UMARU v. PARIS & ANOR
(2021)LCN/15791(CA)
In The Court Of Appeal
(YOLA JUDICIAL DIVISION)
On Wednesday, December 15, 2021
CA/YL/119/2019
Before Our Lordships
Chidi Nwaoma Uwa Justice of the Court of Appeal
Bitrus Gyarazama Sanga Justice of the Court of Appeal
Jamilu Yammama Tukur Justice of the Court of Appeal
Between
HAMISU UMARU APPELANT(S)
And
1. SANUSI PARIS 2. LUKA MEMORIAL STORES LTD RESPONDENT(S)
RATIO
WHETHER OR NOT CONTRACTS ARE LEGALLY ENFORCEABLE AGREEMENTS
Generally, contracts are legally enforceable agreements, with the implication that where one party to a contract is of the opinion that the other party is not fulfilling its obligations created under the contract, the offended party can approach the Court to seek enforcement of the contract or receive monetary compensation in the form of damages. There are however several exceptions to the rule that contracts are enforceable agreements, which include where there were vitiating elements during the formulation of the contract, such as where one of the parties lacks capacity, there is no valuable consideration, there was no intention to enter into legal relationship, one of the parties was coerced or unduly influenced into entering the relationship, and so on.
See: ORIENT BANK (NIG) PLC VS. BILANTE LTD (1997) 8 NWLR (PT.515) 37 @ 76 paragraphs C- E; HYUNDAI HEAVY INDUSTRIES CO. (NIG) LTD v. ASECHEMIE & ORS (2020) LPELR-50584(CA); and ADEWUYI & ANOR v. MRS OIL (NIG) PLC (2019) LPELR-48210(CA).
One major exception, which the Appellant herein has hinged his appeal on is the trite principle of law to the effect that where a contract is illegal in nature, because it violates a specific statute or provision of law, which not only prohibits but also prescribes sanctions for making of such contract, such contract cannot be enforced by the Courts as the Courts are creation of law saddled with the duty of upholding the law not aiding its breach.
The Supreme Court gave a succinct definition of an illegal contract in the case of PAN BISBILDER (NIG) LTD v. FBN LTD (2000) LPELR-2900(SC) (Pp 14-14 Paras D-F) Per GODFREY OKAY ACHIKE, JSC, thus:
“Halsbury’s Laws of England (3rd ed. vol 8 p. 126 para. 218 states that “A contract is illegal where the subject-matter of the promise is illegal or where the consideration or any part of it is illegal.” Without getting unduly enmeshed in the controversy regarding the definition or classification of that term, it will be enough to say that contracts which are prohibited by statute or at common law, coupled with provisions for sanction (such as fine or imprisonment) in the event of its contravention are said to be illegal.”
The Apex Court also gave a brief summation of the effect of an illegal contract in the case of FASEL SERVICES LTD & ANOR v. NPA & ANOR (2009) LPELR-1245(SC) (Pp 21 Para C) Per MAHMUD MOHAMMED, JSC, thus:
“The position of the law is that where a statute declares a contract or transaction between parties not only void but also imposes a penalty for violation, that contract or transaction is illegal ab initio.”
See: I.G.N (NIG) LTD & ANOR v. PEDMAR (NIG) LTD & ANOR (2013) LPELR-41064(CA); OLOYEDE & ORS v. ROBERTS & ANOR (2015) LPELR-41001(CA) and CCII MARKETING (NIG) LTD V. UTIM (2021) LPELR-55654(CA). PER TUKUR, J.C.A.
WHETHER OR NOT PARTIES ARE BOUND BY THEIR CONTRACTS
It is trite that where parties have reduced the terms of their agreement into writing, both the parties and the Court are bound thereby and it is not the duty of the Court to import extrinsic meaning into such agreements. This position of the law was reiterated by this Court in the case of UBA PLC v. NEW TARZAN MOTORS LTD (2016) LPELR-41016(CA) (Pp 14-15 Paras F-C) Per MASSOUD ABDULRAHMAN OREDOLA, JCA thus:
“Let me state, that I subscribe to the submission of the learned counsel to the appellant on the fact that where parties who are desirous of entering a business relationship have reduced the terms of relationship into writing, they would be bound by such terms. Also, if the wordings of the agreement are plain and unambiguous, Courts are generally bound to interpret the agreement literally, giving effect to the terms already agreed upon by the parties. This is moreso, because it is not the business of Courts to write or make new agreement/contract for the parties. See Owoniboys Tech. Services Ltd. v. U. B. N. Ltd. (2003) 15 NWLR (Pt. 844) 545; (2003) LPELR SC 2854.”
See: F. K. CONSTRUCTION LTD & ANOR v. NDIC & ANOR (2013) LPELR-20827(CA); OGUNNIYI v. HON MINISTER OF FCT & ANOR (2014) LPELR-23164(CA); and MGT SCIENCE CENTRE LTD & ANOR v. FBN PLC & ANOR (2017) LPELR-51572(CA)
As the agreement binding the parties is written, clear and has no provision for interest, I find that the lower Court was right to have held that the contract did not contravene the provisions of the Adamawa State’s law on money lending. Issue one is therefore resolved against the Appellant. PER TUKUR, J.C.A.
WHETHER OR NOT THE COURT CAN MAKE AN ORDER THAT AFFECTS A PERSON WHO IS NOT A PARTY TO THE CASE BEFORE IT
It is highly desirable that every person whose interest would be directly affected by the decision of a Court, to be a party to that case, because a Court or Tribunal has no power to make an order which affects the interest of any person or persons who is or are not parties to the case or dispute before it. Where such order is made, it will not be binding on such parties, and is also liable to be set aside at the instance of such parties.
See: PDP v. INEC & ORS (2011) LPELR-8831(CA).
In line with the above, Rules of Court, including that of the lower Court have provisions for the joinder of a party who ought to be part of a matter as there can be no proper adjudication without that party’s presence, either because the judgment would be made for or against him or it would be practically impossible to determine the matter without that party’s presence. This type of party is what the law refers to as necessary parties. The Supreme Court in the case of BWACHA v. IKENYA & ORS (2011) LPELR-8105(SC) (Pp 22-22 Paras D-G) Per MAHMUD MOHAMMED, JSC, defined necessary parties thus:
“As to who are necessary parties, this Court explained in the case of Kalu v. Uzor (2004) 12 NWLR (Pt. 886) 1 at 33 as follows- “Necessary parties are those who are not only interested in the subject matter of the proceedings but also who in their absence, the proceedings could not be fairly dealt with. In other words, the question to be settled in the action between the existing parties must be a question which cannot be properly settled, unless they are parties to the action instituted by the Plaintiffs.”
See: BUHARI & ANOR v. YUSUF & ANOR (2003) LPELR-812(SC); APC v. PDP & ORS (2015) LPELR-24349(CA); and LAMIDO & ORS v. PDP & ORS (2021) LPELR-55828(CA). PER TUKUR, J.C.A.
THE POSITION OF LAW REGARDING THE DETERMINATION OF CIVIL SUITS
The law regarding the determination of civil suits is clear and to the effect that a party who is desirous of getting an order or relief from a Court of law has the duty of proving the existence of facts which establishes his entitlement to the grant of that order or relief. The foregoing is what is referred to as burden of proof in the law of evidence. See: UNION BANK v. RAVIH ABDUL & CO. LTD (2018) LPELR-46333(SC); and ADIGHIJE V. NWAOGU & ORS (2010) LPELR-4941(CA).
The burden of proof in civil cases is discharged on the balance of probabilities or the preponderance of evidence. What this means is that once a party has successfully proven the existence of facts that support his claim to a satisfactory degree, the burden of proving that those facts do not exist shifts to the other party. This process repeats itself till the end of trial where the trial Judge has the duty of placing every relevant piece of evidence of both parties on an imaginary scale and decide in favour of whomsoever the weight preponderates towards. See: Sections 131-134 of the Evidence Act ILORI & ORS v. ISHOLA & ANOR (2018) LPELR-44063(SC); PRESENTATION NATIONAL HIGH SCHOOL & ORS v. OGBEBOR (2018) LPELR-44784(CA); and MARINE GLOBAL SERVICES LTD v. SOUTHERN IJAW LOCAL GOVT. COUNCIL (2018) LPELR-44175(CA). PER TUKUR, J.C.A.
JAMILU YAMMAMA TUKUR, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the High Court of Adamawa State in SUIT NO: ADSY/9/2015 delivered on 17th October, 2018 by Honourable Justice Helen Hammajoda Nuhu, wherein the Court gave judgment in favour of the 1st Respondent.
The material facts of the case leading to this appeal is that the 1st Respondent acting on the belief that the Appellant and the 2nd Respondent were liable to pay him the sum of N5,000,000.00, instituted an action before the lower Court and claimed jointly and severally, via amended statement of claim dated 18th January, 2017: the sum of N5,000,000.00 (Five million naira) being the principal sum of the credit due from the Appellant and 2nd Respondent to the 1st Respondent under a personal guarantee executed by the Appellant to secure the repayment of the sum of N5,000,000.00 credit granted by the 1st Respondent to John James, who collected the money on behalf of the 2nd Respondent, the repayment of which John James defaulted, and costs of the suit.
Relevant processes were exchanged, with the Appellant filing statement of defence and accompanying processes. The 2nd Respondent filed a further amended statement of defence and counter-claim dated 18th January, 2017, via which it sought:
1. For the Plaintiff and the 1st Defendant to pay to the 2nd Defendant the sum of N7,200,000.00 which John James has illegally paid to the Plaintiff from 2nd Defendant’s account for loan it did not collect.
OR ALTERNATIVELY
2. If the Plaintiff is able to establish any connection of the 2nd Defendant with the N5,000,000.00 loan granted to Luka Memorial Stores through John James, then our claim is for the sum of N2,200,000.00 being the excess repayment of the N5,000,000.00 collected as loan.
3. The cost of the suit.
The matter subsequently devolved into a full trial, and after trial had been concluded, in a judgment delivered on 19th October, 2021, the trial Judge held that the Appellant is liable on the 1st Respondent’s claim and ordered the payment of the amount as prayed. The lower Court refused to grant the 2nd Respondent’s counter-claim.
Dissatisfied, the Appellant appealed the judgment via Amended Notice of Appeal dated 7th October, 2019 and filed on 11th October, 2019, but deemed properly filed on 14th October, 2019 with 8 grounds of appeal.
The Appellant’s Brief of Argument is dated 20th February, 2020, and filed on 24th February, 2020, but deemed properly filed on 6th October, 2020.
Appellant’s counsel formulated four issues for determination to wit:
1. Whether the contract of money lending between the 1st and 2nd Respondent is enforceable against the Appellant (Grounds 5 and 6)
2. Whether the 1st Respondent had proved his case as required by law and therefore entitled to judgment (Grounds 2 and 3)
3. Whether there were proper/necessary parties before the lower Court to properly arouse its jurisdiction to adjudicate as it did. (Grounds 4 and 7)
4. Whether the perverse findings of the trial High Court were not a violent infraction of the extant provisions of the Money Lender Law Cap 89, Laws of Adamawa State, 1997 (Grounds 1 and 8)
The 1st Respondent’s Brief of Argument is dated and filed on 12th October, 2020. 1st Respondent’s counsel formulated three issues for determination to wit:
1. Whether the loan agreement dated 24th October, 2014 [Exhibit “A”] by which the 1st Respondent lent the sum of N5,000,000.00 (Five Million Naira) to John James as additional capital for Luka Memorial Stores which was witnessed and guaranteed by the Appellant is illegal and therefore unenforceable against the Appellant as Guarantor (Grounds 1, 5, 6 and 8)
2. Whether the 1st Respondent’s suit was improperly constituted and liable to be struck out for lack of jurisdiction on account of non-joinder of necessary parties? (Grounds 4 & 7)
3. Whether the learned trial was justified in entering judgment for the 1st Respondent against the Appellant on the basis of the pleadings and evidence that was before the Court? (Grounds 2 and 3)
A careful examination of the issues distilled by both parties reveals that they are substantially the same and cover the controversies presented by the facts of this appeal. I therefore adopt the issues as formulated by the 1st Respondent as the issues for determination in this appeal, for convenience’s sake.
ISSUE ONE:
Whether the loan agreement dated 24th October, 2014 [Exhibit “A”] by which the 1st Respondent lent the sum of N5,000,000.00 (Five Million Naira) to John James as additional capital for Luka Memorial Stores which was witnessed and guaranteed by the Appellant is illegal and therefore unenforceable against the Appellant as Guarantor (Grounds 1, 5, 6 and 8)
Learned counsel for the Appellant argued that from the Appellant’s evidence at page 434 of the records, there was no legally recognizable contract between the Appellant and the 1st Respondent.
He referred to the cases of Best Nig Ltd v. Blackwood Hodge (Nig) Ltd ALL FWLR (Pt.573) P.1955 at 1988 paras A-C; and University of Calabar v. Socilets Worlds Ltd (2014) ALL FWLR (Pt.743) P.1947 at 1988.
Learned counsel also argued that from the evidence before the lower Court, it is clear that the agreement grounding the action is illegal and unenforceable, because the 1st Respondent acted as a Money Lender when he issued a loan of N5,000,000.00 and collected interest of N300,000.00 monthly from 2012 to 2015, which is a violation of the extant provisions of the Money Lender Law Cap 89 Laws of Adamawa State 1997.
He relied on: Sections 2, 3 and 5 of the Money Lender Law Cap 89 Laws of Adamawa State 1997; Ajaokuta Steel Company Ltd & 2 Ors v. Corporate Insurers Ltd (2004) 16 NWLR (Pt.899) P.369 at 374-375 Ratios 8 & 10; Nwankwo v. Nzeribe (2004) 13 NWLR (Pt.890) P.422 at 425 Ratio 3; and Batalha v. West Construction Company Ltd (2001) 18 NWLR (Pt.744) P.93 at 100 Ratio 5.
On the other hand, learned counsel for the 1st Respondent argued that the agreement dated 24th October, 2014, by which the 1st Respondent granted the loan sum to John James as additional capital for Luka Memorial Stores which was witnessed and guaranteed by the Appellant, was lawful and enforceable against the Appellant because there is no feature in the agreement which makes it illegal under the Money Lenders Law of Adamawa State Cap 89 laws of Adamawa State 1997.
Counsel submitted that the agreement should be interpreted as it is, in line with the settled position of the law on where the terms of an agreement has been reduced into writing, without importation of terms like interest which was not expressly stated therein.
He referred to the cases of Archbishop Olubunmi Okogie & Ors v. Mrs Margaret Epoyun (2010) 17 WRN 132 Ratio 5 @ 153 lines 40-45; and Union Bank of Nigeria Ltd & Anor v. Benjamin Nwaokolo (1995) 4 SCNJ 93 Ratio 6 @ 107.
RESOLUTION OF ISSUE ONE
Generally, contracts are legally enforceable agreements, with the implication that where one party to a contract is of the opinion that the other party is not fulfilling its obligations created under the contract, the offended party can approach the Court to seek enforcement of the contract or receive monetary compensation in the form of damages. There are however several exceptions to the rule that contracts are enforceable agreements, which include where there were vitiating elements during the formulation of the contract, such as where one of the parties lacks capacity, there is no valuable consideration, there was no intention to enter into legal relationship, one of the parties was coerced or unduly influenced into entering the relationship, and so on.
See: ORIENT BANK (NIG) PLC VS. BILANTE LTD (1997) 8 NWLR (PT.515) 37 @ 76 paragraphs C- E; HYUNDAI HEAVY INDUSTRIES CO. (NIG) LTD v. ASECHEMIE & ORS (2020) LPELR-50584(CA); and ADEWUYI & ANOR v. MRS OIL (NIG) PLC (2019) LPELR-48210(CA).
One major exception, which the Appellant herein has hinged his appeal on is the trite principle of law to the effect that where a contract is illegal in nature, because it violates a specific statute or provision of law, which not only prohibits but also prescribes sanctions for making of such contract, such contract cannot be enforced by the Courts as the Courts are creation of law saddled with the duty of upholding the law not aiding its breach.
The Supreme Court gave a succinct definition of an illegal contract in the case of PAN BISBILDER (NIG) LTD v. FBN LTD (2000) LPELR-2900(SC) (Pp 14-14 Paras D-F) Per GODFREY OKAY ACHIKE, JSC, thus:
“Halsbury’s Laws of England (3rd ed. vol 8 p. 126 para. 218 states that “A contract is illegal where the subject-matter of the promise is illegal or where the consideration or any part of it is illegal.” Without getting unduly enmeshed in the controversy regarding the definition or classification of that term, it will be enough to say that contracts which are prohibited by statute or at common law, coupled with provisions for sanction (such as fine or imprisonment) in the event of its contravention are said to be illegal.”
The Apex Court also gave a brief summation of the effect of an illegal contract in the case of FASEL SERVICES LTD & ANOR v. NPA & ANOR (2009) LPELR-1245(SC) (Pp 21 Para C) Per MAHMUD MOHAMMED, JSC, thus:
“The position of the law is that where a statute declares a contract or transaction between parties not only void but also imposes a penalty for violation, that contract or transaction is illegal ab initio.”
See: I.G.N (NIG) LTD & ANOR v. PEDMAR (NIG) LTD & ANOR (2013) LPELR-41064(CA); OLOYEDE & ORS v. ROBERTS & ANOR (2015) LPELR-41001(CA) and CCII MARKETING (NIG) LTD V. UTIM (2021) LPELR-55654(CA).
The pertinent question at this juncture therefore is whether the loan agreement between the parties, tendered and admitted as Exhibit A is illegal in nature. The law which Appellant’s counsel has used as the basis for his assertion that the agreement is illegal is the Money Lenders Law of Adamawa State CAP 89 Laws of Adamawa State. There is no gainsaying the fact that the law specifically provides in Section 3 that any person except in the case of some exemptions expressly stated in the law, who lends money at interest or who lends a sum of money in consideration of a larger sum being paid shall be presumed to be a money lender until the contrary is proved, and in Section 5 prohibits acting as a money lender without the appropriate license, with penalty prescribed for breach.
The summation of the above is that lending money for interest in Adamawa State, without a Money Lender’s license is illegal. This is not a strange provision and this will not avail the Appellant as he failed at trial and before this Court, to show how the loan agreement which the Appellant guaranteed amounts to an illegal contract by virtue of breach of the provisions of the law governing money lending in Adamawa State.
It is trite that where parties have reduced the terms of their agreement into writing, both the parties and the Court are bound thereby and it is not the duty of the Court to import extrinsic meaning into such agreements. This position of the law was reiterated by this Court in the case of UBA PLC v. NEW TARZAN MOTORS LTD (2016) LPELR-41016(CA) (Pp 14-15 Paras F-C) Per MASSOUD ABDULRAHMAN OREDOLA, JCA thus:
“Let me state, that I subscribe to the submission of the learned counsel to the appellant on the fact that where parties who are desirous of entering a business relationship have reduced the terms of relationship into writing, they would be bound by such terms. Also, if the wordings of the agreement are plain and unambiguous, Courts are generally bound to interpret the agreement literally, giving effect to the terms already agreed upon by the parties. This is moreso, because it is not the business of Courts to write or make new agreement/contract for the parties. See Owoniboys Tech. Services Ltd. v. U. B. N. Ltd. (2003) 15 NWLR (Pt. 844) 545; (2003) LPELR SC 2854.”
See: F. K. CONSTRUCTION LTD & ANOR v. NDIC & ANOR (2013) LPELR-20827(CA); OGUNNIYI v. HON MINISTER OF FCT & ANOR (2014) LPELR-23164(CA); and MGT SCIENCE CENTRE LTD & ANOR v. FBN PLC & ANOR (2017) LPELR-51572(CA)
As the agreement binding the parties is written, clear and has no provision for interest, I find that the lower Court was right to have held that the contract did not contravene the provisions of the Adamawa State’s law on money lending. Issue one is therefore resolved against the Appellant.
ISSUE TWO:
WHETHER THE 1ST RESPONDENT’S SUIT WAS IMPROPERLY CONSTITUTED AND LIABLE TO BE STRUCK OUT FOR LACK OF JURISDICTION ON ACCOUNT OF NON-JOINDER OF NECESSARY PARTIES? (GROUNDS 4 & 7)
Learned counsel for the Appellant argued that the 1st Respondent’s failure to join John James, the Director of Luka Memorial Stores, who signed the loan agreement and collected the money on behalf of Luka Memorial Stores, meant that the lower Court lacked jurisdiction to hear the matter for failure to have necessary parties before it, and that even if non-joinder of a necessary party may at times be seen as a procedural irregularity which does not affect the competence or jurisdiction of the Court, in this instance, it vitiated the proceedings and judgment of the lower Court because it resulted in a miscarriage of justice against the Appellant.
He relied on: ADC v. Yahaya Bello (2017) 1 NWLR (Pt1545) P.112 at 116 Ratio 1 & 4; Oyeyemi v. Owoeye (2017) 12 NWLR Pt.1580 P.364 Q 372 Ratio 5; and Agbekoni v. Kareem (2008) ALL FWLR (Pt.406) 1970 at 1988, paras D & E.
Counsel submitted that the 1st Respondent’s action which culminated in this appeal did not disclose any reasonable cause of action against the Appellant, especially as the 1st Respondent left out the real Debtor in the person of John James.
He referred to the cases of Iweka v. SCOA (2000) 7 NWLR Pt.664 P.325 at 328 Ratio 1; and Williams v. Williams (2008) 10 NWLR Pt.1095 P.364 at 371 Ratios 5 & 6.
On the other hand, learned counsel for the 1st Respondent submitted that the Appellant’s arguments with regards to the effect of the non-joinder of John James should be discountenanced by this Court, as the law is that no matter shall be defeated by reason of mis-joinder or non-joinder of parties and that the Appellant ought not to complain about the non-joinder of James at this stage, because the Appellant failed to apply for the joinder of James as a party before the lower Court, but called him as a Witness.
He relied on: Order 13 Rule 16 of the Adamawa State High Court Civil Procedure Rules 2013; Peenok Investment Ltd v. Hotel Presidential (1982) 12 SC 17; Chief Emmanuel Bello v. INEC (2010) 19 WRN 1 Ratio 5 @ 35 lines 47-50; Nigerian Engineering Works Ltd v. Denap Ltd & Anor (2002) 2 WRN 1; and Green v. Green (1987) 3 NWLR (Pt.61) 480.
Counsel also submitted that in an action to recover debt from a Guarantor, like in the case that led to this appeal, where the principal Debtor has defaulted in payment, the Creditor can proceed against the Guarantor alone to enforce the payment of the debt without joining the principal Debtor.
RESOLUTION OF ISSUE TWO
It is highly desirable that every person whose interest would be directly affected by the decision of a Court, to be a party to that case, because a Court or Tribunal has no power to make an order which affects the interest of any person or persons who is or are not parties to the case or dispute before it. Where such order is made, it will not be binding on such parties, and is also liable to be set aside at the instance of such parties.
See: PDP v. INEC & ORS (2011) LPELR-8831(CA).
In line with the above, Rules of Court, including that of the lower Court have provisions for the joinder of a party who ought to be part of a matter as there can be no proper adjudication without that party’s presence, either because the judgment would be made for or against him or it would be practically impossible to determine the matter without that party’s presence. This type of party is what the law refers to as necessary parties. The Supreme Court in the case of BWACHA v. IKENYA & ORS (2011) LPELR-8105(SC) (Pp 22-22 Paras D-G) Per MAHMUD MOHAMMED, JSC, defined necessary parties thus:
“As to who are necessary parties, this Court explained in the case of Kalu v. Uzor (2004) 12 NWLR (Pt. 886) 1 at 33 as follows- “Necessary parties are those who are not only interested in the subject matter of the proceedings but also who in their absence, the proceedings could not be fairly dealt with. In other words, the question to be settled in the action between the existing parties must be a question which cannot be properly settled, unless they are parties to the action instituted by the Plaintiffs.”
See: BUHARI & ANOR v. YUSUF & ANOR (2003) LPELR-812(SC); APC v. PDP & ORS (2015) LPELR-24349(CA); and LAMIDO & ORS v. PDP & ORS (2021) LPELR-55828(CA).
Before delving into the consequence, if any of failure to join a necessary party to an action, the question of whether John James who signed the agreement as collecting on behalf of the main Debtor, that is the 2nd Respondent, is a necessary party to the action before the lower Court and the answer is in the negative. In an action for recovery of debt against a Guarantor of a debt, the necessary parties are the Creditor and the Guarantor. The principal Debtor, which in any case, is the 2nd Respondent and not John James, is not a necessary party, but is at best a desirable party.
The Apex Court in the case of AFRICAN INSURANCE DEVELOPMENT CORPORATION. v. NLNG LTD (2000) LPELR-210(SC) (Pp 15-16 Paras D-C), Per EMMANUEL OLAYINKA AYOOLA, JSC, detailed when and how a Creditor may sue the Guarantor of a debt thus:
“The principle is now well established that the right of action against a guarantor arises on a default by the principal debtor and not on a finding of liability against such debtor. The law is well stated in Andrews & Millet, Law of Guarantees, 1st edn. at pages 162-163 thus: “The fact that the obligations of the guarantor arise only when the principal has defaulted in his obligations to the creditor does not mean that the creditor has to demand payment from the principal or from the surety, or give notice to the surety, before the creditor can proceed against the surety. Nor does he have to commence proceedings against the principal, whether criminal or civil, unless there is an express term in the contract requiring him to do so.”
See: CHAMI v. UBA PLC (2010) LPELR-841(SC); OKAFOR v. EMENOBI & ANOR (2020) LPELR-51897(CA); and MUTUAL BENEFIT ASSURANCE PLC v. ACCESS BANK PLC (2021) LPELR-52746(CA).
In addition to the above, it is settled law that no proceedings shall be defeated by reason of mis-joinder or non-joinder of parties, and the Court may deal with the matter in controversy as far as regards the rights and interest of the parties actually before the Court. Thus even if John James ought to have been joined as a Party, which by the provisions of the law is clearly not the case, the failure of the lower Court to join him would not nullify the decision.
See: AP & ORS v. GOV OF KWARA STATE & ORS (2009) LPELR-3584(CA).
As a result of the above analysis, this issue is also resolved against the Appellant.
ISSUE THREE:
WHETHER THE LEARNED TRIAL WAS JUSTIFIED IN ENTERING JUDGMENT FOR THE 1ST RESPONDENT AGAINST THE APPELLANT ON THE BASIS OF THE PLEADINGS AND EVIDENCE THAT WAS BEFORE THE COURT? (GROUNDS 2 AND 3)<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”></br<>
Learned counsel for the 1st Respondent argued that from the state of the pleadings exchanged between the parties and the uncontradicted testimony of the 1st Respondent, coupled with Exhibit A, that is the loan agreement, the 1st Respondent was able to prove his entitlement to the sum of N5,000,000.00 from the Appellant, being the sum guaranteed by the Appellant and which was not repaid as agreed.
RESOLUTION OF ISSUE THREE
The law regarding the determination of civil suits is clear and to the effect that a party who is desirous of getting an order or relief from a Court of law has the duty of proving the existence of facts which establishes his entitlement to the grant of that order or relief. The foregoing is what is referred to as burden of proof in the law of evidence. See: UNION BANK v. RAVIH ABDUL & CO. LTD (2018) LPELR-46333(SC); and ADIGHIJE V. NWAOGU & ORS (2010) LPELR-4941(CA).
