African Continental Bank Plc & Anor V. Emostrade Limited (1997)
LawGlobal-Hub Lead Judgment Report
AKPABIO J.C.A.
This is an appeal against a judgment of ITA, J. of the High Court of Cross Rivers State of Nigeria holden at Calabar in Suit No. C/43/94 delivered on 5th February, 1996, wherein he entered judgment in favour of the plaintiff in the sum of N2,500,000.00 being damages for breach of contract will, no order as to costs.
The plaintiff’s particulars of claim as filed in the court below were worded as follows:
“The plaintiffs claim against the defendants jointly and severally is the sum of N5,000,000.00 (Five million naira) being special and general damages for breach of contract in that the defendants who are the plaintiff’s bankers have refused to furnish the plaintiff at her request and expense statement of account held as a customer of the defendants whereof the plaintiff has suffered damages in its trade and profession.”
The gist of plaintiffs claim as finally set out in his six-page statement of claim may be summarised as follows:
At all material times, one Victor Ndoma-Egba, a Barrister and Solicitor, and also the Chairman, Board of Directors of Plaintiffs Company, who testified as PW1, for the plaintiff, held at least five current accounts in which he was sole signatory in 1st defendant’s bank at Calabar. Second defendant was the Calabar Branch Manager in the said Bank. Among the accounts of which P.W1, was sole signatory was Account No. 05474. Apart from the five accounts in which P.W.1 was sole signatory, there was also another Account No.05756 in the name of Ndoma-Egba, Ebri and company, a firm of Solicitors. In respect of this Account, P.W.1, and one Richard Ebri were co-signatories. All the accounts were current accounts.
According to the testimony of P.W.1, at the trial court, on 30/3/93, he (P.W.1.) went to the 1st defendant bank in Calabar to confirm if a cheque they issued to a client had been cleared. The cheque was drawn on Account No.05756.
There P.W.1, met the Branch Manager (2nd defendant). When the Ledger Card for Account No.05756 was produced, P.W.1, noticed at once some unauthorized withdrawals from the account. P.W.1. said he also asked to see Ledger Card for Account No.055694 in the name of “Haston Nigeria Limited” (of which he was also a sole signatory). From it he also noticed large unauthorized withdrawals.
P.W.1. then demanded to see the cheques on which the amounts were withdrawn on both accounts. The cheques were brought at random and he discovered that most of those cheques brought bore signatures with no resemblance to his. The amount involved in the cheques so brought went in excess of N500, 000.00. P.W.1. immediately informed 2nd defendant that the cheques were forged and the signatures were obviously not his own. P.W.1. testified further that besides one cheque for N225, 000 made payable to the 1st defendant all the other cheques were made payable to one Oluwaseyi Fabelurin. The 2nd defendant then asked P.W.1., what he was going to do, and that one replied that he was going to report the matter to the police and instruct his Solicitors, and he later did so.
However, P.W.1, later wrote to the 1st defendant for attention of 2nd defendant confirming what he discussed with him, namely that the cheques he showed to him (P.W.1.) were forged cheques, and that 2nd defendant should immediately credit the relevant account with the amount on the forged cheques he had seen. P.W.1. also demanded that 2nd defendant should make available to him at his (P.W1’s) expense the statement of account and all cheques and other instruments drawn on the accounts from 1/1/91 to that date in respect of all the accounts mentioned i.e., Account No.05604, 5474, 5475, 2192 and 05756. According to P.W.1, in his evidence, he had demanded the statements of accounts and photocopies of all the Instruments to enable him determine the scope of the fraud on those Accounts. According to P.W.1. On 31/3/93, he lodged a complaint at the state C.I.D. and followed it up with formal letter of complaint to the Commissioner of Police. P.W.1. also instructed his Solicitors Messrs Kanu Agabi and Associates who wrote to the Defendants advising them to credit the various Accounts up to the various sums on the forged cheques. In reply to P.W.1’s own letter the Bank (1st defendant) wrote to him through their own Solicitors, Messrs Aniekan & Associates accusing him of colluding with Oluwaseyi Fabelurin to steal his own money, and was threatened with libelling the defendants. They also threatened to sue P.W.1’s Solicitors for libel. In addition to all the steps mentioned above, P.W.1, said he also instructed a firm of Chartered Accountants – Messrs Babingster-Asharger & Co. of Calabar to audit all the aforementioned accounts. He also wrote to the defendants informing them of the appointment of the above firm of Chartered Accountants to audit the said accounts, and solicited their co-operation, but the said co-operation was never given, as a result of which the Accountants had to abandon their assignment. The defendants had still refused to give to plaintiff any statement of their account, as a result of which they were unable to know whether any or all the cheques drawn on all their accounts including Account No.05474 were genuine or not. In due course the plaintiff instituted this action, claiming as already set out above. At the trial evidence was given under cross examination that P.W.1, personally completed all the forms necessary to open the Account No.5474 which is the same thing as Account No.05474. The Mandate Card showing specimen signature of P.W.1, as Sole Signatory was also tendered in evidence.
