African Continental Bank Limited V. Eugene N. Oba & Ors (1993)

LawGlobal-Hub Lead Judgment Report

JAMES OGENYI OGEBE, J.C.A. 

The appellant company brought an action against the respondents in the Asaba Division of the High Court of the defunct Bendel State jointly and severally for the recovery of the sum of N 10, 176.92 being the unpaid balance (principal, interest and other bank charges) as at 30th day of September, 1984 of the overdraft granted to the respondents on their own request at Asaba by the appellant. In the writ of summons, the defendants/respondents were sued jointly and severally as trading as Asaba Development Enterprises.

The appellant filed its statement of claim and the 1st defendant/respondent filed a statement of defence in reply thereto. The appellant later amended its statement of claim. Paragraphs 1 – 6 of the amended statement of claim give the genesis of the transaction which led to this suit. They are reproduced in full below:-
“1. The plaintiff is a Banker carrying on business in Nigeria with Head Office at Lagos and Branches throughout Nigeria and in Asaba.
2. The defendants are customers of the plaintiff at Asaba and operate a Current Account No. 035 under the name and style of Asaba Development Enterprises of No. 37, Nnebisi Road, Cable point, Asaba. The said Current Account was opened at the request of the defendants after the defendants have completed the necessary forms for opening of a Current Account. The signature cards and other forms completed by the defendants particularly Form CDA 47 shall be relied upon at the trial.
3. The plaintiff opened the said account No. 035 for the defendants and issued the defendants with cheque book.
4. Because the account was opened in the trade name of the defendants Asaba Development Enterprises, the 1st and 3rd defendants guaranteed the said account No. 035 by the execution of the plaintiff’s Form ACB/LD/4 of 21st day of February, 1978. The said Guarantee Deed dated 21st day of February, 1978 shall be relied upon at the trial of this suit.
5. On the 7th day of December, 1977, the defendants applied for an overdraft facilities of N2, 000.00 (Two Thousand Naira) from the plaintiff and completed the plaintiff’s application form for the overdraft facilities. The application form dated 7th day of December, 1977 executed by the 1st and 3rd defendants on behalf of the 2nd defendant and themselves shall be relied upon at the trial. The plaintiff granted the said overdraft facilities to the defendants. The defendants agreed to pay interest and other bank charges in respect of the said overdraft.
6. The defendants did receive the said overdraft facilities and utilized same by drawing cheques on it and as at the 30th day of September, 1984, the said sum had been overdrawn by N10, 176.92 (Ten Thousand One Hundred and Seventy Six Naira, Ninety-Two Kobo) by the defendants and the said sum represents the defendants’ withdrawals, lodgements and the plaintiff’s interest and other bank charges. The plaintiff at the trial of this suit will rely on the cheques drawn all the said Account by defendants.”

The 1st respondent in his statement of defence admitted that he and the other respondents were trading as Asaba Development Enterprises and were granted an overdraft of N2, 000.00 by the appellant. Paragraphs 1 – 3 of a statement of defence are reproduced hereunder:-
“1. Save as hereinafter expressly admitted, the 1st defendant denies each and every allegation of facts contained in the statement of claim as if such were set out seriatim and specifically traversed.
2. Save that the 1st defendant admits that the plaintiff is a banker carrying on business at its branch at Asaba, and that the 1st defendant, 2nd and 3rd defendants (trading as Asaba Development Enterprises) operates a correct account at the Branch and further on application, the plaintiff granted overdraft to the sum of N2, 000.00 (Two Thousand Naira) to the defendants, the 1st defendant does not admit other facts contained in paragraphs 2, 6, and 7 of the statement of claim and puts the plaintiff to his very strict proof thereof.
3. With further reference to paragraph 2 of the statement of claim, the 1st defendant, and trading under the name of Asaba Development Enterprises duly registered under the Registration of Business Names Act, with its head office at 37, Nnebisi Road, Asaba and are customers of the plaintiff.”

One Okala Barnabas Chukwudi gave evidence on behalf of the appellant and tendered documents to show the indebtedness of the respondents to the bank. He tendered a bank statement Exhibit ‘E’ as one of such documents. The 1st respondent gave evidence on his own behalf. He confirmed that he was in partnership with the other respondents in the running of Asaba Development Enterprises. He said that the firm was granted N2, 000.00 overdrafts by the appellant. He admitted signing Exhibits D and D1 which were the cheques issued to withdraw money from the firm’s account. He denied owing the appellant any sum.

