United Bank for Africa Plc. & Anor V . M. A. Lawal (2007)
LawGlobal-Hub Lead Judgment Report
JOHN INYANG OKORO, J.C.A.
The dispute in this appeal which arose from the judgment of Adeniran J. of Oyo State High Court sitting at Ibadan and delivered on 13-8-99 is for the determination of whether a customer of a bank having, on his own volition stopped operating his account, the bank is right to continue in charging interest on the said account during the period the account remained dormant.
The Plaintiff now Respondent claimed against the appellant as follows:-
(i) Declaration that the threatened sale by Public Auction of the properties of the Plaintiff situate lying and being at SWQ/200 Orita Sangotedo, Odo-Ona Elewe Road, Ibadan and referred to in the mortgage Deed registered as No.11 at page 11 in volume 2491 of the Lands Registry in the office at Ibadan and the plaintiffs landed property situate in any other place in Nigeria by the 2nd defendant at the instance of the 1st defendant is unreasonable, irregular, unlawful and should be stopped.
(ii) Declaration that the Property and conveyance Law Cap 99 of Oyo State of Nigeria to the extent that it provides or confers or vests a Mortgage with powers of sale, is inconsistent with the provisions of the Land Use Act and therefore unconstitutional ultra vires, null and void and of no legal effect.
(iii) Declaration that the Deed of Mortgage between the Plaintiff and the 1st defendant and registered as No. 11 page 11 in volume 2491 of the Lands Registry in the office at Ibadan to the extent that it provides or confers or vests the 1st defendant with power to sell the Mortgagee property at Ibadan and Offa is invalid, unenforceable, illegal, null and void and of no effect.
(iv) Declaration that the plaintiff is not indebted to the 1st defendant in the sum of N1,156,709.09k or at all.
(v) An order for comprehensive account of the plaintiffs monies lodged with the 1st defendant on account No. 6426 at the 1st defendants Jubilee Market Street Branch otherwise known as Ibadan Main Branch, Oyo state of Nigeria.
(vi) An order of perpetual injunction restraining the defendants particularly the 1st defendant whether by itself, its servants, workmen, agents, and/or privies and indeed anybody acting on its instructions from selling or advertising for sale by public auction and or by private treaty or interfering in anyway with the plaintiffs quiet possession and enjoyment of his property both at SWQ/200 Orita Sangotedo Ibadan or in any other place in Nigeria.
In the statement of defence filed by t he Appellants, paragraph 9-20 contain the counter claim of the appellants. Paragraph 20 of the statement of defence and counter claim reads:-
“Whereof the 1st defendant seeks judgment in the sum of N3,233,691:33 together with interest at 21% from the time of filling the suit till judgment and 6% from the time of judgment till execution of the judgment OR IN THE ALTERNATIVE, order of court to sell the mortgaged properties in accordance with the appropriate laws”.
The Respondent thereafter filed defence to counter claim basically denying the counter claim.
The facts of this case as presented by each party at the trial are briefly put as follows:- The Respondent is a customer of the ISI appellant bank. On 6th May, 1982 the 1st appellant granted loan to the respondent to the tune of N200,000.00 and an additional facility of N100,000.00 in 1985 making it a total of N300,000.00. The Respondent who was the plaintiff at the lower court states that the 1st loan attracted 7.5% interest while the one of 1985 attracted 14% interest rate. For the two facilities, he placed two of his properties, one at Orita Challenge, Ibadan and the other at Ipee Road Offa as security for the loan. He said he had liquidated the first loan leaving the N100,000.00 as outstanding. That it is interest on the N100,000.00 that has escalated to N3,233,691.33. He denies owing the appellant such an amount. However under cross examination he admitted on p.111 of the record that interest rate on the 1st loan was 14%.
The only witness called by the 1st appellant testified that after both facilities were granted the Respondent, he was making payments and withdrawals and as at 13th June 1983, the appellant was owing the sum of N240,792.36 wherein Exhibit D- letter of demand was written and served on him. That the Respondent admitted this through Exhibit E written by him.
He also made request in Exhibit E for a new facility which N100,000.00 was granted to him. Thereafter the Respondent stopped operating the account and as at 26th October, 2004 the respondent was owning the sum of N3,233,691.33 which is both the principal and interest.
At the end, the learned trial judge came to a conclusion as follows:-
“The judgment of this court is that the plaintiffs case was with reference to leg (iv) of his claim succeeds to the effect that he is not owing the 1st defendant the sum of N1,156,709.09 but only N217,133.45k. All other claims are struck out. 1st defendant’s counter claims fails and dismissed. This sum of N217,133.45k should be paid by the plaintiff to 15th defendant within three months from today”.
Dissatisfied with the stance of the learned trial judge, the appellants have appealed to this court. In the briefs of argument filed by the parties and exchanged between them, which were adopted and relied upon in this court, issues for the determination of the appeal by this court were formulated.
The two issues couched by the learned counsel for the appellants read:-
(1) Whether the learned trial judge was justified after considering all the evidence given, that the sum of N217,133.45 was due as principal and interest by arbitrarily taking this sum from the statement of account and giving judgment for it.
(2) Whether after judgment has been given based on the fact that the debt was owing, it should not have attracted interest on it and whether the trial judge was not in error that interest was not due when the plaintiffs account became dormant at his own instance.
The Respondent’s counsel also distilled two issues for determination and they read:-
(i) Whether the 1st defendant was entitled to more than N217,133,45k awarded to it by the lower court considering the fact that the Respondent’s account has been dormant since 1987.
(ii) Whether the plaintiff/respondent is entitled to pay interest on a dormant account or on a judgment debt that is to be liquidated within a stipulated time.
I observe that the two issues formulated by both parties are like Siamese twins and I intend to treat them together as one issue.
It was the contention of the learned counsel for the appellant that by practice, usage and custom of banking institutions, in the course of business with their customers they do charge interest on loans or overdraft granted by them. Also that the nature or amount of interest that is chargeable will be discerned or dictated by the agreement between the bank and the customer. He relied on The Banking and other Financial Institutions Decree 1991 (as amended) particularly Section 23 and The Monitory, Credit, Foreign Trade and Exchange Policy Guidelines for each year which he said is popularly called “Prudential Guidelines”. He submitted further that once an amount is on the bank book as loans or advances, it attracts interest, whether it is termed “non-performing” or “performing”. He opined that it was therefore wrong for the learned trial judge to hold that only the sum of N217,133.45 was due and gave judgment on it by looking at Exhibit 1, the statement of account and stopping at p.4 thereof because the Respondent was said to have stopped operating his account. He asked: “Can a debit balance be left on the bank book without attracting interest simply because the customer neglected or refused to operate the account”? He urged this court to answer in the negative.
In what he calls issue number 2 which I have held is intrinsically the same as the 1st issue, he submitted that the learned trial judge failed to consider interest between June 1987 and October, 1994 and unilaterally fixed the amount payable at N217,133.45 holding in the process that the account became dormant in June 1987 and that interest was not chargeable thereafter and gave no reasons. He then asked if a mortgagor can unilaterally determine relationship with the mortgagee by unilaterally ceasing to operate his loan account and whether the court can rule that the relationship was at an end at that time. He urged the court to resolve both issues in favour of the appellant.
On his part, the learned counsel for the respondent submitted that the 1st appellant ought to have stopped calculation of interest on the Respondent’s account that had become dormant since June 1987. That if interest calculation had been stopped by the 1st appellant as aforesaid, the balance as at October 1994 would have been N217,133.45 and the Respondent would have had no choice but to admit the claim of the appellant. Also that since both parties had admitted that the Respondent stopped operating his account in 1987, there was no need of proof wherein he relied on these cases viz:-
- Agbanelo v. Union Bank Plc (2000) FWLR (pt 13)
- Idakula v. Richards (2000) FWLR (pt 14) 2439
- Nwojimi v. Adu (2000) FWLR (pt 20) 582
- Makanjuola v. Ajilore (2000) FWLR (pt 8) 1328
Learned counsel further submitted that this court is by law not allowed to disturb the findings of fact of the court below in respect of when the respondent’s account with the appellant became dormant and the sum of N217,133.45 therein as the amount due and payable to the appellant. He cited the cases of Benjamin Obasuyi v. Business Vienmes Ltd. (2000) FWLR (pt.10) 1722, Alhaji Aru Wakili v. Haruna Dundu Cumel (2002) FWLR (pt 6) 2433, Raymond Ogu v. Samuel Uche Nwaobia (2000) FWLR (pt 6) 922.
On what he referred to as issue No.2, he submitted that all the interest calculated on the respondents account from July 1987 to October 1994 are not only illegal but unlawful since same is contrary to central Bank Law and Central Bank Guidelines and Policies. Learned counsel did not however say which of the Guidelines or Policies. He urged this court to hold that the sum of N3,233,601.33k standing as debit in the account of the respondent as at October, 1994 is illegal same being interest on the account between June 1987 and October 1994 when the respondents account was dormant.
Finally, he submitted that where a date has been fixed for the payment of a judgment debt, same will not attract any interest until the judgment debtor defaults and relied on Order 40 Rule 7, Oyo State High Court (Civil Procedure) Rules, Oso v. Peugeot Automobile Nig. Ltd. (2002) FWLR (pt.122) 124, Texaco Overseas Petroleum Ltd. v. PEDMAR Ltd. (2002) FWLR (pt.126) 885, Hausa v. First Bank Plc FWLR (pt 29) 2516.
That the respondent had since liquidated the judgment sum within three months as ordered by the court and as such, there is nothing left for interest to be charged. He then urged the court to dismiss this appeal.
It is now trite that in a banker-customer relationship, where there is no express agreement as relating to issue of interest, the bank is entitled to charge interest on the basis that there is a custom and usage to that effect or that the customer has impliedly consented where he, without protest allows his account to be so debited. Where however, as in the instant case, the parties have expressly set out the details of the terms that would govern the loan facilities granted, then they have by implication made it clear that the transaction is not to be governed by the general rules of banking relating to charging interest on the loan or overdraft facilities. See I.D.S. Ltd v. AIB Ltd (2002) 4 NWLR (pt 758) 660, Barclays Bank Ltd v. Abubakar (1977) NSCC 415.
Two credit facilities were made available by the 1st appellant to the respondent in this case as follows:-
(1) Overdraft facility worth N200,000.00 dated 6th May, 1982 to expire on 31st May, 1983 at 14% interest rate per annum (see Exhibit C)
(2) Overdraft facility worth N100,000.00 dated 14th August, 1985 to expire in July, 1986 at 13% interest rate per annum (see Exhibit H).
Both Exhibits C and H clearly evidence the transaction between the parties. Under the agreement, the rate of interest chargeable on the two facilities are 14% and 13% respectively.
Now interest may be claimed as of right where it is contemplated by the agreement between the parties as in the instant case or under mercantile custom or under a principle of equity, such as breach of fiduciary relationship. Interest may also be awarded where there is a power conferred by statute to do so in exercise of the court’s discretion. See Ekwunife v. Wayne W.A Ltd (1989) 5 NWLR (pt 122) 422.
Where interest is claimed as of right, the matter must be specifically pleaded and evidence led in proof of same as the court will never award an amount which is never claimed or pleaded by either party or in excess of what is claimed. See Egonu v. Egonu (1978) 11-12 Sc. 11), Ekpenyong v. Nyong (1975) SC. 71, Ekwunife v. Wayne W.A Ltd (supra); Texaco Overseas Nig Unlimited v. PEDMAR Nig. Ltd. (2002) 13 NWLR (pt 785), p 526.
On page 122 of the transcript record of appeal transmitted to this court is contained part of the judgment of the lower court and I wish to reproduce the relevant portion to this appeal thus:-
“I cannot accept this submission that the balance of N217,133.45 as at June 1987 in Exhibit I series related to the two loan of 1st N200,000.00 and 2nd N100,000.00 I have accepted and I still do that the plaintiff has liquidated the first loan of N200,000.00 principal and interest.
Exhibit 1 series deal mainly with the 2nd loan of N100,000.00 as the same is so headed. I therefore hold that the balance of plaintiffs indebtedness to the first defendant as at June, 1987 when plaintiffs account became dormant was N217,133.45 principal and interest”.
The learned trial judge went on to hold further that interest calculated between 1987 when the account became dormant and 1994 when this matter was filed in court cannot stand. Surprisingly the learned trial judge did not give the basis under which such a decision was reached. A bank customer who takes an overdraft facility and fails to pay back as per the terms of the grant and at the same time refuses to even operate the account thus causing the account to remain dormant, cannot, in my opinion complain as to interest charged during the period the account remains dormant. This is so because first, the bank did not cause the account to remain dormant and secondly it is well settled that by practice, usage and custom of banking, banks do charge interest on loans and overdrafts granted by them to their customers. As long as there is a loan or overdraft facility which remains unsettled, it must attract interest either as per the agreement at the time of the grant of the facility or following the practice, usage and custom of banking institutions.
In the instant case, the first and second overdraft facilities extended to the Respondent were to attract interest at the rate of 14% and 13% respectively. The first one was to expire on 31st May, 1983 while the second was to expire in July 1986. See Exhibit C and H respectively). It follows therefore that the bank was entitled to charge interest at the rates which they agreed. I am to believe that the parties had intended to be bound by the terms of the agreement they voluntarily entered into. Courts are always enjoined to deal carefully with agreements as reached by the parties. See Afribank Nig. Plc v. A.I. Investment Ltd. (2002) 7 NWLR (pt 765) 40.
In this regard, it will be contrary to the established rule of interpretation to impose a more or less onerous interpretation of the provision of the two agreements on one of the parties. See Awolowo v Shagari (1979) 6-9 SC, 51. The intendment in the two agreements as I see it appears to be that parties had agreed that interest on the two overdraft facilities be charged up to and including the two expiry dates respectively. Whether the account remained dormant or not, interest must accrue within the period covered by the facilities. The learned trial judge found as a fact that both the principal sum and interest had been liquidated on the 1st overdraft of N200,000.00. This finding of fact by the trial judge has not been challenged at all by any of the parties and I have no reason to dabble into it. It is trite that where a trial court has dispassionately made findings of fact, unless such findings of fact are perverse or not based on evidence led before it, the court of Appeal will not substitute its own view. See Nwojiri v. Adu (2001) 5 NWLR (pt 705) 192, Bua v. Dauda (1999) 12 NWLR (pt 260) 59, Akinloye v. Eyiyola (1968) NMLR 92, Wulgo v. Bukar (193) 3 NWLR (pt 596) 539.
. As it stands, it seems to me that the N217,133.45, awarded the respondent relates to principal and interest on the 2nd facility of N100,000.00 which was to expire in July, 1986.
Although I have already held above that banks can continue to charge interest on any unliquidated loan or overdraft until the customer pays up, this is not absolute. Where, as in this case, there is a fixed expiry date for an overdraft, the agreed interest rate will only be applicable from the date the agreement came into effect up to the date the facility expired as the indebtedness cannot be treated as an overdraft after the expiry date. Thus, what the bank will be entitled to after the debt is become due is damages for breach and it is not open to the court to award the applicable interest rate per annum to cover from the day the overdraft facilities became due up to the day of judgment of the court. See I.D.S Ltd v. A.I.B Ltd. (2002) 4 NWLR (pt 758) 660, Airoe Construction Ltd v. University of Benin (1985) I NWLR (pt 2) 287.
Thus, the award of N217,133.45 to the respondent, was, in my opinion in order since it covered the period of the grant of the facility up to the time it expired in July 1986, even though it has gone a little above the expiry date. Now that the respondent has accepted and paid the amount awarded against him, and there being no objection to such judgment sum from him, this court will not disturb it. Be that as it may, the appellant has no right to claim interest beyond the date agreed by them on exhibit H. As already stated, the appellant can only sue for damages and no such claim was made before the lower court.
Although I agree with the learned trial judge on the terminal date which interest could be charged, I do not agree on the reason given by him. To say that since the Respondent having unilaterally stopped operating his account, the account also becoming dormant, no interest should be charged is erroneous. If the learned trial judge had held that interest could not be charged beyond the expiry date, he would have been in order. Be that as it may there is nothing before this court to warrant a reversal of the judgment of the learned trial judge based on this issue even though the issue is resolved in favour of the appellant in part.
By order 40 Rule 7 of the High Court of Oyo State (Civil Procedure) Rules, 1988, “the court at the time of making any judgment or order, or at any time afterwards, may direct the time within which the payment or other act is to be made or done, reckoned from the date of the judgment or order, or from some other period of time, as the court thinks fit and the court may order interest at a rate not exceeding 10% per annum to be paid upon any judgment, commencing from the date thereof or afterwards, as the case may be “.
The above rule of court clearly takes away the responsibility from any party benefiting from its provision to state in the endorsement of his claim on the writ or to plead in his statement of claim that fact or the grounds of his entitlement thereto as statutory interest is one provided by statute as opposed to when it is claimed up to the date of judgment and after judgment, there is a claim for interest on the judgment debt based otherwise than on the provision of the statute. Interest on judgment debt is interest after judgment had been delivered. By the Rules of court stated above, such interest is at the discretion of the court to award it or not, on pronouncing the judgment and with effect from that date. See Ekwunife v. Wayne W.A Ltd. (1989) 5 NWLR (pt 122) 422 at 446.
When the learned trial judge in this case entered Judgment for N217,133.45 and directed that the judgment sum be paid within three months from the date of judgment, I am of the view that he exercised his discretion not to award interest on the judgment sum judiciously. It is not in every case that courts will award interest on the judgment sum especially when such sum is to be liquidated immediately or to be paid within a short while as in this case. It is however advisable to lean towards awarding interest on judgment sum in case the judgment debtor refuses or neglects to pay up in time. This will assist the judgment creditor who has to wait for a long period to receive his money. In the instant case, I do not see any wrong done to the appellant by the refusal of the learned trial judge to award interest on the judgment sum within the three months period. This issue does not in the circumstance avail the appellant at all.
Before I am done, I wish to comment albeit briefly on the appellants’ brief filed in this case. I am disturbed that in an appeal such as this an appellant’s counsel can file a brief of argument without citing even one authority to buttress or support his argument. The appellant’s brief in this appeal can best be described as bare and lazy. Counsel should be reminded that the fate of his client’s case may well depend on the persuasive quality of his brief and as such some level of industry must be put into the making or writing of his brief. See Adejumo & ors v. Avantegbe (1989) 3 NWLR (pt 110) 417. I need to add that one of the purposes of brief writing in the appeal courts is to assist the administration of justice by making the work of both counsel and the court easier. It is the view of a learned author and Jurist and I agree with him that “the courts gain immense assistance from excellent briefs when it gets to the stage of the court undertaking research into the matter before it (see Tobi JSC: The brief system in Nigerian courts. Pp.20-23. See also Engineering Enterprises of Niger Construction Coy. Of Nig. v. Attorney General of Kaduna State (1987) 2 NWLR (pt.57) 381, Ehot v. The State (1993) 4 NWLR (pt 290) 644”.
A brief that is written from the first page to the end without a single legal authority is to say the least, inadequate and cannot assist the court. I need not say more.
The sum total of the fore goings is that the appellant has failed to convince this court on why it should reverse the judgment of the learned trial judge, even though the appeal succeeds in part. In the circumstance of the outcome of this appeal, parties are to bear their respective costs.
Other Citations: (2007)LCN/2350(CA)
