GUARANTEE TRUST BANK PLC v. PASTOR RIBEH CHINEDUM NOBLE & ANOR
(2019)LCN/12573(CA)
In The Court of Appeal of Nigeria
On Friday, the 25th day of January, 2019
CA/E/53/2016
RATIO
AGENCY: UNDISCLOSED PRINCIPAL
“The law is that an agent of a disclosed principal is not ordinarily personally liable on a contract he enters on behalf of the said principal: see KHONAM V. JOHN (1939) 15 NLR 12 AT P. 15; NIGER PROGRESS LTD V. NORTH EAST LINE CORPORATION (1989) 3 NWLR (PT. 287) 288. See OKAFOR V. EZENWA (2002) 13 NWLR (PT. 784) 319 and the other cases cited by learned counsel for the Respondents. Being the agent of a disclosed principal, Okechukwu Okeke, the branch head/manager is not personally liable on a contract he entered into on behalf of his principal.” PER CHINWE EUGENIA IYIZOBA, J.C.A.
EVIDENCE: WHETHER FACTS MUST BE PLEADED
“In the case of S. A. F. P. & U. UBA PLC (2010) 17 NWLR (PT. 1221) 19 cited by the Appellant it was held as follows:- ‘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 v. Spok (Nig.) Ltd (1998) 12 NWLR (Pt. 578) 439 at 475.'” PER CHINWE EUGENIA IYIZOBA, J.C.A.
JUSTICES
CHINWE EUGENIA IYIZOBA Justice of The Court of Appeal of Nigeria
MISITURA OMODERE BOLAJI-YUSUFF Justice of The Court of Appeal of Nigeria
ABUBAKAR SADIQ UMAR Justice of The Court of Appeal of Nigeria
Between
GUARANTEE TRUST BANK PLC Appellant(s)
AND
1. PASTOR RIBEH CHINEDUM NOBLE
2. RIBEH EUCHARIA NNEKA Respondent(s)
CHINWE EUGENIA IYIZOBA, J.C.A. (Delivering the Leading Judgment):
This appeal is against the judgment of the High Court of Anambra State Nnewi Judicial Division in Suit No HN/70/2013 delivered on the 20th day of January 2016 Coram Anyachebelu J.
FACTS:
The Respondents who were customers of the Appellant originally placed in fixed deposit with the Appellant bank at its Nnewi Branch the sum of N26, 561,597.94 (Twenty-six Million, Five Hundred and Sixty-one Thousand, Five Hundred and Ninety-seven Naira, Ninety-four kobo) in October 2010. As agreed by the parties, the Appellant paid the Respondents monthly interest on the fixed deposit which was rolled over several times. Subsequently, the Respondents withdrew part of the amount in the fixed deposit, leaving a balance of N15, 000,000.00 (Fifteen Million Naira). The interest was paid up to 21st February 2013. The Respondents later sought to withdraw the remaining sum of N15, 000,000.00 (Fifteen Million Naira) plus the accrued interest but the Appellant was not forthcoming in releasing the amount to them despite repeated demands in writing from the Respondents and their counsel, hence the institution of this suit.
The Appellant in its Statement of Defence averred that on the request of the Respondents for payment of the principal and accrued interest, they wrote to them on 6/2/13 informing them that the bank’s customers St. Hilary Trans global Nig. Ltd and Ikechukwuu Godwin Okolo whose facilities their fund was used to secure were indebted to the Appellant in the sum of Thirteen Million, Three Hundred and Forty two Thousand, One Hundred and Eight nine Naira Thirty six Kobo. (N13,342,189.36) and Four Million, Three Hundred and Seventy five Thousand, Two Hundred and Sixty seven Naira Sixty seven Kobo (N4,375, 267.67) respectively as at January 31, 2013 and that the bank had exercised its right of set off in accordance with the letter of set off executed by the Plaintiffs/Respondents in favour of the defendant/Appellant bank as security for the facilities granted by the bank to the aforementioned customers St. Hillary Trans Global Nig. Ltd and Mr. Ikechukwu Godwin Okolo. The letter was tendered in evidence as Exhibit D2. The Appellant further averred that the 1st Plaintiff/Respondent by a letter dated 12/03/13 in reply to the Defendant/Appellant’s letter stated that it was one Okechukwu Okeke, the relationship manager of the Appellant bank who approached and begged him to allow the bank use their fund as cash collateral and that he acted out of pity. The letter was admitted and marked Exhibit D3.
The Plaintiffs/Respondents insisted that they were not bound by the two (2) letters of set off Exhibits D1 and D5 respectively because at the same time and before the 1st Respondent signed the letters of set off, the Appellant through Okechukwu Okeke, its manager at the Nnewi Branch of the Appellant bank had also executed a letter of indemnity exonerating the 1st Respondent from any liability arising from the refusal and or default of those customers whose loans were secured with the Respondents? fixed deposit. The letter of indemnity was tendered in court as Exhibit P4. The Defendant/Appellant bank denied that the said Okechukwu Okeke had their authority to give the letter of indemnity to the 1st plaintiff and that it is only the Board of Directors of the Defendant/Appellant that can give such indemnity.
In their statement of claim filed 13/6/13, the Respondents as Plaintiffs sought the following reliefs against the Appellant as Defendant:
a) A DECLARATION that the Defendant bank is in breach of the contract of fixed deposit as agreed by the parties
b) A DECLARATION that the plaintiffs are entitled to be paid the principal sum of N15, 000,000.00 which is the amount of fixed deposit with the defendant bank.
c) A DECLARATION that the plaintiffs are entitled to the payment of fixed deposit interest of N532,289.62 from 22nd day of February 2013 to 21st day of May 2013.
d) A DECLARATION that the plaintiffs are entitled to interest at the rate of 28% per annum cumulatively on the sum of N15, 532,289.62 from February 22nd 2013 to May 21st 2013 and thereafter 28% interest on the said sum until the case is determined.
e) 20% judicial interest from the date of judgment until the judgment debt is satisfied or liquidated.
f) AN INJUNCTION restraining the defendant bank from further withholding the fund of the plaintiffs.
The parties filed and exchanged pleadings which were duly amended, list of witnesses and statement on oath of their respective sole witnesses.
Both parties tendered several Exhibits. After hearing, written addresses were filed and duly adopted. Judgment was entered in favour of the Plaintiffs/Respondents, substantially in terms of their claims.
Dissatisfied with the judgment, the Appellant filed a Notice of Appeal with eight grounds of appeal, out of which he distilled the following 7 issues:
1. Whether the lower Court was right in its decision that the defendant bank was not entitled to exercise its right of set off on the facts and circumstances of this case? Ground 2.
2. Whether the appellant is bound by the letter of indemnity given by Okechukwu Okeke to the 1st respondent? Ground 5.
3. Whether the letter of indemnity given to the 1st plaintiff by Okechukwu Okeke suspended the right of the defendant bank to set off the amount owed by the customers whose banking facilities were secured with the plaintiffs fixed deposit suspended the defendant’s right of set off or amount to waiver of same? Ground 4.
4. Whether on the facts and circumstances of this case the defendant is obliged to notify the plaintiffs before exercising its right of set off? Ground 3.
5. Whether the learned trial judge was right in awarding the plaintiff interest on the deposit at the agreed rate? Ground 6.
6. Whether the learned trial judge on the facts and circumstance of the case made a case for the respondents. Ground 7.
7. Whether the judgment of the lower Court is perverse and occasioned a miscarriage of justice? Ground 1.
Learned counsel for the Respondents on his part formulated three issues for determination as follows:
(a) On the strength of the letter of indemnity tendered as Exhibit P4 at the lower Court, was the Appellant justified to hold onto the Respondents’ fixed deposit on the basis of the two letter of set off tendered in Court as Exhibits ‘D1’ and ‘D5′.
(b) Whether the branch manager of the Appellant who executed Exhibit P4 in favour of the 1st Respondent was an agent of the Appellant or was merely acting on his own.
(c) Whether the lower Court was correct to award interest on the Respondents’ fixed deposit as agreed by the parties.
The Respondents’ three issues are more succinct and encompass the 7 issues of the Appellant.
I shall however in the determination of this appeal take above issues (a) and (b) together and then issue (c). I shall refer to (a) and (b) as Issue 1 and (c) as issue 2.
ISSUE 1
On the strength of the letter of indemnity tendered as Exhibit P4 at the lower Court, was the Appellant justified to hold on to the Respondents’ fixed deposit on the basis of the two letters of set off tendered in Court as Exhibits ‘D1’ and ‘D5′.
Whether the branch manager of the Appellant who executed Exhibit P4 in favour of the 1st Respondent was an agent of the Appellant or was merely acting on his own.
APPELLANT’S ARGUMENTS:
Issue 1 above encompasses Appellant’s issues 1 & 3 which were argued together in the Appellant’s brief and issue 2. The issues are as follows:
1. Whether the lower Court was right in its decision that the defendant bank was not entitled to exercise its right of set off on the facts and circumstances of this case?
2. Whether the appellant is bound by the letter of indemnity given by Okechukwu Okeke to the 1st respondent?
3. Whether the letter of indemnity given to the 1st plaintiff by Okechukwu Okeke suspended the right of the defendant bank to set off the amount owed by the customers whose banking facilities were secured with the plaintiffs fixed deposit suspended the defendant’s right of set off or amount to waiver of same?
Learned counsel for the Appellant on these issues submitted that Exhibits D1 and D5 are the letters of set off given by the Respondents to the Appellant authorizing it to set off the debts of the said customers from their fixed deposit. Counsel argued that the set off was a valid contract freely and voluntarily entered into by the parties and is therefore binding on them. He submitted that the duty of the Court was merely to interpret Exhibits D1 and D5 and give effect to them as the wishes of the parties expressed therein. Counsel cited the following authorities: ODUYE V. NIGERIAN AIRWAYS LTD (1988) 2 NWL (PT. 55) 126; AMIZU V. DR. NZERIBE (1989) 4 NWLR (PT. 118) 755; ARTRA INDUSTRIES LTD V. NIGERIAN BANK FOR COMMERCE AND INDUSTRIES (1997) 1 NWLR (PT. 483) P. 574 RATIO 10 AT P. 593 PARAS F ? G; ORIENT BANK PLC V. BILANTE INT?L LTD (1997) 8 NWLR (PT. 515) 37; ALHAJI AMINU A. U. SANYINNA V. AFRICAN INT?L BANK & ORS (2001) 4 NWLR (PT. 703) 355 AT 368.
Learned counsel submitted that the Respondents after giving the letter of set off which are binding on them, cannot turn round to rely on the letter of indemnity allegedly given to them by Okechukwu Okeke to deny the Appellant its right of set off. He opined that the Appellant is entitled to exercise its right of set off, while the Respondents are free to enforce the indemnity against Okechukwu Okeke.
Learned counsel for the Appellant on their issue 2 contended that the letter of indemnity – Exhibit P4 given to the 1st Respondent by Okechukwu Okeke, the Appellant’s then branch head was given to the 1st Respondent alone in respect of his personal account and not to the Respondents in respect of their joint account. Learned counsel submitted that apart from the letter head of the Appellant, there was nothing in the body of the said letter of indemnity indicating that it was given in consideration of the letters of set off executed by the Respondents or in consideration of the overdraft facilities granted to the said customers of the Appellant.
Counsel submitted that the Appellant in paragraph 9 of the Amended Statement of Defence averred that it is only the Board of Directors of the appellant that has the authority to give such indemnity to any person for any reason whatsoever. Counsel argued that the Respondents ought to have led evidence to show that it was within the scope of the duty/authority of the branch head – Okechukwu Okeke to give the letter of indemnity as it is not every act of a staff of a company or bank that is binding on the company or bank or that the bank will be vicariously liable for or be deemed to be the act of the company or bank. Counsel cited the case of OTTO WOLFR (NIG.) LTD. V. NATIONAL BANK OF NIG. LTD (1976 ? 1984) 3 NBLR 272.
Learned counsel finally submitted that the letter of indemnity Exhibit P4 is not binding on the appellant. He urged the Court to resolve the issues in favour of the Appellant.
RESPONDENTS’ ARGUMENTS:
Learned counsel for the Respondents in his brief set out the contents of the letter of indemnity, Exhibit P4 and the contents of the letters of set off Exhibits D1 and D5. He referred to the definitions of ‘set-off’ and ‘Indemnity’ in Black’s Law Dictionary sixth edition at page 1372 and page 768 respectively. Counsel further referred to page 112 of An Almanac of Contemporary Judicial Restatements Vol. 11, where it was stated that indemnity does not alter the assignment of liability but permits the indemnified to effectively escape the burden of paying for the liability incurred. On the submissions of learned counsel for the Appellant that the letters of set-off given by the Respondents are separate contracts distinct from the indemnity, learned counsel citing the cases of RECTOR KWARA STATE POLYTECHNIC V. ADEFILA (2008) ALL FWLR (PT. 431) 941 AT 981 AND NORTHERN ASSURANCE CO. LTD V. WURAOLA (1969) submitted that in the interpretation of a document, no word must be added to or subtracted or ignored in order to give meaning to that document and that it is improper to speculate in construing the contents of the said document.
Counsel further submitted that in order to properly evaluate and construe Exhibits P4, D1 and D5, the lower Court had to discover the intention or contemplation of the parties; and cannot import into the contract ideas not obvious on the face of the documents. In urging the Court to uphold the judgment of the lower Court, counsel pointed out several factors which made it conclusive that the intention of the parties in executing Exhibits D1, D5 and P4 was that in as much as the 1st Respondent allowed the cash in their fixed deposit to be used as collateral for the credit facilities to Okolo Godwin Ikechukwu and St. Hillary Transglobal Nig. Ltd, the Respondents will be exculpated from liability in the event of default by those two customers to repay the credit facilities as agreed.
Learned counsel for the Respondents in reacting to the arguments of the Appellant on his issue 2 relying on the case of FIRST BANK OF NIGERIA PLC V. TSOKWA (2004) 5 NWLR (PT. 866) PG 271 @ 312 submitted that a company, such as a bank being a juristic person can only act or function through its staff, agents and or servants. Counsel submitted that a company can be held liable for the actions of its officers and such officers need not be Directors but those who enjoy formally delegated authority over some aspects of the company’s business on the basis that such actions are those of the company itself. He cited OFORKAJA V. TARABA STATE GOVERNMENT (2003) FWLR (PT. 178) PAGE 1036. Learned counsel argued that the parties from their respective cases presented at the lower Court are ad idem that Okechukwu Okeke, who signed the Letter of Indemnity (Exhibit P4), was the Branch Head/Manager of the Appellant and therefore an agent of the Appellant and is liable for actions he took while acting in his capacity as the Branch head/manager.
He opined that the said Okechukwu Okeke was the agent of a disclosed principal and not personally liable on a contract he entered into on behalf of his principal. Counsel cited the following cases: OKAFOR V. EZENWA (2002) 13 NWLR (PT. 784) 319; ATAGUBA & CO. V. GURA NIG. LTD. (2005) 21 NSCQR 720 @ 725 RATIO 10; EMMANUEL AGBANELO V. UNION BANK OF NIG. LTD (2002) 2 NSCQR 415 @ 418 RATIO 7; DELTA STEEL NIG. LTD V. AMERICAN COMPUTER TECHNOLOGY INC. (1999) 4 NWLR (PT. 597) 53 @ 66 PARA C?D. On the Appellant’s contention that it is only the Board of Directors of the Appellant that has the authority to give such indemnity, Counsel submitted that by virtue of Sections 131 & 132 of the Evidence Act, 2011, whoever desires any Court to give judgment as to the existence of any fact, the burden lies on him to establish the fact. Counsel submitted that at the lower Court, the Appellant did not tender the Memorandum and Articles of Association of the Appellant or any Resolution of the Board of Directors of the appellant stating or specifying that it is only the Board of Directors of the Appellant that can give such indemnity to any person. He opined that in the absence of such credible evidence, the lower Court was not bound to believe or act on the ipsi dixit averment in paragraph 9 of the Amended Statement of Defence. Counsel submitted that the case of UNION BANK OF NIG. V. PROF. A. O. OZIGI (1994) 3 SCNJ relied on by learned counsel for the Appellant is distinguishable from the instant case and urged the Court to resolve the issues in favour of the Respondents and to hold that the Letter of Indemnity (Exhibit P4) signed by Okechukwu Okeke, the Branch Head of the Appellant Bank fully binds the Appellant.
RESOLUTION OF ISSUE 1:
It is appropriate to start by setting out in full the contents of the Exhibits in controversy.
EXHIBIT P4
LETTER OF INDEMNITY
THIS LETTER SERVES AS AN INDEMNITY ABSOLVING MR. NOBLE OPURUM OF ANY LIABILITY INCURRED IN THE USE OF HIS DEPOSIT AS CASH COLLATERAL FOR LENDING PURPOSES.
THIS DOCUMENT CAN BE CALLED IN, IN THE UNLIKELY CASE OF DEFAULT IN AGREED REPAYMENT TERMS.
EXHIBIT D1:
The Managing Dirctor
Guaranty Trust Bank Plc
Plot 1669 Oyin Jolayemi Street
Victoria Island
Lagos
Dear Sir,
LETTER OF SET OFF
In consideration of your granting ST. HILLARY TRANSGLOBAL NIG LTD banking and credit facilities/accommodation from time to time, We, MR & MRS. NOBLE OPURUM of IKECHUKWU AZUBUOGU?S COMPOUND OKPUNOEZE VILLAGE URUAGU NNEWI, hereby agree that in addition to any general lien or similar right you as bankers may be entitled by law, you may at any time and without notice to me combine or consolidate all or any of my deposits and accounts with and liabilities to you in any currency that may at any time be in your possession and set off or transfer any sums or sums standing to the credit of any one or more of such accounts or deposits with you in or towards satisfaction of any of my liabilities to you on any other account whether such liabilities be actual or contingent primary or collateral and several or joint.
Exhibit D5:
The Managing Director
Guaranty Trust Bank Plc
Plot 1669 Oyin Jolayemi Street
Victoria Island
Lagos.
Dear Sir
LETTER OF SET OFF
In consideration of your granting OKOLO IKECHUKW UGODWIN banking and credit facilities/accommodation from time to time. We, MR. & MRS. NOBLE OPURUM of IKECHUKWU AZUBUOGU’S COMPOUND OKPUNOEZE VILLAGE URUAGU NNEWI, hereby agree that in addition to any general lien or similar right you as bankers may be entitled by law, you may at any time and without notice to me combine or consolidate all or any of my deposits and accounts with and liabilities to you in any currency that may at any time be in your possession and set off or transfer any sums or sums standing to the credit of any one or more of such accounts or deposits with you in or towards satisfaction of any of my liabilities with you in or towards satisfaction of any of my liabilities to you on any other account whether such liabilities be actual or contingent primary or collateral and several or joint.
Is the Appellant right in its contention that Exhibits D1 and D5 constitute valid contracts freely and voluntarily entered into by the parties, binding on them and which must be construed independently of Exhibit P4? The claim of the Respondents is that they agreed to issue Exhibits D1 and D5 based on the Indemnity Exhibit P4 issued to them by the bank through their Relationship manager. Apart from the general traverse in paragraph 1 of their Amended Statement of Defence, the Appellant did not specifically challenge the claim of the Respondents that the 1st Respondent executed the set offs Exhibits D1 and D5 based on the letter of indemnity Exhibit P4 issued to him by the bank. Primarily the Appellant’s contention was that the Manager was not authorized to issue the Indemnity. The Appellant further argued that the indemnity – Exhibit P4 was given to the 1st Respondent alone in respect of his personal account and not to the Respondents in respect of their joint account. It is trite principle that pleadings determine the faith of any case. In other words, cases are fought, won and lost based on the pleadings and evidence of the parties. That is why parties and the Court are bound by the pleadings. See ABEKE v. ODUNSI & ANOR (2013) LPELR-20640 (SC); OFORISHE V NIGERIA GAS LTD (2017) LPELR-42766(SC).
The Respondents’ case is clear from their pleadings. In the Plaintiff’s Reply to the Defendant’s Statement of Defence at page 43 of the printed Record, it was averred in paragraph 1 that the set off was backed by a letter of indemnity dated 3/11/2010 given to the Plaintiffs by the defendant bank and in paragraph 2 that the consideration for the execution of the said set off is the indemnity offered by the defendant bank; and in paragraph 3 that it was on the strength of the said indemnity that the Plaintiffs executed the said letters of set off. It was also averred in paragraph 15 that the Plaintiff was induced by the defendant bank to execute the said set off so as to avoid Central Bank of Nigeria sanction for unsecured loan. Evidence of these facts was duly led. Apart from the general traverse, there was no specific denial of any of the averments. The cross-examination of the 1st Plaintiff/Respondent who testified as PW1 is at pages 108 to 111 of the Record. Under cross-examination, PW1 reiterated that before he signed the set off, he was issued a letter of indemnity from the defendant and that he did not know the people he signed the set off for.
There were no other questions under cross-examination to discredit the claims of the Plaintiffs/Respondents. No question or issue arose as to the indemnity being in respect of any account other than the joint account. The only issue raised by the Appellant in paragraph 9b of their Amended Statement of Defence is that Okechukwu Okeke as branch head lacked the authority to give indemnity to the plaintiffs and that such indemnity can only be given by the defendant?s Board of Directors. The case of the Respondents that the set offs were signed because of the indemnity given by the bank is not based on speculation or inference as claimed by the Appellant. It was based on hard facts duly pleaded and in respect of which evidence was led. The Appellant did not deny the claim specifically and did not attempt to discredit it by cross-examination. If the Appellant wanted the Court to infer that the indemnity given to Noble Opurum by the appellant’s branch head was a distinct and separate transaction unconnected with the contract of set off or that the indemnity was in respect of any other account other than the joint account, they should have specifically traversed the facts as pleaded by the Respondents and pleaded facts and led evidence to enable the Court draw such an inference or at the least challenged the claims vigorously in order to discredit them. Parties and the Court are bound by the pleadings of the parties.
The lower Court in my view rightly accepted the evidence of the Plaintiffs in the absence of any specific denial of the facts by the appellant. A general traverse is not an effective denial of essential or material averments in the opposing party’s pleading Balogun Vs U.B.A. Ltd (1992) 6 NWLR (PT. 247) 336 @ 349 D; UBN PLC V CHIMAEZE (2014) LPELR-22699(SC). The Respondents are right that in the circumstances, the proper course to adopt in the interpretation of the real import of the three Exhibits P4, D1, and D5 is to discover the intention or contemplation of the parties. In his brief, learned counsel for the Respondents explained the matter thus:
It is therefore pertinent that to properly evaluate and construe Exhibits P4, D1 and D5 tendered at the lower Court, the Court has to discover the intention or contemplation of the parties. As has been stated earlier, the Respondents had initially fixed the sum of N26,561,597.94 (Twenty six Million, Five Hundred and Sixty one Thousand, Five Hundred and Ninety seven Naira, Ninety four Kobo) in the Appellant’s bank. Part of the fixed deposit sum was later withdrawn leaving a balance of N15, 000,000.00.
Towards the end of the year 2010, it was expressed that the Appellants executed two letters of Set-off (Exhibits D1 and D5) permitting the Appellant to use the fund in their fixed deposit to offset the credit facilities granted by the Appellant to Okolo Ikechukwu godwin and St. Hillary Transglobal Nig. Ltd respectively. The Letters of Set-off were signed by the 1st Respondent only.
Within the same period, the Nnewi branch/manager of the Appellant bank executed a Letter of Indemnity absolving the 1st Respondent of any liability incurred in the use of his deposit as cash collateral for lending purposes. It was also stated that this document can be called in, in the unlikely case of default in agreed payment terms. (underlining mine)
During the proceeding at the lower Court, it was not shown by the Appellant that the 1st Respodent had any other deposit with the Appellant other than the N15,000,000.00 (Fifteen Million Naira) joint fixed deposit which the Respondents had in the Appellant’s Bank. Also, it was not shown that Mr. Noble Opurum (1st Respondent) used any other cash collateral for lending purposes in favour of any customer other than for Okolo Ikechukwu Godwin and St. Hillary Transglobal Nig. Ltd.
Against this background, on the authority of ADETOUN OLADEJI (NIG) LTD V. NIGERIAN BREWERIES PLC (supra), The intention or contemplation of the parties at the time EXHIBITS P4, D1 and D5 were executed was that in as much as the 1st Respondent allowed the cash in their fixed deposit to be used as collateral for the credit facilities to Okolo Godwin Ikechukwu and St. Hillary Transglobal Nig. Ltd, the Respondents will be exculpated from liability in the event of default by those two customers to repay the credit facilities as agreed.
My Lords, to show that the above was what the parties intended and or had in contemplation when the aforementioned exhibits were executed, the honourable Court is respectfully referred to the following facts which occurred after the documents were executed:
a. While the Letters of Set-off were in existence, the Respondents withdrew part of the sum in their fixed deposit leaving an outstanding balance of N15, 000,000.00 (Fifteen Million Naira).
b. As at the time the Respondents reduced their fixed deposit to the tune of N15, 000,000.00, St. Hillary Transglobal Nig. Ltd and Ikechukwu Godwin Okolo were indebted to the Appellant to the tune of N13, 342,189.36 (Thirteen Million, Three Hundred and Forty two Thousand, One Hundred and Eighty nine Naira, Thirty nine Kobo) and N4, 375,267.67 (Four Million, Three Hundred and Seventy five Thousand, Two Hundred and Sixty seven Naira, Sixty seven Kobo) respectively. The above sums were far more than the sum of N15, 000,000.00 left in the Respondents? fixed deposit account.
c. After the Letters of Set-off (Exhibits D1 and D5) in the year 2010, the Appellant continued to pay interest to the Respondents in respect of the fixed deposit up to the month of February 2013.
It is humbly submitted that if the Appellant did not take cognizance of the contents of the Letter of Indemnity (Exhibit P4) vis–vis the credit facilities to its afore-stated customers, it would not have allowed the above mentioned facts to prevail.
It is in recognition of the above facts that the learned trial judge held inter alia in his judgment:
‘The said letters of set-off were signed towards the end of 2010. There was uncontroverted evidence before the Court that the plaintiffs effected a draw down on the fixed deposit and reduced the fixed deposit to the sum of N15m. That was while the setoff was in existence.’
The above is a finding of fact made by the trial judge. It is humbly submitted that it is trite that a finding of fact supported by evidence made by a trial Court will not be disturbed or set aside by an appellate Court.
SEE AGWUNEDU V. ONWUMERE (1994) 1 SCNJ 106 @ 110 RATIO 3 Per Ogundare JSC.
The above finding of facts by the learned trial judge is supported by the evidence led. The claim of the Respondents that they signed Exhibits D1 and D5 as a result of the indemnity given by Exhibit P4 is supported by the fact that they were allowed by the Appellant to draw on the fixed deposit leaving a balance of 15 Million naira and that interest was during the period paid as at and when due until February 2013. In paragraphs 2, 3, 4 and 5 of its Amended Statement of Defence, the Appellant averred:
2. The sum of N26,561,597. 94 belonging to the Plaintiffs who were formerly known as Noble and Eucharia Opurum was in 2010 with their consent and authority pledged to the defendant as collateral for an overdraft of N18 Million granted to St. Hillary Trans Global Nig. Ltd a customer of the defendant maintaining account No. 581/565370/110.
