Chief Chris Nwankwo V. Chief Francis Arthur Nzeribe (2003)

LawGlobal-Hub Lead Judgment Report

SUNDAY AKINOLA AKINTAN, J.C.A. 

This is an appeal from the judgment delivered by Njiribeako, J. sitting at Oguta High Court on 5th October, 1997 in suit No. HOG/42/97.

The present appellant was the defendant while the present respondent was the plaintiff. The plaintiff’s claim before the court as set out in paragraph 8 of the statement of claim is as follows:
“1. The sum of N21,969,600 being money lent by the plaintiff to the defendant pursuant to written agreements dated 30th August, 1991 and 2/11/91, which money the defendant has failed, refused and/or neglected to pay to the plaintiff despite demands.
2. Interest on the said sum calculated at 21% per annum from 1st January, 1993, until judgment is entered.
3. Interest on judgment sum calculated at 4% per annum until satisfaction is made by defendant.”

The statement of claim was filed along with the writ of summons on 19/11/96. The plaintiff applied for and was granted leave to put the claim on the undefended list. The defendant, upon service of the writ, filed an application that he intended to defend the claim and prayed the court to therefore, transfer the claim from the undefended list to the general cause list. His application was granted.

The court therefore ruled as follows on the request for the case to be transferred from the undefended list to the general cause list.
“Court: This suit was listed for hearing on the undefended list. This was because the claim arose from a loan transaction. The document evidencing the loan was filed. The defendant was served. The defendant has filed a notice of intention to defend. He raised a defence of illegality of the transaction. Quoting paragraph 23 of the supporting affidavit: “That my counsel informs me and I verily believe him that the parties executed exhs. A & A1 in clear breach of the law and provisions of the Constitution of the Social Democratic Party.” This is a viable defence. If the loan transaction is tainted with illegality then it is the law that it cannot be enforced by any court of law. I shall admit the defendant to defend but since the issue is one of law, I do not consider it necessary to make an order for pleadings. I will proceed to hear the case without pleading.”

The case was then adjourned to another date for hearing. At the resumed hearing, the plaintiff gave evidence in support of his claim. He tendered the documents he relied on in the course of his evidence. He was duly cross-examined by learned Counsel for the defence. At the end of the cross-examination of the plaintiff, the said plaintiff closed his case. The defendant was then called upon to open his case. But learned Counsel for the defence told the court that:
“My Lord I am not calling evidence. We rely on plaintiff’s case.”

Learned Counsel for the plaintiff then addressed the court. His address was followed by that of learned Counsel for the defendant. Learned Counsel for the defendant submitted that the plaintiff failed to prove his claim in that the contents of the documents he relied on (exhs. A, B & C) were at variance with his evidence. Also, it was submitted that since the plaintiff claimed interest on the amounts loaned, as per exhs. A & A1, the plaintiff contravened the provisions of Money Lenders Law.

The transaction is therefore said to be illegal. The loan granted to the political party is also said to be in breach of section 2(1)(2) of the Transition to Civil Rule (Political Parties Registration and Activities) Act (Cap. 442, Laws of the Federation of Nigeria, 1990). The case was then adjourned for judgment.

In his reserved judgment delivered on 5th October, 1997, the learned trial Judge held, inter alia, that the plaintiff partially proved his claim. Judgment was therefore entered in his favour in the sum of N15,469,000. He was also awarded N8,000 as costs. The sum awarded was exclusive of any claim for interest.

The defendant was dissatisfied with the verdict of the court. He has appealed against it to this court. Five grounds of appeal were filed against the judgment. The parties filed their respective brief of argument in this court. The appellant formulated the following three issues in the appellant’s brief.
“1. Whether the trial court had jurisdiction to hear the case on 10/4/97, when the conditions precedent was not complied with.
2. Whether the trial Judge having assumed jurisdiction was right having transferred the suit to the general cause list, yet refused to order pleadings especially in view of the provisions of Order 25 rule 6(1).
3. Whether upon a proper direction on the evidence the lower court was right to have held that the plaintiff proved his case and was entitled to judgment.”

The respondent, on the other hand, also formulated three similar issues but with slight modifications. I therefore do not consider it necessary to reproduce them, since I consider the three issues formulated by the appellant as quite appropriate in resolving the questions raised in the appeal.

The facts of the case are that both the plaintiff and the defendant were friends. They were also politicians. As at the time in question, the two men were members of the same political party – the Social Democratic Party (SDP). The defendant requested from the plaintiff loans to enable him finance his political ambition of contesting the governorship of his State, Enugu State, on the platform of their political party, the Social Democratic Party (SDP). The plaintiff said he granted the request. On 30/8/91, the plaintiff said he released a total sum of N17,384,600 to the defendant and that the said loan was covered by a written agreement (exh. A.).

According to the written agreement (exh. A), the amount advanced was to be used by the defendant as follows:
“The sum of N6,507,900 provided to the party in the borrower governorship aspirant’s State before the date of this agreement. The sum of N10,876,900 received and signed for by the borrower governorship aspirant to fund the primary elections…”

The borrower was required, under the agreement, “to pay back to the lender within 90 days of his taking office as Governor of Enugu State…”

Again on 2/11/91, the plaintiff granted another loan of N4,585,000 to the defendant also at the defendant’s request. There was also a written agreement (exh. A1) made to cover the said loan.
It is provided in the said agreement (exh. A1), inter alia, that:
“The lender hereby, gives as loan to the borrower a further sum of N4,585,000 on the same terms and conditions contained in the loan agreement of 30th August, 1991.”

A new clause was however, inserted in the latter agreement (exh. A1) regarding the time of payment. The new clause is that:
“If the borrower fails to win the governorship elections in December, 1991, he shall not be required to pay back the loans within ninety days, but must pay back the loan to the lender on or before 31st December, 1992.”

The defendant contested the elections and lost. The plaintiff made a written demand for the repayment of the loans (exh. B dated 8th June, 1996). When the defendant failed to pay back the loans despite the demand, the plaintiff instituted this action. As already stated above, the defendant did not lead any evidence in his defence at the trial.

It is submitted in the appellant’s brief that the application to place the suit on the undefended list was done without the required consent of the trial Judge. The placing of the case on the undefended list is therefore said not to be in accordance with the law.

The learned trial Judge is therefore said to have acted wrongly, when he assumed that there was a valid order placing the suit on the undefended list.

The failure of the learned trial Judge to order pleadings is the point taken up in the appellant’s second issue. It is submitted that under Order 25 of the High Court (Civil Procedure) Rules, 1988 of Imo State, once a case is placed on the general cause list, the undefended list procedure ceases to apply. The failure of the learned trial Judge to order pleadings is therefore said to be contrary to the provisions of the law.

It is submitted in the appellant’s third issue that the plaintiff failed to prove his claim because the evidence, he gave at the hearing, was materially in conflict with his pleadings and the contents of the exhibits he tendered and relied on. Reference is specifically made to the statement of claim where the plaintiff claimed N21,969,600. It is said that without amending the said claim, the plaintiff gave in the course of his evidence that he advanced to the defendant N10.857 million and N4.585 million. Reference is also made to the letter from the plaintiff’s counsel (exh. C) where interest was claimed on the outstanding money. It is argued that there was no basis for the learned trial Judge’s finding that the plaintiff had proved his claim. Since the evidence he relied on in support of his claim was inconsistent with his pleadings. The claim for interest is also said to be contrary to law in that the plaintiff, not being a money lender, had no power to lend money on interest.

It is submitted in reply in the respondent’s brief that, it is not correct that the plaintiff failed to apply for leave of the lower court to have the case placed on the undefended list. The plaintiff is said to have applied for the said leave on 24th October, 1996 and got the leave. But that the record of appeal compiled by the appellant omitted the proceedings relating to the said application which was before another Judge. It is omitted from the record now being used for the appeal. It is therefore argued that the fact that the leave to place the suit on the undefended list was granted by another Judge could not render the subsequent trial of the case by another Judge illegal or render the subsequent proceedings a nullity. The fact that the record of proceedings before the other Judge, Ihekire, J. on 28/1/97 and 25/2/97 was not included in the record compiled by the appellant does not mean that the required leave was not obtained. No act of illegality was therefore committed during the trial of the case.

It is submitted in reply on the second issue that Order 3 rule 3(1) of the High Court (Civil Procedure) Rules, 1988, vested the Judge with discretionary powers to make decision on whether to order pleadings or not. The learned Judge duly exercised his discretionary power by not ordering pleadings. What he did was therefore, in accordance with the provisions of the afore-mentioned rule.

It is submitted on issue 3 that it is not correct that the plaintiff failed to prove his claim. Reference is made to the two written agreements (exhs. A & A1) relied on by the plaintiff. It is submitted that there was no conflict in the plaintiff’s case. The difference between the amount claimed and the amount granted by the learned trial Judge is said to be what was advanced to the political party. As the defendant is said to have failed to prove any act of illegality, this court is urged to affirm the judgment and dismiss the appeal.

The main grievances of the appellant are that there were procedural errors relating to placing the suit on the undefended list which could vitiate the entire trial and that the plaintiff in fact failed to prove his claim and as such the award made to him should not be allowed to stand. Although, the main contention of the appellant when applying to have the case transferred to the general cause list was that the entire transaction was unenforceable on the ground of illegality, the brief was silent on that point.

