Ania Motors Limited paid in the cheque into its First Bank account for clearing and payment by Afribank, the cheque went for clearing but was dishonoured and the Appellant caused the letters “DCR” to be written on the said cheque. One of the Appellant’s employees had at the material time called Respondent by phone to confirm the cheque which he did. Nevertheless, the Appellant dishonoured the cheque.
By a Writ of Summons accompanied by the Statement of Claim dated 27/6/2006 at Pg. 1-13 of the Records of Appeal the Respondent as Plaintiff claimed the following reliefs in these terms:-
“WHEREFORE the plaintiff claims against the defendant N50,000,000 damages (Fifty Million Naira) being damages suffered by the plaintiff as a result of:
“(a) The wrongful dishonor of the said cheque (Breach of Contract) by the defendant and/or negligence of the defendant on dishonor of the said cheque of 23rd May 2006 issued by the plaintiff and
“(b) The publication by the Defendant of and concerning the Plaintiff of the words Drawers Confirmation Required (“D.C.R”)
Pleadings were concluded by the parties, issues were joined and the case proceeded to trial. The Respondent herein as Plaintiff at the trial court gave evidence on his own behalf and called two witnesses. The Appellant herein also called two witnesses.
The Plaintiff’s case at the trial court was that the Appellant wrongfully dishonoured the cheque of N573,300.00 issued to Ania Motors Ltd when he had sufficient funds to warrant the payment of the cheque. The Respondent argued that though he introduced the “practice” or “style” of endorsing the back of the cheques he issued in certain instances, the Appellant was not justified to dishonour the instant cheque because confirmation/endorsement at the back of cheques was not part of the mandate signed and submitted while and when opening his account with the Appellant Bank. He led evidence to the effect that the dishonor of the cheque injured his reputation particularly with Ania Motors who were his clients.
The Defendant’s case at the trial court was that in the light of the conduct, “practice” and “style” of the Respondent in endorsing the back of his cheques, the Appellant was justified to demand his confirmation before honouring the cheque in issue since that cheque of such a large amount contained no form of confirmation or endorsement.
At the end of the trial, the learned trial judge entered judgment for the Respondent in the sum of Three Million, Five Hundred Thousand Naira only, being general damages for the wrongful dishonour of the Respondent’s cheque and the publication of the words “D. C. R.” “Drawer’s Confirmation Required.”
This is an appeal against that judgment. The parties settled their briefs in this court. The Appellant’s brief dated 12/5/10 was filed on 13/5/10 while the Respondent’s brief dated 8/6/10 was filed on 11/6/10.
Parties each adopted a sole issue similar in content for determination which is in essence a challenge of the finding of the learned trial judge. I will adopt the Appellant’s sole issue in the determination of this appeal. It is couched as follows:
“Whether in the peculiar and exceptional circumstances of this case, the evidence on record and admitted documents, the learned trial judge of the court below was right in finding and holding that the Appellant wrongfully dishonoured the Respondent’s cheque issued to Ania Motors Ltd”
In the Appellant’s brief settled by B. C. Nwagboso Esq, learned counsel argued that the conclusion of the learned trial judge is wrong in fact and law and did not reflect a clear appraisal of the evidence adduced by the parties at the trial. Counsel argued that the Respondent sued the Appellant for breach of Contract, negligence and defamation for wrongful dishonor of plaintiff/Respondent’s cheque. He submitted that it is trite law that banker/customer relationship is a specie of contract. He cited WEMA BANK PLC v. OSILERU (2008) 10 NWLR Pt. 1094 Pg. 150 at 170.
Learned Appellants’ Counsel also argued that even though the Respondent’s claim was that it was not part of the mandate he signed while opening the account that he would confirm or endorse cheques issued by him, however in the course of operating this account and at all times material to the case that gave rise to this appeal, the Respondent on his own and contrary to the mandate he signed, started endorsing and confirming the reverse side of the cheques he issued. Counsel argued that the Respondent at Pg. 32 of the Record admitted that it was his normal practice to confirm his cheques and noted that what is admitted need no further proof. He argued that the findings of the learned trial judge on this question of confirmation is not supported by the evidence led.
Learned Appellants’ counsel argued that the evidence led showed that in so far as the parties are concerned, the manner of endorsing or confirming the reverse cheques was immaterial, what was of utmost important is the indubitable fact that the Respondent at all material times introduced the “normal practice” of endorsing the back of his cheque either by stating “The bearer is identified by me please pay without I.D card” or by writing his name, address, signature and date.
He argued that Exh J- a cheque issued by the Respondent to Ugotex Alluminium Ltd had one of this features in that the Respondent wrote on the reverse side of Exh J. The Respondent wrote his name, address and date at the back of the cheque. Appellant’s counsel argued that the trial court was wrong to hold at Pg. 87 of the record as follows:
“That cheque which was honoured by the defendant bank nowhere shows or indicates that the plaintiff gave formal approval, verified or corroborated the issue of the cheque.”
Learned Appellant’s counsel submitted that at paragraph 6.3 of the Statement of Defence (Pg. 17 of the Record of Appeal), the Appellant clearly raised the issue of estoppel before the trial court. He submitted that the Respondent was estopped from saying that he could resile from previous practice between the parties. Having introduced the style or “normal practice” of endorsing/confirming the back side of his cheques the Respondent is equitably and contextually estopped from insisting on the mandate he signed or to allege that the Appellant breached the contract he entered into with the bank or that the bank was negligent or that the bank defamed him.
Learned Appellant’s counsel argued that the Respondent was bound in his dealings with the Appellant by S.151 of the Evidence Act even though the terms of the agreement are embedded in the mandate signed while the account was being opened while the modus operandi is a question of fact depending on the particular and peculiar circumstances of the parties. To ascertain whether the terms of agreement were breached by either party, the court considers not just the document but the conduct of the parties and the surrounding circumstances. He cited NWOBI v. ANUKUM (2001) 14 W.R.N 38 at Pg. 47. He further submitted that the law is settled that in a situation of this nature the Court is entitled, and indeed under a duty to intervene and justifiably set aside the finding or holding of the trial Court. He cited LEGGA v. SARHURU (2008) 16 NWLR Pt. 1114 Pg. 427.
In an offshoot of this issue, learned Appellant’s counsel argued that it was futile for the trial court to distinguish between confirming and endorsing cheques issued to individuals and those issued to corporate bodies since that fact was not pleaded and go to no issue and parties are bound by their pleadings.
Counsel argued that the trial court erroneously relied on the case of STB LTD. v. ANUMNU (2008) ALL FWLR Pt. 399 Pg. 405 (2007) WRN Vol. 29 Pg. 75 at 99 to hold that the endorsement “D. C. R” on a cheque is libelous if the customer had sufficient funds in his account. He argued that the facts in STB v. ANUMNU supra are quite different from the facts of this case. Learned Appellant’s counsel argued that to establish the tort of negligence, the Plaintiff must prove that the defendant failed to take reasonable care which resulted in injury to him. He cited CHAGAURY v. YAKUBU (2006) 3 NWLR Pt. 966 Pg. 138. He submitted that in the circumstances of this case, the Appellant took reasonable care to protect the money of the customer. He argued that the Respondent’s previous conduct of endorsing the back of his cheques put the Appellant on notice not to honour cheques lacking this essential features. Consequently, the Respondent cannot allege negligence when the Appellant acted in accordance with the conduct of the Respondent.
The Respondent in the brief settled by Uche S. Awa Esq. submitted that the learned trial judge was right in that there is no credible evidence at all before the trial court from the Appellant that the Respondent was under a duty to “identify” or “introduce” a drawee, before his cheques are paid even when the cheque is issued to an inanimate body like a Limited Liability Company and in the instant appeal, “ANIA MOTORS LTD”, beneficiary of the aforesaid cheque.
The learned counsel for the Respondent argued that from the evidence of the parties, it was clear that the contract did not contain mandatory confirmation of cheques before payment to third parties. Counsel argued that even though DW2 the bank manager testified that new accounts now have a requirement for mandate of customers before payment to third parties, the account of the Respondent was not one of the new accounts.
Counsel submitted that any purported introduction of confirmation of cheques before payment to a third party will automatically conflict with the main contract of the parties which is the MANDATE. The mandate will override any purported introduction of confirmation by the Respondent. Counsel argued that the evidence before the Court below is comprehensive and was confirmed by parties to the effect that confirmation of cheques for payment to third parties does not form part of the contract, meaning that a cheque issued by the Respondent with or without any endorsement at the back, or by whatever name it is called by the Appellant would or should not hinder the payment of the cheque. Counsel submitted that the mere writing of the Plaintiff’s name and signature without more on a cheque, has nothing to do with confirmation, by whatever meaning or at all. Counsel argued that the Respondents’ evidence that cheques which go through clearing were not confirmed by him in any form was not controverted by the Appellant.
Respondent’s counsel further submitted that different factual and legal implications are provided when cheques are issued to an individual as well as to a corporate body that is inanimate and that cannot be physically identified. What is usually pleaded are facts not evidence. The Respondent specifically pleaded at paragraphs 4, 5, 8, 9 and 16 of his Statement of Claim as is contained at Pg. 3 and 4 of the Record of Appeal that he issued the cheque, subject matter of the suit and this appeal to Messrs Ania Motors Ltd and that the company paid the cheque into its bank account with First Bank Plc and that same went through clearing. The legal implication of such pleadings is very obvious. The company is not a living individual. It is therefore not right and does not accord with the law for the Appellant to submit as he did at paragraph 4.17 of her Brief of Argument that the Respondent and the trial court tried to distinguish between confirming/endorsing cheques issued to individuals and those issued to a corporate body. Furthermore, ANIA MOTORS LTD, pleaded as the beneficiary of the cheque cannot cash the cheque over the counter but must route the cheque through its Bank Account. Counsel concluded his submission by saying that the trial court was right in distinguishing between an individual and a corporate body as it did.
Counsel argued that judgment was awarded to the Respondent for general damages for the wrongful dishonor of the Respondent’s cheque and publication of the words “D. C. R” on the cheque by the Appellants. The issue of negligence therefore came in tangentially while proving breach of contract and libel on the part of the Appellant. He cited STB v. ANUMNU (supra). Counsel submitted further that the evidence of the Respondent and that of P.W. 2 clearly showed that the refusal of the Appellant to honour the cheque caused untold injury to the reputation of the Respondent for which he is entitled to be compensated.
In considering the arguments of both learned counsel on the sole issue for determination, I will first of all start with the question of whether or not the Respondent entered into an implied undertaking to confirm his cheques before payment. On this issue, the learned trial judge held as follows on Pg. 87-88 of the record.
“From the evidence before the Court I am satisfied and I find as a fact that the plaintiff did not enter into any implied undertaking to confirm his cheques before payment nor was it part of his mandate with the defendant. I also find as a fact that the defendant had no justifiable reason not to honour the plaintiff’s cheque”
It is clear that the relationship between Banker and Customer is contractual and the parties are bound by the terms of their contract. The argument of the Appellant is however that we should look both at the agreement between the parties which is called the “mandate” and the modus operandi in order to give effect to the agreement of the parties. The Respondent’s view is that the mandate signed by the Respondent when the contract was signed by the parties- that is when the account was opened is the basis of the contract between the parties and that both parties are bound by the mandate and no more. There is no doubt that as Nsofor JCA opined in NWOBI v. ANUKUM supra the court should not look into only what the parties wrote or said but also what they did -their conduct or modus operandi. That is to say the trade custom governing the contractual relationship between the parties. That is the only way the court can uphold bargains and not be the destroyer of bargains. In WEMA BANK v. OSILARU (2008) WRN (Vol. 4) Pg. 160 at 165, 177 this court held that the relationship between a banker and a customer where a Bank accepts money either in current or deposit account from its customer is a relationship of debtor and creditor and is essentially contractual. See also BALOGUN v. NATIONAL BANK OF NIGERIA LTD (1978) 11NSCC 35; AFRIBANK NIG. PLC v. A. INVESTMENT LTD (2002) 7 NWLR Pt. 40; ALLIED BANK v. AKUBUEZE (1997) 6 NWLR Pt. 509 Pg. (1997) 6 SCNJ 116.
What is estoppel by conduct? One of the earliest locus classicus on this issue is S. NASSAR & SONS NIG. LTD. v. LAGOS EXECUTIVE DEVELOPMENT BOARD. Therein the nature of estoppel by conduct was defined to mean that if a person is led to act to his own peril or detriment as a result of the conduct of another person who knew and intended it to be so, this other person is estopped from denying that the peril or detriment was intended.
In CHUKWUMA v. IFELOYE (2008) 12 SC Pt. 11 g. 291, the Supreme Court reiterated the principle that an estoppel arises against a person who made it and he will not be allowed to say that the representation is not what he presented it to be. This is known as estoppel by conduct or
estoppel in pais. See also OYEROGBA v. OLAOPA (1998) 13 NWLR Pt. 583 Pg. 509 at 519; (1998) 12 SCNJ 115 at 123.
In OKONKWO v. KPAJIE (1992) NWLR Pt. 226 Pg.226 Pg. (1992) 2 SCNJ 290, the Supreme Court held that S. 151 of the Evidence Act is applicable. This position was recently enshrined in ATTORNEY-GENERAL, RIVERS STATE v. ATTORNEY-GENERAL, AKWA IBOM STATE where the Supreme Court held that the doctrine of estoppel though a common law principle has been enacted into our body of laws as S. 151 of the Evidence Act as follows:
“When one person has by his declaration act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative in interest shall be allowed in any proceedings between himself and such person or such person’s representative in interest to deny the truth of that thing.”
In UDE v. OSUJI (1998) 10 SCNJ 75 at 22 the Supreme Court held thus:
“The principle of estoppel by conduct is that if one party has by his word or conduct made to the other a promise or assurance which was intended to affect the legal relation between them and to be acted upon accordingly, then once the other party has taken him at his word, and acted on it, then the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance has been made by him. He must accept their legal relation as modified by himself even though it is not supported in point of law by any consideration, but only by his word or conduct.”
We have to examine the evidence of the conduct of the parties to determine if the Respondent had acted consistently to change the nature of the legal relationship between the parties. That is whether or not his conduct in writing at the back of his cheques has resulted in a modification of the mandate he originally signed and thus there is a variation of the terms of mandate which is now binding on him.
Let us look at the circumstances of this case and the facts on record. At Pg. 39 of the record, D. W. 2 the Bank Manager swore as follows with regard to the reason why the Appellant dishonoured the cheque.
“The cheque was not honoured by the Defendant Bank. It was not honoured because there was lack of confirmation by the drawer. The cheque was endorsed DCR that is Drawer Confirmation Required. After the Endorsement the plaintiff did not confirm the cheque to us.
In the course of business if a customer is not in issues a cheque to a third party above N50,000.00 it required confirmation from the customer before the bank pays. If a customer is not in the habit of issuing a cheque to a particular payee of the cheque is issued to that person and the amount is being N100,000.00 and above the bank requires confirmation by the customer whether there is money in the account or not to protect the Bank and the customer. The cheque was dated 23/5/06 from the day of the account he has not issued such cheque to this particular payee. Between January 2006 to 23/5/2006 the Plaintiff had not issued a cheque of this amount.”
On the other hand, in his evidence in chief at Pg. 28 lines 5-22 of the Record of Appeal, the Respondent testified as follows:
“The mandate I have with the defendant is for them to pay the cheques wheneve I issue them. There was no provision of the confirmation of cheques with the defendant. There was no such thing. The documents I signed while opening the account are still with the defendant. I do not have them but I do not state that if any cheque about N50,000.00 they should get confirmation. There was no such agreement. I gave the Defendant the notice to produce those forms.
