UKPONGSON (NIG) CO. LTD & ANOR v. BOI (2022)

UKPONGSON (NIG) CO. LTD & ANOR v. BOI

(2022)LCN/16575(CA)

In The Court Of Appeal

(CALABAR JUDICIAL DIVISION)

On Friday, July 01, 2022

CA/C/138/2019

Before Our Lordships:

Raphael Chikwe Agbo Justice of the Court of Appeal

Muhammed Lawal Shuaibu Justice of the Court of Appeal

Balkisu Bello Aliyu Justice of the Court of Appeal

Between

1. UKPONGSON NIGERIA COMPANY LIMITED 2. ELDER SAMUEL UKPONG APPELANT(S)

And

BANK OF INDUSTRY LIMITED RESPONDENT(S)

RATIO

WHETHER OR NOT A MORTGAGEE CAN BE RESTRAINED IN EXERCISING HIS POWER OF FORECLOSURE WHERE THE MORTGAGOR HAS COMMENCED A REDEMPTION

THE POSITION OF LAW ON “SIMPLE INTEREST”

It is to be borne in mind that simple interest connotes interest paid only on the principal while compound interest is that interest which is calculated on the total on the principal plus accumulated unpaid interest. Where there is no express agreement, it is settled law that the Bank is entitled to charge compound interest on the basis that there is a custom to that effect or that the customer has impliedly consented where without protest he allows his account to be debited. See ADETORO V UNION BANK OF NIGERIA (2007) ALL FWLR (prt. 396) 590 and UNION BANK OF NIGERIA (2007) ALL FWLR (prt. 396) 590. PER SHUAIBU, J.C.A.

MUHAMMED LAWAL SHUAIBU, J.C.A. (Delivering the Leading Judgment): This appeal is against the judgment of the High Court of Akwa Ibom State, sitting at Ikot Ekpene Judicial Division, delivered on 7th February, 2019, wherein the plaintiffs’ claim was dismissed. The appellants as plaintiffs at the lower commenced Suit No. HT/16/2017 at the lower Court by a writ of summons and statement of claim filed on 9/3/2017 and claimed against the defendant now respondent as follows:-
1. A DECLARATION that the defendant breached the loan agreement with the plaintiffs and consequently, the plaintiffs are entitled to damages.
2. A DECLARATION that in the light of the existing dispute on the loan transaction, the defendant cannot invoke the powers to appoint any auctioneer for the plaintiffs’ company on the grounds that the plaintiffs have not paid the total loan sum.
3. A DECLARATION that the plaintiffs have paid in full the loan facility and even overpaid the defendant.
4. AN ORDER DIRECTING the defendant to render full account of her transaction in the loan agreement between the plaintiffs and itself.
5. AN ORDER DIRECTING an independent auditor to audit the loan account since from its inception till date.
6. AN ORDER compelling the defendant to refund to the plaintiffs any verified excess charges in the cause of the loan transaction.
7. AN ORDER RESTRAINING the defendant either by themselves, agent, privies, assigns, offers or executors from selling, disposing auctioning or creating receiver/managership in respect of the plaintiffs’ property.
8. N200,000.00 (Two Hundred Million Naira) general damages against the defendant for breach of contract.
9. Cost of action assess at N5,000,000.00 (Five Million Naira).

The respondent denied the appellants’ claim and after settlement and exchange of pleadings, the matter proceeded to trial where both parties called a witness each and tendered documentary evidence. At the end of the trial and in a considered judgment delivered on 7th February, 2019, Unwana J., dismissed the appellants’ claim on page 865 of the record of appeal thus:-
“The sum total of the foregoing is that the plaintiffs are not entitled to the reliefs sought. The lone issue for determination is accordingly resolved in the negative.
In the final analysis, I hold that the plaintiffs’ case lacks merit and is hereby dismissed with cost of N50,000.00 against the plaintiffs in favour of the defendant.”

Appellants were dissatisfied with this judgment and appealed to this Court on 8/2/2019. The notice of appeal contains six grounds of appeal located on pages 867-871
the record of appeal.

At the hearing of the appeal on 16/5/2022, learned appellants’ counsel Utibe Nwoko, Esq., adopted and relied on the appellants’ brief of argument filed on 10/3/2020 but deemed properly filed on 8/3/2021 and appellants’ reply brief of 27/10/2021. In the appellants’ brief, he formulated four issues for the determination of the appeal as follows:-
1. Whether from the totality of evidence presented by the parties, it will be correct to judge that the appellants are still indebted to the respondent?
2. Whether charging of interest by the respondent on the loan before disbursement and utilization of the loan did not amount to breach of the contract by the respondent?
3. Whether the demanding of the loan by the respondent within the moratorium did not amount to beach of the fundamental term of the contract by the respondent?
4. From the pleadings, evidence adduced and documents tendered, whether the facility was to attract compound interest instead of reduced balanced in line with Central Bank of Nigeria (CBN) Guidelines?
5. Whether from the evidence of the parties, it was established that the appellants took another loan of N2,700.000.00 (Two Million Seven Hundred Thousand Naira) when there was no express loan agreement?

Learned counsel for the respondent, Bassey B. Anwanane, Esq., also adopted and relied on the respondent’s brief of argument filed on 27/9/2021 but deemed as properly filed on 30/9/2021. He adopts appellants’ issues 1, 4 and 5 but also proffered argument on issues 2 and 3 respectively.

Before I take further step in this matter, may I restate the facts of the case giving rise to this appeal as encapsulated in the respondent’s brief. Sometimes in the year 2007, appellants through the 2nd appellant approached the respondent for credit facility to boost the business of the 1st appellant. As a critical pre-requisite of the disbursement of the loan, the appellants were required to source for, identify the manufacturer or supplier of the equipment or machinery they seek to acquire and to then furnish the respondent with the details.

Pursuant to the appellants’ application, the respondent initially agreed to grant them a loan facility in the initial principal sum of N15,067,000.00 (Fifteen Million, Sixty Seven Thousand Naira Only). The terms of the offer are set out in the offer letter of 6th August, 2007 (Exhibit D1) and in the deed of collateral mortgage (Exhibit D2). The primary loan was originally contracted for 42 months from the date of first disbursement and was inclusive of a 6 months moratorium during which the appellants were to pay interest on the disbursed loan but repayment of the principal to await for the period of moratorium.

Upon the request of the appellants, the loan was subsequently increased by an additional sum of N2,776,776.00 (Two Million, Seven Hundred and Seventy Six Thousand, Seven Hundred and Seventy Six Hundred Naira) in order to provide for the excess exposure on the letter of credit for the machinery, which exposure was occasioned by the exchange rate variation between the time the loan was first appraised and the time when the letter of credit was opened and funded. Thus, the additional sum of N2,776,776.00 brought the principal loan to N17,843,276.00 (Principal Loan) as evidence in letter of additional offer dated 12th June, 2009 (Exhibit D5 and acceptance through appellants’ Board resolution (Exhibit D6).

In the year 2010, applicants applied for and the respondent granted them separate facility in the principal sum of N7,000.000.00 (Seven Million Naira) for working Capital being totally distinct from the principal loan which had its own loan account and statement of account but was eventually liquidated before the commencement of litigation.

When the appellants defaulted with their scheduled of the restructured loan as contracted, and were indebted to the respondent for more than N20.6 Million and did not pay up their debt after several demands, respondent gave them notice that it was going to enforce the various securities it hold, and appointed an auctioneer, then appellants instituted an action at the lower Court.

Issue one:
This issue is whether the totality of evidence adduced at the trial still disclosed the appellants’ indebtedness to the respondent. The contention of the appellants was that they had already paid over N22,000,000.00 (Twenty-Two Million) to the respondent being payment of principal and interest as shown in Exhibit P17 and thus not indebted to the respondent as regards the terms and conditions in their agreement, Exhibit P2.

Learned appellants’ counsel submitted that the respondent has no knowledge of the status of the transaction with the appellants. And that the statement of account is not explicable as the respondent through its witness, DW1 could not ascertain the amount of interest paid in the statement of account nor the principal in the said statement of account.

He also submitted that there is no way the trial Court can infer anything less than what the appellants have established with Exhibit P17 series being an acknowledgements of payments of principals and interest adduced by the appellants. He referred to the cases of UZOR V D.F (NIG) LTD (2010) 15 NWLR (Prt.1217) 553 and OBULOR V OBORO (2001) 8 NWLR (Prt. 714) 25 to contend that speculation is not the duty of the Court or part of adjudiciary processes.

Counsel further submitted that by the Central Bank regulation, that bank interest should be charged only on reduced balance which was also contained in the offer letter, Exhibit P2. A Court is equally bound by the terms of any written contract entered into by the parties relying on BABATUNDE V B.O.N. LTD (2011) 18 NWLR (prt. 1279) 738 at 761.

Learned counsel for the respondent on the other hand, submitted that the only way in which the restructured loans can be said to have been liquidated is by showing 36 consecutive monthly installments of N557,494.39 each commencing 1st July, 2010 or other payments from that date aggregating to N20,069,798.06. The 2nd appellant (PW1) having admitted that they have not made these 36 monthly payments, it is obvious they did not and have not liquidated the loan.

Counsel contend that what the appellants did was to dump on the trial Court Exhibit P17 series which are various receipts’ purporting to be payment to the respondent. He further contend that apart from obvious lack of correlation between the pleadings their evidence and their tabulations, same do not answer to, the 36, equal and consective installment of N557,494.39 commencing on 1st July 2010. Furthermore, appellants have mixed up all the payment for upfront fees and bundled in all the payments that were made by them in regard to the working capital loan which was entirely distinct and separate from the primary loan/restructured loan in issue.
It was the respondent’s further submission that Exhibit D13 is the uncontroverted proof of the appellants’ indebtedness to the respondent and that same clearly shows that the appellants were owing substantial sums of money to the respondent at all relevant dates. And in the light of the respondent’s letter to the appellants, dated June 21, 2010, duly accepted by the appellants, admitted in evidence as Exhibit P6, it is the appellants as plaintiffs who have the burden of proving that they have fully liquidated the restructured loan, which they clearly have not.
Parties in this case are ad idem as regards execution of the term loan facility of N15,067,000.00 granted by the respondent to the appellants for the procurement of additional plant and machinery on conditions stated therein in Exhibit P2. Also not in contention was the grant of additional N2,776,776.00, consolidating the loan to N17,843,776.00 as evidenced in the respondent’s letter of offer dated 12th June, 2009 and the resolution of the appellants’ board accepting additional offer of term credits facility – Exhibit D5 and D6 respectively. It is significant to note that as a result of appellants’ default and vide respondent’s letter of 21st June, 2010 and at the instance of the appellants, the existing loan facility was restructured as follows:-
i. The capitalization of N2,226,022.59 representing the sum of accumulated interest arrears as at December 31st, 2009, projected interest from January till June 30, 2010 and legal fees payable. This will bring the total term loan to N20,069,798.06.
ii. Extention of the tenor of the term loan by nine months to four (4) years three (3) months as against the original approved tenor of three (3) years six (6) months.
iii. The deferment of the principal repayment from 1st October, 2009 to 1st of July, 2010.
iv. The payment of restructuring fee of 0.5% of the term loan in the sum of N89,218.88 to be capitalized.
v. The repayment of the consolidated term loan of N20,069,798.06 in Thirty-Six (36) equal and conjective monthly installments of N557,494.39 effective 1st July, 2010.
vi. The term and conditions of the consolidated loan remains the same as the previously approved loan.