3. The authority averred in paragraph 2 of the statement of defence above authorizing the defendant (sic) to use of the pledged deposit as collateral for the banking/credit facilities granted St. Hilary Trans Global Nig. Ltd from time to time was signed by the 1st plaintiff who is also known as Noble Opurum according to the mandate given to the defendant and communicated to the defendant vide an undated Letter of Set Off addressed to the Managing Director of the defendant.
4. The Defendant accepted the letter of set off and the authority to use the pledged fund standing to their credit with the defendant as collateral for the said facility. Pursuant to the letter of set off the defendant allowed the said St. Hilary Trans Global Nig. Ltd to withdraw the sum of N17,800.00 from the N18,000,000.00 granted to it by the defendant as overdraft facility. The said facility had a tenor of 180 days and subject to 19% p.a. management fee of 0.75% flat on the facility, processing fee -0.25% flat on the facility and security was on the lien on the sum of N26,561,597. 94 in the fixed deposit pledged to the defendant.
5. St. Hilary Trans Global Nig. Ltd did not regularize the account until the overdraft facility of N18 Million was overdue, classified and transferred to past due account opened by the defendant in accordance with Central Bank of Nigeria Prudential Guidelines. The defendant in 2013 set off the sum of Thirteen Million, Three hundred and Forty Two Thousand, One Hundred and Eighty Nine Naira Thirty Six kobo (N13,342,189.36) owed by St. Hilary Trans Global Nig. Ltd from the said pledged fund.
The above are the pleadings of the Appellant. The Appellant deviated from these pleadings and made a lot of allegations and claims not supported by its pleadings. The Appellant in paragraph 5 above admitted that St. Hilary Trans Global Nig. Ltd did not regularize the account until the overdraft facility of N18 Million was overdue, classified and transferred to past due account opened by the defendant in accordance with Central Bank of Nigeria Prudential Guidelines. If the set off was in force, the over draft facility when due and unpaid would simply have been wiped off by debiting the account of the Respondents who provided the set off. There would have been no need to classify the debt and to transfer it to the past due account opened by the defendant in accordance with Central Bank of Nigeria Prudential Guidelines. This averment as is supports the claim of the Respondents in paragraph 15 of their Reply to the Statement of Defence that the defendant bank induced the 1st Respondent to execute the set off so as to avoid CBN sanction for unsecured loan. The Respondents further averred in their paragraph 16 that the defendant bank informed the 1st Respondent that the indemnity is enough to guarantee the security of their fixed deposit.
The Appellant as rightly found by the trial judge did not deny the existence of the indemnity Exhibit P4. Their contention is that the indemnity was not binding on the bank because the signatory Okechukwu Okeke did not have the authority to issue the indemnity. The Appellant in its brief submitted:
‘The said Exhibit P4 is undated but was obviously signed on 3/11/10 being the date scribed beside the signature. On the face of it, it is not clear who is giving the indemnity. It was not stated to have been given by the appellant or by Okechukwu Okeke who signed it. The only link between the appellant and the said exhibit is that it was written on its letter head by its staff who was then Branch Head. The said Branch head did not state that he was acting for or on behalf of the appellant in giving the said indemnity. There is therefore no basis for the finding and the argument of the respondents that it was given by the appellant or by its Branch head on its behalf.’
Learned counsel for the Appellant had further submitted that it is only the Board of Directors of the appellant that has the authority to give such indemnity to any person for any reason whatsoever. The Appellant’s arguments on these grounds are with respect misconceived. I agree with the submissions of learned counsel for the Respondents that a company, such as a bank being a juristic person can only act or function through its staff, agents and or servants as held in FIRST BANK OF NIGERIA PLC V. TSOKWA (SUPRA). A company can be held liable for the actions of its officers and such officers need not be directors but those who enjoy formally delegated authority over some aspects of the company’s business on the basis that such actions are those of the company itself. OFORKAJA V. TARABA STATE GOVERNMENT (SUPRA). Section 65 of the Companies and Allied Matters Act provide:
Any act of the members in general meeting, the board of directors, or of a managing director while carrying on in the usual way the business of the company, shall be treated as the act of the company itself and the company shall be criminally and civilly liable therefor to the same extent as if it were a natural person: Provided that-
(a) the company shall not incur civil liability to any person if that person had actual knowledge at the time of the transaction in question that the general meeting, board of directors, or managing director, as the case may be, had no power to act in the matter or had acted in an irregular manner or if, having regard to his position with or relationship to the company, he ought to have known of the absence of such power or of the irregularity;
(b) if in fact a business is being carried on by the company, the company shall not escape liability for acts undertaken in connection with that business merely because the business in question was not among the business authorized by the company’s memorandum.
The parties are ad idem that Okechukwu Okeke, who signed the Letter of Indemnity (Exhibit P4) was the Branch Head/Manager of the Appellant. The law is that an agent of a disclosed principal is not ordinarily personally liable on a contract he enters on behalf of the said principal: see KHONAM V. JOHN (1939) 15 NLR 12 AT P. 15; NIGER PROGRESS LTD V. NORTH EAST LINE CORPORATION (1989) 3 NWLR (PT. 287) 288. See OKAFOR V. EZENWA (2002) 13 NWLR (PT. 784) 319 and the other cases cited by learned counsel for the Respondents. Being the agent of a disclosed principal, Okechukwu Okeke, the branch head/manager is not personally liable on a contract he entered into on behalf of his principal.
