DiamonF. OGBUAGU, JSCd Bank V. Partnership Investment Co. Ltd (2009)

LAWGLOBAL HUB Lead Judgment Report

F. OGBUAGU, JSC

This is an appeal against the decision of the Court of Appeal, Lagos Division (hereinafter called “the court below”) delivered on the 19th December, 2002 dismissing the appeal of the Appellant to it and affirming the Judgment of the trial High Court – per Rhodes-Vivour, J. (as he then was) delivered on 12th April, 2000.

Dissatisfied with the said decision, the Appellant has further appealed to this Court It filed two separate Notices and Grounds of Appeal firstly, on 20th December, 2002 with two Grounds of Appeal and the second one on 8th January, 2003 with three Grounds of Appeal and which without their particulars, read as follows: .

“GROUND 1

The learned Appellate Judges (sic) erred in law and thereby came to a wrong decision when they held at page 12 of the judgment that: “it has been shown that Appellant owed the 1st Respondent a duty of care, it has been shown that Appellant has breached this duty. Damage as a result of the breach had equally been proved. Appellant should not have paid the 2 cheques without the prior confirmation in writing of the 1st Respondent”

GROUND 2

The Court of Appeal erred in law in upholding the judgment of. The trial court on the award of interest when it held at page 13 of the judgment that:

“the writ contains principal sum and the rate of interest for which recovery the (sic) action was commenced. Thus the fact as contained in the writ had become subsumed in the Statement of Claim”.

GROUND 3

The learned Court of Appeal erred in law in holding that the Appellant was negligent”.

The facts of the case briefly stated are that the 1st Respondent, was a Customer of the Appellant and maintained a Current Account with its Marina Branch, Lagos. On 28th December, 1994, the 1st Respondent requested the Appellant, to issue two (2) separate bank cheques otherwise called “Manager’s Cheques” one in the sum of N11,000,000.00 Eleven Million Naira) in favour of Eko Fisheries Ltd. and the other, in the sum of N6,250,000.00 (six Million Two Hundred and Fifty Thousand, Naira) in favour of first Yield Investment Ltd. The said cheques, were subsequently, delivered to the Beneficiaries. The Managing Director of the 1st Respondent (PW1), orally, requested the Manager of the Appellant – (DW3), not to pay the two cheques without a confirmation and clearance from the 1st Respondent. The said Manager, demanded that the request, be reduced in writing and this was done vide its letter dated 29th December, 1994 – (Exhibit C). However, when the cheques were presented for payment by the said Beneficiaries, the Appellant paid the two cheques through the 2nd Respondent in spite of or contrary to the said instructions in Exhibit C. The case of the Appellant or contention, is that the cheques being Certified Bank Drafts, were honoured on presentation. The Appellant pleaded that the value of the cheques, was on purchase, debited against the buyer’s Account thus making the Appellant, the Drawer or the cehques. Therefore, the 1st Respondent, was not in a position to give further instructions regarding the payment In other words, the Appellant alleged that being Bank Drafts, the 1″ Respondent cannot or could not and had no power, to countermand on them or to request the Appellant, to confirm the drafts before payment is/was made, against them. I note that the 2nd Respondent’s case, was that it properly discharged its duty as a “Collecting Bank”. By a Writ of Summons, the 1st Respondent claimed against the Appellant and the 2nd Respondent jointly and severally as follows:

“1 The sum of N6,2S0, 000.00 (Six million, two hundred and fifty thousand naira) being money received by the Defendants in negligently cashing the bank Draft made out by the 1st Defendant for the Plaintiff.

2. The sum of N11,000,000.00 (Eleven Million Naira) against the 1st Defendant only being money negligently paid by it despite the Plaintiffs subsisting countermand and direct instructions not to pay until confirmation is given by the Plaintiff.
3. Interest from the 29th day of December, 1994 at the rate of 21% per annum until date of judgment and at the rate of 6% per annum till final liquidation.
4. Sum of N2,000,000.00 (Two Million Naira) being general damages following (sic) from the said negligently paid and cashed cheque by the Defendant”.

Pleadings were filed and exchanged by the parties. After the hearing,the learned trial Judge, found in favour of the 1st Respondent and entered judgment accordingly. His Lordship, however, refused the claim for general damages and dismissed the case against the 2nd Respondent. Aggrieved, by the said Judgment, the Appellant unsuccessfully, appealed to the court below which dismissed the appeal, hence this instant appeal.

The Appellant has formulated three (3) issues for determination namely: