Bank of the North Limited V. Alhaji Suarau Akorede (1994)

LawGlobal-Hub Lead Judgment Report

ISA AYO SALAMI, J.C.A. 

The plaintiff, a banker, in Suit No. 1/633/89 brought an action against the defendant, one of its customers claiming the sum of N29,574.89 being overdraft advanced to the customer in 1981 as well as accrued interest thereon. The current account number 504403 showed a debit balance of N29,574.89 as at 31st day of July, 1989. The overdraft made to the defendant was with interest at the rate of 18% per annum in accordance with Central Bank Regulation. The plaintiff pleaded that the defendant failed to repay the advance in spite of repeated demands.

The defendant did not only file a statement of defence in his defence but he also counter-claimed. The defendant admitted being a customer of the bank with a current account but denied that the debt was as a result of an overdraft. Rather, he contended he was granted a loan of N10,000.00 in September, 1981 attracting an interest rate of 10% orally agreed upon by himself and the Manager of the bank payable in five equal monthly installments with effect from October, 1981. He pleaded that the plaintiff demanded repayment of the loan at the expiration of the repayment period in 1982. He further averred that the statement of account contained wrong entries and the whole action is now statute barred-Limitation Law Cap. 64 of the Laws of Oyo State of Nigeria, 1978.
In his counter-claim, the defendant claims that the debit balance in the statement of account of the defendant does not reflect the actual indebtedness (if any) of the defendant and that the plaintiff is not entitled to charge interest at a rate other than the one agreed upon and an order ascertaining the true indebtedness of the defendant to the plaintiff if any.

The plaintiff denied all the allegations contained in the defence and counterclaim in his own reply to defence and counter-claim.
The plaintiff called one witness in support of its claim while the defence called two witnesses including the defendant in support of defence. Counsel then addressed the trial court. The learned trial judge in a reserved and well considered judgment made these findings of facts on the evidence that:-

“(1) The amount advanced to the defendant by the plaintiff was an overdraft of N10,000.00 and not a loan on 15.9.81.
(2) There was no rate of interest expressly agreed upon by the parties other than the prevailing rate at the time of the advance given to the defendant which was 18%.
(3) When the defendant failed to pay back the amount, a demand was accordingly made by the plaintiff in 1982 five months after the overdraft granted became payable. This is based on the fact that plaintiff pleaded in paragraph 6 of the statement of claim that there was a demand and the defendant admitted it that the demand was made in 1982 and the defendant’s evidence was never challenged on the same issue.
(d) Nothing was done by the plaintiff thereafter to recover the debt until this action was instituted in 1989.”

Thereafter, the learned trial judge considered the defence of the defendant relating to limitation law which he thought to be sufficiently fundamental to have been raised and tried in limine. The learned trial judge, Oluborode, J., then concluded as follows:-

“The plaintiff having failed to institute its action, within 6 years after the demand in 1982, which I found proved as mentioned above makes in my view the case statute barred. In the circumstance I do not consider going into other defences very necessary.
Now I pass on to the counter-claim by the defendant asking this court inter alia to declare or ascertain true indebtedness of the defendant to the plaintiff and to declare that the plaintiff is not entitled to charge any interest in excess of the rate agreed upon. I should say straight away that in view of my finding above it appears to me that the court cannot revive an action which is already statute barred by making the relief sought by way of counter-claim. The court cannot ascertain a debt which is legally irrevocable. It is an exercise in futility. In the circumstance the counter-claim shall and is hereby struck out.”

The plaintiff was dissatisfied with the judgment and has appealed to this court on three grounds of appeal which are set out immediately hereunder-

“1 The learned trial Judge erred in law by holding that the claim of the plaintiff against the defendant for the sum of N29,574.89 that the defendant is owing the plaintiff is statute barred on the ground that no action was instituted to recover the same since 1982 when demand was made as raised in the pleading and evidence of the defendant.

PARTICULARS OF ERROR
(i) The finding of fact that was made by the learned trial Judge that the defendant was granted overdraft and not loan has destroyed the defence of statute of limitation based on the existence of loan repayable within 5 months.
(ii) Letter of demand which the defendant alleged was written to him for the repayment of the loan was not tendered in evidence to establish the period when the cause of action arose.
(iii) By virtue of S.131 of the Evidence Act Oral evidence of the defendant cannot be relied upon in the absence of the letter of demand that he alleged was written to him.
(iv) There was no evidence on the part of the plaintiff that there was a demand in 1982.