The above represents the consensus freely reached by the parties herein. Where as in this case, the terms of a written contract are clear, effect must be given to it. Thus, it is not the function of the Court to re-write the contract for the parties. In the absence of fraud or misrepresentation, the parties are bound by its terms. In other words, neither the parties nor the Courts can read into an agreement what was never stated therein or intended. See LEWIS V U.B.A PLC (2016) 6 NWLR (Prt.1508) 329 and IDUFUEKO V PFIZER PRODUCTS LTD (2014) 12 NWLR (prt.1420) 96.

As stated earlier, appellants alleged that all the monies paid into the account of the respondent between 2007 which is N300,134.00 and 2008 which stood at N544,295.23 which are part of Exhibit P17 series before the utilization of the loan, were interest and charges outside the banking transactions. Appellants also alleged that the respondent breached the contract by not crediting the loan facility into the 1st appellant’s account or even allow the appellants to utilize the money by opening a letter of credit in favour of the appellants’ designated Malaysian Company.

Breach of contract is no more than a failure, without legal excuse, to perform any promise which forms an integral part of a contract. It is also connotes unequivocal and absolute refusal to perform an agreement. In ARE V OWOEYE (2014) LPELR – 41096 (CA), it was held that breach of fundamental terms occurs in a contract when a party fails to carry out the contract in its essential terms such a breach goes to the root of the contract.

It is settled that the primary onus of proof in civil cases lies on the plaintiff or claimant. In the present case, it was the appellants who asserts and must therefore prove through credible evidence that the respondent fundamentally breached the terms and conditions of both the initial loan facility – Exhibit P2 and the restructured facility – Exhibit D6. That being the position, the question is, did the appellants prove before the lower Court these alleged fundamental breaches?

In prove, appellants relied heavily on Exhibit P17 series, which are photocopies of bank tellers, manager’s cheques and receipts. Even though the appellants are not disputing the fact that the facility of N7,000,000.00 for working capital was separate and distinct, they nonetheless combined all the payment made to the respondent, inclusive of the working capital loan into one calculation. PW1 was emphatic at page 784 of the record that Exhibit 17 series represent all payments to the respondent in respect of all loans and working capital loans. That apart, in the demand notice, Exhibit P11, respondent on 12/01/2016 put the outstanding debt as N20,926,404.27 and in their response, Exhibit P12, appellants asserted that they had made some payments and hence not defaulting completely on their obligations to the respondent.

The law is that a mortgagee will not be restrained nor can his power of for closure be affected by the exercise of his power of sale thereby because the amount due is in dispute or the mortgagor objects to the manner in which the sale is being arranged or because the mortgagor has commenced a redemption action in Court. See INTERCITY BANK PLC V FEED & FOOD FARMS NIGERIA LTD (2001) 17 NWLR (prt.742) 347. Also in IHEKWOABA V A.C.B. (1998)10 NWLR (prt.571) 590, it was held that in order to stop the mortgagees power of sale of a mortgaged property, the amount owed must be paid in full.

I have held elsewhere in this judgment that the burden of proving the allegations of fundamental breaches of the contract is on the appellants. And that proof in law is a process by which the existence of facts is established to the satisfaction of the Court. In this case, the appellants having failed to prove overcharged interest on the loan facilities, the finding of the trial judge in that regard is unassailable. I resolved this issue against the appellants.

Issue two:
The appellants’ contention here is that the respondent compelled them to pay interest even when the loan was not utilized. Counsel submitted that Exhibits P2 and D1 being the nucleus to this case and nothing should runs contrary to the contents of the agreement executed by the parties therein. He contend that all monies paid into the account of the respondent prior to the utilization of the loan were interest and charges that have no basis in banking transaction.

On the part of the respondent, counsel chronicled events from the offer letter for the initial facility granted, including all the several correspondences regarding the terms and conditions of the letter of credit to the point when on 2nd February, 2009 when appellants authorized the respondent to bid for foreign currency to fund the importation to the letter of credit itself. The loan according to counsel was disbursed on 11th February, 2009 as shown in the statement of account, Exhibit D13. He therefore submitted that no interest was charged or paid before the disbursement. He referred to clauses 7 (a) and 10 (b) of Exhibit P2 to contend that there are obligations that the 1st appellant shall make certain payments, among them legal documentation fees and a commitment fee which are fees due before the disbursement.

It is instructive to note that interest refers to compensation permitted by law or agreed by the parties for the use or forbearance of borrowed money. And as a rule, parties make their own contract and intend thereby to be governed by the contract. The question is, did the respondent charged interest outside the ones agreed in the contract document? Counsel for the appellants has posited rightly that the loan agreement, Exhibit P2 is the nucleus as well as the foundation upon which their relationship revolves. It states clearly that there are fees payable prior to the disbursement of the loan and these includes, appraisal fees of N150,670.00 which is non-refundable. Commitment fee of N150,670.00 on the acceptance of the loan and legal’s fee, also prior to the disbursement of the loan. A careful perusal of the appellants’ tabulations in Exhibit P17B includes receipt for legal fees and thus reckoned as payment of interest/principal. Perhaps, the appellants are ignorant of the difference between interest and fees. While the latter connotes to payment charges for professional services, the former refers to compensation for the use of borrowed money. Therefore, I am of the view that the interest was neither charged nor paid before the loan was disbursed and that the appellants have offered no proof either.

This issue is also resolved against the appellants.

Issue three:
As in issue two above, the appellants are complaining of demand for payment before the expiration of the moratorium period and also before the loan sum was given to the appellants’ designated Malaysian Company. Learned counsel for the appellants contend that from Exhibits D5 and D6, the respondent had already demanded for repayment of the loan within the moratorium period. He submitted that documents tendered and admitted in Court are like words uttered and do speak for themselves. They remain permanent and indelible through ages. In effect, Exhibits 17A, P17A1, P17B, P17C, P17C1 and P17D, which all predates the moratorium period, do not require another proof.

The respondent’s contention on the other hand is that the respondent did not demand for repayment of the loan during moratorium. Even if it had done so (which was not conceeded) the appellants’ would not have suffered any loss or prejudice, by reason only that such a demand had been made.

Counsel submitted that the moratorium period is the part of the tenor of the loan during which interest accrues but repayment of principal does not commence. He contend that the date of first disbursement has been established by Exhibit D13, agreed by parties backed by other documentary evidence to be 11th February, 2009 when the letter of credit was funded. He submitted that the moratorium period ran from 11th February, 2009 to 11th August, 2009 during which period the appellants were to pay interest but not to repay the principal.

A moratorium is an authorization to a debtor permitting temporary suspension of payment. Thus, the repayment of the loan facility is delayed or deferred during moratorium period. Did the respondent demand repayment during moratorium period? To unveil that fact, reference must be made to the parties’ pleadings and evidence adduced before the trial Court. In paragraphs 26-30 of the statement of claim on pages 10-11 of the record, it avers:
26. The plaintiff avers that the 1st defendant (sic) owes the amount directly to the Malaysian Company in the year 2009 but the defendant started counting interest on the loan that was not assessed (sic) in the year 2007.
27. The plaintiffs aver that the 1st plaintiffs gave to the defendant a method machine works PROFORMA INVOICE and the defendant paid the sum of One Hundred and Eighty Thousand, Six Hundred and Eighty Dollars ($118,680). The plaintiffs hereby plead the PROFORMA INVOICE dated the 26th day of November, 2008 and shall rely on it during trial.
28. The plaintiffs aver that the defendant in the loan agreement had given a monetarium of six (6) months to the 1st plaintiff from July 2009 – January 2010. THE LOAN AGREEMENT including the MONETARIUM dated the 6th day of August, 2007 is hereby pleaded and shall be relied upon at trial.
29. The plaintiffs aver that the defendant from inception started breaching the agreement by charging interest when the money was not yet assed by the plaintiffs and by paying the loan facility directly to the method machine works in Malaysia.
30. The plaintiffs aver that the loan facility was entered into in the year 2009 and the delivering the money was done on the 14/8/2009 while the white partners from Malaysia came into Ikot Ekpene to install the machines in the year 2010 at the expense of the plaintiffs.

Reacting to the above, respondent in paragraph 17 of the statement of defence on pages 388-389 of the record averred thus:
17. In further refutation of the various falsehood misconceptions and misrepresentations in paragraphs 26, 27, 28 and 29 of the claim, the defendant states as follows:-
(a) The primary loan/contracted vide the offer letter of 6th August, 2007, had a tenor of three and a half years with a six months moratorium period, commencing from the date of first disbursement. The moratorium period is the part of the tenor of the loan during which interest accrues but repayment does not commence.
(b) Contrary to the false allegations of the plaintiffs’ interest was not charged on the loan in 2007. The defendant puts the plaintiffs to strict proof of their allegation. In fact, interest was not charged until the loan had been disbursed in 2007.
(c) The allegation of paying the loan facility directly to the Method Machine Works in Malaysia is false, mischievous and malicious. The defendant shall in this regard also fraud on the plaintiffs’ letter of January 26, 2009.
(d) The defendant did not breach any term of its agreement with the plaintiffs. The defendant shall found upon the Loan Agreement between parties.

It is abundantly clear, vide clause 4 of Exhibit P2 that the six (6) months moratorium commences from the date of first disbursement while the tenure of the loan facility is three and half (31/2)years inclusive of six (6) months moratorium period. Then, when was the date of the disbursement? Before arriving at that date, it is worthy to note that loan facility was restructured wherein the tenor of the loan was extended by nine months to four 4 years three (3) months as against the original approved tenor of three (3) years six (6) months. The repayment of principal was also deferred from 1st October, 2009 to 1st July, 2010. Thus, the repayment of the consolidated term of N20,069,798.06 in thirty-Six (36) equal and consecutive monthly installments of N557,494.39 effective 1st July, 2016.

The appellants’ contention was that in paragraph 2 (iii) of Exhibit D5 but mistakenly put as D6, the respondent had already demanded for repayment within the moratorium period. For ease of reference, the said respondent’s letter reads:
“The deferment of the principal repayment from July, 2010.” The above is plain and does not show that the respondent wrote to the appellants demanding such payment. Furthermore, the date of first disbursement was vividly stated in the statement of account, Exhibit D13 to be 11th February, 2009. This is in tandem with the evidence of the respondent that the loan was disbursed on 11th February, 2009 when the letter of credit was established and in his evidence PW1 did not controvert that assertion but merely said he did not know when the letters of credit was issued. I have earlier on found that the payments reflected in Exhibits P17A, P17A1 and P12B to be payments for appraised commitment and legal documentation fees respectively. And also the appellants having not substantiate their complaint of charges and/or demand for repayment during the moratorium period, this issue is also resolved against the appellants.

Issue four:
The contention of the appellants here is that the respondent charged compound interest on the loan facility in contravention of the Central Bank of Nigeria’s guideline. Counsel submitted that interest on facility can never be compounded and that the payment of over N22,000,000.00 (Twenty-Two Million Naira) should automatically reduced the principal and consequently, interest ought to be reduced in line with the concept of reduced balance.

In further argument, counsel submitted that even when the payments were not consistent but respondent had received the said amount of the agreed consective payment, as principal and interest and issued receipts to that effect, the appellants had certainly settled parts of the principal and interest and therefore the trial was wrong not have reckoned such payments and the bank’s statement of account, Exhibit D13 cannot ipso facto be a prove of the appellants’ liability. In aid, counsel relied on the authority in F.B.N V UWADA (2003) 12 NWLR (prt. 805) 485 at 504-506 to the effect that a claim of interest must be supported by the agreement.

In his response, counsel to the respondent contend firstly that this issue was neither pleaded nor canvassed at the trial. And being a fresh issue raised by the appellants for the first time in this appeal, and so raised without leave of Court, it is incompetent and cannot stand.

Secondly, counsel contend that the comment of the learned trial judge on page 860 of the record to the effect that “in computing their indebtedness, the plaintiffs failed to take cognizance of the fact that once there was a default in payment of interest, it become compounded as per clause 8 of Exhibit D1, the loan agreement” is simply a comment and did not form a ratio. He thus submitted that the question is whether the plaintiffs are indebted to the defendant and not whether the defendant charged simple or compound interest or not. He concluded that the unpleaded and unproven CBN guidelines do not regulate the respondent herein.

It is to be borne in mind that simple interest connotes interest paid only on the principal while compound interest is that interest which is calculated on the total on the principal plus accumulated unpaid interest. Where there is no express agreement, it is settled law that the Bank is entitled to charge compound interest on the basis that there is a custom to that effect or that the customer has impliedly consented where without protest he allows his account to be debited. See ADETORO V UNION BANK OF NIGERIA (2007) ALL FWLR (prt. 396) 590 and UNION BANK OF NIGERIA (2007) ALL FWLR (prt. 396) 590.

The respondent has contended and I agree with the contention that the issue of charging compound interest was neither pleaded nor canvassed at the trial and same being a fresh issue, the prior leave of this Court is imperative. It is definitely incompetent and liable to be struck out. Also having not pleaded and proved the purported CBN’s guidelines on chargeable interest, the appellants cannot be said to have discharged the burden of proving their said allegations. The issue is thus resolved against the appellants.

Issue five
The appellants’ complaint here is that they have never applied for any additional loan facility of N2,776,776.00 from the respondent and that there is no document evidencing the request as well as the grant of the said additional loan facility.

Counsel submitted that an agreement must be clear, direct and explicit and thus the additional loan agreement cannot be presumed between the appellants and respondent. He contend that there was a variation in the exchange rate which caused the Excess Exposure of N2,776,776.00 and that same does not ipso facto become a loan in the absence of offer and acceptance. He referred to OLADEMO V LAGOS BUILDING INO. CO., LTD (2011) ALL FWLR (prt.592) 1766 to the effect that banking transactions are strictly documentary and the terms of the transaction are explicitly stated.

On the part of the respondent, it was contended that there was a lapse between the loan was first appraised and the initial offer was made and when the letters of credit was open and funded. Thus, the proforma Invoice for the equipment Exhibit P1 was only obtained by the appellants on 20/11/2008 that is more than a year after Exhibit P2. The appellants then applied to the respondent on 2/12/2008 to open the letter of credit, Exhibit D8 which letter was thus opened and negotiated but then the exclusive rate had shifted from what it was in August, 2007 and the loan facility to N15,067.000.00 could no longer fund the transaction. Then on 2/2/2009, the appellants authorized the respondent to bid for foreign currency to fund the importation vide Exhibit D2A. It was then the appellants requested the respondent to increase the initial loan facility by the specific sum of N2,776,776.47 and same was granted to be used to make up the excess disbursement made to the company and letter of credit charges plus CBN Commission. The appellants not only accepted this additional facility but same was backed up by the Board resolution.

Counsel submitted that the appellant have totally failed to discharge the onus of proving their contention that there was no additional facility in the sum of N2,776,776.00 granted and accepted by them. He submitted further that the failure to cross-examine DW1 on a matter of such direct significance is a tacit acceptance of the truth of the witness relying on FIRST BANK OF NIGERIA PLC V M.O. NWADIALU & SONS LTD (2010) 18 NWLR (Prt. 1543)1 at 34-35.

The question here relates to the validity of the additional loan. I have carefully and meticulously perused the various communications between the appellants and the respondent on the additional loan facilities of N2,776,766.00 which the appellants are denying its very existence. It is beyond dispute that vide a letter of 12th June, 2009, the respondent has approved the appellants’ request for an additional loan of N2,776,776.00 to be used to make up for the excess disbursement made by the company and L/C charges plus CBN commission. Thus, the consolidated loan became N17,843,776.00. The 2nd appellant duly accepted the offer of additional loan facility by appending his signature on 24/7/2009 and witnessed by one Victoria Ukpong, Secretary. Furthermore, on the same 24/7/2009, the 1st appellant’s board made a resolution sanctioning the acceptance of the additional offer of term facility in the sum of N2,776,776.00. What more, the respondent restructured the existing term loan facility and thereby extending the tenor by nine months and also deferred payment of principal from 1st October, 2009 to 1st July, 2010. Again, Elder Okon S. Ukpong, the 2nd appellant signed as the managing director of 1st appellant and witnessed by Happiness Iniobong, Secretary.

In its pleadings, respondent in paragraph 12 of the statement specifically averred this additional loan facility thus:-
12. The facility aforesaid was later increased at the instance of the plaintiffs and with the express agreement of all the parties hereto, by the grant of an additional loan facility in the sum of N2,776,776.00 (Two Million, Seven Hundred and Seventy-Six Thousand, Seven Hundred and Seventy-Six Naira only). The purpose of the additional loan was to provide for the excess exposure on the letter of credit for the machinery. The excess exposure was itself occasioned by exchange rate fluctuation or variation between the time that the loan application was first appraised, and the rate at the time the letter of credit was actually opened and funded. The principal loan sum was thus increased from N15,067,000.00 to N17,843,776.00 (Seventeen Million, Eight Hundred and Forty-Three Thousand, Seven Hundred and Seventy-Six Naira only) (“the primary loan”). The defendant will found on its letter of offer of the additional loan facility, duly accepted by the plaintiffs, dated 12th July, 2009, and on the Board Resolution of the 1st plaintiff dated 24th July, 2009, presented by the plaintiffs to the defendant. NOTICE IS HEREBY GIVEN to the plaintiff to produce the original of the aforesaid letter of 12th June 2009.”

When asked under cross-examination on page 792, pw1 who incidentally was the signatory to all the correspondences, he was simply evasive.

Now having fully accepted the restructuring of the primary loan incorporating the additional facility of N2,776,776.00, the appellants are clearly caught by the doctrine of estoppel. In OYEROGBA & ANOR V OLAOPA (1998) LPELR-2878, the apex Court has held that Estoppel in nature is a conclusion creating a disability whereby a party is precluded from contending or proving in any legal proceedings that a fact is otherwise that it has been made to appear giving rise to that disability. Appellants are estopped through their deeds from denying the additional loan of N2,776,776.00.

Finally, it is absurd for a counsel to argue as the appellants’ counsel did in this case, that the absence of separate formally drawn up document title “agreement” means that there is no valid or binding contract. The appellants have also failed in this enterprise and therefore this issue is also resolved against the appellant.

On the whole, the appeal is bereft of any merit and it is hereby dismissed with costs which I assessed at N200,000.00 against the appellant and in favour of the respondent.

RAPHAEL CHIKWE AGBO, J.C.A.: I have read in advance the judgment delivered by my learned brother Shuaibu, JCA and I agree with both the reasoning and conclusion that the appeal be dismissed. I abide by the consequential orders contained in the lead judgment.

BALKISU BELLO ALIYU, J.C.A.: I read before today the draft of the judgment prepared by my learned brother, M. L. Shuaibu, JCA. I am at one with his Lordship’s reasoning and conclusion reached which accord with my view of the appeal also. I am grateful to adopt his reasoning and conclusion as mine to join him in dismissing this appeal for lack of merit. I abide by the order of costs made in the lead judgment.