Adereti & Anor V Attorney General, Western Nigeria (1965)
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The appellants were convicted in the High Court at Ibadan in Western Nigeria on two counts, namely:
(1) Conspiracy to steal the sum of £8,631 contrary to section 443 of the Criminal Code of Western Nigeria Law, and
(2) Stealing the amount of £8,631 the property of the National Bank of Nigeria, contrary to section 331 of the Criminal Code of Western Nigeria Law.
The 1st appellant, at the material time to the charge, that is to say, between 30th June 1960 and 30th July 1960, was the manager of the National Bank at Ibadan, and had completed at that time 20 years service with the Bank. The 2nd appellant was a customer of the said Bank, and was carrying on business as a trader at Ibadan.
The prosecution case was based on a directive (Exh. 1 ) which was a circular issued in 1956 from the Bank’s headquarters in Lagos prohibiting all managers from granting overdrafts to customers, and also forbidding them to allow customers to draw money on uncleared effects. It would appear that in the months of June and July 1960 the 1st appellant, as the manager of the Bank at Ibadan, allowed the 2nd appellant, a customer of the Bank, to overdraw his account to the tune of £8,631. This was made up of (1) monies he was allowed to draw at different times before cheques of other banks paid in by him were cleared with those banks. During that month., the 2nd appellant paid in cheques of other banks 24 times and on each occasion he was allowed by the 1st appellant to draw on the cheques before the cheque was cleared, and (2) all National Bank cheques issued by the 2nd appellant in the course of business and paid into the Bank of West Africa, and which later came to the National Bank for clearance, and were at the instance of the 1st appellant debited to the 2nd appellant’s account in the normal way.
The total loss to the Bank, according to Mr. Dawodu the auditor to the Bank who audited the account in June and July 1961, was £6,536, which represents overdraft and interest. As the charge before the court was for stealing an amount of £8,631, we can only assume that this figure represents the total amount of the overdraft on 30th July 1960, and that the sum of £2,095 had been repaid before the check by the auditor to which we have referred.
The judgment of the learned trial judge was attacked mainly on misdirection. Five instances of misdirection were referred to, but for our purpose it will be enough to mention three of the five:-
“(b) If this is done, the position will be that the 1st accused took the paid sum of money from the owners (i.e. the National Bank of Nigeria, Ibadan) by drawing cheques on the Bank, and converting it to his own use, with intent of repaying it at some future time.”
“(d) It is true that the defence has been able to establish through one of the prosecution witnesses, Tajudeen Onigbajo (8th prosecution witness) who is a graduate of the Institute of Bankers, that in normal banking practice the manager of a bank has a discretion whether or not to allow any customer to draw upon uncleared effects or to grant him overdrafts, but as I interpret the provisions of section 324(2)(f) of the Criminal Code, read along with section 329 thereof, there is an absolute prohibition in law even for a bank manager to part with the money of the bank to a customer who may intend at some future time to repay it, and the only way he can escape criminal liability for the fraudulent conversion of the sum, and therefore for stealing it is to obtain the prior sanction of the authorities of the bank for such transactions.
(e) Even without the instructions in Exhibit 1, I hold as a matter of law that if any manager of the National Bank or any other bank for that matter, parts with the bank’s money to a customer who may wish to repay it at some future time without the prior sanction of his authorities, he will be guilty of stealing.”
From the above and other instances in the judgment the main burden of the learned judge’s statement of the law in his judgment is as follows-
(I) any bank manager who gives an overdraft steals the money of the bank, unless he has the prior authority of his directors to give out the amount on that occasion or on any such future occasion for which he had their sanction, and
(2) any customer who draws a cheque for an overdraft, or who paid in a cheque and drew another for payment before the effects of the one he paid in were cleared, converted that amount to his own use, though he might have had the intent of repaying it at a future date.
The question in this appeal therefore is whether the learned trial judge was right in his interpretation of section 324(2) (f) of the Criminal Code of Western Nigeria, that a bank manager who gives an overdraft to a customer without the previous approval of his directors steals the bank’s money; and also that the bank’s customer who draws a cheque for an overdraft without the previous approval of the directors and gets the money, steals that money.
We find it difficult to accept the proposition of law propounded by the learned trial judge in this matter. The essence of stealing is that there must be a taking of the property against the will of the owner. The manager of a bank has a general authority to deal with the bank’s money, and it is difficult to see, in the absence of fraud on his part, how he can be said to have stolen his employer’s money merely because he parts with money to a bank’s client whose funds are low. The same applies to the client who, in the absence of fraud, receives an overdraft; we are unable to agree that he is guilty of theft. If, however, the cashier has limited authority about parting with the bank’s money, the giving of credit to a customer of the bank does not in the absence of fraudulent intent, in our view, amount to stealing the bank’s money.
The taking of an overdraft from a bank, even in breach of instructions, is no more than accepting a loan: it cannot be stealing-R. v. Prince 11 Cox C.C. 193. And in Cuthbert v. Robarts, Lubbock & Co.  2 Ch.D. 226 it was held that when a client paid a cheque to his banker and drew another for payment before the effects of the one he paid was cleared, he was only asking the bank for a loan.
The essence of the charge before the learned trial judge was that the two men (appellants) – the bank manager and the client – had conspired together to defraud the Bank, and that they both defrauded the Bank by stealing the sum of £8,631 by means of asking for and the giving of overdrafts. In his consideration of the case the learned judge did not deal with the charge of conspiracy, the absence of which, in our view, renders the case of stealing by both appellants nebulous. For if there was no agreement between the bank manager (1st appellant) and the client (2nd appellant) to defraud the Bank, clearly they cannot be charged with stealing in respect of the overdrafts which the Bank gave.
There was no scintilla of evidence proving conspiracy: on the contrary the evidence showed the opposite. The 2nd appellant had been a customer of that branch of the Bank before the 1st appellant became the manager in 1959. His account from 1957 to 1959 showed credit balances throughout. Early in 1959 he was allowed to draw on uncleared effects by the previous manager, Mr. Adebiyi, whom the 1st appellant succeeded in April of that year. In May 1960 the 2nd appellant paid into his account at the Bank a sum of £41,500 in all; he however made a withdrawal of about one thousand pounds over that figure during that month. There was no evidence to show that the facility to draw on uncleared cheques was granted in furtherance of a conspiracy between the two appellants to defraud the Bank. So much for the learned judge’s failure to consider the count of conspiracy.
With regard to the count of stealing, we find it difficult to accept the learned judge’s interpretation of sections 324(2) (f) and 329 Criminal Code of Western Nigeria Law in so far as they relate to the matter in hand; namely that a bank manager who gives an overdraft to a customer, unless there is a previous authorisation to do so, commits an offence of fraudulently converting the amount so given; equally so, we are not ready to subscribe to the view that the client who receives the overdraft, or who was allowed to make a withdrawal on an uncleared cheque, is guilty of converting the money to his own use under the Criminal Code. We think the learned judge clearly misdirected himself as to what the law is on this matter; and the misdirection’s are of such a grave nature that, apart from other considerations in the case which we pointed out earlier, his judgment cannot be allowed to stand. On the view of the law taken by the learned trial judge, one wonders how any bank can carry on business.
The appeal is allowed. The convictions of the two appellants are quashed. Sentences passed are hereby set aside and a judgment of acquittal is entered in each case. If the appellants have paid their fines (£1,000 each.) they are to be refunded.
Other Citation: (1965) LCN/1211(SC)