AROGUNDADE v. SKYE BANK (2020)

AROGUNDADE v. SKYE BANK

(2020)LCN/14893(CA)

In The Court Of Appeal

(LAGOS JUDICIAL DIVISION)

On Tuesday, December 29, 2020

CA/L/947/2017

RATIO

BANKING LAW: RELATIONSHIP BETWEEN A BANKER AND HIS CUSTOMER

I have relayed the facts of the case that led to this appeal above and I will therefore not repeat same. What is clear is that generally based on the customer/banker relationship that exist between the Appellant and Respondent which relationship is akin to debtor/creditor and Agent/Principal, the Respondent is under obligation in law to honour any cheque or monetary instrument presented by the Appellant once the account upon which the cheque or monetary instrument is issued is funded. This Court made this point very clear in Jigna Farms Ltd vs. U.B.N. Plc (2016) LPELR-40231 (CA) in these words:
“The relationship between a banker and his customer is contractual in nature. It is that of a debtor and creditor or principal and agent. A banker is therefore under a duty to honour cheques drawn on it by a customer who has sufficient funds with the bank to cover the amount endorsed on the cheque. Failure to do so constitutes a breach of contract for which the bank will be liable for damages. See STANDARD TRUST BANK LTD V. ANUMNU (2008) 14 NWLR (106) 125, 150-151 and UBA V. UNION BANK PLC (1995) 7 NWLR (405) 72, 81.”
Similarly, the Supreme Court made this same point earlier in the case of U.B.A. Plc vs. Chimaeze (2014) 9 NWLR (Pt. 1411)166 when it held as follows:
“It is the duty of a banker to its customer to honour and pay cheques drawn on it by the customer as long as it has in its possession at the material time, sufficient and available funds for the purpose. Therefore, when there is sufficient and available fund in customers account and a cheque is presented but payment is refused, the holder is entitled to treat the cheque as dishonoured even if requested to represent. See: Ide Chemists Limited vs. National Bank of Nigeria Limited (1979-1984)3 NBLR 111 @118. PER EBIOWEI TOBI, J.C.A.

BANKING LAW: BINDINGNESS OF A BANK TO HONOUR CHEQUE ISSUED BY ITS CUSTOMER

In Allied Bank (Nig) Ltd vs. Akubueze (1997)6 NWLR (Pt.509)374; (1997)6 SCNJ 166 this Court held inter-alia, that a bank is bound to honour cheque issued by its customer if the customer has enough funds to satisfy the amount payable on the cheque in respect of the relevant account and that refusal to honour the cheque will amount to a breach of contract which would render the banker liable in damages. In the same vein in Union Bank of Nigeria limited vs. Nwoye (1996)3 NWLR (Pt. 435)135, this Court held that the liability of a banker to its customer arises in contract held that the liability of a banker to its customer arises in contract when a banker refuses to pay a customer’s cheque when the holds in his account an amount equivalent to that endorsed on the cheque.”

This is an established principle of law which is trite. PER EBIOWEI TOBI, J.C.A.

APPEAL: WHETHER A COURT CAN REFORMULATE ISSUES

The law allows me to adopt the issues formulated by the parties or formulate my own issues provided they arise from the grounds of appeal. See Molokwu & Anor vs. Divine Power Gospel Mission International & Ors (2020) LPELR-49840 (CA); FRN vs. Borisade (2015) 1 S.C. 107.

The issues as formulated by the parties are similar in all intent and purpose even to the language used. The issues formulated by the Appellant have some specific aspect of the appeal before this Court while the Respondent issues are more general. I really do not see the need to go outside the issues formulated therein to formulate my own issues. Though a Court of law has the right to formulate its own issues for determination provided they arise from the grounds of appeal but when the parties have adequately addressed the grounds in the issues for determination, it becomes unnecessary for a Court to formulate its own issues. After all, the case is not that of the Court but the parties and so it is proper and appropriate to follow the issues as formulated by the parties. PER EBIOWEI TOBI, J.C.A.

APPEAL: DIFFERENCE BETWEEN THE RESPONDENT’S NOTICE AND THE NOTICE OF CROSS-APPEAL

The difference between the Respondent’s notice and the Notice of cross-appeal is that in a cross-appeal the Respondent does not agree with the judgment and in fact he is not happy with the judgment while in the case of Respondent’s Notice the Respondent is happy with the judgment but wants the judgment upheld for reasons order than those given by the Court. See Eze & Ors vs. Obiefuna & Ors (1995) LPELR-1191 (SC). In Oguma Association Companies (Nig.) Ltd vs. International Bank for W.A. Ltd (1988) 1 NWLR (Pt. 73) 658, the apex Court held:
“A cross-appeal is just like any other appeal and is governed by the same rules as any other appeal (i.e. Order 8 Rule 2 of the Supreme Court Rules, 1985); but a respondent’s notice is based on a different rule (Order 8 Rule 3 ibid.). A cross-appeal is therefore, like any other appeal, commenced by a notice of appeal. Where a respondent wants a reversal of a decision, a part thereof, or any conclusion of fact in the decision, his proper procedure is by way of a cross-appeal. a cross-appeal does not strictly depend upon an appeal having been filed; any person who has had a judgment in his favour but seeks to reverse the judgment or part of it or any important finding therein can file a cross-appeal without waiting to be served with a notice of appeal by the unsuccessful party. In fact a cross appellant is subject to the same statutory limitation as to time within which to appeal imposed by Section 31 of the Supreme Court Act, 1960, unless of course, time has been extended. See Order 8 Rule 2 of the Supreme Court Rules, 1985. A respondents notice, on the other hand, depends upon an appeal being filed by the unsuccessful party first. It depends on a notice of appeal being served on the respondent first; then, unless time is extended he must file and serve his respondent’s notice within 15 days in the case of an appeal against an interlocutory order or one month in any other case. The procedure of respondents notice is resorted to when the respondent not wanting to appeal against the decision desires to contend in the appeal that the decision of the Court should be varied or that the decision should be affirmed on grounds other than those relied upon by the Court against whose decision the appellant has appealed. It is limited to points which have arisen in the appeal. see on these; Order 8 Rule 3 of the Supreme Court Rules, 1985. See Lagos City Council vs. Ajayi (1970)1 ALL NLR 291 @ Pt. 294 – 297; Alhaji Sunmonu & Ors.vs. Gbadamosi Ashrota (1975)1. NMLR 16” PER EBIOWEI TOBI, J.C.A.

Before Our Lordships:

Obande Festus Ogbuinya Justice of the Court of Appeal

Jamilu Yammama Tukur Justice of the Court of Appeal

Ebiowei Tobi Justice of the Court of Appeal

Between

HENRY O. AROGUNDADE APPELANT(S)

And

SKYE BANK PLC RESPONDENT(S)

EBIOWEI TOBI, J.C.A. (Delivering the Leading Judgment): The Appellant is the Claimant in the lower Court while the Respondent is the Defendant. The Appellant who was a staff of the Respondent operates the following accounts with the Respondent; Current Account No: 0030008056516 for local currency. Personal Domiciliary accounts as follows:
Account No: 4008432363 (Dollar account), Account No: 4008458163 (Euro account) and 4008458039 (Pound sterling account). He is alleged to have been involved in fraud. Following this allegation he was being investigated by the Economic and Financial Crimes Commission (“EFCC”) at the time of the action. Within the period of the investigation and several cases instituted against him in Court, the Appellant issued a cheque bearing No: 19404938 to one Mrs. Helen Adegbite on 26/7/12 for the sum of N5,000.00. This cheque was returned unpaid and the staff of the Respondent endorsed on the cheque “DAR” meaning Drawers Attention Required. The Appellant complaint is that the action of the Respondent is a breach of the duty the Respondent owes him as a customer. The Respondent owed him the duty to honour

cheque presented to it once the account is funded. The refusal to honour the cheque is not only a breach of duty but also defamatory to him as it portrays him as an irresponsible person. He called the said Mrs Helen Adegbite as his witness who testified as to her opinion of the Appellant as an unreliable person for giving her a cheque that was not honoured.

Before the presentation of the cheque on 26/7/12, the Appellant had presented withdrawal forms on 9/3/12 for the sums of $8700 in the dollar account, £200 from the Pound sterling account and €100 from the euro account. The Respondent did not honour the payments as requested on those withdrawal forms but rather endorsed on the forms “Posting Disallowed.” This is the scenario that necessitated the filing of the suit with the claims as stated in the Writ of Summons found on pages 1-2 of the record of appeal. The claim is for the sum of N5,000,000 for damages for breach of contract or breach of duty, N5,000,000 for damages for libel, 21% per annum interest until liquidation and the cost of the litigation.

The above facts the Respondent did not deny but rather the Respondent

raised a defence to justify the endorsements on the cheque and the withdrawal forms. The Respondent’s case at the lower Court is that the Appellant is not entitled to the claims as its action is in line with banking practice. In the light of the fraud investigation and the cases pending in Court, the Respondent was acting within legal limits in placing the Appellant’s accounts on caution/restriction. The Appellant is not entitled to the claims according to the Respondent since he had knowledge of the restriction placed on the accounts before issuing the cheque and writing the withdrawal forms. The lower Court agreed with the Respondent and dismissed the case of the Appellant. The decision handed over by his lordship Hon. Justice Opeyemi O. Oke (Mrs) specifically on page 182 of the record (page 32 of the judgment) states thus:
“Therefore considering the evidence before this honourable Court, I hereby hold that the Claimant failed to prove that the Defendant defamed his character because the Defendant had reasons to restrict his account due to the pending criminal charges against him and there is no way the inscription of ‘DAR’

and ‘Posting DISALLOWED’ injured his character or person. There is no evidence from any witness stating that the Claimant’s reputation has been downgraded in his/her eyes.
From the forgoing, I hereby hold that the Claimant’s claim fails. It is accordingly dismissed in its entirety.”

The Appellant dissatisfied with the judgment filed this appeal on 30/1/17 which has 6 grounds of appeal. The notice of appeal is found on pages 183-189 of the records. I reproduce the grounds of appeal as follows without the particulars:
GROUND ONE
The learned trial Court erred in law when it held at page 28 of its judgment as follows:
“…I have to say that the act of refusing to pay Exhibit ‘B’, C, D, E, & F’ is justifiable considering the fact that the Claimant is undergoing criminal trial for allegations of criminal and financial crimes and I believe that this was precaution taken by the Defendant so as to avoid jeopardizing the ongoing trial or any further investigations…”
GROUND TWO
The trial Court erred in law when it held at Paragraph 1 of page 28 as follows:<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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“I also believe that it will be wrong for the Defendant to have tampered with his accounts if at the end of the day, any of the outcomes of the criminal charges is linked to the claimants account”
GROUND THREE
The learned trial judge erred in law when he relied on the averments contained in paragraphs 6.5, 6.6., and 6.7 of the Defendant/Respondent’s statement of defence dated the 14th day of May, 2013 in justifying the Defendant/Respondent’s refusal to honour for payment Exhibits C, D, E, and F made by the Claimant/Appellant.
GROUND FOUR
The trial Court erred in law when it held that DAR marked on Exhibit C by the Defendant/Respondents is not defamatory of the Claimant/Appellant “due to pending criminal charges against him”
GROUND FIVE
The learned trial judge erred in law when he refused to award damages for libel in favour of the Claimant/Appellant and against the Defendant/Respondent at page 32 of the judgment on the ground that the Claimant/Appellant failed to prove same and that there was no evidence to that effect by any witness before the lower Court.
GROUND SIX
The decision

is against the weight of evidence.

This appeal is therefore against the judgment of the Lagos State High Court of Hon. Justice Opeyemi O. Oke delivered on 29/11/16 in suit No: Mr Henry Arogundade vs. Mainstreet Bank Ltd. The original Defendant has changed to Skye Bank, the present Respondent. The undated Appellant’s brief filed on deemed on 8/5/19 was settled by B.S. Adebayo, Esq. while the Respondent’s brief filed on 26/9/19 was settled by Dr K.U.K. Ekwueme. It is worthy of note that the Respondent filed a Respondent’s notice on 26/9/19. The Appellant in his brief raised 2 issues for determination. The Respondent also raised two issues for determination. I will start with the Appellant’s brief. The two issues of the Appellant are to wit:
1. Whether or not from the totality of the facts of this case and the evidence led the lower Court was right to hold that the defendant/Respondent was justified in refusing to pay exhibits B, C, D, E and F on the ground only that the Claimant/Appellant who made or drew them was standing criminal trial for allegations of criminal and financial crimes.
2. Was the lower Court right in its

finding that the words ‘DAR’ marked or written by the Defendants/Respondent on exhibit ‘C’ is not defamatory of the Claimant/Appellant due to pending criminal charges against him’ and consequently refused to make an award in damages because there was no evidence to grounds the claim in libel.

The Appellant counsel argued issues 1 & 2 together. Learned counsel submitted that the lower Court having held that a banker/customer relationship existed between the parties which created debtor/creditor and principal/agent relationship was wrong in going ahead to refuse to apply those relationship to the case at hand hence the lower Court arrived at a wrong decision. He relied on Standard Trust Bank Limited vs. Anumnu (2008) 14 NWLR (Pt.1106)125 @ 150; Joachimson vs. Swiss Bank Corporation (1992) AER 92; Yesufu vs. A.C.B. Ltd (1981) 1 S.C. 74 and Balogun vs. NBN Ltd (1978) 3 S.C 155.

Learned Counsel submitted that the lower Court should not have relied on the pending criminal charges against the Appellant to dismiss the suit as there is no evidence showing connection between the accounts of the Appellant with the Respondent

and the criminal charges against the Appellant. Learned Counsel went ahead to submit that the evidence of DW1 is inadmissible as it is hearsay relying on Section 38 of the Evidence Act, 2011 and the cases of Subramaniam vs. Public Prosecution (1965) 1 WLR 965 @ 969; Ojukwu vs. Yar’dua (2009) 12 NWLR (Pt.1154) 50; Zenith Bank Plc vs. Ekereuwem (2012) 4 NWLR (Pt.1290) 207; Shanu vs. Afribank (Nig) Plc (2002) 17 NWLR (Pt.795) 185; Olalekan vs. State (2001) 12 S.C. (Pt.1) 38; Haruna vs. A.G. Federation (2012) LPELR-7821 (SC). It is the emphatic submission of counsel that the decision of the lower Court seem to encourage unilateral restriction or freezing of the Appellant’s account by the Respondent without the order of any Court contrary to Section 34 of the Economic and Financial Crimes Commission (Establishment) Act 2004. It is the further submission of counsel that there is no basis for the Respondent to restrict the account of the Appellant when the EFCC has denied freezing the account of the Appellant.

On the meaning of the endorsement ‘DAR’ on the cheque, it is submitted by learned counsel that this means that the cheque was

dishonoured as there is no money in the account and this meaning is fortified much more on the premise that the endorsement was because the Appellant is standing trial for criminal offence. Learned counsel cited Standard Trust Bank Limited vs. Anumnu (supra), Dike vs. A.C.B. (2005) 5 NWLR (Pt.657) 441. This obviously counsel submitted entitles the Appellant as a person in business to damages referring to Allied Bank of Nigeria Limited vs. Jonas Akubueze (1997) 6 NWLR (Pt.509) 374; Balogun vs. N.B.N. Ltd (supra). For the measure of damages, learned counsel submitted that the cheque being a bill of exchange under the Bill of Exchange Act, Cap B3 Laws of the Federation of Nigeria, 2004 the applicable damages will be as it is stated in Section 57 of the Act citing Union Bank of Nigeria vs. Scpok (Nig) Ltd (1998) 12 NWLR (Pt.578) 439; U.B.A. Ltd vs. Ademuyiwa (1999) 11 NWLR (Pt.628) 570; UBN vs. Chimaeze (2006) 36 WRN 60 at 107.

As against the decision of the lower Court S.B. Adebayo, Esq. of counsel emphatically submitted that there is sufficient evidence to establish defamation as to the effect of the endorsement of DAR on the cheque. He finally submitted that

the Appellant is not only entitled to damages for breach of contract or duty of care but also for defamation interest on the judgment sum. He urged Court to set aside the judgment of the lower Court and to allow the appeal.

For the Respondent, Dr. K.U.K. Ekwueme raised the following two issues for determination:
1. Whether the lower Court was right to hold that the Respondent was justified in refusing to pay exhibits B, C, D, E, and F having regard to the evidence before the lower Court Response to Appellant’s Issue 1
2. Whether having regard to the evidence before the lower Court the lower Court was right in holding that the words ‘DAR’ marked or written by the Respondent on Exhibit ‘C’ was not defamatory of the Appellant Response to Appellant’s Issue 2.

The learned counsel for the Respondent answered the first question in the affirmative. Justifying the restriction order on the account and the decision of the lower Court, learned counsel submitted that the existence of the criminal charge against the Appellant based on the legal principle of Lis Pendens, the Respondent acted in line with the law as

honouring the cheque and withdrawal forms will prejudice the criminal case. He referred to Attiogbey vs. United Bank for Africa (2013) LPELR-20326 (CA); Ezomo vs. NNB Plc (2006) 14 NWLR (Pt.1000) 624; Amaechi vs. INEC (2008) 5 NWLR (Pt. 1080) 227. It is the further submission of counsel that the Appellant cannot be entitled to damages for defamation as the Appellant knew that his account had been placed on restriction (via Exhibits G and H) before issuing Exhibit C, the cheque and the withdrawal forms Exhibits D,E and F. Counsel relied on the decision of this Court in Agwaramgbo vs. UBN (2001) 4 NWLR (Pt.702) 1 in submitting that failure to honour Exhibits C, D, E and F in the light of pending criminal actions against the Appellant, the Respondent acted within legal limits. While accepting the general principle in Standard Trust Bank vs. Anumnu (supra) to the effect that the relationship between the bank and the customer is that of Principal/Agent and debtor/creditor, learned counsel submitted that there are exceptions to this principle that the bank should honour all cheques from a customer. One of such is if there is any legal disability stopping the bank

from obeying the instruction. He referred to Mainstreet Bank Plc vs. Dizengoff (West Africa) Nigeria Ltd (2015) ALL FWLR (Pt.781) and Kareem vs. UBN Ltd (1996) 5 NWLR (Pt. 451) 634 @ 651. In view of the pending criminal cases against the Appellant as shown in Exhibits I and M, the Respondent’s counsel submitted that the action of the Respondent is prudent and reasonable.