2. The learned trial judge erred in law by holding that the claim of the plaintiff against the defendant for the sum of N29,574.89 that the defendant is owing the plaintiff is statute barred without the proper evaluation of the evidence that was adduced at the trial.

PARTICULARS OF ERROR
(i) Evidence of the plaintiff that the defendant was not granted any loan and that there was no agreement to repay the loan within 5 months was never discredited under cross-examination.
(ii) The defendant admitted in the course of proceeding that he is owing the plaintiff and the defendant sought a relief in court in respect of the indebtedness of the defendant to the plaintiff.

3. The learned trial judge erred in law by striking out the counter-claim in view of his finding on the limitation law when the defendant had given evidence in support of the counter-claim.

PARTICULARS OF ERROR
(i) The defendant has given evidence in support of the counter-claim that his indebtedness of N10,000.00 to the plaintiff should attract interest at the rate of 10% instead of 18% being claimed by the plaintiff.
(ii) The defence of statute of limitation has been impliedly waived by the defendant.”

Parties in compliance with practice and procedure of this court filed and exchanged briefs of argument. The plaintiff (hereinafter referred to as appellant) settled appellant’s and appellant’s reply briefs. The defendant (hereinafter referred to as respondent) filed respondent’s brief. In both appellant’s and respondent’s briefs issues for determination were formulated. In the appellant’s brief the issues identified as calling for determination are-

“(i) Whether in the absence of the letter of demand that the respondent alleged was written to him there is credible evidence to establish the defence of statute of limitation.
(ii) Whether the defence of statute of limitation that is based on the existence of loan repayable within 5 months can still be sustained in view of the finding of the learned trial judge that the respondent was granted overdraft and not loan.
(iii) Whether the respondent can still reply on the defence of statute of limitation in view of his plea to the court that the court should declare that he was owing the appellant N10,000.00 with the rate of interest of 10%.
(iv) Whether it was proper for the learned trial judge to strike out the counter-claim when evidence was being led in support of the counter-claim and defence of statute of limitation has been waived.”

In the respondent’s brief of argument two issues were identified as calling for determination. They are-:

“(i) Whether the learned trial judge is right in his conclusion that the plaintiff’s claim was statute barred.
(ii) Whether the learned trial judge was wrong in disregarding the counter-claim after he had made a finding that the appellant’s claim was statute barred.”