The burden of proof in civil cases is discharged on the balance of probabilities or the preponderance of evidence. What this means is that once a party has successfully proven the existence of facts that support his claim to a satisfactory degree, the burden of proving that those facts do not exist shifts to the other party. This process repeats itself till the end of trial where the trial Judge has the duty of placing every relevant piece of evidence of both parties on an imaginary scale and decide in favour of whomsoever the weight preponderates towards. See: Sections 131-134 of the Evidence Act ILORI & ORS v. ISHOLA & ANOR (2018) LPELR-44063(SC); PRESENTATION NATIONAL HIGH SCHOOL & ORS v. OGBEBOR (2018) LPELR-44784(CA); and MARINE GLOBAL SERVICES LTD v. SOUTHERN IJAW LOCAL GOVT. COUNCIL (2018) LPELR-44175(CA).
A careful examination of the facts and evidence of the case leading to this appeal, coupled with the decision of the lower Court reveals that the learned trial Judge properly evaluated the evidence before him and arrived at the correct decision.
See: AKINBADE & ANOR v. BABATUNDE & ORS (2017) LPELR-43463(SC), (Pp. 40-41, Paras. E-B); MARCATHY & ANOR V. TOPE & ORS (2011) LPELR-9107(CA); and ONI v. JOHNSON (2015) LPELR-24545(CA).
Exhibit A, coupled with the 1st Respondent’s testimony is of a nature to establish the Appellant’s liability to the tune of N5,000,000.00 as claimed. The position of the law on documentary evidence, to the effect that same being permanent in form is more reliable than oral evidence and a document which is tendered in Court is the best proof of the contents of such document.
See: IKPEAZU v. OGAH & ORS (2016) LPELR-40843(CA); AVZAT INTL LTD & ANOR v. ECOBANK (NIG) LTD (2018) LPELR-44851(CA); and BAKARI v. OGUNDIPE & ORS (2020) LPELR-49571(SC).
The Appellant having agreed to guarantee the sum loaned to the 2nd Respondent by the 1st Respondent cannot run away from his obligations as agreements are meant to be honoured and the Court will enforce valid contracts. See: A.G RIVERS STATE v. A.G AKWA IBOM STATE & ANOR (2011) LPELR-633(SC); and WILLIAMS v. WILLIAMS & ORS (2014) LPELR-22642(CA).
In light of the above, this third and final issue is also resolved against the Appellant.
The implication of the resolution of all the issues in this appeal against the Appellant is that the appeal is devoid of merit and is consequently dismissed.
CROSS APPEAL
The 2nd Respondent in the main appeal, as Cross-Appellant filed a Notice of Cross-Appeal dated 16th October, 2019 and filed on 17th October, 2019, with a single ground of appeal.
The Cross Appellant’s Brief of Argument is dated and filed on 23rd June, 2021, with a Reply Brief dated and filed on 16th September, 2021.
Cross Appellant’s counsel distilled a sole issue for determination thus:
Whether the trial Court which upheld the 2nd Defendant/Cross-Appellant`s Counter-claim in its judgment was right to have not ordered for the repayment of money claimed in the Counter claim on the basis that one John James was not as a party.
The 1st Respondent in the main appeal as 1st Cross Respondent herein, filed a Brief of Argument dated and filed on 22nd July, 2021. 1st Cross Respondent’s counsel also distilled a sole issue for determination to wit:
Whether the learned trial Judge was justified in dismissing the counter-claim of the Cross-Appellant in view of the pleadings and the evidence that was adduced before the trial Court in respect thereof?
A careful examination of the issues raised by both counsel reveals that they both seek to resolve the issue of:
Whether the learned trial Judge was right to have refused to grant the order contained in the Cross Appellant`s counter claim.
Learned counsel for the Cross Appellant submitted that the evidence of John James under cross-examination established the fact that the 1st Cross Respondent collected N300,000.00 monthly as interest from the 2nd Defendant’s account through John James from December 2012 to January 2015, an act which was unlawful as the loan agreement didn’t provide for interest, which was corroborated by the 1st Cross Respondent’s admission that he collected a total sum of N3,000,000.00 as interest on the money he had loaned to John James on behalf of Luka Memorial Stores, as seen in page 244 paragraph 19 of the record, which admission requires no further proof.
He referred to the cases of Mozie & Ors v. Mbamalu & Ors 1 (2006) 12 SEM (Pt.1) 306 at 317; Olubode v. Oyesina (1977) 5 SC 79; and Balogun v. Labiran (1988) 3 NWLR (Pt.80) 66.
Counsel also argued that the lower Court was wrong to have refused to make an order for repayment of the illegal interest charged on the grounds that John James was not joined as a party, because the 1st Cross Respondent ought not to benefit from his unlawful act and John James is not a necessary party to the counter-claim, as the Cross Appellant’s counter-claim was against the 1st Cross Respondent and not John James. He further argued that assuming John James was a necessary party, failure to join a necessary party in a proceeding would not render the proceedings a nullity.
He relied on: Nigerian Engineering Works Ltd v. Denap Ltd & Anor (2002) 2 WRN; Bwacha v. Ikenya & Ors (2011) 3 NWLR (Pt.1235) 610 at 626; and Bello v. INEC (2010) ALL FWLR (Pt.526) 397 at 424.
On the other hand, learned counsel for 1st Cross Respondent argued that the Cross Appellant failed to discharge the burden of proof, on the balance of probabilities, as the interest which it claimed before the lower Court, based on the allegation that the 1st Cross Respondent received the sum of N300,000.00 every month as interest for a period of 24 months from December, 2012, is practically impossible, as the loan agreement was entered into on 24th October, 2014.
He relied on the cases of Akio Abey & Ors v. Chief Alhaji Ibrahim (1999) 12 SCNJ 234 at 252; and Chief Clement Obijiaku v. J.B. Onuha Offiah (1995) 7 SCNJ 142 @ 153.
Counsel also submitted that the failure of the Cross Appellant to tender its statement of account in evidence to prove the outflow of the N300,000.00 monthly interest as alleged, meant that said allegation was not properly established and the lower Court was justified in dismissing the Cross Appellant’s counter-claim.
In the reply brief, learned counsel for the Cross Appellant made the following submissions:
i. That based on the admission of John James and Hamisu Umaru (2nd Cross Respondent) the loan was established and required no further proof.
ii. That the 1st Cross Respondent misconceived the judgment of the trial Court, as the Court did not dismiss the Cross Appellant’s counter-claim as submitted by the 1st Cross Respondent, rather the Court upheld the counter-claim, but refused to order for repayment of the money claimed by the Cross Appellant as found in page 468 of the record.
iii. That the loan as shown by the evidence of Hamisu Umar started in 2012 and N900,000.00 interest was paid in advance to the 1st cross Respondent.
iv. That it is the interest that is tainted with illegality, not the whole agreement and the Cross Appellant should not suffer the adverse effect of such illegality.
RESOLUTION OF THE ISSUE
A counter-claim is the Defendant’s claim against the Plaintiff or Claimant. The defendant has a choice of either coming by a counter-claim or instituting a fresh action also called cross-action. A counter-claim is an independent action as the striking out of the plaintiff’s claim will not affect the counter-claim and the Counter-Claimant is expected to prove his counter-claim just as a regular Plaintiff is.
The Supreme Court in the case of OROJA & ORS v. ADENIYI & ORS (2017) LPELR-41985(SC) (Pp 11-13 Paras E-B) Per MARY UKAEGO PETER-ODILI, JSC, gave an apt exposition on the nature of a counter-claim thus:
“There is a rich case law on the meaning and purport of a counter-claim and I shall have recourse to a few in aid at this point in time. See Effiom v Ironbar (2000) 1 NWLR (Pt. 678) 341 where it was held thus- “A counter-claim is an independent action and it needs not relate to or be in anyway connected with the plaintiffs’ claim or raise out of the same transaction. It is not even analogous to the plaintiff’s claim. It need not be an action of the same nature as the original claim. A counterclaim is to be treated for all purposes for which justice requires it to be treated as an independent action.” See also the case of Okonkwo v. C. C. B. (2003) FWLR (Pt.154) 457 at 508, the nature of a counter-claim had been clearly spelt out as follows:- “Counter-claim though related to the principal action is a separate and independent action and our adjectival Law requires that it must be filed separately. The separate and independent nature of a counter claim is borne out from the fact that it allows the defendant to maintain an action against the plaintiff as profitably as in a separate suit. It is a weapon of defence which enables the defendant to enforce a claim against the plaintiff as effectually as an independent action. As a matter of law a counter claim is a cross-action with its separate pleadings, judgments and costs.”
See: AKPAN v. UDOINWANG & ORS (2020) LPELR-51069(CA); and ABUGU & ANOR v. OWHONDA (2021) LPELR-54683(CA).
The Cross Appellant herein who was Counter-Claimant before the lower Court is of the view that its counter-claim before the lower Court ought to have been granted, but that is not the true position of things, as contrary to the submissions of its counsel, the Cross-Appellant at trial failed to establish its entitlement to said orders by proving on the balance of probabilities that interest was deducted from its account in the sum of N300,000.00 per month, in line with the principles of burden of proof in civil cases as already dealt with in the main appeal.
See: Sections 132 and 133 of the Evidence Act 2011; EKWEOZOR & ORS v. REG. TRUSTEES OF THE SAVIOURS APOSTOLIC CHURCH OF NIG (2020) LPELR-49568(SC); OKOYE & ORS v. NWANKWO (2014) LPELR-23172(SC); and INYANG v. CCECC (2020) LPELR-49694(CA).
The main plank upon which the Cross Appellant has based its assertion that it proved its entitlement to interest is the putative admission by the 1st Cross Respondent herein, but a careful examination of the facts and evidence before the lower Court reveals that this is not the case, as it was the 2nd Cross Respondent’s witness and the 2nd Cross Respondent who testified that interest was charged and deducted from the Cross Appellant’s account, which cannot be held to constitute admission on the part of the 1st Cross Respondent that would do away with the requirement of proof.
Section 123 of the Evidence Act 2011 provides thus:
No fact needs to be proved in any civil proceeding which the parties to the proceeding or their agents agree to admit at the hearing. or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule or pleading in force at the time they are deemed to have admitted by their pleadings:
Provided that the Court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions.
This Court gave a guide on the specie of admission of facts which would establish those facts without the need for further proof, in the case of MOUSSALLATI & ORS v. KNIGHT FRANK ESTATE AGENCY (2017) LPELR-42893(CA) (Pp 23-26 Paras E-B), Per YARGATA BYENCHIT NIMPAR, JCA thus:
“A judgment can be entered on admission but the kind of admission that will bind the parties must be clear, unequivocal and total. Admission is not a game of chance. It is not subject to speculation or conjecture. It is a statement orally made or in writing suggesting a clear and unequivocal inference as to any fact in issue or relevant fact unfavorable to the conclusion contended by the person in whom or on whose behalf the statement is made, see ORJI V DORJI TEXTILES MILL (NIG) LTD (2009) 12 SCNJ 251 and TAIWO V ADEGBORO (2011) 5 SCNJ 125 where the Apex Court reiterated the principle and held that: “Judicial admissions are conclusive. That is to say that where a party agrees to a fact in issue, it is no longer necessary to prove that fact. In effect, after an admission, no further dispute on the fact admitted should be entertained by the Court. This is the strongest proof of the fact in issue.” However, the Court in ANANSON FARMS V NAL MERCHANT BANK (1994) 3 NWLR (PT.331) 241 at 257 held that it is not every admission that can qualify as basis for judgment, the admission that can ground a judgment is the admission that must be unequivocal and must directly touch on or relate to the reliefs sought in the matter.”
See: FUTMINA & ORS v. OLUTAYO (2017) LPELR-43827(SC); BARAU & ORS v. CONSOLIDATED TIN MINES LTD & ORS (2019) LPELR-46806(CA); and ANYALEWECHI v. LUFTHANSA GERMAN AIRLINES (2021) LPELR-55213(CA).
I also agree with the position taken up by the 1st Cross Respondent’s counsel to the effect that the best evidence to prove monthly deduction from an account is to produce a bank statement which would reveal all credit and debit for the given period. Counsel is at liberty to conduct their case as they wish and no two counsel would have the same strategy, however, the law of evidence requires a party to prove its case by calling the best evidence available as failure to do so may result in failure to prove the set of facts it is relying on to establish its claim.
See: EZEMBA V. IBENEME & ANOR (2004) LPELR-1205(SC); and PDP & ANOR v. INEC & ORS (2008) LPELR-8597(CA).
In light of the above the sole issue in the cross appeal is resolved against the Cross Appellant and the cross appeal is consequently dismissed.
In summation I find the appeal and cross appeal to be devoid of any merit and consequently hereby dismissed.
The judgment of the lower Court delivered on 17th October, 2018 in Suit No. ADSY/9/2015 is affirmed.
Parties to bear their respective costs.
CHIDI NWAOMA UWA, J.C.A.: I read in advance, the judgment delivered by my learned brother JAMILU YAMMAMA TUKUR, JCA. My learned brother has adequately resolved the issues that arose in the appeal. For the sake of emphasis, I would add a few words. With the main appeal, particularly issue one, the Supreme Court in AWOJUGBAGBE LIGHT INDUSTRIES LTD. VS. CHINUKWE (1995) 44 NWLR (PT. 390) PG 390 SC AT PAGE 426 PARAS A-C his lordship Onu, JSC held that:
“It is morally despicable and inequitable for the party, after obtaining a ban and utilizing it to turn around and allege that the agreement is null and void.”
See, also ADETUNJI V. AGBOJO (1997) 1 NWLR (PT. 484) PAGE 05 AT 718. PARA B per lge, JCA. In the present appeal, the learned counsel to the Appellant argued that the agreement between the parties was illegal and unenforceable but, it is unambiguously clear that from the contents of Exhibit “A” which was signed by both parties and in fact, the Appellant who stood as the guarantor of the said facility benefitted from same. It was wrong for the Appellant to have turned around to make out that the agreement was illegal and unenforceable. In DALEK NIGERIA LTD. V. OIL MINERAL PRODUCING AREAS DEVELOPMENT COMMISSION (OMPADEC) (2007) 7 NWLR (PT. 1033) PAGE 441 PARAS A-B his lordship Onu, JSC held that:
“Where the words of a contract or agreement are clear, the operative words in it should be given their simple and ordinary grammatical meaning. The Court cannot legally or properly read into the agreement, terms on which the parties have not agreed.”
It is not in doubt that the appellant benefitted from the said loan, the agreement is binding and it is my view that it did not violate any law.
With issue 2, I am in agreement with my learned brother’s position that no proceeding shall be defeated by reason of mis-joinder or non-joinder of parties. It is the correct proposition of the law that where an action is properly constituted, with a Plaintiff having legal capacity to bring the action, a defendant the capacity to defend, a claim with a cause of action against the defendant, and the action has satisfied all pre-conditions for instituting the action, the fact that a necessary party to the action has not been joined, is not fatal to the action and will not render the action a nullity. See, AYORINDE VS. ONI (2000) 2 S.C.N.J. 21-22.<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”>
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In sum, the appeal lacks merit and same is accordingly dismissed. I affirm the judgment delivered on the 17th October, 2017 by the trial Court in Suit NO. ADSY/9/2015 in respect of the main appeal.
With the cross-appeal, it is trite and a long established principle of law that he who asserts shall prove in line with the provisions of Sections 133 and 134 of the Evidence Act, 2011 and the best way for the Cross appellant to have established the payment of the monthly interest of N300,000.00 (Three Hundred Thousand Naira Only) was through the bank statement which was never obtained or presented in evidence before the trial Court. The decision of the trial Court is unimpeachable. The Cross appeal is devoid of merit and it is accordingly dismissed.
BITRUS GYARAZAMA SANGA, J.C.A.: I read a draft of the judgment just delivered by my learned brother J. Y. TUKUR, JCA in the lead judgment. My learned brother painstakingly considered the submission by learned counsel in the main appeal and the Cross appeal and reached the inevitable conclusion that both the appeal and the cross appeal by the 2nd Respondent in the main appeal lacks merit and dismissed same. I concurred with the said findings in the lead judgment and adopt same as mine. For reasons adduced in the lead judgment I also dismiss the main appeal and the cross-appeal. I make no order as to cost.
Appearances:
Etim Akpan Esq. hoding brief for M. E. Goro Esq. For Appellant(s)
F. R. Baiyo Esq. holding brief for Roland C. Emem Esq. for the 1st the Respondent.
Evaristus Paul Esq. for the 2nd Respondent. For Respondent(s)
