African Continental Bank Limited V. S.o. Adebesin & Company Limited & Anor (1998)

LawGlobal-Hub Lead Judgment Report

IGNATIUS CHUKWUDI PATS-ACHOLONU, JCA.

The Plaintiffs/Respondent claimed from the Defendant Appellant as follows in their pleadings

(a) A declaration that the defendant’s refusal to release the charge on plaintiffs’ property at plot 4, Block LXVI, Ilupeju scheme Layout Ikeja which was mortgaged to the defendant under a deed of mortgage dated 29th December, 1971 and registered as No. 50 at page 50 in Volume 1381 of the Lands Registry in Lagos and to release the title deed thereof from December, 1973 to 6th August, 1981 is wrongful.

(b) A declaration that the defendant’s refusal to release to the plaintiff title deeds covering properties at 38 Ikorodu Road, Igbobi, 18 Alli Balogun Avenue, Industrial Estate, Ikeja, 35 Breadfruit Street, Lagos and life insurance policies Nos. 62366 and 683174 from 1973 to 6th August, 1981 is wrongful.

(c)N25,000,000.00 (Twenty-five Million Naira) and 10% interest on the value of the promissory note dated 6/6/83 from the date of maturity till the date the amount is paid off, being special and general damages for the defendant’s wrongful refusal to release the plaintiffs’ title deeds and documents from 1973 to 6th August, 1981 and for the defendant’s negligence in the operation of the first plaintiff’s accounts Nos. 10110, and 11184.

The sum of N25 million claimed is cumulative total of the special and general damages said to have been suffered as a result of the negligent act of the defendant.

The 1st plaintiffs/Respondents story was that it operated 3 accounts in the appellant Bank and sometime in December 1971 was issued a guarantee by the Defendant at the request of the 1st Plaintiff to Messrs Koka Tovarwazravil Pharmaceutical and Chemical Works Titova Yugoslavia. The guarantee was secured by a legal mortgage of the 2nd Plaintiffs property known as Plot 4 Block LXVI Ilupeju Scheme Layout Lagos. In addition to the Legal Mortgage the 2nd Respondent also deposited with Defendant/Respondent his Niger Insurance Company Life Insurance Policies were both valued of N2000.00 each at that time. The 1st Respondent lodged with the Defendant for safe keeping certain other documents. These are documents relating to property at No. 38 Ikorodu Road, Igbobi, No. 10 Alli-Balogun Industrial Estate, Ikeja, and No. 35 Broadfruit, Lagos. On the 5th of May 1973, the 2nd Plaintiff was given 14 days to liquidate the outstanding sum of N55983.21. It is his story that by June 1973 all outstanding money had been made to Messrs Koka Pharmaceutical and Chemical Works Titova of Yugoslavia thus relieving the defendant/appellant of further obligation under the contract. Not withstanding persistent demands for the return of all the documents lodged with the appellant, it refused to release any of them. The defendant/appellant even refused to make available to the 1st Respondent of the nature account he has with the Bank and went on to credit one of his live accounts with the ones he was owing. To alleviate his problems he went to Barclay’s Bank who promised to take over his matter and grant him facilities on condition that he collected the documents hither to lodged the appellant with which he would use to secure new facilities. As a result of the refusal, to release the documents the Plaintiff/Respondents could not obtain any facility to continue this businesses he had secured and by the refusal incurred financial losses of immense magnitude. The documents were only released after he had paid again for a debt he was not owing and when the court ordered the appellant to release the documents.

The appellant disputed the claim and argued it rightly held on to the title because the title deeds i.e. all of them were security for the debt owed. It further stated that all the title deeds said to have deposited for safe keeping were indeed further collaterals to secure the facility provided by the Bank. In this judgment the court below held this after listening to argument of counsel said.

“No evidence was produced to show that the plaintiff did receive a notice informing him about his overdraft and the intention of the bank to sell his securities Exhibits TT-TT1 and Exhibits H-Hs & H3 in order to recover the debt. What readily comes to mind in this instance is that the defendant bank at the material time did not know or keep a proper account in order to decide which property is tied to a particular transaction and the account.”

“I therefore found as of fact the Defendant has wrongfully retained the properties and the Insurance Policies Exhibit TT-TT1 and Exhibit H, H2 and H3. I agree with the learned counsel for the Plaintiffs that the Defendant Bank was negligent. The duty of care hereon this case is quite different from the duty of care envisage in criminal negligence.

It is a breach of implied agreement. However, I agree with the submission as per the Judgment of Bairamain J. in B & F Bank v. Opaleye 1962 1 ANLR page 26 where it was held that where by agreement express or implied, a customers accounts with a banker are to be kept distinct and separate the banker has no right to combine them or to transfer assets or liabilities from one account to another without reasonable notice of the intention to do so without the assent of the customer”.

This is exactly what the defendant bank has done as shown directly or indirectly in Exhibits CC and PP by justifying their action in accordance to Clause 10 of Exhibit X the deed of mortgage.”

The Court awarded a sum in excess of N2 Million to the Respondent. Dissatisfied with the judgment of the court below the Defendant now appellant filed 4 grounds of Appeal from which it distilled 3 questions for determination. The Respondent equally cross appealed.

The questions for determination framed by the appellants are as follows: