OKAFOR v. EMENOBI & ANOR
(2020)LCN/15447(CA)
In The Court Of Appeal
(AWKA JUDICIAL DIVISION)
On Friday, November 20, 2020
CA/AW/169/2010
Before Our Lordships:
Chioma Egondu Nwosu-Iheme Justice of the Court of Appeal
Rita Nosakhare Pemu Justice of the Court of Appeal
Bitrus Gyarazama Sanga Justice of the Court of Appeal
Between
CHIEF J. J. OKAFOR APPELANT(S)
And
1. CHRISTIAN EMENOBI 2. CHARLES OKAFOR RESPONDENT(S)
RATIO
RIGHT OF ACTION AGAINST A GURANTOR
In AUTO IMPORT EXPORT v. J. A. A. ADEBAYO & ORS. (2005) LPELR 642 (SC), the Supreme Court when deciding on when the right of action against a guarantor arise held, per OGBUAGU, JSC as follows:
“Once again, by way of emphasis and this is also settled the liability of a/the guarantor, becomes due and mature, immediately the debtor/borrower becomes unable to pay its /his outstanding debt. The guarantor’s liability, is then said to have, crystalized. See ROYAL EXCHANGE ASSURANCE (NIG) LTD. v. ASWANI TEXTILES LTD. (1992) NWLR (pt.227) 1; (1992) 2 SCNJ 346; EBONI FINANCE & SECURITIES LTD. v. WOLE-OJE TECHNICAL SERVICE LTD. & 2 ORS. (1996) 7 NWLR (pt. 461) 464 at 476 C. A.; SALAWAL MOTOR HOUSE LTD. & ANOR v. HAJJI B. LAWAL & ANOR (1999) 9 NWLR (pt. 692 at 706, C. A.” PER SANGA, J.C.A.
BITRUS GYARAZAMA SANGA, J.C.A. (Delivering the Leading Judgment): This suit No. HIH/12/2005 was commenced by the Appellant as plaintiff against the 1st Respondent as Defendant via a Writ of Summons and Statement of Claim dated 13/4/2005 filed on 14/4/2005 before the High Court of Anambra State Ihiala Judicial Division, C.E.K. Anigbogu J., presiding. The plaintiff was claiming for the following:
a. Return of the 1st Plaintiff’s title documents covering the pledged land.
b. Perpetual Injunction restraining the defendant whether by himself, his servant, agents or privies from dealing with the said land in any manner inconsistent with the rights of the plaintiff.
C. N2,000.000.00 being special and general damages for wrongful detention of the said title documents.
(Pages 4-5 of the Records).
The defendant filed a statement of defence and a counter-claim on 2/6/2005 (pages 7 – 12 of the Records). However, on 24th February, 2009 the defendant filed an Amended Statement of Defence and Amended Counter-Claim wherein he counter-claimed against the Plaintiffs as follows:
1. An order of Court giving the defendant power to realize the terms of the agreement dated 20/1/2004.
2. An order of Court foreclosing the plaintiff from redeeming the two pieces of lands used to secure the capital given to the 2nd plaintiff.
3. N3,845,060.00 being amount owed by the 2nd plaintiff to the defendant comprising:
a. N1,685,960 being the 1500 Euro and cost of 551 pieces left behind in the previous trip.
b. N163,900.00 being the air ticket with which he went to bring back the goods
c. €1,000 (One Thousand Euros) i.e. N175,000.00 taken from the defendant’s agent overseas by the 2nd plaintiff/PW2.
d. N1,820,200 being cost of 949 pieces of tyres not supplied in the second trip.
e. N5Million general damages for breach of the terms of agreement and unlawful detention of the defendant’s capital.
f. 5% interest on the judgment debt until it is paid.
(pages 44 – 49 of the Records).
On 14th March, 2005, the 1st Respondent as Defendant filed a motion exparte seeking for the joinder of the 2nd Respondent (who is the son of the Appellant) as the 2nd plaintiff. The lower Court granted the application and joined the 2nd Respondent as the 2nd plaintiff. (Pages 62 of the Records).
Pleadings having been filed and exchanged the matter went to hearing. Trial commenced on 10/11/2005 when the Appellant entered the witness box and commenced his testimony as P.W1. He was cross-examined on 7/1/2006 by E. E. Egbunonu Esq., of counsel to the defendant. (pages 65 – 69 of the Records). On 11th May, 2006 Prince Ikenna Udorji Esq., of counsel to the plaintiffs moved the Court in terms of their motion for amendment of their statement of Claim which was granted as prayed by the learned trial Judge. (Pages 70 – 71 of the Records).
On 13th July, 2006 Charles Okafor (2nd Respondent) entered the witness box and testified as P.W2. Several documents were tendered by PW2 admitted in evidence and marked as Exhibits A, B, C, D, E and F respectively. (Pages 72-89 of the Records). P.W3 is Prince Callistus Obitude, a 58 years old trader. He entered the witness box to testify for the Plaintiffs on 8th November, 2007. (pages 89-92 of the Records).
On 22nd November, 2007 Nnanna Orji Assistant superintendent of Police (ASP) entered the witness box and testified as P.W4. He was sub poened by the plaintiffs to testify. He wrote a comprehensive Police Report which was tendered by PW2 and marked as Exhibit E. He then identified Exhibits A and E (Pages 93 – 97 of the Records).
The 1st Respondent testified as D.W1 in defence of his case on 11/12/2007. He tendered documents which were admitted in evidence and marked as Exhibit H, J, K, L, M and N respectively. (Pages 97 – 116 of the Records) D.W2 is Nze C.M. Onyesi a 62 years old trader who entered the witness box on 10th November, 2008. He is the Vice Chairman of New Tyre Traders Association. He is among those who attempted to broker peace between the 1st and 2nd Respondents. (His testimony is at pages 117 – 123 of the Records) D.W3 is Emmanuel Emeka Umujiaku Esq., a Legal practitioner. He was sub poena by the 1st Respondent to testify on the role he played in drafting Exhibits A and K. The sub poena was tendered and marked as Exhibit P. In his testimony, he stated that he drafted Exhibit K but denied drafting Exhibit A. His testimony is at pages 124 – 127 of the Records). On 30th April, 2009, learned counsel to the parties adopted their respective final Written Addresses and the matter was adjourned to 8th June, 2009 for judgment.
Judgment was delivered on 29th June, 2009. (The entire judgment is at pages 140 -165 of the record of appeal). The learned trial Judge reviewed the oral and documentary evidence adduced by the parties before him and reached his decision thus:
“While I commend the very diligent effort by counsel on both sides, I hold that the plaintiffs have not proved their claim as required by law. The plaintiffs’ claim is unfounded and baseless and is hereby dismissed accordingly.
Judgment is therefore entered for the defendant as per his counter claim as follows:
1. The Defendant is hereby given power to realize the terms of agreement of 20th January, 2004 as contained in Exhibit K.
2. The 1st plaintiff is foreclosed from redeeming the two parcels of land form the defendant except in the case that the total debt owed the defendant is paid in full.
3. N3,845,000.00 being the amount owed by the 2nd plaintiff to the Defendant comprising:
a. N1,685,960.00 being the value of €1,500 and cost of 551 tyres which the 2nd plaintiff left behind in Germany on the first trip.
b. N163,000.00 being the cost of air ticket with which the defendant sent back the 2nd plaintiff to Germany on the second trip.
c. €1000 (N175,000.00) which the 2nd plaintiff received from the Defendant agent on the second trip and
d. N1,820,000.00 being the total cost of 949 tyres not supplied by the 2nd plaintiff in the second trip.
4. N250,000.00 general damages for breach of the terms of agreement and unlawful detention of the defendant’s capital.
5. 5% interest on the judgment debt until the debt is liquidated.”
This decision aggrieved the 1st plaintiff. He filed a notice and grounds of appeal containing four grounds of appeal (pages 166 – 168 of the Records). The Appellant filed an Amended Notice of Appeal on 15th May, 2012 containing four grounds of appeal which was deemed as properly filed and served on 29th November, 2012 by this Court.