There was no agreement between I and the Defendant that I should introduce any person, my Customers or clients before issuing a cheque to them and I am sure no binding law regards that the agreement had no provisions for the confirmation of my cheques above N50,000.00. This cheque is not the first I have issued to a third party for an amount above N50,000.00”
Still under examination in chief at Pg. 29 lined 1-8, the Respondent testified as follows:
“On the 10/11/2005 I issued a cheque No. 0032 to Ugotex Aluminum Co. Nig. Ltd for the roofing of my Building, the defendant paid that cheque of N60,000.00 without confirmation from me. Ugotex is a Limited Liability Company. I did not introduce them to the Defendant before they paid this cheque neither did I introduce the other persons to the bank. I have Statement of my account evidencing these payments”
Furthermore, under cross-examination at Pg. 32 lines 1-19 of the Record of Appeal, the Respondent further testified as follows:
“Ans: I do not know what you mean by confirming. If I issue a cheque it is my normal practice I usually say
“The bearer is identified by me” for cheques over the counter but not for those that go for clearing. When I issue a cheque to a company I know it will go through clearing, so I don’t write “bearer identified by me”.
Even though the Appellant through D. W. 2 established the fact that as at the time evidence was being led a year after the event, the Appellant had formally introduced confirmation by the drawer as part of the mandate between it and its customers, that was not so at the time the cause of action arose and in any case the contract between the parties commenced when the account was opened. The word “confirmation” as defined by Black’s Dictionary 6th Edition Pg. 298 means:
“A contract, or written memorandum thereof by which that which was infirm, difficult of proof, imperfect, or subject to be avoided is ratified, rendered valid and binding, made firm and unavoidable. To give formal approval Act or process of confirming.”
The implication of the above definition is that the Appellant must prove that the Respondent must by all means and all situations ratify any cheque before it becomes valid. This is clearly outside the legal agreement – the mandate (the authority) between the parties.
The issue here is the claim by the Appellant that it was the Respondent who unilaterally introduced the custom of endorsing or confirming his cheques and he changed the nature of the agreement between the parties and was thus estopped from resiling from the agreement. The Respondent conceded that indeed he resorted to the method of identifying payees to whom he issued cheques which could be cashed over the counter and that he had never in the past had occasion to identify or confirm cheques written in favour of corporate bodies. The point made by the learned trial judge which was also made here by the Respondent is that the cheque in dispute went through clearing. The fact we are to determine, at this point is whether or not the drawer’s confirmation of all cheques issued had become established as a custom between the parties. The trial court found that there was no implied undertaking on the part if the Respondent to confirm his cheques before the Appellant paid. Is there evidence of confirmation in formal terms from the Respondent to validate any cheque above N50,000? I would have to answer No. There was no evidence led by the Appellant in respect of the form of confirmation required. Even the practice of the Respondent in identifying over the counter cheques by putting “bearer identified by me” and putting his name and address at the back of some cheques was not proved to be a customary practice in respect of all the Respondent’s cheques.
It appears that this was not an established or consistent practice between the parties. There was evidence from the Respondent particularly with regard to the cheque he issued in favour of ” Ugotex” which had a form of endorsement since the Respondent put his name and address and signed the back of the cheque. The Respondent swore that he had hitherto issued unendorsed chques which were honoured. On Pg. 43 of the Record D. W. 2 admitted this but said that the amounts in the previous instances were different. The implication of this admission on the part of D. W. 2 is that the cheque was dishonoured not because the Respondent violated established custom between the parties but because it was for a large sum of money. This conclusion in my humble view was against the interest of the Appellant and can be taken as admissible evidence against the maker and as the truth of the fact asserted in the statement. See ADEYEMI OGUNNAAIKE v. TAIWO OJAYEME (1987) 1 NWLR Pt. 53 Pg. 761. The irresistible conclusion to be drawn from this is that there was no established custom between the parties with regard to cheque confirmation to which either was bound and from which either could not resile.
What has reduced the potency of the Appellant’s argument in my humble view is the fact that the cheque was not an open cheque for which money could be paid over the counter but was a cheque issued to a corporate body which must go through what is known as “clearing”. This means that both Banks exchange the value of the cheque through a clearing house. The Appellant argued that the Respondent never pleaded that the cheque went through clearing and those facts in evidence should have been ignored as going to no issue by the learned trial judge.
The Respondent’s pleadings at paragraphs 4, 5, 6, 8, 9 and 16 of his Statement of Claim as contained at Pg. 3 and 4 of the Record of Appeal with particular reference to this issue being paragraphs 4 and 5 of the Statement of Claim. The said paragraphs 4 and 5 are as follows:
4.”On the 23rd of May, 2006, the Plaintiff issued an AFRIBANK NIGERIA PLC cheque number 0034 of the same date to Messrs Ania Mottors Limited, for the sum of N573,300.00 (Five Hundred and Seventy-Three Thousand, Three Hundred Naira).
5.The said Messrs Ania Motors Limited paid in the cheque into its First Bank of Nigeria Plc, Aba, Alaoji Branch account for clearing and payment. The cheque went for clearing but was dishonoured without any justification, by writing or causing to be written on it the letter “D. C. R.” on the said cheque. The is hereby pleaded together with all the endorsements thereon.
It is clear that the fact of whether the cheque went for clearing was amply pleaded by the Respondent and was a relevant fact admitted in evidence and given proper probative value by the learned trial judge.
It is pertinent to add that this suit was instigated by the seeming arrogance and cavalier attitude to a customer displayed by the Appellant. The Respondent swore that the Appellant’s employee called to confirm the cheque and he gave approval to pay. I am of the view that the learned trial judge had good reason to believe that testimony of the Respondent.
In STB LTD v. ANUMNU supra, this court per Adekeye JCA (as she then was) held as follows:
“The legal relationship between a bank and a customer based on contract is that of creditor and debtor, or principal and agent. The creditor/principal being the customer and debtor/agent being the bank. The contractual relationship imposed a duty of care on the bank, the breach of which will impose liability for negligence.
The role of bankers and their predominant business is the receipt of monies on current or deposit account and the payment of cheques drawn by as well as the collection of cheques paid by a customer. The receipt of money from and on account of its customer by a bank constitute the banker the debtor of the customer and the banker undertakes to pay only part of the money thus due from him to the customer against written orders of the customer. The relationship is equally that of principal and agent so that a cheque drawn on the banker by the customer represents the order of the principal to his agent to pay out to the principal, money in his hands, the amount stated on the cheque to the payee endorsed on the cheque. See AFRIBANK NIG. PLC. v. A. I. INVESTMENT (2003) FWLR Pt. 141 Pg. 184; (2002) 7 NWLR Pt.765 pg.40; ACCESS BANK V. MARYLAND FINANCE COMPANY AND CONSULTANCY SERVICE (2005) 3 NWLR PT.913 PG.460; BALOGUN V. NBM (1978) 3 SC 155; (1978) 12 NSCC 36; (1978) ALL NLR 63.”
The facts of STB LTD V. ANUMNU’S case are in pari material with the facts of this case. In that case this court held following HARIAT BALOGUN v. NATIONAL BANK supra that the Bank was liable for breach of contract for wrongfully dishonouring a customer’s cheque. The words “Drawer’s Confirmation Required” DCR had been interpreted to mean that the customer did not have enough money in his account. That is clearly libelous. See DIKE v. ACB (2000) 5 NWLR Pt.657 Pg.458.
The court concluded in STB LTD v. ANUMNU’S case that there is no doubt that the bank as debtor is obliged to pay on request the amount standing to the credit of the creditor. The Appellant in this case without lawful excuse failed in that regard.
I dismiss the appeal as unmeritorious
I award N30,000 cost against the Appellant. Appeal Dismissed.
ABUBAKAR JEGA ABDUL-KADIR, J.C.A.: I have had the advantage of reading in advance a copy of the judgment just delivered by my learned brother, Ogunwumiju, J.C.A. I agree with the reasoning and conclusion reached in the judgment. I would also dismiss this appeal as unmeritorious. I abide by the order as to costs made in the read judgment.
MOJEED ADEKUNLE OWOADE, J.C.A.: I agree.
Appearances
B. C. Nwagboso For Appellant
AND
Uche S. Awa For Respondent
