Trade Bank Plc. V. Yisi Nigeria Limited (2005)

LawGlobal-Hub Lead Judgment Report

ABDULLAHI, J.C.A.

This is an appeal against the decision of the Kwara State High Court of Justice, sitting at Ilorin, in suit No. KWS/254/94, delivered by Hon. Justice Gbadeyan on 23/12/2003, in which judgment was given in favour of the plaintiff (hereinafter referred to as “the respondent”).

Dissatisfied with the whole decision, the defendant (hereinafter referred to as “the appellant”), filed a notice of appeal consisting of 13 grounds.

The facts of the case as can be gathered from the record are that the appellant is a commercial bank, while the respondent was/is its customer. The appellant has branches at Oja-Oba, Ilorin, Dacemo Street, Lagos, and a corporate banking department also in Lagos.

The respondent had her accounts with the appellant at the branches stated above. The respondent applied for banking facilities which were granted on terms. She applied through the appellant for loan under the Central Bank of Nigeria (hereinafter) referred to as “The CBN”) for small and medium enterprises loan scheme (hereinafter referred to as SME Loan”) The loan was only obtainable through a commercial bank but not directly from the C.B.N. to an entrepreneur.

The appellant processed the application on behalf of the respondent and the loan was secured in December, 1991. However, before the CBN approval was given, the respondent needed some foreign exchange to import raw materials. The respondent approached the appellant for a loan and same was granted to it. The appellant sourced the money for the respondent by direct bidding and the respondent utilized it.

The SME loan was released by the C.B.N. and the account of the respondent was credited with the sum released after offsetting part of the loans released to the respondent. When all disbursement was made from the SME, a balance of $82,560 (U.S.) dollars was left in the account of plaintiff/respondent unutilized. The said sum is the crux of this action. The appellant according to them repurchased the unutilized amount and sold same to Marble Finance Company Limited in order to beat the CBN directives that unutilized foreign exchange must be returned to the Central Bank if not utilize within 21 days after disbursement. The proceeds of the repurchased foreign exchange was credited to the account of the respondent with the appellant.

The plaintiff/respondent when it became aware of the foreign exchange standing to their credit, approached the appellant for the release of the said sum. The appellant refused to oblige contending that the unutilized foreign exchange was sold to a third party (Marble Finance Company Limited) and the naira equivalent was credited to their account with the appellant.

The plaintiff/respondent claimed not to have received the proceeds of the repurchased foreign exchange and in any event they contended that they did not authorize the appellant to sell the said foreign exchange standing to their credit to a third party. In fact, they (respondents) claimed, at the time, the foreign exchange was sold, they were badly in need of it to purchase raw materials for their factory.

The respondent through their solicitors wrote a petition to the CBN on the matter. The CBN investigated the matter being the regulatory monetary authority in Nigeria. At the end of the investigation, the CBN directed the appellant to re-credit respondent’s account with the sum of $82,560.00 (U.S) dollars at the applicable rate.

In compliance with the said directive, the appellant reversed the earlier entry and re-credited the respondents for the whole amount, the naira value to the tune of N1,515,150.96. Not satisfied with the CBN’s intervention, the respondent filed an action at the State High Court which is the subject matter of this appeal, claiming:-

1. The sum of $82,560.00 standing to the credit of the plaintiff as at the 1st of May, 1992, in his account with the defendant.
2. Interest on the said plaintiff’s funds at 21% per annum from 1st May, 1992, up to the date of judgment and thereafter at 10% on the judgment sum until the judgment debt is fully liquidated.
3. A declaration that the plaintiff having paid a total sum of N5,200,000.00 as at 30th January, 1995, and having substantial credit due to them as claimed in paragraphs 1 and 2 above could not and is not owing the defendant a staggering debt of N9,072,227 as demanded in the defendant’s letter of 1st November, 1996, or owing any sum whatsoever.
4. An order of injunction restraining the defendant by themselves, their servants, agents and/or privies from further demanding payment of and/or taking any further steps towards the recovery of the alleged indebtedness of the plaintiff and/or its principal officers until the final determination of this suit.
5. An order on the defendant to render a correct proper statement of all the accounts of the plaintiff with defendant.

At the end of trial, the lower court granted all the claims of the plaintiff/respondent, save the one for injunction pending the determination of the case hence this appeal.

The appellant filed thirteen grounds of appeal and the said grounds of appeal shorn of their particulars are as follows:-

1. Error in law

The trial court erred in law, in awarding to the plaintiff/respondent the sum of U.S. $82,560.00, when the evidence from the two sides clearly show that the said sum had been credited to the account of the plaintiff/respondent by the appellant.