Learned counsel to the Respondent in responding to the argument that the Respondent placing restriction on the accounts of the Appellant is hearsay evidence submitted that the submission of the Appellant’s counsel is of no moment as the evidence does not offend the rules of hearsay but more than that, is the fact that, the information from Aminu Garba of EFCC came after the cheque was presented for cashing or the withdrawal form was not paid. It is further submission of counsel that the Respondent did not need a Court order to place a restriction on the Appellant’s accounts and that since exhibit J was delivered after the presentation of the cheque (Exhibit C) and the withdrawal form (Exhibits D, E and F) the said exhibit is of no moment and cannot help the

Appellant’s case.

On the legal effect of the endorsement of ‘DAR’ on Exhibit C, it is the submission of counsel that it does not mean the cheque was dishonoured but rather that the Appellant’s attention is required. Counsel relied on Oceanic Securities vs. Balogun (supra). Relying on the case of Okpozo vs. Bendel Newspaper Corporation & Anor (1990) 5 NWLR (Pt.153) 652 @ 661, counsel submitted that the Oceanic case being later in time to Standard Trust Bank case and Dike vs. A.C.B. case represents the legal position as at today.

Finally on issue 1, it is the submission of counsel that ground 6 is abandoned as no issues were based on it. It is counsel submission that this issue is to be resolved in favour of the Respondent.

In addressing issue 2, it is the submission of counsel that the endorsement ‘DAR’ on Exhibit C is not defamatory and that even if it were, there is no evidence in support of the claim for defamation made by the Appellant. Counsel premised this submission on the fact that the endorsement does not meet the requirement of the law as to what will consist defamatory statement and more so that

the Appellant was aware of the restriction on the account before issuing Exhibit C. He referred to Agbanelo vs. U.B.N. Ltd (supra); Akaniwon vs. Nsirim (1997) 9 NWLR (Pt.520) 255 and Iloabachie vs. Iloabachie (2005) 13 NWLR (Pt.943) 695. Learned counsel emphatically submitted that the ‘DAR’ written on the cheque does not mean the cheque was dishonoured and even if it is, counsel submitted there is good reason for dishonouring Exhibit C relying on Jigna Farms Ltd vs. UBN Plc (2016) LPELR-40231 (CA).

The learned counsel has argued that the Appellant did not formulate any ground on damages and interest at the lower Court and that it cannot raise that in the first instance in this Court relying on Ayangoke & Anor vs. Keystone Bank Ltd (2013) LPELR-21806 (CA). It is further contended in the alternative that the Appellant is not entitled to damages as there is no breach of any duty by the Respondent by the action of the Respondent. In this respect counsel referred to Best (Nigeria) Ltd vs. Blackwood Hodge (Nigeria) Ltd & Ors (2011) LPELR-776 (SC); Panabiz int’l vs. Addidon Nig. Ltd & Anor (2016) LPELR-41350 (CA). In the light of

that since nothing can be placed on something and expecting it to stand, the claim of the Appellant cannot stand and the failure of the main claim affect the ancillary claims relying on Macfoy vs. U.A.C. (1962) A.C. 158; Apari vs. Hose (1999) 5 NWLR (Pt.604) 541; Jimoh vs. Jimoh & Ors (2018) LPELR-43793 (CA); M.C. Investment Ltd vs. Prof. J.T. Duncan (2015) LPELR-25941. Even if damages is to be awarded under Section 57 of the Bill of Exchange Act, that section does not include general damages relying on U.B.N. Plc vs. Sepok (supra). It is the final submission of counsel on issue 2 that it should be resolved in favour of the Respondent. This Court is urged to dismiss the appeal and affirm the decision of the lower Court.

The Respondent filed a Respondent’s notice and raised two issues to be addressed on the Respondent’s notice. These are:
The Respondent respectfully urges this honourable Court to uphold the decision on grounds other than those relied upon by the lower Court for reasons canvassed below.
In this regard, the Respondent respectfully submits the following additional issues for determination:
1. Whether the

Appellants claim for breach of contract/duty ought to have been dismissed on the ground that the Appellant had knowledge that he could not operate his account having regard to exhibits G, H, M, and I; and
2. Whether the Appellant’s claim for defamation ought to have been dismissed on the ground that CW2 admitted not to know the meaning of “DAR”

The Respondent in its notice and arguing the issues raised above is of the firm opinion that the lower Court ought to have dismissed the Appellant’s case at the lower Court on the ground that the Appellant had knowledge that he could not operate the account before issuing and presenting Exhibits C, D, E and F and that the claim for defamation ought to have been dismissed on the ground that the witness of the Appellant CW2 admitted that she does not know the meaning of the endorsement ‘DAR’.

Agent/Principal, the Respondent is under obligation in law to honour any cheque or monetary instrument presented by the Appellant once the account upon which the cheque or monetary instrument is issued is funded. This Court made this point very clear in Jigna Farms Ltd vs. U.B.N. Plc (2016) LPELR-40231 (CA) in these words:
“The relationship between a banker and his customer is contractual in nature. It is that of a debtor and creditor or principal and agent. A banker is therefore under a duty to honour cheques drawn on it by a customer who has sufficient funds with the bank to cover the amount endorsed on the cheque. Failure to do so constitutes a breach of contract for which the bank will be liable for damages. See STANDARD TRUST BANK LTD V. ANUMNU (2008) 14 NWLR (106) 125, 150-151 and UBA V. UNION BANK PLC (1995) 7 NWLR (405) 72, 81.”
Similarly, the Supreme Court made this same point earlier in the case of U.B.A. Plc vs. Chimaeze (2014) 9 NWLR (Pt. 1411)166 when it held as follows:
“It is the duty of a banker to its customer to honour and pay cheques drawn on it by the customer as long as it has in its possession at the

material time, sufficient and available funds for the purpose. Therefore, when there is sufficient and available fund in customers account and a cheque is presented but payment is refused, the holder is entitled to treat the cheque as dishonoured even if requested to represent. See: Ide Chemists Limited vs. National Bank of Nigeria Limited (1979-1984)3 NBLR 111 @118. In Allied Bank (Nig) Ltd vs. Akubueze (1997)6 NWLR (Pt.509)374; (1997)6 SCNJ 166 this Court held inter-alia, that a bank is bound to honour cheque issued by its customer if the customer has enough funds to satisfy the amount payable on the cheque in respect of the relevant account and that refusal to honour the cheque will amount to a breach of contract which would render the banker liable in damages. In the same vein in Union Bank of Nigeria limited vs. Nwoye (1996)3 NWLR (Pt. 435)135, this Court held that the liability of a banker to its customer arises in contract held that the liability of a banker to its customer arises in contract when a banker refuses to pay a customer’s cheque when the holds in his account an amount equivalent to that endorsed on the cheque.”

This is an established principle of law which is trite.

Not in dispute is the fact that the Appellant operate various accounts with the Respondent and that at various time specifically, on 26/7/12 and 9/3/12 the Appellant issued a cheque to Mrs Helen Adegbite (Exhibit C) and presented withdrawal forms (Exhibits D,E and F) respectively, which were not honoured. The Respondent endorsed on Exhibit C ‘DAR’ and on Exhibits D, E and F ‘Posting Disallowed’. The Appellant’s case is that the action of the Respondent is illegal and unlawful as it amounts to a breach of contract or duty and also defamatory and consequent upon that the Appellant is entitled to damages and interest arising from the illegal act. That is the main thrust of the Appellant’s case. The Respondent did not deny not honoring or paying the monetary instrument presented by the Appellant but the Respondent is on the other hand justifying the action on the premise that in view of the doctrine of lis pendens since the criminal cases are pending against the Appellant, it was only prudent and reasonable to place a restriction on the accounts of the Appellant so that the outcome of

the criminal cases will not be prejudiced. While the Appellant emphatically stated that the action of the Respondent amounts to dishonouring the legitimate request to honour monetary instrument on a funded account which makes the action actionable, the Respondents are of the view that the action is justifiable and that the presentation of the cheque and the withdrawal forms were done in bad faith since the Appellant knew that his accounts have been restricted. Since there is no dispute that the Respondent did not pay the Appellant the value in Exhibits C, D, E and F, the main question therefore is whether the Respondent’s action can be justified under the law? The lower Court agreed with the Respondent that the action is justifiable and that the Appellant’s case does not hold water and therefore dismissed same. The main thrust in this appeal is to determine whether the lower Court is right, in other words, whether the action of the Respondent does not constitute a breach of contract between it and the Appellant and whether the endorsement on Exhibit C ‘DAR’ is not defamatory. This is the thrust of this appeal. For completeness however,

as it is conventional and required by law, issues for determination must be formulated from the grounds of appeal. See Akinlagun & Ors vs. Oshoboja & Anor (2006) 12 NWLR (Pt. 993) 60; Ugwu vs. The State (2020) LPELR-49375 (SC).

I had reproduced the issues for determination as formulated by each of the parties. The law allows me to adopt the issues formulated by the parties or formulate my own issues provided they arise from the grounds of appeal. See Molokwu & Anor vs. Divine Power Gospel Mission International & Ors (2020) LPELR-49840 (CA); FRN vs. Borisade (2015) 1 S.C. 107.

it becomes unnecessary for a Court to formulate its own issues. After all, the case is not that of the Court but the parties and so it is proper and appropriate to follow the issues as formulated by the parties. In adopting the issues for determination, I will take issue 1 of the Respondent and issue 2 of the Appellant. I am marrying the issues of both parties but that is just as far as the marriage will go. In the final determination of this appeal, there is no meeting point in the case of the parties. The case of the parties is very different from each other and the difference in their cases is clear like 7up in the soft drink advert. Just as light and darkness cannot accommodate each other’s company or presence so is the case of the parties different. I will now formulate the issues for determination in this appeal as follows:
1. Whether the lower Court was right to hold that the Respondent was justified in refusing to pay exhibits B, C, D,E and F having regard to the evidence before the lower Court.
2. Was the lower Court right in its finding that the words ‘DAR’ marked or written by the Defendant/Respondent on Exhibit C is not

defamatory of the claimant/Appellant due to pending criminal charges against him’ and consequently refused to make an award in damages because there was no evidence to ground the claim in libel.

I will address the issues one after the other but before I do so, it will not be out of place to state that the Respondent filed a Respondent’s notice. The implication of this in law is that the Respondent agrees with the judgment of the lower Court but for reasons different from those given by the Court. The difference between the Respondent’s notice and the Notice of cross-appeal is that in a cross-appeal the Respondent does not agree with the judgment and in fact he is not happy with the judgment while in the case of Respondent’s Notice the Respondent is happy with the judgment but wants the judgment upheld for reasons order than those given by the Court. See Eze & Ors vs. Obiefuna & Ors (1995) LPELR-1191 (SC). In Oguma Association Companies (Nig.) Ltd vs. International Bank for W.A. Ltd (1988) 1 NWLR (Pt. 73) 658, the apex Court held:
“A cross-appeal is just like any other appeal and is governed by the same rules as

any other appeal (i.e. Order 8 Rule 2 of the Supreme Court Rules, 1985); but a respondent’s notice is based on a different rule (Order 8 Rule 3 ibid.). A cross-appeal is therefore, like any other appeal, commenced by a notice of appeal. Where a respondent wants a reversal of a decision, a part thereof, or any conclusion of fact in the decision, his proper procedure is by way of a cross-appeal. a cross-appeal does not strictly depend upon an appeal having been filed; any person who has had a judgment in his favour but seeks to reverse the judgment or part of it or any important finding therein can file a cross-appeal without waiting to be served with a notice of appeal by the unsuccessful party. In fact a cross appellant is subject to the same statutory limitation as to time within which to appeal imposed by Section 31 of the Supreme Court Act, 1960, unless of course, time has been extended. See Order 8 Rule 2 of the Supreme Court Rules, 1985. A respondents notice, on the other hand, depends upon an appeal being filed by the unsuccessful party first. It depends on a notice of appeal being served on the respondent first; then, unless time is extended he

must file and serve his respondent’s notice within 15 days in the case of an appeal against an interlocutory order or one month in any other case. The procedure of respondents notice is resorted to when the respondent not wanting to appeal against the decision desires to contend in the appeal that the decision of the Court should be varied or that the decision should be affirmed on grounds other than those relied upon by the Court against whose decision the appellant has appealed. It is limited to points which have arisen in the appeal. see on these; Order 8 Rule 3 of the Supreme Court Rules, 1985. See Lagos City Council vs. Ajayi (1970)1 ALL NLR 291 @ Pt. 294 – 297; Alhaji Sunmonu & Ors.vs. Gbadamosi Ashrota (1975)1. NMLR 16”

The Respondent in the notice stated the ground as “the lower Court erred in law when it failed to make pronouncement in its judgment on the evidence of Mrs Helen Adegbite, the Claimant/Appellant’s 2nd Witness, in the judgment of the lower Court dated 29/11/16.”

In arguing the Respondent’s notice on pages 20-21 covering paragraphs 109-118, the Respondent formulated two issues for

determination. These are:
1. Whether the Appellant’s claim for breach of contract/duty ought to have been dismissed on the ground that the Appellant had knowledge that he could not operate his account, having regard to Exhibits G, H, M and I; and
2. Whether the Appellant’s claim for defamation ought to have been dismissed on the ground that CW2 admitted not to know the meaning of ‘DAR’.

With my understanding of what Respondent’s Notice is as stated above, I am really at a loss as to the appropriateness of the Respondent’s Notice in this appeal. I cannot understand how the pronouncement on the evidence of CW2 helps the Respondent’s Notice. For the avoidance of doubt, the Respondent’s Notice should state that the lower Court should have decided the case in the favour of the Respondent as it did but on other grounds for instance that the fact that the CW2 said she does not know the meaning of ‘DAR’ should have been a ground for the lower Court’s decision. This is not how the Respondent’s Notice was couched and the issues raised there from. The Respondent’s notice is

couched more like a cross appeal. The Respondent notice is therefore of no relevance in this appeal and does not deserve any serious consideration.

I will now consider issue 1 formulated above in this appeal. For completeness, I will reproduce it again here. It reads thus:
Whether the lower Court was right to hold that the Respondent was justified in refusing to pay exhibits B, C, D, E and F having regard to the evidence before the lower Court.

The lower Court in the judgment specifically on page 178 of the records held:
“I have to say that the act of refusing to pay Exhibits ‘B, C, D, E and F’ is justifiable considering the fact that the Claimant is undergoing criminal trial for allegation of criminal and financial crimes and I believe that this was precaution taken by the Defendant so as to avoid jeopardizing the ongoing trial or any further investigation. I also believe that it will(sic) wrong for the Defendant to have tampered with his accounts if at the end of the day, any of the outcomes of the criminal charges is linked to the Claimant’s accounts. Therefore, considering the facts of this case, this refusal

cannot amount to a breach of banker-customer relationship and I hereby hold that the Claimant is not entitled to any damages.”

The reason the lower Court justified the refusal of the Respondent to honour Exhibits B, C, D, E and F was because there was a criminal charge against the Appellant. The Respondent counsel in the brief submitted that in the circumstance of the case before the lower Court, the doctrine of lis pendens is applicable and on the strength of that doctrine the lower Court was justified in refusing to honour Exhibits B, C, D, E and F. The Appellant on the other hand is emphatic on the general principle of the banker/customer relationship which requires that the bank which collects a deposit from a customer is a debtor to the customer and indeed it is an agent of the customer. The implication of this is that once a customer deposits his money in the bank, the bank has a legal duty to pay back the money as a debtor to the customer, the creditor. The bank as the agent of the customer is holding the money for the customer the principal, and therefore once the principal gives an order by way of a cheque or withdrawal form or slip, the

bank as an agent has both a legal and moral duty to honour the cheque or the withdrawal slip. This is because the master in this respect is the customer.
This legal obligation on the customer comes with consequence should the bank refuse to honour instruction of withdrawal of funds from the account of the customer which is funded. See Oyerinde vs. Access Bank Plc (2014) LPELR-23461(CA); U.B.A. vs. Marcus (2015) LPELR-40397(CA); Citibank Nig Ltd vs. Ikediashi (2014) LPELR-22447.
This general principal recognizes some exceptions that is to say, there are circumstances when the bank can refuse to honour the cheque of a customer over a funded account as it was stated in the cases referred to by the Respondent, that is to say when there are legal grounds or reasons not to honour same. In such instances, the refusal of the bank will be justified. See Diamond Bank Ltd vs. Ugochukwu (2008) 1 NWLR (Pt. 1067) 1. This Court in Abada (Nig) Ltd vs. Unity Bank of Nig Plc & Ors (2018) LPELR- 44003 (CA) in driving home the above point held:
“A bank is obliged to pay cheques drawn on it by its customer provided that the customer has sufficient fund to

satisfy the amount payable on the cheque and there are no legal bars to payment. A customer whose cheque has been wrongfully dishonoured is entitled to claim damages against the bank. The claim may be for breach of contract and/or for libel. See Allied Bank (Nig) Ltd V. Akubueze (1997) 6 NWLR (Pt. 509) 374 and F.A.T.B Ltd V. Partnership Inv. Co. Ltd (2003) 18 NWLR (Pt. 851) 35 SC.”

The question therefore is whether the facts of this case falls within the legal grounds upon which the Respondent could have refused to honour the cheque of the Appellant (Exhibit C) or the withdrawal forms (Exhibits D, E and F). This is what issue 1 is all about.I have relayed the facts above but it will not be out of place to again state briefly the facts as it relates to this issue. It is not in dispute that the Appellant was a staff and customer of the Respondent. It is also not in dispute that the Appellant was investigated and charged for criminal offence in violation of The Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act Cap F2 of the Laws of the Federation, 2004. The offences the Appellant was charged with were; approving credit facilities

without adequate security, failure to take steps to ensure that the books of the bank gave true and fair view of the state of affairs of the bank, granting facility without approval of CBN of unsecured credit, misrepresentation of the shares of Afribank Nigeria Plc on the Nigerian Stock Exchange. The Appellant was charged with these offences in 2010. This was the amended charge to the original charge in Suit No: FHC/L/294/09. This is found on pages 47-61 of the records. The Appellant was charged by the EFCC as 6th Accused person in Charge No: ID/160c/2011 in the High Court of Lagos State. In the suit before the High Court of Lagos State, the Appellant was charged for conspiracy and fraudulent conversion. This is found on pages 62-79 of the records. While these criminal charges were hanging on his head, the Appellant issued Exhibit C to CW2 on 26/7/12. On presentation of this cheque, the Respondent did not honour the cheque and endorsed on it ‘DAR.’ The Appellant had earlier presented withdrawal forms which are Exhibits D, E and F on his domiciliary accounts in pound sterling, American Dollars and Euros on 9/3/12 which was not honoured by the

Respondent. On those forms the Respondent endorsed ‘Posting Disallowed.’ The Respondent’s reason for refusing to honour Exhibits C,D, E and F is because of the criminal matters instituted against the Appellant. The Respondent based on those criminal matters against the Appellant had unilaterally placed a restriction and caution on all the accounts of the Appellant with the Respondent. This is the reason for the restriction on the Appellant’s accounts. The Respondent never obtained any Court order to do that but went on unilaterally to place the restriction on the accounts of the Appellant. Is this a legitimate action which the law allows and permit? I generally do not think so. No person or institution has power unilaterally to place a restriction on the account of a customer. No law allows for such act or action. In a civilized society people abide by the law and consequences are suffered for the violation of the law. This Court has condemned unilateral action of freezing customers account without a Court order in the case of in GT Bank vs. Adedamola & Ors (2019) LPELR-47310 (CA) where Abubakar, JCA (as he then was) categorically stated

that the EFCC under Section 34 of the EFCC Act has no powers to instruct a bank to freeze the account of a customer without obtaining a Court order. This is what his lordship said:
“Let me go back to the thin issue to resolve in this appeal. The compressed facts constituting basis for placing restriction on the Account of the 1st Respondent by the Appellant was following an instruction from the Economic and Financial Crimes Commissions. In fact, the 1st Respondent said so expressly in his affidavit and the statement in support of the application. At paragraph 20 of the affidavit, the Applicant/1st Respondent said as follows. That the order frozen my Bank account was done as a result of crime allegedly committed by another person which I am not privy to.
Again at page 46 of the records of appeal, the Applicant said he was informed by his Bank that his account was placed under restriction by the Economic and Financial Crimes Commission, paragraphs 7 to 14 of the affidavit in support.
On 1st Respondents own showing from the paragraphs in the support, the Bank action was on Instructions because there were allegations of crime surrounding the

operations of the Account. The lower Court found the action of the Appellant, 2nd and 3rd Respondents as a violation of the fundamental Right of the 1st Respondent.
The learned trial Judge at page 51 of the records of appeal said as follows:
…In this case there is no evidence that the applicant committed any criminal offence, or was even reasonably suspected to have committed any offence. The EFCC has not come up with anything suggestive that Akinshiku Roy mentioned the Applicant as having conspired to commit the alleged offence he was accused of.
Even if the Applicant was alleged to have committed a criminal offence, EFCC cannot on its own direct the Bank to place restriction on his accounts in the Bank without an order of Court. The law allows EFCC to come even with ex-parte application to obtain an order freezing the account of any suspect that has lodgements that is suspected to be proceeds of crime. No law imposes a unilateral power on the EFCC to deal with the applicant this way.
Again Guaranty Trust Bank has no obligation to act on EFCCS instructions or directives without an order of Court…
The above is the reasoning of

the learned trial Judge. I decided to check the provisions of the law relating to the powers of the Economic and Financial Crimes Commission to issue instructions to Banks to freeze Bank accounts of Customers, I read the provisions of Section 34(1) of the Economic and Financial Crimes (Establishment) Act 2004 , the Section provides as follows:
34 (1) Notwithstanding anything contained in any other enactment or law, the Chairman of the Commission or any officer authorized by him may, if satisfied that the money in the account of a person is made through the commission of an offence under this Act or any enactments specified under Section 7 (2) (a)-(f) of this Act , apply to the Court ex-parte for power to issue or instruct a bank examiner or such other appropriate regulatory authority to issue an order as specified in Form B of the Schedule to this Act, addressed to the manager of the bank or any person in control of the financial institution where the account is or believed by him to be or the head office of the bank or other financial institution to freeze the account. (Underlining mine).
The above provisions are in accord with the decision of the

lower Court. The Economic and Financial Crimes Commission has no powers to give direct instructions to Bank to freeze the Account of a Customer, without an order of Court, so doing constitutes a flagrant disregard and violation of the rights of a Customer. I must add that, the judiciary has the onerous duty of preserving and protecting the rule of law, the principles of rule of law are that, both the governor and the governed are subject to rule of law. The Courts must rise to the occasion speak and frown against arrogant display of powers by an arm of Government. It is in the interest of both Government and citizens that laws are respected, as respect for the rule of law promotes order, peace and decency in all societies, we are not an exception. Our Financial institutions must not be complacent and appear toothless in the face of brazen and reckless violence to the rights of their customers. Whenever there is a specific provision regulating the procedure of doing a particular act, that procedure must be followed.”
The point must be made and clearly too that the relationship of the Appellant as the customer to the Respondent is such that for as

long as the Appellant has his account with the Respondent funded, the Respondent can deal with the money as it likes and does not need the permission of the Appellant to deal with the money as he pleases. This is because the money is in the custody of the Respondent and to that extent, the Respondent that is the bank can be said to be the owner of the money. In U.B.A. Plc vs. Yahuza (2014) LPELR-23976, this Court held:
“It is trite law that customer’s monies in the hands of the banker are not in the custody or under the control of the customer and such monies remain the property in the custody and control of the banker, and payable to the customer when a demand is made. Thus, if anything happens to the money thereafter e.g. theft of money or unauthorized withdrawals, it is the banker and not the customer that bears the loss – Wema Bank Plc vs Osilaru (2008) 10 NWLR (Pt 1094) 150.”
This power of the Respondent over the money in the bank is limited to the right of the Appellant who is the true owner of the money. The Respondent is under obligation to honour all instructions of the Appellant over his money in the Respondent’s custody. Once the

Appellant gives an instruction as to withdrawal from the account of the Appellant, the Respondent is to obey. The legal implication of this is that whatever powers the Respondent have over the money deposited by the Appellant is limited to the power of the Appellant. The Respondent is under obligation to obey all legitimate instructions of the Appellant on the accounts he has with the Respondent. Usually, instructions are given by way of cheques or withdrawal forms. Except, there are legal reasons for the refusal of the Respondent to obey the instruction given by the Appellant as contained in Exhibits C, D, E and F, the Respondent will be liable for damages. The Respondent has no right to deal with the Appellant’s account without due instruction from the Appellant. Let me quickly say that dealing with money in the bank which include the Appellant’s money the Respondent does not need permission as the money is in the custody of the bank but in dealing with the account of the Appellant, in which case this now separates the Appellant money from all the money in the bank, the Respondent must get the permission of the Appellant. This drives home the

point that the Respondent is a debtor and agent of the Appellant as it relates to his accounts with the Respondent. See Allied Bank of Nigeria Ltd vs. Akubueze (1997) 6 NWLR (Pt. 509) 374; Bank of the North Ltd vs. Yau (2001) 5 S.C. (Pt. 1) 121. In fact, the Respondent owes the Appellant the duty to notify the Appellant if there is any status change in his account with the Respondent. In British and French Bank Ltd vs. Opaleye (1962) LPELR-25173 (SC), the apex Court held:
“Here we are concerned with the question of moving money from one account to another. Swift, F., said in the Greenhalgh case , at p. 164:-
If a banker agrees with his customer to open two or more accounts, he has not, in my opinion, without the assent of the customer, any right to move either assets or liabilities from the one account to the other; the very basis of his agreement with his customer is that the two accounts shall be kept separate, and if the customer pays bills drawn upon him not into his general account, where they will be discounted and he will receive the benefit of being able to draw against them, but into an account in which they will only be used either to

pay bills accepted by the bank or bills drawn by the customer which they are specifically to meet, I do not think a banker, any more than any other individual, can change them from the one account into the other without the customer’s assent.”
The point I am laboring to make here is to drive home the point that generally the Respondent has no right whatsoever to place a restriction on the account of the Appellant unilaterally. This is both legally and morally unacceptable. The law frowns against unilateral use of power by any person or institution hence the doctrine of separation of power was entrenched in our Constitution. This is also why the law recognizes the fact that there is no absolute fundamental right as the right of one stop where that of another begins.
For emphasis sake, I will state again that the Respondent has no right whatsoever to unilaterally place a restriction order on the accounts of the Appellant not even for the best of reasons. If such action is allowed, the bank can abuse such powers and it is to avoid such abuse that Section 34 of the EFCC Act provides that the EFCC cannot instruct a bank to freeze the account of a

customer without the order of a Court. What is clear from the facts of the case on appeal is that there was no Court order that gave the Respondent power to place the accounts of the Appellant with the Respondent on restriction. The Respondent unilaterally took that decision without the order of any Court. This was a bold and dangerous step taken by the Respondent. While generally this is not right but the point must be made that cases are decided on the strength of the facts of each case. See Onyia vs. State (2008) 7-12 S.C 120.

The case of the Respondent is that in the light of the criminal cases against the Appellant, the restriction placed on the accounts of the Appellant is within legal limits. The Respondent on this proposition of the law referred to the case of Agwaramgbo vs. UBN (supra) in submitting that based on the doctrine of lis pendens the Respondent was in order in placing restriction on the Appellant’s accounts without a Court order. The Appellant on the other hand holds the view that the Respondent could not rely on that case. This is the time to look at the application of the doctrine of lis pendens and to see its application to

this appeal.

Once there is a pending suit which determines rights between the parties, no right should be conferred on any of the parties pending the determination of the suit. No action should be taken over the subject matter which will jeopardize the outcome of the case. This is to prevent a situation of foisting on the Court fiat accompli. It stands to reason that once there is a case over the matter the status quo is to be maintained. In Olori Motors Co. Ltd & Ors vs. UBN Plc (2006) 10 NWLR (Pt. 989) 586 the apex Court in stating what lis pendens mean held thus:
“The expression lis pendens variously interpreted indifferent forms means a pending action or suit or a controversy in Court particularly in relation to the subject matter of a property. There is implicit in the doctrine of lis pendens that a buyer who purchases a property still subject of a determination of the Court has bought for himself a big trouble as the outcome can be against the vendor.”
Similarly, the apex Court in Enekwe vs. Int’l Merchant Bank of Nig Ltd & Ors (2006) 11-12 S.C. 3 held thus:
“The expression is made up of two Latin words.

The first is lis. The second is pendens. The word lis means a piece of litigation, a controversy. The word pendens conveys the connotation of pending. The two words put and read together generally mean a pending law suit. The expression is a useful latinism that has given its name to a notice required in some jurisdictions to warn all persons that certain property is the subject matter of litigation, and that any interests acquired during the pendency of the suit must be subject to the outcome of the litigation. Traditionally, this notice was called the notice of lis pendens, but 20th century American Lawyers have shortened the phrase to merely lis pendens. See Bryan Garner, A Dictionary of Modern Legal Usage, Second Edition, page 350. This reflects and confirms the traditional racing colloquial language of the Americas and the Americans.
The doctrine which is embedded in the common law gives notice to persons by way of warning that a particular property is the res of a litigation and that a person who acquires any interest in it must know well ahead that the interest will be subject to the decision of the Court on the property. This reminds me of the

fuller Latin expression, pendent elite nihilinnovetur, which means, during litigation nothing new should be introduced. A person who buys real property in the course and pendency of a litigation has bought litigation for himself and should be prepared to face the litigation. In other words, the fortunes or gains of persons in respect of the property will be dictated or determined by the result or outcome of the litigation. Such is the strong caveat placed on the property. Although the doctrine is not the same as caveat emptor in strict legal content, it has some loose or vague affinity with it, as it relates to a person buying or purchasing a property in a market overt.”
See also Osidele & Anor vs. Sokunbi NSCQR Vol 51 (2012) 337.
The Respondent submitted that the doctrine applies to all manner of cases. I really do not think that represents the legal position. The main purpose of the doctrine is to protect the subject matter of a pending litigation and therefore it is much more relevant in cases involving landed property. In BFI Group Corporation vs. B.P.E. (2012) 18 NWLR (Pt. 1322) 209, the Supreme Court held in this regard thus:<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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“It is being touted that the respondent has taken steps to foist a fait accompli on the Court. The respondent must be made to appreciate the purport of the doctrine of lis pendens which is aimed at preserving the subject matter of litigation. Any extraneous body including Russal which buys the subject of litigation does so at its own risks. See: Vaswani Trading Co. v. Savalakh & Co. (1972) NSCC 692; Ogundiani v. Araba (1978) 6-7 SC 55 at 74.”
For the doctrine to apply, the Respondent must prove that the case pending in Court must relate to the property. This was stated by the Supreme Court in Oronti vs. Onigbanjo (2012) 12 NWLR (Pt. 1313) 23 in these words:
“This Court had in Alhaji Usman Bua v. Bashiru Dauda (2003) 13 NWLR (Pt. 838) 657 per Uwaifo JSC reiterated the conditions on which the doctrine of lis pendens would apply. It was stated thus:
That it must be shown;
(a) That at the time of the sale of the property the suit regarding the dispute about the said property was already pending. See Bellamy v. Sabine (1857) 26 L.J. (N.S.) Equity Reports 797 at 803;
(b) That the action or lis was in respect of real

property; it never applies to personal property. See WIGRAM v. BUCKLEY (1984) 3 Ch. 483 at 492-493;
(c) That the object of the action was to recover or assert title to a specific real property; that is to say, an action in a subject matter adverse to the owner in respect of some substantive right which is proprietary in nature: see CALGARY AND EDMONTON HAND CO V. DOBINSON (1974) 1 All ER 484 at 489; and
(d) That the other party had been served with the originating process in the pending action: see DRESSER UK LTD v. FALCONGALT FREIGHT MANAGEMENT LTD (1992) ALL ER 450 at 523.
It must be stated that the four conditions above must co-exist before the doctrine of lis pendens would apply. Another way of saying it, is that the absence of any of those conditions would render inapplicable the doctrine. It is that simple. I refer to Nsirim v. Nsirim (1995) 9 NWLR (Pt. 418) 144; Enekwe v. International Merchant Bank of Nigeria Limited (2006) 19 NWLR (Pt. 1013) 147.”
The point must be made here that the doctrine is not applicable to all cases. See Network Security Ltd vs. Dahiru & Ors (2007) LPELR-8852 (C.A); Agbu vs. Civil Service Commission Nasarawa State &Ors (2010) 2 FWLR (Pt. 528) 4773.

From the purport and the meaning of cases that are considered under the doctrine of lis pendens and the conditions that need to be satisfied before the doctrine is applied, I feel safe to say that the criminal cases which were pending against the Appellant upon which the Respondent placed restriction on the account of the Appellant does not come within cases where the doctrine can be applied. The point I am making is that the argument of the Respondent’s counsel would not fly as there is no connection between the offences the Appellant is charged with and the situation on ground which will prejudice the outcome of the criminal cases. The subject matter in the criminal matter is not the money but rather the fact that the Appellant is alleged to have fraudulently converted or approved credit facility to some persons. In other words, abusing his position as Executive Director. The outcome of the criminal trials will be conviction if the Appellant is found liable or guilty. The outcome of the criminal cases will in no wise affect the accounts as there is no nexus between the criminal cases

and the accounts restricted.. It is my firm position that bearing in mind the subject matter of the case upon which the doctrine of lis pendens is applied, I make bold to say that the doctrine of lis pendens is not applicable in the matter. The subject matter is not covered by the doctrine. The doctrine cannot apply as the deposits in the various accounts are not tied to the criminal charges. Even if I am wrong, the point still remains that the condition for the application of the doctrine does not exist in this matter. In the circumstance, I do not feel persuaded by the authority of Agwaramgbo vs. UBN (supra).

I will now address the specific issue raised in issue 1, which was whether the lower Court was right in its decision that the Respondent was right in refusing to honour Exhibits C, D, E and F mainly on the premise that there is a criminal charge against the Appellant. The relationship between the Respondent and the Appellant which is customer/banker, Agent/Principal, debtor/creditor does not give the Respondent the power to deal with the account of the Appellant unilaterally without the consent and knowledge of the Appellant, the account holder.

The main exception is if there is a judicial intervention as was mentioned in the GT Bank vs. Adedamola (supra). The point must be made loud and clear that I am not aware of any law that permits the Respondent to unilaterally place restriction on the account of the Appellant without a Court order on the premise that there is a criminal matter of fraud etc against the Appellant. The Respondent justified the action by saying it was prudent to avoid jeopardizing the outcome of the criminal matter. I really do not buy into that argument as I cannot see how the Appellant’s operation of the accounts will jeopardize the outcome of the criminal matters against the Appellant. Maybe, I am not seeing it the way the Respondent is seeing it, but really such an argument will not hold water with me.
In the first place, the point must be made that what is prudent may not be necessarily legal. Prudence is within the realm of morality which is not necessarily legality. A moral action may not necessarily be a legal action. The action of the Respondent could receive moral approval but definitely not legal approval. An action receives legal approval because there is an

enabling law that backs such an action. When morally an action is fine but there is no law backing such an action, the action will be illegal because morality and law are not synonymous. See Unity Bank Plc vs. Olatunji (2015) 5 NWLR (Pt. 1452) 203; Salisu & Ors vs. Abubakar & Ors (2014) LPELR-23075 (CA).
The question now is, what is the law upon which the Respondent placed the restriction order on the accounts of the Appellant. The Respondent is a bank and therefore an agent of the Appellant. The duty of the Respondent as banker and agent is to carry out the instructions of the Appellant on the accounts. The Respondent has no right to unilaterally take any action adverse to the Appellant on the account without express or implied agreement of the Appellant. Where the Respondent does anything adverse to the interest of the Appellant on the accounts, this will be treated as breach of contract or duty.
The Respondent has a duty in law to honour or pay any demand made by the Appellant on the account domiciled with the Respondent provided the account is funded. This is a duty that the Respondent is obligated to perform failing which there are

consequences. See Access Bank Plc vs. Maryland Finance Co and Consultancy Services (2005) 3 NWLR (Pt. 913) 460; First African Trust Bank Ltd vs. Partnership Investment Coy Ltd (2003) 18 NWLR (Pt. 851) 35.
The only two instances recognized by law upon which the Respondent will not be obligated to honour payment instructions from the Appellant are, if the account is not funded or there are other legitimate and legal reasons which the Respondent will adhere to. The only legal reason which comes to mind is if there is a Court order which authorizes the Respondent to place a restriction on the account. The refusal of any bank to honour cheques or withdrawal instruction from an account on these two grounds is undefendable. Apart from these, a bank will be walking on dangerous grounds to refuse to honour a cheque from a customer on a funded account. The Respondent should have done better than it did. It would have been better for the Respondent to err on the side of caution than to take the dangerous risk of unilaterally placing restriction on the account of the Appellant. The law has made it easy on how to secure such an order which is by way of an ex parte

application. The Respondent was not properly advised in unilaterally placing a restriction on the accounts of the Appellant.
The Appellant apparently standing criminal charges but he has not been found guilty, he is as innocent as anyone and he has rights that must be protected. In fact, all through the period of the trial, he is innocent and all his rights are intact and can only be taken away by the order of a Court and not by the action of a person or organization. No matter how prudent that may appear it is lawless. The Respondent should not jump the gun but allow the Court to carry out its function. The least the Respondent should have done was to have secured a Court order to place a restriction on the Appellant’s account. Not to have done that but to unilaterally place a restriction on the accounts of the Appellant is lawless. To allow such a lawless action that does not have any legal basis even for the best moral or prudent reasons in the world will create anarchy as banks or organizations if not checked will just for the worse of reason place restrictions on people’s account. The Nigerian Court cannot encourage such an action and I

certainly will not. The Respondent stepped out of line in unilaterally placing a restriction on the account of the Appellant which informed endorsing Exhibit C with the words ‘DAR’ and Exhibits D, E and F ‘POSTING DISALLOWED.’ The point I am laboring to make here is that the Respondent has no power under any law to unilaterally place a restriction on the account of the Appellant and therefore refused to honour Exhibits C, D, E and F. I make bold to say that the fact that there are criminal trials against the Appellant does not help the case of the Respondent. I can even go further that the fact that the Appellant knew that his account has been placed under restriction before presenting Exhibits C, D, E and F is of no moment as it relates to this issue. The Respondent’s action is void ab initio. The Appellant was looking for evidence hence he presented those Exhibits and he got evidence. Since the action of the Respondent is void ab initio, the Respondent has breached the duty of care and indeed the contractual obligation he has with the Appellant when he did not honour the cheque and the withdrawal forms. The lower Court was

therefore wrong in holding that the Respondent was right and justified in refusing to pay the value on Exhibit C, D, E and F.
In the circumstance, I have no difficulty in resolving this issue in favour of the Appellant.

I will now turn to issue 2, which is as follows:
Was the lower Court right in its finding that the words ‘DAR’ marked or written by the Defendant/ Respondent on Exhibit C is not defamatory of the claimant/Appellant due to pending criminal charges against him and consequently refused to make an award in damages because there was no evidence to ground the claim in libel.

The general law is that a customer can sustain an action in defamation if his cheque is returned unpaid and if such action is termed wrongful. See Oyerinde vs. Access Bank Plc (2014) LPELR-23461 (CA). An action in defamation will stand if the Appellant can show that there were defamatory words published to a third party which in the eyes of any reasonable person lowers the reputation of the person referred to in the defamatory words and thus create hatred towards that person. The test here is objective test. If whatever is written on the

cheques or withdrawal forms gets to a third party and it is such that will lower the reputation of the person referred to in the cheque and withdrawal forms in such a way that a reasonable man will see it as such then defamation would have been established. The Supreme Court in the case of Ekong vs. Otop (2014) 11 NWLR (Pt. 1419) 549 brought out the ingredient to establish defamation in these words:
“This Court has laid down in quite a number of decisions certain conditions which must be satisfied before defamation can be proved. In an action for libel, the plaintiff must prove the following:
1. That the defendant published in a permanent form a statement;
2. That the statement referred to the plaintiff;
3. That the statement conveys defamatory meaning to those to whom it was published; and
4. That the statement was defamatory of the plaintiff in the sense that:
(a) It lowered him in the estimation of right-thinking members of the society; or
(b) It exposed him to hatred, ridicule or contempt; or
(c) It injured his reputation in his office, trade or profession; or
(d) It injured his financial credit.

See DALUMO V. SKETCH PUBLICATION COMPANY LTD (1972) 5 SC 308, ONU V. AGBESE (1985) 1 NWLR (pt. 4), SKETCH V. AJAGBEMOKEFERI (supra).”
Similarly, this Court in Aliero vs. Muhammadu & Ors (2019) LPELR-47338 (CA) held thus:
“Defamation involves a false statement that defames or harms another persons reputation. See the case of ESENOWO vs. UKPONG (Supra). See also the case of GUARDIAN NEWSPAPER LTD. ANOR vs. REV. PASTOR C. I. AJEH (2011) LPELR- 1343 (SC) on the subject. Defamatory statements are categorized as libel or slander. Libel is written or visual defamation and slander is spoken or oral defamation. What has been presented in this case is libel. This is easily gleaned from the processes filed by the parties to this action especially as it has to do with Exhibits A and A1 of the 18th day of April, 2014.
The tort of defamation generally consists of the following elements: (1) false statement of fact; (2) capable of a defamatory meaning or by reason of an innuendo; (3) of and concerning another living person; (4) publication to a third party; (5) some degree of fault on the part of the person making the statement; and (6) harm to

the reputation of the person defamed. See the case of SKYE BANK PLC & ANOR vs. CHIEF MOSES BOLANLE AKINPELU (2010) 9 NWLR (PT. 1198) 179.”
In relation to this case, the question is, whether endorsing Exhibit C with the words ‘DAR’ and writing ‘POSTING DISALLOWED’ amounted to defamation? The lower Court held that they do not amount to defamation. The Appellant naturally disagrees with the lower Court and the Respondent agrees with the lower Court. Naturally they hold different views, one of them is right and the other wrong as both of them cannot be right. The position they have all taken cannot meet like Rivers Benue and Niger meeting in the confluence. My duty at this level is to look at the decision of the lower Court in deciding whether the Court is right or wrong. Let me handle the less difficult one first, that is Exhibits D, E and F. These are withdrawal forms written by the Appellant himself to the Respondent on 9/3/12 seeking to withdraw money from his domiciliary accounts which were funded. The Respondent did not honour these forms but wrote on them ‘POSTING DISALLOWED.’ I will not waste my time to

look at the implication of the words above because it comes to no moment here. This is because the facts of the case did not satisfy the condition for the tort of defamation. Whether the words are defamatory on itself will not establish the tort but in addition to that the words must have been published to a third party, that is a persons outside the parties on record. See Popoola vs. Edobor & Ors (2017) LPELR-42539; Dalumo vs. The Sketch Publication Co. Ltd (1972) 1ANLR 567. There is no evidence before the lower Court that apart from the parties, any other person saw the writing on Exhibits D, E and F. To that extent the lower Court was right in holding that the Appellant is not entitled to damages on Exhibits D, E and F as he has been unable to prove defamation.
On Exhibit C, if I hold that the words ‘DAR’ is defamatory, I may hold a contrary position as to the issue of publication to the above as there is clear evidence that a third party was involved, that is CW2 to whom the cheque was given and returned to. I also do not agree with the submission of Respondent’s counsel that there is no evidence before the lower Court as to the

effect of the word ‘DAR’ on the CW2 vis a vis the way she viewed the Appellant. There is enough evidence as can be seen on pages 1-2 of the additional record of appeal. In Paragraph 7 the CW2 said:
“I have since stopped doing business with the Claimant and would not want to have anything to do with him again. The Claimant is a man of unsound financial standing.”
If this is not enough evidence to establish lowering the reputation of the Appellant before CW2, I wonder what it is. I also do not think as argued by the Respondent that it is of no moment whether the CW2 has knowledge that the Appellant has been sacked from the bank and standing criminal trial or that she does not know what ‘DAR’ means. The point is that she has averred and testified that based on the fact that the cheque was returned she stopped doing business with the Appellant and she now sees him as a person of unsound financial standing.
Having established that, the question now is what does ’DAR’ mean when endorsed on a cheque and what is the legal effect of that endorsement. The Appellant counsel submitted that it means that there

is no money in the account of the Appellant and therefore the cheque was not paid. If this is correct, the Appellant will be entitled to damages for defamation. The Respondent on the other hand says that the meaning of DAR is that the attention of the Appellant is required. If this is correct then the Appellant will not be entitled to damages for defamation. This Court has taken different positions on the effect of ‘DAR’ on a cheque arising principally based on the facts presented before the Court. Learned counsel brought out the different views of this Court. I will say here that each decision is based on the facts before the Court. One thing that is clear is that ‘DAR’ endorsed on a cheque means and implies that the cheque was not honoured. A cheque is said to be honoured when the value of the cheque is paid. If it is not paid for whatever reason the cheque can be said to be dishonoured in the loose sense but not in a technical sense. The facts of this case is clear on the subject. This is that Exhibit C was issued on a funded account but the Respondent did not honour it. Instead of honouring same, the Respondent wrote

