Savannah Bank Of Nigeria Ltd. V. Alhaji R.A. Salami (1996)

Savannah Bank Of Nigeria Ltd. V. Alhaji R.A. Salami (1996)

LAWGLOBAL HUB Lead Judgment Report

MOHAMMED, J.S.C.

The plaintiff, who is respondent in this appeal, instituted an action before the High Court of Ijebu-Igbo, Ogun State, and claimed against the defendant N50,000.00 as special and general damages for wrongful dishonour of his cheques.

The facts which gave rise to this appeal are in the following narrative:

Alhaji R.A. Salami maintained a current account No. 074 with the appellant at Ijebu-Igbo branch. The respondent, on 5th November, 1984, issued out two separate cheques for N1,000.00 and N3,000.00 in favour of one Ladipo Sodeinde and Alhaji Ileaje respectively. Again, on 31st December, 1984, he issued out cheque No. 119/C006534 for the sum of N2,000.00 and another cheque No. 119/006535 for the sum of N1,000.00. Both cheques were issued in favour of his son, Mr. Isiaka Ayodele, with special instruction to his son that if he collected the a money he should deliver it to any of his friends coming from Abuja. The money was to be used for the joint venture the respondent was executing with his friend at Abuja. All the cheques were dishonoured by the appellant. The respondent demanded for an apology from the bank for dishonouring his cheques when he had enough funds in his account to meet the amount in the cheques. When the apology was not given he instituted this action.

Pleadings were ordered, duly filed and delivered. The respondent gave evidence showing that he had enough funds in his current account No. 074 to meet the amount requested to be drawn in all the dishonoured cheques. His second witness was one Alhaji Rahman Olalere Yinusa. Part of his evidence touches the main issue concerning this appeal. When PW2 was cross-examined part of his reply reads thus:

“I can read and write. I agree that the overdraft given to me was for a period of 3 months. The Manager of the defendant Bank stated the conditions under which the overdraft would be approved. I also signed a paper in October 1984 in connection with this overdraft.

Letter of Approval dated 22/10/84 is admitted and marked Exhibit ‘L’. Witness continues: One of the conditions is that the guarantor must be a customer of the defendant Bank. Another condition is that the guarantor’s account must be good: I first nominated one Popoola as a guarantor. Popoola is a wealthy man. He later refused to go through with the formal process because according to Poopola, he guaranteed someone who later died and as at that time, he (Popoola) was still paying the debt. Before he said this, he had signed the formal guarantor’s form.

Witness reads out Clauses 4 and 9 of Exhibit “L”. The Manager told me that guarantor’s account must not fall below N5,000.00 during the pendency of the loan to me. I explained this to the plaintiff.”

The case for the appellant was given through six witnesses. But the most important of them is the evidence of Mr. Oluyemi Kuforiji the Manager of the respondent bank at Ijebu-Igbo branch. Part of his evidence is as follows:

During October 1984, Alhaji Yinusa applied for credit facilities. I looked at the account ledger in his name. He told me the purpose he wanted the money i.e. to buy drugs. He asked for N5,000.00

I gave conditions under which I would approve the overdraft. I told him he should have a fixed amount of N5,000.00 in his account or someone with N5,0000.00 in his savings or current account. This amount of N5,000.00 would be used to support the overdraft. This is known as personal guarantee supported with cash. This means that the account of the guarantor must not fall below N5,000.00 at any time before the overdraft is fully repaid. In other words, the guarantor’s account is blocked to the extent of N5,000.00. I repeat, the account blocked must not be allowed to reduce beyond N5,000.00. On this arrangement, Alhaji Salami’s account would not be allowed to go below the sum of N5,000.00″

The respondent told the trial court that on 5th November, 1984, he instructed his son to pay N4,000.00 into his current account and after payment he was given a teller. The teller was admitted as Exhibit “G”. The respondent however, admitted during cross examination that the Manager told him that at the time his cheque for N1,000.00 was presented for cashing his account’s credit balance would fall below N5,000.00 The respondent however denied any knowledge that the condition of his standing as guarantor for Alhaji R.O. Yinusa was that his account must not fall below N5,000.00.

The learned trial Judge after considering all the evidence adduced found, in a well considered judgment, that the dishonour of the respondent’s cheques was not wrongful. He accordingly dismissed his claim. Alhaji R.A. Salami being dissatisfied with the decision of the trial High Court filed an appeal before the Court of Appeal. In a split decision Sulu-Gambari, J.CA. and Ogwuegbu, J.C.A. (as he then was) allowed the appeal and awarded N10,000.00 damages in favour of Alhaji Salami. Akanbi, J .C.A. (as he then was) dissented and dismissed the appeal.

The majority decision was based on the interpretation given to Exhibit “J”. Exhibit “J” was a letter which Alhaji Yinusa told the trial Court that the Manager told him to get the respondent to write to the bank and say that he (the respondent) agreed to stand as a guarantor to the loan which Alhaji Yinusa applied to be given. Alhaji Yinusa told the Court that he helped the respondent to write the letter. The letter is Exhibit “J” and it reads: