MUTAZU & ANOR v. BOA LTD (2020)

MUTAZU & ANOR v. BOA LTD

(2020)LCN/14412(CA)

In The Court Of Appeal

(KADUNA JUDICIAL DIVISION)

On Friday, July 24, 2020

CA/K/08/2017

Before Our Lordships:

Obietonbara O. Daniel-Kalio Justice of the Court of Appeal

Saidu Tanko Hussaini Justice of the Court of Appeal

Oludotun Adebola Adefope-Okojie Justice of the Court of Appeal

Between

1. ALHAJI AJI HUSSAINI ALIYU MUTAZU 2. HALLICKS NIGERIA LIMITED APPELANT(S)

And

BANK OF AGRICULTURE LIMITED RESPONDENT(S)

RATIO

WHETHER OR NOT A BANK IS ENTITLED TO CHARGE INTEREST ON A LOAN TRANSACTION

I however, agree with the Respondent’s Counsel that a Bank is entitled to charge interest on a loan transaction. See Nagebu Co (Nig.) Ltd v. Unity Bank Plc (2014) 7 NWLR Part 1405 Page 42 at 83 Para B-D per Abiru JCA; Abdullahi v. Waje Community Bank (2000) 7 NWLR Part 663 Page 9 CA at 29 Para G-H per Salami JCA (as he then was).
The question however is whether this interest should continue to run through the pendency of the action. It was held by this Court, per Omage JCA in the case of Nuba Commercial Farms Ltd Vs. NAL Merchant Bank Ltd (2001) 16 NWLR Part 740 Page 510 at Pp. 520 -521 G-F as follows:
“Generally a claim before the Court is ascertained and when the claim is for a definite sum with interests particularly in banking cases, the expectation of the law is that the claims of the plaintiff having been placed before the Court as an independent arbiter to determine the usual calculation of interest will be as the Court in its judgment will determine. In other words the claimant will not continue to calculate the interest in his records and thereby be a judge in its own cause. It seems to me that once the case is filed in a Court of law, the bank’s calculation of interest on the agreed rate should be stayed and the matter left for determination by the Court according to the law in the matter before the Court…” PER ADEFOPE-OKOJIE, J.C.A.

OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the Kaduna State High Court delivered on 21st July 2016 by Hon. Justice M.C. Bello, in which he dismissed the Appellants’ claim but granted the Counterclaim of the Respondent.

The dispute between the parties, leading to the institution of the action before the lower Court, is that the 2nd Appellant obtained a loan facility of N5,000,000.00 (Five Million Naira) from the Respondent to finance the marketing of agricultural produce, the repayment of which was guaranteed by the 1st Appellant. The interest rate on the loan was 5% above the prime lending rate approved by the Central Bank of Nigeria (CBN), which at the time of the approval stood at 15%.

The terms and conditions of the loan were contained in the Offer Letter, a Loan Agreement and a Deed of Legal Mortgage. The Appellant’s 15 (fifteen) properties were mortgaged as collateral. The loan had a tenure of 9 (nine) months from 16th February 1994 for the repayment of the same with an accrued interest that would stand at the total sum of N6,125,000.00 as contained in the

Schedule of the Repayment.

The Respondent, alleging continuous default of repayment of the loan and accrued interest by the 2nd Appellant, sought to exercise its power of sale over the 15 properties, by notification in the newspapers. The Appellants quickly filed a claim before the lower Court seeking, by its Amended Statement of Claim, the following reliefs:
i. A declaration and an order that the Defendants decision to sell the 1st plaintiff’s 15 properties, itemized above pursuant to a purported exercise of a power of sale, derived from a deed of Legal Mortgage entered between the said parties made after publications in the New Nigerian Newspapers of 13th February, 1996 and from the conduct of Kusfa Nig. Limited (auctioneers) is illegal, null and void and ineffectual on the ground that;
(a) Defendant did not establish her right to the sum claimed.
(b) Sum claimed was not ascertained or properly ascertained and same is in dispute till date.
(c) Defendant itself breached fundamentally, important and relevant aspect of the Deed of Legal Mortgage and all Central Bank of Nigeria guidelines in that regard.
ii. A declaration that

the defendants interest charge on the facility granted to the 2nd Plaintiff are the outcome of wrong and indeed illegal interest charges in that:
(a) Charges in excess of 21% were employed in the computation of interest.
(b) Compound interest was employed instead of simple interest contrary to hallowed Banking practice, thereby resulting into inflated balances.
iii. A declaration and an Order that all payment made by the 1st Plaintiff into the 2nd Plaintiff’s account with the defendant in liquidation of the afore described loan facility ought to have been capitalized or reflected as reducing the principal loan and not interest elements contained in the various statement of account emanating from the defendant and issued to 1st Plaintiff and by so doing, the outstanding balance is incorrect as it is a product of illegal entries and other steps adversely affecting the plaintiffs rights herein.
iv. A declaration that any decision by the defendant Bank to dispose off by sale, assignment etc the 15 properties mortgaged by the 1st Plaintiff for the sum not exceeding N8, 000, 000.00 is not illegal, amounting to a fraud but is null and void

and of no effect as it is a gross undervalue and a misrepresentation of this real or even forced sale value of these properties.
iva. A declaration that the Plaintiffs are not liable to repay the Defendant more than N6, 125, 000. 00. stated in the “Schedule of Repayments” of the Loan Agreement as full and final liquidation of the loan.
v. An order of injunction restraining the defendant acting through their servants and agents from auctioning or attempting to auction the afore listed 15 properties or do anything likely to affect or destroy the 1st Plaintiff’s reversionary rights and interest in the afore-described properties.

