UNION BANK OF NIGERIA PLC v. MUSHEED DAWODU
In The Court of Appeal of Nigeria
On Monday, the 18th day of November, 2002
GEORGE ADESOLA OGUNTADE Justice of The Court of Appeal of Nigeria
SULEIMAN GALADIMA Justice of The Court of Appeal of Nigeria
PIUS OLAYIWOLA ADEREMI Justice of The Court of Appeal of Nigeria
UNION BANK OF NIGERIA PLC – Appellant(s)
MUSHEED DAWODU – Respondent(s)
OGUNTADE, J.C.A. (Delivering the Leading Judgment): In suit No. LD/1212/87 at the Lagos High Court, the appellant (hereinafter referred to as the plaintiff) brought a suit against the respondent (hereinafter called the defendant) claiming as follows:-
(a) The sum of N109,725.55 being the balance payable by the defendant to the plaintiff at the close of business on 1/09/87 due on the loan/overdraft facilities extended to the defendant by the plaintiff at the defendant’s request.
(b) Interest at the rate of 21% per annum at monthly rate on the sum of N109,725.55 from 1/09/87 to the date of judgment and thereafter at 6% per annum from date of judgment until the whole debt is liquidated plus costs thereof.
The plaintiff filed an amended statement of claim. The defendant filed a statement of defence and counter-claim. The counter-claim was stated thus:-
(a) For the sum of N160,821.42. (b) An account of what number of shares if any have been received by way of scripts or bonds in respect of the share certificates deposited with the plaintiff for and on account of the defendant.
(c) An account of what dividends since 1980, if any have been received by the plaintiff in respect of those certificates for and on behalf of the defendant. (d) A return to the defendant of the said share certificates plus additions and dividends found due. (e) Further interest on the sum of (a) at the current banking rate from February, 1988 until final disposition of this case.
The plaintiff on 29-4-88 filed a process captioned ‘Reply to the defendant’s statement of defence and counter-claim.’ The suit was heard by Adeniji, J. The plaintiff called one witness. The defendant testified. He called one witness. In the judgment delivered on 27-2-97, plaintiff’s case was dismissed. The defendant’s counter- claim for N160,821.42 was granted with interest as claimed. The plaintiff was dissatisfied with the judgment of the lower court. It brought an appeal against it on three grounds of appeal. Although the appellant raised three grounds of appeal, it in its brief strangely raised five issues for determination, namely:
1.Whether or not the trial Judge was right to hold that the plaintiff/appellant did not file a reply/defence in reaction to the defendant/respondent’s statement of defence/counter-claim and had thus accordingly admitted the counter-claim of the defendant/respondent?.
2.Whether or not it was proper and right for the learned trial Judge to raise suo motu a fundamental point or issue not raised by any of the parties and proceeded to determine same in the final judgment without hearing parties on same?. 3. Whether or not the approach adopted by the learned trial Judge in determining the suit ensured a fair hearing to the parties?. 4. Whether or not the learned trial Judge was right in holding that exhibit C does not amount to an admission of debt known to law?. 5. Whether or not the trial court properly evaluated the oral and documentary evidence adduced at the trial and made proper findings and inference there from in reaching its judgment in the suit?.
The respondent’s issues are these:-
1.Whether or not the learned trial Judge on the pleadings and evidence was right in giving judgment for the defendant/respondent on his counter-claim in view of the state of the pleadings and evidence?.
- Whether exhibit C can be regarded as an admission of the plaintiff/appellant’s claim in this suit?.
- Whether or not the judgment of the court is not supported by evidence?.
As I observed earlier, the appellant formulated five issues out of its three grounds of appeal. This is because the appellant fragmented the only issue that could possibly have arisen from the first ground of appeal into three. The approach I adopt is to treat appellant’s issues one, two and three as one issue. When treated like that, a meeting point is reached between the appellant’s and respondent’s issues. The issues formulated by the respondent I must say are apt and appropriate.
In the appellant’s issues, 1, 2 and 3, the central complaint is that the lower court was wrong to have concluded that the plaintiff/appellant did not plead a defence to the defendant’s counter-claim.
The lower court in its judgment on the defendant’s counter-claim reasoned thus:-
“A counter-claim is a claim presented by a defendant in opposition to or deduction for the claim of the plaintiff thereby giving it the cloak of distinct, separate, independent cause of action. See: Amon v. Bobbett (1889) 22 Q.B.D. 543; 548; Stumore v. Campbell & Co. (1892) 1 G.B. 314 at 317. It is for this reason under our adversarial system of jurisprudence with the rule of pleading that it must be pleaded in the statement of defence by separating the facts relied upon to sustain a counter-claim from the remaining part of the statement of defence and to arrange them in numbered paragraphs under the heading ‘Counter-Claim’.
It is therefore mandatory for the plaintiff to file and serve a defence to a counter-claim. If the plaintiff fails to file a defence to a counter-claim as in this case, then there will be no issues joined between parties on the subject matter of the counter-claim and will be regarded as admitted: See:- V.B.N. Plc v. Dawodu (Oguntade, J.C.A.) 297 Nigeria Housing Dev. Society Ltd. v. Mumuni (1977) 2 S.c. 57, 85, 86; 2. Bronik Motors Ltd. v. Wema Bank Ltd. (1983) 1 SCNLR 296 Eleki v. Oko (1995) 5 NWLR (Pt. 393) 100. Kaduna ile Ltd. v. Umar (1994) 1 NWLR (Pt.319) 143. In this case, the plaintiff in the original suit did not file a reply to the counter-claim of the defendant. In order to raise an issue of fact, a defendant should properly traverse an averment either expressly or by necessary implication; the plaintiff did not hear. The true position of the law is that where no pleading is delivered in reply to counter-claim the defendant will not be obliged to lead evidence on the counter-claim. Clearly, it will be superfluous to do so since by failing to plead a defence to the counter-claim the defendant is entitled to sign judgment in default of pleading for the counter-claim would be deemed admitted. See:- 1. Nigeria Housing Dev. Society Ltd. v. Mumuni (1977) 2 S.C. 57, 85, 86; 2. Bronik Motors Ltd. v. Wema Bank Ltd. (1983) 1 SCNLR 296 3. Eleki v. Oko (1995) 5 NWLR (Pt. 393) 100. 4. Kaduna ile Ltd. v. Umar (1994) 1NWLR (Pt.319) 143.
In this case, the plaintiff in the original suit did not file a reply to the counter-claim of the defendant. In order to raise an issue of fact, a defendant should properly traverse an averment either expressly or by necessary implication; the plaintiff did not here. The true position of the law is that where no pleading is delivered in reply to counter-claim the defendant will not be obliged to lead evidence on the counter-claim.
Clearly, it will be superfluous to do so since by failing to plead a defence to the counter-claim the defendant is entitled to sign judgment in default of pleading for the counter-claim would be deemed admitted.
- Aladegbemi v. Fasanmade (1988) 3 NWLR (Pt.81) 129; 2. Oyegbola v. Esso WA. Ltd. (1966) 1 All NLR 170 at 171.
- Kaduna iles Ltd. v. Umar (1994) 1 NWLR (Pt. 319) 143.
In this case, the plaintiff has admitted paragraphs 12 17 of the counter-claim. In law, a trial court is always entitled to accept and/or act upon uncontradicted, and unchallenged evidence establishing loss legally recoverable in a given case. See:- 1. Boshali v. Allied Commercial Exporters Ltd. (1961) 2 SCNLR 322;
- Odulaja v. Haddard (1973) 11 S.C. 357; 3. Nzeribe v. Dave Engr. Co. Ltd. (1994) 8 NWLR (Pt. 361) 124;
4.Egbunike v.A.C.B.Ltd(1995) 2 NWLR(Pt. 373) 34;5.Yesufu v. Kupper Inter. N.V(1996) 5 NWLR (Pt.446)17 at 32-33.”
As the averments have not been controverted by the plaintiff, I accept them in proof of the case of the
defendant. Was the lower court wrong in its approach? To be able to answer this question satisfactorily, it is necessary to consider the state of pleadings in relation to the counter-claim at the commencement of the trial. In paragraphs 12 to 17 of the defendant’s statement of defence and counter-claim, it was pleaded thus:-
- The defendant avers that he deposited four Saving Account Passbooks and various Company Share Certificates with the plaintiff as securities for the overdraft facilities granted to him by the plaintiff about October, 1980.
- The defendant avers that the savings Account Passbooks Numbers 07:042, 09:551, 06:749 and a fourth one so deposited contained well over N47,617.000, N23,583.00, N1,250.65 and N2,000.00 respectively.
(Continuation of the judgment)
- It is well known to the parties that all the passbooks deposited earned and would continue to earn interest on the deposits contained in them from time to time and the defendant avers that moneys in the passbooks have earned interest varying between 71/2 and 15% per annum from 1980 up to January, 1988.
15.The defendant avers that the total amount now due to him from the plaintiff in respect of this Savings Account deposits with yearly interest is N 160.821.42 up to January, 1988.
16.The defendant further avers that the shares comprised in each Company Share Certificate deposited with the plaintiff are liable to increase through bonus shares while the plaintiff was authorised by the defendant to collect dividends on the shares as and when such dividends are declared since 1980.
The companies whose shares are in question are:-
Afprint Limited, Nigerian Breweries Limited, Daily Times of Nigeria Limited, Glaxo Nigeria Limited, G.Cappa Limited and Cappa and D’ Alberto Limited.
- The plaintiff holds the said shares and the dividends accruing to them on trust to the defendant and is accountable to the defendant in respect of them.”
The plaintiff in paragraphs 13, 14, 15 and 16 of its reply to statement of defence and counter-claim pleaded in reaction to the counter-claim thus:-
“13.Save for the fact that name of the companies mentioned are correct and that few dividends were received the plaintiff denies intoto and unequivocally the averments in paragraph 16 of the defendant’s statement of defence.
- As to paragraph 17 of the statement of defence the plaintiff denies the defendant’s contention and state that the shares were pledged to the bank as a security for facilities granted the defendant and that the plaintiff lawfully exercised its right of sale.
15.The defendant’s averments in paragraphs 18 and 19 are unsustainable, unattainable (in law and fact) and are unacceptable to the plaintiff when juxtaposed against the weight and preponderance of evidence in favour of the plaintiff’s case and against the defendant.
16.In answer to paragraph 20 of the defendant’s statement of defence headed Counter-Claim the plaintiff maintains firmly that the defendant has no claim whatsoever against the plaintiff and will at the trial show that the defendant was and is still indebted to the plaintiff as per the sum claimed in the writ of summons and statement of claim.”
A comparison of the relevant pleadings of the parties on the counter-claim shows that whereas the defendant had pleaded he was entitled to between 71/2 and 15% per annum from 1980 up to January, 1988 as interest due on deposits contained in his passbooks deposited with the plaintiff; and that a total sum of N160,821.42 was due to him, the plaintiff only generally denied the averment. Whereas the defendant by his counter-claim was asking for judgment against the plaintiff on a specific demand, the plaintiff only pleaded that the defendant “has no claim.”
Order 17 rules 9 and 13 of the High Court of Lagos State (Civil Procedure) Rules, 1994 provide:-
- Every allegation of fact in any pleadings not being a petition or summons, if not denied specifically or by necessary implication or stated to be not admitted in the pleading of the opposite party shall be taken to be admitted except as against an infant, lunatic, or person of unsound mind not adjudged a lunatic.
- It shall not be sufficient for a defence in his defence to deny generally the grounds alleged by the statement of claim or for a plaintiff in his reply to deny generally the grounds alleged in a defence by way of counter-claim but each party must deal specifically with each allegation of facts of which he does not admit the truth except damages.
It is clear that the plaintiff did not even generally deny “plaintiff’s specific claim”. It is settled law that a trial court may enter judgment in respect of a counter-claim if the plaintiff fails to file a defence thereto. See Kaduna ile Ltd. v. Isa Umar (1994) 1 NWLR (Pt. 319) 143.
In the circumstances of this case, I think that the fair conclusion to reach is that the plaintiff filed no defence to the defendant’s counter-claim. The lower court was correct to hold that the plaintiff was to be deemed as having admitted the counter-claim.
Appellant’s counsel has strenuously argued that the lower court was wrong to have decided the case in relation to the counter-claim on an aspect not raised by parties. This submission is both inapt and inept.
A court is bound by the parties’ pleadings and cannot decide a case upon a matter not raised on parties’ pleadings. See Ogiamien & Anor v. Ogiamien (1967) NMLR 245; Y. A. Oseni & Ors. v. Salami Taylor (1975) 2 WS.C. of 766 and Ochonma v. Unosi (1965) NMLR 321. It is a correct statement of the law that if a court decides to determine a case upon an issue not raised by parties, it must first bring the matter to the attention of parties so that it may be further addressed on the point. But that principle is inapplicable in a case as this where the Judge was only deciding the case on pleadings which the parties themselves had filed. I decide appellant’s issues 1,2 and 3 against the appellant.
Appellant’s 2nd issue relates to whether a letter tendered in evidence by the plaintiff as exhibit C ought not be taken as an admission of plaintiff’s claim. Exhibit ‘C’ was tendered by PW1 in the course of his evidence on 25-3-94 at page 52 of the record. PW1 testified thus:- “The defendant complied with the terms and conditions in exhibit A-A2. We issued him a formal letter of demands issued to the defendant… (Letter admitted as exhibit ‘B’). The defendant did not pay. This is one of the letters tendered, no objection admitted and marked exhibit C. We sent him his statement of accounts for 1986-1988 tendered, no objection admitted and marked exhibit D-D6.
It is manifest that the letter by which the defendant was said to have admitted his indebtedness to the plaintiff i.e. exhibit ‘C’ was written in reply to a letter of demand sent by the plaintiff to the defendant exhibit ‘B’. The letter of demand to the defendant exhibit ‘B’ dated 16-6-87 reads thus:-
“Re: Indebtedness of Muheeb Dawodu & Sons to Union Bank of Nigeria Limited.
We have been informed that the above named company in which you are a proprietor/director is indebted to Union Bank of Nigeria Limited, Obun-Eko Branch, Lagos in the sum of N106,675.38 (One hundred and Six Thousand Six Hundred and Seventy-Four Naira, Thirty-Eight Kobo) being overdraft facilities granted it and all efforts to make the company repay have so far failed.
We have instructions to demand and we hereby demand and require you to pay to this branch forthwith the principal sum. TAKE NOTICE that if such principal sum plus interest are not paid before the expiration of 30 days from the date of this notice we shall take legal steps to recover the said sum without any further notice from us.”
It is to be noted here that the above letter was specific as to the amount being demanded and how the debt claimed had arisen. The defendant in a letter dated 3-10-86 wrote to the plaintiff exhibit ‘C’ which reads:- REFUND OF OUTSTANDING LOAN IN MY CURRENT ACCOUNT LEDGER A/C NO.401160760
You will recall that we discussed my indebtedness to CFAO Motors Nigeria Limited which initially stood at N174,242.60k. I remember at the time that I said it was most difficult for me to start to pay back your loan while I was engaged with the payment of the C.F.A.O. loan. I am happy to inform you that the C.F.A.O. loan has now been finally settled and satisfied. I enclose herewith accounting evidence CFAO showing that my indebtedness to that company is now nil.
My appreciation goes to the CFAO who invited me at the most trying time to visit them in their offices.
The CFAO volunteered to supply me with their available goods on cash and carry basis. The method I adopted was that I would look out for any interested buyer; take such buyer to the CFAO where the buyer would offer purchase price plus profit I intended to make from the goods. I thereafter paid to CFAO both the purchase price and the profit receive from the buyer. It is in this way that I managed gradually to liquidate the loan sum of N174,242.60K in favour of C.F.A.O. As at now, although I cannot take goods from CFAO any more because I have no cash to put down for the goods that are available for me, the CFAO has promised me a weekly allocation of goods but my problem is that I have no money to take up the allocation.
That is why I am appealing to you to assist me with money to take my weekly allocations and 1 promise to pay over to you immediately the capital sum advanced to me plus the profit I make on the sale. Such profits will be used in liquidating the outstanding debt both old and fresh owed to your bank.
The weekly loan you will grant me will be known as a special loan which I want on Account No. 2 No. 401160779 and will be refunded on a weekly basis. This is my proposal for the consideration of which I shall be very grateful.
A view of my past record of activities with your bank will definitely convince you that I can perform and I promise to do so.
The letter written by the defendant above on 3-10-86 could not logically be an admission of a demand that had not come into existence since exhibit ‘B’ was only written on 16-6-87. As for the statement of account said to have been sent to the defendant, there was no evidence as to who prepared them and how they were prepared. See section 97(1)(h) and 97(2)(e) of the Evidence Act. There was no evidence as to when the said statements of account were sent to the defendant. Were they sent to the defendant before or after exhibit ‘C’ was written?
In paragraph 8 of the statement of defence and counter-claim, the defendant pleaded:-
“In or about the early part of the year, 1982, the business of the defendant started to suffer great reverses and the defendant was then not able to utilise the overdraft facility granted to him and this was to the plaintiff knowledge.”
In his evidence in court, the defendant at page 119 of the record testified:-
“Between 1976-1980, I was granted overdraft facility by the plaintiff from 1976-1980. It had terms and conditions and expires (sic) at the end of the year. I see exhibits A-A2 identified – they are overdraft facilities granted to me in particular A2 (4-11-80) which has led to this case. I did not utilise the facility, as the sales market was very dull. The plaintiff knew about the reverses and wrote a letter to me. Exhibit “H”.”
The defence of the defendant was that he did not withdraw the money or utilise the facilities granted him vide exhibit A2 as overdraft. The plaintiff tendered exhibit ‘C’ as proof that the defendant had admitted owing the amount claimed. Remarkably however, the letter exhibit ‘C’ did not mention any amount which could be said to be an admission of a specific figure. Further exhibit ‘C’ did not refer to any previous letter or communication addressed to the defendant. Neither did it refer to a particular statement of account. It is of course true that reading through exhibit ‘A’, one gets the impression that the defendant clearly acknowledged therein that it was indebted to the plaintiff. In the letter, the defendant had written in paragraph 1:
“I remember at the time that I said it was most difficult for me to start to pay back your loan while I was engaged with the payment of the C.F.A.O. loan.”
And at paragraph 3 of the letter the defendant wrote:- “That is why I am appealing to you to assist me with money to take my weekly allocations and I promise to pay over to you immediately the capital sum advanced to me plus the profit I make on the sale. Such profits will be used in liquidating the outstanding debt both old and fresh owed to your bank.” Although the defendant had been seeking a fresh loan from the plaintiff vide exhibit ‘C’, it is apparent however that the defendant knew and acknowledged that he owed plaintiff some money. Having said that, it is obvious that a mere general admission of indebtedness cannot be used as a basis of a judgment for a specific sum. The learned authors of law and practice relating to Evidence in Nigeria 1st edition para. 4.04 at page 50 writes on the nature of an admission thus:-
“The value of an admission depends on the circumstances under which it was made. It is for the trial court to decide the issue and to give due weight to the alleged admission and the explanatory facts or circumstances: Nii Abossey Okai II v. Nii Ayikai II (1946) 12 W.A.C.A. 31; Joe 19a & Ors. v. Ezekiel Amakiri & Others (1976) 11 SC 11. An admission is like all other evidence. The court has to consider the circumstances under which it was given, and what weight is fairly to be attached to it. If, for example, a person admits something of which he knows nothing that is of no real evidential value. Seisemograph Services (Nig.) Ltd. v. Kekke Ogbenegweke Eyuafe (1976) 9-10 S.C. 135; Comptroller of Customs v. Western Electric Co. Ltd. (1965) 3 All ER 599.
The conclusion to be arrived at is that the lower court was right to hold that the letter exhibit ‘C’ was not an admission of the sum claimed i.e. N109,725.55. The plaintiff should have produced in evidence the cheque leaves or withdrawal slips by which the defendant drew out the money.
The last and final issue queries whether or not the lower court correctly evaluated the evidence before it. In the light of what I have state above, I am satisfied that the lower court was right in its conclusion on the evidence.
Accordingly, this appeal fails. It is accordingly dismissed. I award N6,500.00 costs against the appellant in favour of the respondent.
ADEREMI, J.C.A.: I have read before now the judgment just delivered by my learned brother, Oguntade, JCA. I agree with his reasoning and conclusion that the appeal is devoid of merit. I adopt the said judgment as mine as I have nothing to add. I will also dismiss the appeal with cost of N6,500.00 in favour of the respondent.
GALADIMA, J.C.A.: I have read the draft judgment of my learned brother, Oguntade, JCA in this appeal. I am in entire agreement with the reasoning and conclusion reached in the said judgment that the appeal lacks merit and should be dismissed with costs of N6,500.00in favour of the respondent.
Chief B.I.D. Ezeogu (With him, Okey Ezeogu, Esq. and C. O. Elukemka, Esq.)For Appellant
- O. Dawodu, Esq.For Respondent