The contention in the Appellant’s brief that it is only the Board of Directors of the Appellant that has the authority to give such indemnity to any person for any reason whatsoever is in view of Section 65 of the Companies and Allied Matters Act misconceived. As shown in the relevant section and as submitted in the Respondents? brief, the burden rests on the Appellant to adduce evidence that it is only the Board of Directors that has authority to give such indemnity and that the Respondents were aware of the position. In the absence of such evidence, the lower Court was right in rejecting the ipsi dixit averment in paragraph 9 of the Amended Statement of Defence. Also, the argument of the Appellant that the Letter of Indemnity (Exhibit P4) was given to the 1st Respondent alone in respect of his personal account and not to the Respondents in respect of their joint account is unacceptable in view of the clear pleadings of the Respondents to the contrary and in the absence of any serious traverse. Furthermore, as submitted by the Respondents, just as the letter of indemnity (Exhibit P4) was given to the 1st Respondent only, the letters of set-off (Exhibits D1 and D5) though expressed to be given jointly by the Respondents were signed by the 1st Respondent alone. The issue raised by the Appellant that in the joint account the mandate authorizes only the 1st Respondent to sign is a matter of evidence which the Appellant failed to adduce.
As I earlier stated the outcome of any case is determined by the state of the pleadings as the parties and the Court are bound by the pleadings. Most of the issues the Appellant raised in his brief of argument are outside the pleadings of the parties. Contrary to the contention of the Appellant, the letter of indemnity Exhibit P4 is not intended to contradict or vary the terms of the letters of set-off Exhibits D1 and D5. As pleaded and led in evidence without any serious rebuttal the three Exhibits are supplemental to each other. The case of UNION BANK OF NIG. LTD V. PROF. A. O. OZIGI (SUPRA) cited by counsel for the Appellant is not relevant to the facts of the instant case. I agree with the argument of the Respondents that they did not plead and did not lead any oral evidence to contradict Exhibits D1 and D5. They pleaded and tendered Exhibit P4 as supplemental evidence to Exhibits D1 and D5.
Although Indemnity is defined by Black’s Law dictionary, sixth Edition at page 768 as ‘Reimbursement. An undertaking whereby one agrees to indemnify another upon the occurrence of an anticipated loss’, in Almanac of Contemporary Judicial Restatements Vol. 11, it was stated that indemnity does not alter the assignment of liability but permits the indemnified to effectively escape the burden of paying for the liability incurred. The lower Court in my opinion is right in its conclusion that even though Exhibit P4 was headed ‘letter of indemnity’ the wordings must be construed in a way to fully appreciate its import and intention. It was stated therein that the letter serves as an indemnity absolving Mr. Noble Opurum of any liability incurred in the use of his deposit as cash collateral for lending purposes and that the document can be called in, in the unlikely case of default in agreed repayment terms.
If as argued in the Appellant’s brief, the indemnity was in respect of some private account of the 1st Respondent and not the joint account, the onus was on the Appellant to plead and lead evidence of the private account. With the above express provision in Exhibit P4 and in accordance with the pleadings of the Respondents, the lower Court had no difficulty in holding thus:
‘The Defendant Bank purports to have used the Plaintiff’s fund as a set off. The set off was solely signed by the 1st plaintiff but with respect to a joint Account. No wonder the Indemnity also made reference to the 1st Plaintiff specifically.
Issue 1 is resolved against the Appellant and in favour of the Respondents.
ISSUE 2
Whether the lower Court was correct to award interest on the Respondents? fixed deposit as agreed by the parties
APPELLANTS’ ARGUMENTS:
This issue is Appellants’ issue 5. Under it, learned counsel for the Appellant submitted that the Respondents claimed interest on the amount at 28% p. a. without averring anywhere in either the Statement of Claim or the Reply to the Statement of Defence the basis for the claim or how it arose. Counsel submitted that the error was pointed out to the trial judge by learned counsel for the Appellant and that the trial judge agreed with the Appellant but still went ahead to order the Appellant to pay interest on the principal sum at the agreed rate of interest. Counsel opined that there was no averment in the pleadings or evidence of the agreed rate of interest before the Court to warrant the making of the order. Learned counsel cited a long line of authorities in support of his arguments.
RESPONDENTS’ ARGUMENTS:
Learned counsel for the Respondents on this issue submitted that the lower Court refused to grant the interest claimed in relief (C) A DECLARATION that the plaintiffs are entitled to the payment of fixed deposit interest of N532, 289.62 from 22nd day of February 2013 to 21st day of May 2013 because they failed to supply the yardstick by which they arrived at the sum claimed. Counsel submitted that after refusing the specific claim for the interest of N532, 289.62, the lower Court being of the view that fixed deposit is interest yielding and should accompany the refund proceeded to hold that the plaintiffs are entitled to be paid the principal sum of N15,000,000.00 together with the accrued interest as agreed from 22nd February 2013 till date of judgment. In order to show that the Appellant was wrong in his contentions learned counsel set out paragraphs 5, 6, 7, 8, 9, 10 and 11 of the Statement of Claim of the Respondents. He submitted that PW1 led evidence of these averments and that they were not challenged by the Appellant in cross-examination. Citing the case of OBANOR V. OBANOR (1976) 6 ECSLR 320, Counsel submitted that it is trite that evidence which is unchallenged under cross-examination is deemed admitted.
