Ali Pindar Kwajaffa & Ors V. Bank of the North Limited (1998)

LawGlobal-Hub Lead Judgment Report

EDOZIE, J.C.A.

The three appellants were the plaintiffs before Borno State High court sitting in Maiduguri in suit No. M/135/93. The 1st appellant is the father of the 2nd appellant and the Managing Director of the 3rd appellant a limited liability company carrying on the business of metal fabrication in Maiduguri. The latter, that is, the 3rd appellant is a customer of the respondent bank at its main branch office in Maiduguri.

In paragraph 24 of their further amended statement of claim (claim for short) the appellants as plaintiffs sought against the respondent bank reliefs summarised thus;

(a) A declaration that the deed of legal mortgage dated 13 the October 1982 executed by certificate of occupancy No.s Bo/1621 and NE/1367 is void ineffective and of no effect.

(b) A declaration that the 2nd appellant being a minor could not have consented to any matter relating to the transfer of his property covered by Certificate of Occupancy No. Bo/1621.

(c) A declaration that the appellants had liquidated their indebtedness to the respondent.

(d) An order directing the respondent to release to the appellants certificates of occupancy Nos. BO/1621 and NE/1347 being held by it.

(e) A perpetual injunction restraining the respondent its servants or privies from selling or trespassing into their aforesaid properties.

The respondent denied the appellants’ claims and in paragraph 2 of a counter-claim subjoined to its further amended statement of defence (defence for short) the respondent counter-claimed against the appellants for the following releifs:

“(a) A declaration that there is a subsisting legal mortgage between the plaintiffs and the defendant.

(b) A declaration that the defendant is entitled to N1,858,622.15 as at 28th July 1993 with interest on the loan facility and 30% interest on the said outstanding (sic) from the 28th July 1993 to 1st January 1994 and 21% on the outstanding sum from the 1st January 1994 until liquidation of the outstanding sum.”

From the pleadings filed, oral evidence of witnesses called by the panics and the numerous documentary evidence tendered. The facts of the case leading to this appeal may be summarised as follows; as far back as the year 1980, the 3rd appellant had an account with the respondent hank. The account number is 400127. Initially the 3rd appellant was granted an overdraft facility for the sum of N80.000. By the year 1982, the outstanding amount of the overdraft stood at N487.375.50. At the instance of the 3rd appellant the respondent hank convened the overdraft account into a loan account and the account number was variously referred to as 400127/62586, 44014/62586/400127. Pursuant to the conversion, the appellant mortgaged to the respondent bank properties covered by Certificates of Occupancy Nos. Bo/1621 and NE/1367 belonging respectively to the 2nd and 1st appellants. A deed of legal mortgage dated 13/10/82 registered as No.347 at page 347 vol.7 (Misc.) of the Lands Registry in the office at Maiduguri (Exh.E) was executed by the parties with 1st and 2nd appellants as mortgages/sureties, 3rd appellant as borrower and respondent as mortgages. It is the appellants’ case that in November 19R2 when the respondent drew their attention to the outstanding amount, the 1st appellant and the respondent bank agreed that the amount should attract interest at the rate of 13% but rather than adhere to this agreement, the respondent inflated the interest rate. The appellants further claimed that they paid to the respondent bank the sum of N1.189,963.26k; that the 1st appellant again paid under duress the sum of N300,000 and finally that the Nigerian Bank for Commerce and Industry (NBCI) paid on their behalf the sum of N82,257.74 on 19/7/84. By reason of all these payments, the appellants contend that they have fully liquidated their indebtedness to the respondent bank. They relied on the 3rd appellant’s statement of account with the respondent which was admitted in evidence as Exh. “B”.

On its part, the respondent denied reaching agreement with the 1st appellant on the interest rate maintaining that interest rates are charged in accordance with the Central Bank guidelines. The respondent admitted that the 1st appellant paid the sum of N300,000 but denied it was paid under compulsion. It is the respondent’s case that the appellants are still indebted to it to the tune of N1,858,622.15 as at 28th July 1993. Regarding the sum of N82.297.74 paid by the NBCI the respondent explained that the NBCI paid the amount for the release of another C of O No NE/154 held by the respondent as security for another overdraft of N40,000 it granted to the 3rd respondent which had risen to N82,297.74. The NBCI took that step so as to use the C of O No NE/154 as security for its own loan to the 3rd appellant. By a letter dated 19/3/84 Exh, J4 the respondent bank reminded the 3rd appellant or its default in repayment of the loan and in response the 1st appellant by a letter dated 29/3/84 Exh J pleaded for time to repay the loan. As the appellants were, unable to liquidate the loan, the respondent in accordance with the terms of the legal mortgage served them notice of its intention to exercise its power of sale.

Upon the foregoing conflicting assertions of the parties Mshelia J on 31/5/96 dismissed the appellants’ claims in their entirety and entered judgment for the respondent in terms of its counter-claim. Against that judgment, the appellants have lodged the instant appeal predicated on three original and two additional grounds of appeal on the strength of which the appellants’ counsel in his brief of argument raised five issues for determination which were adopted in the respondent’s brief of argument. The five issues raised read as follows: