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BANK OF THE NORTH LTD.
MEMUDU ADIGUN ONIYO
COURT OF APPEAL
IN THE ILORIN JUDICIAL DIVISION
20 WRN 83
BEFORE THEIR LORDSHIPS
MURITALA AREMU OKUNOLA, JCA (Presided)
PATRICK IBE AMAIZU, JCA (Delivered the leading judgment)
WALTER SAMUEL NKANU ONNOGHEN, JCA
Mahud Gafar Esq, with Abdul Esq. for the appellant.
Chief P. A. O. Olorunishola SAN with B. S. Jibril Esq. & Chief Fajenyo for the respondent.
BANKING AND FINANCE – Payment into a bank account – how proved – Ishola v. SGBN (1997) 2 NWLR (Pt. 488) 405 applied and followed – whether the plaintiff discharged the onus to prove repayment of loan granted to them.
BANKING AND FINANCE – Uncommunicated variations of interest rate payable on loan – whether enforceable against the customer of a bank.
COMMERCIAL LAW – CONTRACT – “Contract” – effect of breach of same – meaning of.
PRACTICE AND PROCEDURE – EVIDENCE – “Proof” – meaning of.
PRACTICE AND PROCEDURE – EVIDENCE – Burden of proof in civil cases – on whom lies.
PRACTICE AND PROCEDURE – EVIDENCE – Proof – negative assertions – whether capable of legal proof.
PRACTICE AND PROCEDURE – EVIDENCE – Section 149(d) of Evidence Act, 1990 – purport of.
WORDS AND PHRASES – “Contract” – meaning of effect of breach of same.
PATRICK IBE AMAIZU, JCA (Delivered the following judgment): :
The claim of the plaintiff before the lower court as stated in paragraph 17 of the statement of claim is as follows-
“(1) That the plaintiff is not indebted to the defendant in respect of any loan or overdraft account No. 400347.
(2) That the plaintiff is entitled to all the documents of the plaintiff being retained by the defendant in connection with the said account.
(3) An order that the defendant should surrender the title documents in respect of the said account to the plaintiff forthwith.
(4) An order restraining the defendant and his servants and agents from selling or disposing of the plaintiff’s property at No. 80 Old Yidi Road, Ilorin.”
Pleadings were filed and exchanged by the parties. Thereafter, the trial proceeded. At the trial, the plaintiff gave evidence for himself. He called no witness.
It is his evidence that as a customer of the defendant he obtained a loan/overdraft of N3,000.00 from the defendant in 1974. He was only allowed to withdraw N1,000.00 from the loan account. He however liquidated the loan. In 1976, he took another loan, also of N3,000.00. The interest on the loan was 9% per annum. He mortgaged his building in order to secure the loan. The defendant did not give him a copy of the agreement despite his repeated demand for it. It is further his evidence that some time in 1996, he accompanied a friend to the defendant’s establishment. He took the opportunity to ask for his account. He was told that his indebtedness to the bank was over N16,000.00. He did not take them serious. This was because, according to the witness, after he had completely repaid the loan, the account became dormant. He later consulted a lawyer when the defendant continued to pester his life with the demand to refund the loan. His lawyer asked for his statement of account from the defendant. It was when he received the statement of account that he discovered that the defendant charged him interest ranging from 9% to 26% per annum. This, the witness claimed, was contrary to the interest of 9% which the parties agreed to be paid on the loan. It is further his evidence that the defendant did not inform him of the variation in the rate of interest.
It is his evidence that at the time he obtained the loan, he gave the defendant No. 49 Gambari Road, Ilorin, as his contact address. He later moved to No. 80 Old Yidi Road, Ilorin. He informed the defendant of the change of his address.
The defendant on the other hand gave evidence through an officer of its company – one Mustapha Lawal. He was the Advance Officer in the defendant’s establishment. It is his evidence that the bank did not unilaterally increase the rate of interest payable on the plaintiff’s loan.
According to him, the bank usually communicates to a customer in writing any review of interest rate. He was emphatic that the defendant was notified when the interest was reviewed upwards. He tendered some letters to show that the plaintiff was notified of the change in the interest rate.
It is his evidence that the plaintiff communicated to the defendant the change of his address. The letter to that effect was received on the 14th May, 1990 by the defendant. Finally, the witness claimed that the plaintiff was owing the defendant in 1990 the sum of N16,729.13 and in 1996, N106,525.97.
At the end of the hearing, and, after the learned counsel for the parties have adopted their written addresses, the learned trial Judge in a reserved judgment held as follows-
“It is trite law that the bank has a duty to show that it regularly communicates the variations in the interest rates and the statement of account to the borrower before the borrower could be held liable for the increased interest charges.
Furthermore, the bank has a duty to show the correct amount of the indebtedness of the borrower, and offer evidence as to how it arrived at it. It can no longer be taken for granted that the bank can arbitrarily claim from the borrower any thing to its credit because the interest is compounded. See the applicable Supreme Court decision in the case of Alhaji Aminu Ishola v. Societe Generale Bank (Nig.) Ltd. (1997) 2 NWLR (Pt. 488) 405 at 433.
I am therefore of the firm view that the plaintiff’s case succeeds and the four sought reliefs shall be granted. Judgment is hereby entered for the plaintiff as per his class.”
Being dissatisfied with the judgment, the defendant now the appellant appealed against it to this court. In compliance with this court’s rules the parties through their counsel filed and exchanged briefs of argument. Before us, the parties adopted their briefs and relied on the submissions made therein.
In its brief of argument, the appellant set out the following issues for determination namely-
The plaintiff now the respondent formulated also four issues. I do not consider it necessary to reproduce the issues so formulated. This is because, in my view, this appeal can be resolved on the following two issues namely-
On issue one, Gafar Esq, of counsel observed that the complaint of the appellant is that the learned trial Judge was wrong in his conclusion that the respondent proved that he had repaid the loan given to him. The learned counsel referred to the evidence adduced by the respondent in the lower court in support of the claim. In the view of the learned counsel, the sum total of the evidence adduced in support of the claim is that-
“………In 1996 I accompanied a friend to the bank and I asked about my account. I was then told it was in debit to the tune of over N16,000. I did not take them serious because the account was dormant for a long time (see page 17 of the record).”
The learned counsel referred also in this regard to the respondent’s reply to a question put to him. It runs thus-
“I stopped operating the account loan account (sic) when I finished paying the 1976 loan but I cannot remember when exactly I finished paying. I have finished the payment.”
It is the contention of the learned counsel that the above pieces of evidence whether taken alone or together are not sufficient to support the claim of the respondent that he has completely refunded the loan. The learned counsel reminded the court that the respondent did not tender any document such as cheques or tellers to support his claim that he has repaid the loan. He observed that from the evidence, the respondent did not even know when he completed the repayment of the loan. In the view of the learned counsel, the findings of the learned trial Judge based on the above evidence cannot be justified.
The learned counsel referred to the evidence of DW1 that some time in 1990 the respondent acknowledged his indebtedness to the appellant by a letter – exhibit D9. He further observed that after the said acknowledgement the respondent made payments into his account. He referred to exhibit 8 – the respondent’s statement of account which contains the respondent’s outstanding balances. The learned counsel referred to the case of Ndili v. Akinsumade & Ors. (2000) 8 NWLR (Pt. 668) page 293 and submitted that the learned trial Judge’s finding that there is an overwhelming evidence in favour of the respondent that he has liquidated the debt is perverse, and, “betrays the trial court’s disposition to the case of the appellant”. He urged the court to set aside the perverse decision and make the correct finding which the lower court failed to make.
Finally, the learned counsel submitted that having regard to the facts of the case it is wrong for the lower court to hold that the respondent had repaid the debt he owed the appellant based solely on the ipse dixit of the respondent. He cited the case of Bank of the North v. Alhaji Abba Satomi Saleh (1999) 9 NWLR (Pt. 618) page 331. He urged the court to resolve the issue in favour of the appellant.
In his reply, Olorunishola Esq., SAN, of counsel referred to the evidence of the respondent that his account became dormant after he had refunded the loan. The learned SAN also referred to the evidence that the respondent got to know of his being indebted to the appellant to the tune of N16,729.13k when he accompanied a friend to the bank. The learned SAN first referred to exhibit 8 which shows ranges of interests charged on the loan as 9%, 20%, 26% to 1%. The learned SAN submitted that the said rate of interest was contrary to the agreement reached by the parties as per exhibit 5.
It is the learned SAN’s contention that the appellant did not controvert the fact that the respondent has completed refunding the loan. In the learned SAN’s view, if the respondent has not completed the refund of the loan, the appellant would have confronted him with his ledger card and statement of account. He relied on the case of Oforlete v. The State (2000) 7 WRN 86; (2000) 12 NWLR (Pt. 681) 415; (2000) FWLR (Pt. 12) 2081. The learned SAN reminded the court that there is no evidence that the appellant ever sent a statement of account to the respondent. It is his submission that the respondent having testified that he has fully repaid his loan the onus shifts to the appellant to show why and how the respondent still has a debit balance. He contended that the appellant did not produce the ledger card of the respondent because it would have been against him. He relied on the provisions of section 149(d) of the Evidence Act.
It is the contention of the learned SAN that since the facility given to the respondent was an over draft, it is not reasonable to expect the respondent to tender tellers and cheques showing the refunds he has made.
This is more so, the learned SAN further contended, as it took a long period of time to complete the transaction between the parties. The learned SAN referred to exhibit D9. He contended that the letter clearly states-
“according to your letter my debt stands at N16,729.13-”
It is his submission that the above statement shows that the respondent was not convinced that he was owing any thing to the appellant. The statement only referred to the claim by the appellant that he was indebted to it. In the learned SAN’s view, that does not mean that the respondent admitted owing the appellant. It is further his view that an admission must not be equivocal. It must be clear and precise. He relied on the case of Udo v. Okupa (1991) 5 NWLR (Pt. 191) 365 at 386.
The learned SAN urged the court to take into account the circumstances by which the alleged admission was made. He cited the case of Seismograph Services Nig. Ltd. v. Chief Keke Ogberegweke Eyuafe (1976) 9 – 10 S.C 135 at 146 – 149. The learned SAN reminded the court that the loan given to the respondent was N3,000 with 9% interest rate. It is his view that even if the loan is “compounded for 9 years plus and without paying money into the account it still raises the question of how N16,729.13.00 came about.”
Finally, it is the contention of the learned SAN that from the evidence adduced before the lower court, the debt of the respondent (if any) has not been ascertained. He urged the court to resolve the issue in favour of the respondent.
I now consider the submissions of the learned counsel for the parties. By section 137(1) of the Evidence Act, 1990, in civil cases, the burden of first proving the existence or non existence of a fact lies on the party against whom the judgment of the court would be given if no evidence were produced on either side. In the present case, it is common ground that the respondent was granted a loan of N3,000 at an interest rate of 9% in 1976. The respondent sought a declaration in the lower court that he is no longer indebted to the appellant. It is therefore evident from the facts that the respondent would fail if no evidence is adduced to prove that the respondent has made the refund. Onuigbo v. Samuel Nwekeson & Ors. (1993) 3 NWLR (Pt. 283) page 533. Proof is defined by the Blacks Law Dictionary to mean “establishment of a fact by evidence”.
It is obvious that the fact which the respondent was to establish by evidence was the payment of N3,000 plus interest to the appellant. In order to find out whether the fact was established by evidence I have to look at the evidence adduced by the parties. The relevant part of the evidence of the respondent in the lower court is as follows-
“In 1996, I accompanied a friend to the bank and I asked about my account. I was then told that it was in the debit to the tune of over N16,000. I did not take them serious because the account has been dormant for a long time.”
Another part of the respondent’s evidence that is relevant is-
“I stopped operating the loan account when I finished paying the 1976 loan but I cannot remember when exactly I finished paying. I have finished paying.”
As I had earlier observed, the respondent having alleged that he has completed paying his debt, the onus was on him to establish that fact by admissible and credible evidence. In the case of Alhaji Aminu Ishola v. Societe Generale Bank (Nig.) Ltd. (supra) page 405 the Supreme Court held that payment into a bank account may be proved either-
(a) by the oral evidence of the person who actually made the payments personally to the bank or
(b) by the production of a bank teller or acknowledgement receipt showing on the face of it that the bank had received the payment.
It is clear from the evidence of the respondent in support of the alleged payment to the appellant that neither of the above two conditions was met. The respondent did not claim in his evidence that he personally made the payments into the bank. Also the tellers or acknowledgement receipts issued for the payments were not tendered.
It is the submission of the learned SAN that because the appellant failed to tender the respondent’s ledger card it is to be presumed under section 149(d) of the Evidence Act, 1990 that the failure to produce it was because it would have been against the appellant. I am afraid, that is not my understanding of the provisions of section 149(d). Sub section (d) of section 149 deals with failure to call evidence and not failure to call a particular witness. Where a party can prove its case without calling such a witness he can afford not to call the particular witness.
In the present case, exhibit 8, the statement of account of the respondent shows that in 1990, the respondent was indebted to the appellant to the tune of N16,729.13 and in 1996 – N106,525.97. I think that evidence is enough for that purpose.
I now refer to part of the judgment of the lower court on this issue. It reads-
“………in the instant case, there is overwhelming evidence in favour of the plaintiff that the borrower whose claim of having fully repaid the loan is not controverted or in any way challenged by the bank’s ledger or statement of account or an unequivocal admission on the part of the plaintiff of his indebtedness for a certain amount.”
In paragraph 8 of the statement of claim the respondent stated as follows-
The plaintiff avers that he thought it was a joke as the plaintiff had long stopped operating his account and that at the time when he stopped operating the account he had no liability on the account.
The appellant denied the averment in paragraph 1 of the statement of defence. It went further to state in paragraph 4 & 5 as follows-
“4. The defendant states that the plaintiff has always acknowledged his indebtedness to the defendant especially by his letter written to the defendant on or about 14th May, 1990.
Before the lower court the witness called by the appellant gave evidence partly as follows-
“The plaintiff defaulted by not fulfilling his obligations to the bank. The plaintiff acknowledged his indebtedness to the bank in writing. I do not know the exact date of the letter but if I see the letter I can identify it – – – –
Court: It is admitted & marked exhibit 9. The plaintiff still operates his account by putting in money some time in 1994. The indebtedness skyrocketed because the plaintiff refused to service his debt and because of the upwards increase in the interest rate.”
It does not seem to me that the lower court was right in holding that the claim of the respondent that he has fully refunded the loan was not controverted in the light of the above averments and the evidence adduced in support thereof. I agree entirely with the submission of the learned SAN “that before the trial court and even now, the debt of the plaintiff (if any) has not been ascertained and cannot be ascertained by the evidence before the court.” In that case, it was wrong for the lower court to hold that “the plaintiff’s case succeeds.”
In the light of the foregoing, issue one is resolved in favour of the appellant. On issue 2, Gafar Esq., of counsel referred to the finding of the lower court that the appellant must prove that it communicated the variations in the interest rates to the respondent before the respondent could be held bound by the variations. It is the learned counsel’s view that the lower court was in error when it held that the appellant did not communicate the review of the interest rate to the respondent.
The learned counsel observed that the respondent claimed that he did not receive notice of the review of the interest rate sent by the appellant. He submitted that in that case, the burden to prove the assertion is on the respondent. He further submitted that in order to discharge the burden the respondent as the plaintiff should rely on the strength of his case and not on the weakness of the defence. It was clearly wrong, according to the learned counsel for the trial court to hold that it was the duty of the appellant to prove that the variation in the interest rate was communicated to the respondent.
The learned counsel reminded the court that during the cross examination of the respondent, he admitted that he received letters from the old address he gave to the appellant up till 1996. The learned counsel observed that the respondent did not join issue with the appellant when the latter averred that it sent the notice of the review of the interest rates to him. It is the learned counsel’s view that the respondent should have filed a reply covering the issue of non receipt of the notice of increase of interest rates to be able to lead an additional evidence on the issue. He relied on the case of Oshodi v. Eyifunmi (2000) 11 WRN 86; (2000) 13 NWLR (Pt. 684) 298; (2000) 7 SCNJ 295. The learned counsel submitted that the appellant complied with clause 3 of exhibit 8 by sending notices of the review of the interest rates to the respondent’s address.
Finally, the learned counsel gave reasons why the lower court should not have relied on the evidence of the respondent. He cited the following cases- Nnajiofor v. Ukonu (No.2) (1986) 4 NWLR (Pt. 36) 505. Ayanwale v. Atanda (1988) 1 S.C 1.
He urged the court to resolve issue 2 in favour of the appellant.
In his reply, Chief Olurunisola, SAN, of counsel referred to paragraph 15 of the statement of claim wherein it is averred that the appellant charged 26% interest on the loan without previous notice of any kind to the respondent. He referred also to paragraph 16 wherein it is averred that the increase in the rate is in breach of the agreement between the parties. He contended that the agreement expressly stipulated that any variation in the interest must be in writing and must be communicated to the borrower i.e., the respondent.
The averments, according to the learned SAN were denied by the appellant in paragraph 7 of the statement of defence. It is the view of the learned SAN that in that case the parties have joined issues on the matter.
The learned SAN submitted that for the notice to be effective, there must be evidence, that the respondent signed for having received the notices, or, that the notices were posted to the respondent. The learned SAN referred to the answer of DW1 during his cross examination, that exhibits D1 to D7 which were notices of variation in interest rates posted to the respondent were returned unclaimed. He contended that the notices were therefore not communicated to the respondent. He also reminded the court that DW1 was not in charge of posting exhibits D1 – D8. It is his contention that the secretary who was in charge of stamping and posting the notices should have been called to give evidence. He relied on the cases of- Nsirim v. Omuna Construction Co. Ltd. (1994) 1 NWLR (Pt. 318) 1; Lewis & Peat v. Akhimien (1976) 7 SC 157 at 168.
Finally the learned SAN submitted that as the respondent’s evidence is documentary, it should be accepted by the court. He urged the court to resolve the issue in favour of the respondent.
A contract is defined as an agreement between two or more persons which creates an obligation to do or not to do a particular thing. If a party to an agreement fails to comply with the terms of the agreement, he is said to be in breach of the agreement. In that case, the guilty party can not enforce the agreement.
It is common ground in the present case that under the agreement reached by the parties, the appellant has to inform the respondent of any variation in the rate of interest earlier agreed by the parties.
It is the appellant’s case that he communicated the variation in the rates of interest charged on the loan it gave to the respondent to him. The respondent, on the other hand denied that he received such notices.
It is the law that once a letter is put in the post it is presumed to have reached its destination. It does not matter whether in fact the letter reached its destination or not. But it is only a presumption. And like every presumption, it is rebuttable. In the present case, the person who actually posted the notices to the respondent did not give evidence. There is no evidence that any body saw when the letter was posted. It is my view therefore that the evidence that the notices were posted to the respondent is hearsay. But this is not all. The records of proceedings show that the notices sent to the respondent were returned unclaimed. The record runs as follows-
“Chief Olorunisola shows him a letter written by the pro manager of the bank.
Q: It shows that all letters written by the bank to C49 were returned unclaimed.
It has been accepted that when as a result of pleadings by the parties to a case a material fact is affirmed by one of the parties but denied by the other, the question thus raised between the parties becomes an issue of fact to be resolved at the trial. Nsirim v. Omuna Construction Co. Ltd. (supra).
In the present case, the respondent averred in his statement of claim “that the defendant charged 26% compound interest on the loan without previous notice of any kind to the plaintiff……………………”
In his reply, the appellant averred in paragraph 3 of the statement of defence that “in accordance with the deed of legal mortgage, each time it revises the interest rate it always gives the plaintiff notice of such charges, and will in this regard rely on letters dated 15/5/88, 13/10/89, 18/1/90, 12/2/91, 2/3/92, 31/5/92, 30/11/92, 17/8/93 & 7/3/94.”
The rule on the burden of proof of averments in the pleadings is that the burden of proof rests on the party whether the plaintiff or the defendant who substantially asserts the affirmative of an issue. See Messrs Lewis & Peat (NRI) Ltd. v. A. E. Akhimien (1976) 7 S.C page 157. From my analysis of the evidence adduced in support of the averments the appellant has not discharged the burden. It is my view therefore that the notice of the change in interest rate was not communicated to the respondent.
As I have indicated above, there is no evidence to show that the respondent has liquidated his debt. The appeal succeeds in part. Equally, there is no evidence to show that the respondent received notices of variation in the rate of interest, such rate of interest is therefore ineffective and should not be used in calculating the respondent’s indebtedness.
The appeal succeeds in part. I do not make any order as to costs.
MURITALA AREMU OKUNOLA, JCA: I read before now a copy of the leading judgment of my learned brother Amaizu JCA. I agree with his reasoning and conclusion that the appeal succeeds in part.
I would also allow the appeal in part and make no order as to costs.
WALTER SAMUEL NKANU ONNOGHEN, JCA: I have had the advantage of reading in draft the lead judgment of my learned brother Amaizu JCA just delivered.
I agree with his reasoning and conclusion that the appeal be allowed in part in that the respondent failed woefully to prove the fact that he had finished repaying the loan. What he stated in evidence on this issue is as follows:
“I stopped operating the loan account when I finished paying the 1976 loan but I cannot remember when exactly I finished paying. I have finished the payment.”
This, to my mind, is not sufficient to give judgment to the respondent. He did not tell the court how the payments were made either by bank tellers or cheques or drafts etc. He also did not tell the court that he made the payments himself. The burden of proof of the repayment is squarely on the respondent which he failed to discharge.
I however do not agree with the submission of learned counsel for the appellant at page 6 of the appellant’s brief while dealing with issue No. 3 to wit:
“The first point to be made under this issue is that since it is the respondent who instituted the action claiming that interest rate was reviewed without notice to him, the burden to establish that assertion rests on him.”
The question is how does one prove a negative assertion? The answer is, it is never done. It is trite law that only a positive assertion is capable of legal proof. In the present case there is evidence, and both parties are agreed, that any variation in interest rate must be communicated to the respondent. There is also the evidence that letters written to the respondent to notify him of the variations were never received by him. This clearly shows that the respondent was not aware of the variations contrary to what was agreed between the parties. To that extent I agree with the learned trial Judge that the variations in interest rates except exhibit D8 is contrary to the agreement between the parties and therefore unenforceable against the respondent.
Consequently I too allow the appeal in part and abide by the consequential orders made in the said lead judgment of Amaizu JCA including the order as to costs.
Appeal allowed in part.
Cases referred to in the judgment
Ayanwale v. Atanda (1988) 1 NWLR (Pt. 68) 22; (1988) 1 S.C 1.
Bank of the North v. Saleh (1999) 9 NWLR (Pt. 618) 331.
Ishola v. Societe Generale Bank (Nig.) Ltd. (1997) 2 NWLR (Pt. 488) 405.
Lewis & Peat (NRI) Ltd. v. Akhimien (1976) 7 S.C 157.
Ndili v. Akinsumade (2000) 8 NWLR (Pt. 668) 293.
Nnajiofor v. Ukonu (No. 2) (1986) 4 NWLR (Pt. 36) 505.
Nsirim v. Omuna Construction Co. Ltd. (1994) 1 NWLR (Pt. 318) 1.
Oforlete v. State (2000) 7 WRN 86; (2000) 12 NWLR (Pt. 681) 415; (2000) FWLR (Pt. 12) 2081.
Onuigbo v. Nwekeson (1993) 3 NWLR (Pt. 283) 533.
Oshodi v. Eyifunmi (2000) 11 WRN 86; (2000) 13 NWLR (Pt. 684) 298; (2000) 7 SCNJ 295.
Seismograph Services Nig. Ltd. v. Eyuafe (1976) 9 – 10 S.C 135.
Udo v. Okupa (1991) 5 NWLR (Pt. 191) 365.
Statute referred to in the judgment
Evidence Act Cap. 112 Laws of the Federation of Nigeria, 1990 Ss. 137(1) & 149(d).