S. O. Akinnola Vs D.a. Faseun & Ors (1973)

LawGlobal-Hub Lead Judgment Report

PER ELIAS, J.S.C.

This appeal is against the judgment of the Western State Court of Appeal in Suit No. CAW/111/68 delivered on September 17, 1969, in which the court confirmed the judgment of the Akure High Court and held that in order to be effective, an acknowledgment of a debt by a borrower must, under Section 30 of the Money-lenders Law, (Cap. 78) of the Western State of Nigeria, state the amount due and give an undertaking by the debtor to pay that amount and that the plaintiff/appellant’s claim must be dismissed for failure to prove that both conditions had been met in this case.

The facts in this case are straight-forward. On April 2, 1962, the plaintiff, a registered money-lender, lent to the defendants jointly and severally the sum of £1,600 as principal with interest at 45% per annum. When the defendants failed to pay, the plaintiff wrote to the defendants a letter of demand (Exhibit G) dated March 1, 1963, and the 3rd defendant also wrote to the plaintiff a letter (Exhibit H) dated March 16, 1963. In the belief that the 12 month-period allowed by Section 30 of the Money lenders Law should count from the date of the 3rd defendant’s letter, the plaintiff commenced action on March 14, 1963. The question, therefore, was whether the letter (Exhibit H) was a valid acknowledgment of the debt by the defendants within the meaning of Section 30 of the Money lenders Law. The plaintiff contended that Exhibit H must be read together with Exhibit G and that the former was an acknowledgment of the debt stated in Exhibit G.

The defendant however, contended that the claim was statute-barred because Exhibit H does not satisfy the requirement of Section 30 of the Money lenders Law in that it does not state the amount due and give an undertaking to pay that amount, and that an acknowledgment under the Limitation Law (Cap. 64) of the Laws of the Western State of Nigeria cannot satisfy the provisions of the Money – lenders Law. The learned trial Judge upheld the defendants’ submissions and held, quite rightly in our view, that “an acknowledgment under the Limitation Law (Cap. 64) Laws of the Western State of Nigeria does not have to state the amount and that it is sufficient if it is in writing and signed by the person making it by virtue of Section 23 (1) Limitation Law.” He then concluded: “The result is that relying on the Money-lenders Law, this action cannot be sustained. Though the preponderance of evidence is in favour of the plaintiff and I hold that the debt is owed by the defendants, he cannot now enforce his right in a court of law. The action is therefore struck out.”

On appeal, the Western State Court of Appeal upheld the learned trial Judge’s finding that the plaintiff/appellant’s action is statute-barred because Exhibit H is not a valid acknowledgment under Section 30 of the Money – lenders Law, the proviso to which reads:

“If at any time within the period when proceedings can be brought, the debtor acknowledges in writing the amount due and gives a written undertaking to the Money lender to pay that amount, proceedings for the recovery of the amount due may be brought at any time within a period of 12 months from the date of the acknowledgment and undertaking.” The Western State Court of Appeal recalled that in Ex. G, the plaintiff/appellant wrote as follows:  “The amount due and payable now is £2,260 being £1,600 the principal amount lent to you and £660 the accrued simple interest due and payable thereon at 45% per annum as at 1/3/63. If the loan is not paid on or before the 1st of April, 1963, it would have fattened to £2,230 and will legally continue to grow at this rate until payment or judgment in the event I am forced to put you to court.” And that in Exhibit H the 3rd defendant wrote as follows:- “You can always be sure that you will have all your money back and by God’s grace you shall be given the 1st instalment next month…………………………………………….. We all admit liability for the debt and shall certainly pay it up when we are able.  The Western State Court of Appeal then asked the rhetorical question: “One may then ask which amount was acknowledged in Exhibit H? Is it the amount of £2,260 or £2,320 as stated in Exhibit G or £3, 010 as claimed in the writ of summons or the amount to which the loan will fatten at a future date?” It then came to the conclusion that the plaintiff/appellant’s action failed because “in construing the Money – lenders Law there could be no question of an equitable construction in favour of the Money- lender”, and that an acknowledgment under the Law ‘should be clear and unmistakable on the face of it.”  Against this decision, the present appeal has been brought before us on the following grounds:

“1. The appellate court erred in law in not holding that Exhibit H constituted an acknowledgment of the debt within Section 30 of the Money – lenders Law particularly in view of the finding of fact of the learned trial Judge, to wit: ‘I am satisfied that the letter (Exhibit H) written by the 3rd defendant on 16/3/63 was as a result of the demand made by the plaintiff in his own letter of an earlier date (Exhibit G) though (Exhibit H) did not say so in many words’

(a) When (Exhibit G) contains all the terms in writing.

(b) When (Exhibit G) and (Exhibit H) together from a sufficient memo in law by reading the two together.

(c) When there is nothing in law which requires that in acknowledging the debt due under the Money – lenders Law, the debtor cannot by reference or incorporation to other documents so acknowledge the debt due.

(d) When the mischief which Section 30 of the Moneylenders Law like the statute of Frauds was designed to prevent is, surprise or fraud on the borrower whereas in this case the lender communicated the money due to the borrower which was in turn duly acknowledged by the borrower.

(e) When the intendment of the statue was not to encourage fraud or dishonest dealings as borne out in this case by the finding of the learned trial Judge that the borrower is in fact dishonest.

