Aminu Musa Oyebanji V. The State (2015)
LAWGLOBAL HUB Lead Judgment Report
SULEIMAN GALADIMA, J.S.C.
This appeal is against the judgment of the Court of Appeal, Ibadan Division, delivered on the 22nd day of June, 2011. The Court affirmed the conviction and sentence of the appellant by the trial High Court Ibadan Judicial Division handed down on the 30th day of October, 1992. The trial Court found him guilty of stealing the sum of N1,273,093.75 contrary to and punishable under Section 390(9) of the Criminal Code, Cap 30 VOL. II Laws of Oyo State of Nigeria, 1978. The appellant was sentenced to five years imprisonment with hard labour or to pay a fine of N5,000.00 (Five Thousand Naira) in lieu.
Dissatisfied with the decision of the Court of Appeal, Appellant has further appealed to this Court.
The Five grounds of appeal contained in the Appellant’s notice of appeal filed on the 5th July, 2011 with particulars read as follows:
“(I). The Court of Appeal erred in law by holding at page 8 of the judgment as follows:
“It is on record that monies were paid to the Appellant in cash for the purchase of tyres, tubes and granulated sugar. If money given for a specific purpose is neither used for that purpose nor returned on demand or at a reasonable time thereafter, the case comes within the provision of stealing by conversion under the criminal code.”
PARTICULARS OF ERROR
a. There was no evidence of payment of money to the appellant.
b. The appellant is a separate legal entity, different from Baminco Nigeria Limited.
c. There was no evidence from the records that the sum of N1,180,593.75 was given to the appellant.
(II) The Court of Appeal erred in law by holding at page 8 of the judgment as follows:
“I am inclined to agree with the learned counsel for the Respondent’s submission that the contention of the Appellant’s Counsel that the relationship is contractual and that only civil action should be commenced to resolve the subject matter of the dispute is misconceived.”
PARTICULARS OF ERRORS
a. There are evidence on records that the agreement regarding the transaction was between Associated commodities & foodstuffs Nigeria Limited and Baminco Nigeria Limited.
b. The learned Justices of the Court of Appeal should have in view of the evidence of witnesses and exhibits at the lower court, hold that there was a contractual relationship between two corporate entities and that the question of stealing does not arise.
(iii) The Court of Appeal erred in law by holding at page 9 of the judgment as follows:
“In my opinion, this is a case in which the law should disregard the corporate entity and pay regard to the entities behind the legal veil of incorporation. Allegation of Crime lifts the veil of corporate or voluntary association and opens up the body to prosecution upon good substantial facts placed before a competent jurisdiction.”
a. The learned trial Judge and the Justices of the Court of Appeal did not follow the due procedure in law in lifting the veil of the company suo motu and thereby caused a miscarriage of justice to the appellant.
b. The learned Justice of the Court of Appeal wrongly lifted the veil of Baminco Nigeria Limited and upheld the conviction of the appellant because he is a director in Baminco Nigeria Limited.
(IV) The learned Justice of the Court of Appeal wrongly upheld the conviction of the Appellant on the ground that the letter of credit had lapsed on 10th of April, 1987.
PARTICULARS OF ERROR:
a. The learned Justices of the Court of Appeal erred in law on page 11 of the Judgment of the court as follows:
“The lower court has rightly lifted the veil of incorporation having found that the Appellant was dishonest from the evidence before it. At page 74 lines 27-33 of the record, the learned trial Judge found as follows: As there was no existing letter of credit after 10th April, 1987 the money collected under Exhibits 6 and 7 was fraudulent when no goods were forthcoming. Associated Commodities caused their Solicitor as per Exhibit ‘8’ to write Baminco demanding the supply of the goods or the refund of the money paid. Neither was effected till date.”
b. There were enough evidence on records establishing that the Letter of credit was opened by Baminco Nigeria Limited through Nigeria Merchant Bank Lagos in favour of Trappofin S.A Switzerland.
c. The letter of credit was not intended to be deployed to steal from Associated Commodities & Foodstuffs (Nig) Limited.
d. That on the contrary the opening of the letter of credit was enough evidence that Baminco Nigeria Limited, genuinely through its Managing Director, the appellant, entered into a lawful and valid contractual transaction.
e. That the fact that the letter of credit was not renewed beyond 10th April, 1987 was not in law improper as to amount to an intention to steal.
(V). The Court of Appeal was wrong in law in upholding the conviction of the appellant when the prosecution has failed to discharge the one upon it to prove the guilt of appellant beyond reasonable doubt.
PARTICULARS OF ERROR
a. The evidence relied upon by the Court of appeal are not sufficient to affirm the conviction of the Appellant.
b. The Appellant was an agent of disclosed principal and cannot in law be personally held liable on a contract he entered into on behalf of his principal when there is no evidence that the appellant had acted outside the scope of his authority.
c. The ingredients of the offence of stealing were not proved by the evidence at the trial court.
Briefs of argument were filed and exchanged by the parties.
In the appellant’s brief settled by his learned counsel, Adekunle Ojo Esq. and filed on 2/11/2011, the following 4 issues were identified for determination of the appeal:-
“1. Whether or not the learned Justices of the Court of Appeal and the trial Judge followed the legal procedure in lifting the veil of Baminco Nig. Limited suo motu.
- Whether or not it is a misconception in law of the Court below to hold that the failure of a contracting company in an ongoing commercial transaction to renew a letter of credit amounts to an intention to defraud by one of its director.
- Whether or not the transaction for which the Appellant was tried and convicted was purely civil and a contractual relationship between Association Commodities and Foodstuffs (Nig.) Ltd and Baminco Nigeria limited.
- Whether the prosecutor proved the guilt of the appellant beyond reasonable doubt.”
In the Respondent’s brief settled by his counsel, M.O. Adebayo, Hon. Attorney-General of Oyo State Ministry of Justice and deemed filed on 24/3/2013, a lone issue was raised for the consideration of the appeal thus:
“2.01. Whether the lifting of the veil of Baminco (Nig.) Limited by both the trial Court and the Court below as the plank for the conviction and sentence of the appellant was not right in the circumstances of this case.”
The appellant’s learned counsel deemed it necessary to file a Reply brief and this he did on 10/10/2012.
At this stage, I think it is proper to summarize the facts of this case. An agreement was entered in 1986 between BAMINCO (NIG.) LIMITED and ASSOCIATED COMMODITIES and FOODSTUFF (NIGERIA) LIMITED. The Appellant was the Managing Director of the former company which was approached by the officers of the latter company to assist them to import tyre, tubes and granulated sugar, as they could not secure foreign exchange to procure these goods. For this reason a total sum of N1,180,593.75k (One Million, One Hundred and Eighty Thousand, Five Hundred and Ninety Three Naira, Seventy-Five Kobo) was paid in several installments on certain dates to the Appellant.
A letter of credit was issued in favour of the Appellant by the Nigerian Merchant Bank which expired on the 10th day of April, 1987, even before the Appellant collected the 2nd payment, which was evidenced by Exhibit 7 from the Associated Commodities and Foodstuff (Nig.) Ltd. The letter of Credit was never renewed. After repeated demands, which the appellant ignored a report was lodged with the police which culminated into arraignment before the Oyo State High Court, Ibadan. As I have stated earlier, the appellant was convicted and sentenced for stealing by the trial court, and the court below affirmed the conviction and sentence.
On the 19th day of March 2015, when this appeal was heard, learned counsel for the parties adopted their briefs of argument. Without further adumbrating on the issues raised for determination, appellants’ counsel urged the court to allow the appeal whilst the respondent’s counsel urged that the appeal be dismissed for lacking in merit.
I am often bewildered why in a simple matter like this; learned counsel for the appellant would deem it necessary to proliferate issues in his brief; a practice this court loathes. In the court below two issues formulated by the parties were similar. The court rightly considered the respondent’s two issues. It was the decision based on those issues that the appeal to this Court was predicated. In this appeal, I am of the respectful view that a sole issue raised by the respondent herein is apt and it suffices for my determination of the appeal.
The totality of the arguments put up by the learned counsel for the appellant on all the 4 issues he raised for determination dovetails with one another. The summary of these arguments and submissions are as follows:
(i) That the prosecution failed to prove that the specified sum of N1,273,093.75 contained in the charge against the appellant were traced to him and that it was stolen from the Associated Commodities and Foodstuffs (Nig.) Ltd and they were collected by the appellant;
(ii) That the money had passed from Associated Commodities and Foodstuff Limited to Baminco (Nig.) Ltd and there was no evidence adduced that the appellant to the exclusion of every other person had access to the money allegedly stolen;
(iii) That the prosecution did not establish that the appellant acted outside the scope of his authority while acting for his company. Hence he cannot be convicted for working as an agent of a disclosed principal; and
(iv) That the prosecution did not prove that the appellant had a mens rea to steal money belonging to Associated Commodities (supra).
The summary of the above submissions and contentions of the appellant are questioning the proprietary of lifting of veil of Baminco (Nig.) Ltd to get to the appellant who is said to be behind the mask. Hence the rationale behind the formulation of sole issue by the respondent for determination. This issue has earlier been reproduced in this judgment.
Arguing the sole issue, learned counsel for the Appellant, referred to the second count of the charge in the information under which the Appellant was convicted and sentenced by the trial court. He submitted that the appellant was neither charged as a Director or Agent of Baminco (Nig.) Limited nor as a Trustee; but that the ownership of the sum of N1,273,092.75, the subject matter of the said Count II, was traceable to the company that paid it.
It is pertinent to state here that although the appellant was arraigned on a two count charge of obtaining by false pretence and stealing, it was on the latter charge the trial court found him guilty and sentenced him. Court II of the charge reads:
“COUNT II – STATEMENT OF OFFENCE
Stealing contrary to and punishable under section 390(9) of the Criminal Code Laws of Oyo State of Nigeria Cap 30 Vol. II, 1978.
PARTICULARS OF OFFENCE
AMINU MUSA OYEBANJI “M”, between July, 1986 and November 1987 at Molete, Ibadan in the Ibadan Judicial Division stole a total of N1,273,093.75 belonging to the Association Commodities and Foodstuff (Nig.) Limited.”
The definition of stealing is given in Section 383(1)(2)(3) and (4) of the Criminal Code Laws of Oyo State of Nigeria Cap 30 Vol. II, 1978 is given thus:
“(1) A person who fraudulently takes anything capable of being stolen or fraudulently converts to his own use or to the use of any other person, anything of capable of being stolen, is said to steal that thing.
(2) A person who takes or converts anything capable of being stolen is deemed to do so fraudulently if he does so with any of the following interests:
(a) an intent permanently to deprive the owner of the thing of it;
(b) an intent permanently deprive any person who has any special property in the thing of such property;
(c) an intent to use the thing as a pledge or security;
(d) an intent to part with it on a condition as to its return which the person taking or converting it may be unable to perform;
(e) an intent to deal with it in such a manner that it cannot be returned in the condition in which it was at the time of the taking or conversion;
(f) In the case of money, an intent to use it at the will of the person who takes or converts it, although he may intend afterwards to repay the amount to the owner.
(3). The taking or conversion may be fraudulent, although it is effected without secrecy or attempt at concealment.”
(4). In the case of conversion, it is immaterial whether the thing converted is taken for the purpose of conversion or whether it is at the time of the conversion in the possession of the person who converts it. It is also immaterial that the person who converts the property is holder of a power of attorney for the disposition of it, or is authorised to dispose of the property.”
It is not disputed that the various sums of money was paid to the appellant for the purpose of purchasing, tyres, tubes and granulated sugar. The question, however, is whether there is basis for inferring fraudulent intent by the appellant to covert the money to his own use.
To sustain a charge of stealing against the appellant, the prosecutor must prove:
(i) That the things stolen is being capable of being stolen:
(ii) That the accused has intention of permanently depriving the owner of the things stolen.
(iii) That he was dishonest and
(iv) That he had unlawfully appropriated the thing stolen to his own use.
See MUHAMMED vs. THE STATE (2000) FWLR (pt.30) 2623 at 2626.
The evidence of witnesses called by the prosecution, particularly PW 1 – PW 6 and numerous exhibits tendered at the trial court, corroborate that the fact that appellant was paid various sum of money to import tyres, tubes and granulated sugar on behalf of the Associated Commodities and Foodstuffs Ltd.
PW2, Juliana Titilope Raimi at page 30 lines 23-31 of the record stated as follows:
“On 19th March, 1987 my company paid accused N516,000.00 for the purpose of ordering tyres and tubes for my company. Also in June 1988 my company paid another sum of N606,093.75 to accused’s company for granulated sugar. Accused did not issue a receipt in respect of the first payment of N516,000.00k. Accused issued a receipt in respect of the second payment of N606,093:75k after much pressure.”
The question is did the appellant keep to terms of agreement to supply the goods PW2 on page 31 of the record gave evidence in the negative thus:
“Up till now my company has not recovered any tyre or tube in respect of the first payment of N516,000.00 nor has my company received the payment made to the accused bank. In respect of the 2nd payment my company has not received any supply of granulated sugar nor has received a refund of the money paid.”
The conduct of the appellant is reprehensible. He failed to supply the goods. He did not; neither did he refund the money he collected. The learned trial judge found as follows:
“I therefore find proved that monies paid to the accused for specific purpose i.e. for the purchase of tyres, tubes and granulated sugar had not been utilized for that purpose. Learned counsel for the accused argued that the accused is not liable and that the company BAMINCO is liable. The role of a corporation is well stretched out by Viscount Haldane L. C. in LENNARDS CARRYING CO. v. ASIATIC PETROLEUM CO. LTD (1915) A.C. 705 when in delivering judgment he said at pages 713-714.
“My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own, it’s active and directing will must consequently be sought in person of somebody who for some purpose may be called on again, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation.”
The courts below rightly disregarded the corporate entity of the Baminco (NIG.) Limited and paid regard to the entities behind the legal facade or “veil” of incorporation in the interest of justice.
It is in BOLTON ENGINEERING CO. LTD V. GRAHAM & SONS (1957) I Q B 159 at 172-173 that DENNING L.J brought out clearly the human personification of a company where he stated thus:
“A company may, in many ways, be liken to a human body. It has brain and nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the Centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company and control what it does. The state of mind of the company of those managers is the state of mind of the company and is treated by law as such.”
In my respectful view, the veil of corporation ought to be lifted in the interest of justice and in the circumstance of this case. There can be no better instance when the corporate veil can be lifted as in this case. The court will not allow a party to use its company as a cover to dupe, defraud or cheat innocent individual or a company who entered into lawful contract with it only to be confronted with defence of the company’s legal entity as distinct from its directors. As it has been observed elsewhere, most companies in this country are owned and managed solely by an individual, while registering the members of his family as the shareholders. Such companies are nothing more than one-man business! Hence, there is the tendency to enter into contract in such company’s name and later turn around to claim that he was not a party to the agreement since the company is a legal entity. See AKINWUNMI ALADE v. ALICE (NIGERIA) LTD & ANOR (2010) 12 SC (pt. II) 59.
This case at hand is a case in which the law should disregard the corporate entity and pay regard to the entities behind the corporate veil. Section 35 of the Criminal Code Cap. 38 VOL.II Laws of Oyo State 2000 which is in pari materia with Section 35 of the same code 1978, the law applicable at the time of the trial and conviction of the appellant provides thus:
“35. A person, who being a member of corporation, or Joint Stock Company, does or omits to do any act with respect to the property of the co-partnership, corporation, or company, which, if he were not a member of the co-partnership, corporation or company, who constitute an offence is criminally responsible to the extent as if he were not such member.”
By this provision, the allegation of crime lifts the veil of corporate or voluntary associations and unmasks the face of the suspected criminal to face prosecution.
Where the veil is lifted, the law will go behind the corporate entity so as to reach out to individual member of the company whose conduct or act is criminally reprehensible.
I do not agree, with due respect with the contention of the learned counsel for the appellant that the relationship is contractual and that only civil action should be commenced to resolve the subject matter of the dispute. PW 2 stated at page 31 of the record thus:
“Apart from the accused, I do not know of any other directors of the company; he seemed to be all in all of the company.”
In this case fraud is in issue. Money was paid to appellant for specific purpose. He failed to use it for that purpose and did not refund it. Fraud is a criminal offence. It involves criminal act. The offence of stealing is proved against the appellant who dishonestly, unlawfully appropriated the money paid to him. At page 74 of the record, the learned trial judge found as follows:
“As there was no existing letter of credit after 10th April, 1987, the money collected under Exhibits 6 and 7 was fraudulent. When no goods were forthcoming, Associated Commodities caused their solicitor as per Exhibit ‘8’ to write BAMINCO demanding the supply of the goods or the refund of the money paid. Neither was it effected till today.”
The appeal is against the concurrent findings of the two lower courts. This court does not make a practice of interfering with such concurrent findings of facts unless the findings are perverse or there are circumstances to warrant same. The Appellant has not shown any of these. In the circumstance, I cannot disturb the findings.
In sum, this appeal lacks merit. It is dismissed. The judgment of the court below is affirmed. In consequence, the conviction and sentence of the appellant is hereby affirmed.
SC.374/2011