The Respondent, by its Amended Statement of Defence, counterclaimed for the following:
i. The sum of N89, 584, 281 with interest of 19% per annum from the 20th day of October 2014 till judgment and after judgment the interest at the rate of the Court till the entire judgment sum and cost is paid.
ii. A declaration that there is a valid subsisting and binding legal mortgage between the Plaintiffs and Defendants.
iii. A declaration that under the said mortgage agreement dated the 14th day of

July 1994 and registered as 56/56/79, the Plaintiffs having defaulted in the repayment of the loan and having been served with the statutory demand notice, the power of sale contained in the mortgage has arisen and has become exercisable.
iv. A declaration that the Defendant is entitled to foreclose the said mortgage.
v. A declaration that the Defendant is entitled to sell the mortgaged properties in realization of the indebtedness by the Plaintiffs.

Dissatisfied with the dismissal of its claim and the grant of the Counter Claim by the lower Court, the Appellants appealed to this Court by Notice of Appeal filed on 22/7/16, subsequently amended with leave of this Court granted on 9/7/20. The extant Amended Notice of Appeal, which was filed on 3/7/2020, was deemed properly filed on 9/7/20.

The Appellants’ Further Amended Brief of Arguments filed on 3/7/2020 and deemed properly filed on 9/7/20 was prepared by E.O. Isiramen Esq, in which were distilled five issues for determination, as follow:
1. Whether the application of interest rate above the prime lending rate as specified by Central Bank of Nigeria (CBN) by the Respondent is

not a fundamental breach of the loan agreement and therefore not entitling the Respondent to the exercise of the power of sale over the Appellants 15 mortgaged properties or judgment in the sum of N89,584,281.00k being a sum arrived at as a result of the several breach of the loan agreements by the Respondent which is manifest by the evidence adduced before the Court?
2. Whether the Respondent breached the terms of the loan agreement when it applied the repayments made by the Appellants to liquidate the interest elements instead of first applying same to liquidate the principal loan and thus by so doing, the alleged debit balance of N89,584,281.00k of the Respondent claims is incorrect and the Respondent is therefore not entitled to judgment in the said sum.
3. Whether the lower Court was right to have entered judgment in the sum of N89,584,281.00k in favour of the Respondent as reflected in Exhibit 47 which is a computer generated statement of account that failed to meet the requirements of admissibility of such evidence as provided by the Evidence Act.
4. Whether the Trial Court did not err when judgment was entered in favour of the Respondent in

the sum of N89,584,281.00 which is an amount arrived at by the Respondent as a result of its continuous charge of interest on the Appellants account during the pendency of the suit.
5. Whether the Appellants are liable to repay to the Respondent as full and final liquidation of the loan, a sum more than N6,125,000.00 which is the amount stated in the “Schedule of Repayments” of the Loan Agreement?

The Respondent’s Counsel, Ogbeni Biola Oyebanji, in the Respondent’s Further Amended Brief of Arguments filed on 16/5/2020 and deemed properly filed on 9/7/2020, distilled three issues for determination, as follows:
1. Whether there were fundamental breaches in the loan agreement for which the Respondent cannot exercise the power of sale over the Appellants’ 15 Mortgaged properties in line with the agreement of the parties?
2. Whether Exhibit 47, being a computer generated evidence that enjoys a presumption of accuracy by the force of law, and being a specie of evidence which is not inadmissible per se properly admitted when the Appellants said they had no objection to its admissibility?

Whether the Appellants are only liable to repay to the Respondent as full and final liquidation of the loan, the sum of N6,125,000.00 when the said liquidation of the loan was not repaid within the time stipulated in the agreement and had thus accumulated interest on the sum over the years in line with loan agreement (Exhibit 37) and the Deed of Mortgage (Exhibit 36)?The Appellants’ filed a Reply Brief of Arguments on 18/6/2020 and also deemed properly filed on 9/7/20.
I shall condense the issues raised by both counsel for succinctness into the following issues:
1. Whether the application of the interest above the prime lending rate specified by the Central Bank of Nigeria (CBN) and the application of the repayments made by the Appellant to liquidate the interest accruing rather than the principal loan are fundamental breaches to the agreement.
2. Whether the lower Court was right to have entered judgment in the sum of N89, 584, 281. 00k in favour of the Respondent based on Exhibit 47.
3. Whether the Appellants are liable to repay to the Respondent as full and final liquidation of the loan, a sum of more than N6,125,000.00, the amount

stated in the “Schedule of Repayments” of the Loan Agreement?

Before proceeding to a determination of the issues formulated, mention must be made of the font size of both Appellants’ Brief and Reply Brief as well as the number of pages of the latter Brief.
Order 19 Rule 3 (6) (b) and Rule 5 (2) of the Court of Appeal Rules 2016 are specific on the type of font that should be used in the Briefs of Counsel and the number of pages of the Reply Brief. It is stated in Rule 6 (c) of Order 19 that any Brief that does not comply should not be accepted by the Registry. Unfortunately, the Registry accepted these Briefs without ensuring their compliance with the Rules
There is a reason for putting these strictures, as a font that is smaller than that advocated, is a tedium on the eyes and invariably leads to more pages of the Briefs than as advocated by the Rules. The Appellant’s Reply Brief, I also note, is 19 pages, more than the 15 pages advocated. Rules of Court are meant to be obeyed and not circumvented under any guise.
In the interest of justice, however, the fault not being that of the client, the Briefs shall be duly

considered.

The 1st issue for determination is:
Whether the application of the interest above the prime lending rate specified by the Central Bank of Nigeria (CBN) and the application of the repayments made by the Appellant to liquidate the interest accruing rather than the principal loan are fundamental breaches?

Appellants
The Appellants’ Counsel, Isiramen Esq. submitted that the Respondent breached fundamentals of the loan agreement and as a result, the outstanding balance the Respondent claimed is incorrect. These include the following:
A. The interest applied by the Respondent to the loan was above the prime lending rate as specified by CBN. He referred to Exhibits 1, 3, 5, 6, 36, 37, 38, 39 and Exhibit 47. He further argued that CBN is the apex bank empowered by law to determine interest rate to be charged by licensed banks. He relied on UBN Ltd v. Sax (Nig.) Ltd (1994) 8 NWLR (pt. 361) 150 PP 165 paras F – G; and Kioki v. First Bank Nig. Plc (1994) 8 NWLR (pt 365) 665 at 682 – 683 paras H. C and Section 23(1) of the Banks and Other Financial Institutions Act. He argued that at the time the loan was granted,

the Bank’s prime lending rate specified by CBN, per Exhibit 39 was 15%. In the various statements of account tendered, contradictory and conflicting interest rates were applied. He contended that parties agreed at an interest rate of 20% at the commencement of the loan but the Respondent unilaterally charged 21%.
B. The Respondent’s application of repayments to liquidate the interest elements instead of first applying same to liquidate the principal loan as agreed in the Deed of Legal Mortgage and Loan Agreements Exhibit 36 and 37, which resulted in an incorrect debit balance of N89,584,281.00.
C. The Respondent’s failure to disburse the N5 Million loan to the 2nd Appellant as agreed and wrongful debit entries made by the Respondent into the 2nd Appellant’s account outside the terms of the loan agreement. Counsel contended that the evidence led by the Appellants show that out of the N5m loan, only N4,668,900.00 was disbursed and that the Respondent did not provide a satisfactory explanation for the short fall neither did explain other illegal disbursements made for other purposes as contained in Exhibits 71 to 77, 88, 82 and

83.

Respondent
In response to the first part of the Appellants contention, the Respondent’s Counsel submitted that by the Deed of Legal Mortgage, (Exhibit 36) and in paragraph 36 of the Loan Agreement, parties consented that interest in arrears shall itself bear interest at the rate of 5% per annum or as may be varied from time to time or at any time capitalized and added. He further submitted that the Respondent was magnanimous to have applied an interest rate of 21% instead of 25% it was entitled to as of right and that by clause 5(d) of Exhibit 36, the consent of the Appellants is not necessary before applying the interest rate. The Courts, he said, have held that notwithstanding the regulatory capacities of the CBN, the parties may still make agreements and contract themselves out of the statute which is exclusive to themselves and in respect of which the Central Bank is not involved. Charging 1% on the combined principal and interest is therefore justified, sustainable and defensible. He referred to the case of UBN v. Ozigi (1994) 3 NWLR (pt. 333) 385.

Counsel also submitted that by CBN Statistical Bulletin, interest rates to be

charged by Banks are not static but vacillates from time to time at the whims of economic variables. He cited Owoniboys Tech Services Ltd vs. UBN Plc (2003) FWLR (Pt 180), 529 at 1562 A – C. He submitted that the Appellants did not protest against the terms but unqualifiedly accepted the terms and proceeded to sign the Loan Agreement and Deed of Mortgage

On the second complaint learned counsel, Ogbeni Biola Oyebanji, submitted that by the evidence of DW1 and the Loan Agreement in Exhibit 37, the servicing of the interest on the loan rather than the principal sum was devoid of fraud and same was in accordance with the Loan Agreement entered into by both parties and that by banking practices the principal sum is static over the period of agreement between parties, and interest chargeable continues to be added to the principal when a default to pay arises. He submitted that the Appellants consented to this term and willingly signed same, and are therefore bound.

On the contention that the Respondent did not disburse the entire N5m loan, Counsel argued that the evidence of PW1 and other relevant documents admitted as exhibits which were duly signed

by the Appellants, with no objection being raised to its admissibility, clearly show that the disbursement of the loan was in accordance with the terms agreed upon. He submitted that the remaining balance of N325,000.00, N424,000.00 and N5000 were not receivables by the Respondent but costs incurred on his behalf and of which he agreed to.

The Respondent’s Counsel argued further that the Appellants went outside their pleadings and their case when they alleged that disbursement will be made in two installments and accusing the Respondent of making 30 entries of fictitious disbursements totaling N75,039,818.07, only to make a u-turn to claim the sum of N89,584,281.94. He pointed out that Exhibit 47 itemized and chronologically stated the indebtedness of the Appellants to the Respondent which culminated in the sum of N89,584,281.94. He urged this Court to so hold and resolve issue one in favour of the Respondent.

Resolution of Issue 1
The first part of this issue complains about the interest rate applied to the facility, as being above the lending rate specified by CBN. Counsel contended that parties agreed to an interest rate of 20% at the

commencement of the loan but the Respondent unilaterally charged 21%.
It is trite law that parties to a contract are bound by the terms of the contract they willingly enter into. In determining their rights and obligations under the contract, the Courts and the parties must respect its sanctity and not allow a term on which there was no agreement to be read into the contract. Both the Courts and the parties lack the jurisdiction to add to or subtract from the terms therein. See Idufueko v. Pfizer Products Ltd (2014) 12 NWLR Part 1420 Page 96 at 115 Para C-D per Galadima JSC; Jeric (Nig.) Ltd v. Union Bank Nigeria PLC (2000) 15 NWLR Part 691Page 447 SC at 462-463 Para G-A per Kalgo JSC; Page 466 Para C per Kutigi JSC (as he then was).
In construing the terms of the contract, the documents in question are the Loan Offer letter, Exhibit 1, the Loan Agreement, Exhibit 37 and the Deed of Legal Mortgage, Exhibit 36.
In Exhibit 1, which is the Loan Offer dated 16th February, 1994, the interest rate on the loan given to the 2nd Appellant by the Respondent is stated as follows:
“INTEREST RATE: 5% per annum over and above the Bank’s Prime

lending rate currently 15% per annum which may be varied from time to time.”
Exhibit 1 also states on the 2nd page, under “Special Conditions”
“The Bank reserves the right to vary the rate of interest and such variation would be effective as if it has formed part of this offer”.
In the Loan Agreement, Exhibit 37, Clause 2 and 3 state:
“2. The Loan period is Nine Months
3. a. The Borrower shall pay to the Bank interest on such part of the loan as may from time to time be outstanding at the rate of 5% per annum payable from the date of each disbursement provided the bank may vary the rate of interest without prior notice and the new rate shall be deemed to form part of the agreement.
b. If any interest Agreement is required by this to be paid, shall not be paid by the day on which the same shall become payable then without prejudice to any or all of the rights and remedies accruing to the Bank consequent on such default and without rendering such interest other than overdue and immediately payable without demand interest so in arrears. Shall then henceforth itself bear interest at the rate of 5%

percent per annum or as may be varied from time to time computed from the date the same became payable to the date on which it is in fact paid and may at the sole discretion of the Lender be at any time capitalized and added for all purposes to the loan hereby secured and bear interest accordingly until actually paid and the interest charges thereon shall be secured in the same manner as the loan and overdue interest whether capitalized or not and all covenant provisions and remedies contained in this Agreement and all rules of Law and Equity in relation to the loan and the interest thereon shall equally apply to such overdue interest and to the interest thereon.”
Underline mine
In the Deed of Legal Mortgage, Exhibit 36, under the Testatum, Clause 1 states as follows:
“NOW THIS DEED WITNESSETH as follows:-
In consideration of the sum of N5,000,000.00 (five million Naira) only Paid by the Bank to the Borrower at the request of the Guarantor (the receipt whereof the Borrower and the payment whereof as afore-said the Guarantor hereby respectively acknowledge (sic)) the Borrower and the Guarantor jointly and severally covenant with

the Bank to pay to the Bank on 31/12/94 next the said sum of N5,000,000.00 (five million Naira) only.
With interest thereon from the date hereof at the rate of 5 percent per annum which may be varied from time to time and if the said sum (hereinafter called the principal money) or any part thereof shall not be paid on that day to pay interest to the Bank at the rate aforesaid (as well after as before any judgement) on the principal money or such part thereof as shall from time to time remain owing.”
Underlining Mine
It is clear from these clauses that even though the interest rate is stated to be 5% above the prime lending rate of 15% operative in the Bank, being 20%, the rate, as stated in these clauses may be varied.
By Clause 3(a) of the Loan Agreement, this variation may be without the prior notice of the 2nd Appellant. This, thus, is the agreement entered into between the parties and which, I hold is binding on them.
In the case of Owoniboys Tech. Serv Ltd. V. U.B.N. Ltd. (2003) 15 NWLR Part 844 Page 545 at 585 to 586 Para F-F, the Supreme Court, per Ejiwunmi JSC, quoted with approval their earlier decision in

U.B.N. v. Ozigi (1994) 3 NWLR (Pt.333) 385, where Adio JSC held:
“In other words, the words in a document must first be given their simple and ordinary meaning and under no circumstances may new or additional words be imported into the text unless the document would be by the absence of that which is imported impossible to understand. The presumption is that the parties have intended what they have in fact said so that their words must be construed as they stand. See Solicitor-General, Western Nigeria v. Adebonojo (1971) 1 All NLR 178.”
And further on at page 405, His Lordship said thus:-
“The provision of clause 3 of the mortgage agreements is clear and unambiguous. It is possible to understand and apply it as it stands. There was, therefore, no necessity to import new or additional words into it to require prior consultation with, or the giving of prior notice of increase in rates of interest on the loan in question to the respondent. Therefore, failure of the appellant to hold prior consultation with or to give prior notice to the respondent about increase in rates of interest on the loan could not, as the Court of Appeal held, result in the

nullification of the interest rates stipulated under the provision of clause 3 of the mortgage agreements.”
In the case cited by the Appellants’ Counsel of Union Bank Ltd v Sax (Nig) Ltd (1994) 8 NLR Part 361 Page 150, the Supreme Court, per Adio JSC, while holding that parties to an agreement are bound by their terms, for which extrinsic evidence is not admissible to add to, vary or contradict, observed that in the case before them, there was no evidence on the amount of the additional loan, the period of repayment and the rate of interest. In the absence of these fundamental terms, it was held that there can be no valid contract. That case is different from the instant one, where these terms were specifically stated, I hold.
The charge of 21% subsequent to the initial charge of 20% by the Respondent, can thus not be faulted, I hold, the parties having freely contracted as they did.
The Appellants’ complaint that the application of the repayments made by the Appellant were used by the Respondent to liquidate the interest accruing rather than the principal loan, is strange to me. I am not sure if what learned Counsel is advocating is

if there is a default in repayment of a loan, the issue of interest should not be addressed until the loan is repaid? Are the unpaid principal and the interest accruing not part of the indebtedness, I ask?
In any event, Clause 3(b) of the Loan Agreement, Exhibit 37, is an answer to this contention. It states thus:
“(b) If any interest required by this Agreement to be paid shall not be paid by the day on which the same shall become payable then without any prejudice to any or all of the rights and remedies accruing to the bank consequent on such default and without rendering such interest other than overdue and immediately payable without demand interest so in arrears, shall then or may be varied from time to time computed from the date the same became payable to the date on which it is in fact paid and may at the sole discretion of the Lender be at any time capitalized and added for all purposes to the loan hereby secured and bear interest accordingly until actually paid and the interest charged thereon shall be secured in the same manner as the loan and overdue interest whether capitalized or not and all covenants provisions and remedies

contained in and conferred in this Agreement and all rules of Law and Equity in relation to the loan and the interest thereon shall equally apply to such overdue and to the interest thereon.” (Underlining mine)
The capitalization and servicing of the interest as against the principal loan was thus a direct consequence of the outstanding on the loan repayment, I hold. It is clear from commercial transactions that while the principal remains constant, the interest accrues, according to how well the debt is being serviced. Thus, when any payment is made to defray the debt, it is the interest account that would be reduced by any payment made by the customer. It would make no economic sense or banking practice on loan repayment, to reduce the principal first, leaving the interest to increase, only to claim that the principal having been repaid, there is no responsibility to pay the interest, I hold.
Both parties, I note, have referred to the evidence of the witnesses in respect of these terms. However, as has been held in the cases cited above, where parties have reduced into writing the terms of their agreement, oral evidence is not material in

resolution of those terms that have been agreed upon, I hold.
The Appellants have again argued that the failure of the Respondent to disburse the N5 Million loan to the 2nd Appellant and instead disbursing only N4,668,900, prevented the proper execution of the business for which the facility was obtained. Also that the disbursement of the loan was to be in two installments.
The Respondent’s Counsel has however contended, in reliance on the unchallenged deposition on oath of DW1 at Page 695 of the Record of Appeal, that the balance disbursed to the 2nd Appellant was N4,910,673.50 and that the balance was disbursed to the Bank’s Solicitor for legal documentation of the loan.
As pointed out by the Appellants’ Counsel, the Loan Agreement, executed by the parties, Exhibit 37, shows the Schedule of Disbursement, as follows:
“1. Legal documentation- N325,000
2. Appraisal fees- N5,000
3. Purchase of product 60%- N2,547,600
4. Purchase of product 40%- N1,698,000
5. Contingencies- N424,000”
I also note, from Page 988 at Volume 2 of the Record of Appeal, that the 1st Appellant, Alhaji Hussain

Aliyu Matazi admitted under cross examination:
“It was part of the agreement that I will pay for the legal mortgage, insurance, management fees etc.”
A simple subtraction of the legal fees of N325,000 and appraisal fees of N5,000 from the loan amount of N5,000,000 leaves a balance of N4,670,000. This means that even if the 2nd Appellant were correct, which is disputed by the Respondent, it was paid a trifle higher than the sum of N4,668,900 he complained about.
However, as rightly contended by the Respondent’s Counsel, Ogbeni Oyebanji, averments on both this contention and the contention of the Appellants that more disbursements than the two that were supposed to have been made were made, and its detrimental effect on the purpose of the loan, were not pleaded. Similarly, the allegation made in the Appellants’ Brief of Arguments that over “30 entries of fictitious disbursements totaling N75,039,818.07” were made, was also not pleaded, with similarly no issues joined in respect thereof.
A party, I hold, is bound by his pleadings and cannot go outside his pleadings in canvassing issues. The Court and the

parties are bound by these pleadings and the issues joined and must not deviate there from. See Odom v. PDP (2015) 6 NWLR Part 1556 Page 527 at 565 Para D-E; (2015) All FWLR Part 773 Page 1962 at 1989 Para E, per M.D. Muhammad JSC; Fagbenro v. Arobadi (2006) 7 NWLR Part 978Page 172 SC at 194-195, Para H-B per Onnoghen JSC (as he then was).
It is rightly contended by the Respondent’s Counsel that submissions of Counsel cannot take the place of pleadings and evidence in support thereof. See Oyeyemi v Owoeye (2017) 12 NWLR Part 1580 Page 364 at 403 Para E-F per Bage JSC; Oforishe v Nigerian Gas Company Ltd (2018) 2 NWLR Part 1602 Page 35 at 57 Para D per Rhodes-Vivour JSC.
In totality on this issue, I hold that the application of the interest rate above the prime lending rate specified by the Central Bank of Nigeria (CBN), the application of the repayments made by the Appellant to liquidate the interest accruing rather than the principal loan and the other disbursements complained of are not fundamental breaches to the agreement. I thus resolve the 1st issue for determination against the Appellants.

The 2nd issue for determination is:<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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Whether the lower Court was right to have entered judgment in the sum of N89, 584, 281. 00k in favour of the Respondent based on Exhibit 47.
Learned Counsel to the Appellants, E.O. Isiramen Esq. submitted that in an attempt to prove its Counter Claim, the Respondent relied onExhibit 47, which is a computer generated statement of account without compliance with Section 84 of the Evidence Act 2011 which is mandatory. He cited Kubor v. Dickson (2013) 4 NWLR (pt 1345) 534 at 577 – 578 Para D – F. He argued that though the Appellants did not object to the admissibility of Exhibit 47, it is not within the competence of parties to a case to admit by consent or otherwise a document which by law, is inadmissible. He relied on Olukade v. Alade (1976) ISC 83. He urged the Court to expunge Exhibit 47 as same shows contradictory or conflicting figures or entries.

In his response, the learned counsel to the Respondent submitted that Exhibit 47 falls in the category of documents which are not inadmissible per se, but are admissible subject to certain conditions to be met, being a computer generated document. He cited the case of

A.G. Oyo vs. Fairlakes Hotels (No. 2) (1989) 5 NWLR (Pt 121) 255 at 273 B – C and submitted that where such document is sought to be admitted and no objection is registered against its admissibility, the Court would be right to admit the same in evidence even where the condition for its admissibility was not laid by the party seeking to tender it. He argued that Exhibit 47 was properly admitted as its admissibility was in substantial compliance with the provision of Section 84(8) of the Evidence Act. Non-compliance with Section 84(2) is clearly distinguishable from the facts of this case, he submitted. He urged the Court to so hold and resolve this issue in favour of the Respondent.

Exhibit 47 is the 2nd Appellant’s Statement of Account with the Respondent. It is computer generated.
The requirements of the Evidence Act with respect to the admission of computer- generated evidence is provided in Section 84 of the Evidence Act 2011, excerpts of which are as follow:
SECTION 84
(1) In any proceeding a statement contained in a document produced by a computer shall be admissible as evidence of any fact stated in it of which direct oral evidence

would be admissible, if it is shown that the conditions in subsection (2) of this section are satisfied in relation to the statement and computer in question.
(2) The conditions referred to in subsection (1) of this section are-
a. that the document containing the statement was produced by the computer during a period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period, whether for profit or not, by anybody, whether corporate or not, or by any individual;
b. that over that period there was regularly supplied to the computer in the ordinary course of those activities information of the kind contained in the statement or of the kind from which the information so contained is derived;
c. that throughout the material part of that period the computer was operating properly or, if not, that in any respect in which it was not operating properly or was out of operation during that part of that period was not such as to affect the production of the document or the accuracy of its contents; and
d. that the information contained in the statement

reproduces or is derived from information supplied to the computer in the ordinary course of those activities.
In the instant case, the statement of account was tendered in evidence by the Respondent’s witness, DW1, Aliyu A.A. Zurmi, at Page 995 of the Record. The witness introduced himself as a Senior Manager of the Respondent Bank.
Prior to tendering the document, he stated:
“DW1: In paragraph 23(i) of my deposition on oath and 47 the outstanding indebtedness of the plaintiff is N89,584,281.94. We have the statement of account. I can identify it through the name of the Bank; my signature. This is the statement. It is extracted from the clients loan’s ledger the original of which is kept in the Bank. It is prepared in the cause of the business of the Bank.
G. Yusuf – we seek to tender the statement in evidence.
E. O. ISIRAMEN – No objection.
COURT – Admitted and marked as Exhibit 47.”
The question is whether these responses complied with Section 84 above.
Section 84 (4) of the Evidence Act Supra stipulates what is required of a witness desiring to give evidence under this

section is required to do. It states:
“Section 84
(4) In any proceeding where it is desired to give a statement in evidence by virtue of this section a certificate-
a. identifying the document containing the statement and describing the manner in which it was produced;
b. giving such particulars of any device involved in the production of that document as may be appropriate for the purpose of showing that the document was produced by a computer.
(i) dealing with any of the matters to which the conditions mentioned in subsection (2) above relate; and purporting to be signed by a person occupying a responsible position in relation to the operation of the relevant device or the management of the relevant activities, as the case may be, shall be evidence of the matter stated in the certificate; and for the purpose of this subsection it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it.”
Exhibit 47, from the evidence of this witness, was signed by him. As a Senior Manager in the Bank, he satisfies the requirement of its production by a person occupying a

responsible position. The statement, from his evidence, was extracted from the Client’s Ledger account, the original of which is kept at the Bank. The document contains the stamp of the Bank. This, I hold, is substantial compliance with the requirements of Section 84 (4) of the Evidence Act. I believe this may have been why the Appellants’ Counsel did not object to its admission in the lower Court. It was also not an issue canvassed at the lower Court and no leave of this Court was obtained to argue it as a fresh issue. See Oforishe v Nigerian Gas Company Ltd (2018) 2 NWLR Part 1602 Page 35 at 57 Para F-G per Rhodes-Vivour JSC; Gwede v. INEC (2014) 18 NWLR Part 1438 Page 56 at 87 Para D-F per Onnoghen JSC (as he then was).
Indeed, nowhere, under cross examination, did the Appellants’ Counsel seek to impugn this document. It is thus too late in the day, I hold, to seek to invalidate this document, which, I hold, was properly received in evidence by the lower Court.
This case can by no stretch of imagination be compared with the case cited by the Respondent’s Counsel of Kubor v Dickson Supra, where the document was downloaded

from the internet and tendered from the Bar by Counsel, with no foundation laid, unlike the instant case where the document was tendered by a senior officer of the Bank who properly introduced the document and the admission of which statement was consented to by the opposing Counsel. I accordingly hold that Exhibit 47 was properly received by the Court.

The 2nd part of this issue is whether the lower Court was right to have entered judgment in the sum of N89, 584, 281. 00k in favour of the Respondent, based on this document.

Learned Counsel to the Appellant has contended that the Respondent cannot continue to charge interest on a facility which is a subject of litigation before a Court of competent jurisdiction. He relied on the case of Nuba Comm. Ltd v. NAL Mer Bank (2001) 16 NWLR (Pt. 740) 510 at 520 – 521 paras G – A, G – H, 522 paras C – D. He argued that as at 8th Dec. 1995 when the Respondent purportedly advertised the mortgaged property in a bid to exercise its power of sale, the Appellant’s debt stood at N6,348,479. That by his Writ issued on 21/4/1997 the issue of interest has been put before the Court for

adjudication. He stated that by an amended statement of defence, the Respondent introduced a counter claim of N17, 810, 861. 70 and continued to indiscriminately charge interest and subsequently thereto amended its counter claim to reflect the interest changed during the pendency of the case which stood at N89,584,281.00. as portrayed in Exhibit 47 where a document made during the pendency of the suit. He relied on Sec 83(3) of the Evidence Act and the case of High Grade Maritime Services Limited V First Bank of Nigeria Ltd (1991) 1 SC Part 11 Page 26, Nigeria Social Insurance Trust Fund Management Board v Klifco Nigeria ltd (2010) 4-7 SC (pt 11) 238.

He urged the Court to hold that the trial Court erred in entering judgment in favour of the Respondent in the sum of N89,584,281.00 an amount arrived at as a result of wrongful charge of interest.

In response, learned Counsel to the Respondent submitted that there were no issues at trial on whether a party can continue to charge interest during the pendency of the case and that there is no ground of appeal from which this issue was raised. Being a new issue, the necessary leave of this Court is

mandatory before same can be canvassed. He urged the Court to discountenance them. He cited Kalio v Kalio 752 SC 15. He also submitted that the issue of Exhibit 47 having been made during the pendency of this suit is a new issue raised having not been canvassed at trial.

Learned counsel cited the case of Hydro works Ltd v Rimi LG CA/K/248/2000 LPELR (2001) 5712 Per Salami JCA (as he then was) on whether the issue of application of the repayment is first to the repayment of the principal or the interest. He finally submitted that as long as the loan granted remains unpaid, the Respondent is entitled to continue to charge interest thereon as it is an integral part of the business of the Respondent to grant loans and is entitled to charge for the services, unless otherwise provided and proved. He urged the Court to dismiss this appeal and affirm the judgment of the lower count as being correct and unassailable.