On the question whether there was a procedural error in respect of the application to place the suit on the undefended list, it not in doubt that the application to that end was made and that the request was granted by Ihekire, J. before the case came before Njiribeako, J. for trial. Although, the proceedings before Ihekire, J. was not included in the record of appeal compiled by the appellant and now being used for this appeal, the omission to include the said proceedings in the record of appeal now being used is not per se enough to hold that the leave was not sought and obtained as required by law.

The next point to be considered is whether failure of the learned trial Judge to order pleadings after granting the defendant’s request to transfer the case from the undefended list to the general cause list is contrary to the provisions of the rules of the court. Order 23 rule 3(2) of the High Court (Civil Procedure) Rules, 1988 of Imo State provides that:
“Where leave to defend is given under this rule, the action shall be removed from the undefended list and placed on the ordinary cause list and the court may order pleadings or proceed to hearing without further pleadings.”

It is clear from the above provision that it is not mandatory on the Judge after removing the case from the undefended list and placing same on the ordinary cause list to order pleadings. What the rule provides is that the Judge “may order pleadings or proceed to hearing without further pleadings.” In other words, the Judge has a discretion to either ordering pleadings or proceed to hearing the case without further pleadings. In the instant case, the learned trial Judge took into consideration the main defence which the defendant put across in his application for the transfer of the case to the general cause list. The defence was that the transaction was illegal and as such unenforceable. The learned Judge therefore believed that the question to be resolved at the trial was therefore, mainly legal and as such pleadings was not strictly necessary. I have no doubt that the exercise of his discretion not to order pleadings is quite in order and that he acted within the provisions of the afore-mentioned rule.

The next question raised in the appeal is whether the plaintiff proved his claim and was in fact entitled to the award made to him. The award made to the plaintiff was less than what he claimed. According to the evidence led at the trial, the loans granted were in two categories. The first category is those made to the defendant to enable him contest the elections. The other category is the one lent to the political party and which by the second agreement (exh. A1) the defendant was required to refund to the plaintiff. This was the portion of the loan which the court refused to grant. The law is settled that while a court may grant less than what is claimed, it is however not allowed to grant more than what is claimed or what is not claimed: See Ekpenyong v. Nyong (1975) 2 SC 71; Carlen (Nig.) Ltd. v. Unijos (1994) 1 NWLR (Pt. 323) 631; Makanjuola v. Balogun (1989) 3 NWLR (Pt. 108) 192 and Kalio v. Daniel Kalio (1975) 2 SC 15. It follows therefore, that since the award made by the learned Judge is a portion of his claim, the award is therefore quite in order.

The point was also raised that since the agreements provided for payment of interest on the loans, the transactions are said to be illegal in that the plaintiff was not a licensed money lender. The position of the law is that a loan transaction which shows that an offence has been committed against section 114(1) of the Money Lenders Law by charging unauthorised interest is an illegal contract and one which the courts will not enforce: See Fashina v. Odedina (1957) 11ERNLR 45.

But three categories of persons are exempted from people excluded from being categorised as money lenders. They are a banker, an insurer and a person who does not have for its primary object the lending of money. See Eboni Finance & Securities Ltd. v. Wole-Ojo Technical Services Ltd. (1996) 7 NWLR (Pt.461) 464 and Veritas Insurance Co. Ltd. v. City Trust Investment Ltd. (1993) 3 NWLR (Pt. 281) 349.  The onus is on the appellant to show that the respondent was not in the category of those exempted from the provisions of the Money Lenders Law. This burden could only be discharged by leading evidence at the trial to the effect that the plaintiff was not a person who did not have for his primary object the lending of money. In other words, that he (plaintiff) was a person whose primary business was lending money.

Having failed to establish that at the trial, the provisions of the afore-mentioned Money Lenders Law cannot be made applicable to the loans made to the appellant by the plaintiff since it has not been shown that the plaintiff regularly made such loans. Finally, as it was not denied by the appellant that he never received the amounts which the plaintiff/respondent said he lent to him at his request, I think the principle of unjust enrichment should be made applicable in the instant case. Under the said principle, the appellant, who freely entered into the loan agreements and benefited from them by receiving the various sums advanced to him under the said agreements, should not be allowed to rely on frivolous excuses and thereby continue to unduly enrich himself from the benefit he received under the loan agreements.

In the final result, I hold that there is totally no merit in the appeal. I accordingly, dismiss the entire appeal and affirm the judgment of the lower court, including all the awards made therein. I also, award N10,000.00 in favour of the respondent as his costs in this court.

Other Citations: (2003)LCN/1402(CA)