The facts in brief that led to filing this suit as can be gleaned from the pleadings and evidence adduced before the lower Court are that the 1st Respondent contracted the 2nd Respondent to travel to Germany to purchase a container load of motor vehicle tyres numbering 3500. The 2nd Respondent under took the journey. On his return from Germany, there was a short supply of the tyres and a dispute arose in that respect between the 1st Respondent and 2nd Respondent. Some people in the tyre business intervened (including DW2) with a view to mediate in the disputation. They convinced the 1st Respondent to sponsor the 2nd Respondent on another journey back to Germany to retrieve the tyres left behind and to buy more tyres to make up a container load. Initially the 1st Respondent expressed reservation on the wisdom of sending back the 2nd Respondent to Germany, fearing that he (2nd Respondent) may abscond and refuse to return to Nigeria. The Appellant, who is the father of the 2nd Respondent volunteered to release to the 1st Respondent title deeds to his two landed properties, one at Uli and the other at Aba as collateral security and deposited the title documents with the said 1st Respondent.
The 1st Respondent then released the needed funds and the 2nd Respondent went back to Germany. However, on his return from the second trip another dispute arose. The 1st Respondent claimed that there was another shortage that the 2nd Respondent did not return with the full number of tyres. The 2nd Respondent on his part claimed that the 1st Respondent converted his own property inside the container because the said 1st Respondent cleared the container from the wharf without the knowledge of the Appellant and 2nd Respondent. The Appellant then instituted this suit without joining his son who is the 2nd Respondent. It was the 1st Respondent that filed an exparte motion seeking for the 2nd Respondent as 2nd plaintiff.
The lower Court issued an order joining the 2nd Respondent as 2nd plaintiff.
The sum total of the evidence is that the 2nd Respondent defaulted in the first trip and did not deliver the goods as earlier agreed. The second trip was to recover the items not delivered in the first trip and to purchase more tyres which also was not realized or achieved by the 2nd Respondent. The 1st Respondent claimed that the Appellant willingly guaranteed the 2nd Respondent’s perfection of the contractual agreement in the second trip when he pledged and/or mortgaged the title documents of his two pieces of land at Uli and Aba. That the Appellant instituted this suit as ploy to frustrate the 1st Respondent from selling off and/or assigning the two pieces of land to recover the money he lost as a result of the fraudulent acts of the 2nd Respondent. Thus the 1st Respondent counter-claimed against the Appellant and the 2nd Respondent.
The Appellant’s Brief of Argument was filed on 15th May, 2012 but deemed properly filed and served on 29th November, 2012. However, by order of this Court the Appellant filed an Amended Appellant’s brief on 7th February, 2019. J.R. Nduka Esq., settled the Appellant’s brief wherein he formulated four issues for determination as follows:
1. Whether the 1st plaintiff (Appellant) is co-indebted with the 2nd plaintiff (2nd Respondent). (From Ground 4).
2. Whether the Defendant’s Exhibit K is admissible in evidence. (From Ground 1).
3. Whether the probative value (sic) to be attached to the Defendant’s Exhibit K (From Ground 2).
4. Whether the 1st plaintiff (Appellant cannot redeemed his pledge (from Ground 5)
The 1st Respondent’s brief was prepared by Chief (Dr.) E. E. Egbunonu. It was filed on 19th December, 2012. Learned counsel to the 1st Respondent formulated three issues for determination as follows:
1. Whether the case before the trial Court was on ownership of the two parcels of land mentioned in Exhibit K or breach of trust/contract.
2. Whether the Appellant and the 2nd Respondent are not jointly responsible upon breach of Exhibit K and whether Exhibit A was not forged.
3. Whether trial Court was not right entering judgment against the Appellant and the (2nd Respondent).
I will consider the issues canvassed by learned counsel in their respective briefs together then make my findings known.
In his submission on issue 1, learned counsel to the Appellant argued that his client is not co-indebted with the 2nd Respondent. That the liability of the Appellant to the 1st Respondent does not extend to the 2nd Respondent. That the sum of N1,685,690.00 which is the amount of the indebtedness of the 2nd Respondent to the 1st Respondent at the time the Appellant undertook to guarantee the second trip of the 2nd Respondent to Germany. That Exhibit K specifically provided thus:
“…. That the 2nd party shall faithfully discharge his obligation in this agreement and further undertakes to fully indemnify the 1st party to the tune of the amount owed to him by 2nd party.”
That where parties embodied the terms of their contract in a written document extrinsic evidence is not admissible to add, vary, subtract from or contradict the terms of the written instrument. Cited the authority of U.B.N v. NWAOKOLO (1995) LPELR-3385 (SC); (1995) 6 NWLR (pt. 400) 127.
That by the of interpretation of documents, when a document is clear and unambiguous, the operative words in it should be given their simple and ordinary grammatical meaning. Cited:
1. U. B. N. LTD v. SAX (NIG) LTD. & ORS (1994) 8 NWLR (pt. 361) 150
2. L. R. C. I. v. MOHAMMED (2005) II NWLR (pt. 935) 1;
3 ABALOGU v. THE SHELL PETROLUM DEVELOPMENT COMPANY OF NIGERIA LTD. (2003) 6 SCNJ 262;
4. AL-RISSALAH PRINTING & PUBLISHING CO. LTD. & ORS v. EL- HOUSSEINI & ORS (2007) LPELR – 8543 (CA)
Learned counsel urged the Court to resolve this issue in favour of the Appellant.
Issue 2 canvassed by the Appellant is:
Whether the Defendant’s Exhibit K is admissible in evidence.
In his submission on this issue, learned counsel to the appellant argued that by Section 2 of the Land Instruments (Preparation and Registration) Law, Cap. 75, Laws of Anambra State, an “Instrument” means a document affecting land in Anambra State whereby one party confers, transfers, limits, charges or extinguishes in favour of another party or purporting to do so, any right or title to, or interest in land in Anambra State, a certificate of purchase and power of attorney under which any instrument may be executed, but not a will. That by the express wordings of this provision vis-à-vis Exhibit K, the Appellant pledged the two parcels of land in issue to the 1st Respondent. That the effect is that Exhibit K is a registrable instrument within the meaning of Section 2 of the Land Instruments (preparation and Registration) Law, Cap 75 laws of Anambra State. That the effect of not registering Exhibit K is that it is not admissible in evidence. Cited Section 22 of the Land Instrument Law (supra) which provides that:
“No instrument shall be pleaded or given in evidence in any Court as affecting land unless the same have been registered.”
Learned counsel to the Appellant cited and quoted the decision of the apex Court in OKOYE v. DUMEZ NIG. LTD. & ORS (1985) LPELR – (SC) 89 and urged the Court to resolve this issue in favour of the Appellant.
Issue 3 canvassed by the Appellant is:
Whether Exhibit K has any probative value to be attached to it?
Learned counsel answered the poser raised in this issue in the negative. That Exhibit K has no probative value notwithstanding the power of the lower Court to evaluate the said exhibit. That from the word go the document is suspect. That Exhibit A is the Appellant’s version of Exhibit. K as each was signed by the parties to this suit. That both documents surfaced at the Police Station and none was signed by the solicitor that prepared them. That “suddenly, at the trial, one is now signed”. Learned counsel reharshed his own version if what took place during trial by quoting pages 126 of the Records. He cited Section 92 (1) of the Evidence Act. Learned counsel to the Appellant reiterated that Exhibit K has no probative value. He urged the Court to resolve this issue in favour of the Appellant.
Issue 4 formulated by the Appellant is:
Whether the Plaintiff cannot have the power to redeem his pledge?
Learned counsel submitted that there is evidence that the 2nd Respondent travelled to Germany as agreed upon in Exhibit K. What was in dispute in this suit is whether the said 2nd Respondent satisfied the conditions agreed upon by the parties. That he did. That he even put the goods in a container which the 1st Respondent converted when it arrived. That the said 1st Respondent on the other hand alleged that he recorded more losses from the second trip by the 2nd Respondent to Germany. That considering these facts the liability of the Appellant who guaranteed the 2nd Respondent on the second journey to Germany “cannot be said to have arisen”. That it is after the trial Court’s decision that the 2nd Respondent did not meet the terms of the agreement that the Appellant’s duty to pay up the 2nd Respondent’s indebtedness arose. That the lower Court was wrong to hold that the Appellant’s right to pay-up and redeem his landed properties was taken away. Learned counsel to the Appellant urged the Court to resolve this issue in favour of his client. He urged the Court to allow this appeal and set aside the judgment by the lower Court delivered on 29/6/2009.
The 1st Respondent’s counsel formulated and argued three issues which I will also consider seriatum.
Issue 1 is:
Whether the case before the trial Court was on ownership of the two parcels of land mentioned in Exhibit K or breach of trust/contract?
Learned counsel while arguing this issue submitted that Exhibit K is a simple agreement of monetary transaction. That the fact that the Appellant used his unregistered document to secure his son’s integrity does not transfer liability of non-registration to the 1st Respondent. To hold otherwise is to make the Appellant and his son escape liability purely on their own default. That Exhibit K was never tendered in Court in proving or establishing title to land per se. That the argument by the Appellant challenging the non-registration of Exhibit K is a non soquitor targeted at derailing the course of justice. That the law governing the admissibility or otherwise of unregistered instrument depends on the purpose for which it is being sought to be admitted. That Exhibit K is admissible as it was tendered to show that there was a transaction between the appellant, his son and the 1st Respondent. That title to the two lands were not in issue before the lower Court. That it was an agreement tendered in Court to show that the facts contained therein-existed between the Appellant and the 2nd Respondent on the one side and the 1st Respondent on the other side. It was never tendered as a deed over any property per se. That it therefore need not be registered and stamping of same suffice. Cited: AKINGBADE v. ELEMOSHO (1964) 1 All NLR 154; ABU v. KUYABANA (2002) 4 NWLR (Pt.758) 599 at 615 – 616.
That at the point of litigation in Court, the duty to register the document was not on the 1st Respondent and thus the document will ordinarily pass on grounds of equitable interest. Cited ATUFE v. OGHOMIENOR (2004) 13 NWLR (pt. 890) 327 at 347 – 348. That the trial Court did not decide on the ownership of the two pieces of land used as collateral, but whether the Appellant and 2nd Respondent breached the terms of their agreement with the 1st Respondent. That the trial Court decided that the Appellant and 2nd Respondent breached the agreement and were liable to pay the 1st Respondent either in cash or by foregoing the pledged lands for 1st Respondent to sell and recover his losses. That the Appellant did not object to the admissibility of Exhibit K at the lower Court on registration and is thus estopped from raising that objection at Appellate stage. Cited: SAKARE v. BELLO (2003) 17 NWLR (pt. 848) 154 at 171.
Learned counsel made further submission along that line and urged the Court to resolve this issue in favour of the 1st Respondent.
The second issue argued by learned counsel to the 1st Respondent is:
Whether the appellant and the 2nd Respondent are not jointly responsible upon breach of Exhibit K and whether Exhibit A was not forged.
In his argument on this issue learned counsel to the 1st Respondent submitted that the Appellant who is the father of the 2nd Respondent voluntarily entered into an ordinary, agreement to guarantee that his son should go back to Germany and retrieve both the money and goods the 1st Respondent entrusted into his care in his first trip and that the 1st Respondent should further fund the trip back to Germany and provide money with which the 2nd Respondent would use in addition to the money he left behind in his first trip to complete a container load of tyres and send all back to Nigeria. That that is what is contained in Exhibit K. That the Appellant having guaranteed that his son would travel the second time and come back with both the old and new consignments is liable with the 2nd Respondent who defaulted by short supplying the goods again. Learned counsel refer to pages 65, 67, 68, 75,77,82 and 86 of the Records. That it requires a holistic interpretation of Exhibit K and a calm consideration of the evidence of the Appellant and the 2nd Respondent to have a full grasp of the facts of this case. Cited: UNILIFE DEVELOPMENT CO. LTD v. ADESHIGBIN (2001) 4 NWLR (pt. 704) 609 at 448 – 449. That the indebtedness of the 2nd Respondent to the 1st Respondent became transferred to the Appellant who is the guarantor at the point the 2nd Respondent failed to discharge the obligations contained in Exhibit K Cited: AUTO IMPORT EXPORT v. ADEBAYO (2005) 19 NWLR (pt. 959) 44 at 126 – 127.
