Kossen (Nig.) Limited & Anor V. Savannah Bank Of Nig. Limited (1995)

LAWGLOBAL HUB Lead Judgment Report

MOHAMMED, J.S.C. 

The plaintiff, now respondent, is a commercial bank with a branch office at No. 21 Murtala Mohammed Way, Jos. In 1984, when it was observed that the account books of the respondent’s branch in Jos could not balance, the headquarters raised a task force of auditors and dispatched them to Jos on an assignment to reconcile the books of the respondent’s branch there. At the end of the reconciliation a fraud was discovered involving the operation of customers accounts Nos. 2808 and 1664.

The matter was reported to the police.

Meanwhile, on 7th May, 1985, the respondent, as plaintiff, commenced proceedings in the Jos High Court against five defendants. The appellants, in this appeal, were the 2nd and 3rd defendants in the Suit. In the action the respondent claims the sum of N732.1 06.23 against the defendants jointly and severally being money had and received to the plaintiff’s use. In the alternative the respondent claims from the five defendants jointly and severally the sum of N732, 106.23 being money obtained by the defendants from the respondents by deceit.

The second appellant, Mr. Julius Babuje Pusmut, is the central figure in the action which led to this appeal. Mr. Pusmut was the 3rd defendant before the trial court. Mr Pusmut was the credit officer of the Jos Branch of the respondent bank. He occupied that position between January, 1981 to July, 1983. His function was to consider loans to customers of the respondent. He could also approve cheques for payment as well as interview credit customers and examine their books. Mr Pusmut was initially given power to approve payment of cheques up to the limit of N20,000.00.This power was later increased to N40,000.00

When the task force investigated the books of Jos Branch of the respondent they came across two accounts, viz Nos. 2808 and 1664. There are two other accounts which the task force unveiled and which were discovered to have been used in transferring the money cashed or paid out fraudulently from accounts Nos. 2808 and 1664. The accounts which were used in other banks are No. 016276 at the First Bank, Jos and an account whose number was not given in the evidence at the Union Bank, Bank Street, Jos. Account No. 016276 was opened under a fictitious name of one Alhaji Ali Damina. It was found during police investigation that Mr. Pusmut, the 2nd appellant, introduced “Alhaji Ali Damina” to P.W.1 who was a staff of the First Bank and eventually the account was opened. P.W. 15, police Superintendent, Mark Panmak Sodo, who investigated the case discovered, through the photograph used in opening account No. 016276 that he knew the person who opened the account and that his real name was Mallam Ali Gunok.

When confronted. Mallam Gunok admitted, opening the account and that it was Mr. Pusmut the 2nd appellant who directed him to do so.

The second account which was opened at the Union Bank was owned by Kossen (Nigeria) Limited, the 1st appellant. The company was floated by the 2nd appellant. It was shown through the evidence that it commenced business in December, 1983. but by the end of the month the company lodged in its account the sum of N401,151.00. The 2nd appellant testified before the trial court that the 1st appellant traded in maize, beer, cement, rice and concrete blocks. However, during his investigation, P.W.15 found that the 1st appellant was allocated some bags of cement by the Benue Cement Company about 7 times between March, 1983 and April. 1984. He also found that it was allocated 200 cartons of beer a week. The allocation was stopped in June, 1983.

Account No. 2808 was opened on 16th July, 1982 in the Jos Branch of the respondent where the 2nd appellant worked as a credit officer. It was discovered that no approval was given before the account was opened. It was shown to have been opened in the name of one Alhaji Sale Mohammed. The trial court found that Mr. Pusmut, the 2nd appellant, was the person who opened this account and used a fictitious name of Alhaji Sale Mohammed. The Court of Appeal, quite correctly, agreed with this finding. The main features which the trial court found about account 2808 are:-

“1. all transactions were withdrawals from the account; there were no corresponding deposits.

2. the account was operated as an overdraft account, but no overdraft was granted to the owner of the account.
3. at every occasion on which a large sum of money was withdrawn, the balance on the account instead of showing over-drawn balance would show credit balance which never existed.
4. all the withdrawals were in large sum of money which could only be approved by Senior Officers of the Bank”.

Evidence was given, by P.W.11 and P.W.18 that a total sum of N61.5,880.00, were paid out to the 2nd appellant on account No. 2808. Exhibits of cheques were tendered to show that all payments drawn from account No. 2808 were authorised by the 2nd appellant and most of the money were paid directly to him by the cashiers.

Another account was used in withdrawing large sums of money from the Jos branch of the respondent. This is account No. 1664. The account was owned by Alhaji Mohammadu Kano P.W.4. Alhaji Mohammadu Kano once approached the 2nd appellant when he was in need of a new cheque book. He had by then N 10.000.00 in his account No 1664. The 2nd appellant gave him a form to sign but P.W.4 could only sign in arabic. In his judgment, the 2nd appellant was found by the learned trial Judge to have used this account in fraudulently withdrawing a total sum of N62.386.00 from that account.

In sum, after the learned trial Judge had meticulously considered all the evidence adduced by the parties, in this suit, he concluded his well considered judgment by finding in favour of the respondent and against the defendants jointly and severally in the sum of N729,003 .84. He also directed that interest shall be paid at the rate of 10% from the date of the judgment. Dissatisfied with the judgment, the 2nd and 3rd defendants appealed to the Court of Appeal. Jos Division. After making a considerable finding and analysing all the salient issues raised in that appeal the Court of Appeal found no merit in the appeal and dismissed it.

Kossen Nigeria Limited and Mr. Julius Babuje Pusmu have now appealed to this court. The following issues have been formulated by the learned counsel for the appellants.