‘DAR’ on the cheque which means that the attention of the drawer is required. In one breath depending on the facts before this Court, DAR can mean that there is no money in the account. If this is the meaning of ‘DAR’, since the account was funded, the Respondent will have breached his contractual obligation towards the Appellant. The other interpretation given to ‘DAR’ is that the phrase does not necessarily mean the account is not funded but for any other reason, the attention of the drawer is required. Taking this meaning, which in my opinion is more plausible, a customer cannot yet conclusively say that his cheque was dishonoured , it is only after the drawer’s attention has been drawn and subsequently the bank refuses to pay that it can technically be said that the cheque has been dishounoured. It is my opinion that the endorsement of ‘DAR’ on the cheque is a warning that precedes dishonouring a cheque if the issue is not sorted out. The common English used for ‘Drawers Attention Required’ is not conclusive that the bank will not pay or decided not to pay. It is also in my opinion not a

conclusive point stating that the bank is not paying because the account is not funded. That could be what the person holding the cheque could interpret it to mean but that may not necessarily be the case. The attention of the drawer can be required for several reasons and not necessarily that there is no money in the account. For instance, the attention of the drawer can be required when there is irregular signature or when the amount in the cheque exceeds the mandate given to the bank. To therefore hold that once ‘DAR’ is endorsed on a cheque, it only means that the account is not funded with due respect to earlier positions will not be a fair representation of the meaning of ‘DAR’. When a cheque is returned with that endorsement, the reasonable thing to do is to get in touch with the bank to find out what the bank needs the attention of the drawer for. Without getting in touch with the bank but to hold that ‘DAR’ means there is no fund in the account will be taking it too far with due respect. It is my firm view that a bank cannot be alleged to have technically dishonoured a cheque when ‘DAR’ is endorsed on

same as the endorsement per se does not imply that the cheque is dishonoured because the account is not funded. It is an invitation to the customer to sort out whatever is the problem with the cheque or the account of the customer. If the customer refuses to get in touch with the bank, the burden to prove that the bank did not pay because the account was not funded moves to the Appellant, the law is settled that he that alleges must prove. See Action Alliance & Ors vs. INEC (2019) LPELR-49364; Akinbade & Anor vs. Babatunde & Ors (1972) 12 S.C. (Pt. III) 84.
The position of this Court before today which with all due respect I am not persuaded and I say this with all sense of responsibility was stated in Jigna Farms Ltd vs. UBN Plc (2016) LPELR-40231 (CA), this Court held:
“In the instant case, the two cheques drawn on the respondent by the appellant were duly presented for payment and payment was refused with the endorsement “DAR” thereon. The inscription DAR means in full “Drawer’s Attention Required.” In the case of OCEANIC SECURITIES INTERNATIONAL LIMITED V. BALOGUN (2013) ALL FWLR (677) 633, 661, MBABA, JCA, stated as follows:<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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“Can it also be said that the inscription “DAR” written on a cheque by a bank on presentation means that the cheque is dishonoured and that there is no money in the account of the drawer. That cannot be so, except there is concrete evidence to the effect that such inscription connotes such meaning or reference. Ordinarily the inscription “DAR” is an acronym usually interpreted to mean Drawers Attention Required. Of course the drawer’s attention can be required by a bank for myriad of reasons, for example to explain some things before a cheque is cashed, mostly to protect the interest of the customer (drawer) and Bank. It would therefore be wrong for the drawer to run to town with the evil news that the cheque has been dishonoured simply because the cashier or accountant of the bank has written “DAR” on the cheque.”
However, in the case of STANDARD TRUST BANK LTD V. ANUMNU supra. 157, it was held that;
“Drawer Attention Required’, which expression connotes non-availability of funds in the customer’s bank account which will equally be wrongful and defamatory to return a cheque so marked if the customer has adequate funds in his account… the

connotation to a third party is that there is no fund or no sufficient fund in the account to accommodate the dishonoured cheque.”
It seems clear to me that where a customer, as in this instance, draws a cheque on his bank and, on being duly presented for payment, payment is refused, the cheque is thereby dishonoured. See Section 47 (1) of the Bills of Exchange Act. This is especially so where the Inscription “DAR” is made on the cheque by the banker. In the Black’s Law Dictionary, 8th Ed. Page 501 the word “dishonor” is defined as “To refuse to accept or pay (a negotiable instrument) when presented.” The trial Court was therefore not right in holding that the appellant did not prove that the cheques were dishonoured. Whether or not the dishonour is wrongful depends on whether or not the customer has sufficient funds in his account to cover the sum in the cheque. Where the customer has sufficient funds in the account to cover the sum in the cheque the dishonour of the cheque is wrongful except there are other legally acceptable reasons for refusal of payment.”
The above decision is not radically different from the position I have held above.

The decision only puts obligation on the Respondent to show why the cheque was not paid. By the above decision, returning a cheque unpaid amounts to dishonouring same. If the cheque is not endorsed with ‘DAR’ I will agree entirely with the above decision. When the cheque is so endorsed, it is a warning before formal dishonouring of same. Whichever way, we look at it, this Court in the above decision has held that the dishonor of a cheque can be wrongly done or not. It is not wrongfully done when there are legally acceptable reasons for the refusal of the payment. I have held that the reason given for the refusal to honour Exhibits C, D, E and F, which is that there is a pending criminal action against the Appellant is not legally tenable. That I have dealt with in issue 1. On the issue 2, I cannot see my way clear in coming to that conclusion that ‘DAR’ endorsed on the cheque on its own amounts to defamation.
The reputation of a person is lowered when there is a reputation in the first place. A person is said to have reputation when he has character and deals fairly with people. This is where in my view the fact that the Appellant

knew before issuing Exhibit C that his account has been placed on restriction by the bank becomes relevant. The Appellant had known since 19/7/10 that his account has been placed on restriction that is evidenced by Exhibit G when he brought a motion for the unfreezing of his account, the Court refused same. He knew his account had been restricted since 2010 and he knew the restriction had not been removed, he decided to issue Exhibit C knowing that it will not be honoured since his account was restricted. The Appellant did not bring an action to claim that his account was unlawfully restricted but rather for the refusal to honour Exhibits C, D, E and F. While I have held that the refusal to honour Exhibits C, D, E and F was not justified I however cannot hold that the inscription ‘DAR’ is defamatory as the meaning of ‘DAR’ is not defamatory in all intent and purpose. This is a Court of justice, the Appellant long ago knew that his account had been restricted and that effort to have it unrestricted failed but yet went on to give someone a cheque on that account. What is the justice on this in an action for defamation. I resolve this issue in

favour of the Respondent.

At this point, I am saying for avoidance of doubt and for clarity sake that the lower Court was right in holding that the Appellant is not entitled to damages for libel but the lower Court was wrong in holding that the Respondent had justification in refusing to pay Exhibit C, D, E and F.

Having so held above, I will now exercise the powers of this Court under Section 15 of the Court of Appeal Act in assuming the position of the trial Court in assessing the damages arising from relief 1 of the claim of the Appellant in the lower Court. The claim of the Appellant in the lower Court is for:
1. The sum of N5,000,000 as damages for breach of contract or in the alternative breach of duty;
2. The sum of N5,000,000 as Damages for libel;
3. Interest at the rate of 21% per annum until liquidation.
4. The cost of this suit.

The Respondent is liable for breach of contract or the duty he owes the Appellant as its customer in refusing to honour Exhibit C, D, E and F. The Appellant is not under an obligation to prove what he has actually suffered. I agree that Section 57 of the Bill of Exchange applies and

therefore the damages assessed will be at large. There is no justifiable reason for the Respondent in dishonouring Exhibits C, D, E and F. In the circumstance, the damage is assessed at N3,000,000.

The Appellant wants interest of 21%. The law is clear on pre judgment interest, it is that it must be pleaded with details and evidence adduced in that respect. See Grant Properties Limited & Anor vs. Osasanya & Anor (2019) LPELR-49526. In Sani Abacha Foundation for Peace and Unity & Ors vs. United Bank for Africa Plc (2010) 17 NWLR (Pt. 1221) 192 the apex Court held:
“It is settled law that where interest is being claimed as a matter of right, the facts of that entitlement must be pleaded by the claimant followed by evidence to establish same. It is only when the Court is satisfied, after reviewing the pleadings and evidence that it may award same. See U.B.N Plc vs Spok (Nig) Ltd (1998) 12 NWLR (Pt. 578) 439 AT 475.”
The Appellant is not entitled to pre-judgment interest as interest was not pleaded or proved. After the judgment the Appellant is entitled to post judgment interest that is to say the Appellant is entitled to interest

at 10% from today on the N3,000,000 judgment sum until liquidation.

In the whole, this appeal succeeds in part which is to the effect that the relief 1 of the Appellant at the lower Court succeeds and the damages is assessed at N3,000,000 with 10% interest from today until liquidation.
Parties are to bear their respective cost.

OBANDE FESTUS OGBUINYA, J.C.A.: I agree with the erudite leading judgment delivered by my learned brother, Ebiowei Tobi, JCA.

JAMILU YAMMAMA TUKUR, J.C.A.: My learned brother EBIOWEI TOBI JCA, afforded me the opportunity of reading in draft before today the lead judgment just delivered and I agree with the reasoning and conclusion contained therein, adopt the judgment as mine with nothing further to add.

Appearances:

S. Adebayo, Esq. For Appellant(s)

Adeniyi Aderogba, Esq. For Respondent(s)