Alhaji Muktari Uba & Sons Ltd & Anor V. Lion Bank of Nigeria Plc (2005)
LawGlobal-Hub Lead Judgment Report
JEGA, J.C.A.
By a writ of summons filed at the lower court on 12th June, 2001, which writ of summons was subsequently placed on the undefended list, the plaintiff/respondent claimed thus:
“The sum of N193,917.57 (One hundred and ninety-three thousand, nine hundred and seventeen naira fifty seven kobo) being the outstanding debit balance of loans granted to the appellants/defendants which the appellants/ defendants have refused to pay despite repeated demands to do so. The respondent/plaintiff also claim 21% interest on the said sum from the 18th March, 1999, till the day of judgment, and thereafter 10% court interest, until the debt is fully liquidated.”
On the 27th July, 2002 after the learned trial Judge refused to grant the notice of intention to defend, he entered judgment for the respondent/plaintiff in the sum of N193,917.57, being the balance of overdraft facility granted to the appellants/defendants since 1988 plus 21% interest as from 1999 until the day of judgment. There after at 10% court interest. Dissatisfied with the judgment, the appellants appealed to this court vide their notice of appeal dated 18th September, 2002 filed on the same date. The said notice of appeal contained three grounds of appeal.
We took the appeal on 25th January, 2005. In accordance with the rules of this court, learned Counsel for the appellants adopted his brief of argument which was dated and filed on the 24th September, 2002, he urged us to allow the appeal. In the same vain, learned Counsel to the respondent adopted her brief of argument which was dated 2nd March, 2004 and filed on the 5th October, 2004. Counsel urged us to dismiss the appeal and affirm the judgment of the lower court.
From the notice of appeal predicated on three grounds of appeal, learned counsel to the appellants formulated two issues for determination. The issues are stated thus:
- “Whether the respondent’s claim is a liquidated sum?
- Whether the trial court can draw inference on disputed facts.”
The learned counsel to the respondent on his part adopts the 1st issue for determination formulated by the appellants and formulated one issue as follows:
“Whether the plaintiff/respondent is entitled to judgment given the circumstances of the case.”
The issues formulated by the appellants and ones formulated by the respondent are one and the same. In fact, the respondent adopted the 1st issue for determination formulated by appellants and his second issue for determination is same with that of the appellant but couched in different words. Accordingly, for the purpose of this appeal, the issues as formulated by the appellant would serve in the treatment of this appeal.
Issue No. 1 – whether the respondent’s claim is a liquidated sum? Learned Counsel for the appellants in his submissions as contained in the brief of argument contends that the learned trial Judge on page 6 of the record was more concerned about analyzing the types of claim that were envisaged on the undefended list and what the applicant need to establish was that his claim is in respect of a liquidated sum of money and the respondent taking all things into consideration has no defense whatsoever to the claim, that the lower court went ahead to agree that the claim as presented was for a liquidated sum of money notwithstanding the failure and refusal of the respondent to attach the statement of account of the 1st appellant and the instrument used in drawing the account. Further, the lower court dwelled into the notice of intention to defend and was of the view that the repayments alleged by the appellant must be in respect of the N100,000.00 requested for on 31/12/88 and not the alleged N10,000.00 Learned Counsel referred to Order 23 rule 1 of the Kano State High Court (Civil Procedure) Rules, 1988, under which the respondent’s writ of summons on the undefended list was predicated and submits that the said Order 23 rule 1 deals squarely on a claim to recover a debt or liquidated money demand. Learned Counsel contends that the fact that a claimant presented his claim as a claim to recover a debt or liquidated money demand on the undefended list as envisaged by Order 23 rule 1 of the Kano State High Court (Civil Procedure) Rules, 1988, does not ipso facto make such a claim liquidated. Counsel further argued that the fact that the lower court agreed that the claim of the respondent as presented was a liquidated sum without much ado must be looked at taking into consideration the provisions of Order 23 rule 1of the Kano State High Court (Civil Procedure) Rules, 1988. That for the respondent’s claim to pass the test of being called a liquidated sum of money, it must be shown that the amount claimed is fixed or has been agreed upon between the parties herein which was not the case before the lower court.
Furthermore, the respondent’s claim must also have been shown to be capable of ascertainment by mathematical computation or by operation of the law to warrant same to be called a liquidated money demand.
Learned Counsel for the appellant contends that the respondent did not place anything before the lower court, i.e. the statement of account and the instrument used to overdraw the account to show the amount claimed as being fixed or an amount that has been agreed upon by parties and very importantly that the amount, the subject matter of the suit is capable of ascertainment by mathematical computation or by operation of the law. Further, counsel for the appellants argues that exhibits ‘A1’, ‘A2’, ‘B’ & ‘C’ attached to there respondent’s affidavit in support of their writ of summons at the lower court does not establish on their faces a prima facie evidence of indebtedness same not being an agreement between the parties herein that is capable of being ascertained by mathematical computation or operation of the law. Learned Counsel submits that the burden of proof under section 136 & 137 of evidence Act, Cap. 112, Laws of the Federation of Nigeria, 1990, has not been discharged to entitle the respondent to judgment on the undefended list, reference made to Iron Products Ltd. v. Sentinel Assurance Co. Ltd. (1992) 4 NWLR (Pt.238) 734 at 739; Holding No.5. Black’s Law Dictionary, 7th Edition by Byana Garner pages 240, 410 and 941. Further, counsel argues that the learned trial Judge when considering the respondent’s claim did not advert his mind to the requirement of what a liquidated sum should be and by so doing entered judgment against the appellants. Finally, counsel urged us to resolve the first issue in their favour and hold that taking the surrounding circumstances of the respondent’s claim into consideration, the learned trial Judge was wrong in entering judgment for the respondent.
In her reply to the issue No.1, learned Counsel to the respondent contends that under Order 23 rule 1 of the High Court Rules of Kano State, a claim for debt or liquidated money demand has been maintained against the appellants. Learned Counsel to the respondent submits that the amount claimed from the appellants was a fixed amount with interest as a result of the facility of N100,000.00 granted the appellants as a result of their request to the respondent through their letter dated 31/12/88 to which they attached the letter of grant belonging to Alhaji Muktari Uba as shown on pages 21-22 of the record of proceedings compiled by the appellants. Further, counsel to the respondent submits that exhibits A1, A2, B & C from pages 14-15 tell the story of how the appellants got the facility. Exhibit A2 shows that a verbal approval was given as minuted on the letter and the facility was processed on 12/1/89 as contained on page 21 of the record of proceedings. Exhibit C is the letter of demand from Messrs Kayode Olatunji & Co. that was written in 1994, when the total outstanding balance stood at N66,244.39 and the appellants responded by their exhibit C letter in September, 1996, as shown on page 31 of the record of proceedings compiled by the appellants. That by exhibit ‘B’ and exhibit ‘c’ the appellants/respondents had L.B.N. Plc. 30 January, 2006 acknowledged their indebtedness to the respondent/plaintiff. Submits that the appellant is only trying to hide under exhibit A attached to their defense so as not to pay and that exhibit A is a different transaction entirely.
Issue No.1 is whether the respondent’s claim is a liquidated sum. Black’s Law Dictionary at page 240 defines what a liquidated claim is. It states thus:
“A claim for an amount previously agreed on by the parties or that can be precisely determined by operation of law or by the terms of the parties’ agreement.”
The term liquidated claim is defined by this court in the case of Iron Products Ltd. v. S.A.C. Ltd. (supra) at page 746, paras A-G. This court states as follows:-
“A liquidated claim or demand may be defined as a claim or demand in which the amount is fixed, or has been agreed upon or is capable of ascertainment by mathematical computation or operation of law.”
Order 23 rule 1 of the High Court of Kano State (Civil Procedure) Rules, 1988, provides for the procedure to be followed in respect of liquidated money demand. It states thus:
“Order 23 rule 1: Whenever an application is made to a court for the issue of a writ of summons in respect of a claim to recover a debt or liquidated money demand and such an application is supported by an affidavit setting forth the grounds upon which the claim is based and stating that in the deponent’s belief there is no defence thereto, the court shall, if satisfied that there are good grounds for believing that there is no defence thereto, enter the suit for hearing in what shall be called the ‘undefended list’ and mark the writ of summons accordingly, and enter thereon a date for hearing suitable to the circumstances of the particular case.”
In the appeal at hand, the claim of the respondent as endorsed on the writ of summons is for the sum of N193,917.57 (one hundred and ninety three thousand, nine hundred and seventeen Naira. fifty-seven kobo). The respondent also claims 21% interest on the said sum as from the 18th March, 1999, to the date of judgment and thereafter 10% court interest rate until the debt is fully liquidated.
The case of the respondent at the lower court was that, it granted the appellant overdraft facility of N100,000.00 on the 31st December, 1988 to justify its case being placed on the undefended list, the respondent exhibited a letter from the 1st appellant dated 31st December, 1988, which is an application for overdraft facility of N100,000,00. On the right hand side of the application for overdraft facility, there is a handwritten inscription which states as follows:
“Godiya
The M/D has already gave a verbal approval pls process (sic)
Signed
12/1/89”
Apart from the application for overdraft facility of N100,000.00 with the handwritten inscription of the M.D. signifying approval, there is nothing before the lower court to show what actually transpired between the parties. There is no letter of offer of the overdraft facility of N100,000.00 from the respondent to the appellants stating the terms of the offer including the interest rate chargeable and the period of repayment. There is nothing exhibited before the lower court to show that the appellants’ particularly the 1st appellant, that it has withdrawn the amount indicated in the application for overdraft facility. Also, there is no statement of account of the 1st appellant with the respondent exhibited showing the payments made from the date the facility was alleged to have been granted and the balance outstanding against the 1st appellant at the time of filing this suit at the lower court. In fact, from the facts of this case and the totality of the documentary exhibits attached in support of the case, there is nothing whatsoever to show that the respondent has advanced an overdraft facility of N100,000.00 to the appellants. The handwritten inscription on the application for overdraft facility of N100,000.00 by the appellants to the respondent signifying verbal approval by the M.D. cannot by any stretch of imagination be termed to mean the grant of the facility applied.
In modern banking, transactions are strictly documented and terms of the transactions are explicitly stated. With regard to grant of over draft facility, there must be a letter of offer stating the terms of the facility granted, i.e the interest rate, the duration of payment and the security for payment and there must be acceptance by the applicant accepting the terms as contained in the offer. In the instant appeal, nothing has been placed before the lower court to show that the appellants have accepted the offer of overdraft facility of N100,000.00 from the respondent. Since there is nothing on record to show that the overdraft facility of N100,000.00 had been offered to the appellants, equally there is nothing on record to show that the appellants have accepted the said offer, the issue of liquidated money demand does not arise at all. Therefore, the respondent’s claim is not a liquidated sum. Accordingly, issue No.1 is resolved in favour of the appellants against the respondent.
Issue No.2 is centered squarely around issue No.1, i.e. it stands or falls with issue No.1. Since I have made a definite finding that the claim of the respondent is not a liquidated money demand, then issue No.2 becomes purely academic, because there would be no facts to rely or infer from to decide the dispute between the parties.
It is therefore, absolutely needless to give any consideration to issue No.2. On the totality of the foregoing, I hold that the appeal succeeds and it is hereby allowed. The judgment of Yusuf, J. in suit No. K/384/2001, delivered on 27th September, 2002, is hereby set aside, and in its place an order is made by this Honorable Court transferring this matter suit No. K/384/2001 to the general cause list for a full trial on the pleadings. This suit is remitted back to Kano State High Court to be assigned by the Hon. Chief Judge to a Judge other than Yusuf, J. The appellants are entitled to costs which I assess at N5.000.00.
Other Citations: (2005)LCN/1726(CA)