The counsel representing the parties addressed the trial court after which it gave its judgment dismissing the appellant’s claim for 2 reasons: (i) That the appellant by failing to sue the Asaba Development Enterprises the action against the respondents was incompetent since they were merely guarantors, (ii) Exhibit ‘E’ was not properly proved in accordance with Section 96(1) (h), (2) (e) of the Evidence Law.

The appellant was not satisfied with that judgment and has appealed to this Court on 5 original grounds of appeal and with that leave of court 2 additional grounds. I do not consider it necessary to set out these grounds in the judgment. In accordance with the rules of the Court, the parties filed their briefs of argument. In the appellant’s brief 4 issues were formulated for determination as follows:-
“1. Whether the learned trial Judge was correct in holding that the proper defendants were not before him.
2. Having held that the Asaba Development Enterprises was a necessary party to the action, was the learned trial Judge correct in dismissing the action because it had not been made a party.
3. Whether it was right for the learned trial Judge to formulate suo motu issues for the parties and adjudicate on the issues so formulated without hearing arguments from the parties and proceeded to give judgment on the issues so formulated.
4. Whether the learned trial Judge was right in dismissing the plaintiff/appellant’s claims having regard to all the circumstances of the case.

The respondent’s brief formulated only 2 issues for determination as follows:-
“(a) Was the learned trial Judge correct in dismissing the action having regard to all the circumstances of the case.
(b) Whether the learned trial Judge was right in dismissing the plaintiff’s claim for failure to comply with Section 96 (1) (h), (2) (e) of the Evidence Law.”

The summary of the argument of the appellant in respect of the issues formulated on its behalf is that the Asaba Development Enterprises has no legal personality and could not be sued. It was a trade name used by the respondents and the 1st respondent admitted that much in the statement of defence and evidence in court. The trial court was therefore, wrong to have held that the case against the respondents was incompetent for failure to join the Asaba Development Enterprises. It was argued that the respondents did not challenge the capacity in which they were sued and the trial court should not have suo motu raised that issue. It was also argued that since the 2nd and 3rd defendants did not file any statement of defence nor defend the suit, the trial court should have entered judgment against them. It was finally argued that the appellant’s only witness did substantially comply with Section 96(1) (h), (2) (e) of the Evidence Law in tendering Exhibit ‘E’ which was admitted without objection, and the trial court was wrong in expunging it from the record. The following cases were cited in support of the appellant’s submission: Onibudo v. Abdullai (1991) 2 NWLR (Pt. 172) 230 at pp. 242 & 245; Abakaliki LGC v. Abakaliki RMO (1990) 6 NWLR (Pt. 155) 182 at 192; Fed. Capital Dev. Authority (FCDA) v. Naibi (1990) 3 NWLR (Pt. 138) 270 at 281; Ochoma v. Unonsi (1965) NMLR 321 at 281 & 283; Emegokwue v. Okadigbo (1973) 4 SC 113 at 117; Olawuyi v. Adeyemi (1990) 6 NWLR (pt. 147) 746 at 785 – 786.

The summary of the reply in the 1st respondent’s brief is that the trial court was right in holding that the cause was incompetent against the respondents since the principal debtor was not made a party to the case. It was submitted that the Asaba Development Enterprises being an unincorporated association may sue and be sued. The case of Fawehinmi v. N.B.A. (2) (1989) 2 NWLR (Pt. 105) 558 was cited in support. It was also submitted that the trial court rightly rejected Exhibit ‘E’ for non-compliance with the provisions of Section 96(1) (h),(2) (e)of the Evidence Law.

In my respectful view, only 2 issues call for determination in this appeal, the first is-

“Whether the trial court was right in raising on its own the matter of the competence of the respondents in the action.”

From the state of the pleadings before the trial court, the capacity of the respondents to the action was not an issue. The 1st respondent in paragraph two of his statement of defence quoted earlier in this judgment admitted that he and the other respondents were trading as Asaba Development Enterprises. That admission confirmed without any shadow of doubt that they were proper defendants before the trial court. That admission equally confirmed that the name Asaba Development Enterprises was a mere business name which was not a legal personality that can be sued. I have read the record of the trial court very carefully and nowhere in the address of the learned counsel for the 1st respondent before that court, did he challenge the capacity in which the 1st respondent was sued.

It is trite law that a trial court should not formulate cases for the parties. It is not for a trial court to engage itself in a hypothetical case or make a defence for a party or invent a case for the parties. The duty of the trial court is to try the specific issues set out by the parties in their pleadings as supported by credible evidence –
See the case of Aguocha v. Aguocha (1986) 4 NWLR (Pt. 37) 566. I am clearly of the view that the action against the respondents before the trial court was competent and the trial court was wrong to have held otherwise. In fact, that issue was not before the trial judge and he should not have raised it suo motu.