Mr. Ime Ime Umanah Jnr V. Nigeria Deposit Insurance Corporation (2016)

LAWGLOBAL HUB Lead Judgment Report

OLABODE RHODES-VIVOUR, J.S.C.

This is an appeal from the Judgment of the Court of Appeal, Lagos Division, delivered on 9 February 2005 in appeal No. CA/L/52/0202 which upset the judgment of a Federal High Court, Lagos Division, delivered on 1 November, 2001 in Suit No: FHC/L/FB/2000. It arose as follows:

In the trial Court the appellant was the plaintiff, while the defendants were:

1. Rabo Farms Ltd
2. Chief Ime Sampson Umanah
3. Mrs. Nnene Ime Umanah
4. Ime Ime Umunah

3 and 4 were subsequently struck out.

The 1st Respondent obtained credit facilities amounting to fifteen million naira (N15m.) from the plaintiff. The sum was guaranteed by the 2nd respondent. The plaintiff’s claim is for recovery of the debt of 15m.

On 2 May, 2001 the 2nd respondent filed a motion on notice seeking an order of Court striking out his name from the suit. The 2nd respondent supported his application with a 13 paragraph affidavit and a further affidavit of 12 paragraphs with annexures OA, A1 and OA2. The plaintiff did not file a counter affidavit. The motion on notice became necessary because the 2nd

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defendant was of the view that he had repaid above the guaranteed sum of N15m, and so his liability should be discharged. The issue considered by the learned trial judge was whether the 2nd respondent as guarantor of the principal debt should be discharged at this stage.

After hearing submissions from counsel and examining affidavits and annexures, (the plaintiff did not file counter-affidavit) the learned trial judge in the penultimate paragraph observed that:

“The guarantor in this case has shown he paid the principal sum and extra 45 million in addition. A guarantor cannot be liable for more than he has undertaken.”

And concluded as follows:

“In view of the foregoing on the provision of Order 2 Rule 5(3) of the Federal High Court (Civil Procedure) Rules 2000, I grant the application sought and order that the name of the 2nd respondent/applicant Chief Umanah be struck off the list. Trial in respect of the principal plaintiff will continue.”

From this decision the plaintiff appealed to the Court of Appeal. That Court upset the Ruling of the learned trial judge when it concluded thus:

The conclusion that I have