ZENITH BANK PLC v. REUBEN & ORS
(2020)LCN/15832(CA)
In The Court Of Appeal
(LAGOS JUDICIAL DIVISION)
On Thursday, February 06, 2020
CA/L/997/2016
Before Our Lordships:
Mohammed Lawal Garba Justice of the Court of Appeal
Joseph Shagbaor Ikyegh Justice of the Court of Appeal
Tijjani Abubakar Justice of the Court of Appeal
Between
ZENITH BANK PLC APPELANT(S)
And
1. MR. NICHOLAS FRIDAY REUBEN 2. MR. RAYMOND ONYEMAIZU 3. MR. DAVE ANYANWU 4. ARIK AIR LTD RESPONDENT(S)
RATIO:
POSITION OF LAW ON THE COMBINATION OF ACCOUNTS OF CUSTOMERS OF A BANK
The case of Allied Bank of Nigeria Ltd. v. Jonas Akubueze (1997) 6 NWLR (pt. 509) 374 at 397 – 399 had to say on the combination of accounts of customers of a bank thus –
“Now turning to the issue of combination of accounts, the general principle is that unless precluded by agreement, express or implied from the course of business, the banker is entitled to combine current accounts kept by a customer in his own right, even though at different branches of the same bank, and to treat the balance, if any, as the only amount standing to his credit: but the banker may not arbitrarily combine a current with a loan account. See Garnett v. McKewan (1861 – 73) All E.R. 686. But see Buckingham and Co. v. London (1895) 12 T.L.R. 70 where the banker was precluded by the course of business and W.P. Greenhalgh and Sons v. Union Bank of Manchester (1924) All E.R. 338 where the banker was precluded by agreement. See too Re E.J. Morel (1934) Ltd. (1962) Ch. 21, (1961) 1 All E.R. 796…
In the said case of British and French Bank Ltd v. Opaleye, supra, this Court held inter alia that where a customer opens two accounts with a banker, one in the customer’s name and the other in a business name, there is, in the absence of any express agreement to the contrary, an implied agreement that the accounts are to be kept distinct and separate. By this decision, which to this day has remained undisturbed, this Court approved and applied the decision of the English Court of Exchequer in Garnett v. McKewan supra, where Piggot, B. observed as follows: – “No one would say that a banker might set-off against his customer’s account a debt due to him from his customer in another capacity, a private debt, for example, a debt due to him as carrying on some distinct business. Nor has a banker any right to compound two accounts lodged with him by one person in two different capacities. He would have no right to blend them, a personal account and a trust account.
Bramwell, B, in agreeing with Piggot, B had this to say: – “It is admitted that in some cases the bank could not customer with a debt due to him, for example, a debt due as carrying on a different business, as that of brewers. Nor again, would they not have any right to blend two accounts kept by one person with them in different characters, as a personal and a trust account.” The issue of right to combine two account of a customer by a banker was fully considered by the Court below where Ejiwunmi, J.C.A. with whom Achike and Tobi, J.J.C.A. agreed concluded thus: – “It follows from the authorities reviewed above that our Courts have adhered to and followed in these type of cases the principles enunciated in the British French Bank v. Opaleye (supra) which are set out at page 26 of the judgment thus: –
(i) In the absence of an express agreement, an agreement regulating the relationship of banker and customer is implied from the course of business between them.
(ii) Where a banker opens two accounts with a customer, one in the customer’s own name and the other in a business name, there is, in the absence of any express agreement to the contrary, an implied agreement that the accounts are to be kept distinct and separate.
(iii) Where by agreement, express or implied, a customer’s several accounts with a banker are to be kept distinct and separate, the banker has no right to combine them or to transfer assets or liabilities from one account to another, without reasonable notice of the intention so to do, or without the assent of the customer.” JOSEPH SHAGBAOR IKYEGH, J.C.A.
POSITION OF LAW WHERE A CUSTOMER HAVING TWO ACCOUNTS IN A BANK.
I think it needs be pointed out that a customer having two accounts “in his own right” may only mean that he has both accounts in his name or in the same name, character or capacity and that neither account is a trust account. See British and French Bank Ltd. v. Opaleye supra. The right to combine accounts does not exist where the accounts are not held in the same right, as where one is a trust account and the other, a personal account. See R v. Gross, ex parte Kingston (1871) 6 Ch. App. 632 Union Bank of Australia Ltd. v. Murray- Aynsley (1898) A.C. 693 P.C. Bank of New South Wales v. Goulburn Valley Butter Co. Proprietary Ltd. (1902) A.C. 543 P.C.” JOSEPH SHAGBAOR IKYEGH, J.C.A.
JOSEPH SHAGBAOR IKYEGH, J.C.A. (Delivering the Leading Judgment): The appeal emanated from a decision of the National Industrial Court of Nigeria sitting in Lagos (the Court below) whereby it made garnishee order absolute on the account of Arik Air Limited, the 4th respondent, kept with the appellant in part satisfaction of judgment debt in favour of the 1st – 3rd respondents.
In summary, due to the 4th respondent’s continued suspension of the 1st – 3rd respondents from work for four years without pay, the 1st – 3rd respondents filed an action at the Court below for a declaration that the withholding of their salaries by the 4th respondent was a violation and/or a breach of the terms of contract between them and the 4th respondent. The Court below entered judgment on their claim and awarded accumulated arrears of salaries and emoluments of N101,000.00, N196,000.00 and N210,000.00, to the 1st, 2nd and 3rd respondents respectively, for the period in question.
The 1st – 3rd respondents obtained garnishee order nisi at the Court below to enforce the money judgment which was made absolute by the Court below upon hearing the parties concerned.
The garnishee order absolute attached the account of the 4th respondent with the appellant; hence the appeal contained in a notice of appeal with three (3) grounds of appeal filed on 20.06.16 by the appellant.
The parties, save the 4th respondent, filed and exchanged their briefs of argument.
The 1st – 3rd respondents filed a notice of motion upon which they raised a preliminary objection to the hearing of the appeal. The 1st – 3rd respondents were duly served hearing notice for the appeal. They did not appear either by themselves or through their learned counsel at the hearing of the appeal.
It follows that the 1st – 3rd respondents’ notice of preliminary objection to the hearing of the appeal which was argued in their brief is deemed abandoned and is hereby struck out. See A.G. Rivers State v. Ude (2006) 17 NWLR (pt. 1008) 406 at 452; Nsirim v. Nsirim (1990) 3 NWLR (pt. 138) 285; Onochie v. Odogwu(2006) 6 NWLR (pt. 975) 65, Magit v. UniAgric Makurdi (2005) 19 NWLR (pt. 959) 211 to the effect that a notice of preliminary objection that is raised and argued in the respondents’ brief required the respondent to seek for the leave of the Court to move it at the hearing of the appeal or it would be deemed abandoned and consequently struck out by the Court.
The appellant submitted in its brief of argument filed on 14.10.16 that it had shown cause in pages 224 – 231, 391 – 392 of the record of appeal (the record) by affidavit evidence of its right of lien/set off in respect of the credit balance in Account Number 1011084384 belonging to the 4th respondent who was the judgment debtor at the Court below was not materially denied by the 1st – 3rd respondents, the Court below should have invoked Sections 83(1) and 88 of the Sheriffs and Civil Process Act, Laws of the Federation 2004, read with the cases of Okereke v. Ejiofor (1996) 3 NWLR (pt. 434) 90 at 104 para D-E., Honda Place v. Global Motor Holdings Nigeria Ltd. (2005) 14 NWLR (pt. 945) 273 at 293 – 394 paras F-A, Kotoye v. Saraki (1993) 5 NWLR (pt. 296) 710 at 723, Long-John v. Blakk (1998) 6 NWLR (pt. 555) 524 at 532, Ogoejeofo v. Ogoejeofo (2006) 3 NWLR (pt. 966) 205, Obafemi Awolowo University v. Olanihun (1996) 8 NWLR (pt. 464) 123 at 127 paras C-E, First Inland Bank Plc v. Glory Effiong (supra), Fidelity Bank Plc v. Francis Okwuowulu (supra), Ezechukwu & Anor. v. I.O.C. Onwuka (2016) LPELR-26055 (SC), Henry Stephens Engineering Ltd. v. S.A. Yakubu (Nig.) Ltd. (2009) LPELR S.C. 153/2002, Ajomale v. Yaduat & Anor. (No.2) (1991) 5 NWLR (pt. 191) 226 @ 282 – 283, Magnusson v. Koikoi (1993) 12 SCNJ 114, Honda Place v. Global Motor Holdings Nigeria Ltd. (supra), Kotoye v. Saraki (supra), Long-John v. Blakk (supra), Ogoejeofo v. Ogoejeofo (supra) to refuse to make the garnishee order absolute for the appellant to exercise its right of lien/set-off in priority over the judgment debt with respect to the garnisheed account of 4th respondent; upon which the appellant urged that the appeal should be allowed and the garnishee order absolute be set aside.
The 1st – 3rd respondents argued in their brief filed on 22.11.16 that contrary to the appellant’s contention that there is lien on the 4th respondent’s garnisheed account which had been held in security for the huge debit in the other account No. 1011098949, no evidence of lien existed as the appellant allowed the account in debit to be operated several times by the 4th respondent as shown in Exhibit ZB1 contained in page 226 of the record of appeal (the record) therefore, the appellant who asserted lien did not establish it but left the matter of lien for speculation.
The 1st – 3rd respondents also contended in their brief that the appellant did not put in evidence the “agreement” or arrangement between the 4th respondent and the appellant giving the latter lien on account No: 0036007076 with credit of N8,733,194.00 as security for the huge debit balance of N6,953,709,853.58 in account No. 0006179299 to establish the allegation that there was in existence such an agreement vide Mercantile Bank of Nigeria Plc. v. Nwobodo (2000) 3 NWLR (pt. 648) (no pagination).
The 1st – 3rd respondents further contended that the appellant did not establish the nexus between the two accounts operated by the 4th respondent with the appellant but left the matter for speculation; nor did the appellant establish lien or restriction on withdrawal on the garnisheed account, Exhibit VAI, as withdrawal of N22,000,000.00 was allowed by the appellant on 10.07.13 vide Ogboru v. Uduaghan (2013) 13 NWLR (pt. 1370) 33 at 55, Afrotec v. M.I.A. (2001) 6 W.R.N. 65 at 127 – 130.
It was also contended that the action of the appellant allowing withdrawal by the 4th respondent on an account that was allegedly under lien is at variance with the appellant’s position that the 1st – 3rd respondents cannot be paid the judgment sum because the account is under lien on the premise that he who comes to equity must come with clean hands vide Iliyasu v. Ahmadu (2011) 13 NWLR (pt. 1264) 236 at 259.
It was also contended that it is “curious” that the appellant, a prudent business body, would allow withdrawal on account that was in debit of N6,000,000,000 without restriction or inhibition vide Exhibit VAII in pages 6 – 34 of the record therefore no reasonable person would believe that an account that is heavily in debit should have been allowed to be regularly withdrawn by the debtor vide Adigun v. A.G., Oyo State (1987) 1 NWLR (pt. 53) 678, Manoprix (Nig.) Ltd. v. Okenwa (1995) 3 NWLR (pt. 383) 325 at 338, Kotoye v. CBN (1989) 1 NWLR (pt. 98) 419.
It was further contended that the account garnisheed was in existence and in credit and its number had not changed to another version since the garnishee order nisi was made, therefore the Court below was right in making the garnishee order absolute vide Fidelity Bank Plc. v. Okwuowulu (2013) 6 NWLR (pt. 1349) 107 at 218; upon which the 1st – 3rd respondents concluded in argument that the appeal should be dismissed and the decision of the Court below making the garnishee order absolute be affirmed.
It was contended by the appellant in its reply brief filed on 13.12.16 that the affidavit showing cause with Exhibits contained in pages 224 – 231 of the record and the further affidavit together with Exhibits contained in pages 391 – 404 thereof showed indisputably by Exhibits ZB1, ZB2, BAC1, BAC2 and BAC3 that the 4th respondent is heavily indebted to the appellant as a result of facilities the appellant granted it, therefore these documentary evidence which speak for themselves and are more reliable and authentic than words defeated the contention of the 1st – 3rd respondents that no debt has accrued to the appellant for which the appellant can place a lien on the account of the judgment debtor, the 4th respondent, in its custody vide Section 88 of the Sheriffs and Civil Process Act and the case of Aiki v. Idowu (2006) 9 NWLR (pt. 984) 50.
