Josadeg Nigeria Limited & Anor. V. Nigeria Deposit Insurance Corporation (2004)

LawGlobal-Hub Lead Judgment Report

ROWLAND, J.C.A.

In the High Court of Oyo State, the plaintiff, who is now the respondent filed an action against the appellants who therein were the defendants, claiming jointly and severally as follows:

“(a) The sum of N315,560.42 being balance due and payable by the defendants to the plaintiff on account of loan and overdraft facilities granted by the plaintiff to the defendants jointly and severally at their request as well as interests, commission and or other charges on the said facilities as at 31st August, 1992.

(b) Interest on the above stated sum at the rate ruling in the financial market from the 1stday of September, 1992 until judgment is delivered thereof and, thereafter, interest at the rate of 10% until the whole debt is liquidated.”

Pleadings were ordered and were duly settled, filed and exchanged.

The case then proceeded to trial and the parties called one witness each. At the close of the case, the counsel to the parties addressed the court. In a considered judgment, delivered on 10th October, 1994, the learned trial Judge entered judgment against the defendants jointly and severally in the sum of N315,060.47 (Three hundred and fifteen thousand, sixty naira, forty seven kobo) being the balance due and payable to the plaintiff on account of loan and overdraft facilities granted by the plaintiff to the defendants at their requests as well as interests, commissions and or other charges on the said facilities as at 31st August, 1992. The trial court also awarded in favour of the plaintiff against the defendants interest on the said sum of N315,060.47 at the rate of 21% per annum until the 1st day of September, 1992, and thereafter, interest at the rate of 5% per annum until the whole debt is liquidated.

Dissatisfied with the judgment of the court below the defendants have now appealed to this court on a number of grounds. The defendants shall hereinafter be referred to as the appellants, and the plaintiff the respondent.

As borne by the records, the appellants were granted loans and overdraft facilities by the bank at various times at different rates of interest ruling at the time of each grant or approval of the facility. The first facility of N50,000.00 granted in 1985 was at an agreed rate of 9% per annum. This agreement as to interest rate was reached between the appellants and the bank – the respondent.

In 1986, another facility of N80,000.00 was granted by the bank to the appellants at an agreed rate of 13% which was the ruling interest rate at the time. A third facility of N90,000.00 was later granted to the appellants by the bank. The terms of the two subsequent facilities were agreed upon by the parties as in the first grant of N50,000.00.

The parties executed a deed of legal mortgage, exhibit ‘A’, which stipulated among others, that the bank may vary the interest rate without any prior communication or notice to the appellants. In line with the provisions of clause 2 of exhibit ‘A’, the bank, at various times, applied the rates of interest which were given in evidence by its witness in court.

The appellants contended at the lower court that the facilities were Agricultural facilities granted under the Agricultural Credit Guarantee Scheme Fund Act, Cap. 13, Laws of the Federation of Nigeria, 1990, which they claimed provided for a specially fixed rate of interest. The bank denied this averment both in its pleadings and evidence. It turned out that there was a cover for the first facility of N50,000.00 by the Central Bank of Nigeria pursuant to the ACGSF, aforesaid.

The appellants presented a counter-claim which contained declaratory reliefs. In the course of his judgment, the learned trial Judge made specific findings of fact which appeared to have answered the declaratory reliefs contained in the counter-claim being sought by the appellants.

As already indicated above, the appellants were dissatisfied with the judgment of the lower court and have appealed to this court. From the grounds of appeal, the appellants raised three issues for determination. They are:

“1. Whether the rate of interest applicable to all the loans/overdraft facilities the subject-matter of this suit should be a fixed rate as stipulated under Decree No.2 of 1977 or a rate subject to variation according to the dictate of money market as contained in the deed of legal mortgage executed by the appellants in favour of the respondent?.

2. Whether on the totality of evidence and pleading in this suit the learned trial Judge was right in his finding that the statement of account of the appellants in respect of the loans/overdraft facilities leading to this suit was in debit to the tune of N315,060.47 awarded to the respondent as the judgment sum?.
3. Was the learned trial Judge right in failing to make any pronouncement on the counter-claim of the appellant?”

The respondent identified three issues for determination in this appeal.

They are: –

“1. Whether the appellants established before the lower court that the loans granted to them attracted a fixed rate of interest?.

2. Whether the learned trial Judge was wrong in entering judgment in favour of the respondent in the sum of N315,060.47 as at 31st August, 1992 when there was no proof by the appellants to discredit or counter the statement of account tendered by the respondent?.
3. Whether the alleged failure of the learned trial Judge to pronounce on the success or otherwise of the counterclaim occasioned a miscarriage of justice to the appellants?.”

I have taken a critical look at the pleadings and the evidence contained in the records of this suit. I am of the firm view that the bone of contention between the parties relates to the interest chargeable on the loans and not that the appellants are not owing the respondent at all. I have also taken a hard look at the issues formulated by the parties in their briefs and I am convinced that the issues formulated by the respondent have more direct bearing to the grounds of appeal. I shall therefore treat this appeal in accordance with the issues formulated by the respondent.

On issue No.1, it must be noted that the respondent’s case before the lower court was that it granted facilities to the appellants amounting to N220,000.00 at various times between 1985 and 1988. The respondent contended that the facilities so granted and the terms thereof were regulated by exhibit ‘A’, the deed of legal mortgage, executed by the parties. The appellants on the other hand averred and contended that the loans were Agricultural Loans granted under the ACGSF established under Decree No. 20 of 1977 (now known as Agricultural Credit Guarantee Scheme Fund Act) Laws of the Federation of Nigeria, 1990. The appellants’ further contention was that the loans, being granted under the ACGSF aforesaid, “carried a specific rate of interest variable only under the directive of the Commissioner for Finance (now Minister of Finance)”.

The finding of the learned trial Judge on these disagreements is at page 64 line 33, page 65 lines 1-35 of the records to the effect that the respondent obtained a guarantee of the Central Bank of Nigeria for the first loan of N50;000.00 under the Agricultural Credit Guarantee Scheme Fund. The learned trial Judge further held that there was no evidence that the other two facilities had any guarantee of the CBN and ACGSF. This is what the learned trial Judge said at page 65 lines 3-15 of the records:

“On the evidence available, I have no doubt in holding that the loan of N50,000.00 was guaranteed under the Fund while there is no evidence that the overdraft of N80,000.00 and the additional loan of N90,000.00 mentioned in exhibit ‘E’ were Agricultural loan facility under the Scheme. In exhibit ‘E’ the rates of interest applicable to the loans and overdraft facilities were 9% and 13% respectively. Where loans are approved under the Agric. Credit Guarantee Scheme, the rates of interest are as directed by the Minister responsible for finance. No evidence has been led by the defendants to show what rates of interest were fixed by the Commissioner for Finance in accordance with section 9 of the Decree.”

The above finding of the learned trial Judge cannot be faulted as it is supported by the pleadings and evidence of the case. It is now settled that he who asserts must prove. See Mark Ugbo & 4 Ors. v. Aburime (1994) 8 NWLR (Pt.360) 1, (1994) Vol. 25 ALRCN page 174 at 193; Okubule v. Ayagbola (1990) 4 NWLR (Pt.l47) 723; Ike v. Ugboaja (1993) 6 NWLR (Pt.301) 539; Union Bank oj Nigeria Ltd. v. Professor Albert Ozigi (1994) 2 NWLR (Pt.333) 385.

It is manifest from the records that the appellants’ case was that, being facilities granted under the ACGSF, the interest rate chargeable for the facility would be regulated by section 9 of the Agricultural Credit Guarantee Scheme Fund Act, Cap. 13, Laws of the Federation of Nigeria, 1990. Now, what does section 9 of the ACGSF say? It simply says:

“The rate of interest payable on a loan granted under this Act shall be as may be directed by the Minister.”

It should be noted that section 19 of the Act, which is the interpretation section, defines the “Minister” as the “Federal Minister” charged with the responsibility for finance. The evidence of the appellants on which they heavily relied is at page 47 lines 7-10 as follows: –

“The agreed rate of interest under the scheme which the loan was granted was 9% … I applied for an overdraft facility of N80,000.00 at the rate of 13% interest. ”

It is instructive to note that the appellants’ evidence did not mention the Minister as fixing any rate of interest nor did they lead any evidence to establish any direction by the Minister as to the interest rate applicable. The learned trial Judge therefore made a correct finding when he held that:

“no evidence has been led by the defendants, to show what rate of interest were fixed by the Commissioner for Finance in accordance with section 9.”

I am also of the view that without appealing against this specific finding of the learned trial Judge, the appellants cannot impeach the judgment of the trial court as to the rate of interest applicable to the facilities. See Zaccheus Abiodun Koya v. United Bank For Africa Ltd. (1997) 1 NWLR (Pt.481) 251, (1997) Vol. 46 LRCN page 1 at page 14. It must be said also that in the absence of any evidence by the appellants as to the rate of interest directed by the Minister, the learned trial Judge was profoundly in order to recourse to exhibit ‘A’ – the deed of mortgage in determining the rate of interest applicable to the facilities including the first loan of N50,000.00. The appellants canvassed at paragraphs 5.8 page 4 of their brief of argument that the appellants’ case was that all the three loans were granted pursuant to Decree No. 20 of 1977. With due respect to the learned counsel for the appellants, it seems to me that the appellants cannot raise any issue out of it because they did not appeal against the specific finding of the lower court at page 65 lines 3-8 of the records that:

“On the evidence available, I have no doubt in holding that the loan of N50,000.00 was guaranteed under the fund while there is no evidence that the overdraft of N80,000.00 and the additional loan of N90,000.00 mentioned in exhibit ‘E’ were agricultural loan/facility under the Scheme.”

See Zaccheus Abiodun Koya v. United Bank for Africa Ltd. (supra).

It is trite law that where any finding of fact is not challenged by an appellant in any ground of appeal such finding remains rightly or wrongly, the settlement of that issue as between the parties to the appeal. See Zaccheus Abiodun Koya v. United Bank for Africa Ltd.182 Nigerian Weekly Law Reports 13 June 2005 (Rowland, J.C.A.) (supra). I need say no more about this as it has settled issue No. (1) in favour of the respondent bank.

The next issue canvassed by both parties in their briefs is whether or not the learned trial Judge was wrong in entering judgment in favour of the respondent in the sum of N315,060.47 as at 31st August, 1992 when there was no proof by the appellants to discredit or counter the statement of account tendered by the respondent.

It was submitted for the appellants that on the totality of evidence and pleadings in this suit, the learned trial Judge was not right in his finding that the statement of account of the appellants in respect of the loans/overdraft facilities leading to this suit was in debit to the tune of N315,060.47. The respondent contended that the learned trial Judge was right in his finding. That as at 31st of August, 1992 the appellants were indebted to the respondent in the sum of N315,060.47. The finding of the court below is at page 66 lines 20-28 of the records. The learned trial Judge put it thus:

“1 have examined exhibit ‘D’ and found that the balance on the loan and overdraft facilities as at 31st August, 1992 are:

(i) N28,562.86 as shown on page 3;

(ii) N107,101.05 as shown on page 24 of exhibit ‘D”.

The total amount due as per exhibit ‘D’ is N31,062.42 as at 31st August 1992. I am inclined to accept this figure as against the sum of N269,396.55 which the defendants have admitted by exhibit M especially since the accuracy of the said exhibit ‘D’ has not been challenged by the defendant.”

I would like to say again for the purpose of emphasis that having failed to challenge the finding of the learned trial Judge that:

“No evidence has been led by the defendant to show what rate of interest were fixed by the Commissioner of Finance in accordance with section 9 of the above Decree.”

It seems to me therefore that the points canvassed by the appellants in paragraphs 6.2, 6.3 and 6.4 of page 5 and also 6.5, 6.6, and 6.7 at page 6 are misconceived. This is so considering the fact that the learned trial Judge rejected their evidence, if any, by the above finding. I am of the firm view that the only way the appellants can reopen the issue is by way of formulation of a ground or grounds of appeal touching these points. Having failed to do so, the appellants are estopped from lazily raising any issue on them. See Zaccheus Abiodun Koya v. United Bank for Africa Ltd. (supra). I should like to point out that the submission of the appellants at page 6, paragraphs 6.6 and 6.7 of their brief misses the point made by the learned trial Judge, that the appellants provided no evidence showing at what rate of interest the Minister of Finance directed. In the absence of such evidence, it seems to me that the question of excision of the first facility of N50,000.00 from the second facilities of N80,000.00 and N90,000.00 in order to calculate the interest rates applicable to them does not arise. The question, once again, is, did the appellants prove the interest rate applicable under the direction of the Minister of Finance in accordance with section 9 of the ACGSF? The answer, as found by the learned trial Judge is in the negative. I think the learned trial Judge is right.

It is pertinent to reproduce the following paragraph of the pleadings: –

Paragraph 3 of the respondent’s amended statement of claim at page 26 of the records states thus:

“The plaintiff avers that the defendants at various times severally applied for and were granted loan and overdraft facilities totalling N230,000.00.The plaintiff shall tender all the documents relevant to this at the trial hereof.”

By paragraph 3 of its consequential amended statement of defence and counter-claim at page 32 of the records, the appellants averred thus:

” … that the total sum of facilities obtained from the plaintiff was N220,000.00 made up of the following: two separate loans of N50,000.00 and N90,000.00 obtained by Josades Enterprises and overdraft facility of N80,000.00 granted to Josadeg Nigeria Limited.”

By paragraph 1of the reply to consequential amended statement of defence and defence to counter-claim at page 38 of the records, the respondent pleaded thus:

” … that the sums of N50,000.00 and N90,000.00 were obtained by Josadeg Enterprises while the sum of N80,000.00 was utilized by Josadeg Nigeria Limited, the 1st defendant. As at the time the first two loans of N50,000.00 and N90,000.00 were granted and utilized the 2nd defendant was carrying on business as Josadeg Enterprises.”

It can be readily seen from the pleadings of the parties above that there was no disagreement as to the amount of money granted as loan facilities to the appellants. Parties agreed that the amount was N220,000.000 and not N230,000.00. With this state of pleading, it is difficult to see how the appellants came about the notion that exhibit ‘D’ was calculated on the basis of N230,000.00. I hasten to say that this appeal has brought into focus again the importance of pleadings in civil matters. The law is that parties are bound by their pleadings and will not be allowed to set up in court a case which was at variance with the pleadings. See Ehimare v. Emhonyon (1985) 1 NWLR (Pt. 2) 177; George v. Dominion Flour Mills Ltd. (1963) 1 SCNLR 117, (1963) 1 All NLR 71; Metalimpex v. A.G. Leventis (Nig.) Ltd. (1976) 2 SC 91; Ochonma v. Unosi (1965) NMLR 321.

In the instant case, exhibit ‘D’ was tendered by the respondent without even a feeble challenge by the appellants. The appellants did not point out to the learned trial Judge where or how exhibit ‘D’ was calculated on the basis of N230,000.00, they did nothing at all to discredit exhibit ‘D’ by way of evidence. They put no alternative figure before the learned trial Judge. It must be pointed out that the appellants cannot provide in the Court of Appeal the evidence which they failed to adduce in the lower court in the Course of the trial of this suit. It should be pointed out also that the contention of the appellants that only N210,000.00 was utilized by them is not borne out by admissible evidence before the trial court. For the second appellant’s evidence that the sum of N90,000.00 was approved and that only N80,000.00 was utilized is not covered by any paragraph of their pleading and, therefore goes to no issue. See paragraph 3 of their consequential amended statement of defence and counter-claim and lines 10-14 of the second appellant’s evidence at page 47 of the records. See also the case of Emegokwue v. Okadigbo (1973) 4 SC 113.

Under cross-examination, the 2nd appellant admitted at page 49 lines 29-34 thus:

“I am aware that the Central Bank is only liable if the bank had made efforts to recover the debt and did not succeed. In that case the bank involved should have previously informed the Central Bank about the default and steps taken to recover. I am aware of the Guidelines for the Agricultural Guarantee Scheme.”

As to whether the sum of N50,000.00 found to have been guaranteed carried a fixed rate of interest, it has been shown, supra, that the idea of “a fixed rate of interest” was neither in the ACGSF nor proved by the appellants. It seems to me therefore that their contention of “a fixed rate of interest” has no basis on which it can stand. It is difficult to see the point the appellants are trying to make by paragraph 6.9.1 of their brief. However, the law is that an amendment does not speak from the date of the amendment but from the date of the original document, which was amended. See the case of Oseyomon v. Ojo (1997) 52 LRCN 2068 at 2094. In this regard, it is pertinent to point out that the respondent’s reply dated the 17th January, 1994 was an amendment to the earlier one dated 18th of June, 1993 and filed on the 22nd day of June, is a follow up to the statement of claim dated the 16th day of October, 1992 and filed on the 3rd of November, 1992. It should be noted therefore that as far back as 16th October, 1992, the respondent had stated that the appellants owed it the sum of N315,560.42 as at 31st August, 1992. The learned trial Judge found that the actual amount as per exhibit ‘D’ was N315,060.47. Now the question is, what did the appellants do to puncture this figure which the respondent made known to them as their debt profile since October, 1992? It is manifest from the records that up to 30th April, 1994, when the 2nd appellant gave evidence, they did nothing to disprove or discredit this figure.

There is no doubt that there was no dispute as to how much was granted to the appellants by the respondent. At the close of the pleadings there emerged an agreement that it was N220,000.00. The idea of N230,000.00 to my mind existed (and still exists) in the imagination of the appellants. What is their proof that exhibit ‘D’ was calculated on the basis ofN230,000.00 and not on N220,000.00. It appears to me that there is nothing, but the averment which was corrected by the respondent’s subsequent pleading. That being, so, I have no hesitation in resolving issue No.2 against the appellants.

The last issue for determination in this appeal is issue No.3. Under issue No.3 the appellants submitted in paragraph 7.6 of their brief that “the learned trial Judge occasioned a miscarriage of justice by his failure to make any pronouncement on the appellants’ counter-claim”. The respondent has a different view.

Without much ado, I would like to say that a counter-claim is in itself an action distinct and separate from the main claim of the plaintiff. It is by its nature a cross-action by the defendant and the defendant is with respect to its claim in the counter-claim a plaintiff and the main plaintiff a defendant to the action in the counter-claim. See Potter Dabup v. Haruna Bako Kolo (1993) 9 NWLR (Pt. 317) 254 at 270; Oragbade v. Onitiju (1962) 1 SCNLR 70, (1962) NSCC 16.

It is true that the learned trial Judge did not devote any portion of his judgment to pronounce specifically on the failure of the counter-claim, but this has not been shown to have occasioned a miscarriage of justice to the appellants. In the case of Fadlallah v. Arewa iles Ltd. (1997) 8 NWLR (Pt.518) 546, the Supreme Court said as follows:

“It is not every slip committed by a court that will result in an appeal against a judgment being allowed. An error or slip that may have the result of the appeal being allowed must be fatal in the sense that it must have occasioned a substantial miscarriage of justice.”

Also in Amadi v. NNPC (2000) 10 NWLR (Pt.674) 76, (2000) 49 LRCN page 1951 at page 1993, the Supreme Court said per Karibi-Whyte, SC (as he then was):

“Not all errors result in miscarriage of justice. There is miscarriage of justice only where there are substantial errors in adjudication with the resultant effect that the party relying on such errors may likely have a judgment in his favour.” See also M.D.P.D.T. v. Okonkwo (2001) 11 NWLR (Pt.711) 206, (2001) 10 W.R.N. page 1 at pp. 50-51.

It should be noted that the counter-claim of the appellants are rooted in declarations. See page 16 of the records. On the whole, the appellants prayed for six declarations and one order of court. It seems to me that where the facts are interwoven and intertwined with regard to claims and counterclaim such that the success of the main action or claims automatically pronounces on the failure or dismissal of the counter-claim, a trial court to my mind cannot be justifiably or validly charged with failure in its duty. It seems to me that this is the case in this appeal. It must be pointed out that the findings of fact by the learned trial Judge in favour of the respondent and also in favour of the appellants took care of the contentions and claims of both the respondent as plaintiff and the appellants as defendants/counter -claimants.

As manifested by the records, at the close of evidence by both the respondent and the appellants, the issues submitted by the learned counsel for the appellant in his address at page 51 lines 4-9 of the records as arising for determination in the suit were as follows:

“(i) Whether the facility as granted to the defendants (appellants herein) was an agricultural loan carrying fixed rate of interest under the Agricultural Credit Guarantee Scheme?, and

(ii) Whether if so, the plaintiff has consent to charge variable rates of interest on the said facilities?.”

The counsel for the respondent (then plaintiff) in his own address at page 53 lines 10-11 of the records said:

“I wish to adopt the issues which my learned friend has formulated. ”

It seems to me that the issues submitted above as arising for determination in the lower court took care of the contentions of the appellants in their specific counter-claims contained in paragraph 28(i)-(vii) of their consequential amended statement of defence and counter-claim at pages 35-36. This goes to show that the facts and even the claims and counter-claims of the parties are intertwined and interwoven. It would appear that what the learned trial Judge did was to pronounce on the issues which both counsel agreed and submitted as arising for determination having regard to the pleadings and evidence. It seems to me therefore that any pronouncement by the learned trial Judge will dispose of the issues raised both in the claim and in the counter-claim.

From the nature of the claim, the counter-claim and the pleadings, I have no doubt in my mind that the alleged failure of the learned trial Judge to make specific pronouncement on the counter-claim is a mere slip which is not enough to move this court to allow this appeal. For, in the case of Onifade v. Olayiwola (1990) 7 NWLR (Pt. 161) page 130, the Supreme Court per Nnaemeka Agu, JSC (as he then was) said that: –

“It is now too late in the day to dispute the fact that it is not every ground of appeal that has been successfully argued that will necessarily result in the appeal being allowed. Even under the old practice, where a number of grounds were argued and some were successfully attacked, but some were not, it did not necessarily follow that because of those successful grounds the appeal must be allowed.”

With the above authorities on issue No.3 in the briefs of the parties, I have no doubt in my mind that what the learned trial Judge did in respect of the counter-claim does not occasion a miscarriage of justice and therefore, the contentions of the appellants are of no avail. In the final analysis, I hold that this appeal is devoid of merit and it is therefore dismissed in its entirety. I award N10,000.00 costs in favour of the respondent against the appellants.

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Other Citations: (2004)LCN/1667(CA)