MR. ALBERT FOLORUNSHO v. ROSULA NIGERIA LIMITED & ANOR
(2019)LCN/12983(CA)
RATIO
COURTS: WHETHER A COURT SHOULD DEAL WITH AN ISSUE THAT IS NOT PLACED BEFORE IT
In the case of Kraus Thompson Org. Ltd. v. Univ. of Calabar (2004) 18 NSCQR, 262, (2004) 9 NWLR (879) 631, it was held by the Supreme Court; per Mustapher, JSC, that:-
Now, it is settled law that when an issue is not placed before a Court,such Court has no business whatsoever to deal with it as decisions of a Court of law must not be founded on any ground in respect of which it has neither received argument from or on behalf of the parties before it nor even raised by or for the parties or either of them.
The cases of Shitta-Bay v. FPSC (1981) 1 NCLR, 372 and Saude v. Abdullahi (1989) 4 NWLR (116) 387 were referred to by the apex Court for the position.
In the earlier case of Odekilekun v. Hassan (1997) 12 NWLR (531) 56, the apex Court; per Iguh, JSC did restate the law that:
It cannot be over-stressed that save for a question, such as jurisdiction, Courts of law must limit themselves to the issues raised by the parties in their pleadings.PER MOHAMMED LAWAL GARBA, J.C.A.
ISSUES: ISSUES TO BE CONSIDERED IN DETERMINING A CASE MUST ARISE FROM THE PLEADINGS OR EVIDENCE OF PARTIES
It must be noted and always remembered that that issues to be considered in the determination of a case must inure, arise or be derivable from the pleadings and evidence presented by the parties. Even though a Court of law has the inherent jurisdiction and is at liberty to consider issues other than in the form raised by the parties in a case, such other issues must relate to and be traceable to the pleadings and evidence placed before it by the parties themselves in their pleadings and evidence. Oniah v. Onyia (1989) 1 NWLR (99) 514; Ojo-Osagie v. Adonri (1994) 6 NWLR (349) 131; Kraus Thompson Org. Ltd. v. Univ. of Calabar (supra); Ogundele v. Agiri (2009) 18 NWLR (1173) 219.PER MOHAMMED LAWAL GARBA, J.C.A.
WHETHER A COUNTER CLAIM IS A DEFENCE TO AN APPELLANT’S ACTION OR AN INDEOENDENT AND SEPARATE ACTION
The simple answer to the argument is the law that the counter claim is not a defence to the Appellants action, but a distinct, independent and separate action from that of the Appellant. See Jeric Nig. Ltd. v. UBN, Plc (2000) 12 SC (Pt. II) 133, (2000) 15 NWLR (691) 447; Effiom v. Ironbar (2000) 11 NWLR (678) 344; Ogbonna v. A. G. Imo State (1992) 1 NWLR (220) 647, (1992) 2 SCNJ, 26; Usman v. Garke (2003) 7 SC, 33, (2003) 14 NWLR (840) 261; Ogli Oko Memorial Farms Ltd. v. N.A.C.B. Ltd (2008) 12 NWLR (1098) 412, (2008) 34 NSCQR (Pt. II) 157.PER MOHAMMED LAWAL GARBA, J.C.A.
In The Court of Appeal of Nigeria
On Friday, the 29th day of March, 2019
MOHAMMED LAWAL GARBA, J.C.A. (Delivering the Leading Judgment): This appeal is against the decision of the Federal High Court, sitting at Lagos (Lower Court) contained in the judgement delivered on 6th & 7th of February, 2002, by which the Appellants claims were dismissed.
From the twelve (12) grounds contained on the Amended Notice of Appeal dated 6th July, 2010, three (3) issues are said to arise for determination by the Court in the Appellants brief filed on the 16th March, 2005 as follows: –
1.Was the learned trial Judge right to invalidate the Debenture Deed when the issue of its validity was not before her and even though Defendants/Respondents had enjoyed its benefits?
2. Was the learned trial Judge right to hold that the power of appointment of the Plaintiff/Appellant as Receiver of the 1st Defendant/Respondent vests in a director or manager of Inland Bank Plc and not the bank itself and the said power was not properly exercised in the appointment of the Plaintiff/Appellant when the only evidence at the trial showed that the Deed of Appointment was duly executed and authenticated as required by law?
3.Whether the learned trial Judge has not caused a miscarriage of justice to the Plaintiff/Appellant by delivering her judgement more than 90 days after addresses of counsel and in bits over a period of two days
The issues were adopted and argued in the Defendants/Respondents brief filed on 17th May 2006, deemed on the 6th July, 2010 in reaction to which the Appellants Reply brief was filed on the 16th July, 2010.
In brief, the facts which gave rise to the Appellants claims against the Respondents were that the 1st Respondent, as security for a loan facility from Inland Bank, Plc (the Bank) issued/executed a Debenture Deed (Deed) in favour of the Bank which in exercise of its powers thereunder, appointed the Appellant as receiver on failure by the 1st Respondent to pay back the facility as agreed by the parties. The claims, as indorsed on the summons dated 8th May 2011, were thus: –
1. A DECLARATION that the powers of the debenture holder under the Deed of Debenture dated 26th January, 2000 between Inland Bank Nigeria, Plc and the 1st defendant has become exercisable;
2. A DECLARATION that the plaintiff has been duly appointed by Inland Bank Nigeria Plc (holder of the debenture described in relief one above) under the said deed of debenture.
3. AN ORDER directing the defendants whether by themselves, their servants, agents and/or privies to furnish the plaintiff with a statement in the prescribed form as to the time and correct affairs of the 1st Respondent;
4. AN ORDER that the statement of affairs mentioned in (iii) above, be submitted and verified by statutory declarations of all persons who were at the date of the appointment of the plaintiff as Receiver, the Directors, the Company Secretary and Auditors of the 1st Defendant;
5. AN ORDER that the Defendants should stay away from or desist from interfering with the property and/or assets of the 1st defendant during the period of the plaintiffs exercise of the powers of his office of the Receiver of the 1st defendant.
6. AN ORDER of injunction, restraining the defendant whether by themselves, their servants, agents and/or privies or otherwise howsoever from disturbing and/or preventing the plaintiff in the exercise of his duties and powers as Receiver of the 1st defendant.
These claims were premised on the determination of three (3) questions set out on the summons as follows: –
(a)whether there exist between Inland Bank (Nig) PLC and the 1st defendant a valid debenture deed pursuant to which a receiver can be appointed;
(b) whether the purported appointment of a Receiver by Inland Bank (Nig) PLC was legally and validly done;
(c) if the answer to (b) is in the affirmative can the defendants prevent the plaintiff so appointed from exercising the power of the office of Receiver
APPELLANTS ARGUMENTS:
It is submitted that the High Court was wrong to have pronounced the Debenture Deed invalid since the question of its validity was abandoned by the Appellant and the Respondents Counter-Claim was struck out. That the issue of the validity of the Deed was no longer before the Lower Court for decision from the cases of the parties and so it could not reach a decision on it by the authority of Agu v. Ikewibe (1991) 22 NSCC (Pt. I) 385 @ 400; Alli v. Alesinloye (2000) 6 NWLR (660) 177 and Oladapo v. B. O. N. Ltd (2001) 1 NWLR (694) 255 @ 262.
In the alternative, citing Utih v Onoyivwe (1991) 22 NSCC (Pt. I) 43 and Section 650 of Companies and Allied Matters Act (CAMA), it is contended that the Deed (admitted in evidence as Exhibit MA1/A satisfied the provisions of Section 168 of CAMA which the Respondents cannot rely on after benefiting from the loan facility in question, to invalidate the Deed. Ude v. Nwara (1993) NSCC (PT. 1) 236 and Monye v. P. T. F. T. M. (2002) 15 NWLR (789) 209 were cited on when the word shall used in the provisions of a statute would not connote mandatory meaning, but directory or discretionary. Sections 173, 174 and 175 of CAMA were also referred to and it is further argued that the Respondents who owe the debt claimed from the facility granted to the 1st Respondent, would not, on the authority of Awojugbagbe Light Ind. Ltd. v. Chinukwe (1995) NWLR (390) 379 @ 346 and Adedeji v. NBN Ltd (1989) 7 NWLR (96) 212 @ 216, be allowed to invalidate the security used for the facility. A case between the Respondents in the Lower Court with No. FHC/L/CS/249/2001 was referred to and the Court is urged to resolve Issue 1 in favour of the Appellant.
On Issue 2, reference was made to Section 209(1) of CAMA on the power to appoint a Receiver under a debenture and it is submitted that the Deed vested the power to appoint a Receiver on the Bank, which could only act through its officials, as provided for in Clause 8 and in Section 77 of CAMA and so the Deed of Appointment of the Appellant as Receiver was valid. That the Appellant was validly appointed by the Bank in exercise of its power under the Deed. The case of No: FHC/L/CS/249/2001 before the Lower Court was again referred to and the Court is urged to resolve the issue in Appellants favour.
The arguments on issue 3 are that because the judgement of the Lower Court was delivered in parts on two (2) days and after the expiration of ninety (90) days after final addresses, miscarriage of justice was occasioned to the Appellant, since the Lower Court considered the abandoned issue of the validity of the Deed no longer arising from the pleadings and evidence by which it was bound. Relying onAgbanyi v. State (1995) 1 NWLR (369) 1, it is submitted that it is not enough for the Lower Court to just say that it considered the abandoned issue in the interest of justice without showing how such interest was to be served.
The Court is urged to resolve the issue in favour of the Appellant and in conclusion, to allow the appeal since the 1st Respondent did not deny owing the debt or its failure to pay back the sum claimed.
RESPONDENTS SUBMISSIONS
It is submitted on Issue 1 that the 1st Respondent in its counter claim, sought a declaration that the Deed was illegal, null and void and so even if the Appellant had withdrawn the question on the validity of the Deed, the Lower Court was right to have considered it as an issue raised in the counter claim. Also, that the Deed was invalid for non-compliance with mandatory provisions of Section 168 of CAMA and not being a debenture as defined in Section 650(1). Reference was made to the case of Breach v. Comm. of Stamp Duties (indicated to be supra, but not cited before then) and it is argued that the Deed does not contain a written acknowledgement of indebtedness by the company. The Court is urged to hold that the Deed did not comply with the requirements set out in Section 168(a)-(d) of CAMA and that the noncompliance was fatal to its validity.
On Issue 2, it is contended that the Bank was not conferred with the power to appoint a Receiver under the deed, but the power was vested on a Director/Manager of the Bank as indicated in Clause 8 of the Deed. Watersons Trustees v. St. Guiles Boys Blub (1943) 369 @ 374 (sic) cited in Words and Phrases Legally Defined, 2nd Ed. Vol. 5 page 237, was referred to and it is further argued that the Deed of Appointment of the Receiver by the Bank was invalid, void and of no legal consequence since the appointment was not made by a Director/Manager of the Bank.
Learned Senior Counsel who settled the Respondents brief also argued that the Deed also contravened the provisions of Section 390 (1) of CAMA by providing that the Receiver shall be deemed to be an agent of the company instead of the Bank which appointed him.
It is maintained that the appointment of the Appellant as Receiver by the Bank was null and void.
The submissions on Issue 3 are to the effect that the delivery of the judgement on two (2) days and after the expiration of ninety (90) days after final addresses, would not automatically nullify the judgement.
Relying on Owoyemi v. Adekoya (2003) 18 NWLR 307 @ 343 (sic), the learned SAN said the judgement of the Lower Court ought to be allowed to stand since the Appellant has not suffered any miscarriage of justice or prejudice by the judgement being delivered on two (2) days or outside the ninety (90) days period after final addresses.
In conclusion, the Court is urged to dismiss the appeal.
In the Appellants Reply brief, the case of Alubankudi v. A. G. F. (2002) 17 NWLR (796) 338 was cited for the submission that a Court should not consider issues not presented before it by the parties and Araka v. Egbue (2003) 17 NWLR (848), on reliance by courts on foreign judicial authorities. It is also submitted, on the authority ofEliochin v. Mbadiwe (1986) 1 NWLR (2014) 47, that without a cross appeal, the Respondents could not raise or reply on the validity of their counter claim or raise the issue of purported contravention of Section 390(1) of CAMA when the Lower Court had decided that there was no such contravention.
RESOLUTION:
At page 5 of its judgement, which appears at page 346 of the Record of Appeal, the Lower Court stated that: -While making his submission, Plaintiffs counsel I. O. Fagbemi abandoned the first issue formulated by him for determination in the Originating Summon which relates to the validity of the debenture and decided to address the issue in his reply on points of law to the Defendants Counsels reply.
Then, later at page 19 of the judgement (page 359 of the Record of Appeal) it said: –
It will be noted that I have adopted the issue No.1 relating to the validity of the debenture deed even though the Plaintiff had withdrawn same. This is because, inspite of the withdrawal, the issue reverberates throughout the arguments of Counsel. Moreover, it is my view that the issue is fundamental to these proceedings and so it will be in the interest of justice to consider same.
By these statements, the Lower Court acknowledged that the Appellant had abandoned the Issue 1 formulated for determination on the Originating Summons and so the issue was withdrawn from the issues which were placed before it by the Appellant for determination. The consequence was that the issue abandoned or withdrawn by the Appellant was no longer before the Lower Court for determination in the case presented by the Appellant as Plaintiff or Claimant, which was not challenged by the Respondents as noted by the Lower Court when it said at page 359 of the Record of Appeal that: –
I wish to observe that the Respondents did not file any counter-affidavit. So therefore, the submission of the Plaintiffs Counsel that all their depositions in the three affidavits filed by them in support of the Originating Summons are deemed to be admitted by the Defendants as true is upheld.
In the absence of any challenge/defence and with the presumed admission of the case presented by the Appellant before the Lower Court on ground of failure to file Counter Affidavit by the Respondents, the issues raised and presented by the Appellant for determination in the case were the only valid and proper issues placed before the Lower Court for its decisions in the case. In the case of Kraus Thompson Org. Ltd. v. Univ. of Calabar (2004) 18 NSCQR, 262, (2004) 9 NWLR (879) 631, it was held by the Supreme Court; per Mustapher, JSC, that:-
Now, it is settled law that when an issue is not placed before a Court,such Court has no business whatsoever to deal with it as decisions of a Court of law must not be founded on any ground in respect of which it has neither received argument from or on behalf of the parties before it nor even raised by or for the parties or either of them.
The cases of Shitta-Bay v. FPSC (1981) 1 NCLR, 372 and Saude v. Abdullahi (1989) 4 NWLR (116) 387 were referred to by the apex Court for the position.
In the earlier case of Odekilekun v. Hassan (1997) 12 NWLR (531) 56, the apex Court; per Iguh, JSC did restate the law that:
It cannot be over-stressed that save for a question, such as jurisdiction, Courts of law must limit themselves to the issues raised by the parties in their pleadings.
Inspite of the above established principle of law, the Lower Court, as seen above, went ahead to consider the abandoned and withdrawn issue of the validity of the Deed and decided it in its judgement on the Appellants case on the ground that:
.. the issue reverberates throughout the argument of Counsel. Moreover, the issue is fundamental to these proceedings and so it will be in the interest of justice to consider the issues.
The first point to be made about the reason given by the Lower Court is that any arguments made by Counsel on an issue which was not placed before a Court for determination in a case by the parties would clearly be irrelevant for the purpose of the determination of the case by the Court. The arguments by Counsel in a case on an issue which was admittedly abandoned or withdrawn and so no longer one which defined the material and relevant issues for decision of the case would go no issue in the case and therefore not deserving of any consideration by the Court. It must be noted and always remembered that that issues to be considered in the determination of a case must inure, arise or be derivable from the pleadings and evidence presented by the parties. Even though a Court of law has the inherent jurisdiction and is at liberty to consider issues other than in the form raised by the parties in a case, such other issues must relate to and be traceable to the pleadings and evidence placed before it by the parties themselves in their pleadings and evidence. Oniah v. Onyia (1989) 1 NWLR (99) 514; Ojo-Osagie v. Adonri (1994) 6 NWLR (349) 131; Kraus Thompson Org. Ltd. v. Univ. of Calabar (supra); Ogundele v. Agiri (2009) 18 NWLR (1173) 219. The issue or question raised by the Appellant on the Originating Summons, which was later abandoned and withdrawn from the case presented before the Lower Court, was Whether there exist between Inland Bank (Nig) Plc and the 1st Defendant valid debenture deeds pursuant to which a receiver can be appointed.
Having been abandoned and withdrawn from the unchallenged case presented by the Appellant to the Lower Court for determination, the above issue had effectively ceased to be a relevant and material issue which the Lower Court had the duty to consider in the determination of the case. No matter the amount of argument or how much such arguments by the learned Counsel for the parties on such an abandoned issues reverberates in the Addresses, cannot make the issue relevant or material, let alone fundamental to these proceedings for it to be in the interests of justice that it be considered by the Lower Court in the case.
Learned Counsel for the Respondents has argued that the issue of the validity of the Deed was raised by the Respondent in the counter claim and that even in the absence of the counter claim; it was opened to the Respondents to challenge the validity of the Deed. The simple answer to the argument is the law that the counter claim is not a defence to the Appellant?s action, but a distinct, independent and separate action from that of the Appellant. See Jeric Nig. Ltd. v. UBN, Plc (2000) 12 SC (Pt. II) 133, (2000) 15 NWLR (691) 447; Effiom v. Ironbar (2000) 11 NWLR (678) 344; Ogbonna v. A. G. Imo State (1992) 1 NWLR (220) 647, (1992) 2 SCNJ, 26; Usman v. Garke (2003) 7 SC, 33, (2003) 14 NWLR (840) 261; Ogli Oko Memorial Farms Ltd. v. N.A.C.B. Ltd (2008) 12 NWLR (1098) 412, (2008) 34 NSCQR (Pt. II) 157. In the premises of the law, the counter claim of the 1st Respondent was not relevant issue to be considered in the determination of the issues submitted by the Appellant in the unchallenged case presented before the Lower Court, being a distinct and independent action.
This position apart, as rightly submitted by the Appellant, the Lower Court had struck out the counter claim for being incompetent and so there was no longer any valid counter claim before the Lower Court from which the issue of the validity of the Deed could have been properly raised by the 1st Respondent for determination in the Appellants case.
In any case, even though it was opened to the Respondents to challenge the validity of the Deed outside the counter claim, there was/is no record in the proceedings of the Lower Court that such a challenge was raised by them for decision by that Court.
In the result, from both the case presented by the Appellant and the counter claim by the 1st Respondent, which was struck out for being incompetent, the issue of the validity of the Deed was not placed before the Lower Court by the parties and so it erred in law to have considered and decided it in the Appellant?s case. Since the issue was not placed before it for decision by the parties, the Lower Court had no business in law, to have dealt with and decided it in the Appellants case.
However, in case the Lower Court was entitled to and so rightly considered the aforenamed issue, is the decision that the Deed is invalid for noncompliance with the provision of Section 168 of CAMA, right?
It may be recalled that the decision by the Lower Court is predicated on the definition in Section 650(1) and what are said to be the mandatory requirements set out in Section 168 (a)-(d) of the CAMA.
Section 650 (1) provides that:
Debenture means a written acknowledgement of indebtedness by a company ? and includes debenture stock, bonds and any other securities of a company whether constituting a charge on the assets of the company or not.
From these provisions, a debenture is a written acknowledgement of indebtedness by a company which may include debenture stock, bonds and other securities of the company. For the existence of a written acknowledgement of indebtedness or a debenture to arise, there must be facts which show and establish the existence of a debt owed by the company to another party to who a written acknowledgement of indebtedness could be made. A debenture as defined above is only evidence and proof of an existing debt owed by a company which could be acknowledged in writing to the creditor.
Where the existence of a debt is not denied by a company nor the execution of a debenture by the company challenged or disputed, the issue or question of existence and validity of the debenture would not arise as between the company and the creditor.
Furthermore, by the definition in Section 650(1), a debenture includes any other security of a company whether constituting a charge on the assets of the company or not.
The unchallenged case put forward by the Appellant in the Affidavits in support of the Originating Summons, which was deemed admitted by the Respondents on ground of their failure or refusal to file Counter Affidavit, was that the Deed was issued and executed by the 1st Respondent as security for the loan and overdraft facilities it was granted by the Bank. By its express tenor and intention, the Deed created and constituted a charge on the assets of the 1st Respondent for the loan and overdraft facilities as debt owed by it to the Bank. Prima facie, the Deed is a debenture as defined by the provisions of Section 650(1) to constitute a written acknowledgement of indebtedness by the 1st Respondent to the Bank to who it was issued and in whose favour it was executed as the creditor and debenture holder.
Section 168(a)-(d) of Company and Allied Matters Act provide that:
Every debenture shall include a statement on the following maters, that is
(a) the principal amount borrowed;
(b) the maximum discount which may be allowed on the issue or re-issue of the debentures, and the maximum premium at which the debenture may be made redeemable;
(c) the rate of and the dates on which interest on the debentures issued shall be paid and the manner in which payment shall be made;
(d) the date on which the principal amount shall be repaid or the manner in which redemption shall be effected, whether by the payment of installments of principal or otherwise.”