The lower Court held, in dismissing the Appellants’ claim and granting the Counter Claim held::
“On the whole, I uphold the submission of Learned Counsel to the Defendant in its entirety.
Accordingly it is ordered as follows:-<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>

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The case of the Plaintiffs is hereby dismissed in its entirely.
The Counter-Claim of the Defendant is upheld and it is ordered as follows:
2. The Plaintiffs shall pay to the Defendant the sum of N84,584,281.00k with interest at 19% P.A. from 20/10/2014 till judgment and after judgment the interest at the rate of the Court until the entire judgment sum and cost is paid.
3. There is valid subsisting and binding legal mortgage between the Plaintiffs and the Defendant.
4. Under the said mortgage agreement dated 14/7/94 and registered as 56/56/79, the Plaintiffs having defaulted in the payment of the loan and having been served with the statutory demand notice, the power of sale contained in the said mortgage has risen and has become exercisable.
5. The Defendant is entitled to foreclose the said mortgage.
6. The Defendant is entitled to sell the mortgage properties in realization of the indebtedness by the Plaintiffs.”

Contrary to the submission of learned Respondent’s Counsel, as pointed out in the Appellants’ Reply Brief, the Appellants, by its Motion filed on 3/7/2020 sought and was granted leave by this

Court, at its sitting on 9/7/2020, to raise and argue a fresh issue, as ground 9 in its proposed Notice of Appeal. Ground 9 in the Amended Notice of Appeal filed on 3/7/2020 and deemed filed on 9/7/2020, complained of the continuous charge of interest on the Appellants’ account during the pendency of the suit. Under the “Particulars”, it was stated that the lower Court ought to have stopped the running of interest on the account at the initiation of the suit and to await the Court’s verdict. The objection of the learned Counsel to the Respondent is accordingly discountenanced.

NWLR Part 740 Page 510 at Pp. 520 -521 G-F as follows:
“Generally a claim before the Court is ascertained and when the claim is for a definite sum with interests particularly in banking cases, the expectation of the law is that the claims of the plaintiff having been placed before the Court as an independent arbiter to determine the usual calculation of interest will be as the Court in its judgment will determine. In other words the claimant will not continue to calculate the interest in his records and thereby be a judge in its own cause. It seems to me that once the case is filed in a Court of law, the bank’s calculation of interest on the agreed rate should be stayed and the matter left for determination by the Court according to the law in the matter before the Court…”
The learned Jurist then continued:
“Now the issue is this. Is the bank having filed a claim in Court entitled to continue to calculate the sum due, or claimed from the Court according to its own calculated interest in its office, or is the claimant entitled only to the sum claimed on the statement of claim as filed in the Court. As I recorded

above, unless the statement of the claim is amended before judgment, and evidence exists in Court on the claim, before it, a Court of law will not and should not award more than the sum stated on the statement of claim of the party claiming. A Court of law will look at the case before it to see whether the claim before it asks for interests on the principal sum up to the date of judgment.” Underline Mine
The second portion of this judgment above, as underlined, thus qualifies the general statement made by the learned jurist. What transpired in that case, as is apparent from the foregoing is that the Respondent Bank, in spite of submitting its Counterclaim in a stated amount and a determined interest, went behind its claim and sought judgment on “calculated interest in its office”.
The Statement of Claim in the instant case, having been amended before judgment, as advocated in that case, rendered the interest claimed properly before the Court, I hold and for which judgment was rightfully entered. I accordingly resolve the 2nd issue for determination against the Appellants.

The 3rd issue for determination is:
Whether the Appellants are liable to repay to the Respondent as full and final liquidation of the loan, a sum of more than N6, 125, 000. 00, the amount stated in the “Schedule of Repayments” of the Loan Agreement?

Appellant
The Appellants’ Counsel has submitted that parties are bound by their agreement and that repayment is to be in accordance with the Loan Agreement per the “Schedule of Repayments” attached and are to repay the sum of N6,125,000.00 in accordance with Exhibits 36 and 37. He argued that in Exhibit 37 no specific amount was stated as the installment and no date was stated therein for the payment of the entire N6,125,000.00 by installments. He cited the cases of Maryam v Idris (2000) FWLR (Pt23) p1237 and A.I. Inv. ltd v Afribank (Nig) Plc (2013)9 NWLR (Pt 1359) 380 P 408 – 409 Paros G-D. He urged the Court to resolve the issue in favour of the Appellants.

Respondent
In response to this argument, the learned counsel to Respondent has submitted that in Exhibit 37, the execution date is 16/2/1994 and the loan is for a period of Nine (9) months. That the sum of N6,125,000,00 stated in the schedule is

the sum that ought to be repaid by the Appellant if they had repaid the loan within the nine (9) months period. He further argued that the default of the Appellant in repaying the loan and interest triggered the consequence of the failure as stated in paragraph 3 (b) of Exhibit 37. Counsel argued that the proposition by the Appellant to pay N6,125,000.00 is not only unfair, unjust, inequitable but also condemnable as same is not in consonance with the terms and conditions of the loan as agreed by the parties.

Appellants’ Counsel, E.O. Isiramen Esq. in his Reply Brief of Arguments submitted that the offer of loan was not accepted on the same date of issuance 16/2/1994 but on 19/3/94, that with the three months grace period, the Respondent should have started charging interest on the loan from the 19/6/1995 and not from 14/6/1994 or 30/4/1994.

He further submitted that paragraph 3:19 of the Respondent’s Brief was contradicted by DW1 during cross examination when he testified that by Exhibit 36 4(7), the Deed of Legal Mortgage, the principal is to be paid first before the interest, admitting it violated the terms of the loan agreement by

using the Appellant’s repayments to service the interest elements instead of the principal loan.

