Alhaji Banmidele Lawal Vs Union Bank Of (Nig.) Plc & Ors (1995)

LAWGLOBAL HUB Lead Judgment Report

OGWUEGBU, JSC 

This is an appeal from the judgment of the Court of Appeal, Kaduna Division in which the judgment and order of the High Court of Kwara State (Gbadeyan, J.) in favour of the plaintiff were set aside. The plaintiff who was dissatisfied with the judgment has appealed to this court on six grounds of appeal. From the grounds of appeal, the following three issues for determination were formulated:-

“(i) Whether the Court of Appeal was right in disturbing the finding of the trial court that the 1st respondent accepted the arrangement contained in Exhibit 14:

(ii) Whether the Court of Appeal was right in holding that the trial court did not properly apply the doctrine of estoppel and waiver to the facts of the case;

(iii) Whether the Court of Appeal was right in reversing the decision of the trial court on, whether in the circumstances of the case, the appellant proved his case on a balance of probability in view of the fact that the 1st respondent did not adduce any evidence.”

The plaintiff who is the appellant in this court claimed as per his amended statement of claim against the defendants jointly and severally as follows:-

“1. A declaration that the plaintiff was discharged and/or relieved of all liabilities whatsoever to the 2nd defendant for any debt howsoever in relation to the debt owed it by the 3rd defendant by reason of an agreement dated 3/7/87.

2. A declaration that the parties having acceded to, acted upon, and implemented the said agreement of 3/7/87, are estoppel in law and equity from going back on the said agreement as they are deemed to have waived their rights.
3. An order directing the immediate release of the plaintiff’s title documents and properties at numbers 1- 3 Oremeji Idofian Street Ilorin to the plaintiff by the 2nd defendant”

The parties will hereinafter be referred to as appellant and respondents respectively. I will now set out briefly the facts of the case for a proper appreciation of the issues canvassed in the appeal. The appellant and the 2nd respondent were the directors of the 3rd defendant. The appellant was the Managing Director. The 3rd respondent operated a current account with the 1st respondent’s Ilorin Main Branch. The 3rd respondent took a loan/overdraft facility from the 1st respondent and secured it with two legal mortgages one covering properties numbered 1 – 3 Oremeji Idofian Road, Ilorin, belonging to the appellant and the other covering properties numbered 4 to 7 in the same street belonging to 1st respondent (Exhibit 15 and 16).

In addition, the appellant and the 1st respondent each guaranteed the repayment of all loans received from the 1st respondent by the 3rd respondent in two separate guarantees. The one executed by the appellant is Exhibit “17” and that executed by the 2nd respondent is Exhibit “18” By a letter dated 21/3/87 (Exhibit “10”) addressed to the 1st respondent by the 2nd respondent, the latter informed the 1st respondent that he had been assigned the responsibility of liquidating the entire debt owed to it by the 3rd respondent.

The 1st respondent in its reply (Exhibit “6”) demanded from the 2nd respondent a copy of the resolution of the 3rd respondent company to Exhibit “l0”. The appellant in his capacity as the Managing Director of the 3rd respondent wrote to the 1st respondent (Exhibit “9”) and enclosed a copy of the agreement between the appellant and the 2nd respondent (Exhibit “14”) with regard to the assignment of the indebtedness of the 3rd respondent. The 1st respondent by a letter dated 28/9/87 (Exhibit “12”) promptly reacted to Exhibit “9”.

In Exhibit “12”, the 1st respondent expressly rejected the notice of assignment of the 3rd respondent’s indebtedness to it.

In the interval, the 1st respondent successfully obtained judgment against the 2nd and 3rd respondents. In respect of the loan granted to the 3rd respondent (Exhibit “19”). The judgment debt was not satisfied. The 1st respondent took steps to realize the debt and advertised the sale by public auction of the properties mortgaged to it by the appellant’ and the 2nd respondent.

Thereupon, the appellant instituted the action claiming the reliefs set out above: The appellant sought and obtained an order of interlocutory injunction in the trial court restraining the 1st respondent from exercising its power of sale under the deed of legal mortgage (Exhibit “15”) until the determination of the substantive action. As stated earlier in this judgment, the appellant won in the High Court and lost in the court below and being dissatisfied with the decision, appealed to this court. The three issues for determination in the appeal have also been set out above.

At the hearing of the appeal, learned counsel for the appellant adopted and relied on the brief of the appellant filed on 8/5/92, the 1st respondent’s counsel also adopted and relied on the 1st respondent’s briefs filed on 9/6/92. The 2nd and 3rd respondents filed no briefs of argument and were unrepresented. Mr. Adeleye for the appellant had submitted in the brief of argument that the Court of Appeal was wrong in disturbing the findings of the trial court; that all the parties including the 1st respondent accepted Exhibit “14” and acted upon it. It was also argued that on a proper construction of Exhibit “6,” the 1st respondent impliedly accepted the assignment contained in Exhibit “14” and the court below was therefore wrong in treating Exhibits “14” and “6” as offer and acceptance. It was the contention of the learned appellant’s counsel that the parties acted on Exhibit “14” and changed their positions when the appellant started liquidating the debt owed by the 3rd respondent to the Societe Generale Bank Nig. Ltd. and 2nd respondent, in the same manner, started paying the debt of the 3rd respondent to the 1st respondent coupled with the action filed by the 1st respondent against the 2nd and 3rd respondents which resulted in Exhibit “19”.

It was also submitted that in the above circumstances, it would be unconscionable for the 1st respondent to deny its acceptance of Exhibit “14” more so when the appellant was not made a party to Exhibit “19”. We were referred to Exhibits “11” and “12” which the learned trial Judge held was not received by the appellant and yet the court below placed undue reliance on Exhibit “12” which was not in existence when the action giving rise to this appeal was filed. It was further submitted that the appellant’s case was not based on contract but on estoppel and that misapprehension led the court below to hold that the 1st respondent was not a party to Exhibit “14” and could not be bound by it.

As to the doctrine of estoppel and the principle of waiver, counsel submitted that contrary to the conclusion reached by the court below, the learned trial Judge rightly and properly applied them based, on his finding on the conduct of the parties towards Exhibits “14,” “6,” “9” and “10” and that by implication, the 1st respondent consented to the assignment. We were urged not to allow the 1st respondent who by its conduct had induced the appellant to believe that it would not enforce its rights under the mortgage to do so.

The following cases were referred to and relied upon:- Birmingham and District Land Co. v. London and North Western Railway Co. (1989) 40 Ch D. 268 at 286, Central London Property Trust Ltd. v. High Trees House Ltd. (1947)KB. 13; Tika-Tore Press Ltd. v. Abina (1973) 1 All N.L.R. (Pt. 11), 244. On issue three, it was submitted that the court below was in error to have reversed the decision of the trial court which was based on preponderance of evidence before it. It was argued that the 1st respondent offered no evidence at the trial and cannot be heard to complain on weight of evidence.

Learned counsel referred to paragraphs 14 -18, 19, 23 and 23A of the amended statement of claim of the appellant which were not displaced by Exhibits “15,” “17” and “6.” Since the 1st respondent offered no evidence to rebut those paragraphs of the statement of claim, they were deemed to have been admitted by it. He cited the cases of Ewerami v. A. C. B. Ltd. (1978) 4 S.C. 99 at 108, Tildeslay v. Harper (1877) 7 Ch. D. 403 and Omoregbe v. Lawani (1980) 3-4 S.C. 108 at 117. In reply to the above contentions, the learned counsel for the 1st respondent submitted as follows:-

1. That on a proper construction of Exhibit “6,” it cannot be said that the 1st respondent accepted Exhibit “14” which is an arrangement between the appellant and the 2nd respondent.
2. That in Exhibit “6” the 1st respondent gave two conditions to the 2nd respondent under which it would accept that the latter would liquidate the debt owed it by the 3rd respondent and until the conditions were fulfilled by the 2nd respondent and accepted by the 1st respondent, it could not be said that the 1st respondent had accepted the offer made by the respondent.
3. That the 2nd respondent never replied to Exhibit “G’ and Exhibit “12” dispelled any doubt as to the stand of the 1st respondent on Exhibit “14”.
4. That in any case, clause 12, of the Exhibit “17” permitted’ the 1st respondent to enter into arrangement of any nature with any other person liable in respect of the principal debt without its right being affected under the guarantee.
5. That the only issue in the case is whether Exhibit “6” could be interpreted to mean acceptance of Exhibit “14” by the 1st respondent and that Exhibit “12” is additional evidence which supplements Exhibit “16.”
6. That non-joinder of the appellant in Exhibit “19” could not justify the order for the release of his property in Exhibit “15” because the 1st respondent has a right to sell the mortgaged properties as unpaid mortgagee under Exhibit “15” without recourse to the court.
7. That the acts of the 1st respondent which were held by the trial court to amount to estoppel by conduct, namely, Exhibit “6”, non-joinder of appellant in the suit leading to the judgment in Exhibit “19” and the alleged payments made by the appellant to Societe Generale Bank Ltd. do not constitute estoppel by conduct.
8. That even though the 1st respondent did not call any evidence, it furnished enough credible evidence which were sufficient to rebut the claim of the appellant that his obligations under Exhibit “15” and “17” were waived.
9. That these were done by tendering Exhibits “15” and “17” through the appellant and extracting other oral evidence from him through cross-examination by counsel for the 1st respondent.
10. That Exhibit “14” could not affect the obligations under Exhibits “15” and “17” because it was a domestic arrangement between the appellant and the 2nd respondent and did not refer to Exhibits “15” and “17.”
11. That the meeting which gave birth to Exhibit “14” could not bind the 3rd respondent nor its members and could not also bind the 1st respondent who was not member of the 3rd respondent company. The cases of Ingyengierefaka v. Gidom (1974) Nigerian Commercial Law Report 528 and Purohit v. Indian Building Contractors, Ltd. (1964) (1) A.L.R, Comm. 226 were cited.
12. That an agreement for a composition will not prevent the creditor from suing unless a fund has been provided giving him some benefit, and creating a disadvantage to the other, so as to amount to a consideration. Counsel cited De Souza v. Mandavia & or. (1964) 1 A.L.R. Comm. 414 and Stackhouse v. Barnston 32 E.R. 925. The entire case is based on documentary evidence and the determination of the appeal will be based on the legal effect given to the documents tendered and admitted in evidence. The most important of the Exhibits are 15, 17, 16, 18, 14, 10, 6, 9, 12 and 19. I will start with Exhibit 14 which is the beginning of the controversy giving rise to the present proceedings. It provides: “This Agreement is made the 3rd day of July, 1987 between Alhaji B. A. Lawal of the first part AND Alhaji Subair A. Atanda …………………… of the second part.

Whereas:-

1. The parties hereto are both directors of Sabal Technical and Engineering Company Ltd. of No. 12 – 14 Brown Street Aguda Surulere, Lagos ……………………………………………….
2. The parties being desirous to share the liabilities of the company owning (sic) to poor performance of the company among other reasons.
3. …………………………………………………. IT IS HEREBY AGREED AS FOLLOWS:-
4. That all debts including the loan account and interest thereon owed by the company with the Union Bank of Nigeria Ltd. at Murtala Muhammed Way Ilorin shall become the liability of Alhaji Subair A. Atanda and the same shall become payable by him solely and singularly.
5. That all debts including the loans account and interest thereon owed by the company with Societe Generale Bank of Nigeria Ltd. at Ibrahim Tiawo Road, Ilorin shall become the liability of Alhaji B. A. Lawal and the same shall become payable by him solely and singularly. ………………………

”By a letter dated 21/8/87, the second respondent wrote to the 1st respondent (Exhibit “10”) stating in part:- However, it has been resolved that I shall be responsible for liquidating the debt owed by Sabal Technical & Engineering Company Limited. I wish to state further that I would not want the matter to be handled yet by the Bank Solicitors. In the light of the foregoing, I am prepared to liquidate whatever is owed your bank by the above named company by monthly installment payment of N5,000.00 (Five Thousand Naira) beginning from the end of October 1987………………………………………..

Yours faithfully, Sgd. Alhaji Subairu Atanda”

By a letter dated 11/9/87 (Exhibit “6”) the 1st respondent replied the 2nd respondent as follows:- “We refer to your letter dated 21st August, 1987 and shall be pleased to receive a copy of your company’s Board Resolution wherein you were said to be responsible for liquidating the debt owed by Sabal Technical & Engineering Company Limited. While we appreciate your willingness to repay the debt of the above named company, we wish to mention that the proposed monthly repayment installment of N5,000.00 is not enough to care for monthly interest charges talk less of reducing the principal debt. A higher figure is preferable.

Your early reply is necessary to avoid the legal action threatened in our Solicitor’s letter dated 29th June, 1987.” There was no reply to this letter. By a letter dated 23/9/87 (Exhibit “9”), the appellant in his capacity as the Managing Director of the 3rd respondent wrote to the 1st respondent. It reads in part:-

“I write to bring to your notice that the Director of the above named company as a result of poor business fortunes have agreed to share the debts outstanding against the company and assigned same to individual directors. Under the deed of settlement dated 3rd July, 1987 all the debt due to your bank, U.B.N. Ltd. are now the sole liability of Alhaji Subairu A. Atanda, a copy of the agreement is attached herewith. By this, all other directors are discharge (sic) from further liabilities. Please acknowledge receipt.”

The first respondent promptly replied by a letter dated 28/9/87 (Exhibit “12”) in the following terms: “The Managing Director, Sabal Technical & Engineering Co. Ltd., 197 Abdul Azeez Attah Road, Ilorin. Dear sir, Re: Notice of Assignment/ Sharing of Debt Reference to your letter dated 23rd September, 1987 on the above. We hereby inform you that the purported notice of assignment/sharing of debt is not acceptable to the bank. Please note that we still maintain the joint and several liability of all your directors as well as the company until the debt is fully repaid. Yours faithfully, Sgd “Sub-Manager.” Now, on a proper construction of Exhibits “14”; “10,” “6” and “11” among others, was the liability of the appellant under Exhibits “15” and “17” (the deed of legal mortgage and the guarantee) discharged? The main question here is whether the 1st respondent approved or accepted the terms of Exhibit “14”. The learned trial Judge concluded that the parties including the first respondent accepted the arrangement in Exhibit “14” and the said Exhibit “14′ discharged the appellant from his liability to the 1st respondent. The court below reversed the conclusion. Exhibit “1” was an agreement entered into by the appellant and the 2nd respondent in which they purported to share the liabilities of the 3rd respondent between themselves. The 1st respondent was not a party to it. When the 1st respondent received Exhibit “10,” it sought clarification of the purported agreement by writing Exhibit “6” which was addressed to the 2nd respondent and demanded a copy of the resolution of the 3rd respondent approving the sharing arrangement. The 1st respondent in Exhibit “8” further stated that the proposed monthly repayment installment of N5,000.00 was not even to take care of the monthly interest charges let alone reducing the principal debt. The two points raised in Exhibit “6” did not on a proper construction of it amount to an acceptance of Exhibit “14” by the 1st respondent. Even if it is conceded that Exhibit ”6′ was a conditional acceptance (which was not the case), at best, it was a conditional acceptance authorizing which was dependent on the production of the resolution of 3rd respondent company a the sharing of its liabilities and an upward review of monthly installment payment acceptable to the 1st respondent. There was no reply to Exhibit “6”. I agree with the court below that Exhibit “6” was a counter-offer or a qualified acceptance which could not give rise to a binding agreement between the parties. See Sulaiman & Bros. v. Haus Mehr of Hamburg (1957) 2 FSC. 60 and Odunsi v. Boulos: (1959) 4 FSC. 234. In addition, Exhibit “12′ put any controversy over Exhibit “14” to rest. It was a rejection of Exhibit “14”. There was no misapprehension on the part of the court below of the purport of Exhibits “6” and “12. The construction placed on the exhibits by the court below cannot in my view be impeached. That court while construing. Exhibits “14”, “6” and “12” said:

“…………. for avoidance of doubt even without the 3rd respondents Board Resolution having been furnished to the appellant as requested by it, per Exhibit “6,” whatever hesitation or ambiguity that lingered in the mind of anybody in relation to the appellant’s view on Exhibit, 4 was clearly dispelled by Exhibit’ 12……………………………………………. In the result I hold that on a proper construction of Exhibits 6 and 12, one is driven to the irresistible conclusion that the appellant did not impliedly or expressly accept the arrangement under Exhibit 14. The evidence before the court in this regard dearly supports this conclusion.” The finding by the learned trial judge that the appellant did not receive Exhibits “11” and “12” did not put an end to the question whether the 1st respondent accepted the terms set out in Exhibit 14. When the 2nd respondent testified in the trial court as 1st defendant, he stated that the appellant sent him a letter from the let respondent. He photocopied it and sent the original back to the appellant and that the plaintiff had the original of Exhibit 12. The 2nd respondent was not cross-examined on this assertion. The 2nd respondent as 1st defendant in the court of trial averred in paragraph 17 of his joint statement of defence with the 3rd respondent that the 1st respondent wrote Exhibit 12 to the appellant in reply to Exhibit 9 which the appellant wrote to the 1st respondent in respect of Exhibit 14. Notice was given to the appellant to produce the original of Exhibit 12. With this averment coupled with the evidence of the 2nd respondent on Exhibit 12 which was not challenged, one is at pains to see how the learned trial judge came to the conclusion that Exhibit 12 was not received by the appellant. That finding was unsound and the court below disregarded it. See Commissioner for Works & Housing v. Lababedi & ors. (1977) 11 – 12 S.C. 15 and Chief Ebba v. Chief Ogodo & or. (1984) 4 S.C. 84. As to estoppel by conduct and waiver, it was submitted on behalf of the appellant that acting on Exhibit 14 the appellant started to liquidate the 3rd respondent’s liability to Societe Generate Bank (Nigeria) Ltd. and paid a total of N42, 000.00 as shown in Exhibit 2, 3 and 4 while the 2nd respondent paid N38,000.00 to the 1st respondent. In addition, the 1st respondent instituted Suit No. KWS/324/89 against the 2nd and 3rd respondents which led to the judgment contained in Exhibit 19 without joining the appellant in the proceedings. It was argued that these acts of the 1st respondent induced the appellant to believe that the rights under Exhibits 15 and 17 would not be enforced against him. The 1st respondent should not be allowed by the court to enforce those rights without placing the parties in the same position as they were, he contended. Exhibit 6 did not show that the 1st respondent accepted the arrangement set out in Exhibit 14. There is also nothing in Exhibit 6, 9, 10 and 14 to show that the 1st respondent agreed to or acted on Exhibit 14. The 1st respondent’s rejection of Exhibit 14 was communicated to the 3rd respondent whose directors were the appellant and the 2nd respondent (Exhibit 12). Despite the rejection of Exhibit 14 by the let respondent and the dear wording of the said exhibit, the learned trial Judge found that the conduct of the 1st respondent amounted, to either estoppel or waiver. The doctrine of estoppel is that where one party has by his words or conduct made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then once the other party has taken him at his words and acted on it the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous relations as if no such promise or assurance had been made by him. See Tika-Tore Press Ltd. v. Abina & ors. (1973) 12 S.C. 79 at 91-94. When the appellant made payment to Societe Generale Bank (Nigeria) Ltd., the 1st respondent had not been shown Exhibit 14 nor the resolution of the Board of Directors of the 3rd respondent approving or authorising the arrangement. Again, when the appellant made payments on 13/11/87 (Exhibit 3) and 27/7/88 (Exhibit 4), the 1st respondent had informed the 3rd respondent and its directors (appellant and 2nd respondent) that Exhibit 14 was unacceptable to it. From the foregoing, there was nothing done by the 1st respondent which could have misled the appellant The appellant was also in a position to find out the reaction of the 1st respondent to Exhibit 14 being the Managing Director of the 3rd respondent to whom Exhibit 12 was addressed. A person who is in a position to find out the true situation but chooses not to complain that the conduct led to his detriment or peril. See Caroline Morayo v. Okiade & ors.(1940) 8 W A.C.A. 46. The 1st respondent never abandoned or relinquished its right under Exhibit 15 or 17. Exhibits 6, 12 and 14 did not amount to any surrender of the right of the 1st respondent under Exhibit 17 nor varied Exhibit 17. Exhibit 14 was silent on Exhibits 15 and 17 (The legal mortgage and the guarantee) entered into between the 1st respondent and the appellant and in particular. Clause 2 of Exhibit 15 and Clause 6 of Exhibit 17. Clause 6 of Exhibit 17 reads:-