These simple provisions require that a written acknowledgement of indebtedness by a company shall include a statement on the sum or amount borrowed, the date on which it is to be repaid, maximum discount on the issue and maximum premium at which the debenture may be redeemable, the rate of interest, dates and the manner in which the interest shall be paid as well as the manner in which the redemption shall be effected.
These requirements aim at bringing out in concise form and precise way, the terms of a contract agreed to by the parties to a debenture; i.e., the debtor company and the creditor party in respect of security given by the company for the transaction giving rise to the debenture. At the time of the issue and execution of a debenture by a company as a security for any transaction, all the terms and conditions set out therein would be very clearly known and understood by the company as issuer on the one part, and the debenture holder, as the beneficiary thereof, on the other part, on the requirements set out in Section 168(a)-(d) CAMA.
In the Appellants case, the unchallenged and undeniable facts deposed to in the further Affidavit, dated 4th of May, 2001 in support of the Originating Summons giving rise to the Deed in question are paragraph 3(i) (ii), (iii), (iv) and (viii) which are as follows: –
(i) the 1st defendant applied to the bank and was granted loan which was secured by a Debenture Deed dated 26 the day of January 2000;
(ii) the 1st defendant has made draw down of the said loan facility which it secured by the above-mentioned Deed of Debenture and presently it is owing Inland Bank Nigeria Plc well over N527,751,145.16;
(iii) that upon the execution of the aforesaid deed of debenture, same was duly registered at the Corporate Affairs Commission, Abuja in compliance with the provisions of Companies and Allied Matters Act 1990;
(iv) that by reasons of the failure and/or neglect of the 1st defendant to meet its obligations of repaying back the loan and accrued interest, I was appointed receiver of the 1st defendant company;
(viii) that the loan to the 1st defendant was in two trenches one on commercial paper to the tune of N286,326,824.49 and an overdraft of N62,971,194.08.
These unchallenged and admitted facts show, unequivocally, that on its application, the 1st Respondent was granted loan and overdraft facilities by the Bank in respect of which the Deed was issued and executed by the 1st Respondent as security and that the 1st Respondent failed and/or neglected to meet its obligations of repaying the facilities as agreed by the parties. The loan facility was to the tune of 286,326,824.49 while the overdraft facility was of 62,971,194.08 which the 1st Respondent utilized and that as at the time the action was commenced, the 1st Respondent owed over 527,751,145.16 as debt on the facilities. In paragraph 24(iv) it is averred that the 1st Respondent has abandoned its account with the Bank. The Deed was attached to the Affidavit as Exhibit A in demonstration and support of the facts which gave rise to the debt owed by the 1st Respondent. Neither the facts giving rise to the debt nor the execution of the Deed were denied, disputed or challenged by the 1st Respondent in particular, and the 2nd Respondent and so the sums or principal amounts borrowed by the 1st Respondent in respect of which the Deed was issued and executed are very well known to the parties and stated specifically in the Affidavit such that the reference in Clause 1 of the Deed to the moneys hereby secured is sufficient compliance with the provisions of Section 168(a) of CAMA on the principal sums borrowed.
Clause 2 of the Deed has set out the rate of interest, when and how the interest was to be charged and paid on the debt owed, for the purpose of Section 168(c). For the requirement in Section 168(d) clause 5 clearly set out when the principal sums or moneys secured by the Deed were to become immediately payable and so effectively meets the requirement. Because the Deed was not re-issued and not redeemed by the 1st Respondent, non-provision for maximum discount or premium at which the Deed was to be re-issued or re-deemed provided for in Section 168(b) is not of any consequence to the Deed. Substantially, therefore, the Deed, in its purest, purposeful and practical contents and con, has complied with the requirements of Section 168(a)-(d) of CAMA for it to be a binding under taking and security as well as legally effective acknowledgement of indebtedness in writing by the 1st Respondent to constitute a valid debenture within the purview of the definition in Section 650(1) of CAMA.
After all, Section 169(1) of CAMA provides that: –
Statements made in debenture or debenture stock certificates shall be prima facie evidence of the title to the debenture of the person named therein as the registered holder and of the amounts secured thereby.
The law would not allow or permit the 1st Respondent who admittedly, was granted loan and overdraft facilities which were fully utilized by it and which it failed, neglected and/or refused to pay back, to use or employ legalistic encrushments and cross technicality to avoid meeting its financial obligations which were long overdue. To challenge the validity of the Deed it issued and executed as security for the financial obligations arising from the facilities fully utilized and enjoyed by it, the 1st Respondent and indeed the 2nd Respondent used and are attempting to continue the use of the instrumentality of the judicial processes to frustrate the recovery of debt admittedly owed to the Bank. They cannot be heard to challenge the validity of the Deed which they freely and voluntarily issued and executed as the security for the loan and overdraft facilities they fully utilized and benefitted from, merely for the purpose of frustrating and eventually cheating out the Bank from the recovery of customers funds deposited with it. Although the law is said to be an ass which could be taken for a ride by anyone and anyhow, equity would not allow it to be used as a vehicle for injustice driven on pure technicalities. See Oilfield Supply Centre Limited v. Johnson(1987) 2 NWLR (Pt. 58) 625 @ 639,Adedeji v. NBN Limited (1989) 1 NWLR (76) 212 2 226-7 and Awojugbagbe Light Industry Limited v. Chinukwe (1995) 4 NWLR 9390) 319 all cited before the Lower Court.
See also Okechwkwu v. Onuorah (2000) 12 SC (pt. II) 104 @ 109.
The Appellants being admitted debtors, owe, not only the legal, but also the moral duty and obligation, expressed or implied, to pay the debt owed to the Bank who, very richly, deserves and is entitled to exercise the right vested on it by virtue of the mutual agreement in the Deed, to recover the sums owed, not withstand any perceived omissions therein. N.B.N. v. Shoyoye (1977) 5 SC, 181, Afribank v. Alade (2000) 13 NWLR (685) 591.
The Deed, for the aforenamed reasons, is a valid security issued by the Appellants and executed between the parties thereto for the loan and overdraft facilities in question, granted to the 1st Respondent by the Appellant and fully utilized and enjoyed by the Respondent.
I also find merit in the arguments of the Appellant that Deed was/is a valid Debenture and the Lower Court was wrong in law to have invalidated the Debenture on ground of alleged non-compliance with the provisions of Section 168(a)-(d) of CAMA.
On issue 2; the power to appoint a receiver, by Section 209(1) of CAMA, a Debenture holder is empowered to appoint a receiver of any assets subject to a security, at any time he becomes entitled to realize his security on the debenture. Pursuant to the provision, the Deed; in clause 8 provided that: –
At any time after the principal moneys secured become payable the Bank may (by an instrument in writing under the hand of any Director or Manager of the Bank in Lagos/Jos) appoint any person or persons (including any Manager or other official of the Bank) to be a Receiver or Manager of the property hereby mortgaged and may remove any such Receiver or Manager and may in like manner appoints another in his stead. ANY Receiver or Manager so appointed shall be deemed to be the Agent or Agent of the Company and the Company shall be solely responsible for his or their acts or defaults and for his or their remuneration. (Underline supplied)
Plainly, and it is clear as crystal from the underlined portion of the unambiguous words used in the provisions, which are to be ascribed their ordinary and natural meaning in the con they are employed by the legislature; See Ekeogu v. Aliri (1991)3 NWLR (179) 258, N.D.I.C. v. Okem Enterprise Limited (2004) 4 SC (Pt. II) 77, Adesanoye v. Adewole (2006) ALL FWLR (340) 1000, the debenture holder; i.e. the Bank, was conferred or vested with requisite authority and power to appoint any person or persons to be a receiver or manager of the property mortgaged thereby.
It is beyond argument that the power to appoint a receiver or manager over the assets or property used in the Deed as security for the loan and overdraft facilities granted to the 1st Respondent was vested in the Bank, as the creditor who granted the facilities and Debenture Holder. The Bank as Debenture Holder, being a corporate legal person, personality or entity, conferred with juristic personality to sue or be sued by law, can only act through its officers who are natural persons, as its agents or servants. Recently, the Apex Court restated the position of the law in the case of Chemiron Int. Ltd v. Stabilini Visinoni Limited (2018) 17 NWLR (1647) 62 @ 77 when it said: – — the respondent being a body corporate carries out its affairs and responsibilities through its agents and servants who are human persons. This was restated by this Court per Coker JSC in Kate Enterprises Limited v. Daewoo Nigeria Limited (1985) 2 NWLR (Pt. 5) 116.
In the premises of the law, the Bank could only exercise the authority and power to appoint a receiver or manager vested on it in the Deed, through its officers, and servants who are human beings, as its agents. In the physical exercise of the power so vested in the Bank, on its behalf and for it, the officers or/and servants of the Bank do not do so in their own right as persons or in whom the power was so directly vested, but only as agents through whom the Bank could act and conduct its affairs. Tren Company Nigeria Limited v. African Real Estate (1978) 7 LRN 146 @ 153, Ishola v. Societe General Bank Nigeria Limited (1997) 2 NWLR (488) 405, UBN, Plc v. Jase Motors Nigeria Limited (1997) 7 NWLR (513) 387. The Bank could therefore act, carry out any of its affairs and exercise its authority or power through any of its authorized officers and servants as its agents for all purposes.
In the Appellants case, the Deed expressly and unambiguously recognized and acknowledged the position of the law by vesting the power to appoint a receiver or manager in the Bank, exercisable under the hand of any Director/Manager of the Bank.
Undoubtedly, the Banks power to appoint a receiver or manager, with without any prescription, was to be exercised under the hand of any of its officials, officers or servants such as Director or Manager, both of whom are not ordinary officials, officers or servants of the Bank, but also who are directly involved in the management and direction of the conduct of its affairs, as agents. A Director or Manager of a Bank or Company is presumed in law to be an agent of the Bank or Company and when he carries out duties on behalf of and for the Bank or company, such acts are binding on Bank or company, as the principal.
See: Owena Bank, Plc v. Olatunji (2002) 12 NWLR (781) 255, FBN, Plc v. Excel Plastics Industries Limited (2003) FWLR (160) 1624, F.C.D.A. v. Ezinkwo (2007) 18 WRN, 158.
With due respect to the Lower Court, the holding that clause 8 conferred the power to appoint a receiver on any Director or Manager of the Bank in Lagos/Jos and to be exercised by an instrument under his hand, is patently wrong since neither any Director nor a Manager in Lagos/Jos of the Bank, was the Debenture Holder to whom the security in terms set out in Deed was issued by the Respondents. The Lower Court has rightly stated at page 36 of its judgement; which is at page 375 of the Record of Appeal that: –
Exhibit EA1 is an agreement between the bank and the Defendants and if the bank acts contrary to the agreement reached by them, it is my belief that the Defendants will have a right to challenge the action of the Bank.
Exhibit MA1 referred to by the Lower Court is the Deed which bears out the statement that it is an agreement between the Bank and the Respondents which was evidently issued and executed by a Director and Secretary of the 1st Respondent for and on its behalf. The Director and Secretary of the 1st Respondent who executed the Deed as agents of the 1st Respondent were not mentioned nor were they the issuer of the Deed, but only exercised the authority and power of the 1st Respondent to issue the Deed as security for the facilities granted to it by the Bank, as agents through whom it could act.
Prima facie, there can be no viable argument against the fact that the agreement between the parties to the Deed, is that the Bank; the Debenture Holder and in whose favour it was issued, was conferred with and vested the authority and power to, in the event of default, failure or refusal to abide by the agreed terms and conditions of the facilities granted to it, appoint a receiver or manager over the assets of the 1st Respondent stipulated in the Deed, mortgaged as security. Clause 8 of the Deed cannot reasonably be read and be said to have vested or conferred the power to appoint a receiver, on any Director or Manager of the Bank and not the Bank itself. It must be remembered that the only duty of a Court of law in the interpretation of the terms of an agreements expressly, freely and voluntarily entered into by parties, is to give effect to the ordinary and clear tenor of the terms agreed to by them. It is not part of the judicial responsibility, authority and power of a Court to read in or read out, add or subtract from the terms and conditions agreed to by the parties or rewrite such terms for them on any ground.
Afrotec v. MIA Sons Limited (2000) 12 SC (Pt. II) 1 @ 15, Koiki v. Magnusson (1999) 8 NWLR (615) 492, Baba v. N.C.A.T.C. (1991) 5 NWLR (192) 388, Dantata v. Dantata (2002) 4 NWLR (756) 144, Owoniboys Technical Service Limited v. UBN Limited (2003) 15 NWLR (844) 545.
The Deed of Appointment dated 1st March, 2001 made by the Bank, in exercise of the power vested in it to appoint a receiver or manager in the Deed appointed the Appellant as the Receiver and was patently, signed by a Director and Secretary of the Bank. In other words, the appointment of the Appellant as the Receiver was made by the Bank under the hand of or through a Director and Secretary of the Bank; two (2) of its officials or officers who are directly involved in the direction and management of the conduct of its affairs, as agents, prima facie authorized to act for and on behalf of the Bank.
Since the Deed of Appointment of the Appellant as Receiver was made by the Bank, under the hand and through a Director and another authorized official or officer of the Bank, the appointment was made in compliance and accordance with the terms and conditions expressly agreed to by the parties to the Deed.
The appointment of the Appellant was in the circumstances, validly made by the Bank in exercise of the power vested on it in the Deed and in line with the provisions of Section 209(1) of CAMA.
The issue is resolved in Appellants favour.
The last issue in the appeal is on the delivery of judgement on two (2) days and after expiration of ninety (90) after final addresses. The parties do not dispute that the fact that the judgement of the Lower Court was delivered in two (2) installments with the titles: –
JUDGEMENT on 6th February, 2002 refusing all the Appellants claims as per the Originating summons and JUDGEMENT IN THE DEFENDANTS COUNTER CLAIM on 7th February, 2002 by which the counter claim was found not properly constituted and struck out.
In addition, the learned Counsel for the parties do not dispute that the two (2) installments of the judgement were delivered outside the ninety (90) after conclusion of evidence and final addresses prescribed by the provisions of Section 294(1) of the 1999 Constitution.
In the delivery of the judgement in installments on two (2) separate days, the learned Counsel for the Appellant has not referred to and relied on any statutory provisions or established principle of law which required that the judgement or decision of a Court must be delivered on a single day or date or that it must be read or delivered at once in a single sitting of the Court. I am not aware of any such requirement and so entitled to presume that there was no such requirement of the law at the time the Lower Court delivered the judgement in question. In any case, apart from alluding to the fact that the judgement was delivered on 6th and 7th of February, 2002, the learned Counsel for the Appellant did not show how he was prejudiced by the said fact in the case he presented, in respect of which judgement was delivered on the 6th February, 2002. The primary complaint under the issue by the Appellant is that the Lower Court considered an issue which was abandoned and so no longer before it, which however, as seen earlier, was made a ground of his appeal and issue 1 raised from it by Counsel.
?I do not find any support from the argument of the learned Counsel for the Appellant that the mere fact that the judgement of the Lower Court was delivered on 6th and 7th February, 2002 caused any prejudice or occasioned a miscarriage of justice to the Appellant to warrant an interference with the judgement. At best, the procedure was unusual and can be said to be irregular but had nothing to do with the substance of the judgement.
On the failure to deliver the judgement within the period of time prescribed in Section 294(1) of the Constitution, the Section says that: –
(1) Every Court established under this Constitution shall deliver its decision in writing not later than ninety days after the conclusion of evidence and final addresses and furnish all parties to the cause or matter determined with duly authenticated copies of the decision within seven days of the delivery thereof.
Apparently, the Lower Court; as a Court established under the Constitution is directed and exhorted by the provisions to deliver its judgement/decision in writing within ninety (90) days after the conclusion of evidence and final addresses in the case. The provisions imposed a legal and judicial duty and obligation on the Lower Court to do so when and as prescribed therein,without option. The purpose of the provision is to make the Courts rendered their decisions in case, while the facts, evidence and peculiar circumstances placed before it were still fresh and within its reasonable memory to be in a proper position to make informed appraisal, assessment and evaluation of all relevant and material points that call for determination. The longer it takes for a decision to be delivered in a case, the more likely it becomes for a clear precise and accurate memory of the special peculiarities of a case to fade away and be overlooked by a Court. For that reason, every Court established under the Constitution has a first line binding obligation and duty to deliver its decision in a case in strict compliance and accordance with the provisions.
Where it fails or omitted to do so, since the section is made up of more subsections, the principles of Constitution interpretation says that all the provisions of the other subsection be considered and interpreted together in order to find out what the consequence of the omission or failure to comply with the provisions of the subsection, would be. Section 294(5) provides that: – (5)The decision of a Court shall not be set aside or treated as a nullity solely on the ground of non-compliance with the provisions of Subsection (1) of this section unless the Court exercising jurisdiction by way of appeal or review of that decision is satisfied that the party complaining has suffered a miscarriage of justice by reason thereof.
In the case of Cotecna International Limited v. Churchgate Nigeria Limited (2010) 18 NWLR (1225) 346, the apex Court dealing with the provisions of Section 294 Subsections (1) and 5, said that: –
Section 294(1) of the 1999 Constitution provides that a written judgement of every Court established under the Constitution shall be delivered not later than ninety (90) after the conclusion of evidence and final address. By virtue of Subsection 5 of Section 294 of the Constitution, this Court is enjoined not to set aside the judgement of the trial Court solely on the ground that it was delivered outside the ninety days period after final address, unless the party complaining has suffered a miscarriage of justice. It would appear to me and I am of the view that the delivery of judgement earlier than the scheduled date without notice to the appellant will not nullify the judgement unless the appellant can show that it has resulted in a miscarriage of justice.
See also Total Nigeria Plc v. New C.H.C.(2015) 17 NWLR (1489); Ahmed v. CBN (2013) 11 NWLR(1365) 352 @ 555, Alimi v. Kosebinu (2016) 17 NWLR (1542) 337.
The provision of the law is therefore, that a judgement delivered outside or after the expiration of the period of ninety (90) days as stipulated in Subsection 1, shall not be set aside or treated as a nullity solely on the ground of non-compliance with the provision, unless the party complaining of the non-compliance satisfies the appellate Court that he has suffered a miscarriage of justice thereby. As a result, it is not enough for a party to simply complain at the appellate Court that a Lower Court did not comply with the provisions of Subsection 1 of Section 294, but has the burden to show and satisfy the appellate Court that the non-compliance did occasion a miscarriage of justice to him, if such a judgement was to be set aside or treated as a nullity by the appellate Court. See also SBN Limited v. Starite Industry Overseas Corporation (2009) 8 NWLR (1144) 491, SPDCN Limited v. Ekwens (2009) 4 NWLR (1131) 220, Igwe v. Kalu (2002) 5 NWLR (761) 678, Atungwu v. Chekwu (2004) 17 NWLR (901) 18 and Owoyemi v. Adekoya (supra).
The burden on the complainant is not discharged by the mere assertion that a miscarriage of justice was occasioned by the non-compliance and calling on the appellate Court to conjecture such an effect, but must demonstrate that for instance, the delay in delivering the judgement had denied or robbed the trial Court of the expected capacity to fully and correctly appreciate the peculiar facts, evidence and circumstances disclosed in the case or that material impressions of trial were lost as a result of the non-compliance. See alsoFBN Limited v. Adepetu & Co. Nigeria Limited (2009) 11 NWLR (1157) 156.
In the one (1) page arguments of the issue in the Appellants brief, there is not even an attempt at demonstrating how the non-compliance with the provisions of Subsection 1 of Section 294 occasioned a miscarriage of justice to the Appellant in the case in order to discharge the burden it bears and satisfy the Court that there is justification for the judgement if treated as a nullity, on that ground.
The issue is lacking in merit and is resolved against the Appellant.
In the final result, the appeal is meritorious on issues 1 and 2, resolved in Appellants favour and is allowed to that extent.
However before making consequential order, I would consider and determine the cross appeal by the Respondents/Cross Appellants.
The Notice of Cross Appeal filed on 9th May, 2014 contains two (2) grounds from which two (2) issues are distilled for decision by the Court in the Cross Appellants brief filed on 20th June, 2014.
The submissions of the Cross Appellants on the appeal are that the Lower Court was wrong to have held that clause 8 of the Deed which stated that the Receiver was an agent of 1st Respondent contravened the provision of Section 390(1) of CAMA which says that the Receiver is an agent of the debenture holder who appointed him. Section 390(1) of CAMA and the cases of Tanarewa Nigeria Limited v. Arzar (2005) 5 NWLR (919) 593 @ 640 and Carnco Foods Nigeria Limited v. Mainstreet Bank Limited (supra) also reported in (2013) LPELR-20725(CA) were relied on to show that a receiver is an agent of the party who appointed him; the debenture holder. The case of Adeniyi v. Government Council, Yaba College of Technology (1993) 6 NWLR (300) 426 @ 461 was cited for the argument that a provision in an agreement excluding a statutory provision is null and void and the Court is urged to hold that the appointment of the Cross Respondent as Receiver in the Deed is illegal, null and void on ground of failure to comply with Section 390(1).
It is also the case of the Cross Appellants that the Deed is illegal, null and void for contravention of Sections 21 and 22 of the Land Use Act (Act) on ground that it purported to affect interest in land without the prior consent of Governor. Section 26 of the Act was set out and said to have rendered the Deed null & void relying on Awojugbagbe Light Industry Limited v. Chinukwe (supra) and Savannah Bank of Nigeria Limited v. Ajilo (1989) 1 NSCC (20) 135 on the undesirability of allowing the Cross Appellants to take advantage of its own wrong in failing to obtain the prior consent of the Governor before alienating its interest in land by the Deed.
In conclusion, the Court is prayed to allow the cross appeal.
In the Cross Respondents brief filed on 25th July, 2014, an objection to cross appeal on the ground that it is academic since the Lower Court had invalidated the Deed and appointment of the Cross Respondent as receiver, the issues which are canvassed in the cross appeal. It is contended that the cross appeal serves no purpose as it was rendered empty by the judgement of the Lower Court invalidating the Deed which it seeks to attack and so liable to be struck out on the authority of Ezeanya v. Okeke (1995) 4 NWLR (388) 142 and Help Nigeria Limited v. Silver Anchor Nigeria Limited (2006) 5 NWLR (972) 196 @ 224.
On the merit of the issues in the cross appeal, relying on Corporate Ideal Industry Limited v. Ajaokuta Steal Company Limited (2014) 7 NWLR (1405) 165 and Fasel Services Limited v. NPA (2009) NWLR (1146) 400 @ 416, it is submitted that a contract or provisions therein is illegal only if it is prohibited by statute and a sanction prescribed for it. Section 390(1) is said not to have provided any sanction and does not make clause 8 of the Deed illegal but only says that a receiver is an agent of the party that appointed him as was held in the cases cited in the Appellants brief. The Court is urged to resolve the issue in favour of the Cross Respondent.
On issue 2, it is submitted that the issue of the validity of the Deed was not an issue placed before the Lower Court and on the authority of Alli v. Alesinloye (2000) 6 NWLR (660) 177, that Court ought not to have considered it on that basis, the issue is said to be incompetent and the Court is urged to resolve it in Cross Respondents favour.
In the Cross Appellants Reply brief, it is submitted that the Cross Appeal is not academic as it challenges findings by the Lower Court on the contravention of Section 390(1) of CAMA and so the cases cited by the Cross Respondent on the objection do not apply to the cross appeal. CitingOkilue v. Medukam (2011) 2 NWLR (1230) 176 @ 195, it is contended that the Cross Appellants have a right to appeal any finding made by the Lower Court with which they are not satisfied. The cross appeal is said not to be incompetent since it can be sustained by a single ground as was stated in Abe v. University of Ilorin (2013) 6 NWLR (1379) 183 @ 206.
Learned Counsel then said the Lower Court took arguments on and considered the issue of the validity of the Deed at pages 249-252, 360 and 373 and the Court is urged to discountenance the Cross Respondents arguments on the abandonment of the issue of validity of the Deed.
Other arguments in the Reply brief are repetitions and further submission on Section 390(1) of CAMA.
Dealing with the objection raised by the Cross Respondent to the cross appeal first, I should say that the fact the decision of the Lower Court invalidating the Deed was in favour of the Cross Appellants did not take away their right to appeal against any portion thereof with which they are dissatisfied.
In the course of its judgement, the Lower Court had made various findings on material issues which were disputed by the parties in the case, before finally arriving at the conclusion that the Deed was invalid.
Every finding by a Court on a material issue disputed by the parties in a case and in respect of which it was fully addressed, constitutes a determination by that Court which qualifies as a decision under Section 315 of the Constitution against which a right of appeal is conferred under the provision of Section 240 and 243(1)(a) of the Constitution on the parties to a case who are not satisfied therewith. That is the position stated in the case of Okilue v. Medukam(supra), representing the law.
The Cross Respondent has also argued that the cross appeal is academic since the Deed was invalidated by the Lower Court and the Cross Appellants have not suffered any miscarriage of justice. I should remind the Cross Respondent that the basis of his appeal is that the Lower Court was wrong to have invalidated the Deed and if the Court found merit (as it has done) in the appeal, the decision would be set aside, leaving the Cross Appellants without an opportunity to challenge the live findings on the validity of Deed if they did not file a cross appeal against same. An academic appeal is one which even if decided in favour of an Appellant is of no practical value or useful purpose at all as it related to spent or dead issue/s that are no longer material and relevant in the dispute between the parties. In the case of Nwosu v. PDP (2018) 14 NWLR (1640) 532 @ 565 the Apex Court defined the word Academic as follows: –
— not connected to a real or practical situation and therefore not important.
In the earlier case of A.G Plateau State v. A.G. Federation A suit is academic where it is merely theoretical, makes empty sound and of no practical utilitarian value to the Plaintiff even if judgement is given in his favour. A suit is academic if it is not related to practical situations of human nature and humanity.”
From these definitions, an appeal is academic when it is merely theoretical, of no practical purpose and useful value, but speculative, conjectural and hypothetical and only seeks opinion which confers no legal benefit. In view of the Cross Respondent?s appeal against the decision of the Lower Court invalidating the Deed, the cross appeal cannot be described as academic.
The objection is unsustainable and is over-ruled.
The pith of the issue 1 in the cross appeal is that clause 8 of the Deed which says that the Receiver is the agent of the 1st Cross Appellant contravenes the provisions of Section 390(1) of CAMA which provides that the Receiver is the agent of the debenture holder who appointed him. Section 390(1) of CAMA is the law which stipulates that a Receiver is the agent of the party who appointed him; the debenture holder and the parties cannot by their contract, change that position of the law by making the Receiver the agent of the party issuing the debenture. Whether or not parties make any specific provision in their contract, the law is and so the fact remains, that a Receiver appointed by a debenture holder, by dint of Section 390(1) of CAMA, is the agent of the debenture holder for the purpose of the receiver-ship and not of the debenture issuer. So the mere fact that a statement was made in a debenture that a receiver is an or the agent of the debenture issuer instead of being an agent of the debenture holder as provided in Section 390 (1), only renders the statement in effective or inoperative, but does not, ipso facto, go to invalidate the debenture on the ground alone. The statement also does not deprive the debenture holder of the right and power to appoint a receiver in the debenture or affect the appointment of a receiver duly appointed by the debenture holder in accordance with the terms and conditions set out therein.
The two (2) cases of Tanerewa Nigeria Limited v. Arzar (supra) and Carnco Foods Nigeria Limited v. Mainstreet Bank Limited (supra) cited by the Cross Appellants also restated the position of the law that the receiver is the agent of the debenture holder who appointed him for the purpose of the receivership irrespective of what is contained in the debenture.
In the present appeal, since it is not the case of the Cross Appellants that the debenture holder has no power to appoint a receiver under the Deed or that the receiver appointed was not appointed by the debenture holder, the mere statement that the appointed receiver shall be the agent of the 1st Appellant instead of the debenture holder, did not invalidate the appointment of the Cross Respondent as the receiver over the Assets and property of the 1st Cross Appellant by the debenture holder.
There is no merit in the issue and it is resolved against the Cross Appellant.
On Issue 2, the simple answer is that what Sections 21 and 22 of the Land Use Act provide for is that the prior consent of the Governor is a condition precedent for alienation of interest in Land and Section 26 of the Act, renders any alienation without the requisite consent, null and void. However, the sections do not prohibit and affect agreements between parties for the alienation of interest in and before the alienation which would require the prior consent of the Governor. In other words, the provisions of Sections 21, 22 and 26 of the Land Use Act do not out law entering into contract agreements for the alienation of interest in land without the consent of the Governor. SeeAgbabiaka v. Okojie (2004) 15 NWLR (897) 503; Omozeghian v. Adjarhjo (2006) 4 NWLR (1969) 33; Mainagge v. Gwamma (1997) 11 NWLR (528) 191. In the case of Ibekwe v. Maduka (1995) 4 NWLR (392) it was held that:
The combined effect of Section 22 (1) and (2) of the Land Use Act does not make an agreement, to alienate without first obtaining the Governors consent void. It makes an agreement to alienate conditional upon obtaining the Governors consent. Before the consent is obtained, the agreement is inchoate.
Then in the case of Igbum v. Nyarinya (2001) 5 NWLR (707) 554 it was stated that: –
There appears to exist some considerable misconception about the import of Section 22 of the Land Use Act, 1978 . There are certainly two broad stages culminating into the vesting of title to a purchaser in land transaction. The first stage is the agreement or contract stage. This stage does not require the consent of the Governor under Section 22 of the Act. This stage of entering into a contract for sale of land, no alienation has taken place as envisaged by the said Section 22 and therefore the requirement of consent of the Governor, does not arise. Up to the point of arriving at a binding contract, no consent of the Governor is required as a legal pre-requisite. The second stage involves alienation or transferring the vendors right of occupancy and which is done by a conveyance or deed. Because this stage invariably involves the vesting of title in the purchaser, the consent of the Governor must, as a legal pre-requisite be sought and obtained. Failure to do so will render null and void the whole transaction by virtue of Section 26 of the Land Use Act, 1978.”
See also Inter. Nig. Ltd v. Aderemi (1999) 8 NWLR (614) 268 @ 292-91; George & Co. Ltd v. Afinotan (2014) LPELR-22982; B. Manufac. Nig. Ltd. v. M/S O. L. Ltd (2007) 5 SC, 84, (2007) 14 NWLR (1053) 1009.
In the Cross Appellants case, the Deed was only an agreement by which the 1st Cross Appeal gave as security, its interest in the land and building at Ibafo, for the facilities it was granted by the Bank; the debenture holder, in the event if failed to honour its obligations. The interest in the said land was not by the Deed, transferred or even alienated by the 1st Cross Appellant to the debenture holder to warrant for the prior consent of the Governor as required under Section 22 of the Land Use Act. In fact, the Deed cannot even be said to be a contract agreement for the alienation of the land in question between the 1st Cross Appellant and the Debenture holder, but simply an agreement to use the land as security for the facilities granted to the 1st Cross Appellant. A proper agreement for the alienation of the land in question would come later after the debenture holder has effectively called in and taken steps to realize the security secured by the Deed. It is therefore a gross misconception for the Cross Appellants to argue that the Governors prior consent was required for the Deed by which the land in question was only given as a security and not alienated by the 1st Cross Appellant. See Okuneye v. FBN, Plc (1996) NWLR (457) 749.
In any case, the Lower Court is right, that the 1st Cross Appellant would not be allowed to use the law to benefit from its own wrong since the duty to obtain the Governors consent even if required, was on it. Omozeghian v. Adjarho (supra); Sosan v. H. F. P. Eng. Nig. Ltd(2004) 3 NWLR (861) 546; Amadi v. Nsirim (2004) 17 NWLR (901) 111.
In the result, the issue is misconceived, devoid of merit and resolved against the Cross Appellants.
The cross appeal, with the issues canvassed therein resolved against the Cross Appellants, is unmeritorious and it is dismissed accordingly.
On the whole, I allow the appeal of the Appellant and as a consequence, set aside the judgement of the Lower Court that the Deed and the Deed of Appointment of the Appellant were invalid, null and void. It is declared that the Deed of Debenture dated 26th January, 2000 is a valid Deed between the Bank and the Respondents and that the Appellant was legally and validly appointed as the Receiver/Manager over the assets covered by the Deed by the Debenture Holder; the Bank.
An order of injunction is also hereby made restraining the Respondents, their agents or privies from dealing with the assets of the 1st Respondent covered by the Deed, during the Receivership of the Appellant except with his consent and under his direction.
The cross appeal is dismissed for lacking in merit.
There shall be Five Hundred Thousand Naira (500,000.00) costs in favour of the Appellant/Cross Respondent to be paid by the Respondents/Cross Appellants for the prosecution of the two (2) appeals.
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO, J.C.A.: I have had the opportunity to read the lead judgment of my learned brother, MOHAMMED LAWAL GARBA, JCA and I am in agreement with the judgment.
I also hold that the appeal succeeds and set aside the judgment of the lower Court and I abide by all the consequential orders in the lead judgment.
GABRIEL OMONIYI KOLAWOLE, J.C.A.: I have had the privilege to read in draft, the leading judgment of my learned brother, MOHAMMED LAWAL GARBA, JCA just delivered in this appeal.
The leading judgment, by my assessment, has adequately and exhaustively considered and clinically resolved the knotty issues set down by both the main appeal and the Cross Appeal by the Respondents.
I agree with the decision reached, that the appeal is meritorious and ought to be upheld, while the Cross Appeal as found by my learned brother as one that is lacking in merit. It is my assumption, that counsel who practice in this Court as well as in the other superior Courts of record created by the Constitution, should have realized that the tenor of judicial decisions over the years, was that the Court will not readily lend to a party, its sacred judicial powers to assist such party who having taken advantage or benefit of a loan or over-draft facility from a Bank or Financial Institution, to turn round and seek judicial “help” to invalidate such loan or over-draft facility agreement which it had effectively utilized and to the detriment of the lender.
I agree that the appeal be upheld, and that the Cross Appeal be dismissed as it constituted a gross abuse of the Court’s process. I also abide with the consequential order as to cost awarded in the leading judge.
Appearances
R. U. Ezeain with him, O. Nwoko for the Appellant/Cross Respondent.
For Appellant(s)
O. Benson and C. Aniesionwu for the Respondents/Cross AppellantsFor Respondent(s)
Appearances
R. U. Ezeain with him, O. Nwoko for the Appellant/Cross Respondent.For Appellant
AND
O. Benson and C. Aniesionwu for the Respondents/Cross AppellantsFor Respondent
