Union Bank of Nigeria Plc V. Chief James J.a. Akinrinmade (1999)

LawGlobal-Hub Lead Judgment Report

ONNOGHEN, J.C.A.

The facts of the case are that the Respondent is a Customer of the 1st Appellant allegedly operating a Personal Account No. 3161255768. On the 30/10/91 the 2nd Appellant on the instruction of the 1st Appellant advertised the Respondent’s personal building situate at No. 8, Offa Road, G.R.A., Ilorin for sale by auction by virtue of mortgage deeds dated 23/9/77 and 25/8/82 which the Respondent allegedly executed in respect of his indebtedness to the 1st Appellant.

The Respondent however contends that the 1st Appellant cannot sell his mortgaged property since he is not indebted to the 1st Appellant on account of his personal account No. 3161255768 which was not in debit as shown in Exhibit 5.

The 1st Appellant on the other hand contends that the Respondent at all times material to the case maintained two different personal accounts with numbers 3162290192 and 3162290206 under which he had enjoyed banking facilities from the 1st Appellant but that the Respondent later transferred these accounts to Rinso Ranch Ltd. through a Deed of Rectification dated 4/2/79 – Exhibit C. The 1st Appellant further maintained that the Respondent and Rinso Ranch Nig. Ltd. at various times obtained overdraft and loan facilities to the benefit of the Company and that the Respondent personally guaranteed the banking facilities obtained by the Company. The deed of guarantee is Exhibit 7. The name Rinso Ranch Ltd & Rinso Ranch Nig. Ltd. is used interchangeably in the Exhibits. It is my view that it refers to the same company.

However, due to the default of Rinso Ranch Nig. Ltd and the Respondent to liquidate the debt of Rinso Ranch Ltd. to the 1st Appellant, the 1st Appellant sought to exercise her right of sale under the Deed of Mortgage but the Respondent instituted this suit at the High Court claiming as follows:-

“(1) A declaration that the Defendants cannot as advertised in the Herald Newspaper of 30/1/91 auction the Plaintiffs building situate at No. 8, Offa Road, G.R.A., Ilorin by virtue of purported mortgage deeds dated 23/9/77 and 25/8/82 respectively or by any other means howsoever.

(2) A declaration that having not complied with Section 22 of the Land Use Act 1978 the Defendants are not entitled to auction the Plaintiff’s said building on 29/11/91 as advertised in the Herald Newspaper of 30/10/91 or at any other time.

(3) A declaration that the notice to auction the said Plaintiff’s building is null and void and of no effect.

(4) An injunction restraining the Defendants from auctioning the said Plaintiff’s building situate at No.8, Offa Road, G.R.A., Ilorin.

During the pendency of the action al the High Court, the 1st Appellant presented an application for leave to join Rinso Ranch Ltd. as a party to the action which application was opposed and eventually refused by the Court.

The 1st Appellant, however, counter claimed against the Respondent as follows:-

“Whereof the first Defendant/Counter-claimant claims against the Plaintiff as follows:-

(a) The first Defendant/Counter-claimant claims against the Plaintiff as mortgagor and guarantor of the Company’s debt to the first Defendant the sum of N856.378.35 (Eight Hundred and Fifty-Six Thousand, Three Hundred and Seventy Eight Naira, Thirty-Five Kobo) outstanding against the Company as at 1/11/91 arising out of an overdraft/loan facilities plus interest granted to the Plaintiff and/or the Company (as the case may be) by the first Defendant at the request of the Plaintiff and/or the Company and which was secured with the Plaintiffs said property and an agreement of personal guarantee executed by the Plaintiff in favour of the first Defendant and interest thereon at the prevailing Union Bank of Nigeria Plc prime lending rate until judgment is entered and thereafter 10% per annum until judgment debt is fully liquidated.”

At the conclusion of trial the learned trial Chief Judge Hon. Justice, T. A. Oyeyipo entered judgment for the Respondent and dismissed the counter claim of the 1st Appellant. Dissatisfied with the judgment delivered on 3rd July, 1997 the Appellants have appealed to the Court on seven grounds out of which learned counsel for the Appellants. Alhaji Moh’ d Syrajludeen O. Adegboye, formulated three issues for determination viz:-

“1. Whether the Respondent has succeeded in proving his case on the balance of probabilities (Grounds of appeal numbers 1, 2 and 3).

2. Whether the 1st Appellant was entitled to exercise its right to auction the mortgaged properties as per Exhibits 3 and 4 (Grounds of appeal number 4).
3. Whether the Honourable Chief Judge was not wrong in dismissing the Counter claim of the 1st Appellant even after finding as a fact that Rinso Ranch Nig. Ltd. is indebted to the 1st Appellant (Ground of appeal numbers 5, 6 and 7).”

The Appellant’s Brief of argument in which the issues for determination are formulated was filed on 28/10/98. The brief was adopted by learned counsel for the Appellant during the hearing of the appeal on 30/9/99.

The Respondent through Counsel Chief S. F. OJeyemi filed his brief of arguments on 3/6/99 in which he adopted the issues formulated by learned counsel for the Appellants in the Appellant’s Brief of Arguments.

