A. I. Egbunike & Anor Vs African Continental Bank Ltd (1995)

LAWGLOBAL HUB Lead Judgment Report

ADIO, JCA.

The respondents claim against the appellants, jointly and severally, in the High Court of Justice, Anambra State of Nigeria was, as stated in paragraph 18 of the Amended Statement of Claim, as follows:-

“(i) the sum of N800,312.28 (eight hundred thousand, three hundred and twelve naira twenty-eight kobo) being balance of overdraft with compound interest at the rate of 10% per annum as at close of business on the 26th November, 1979.

(ii) compound interest at the rate of 10% per annum with monthly rests until the debt is fully repaid or judgment is obtained counting from 27th November, 1979.”   Pleadings were duly filed and exchanged. The respondent filed a Statement of Claim which was amended with the leave of the court. The appellants filed a Statement of Defence which was also amended with the leave of the court.   The evidence led by the respondent, a banker, was that the appellants were current account customers of the Abakaliki Branch of the bank. Sometime, in 1978, the appellants paid into their account at the bank two cheques made by them in favour of themselves and drawn on the Co-operative Bank of Eastern Nigerian.

Before the two cheques were cleared, the first appellant requested for a withdrawal of some funds from the amount for which the aforesaid cheques were issued. He was allowed to do so and, in fact, did so with the approval or consent of one Mr. Egbunike, the bank Manager who happened to be a brother of the 1st appellant. The aforesaid Manager of the bank caused the account of the appellants in the bank to be credited with the amount for which the said cheques were issued and immediately allowed the appellants to withdraw from the account.  

The amount that the appellants withdraw was N661,000.00 and the two cheques, which the appellants issued in favour of themselves and which they paid into their current account in the respondent bank, were for the total sum of N678,000.00. It was subsequently discovered that despite the fact that the appellants were allowed by the then Manager of the respondent to withdraw the said sum of  N661,000.00 on the same day that they paid the said two cheques for the sum of N678,000.00, which were made by them in favour of themselves, into their account, the aforesaid two cheques for the sum of N678,000.00, were never sent for clearance by the then Manager of the respondent or anybody. They have since then disappeared and nobody knew where they were. In effect, those two cheques were never presented for clearance or for payment. The appellants rested their case on the respondents case and did not call any witness to testify for them.   The learned trial Judge, after consideration of the evidence before him and the submissions of the learned counsel for each party, dismissed the respondents claim. He held that allegation of fraud or of commission of a criminal offence was the basis of the respondents claim and therefore, the provisions section 137 (1) of the Evidence Act applied. The respondent, according to the learned trial Judge, had to prove its case beyond reasonable doubt but, in his view, the respondent failed to discharge the burden.   Dissatisfied, the respondent lodged an appeal against the judgment to the Court of Appeal. The court below allowed the appeal. It set aside the judgment of the learned trial Judge and entered judgment for the respondent. The court below held that the Amended Statement of Defence filed by the appellants did not comply with the rules applying to pleadings. The Amended Statement of Defence was evasive and in some respects equivocal. It pointed out that in one instance the appellants admitted an averment in the Amended Statement of Claim while in the same Amended Statement of Defence the appellants denied the averment in question. The court below expressed the view that upon a true and fair construction of the Amended Statement of Defence, the reasonable conclusion was that the appellants admitted the respondents claim. The court below did not share or endorse the view of the learned trial judge that the basis of the respondents claim was allegation of fraud or of crime and held that even if section 137(1) of the Evidence Act applied, the respondent discharged the burden of proving its case beyond reasonable doubt.

Dissatisfied with the judgment of the Court Appeal, the appellants have lodged an appeal to this court. In accordance with the relevant rules, the parties have duly filed and exchanged briefs. There were four issues identified for determination in the appellants brief while the respondent, in its brief, identified five issues in addition to the four issues in the appellants brief. The four issues in the appellants brief and the seventh and ninth issues in the respondents brief are sufficient for the determination of this appeal. The four issues identified for determination in the appellants brief are as follows:

“(i) Whether it is correct in law to say that the material averments in the plaintiffs pleading had all been admitted in the Statement of Defence in this case.

(ii) Whether having regard to the fact that the trial in the High Court was conducted on the footing that all the averments in the Statement of Claim had to be proved it is open to the Court of Appeal to have allowed the plaintiffs appeal on the ground that there was no need for any witnesses to have been called to testify to the facts already admitted on the pleadings.

(iii) In the alternative to Questions (i) and (ii) and on the hypothesis that all the facts in the Statement of Claim were admitted and regarded as proved, was the court below correct in concluding that the plaintiff was `without further ado entitled to judgment?

(iv) Was the court below correct in the view it took regarding the reference by the Defendants to a newly incorporated company?”

The two additional issues formulated in the respondents brief, and which are relevant for the determination of this appeal, are as follows:-

“(vii) As the defendants/appellants did not appeal against the finding of the Court of Appeal that their defence at the trial amounted to confession and avoidance, whether the defendants) appellants are not liable on the ‘confession’ (or indeed, admission) if the ‘avoidance’ fails?

(viii) Has section 45 of the Bills of Exchange Act discharged the defendants from liability to pay the sum claimed?”   When this appeal came before this court for hearing, the learned counsel for the respondent raised a preliminary objection, on the basis of the previous notice which has been given, that the appellants could not competently raise in this appeal the issue of the applicability of section 45 of the Bills of Exchange Act as the issue was not raised before the learned trial judge and in the court below and no leave had been granted to appellants to raise it in this court. The brief reply of the learned Senior Advocate for the appellants was that the appellants could raise the issue as a party could not in his pleadings be expected to plead law, the objection was well taken. The question is whether section 45 of the Bills of Exchange Act applied was not raised in any of the lower courts and leave to raise it in this court was not sought and obtained. Even if it can be raised in this court, the circumstances, as will be shown hereunder, were such that the appellants were not discharged under the provisions of the section. The question was raised under issue (ix) in the respondents brief. The submission in the appellants brief was that section 455 of the Bills of Exchange Act was applicable to this case and by virtue of the provision of the section the appellant has been discharged from liability in respect of the cheques drawn by them on the Cooperative Bank of Eastern Nigeria, Aba which were delivered to the respondent in consideration of the amount of N678,000.00 credited to their (defendants) current account with the respondent bank.   The submission in the respondents brief was, inter alia, that the payee of the two cheques in question was not the respondent.