African International Bank Ltd. V.lee & Tee Industries Ltd. & Anor (2003)

LawGlobal-Hub Lead Judgment Report

AMINA ADAMU AUGIE, J.C.A. 

This is an appeal against the judgment of Dorubo Narebor, J. in suit No. W/220/90, delivered on the 19th of September, 1996. The appellant was the defendant before the High Court in Warri and the respondents, the plaintiffs and they will hereinafter, be referred to by the same description.

The plaintiffs are customers of the defendant bank. On the 29th of October, 1987, the defendant granted the 1st plaintiff a loan of 2.9 Million Naira to purchase flour. The 2nd plaintiff was the surety and his property was used as security by a Deed of Mortgage registered as No. 23 at page 23 Vol. 739. The plaintiffs did not pay the proceeds of the sale of the flour into the 1st plaintiff’s account with the defendant bank as agreed upon, rather they diverted the proceeds into the account of J. E. Ziregbe (Nig.) Limited at the New Nigeria Bank.

The defendant then sued the plaintiffs and two other persons to recover a total sum of N3,130,182.77, being principal and interest. The suit was eventually settled out of court and the terms of settlement were made the judgment of the court. Pursuant to that judgment, the plaintiffs paid the sum of N2.7 Million Naira leaving a balance of N430,182.77, which the defendant thereafter converted into a loan, and secured with the 2nd plaintiff’s landed property.

The legal mortgage earlier registered in respect of the original loan was upstamped and registered as No. 11 page 11 Vol. 745. The 1st plaintiff has since then paid nothing out of the said balance. When the defendant advertised the mortgaged property for sale, the plaintiffs commenced this action in the High Court, Warri, claiming the reliefs set out in paragraph 15 of the statement of claim.

“15. WHEREFORE the plaintiffs claim:

i. A declaration that the mortgage Deed, dated 19th October, 1987, entered into between the plaintiffs and the defendant and registered as No. 11 at page 11 in Vol. 745 and No. 23 page 23 Vol. 739 of the lands (sic) in the office at Benin City is null and void and of no effect for non-compliance with the requirements of the Companies Decree, 1968, particularly, section 94 of the said Decree.

ii. A declaration that the defendant cannot sell the plaintiff’s landed property at Akusu Avenue, in Kodesoh Layout, Effurun, within the jurisdiction of Warri High Court, when the defendant has not proceeded against the principal debtor – Lee & Tee Limited.

iii. A declaration that the defendant cannot sell the 2nd plaintiff’s landed property at Akusu Avenue in Kodesoh Layout, Effurun, within the jurisdiction of Warri High Court, when the amount allegedly owing by the defendant has not been specified.

iv. A declaration that the defendant cannot sell the plaintiff’s landed property at Akusu Avenue in Kodesoh Layout, Effurun, when the relevant provisions of the Land Use Decree (Decree No. 61,1978) have not been complied with, particularly, sections 22, 23 and 26 of the said Decree.

v. Order of perpetual injunction restraining the defendant, her servants, agents, and privies from selling or tampering in anyway with the 2nd plaintiff’s properties at Akusu Avenue, Kodesoh Layout, Effurun, within the jurisdiction of the Warri High Court.

vi. N250,000.00 (Two Hundred and Fifty Thousand Naira) general damages suffered by the plaintiff’s, when on the 23rd July, 1990, the defendant unlawfully and wrongfully published in the Guardian Newspapers of that said date at page 13, offering for sale to the general public, the plaintiff’s landed properties at Akusu Avenue, in Kodesoh Layout, Effurun, within the jurisdiction of Warri High Court, a publication which was designed not only to embarrass the plaintiffs, but also to ruin their business. The defendant knew or ought to know that it has no right to sell.

vii. In the alternative, a declaration that the defendant cannot sell (if it has a right to sell) the plaintiffs properties at Akusu Avenue in Kodesoh Layout, Effurun, less than the sum of N723,000.00(Seven Hundred and Twenty-three Thousand Naira), being the value of the said properties as at 10-4-89, as per valuation report by Ochonogor & Co., which valuation was accepted by the High Court, Warri unchallenged as per the ruling of the said court dated 18th July, 1989, in suit No. W/222/87 Bank of Credit and Commerce International (Nigeria) Limited v. Lee & Tee Industries Limited and Others.

viii. An order compelling the defendant to return to the plaintiffs the title Deeds registered as No. 37 at page 37 in volume 267 in the lands office in Benin City.