Federal Mortgage Bank Of Nigeria V. Nigeria Deposit Insurance Corporation. (1999)

LAWGLOBAL HUB Lead Judgment Report

E. OGUNDARE, J.S.C.

The plaintiff (now appellant) placed the sum of N5,000,000.00 (five million naira) on a short-term deposit with the United Commercial Bank (hereinafter is referred to as the defendant) on 8/12/92 at an interest of 40% per annum. There were roll-overs. The deposit eventually matured on 6/3/94. The defendant defaulted in paying back the said deposit and interests despite numerous demands made by the plaintiffs. By a writ of summons filed on 31/5/94, the plaintiff claimed from the defendant-

“(i) The sum of five million naira (N5,000,000.00) being the principal amount paid on the short-term deposit/placement made on the effective date of 8/12/92 by the plaintiff with and in favour of the defendant and which said sum finally matured on 6/3/94 after four roll-overs which the defendant has refused and failed to repay despite demands by the plaintiff.

(ii) Interest on the above mentioned sum at the agreed rate of 40% per annum from 6/12/93 to 6/3/94 being the effective and maturity dates respectively of the 4th roll-over.

(iii) Interest on the said sum at the agreed rate of 40% per annum from 6/3/94 (being the agreed maturity date of the 4th roll-over) until judgment is given and thereafter at the rate of 15% per annum until full repayment.”

The plaintiff filed simultaneously a statement of claim by paragraph 14 of which it finally claimed as hereunder:

“(i) The sum of five million naira (N5,000,000.00) being the principal amount of the short-term, deposit/placement made on the effective date of 8/12/92 by the plaintiff with and in favour of the defendant and which said sum finally matured 6/3/94 after four (4) roll-overs which the defendant has refused and failed to repay despite numerous demands by the plaintiff.

(ii) interest on the above-mentioned sum at the agreed rate of 40% per annum from 6/3/94 (being the agreed maturity date of the 4th roll-over) until judgment is given and thereafter at the rate of 15% per annum until full repayment.

On failure of the defendant to enter appearance and file its pleadings, judgment at the instance of plaintiff was on 12/7/94 entered against it. The defendant did not appeal against this judgment. Rather, on the plaintiff taking steps to levy execution on the movable property of the defendant in satisfaction of the judgment debt, the latter on 6/9/94, by way of motion applied for-

“1. An order of stay of execution restraining the plaintiff from further levying execution and sale of the goods and chattels of the defendant pursuant to the judgment of this honourable court dated 12th July, 1994;

2. An order of this honourable court allowing the defendant to liquidate the entire judgment debt instalmentally:”

In the supporting affidavit, the defendant’s Company Secretary/Legal Adviser. Mrs. Nkoyo Egbedi, deposed, inter alia.

“2. that I have the authority of my employers to depose to this affidavit:

3. that judgment was given in this suit by this honourable court on the 12th of July, 1994 in favour of the plaintiff/respondent for the sum of N6,252,245.13 (six million, Two hundred and fifty-two thousand, two hundred and forty-five naira, thirteen kobo only);
4. that on 5th September, 1994 the representative of the plaintiff and the deputy sheriff came to levy execution pursuant to the said judgment by attaching the goods and chattels of the defendant at Victoria Island;
5. that on the said 5th September, 1994, the defendant paid the counsel to the plaintiff N2,500,000.00 (two million, five hundred thousand naira only) vide a Commercial Trust Bank Limited with bank draft No. 15592;
6. that now shown to me and attached as Exhibit A is a copy of the bank draft referred to in paragraph 5 supra:
7. that the defendant is desirous of liquidating the debt by paying instalmentally upon terms and conditions to be agreed upon by both parties;
8. that in proof of the fact that the defendant wishes to liquidate the debt, I repeat paragraph 5 supra:
9. that the defendant will suffer substantial injustice if a stay is not granted, as it will be unable to fulfill its obligations to its numerous customers if its goods and chattels are sold by the plaintiff;
10. that it will be equitable and in the interest of justice if the defendant is allowed to liquidate debt installmentally.
11. that the current political and economic crisis in the nation makes it impossible for the defendant to liquidate the judgment debt immediately;
12. that the defendant is acting in good faith.”

This motion was yet to be heard when on 19/9/94 the plaintiff, too, brought a motion praying for:-

“(i) An order of this honourable court compelling the respondent (N.D.I.C.) to produce forthwith and deposit in the Lagos High Court premises all the defendant’s attached properties listed in the inventory attached herewith and marked Exhibit’ A’ which said properties were attached on 5/9194 by a bailiff of the Lagos High Court in the name of the plaintiff in execution of the judgment of this honourable court given on 14/7/94 and which said properties have now been removed and detained by the respondent (N.D.I.C.) and which still remain in the respondent’s possession and custody.