Bank Of America (National Trust And Savings Association) V Nigerian Travel Agencies Ltd (1967)
LawGlobal-Hub Lead Judgment Report
This is an appeal from the decision of Alexander J. In the Lagos High Court on the 12th October, 1964, in which he allowed the appeal of the defendants against the decision of Mr. A. R. Bakare. Chief Magistrate, who had entered judgement for the plaintiffs for the sum of £230 and costs. The learned Judge of appeal dismissed the plaintiffs’ claim with costs.
The plaintiffs claim was as follows-
“The plaintiffs’ claim as holders in due course of two cheques drawn by the defendants upon their account at Barclays Bank D. C. O., 55 Marina, Lagos, in favour of one T. A. N. Cockram and which cheques were endorsed by the said T. A. N. Cockram in blank to the plaintiffs for valuable consideration.
The said cheques were dishonoured on presentation to the said bank and were returned to the plaintiffs marked-” payment stopped.”
PARTICULARS OF CHEQUE
No. 66/A091286 dated 27-9-62
No. 66/A091284 dated 27-9-62
The facts were that the defendant company authorised two persons, one called Cockram who was the manager, and the other called Ajayi who was a director, to sign jointly cheques on behalf of the company. On the 7th of September, 1962, the 1st at defence witness (N. P. Roberts), who was another director of the company, dismissed Cockram with two months notice. On the 27th of September, 1962, Roberts went to the Manager of Barclays Bank D. C. O., 55 Marina, Lagos, and informed him that as Cockram had been dismissed and was leaving Nigeria the next day, he was withdrawing Cockram’s authority as signatory of the cheques of the company. Roberts then returned to the offices of the company and informed Cockram that he had withdrawn the authority of Cockram to sign cheques for the company and that he should leave and pack. On the 27th of September, 1962, however, these cheques were signed by Ajayi and Cockram on behalf of the company, and whilst the company was willing to honour four of them, two, which in fact were made out in Cockram’s name were endorsed by Cockram to the Bank of America, Lagos and used by him to purchase traveller’s cheques, but these two cheques were subsequently dishonoured being endorsed “payment stopped.”
It is the case for the plaintiffs/appellants that as they are holders in due course, the defendants are liable to pay on the cheques, but the defendants rely on section 24 of the Bills of Exchange Act and claim that the cheques were forged, and that, therefore, they are not liable. Now the main ground of appeal is whether the learned judge of appeal was right to hold that the cheques were forged. After some argument it eventually resolved itself in the main into a question of fact as to whether when the cheques were signed, the authority of Cockram to sign on be-half of the company had been withdrawn. If it had been, then it was submitted that they were forgeries. There was evidence given by Roberts that he went to Barclays Bank at 8.a.m. and withdrew the mandate to accept cheques with Cockram’s signature on behalf of the company, and at about 9.15 a.m., he dismissed Cockram and then left the offices of the company at 9.30 a.m. Roberts said that Cockram did not sign any cheques between 9.a.m. and 9.30 a.m. Ajayi said in his evidence that he signed the two cheques, which in fact were later dishonoured, at 10. a.m at the request of Cockram whom he did not then know had had his authority to sign withdrawn, as Roberts never informed him (Ajayi) of this till the next day, the 28th of September 1962.
Now if these facts were accepted, then it was dear that Cockram procured Ajayi’s signature after his (Cockram’s): authority to sign had been withdrawn, but Mr. Burke for the appellants maintains that the learned Chief Magistrate never specifically made a finding accepting this evidence; on the contrary, Mr. Burke maintains that the Chief Magistrate showed his doubt by stating in his judgment -” I find the action of the first defence witness hard to understand.” It is necessary to look at the full passage in the judgment rather than to take one sentence in isolation in order to understand what the learned Chief Magistrate was referring to. His judgment in this respect reads as follows-
“Can section 24 of the Bills of Exchange Act avail the defendant/company in the circumstances narrated above? I find the action of the first defence witness hard to understand. Cockram was given notice of termination of his appointment on 7-9-62. His authority to sign cheques jointly with Ajayi was not withdrawn there and then. On 27-9-62, Cockram was dismissed summarily, yet, the first defence witness failed to inform Mr. Ajayi of his action in withdrawing that morning the authority of both Ajayi and Cockram as signatories to the company’s cheques. The company’s cheque book was not immediately taken into custody by the first defence witness. Mr. Ajayi was not given to know at any time that Cockram had been served with notice of termination or that he had been dismissed from the company’s service.
In signing the cheques exhibits A and A1 Mr. Ajayi acted in good faith. The plaintiffs had no notice of the withdrawal of Cockram’s authority to sign the defendant’s cheques. If Cockram’s signature alone had appeared on exhibits A and A1 and the plaintiffs had accepted them as genuine, they would not have been in a position to enforce payment of the cheques. As it is, the signature on the cheques were those of the persons usually authorised to draw the defendant’s cheques and in my view, the defendant/company is precluded from setting up the want of authority on the part of the signatories to avoid payment.
The first defence witness had not done all that a reasonable person should do effectively to withdraw the authority of both Cockram and Ajayi as signatories to the company’s cheques and accordingly, the defendant is liable to the plaintiff/bank.”
We agree with Mr Impey for the respondents that the sentence on which Mr Burke relies does not show that the learned Chief Magistrate was not believing the story of Roberts (the first defence witness), but rather that he thought his failure to take away the cheque books and to notify Ajayi that Cockram’s authority was withdrawn amounted to negligence on the part of Roberts. The learned Chief Magistrate accepted that Ajayi acted in good faith and impliedly found that Cockram did not. We do not therefore consider that Mr Burke was correct in his argument that the evidence as to when the cheques were signed was disbelieved.
Alexander J. considered that the cheques were forgeries and he therefore held that the defendants had established their defence under section 24 of the Bills of Exchange Act. We consider he was right in so holding. In our view, the cheques were false documents within the meaning of section 464(b) of the Criminal Code, which reads-
“A document or writing is said to be false if the whole or some material part of the document or writing purports to be made by or on behalf of some person who did not make it or authorise it to be made, or if, in a case where the time or place of making is material, although the document or writing is made by or by the authority of the person by whom it purports to be made, it is with fraudulent Intent falsely dated as to the time or place of making, and, accordingly were forgeries within section 465 of the Criminal Code, as the action of Cockram in passing the cheques to the Bank of America and using them to obtain traveller’s cheques for himself, clearly showed his intent that they should be acted upon as genuine, as indeed they were by the unfortunate Bank of America. Mr Impey sought to rely on the case of R. v. Mitchell (1847) 1 Den. 282 as showing the actions of Cockram amounted to forgery, but we do not think it helpful to refer to this case when the words of the Criminal Code, which is what applies In Lagos, are what are material, and when these, in our view, are clear.
Mr Burke sought to rely on Morison v. London County and Westminster Bank Limited 3 K. B. 356 as establishing that these cheques were not forgeries, but in our judgment, that case is not in pari materia as it deals with when a person has authority to sign a cheque on behalf of another yet abuses his right by misapplying the proceedings. That is not the position here where the issue is whether or not Cockram had authority to sign the cheques at all at the time he and Ajayi did so.
Mr Burke did also submit that there was no evidence that Roberts had the power to withdraw the authority to sign cheques on behalf of the company from Cockram, but Mr Impey rightly, in our view, pointed out that Ajayi, another director, said “first defence witness is in control of day-to-day running of the company, and he decides who the signatories of the company’s cheques shall be”, which answers this objection. The appeal is accordingly dismissed with 33 guineas costs.
Other Citation: (1967) LCN/1483(SC)