L. T. Thadani & Anor V. National Bank Of Nigeria Ltd & Anor (1972)
LawGlobal-Hub Lead Judgment Report
G. B. A.COKER, J.S.C.
The sole point for determination in this appeal is whether or not a letter produced in evidence at the trial as Exhibit “C” was a sufficient acknowledgment of a debt to take the case out of the provisions of the Statutes of Limitation.
The respondent, that is to say the National Bank of Nigeria Ltd., had lent monies to the appellants by way of overdrafts on their current account and at the time of the institution of the present proceedings it is stated that the balance on the accounts of the defendants (now appellants) stood at 3,980.18.10d.
The plaintiffs then instituted the present proceedings against the defendants claiming the above amount. In the course of the proceedings and after the parties had delivered their first set of pleadings a third party, Dr. A. Maja was joined by order of court. The parties then filed and served amended pleadings and the case went to trial.
Both the present appellants, as defendants, and Dr. Maja as an added defendant, resisted the claims of the plaintiffs and Dr. Maja pleaded, inter alia that he would contend at the hearing that the action was “statute barred because more than six years has elapsed since the cause of the action arose.” For reasons which are not relevant to this decision, it was adjudged that no case was made out by the plaintiffs against Dr. Maja and the action was struck out as against him.
We stated before that the appellants (who will hereafter in this judgment be referred to as the defendants) resisted the claims of the plaintiffs. Apart from alluding to the indemnity by Dr. Maja in their pleadings, they disclaimed liability in their statement of defence, paragraphs 8 and 9 of which read as follows:-
“8. From the 30th day of January, 1956, the said joint account was never in credit and all transactions thereon were for the said partnership business of fishing.
9. The plaintiff’s cause of action did not accrue within six years before the commencement of this action and the 1st and 2nd defendants will rely upon Section 3 of the Limitation Act, 1623 as a bar to this action.”
In a reserved judgment, the learned trial Judge held that the claim was not statute barred in that there was indeed an acknowledgment of the debt by the defendants which took the matter out of the Statutes of Limitation. In the course of the hearing, the plaintiffs had produced a letter dated the 7th February, 1963, by which on that date their solicitor wrote to the defendants asking for payment of the amount now claimed. The letter was admitted in evidence as Exhibit “D” and it reads as follows:-
“Dear Sirs,
I am instructed by my clients, the National Bank of Nigeria limited, to demand from you the immediate payment of the sum of 3,980.18.10d. (Three Thousand Nine Hundred and Eighty Pounds Eighteen Shillings and Ten Pence) being amount long overdue and owing to their Bank up to and including the 31st January, 1963, as per attached Statement of Account.
Unless this amount is paid to my clients within seven (7) days from the date hereof, they shall be compelled to institute legal proceedings against you without further notice.”
The plaintiffs also produced a letter (admitted in evidence as Exhibit “C”) by which the defendants replied to the letter Exhibit “D”. That letter, i.e., Exhibit “C”, is dated the 11th February, 1963, and it reads in full as follows-
“Dear Sir,
We acknowledge receipt of your letter of the 7th instant together with the statements of account enclosed.
The account was in connection with the defunct Lagos Fishing Company and we were advised at the time by Dr. Maja to take money from the Bank to run the Fishing boats and he endorsed the cheques before our receiving money from the Bank. If you go through the statements you will see that we were debited and credited on the 1st March, 1957. After these the further debits from item 200pounds to item 250pounds were used in docking and repairing “Strath Blair.”
1. Item 432.14.10d on the 20th May, 1958, to pay National Bank for netting fishing gear for “Strath Blair” which is owned by Dr. Maja.
2. The item 327.6.6d on 5th June, 1958, was in connection also with the Lagos Fishing Company.
3. The item 218.0.0d was for coal supplied “Strath Blair” by the Nigerian Railway.
all other items shown on the statements are for interest due.
We wish to inform you that we have taken Dr. Maja, owner of Lagos Fishing Company to the High Court in connection with this account and ask you to please hold on in the meantime until we hear the Court’s decision.”
The position therefore at the trial was that the Plaintiffs sought to disprove paragraph 9 of the amended statement of defence by the letter Exhibit “C” which was a reply to the plaintiffs’ letter Exhibit “D”. The learned trial Judge, Sowemimo, J.,(as he then was), heard arguments on this point from both sides and in his judgment stated as follows:-
“The letter Exhibit C is a reply to Exhibit D, Exhibit D is a letter of demand from the plaintiffs to the defendants for a payment of the sum which is the subject matter of this claim. Exhibit C, as far as is material to this case, reads as follows:-
“We acknowledge receipt of your letter of the 7th instant together with the statements of account…………
We wish to inform you that we have taken Dr. Maja, the owner of Lagos Fishing Company, to the High Court in Connection with this action and ask you to please hold on in the meantime until we hear the court’s decision.”
On a proper construction of this letter, I hold that it is a sufficient acknowledgement of the debt as set out in Exhibit D and if I so, hold, the defence of the debt being barred on statute of limitation will be of no avail to the first and second defendants.”
He then gave judgment in favour of the plaintiffs against the defendants as claimed with costs.
The defendants have appealed to this court against that Judgment and as stated above, the only point argued before us was whether or not on a proper construction of the letter Exhibit “C” it constituted an acknowledgement of the debt so as to destroy the plea of the defendants that the claim was statute barred. In arguing the appeal, learned counsel on both sides referred the court to a number of authorities and invited our attention to various dicta of Judges as to what constitutes an acknowledgement for the purposes of the Statutes of Limitation.
