Eco International Bank PLC V. Nigeria Union Local Government Employees, Jalingo Lgc & Anor (2014)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

ADAMU JAURO, J.C.A. (Delivering the Leading Judgment)

The appeal herein is against the judgment of the Taraba State High Court of Justice, delivered on 7th July, 2011 in suit No. TRSJ/147M/2012.

The facts culminating in this appeal can be neatly compressed as follows: The 1st respondent applied for and was granted a term loan facility by the appellant vide a letter dated 6th November, 2007. The loan was for N35,000,000.00 to be disbursed to the members of the 1st respondent for the purpose of investing it in agricultural produce.

The loan was guaranteed by a letter of irrevocable standing payment order given by the 2nd respondent for a monthly deduction of N2,482,209.44 from the subvention account of the 2nd respondent for 16 months to service the loan. By the same letter, the 2nd respondent guaranteed a continuous domiciliation of its subvention account with the appellant throughout the tenure of the loan.

Repayment of the loan was however not effected within the stipulated time and as at 25th January, 2011, the unpaid outstanding balance was N14,359,759.38.

Consequent upon the foregoing, the appellant as plaintiff instituted an action under the undefended list procedure against the 1st and 2nd respondents and claimed for the following reliefs:

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“1. The sum of N14,359,759.38 (Fourteen Million, Three Hundred and Fifty Nine Thousand, Seven Hundred and Fifty Nine Naira and Thirty Eight Kobo), being debt owed to the plaintiff by the defendants from a term loan facility granted to the defendants by the plaintiff.

2. 19% compound interest per annum and 1% default fee per Month on the N14,359,759.38 (Fourteen Million, Three Hundred and Fifty Nine Thousand, Seven Hundred and Fifty Eight Naira and Thirty Eight Kobo), debt beginning from 26th January, 2011 till the date the debt is fully repaid to the plaintiff.
3. Cost of litigation.”

The two defendants were served the originating processes but none of them filed any response by way of notice of intention to defend the action with an affidavit disclosing a defence on the merit. With this development, the appellant as plaintiff applied for judgment pursuant to Order 22 Rule 4 of the Taraba State High Court (Civil Procedure) Rules 1997. In a judgment delivered on the 7th July, 2011 the Lower Court entered judgment in favour of the plaintiff now appellant against the 1st defendant as follows:

“on the whole, judgment is hereby entered for the plaintiff as per writ of summons pursuant to Order 22 Rules 4 of the Rules of this court as follows:

1. In the sum of N14,359,759.38 owed to the plaintiff by the 1st defendant/respondent balance from a term loan facility granted to the 1st defendant by the plaintiff.
2. 19% interest per annum and 1 default fee per month on the said sum from judgment until final liquidation of the said sum.”

The Lower Court however exculpated the 2nd defendant from any liability in the following words:

“…..there is no facts to the effect that the second Respondent/Defendant’s account is no more domiciled with the applicant/plaintiff, then the second Respondent/Defendant cannot be jointly liable for default of repaying the loan benefitted by the first Respondent/Defendant”

See page 16 lines 13 to 17 of the record.

Peeved and distressed by the aforementioned portion of the judgment exculpating the 2nd defendant from liability, the plaintiff challenged same vide a notice of appeal dated and filed 6th September, 2011. The said notice of appeal was amended by order of court made on 12th November, 2013. The amended notice of appeal is anchored and predicated upon a solitary ground of appeal.