In response to the above the defendants made a 17 para, statement of defence in which they alleged that the plaintiff was not a limited liability company and was not a body known to the law which can sue or be sued and would at the trial be put to the strictest proof of its status. It was stated further that the plaintiff was not known to the 1st defendant as its customer at its Calabar Branch, as “Emostrade Limited” was not its customer. It was also averred that the 1st defendant owed no obligation to furnish statement of account to the plaintiff for the mere asking and without any offer of the fee or cost therefor.
It was also contended that the defendants owe no contractual duty to the plaintiff to avail him with statement of account and cheques/other instruments drawn on the plaintiffs account if any once the said cheques/other instruments were paid. At any rate even if such a duty existed the plaintiff did not make a demand timeously and was estopped from suing on it.
Finally, it was alleged that the 1st defendant discharged its duty to the plaintiff, if any and that all necessary statements of accounts were sent to the plaintiff even without its request and also at its request, through his accountant one Oluwaseyi Fabelurin.
At the trial, each side fielded only one witness. The plaintiff fielded its Chairman, Chief Victor Ndoma Egbaas P.W.1, while the 1st defendant fielded one Christian Udechukwu Okuka, their “Recoveries and Litigation Officer, Calabar Branch, as D.W.1. D.W.1 while contending in his evidence that “Emostrade Limited” was not their customer, as no Certificate of Incorporation was deposited with them, he nevertheless admitted that there was an Account No.5474, in the name of “Emostrade Limited”. He testified that “Account No.5474 is our Account Number allocated to the customer Emostrade is our customer. Chief Victor Ndoma-Egba is only signatory to Account No.5474…
The certificate that Emostrade is a business name is in the file.”
At the conclusion of evidence and address, the learned trial Judge, ITA, J. took a hard look at all the evidence adduced before him, and came to the conclusion that:
“a trading account was blocked making it impossible for the Account holder to operate the Account. This was recognised as a breach of contract between the customer and the Bank.”
He therefore awarded damages assessed at N2, 500,000 as adequate compensation for the plaintiff in the circumstances of this case.
Against the above judgment the defendants were dissatisfied and so appealed to this court on four grounds from which the following three issues for determination were formulated. The defendants will hereinafter be referred to as the appellants.
“In our humble view the following issues call for determination in this appeal.
(i) Whether the existence of the plaintiff as a legal person qua a limited liability company capable of suing the defendants was established at the trial.
(ii) Whether the plaintiff if it is a legal person capable of suing the defendants had at the trial established by evidence any privity of contract between it and the defendants to sustain the suit.
(iii) Whether (if the plaintiff is a legal person and proved the privity of contract) the plaintiff also proved any breach of contract against the defendants to warrant an award of N2, 500,000.”
The plaintiff, who will hereinafter be referred to as respondent, also filed a brief in which they adopted the three issues formulated by the appellants, and also formulated an additional one as follows:-
“Whether the errors alleged concerning the judgment of the learned trial Judge, even if detected by this court, are sufficient to warrant a reversal of the trial court’s judgment as sought by the Appellant.”
I have carefully considered all the four issues formulated above and consider them adequate for the resolution of this appeal. I shall therefore proceed to do so as follows:-
“Re issue (i)
“Whether the existence of the plaintiff as a legal person qua a limited liability company capable of suing the defendants was established at the trial.”
Under this issue it was contended on behalf of the appellants by their learned Senior Counsel, Udechukwu, S.A.N. in their brief that the learned trial Judge at the court below erred in law when he entered judgment for the plaintiff whose legal existence was challenged but was never established. It was then pointed out that the plaintiff did not tender its Certificate of Incorporation. Exhibits 16 and 27 produced by the defendant showed beyond the shadow of a doubt that the plaintiff was not the holder of the account upon which it based its suit. It was then submitted that the finding by the court below that the plaintiff was a legal person was perverse and untenable.
In reply to the above it was submitted that the learned trial Judge used the appellant’s amended statement of defence to reach the conclusion that the appellants had therein pleaded enough to indicate unequivocal acknowledgement of the plaintiff, as a limited liability company, and why in the circumstances, the respondent had no duty to engage in the superfluous proof demanded by the appellants that he was indeed incorporated. The issue of the plaintiff’s incorporation and consequent “existence” was for that trial a non-issue because what was admitted needed no proof.” (S.75 of Evidence Act. 1990).