Pausing here, I wish to discuss ground 3 of the grounds of appeal. The ground raises the issue of acknowledgement which was never canvassed at any stage of proceedings in the court below. This court is thereby denied the opportunity or benefit of the opinion of the trial judge since it is not a court of first instance. To raise the issue for the first time in this court leave of this court is required. There is nothing before me indicative of such leave having been sought and obtained. The Supreme Court laid down the principle governing appeal courts’ exercise of its discretion as to whether to grant or refuse leave to argue a new point or points not raised in the court below in the case of Djukpan v. Orovuyovbe and another (1967) NMLR 287 where Lewis, J.S.C. delivering the judgment of the court said at pages 289 and 290 of the report that:-
“We agree with Dr. Odje that this court has a discretion whether to allow grounds of appeal to be argued which had not been argued in the High Court, but in our view when this is the position the burden is on the appellant to satisfy us that there will be no injustice by allowing them to be argued here on the material before us. If there are special circumstances and they involve substantial points of law then as the privy Council did in Abinabina v. Enyimadu (1) leave may be granted or as in the Commissioner of Lands v. Arah (2) where the new points sought to be raised went to the existence of the action then leave may be granted. The Judicial committee of the Privy Council in the United Marketing Co. v. Kara (3) has in our view helpfully set out the practice which it considers desirable in the following passage from Lord Hodson’s judgment at page 524:-
“Their Lordships are of opinion that the appellants should be allowed to take this point at this stage. In the first place, the point could have been met by evidence that if the claim had been made against the company under a subsisting policy the company would not rely on the breach of the condition or possibly by some other evidence. Their Lordships would not depart from their practice of refusing to allow a point not taken before to be argued unless satisfied that the evidence upon which they are asked to decide established beyond doubt that the facts, if fully investigated, would have supported the new plea: Connecticut Fire Insurance Co. v. Kavanagh (1982) A.C. 473,480; and Arcrambault v. Archambault (1902) A.C. 575.
Even if the facts were beyond dispute and no further investigation of facts were required, their Lordships would not readily allow a fresh point of law to be argued without the benefit of the judgment of the judges in the court below. In this case the appellants have relied in support of their submission that there was a breach of conditions on two South African cases, Lewis Ltd. v. Norwich Union Fire Insurance Co. Ltd. (1916) SALR, App. 509 and Sacks v. Western Assurance Co., (1907) Tr. M.C. 257 which on similar facts support their submission, but their Lordships are not prepared to say that the point is too plain for argument to be required upon it. The argument and judgment in these two cases indicate that at any rate in the United States of America there are conflicting decision on this topic and no direct authority in this country was available so far as the researches of the appellants were able to show. Accordingly, their Lordships, would not, even if the question were a bare question of law, entertain the submission that the respondent’s claim is to be defeated by reason of his breach of a condition of his contract of insurance with the Jubilee Co. and they would follow the guidance given by Lord Birkenhead L.C. in North Staffordshire Railway Co. v. Edge, (1920) A.C. 254, 263, when he said-
“The efficiency and the authority of a court of appeal, and especially a final court of appeal, are increased and strengthened by the opinions of learned judges who have considered these matters below. To acquiese in such an attempt as the appellants have made in this case is in effect to undertake decisions which may be of the highest importance without having received any assistance at all from the judge in the courts below.” The Lord Chancellor went on to say that there might be very exceptional cases where new matters might be considered but their Lordships do not regard this case as requiring such exceptional treatment.”
Moreover, there may, for instance, be cases where subsequent decisions of this court are contrary to what was decided in the High Court so that they were not known at the time in that court or there may be special circumstances where the lower court is bound by a decision, when the higher court is not, which would warrant leave being granted though even then in the latter instance it is desirable for the point to be taken at the earliest opportunity even if it has in fact then only to be reserved for argument in a later appellate court.”
See also Shonekan v. Smith (1964) 1 All NLR 168; Akpene v. Barclays Bank (1977) 1 S.C. 47; Adegbaiye v. Layinmi (1986) 5 NWLR (Pt. 43) 655 and Kosile v. Folarin (1989) 4 SCNJ 198; (1989) 3 NWLR (Pt. 107) 1

The learned counsel has not made any effort to explain why the discretion of this court should be exercised in favour of his client. Since appellant has failed to proffer any explanation the discretion of this court would not be exercised in its favour. Ground three of the grounds of appeal is incompetent and for that reason it is struck out. The issue identified therefrom as well as arguments canvassed in that behalf in all the briefs are hereby expunged.
Be these instances as they may, I cannot fathom the grudge of the appellant in respect of striking out of the respondent’s counter-claim stricto sensus is not a separate or independent action. The counter-claim is pegged on the appellant’s claim and frazzled with the acceptance of the appellant’s version that the facilities or advance given to the respondent was on overdraft and not loan and the interest rate is 18% and not 10% as alleged by the respondent. Pray what is left of respondent’s counter-claim to be considered with its life and soul taken away. Nothing. It is seriously anaemic. It is all a gimmick. The respondent, if he ever had a cause of action, that cause of action disappeared with the findings of the learned trial judge which are set out earlier in this judgment.

In the circumstance, the only issue calling for determination in this appeal is as framed in respondent’s issue (i) Which is related to the remaining two grounds of appeal in the respondent’s brief. Appellant failed to relate its formulation to any of the grounds of appeal. At the hearing of the appeal, learned counsel for appellant adopted and relied upon both appellant’s brief and appellant’s reply briefs, respondent also adopted and relied on respondent’s brief.
The appellant contended that the letter of demand that the respondent alleged was written to him ought to have been tendered in evidence to establish the period when demand was made and the period that he was given to liquidate the overdraft in order to establish the period that the cause of action arose for the defence of statute of limitation. Counsel submits that the defence of statute of limitation has been abandoned since there is no credible evidence to establish the period when the demand for the payment of the debt was actually made and the period the respondent was given in the letter of demand to liquidate the overdraft. Counsel craved in support of his submission the case of Federal Capital Development Authority v. Alhaji Musa Naibi (1990) 3 NWLR (Pt. 138) 270, 282.
Learned counsel for respondent contended that whether the claim of the appellant was based on overdraft or loan the same is time barred. The respondent relied on s. 4 (1)(a) of the Limitation Law of Oyo State. Cap. 64 Vol. 3 Halsbury’s Laws of England 3rd Edition vol. 24 Article 396; Wema Bank Ltd. v. Okutoro 1980, High court of Lagos State 219, 223-4; National Bank of Nigeria Limited v. Makun 1963 WNLR 49,51-52 and National Bank of Nigeria Ltd. v. Adewale Thompson 1962 2 All NLR 36, 38-39, 42. He then refers to paragraph 6 of the statement of claim and paragraphs 6,7 and 9 of the statement of defence. The appellant averred in paragraph 6 of its statement of claim as follows:-

“6. The plaintiff has demanded from the defendant for the payment of his debt but the defendant has been promising to pay without paying. The plaintiff will rely on its letters of demand to the defendant.” (italics mine)

The respondent reacted to the appellant’s averments set out above in paragraphs 6 and 7 of the statement of defence and counter-claim by admitting part of it and denying the rest. He averred as follows-:

“6 The defendant admits paragraph 6 of the statement of claim only to the extent that the plaintiff demanded repayment of the loan only at the expiration of repayment period in1982.
7. The defendant denies making any promise and will contend that any letter of demand after 1982 are after thought and cannot be used in this case.” (italics mine)

In the circumstance, it is an elementary principle of our law which no longer requires citing of authorities, in civil cases; that what is admitted requires no further proof. See section 75 of the Evidence Act Cap. 112 of the Laws of Federation of Nigeria, 1990 and the case of T.L. Owosho v. H.A. Dada (1984) 7 S.C. 149 at 163-4 where Aniagolu J.S.C. said:-
“But a plaintiff need not proceed to prove an admitted fact. And a fact is deemed to be admitted if it is neither specifically denied nor admitted by implication, having regard to the other facts averred in the pleadings.”
See also the case of The British India Insurance Co. Nigeria Limited v. Tharsards (1978) 3 S.C 143, 149 where the Supreme Court discussed and appraised the case of Chief Okparaoke v. Obidike Egbuonu (1941) 7 WACA 53, 55.

The appellant filed a reply to statement of defence as well as defence to counter-claim but failed or neglected to deny any of the two paragraphs particularly paragraph 6. The averment of the respondent to the effect that he was served notice in 1982 soon after the expiration of agreed repayment period of 5 months is taken as established.
The respondent whom I presume to be illiterate, without so deciding, because he testified in Yoruba went further to say that he discussed a loan with the appellant who approved N10,000.00 for him at the rate of 10% payable in five monthly instalment with effect from October, 1981. He took advantage of the transaction by drawing the loan and since then had not operated the account, a fact which is confirmed by exhibit A and B. He testified further that soon after the expiration of the five months he received a letter from the appellant in 1982. The substance of his evidence was neither challenged nor controverted and was accepted rightly, in my view, by the learned trial judge who however found that what appellant referred to as a loan was in fact an overdraft and the rate of interest was at the prevailing rate of 18% and not 10% as alleged by respondent.
In civil cases, which the instant appeal is, the burden of proof is never static it shifts as the case develops; it shifts on the party who will lose if no evidence is adduced. See Abiodun and others v. Adehin (1962) 1 All NLR 550; Tewogbade and Co. v. Arasi Akande and Co. (1968) NMLR 440 and Are v. Adisa (1967) NMLR 304. The respondent having shown that he received a notice in 1982, it is incumbent on the appellant who pleaded in paragraph 6 of its statement of claim that it would rely on its letters of demand to defendant to take steps, if he has any letter to the contrary, to challenge or confront the respondent with it or them. But it failed to do so. Its failure to do so is fatal to its case. It follows that if it had done so it would have been against it. See section 149(d) of the Evidence Act, Cap. 112 which provides as follows:-
“149. The court may presume the existence of any fact which it thinks likely to have happened, regard being had to common course of natural events, human conduct and public and private business in their relation to the facts of the particular case, and in particular the court may presume-
(a) xxxxxxxxxxxxxxxxxxxxxxx
(b) xxxxxxxxxxxxxxxxxxxxxxx
(c) xxxxxxxxxxxxxxxxxxxxxxx
(d) that evidence which could be and is not produced would if produced, be unfavourable to the person who withholds it;
(e) xxxxxxxxxxxxxxxxxxxxxxx
With this, it appears respondent’s case is cut high and dry.

Now, having resolved issue of facts, I turn to the provisions of section 4(1)(a) of Cap.64 of the Laws of Oyo State, 1978, which provides as follows:-

“4(1) The following actions shall not be brought after the expiration of six years from the date on which the course of action accrued, that is to say-
(a) Actions founded on simple contract or on tort.”

The present action is founded on simple action of borrowing and lending money by a customer from his bank which, to my mind, is a specie of contract. I am not unaware of the heavy weather the learned counsel for appellant has made about possible distinction between overdraft and loan. I am not aware of any authority and if there were he was unable to draw a line by adducing evidence amply demonstrating that the incidence of overdraft and loan vis-a-vis the provisions of section 4(1) of Limitation Law Cap. 64 is different. There is not much distinction between an overdraft and a loan on current account, the only differing feature is when the loan is secured by mortgage and that distinction arises where the security is to be foreclosed. See generally the cases of Aforka v. African Continental Bank Limited (1994) 3 NWLR (Pt. 331) 217 and Union Bank of Nigeria Limited v. Professor Albert Ojo Ozigi (1991) 2 NWLR (Pt.176) 677.

I think that it is just a case of that which is called rose will still smell sweet by another name. In either case notice of demand must be served on the borrower. I refer to the following passage based on the decision in Joachimson v. Swiss Bank Corporation (1921) 3 K.B. 110 in Halsburys Laws of England 3rd Ed. Vol. 24 article 396-
“In the case of money on current account, the statute does not run, in the absence of special contract or waiver, until after demand for payment, as a demand, either by the issue of a writ or otherwise, is an essential ingredient in the cause of action against the banker for money lent.”
And in Llodys Bank Limited v. Margolis and others (1954) 1 All E. R. 734, Upjohn J. has this to say at p. 738, about dealings in an overdraft current account where the bank took a legal charge secured on a farm owned by the customer:-
“As between a customer and a banker who are dealing on a current account it seems to me impossible to assume that the bank were to be entitled to sue on the deed on the very day after it was executed without making a demand and giving the customer a reasonable time to pay.”
See also observation of Lord chancellor in Rouse v. Bradford Banking Company (1894) A.C. 586:-
“I would be inclined to take the view that it would be unreasonable for a bank, after having granted an overdraft to immediately proceed to sue for it, without making a demand, and giving the customer a reasonable time to pay. I can hardly think that it would be in the contemplation of a customer to whom an overdraft was given that, the bank would without warning issue a writ. If the bank are at liberty to act that way commerce and industry would be greatly handicapped.”

On the facts accepted by the learned trial judge and authorities cited there had been breach since 1982 when a demand for repayment of the loan was made. The appellant’s action to recover the same was not brought until August, 1989, a period of about 7 years and six months, the appellant’s claim I agree is caught by the six-year provision of Limitation Law Cap. 64 allowing for a reasonable period of more than one year to repay his indebtedness from time of demand.

The answer to the only issue calling for determination is positive. Grounds 1 and 2 of the grounds of appeal fail and are dismissed by me. The appeal equally fails and it is dismissed. The respondent is entitled to costs of this appeal which is assessed at N750.00.

In parenthesis, the appellant, assuming its action is not met and defeated by Limitation Law Cap. 64 would still have met a dismal failure because it failed to show that there had been a breach. It did not lead evidence of its own demand for repayment nor evidence of the period it gave respondent in the letter of demand to liquidate the demand.

Other Citations: (1994)LCN/0197(CA)