3PLR – ACB PLC V. EMOSTRADE LTD
POLICY, PRACTICE AND PUBLISHING, LAW REPORTS 3PLR
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ACB PLC
V.
EMOSTRADE LTD
COURT OF APPEAL
CA/E/143/96
3PLR/1998/4 (CA)
OTHER CITATIONS
(1998) 2 NWLR (PT. 536) 19
BEFORE THEIR LORDSHIPS:
AKPABIO JCA
UBAEZONU JCA
SALAMI JCA
REPRESENTATION
- O Ulasi (with him, A B Chiafor) – For the Appellants
Richard D Ebri (with him, Shinema Binga) – for the Respondent
MAIN ISSUES
BANKING AND FINANCE – BANKER-CUSTOMER RELATIONS: Privity of contract – Whether exists between sole signatory of account of incorporated company and bank – Where customer failed to deposit certificate of incorporation with the bank – Whether ground to deny signatory competence to institute the action in the name of the company
BANKING AND FINANCE – BANKER-CUSTOMER RELATIONS:- Privity of contract – Current account which ownership status has evolved from individual, to partnership and then to incorporated company – Where certificate of incorporation not deposited with bank – Implication for privity of contract over the account
BANKING AND FINANCE LAW:- BANKER-CUSTOMER RELATIONS – Where based on a current account – Nature of relationship – Whether in contract or trust – Privity of contract – Privity of contract as to a bank account held by an agent – Whether extends to disclosed principal of agent
BANKING AND FINANCE LAW:- Contract arising out of a bank account or banking transaction – Consideration for same – Whether can be satisfied by proof of charges which the bank was bound to charge at the end of the transaction
COMPANY LAW – INCORPORATION:- Rights arising therefrom – Competence to bring an action – Whether must in all cases be proved – Registered business name – Proper way of bringing an action
COMPANY LAW – PRE-INCORPORATION CONTRACTS: Rule that a limited liability company is entitled to the benefit of all the pre incorporation contracts entered into by its human agents before it was incorporated – Bank account held by a pre-incorporation agent of an incorporated entity for its benefit – Right of action of incorporated entity over same
TORT AND PERSONAL INJURY:- When relationship between bank and customer can create a trust in favour of customer – When right of action for damages for breach of trust would arise against a bank
COMMERCIAL LAW – AGENCY:- Banker-customer relations – Disclosed agent of an account holder – Nature of agency created – Implications for existence of privity of contract between bank and disclosed principal
PRACTICE AND PROCEDURE – ACTION:- Misnormer – Meaning and nature of – Where the proper is not before the court – Nature of misnormer that can vitiate proceedings – How cured – Whether an application can be made to correct same – Evidence that both parties are ad idem as to the identity of the party suing- Effect – Duty of court thereto
PRACTICE AND PROCEDURE – ACTION:- Competence to bring an action – Party bringing an action as a duly incorporated limited liability company – Whether needs to prove status through evidence of certificate of incorporation – Failure to do so – Whether can be cured by admission of the opposing party
PRACTICE AND PROCEDURE – ACTION:- Right of action – Whether only maintainable by a legal or juristic person – Onus for proving status of a juristic person derived from incorporation – On whom lies – Whether a sine qua non for competency of the action – How proved – Whether only by the production of its certificate of incorporation – Whether an admission suffices
PRACTICE AND PROCEDURE – APPEAL:- Issue for determination – formulation of in a brief – Need for same to arise and be founded on a ground or grounds of appeal filed – Whether parties to an appeal will not be allowed to argue any issue not covered by the grounds of appeal – Effect
PRACTICE AND PROCEDURE – APPEAL: Issues for determination – Splitting of ground of appeal into more than one issue for determination – Validity – Whether a ground or more grounds of appeal may be related to an issue and argued together but a ground of appeal may not be framed into several issues and canvassed separately
PRACTICE AND PROCEDURE – APPEAL:- Omnibus ground of appeal – Where relates to examination or review of quantum of damages – Validity
PRACTICE AND PROCEDURE – APPEAL:- Ground of appeal – Ground relating to quantum of damages – Whether quantum of damages can only be questioned by a ground of law and not of fact
PRACTICE AND PROCEDURE – EVIDENCE: Evidence that was not pleaded – How treated by court
PRACTICE AND PROCEDURE – EVIDENCE: Presumptions – Presumption of law that the record of proceedings in a case is deemed to be correct – Duty of appellate court where there has been no application to rectify any inaccuracy in it
PRACTICE AND PROCEDURE – JURISDICTION: Action initiated by a juristic person whose incorporation was unproven by evidence of the incorporation certificate – Whether invalidates competence of the court to entertain the action
WORDS AND PHRASES: “Misnomer” – Meaning of
MAIN JUDGEMENT
AKPABIO JCA DELIVERING LEADING JUDGEMENT
This is an appeal against a judgment of ITA, J of the High court of Cross Rivers State of Nigeria holden at Calabar in Suit No C/43/94 delivered on 5th February, 1996 wherein he entered judgment in favour of the plaintiff in the sum of N2,500,000.00 being damages for breach of contract with no order as to costs.
The plaintiff’s particulars of claim as filed in the court below was worded as follows:
“The plaintiff’s claim against the defendants jointly and severally is the sum of N5,0000,000.00 (Five million naira) being special and general damages for breach of contract in that the defendants who are the plaintiff’s bankers have refused to furnish the plaintiff at her request and expense statement of account held as a customer of the defendants whereof the plaintiff has suffered damages in its trade and profession”.
The gist of plaintiff’s claim as finally set out in his six page statement of claim may be summarised as follows:-
At all material times, one Victor Ndoma Egba a Barrister and Solicitor, and also the Chairman, Board of Directors of plaintiff’s company, who testified as PW1, for the plaintiff, held at least five current accounts in which he was sole signatory in 1st defendant’s bank at Calabar. Second defendant was the Calabar Branch Manager in the said Bank. Among the accounts of which PW1 was sole signatory was Account No 05474. Apart from the five accounts in which PW1 was sole signatory, there was also another Account No 05756 in the name of Ndoma Egba Ebri and company, a firm of Solicitors. In respect of this Account, PW1 and one Richard Ebri were co-signatories. All the accounts were current accounts.
According to the testimony of PW1 at the trial court, on 30/3/93, he (PW1) went to the 1st defendant bank in Calabar to confirm if a cheque they issued to a client had been cleared. The cheque was drawn on account No 05756.
There PW1 met the Branch Manager (2nd defendant) When the Ledger Card for Account No 05756 was produced, PW1 noticed at once some unauthorised withdrawals from the account. PW1 said he also asked to see ledger Card for Account No 055694 in the name of Ilaston Nigeria Limited (of which he was also a sole signatory). From it he also noticed large unauthorised withdrawals. PW1 then demanded to see the cheques on which the amounts were withdrawn on both accounts. The cheques were brought at random and he discovered that most of those cheques brought bore signatures with no resemblance to his. The amount involved in the cheques so brought went in excess of N500,000.00 PW1 immediately informed 2nd defendant that the cheques were forged and the signatures were obviously not his own. PW1 testified further that besides one cheque for N225,000 made payable to the 1st defendant all the other cheques were made payable to one Oluwaseyi Fabelurin. The 2nd defendant then asked PW1 what he was going to do and that one replied that he was going to report the matter to the police and instruct his Solicitors and he later did so.
However, PW1 later wrote to the 1st defendant for attention of 2nd defendant confirming what he discussed with him namely that the cheques he showed to him (PW1) were forged cheques and that 2nd defendant should immediately credit the relevant account with the amount on the forged cheques he had seen (PW1’s) expense the statement of account and all cheques and other instruments drawn on the accounts from 1/1/91 to that date in respect of all the accounts mentioned i.e. Account No 05604, 5475, 2192 and 05756. According to PW1 in his evidence, he had demanded the statements of accounts and photocopies of all the Instruments to enable him determine the scope of the fraud on those Accounts. According to PW1 on 31/3/93 he lodged a complaint at the state CID and followed it up with formal letter of complaint to the Commissioner of Police.
PW1 also instructed his Solicitors Messrs. Kanu Agabi and Associates who wrote to the Defendants advising them to credit the various Accounts up to the various sums on the forged cheques. In reply to PW1’s letter the Bank (1st defendant) wrote to him through their own Solicitors, Messrs. Aniekan AND Associates accusing him of colluding with Oluwaseyi Fabelurin to steal his own money, and was threatened with libelling the defendants. They also threatened to sue PW1’s Solicitors for libel. In addition to all the steps mentioned above, P.W1 said he also instructed a firm of Chartered Accountants – Messrs. Babingster – Asharger AND Co of Calabar to audit all the aforementioned accounts. He also wrote to the defendants informing them of the appointment of the above firm of Chartered Accountants to audit the said accounts, and solicited their cooperation, but the said co-operation was never given, as a result of which the Accountants had to abandon their assignment. The defendants had still refused to give to plaintiff any statement of their account, as a result of which they were unable to know whether any or all the cheques drawn on all their accounts including Account No 05474 were genuine or not. In due course the plaintiff instituted this action, claiming as already set out above. At the trial evidence was given under cross examination that PW1 personally completed all the forms necessary to open the Account No 5474 which is the same thing as Account No 05474. The Mandate Card showing specimen signature of PW1 as Sole Signatory was also tendered in evidence.
In response to the above the defendants filed a 17 paragraph statement of defence in which they alleged that the plaintiff was not a limited liability company and was not a body known to the law which can sue or be sued and would at the trial be put to the strictest proof of its status. It was stated further that the plaintiff was not known to the 1st defendant as its customer at its Calabar Branch, as “Emostrade Limited” was not its customer. It was also averred that the 1st defendant owed no obligation to furnish statement of account to the plaintiff for the mere asking and without any offer of the fee or cost therefor.
It was also contended that the defendants owe no contractual duty to the plaintiff to avail him with statement of account and cheques other instruments drawn on the plaintiffs account if any once the said cheques other instruments were paid. At any rate even if such a duty existed the plaintiff did not make a demand timeously and was estopped from suing on it.
Finally, it was alleged that the 1st defendant discharged its duty to the plaintiff, if any and that all necessary statements of accounts were sent to the plaintiff even without its request and also at its request, through his accountant one Oluwaseyi Fabelurin.
At the trial each side fielded only one witness. The plaintiff fielded its Chairman, Chief Victor Ndoma Egba as PW1 while the 1st defendant fielded one Christian Udechukwu Okuka their Recoveries and Litigation Officer, Calabar Branch, as DWI while contending in his evidence that “Emostrade Limited” was not their customer as no Certificate of Incorporation was deposited with them he nevertheless admitted that there was an Account No 5474, in the named “Emostrade Limited” He testified that “Account No 5474 in the named “Emostrade Limited” He testified that Account No 5474 is our Account Number allocated to the customer Emostrade is our customer. Chief Victor Ndoma Egba is only signatory to Account No 5474…….
At the conclusion of evidence and address, the learned trial Judge, ITA, J took a hard look at all the evidence adduced before him, and came to the conclusion that:
“a trading account was blocked making it impossible for the Account holder to operate the Account. This was recognised as a breach of contract between the customer and the Bank”.
He therefore awarded damages assessed at N2,500,000 as adequate compensation for the plaintiff in the circumstances of this case.
Against the above judgment the defendants were dissatisfied and so appealed to this court on four grounds from which the following three issues for determination were formulated. The defendants will hereinafter be referred to as the appellants.
“In our humble view the following issues call for determination in this appeal.
(i) Whether the existence of the plaintiff as a legal person qua a limited liability company capable of suing the defendants was established at the trial.
(ii) Whether (if the plaintiff is a legal person and proved the privity of contract) the plaintiff also proved any breach of contract against the defendants to warrant an award of N2,500,000.00.
The plaintiff, who will hereinafter be referred to as respondent, also filed a brief in which they adopted the three issues formulated by the appellants and also formulated an additional one as follows:-
“Whether the errors alleged concerning the judgment of the learned trial Judge, even if detected by this court, are sufficient to warrant a reversal of the trial court’s judgment as sought by the Appellant”.
I have carefully considered all the four issues formulated above and consider them adequate for the resolution of this appeal. I shall therefore proceed to do so as follows:-
“Re issue (i)
“Whether the existence of the plaintiff as a legal person qua a limited liability company capable of suing the defendants was established at the trial”
Under this issue it was contended on behalf of the appellants by their learned Senior Counsel, Udechukwu, SAN in their brief that the learned trial Judge at the court below erred in law when he entered judgment for the plaintiff whose legal existence was challenged but was never established. It was then pointed out that the plaintiff did not tender its Certificate of Incorporation. Exhibits 16 and 27 produced by the defendant showed beyond the shadow of a doubt that the plaintiff was not the holder of the account upon which it based its suit. It was then submitted that the finding by the court below that the plaintiff was a legal person was perverse and untenable.
In reply to the above it was submitted that the learned trial Judge used the appellant’s amended statement of defence to reach the conclusion that the appellants had therein pleaded enough to indicate unequivocal acknowledgment of the plaintiff, as a limited liability company, and why in the circumstances the respondent had no duty to engage in the superfluous proof demanded by the appellants that he was indeed incorporated. The issue of the plaintiff’s incorporation and consequent “existence” was for that trial a non-issue because what was admitted needed no proof (s 75 of Evidence Act 1990).
I have carefully considered the two arguments canvassed above and must say that regardless of whether the respondent was duly incorporated as a limited liability company or not, there can be no question of his being a legal person or a juristic person in this case. That is because respondent’s name on the writ of summons “EMOSTRADE LIMITED” is prima facie a limited liability company, and therefore a juristic person. See the case of Agbonmagbe Bank Ltd v General Manager G B Oluwant Limited AND Anor (1961) 1 All NLR (pt 1) 116 where in a Statement of Claim 1st defendant was named as “General Manager, G B Olivant Ltd Preliminary objection that such name was not of a person known to law, such a person could not be sued, and ought to be struck out of the action. It was held that there was no misnomer of 1st defendant as that was not a case where the defendant had been sued in a wrong name. First defendant was not a juristic person, and as such could not be sued. First defendant’s name was accordingly struck out from the action. It was further held that in case of misnomer, if application was made to amend the writ by substituting the proper name, it should be granted.
In the instant case, the appellants who were the defendants were not complaining that they had no juristic personality and so should be struck out of the action. They also did not file any preliminary objection at the court below for the plaintiff to be struck out of the suit for being an non juristic person, which could have been the end of the matter.
In any case regardless of whether the respondent was or was not a limited liability company, on the appellants own admission, the respondent was a partnership. It was a Registered Business Name. It was also accepted by the appellants themselves that the Account No 05474 was their own and was held by Chief Victor Ndoma Egba (P.W I) who was the sole signatory to the account. So what were the appellants quarreling about? That respondent did not incorporate his business under the Companies AND Allied Matters Act 1990. And how did that prejudice them? And in what way did the appellants suffer any loss? None. To put it briefly, this was, in my respectful view a case of misnomer of plaintiff, which with leave of the Court could be cured by amendment. The writ of summons could have been amended by showing the plaintiff to be Chief Victor Ndoma Egba (Trading under the Name and style of Emostrade”) This is if truly the plaintiff had not been incorporated. But if on the other hand the respondent had actually been incorporated but failed for one reason or the other to lodge his certificate of incorporation with the bank that should not be any business of the appellants as long as the same man was still the signatory to the Account. Finally on this issue one must refer to the recent case of A B Manu AND Co v Costain (W A) Ltd (1994) 8 NWLR (pt 360) 112 where the appellant had contended that he knew the respondent as Costain (West Africa) Ltd and not as Costain (W A) Ltd. It contended therefore that the respondent was not competent to institute the action in the name it proffered.
In unanimously dismissing the appeal it was held inter alia as follows by the Court of Appeal, Lagos Div.
“Misnomer can be said to be a mistake in name – giving incorrect name to person(s) in the writ of summons. It occurs when a mistake is made as to the name of a person who sued or was sued or when an action is brought by or against the wrong name of a person. In the instant case, going by the facts contained in Exhibit 31” of a letter written by the appellant to the respondent, the words “West Africa” were therein abbreviated. It cannot therefore be said that the appellant did not know that Costain (W A) Ltd means no other thing that Costain (West Africa) Limited.
In conclusion it was held at P 121 of the report as follows:-
“On Nature of misnomer that can vitiate proceedings:-
When both parties are quite familiar with the entity envisaged in a Writ of Summons, and could not have been misled or have any real doubt or misgiving as to the identity of the person suing, then there can be no problem of mistaken identity to justify the striking out of the action. Misnomer that will vitiate the proceedings would be such that will cause reasonable doubt as to the identity of the person intending to sue or be sued.
In the instant case, both parties are ad idem as to the identity of the party suing, that is the respondent and there is no misnomer whatsoever of a nature that could vitiate the proceedings at the trial court”
In view of the foregoing, I hold the view that the name of the respondent on the writ was a mere misnomer which did not and could not vitiate the proceedings Issue No 1, must therefore be resolved in favour of the respondent.
Re Issue (ii)
“Whether the plaintiff if it is a legal person capable of suing the defendants had at the trial established by evidence any privity of contract between it and the defendants to sustain the suit”.
Under this issue the main point canvassed on behalf of the appellants was that a limited liability company was known only by the name by which it is incorporated (Section 37 of the Companies and Allied Matters Act, 1990 was cited in support). It was only in that name that it could contract or do business. It was then submitted that the respondent having failed to produce its certificate of incorporation, if indeed it had one, there was no proof that as at the date the account was opened which was 18th May, 1987 (as per Exhibit 17) there was in existence any company called Emostrade Ltd which could contract with any one of the defendants. It was further submitted that the plaintiff company, even if it existed, not being the holder of account No 05474 could not compel the defendants to give it any information relating to that account, and cannot sustain a suit to enforce such an obligation or to claim damages for breach of contract by virtue of purported refusal by the appellants to oblige it. (The case of UBA Ltd vs Penny Mart Ltd (1992) 5 NWLR (pt 240) 228 at 240 was cited in support.
In reply to the above it was submitted that evidence of privity of contract between the plaintiff and the defendants at the trial were replete. Simply put, the privity of contract that the appellants would be searching for will be no more than a convincing nexus between both parties to show that the defendants held something of the plaintiff, over which that plaintiff could complain, and to which complaints the appellants ought to be answerable, or at least sensitive. Reference was then made to the evidence of DW1 at p 47 lines 16-19 of the records to show that all the above requirements were established. At the said p 47 of the records, D W I was recorded as saying as follows:-
“Account No 5474, yes there is and is in the name of Emostrade Ltd Ledger is with the bank.
Attention was also drawn to the evidence of the same D W I at p 47 lines 23 -27 where he said that there were other documents relating to account No 5447 but which were not tendered to show that Emostrade was different from Emostrade Ltd The court was therefore urged to overrule the submissions of the appellant under this issue and disallow the appeal.
I have carefully considered all the arguments canvassed above by learned counsel on both sides, and must first observe that the admission of DW1 under cross examination at P 47 of the records that:
“Accounts No 5474 yes there is and in the name of Emostrade Ltd Ledger is with the bank”
had hit me like a bolt from the blues because it ran counter to the case of the appellants as stated in their pleadings, especially paragraph 5, which reads as follows:-
“The plaintiff is not known to the 1st defendant as its customer at its Calabar Branch. Emostrade Limited is not its Customer”.