I have carefully considered the two arguments canvassed above and must say that regardless of whether the respondent was duly incorporated as a limited liability company or not, there can be no question of his being a legal person or a juristic person in this case. That is because respondent’s name on the writ of summons “EMOSTRADE LIMITED” is prima faciei a limited liability company, and therefore a juristic person. See the case of Agbonmagbe Bank Ltd. v. General Manager G. B. Ollivant Limited & Anor (1961) 1 All NLR (Pt.1) 116 where in a Statement of Claim 1st defendant was named as “General Manager, G. B. Ollivant Ltd.” Preliminary objection that such name was not of a person known to law; such a person could not be sued, and ought to be struck out of the action. It was held that there was no misnomer of 1st defendant as that was not a case where the defendant had been sued in a wrong name. First defendant was not a juristic person, and as such could not be sued. First defendant’s name was accordingly struck out from the action. It was further held that in case of misnomer, if application was made to amend the writ by substituting the proper name, it should be granted.
In the instant case, the appellants who were the defendants were not complaining that they had no juristic personality, and so should be struck out of the action. They also did not file any preliminary objection at the court below for the plaintiff to be struck out of the suit for being a non-juristic person, which could have been the end of the matter.
In any case, regardless of whether the respondent was or was not a limited liability company, on the appellants’ own admission, the respondent was a partnership. It was a Registered Business Name. It was also accepted by the appellants themselves that the Account No.05474 was their own and was held by Chief Victor Ndoma Egba (P.W.1.) who was the sole signatory to the account. So what were the appellants quarrelling about? That respondent did not incorporate his business under the Companies & Allied Matters Act 1990. And how did that prejuce them? And in what way did the appellants suffer any loss? None. To put it briefly, this was, in my respectful view a case of misnomer of plaintiff, which with leave of the Court could be cured by amendment. The writ of summons could have been amended by showing the plaintiff to be “Chief Victor Ndoma-Egba (Trading under the Name and style of “Emostrade”.) This is if truly the plaintiff had not been incorporated. But, if, on the other hand the respondent had actually been incorporated, but failed for one reason or the other to lodge his certificate of incorporation with the bank, that should not be any business of the appellants, as long as the same man was still the signatory to the Account. Finally, on this issue, one must refer to the recent case of A. B. Manu & Co. v. Costain (W.A.) Ltd. (1994) 8 NWLR (Pt. 360) 112, where the appellant had contended that he knew the respondent as “Costain (West Africa) Ltd., and not as “Costain (W.A.) Ltd.” It contended therefore that the respondent was not competent to institute the action in the name it proffered.
In unanimously dismissing the appeal, it was held inter alia as follows by the Court of Appeal, Lagos Div.
“Misnomer can be said to be a mistake in name – giving incorrect name to person(s) in the writ of summons. It occurs when a mistake is made as to the name of a person who sued or was sued or when an action is brought by or against the wrong name of a person. In the instant case, going by the facts contained in “Exhibit 31” of a letter written by the appellant to the respondent, the words “West Africa” were therein abbreviated. It cannot therefore be said that the appellant did not know that Costain (W.A.) Ltd means no other thing, that Costain (West Africa) Limited.
In conclusion it was held at P.121 of the report as follows:-
“On Nature of misnomer that can vitiate proceedings:-
When both parties are quite familiar with the entity envisaged in a Writ of Summons, and could not have been misled or have any real doubt or misgiving as to the identity of the person suing, then there can be no problem of mistaken identify to justify the striking out of the action. Misnomer that will vitiate the proceedings would be such that will cause reasonable doubt as to the identity of the person intending to sue or be sued.
In the instant case, both parties are ad idem as to the identity of the party suing, that is the respondent and there is no misnomer whatsoever of a nature that could vitiate the proceedings at the trial court”.
In view of the foregoing, I hold the view that the name of the respondent on the writ was a mere misnomer which did not and could not vitiate the proceedings. Issue No.1, must therefore be resolved in favour of the respondent.
Re Issue (ii)
“Whether the plaintiff if it is a legal person capable of suing the defendants had at the trial established by evidence any privity of contract between it and the defendants to sustain the suit.”
Under this issue, the main point canvassed on behalf of the appellants was that a limited liability company was known only by the name by which it is incorporated (Section 37 of the Companies and Allied Matters Act, 1990 was cited in support).
It was only in that name that it could contract or do business. It was then submitted that the respondent having failed to produce its certificate of incorporation, if indeed it had one, there was no proof that as at the date the account was opened which was 18th May, 1987 (as per Exhibit 17) there was in existence any company called Emostrade Ltd. which could contract with anyone of the defendants. It was further submitted that the plaintiff company, even if it existed, not being the holder of account No.05474, could not compel the defendants to give it any information relating to that account, and cannot sustain a suit to enforce such an obligation or to claim damages for breach of contract by virtue of purported refusal by the appellants to oblige it. (The case of U.B.N. Ltd. v. Penny-Mart Ltd. (1992) 5 NWLR. (Pt.240) 228 at 240 was cited in support.
In reply to the above it was submitted that evidence of Privity of contract between the plaintiff and the defendants at the trial were replete. Simply put, the privity of contract that the appellants would be searching for will be no more than a convincing nexus between both parties to show that the defendants held something of the plaintiff, over which that plaintiff could complain, and to which complaints the appellants ought to be answerable, or at least sensitive. Reference was then made to the evidence of D.W.1, at p.47 lines 16-19 of the records to show that all the above requirements were established. At the said p.47 of the records, D.W.1, was recorded as saying as follows:-
“Account No.5474, yes there is and is in the name of Emostrade Ltd. Ledger is with the bank.”
Attention was also drawn to the evidence of the same D.W.1, at p.47 lines 23 – 27, where he said that there were other documents relating to account No.5474, but which were not tendered to show that Emostrade was different from Emostrade Ltd. The court was therefore urged to overrule the submissions of the appellant under this issue and disallow the appeal.
I have carefully considered all the arguments canvassed above by learned counsel on both sides, and must first observe that the admission of D.W.1 under cross-examination at p.47 of the records that:
“Accounts No. 5474, yes there is and in the name of Emostrade Ltd. Ledger is with the bank.”
had hit me like a bolt from the blues, because it ran counter to the case of the appellants as stated in their pleadings, especially paragraph 5, which reads as follows:-
“The plaintiff is not known to the 1st defendant as its customer at its Calabar Branch. Emostrade Limited is not its Customer”.
It is our law that evidence that was not pleaded goes to no issues, and should be ignored (Emegokwe v. Okadigbo (1973) 4 S.C. 113 at 117). On the other hand, there is a presumption in our law that the record of proceedings in a case is deemed to be correct; especially as there has been no application to rectify any inaccuracy in it. An appeal should be fought on the basis that the record is correct. Ehikioya v. C. O. P. (1992) 4 NWLR (Pt.233) 57 at 74; and Ojeme v. Momodu (1994) 1 NWLR (Pt.323) 685 at 697.
Be that as it may, it is my firm view that even if one is to ignore the unfortunate admission at p.47 of the record, and go by what has been the case of the appellants all along, namely that their account No.05474 is held by “Emostrade” and not by the present plaintiff who calls himself “Emostade Ltd” one will still come to the inevitable conclusion that there is or was privity of contract between the appellants and the respondent, and that the respondent has a locus standi in this case. This is so because it is common ground (from the records) that respondent first opened account No.05474 in 1981 under his personal name of “Victor Ndoma-Egba” simpliciter. As an individual, he was the sole signatory to that account. Then in 1987 he converted himself into a sole partnership under the business name of Emostrade. In this new name he continued to be the sale signatory as Victor Ndoma-Egba. This Victor Ndoma Egba is the P.W.1, in this case. Then on a date that has not been specified, P.W.1, once more converted himself into a limited liability company under the name of “Emostrade Limited” with Victor Ndoma-Egba (P.W.1.) as its Chairman and also still the sale signatory. In the normal course of events P.W.1, should have informed his bankers (the appellants) about his change in status or incorporation into a limited liability company, and also would have been required to lodge a copy of his certificate of incorporation with them. But for a reason that was not known, these steps were not taken before the incidents leading to this appeal took place. The question then arises. What prejudice if any have the appellants suffered as a result of the failure of respondent to inform them of his new status as a corporate personality? As far as anyone can see, there was none, because the relationship of Banker and Customer still subsisted between the parties. As long as that relationship existed, the appellants cannot be heard to complain that there was no privity of contract between the respondent and themselves, merely because their records had not been amended. It is common knowledge that a limited liability company is entitled to the benefit of all the pre-incorporation contracts entered into by its human agents before it was incorporated.