“This guarantee is to be applicable to the ultimate balance that may become due to you from the Principal, and until payment of such balance the undersigned shall not be entitled to participate in any security held or money received by you on account of such balance or to stand in your place in respect of any such security or money.”

Clause 2 of Exhibit 15 reads in part:-

“……………………subject to the priviso for redemption following namely that if all moneys herein before convenanted to be paid shall be paid accordingly then the term hereby created shall cease.” Exhibits 6, 12 and 14 did not affect the liability of the appellant as provided in Exhibits 15 and 17. Exhibit 14 neither modified Exhibits 15 and 17 nor increased the liability of the appellant under them. The judgment (Exhibit 19) which is against the 2nd and 3rd respondents did not amount to a release of the appellant. The appellant was still liable and had not discharged his joint and several liability with the 2nd respondent. Clause 12 of Exhibit 17 gave the 1st respondent power to enter inter arrangements of any nature with any other person liable in respect of the principal debt without its rights under Exhibit 17 being affected. In the light of the above clause, the appellant cannot question his non-joinder in the suit which resulted in Exhibit 19. I am therefore of the view that the court below was right in holding that the learned trial Judge did not apply the doctrine of estoppel and the principle of waiver correctly.

It was contended that the court below gravely erred’ in reversing the decision of the trial court which was based on preponderance of evidence before it, that the 1st respondent called no evidence in support of his pleadings and should have been deemed to have abandoned its statement of defence. The case of International Bank for West Africa Ltd. v. Oguma Associated Co. (Nig.) (1986) 2 N.W.L.R. (Pt.20) 124 was cited. Evidence, as used in judicial proceedings has several meanings. In one sense, it means the testimony, whether oral, documentary or real which may legally be received in order to prove or disprove some fact in dispute.

Evidence in a judicial proceeding does not consist of oral evidence alone and proof of a fact can be documentary. The case between the parties was mainly documentary. The 1st respondent tendered various documents through the appellant and his witnesses in support of its pleading. The 2nd respondent also gave evidence part of which supported the case of the 1st respondent. The 1st respondent through cross-examination of the appellant by its counsel extracted answers which supported its case. It is not in every case that a party must adduce oral evidence to establish his claim or disprove a claim against him since that can be done in other ways short of going into the witness box.

Indeed, he need not be physically present in court if he is represented by a legal practitioner. See the unreported judgment of this court in S.C 126/1992: Cross River State Newspapers Corporation v. Oni & Ors. delivered on 20/1/95; But now reported in (1995) 1 NWLR (Pt.371) 270); y British & French Bank Ltd. v. Solel-El-Asad (1967) N.M.L.R 40 and Kehinde v. Ogunbunmi & ors. (1968) N.M.L.R. 37. The case of International Bank for West Africa Ltd. v. Ogumi Associated Companies (Nigeria) Ltd. supra decided that pleadings do not amount to evidence and that a party wishing to establish his claim must plead and prove it. Proof in the context does not mean proof by oral evidence alone.

The court below construed the exhibits tendered and legally admitted in the trial court together with the oral evidence adduced before coming to its decision. Its decision was right. The appeal therefore fails. I can find no merit in it and I hereby dismiss it with N1,000.00 costs to the 1st respondent.

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Other Citation: (1995) LCN/2676(SC)