It is our law that evidence that was not pleaded goes to no issues, and should be ignored (Emegokwe v Okadigbo (1973) 4 S C 113 at 117) On the other hand there is a presumption in our law that the record of proceedings in a case is deemed to be correct; especially as there has been no application to rectify any inaccuracy in it. An appeal should be fought on the basis that the record is correct. Ehikioya vs C O.P (1992) 4 NWLR (pt 233) 57 at 74; and Ojeme vs Momodu (1994) 1 NWLR (pt 323) 685 at 697.
Be that as it may it is my firm view that even if one is to ignore the unfortunate admission at p 47 of the record and go by what has been the case of the appellants all along namely that their account No 05474 is held by “Emostrade” and not by the present plaintiff who calls himself “Emostrade Ltd one will still come to the inevitable conclusion that there is or was privity of contract between the appellants and the respondent and that the respondent has a locus standi in this case.
This is so because it is common ground (from the records) that respondent first opened account No 05474 in 1981 under his personal name of “Victor Ndoma Egba” simpliciter. As an individual he was the sole signatory to that account. Then in 1987 he converted himself into a sole partnership under the business name of Emostrade. In this new name he continued to be the sole signatory as Victor Ndoma Egba. This Victor Ndoma Egba is the PWI in this case. Then on a date that has not been specified PW1 once more converted himself into a limited liability company under the name of Emostrade Limited with Victor Ndoma Egba (PWI) as its Chairman and also still the sole signatory. In the normal course of events PWI should have informed his bankers (the appellants) about his change in status or incorporation into a limited liability company and also would have been required to lodge a copy of his certificate of incorporation with them. But for a reason that was not known these steps were not taken before the incidents leading to this appeal took place. The question then arises. What prejudice if any have the appellants suffered as a result of the failure of respondent to inform them of his new status as a corporate personality? As far as anyone can see, there was none, because the relationship of Banker and Customer still subsisted between the parties. As long as that relationship existed, the appellants cannot be heard to complain that there was no privity of contract between the respondent and themselves, merely because their records had not been amended. It is common knowledge that a limited liability company is entitled to the benefit of all the pre incorporation contracts entered into by its human agents before it was incorporated. In the instant case, Chief Victor Ndoma Egba (P W I) was clearly one of the human agents of either “Emostrade or Emostrade Limited. The partnership or company was entitled to the benefit of whatever banking contract there might have been between the appellants and the respondent’s Chairman, (PWI) In this connection reference must be made to the case of New Nigeria Bank Ltd v.. Boardman Odiase (1993) 8 NWLR (pt 310) 235 In that case the respondent had sued the appellant for N750,000.00 being special and general damages for diverting Foreign Exchange Approval granted by the Central Bank of Nigeria for his (respondent’s) benefit to the benefit of a total stranger. The defendant/appellant later raised a preliminary objection complaining inter alia that the plaintiff has no locus standi in this suit in that there was no privity of contract between the plaintiffs and the defendant.
The learned trial Judge at the court below, Obi, J held that respondent had a locus standi to sue, as he was clearly a disclosed principal while his mother, Mrs. Obasuyi and Dr. Aimuwu through whose account the Foreign Exchange application was made, were his agents. As to whether consideration was given or not given, he held that the charges which the bank was bound to charge at the end of the transaction was the consideration. On appeal to us at Benin Division, we accepted and affirmed the ruling of the Court below. We also added that even if there had been no breach of contract, there was a serious breach of trust. Under our law there was nothing that prevented a beneficiary from suing a trustee for breach of trust.
In view of the foregoing, I hold that since PWI was clearly the agent of the respondent in all his transactions with the appellant, in respect of account No 05474, there was clearly privity of contract between respondent and the appellants to sustain the suit. Issue No (ii) must therefore also be answered in the affirmative.
Re Issue (iii)
“Whether (if the plaintiff is a legal person and proved the privity of contract) the plaintiff also proved any breach of contract against the defendants to warrant an award of N2,500,000.00”.
Under this issue, the contention of the appellant was that there was no evidence on record to show that the appellants were in any way accountable to the respondent as all the documents tendered as Exhibits 1-15 concerned accounts said to be held by Victor Ndoma Egba and not the respondent – Emostrade Ltd It was also submitted that there was no evidence that the respondent suffered any loss by the appellants alleged refusal to submit to account. The plaintiff has not established his loss.
In response to the above, it was quickly pointed out that there was no ground of appeal that questioned award or quantum of damages – whether excessive or not: or whether awarded on correct principles of law or not.
Not having appealed against damages, it was not therefore open to the appellants to formulate an Issue that questioned award of damages.
I have carefully considered the two arguments canvassed above, and must agree with the learned counsel for respondent that an issue for determination formulated in a brief must arise and be founded on a ground or grounds of appeal filed; and parties to an appeal will not be allowed to argue any issue not covered by the grounds of appeal. Such an issue becomes irrelevant and incompetent and must be struck out.
See e.g.
- Onifade v Olayiwola (1990) 7 NWLR (pt 161) 130 at 157
- Momodu v Momoh (991) 1 NWLR (pt 169) 608 at 620 – 621
- Labiyi v Anretiola AND Ors (1992) 8 NWLR (pt 258) 139
However, in the instant case, while there was clearly no ground of appeal against quantum of damages, nor even the principle of the award, there was definitely ground 3, which questioned the appropriateness of awarding damages to a person who has suffered no loss. This argument was founded on the thesis that all the documents tendered as Exhs 1-15 in this case transpired between the appellants and Chief Victor Ndoma Egba and not with the plaintiff on record “Emostrade Ltd” This issue, I must observe is very similar to the last issue in which it was argued that there was no privity of contract between the appellants and the plaintiff – Emostrade Ltd, but with Chief Victor Ndoma Egba. That issue was resolved in favour of the respondent because of the fact that Chief Victor Ndoma Egbe, by virtue of being the Chairman of respondent Company, was clearly the human agent or alter ego of the respondent, who ipso factor was entitled to the benefit of all the pre incorporation contracts entered into between Chief Victor Ndoma Egba and third parties. By parity of reasoning therefore all the documents exhs 1-15 written between appellants and Chief Victor Ndoma Egba, were ipso facto” written between the appellants and respondent as the disclosed principal of Chief Victor Ndoma Egba. In the same way the respondent could take the benefit of any contract entered into between Chief Ndoma Egba and third parties, it can also take the benefit of damages awardable to Chief Victor Ndoma Egba, who was its human agent in respect of all the transactions complained of. This issue must therefore also be resolved in favour of the respondent namely that damages were properly awarded in favour of the respondent as the principal of Victor Ndoma Egba (PWI) in this case.
With issues (i) to (iii) of appellants having been resolved in favour of the respondent it becomes unnecessary to consider the lone issue formulated by the respondent. This appeal therefore fails and is accordingly hereby dismissed with costs assessed at N3,000.00 in favour of respondent.
UBAEZONU JCA [agreed with the lead judgement.]
SALAMI JCA (Dissenting):
In the High Court of Justice of the Cross River State of Nigeria, sitting at Calabar the plaintiff’s claim as per the particulars of claim endorsed on its writ of summons read as follows-
“The plaintiff’s claim against the defendants jointly and severally is the sum of N5,000,000.00 (Five million naira) damages for breach of contract for the defendants who are plaintiff’s bankers have refused to furnish the plaintiff at her request and expense statement of account held as a customer of the defendants whereof the plaintiff has suffered damages in his trade and profession.
Pleadings were ordered and exchanged and eventually sealed at amended statement of claim and amended statement of defence. At the trial each party called a witness and addressed the court. Thereafter, the learned trial Judge, Ita, J in a reserved and considered decision entered judgment in favour of the plaintiff in the sum of N2,500,000.00
The defendants were dissatisfied with the decision. Being aggrieved they have appealed to this court on four grounds of appeal.
Briefs of argument, in compliance with the practice of this court, were filed and exchanged by the parties, to the instant appeal. In the appellant’s brief the following issues were formulated:
(i) Whether the existence of the plaintiff as a legal person qua a Limited Liability Company capable of suing the defendant was established at the trial.
(ii) Whether the plaintiff, if it is a legal person capable of suing the defendants had at the trial established by evidence any privity of contract between it and the defendants to sustain the suit.
(iii) Whether (if the plaintiff is a legal person and proved the privity of contract) the plaintiff also proved any breach of contract against the defendants to warrant an award of N2,500,000.00
Clearly these formulations are variants of one and another. Issue (i) is related to ground 1 of the grounds of appeal while Issue (ii) is related to grounds 2 and 3 and Issue (iii) is related to grounds 2 and 4. The splitting of ground 2 into two issues is improper, a ground or more grounds of appeal may be related to an issue and argued together but a ground of appeal may not be framed into several issues and canvassed separately.
The plaintiff in its brief adopted the appellant’s formulation and made a lone addition thereto. The respondent’s additional identification of issue reads as follows-
“Whether the errors alleged concerning the judgment of the learned trial judge even if detected by this court are sufficient to warrant a reversal of the trial court’s judgment as sought by the appellants”.
As earlier observed, the three issues are variants of one and another, the appellants seem to have put all their eggs in the same basket. Ground 4 of the grounds of appeal is an omnibus ground which does not afford this court an opportunity to examine or review quantum of damages which invariably can only be questioned by a ground of law and not of fact.
In arguing issue 1, learned counsel for appellant contended that learned trial judge erred in law when he entered judgment for the plaintiff whose legal existence was challenged but was never established. He contended that the admission ascribed to the appellants only witness cannot be supported by evidence. Counsel went further to submit that assuming there was an admission, it does not relieve the plaintiff of the burden of establishing that it has a competence to institute the action. The finding of the learned trial Judge for respondent is hinged or pegged upon a chance admission of the only witness for the appellants in the course of his cross examination or admission scouranged from some paragraphs of the statement of defence.
It is apt, at this stage, to state the facts of the case albeit succinctly. The respondent suing as a Limited Liability Company, claims N5,000,000.00 as special and general damages for breach of contract. The contract is founded upon existence of banker and customer relationship. The account is variously described as number 5474 or 05474 operated at Calabar branch of the appellant but it is agreed, notwithstanding the discrepancies in the number of the account, that it is one and the same account. The breach of contract is based on the refusal of the appellants to furnish the respondent with statement of account. In a joint statement of defence, the appellants put personality of the respondent in issue by averring that the respondent is not a limited liability company duly incorporated under the relevant enactment which can sue or be sued and would at the trial be put at the strictest proof. The appellants only witness testified that Emostrade was a partnership registered as a business name with one Chief Victor Ndoma Egba as the sole signatory, as well as sole partner. The account was first opened in 1981 with the personal name of Victor Ndoma Egba. He remained the sole signatory of his personal account until 1987 when he converted the account to the name of a firm, Emostrade which was registered as a business name. Thereafter the holder of the same account No 05474 was changed to Emostrade Limited. The signatory to the account remained Victor Ndoma Egba who incidentally is the first and only witness for the plaintiff. Ordinarily, the person putting up the fiction ought to have informed the bank of the change of status of the holder of the account and furnish the particulars of incorporation to the bank, the 1st appellant. Exhibits 1-15 tendered by the respondent did not show that it is a limited liability company which can sue and be sued. Exhibits 16 and 17 further put respondent on notice as to its status. The question that has agitated my mind is the insistence of the operator of Account No 05474 at Calabar Branch of the African Continental Bank to sue as a limited liability company when he cannot produce the evidence of incorporation when challenged to do so. He has couple of options. The action could be brought in the firm’s name Emostrade, if Victor Ndoma Egba wants to masquerade behind fictional person, or persons. In the alternative the action could have been equally and competently brought by “Chief Victor Ndoma Egba” or “Chief Victor Ndoma Egba (trading under the name and style Emostrade)” Either title is supported by the bank records but to foist a personality whose identity is not only seriously in doubt but strenuously contested on the appellants and remain adamant is baffling. The adamantine posture of the counsel for the respondent and Chief Victor Ndoma Egba who is also a legal practitioner makes one to wonder what could be responsible for such a rigidity. In any case, no action can be brought by or against any party other than a natural person or persons unless such a party has been given by statute expressly or impliedly, or by common law, legal personality under the name by which it sues or is sued, or a right to sue or be sued by that name.
See Knight AND Searle v Dove (1964) 2 All E R 307; Chief Thomas v Local Government Service Board (1965) All NLR 168, 171 – 2.
In a not too dissimilar case in the case of Accuracy General Construction Ltd v Col J U Anaja AND Others (1978) 2 FCA 41, it was pleaded that the plaintiff was registered under the Registration Certificate no 190977 whereas Exhibit 1A which is the certificate it is a different body, i.e. Accuracy General Constructing Company and Technical Suppliers, that is duly registered and not the association that has brought the suit culminating in the appeal. At page 46 of the report, this court said –
“The question now is not whether the Respondents were misled or not by all these comedy of errors or wrong nomenclature but whether the error is fatal to the claim before the court. A submission was made before the learned Judge, that there was no proper plaintiff, in this action. The learned Judge, with respect, did not deal with this submission but instead went into the question of whether the plaintiff was a juristic person or not and held wrongly in our view that is was on the evidence before him. The importance of the submission as to the proper plaintiff goes into the question of misnomer and not the issue of legal entity or juristic person.
We are of the view that there is no proper plaintiff in this suit and the consequence of that is that on the submission made to the learned judge, the suit as it stood with no attempt to amend to bring the proper plaintiff, should have been struck out on that ground alone: N Okechukwu AND Sons v D S A Nda (1967) NMLR P 368.
The submission of the learned counsel for respondent to the effect that what was in issue was a mater of pleading and evidence as exchanged between the parties in proof of an issue and not some unrelated application of a law susceptible to varying interpretations of convenience is unhelpful. The learned counsel has urged us to disregard the provisions of Companies and Allied Matter Act of 1990 particularly sections 36 and 37 thereof and rely on evidence. What evidence did the respondent proffer to show that it is incorporated? None.
The respondent should face the issue of his status or competence to bring the action fairly and squarely. It is not a matter of hide and seek and I am firmly of the view that it cannot bluff its way through.
That he has a status to bring the suit in the manner it did is a matter within its personal knowledge which onus it has the burden to discharge. See Section 142 of the Evidence Act, Cap 112 of the Laws of the Federation of Nigeria, 1990, which provides as follows-
“142. When any fact is especially within the knowledge of any person, the burden of proving that fact is on him”.
It is not open to respondent to seemingly contend that the appellant has produced no evidence that the respondent has no registration certificate. The point that the respondent is a registered limited liability company is a matter peculiarly within its knowledge and the appellants are under no obligation of giving evidence of non existence of the licence. See the English case of Rex v Oliver. Furthermore, the respondent has asserted that is it a limited liability company, the burden is on it to so prove.
I therefore, agree with the submission of the learned counsel for the appellant that the answer to the challenge offered by the appellants is the production of its certificate of incorporation and not placing reliance on some mundane admission. See the case of Registered Trustees of the Apostolic Church Ilesha Area, Nigeria West Africa v Attorney General of the Mid Western Nigeria AND Ors (1972) 4 S C 150 158-9 where the Supreme Court held as follows:-
“We are in agreement with the learned trial Judge, that whatever may be the admission of the 3rd respondent of the status of the appellant, there is no evidence before the court that the appellant was ever a corporate body. This could only be established as a matter of law by the production of the certificate of incorporation, admission inter partes notwithstanding. The corporate status of appellants not having been established, then under Land (perpetual succession) Act, no property could be vested in the named Trustees and neither could they sue or be sued.
This case was cited with approval by the Supreme Court in the case of Fawehinmi v Nigerian Bar Association (No 2) (1989) 2 NWLR (pt 105) 558 At page 632 of the report, the Supreme Court observed per Karibi Whyte, JSC as follows:-
“The proposition that an action is only maintainable by a legal person was clearly brought out in the recent decision of this court in Nurses Association v Attorney General (1981) 11-12 SC 1 Thus the onus is on the party claiming the status of a juristic person derived from incorporation or not to establish it. In this court, in Apostolic Church Ilesa v AG Mid West (1972) 4 SC 150, it was held that the corporate status of a body is established by the production of its certificate of incorporation”.
The learned trial Judge was therefore labouring under misapprehension of law when he held –
“It is in evidence that the defendant recognised the existence of the plaintiff on the basis of their pleading in Amended Statement of Defence paragraphs 9, 10, 11 and 12. What is admitted need not be proved. Arguing the contrary is either not sound or not intended to be relied on. On the relevance of section 36(5) AND 6 and Section 37 of the Companies and Allied Mattes Act – Act No 1 1990 … Certificate of incorporation merely says that a company which sought registration was registered and there it stops.
If the learned trial Judge had carefully, properly and dispassionately considered the authorities cited by the learned counsel for the appellant, the matter in a way, would have stopped there. it would have put an effective end to the respondent’s claim if it fails to avail itself of the opportunity of replace the present party with a party having a legal personality. The objection taken to the respondent’s right to sue and be sued goes into the competence of the court to entertain the action. The onus is on the party objected to, to establish or prove its right to sue. See Ajao v Sonola AND Anor (1973) 5 SC 119, 123 Notwithstanding the alleged admission, the respondent still had the burden of establishing its competence to sue or be sued. Such issue is never resolved on mere admission.
See Seismograph Service (Nigeria) ltd v Chief Keke Ogbenegweke Eyuafa (1976) 9-10 SC 135 and Gramaphone Company Ltd v Magazine Holden Company (1911) 28 R.P.C 221.
The answer to the appellant’s first issue is in the negative therefore, ground 1 of the grounds of appeal related to it succeeds. Having found that the respondent is not competent to bring the action, the writ of summon is hereby stuck out by me. All the orders made by the trial court pursuance to the issuance of the writ of summons is set aside. This seems to resolve all the issues in controversy between the parties. The appeal in the circumstance succeeds and it is allowed. All the consequential orders in the court below including the orders as to costs are set aside. There is order as to costs assessed in the court below at N1,500.00 and in this court N2,000.00 in favour of appellant.
Appeal dismissed.
Cases referred to in the judgment:
A.B Manu AND Co v Costain (W A) Ltd (1994) 8 NWLR (pt 360) 112
Accuracy General Construction v Anaja (1978) 2 FCA 41.
Agbonmagbe Bank Ltd v G.M, G B Ollivant Limited (1961) 1 All NLR (pt 1) 116
Ajao v Sonola (1973) 5 SC 119
Ehikioya v C.O.P (1992) 4 NWLR (pt 233) 57
Emegokwue v Okadigbo (1973) 4 C 113
Fawehinmi v N.B.A (no 2) (1989) 2 NWLR (pt 105) 558
Labiyi v Anretiola (1992) 8 NWLR (pt 258) 139
Momodu v Momoh (1991) 1 NWLR (pt 169) 608
New Nigerian Bank Ltd v Odiase (1993) 8 NWLR (pt 310) 235
Ojeme v Momodu (1994) 1 NWLR (pt 323) 685
Onifade v Olayiwola (1990) 7 NWLR (pt 161) 130
Reg. Trustees, Apostolic Church Ilesaha v A-G Mid Western State (1972) 4 S C 150.
Seismograph Services (Nigeria) Ltd v Eyuafe (1976) 9-10 SC 135
Thomas v Local Government Service Board (1965) 1 All NLR 168
U.B.N Ltd v Penny Mart Ltd (1992) 5 NWLR (pt 240) 228