On issue No. 1, learned counsel for the Appellants submitted that the Respondent failed to establish his claim by pleaded facts and admissible evidence on a preponderance of evidence. That Exhibits 3 and 4 entitle the 1st appellant to exercise its power to auction the said property covered by Exhibit 2.

That it is not in dispute that the respondent got overdraft and loan facilities in the course of his operation of accounts No. 3161255768 between 1977 and 1982.

That the facilities were secured by Exhibits 3 and 4. That by Exhibit 6, the Deed of Rectification the Respondent transferred his personal accounts, assets and liabilities to Rinso Ranch Ltd. That the Respondent also executed Exhibit 7, the Deed of guarantee wherein he stood as guarantor to the company for its overdraft and loan facilities from the 1st appellant.

That the Respondent admitted under cross examination that he is the Managing Director of Rinso Ranch Nigeria Ltd. and that the said Company obtained loan facilities from 1st appellant to the tune of N330,060.00. He agreed that the said Company has not paid back its outstanding debt to the 1st Appellant.

That the Respondent also agreed that he executed Exhibits 6 and 7 but said that the Exhibits are not binding on him. He further stated that Exhibits 6 and 7 were made on the condition that agricultural loan would be granted to Rinso Ranch Nig. Ltd. which was never done.

Learned Counsel for the Appellants then submitted that the fact that Exhibits 6 and 7 were made under certain conditions was not covered by the pleading in paragraph 16 of the Reply to the Statement of Defence and Counter-Claim. He then submitted that the evidence on the non fulfillment of the future event goes to no issue.

Learned Counsel further submitted that the learned trial Chief Judge’s conclusion that Exhibit 6 is conditional on the happening of a future event which did not happen etc is based exclusively on extrinsic evidence contrary to Section 32 of the Evidence Act. Learned Counsel then cited and relied on the Supreme Court decision in the case of Layade v. Panalpina (1996) 7 SCNJ 1 at 14-15, (1996) 6 NWLR (Pt.456) 544 and Union Bank of Nig. Plc. v. Albert Ozigi (1994) 4 SCNJ 42 at 55; (1993) 3 NWLR (Pt. 333) 385

That Exhibits 6 and 7 speak for themselves and that the trial court is bound by them. That it is not the duty of the Court to rewrite the agreement between the parties.

Turning to the issue whether the appellants specifically denied the averments in paragraph 10(a) of the statement of claim, learned counsel for the Appellants submitted that the Appellants have sufficiently denied the said paragraph in paragraphs 1, 2 (a-t) both inclusive, 4, 5, 6, 7 and 8 of the Amended Statement of Defence and counter claim.

That the appellants have pointedly averred that the Respondent owes the 1st Appellant either as a Customer, mortgagor and guarantor of the debt of Rinso Ranch Nig. Ltd. He then referred to the Supreme Court decision in the case of Omorhirhi & Ors. v. Enatevwere (1988) 3 SCNJ 168 at 181 -182; (1988) 1 NWLR (Pt. 73) 746; Mandilias & Kamberis Ltd. v. Lamidi Apena (1969) NMLR 199. Attah & Ors. v. Nnacho & Ors. (1965) NMLR 28.

Finally Learned Counsel submitted that the Respondent failed to discharge the burden of proof cast on him by Sections 136 and 137 of the Evidence Act and that this case lacks cogency and should be dismissed. He then urged us to allow the appeal on this issue.

On his part, Learned Counsel for the Respondent Chief S. F. Odeyemi submitted that the Respondent proved his case in compliance with Sections 135, 136 and 137 of the Evidence Act on the balance of probabilities. That the respondent tendered Exhibits 1, 1A, 2, 3, 4, 5, 6, 7 and 8 during his examination in chief.

That the Respondent proved that the Appellants are not entitled to auction his personal building because he is not indebted to the 1st Appellant in respect of his personal account NO. 3161255768 – Exhibit 5.

That Exhibits 3 and 4 are the mortgage deeds by which the Respondent pledged his building in case of default in the payment of overdraft.

That by clause 6 in both Exhibits 3 and 4 the appellants can only sell when there is indebtedness which has been demanded and the Respondent defaulted in paying same. He then relied on UBN Ltd v. Ozigi (1994) 3 SCNJ 42 at 55, (1993) 3 NWLR (Pt.333) 385 and submitted that parties are bound by the agreement between them.

That the fact that the Respondent is not indebted by virtue of Exhibit 5 has not been controverted by the Appellants.

On paragraph 10(a) of the Amended Statement of Claim, learned Counsel urged the Court to condemn and reject the Appellant’s general traverse which they claimed to be a rebuttal to the Respondent’s case.

That the Appellants admitted the Respondent’s pleading and evidence that he is not indebted to the 1st Appellant and that by paragraph 3 of the amended statement of defence the Appellants state thus:

“The Defendants deny paragraphs 7 – 14 of the Statement of Claim and put the Plaintiff to strictest proof thereof.”

