Vincent Standard Steel Industries Limited & Anor V. Lead Bank Limited & Ors (2009)
LawGlobal-Hub Lead Judgment Report
MARY U. PETER-ODILI J.C.A.
The Plaintiffs now Appellants claimed against the Defendants now Respondents at the High Court of Justice, Federal Capital Territory, Presided over by S. D. Baje J. the following reliefs as per the Statement of Claim:-
i. Declaration that the purported Deed of Tripartite Legal Mortgage registered as No.FC.16 at page 16 in Volume 13Mise on the 21st February 2000 in the Federal Capital Territory Lands Registry, Ahuja between Vincent Standard Steel Industries Limited, Chief Vincent Nwankwo and Lead Merchant Bank Limited was never executed by Chief Vincent Nwankwo as the Surety.
ii. Declaration that the said Deed of Tripartite Legal Mortgage registered as NO. FC.16 at page 16in Volume 13 Misc on the 21st February, 2000, in the Federal Capital Territory, Abuja Lands Registry Abuja between Vincent Standard Steel Industries Limited, Chief Vincent Nwankwo, and Lead Merchant Bank Limited is null and void and of no effect.
iii. An order compelling the 1st Defendant to return the Certificate of Occupancy No. FCT/ ABU/ AN133 and the duly registered Power of Attorney in respect of the property of the Plaintiffs.
iv. An order compelling the 1st Defendant to execute a deed of release of the above property in favour of the Plaintiffs.
v. Perpetual Injunction restraining the Defendant from selling, assigning or doing anything inconsistent with the
Plaintiffs on the property covered by Certificate of Occupancy No. FCT/ABU/AN133.
The Plaintiffs filed their Statement of Claim, while the Defendants filed their Joint Statement of Defence. The 2nd Plaintiff gave evidence on behalf of the 1st Plaintiff and tendered documents which were admitted as Exhibits. There were Exhibits A, 8, C1, e2, 0, El, F, G, H, H2, H3, H4, J, J2, K, M, Ni, N2, P, Pl,PW2, R, S. The Defendants gave evidence through one witness and tendered some documents which were admitted as Exhibits and these are Exhibits U and U2. Thereafter, counsel addressed the Court and the Court delivered its judgment on 23rd February 2004 dismissing the Plaintiffs’ claim and being dissatisfied the Plaintiffs have appealed to this Court.
FACTS:-
The Appellants as Plaintiffs at the trial Court claim against the Respondents as Defendants as shown in Part 1 of this brief. The grievances of the Appellants against the Respondent are quite simple. Sometime in 1996, the Appellants applied for N40 million import finance facility from the 1st Respondent. The 1st Respondent granted the facility and the tenure was for 160 days. The interest payable was 21% per annum and repayment on the arrival of supplies/ documents or at maturity whichever is earlier. The Appellants reduced Exhibit A, which is the personal Guarantee of the 2nd Applicant. Exhibit B is the Insurance Cover as required by the Central Bank of Nigeria. The Letters of Credit were tendered and admitted in Evidence as C1 and C2. The further contention of the Appellants was that on the consignment of the goods, there was hardship, as the ship sank and the goods destroyed. Exhibit D is the fax message and Exhibits El and E2 – Letters of Suspension of them. The Appellants contended further that after the loss from the sunk ship, they applied for a further import facility of N100 million. This is Exhibit G.
The 1st Respondent replied and approved only N57 million fresh facilities, but on the condition that the Appellants must secure the facility with a property in Abuja or Lagos Exhibit H is the letter to this effect. That upon the insistence of the appellants, that N57 million approved was too small, the 2nd Appellant refused to sign the Deed of Tripartite Mortgage.
The three copies of the said deed unsigned were tendered and admitted as Exhibit H2, H3 and H4. The 2nd appellant then accepted the N60 million approved and consequently, a Power of Attorney in respect of the property, and a tripartite mortgage were duly executed. These are Exhibits K, 2 and K respectively.
It was further contended for the Appellants that shortly after the due execution of Exhibit K, the deed of legal mortgage in respect of the later transaction relating to the N60 million, the 1st Respondent caused to be published in THIS DAY Newspaper of 14th August, 2000 auction notice of the said property. After several messages and correspondences by both parties to resolve the matter without any success, the Appellant proceeded to the trial court for the resolution.
In the Statement of Claim at pages 65 – 69 of the Record. The 2nd Respondents are agents of the 1st Respondent for the said auction sale.
The Respondents filed a Joint Statement of Defence. That the crux of the defence by the Respondents ventilated through their sole witness DW1 is, principally that as a result of the outstanding indebtedness owing from the finance facility granted to the Appellants, 1st Respondent requested for additional security to which the appellants gave the property at Abuja as shown in Exhibit K. It was the further contention of the Respondents that the 1st Respondent did not approve the additional facility of N100 million as requested by the Appellants.
At the close of evidence, counsel to both parties addressed the Court and the learned trial Judge dismissed the Plaintiffs/Appellants’ Claim and dissatisfied the Appellants appealed to the Court of Appeal.
On the 1st June 2009 when the appeal was heard the learned counsel for the Appellant adopted their Brief which was filed on 21/5/04 and urged the court to allow the appeal. He further adopted their Cross-Respondents Brief filed on 6/4/05.
For the Respondents was filed a Brief on 7/7/04 which the learned counsel on their Brief adopted. They also filed a Cross-Appellants’ Brief on 23/6/05 which was deemed on 13/4/06 and a cross-appellants’ reply on 18/11/04.
Learned counsel in accordance with the Brief of the Appellants sought leave of this court to raise and argue the issue of jurisdiction for the first time in the Appeal. The Grounds for the Application were that the issue of jurisdiction is the spinal cord of any matter and can be raised at any time of the proceedings and even for the 1st time in an appellate Court and being a jurisdictional issue raised in ground one is purely an issue of leave that does not require any evidence.
The Appellant distilled three (3) issues for determination which are:-
1. Whether the trial Court has jurisdiction to entertain or pronounce on the documents, Exhibits A & K having regard to the provision of Sections 22 & 26 of the Land Use Act; Cap 202, LFN.
2. Whether the trial Judge was right in holding that Exhibits H1, H2 and H3 executed and meant for the purpose of Exhibit “KH covered the liability of the Appellant in Exhibit “A vis -a-vis the clear terms of Exhibits H1, H2, and H3.
3. Whether the learned trial Judge was right in placing heavy reliance on the case of USA v. AOEUYA (1993) 6 NWLR (pt. 299) 382 – 383 in arriving at the decision that Clause 1in Exhibit K Covers the transaction in Exhibit A.
The Respondent adopted the three issues couched by the Appellants but before then had raised a Preliminary Objection contesting the raising of the issue of jurisdiction by the Appellants for the first time which preliminary observation or objection I shall deal with first before embarking if possible on the issues for determination.
PRELIMINARY OBSERVATION:
Mr. Abe for the Respondents contended that the Application by the Appellants to seek leave to raise and argue the issue of jurisdiction in this court for the first time on Appeal contained at page 5 of their Brief is wrong, improper and has no legal basis by virtue of Order 3 (3) (1) of the Court of Appeal Rules 2002. That the mere notification by the Appellants’ by their intention to seek leave to raise and argue the issue of jurisdiction in the manner they have done in this instance is wrong and cannot be legally sustained. That there was need for a Motion on Notice and affidavit in support which the Appellants failed to do and so the application is incompetent and cannot be granted. He cited Jov v. Dom (1999) 7 SC (pt. 111) 27; saude v. Abdullahi (1989) 4 NWLR (pt. 116) 387- 408; Egbe v. Alhaji (1990) 1 NWLR (pt. 128) 546; Kaballa v. A. G. Ugbanda (1965) 3 NLR 512.
Learned counsel for the Respondents said that the lack of consent by the Minister of the Federal Capital Territory before the creation of the Deed of Tripartite Legal Mortgage (Exhibit K) is not one of the Ratio Decidendi of the trial court and that Sections 22 and 26 of the Land Use Act Cap. 202 Laws of the Federation of Nigeria does not apply to the Federal Capital Territory. He cited Egbe v. Alhaji (1990) 1 NWLR (pt. 128) 546; Ona v. Atenda (2000) 5 NWLR (pt. 656) 244; Section 49 (1) of the Act. That Ground one of the Appellants Notice of appeal as it relates to paragraphs (i) (ii) & (iii) above is incompetent and defective and should be struck out by this Court. I refer and follow the case of: Obioha v. Duru (1994) 8 NWLR (pt. 365) 631 at 646 per Onu lSC.
“My consideration of this issue (Issue 2) above apart, learned counsel for the Plaintiffs has additionally raised an objection to the ground from which it is distilled i.e. additional ground 5. It is that leave of this court was neither sought nor obtained before raising it. Merely asking leave of court to file additional grounds of appeal, it is argued, does not automatically confer a party with the right to argue a fresh point without leave.
It is enough to say that leave not having been specifically sought or obtained by the defendants to canvass additional ground 5 as a fresh point, issue 2 from which it is formulated is not properly before this Court. This court has held in a number of cases including Amusa Opoola Adio v. The state (1986) 2 NWLR (pt.24) 581 at 588; Alhaji Latifu Ajuwon & ors v. Madam Alimotu Adeoti (1990) 2 NWLR (pt. 132) 271 at 283, 296, that in order to urge issues or matters which were not urged in the court below, one has to apply specifically for leave to do so”.
Learned counsel for the Appellants in raising the issue of jurisdiction at this point and basing it on whether or not there was consent of the Minister before the Legal Mortgage was executed thus bringing into question the validity or otherwise of that Mortgage. This is only being brought in at this appellate stage to which learned counsel for the Respondents has put forward the objection that it is not allowable especially since the Notice to bring in the matter of jurisdiction was not initiated by way of motion supported by affidavit to which counsel for Respondent can properly react to. Indeed the issue of jurisdiction can be raised at any stage of the proceedings even on appeal. However an appellant ought to seek leave in order to properly raise it as a valid issue since it was not previously raised and this includes any issue irrespective of whether it borders on jurisdiction or not. See A.C.B. Plc. v. Emedo (2003) 10 NWLR (pt. 828) 244 at 255; Akpene v. Barclays Bank (1977) 1 SC 37; Ejiofodomi v. Okonkwo (1982) 11 SC 74.
Since leave was not sought from this Court or obtained to raise the issue of jurisdiction on this appeal and this leave is absolutely necessary as the matter intended to be argued has to do with whether or not consent was first obtained before the execution of the Legal Mortgage which fact ought to be introduced by way of evidence and so the matter strictly is not purely that of law therefore the ground of appeal and the issue 1 distilled therefrom are incompetent and hereby struck out.
R.E.A.N.v. Anumnu (2003) 6 NWLR (pt. 815) 52; Section 25 (1) & (2) of the Court of Appeal Act; Ajibade v. Pedro (1992) 5 NWLR (pt. 241) 257; Oshotoba v. Olujitan (2000) 5 NWLR (pt. 655) 159. The reason for the foregoing position is that dealing with the matter of jurisdiction upon the ground it is based would be taking the other party, the respondents unawares with their right of fair hearing in the related matter jeopardized. That is not allowed by our adversarial system of adjudication which makes it mandatory that equal opportunity be given to both contending parties, at every point of the process so that every reasonable person would clearly see that the balance of justice was maintained. See Ceekay Traders Ltd. v Genemeral Motors Ltd. (1992) 2 NWLR (pt. 222) 132; Yakubu v. Governor of Kogi State (1995) 8 NWLR (pt.414) 386.
ISSUE ONE:
Whether the trial Court has jurisdiction to entertain or pronounce on the documents; Exhibits A & K having regard to the provision of Sections 22 & 26 of the Land Use Act, Cap 202, LFN.
