Bank of the North Limited V. Alhaji Suarau Akorede (1994)

LawGlobal-Hub Lead Judgment Report

ISA AYO SALAMI, J.C.A. 

The plaintiff, a banker, in Suit No. 1/633/89 brought an action against the defendant, one of its customers claiming the sum of N29,574.89 being overdraft advanced to the customer in 1981 as well as accrued interest thereon. The current account number 504403 showed a debit balance of N29,574.89 as at 31st day of July, 1989. The overdraft made to the defendant was with interest at the rate of 18% per annum in accordance with Central Bank Regulation. The plaintiff pleaded that the defendant failed to repay the advance in spite of repeated demands.

The defendant did not only file a statement of defence in his defence but he also counter-claimed. The defendant admitted being a customer of the bank with a current account but denied that the debt was as a result of an overdraft. Rather, he contended he was granted a loan of N10,000.00 in September, 1981 attracting an interest rate of 10% orally agreed upon by himself and the Manager of the bank payable in five equal monthly installments with effect from October, 1981. He pleaded that the plaintiff demanded repayment of the loan at the expiration of the repayment period in 1982. He further averred that the statement of account contained wrong entries and the whole action is now statute barred-Limitation Law Cap. 64 of the Laws of Oyo State of Nigeria, 1978.
In his counter-claim, the defendant claims that the debit balance in the statement of account of the defendant does not reflect the actual indebtedness (if any) of the defendant and that the plaintiff is not entitled to charge interest at a rate other than the one agreed upon and an order ascertaining the true indebtedness of the defendant to the plaintiff if any.

The plaintiff denied all the allegations contained in the defence and counterclaim in his own reply to defence and counter-claim.
The plaintiff called one witness in support of its claim while the defence called two witnesses including the defendant in support of defence. Counsel then addressed the trial court. The learned trial judge in a reserved and well considered judgment made these findings of facts on the evidence that:-

“(1) The amount advanced to the defendant by the plaintiff was an overdraft of N10,000.00 and not a loan on 15.9.81.
(2) There was no rate of interest expressly agreed upon by the parties other than the prevailing rate at the time of the advance given to the defendant which was 18%.
(3) When the defendant failed to pay back the amount, a demand was accordingly made by the plaintiff in 1982 five months after the overdraft granted became payable. This is based on the fact that plaintiff pleaded in paragraph 6 of the statement of claim that there was a demand and the defendant admitted it that the demand was made in 1982 and the defendant’s evidence was never challenged on the same issue.
(d) Nothing was done by the plaintiff thereafter to recover the debt until this action was instituted in 1989.”

Thereafter, the learned trial judge considered the defence of the defendant relating to limitation law which he thought to be sufficiently fundamental to have been raised and tried in limine. The learned trial judge, Oluborode, J., then concluded as follows:-

“The plaintiff having failed to institute its action, within 6 years after the demand in 1982, which I found proved as mentioned above makes in my view the case statute barred. In the circumstance I do not consider going into other defences very necessary.
Now I pass on to the counter-claim by the defendant asking this court inter alia to declare or ascertain true indebtedness of the defendant to the plaintiff and to declare that the plaintiff is not entitled to charge any interest in excess of the rate agreed upon. I should say straight away that in view of my finding above it appears to me that the court cannot revive an action which is already statute barred by making the relief sought by way of counter-claim. The court cannot ascertain a debt which is legally irrevocable. It is an exercise in futility. In the circumstance the counter-claim shall and is hereby struck out.”

The plaintiff was dissatisfied with the judgment and has appealed to this court on three grounds of appeal which are set out immediately hereunder-

“1 The learned trial Judge erred in law by holding that the claim of the plaintiff against the defendant for the sum of N29,574.89 that the defendant is owing the plaintiff is statute barred on the ground that no action was instituted to recover the same since 1982 when demand was made as raised in the pleading and evidence of the defendant.

PARTICULARS OF ERROR
(i) The finding of fact that was made by the learned trial Judge that the defendant was granted overdraft and not loan has destroyed the defence of statute of limitation based on the existence of loan repayable within 5 months.
(ii) Letter of demand which the defendant alleged was written to him for the repayment of the loan was not tendered in evidence to establish the period when the cause of action arose.
(iii) By virtue of S.131 of the Evidence Act Oral evidence of the defendant cannot be relied upon in the absence of the letter of demand that he alleged was written to him.
(iv) There was no evidence on the part of the plaintiff that there was a demand in 1982.

2. The learned trial judge erred in law by holding that the claim of the plaintiff against the defendant for the sum of N29,574.89 that the defendant is owing the plaintiff is statute barred without the proper evaluation of the evidence that was adduced at the trial.

PARTICULARS OF ERROR
(i) Evidence of the plaintiff that the defendant was not granted any loan and that there was no agreement to repay the loan within 5 months was never discredited under cross-examination.
(ii) The defendant admitted in the course of proceeding that he is owing the plaintiff and the defendant sought a relief in court in respect of the indebtedness of the defendant to the plaintiff.

3. The learned trial judge erred in law by striking out the counter-claim in view of his finding on the limitation law when the defendant had given evidence in support of the counter-claim.

PARTICULARS OF ERROR
(i) The defendant has given evidence in support of the counter-claim that his indebtedness of N10,000.00 to the plaintiff should attract interest at the rate of 10% instead of 18% being claimed by the plaintiff.
(ii) The defence of statute of limitation has been impliedly waived by the defendant.”