That a general traverse cannot apply in the face of paragraph 10(a)(i and ii). He urged us to hold that the Respondent has proved on the balance of probability that he is not personally indebted to the 1st Appellant and as such the appellants are not entitled to auction his building,

As regards the deed of rectification, Exhibit 6 dated 4/1/79; Exhibit 7, Guarantee dated 8/8/79 and Account Nos. 31622902006 (Exh. 12) and 3162290192 (Exh. 13) Learned Counsel urged the Court to hold that the Respondent never operated account Nos. 31622902006 and 3162290192 which he later allegedly transferred to Rinso Ranch Nig. Ltd. That the Respondent having denied operating those accounts the burden shifted to the Appellants to prove that he maintained those accounts and later transferred them to Rinso Ranch Nig. Ltd.

That the Appellants failed to do so. That the Appellants did not tender any document to show that the Respondent operated those accounts before transferring them to Rinso Ranch Nig. Ltd.

He further submitted that Exhibits 6 and 7 are in respect of the personal accounts of the Respondent only and that Exhibit 6 and 7 were later abandoned for non-realisation of their purpose.

That Exhibit 3 – Mortgage Deed dated 23/9/77 is headed “LEGAL MORTGAGE TO SECURE MORTGAGOR’S OWN ACCOUNT’ and that as at that date the only personal account of the Respondent is No. 3161255768. Learned Counsel then concluded that when the Respondent signed the Deed of Rectification, Exhibi 16, it was his personal account No. 3161255786 which was meant to be used for the account of Rinso Ranch Nig. Ltd and that since the Respondent is not owing on that account as well as Rinso Ranch Nig. Ltd., the Respondent’s property cannot be auctioned.

That Exhibit 3 was cancelled by being submerged in Exhibit 4. That Rinso Ranch Nig. Ltd. is not mentioned in Exhibit 4. That since Exhibits 6 and 7 hang on Exhibit 3 which was abandoned or cancelled the appellants are not entitled to auction Respondent’s building by virtue of Exhibits 3, 6 and 7.

That the decision of the Lower Court is not based on extrinsic evidence as submitted by his learned friend. He then urged us to dismiss issue No. 1.

I have carefully gone through the record of Proceedings and Judgment of the Lower Court and submissions of Learned Counsel for both parties to this appeal contained in their Briefs of Arguments, and must confess that this is a very interesting case.

It is my considered view that a resolution of issue No. 1 is dependent on the resolution of the issue as to whether or not the Respondent operated account No. 32 61255768 only as contended by the Respondent and found by the Learned Chief Judge or operated in addition account Nos. 3162290192 and 3162290206 as contended by the appellants. If the Respondent operated account No. 3161255768 only then exhibits 6 and 7 can be said to relate only to that account as canvassed by the respondent and accepted by the learned trial Chief Judge. It will also follow that since account No. 3161255768 as evidenced in exhibit 5 is not in debt the 1st appellant’s power of sale under the mortgage between the parties cannot be invoked at this stage – See Clause 6 of Exhibits 3 and 4 – Deed of Mortgage.

To resolve issue No. 1 it is necessary to take a close look at the evidence before the Court.

Both parties are agreed that the Respondent operated account No. 3161255768 Exhibit 5 and that he obtained certain credit facilities as a result of which he executed exhibit 3 and 4 – Deed of mortgage. However, while the appellants contend that the Respondent apart from account No. 3161255768 also operated personal account No. 3162290206 and 3162290192 under which he had enjoyed banking facilities from the Appellant. That the Respondent later transferred these accounts to Rinso Ranch Nig. Ltd. through a deed of rectification dated 4/1/79 See exh. 6. The Appellants also stated that the Respondent and Rinso Ranch Nig. Ltd., at various times, obtained overdraft and loan facilities to the benefit of the Company and that the Respondent personally guaranteed the banking Facilities obtained by the Company as evidence in exh. 7. On the other hand the Respondent denied all the allegations maintaining that he operates only one personal account with the 1st Appellant as stated earlier in this judgment.

On its part the learned Chief Judge had these to say at pages 90- 93 of the record, inter alia:

” …. I believe the plaintiff on the first issue that he was not personally indebted to the 1st Defendant. The Plaintiff’s account is confirmed to some extent by averments contained in his Amended Statement of Claim the reply and the evidence adduced in support thereof.

As rightly submitted by the cumulative effect of both paragraph 10(a) of the Plaintiff’s Statement of Claim clause 6 of the mortgage Deed of Exhibit 3 and the clause 6 of the mortgage deed exhibit 4 is that the power of sale shall only be exercised if and only if the Plaintiff is indebted to the 1st Defendant and such debt is not settled a month after notice to settle such debt is given.

The Plaintiffs averment in paragraph 10(a) of the Statement of Claim is very germane to the resolution of the issue now under consideration ….

This germane averment … has not been denied in the Defendant’s Statement of Defence and Counter Claim …. The general traverse of the defendants does not safe (sic) such a situation …. In the light of the foregoing I have no hesitation in coming to the conclusion that the Plaintiff is not personally indebted to the 1st Defendant.

The next matter for consideration in respect of the first issue is whether the 1st defendant is entitled to auction the building of the Plaintiff by virtue of the mortgage deeds exhibits 3 and 4…. I am of the clear view that clause 6 in such exhibit 3 and Exhibit 4 is clear and unambiguous, consequently therefore having found that the plaintiff is not personally indebted to the 1st Defendant, I have no hesitation in coming to the conclusion that the defendants have no justification to auction the plaintiff’s property.”

However, a very close look at Exhibit 5 – account No. 3161255768 – reveals that it is not the personal account of the Respondent as contended by him and found by the Learned Trial Judge in his judgment under consideration. The stubborn fact in exhibit 5 is that it is a joint account of Mr. J.J.A. & Mrs. M.T. Akinrinmade, Koko 1 Cattle Ranch c/o No.3, Offa Road, Ilorin, Kwara State.

This being the case the foundation on which the resolution of the issue before the trial court was based is faulty. In other words that finding is not supported by evidence and in law we say that it is perverse.

I am not unmindful of the position of the law on attitude of an Appellate Court to findings of fact by the trial Court. I agree with the law that an appellate court should not interfere with the findings of fact by a trial court once the findings are based on the evidence upon the pleading of the parties. The appellate court can however interfere where the trial court failed to inter alia make findings or arrived at inconsistent findings on a crucial issue raised by the parties – the recent Supreme Court decision in the case of Uzoechi v. Onyenwe (1999) 1 NWLR (Pt. 587) 339; Jov. V. Dom (1999) 9 NWLR (Pt. 620) 538; Menaghor v. Bazuaye (1999) 9 NWLR (Pt. 620) 552.

In the present case it is clear from Exhibit 5 that the findings of fact by the trial judge are inconsistent with the said exhibit 5. It is trite law that exhibit 5 speaks for itself. That apart, the fact that exhibit 5 is a joint account gives credence to the averment by the 1st appellant that the respondent operated two personal accounts Nos. 316229012 and 3162290206 and that the Deed of Rectification exhibit 6 relates to these accounts. This is consistent with the fact that exhibits 12 and 13 are in the name of Rinso Ranch Ltd. It is my considered view that exhibit 6 relates to exhibits 12 and 13 as contended by the appellants since it has been established that it does not relate to exhibit 5 as found by the trial judge.

It follows also the heading “Legal Mortgage To Secure Mortgagor’s Own Account” as as contained in exhibits 3 and 4 did not relate to Exhibit 5 as the learned counsel for the respondent would want us believe and hold particularly since exhibit 5 is not the “Mortgagor’s own personal account”. It is therefore wrong to regard Exhibit 5 as being the personal account of the Respondent involved in the transaction between the parties as held by the learned trial Chief judge. If follows therefore that the Deed of Rectification Exhibit 6, does not relate to exhibit 5 as the Respondent would want us hold or as found by the learned trial Chief Judge in view of the fact of this case.

The fact that exhibit 5 cannot be the personal account of the respondent involved in this action is reinforced by the fact that exhibit 5 does not only say that it is not. It is equally not in the name of Rinso v. Ranch Nig. Ltd., following exhibit 6. This would have been the case if exhibit 6 relates to exhibit 5.

However the ready explanation of the respondent seemed to be that since exhibit 6 was based on a condition that never happened that is why exhibit 6 is still in the name of the original owners. The argument is not tenable having regards to the facts of the case as proved by documentary evidence. It has been found as a fact that exhibit 5 cannot be the personal account talked about in exhibit 6. That apart, the contents of exhibits 6 and 7 do not admit of the inference that there are based on a future event which never materialised as contended by the respondent and accepted by the trial court. As pointed out in this judgment the error of the learned trial Chief Judge arises from the assumption that exhibit 5 is the personal account of the respondent. It is trite that a document speaks for itself. An examination of exhibits 6 and 7 does not reveal that they are contigent on any happening of a future event. The Supreme Court has held in Layade v. Panalpina (1996) 6 NWLR (Pt. 456) 544 at 558; (1996) 7 SCNJ 1 at 14-15 per Adio. J.S.C., as follows and I quote;

”The general rule is that where parties have embodied the terms of their agreement or contract in a written document, as it was done in this case, extrinsic evidence is not admissible to add to, vary, subtract from or contradict the terms of the written instrument.. .. So, where the parties enter into a contract, they are bound by the terms of that contract and it is unfair to read into such a contract the terms on which there was no agreement. See Abdullahi Baba v. Nigerian Civil Aviation Centre, Zaria & Anor. (1991) 15 NWLR (Pt. 192) 388″.

See also the Supreme Court decisions in Olaoye v. Balogun (1990) 5 NWLR (Pt. 148) 24 and Union Bank of Nig. Plc. v. Ozigi (1994) 3 NWLR (Pt. 333) 385.

At page 93 of the Record of Proceedings the learned Trial Chief Judge held as follows and I quote:

“Exhibit 6 seems to me to be conditional on the happening of a future event. Since that event did not take place Exhibit 6 becomes vacated and aborted. It is now too late in the day for the 1st Defendant to fall back on it…..

With regard to the issue of guarantee, exhibit 7 was dated 8/8/78. The question that must be asked and answered is this – When was the load being guaranteed by the plaintiff given to Rinso Ranch Ltd. The evidence before me and which I accept is that neither the 1st Defendant nor the plaintiff acted on Exhibit 7″.

It is on record that the respondent admitted executing exhibits 6 and 7 though he states that exhibits 6 and 7 are not binding on him in that it was made on condition that agricultural loan would be granted to Rinso Ranch Ltd. However, the exhibits under consideration do not say so neither can those facts be inferred. From the authority of Layade v. Panalpina supra and section 132 of the Evidence Act a court of law is not permitted to rely on extrinsic evidence in coming to a conclusion as the learned trial Judge did in the case under consideration. It is trite that no content of any documentary evidence can be contradicted, altered, added to or varied by oral evidence – also the Supreme Court case of Union Bank Plc. v. Ozigi (1994) 3 NWLR (Pt. 333) 385.

Turning now to the sub-issue as to whether or not the appellants specifically denied the averments in paragraph 10(a) of the statement of claim; the learned trial Chief judge has held that the said averments needed no further proof as they were denied admitted since the appellants allegedly did not specifically deny them.

paragraph 10(a) of the Statement of Claim avers that:

’10. The plaintiff will contend at the trial that the defendants cannot auction the said plaintiff’s building by virtue of the purported mortgage deeds dated 23/9/77 and 23/8/82 respectively or by any other means howsoever.

Particulars

(a) The Plaintiff is not owing the 1st defendant in respect of which the 1st defendant can exercise right of sale under any mortgage deed.”

In paragraph 3 of the Amended Statement of defence and counter claim the appellants pleaded as follows:

“3. The defendants deny paragraphs 7-14 of the statement of claim and put the plaintiff to the strictest proof thereof.”

However, when you look at other paragraphs of the Amended Statement of defence and counter claim it becomes very clear that the said paragraph 10(a) of statement of Claim has been sufficiently denied.

In paragraph 2 of the said Amended Statement of Defence and Counter-Claim the defendants pleaded thus:

“2. Further to paragraphs 4 and 5 of the Statement of Claim the first defendant avers as follows:

(a) The Plaintiff was initially maintaining two accounts with Nos. 3162290192 and 3162290206 with first defendant in his personal name and has been enjoying overdraft and loan facilities from the first defendant since sometime in 1977 on these accounts. The plaintiff pledged his properties in issue to secure the said facilities granted him by the first defendant on the aforementioned accounts. The deed of mortgage dated 23/9/77 is pleaded.

(b) That the plaintiff later incorporated Rinso Ranch Nigeria Limited (hereinafter called the Company) and the said accounts Nos. 3162290 192 and 3162290206 were transferred to the Company. A deed of Rectification was executed by the plaintiff to this effect. The deed of Rectification dated 4/2/79 is pleaded.

(c) That the overdraft and loan facilities were increased and/or reviewed at various times by the 1st defendant at the request of the plaintiff and/or the company (as the case may be) and the plaintiff and the company took benefit of the facilities so granted.

(d) The first defendant pleads the deed of mortgage (over the same properties)dated 25/8/82 executed by the plaintiff in favour of the first defendant when the facilities was increased to N50.000.00 first defendant’s letter of September, 1983 to the Company increasing the overdraft and loan facilities to a total of N330,000.00 ….

…

(e) …

(f) The Plaintiff also personally guaranteed the debt of the company to the first defendant. The said guarantee is pleaded …

(4) In reply to paragraph 7 and 8 of the Statement of Claim the first defendant avers that the comprehensive statement of account of the company reflects the indebtedness of the company to the first defendant to the tune of N856,378.35 … as at 11/11/91 inclusive of interest rates and which debt the plaintiffs guaranteed, and pledge his property in issue to secure …

(5) In reply to paragraph 9 of the Statement of Claim the defendants deny that the liability of the plaintiff to the first defendant is discharged, since the company is still indebted to the first defendant as stated in paragraph 4 above.

(6) The defendants aver that the deeds of mortgage executed by the plaintiff in favour of the first defendant are valid and subsisting.

(7) The defendants further aver that several notices of demand and notice of intention to auction the mortgage property were sent to the company as debtor and the plaintiff as mortgagor and guarantor of the debt but the company and the plaintiff have refused to settle the indebtedness of the company to the first defendant. First defendant’s letters to the plaintiff and/or the company are pleaded.

(8) The defendants aver that the first defendant can take steps to realize the mortgage property since the company as debtor and the plaintiff as mortgagor and guarantor have defaulted in liquidating the company’s said debt to the first defendant….”

It is important to note that the first defendant went on to counter claim against the plaintiff on the transaction giving rise to the action.

In the opening paragraph of the Amended Statement of Defence and Counter-Claim, the defendant stated that:

“SAVE AND EXCEPT where the defendants expressly admit an allegation of fact in the statement of claim the defendants deny each and every allegation of fact contained in the Statement of Claim as if same were fully set out and separately denied.”

I agree with counsel for appellants that all the above paragraphs of the Amended Statement of Defence and Counter Claim pointedly aver that the Respondent is owing the 1st appellant either as a customer, mortgagor and guarantor of the debt of Rinso Ranch Ltd.

It is still the law that where a defendant fails to deny specifically an allegation of fact in the Statement of Claim and a denial cannot be reasonably inferred from the defendant’s pleadings that fact will be taken as admitted and therefore regarded as established at the hearing without further proof. This is the basis of the learned trial judge’s holding in this case under the issue now being considered – see Samson Ajibade v. Mayowa (1978) 9 & 10 S. C. 1 and Odume v. Nnachi (1964) 1 All NLR 329. However that is not the case in the present appeal. Here the defendant’s pleading clearly deny the plaintiff’s case, particularly paragraph 10(a) of the Statement of Claim.

In the case of Anah v. Nnacho (1965) NMLR 28 at 31 the Supreme Court in considering a general traverse stated thus:

“Now it seems clear that the cumulative effect of these two paragraphs is that the appellants joined issue with respondents in respect of all the lands described in the pink area of Exhibit 2. By common practice a general traverse in the form of paragraph 15 of the statement of defence has always been accepted and when employed it puts the opponent to proof of the facts stated or alleged.”

It is now trite that it is the duty of the plaintiff in a civil case to prove his case on the balance of probabilities – see Daodu v. N.N.P.C (1998) 1 SCNJ 95 at 106, (1998) 2 NWLR (Pt. 538) 355

The burden of proof rests squarely on the plaintiff who asserts – Sections 136 and 137 of the Evidence Act, 1990. It is my view that the plaintiff has not discharged that duty in the case under consideration. His case lacks cogency.

It is therefore my view that issue No. 1 be answered in the negative, the Respondent having failed to prove his case on the balance of probabilities as required by law.

The second issue is whether the 1st appellant was entitled to exercise its right to auction the mortgaged property as per exhibits 3 and 4.

Learned counsel for the appellants while arguing this issue submitted that it is agreed by all parties that Rinso Ranch Ltd. is indebted to the 1st appellant. That this fact is pleaded by the appellants but not denied by the Respondent. That the Respondent agreed under cross examination that Rinso Ranch Ltd. is indebted to the 1st appellant and that the debt has not been paid. He also agreed that he is the Managing Director of Rinso Ranch Ltd. That this admission in conjunction with exhibits 6, 7, 9, 12 and 13 sufficiently show the existence of such indebtedness. That exhibits 10 and 11 are letters of demand served on the Respondent and his company in their capacities as debtor and Mortgagor and guarantor respectively. That under the terms of Exhibits 3 & 4 the 1st appellant is empowered to sell the mortgaged property where there is wilful delimit to settle the debt. That it was the duty of the Respondent as guarantor to save the situation but he failed resulting in the mortgaged property being open for auction.

That the 1st appellant as an unpaid mortgagee was justified in advertising the mortgaged property covered by exhibits 2 for sale through exhibits 1 and 1A. That the particulars of the alleged contravention of section 27 of the Land Use Act and the basis upon which the notice to auction the Respondent’s said property should be declared null and void are not pleaded. That the court should discountenance such allegations in the absence of the required particulars and evidence in proof of same. He urged the court to invoke the principles stated by the Supreme Court in the case of Chief B. Ugochukwu v. CCB. Nig. Ltd. (1996) 6 NWLR (Pt. 456) 524 (1996) 4 NCLC 661 at 683 that it is rather fraudulent and unconscionable for a Mortgagor to turn round a few years after executing the Mortgage Deed (and when as a result of his default the Mortgagee sought to exercise its right under the Mortgage Deed) to assert that the Mortgage Deed is null and void for non-compliance with the Land Use Act and to dismiss the respondent’s claim and allow the appeal.

In his reply learned counsel for the respondent submitted that the 1st appellant is not entitled to exercise any right to auction respondent’s mortgaged properties under exhibits 3 and 4.

That the success of this issue depends on whether or not the respondent transferred his personal account No. 3161255768 to Rinso Ranch Ltd. and whether exhibits 6 and 7 have not been abandoned by the parties.

That the property advertised for sale was mortgaged on the respondent’s account No. 3151255768 which is not indebted.

That even if rectification (Exhibit 6) and Guarantee (Exhibit 7) are proved the 1st appellant can still not auction respondent’s property because

(i) No debt is proved against Rinso Ranch Ltd.

(ii) Respondent as Managing Director alleged breach of agreement which was not denied.

(iii) No demand for repayment proved to be served on Rinso Ranch Ltd.

That exhibit 9 is not evidence of receipt of loan. The figures in exhibit 9 contradict the figures in exhibits 11 and 12; that is the statement of account.

Learned counsel agreed that the respondent testified that Rinso Ranch Ltd was owing 1st appellant and that the lower court did say so. He however submitted that the 1st appellant failed to place before the court the agreement between 1st appellant and Rinso Ranch Ltd. as to mode of recovery of loan when there is default in repayment.