That the appellant guaranteed that if his erring son failed to bring back the goods, which by implication means the old goods and money, the second amount of money given to him to enable him travel and to buy and complete a full container load of goods (I e. tyres), then the Appellant become liable to discharge the duties of his son. That the 1st Respondent on the strength of Exhibit K can, under the law recover his losses from either the Appellant or the 2nd Respondent. That he also has the right to sell the collateral deposited by the Appellant. That there is no need for the 1st Respondent to be chasing the Appellant and his son when the Appellant’s receipts of his two pieces of land which he surrendered to the 1st Respondent can be used to recover his losses. Learned counsel to the 1st Respondent analysed the evidence adduced before the lower Court vis-à-vis Exhibit K and submitted that it is clear from Exhibit K that both the Appellant and 2nd Respondent are jointly liable as the Appellant’s obligation arose at the point his son failed to deliver in full the goods as agree and the 1st Respondent by Exhibit K has the liberty to sell the two pieces of land to recover his losses as agreed by parties if the Appellant failed to indemnify him. Learned counsel urged the Court to resolve this issue in favour of the 1st Respondent.
Issue 3 argued by learned counsel to the 1st Respondent is:
Whether the trial Court was not right in entering judgment against the Appellant and the 2nd Respondent.
Learned counsel to the 1st Respondent submitted that the learned trial Judge was indeed right in entering judgment against the Appellant and the 2nd Respondent. That the issue before the lower Court was to ascertain the intensions of the parties from the agreement they have entered. That the said lower Court painstakingly went through the evidence and came out with the verdict that Exhibit A was a forgery and Exhibit K was the agreement between the parties. That at pages 158 – 159 of the Records the lower Court found and declared Exhibit A to be a forged document thus upholding the genuiness of Exhibit K. That the totality of evidence before the trial Court point to one conclusion only to wit: the 2nd Respondent breached the agreement contained in Exhibit K which led to the said 2nd Respondent owing the 1st Respondent a total sum of N3,845,000 as determined by the learned trial Judge and general damages of N250,000.00.
That the lower Court in its judgment ordered the Appellant and the 2nd Respondent to pay to the 1st Respondent the total debt owed him or in the alternative the Appellant became foreclosed for redeeming the two parcels of land used as collateral from the 1st Respondent. That the Appellant do not have any valid appeal before this Court. Learned counsel urged the Court to so hold and resolve this issue in favour of the 1st Respondent and to dismiss this appeal and uphold the judgment of the lower Court.
FINDINGS:
I have considered the facts of this case as contained in the records, the pleadings by the parties as reflected in the Amended Statement of Claim, Amended Statement of Defence and Amended Counter Claim, then I considered the documentary evidence relied upon by the parties particularly Exhibits A and K and the oral evidence adduced by the parties as reflected in the testimonies of the witnesses; I also considered the issues raised and argued by learned counsel in their respective Final Written Addresses and the review of the evidence by the learned trial Judge in his judgment, I am of the view that the following two issues can adequately resolve the controversy between the parties in this suit:
1. What is the purpose of drafting Exhibit ‘K’?
2. Was the transaction that gave rise to drafting Exhibit K deals with determination of title to the two pieces of land mentioned therein or a simple case of pledge/contract?
On issue 1, it is my finding the Exhibit K was draft for the sole reason that the 2nd Respondent’s second journey to Germany will be a success. I have already stated the facts that gave rise to filing this suit above wherein I stated that the 1st Respondent who deals in tyres contracted the 2nd Respondent to travel to Germany to purchase a container load of vehicle tyres numbering Three Thousand Five Hundred (3,500). The 2nd Respondent went to Germany at the expense of the 1st Respondent and on his return it was discovered that there was a short supply of the tyres and a dispute arose between the 1st and 2nd Respondents. A Peace Committee was constituted by the Tyre Dealer Association Onitsha Market to resolve the dispute. D.W2 was the Chairman of the Peace Committee. It was resolved that the 1st Respondent should sponsor the 2nd Respondent back to Germany with more funds in order to retrieve the tyres left behind by the 2nd Respondent in Germany and to buy more tyres to make up a container load. The 1st Respondent expressed reservations to this arrangement and stated so on basis that the 2nd Respondent may go back to Germany and refuse to return. The Appellant is the biological father of the 2nd Respondent. He surrendered to the 1st Respondent the title deeds of his two landed properties at Uli and Aba as collateral guaranteeing the safe return of his son with the assurance that the 1st Respondent can deal with the two lands as he deem fit to recover his money in the event that the 2nd Respondent did not return and also as security for delivery of the goods. Thus Exhibit K was drafted.
