Standard Trust Bank Ltd. V. Interdrill Nigeria Ltd. & Anor. (2006)

LawGlobal-Hub Lead Judgment Report

PIUS OLAYIWOLA ADEREMI, J.C.A.

This is an appeal against the judgment delivered on 5th December 2003 in the High Court of Justice, Delta State, Warri Judicial Division in suit No. W/76/2001: Standard Trust Bank Ltd v. Interdrill Nigeria Limited and Joseph Bogwu in which the trial judge dismissed the Plaintiff’s case in toto. The plaintiff (hereinafter referred to as the appellant) had by a Writ of summons marked by the plaintiff/appellant “UNDEFENDED LIST” claimed against the defendants (hereinafter referred to as the respondents) jointly and severally as follows:

“1. The sum of N17,835,802.67 (Seventeen Million Eight Hundred and Thirty-Five Thousand, Eight Hundred and Two Naira Sixty- Seven Kobo) being the outstanding debit balance in the first defendant’s account with the plaintiff as at 2nd February, 2001 which sum is due to the plaintiff from an overdraft facility granted to the first defendant at the first defendant’s request and guarantee by the second defendant which sum the defendants have failed neglected, omitted and/or refused to pay inspite of repeated demands.

2. 31 % per annum on the said sum of N17, 835,802,67 (Seventeen Million Eight Hundred and Thirty-Five Thousand, Eight Hundred and Two Naira Sixty-Seven Kobo) from February 03, 2001 until judgment and thereafter 10% per annum on the judgment sum until same is fully liquidated.”

As I have said, the appellant endorsed the Writ as an Undefended List and he therefore supported it with a twenty-four-paragraph affidavit setting forth the grounds upon which the claim was based, together with copies of documents substantiating the claim. Upon the service of the said writ on the respondents they filed a Notice of intention to defend the suit supporting it first with an affidavit of 18 paragraphs and by a 6-paragraph further and better affidavit disclosing their defence. In its opposition, the appellant filed a Reply of a paragraph to the said further and better affidavit of the respondents. Sequel to considering these opposing pieces of printed evidence and upon taking the addresses of their respective counsel, the Judge in a considered ruling removed the case from the Undefended List and transferred same to the General Cause List for hearing and determination. Suffice it to say that on the application of the appellants, the case was transferred to another judge, who for the purposes of this appeal will henceforth be referred to as the learned trial judge who set the case down for hearing and parties proceeded to leading evidence from the 5th of August 2003. It is perhaps necessary to say that the parties led evidence based on opposing printed depositions they filed. At the conclusion of their evidence and after taking the addresses of counsel, the learned trial judge in a considered judgment delivered on the 5th of December, 2003 ordered a dismissal of the appellant’s suit.

In reaching this conclusion, the learned trial judge had reasoned:-

“The court prefers the evidence of plaintiff that the nature of the transaction was the grant of facility of N20,000,000.00 by the plaintiff to the 1st defendant by the implied admission of the defendant 1st defendant utilized N10,000,000.00 – See paragraph 11 of the affidavit of defendants accompanying the Notice of Intention to defend and see Exhibits 1 and 2 Exhibited to the accompanying affidavit to the writ. The court finds as a fact that there was a banker and customer relationship and the facility was granted in cause (sic) of the relationship, See paragraphs 2, 3 and 4 of the affidavit accompanying the writ of summons.

The Court rejects the defence of the relationship of partnership set up by the defendants, it is a frivolous attempt to defeat the transaction duly entered into by the plaintiff and the defendant.

The crucial question for the consideration of the court is whether the plaintiff by the affidavit evidence proved the indebtedness of N17,835,802.67 on preponderance of evidence.

The defendants at paragraph 14 of the affidavit accompanying the notice of intention to defend, denied the interest of 31 % per annum which the plaintiff charged on the N10,000,000.00 and the debt of N17,835,802.67 and respectively described same as outrages and imaginative. At paragraphs 13 and 15 of the same affidavit defendants denied the receipt of statement of accounts plaintiff allegedly sent to the defendants.

Defendants specially denied the rate of .interest of Exhibit STB9 Exhibited to the affidavit accompanying the writ. The denial of the receipt of the statement of accounts and the interest rates placed on burden on the plaintiff to prove on preponderance of evidence the true interest rates agreed by the parties at the time of the loan transaction.

Exhibit STB1 Exhibited to the affidavit accompanying the writ of summons under interest rate states the interest to be 12% on the aggregate reflecting 20% interest rate on the loan and the 1% as floating above the bank in the prime lending rate. Other charges were 5% flat per month for arrangement fee and 5% flat per month for management fee. The conditions precedent to draw down were stated in the agreement and the court holds that the same were perfected by the evidence of the drawing of N10,000,000.00 out of the facility granted by the plaintiff by the 1st defendant.

The plaintiff at paragraph 10 of its affidavit deposed that it charged prevailing interest rate on the facility. It particularly at paragraph 11 thereof deposed: –

Para 11: That I know as a fact that it was agreed upon between the parties that interest at 21% per annum subject to review in line with the prevailing bank rate would be charged from time by the plaintiff on any outstanding monies due it from the defendant.

Plaintiff deposed at paragraph 17 of its said affidavit of the present bank levy rates of 31% per annum which brought the debt claimed to the sum of N17, 835,802.67.

In Exhibit STB1 exhibited to the said affidavit plaintiff under the clause of interest rate it stated that:

“The Bank’s PLR is determined by ruling money marked conditions and therefore liable to charge without notice.”

….

There is no evidence that there was further agreement on the prevailing interest rates chargeable from time to time since 14/8/98 when the facility was granted and the said Exhibits (sic) STB1 was signed. The court holds that it is quite outrages and unlawful for the plaintiff to charge 31% interest on the facility granted the 1st defendant. As the evidence show (sic), plaintiff fails to show the various prevailing rates of interest charged since 14/8/98. The two rates of interest shown are 21% and 31 % but the various periods they were employed to calculate the indebtedness of the defendants are not shown. It is not the business of the court to do the calculation; it is squarely the business of plaintiff to do so. Plaintiff has woefully failed to discharge this owns …

The case is hereby dismissed.”

Being dissatisfied with the said judgment, the plaintiff/appellant has appealed to this court via a Notice of Appeal dated 9th December 2003 which has incorporated into it eight grounds. Thereafter the parties filed and exchanged briefs of argument; the appellant’s brief was filed on the 17th of August 2004 while the respondents’ brief was deemed to have been properly filed on the 31st of January 2006. When this appeal came before us for argument on the 2nd of May 2006. Mr. Etuwewe, learned counsel for the appellant referred to, adopted and relied in his client’s brief, by way of amplification, the learned counsel submitted that account of law must always confine itself to the case presented to it and relying on the decisions in ABUBAKAR TATARI ALI POLY VS. MAINA (2005) ALL FWLR (PT.284) 250 at 268 and UBN LTD VS. SALAMI (1998) 3 NWLR (PT.543) 538, he urged us to allow the appeal. For his part, Mr. Ejeh, learned counsel for the respondent also referred to adopted and relied on his client’s brief of argument and urged us to dismiss the appeal. The appellant distilled only two issues for determination by this court and as set out in its brief, they are as follows: –

“1. Whether the learned trial judge was right in discountenancing and attaching no weight to the evidence of PW1 together with the Exhibit thereon.

2. Whether the learned trial judge was right in dismissing the plaintiff’s claim on the ground that the plaintiff is unable to prove interest on the principal sum of N10,000,000.00 which the court found was utilized by the defendants on the basis of Bankers/Customer Relationship or at all.”

For ‘their part, the respondents identified three issues for determination and as set out in their brief, they are in the following terms: –

“1. Whether the trial judge was right in attaching no weight to the evidence of PW1 together with the exhibits thereon.

2. Whether the appellant proved the indebtedness of N17,835,802.67 (Seventeen Million Eight Hundred and thirty-Five Thousand, Eight Hundred and Two Naira, Sixty-Seven Kobo) on the preponderance of evidence.
3. Whether the learned trial judge was right when he held that the plaintiff has failed to prove interest.

After a careful examination of the issues raised by both parties, I am of the clear view that issue No. I on the appellant’s brief is similar to issue No.1 on the respondent’s brief; I shall take both together Issue No.2 on the appellant’s brief can be taken together with issues Nos. 2 and 3 in the respondent’s brief which issues are interwoven; I shall thereafter take them together.

Arguing Issue No. 1 in its brief of argument, the appellant submitted that it was, a wrong application of the law for the learned trial judge to hold that PW1- Kelechi Okechukwu Ogbuna, a Business Officer of the appellant would not be believed for the mere season that he was not in the employment of the appellant at the time of the transaction. It was its submission that the mere fact that PW1 was not in the employment of the appellant at the material time relevant to the transaction which forms the basis of this case, would not in law, on its own, be sufficient to justify the court rejecting his evidence in toto, reliance was placed on the decisions in (1) COMET SHIP AGENCIES LTD VS. BABBIT LTD (2001) FWLR (PT .40) 1630 and (2) KATE ENTERPRISES LTD VS. DAEWOO (NIG) LTD (1985) 2 NWLR (PT.5) 127. For their part the respondents argued that before any employee of a company can give evidence of any transaction in which the company is involved it must be shown that employee must be well placed to have personal knowledge of such transaction; support for this submission was placed on the two cases of COMET SHIPPING AGENCIES LTD and KATE ENTERPRISES LTD referred to by the appellant; PW1’s, it was further argued evidence about what one Eluma Ifeanyi deposed to in support of the affidavit amounted to hearsay evidence, which as was contended is inadmissible in law, support being found in the case of FLASH FIXED ODDS LTD VS. CHIEF AKATUGBA (2001) FWLR (PT.76) 709; and as PW1 did not depose to the supporting affidavit his evidence in proof of the depositions has no legal value, it was again argued while the cases of AGWUEGBO VS. KAGOMA (2000) FWLR (PT.19) 511 and THE CHAIRMAN, NPC VS. THE CHAIRMAN IKERE LOCAL GOVT & ORS (2001) FWLR (PT.70) 1466 were relied upon for support. It was finally submitted that even though the respondents were not given the opportunity to controvert the evidence of PW1 the learned trial Judge was right in not countenancing or attaching any weight to the evidence of that witness.

Let me start the consideration of this issue by saying that the qualitative and not the quantitative character of the evidence led in the court is what the law stresses. In the trial of cases, the question often asked is who can be called as witnesses? The answer to that question is in the provision of section 155 (1) of the Evidence Act, which reads:

All persons shall be competent to testify, unless the court considers that they are prevented from understanding the question put to them, or from giving rational answers to those questions, by reason of tender years, extreme old age, disease, whether of body or mind, or any other cause of the same kind.”

It has been held that all persons here include those who are even interested in the matter; in YUSUF VS. N.T.C. LTD (1977) 6 S.C. 39, the Supreme Court held at page 41 thus: –

“It was wrong for the learned trial judge to reject the evidence of the two witnesses called by the defendant merely because they were officials of the defendant and therefore interested parties.”

I agree with the submission of the respondents that cases can be tried upon affidavit; however, the facts or deposition in such an affidavit have to be proved like averments in pleadings. See the decision in BOOTHA MARITIME INC. VS. FAREAST MERCHANTILE CO. LTD (2001) FWLR (PT.50) 1713.

In the instant case the appellant who was the respondent in the court below filed an affidavit of 24-paragraph and sworn to by one Eluma Ifeanyi, a credit Officer of the appellant and reply to further and better affidavit which contains 9 paragraphs and sworn to by one Ben Obieze, a counsel in the Chambers of counsel to the appellant. In opposition thereto, the respondents who were the defendants swore to an 18-paragraph affidavit and a six-paragraph further and better affidavit disclosing a defence.

The main thrust of the counter-affidavit is that both parties went into partnership – that was what was put up as a defence on the merit. I pause to say that in a trial by affidavit once a counter affidavit has been filed the court must consider it whether or not the deponent or his counsel is present in court; the counter-affidavit is the party’s evidence before the court in respect of the matter for which it was filed. See (1) GEVER VS. CHINA (1993) 9 NWLR (PT.315) 97 and (2) A-G ENUGU STATE v. OMABA (1998) 1 NWLR (PT.532) 83. With regards to the printed evidence on both sides even though the respondents did not call oral evidence to substantiate the depositions in their counter-affidavit, the trial judge found as follows: –

“The court prefers the evidence of plaintiff that the nature of the transaction was the grant of facility of N20, 000,000.00 by the implied admission of the defendant, 1st defendant utilized N10,000,000.00….

The court finds as a fact that there was a banker and Customer relationship and the facility was granted in the cause (sic) of the relationship …..

The court rejects the defence of the relationship of partnership set up by the defendants, it is a frivolous attempt to defeat the transaction duly entered unto by the plaintiff and the defendants.”

The consideration of the counter-affidavit by the court below, even though no evidence was called, is in line with the principles in GEVER’S case supra. Having so found as I have shown supra, the substratum of the defence was knocked out; all that was left was the printed evidence of the appellants, which was supported by oral testimony of PW1. It is now very axiomatic that proof of issues in a civil case is on a balance of probabilities. Where there is nothing to put on the one side of the imaginary scale of justice, minimum evidence on the other side satisfies the requirement of proof even where strict proof such as proof of special damages is the matter. See (1) MOGAJI VS. ODOFIN (1978) 4 S.C. 91, (2) ODULAJA VS. HADDAD (1973) 11 S.C. 357 and (3) BURAIMOH VS. BAMGBOSE (1989) 3 NWLR (PT.109) 352. The only reason why the court refused to accord any evidential value to the testimony of DW1 is as the trial judge said at page 88: –

“The court will however attach no weight to the evidence of PW1 in view of his evidence under cross-examination that he was not employed when the transaction was made nor did he depose to the said accompanying affidavit. The evidence of DW1 merely repeats some paragraphs of accompanying affidavit.”

The plaintiff/appellant, a limited liability company, is an abstract body that only exists in the eyes of the law. In many ways it has always being likened to a human body. The law ascribes to a limited liability company the possession of a brain and a nerve centre, which controls what, it does. Since it cannot form an intention within its abstract body, to operate, it must act through its agents; its employees or servants, who are often regarded as the hands to do the work of the company these are not in law, regarded as representing the mind or the will of the Company. Another category of employees of the legal fiction is the managers and directors; the law ascribes the right to control the will and mind of the company to this category of higher employees; the state of their minds is treated by the law as that of the limited liability company, a mere legal fiction. See (1) RAMANCHADAM VS. EKPENYONG (1975) 5 S.C. 29 and (2) TRENCO LTD VS. AFRICAN REAL ESTATE LTD (1978) 4 S.C. 9. PW1 – Kelechi Okechukwu Ogbonna – in his evidence described himself as Business Officer of the Plaintiff/appellant whose duties included managing the relationship between the customer and the bank, i.e. the plaintiff/appellant. He therefore qualifies to be described as one, of the directing minds and will of the plaintiff/appellant; it is true that he was not in the employment of the plaintiff/appellant at the time the transaction was concluded. Would this be an inhibition to ascribing probative value to the evidence of PW1 or to making him a competent and compellable witness? I think not. In the case of KATE ENTERPRISES LTD VS. DAEWOO (NIG) LTD (1985) 2 NWLR (PT.5) 127 which is also in (1985) 7 S.C. 1, the Supreme Court per UWAIS J.S.C. (as he then was) held thus:-

“To insist that the very person in the appellant company who negotiated the transaction with the respondent must be called as witness when the documents relating to the transaction are available

and have been admitted in evidence without objection and PW1 is in a position to know about the transaction by the office he holds is, in my view, a negation of the very essence of the corporate personality of the appellants.”

In the recent case of SALEH VS. BANK OF THE NORTH LTD (2006) 6 NWLR (PT .976) 316, the Supreme Court per the judgment of MUSDAPHER J.S.C. at pages 326 – 327 lucidly stated the principle thus: –

“I entirely agree with the opinion of the court below, that the mere fact that a bank staff was not around when a customer’s bank account was opened was not enough to prevent the staff from testifying or giving evidence on customer’s account ….

It is settled law, that a company such as the respondent bank herein is a juristic person and can only act through its agents or servants. Any agent or servant can consequently give evidence to establish any transaction entered into by a juristic personality. Even, where the official giving the evidence is not the one who actually took part in the transaction on behalf of the company. Such evidence nonetheless is admissible, will not be discountenanced or rejected as hearsay evidence. The learned trial judge was clearly in error to have ignored the evidence led by the respondent’s witnesses on the ground merely that they were not around when the appellant opened its account with the respondent bank.”

I have said that the appellant is a mere legal abstraction and that PW1 by virtue of his position, must have knowledge of any particular transaction entered into by his employers – the legal fiction. In the case of COMET S.A. (NIG) LTD VS. RABBIT (NIG) LTD (2001) 7 NWLR (PT.712) 442, this court (the Lagos Division) held that its Manager was competent to testify about the Company’s affairs. Following the above authorities, more in particular the case of DAEWOO which is binding on this court, I hold that the learned trial judge erred in holding that the evidence of PW1 was lacking in evidential value for the reason stated. Since that evidence was not challenged and there is no legal inhibition militating against it, I hold that that testimony is of high evidential value. It is even erroneous for the trial judge to later hold otherwise having earlier held that he preferred the evidence of plaintiff that the nature of the transaction was the grant of facility of N20,000,000.00 to the Plaintiff by the 1st defendant.

Issue No. 1 in the appellant’s brief is consequently answered in the negative; the learned trial judge was not right in so holding, and I also answer Issue No. 1 in the respondents’ brief in the negative.

On issue NO.2 in the brief of the appellant and issues Nos. 2 and 3 without(sic) of the respondents, having found that the defence of partnership put forward by the respondent failed and having held that the relationship between them is that of the banker/customer, the learned trial judge should have proceeded to properly evaluate the evidence led on the issue of interest. The word “INTEREST” as applicable to the relationship of banker/customer is a sum of money payable in respect of the use of the banker’s money by the customer which money is often termed PRINCIPAL. I hasten to add that failure to sufficiently plead that the plaintiff is entitled to an interest rate agreed by both parties will result into failure to get judgment on that interest so claimed. See (1) NDIC VS. ECOBANK (NIG) LTD (2003) 11 NWLR (PT.830) 93 and (2) BENDEL FEED & FLOUR MILL LTD VS. N.P.M.B LTD (2000) 5 NWLR (PT.655) 29. Exhibits STB1 and STB2 copies of which were attached to the supporting affidavit clearly authenticate the interest rate payable.

The first respondent signed the Memorandum of Acceptance Column by affixing its common seal and one of its directors by name JOSEPH BOGWU who, incidentally, is the second respondent signing it and the secretary of the Company by name Johnson Uwabor also signing.

Again, the second respondent also signed the Guarantee and Indemnity Form – Exhibit STB2 which itself accompanied the supporting affidavit. There was no scintilla of evidence denying the signatures of the respondents. In the absence of plea of NON EST FACTUM or allegation of signing under duress the mere fact of the signature of a person on a document makes the contents binding in him. I do realise that this is a court of appeal and we must be wary in upturning the findings of the trial judge.

However, where it is clear that the trial judge had not taken the advantage of seeing and hearing the witnesses and by that reason he has reached a wrong conclusion in the evaluation of the evidence of such witness or witnesses, the appellate court can interfere by reversing the findings. The summation of the trial judge, from what I have said supra is wrong in law. A proper evaluation of the totality of the evidence led would have led him to come to the right conclusion by entering judgment in favour of the appellant. It is for the above that I hereby hold that Issue No. 2 on the appellant’s brief must be resolved in its favour and I so resolve. Issues Nos. 2 and 3 on the respondents’ brief are resolved against the respondent.

Having so held, the conclusion that I reach now is that this appeal is meritorious. It is hereby allowed. The judgment of the court below dismissing the plaintiff/appellant’s case in toto is hereby set aside. In its place, I hereby enter judgment in favour of the plaintiff/appellant but against the defendants/respondents in the following terms: –

“(1) The defendants/respondents shall pay the sum of N17,835,802.67k (Seventeen Million, Eight Hundred and Thirty-Five Thousand, Eight Hundred and Two Naira Sixty Seven kobo) being the outstanding debt balance in the first defendant’s account with the plaintiff as at 2nd February, 2001 which sum is due the plaintiff from an overdraft facility granted to the first defendant at the first defendant’s request and guaranteed by the second defendant which sum the defendants have failed, neglected, omitted and/or refused to pay inspite of repeated demand.

(2) 31% per annum on the said sum of N17, 835,802.67k (Seven Million, Eight Hundred and Thirty-Five Thousand, Eight Hundred and Two Naira, Sixty-Seven Kobo) from February 3, 2001 until judgment and thereafter 5% (five per cent) per annum on the judgment sum until same is fully liquidated.”

The appellant is entitled to the cost of this appeal, which I assess and adjudge in its favour but against the respondents at N5, 000.00 costs in the court below and N7, 500.00 as costs in this appeal.

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Other Citations: (2006)LCN/2007(CA)