That it is on record that 1st appellant has not proved that they made any demand on Rinso Ranch Ltd. so they cannot succeed referring to Ishola v. SGB (1997) 2 SCNJ 1 at 5. (1997)Â Â NWLR (Pt. 488) 405.

Learned counsel then submitted that the case of Ugochukwu v. A.CB. (Nig.) Ltd. supra is not applicable to this case and should be considered overruled. That in Onamade v. A.C.B. Ltd. (1997) 1 SCNJ 65at 68.(1997) 1 NWLR (Pt. 480) 123 the Justices unanimously held that sections 22 and 26 of the Land Use Act must be complied with. He then urged us to dismiss issue No. 2.

It has already been resolved, during the consideration of issue No. 1 that account No. 3161255768 is not the personal account of the respondent but a joint account with his dear wife.

Now, recital No.2 to the Deed of Rectification, Exhibit 6 states as follows; Italics mine for emphasis:-

“2) Mr. James Jinadu Akintola Akinrimade referred to in the compromise as mortgagor was keeping account with the bank in his own name for the purpose of his business and whereas the business has been changed to a limited liability company namely: Rinse Ranch Nigeria Ltd. and registered under the Companies Decree 1968.”

Again, the third recital states as follows:-

“3) The accounts name is now changed”.

From the totality of the above, it is clear and I hereby hold that recital Nos 2 and 3 cannot be referring to exhibit 5 – account No. 31612255768 because:

(i) It is not the personal account of the respondent spoken of.

(ii) Exhibit 5 is a joint account from the face of which it is clear it is not used for the personal business of the respondent as stated in Exhibit. 6.

(iii) Exhibit 5 deals mainly with salary.

(iv) Most importantly Exhibit 5 is not in the name of Rinso Ranch Ltd. since the name of the personal account referred to in exhibit 6 has been changed.

It is still in the name of the joint owners and operators whereas exhibits 12 and 13 are in the names of Rinso Ranch Ltd. It is therefore very clear that exhibit 5 is not the personal account talked about in exhibit 6. It is my considered view that exhibits 12 and 13 are more likely to be the truth and I so hold.

From the totality of the evidence on record, it is clear that the parties have not abandoned exhibits 6 and 7 since it has not been shown that the liabilities created therein have been duly discharged by the respondent. Rather there is the evidence which the trial court accepts that Rinso Ranch Ltd. is still indebted to the 1st appellant arising from the transactions between the parties.

Exhibits 9, 10 and 11 confirm that Rinso Ranch Ltd. is indebted to 1st appellant and that demands were made both on that company and Respondent as guarantor:-

It must be remembered that the respondent does not dispute executing exhibits 6 and 7. These exhibits are therefore binding on him and having admitted that the company in which he is the Managing Director and on whose behalf he executed exhibits 6 and 7 is still indebted to 1st appellant it is my considered view that the 1st appellant can and has the legal authority to exercise the power of sale contained in exhibits 3 and 4 following the default of the respondent to discharge his obligations to the 1st appellant.

There is the sub-issue as to whether or not the Mortgage Deeds are contrary to section 22 of the Land Use Act and thereby null and void. This matter was pleaded in paragraph II of the statement of claim – see page 3 of the record of proceedings. In paragraph 6 of the Amended Statement of Defence and Counter Claim the 1st appellant pleaded thus:

“The defendants aver that the deeds of mortgage executed by the plaintiff in favour of the first defendant are valid and subsisting.”

In his testimony before the trial court the respondent said nothing about the validity of the deed of mortgage.

In his judgment the learned trial Chief Judge stated thus:

“As alternative submission, Chief Odeyemi relying on the case of Savannah Bank (Nigeria) Ltd. v. A. O. Ajilo (1989) 1 NWLR (Pt. 97) 305 at 310 seeks to take umbrage under sections 22 and 26 of the Land Use Act. In view of the decision I reached in this matter, there is no need for any academic peregrination to over flog the issue. Suffice it to say that it seems to me morally despicable for a person who has benefited from agreement to turn round and say that the agreement is null and void………”

That being the position taken by the learned Chief Judge I find it difficult to see the basis of the complaint of learned counsel for the appellant in this sub-issue. In fact he has agreed with the learned Chief Judge so what is his complaint? I don’t see any. It therefore does not matter whether the respondent gave particulars of alleged contravention of section 22 or not. In any event learned counsel for the appellants has not referred us to any legal authority for his proposition that such particulars must be given after specifically pleading the section of the Act alleged to have been infringed.

Having regards to the matters considered under issue No.2 it is my considered view that the issue be resolved in the positive which is accordingly done.

On issue No.3 to wit:

Whether the Honourable Chief Judge was not wrong in dismissing the counter claim of the 1st appellant even after finding as a fact that Rinso Ranch Ltd., is indebted to the 1st appellant. Learned counsel for the appellants referred to the Amended Statement of Defence and Counter Claim and submitted that the Counter Claim is predicated on the failure of Rinso Ranch Ltd to pay back the banking facilities granted to Rinso Ranch Ltd., and guaranteed by the Respondent and which as at 1/11/91 stood at a sum of N856,378.35.

That exhibits 6 and 7 are not ambiguous and should be given their natural and ordinary interpretations.

He then stated the facts as being that the respondent operated two personal accounts with the 1st appellant with numbers 3162290192 as well as 3162290206 since 1977. That the respondent got loan facilities from the 1st appellant in 1977 which were secured with the execution of two Deeds of legal mortgage over plaintiffs property situated at Offa Road, G.R.A. Ilorin. That by exhibit 6 the respondent transferred the aforesaid two accounts and liabilities thereon to Rinso Ranch Ltd. incorporated by the respondent and of which he is the Managing Director. That consequent upon exhibit 6 the respondent also executed a personal guarantee, Exhibit 7 in favour of the 1st appellant in respect of the debt of Rinso Ranch Ltd. That both the Respondent and Rinso Ranch Ltd have defaulted in liquidating the debt to the 1st appellant as shown in the state of Rinso Ranch Ltd accounts in Exhibits 12 and 13. That the respondent agrees that Rinso Ranoo Ltd. is indebted to the 1st appellant and that it is yet to repay the loan. Also that the lower court also held that Rinso Ranch is indebted to the 1st appellant.

Learned counsel then submitted that the evidence of DW1 and DW2 are unchallenged and that all exhibits tendered by the appellants have not been discredited.

That exhibits 6 and 7 could not have been made in contemplation of future event which never came to pass. Learned counsel then submitted that having found as a fact that Rinso Ranch Ltd. is indebted to the 1st appellant, it would not be fair, just and equitable to dismiss the Counter-claim of the 1st appellant particularly as the guarantor of the loan is a party before the court.

Learned counsel then urged the court to allow the appeal and grant the Counter claim.

In his reaction learned counsel for the respondent submitted that the appellants did not prove specific sum of money against the Respondent. That since the Respondent denied ever opening account Nos. 3162290206 and 3162290192, let alone transferring it to Rinso Ranch Ltd., the 1st appellant has the burden to prove that Rinso Ranch Ltd. opened an account with her in respect of which the company’ is owing. That the 1st appellant has failed to prove this.

That the respondent’s statement on page 90 of the record that Rinso Ranch Ltd. is owing in connection with contractual arrangement different from the present cause of action. That this aspect is yet to come to court for adjudication. That the court was right in dismissing the Counter Claim because it was not proved.

That Rinso Ranch Ltd. is not a party before the court. That the court should affirm the dismissal of the Counter Claim.

I agree with the appellants that the learned trial judge held that Rinso Ranch Ltd. is indebted to the 1st appellant. At page 89 of the record the learned trial judge held thus:

“From the evidence adduced before me and which evidence I accept, I have no hesitation in finding as a fact that Rinso Ranch Ltd. is at all material times indebted to the 1st Defendant/Counter Claimant.”

Again at page 93 he held as follows:

“As regards the second issue of whether vel non the plaintiff is answerable to the 1st Defendant on account of Rinso Ranch Ltd’s indebtedness I have no iota of doubt in my mind from the tenor of evidence that Rinso Ranch (Nig.) Ltd is indebted to the 1st Defendant. It is also not in dispute that the plaintiff is the Managing Director of Rinso Ranch Nig. Ltd., a company incorporated by him.”

Since it has been established beyond doubt as found by the trial court that Rinso Ranch Nig. Ltd. or Rinso Ranch Ltd. is indebted to the 1st appellant and since by virtue of exhibits 6 and 7 the respondent transferred his personal account to the said Rinso Ranch Ltd and guaranteed its liability to the 1st appellant arising from that account – see Exhibit 7 and since by exhibits 12 and 13 Rinso Ranch Ltd is indebted to the 1st appellant on account of the transferred account so guaranteed and in view of the fact that the 1st appellant has demanded repayment which the respondent and Rinso Ranch Ltd have failed to effect, the respondent is liable on the counter claim of the 1st appellant as he undertook in Exhibit 7.

In conclusion, this appeal is allowed. The judgment of the learned trial Chief Judge delivered in suit No. KWS/217/91 on 317/97 entering judgment to the respondent and dismissing the Counter-claim of the 1st appellant is hereby set aside.

In its place there shall be judgment for the 1st appellant in the following terms:

(a) The Respondent as Mortgagor and guarantor of the debt of Rinso Ranch Ltd. to the 1st appellant standing as at 1/11/91 at N856.378.35 is hereby adjudged liable to pay same to the 1st appellant together with 6% interest thereon per annum from 3rd July, 1997 being the date of judgment of the lower court until the judgment debt is fully paid up.

(b) It is hereby declared that the 1st appellant is entitled to exercise her rights under the deeds of mortgage and rectification executed by the plaintiff in her favour since the company and Respondent have defaulted to settle the company’s debt to the 1st appellant.

(c) There shall be cost in favour of the 1st appellant at N5,000.00 against the Respondent.

Appeal allowed.

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Other Citations: (1999)LCN/0503(CA)