Ishola V. Societe Generale Bank (Nig.) Limited (2012)

LAWGLOBAL HUB Lead Judgment Report

IGUH, J.S.C.

In the Ilorin Judicial Division of the High Court of Kwara State, the plaintiff instituted an action against the defendant claiming, as subsequently amended, as follows –

“(1) The sum of One Hundred and Fifty-Four Thousand, Three hundred and fifty-seven Naira, Fourteen Kobo (154,357.14k) being the principal Overdraft, plus accumulated interests and other Bank charges as on the 31st day of October, 1986.

(2) Interest at the Bank rate of 15% per annum on the said sum from the 1st day of November, 1986 until 30th day of September, 1987.

(3) Interest at the Current Bank rate of 19% per annum from the 1st day of October, 1987 until the day of judgment.

(4) Interest at the rate of 10% per annum on the judgment debt from the date of judgment till final liquidation thereof.”

The suit was originally filed in the undefended list pursuant to the provisions of Order 3 Rules 8-14 of the Kwara State High Court (Civil Procedure) Rules, 1975. Following the defendant’s notice of intention to defend the suit under the provisions of Order 3 Rule 10 of the said Rules, he was admitted to defend the same whereupon the suit was on the 9th day of April, 1987 transferred to the General Cause List for hearing and determination. Pleadings were ordered in the suit and were duly, settled, filed and exchanged.

The plaintiff’s case is that on the 13th February, 1980, the defendant opened a Current Account No. 00307811131 with the sum of N200.00 in his name. On the basis of some arrangement between them, the defendant operated this account and on various dates purchased Bank Drafts from the plaintiff bank by means of cheques drawn on his account. The total amount of drafts purchased by the defendant from the plaintiff bank together with his other withdrawals from the said account between the 13th February, 1980 and the 3rd March, 1981 was N447,772.71. On the other hand, the defendant’s total lodgements into the account during the period amounted to N377,777.35. The defendant’s account was therefore over drawn to the tune of N69,995.35 as at the 3rd day of March, 1981. This was in addition to the accumulated interests, commissions and other charges which accrued to this account during the period which amounted to N5,630.11. The plaintiff claimed that as at the 3rd March, 1981 from which date the defendant stopped operating the account, his total indebtedness stood at N75,625.47. The account has remained dormant ever since although interest and commissions continued in the normal way of business to be charged and debited to the account. The plaintiff further claimed that the total outstanding debit balance in the defendant’s account as at the 31st October, 1986 stood at N154,357.14.

The plaintiff wrote various letters to the defendant drawing his attention to the position of the account. As these letters were ignored, the plaintiff finally made a formal demand in writing to the defendant for the liquidation of his indebtedness. This was by Exhibit 44 dated the 9th February, 1982. As Exhibit 44 was further ignored, the plaintiff filed this action as above indicated. Relevant documents including the defendant’s ledger cards Exhibit 2, and the bank statements of the defendant’s current account were tendered and admitted in evidence at the hearing.

The defendant’s position is a total denial of the plaintiffs’ claims. He denied enjoying any overdraft facilities as claimed by the plaintiff. In particular, he claimed that the plaintiff in breach of its duties misplaced some N60,000.00 he lodged into his account by cash and cheques but were never reflected or credited to his said account. He further asserted that the statements of account upon which the plaintiff has founded its claims were unreliable, inaccurate and did not show the correct position of his account. During his cross-examination, however, the defendant put the amount he paid but not credited to his account at over N64,000.00. In the alternative the defendant contended that the plaintiff’s action being in debt, was, in law unenforceable, in that the action in respect of the alleged debt was not filed within 6 years of its accrual and was therefore statute-barred by virtue of the provisions of the English Limitation Act, 1623. On the question of the interests claimed, the defendant denied knowledge of any banking tradition or custom in relation to interest chargeable on loans or overdrafts. He did not authorise or consent to the plaintiff charging any interest on his account. He also denied entering into any agreement with the plaintiff which entitled it to charge any interest, commission or Bank charges to his account. He described the plaintiff’s claims as baseless and, at all events, statute-barred.

At the subsequent trial, both parties testified on their own behalf and tendered Exhibits. At the conclusion of hearing, the learned trial Judge, Fabiyi, J. after a careful review of the evidence on the 19th January, 1990 found for the plaintiff against the defendant and decreed as follows –

“In conclusion, I enter judgment in favour of the plaintiff against the defendant in the sum of N69,995.35 plus 10% interest from 16.2.87 until the judgment sum is finally paid up.”

Dissatisfied with this decision of the trial court, the defendant lodged an appeal against the same to the Court of Appeal, Kaduna Division, which in a unanimous decision, substantially dismissed the appeal on the 1st day of July, 1993, and affirmed the judgment of the trial court in favour of the plaintiff against the defendant in the sum of N69,995.35 being the balance of overdraft facility granted by the plaintiff to the defendant as at the 31st day of October, 1986. It was however ordered that the 10% interest chargeable on this judgment debt was to start running from the date of the judgment of the trial court on the 29th January, 1990 and not from the date the action was instituted on the 16th February, 1987.

Aggrieved by this decision of the Court of Appeal, both parties appealed to this court. The defendant has complained in the main appeal against that part of the decision of the court below which upheld the finding of the trial court to the effect that he was indebted to the plaintiff in the sum of N69,995.35 and that the suit was not statute barred. The plaintiff, on the other hand, has attacked that part of the decision of the court below which affirmed that the various rates of interest claimed on the overdraft were not proved. I shall hereinafter refer to the plaintiff and the defendant in this judgment simply as the respondent or the respondent/ cross-appellant and the appellant respectively.

Nine grounds of appeal were filed by the appellant against this decision of the Court of Appeal. I find it unnecessary to reproduce them in this judgment. It suffices to state that the appellant, pursuant to the rules of this court, filed his brief of argument in which three issues were identified for the determination of this court. These are as follows –

“1. Whether the Lower Court was right to have affirmed the finding of the trial court on the issue of Statute of Limitation when Exhibit 49 is a letter of demand and it pre-dated Exhibit 44, another letter of demand, relied upon to dismiss the plea of Statute of Limitation raised by the appellant at the trial.

2. Whether the lower court was not wrong having regard to the admissible oral and documentary evidence led at the trial to have found in favour of the respondent to whom it awarded the sum of N69,995.35 and whether the respondent proffered enough qualitative evidence to entitle it to the relief granted and whether this is not a deserving case for this court to upturn the concurrent findings of facts of the lower and trial courts.
3. Whether the judgment of the lower court delivered by only two Justices of that court was not a nullity after the third Justice that took part when the appeal was argued and judgment reserved was no more de facto, de jure a member of that court before the lower court purported to have delivered the judgment in this case”.

The respondent/cross appellant, for its own part also submitted three issues in its brief of argument as arising in this appeal for determination. These are –

“(1) Whether or not the Lower Court was right in affirming the finding of the trial court that the respondent’s claim was not statute barred basing its decision on the fact that the action was filed within Six years of the first letter of demand which is letter of 9/2/1982 i.e. Exhibit 44.

(2) Whether or not the Lower court was right in affirming the finding of fact by the trial court that on the totality of pleadings and evidence before the trial court that the respondent was entitled to N69,995.35 as overdraft facility against the appellant.

(3) Whether the judgment of the Lower Court is a nullity having regard to the fact that the 3rd member of the panel that heard the appeal on 12/5/93 and who has written his judgment and handed same to Honourable Justice Muritala Aremu Okunola after the conference on 12/5/93 was before the date of judgment on 1/7/93 elevated from the lower court bench to this court bench.”

A close study of the issues set out in the respective briefs of the parties reveals that they are patently identical and refer to the same questions. It is plain that they are both similar and it will not matter which of the two sets of issues is adopted for my consideration of this appeal.

There is next the cross-appeal by the respondent/cross appellant in which the sole issue for consideration is whether the Court of Appeal was right in affirming the decision of the trial court to the effect that the cross-appellant did not establish his entitlement to the various interest claimed by credible evidence. Both parties are in agreement on this sole issue for consideration in the cross-appeal.

At the oral hearing of the appeal, both learned counsel for the parties proffered additional arguments in amplification of the submissions contained in their written briefs of argument.

Learned counsel for the appellant, Yusuf O. Alli, Esq. submitted with regard to the first issue that the alleged debt claimed by the respondent was in law statute-barred and unenforceable in that it did not accrue within 6 years of the institution of the action pursuant to the provisions of Section 3 of the Limitation Act, 1623 and/or the Limitation Decree 1966. He stressed that a special defence or plea, such as one founded on the statute of Limitation, must be replied to by a plaintiff in a reply and that failure to do so will amount to acceptance of such special plea of the defendant. He contended that it was not the case of the respondent that there was an agreed date for the repayment of the overdraft alleged. In his view, the Limitation Act in the present transaction commenced to run from the 28th day of July, 1980 on which date the account of the appellant was allegedly overdrawn. He therefore submitted that this action became statute-barred from the 29th day of July, 1986 and that the respondent’s suit which was filed on the 16th February 1987 was clearly out of time.

Alternatively he pointed out that it was Exhibit 49 dated the 9th February, 1981 and not Exhibit 44 of the 9th February, 1982 that was the respondent’s first letter of demand.

He argued that Exhibit 49 having preceded Exhibit 44, time the Limitation Act, 1623 started to run was from the 9th February, 1981 which, all the same, rendered this suit filed on the 16th February, 1987 statute-barred and incompetent. He made a third submission on the issue. This is to the effect that the time within which to claim the debt, if any, started to run from February, 1980 in which month the appellant stopped the operation of his account. The action, having been filed on the 16th February, 1987 was here again statute-barred.

On the second issue, learned counsel attacked the evidence of the respondent as hearsay and unreliable and submitted that the court below had no legal basis on the facts to have affirmed the finding of the trial court on the issue of the award of N69,995.35 in favour of the respondent.

On the third issue, learned counsel pointed out that Uthman Mohammed, JCA., as he then was, had ceased to be a Justice of the Court of Appeal on the 1st July, 1993 when judgment in the appeal was delivered by the court below. He explained that the said Uthman Mohammed, JCA., was on the 3rd June, 1993 sworn in as a Justice of the Supreme Court of Nigeria. Relying on the case of Ogbunyiya and others v. Okudo and others (1978) 3 LRN 318 at 327-328 learned counsel submitted that the learned Justice, having become a member of this court on the 3rd June, 1993, lacked jurisdiction to express any opinion on the judgment of the Court of Appeal in issue on the 1st July, 1993. He urged the court to allow this appeal.

Learned counsel for the respondent, Mr. Biodun A. Adebara, in his reply on issue 1, conceded that it is the Limitation Act, 1623 that applies to this transaction but submitted, relying on the case of Angyu v. Malami (1992) 9 NWLR (Pt. 264) 242, that time would only start to run from the date demand for the recovery of the outstanding overdraft was made by the respondent. He stressed that it was the respondent’s letter of the 9th February, 1992, Exhibit 44, that was the first demand addressed to the appellant and not Exhibit 49, dated the 9th February, 1981. He argued that Exhibit 49 was merely a letter reminding the appellant of his indebtedness and inviting him to come over to the respondent’s office for discussion on the issue. He contended that time started to run in the present transaction from the date of Exhibit 44, that is to say, the 9th February, 1982. This action having been filed on 16th February, 1987 could not therefore be said to be statute-barred as it was instituted 5 years and seven days after the cause of action arose.

On issue 2, learned counsel submitted that from the pleadings and evidence adduced before the court, the court below was justified in affirming the finding of fact arrived at by the trial court to the effect that the appellant was liable to the respondent in the sum of N69,995.35. He stressed that the total lodgements made by the respondent into his current account amounted to N377,777.35 as against his total withdrawals which added up to N447,772.71. The withdrawals therefore outweighed the deposit by N69,995.35 for which judgment was entered for the respondent.

On issue 3, teamed counsel relied on the provisions of section 11 of the Court of Appeal Act, 1976. The crux of his submission is that if a member of a panel of Justices who heard an appeal participated in the conference in respect of the appeal and thereafter reduced his opinion in writing and gave the same to another Justice of that court for pronouncement before he retired from service or was elevated to a higher bench, or even died or otherwise became incapable of reading his opinion, the validity of such an opinion cannot be questioned. He argued that in the present case, Uthman Mohammed, JCA., as he then was, with the rest of the Justices who heard the appeal, participated in the conference over the appeal.

Thereafter, he wrote his opinion which he handed over to Okunola, JCA. on the date the appeal was heard and before his elevation to the Supreme Court. In these circumstances, he submitted that his opinion in the appeal was entirely without fault and unimpeachable.

On the cross-appeal, the submission of Mr. Adebara is that the cross-appellant pleaded sufficient facts and adduced enough evidence to be entitled to all the interest it claimed. He referred to the decision of this court in Union Bank of Nigeria Ltd. v. Professor Albert Ozigi (1993) 3 NWLR (Pt.333) 385 where it was observed that the power to fix the interest payable on Bank loans is vested by law in the Central Bank of Nigeria. He indicated that there was the evidence of P.W. 1 which was sufficient proof of rates of interest pleaded and that there was no need to tender the Central Bank guidelines on interest.

Mr. Alli, for his own part, submitted that the cross-appellant had failed to dislodge the concurrent findings of the trial court and the court below that the interests claimed were not established. Relying on the case of Himma Merchant Bank Ltd. v. Aliyu (1994) 5 NWLR (Pt. 347) 667 at 676-677, learned counsel submitted that the cross-appellant proferred no credible evidence on the interest claimed and therefore failed to prove the same. He pointed out that the facts of the case of Union Bank of Nigeria Ltd v. Professor Albert Ozigi, supra, relied on by the cross-appellant are distinguishable from the facts of the present case. According to learned counsel, in the former case, the Central Bank guideline was tendered, there was evidence of agreement by the parties as to the rate of interest and documents were also tendered in support of the various rates of interest claimed, unlike in the present case. He urged the court to dismiss the cross-appeal.

Turning now to issue number 1 in the main appeal, both parties are in agreement that the English Limitation Act, 1623 is not only a statute of general application but that it is the law governing the limitation of action in the present suit. Section 3 of this statute provides that all actions in debt, as therein stipulated, shall be commenced within six years from the accrual of the cause of action. The appellant in paragraphs 22 & 23 of his further amended Statement of Defence pleaded thus –

“22 The defendant will in further denial and or in the alternative defence to paragraphs 6, 7, 8, 9, 10, 11, 12,13, 14, 15, 17,18,19, 20, 21, 22 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, and 33 of the amended statement of claim contend that the plaintiff’s action/claims being in debt, is in law unenforceable, and invalid in that the alleged debts did not accrue within 6 years before this action was instituted and is barred by Limitation Act of 1623 and/or Limitation Decree 1966.

PARTICULARS:

(i) Each of the alleged sum of money granted as overdraft/ debt arose in 1980.

(ii) The plaintiff knew and or ought to know of each of the debt since they became accrued since 1980

(iii) The defendant never acknowledged any debt due to the plaintiff.

(iv) The defendant did not at any time specifically pay part of any acknowledged debt due to the plaintiff.

(v) Defendant was not guilty of fraud, mistake or concealment of any fact relating to any of the alleged overdraft claimed.

The defendant will therefore urge the court to dismiss this action as baseless, time statute barred and constitutes an abuse of the process of court.”

Mr. Yusuf Alli of learned counsel has vigorously contended that the appellant, having set up a special plea of the Limitation Act, it became incumbent on the respondent to file a reply thereto. He argued that where, as in this case, a plaintiff fails to file a reply to such a defence, he would be deemed to have admitted the special plea of the defendant.

The first question must be whether the plaintiff/respondent can, on the state of the pleadings, be deemed to have admitted, whether directly or by necessary implication, that this claim is statute- barred as averred by the defendant/appellant.

It cannot be over-emphasised that the proper function of a reply in the settlement of pleading is to raise in answer to the defence, any matter which, to be admissible in evidence, must be specifically pleaded, or which makes the defence not maintainable or which otherwise might take the defence by surprise or, where because of the defence fled, the plaintiff proposes to lead evidence in rebuttal or to raise issues of fact not arising out of the two previous pleadings. See Bakare and Another v. Ibrahim (1973) 6 SC 205, Azeez Akeredolu v. Lasisi Akinremi (1989) 3 NWLR (Pt. 108) 164 at 172 etc. A party who desires to rely on any material facts to defeat the defence that an action is statute-barred must expressly plead such facts in his reply to take the case out of the statute unless he has already done so in his Statement of Claim.

Essentially, a reply may also constitute the defence of a plaintiff to a counter-claim of the defendant or to the new facts raised by the defendant in his Statement of Defence. Where, however, as in the present case, no counter-claim is filed, further pleadings by way of a reply to the statement of defence is generally unnecessary if the sole purpose is to deny the averment contained in the Statement of Defence. See Akeredolu v. Akinremi, supra.

In the present case, the respondent had in paragraphs 24, 25 and 26 of its amended Statement of Claim averred as follows –

“24 In February, 1981 and January, 1982 the plaintiff’s Manager wrote two letters Ref. SGBN/IL/YAS/MOR dated 19th February, 1981 and SGBN/IL/SO/AK dated 15th January, 1982 respectively to the defendant reminding him of his indebtedness to the plaintiff and inviting him to the plaintiff’s Office for a discussion over the said indebtedness, to which the plaintiff received no reply.

The plaintiff wrote a letter of demand to the defendant for the repayment of the Overdraft on the 9th day of February, 1982 by the letter written by the plaintiff’s Manager which letter was replied to by the defendant by his letter dated 16th February, 1982, all of which are hereby pleaded.

The defendant is hereby given notice to produce the original at the hearing.

The plaintiff’s Solicitor, Messrs SHITTU AROSANYIN and company also wrote a statutory letter of demand dated 15th August, 1985 to the defendant demanding the repayment of the said over-draft. This letter is hereby pleaded. The defendant is hereby given notice to produce the original at the hearing.”

The respondent, therefore quite clearly, pleaded that after the respondent had written several letters of invitation to the appellant inviting him for a discussion over his indebtedness which the said appellant ignored, the respondent was obliged to make a written demand on him for the repayment of the overdraft in issue. The said demand was made on the 9th day of February, 1982 and was tendered in evidence as Exhibit 44. It is dear from the respondent’s amended Statement of Claim that Exhibit 44 was the first written demand by the respondent on the appellant in respect of the overdraft.

A second demand of the 15th August, 1985 was also pleaded in paragraph 26 of the amended Statement of Claim. The first demand pleaded is, however, Exhibit 44. It seems to me plain that Exhibit 44, if in fact it was established, would constitute a complete answer to the defence under the Limitation Act as it would mean that this action which was filed on the 16th February 1987 was instituted in under six years of the accrual of the cause of action. Learned appellant’s counsel cannot, with respect, be right when he submitted that the respondent required to file further reply in answer to the appellant’s plea under the Limitation Act, that the respondent pleaded no facts which made the appellant’s defence under the Limitation Act not maintainable or that the respondent must be deemed to have admitted the appellant’s special plea as established. I will now consider whether the appellant succeeded in establishing his defence under the statute of Limitation.

Generally, a debt is repayable either on demand, or on notice given or upon any other condition agreed upon by the parties. See Lloyds Bank Ltd. v. Margolis and others (1954) 1 All E.R. 734 at 748, Joachimson v. Swiss Bank Corporation (1921) All E.R. 92 at 99 etc. It is also an implied term in the relationship between a banker and his customer that there should be no right of action for the repayment of an overdraft until there has been a demand or notice given. See Angyu v. Malami (1992) 9 NWLR (Pt. 264) 242 at 252. The cause of action does not arise until there has been a demand made or notice given. When therefore there is no specific date agreed upon for the repayment of an overdraft, as in the present case, a demand should be made or notice given. In other words, a cause of action on an unpaid overdraft is not deemed to accrue where no specific date for payment is agreed upon until there has been a demand made or notice given. The next question must now be an identification of the first letter of demand made on the appellant by the respondent in respect of the overdraft in issue. Whilst the respondent pleaded and asserted that this is Exhibit 44, the appellant contended that it is Exhibit 49.

After a careful consideration of the above issue, the learned trial Judge in the clearest possible term held thus –

The first letter of demand herein is Exhibit 44 dated 9.2.82.”

Affirming the above finding of the trial court, the court below observed as follows –

“In the present appeal, while the appellant is asserting that the first letter of demand was Exhibit 49 dated 9/2/1981, the respondent was saying that its first letter of demand to the appellant was Exhibit 44 dated 9/12/82. Learned trial Judge having examined the letters Exhibits 44 and 49, decided that Exhibit 44 was in fact the first letter of demand.

The learned trial Judge was indeed right because Exhibit 49 is not a letter of demand but a letter drawing the attention of the appellant to the position of his account. Such letters usually written by banks to their customers do not amount to letters of demand. See Angyus v. Malami supra at page 253.”

It is trite that where there are concurrent findings of a trial court and the Court of Appeal, then unless the findings are –

(i) found to be perverse; or

(ii) not supported by the evidence; or

(iii) reached as a result of a wrong approach to the evidence; or

(iv) a result of a wrong application of a principle of substantive law or procedure, this court, even if disposed to come to a different conclusion upon the printed evidence, cannot do so. See Enang v. Adu (1981) 11-12 SC 25 at 42, Nwadike v. Ibekwe (1987) 4 NWLR (Pt. 67)718, Igwego v. Uzengo (1992) 6 NWLR (Pt. 249) 561 at 576 etc. The aforesaid findings of both courts below that Exhibit 44 dated the 9th February, 1992 is the respondent’s first letter of demand to the appellant in respect of the overdraft have neither been proved to be perverse or unsupported by evidence nor erroneous on point of law or fact. I have myself studied both Exhibits 44 and 49 with the evidence before the trial court and it is equally clear to me that only two letters of demand were addressed by the respondent to the appellant. These are Exhibits 44 dated the 9th February, 1982 and Exhibit 45 dated the 15th August, 1985. The latter is a statutory letter of demand addressed to the appellant by the respondent’s solicitors demanding payment of the overdraft. Neither of the parties pleaded or testified to Exhibit 49 as a letter of demand. Indeed, ex facie, Exhibit 49 is only a letter drawing the attention of the appellant to the position of his account and inviting him for a discussion over this indebtedness. Without doubt, such letters usually written by Bankers to their customers whose accounts are in the red do not and cannot amount to letters of demand. See Angyu v. Malami, supra at page 253. I am in total agreement with both courts below that Exhibit 44 dated the 9th February, 1982 is the first letter of demand addressed to the appellant by the respondent. But the question remains to be answered whether the present suit is caught by the provisions of the Limitation Act, 1623.

Exhibit 44 dated the 9th February, 1982 was firmly established as the first letter of demand addressed to the appellant by the respondent in respect of the overdraft. The respondent’s cause of action in the transaction therefore arose on the said 9th February, 1982. It is also not in dispute that the respondent’s action was filed on the 16th February, 1987. On the issue under consideration, the learned trial Judge found thus –

“The first letter of demand herein is Exhibit ’44 dated 9.2.82. This action was filed on 16.2.87. The period between is about five years i.e. less than six years envisaged by section 3 of the Limitation Act of 1623 and/or section 7 (1) of the Limitation Decree 1966. I cannot therefore acquiesce with the rationale that the plaintiff’s claim is statute-barred.”

For its part, the court below held –

“…………… since the first demand was made on 9/2/1982 while the action was filed on 16/3/1987, the decision of the trial court that the respondent’s claim was not statute-barred must be upheld.”

I, too, totally agree that the respondent’s claims on the facts as found by the trial court and affirmed by the court below cannot in any way be said to be statute-barred as the suit was filed 5 years and seven days after the accrual of the cause of action in the transaction. Issue 1 is therefore resolved against the appellant.

Issue 2 questions the correctness or otherwise of the judgment of the trial court in favour of the respondent in the sum of N69,995.35 as affirmed by the court below. In this regard, the respondent predicated his claim against the appellant on debt arising from overdraft facilities it granted to the appellant. The only witness who testified for the respondent in respect of this overdraft was P.W. 1, Surajudeen Agunbiade, a Loans officer of the respondent bank. Learned counsel for the appellant attacked the evidence of this witness as hearsay, irrelevant and totally unreliable since he admitted not being the Manager of the respondent bank at all material times. Mr. Niemes, who was the then Manager and who granted the overdraft facilities to the appellant was said to have left the bank before P.W. 1 was employed.

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SC.30/1994