We cannot but confess that the matter is not free from difficulty and whilst a tribunal faced with the construction of a document for this purpose will have to decide as a matter of law whether the document could constitute an acknowledgement, the issue whether it does so or not is a matter essentially of fact. In Spencer v. Hemmerde (1922) 2 AC 507 at p. 534, Lord Sunner summarised the position as follows:-
“The decisions on the exact meaning and effect of the precise words employed by generations of shifty debtors are, it is agreed on all hands, irreconcilable. It may, perhaps, serve in some degree to mitigate the appearance of hopeless contradiction if the theory, on which the decisions have gone, can, to some extent, be unified. I do not think it has been as self-contradictory as is generally supposed. The Restoration lawyers, no doubt, were brought face to face with two things; a multitude of debts still unpaid but long irrecoverable owing to the Civil war, and a statute, which, in terms, left the creditor without remedy. When first new promises and acknowledgments came into recognition, and why, we do not know, but ultimately it became necessary to invent an explanation, where a simple and existing rule of practice had to be extended to complex cases.”
Before us, it was not contended that Exhibit “C” could not constitute an acknowledgement; what learned counsel for the defendants said was that it does not. On the other hand, learned counsel for the plaintiffs contended that taken along with Exhibit “D”, an acknowledgement of the debt is clearly inferred. Section 3 of the Statutes of Limitation, 1623 provides, so far as is material to this case, as follows:
“3. And …. all actions of trespass, quare clausum fregit, all actions of trespass, detinue………………..all actions of debt grounded upon any lending or contract without specialty, all actions of debt for arrears of rent……………..shall be commenced and sued within the time limit hereafter expressed, and not after (that is to say) the said actions upon the case (other than for slander) and the said actions for attempt and the said actions for trespass, debt, detinue …………within three years next after the end of this present session of Parliament, or within six years after the cause of such actions or suit, and not after…………….”
The principle of acknowledgment or part-payment is founded on the theory that by so doing the debtor establishes a fresh contractual relationship so that a cause of action then starts to run from the date of the fresh contractual relationship. In Stamford Spalding & Boston Banking Co. v. Smith (1892) 1 QB 765, Lord Herschell at p. 768 stated thus concerning the effect of a document which is relied upon as an acknowledgement:-
“It cannot be disputed that an acknowledgement, in order to exclude the operation of the statute, must be absolute and unconditional, and one from which a promise to pay the debt can be inferred. But it was argued that if an acknowledgement is in fact made, it is immaterial to whom it is made. Such appears to have been considered the law at one time, and there are certainly some dicta to that effect; but that is not the law now. In my opinion, since the decision in Tanner v. Smart (1827) 6 B & C 103 it has been abundantly settled that an acknowledgement to a stranger is not sufficient. It must be to the creditor or his agent, to some one who was entitled to receive payment of the debt, and to whom you could presume a promise to pay the debt.”
The position therefore is that before a writing could be described as an acknowledgement to take the case out of the Statutes of Limitation, the writing by the debtor should recognise the existence of the debt or the rights against himself. Beyond this whether a document does this or not is a question of fact depending upon its contents.
It is the duty of a court called upon to decide such an issue to study carefully the document on which reliance is placed by the defendant and ascertain as best as it can whether the document by its contents does recognise the existence of a right or debt against the defendant or indeed the existence of a right of recourse against himself. It is not necessary that the document should state the precise figure of the indebtedness. In Ajike v. Cardoso & Anor. (1939) 5 WACA 134, it was observed that the court would then turn to the letter written with a view to determining whether, according to the ordinary and the natural meaning of that letter, it contains either an expressed promise to pay or a clear acknowledgement of the debt and, in the latter case, whether the acknowledgement is coupled with words which prevent the implication of an unconditional promise.
Applying these directions, we have carefully studied the letters Exhibits “C” and “D” ourselves. We do not share the views of the learned trial Judge that the letter Exhibit “C’ on which the defendants rely contains an acknowledgement by the defendants to the plaintiffs of a right against themselves or of the existence of a debt due and payable by them to the plaintiffs. It is agreed by all parties that the letter contains no promise to pay or repay any amount of any debt and in no part of the letter Exhibit “C” did the defendants expressly or impliedly say that they were indebted to the plaintiffs and/or that such debt could be enforced against them. Evidently, by their letter Exhibit “C”, all that happened was that the defendants acknowledged the receipt of the letter Exhibit “D” with the Statement of Account enclosed, but they did not acknowledge as such that they accepted the liability shown as theirs in that account.
This was the only matter argued before us and we are of the view that the document Exhibit “C” is not an acknowledgement which would take the claim out of the provisions of the Statutes of Limitation, 1625, which applied to the case. On this basis the plea of the defendants in paragraph 9 of their Statement of Defence should have been accepted and we will now do so.
The appeal succeeds and it is allowed. The judgment of the Lagos High Court in Suit No. LD/113/65, against the appellants, including the order for cost, is set aside and it is ordered that the plaintiff’s case be dismissed and that this shall be the judgment of the court. The respondents shall pay the costs of these proceedings fixed in this court at 80 guineas and in the court below at 40 guineas.
Other Citation: (1972) LCN/1620(SC)