2. The Court of Appeal and the trial Judge erred in law in relying on the case of Lockwood v. Saunders, 1942, 9 LJCC 264;

(a) The facts of which were not available.

(b) When on the available materials in the case of Lockwood v. Saunders (1942) 9 LJCC 264 there was nothing to indicate that any specific sum was demanded from the debtor which he admitted.

(c) When all the material that was available in the said case was that he merely admitted the existence of debt. 3. The learned trial Judge erred in law when he held as follows: ‘Under the Money – lenders Laws, the acknowledgment whether it is a reply to a demand which states the amounts or not, must itself state the amount due in order to be effective, when:

(a) Section 30 of Moneylenders Law did not stipulate that the debtor should state (express in words) but merely provides that the debtor should acknowledge (agree or admit) the amount due.

(b) When the amount due in this case was known to the debtor by reason of Exhibit G and was duly acknowledged or admitted in Exhibit H. 4. That the Court of Appeal was wrong in law in holding that the amount acknowledged was not known when:

(a) Exhibit G specified that the sum of £2,260 was due at the time of the demand, and that if not paid the money would fatten to £3, 320 on the anniversary of the transaction which was the 1st of April.

(b) When in any case the plaintiff was entitled to the amount proved or admitted by the debtor which was £2, 320 at the said anniversary of the money lending transaction.\ PART II 1. The learned trial Judge erred in law in considering the defence and particularly the amendment of the Statement of Defence made on the 4th of July, 1966, when there was no Statement of Defence before the court since there was no material before the court that the defendants ever filed any Statement of Defence in accordance with the court’s order made on 2/11/65.”

 Mr. Gani Fawehinmi, learned counsel for the appellant, chose to argue all the grounds together, contending in the main that Exhibit H was a sufficient acknowledgment within the meaning of Section 30 of the Moneylenders Law. And while recognizing that the provisions of Section 13 of the Limitation Law is different from those of Section 30 of the Moneylenders Law, he drew an analogy between them and cited Thadani v. National Bank of Nigeria Ltd., S.C. 63/69 delivered on 21/1/72, a case on the Limitation Law, to buttress his argument. We do not think that the two enactments should necessarily be equated in this way. We note, however, that the learned trial Judge had found that Exhibit H was a reply to Exhibit G and that the defendants did owe the plaintiff. He had said:

“Every averment in the plaintiff’s Statement of Claim was proved to my satisfaction. Not only was it proved that the loan was made, it was proved that a cheque (Exhibit E) for £1,600 was made out in favour of the defendants by the plaintiff and the cheque was cashed by the defendants over the counter of the National Bank Ltd., Ondo on 19/4/62.  I am also satisfied that the letter (Exhibit H) written by the 3rd defendant on 16/3/63 was as a result of the demand made by the plaintiff in his own letter of an earlier date (Exhibit G) though Exhibit H did not say so in so many words”

The learned trial Judge also said:

“I disbelieve the denial of the defendants that £1,600 was paid to them by the plaintiff and find as a fact that the amount was so paid to them by the plaintiff pursuant to the loan agreement entered into by them with the plaintiff.”

We consider that, on a true construction of the proviso to Section 30 of the Moneylenders Law (Cap. 78), an acknowledgment made in the particular language of Exhibit H by reference to Exhibit G should be regarded as sufficient to take the case out of the category of actions that are statute-barred under the Moneylenders Law. To hold, as did the Western State Court of Appeal, that in order that an acknowledgment under the Money-lenders law could be valid, the debtor must state therein the exact amount due and give an undertaking to pay that amount, would enable many a debtor to escape paying even where, as in the instant case, he has expressly admitted liability for the amount claimed.

We think that there might be circumstances in which what the debtor purported to acknowledge might sometimes be in doubt, as when the lender or creditor has failed in his letter of demand to specify the amount being claimed or has made it only in a vague sort of way. But that is not the case here where the appellant set out with sufficient particularity that as at March 1, 1963, his claim was as follows:

“The amount due and payable now is £2, 260 being £1,600 the Principal amount lent to you and £660 being the accrued simple interest due and payable thereon at 45% per annum as at 1/3/63.”

The fact that in this subsequent writ of summons he claimed £3, 010 should not be taken as casting any doubt as to the amount actually acknowledged at the date of the demand, with which alone, for the purposes of the proviso to Section 30 of the Moneylenders Law, we are concerned in considering whether or not the claim was statute-barred.  Mr. Fawehinmi himself conceded that he could not put the appellant’s claim any higher.  Mr. Bello, learned counsel for the respondents, merely repeated the substance of the case which had been put forward in the trial court and in the Western State Court of Appeal and asked us to dismiss the appeal. For the reasons we have given, we are unable to accede to his request.  

We accordingly allow this appeal and set aside the judgments of the Akure High Court in Suit No. AK/24/64 delivered on 13/10/67 and of the Western State Court of Appeal in Suit No. CAW/111/68 delivered on September 17, 1969. We also set aside the orders as to costs made by the two courts. We find in favour of the appellant in the sum of £2,260 which was the amount of his claim that was acknowledged by the respondents, and this shall be the judgment of the court. We award him costs assessed against the respondents, in the High Court at 203 naira, in the Court of Appeal at 102 naira, and in this court at 133 naira.

Other Citation: (1973) LCN/1763(SC)