In the instant case, Chief Victor Ndoma Egba (P.W.1.) was clearly one of the human agents of either “Emostrade” or “Emostrade Limited”. The partnership or company was entitled to the benefit of whatever banking contract there might have been between the appellants and the respondent’s Chairman, (P.W. 1.). In this connection reference must be made to the case of New Nigeria Bank Ltd. v. Boardman Odiase (1993) 8 NWLR (Pt.310) 235. In that case the respondent had sued the appellant for N750, 000.00 being special and general damages for diverting Foreign Exchange Approval granted by the Central Bank of Nigeria for his (respondent’s) benefit to the benefit of a total stranger. The defendant/appellant later raised a preliminary objection complaining inter alia that “the plaintiff has no “locus standi” in this suit in that there was no privity of contract between the plaintiffs and the defendant.
The learned trial Judge at the Court below, Obi, J. held that respondent had a “locus standi” to sue, as he was clearly a disclosed principal while his mother, Mrs. Obasuyi and Dr. Aimuwu, through whose account the Foreign Exchange application was made, were his agents. As to whether consideration was given or not given, he held that the “charges” which the bank was bound to charge at the end of the transaction was the consideration. On appeal to us at Benin Division, we accepted and affirmed the ruling of the court below. We also added that even if there had been no breach of contract, there was a serious breach of trust. Under our law there was nothing that prevented a beneficiary from suing a trustee for breach of trust.
In view of the foregoing, I hold that since P.W.1. was clearly the agent of the respondent in all his transactions with the appellant, in respect of account No.05474, there was clearly privity of contract between respondent and the appellants to sustain the suit. Issue No. (ii) must therefore also be answered in the affirmative.
Re Issue (iii):
“Whether if the plaintiff is a legal person and proved the privity of contract) the plaintiff also proved any breach of contract against the defendants to warrant an award of N2, 500,000.”
Under this issue, the contention of the appellant was that there was no evidence on record to show that the appellants were in any way accountable to the respondent as all the documents tendered as Exhibits 1 – 15 concerned accounts said to behold by Victor Ndoma-Egba and not the respondent – Emostrade Ltd. It was also submitted that there was no evidence that the respondent suffered any loss by the appellant’s alleged refusal to submit to account. The plaintiff has not established his loss.
In response to the above, it was quickly pointed out that there was no ground of appeal that questioned award or quantum of damages – whether excessive or not; or whether awarded on correct principles of law or not.
Not having appealed against damages, it was not therefore open to the appellants to formulate an Issue that questioned award of damages.
I have carefully considered the two arguments canvassed above, and must agree with the learned counsel for respondent that an issue for determination formulated in a brief must arise and be founded on a ground or grounds of appeal filed; and parties to an appeal will not be allowed to argue any issue not covered by the grounds of appeal. Such an issue becomes irrelevant and incompetent and must be struck out.
See e.g.
- Onifade v. Olayiwola (1990)7 NWLR (Pt.161) 130 at 157.
- Momodu v. Momoh (1991)1 NWLR (Pt.169) 608 at 620 – 621.
- Labiyi v. Anretiola & Ors (1992) 8 NWLR (Pt.258) 139.
However, in the instant case, while there was clearly no ground of appeal against “quantum” of damages, nor even the principle of the award, there was definitely ground 3, which questioned the appropriateness of awarding damages to a person who has suffered no loss. This argument was founded on the thesis that all the documents tendered as Exbts. 1 – 15 in this case transpired between the appellants and Chief Victor Ndoma-Egba, and not with the plaintiff on record “Emostrade Ltd” This issue, I must observe is very similar to the last issue in which it was argued that there was no privity of contract between the appellants and the plaintiff – Emostrade Ltd., but with Chief Victor Ndoma-Egba. That issue was resolved in favour of the respondent because of the fact that Chief Victor Ndoma-Egbe, by virtue of being the Chairman of respondent Company, was clearly the human agent or alter ego of the respondent, who “ipso factor” was entitled to the benefit of all the pre-incorporation contracts entered into between Chief Victor Ndoma-Egba and third parties. By parity of reasoning therefore all the documents exbts 1-15, written between appellants and Chief Victor Ndoma-Egba, were “ipso facto” written between the appellants and respondent as the disclosed principal of Chief Victor Ndoma-Egba. In the same way the respondent could take the benefit of any contract entered into between Chief Ndoma-Egba and third parties, it can also take the benefit of damages awardable to Chief Victor Ndoma-Egba, who was its human agent in respect of all the transactions complained of. This issue must therefore also be resolved in favour of the respondent namely that damages were properly awarded in favour of the respondent as the principal of Victor Ndoma-Egba (P.W.1.) in this case.
With issues (i) to (iii) of appellants having been resolved in favour of the respondent it becomes unnecessary to consider the lone issue formulated by the respondent. This appeal therefore fails and is accordingly hereby dismissed with costs assessed at N3, 000.00 in favour of respondent.
Other Citations: (1997)LCN/0306(CA)