DECISION
The Schedule of Repayments referred to by the Appellants’ Counsel is attached to Exhibit 37, the Loan Agreement, as follows:
1. “Schedule of Repayments” attached to Exhibit 37 is reproduced hereunder as follows:
SCHEDULE OF REPAYMENT
REPAYMENT (INSTALMENT) AMOUNT(N) REMARKS
DATE INTEREST PRINCIPAL TOTAL
1,125,000.00 5,000,000.00 6,125,000.00

However, as submitted by the Respondent’s Counsel, Clause 2 of this agreement states that “The Loan Period is Nine Months”.

This same agreement, as has been reproduced in the determination of Issue No. 1, states as follows:
“2. The Loan period is Nine Months
3a. The Borrower shall pay to the Bank interest on such part of the loan as may from time to time be outstanding at the rate of 5% per annum payable from the date of each disbursement provided the bank may vary the rate of interest without prior notice and the new rate shall be deem to form part of the agreement.
b. If any interest Agreement to required by

this be paid shall not be paid by the day on which the same shall become payable then without prejudice to any or all of the rights and remedies accruing to the Bank consequent on such default and without rendering such interest other than overdue and immediately payable without demand interest so in arrears. Shall then henceforth itself bear interest at the rate of 5% percent per annum or as may be varied from time to time computed from the date the same became payable to the date on which it is in fact paid and may at the sole discretion of the Lender be at any time capitalized and added for all purposes to the loan hereby secured and bear interest accordingly until actually paid and the interest charges thereon shall be secured in the same manner as the loan and overdue interest whether capitalized or not and all covenant provisions and remedies contained in this Agreement and all rules of Law and Equity in relation to the loan and the interest thereon shall equally apply to such overdue interest and to the interest thereon.” Underline Mine

Contrarily, the case of A.I. Inv. Ltd v. Afribank (Nig.) Plc (2013) 9 NWLR Part 1359 Page 380 Pp. 408 -409

Paras G-D cited by the Appellants’ Counsel in support of his contention actually works against him, as it was held in that case by Alagoa JSC reading the lead judgment, as follows:
“Parties are bound by the terms of an agreement freely entered into by them and the duty of a trial Court is simply to give effect to that agreement freely entered into by parties and not to make a new agreement for them. This is an age old legal principle – a notorious one for that matter and there is plethora of case law on that subject matter… In Nika Fishing Co. Ltd. v. Lavina Corporation (2008) 16 NWLR (Pt. 1114) 509 at p. 543 paras. B-C, the Supreme Court per Niki Tobi, (JSC), put the position this way;
‘It is the law that parties to an agreement retain the commercial freedom to determine their own terms. No other person, not even the Court can determine the terms of contract between parties thereto. The duty of the Court is to strictly interpret the terms of the agreement on its clear words.”

It is thus clear from the foregoing that the 2nd Appellant, having defaulted in repayment of the loan within the time specified,

rendered itself liable to repay both the principal and the interest that had accrued.

In response to the Appellants’ arguments that the repayment should have been addressed to the principal first, the dictum of the respected Salami JCA, (as he then was) in the case of Hydro Works Ltd V Rimi Local Govt. (2001) LPELR-5712 (CA); (2002) 1 NWLR Part 749 Page 564 is instructive, as follows:
“In computing interest upon which partial payments have been made, every payment is to be first applied to keep down the interest, but the interest is never allowed to form a part of the principal so as to carry interest.”
This is the custom in the banking sector, I hold. Any payment thus goes to service and to reduce the interest, the total sum outstanding thus being that as reflected in the Statement of Account, I hold.
I, indeed find it curious that the 2nd Appellant, rather than face the repayment of the loan obtained by him, supposed to have been repaid in nine months, pays a paltry sum, as testified by the Respondent, of only about N200,000.00 and yet expects to peg his indebtedness to a figure outstanding over twenty years ago.

I again resolve this issue for determination against the Appellants.

Having resolved all issues against the Appellants, this appeal fails and is accordingly dismissed. The judgment of the lower Court is consequently affirmed. The Appellants shall pay costs of Fifty Thousand Naira (N50,000.00) to the Respondent.

OBIETONBARA O. DANIEL-KALIO, J.C.A.: I have read the judgment of my lord OLUDOTUN ADEBOLA ADEFOPE-OKOJIE, JCA and I agree with my lord’s reasoning and conclusions leading to the dismissal of the appeal. Parties are bound by agreements they freely and willingly enter into and therefore the Appellants cannot succeed in this appeal. I however have some sympathy for the Appellants seeing the hefty amount of money now due to the Respondent as against the relatively small amount borrowed. Although I am not an economist and cannot pretend to be one, I strongly feel that the Government and the Central Bank of Nigeria need to look at interest rates. Could there be a direct link between high interest rates and non-performing loans; a direct link between high interest rates and a collapsed manufacturing sector and the

knock on effect of massive unemployment? If one considers the low interest rates in developed countries vis-a-vis the high interest rates in this country, one would be tempted to conclude that high interest rates are directly proportional to high incidents of poverty in the populace. I am merely thinking aloud. As regards the unflappable demands of the law, judgment goes to the Respondent. The appeal has no merit, and is dismissed. The judgment of the lower Court is affirmed.

SAIDU TANKO HUSSAINI, J.C.A.: I have read in draft the lead Judgment of my Lord, Oludotun Adebola Adefope- Okojie, JCA, wherein all three (3) issues earmarked for determination were all resolved against the Appellants.
I am in agreement with those findings and conclusion. The appeal necessarily fails and same is dismissed.

Appearances:

E.O. ISIRAMEN, ESQ., with him, IFEANYI CHUKWURAH, ESQ. and A. A. IBIYEYE ESQ. For Appellant(s)

BIOLA OYEBANJI, ESQ., with him, USMAN ABDULLAHI, ESQ. and H. I. OYEBANJI, ESQ. For Respondent(s)