Mr. Gbadeyan, learned counsel for the Appellants stated that the learned trial Judge erred in law in pronouncing on Exhibit K (Deed of Tripartite Legal Mortgage) as valid in order to cover the Liability in Exhibit A, which is under the Land Use Act Cap. 202, LFN and Abuja. That no consent was first sought and obtained. That a calm examination of Exhibit K demonstrates that it was only duly stamped and the purported registration particulars and the usual Certificate of Occupancy particularly under it as registered, it has nothing to do with the consent to be granted by the Honourable Ministry of the FCT. That the evidence of DW1 as pointed out clearly demonstrates that the consent of the Minister was not first sought and obtained and so Exhibit K is void as nothing can be put on it in the absence of any consent for it will collapse. He stated that the provisions of sections 22 and 26 being mandatory it is immaterial that it is the Appellant who was supposed to obtain the consent as the land Use Act transcend all equities and the common law provisions. He cited Savannah Bank (Nig.) Ltd. v. Ajilo &. ors (1989) 1 NSCC; Union Bank Limited &. Anor v. Ajodare &. 01’S (2000) 11 NWLR (pt. 679) 644 at 654- 656; UBN v. Orharhuge (2000) 2 NW ILR (pt. 645) 49S at 499; Jacobson Engineering Co. Ltd. &. Anor v. UBA Ltd. (1993) 3 NWLR (pt.283) 586 at 600.
That on the strength of the mandatory provision, the court should hold that the trial court lacked jurisdiction to entertain and pronounce on the validity of Exhibit K covering the transaction in Exhibit A and this Issue I should be answered in the negative.
In response, learned counsel for the Respondents submit that the issue of jurisdiction of a Court to hear and determine a matter validly before it cannot be removed or derogated from just because that court made pronouncement one way or the other in respect of a document before it. He cited Madukolu v. Nkemdilim (1962) 2 SCNLR 341.
Mr. Abe further stated that the Lower Trial Court is clothed with jurisdiction to admit in evidence Exhibit “K” and to pronounce same as duly binding on the parties that executed it i.e. the Appellants and the 1st Respondent. That the Land Use Act Cap 202 Laws of the Federation 1990 is inapplicable to properties held by the Federal Government and its agencies in the Federal Capital Territory (as it is in this case property situate in Abuja). That the issue of consent or otherwise of the Minister of F.C.T. was not raised in the pleadings of the parties, nor evidence led on it. He referred to Ona v. Atenda (2000) 5 NWLR (pt. 656) 244 at 267 paras C – D.
Learned counsel for the Respondents said that parties are bound by their pleadings and since the Appellants had not in the Court below raised the issue of lack of consent and so cannot now raise it. That a party cannot on appeal make out a different case from the one in the Court below and so this issue should fail here. He cited Section 149 (d) Evidence Act; Egbe v. Alhaji (1990) 1 NWLR (pt. 128) 546 at 590.
Section 22 of the Land Use Act, 1978 forbids a holder of a right of occupancy from alienating his right of occupancy or any part thereof without first obtaining the consent of the appropriate authority mandated under the Act; the Governor in respect of a statutory right of occupancy and the Local Government council in respect of customary right of occupancy. Section 26 of the act expressly declares null and void any transaction which does not conform with the provision of Section 22 of the
Act. Per Mudsdapher JCA (as he then was). UBN Plc. v. Ayo Dare & Sons (Nig.) Ltd. (2000) 11 NWLR (pt. 679) 644 at 655; Savannah Bank v. Ajilo (1989) 1 NWLR (pt. 97) 305.
The matter of whether or not consent of the Governor or any officer occupying authority upon which he is in a position to provide the consent is one necessitating the taking of evidence.
It is the holder of a right of occupancy who is to seek consent of the governor to mortgage or alienate. Therefore, it is unconscionable for a mortgagor to turn round and maintain that the consent of the governor he obtained was flawed, having received valuable consideration, that is the loan from the mortgagee. UBN Plc. v. Orharhuge (2000) 2 NWLR (pt. 645) 495 at 513 – 514; Ugochukwu v. C.C.B Ltd. (1996) 6 NWLR (pt. 456) 524.
The interest of the mortgagee in mortgaged property is inchoate if no consent is obtained before the mortgage is registered. UBN Plc. v. Orharhuge (2000) 2 NWLR (pt. 645) 495 at 514 (CA) per Akaahs
JCA; Awojugbagbe light Industries limited v. Chinukwe (1995) 4 NWLR (pt. 390) 379.
As I stated earlier in my ruling on the preliminary objection of the Respondents as to whether the matter of the absence of consent can be raised at this stage not having been raised either in pleadings or in evidence in the Court below not being brought in after leave had been sought and obtained cannot now be entertained at this stage. Therefore that ground on jurisdiction and the Issue 1 distilled therefrom cannot stand having been struck out when the ruling on the preliminary objection was delivered.
ISSUE TWO:
Whether the learned trial Judge was right to hold that the contents of Exhibit “K” executed by the Appellants covered their liability in Exhibit A viswa-vis Exhibits H1, H2 and H3.
Mr. Gbadeyan for the Appellants submitted that parties to a contract are free to contract on their own terms and that parties are bound by the terms of agreement entered into, He cited Baba v. NCATC (1991) 5 NWLR (pt. 192) 388 at 392; Chukwurah v. Shell Petroleum (1993) 4 NWLR (pt. 289) 512 at 517; Layode v. Panalpina World Trans (Nig.) Ltd. (1996) 7 SCNJ 1 at 3.
That the parties i.e. the Appellants and 1st Respondent are intricately bound by the term of the Mortgage agreement entered into by them in respect of the transaction contained in Exhibit “K”, That the 2nd Plaintiff/Appellant executed the tripartite mortgage agreement Exhibits Hi, H2 and H3 in consideration of his application in Exhibit “K”, a new loan which is clearly an admission of the fact that Exhibit “A” was not contemplated when the parties were entering into the mortgage agreement. That the learned trial Judge was in error in reading into this Clause of the agreement a meaning not intended or contemplated in the agreement that the issue of whether the Appellants were owing and how much was being owed as a result of the import finance facility granted to the Appellant Exhibit “A” in 1996 was still raging as of the time and even after the parties entered into the mortgage agreement. That it cannot be said that either party intended the Mortgage to cover the liabilities that were still being disputed in the earlier transaction between the parties. He referred to Layode v. Panalpina World Trans (Nig.) ltd. (supra).
Mr. Gbadeyan stated that the terms/clauses contained in the Mortgage agreement are clear and unambiguous so there was no need for extrinsic evidence to interpret their meanings. That extrinsic evidence is admissible to resolve a patent ambiguity in an instrument otherwise the instrument would fail completely for uncertainty, for example where the language of an agreement is so vague or contradictory as to be incurable. He cited Shettimari v. Nwokoye (1991) 9 NWLR (pt.213) 60 at 62; Nimanteks Associatesv. Marco Construction Co. Ltd. (1991) 2 NWLR (pt. 174) 411 at 427.
Learned Counsel for the Appellants contended that there was no evidence before the trial Court to ground the judgment of the court. That there is no innovation or subrogation of any kind between the two different and distinct contract/transactions and so the judgment was against the weight of evidence which occasioned a miscarriage of justice.
He cited Ciroma Y. Ali (1999) 2 NWLR (pt. 590) 317 at 328; Mogaji & ors Y. Odofin & ors (1978) 4 SC 91; UBN Ltd. Y. Ozigis (1994) 3 NWLR (pt. 333) 385 at 402; Onwuka Y. Omogui (1992) 3 NWLR (pt. 230) 393 at 416 paras B- C.
Learned counsel for the Respondents contended that Exhibits H2, H3 and H4 are void and of no legal effect since they purport to be a Deed of Legal Mortgage which was neither executed by the parties nor registered as required by the law. He cited Alhaji Saidu Usman v. Alhaji Salhu Kareem (1995) 2 SCNJ 158. He further stated that where an inadmissible document was wrongly admitted, it is trite that the court should expunge it from the record as it is in this case with Exhibits H2, H3 and H4. He cited
Oredola Okoya Trading Co. (Nig.) Ltd. Y. A.G. Kwara State & anor (1992) 9 SCNJ 13; Egbe Y. Oriregham (1985) 2 NWLR (pt. 10) 884 at 893j Okoya & ors v. A. Santili & ors (1994) 4 SCNJ 333.
He stated on that it is trite law that where any contract or any grant or disposition of property has been reduced to the form of a document, no oral evidence may be given of the terms of the contract except the documents themselves. That the contents of such documents cannot be contradicted altered, added to or varied by oral evidence. He referred to U.B. N. Plc v. Professor Albert Ozigi (1994) 3 NWLR (pt. 833) 385 at 400.
I would refer to the letter from the 1st Respondent Exhibit A:-
“LEAD MERCHANT BANK LIMITED. 1, Oladele Olashore Street, Victoria Island, P.M.B. 12621, Lagos, Nigeria, Phone: (01) 2620430 – 9, Fax (234-1) 2614563, Telex 28494, 28819 LEAD NG. CB/VINCENTA/SOO.POA/96 17th May, 1996
The Managing Director
Vincent Standard Steel Industries Nig. Ltd.
52 James Robertson Street
Surulere – Lagos
Dear Sir
N40 MILLION IMPORT FINANCEFACILITY
We refer to your application dated 1st February, 1996 in respect of the above subject-matter and are pleased to advise that the Bank has acceded to your request under the following terms and conditions viz:
REQUEST: N40.M (Forty million naira only) Import finance Credit Line.
PURPOSE: To finance the importation of raw materials.
TENOR: 180 (One hundred and Eighty) days.
PRICING: 21% per annum in line with the current CBN Guidelines on lending.
REPAYMENT:-Repayable on arrival of shipping documents or at maturity whichever is earlier.
SECURITY: 1. Lien on shipping documents relating to consignments.
2. Personal Guarantee of the Chairman of the company executed separately on our standard Guarantee forms (attached herewith).
3. Hypothecation on consignment of goods being cleared.
CONDITIONS PRECEDENTTO DRAWDOWN
1. Board of Directors’ resolution authorizing the borrowing and acceptance of the terms and conditions of the offer.
(Specimen copy for adoption herewith attached).
(Signed) Directors:
O. Olashoro (Chairman)
O.A.Smith (managing), A.O. Olashoro (Executive), Akin
A. Akinola, B.A.O. Fisher, Saleh Jambo, Chief I.A. Odeyemi,
Mrs. Ladi Balarabe, O. Aleshinloye-Williams, Dr. (Mrs.) J.A.
Akhigbe.
RC126564.
2. Personal Guarantee of the Chairman of the company to be duly executed on our standard Guarantee forms.
3. A letter of hypothecation on consignment being imported to be in place.
OTHER CONDITIONS
1. Letters of Credit covering the transaction to be established through Lead Merchant Bank Limited and the entire facility to be utilized within the Bank.
2. Release of shipping documents on arrival shall be strictly against repayment of the facility.
3. All incidental costs relating to the importation are to be borne by the Customer.
Without prejudice to the above, please note that the Bank reserves the right to vary, alter and/or amend any of the terms and conditions of approval stated above.
If after 7 days of this letter we are yet to receive your acceptance of the Offer and other relevant documents called for, the Offer will lapse.
Kindly signify your acceptance of the offer on the duplicate copy of this letter and return same to us together with all the other relevant documents listed above for our records.
Thank you.
Yours faithfully”.
Two letters emanated from the Appellant to 1st Respondent dated 10th December 1997 and 15th December 1998 and I shall quote:-
“VINCENT STANDARD STEEL INDUSTRIES (NIG.) LTD.
(Re.45645)
Our Ref: VSSl/LMB/1 Date: 10/12/97.
The Managing Director
Lead Merchant Bank
NO.1 Oladele Olasholi
Victoria Island
Lagos.
Dear Sir,
SUSPENSION OF INTEREST CHARGES ON BILL NO.LC/lMB/96/05/0114 & LC/LMB/96/Q5/0115
Now we have been informed by the Shipping Company that the two Vessels carrying the above goods are having problems in December and January which shows that the consignments may not be delivered and as it stands, we request you to stop further interest charges being that the goods and the money may not be seen as expected.
Kindly consider and suspend the interest forthwith, until the situation is finally cleared towards the recovery of the goods or money involved.
Thanks for your co-operation.
Yours faithfully,
VINCENT STANDARD STEDL IND. (NIG.) LTD.
(SIGNED)
CHIEF V. O. NWANKWO
(Chairman/Chief Executive)
VINCENT STANDARD STEEL INDUSTRIES (NIG.) LTD.
(RC.4S64S)
Our Ref: VSSI/LMB/OD/-003/98 Date: 15th December, 1998
The Managing Director
Lead Merchant Bank Ltd
1, Oladele Olashore Street
Victoria Island
Lagos.
ATTENTION: DR. I.A. ADEWUSI/TUNDE OLAYINKA PROPOSALS CONCERNING THE ORDERS OUTSTANDING ON LC NO.LMB96/05/0114. AND LC NO.LMB 96/05/0115
We have received the documents stating your proposals concerning the orders on the two letters of credit above which have become problem consignments since 1996.
You will recall that all the documentation for both letters of credit was processed by your bank officials on our behalf before the letters of credit were duly opened. However, the consignment under the letters of credit were only partly delivered because the vessels – Mr Cordigliera and Mr Thomas Delmas both carrying the different consignments sank with the goods in them.
We have since been making efforts to obtain recoveries from Lloyds Agent and the Shipping Company, for which assurance has been given. Bear in mind that the recoveries will be credited directly to your account to off-set the L/C’s principle.
We have however, noted from your documents and from your bank .statements that you have been charging interest on the original cost of the L/C’s involved in the mishap. As a result of this observation, we wish to restate our earlier proposal to your bank:
a) Your bank should reverse all the interests charged in respect of the two letters of credit, since it is a legal principle that “you cannot profit from your own loss”,
b) The debit for the original cost of the letters of credit should be suspended as previously agreed. This is an import finance transaction on which what was sent to us was a certificate known as “Certificate of Non-Delivery”, certified by the Shipper and Carrier.
In fact, we are disappointed by your management use of language during our meeting of 9/12/98 which tended to misrepresent facts.
Besides these, we had formally requested for your assistance in the form of a facility in our letter of 26/6/98. We repeated the same request for facility of N100M in our meeting in your Board Room on
9/12/98. Our Chairman has provided Security to cover this request.
It is obvious to you that the two consecutive mishaps have depleted our working capital and this facility will help to beef it up.
In addition to our track record of effective performance which is well known to you, we have introduced the services of African Management Services Company to cover the management requirements of our group including Vinfesen Industries (Nigeria) limited. AMSCO is expected to introduce innovations and widen our market horizon beyond local frontiers. For example, we now target UNDP projects for supply of our PVC Pipes and Woven Sacks.
Finally, please find enclosed herein a copy of the survey report from experts in London in conjunction with the Lloyds agent on the mishap and salvage costs of the two vessels involved which were covered by your letters of credit.
We look forward to your favourable consideration of these our proposals.
Yours faithfully
VINCENT STANDARD STEEL INDUSTRIES (NIG.) LIMITED
(SIGNED)
CHIEF V. O. NWANKWO
CHAIRMAN/CHIEF EXECUTIVE”.
EXHIBIT K
“VINCENT STANDARDSTEELINDUSTRIES (NIG.) LTD.
Our Ref: VSSI/LMB/AWC-VI/98 Date: 29th June, 1998
The Managing Director
Lead Merchant Bank limited
1, Oladele Olashore Street
Victoria Island
P.M.8. 12621
Lagos.
Dear Sir,
REQUEST FOR APPROVAL OF REVOLVING IMPORT FINANCE OF N100.000.000.00 (ONE HUNDRED MILLION NAIRA) FOR IMPORTATION OFOUR RAW MATERIALSNEEDED
We humbly apply for Revolving Import Finance in support of financing our raw materials needed for our expansion of the Steel Industries which is needed for the new production of Plates and Sheets for the supply to the Oils Companies and Automobile Motor Manufacturers in Nigeria to be used for the Body Building and Oil Company, hanging bridges etc.
The newly invested expansions are the latest in the series and if financed, will generate a reasonable turnover yearly.
The company is willing to pay back the amount allocated to us for the expansion as feasibility approves.
Thanking you for your co-operation
Yours faithfully,
For: VINCENT STANDARD STEEL INDUSTRIES (NIG.) LTD.
(SIGNED)
CHIEF V. O. NWANKWO
CHAIRMAN/CHIEF EXECUTIVE”.
The learned trial Judge had held among other things viz:-
“Having arrived at this fact, the next question to answer is whether the tripartite Deed of Legal Mortgage and all the accompanying document Exhibit K was done by the 2nd Plaintiff in fulfillment of his application for additional grant of Nl00,000,000.00 working capital was (sic) a separate transaction completely derived from Exhibit A. Also another question is whether Exhibit ‘K’ can therefore be used by the defendants to give effect to the agreement in Exhibit A.
Exhibit ‘H’ is the letter of request by the Plaintiff of the additional working capital. It was dated the 26th of June 1998, the heading is for request for approval of Revolving Import Finance of N100,000,000.00 for Importation of our Raw Material needed. Along with Exhibit ‘H’ the Plaintiff attached a Power of Attorney in respect of Plot 301 Area A4 BCDEF District Abuja FCT. The 1st defendant responded on the 10/9/98 by sending to the 1st Plaintiff and for the attention of the 2nd Plaintiff a tripartite Legal Mortgage Exhibit H1, H2, H3. From the sequence of the events therefore the court found no difficulty in arriving at the fact that there is a nexus between Exhibit ‘H’ the letter asking for additional finance of N100,000,000.00 and Exhibit H1, H2, H3 the tripartite Legal Mortgage. The dates and the events are in sequence. The next question is whether such mortgage consented for the consideration of Exhibit K can be reverted to settle the indebtedness being claimed by defendant against the Plaintiff for settlement in Exhibit “A”.
The Lower Court concluded by holding that the clause at page 2 of the Exhibit H1 is quite elaborate, certainly it has covered the liability contained in Exhibit ‘A’. Although Exhibit H1, H2 and H3 were meant for the purposes of Exhibit K. It’s content and what the 1st and 2nd Plaintiffs executed covered the liability in Exhibit “A”. The defendants were thus right to hold onto the Tripartite executed by the 1st and 2nd Plaintiffs Exhibit H1, H2 and H3 in settling the liability in Exhibit ‘A’.
The guiding principles in the interpretation of agreements or contracts are needed to be referred to here to shed light on the interpretation that should be followed by this Court.
The duty of the court is to strictly interprete the terms of the agreement on its clear wordings. There is no room for any decorative interpretation in doing so, or embellishments for all the parties themselves should know what they meant by the words they used better than a stranger (including the court) to the contract. Nimanteks Associated v. Marco Construction Co. Ltd (1991) 12 NWLR (pt. 174) 411; Dams v. Lajide (19973) 5 SC 207; Bookshop House v. Stanley Consultants (1986) 3 NWLR (pt. 26) 87.
Where the wordings of the agreement are not clear, a court of law must go further to interprete the agreement in a way to bring out the real interpretation of the parties. Nimanteks Associate v. Marco Construction Co. ltd. (supra) 427.
In the course of the interpretation of an agreement, the court has no jurisdiction to introduce into the agreement a term which is not there or remove from the agreement a term which is there, for it is not the duty of a court to rewrite an agreement for the parties. That remains in the exclusive domain of the parties. Nimanteks Associates v. Marco Construction Co. Ltd (supra) 247.
From the judicial authorities above referred to and relating them to the facts and documents available at the Court below and now considered by this Appellate Court, clearly the transaction from inception as shown by Exhibit A and culminating in Exhibit K are a continuing process which chain cannot now be separated or broken. Therefore I answer the question raised in this Issue in favour of the Respondents. This is buttressed by the fact that parties to an agreement retain the commercial freedom to determine the terms of contract between the parties thereto. I rely on Nimanteks Associates v. Marco Construction Co. ltd. (1991) 12 NWLR (pt. 174) 411 at 427.
ISSUE THREE:
Whether the learned trial of Judge was right in placing heavy reliance on the case of UBA vs. ADEUYA (1993) 6 NWLR (pt. 299) 382 – 383 in arriving at the decision that clause 1 in Exhibit K covers the transaction in Exhibit A.
Learned counsel for the Appellants contended that the 2nd Appellant led evidence to show that he applied for an additional loan facility of Nl00m, Exhibit “G” and he even showed that the 1st Respondent replied both orally and in writing as evidenced in Exhibits H, Hl, H2, H3 and H4.
He cited IBWA ltd. v. Unakalamba (1998) 9 NWLR (pt. 568) 245 at 269.
Learned counsel for the Respondents said the learned trial Judge was right to have placed reliance on the case of UBN Ltd v. S.K. Adeuya (supra) because the reliefs sought tallied with the same reliefs the Appellants in this appeal sought before the learned trial Court i.e. claiming that Exhibit K did not cover the indebtedness in Exhibit “A” which claim the trial Judge found was not proved by the appellants as happened in Adeuya’s case. That no case was made by the appellants that Exhibit “K” was void for lack of consent nor did they request for a Banking Facility granted by the 1st Respondent in Exhibit “A”. Those parties are bound by their pleadings and evidence led outside the pleadings or at variance with pleadings goes to no issue. Also that no court can make for the parties a case other than that which they put before the Court. He cited Obomhense v. Erhahon (1993) 7 SCNJ 479; Victor Olurotimi v. Mrs. Felicia M. Ige (1993) 10 SCNJ 1; Joy v. Dom (1999) 7 5e (pt. 111) 24; RE Madaki (1996) 7 NWLR (pt 459) 459 at 153 where the Court held that leave must be sought and obtained not only to raise fresh issue on Appeal that raise fresh points on Appeal which application for leave to file a ground of Appeal which raised a new issue. See Okpanun v. S.F.E. (Nig.) Ltd. (1998) 7 NWLR (pt. 559) 537.
The answer in Issue 2 has taken care of this Issue as I agree with learned counsel for the Respondents that the trial judge was in order in relying on the case of UBN Ltd. v. S.K. Adeuya (supra) since the facts in that case are on all fours with the instant situation. In the Adeuya case (supra) the respondent as Plaintiff in the trial court had applied for an overdraft of N5000.00 in 1981 from the appellant. He repaid a small portion of the overdraft and they applied for a loan of N50,000.00 in 1983.
The appellant got the respondent to execute a mortgage Deed tendered as Exhibit ‘E’ but subsequently failed to give him the loan. The Appellant threatened to sell the respondents property which was used as a security for the mortgage and that brought about this action. The Respondent’s position was that Exhibit “E” had nothing to do with the overdraft he obtained from the Appellant in 1981. The Appellant’s own view said Exhibit E although executed in 1983 was the Mortgage Deed that covered the respondent’s indebtedness and showed in evidence that at no time did the Respondent apply for another loan other than the overdraft of N5000.00 applied for in 1981. The trial Judge found for the Respondent and held that Exhibit ‘E’ consent to mortgage the respondent’s property was given as far back as 10th September 1980 before the overdraft was granted to the Respondent in 1981 and if the trial judge had adverted his mind to the letter of consent read together with Clause E, he would have come to the conclusion that Exhibit ‘E’ covered the overdraft of 1981.
In the same way in this case before us now there is a nexus between
Exhibit G the letter asking for additional finance of N100,000.000.00 and Exhibit H1, H2, H3 the tripartite Legal Mortgage. Indeed it is Exhibit ‘G’ which the defendants/respondents have used to give effect to Exhibit A.
From the chain of events they are within the same transaction. Therefore I answer positively and that is that Clause I in Exhibit K covers the transaction in Exhibit A and that Clause reads as follows:-
“We have received the documents stating your proposals concerning the orders on the two letters of credit above which have become problem consignments since 1996”.
In fact apart from Clause 1 the entire document attests to the finding of the trial Judge which I agree with. The appeal is therefore found to lack merit and is dismissed.
CROSS – APPEAL:
The Notice of Cross – appeal was filed on 30/3/04 and it embodied the fact that only part of the Decision of the Court below was contested by the Cross-/Appellants. I shall restate the two grounds without particulars:-
GROUND ONE:
The learned trial Judge misdirected himself in law when he held as follows “From the sequence of the event therefore the court found no difficulty in arriving at the fact that there is a nexus between Exhibit “H” the letter asking for additional finance of N1000,000,000.00 and Exhibit H1, H2, H3 the tripartite legal mortgage. The dates and the events are in sequence” which misdirection has occasioned a miscarriage of justice.
GROUND TWO :
The learned trial Judge misdirected himself in law when he held as follows “The clear position in the opinion of this court is that 2nd Plaintiff executed the tripartite mortgage agreement Exhibits H1, H2 and H3 in consideration of his application in Exhibit “K” which misdirection has occasioned a miscarriage of justice.
RELIEFS SOUGHT FROM THE COURT OF APPEAL:
1. AN ORDER to the effect that there was no nexus between Exhibit “H” and Exhibits “Hl”, “H2”, “H3” and “K”.
2. AN ORDER to the effect that Exhibit “A” and “K” and documents of related transactions and that the liability arising from Exhibit “A” and legally averred and secured with Exhibit UK”.
3. AN ORDER EXPUNGING exhibits H1, H2 and H3 from the record being inadmissible evidence.
4. AN ORDER affirming the judgment of the trial court on the basis of the above findings of facts under reliefs No. 1, 2 and 3.
The Cross-Appellants in their Brief of Argument filed on 18/11/04 framed two issues for determination which are:-
i. Whether there was any nexus or legal relationship between Exhibits “H”,”HI” ,”H2″ and “H3” capable of being enforced against either parties.
ii. Whether from the evidence on record there was any nexus between Exhibit K the duly executed Deed of Tripartite Legal Mortgage and Exhibits H, H1, H2 and H3 capable of being enforced against either party.
The Cross-Respondents raised a Preliminary Application viz:-
TAKE NOTICE that the appellants/Cross-Respondents shall contend strongly that the Respondents/Cross-Appellant’s ground 1 of their grounds of Appeal as contained in their notice of Cross-Appeal filed on the 30th March, 2004 is grossly incompetent. The Appellants/Cross – Respondents state that the reasons for this objection to ground 1 of the Grounds of Appeal are as enunciated hereunder.
The Cross-Respondent’s Brief filed on 6/4/05 and deemed flied on 31/5/05 was adopted by learned counsel on behalf of Cross-Respondents and in argument on the preliminary objection stated that the first leg of the objection is that particulars (ii) and (iii) do not in any way relate to the said ground of appeal which they seek to support. That nowhere in the decision complained against would it be found that the Lower Court held that the Deed of Mortgage Exhibits “H2”, “H3” and “H4” were executed by the parties. This being a novel issue being raised by the Cross – Appellants and the position of the law is crystal clear that leave of the court must be sought and obtained before same can be raised for the first time on appeal.
He cited Obioha v. Duru (1994) 8 NWLR (pt. 365) 631 at 646 – 647 paras G – A, Military Administrator Akwa Ibom State v. Obong (2001) 1 NWLR (pt. 694) 214 at 234 paras C – D.
Mr. Abe of counsel further stated that Ground 1 of the Grounds of Appeal is clearly an allegation of errors of facts as same questions the evaluation of evidence adduced by the parties in proving their cases before the trial judge. He referred to Ogbechie v. Onochie (1986) 2 NWLR (pt. 23) 484 at 486; Tilbury Construction v. Ogunniyi (1988) 2 NWLR (pt. 74) 64 at 65. Learned counsel for the Cross- Respondent/Applicant stated that the Cross-Appellants failed woefully to show the reason (s) why they feel the alleged error is that of law. That the ground in issue contains facts and the procedure for raising same comes into play. That by virtue of Section 241 (1) of the 1999 Constitution, the said Ground of appeal is incompetent as no leave of either the trial court or this Appellate court was sought before the same was filed. He relied on Tilbury Construction v. Ogunniyi (supra); Akwiwu &. anor v. Songanuga (1984) 5 SC 184; Ojeme v. Momodu (1983) 3 SC 173.
That this Court should discountenance these particulars of misdirection and indeed Ground 1 as contained in the Cross – appellant’s Notice of Cross-Appeal and strike out Issue NO.1 distilled therefrom in the Cross-appellants Brief of Argument.
In reply, learned counsel for the Cross-Appellant adopting their Reply Brief filed on 23/6/05 that Order 3 Rule 2 (2) of the Court of Appeal Rules 2002 supported that the grounds of appeal which allege misdirection or error in law, the particulars and the nature of the misdirection or error shall be clearly stated and so the Cross-Appellants have done. That the particulars of misdirection (i), (ii) and (iii) in support of ground 1 of the Notice of Cross Appeal relate to the said ground of Appeal and cannot be described as a novel or fresh issue being raised by the Cross-Appellant. He referred to Kalu v. Mbuko (1988) 3 NWLR (pt. 80) 86; Chidiak v. Laguda (1964) 1 All NLR 160.
Learned counsel for the Cross- appellant further submitted that ground I of their Notice of Appeal is clearly one of misdirection of law on the part of the learned trial Judge when he impliedly gave legal efficacy to Exhibits H1, H2, H3 respectively even when the said Deed of Tripartite Legal Mortgage should never have been admitted into evidence and given legal effect in the first place. He cited Sosanya v. Onadeko (2005) 8 NWLR (pt. 926) 185; Medical Practitioners Tribunal v. Okonkwo 5 NSCQR 650 at 693.
He stated on that contrary to the submission of the Cross Respondents, the said ground of appeal did not involve an allegation of errors of facts as the particulars in support did not question the evaluation of evidence adduced by the parties but questioned the misapplication of the law to the facts shown in the said Exhibits HI, H2, and H3 admitted in evidence wrongly. He cited Udoh v. Abere & anor (2001) 6 NSCQR 579 at 608; Transkomplet (Nig.) Ltd. v. Galadima (1999) 3 NWLR pt. 596) 631; Adeleke v. Asani (2000) 10 NSCQR 494, Yaro v. State (1972) 2 SC63.
The function of an appellate court on a question of fact is mainly limited to seeking:
(a) Whether or not there was evidence before the trial court upon which its decision on facts was based;
(b) Whether the trial court wrongly accepted or rejected any evidence tendered at the trial;
(c) Whether evidence called by either party to the conflict was put on either side of an imaginary balance and weighted one against the other, in other words, whether the trial court properly evaluated the evidence;
(d) Whether the trial court correctly approached the assessment of the evidence before it;
(e) Whether the evidence properly admitted was sufficient to support the decision upon the inference drawn therefrom;
(f) Where the issue is that of credibility of witnesses the appellate court has a very limited, if any, scope to interfere. It can only do so when the trial court decided to believe a witness quite contrary to the trend of accepted evidence or where oral testimony is contrary to the contains of a written document.