The 2nd Respondent returned safely but with another tale of shortage of the tyres in the second trip without retrieving the tyres left behind in the first trip to Germany. Another dispute arose between the 1st Respondent and the 2nd Respondent Exhibit K was prepared by one Emeka Umejiaku Esq. While Exhibit A was tendered in evidence by the Appellant Exhibit K was tendered by the 1st Respondent. In his judgment the learned trial Judge, while considering the two documents held, inter alia, as follows:
“In Exhibit A it was stated that if the 2nd plaintiff fails to return to Nigeria, the guarantor, i.e. 1st plaintiff shall sell the lands and use the money realized to compensate the defendant for the losses suffered by him. Whereas in Exhibit K it was stated that in the event of a default by the 2nd plaintiff the property in the two documents shall pass to the defendant who shall deal with them to indemnify himself. While Exhibit K states the amount of money given in evidence, Exhibit A was silent on the issue of money involved or advanced by the defendant.
Finally, Barrister Umejiaku said he did not prepare Exhibit A and that was why he did not sign it. I am inclined to believe that the contents of Exhibit K represent the deal between the parties. Exhibit A is ambiguous and cannot assist anybody to appreciate the nature of the transaction between the parties.
“… Exhibit K as in the file now is only a certified true copy of the original document and I accept it as the copy of the document prepared by Umejiaku Esq., on the instruction, of the parties. Even if Exhibit K were not in evidence, evidence before me from both sides is to the effect that the 1st plaintiff, father of the 2nd plaintiff deposited the document with the defendant as collateral security for the transaction between the 2nd plaintiff and the defendant in the second trip. As to who would utilize the documents to satisfy any default on the part of the 2nd plaintiff, it does not sound reasonable to me that the defendant who had custody of the documents will return them to the 1st plaintiff upon the default by the 2nd plaintiff, for the 1st plaintiff to sell the property and then pay the defendant. If that were to be so, the essence of the security would have been defeated. Collateral security by its simple meaning and usage, places the person upon which it is given in a position of authority to deal with the goods or property in the event of a default. I therefore reject the evidence of the plaintiffs that the defendant was to surrender the documents to the 1st plaintiff. Who would then sell them and reimburse him.” (pages 149 – 150 of the Records).
This holding by the learned trial Judge accurately represents the position of the law. This because Exhibit K was not opposed when it was tendered at the trial Court by the Appellant therefore he is estopped from raising any objection at the appellate stage. In SAKARE v. BELLO (2003) 17 NWLR (pt. 484) 154 at 171, the apex Court held thus:
“Where evidence was admitted at the trial Court without objection or by consent of the parties, or was used by the opposing party, it would be within the competence of the trial Court to act on it and the Appeal Court will not entertain any complaint on the admissibility of such evidence.”
I am also of the opinion that the indebtedness of the 2nd respondent to the 1st respondent was transferred to the appellant, who stood as guarantor, when the 2nd respondent failed to discharge the obligations contained in Exhibit K. In AUTO IMPORT EXPORT v. J. A. A. ADEBAYO & ORS. (2005) LPELR 642 (SC), the Supreme Court when deciding on when the right of action against a guarantor arise held, per OGBUAGU, JSC as follows:
“Once again, by way of emphasis and this is also settled the liability of a/the guarantor, becomes due and mature, immediately the debtor/borrower becomes unable to pay its /his outstanding debt. The guarantor’s liability, is then said to have, crystalized. See ROYAL EXCHANGE ASSURANCE (NIG) LTD. v. ASWANI TEXTILES LTD. (1992) NWLR (pt.227) 1; (1992) 2 SCNJ 346; EBONI FINANCE & SECURITIES LTD. v. WOLE-OJE TECHNICAL SERVICE LTD. & 2 ORS. (1996) 7 NWLR (pt. 461) 464 at 476 C. A.; SALAWAL MOTOR HOUSE LTD. & ANOR v. HAJJI B. LAWAL & ANOR (1999) 9 NWLR (pt. 692 at 706, C. A.”
It is my holding that the Appellant having guaranteed that his son would travel to Germany the second time and come back with both the old and new consignments is liable, with the 2nd Respondent when the latter defaulted by short supplying Exhibits A and K is to put the Appellant in the position of the guarantor of the 2nd Respondent in his 2nd journey to Germany. The Exhibit K is an agreement tendered in the lower Court to show the facts contained therein between the Appellant and the 2nd Respondent on the one hand and the 1st Respondent and 2nd Respondent on the other. It was not tendered as a deed over any property per se. Therefore, the argument by learned counsel to the Appellant that it ought to have been registered by virtue of Section 2 of the Land Instruments (Preparation and Registration) Law, Cap 75, Laws of Anambra State is a misconception of the position of the law. I hereby discountenance that argument. I resolve this issue in favour of the Respondent.
In answer to the second issue I formulated, i.e. whether the transaction that gave rise to drafting Exhibit K is on determination of title to the two lands at Uli and Aba or a simple case of pledge/contract? It is my finding that from the facts of his case (which I narrated under issue One above), the title deeds of the two properties at Uli and Aba were voluntarily surrendered by the Appellant to the 1st Respondent as a pledge guaranteeing the safe return of the 2nd Respondent from Germany with the unsupplied tyres from the first trip and full supply of the agreed number of tyres in the second trip as contained in Exhibit K. Both promises were not fulfilled by the 2nd Respondent. Thus the liability of the Appellant as guarantor to the 2nd Respondent (who is his son) becomes due and mature the moment the 2nd Respondent failed to fulfil his part of the bargain. The guarantor’s liability crystalised and therefore the 1st Respondent is entitle to disposed of the property in his possession to recoup the money he lost as a result of the two botched trips to Germany by the 2nd Respondent. The learned trial Judge aptly captured the position when he held thus:
“I have equally relied on the position of the 1st plaintiff as guarantor with Exhibit K and held that the purport of that collateral was to the effect that if the 2nd plaintiff performs in terms of the second trip and returns with the defendant’s goods and money, the defendant will return the documents to the 1st plaintiff, but where there is a default, the defendant was to apply the property of the collateral to satisfy his loss and indemnify himself.” (Pages 161 of the Records).
This holding by the learned trial Judge is the correct position of the law in that respect. It is my holding that the transaction that gave rise to drafting of Exhibit K has nothing to do with the determination of the title to the Appellant’s lands at Uli and Aba. Rather it is a simple case of pledging the said landed properties by the Appellant as collateral for the return of the 2nd Respondent to Nigeria from Germany where he went to retrieve the money and goods from the first trip and to use the additional money given to him to buy a container load of tyres to convey same back to Nigeria which he failed to do. I also resolve this issue against the Appellant.
It is therefore the judgment of this Court that this appeal lacks merit. It is hereby dismissed. The judgment by the trial Court delivered on 29th June, 2009 in Suit No. HIH/12/2005 is affirmed by me. The 1st Respondent is entitled to cost against the Appellant and the 2nd Respondent jointly and severally which I assessed at N100,000.00.
CHIOMA EGONDU NWOSU-IHEME, J.C.A.: I had the advantage of reading the draft of the lead Judgment delivered by B. G. SANGA, JCA.
I agree with the reasons therein advanced to arrive at the final conclusion that the appeal be dismissed.
I abide by the order as to costs made by SANGA, JCA in the lead Judgment.
RITA NOSAKHARE PEMU, J.C.A.: I had read in draft the lead judgment just delivered by my brother BITRUS GYARAZAMA SANGA, JCA.
I agree with his reasoning and conclusion.
I also dismiss the appeal.
I abide by the consequential order made as to costs.
Appearances:
J. R. NDUKA Esq. For Appellant(s)
CHIEF (DR.) E. E. EGBUNONU Esq. For Respondent(s)