Counsel referred to Exhibit P1 (h), which is the last confirmation of the fixed deposit by the Appellant dated 1 November 2012 with the face value of N15,000,000.00, maturity date of 21st February 2013 and discount rate is 12.2500% per annum. Counsel submitted that it is on the basis of this clear agreement between the parties reduced into writing in Exhibit P1 (h) that the discount/interest rate is 12.2500% per annum that the lower Court relied on in holding that the Respondents are entitled to be paid the principal sum of N15,000,000.00 with the accrued interest as agreed from 22nd February, 2012 till date of the judgment. Counsel submitted that the complaint of the appellant that the rate of interest was not pleaded and that there was no evidence of any agreement of interest is without foundation. He submitted that all the cases cited by the Appellant support the case of the Respondents.
RESOLUTION OF ISSUE 2:
It is quite obvious from the pleadings and evidence led in this case that the arguments of learned counsel for the Appellant on the interest is misconceived. The parties had a written agreement on the interest payable for the fixed deposit. It was all duly pleaded in the Respondents’ Statement of Claim as follows:
Paragraph 5: The plaintiffs aver that on or about the 26th of October, 2010, the plaintiff fixed the sum of N26,561,597.94 in the fixed deposit as advised by their professional bankers, that is, the defendant in this case, on the terms and conditions stipulated in the memo of investment in fixed deposit dated the 26th day of October, 2010.
Paragraph 6: the plaintiffs aver that between the 20th day of January, 2011 and 1st day of November, 2012, they have rolled over the investment for eight times.
Paragraph 7: The plaintiffs further assert that in each case, the defendant bank has paid the interest on the investment as stipulated in the memo of investment in fixed deposit as stated hereunder.
Paragraph 8: the plaintiffs aver also that the interest for the 1st November, 2012 fixture which ought to be paid on the 21st day of February, 2013 was paid on the 7th day of May, 2013.
Paragraph 9: the plaintiffs aver that later, they reduced the investment or fixture to N15,000,000.00 with interest payable up front.
Paragraph 10: the plaintiffs contend that since the 22nd say of February, 2013 the defendant bank has not paid them any interest on the investment which now amount to N532, 289.62
Paragraph 11: the plaintiffs hereby plead and shall reply on nine memoranda of investment in fixed deposit evidencing the fixed deposit transactions.
At the hearing of the suit, PW1 (1st Respondent) adopted his statement on oath in line with the above paragraphs of their Statement of Claim.
In Exhibit P1 (h) tendered by the Respondents, it was clearly stated that the rate of interest on the fixed deposit of N15, 000,000.00 is 12.2500% per annum. It was on that basis that the lower Court awarded interest on the N15,000,000.00 as agreed by the parties. The trial Court rejected the claim of 28% and even the specific amount of N532,289.62 because the claims were denied by the appellant and there were no particulars in support of the claims. Having seen that there was an agreement between the parties as to the percentage interest payable in Exhibit P1 (h), the Court had no difficulty in ordering the return of the fixed deposit with interest as agreed by the parties. In the case of S. A. F. P. & U. UBA PLC (2010) 17 NWLR (PT. 1221) 19 cited by the Appellant it was held as follows:-
‘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 v. Spok (Nig.) Ltd (1998) 12 NWLR (Pt. 578) 439 at 475.
The Respondents pleaded that interest was payable on their fixed deposit and they tendered a document that indicated the agreed rate of interest. In the above case at page 202 paras C – E, Oguntade JSC went further to hold:
.. if even it was not claimed on the writ but facts are pleaded in the statement of claim and evidence given which show entitlement thereto, the Court may, if satisfied with the evidence, award interest. Adjudication on the plaintiff’s right to interest in such a case is, like on any other issue in the case based on the evidence placed before the Court. The evidence called at the trial in such a case will also establish the proper rate of the interest and the date from which it should begin to run.
The Respondents were on solid grounds. In the Supreme Court case of A – G Ferrero & CO LTD V. H. C. (NIG) LTD (2011) 13 NWLR (PT. 1265) 952 @ 595 cited by learned counsel for the Respondents the Court held inter alia:
A claim for pre-judgment interest may be made by a plaintiff as a right where:
a) It is either expressly provided for in or is contemplated by the agreement between the parties.
b) It is claimed under a mercantile custom
c) It is claimed under a principle of equity such as breach of fiduciary relationship?
The lower Court was justified in awarding interest on the fixed sum of N15, 000,000.00 as agreed.
In view of the resolution of issues 1 and 2 above in favour of the Respondents and against the Appellant, Appellant’s issues 4, 6 and 7 are moribund. The learned trial judge as shown above did not make any case for the Respondents but merely decided the issues raised by the parties. The case the Appellant tried to make was hamstrung by its failure to plead facts which would enable it lead evidence in proof of the facts. Parties and the Court are bound by the pleadings.
This appeal is totally lacking in merit. It is hereby dismissed with costs assessed at N100, 000.00 in favour of the Respondents.
MISITURA OMODERE BOLAJI-YUSUFF, J.C.A.: I have read the draft of the judgment delivered by my learned brother, CHINWE EUGENIA IYIZOBA, JCA. I agree with his reasoning and conclusion that the appeal lacks merit and is hereby dismissed. I abide by the consequential orders made therein.
ABUBAKAR SADIQ UMAR, J.C.A.: I read in advance the lead Judgment of my learned brother Eugenia lyizoba JCA, just delivered and I agree entirely with his reasoning and conclusions. He has dispassionately resolved all the issues in the appeal and I have nothing to add or subtract.
I too dismiss the appeal and endorse the order of costs made in the lead Judgment.
Appearances:
Chief G. Oseloka Osuigwe with him, O.F. Okeke, Esq.For Appellant(s)
Ike Obeta, Esq.For Respondent(s)