See Union Bank (Nig.) Ltd. v. Adeuya (1993) 6 NWLR (pt. 299) 375 at 383; Agbonifo v.Aiwereoba (1988) 1 NWLR (pt. 70) 325 at 339, Balogun v. Atanji (1988) 1 NWLR (pt. 70) 301.
An appeal presupposes the existence of some decision appealed against. In the absence of such a decision on a point, there cannot possibly be an appeal against what had not been decided against a party. Military Administrator Akwa Ibom State v. Obong (2001) 1 NWLR (pt. 694) 214 at 234; Ogbonnaya v. Adapalm Nig. Ltd. (1993) 4 NWLR (pt. 292) 147; U.B.N. Ltd. v. Ozigis (1994) 3 NWLR (pt. 333) 385; Anyanwu v. Mbara (1992) 5 NWLR (pt. 242) 386; Babalola v. State (1989) 4 NWLR (pt. 115) 264; Oredoyin v. Arowolo (1989) 4 NWLR(pt. 114) 172.
This objection has set this court on a full academic hypothetical is course and I need not say that it is not the duty of Court, this one or any other. Therefore this objection is dismissed.
I adopt the same issue couched by the Cross-Respondents which captures what really is in issue since the second issue of the, Cross-appellant is in fact a repetition.
SINGLE ISSUE:
Whether there was any nexus between Exhibits H, H2, and H3 on one hand and Exhibit K on the other hand capable of being enforced against either party.
For the Cross-Appellant it was contended that the findings of the Lower Court to the effect that “from the sequence of the event therefore the court found no difficulty in arriving at the fact that there is a nexus between Exhibit H, the letter asking for additional finance of N-100,000,000.00 and Exhibits HI, H2, and H3 the Tripartite Legal Mortgage” is not only a far cry but a clear contradiction from the admitted evidence on record. That the finding above is not only perverse but has occasioned a miscarriage of justice and a clear violation of the legal principles governing evaluation of evidence on record. That the findings were not based on any credible evidence or reasonable inference drew from admitted facts on record. He cited Ojibah v. Ojibah (1991) 5 NWLR (pt. 191) 296.
Mr. Abe said the unsigned documents Exhibits H2, H3, H4 cannot bind any of the parties and also since they were wrongly admitted unregistered instruments, they should be expunged from the record. He cited National Bank of Nigeria ltd. v. P. B. Olatunde &. Co. Ltd. (1994) 4 SCNJ 65.
He further stated that it is Exhibit K that has nexus or legal relationship with Exhibit ‘A’ the request for the banking facility for two letters of credit granted or opened by the 1st Respondent/Cross Appellant for and on behalf of the 1st Appellant/Cross Respondent. That Exhibit K has no nexus at all with the later request of the 1st Appellant/Cross Respondent – contained in Exhibit ‘G’ (though wrongly called Exhibit “H” by the Lower Court) for a fresh import facility of N100,000,000.00 which application was never processed let alone approved by the 1st Respondent/Cross Appellant.
That the recitals of Exhibit K show no relationship to any future facility approved or granted on the proposed sum of N100,000,000.00 in Exhibit G but to the sum already advanced and utilised in Exhibit “A” which had risen then to the sum of sixty million naira (N60,000,000.00).
That from the evidence adduced in the Court below, this Court under Section 16 of the Court of Appeal Act 1976 to make the proper findings of fact and drew correct inferences from the established facts on record which the trial court failed to do or did improperly. He cited Agberedo v. Union Bank of Nigeria Plc (2000) 4 se (pt. 1) 233; Onwuka &. anor v. Onogin (1992) 3 SCNJ 98 at 11S – 116.
Oladele Gbadeyan of counsel for the Cross-Respondents submitted that the trial Judge inadvertently referring to Exhibit G as Exhibit ‘H’ is not so grave as to occasion a miscarriage of justice. He cited National Bank of Nigeria Ltd. v P. B. Olatunde &. Co. (1994) 4 SCNJ 65; Agbeje v. Ajibola (2002) FWLR {pt. 92 1677; Ukejianya v. Uchendu (1950) 13 WACA4S at 46; Emmanuel Ageni &. ors v. Williams Soweimimo (1982) 5 SC 60.
He said that Exhibits H2, H3, ‘H4’ are admissible documents for the purpose of proving the existence of a transaction between the Cross-Respondents and the 1st Cross-Appellant relating to a fresh import finance request made by the 2nd Cross-Respondent. That the earlier Deed of Mortgage, Exhibits ‘H2’, H3 and ‘H4’, were a direct result of Exhibit ‘H’ the letter of request for N100 million additional facilities. He stated for the Cross-Respondents that the 2nd Cross-Respondents refusal to sign same, as he had testified at page 100 of the record of Appeal was due to the insufficiency of the amount approved by the 1st Cross-Appellant. That Exhibit K had a nexus with the earlier request as same was prepared and signed by the parties thereto after the amount was increased to N60 million. That the Cross-Appellants by law had to show what the purported interest is and how same had added up to N20 million. See UBN Plc. v. SCPOK (Nig.) Limited (1998) 12 NWLR (pt. 578) 439 at 450 at 475.
In answer to this single issue Exhibits H, H2, H3 were properly admitted especially since they were relevant and taken within view of all that transpired between the parties added a voice to the fact that at no time was there a break in communication in the transaction between the parties. That is that at all times material the parties were in touch and that Exhibits Hi, H2, and H3, the Tripartite Legal Mortgage and lent weight to the issue of the Respondents/Cross Appellants had made enforceable the agreement encapsulated by Exhibit K. I answer in favour of the Cross-Appellants.
In conclusion therefore the appeal fails and is dismissed while I affirm the judgment and orders of the Court below. I award costs of N50,000.00 to the Respondents to be paid by the Appellants.
In respect of the Cross-appeal it is allowed even though that question had been answered in Issue 2 of main appeal. I affirm the decision of the Court below that there is a nexus between Exhibits H1, H2, and H3 on the one hand and Exhibit K on the other hand.
For the Cross-appeal I award N30,000.00 to the Cross-Appellants to be paid by the Cross-Respondents.
Other Citations: (2009)LCN/3401(CA)
