Co-operative & Commerce Bank (Nigeria) Plc V. Samed Investment Company Limited (2000)

LawGlobal-Hub Lead Judgment Report

UBAEZONU, J.C.A.

This is an appeal from the ruling and judgment of the High Court of Enugu State in Enugu Judicial Division delivered on 30th November, 1994 by Edozie, J. The case was a suit filed in the undefended list. On the said 30th November, 1994, the learned trial Judge delivered both a ruling and a judgment in the said suit. This appeal is against the said ruling and judgment.

The plaintiff/respondent is a limited liability company which applied for loan from the National Economic Reconstruction Fund (herein after referred to in this judgment as “Nerfund” for short). The said loan was to be guaranteed by the defendant/appellant. The amount of the loan was N2, 550,000 (Two Million and Five Hundred and Fifty Thousand Naira). The respondent was to mortgage a landed property to the appellant to secure the loan. Again, 30% of the loan amounting to N765, 000 (Seven Hundred and Sixty-Five Thousand Naira) was deposited with the appellant under terms which do not seem to be clear from the facts of this case. The terms do not seem to be clear in the sense that the appellant called the deposit one thing while the respondent called it another thing. It is the fog which beclouds the nature of this deposit that has given rise to this case in the lower court. The respondent sought to withdraw the deposit. The appellant was not forthcoming. Consequently, the respondent sued to recover the deposit under the undefended list cause. The appellant in opposition to the suit filed a Notice of Intention to Defend under Order 24 Rule 9(2) of the High Court Rules of Anambra State, 1988 applicable in Enugu State. The learned trial Judge heard argument from counsel on both sides and in a ruling dismissed the Notice of Intention to defend. Thereupon she gave judgment for the respondent on the same day. From the said ruling and judgment, the appellant has appealed to this court. The appellant has also filed a brief of argument wherein its counsel formulated three issues for determination thus:

“(i) Whether the appellant raised a triable issue in its affidavit in support of its Notice of Intention to Defend entitling it to be let in to defend the suit pursuant to Order 24 Rule 9(2) of the High Court Rules of Anambra State, 1988 applicable to the said suit.

(ii) Whether the learned trial Judge was right in law when she found as follows:

“To guarantee the loan, the plaintiff mortgaged its properties at kilometre 4, Onitsha-Owerri Road, Onitsha to the defendants … This is the condition for guaranteeing the loan. But because of the long delays which usually occur in perfecting mortgages the defendants acting cautiously requested plaintiff to place cash deposit of 30% of the loan as interim security pending the completion of the said mortgage.”

(iii) Whether the learned trial Judge was right in law when she wrote a ruling dismissing the Notice of Intention to Defend and on the same date wrote another ruling on the same tenor and then entered judgment for the respondent.

Arguing the first issue which is the most important issue in this appeal and on which this appeal may stand or fall, learned counsel for the appellant submits that a triable issue is an issue which if raised by the defendant will necessitate calling for an explanation from the plaintiff before the defence of the defendant can be rejected. He relies on Jipreze v. Okonkwo (1987) 3 NWLR (Pt.62) 737 at 744 per Olatawura JCA (as he then was). It is submitted by the appellant that as soon as the loan was approved and while the appellant was making efforts to secure the release of the loan to the respondent, the respondent started demanding the refund of the N765, 000. The appellant argued that as the mortgage had not been perfected it was premature to refund the N765, 000 deposits which the appellant described as “additional cash security” for the said NERFUND loan. The respondent in its affidavit described the deposit as “temporary cash collateral.” This is the bone of contention between the parties. The appellant submits that these two contentions between the parties call for explanation on the part of the respondent who is the plaintiff in the case before the defence of the appellant can be rightly rejected. The appellant’s affidavit, it is contended, has thrown some doubt on the case of the respondent. Counsel refers to U. T. C. v. Pamotei (1989) 2 NWLR (Pt.103) 244 at 299; Agueze v. Pan African Bank Limited (1992) 4 NWLR (Pt.233) 76 at 87; Ekunta v. Silver Eagle Shipping Agencies Limited (1987) 4 NWLR (Pt.65). 472 at 484; Agwuneme v. Eze (1990) 3 NWLR (Pt.137) 242, 254 – 255.

On issue No.2, the appellant complains about a statement made by the learned trial Judge in her ruling which statement is setout in issue No.2. It is argued that the mortgage of the respondent’s property was not the only condition of the loan. There were other conditions which are not contained in Exh. 001. When therefore the Judge stated in her ruling that the mortgage of the landed property”… was the condition for guaranteeing the loan”, she acted in error. Certain depositions in the appellant’s affidavit were in conflict with those in the respondent’s affidavit. Oral evidence was therefore necessary to reconcile the conflict – see Falobi v. Falobi (1976) 1 NMLR 169. The learned trial Judge failed to do this before resolving the conflict in favour of the respondent.

On issue No.3, the appellant complained that the learned trial Judge wrote a ruling and at the same date and sitting delivered a judgment in the said case. I would have dismissed this issue with a wave of hand but for the fact that the correct interpretation of Order 24 Rule 9(4) of the High Court Rules of Anambra State may arise. Counsel criticized the production of the two documents: – a ruling and judgment. He refers to the case of Federal Administrator-General v. Daniel (1958) SCNLR 472; (1958) 3 FSC 115 at 118; Abiola v. Federal Republic of Nigeria (1995) 3 NWLR (Pt.382) 203 at 226 – 7; Commissioner of Lands v. Edo-Osagie (1973) 6 S.C. 155; (1973) 1 All NLR 715.

The respondent also filed a respondent’s brief and therein formulated a lone issue for determination. The respondent in stating the facts of the case said that the appellant informally requested the respondent to make an investment deposit of 30% of the facility under a fund management with the appellant to act as a temporary cash collateral pending when the respondent would provide adequate and acceptable title documents to its properties as proper security to be covered by a mortgage.

The respondent maintained in its brief that the investment deposit was a different transaction and/or contract from the NERFUND facility. After furnishing proper collateral for the NERFUND facility the respondent applied for the refund of the investment deposit. The appellant at first promised to refund the deposit but later became evasive. After paying interest on the deposit, the appellant unilaterally terminated the deposit as an investment deposit and converted same as additional cash security in breach of the arrangement between the parties. The respondent as a result, sued the appellant to recover the deposit. The lone issue of the respondent, in the light of the above facts, is

”In the circumstance of this appeal and with the totality of evidence and materials placed before the court below, whether the appellant’s Notice of Intention to Defend was rightly dismissed and judgment entered in favour of the Respondent in accord with substantial justice.”

It is submitted for the respondent that the claim by the respondent against the appellant arose out of a banking transaction in which the appellant failed to meet with its obligations by describing the investment deposit as part of the collaterals required to secure the NERFUND credit facility. This is as per the appellant’s letter of 7th July, 1993 by which the appellant paid the respondent an interest on the deposit and informed the respondent of the decision of the Board of the appellant that the deposit was a requirement of NERFUND facility. It is submitted that it was this letter that sparked off this suit. At no time before this letter did the appellant tell the respondent that the deposit was part of the collateral of the NERFUND loan.