I. Egbunike & Anor. V. African Continental Bank Ltd. (1995)

LAWGLOBAL HUB Lead Judgment Report

ADIO, J.S.C. 

The respondent’s claim against the appellants, jointly and severally, in the High Court of Justice, Anambra State of Nigeria was, as stated in paragraph 18 of the Amended Statement of Claim, as follows:-

“(i) the sum of N800,312.28 (eight hundred thousand three hundred and twelve naira twenty-eight kobo) balance of overdraft with compound interest at the rate of 10% per annum as at close of business on the 26th November, 1979.

(ii) compound interest at the rate of 10% per annum with monthly rests until the debt is fully repaid or judgment is obtained counting from 27th November, 1979”

Pleadings were duly filed and exchanged. The respondent filed a Statement of Claim which was amended with the leave of the court. The appellants filed a Statement of Defence which was also amended with the leave of the court.

The evidence led by the respondent, a banker, was that the appellants were current account customers of the Abakaliki branch of the bank. Sometime, in 1978, the appellants paid into their account at the bank two cheques made by them in favour of themselves and drawn on the Co-operative Bank of Eastern Nigeria. Before the two cheques were cleared, the first appellant requested for a withdrawal of some funds from the amount for which the aforesaid cheques were issued. He was allowed to do so and in fact did so with the approval or consent of one Mr. Egbunike, the bank manager who happened to be a brother of the 1st appellant. The aforesaid Manager of the bank caused the account of the appellants in the bank to be credited with the amount for which the said cheques were issued and immediately allowed the appellants to withdraw from the account.

The amount that the appellants withdrew was N661,000.00 and the two cheques, which the appellants issued in favour of themselves and which they paid into their current account in the respondent bank, were for the total sum of N678,000.00. It was subsequently discovered that despite the fact that the appellants were allowed by the then Manager of the respondent to withdraw the said sum of N661,000.00 on the same day that they paid the said two cheques for the sum of N678,000.00 which were made by them in favour of themselves, into their account. The aforesaid two cheques for the sum of N678,000.00 were never sent for clearance by the then Manager of the respondent or anybody. They have since then disappeared and nobody knew where they were. In effect, those two cheques were never presented for clearance or for payment. The appellants rested their case on the respondent’s case and did not call any witness to testify for them.

The learned trial Judge, after consideration of the evidence before him and the submissions of the learned counsel for each party, dismissed the respondent’s claim. He held that allegation of fraud or of commission of a criminal offence was the basis of the respondent’s claim and, therefore the provisions of section 137(1) of the Evidence Act applied. The respondent, according to the learned trial Judge, had to prove its case beyond reasonable doubt but, in his view, the respondent failed to discharge the burden.

Dissatisfied, the respondent lodged an appeal against the judgment to the Court of Appeal. The court below allowed the appeal. It set aside the judgment of the learned trial Judge and entered judgment for the respondent. The court below held that the Amended Statement of Defence filed by the appellants did not comply with the rules applying to pleadings. The Amended Statement of Defence was evasive and in some respects equivocal. It pointed out that in one instance, the appellants admitted an averment in the Amended Statement of Claim while in the same Amended Statement of Defence the appellants denied the averment in question. The court below expressed the view that upon a true and fair construction of the Amended Statement of Defence, the reasonable conclusion was that the appellants admitted the respondent’s claim. The court below did not share or endorse the view of the learned trial Judge that the basis of the respondent’s claim was allegation of fraud or of crime and held that even if section 137(1) of the Evidence Act applied, the respondent discharged the burden of proving its case beyond reasonable doubt.

Dissatisfied with the judgment of the Court of Appeal, the appellants have lodged an appeal to this court. In accordance with the relevant rules, the parties have duly filed and exchanged briefs. There were four issues identified for determination in the appellants’ brief while the respondent, in its brief, identified five issues in addition to the four issues in the appellants’ brief. The four issues in the appellants’ brief and the seventh and ninth issues in the respondent’s brief are sufficient for the determination of this appeal. The four issues identified for determination in the appellants’ brief are as follows:-

“(i) Whether it is correct in law to say that ‘the material averments in the plaintiff’s pleading had all been admitted’ in the Statement of Defence in this case.

(ii) Whether, having regard to the fact that the trial in the High Court was conducted on the footing that all the averments in the Statement of Claim had to be proved it is open to the Court of Appeal to have allowed the plaintiff’s appeal on the ground that there was no need for any witnesses to have been called to testify to the facts already admitted on the pleadings.

(iii) In the alternative to Questions (i) and (ii) and on the hypothesis that all the facts in the Statement of Claim were admitted and regarded as proved, was the court below correct in concluding that the plaintiff was ‘without further ado entitled to judgment.’

(iv) Was the court below correct in the view it took regarding the reference by the defendants to a ‘newly incorporated company. ‘”