The appellant also contended in the reply brief that the two accounts operated by the 4th respondent in the appellant’s custody were kept by the appellant in its own right to treat the balance, if any, as the only amount standing to its credit and could therefore be combined unless precluded by agreement express or implied from the course of business from doing so vide Uba v. Union Bank of Nigeria Plc (1995) 7 NWLR (pt. 405) 72.
Consequently, the appellant contended that the sweeping denial made by the 1st – 3rd respondents that the 4th respondent is not indebted to the appellant was insufficient to controvert the indebtedness vide Okereke v. Ejiofor (1996) 3 NWLR (pt. 434) 90 at 104; therefore, the submission of counsel on the issue alone should not be taken as controverting the affidavit showing cause and the further affidavit which should be taken as unchallenged vide Honda Place v. Global Motors Holdings Nigeria Ltd. (2005) 14 NWLR (pt.9450) 273 at 293.
The appellant concluded by urging for the appeal to be allowed and the garnishee order made absolute by the Court below be set aside.
The case of Allied Bank of Nigeria Ltd. v. Jonas Akubueze (1997) 6 NWLR (pt. 509) 374 at 397 – 399 had to say on the combination of accounts of customers of a bank thus –
“Now turning to the issue of combination of accounts, the general principle is that unless precluded by agreement, express or implied from the course of business, the banker is entitled to combine current accounts kept by a customer in his own right, even though at different branches of the same bank, and to treat the balance, if any, as the only amount standing to his credit: but the banker may not arbitrarily combine a current with a loan account. See Garnett v. McKewan (1861 – 73) All E.R. 686. But see Buckingham and Co. v. London (1895) 12 T.L.R. 70 where the banker was precluded by the course of business and W.P. Greenhalgh and Sons v. Union Bank of Manchester (1924) All E.R. 338 where the banker was precluded by agreement. See too Re E.J. Morel (1934) Ltd. (1962) Ch. 21, (1961) 1 All E.R. 796…
In the said case of British and French Bank Ltd v. Opaleye, supra, this Court held inter alia that where a customer opens two accounts with a banker, one in the customer’s name and the other in a business name, there is, in the absence of any express agreement to the contrary, an implied agreement that the accounts are to be kept distinct and separate. By this decision, which to this day has remained undisturbed, this Court approved and applied the decision of the English Court of Exchequer in Garnett v. McKewan supra, where Piggot, B. observed as follows: – “No one would say that a banker might set-off against his customer’s account a debt due to him from his customer in another capacity, a private debt, for example, a debt due to him as carrying on some distinct business. Nor has a banker any right to compound two accounts lodged with him by one person in two different capacities. He would have no right to blend them, a personal account and a trust account.
Bramwell, B, in agreeing with Piggot, B had this to say: – “It is admitted that in some cases the bank could not customer with a debt due to him, for example, a debt due as carrying on a different business, as that of brewers. Nor again, would they not have any right to blend two accounts kept by one person with them in different characters, as a personal and a trust account.” The issue of right to combine two account of a customer by a banker was fully considered by the Court below where Ejiwunmi, J.C.A. with whom Achike and Tobi, J.J.C.A. agreed concluded thus: – “It follows from the authorities reviewed above that our Courts have adhered to and followed in these type of cases the principles enunciated in the British French Bank v. Opaleye (supra) which are set out at page 26 of the judgment thus: –
(i) In the absence of an express agreement, an agreement regulating the relationship of banker and customer is implied from the course of business between them.
(ii) Where a banker opens two accounts with a customer, one in the customer’s own name and the other in a business name, there is, in the absence of any express agreement to the contrary, an implied agreement that the accounts are to be kept distinct and separate.
(iii) Where by agreement, express or implied, a customer’s several accounts with a banker are to be kept distinct and separate, the banker has no right to combine them or to transfer assets or liabilities from one account to another, without reasonable notice of the intention so to do, or without the assent of the customer.”
I think the Court of Appeal was entirely right in the above observation which I fully endorse. Where, therefore, a customer of a bank operates two or more current accounts, the bank is entitled to combine the two or more accounts kept by the customer in his own right even though at different branches of the same bank, and to treat the balance, if any, as the only amount really standing to his credit, unless precluded by agreement, express or implied from the course of business from so doing.
I think it needs be pointed out that a customer having two accounts “in his own right” may only mean that he has both accounts in his name or in the same name, character or capacity and that neither account is a trust account. See British and French Bank Ltd. v. Opaleye supra. The right to combine accounts does not exist where the accounts are not held in the same right, as where one is a trust account and the other, a personal account. See R v. Gross, ex parte Kingston (1871) 6 Ch. App. 632 Union Bank of Australia Ltd. v. Murray- Aynsley (1898) A.C. 693 P.C. Bank of New South Wales v. Goulburn Valley Butter Co. Proprietary Ltd. (1902) A.C. 543 P.C.”
I agree that a customer operating more than one account with a bank in the same branch exposes the accounts to combination if the accounts are operated in the same name and character which was the case here. But the alleged arrangement or agreement between the 4th respondent and the appellant for the appellant to have lien on the account was not established as documentary evidence of the alleged arrangement or agreement and/or the contents of the oral arrangement, if any; was not proffered by the appellant.
The appellant cannot be right, in my opinion, to contend that the 1st – 3rd respondents admitted the existence of the indebtedness of the 4th respondent to it as the pleading for the purpose was sufficient and did not amount to an admission.
Section 88 of the Sheriffs and Civil Process Act provides —-“Lien of claim of third person on debt.
Whenever in any proceeding to obtain an attachment of a debt it is suggested by the garnishee that the debt sought to be attached belongs to some third person or that any third person has a lien or charge upon it, the Court may order such third person to appear and state the nature and particular of his claim upon such debt.”
The appellant did not supply the particulars of the arrangement or agreement which if written should have been evidenced by the attachment of the written agreement to the affidavit of the appellant as an Exhibit or if the agreement was verbal the particulars thereof should have been made part of the affidavit evidence of the appellant.
I also agree with the 1st – 3rd respondents that the fact that the 4th respondent had access to the garnisheed account and withdrew some money therefrom defeated the claim of lien by the appellant on the garnisheed account.
Similarly, had the claim of lien been authentic, the appellant as a reasonable banker would not have allowed the 4th respondent to withdraw monies from the account that was heavily alleged to be in debit as shown in Exhibit ZB1 in the affidavit to show cause.
Lien was therefore not established by satisfactory evidence and Section 88 of the Sheriffs and Civil Process Act (supra) could not have been invoked by the Court below in the circumstance.
In the result, there is no substance in the appeal and I hereby dismiss it for lacking in merit with N500,000 costs in favour of the 1st – 3rd respondents against the appellant.
MOHAMMED LAWAL GARBA, J.C.A.: After reading a draft of the lead judgment written by my learned brother JOSEPH SHAGBAOR IKYEGH, J.C.A., in this appeal, I completely agree with the views expressed and the conclusion that the lower Court was right to have made the garnishee order nisi, absolute, on the basis of the credible evidence before it. The Appellant speaking from both sides of the mouth, wanted to eat its cake and still keep same by the claim of an unsubstantiated lien on the garnished account of the 4th Respondent.
I join in dismissing the appeal for being devoid of merit and endorsed the order on costs as made in the lead judgment.
TIJJANI ABUBAKAR, J.C.A.: I read the leading Judgment just delivered by my Lord JOSEPH SHAGBAOR IKYEGH, J.C.A., I am in full agreement with the reasoning and conclusion. I adopt the Judgment as my own, I have nothing extra to add.
Appearances:
Mr. M. Ogbewode For Appellant(s)
1st – 3rd Respondents were served hearing notice but were unrepresented.
4th Respondent was served hearing notice but was unrepresented. For Respondent(s)
