NATIONAL BANK NIGERIA LIMITED V. MOBIL OIL NIGERIA LIMITED

NATIONAL BANK NIGERIA LIMITED

V.

MOBIL OIL NIGERIA LIMITED


COURT OF APPEAL

(LAGOS DIVISION)

WEDNESDAY, 1ST DECEMBER 1993

CA/L/160/92

3PLR/1993/78  (CA)

 

OTHER CITATIONS

[1994] 2N.W.L.R. PART 328 PG.534

 

BEFORE THEIR LORDSHIPS

IBRAHIM KOLAPO SULU-GAMBARI;

NIKI TOBI;

EUGENE CHUKWUEMEKA UBAEZUONU.

 

REPRESENTATION

Chief R. A. O. Oriade – for the Appellant

A Yonwuren, Esq for the Respondent.

 

MAIN ISSUES

BANKING AND FINANCE – Cheques

BANKING AND FINANCE – Bills of Exchange

BANKING AND FINANCE – Determination of Interest rate

TORT AND PERSONAL INJURIES – Liability of negligence

 

MAIN JUDGMENT

Lead Judgement: Delivered by Sulu-Gambari JCA

The plaintiff claimed, at the trial court, against the 1st and 2nd defendants jointly and severally the sum of N2,603,090.40 being the property of the plaintiff which both the defendants converted to the use of the 1st defendant. The claim could be broken down as follows:-

 

(i)      Capital of sum converted .. . N2,293,876.90

 

(ii)     Special Damage .. .. 309,213.50

 

Total N2,603,090.40

 

Also claimed is the interest at the rate of 13% per annum compounded at the end of every month as well as after and before judgement on the said sum of N2,603,090.40 from the June, 26 1986.

 

Pleadings were filed and exchanged by the parties. The plaintiff called ten witnesses; the 1st defendant testified and also called three witnesses while the 2nd defendant called only one witness in support of its case.

 

The case of the plaintiff, from its pleadings, was that the company established an Insurance section as part of its Treasury section in January, 1983 and the 1st defendant who was employed in November, 1982 was put as Head of that Insurance section. In that capacity, the 1st defendant was said to have collected and/or received debit notes direct from the Lion of Africa Insurance Company Limited, which genuine debit notes were said to have been mingled with the false debit notes.

 

It was discovered in the course of criminal investigation that the 1st defendant opened and operated a Current Account No 130722 in the name of Lion of Africa Insurance (Consultancy) Company limited with signature cards marked Exhibits P1 and P2. The 1st defendant was the sole signatory of the said account. From the amount in the Current Account No 130722 the 1st defendant also opened a Fixed Deposit Account with the sum of N240,000.00.

 

Cheques that were issued for payment to and in the name of Lion of Africa Insurance Company Limited, which were also crossed generally, were alleged to have been paid into current Account No 130722 with the 2nd defendant Bank which was solely maintained and operated by the 1st defendant as a sole signatory. This means that the alone operated the account and could draw any cheque and take any amount of money out of the account without anybody counter signing with him.

 

The plaintiff’s case is to the effect that some cheques marked Exhibit P5 amounting in cash to N2,293,876 90 which were endorsed for payment to the Lion of Africa Insurance Company Limited lodged with the 2nd defendant by the plaintiff were paid into the account of Lion of Africa Insurance (Consultancy) Company Limited. That in view of the discrepancy in the two names highlighted above the 2nd defendant should have been put on notice or suspicion when it was paying the amount meant for one individual entity into the account of a different entity. The suspicion must surely be more, particularly when the cheques were crossed and marked not negotiable and for this reason, it was the plaintiff’s case that the 2nd defendant was liable in negligence and in conversion of the proceeds of the cheques.

 

The 2nd defendant claimed to have acted normally and in the ordinary course of its business and banking practice in opening Current Account No 130722 for the 1st defendant who did not give the 2nd defendant any reason to doubt his (1st defendant’s) integrity when the (1st defendant) did not disclose to the 2nd defendant that the was an employee of the plaintiff. What the disclosed to the 2nd defendant that the was an employee of the plaintiff. What the disclosed to the 2nd defendant was simply that the was an Insurance Broker and the Agent of the Lion of Africa Insurance Company Limited and also a petrol dealer for the plaintiff. The 2nd defendant therefore contended that it acted in good faith without any negligence in keeping Current Account No 130722 for the 1st defendant.

 

Under cross examination, the 1st defendant denied being the owner of Current Account No 130722 with the 2nd defendant Bank at No 6 Davies Street (Branch) Lagos. He also denied being the owner of the credit balance of N105,416 00 left in Current Account No 130722 and nor was he aware of any Fixed Deposit Account in the sum of N240,000.00 with the 2nd defendant Bank.

 

The learned trial Judge highlighted the point that was common among the parties both on the pleadings and evidence adduced at the trial which was that the 1st defendant was formerly employed by the plaintiff company and was put in charge of the Insurance section of the plaintiff’s establishment.

 

The learned trial Judge gave as his reason for not probing the issues of falsification and altering the fact that criminal proceedings were on course for such acts and also that no evidence had been adduced to found the charges of falsification and altering which wee in any case not the convener of the civil proceedings being conducted.

 

Having regard to the cause of action formulated on the Writ of Summons, the issues joined on the pleadings and evidence adduced the following issues called for the decision of the learned trial Judge:

 

(i)      Whether the 1st defendant opened and operated Current Account No 130722 in the name of Lion of Africa Insurance (Consultancy) Co with the National Bank of Nigeria Ltd at No 6 Davies Street, Branch, Lagos, and also whether the 1st defendant is the owner of the Fixed Deposit of N240,000.00 with the said Bank.

 

(ii)     Whether certain cheques issued by Mobil Oil Nigeria Ltd in favour of Lion of Africa Insurance Co. Ltd were diverted into Current Account No 130722 and also whether the proceeds of the said cheques have been put to use and benefit of the 1st defendant and/or to the use and benefit of any other person or entity.

 

(iii)    Whether in the operation of Current Account No 130722 the National Bank of Nigeria Limited (2nd defendant) was guilty of negligence as the Collecting Banker in respect of other the specially crossed cheques in the name of Lion of Africa Insurance co Limited or the proceeds of such cheques which were paid into and/or credited to the said Account No 130722 and also whether the said Bank is entitled to the protection under section 2(2) of the Bills of Exchange Act 1964.

 

Having so highlighted the issues, the learned trial Judge came to the logical conclusions (i) that it was the 1st defendant who applied for, opened and also operated Current Account No 130722 in the name of Lion of Africa Insurance (Consultancy) company limited with the National Bank of Nigeria at No 6 Davies Street Branch, Lagos; and that the sum of N240,000.00 was in fact credited to the 1st defendant in a fixed deposit (ii) having examined the 35 cheques in Exhibit P5 that all the cheques were paid by Tellers mark Exhibit P7 into Current Account No 130722 owned and operated by the 1st defendant and that the 1st defendant diverted those 35 cheques in Exhibit P 5 into his (1st defendant’s) Current Account No 130722 wrongfully and unlawfully; (iii) that the National Bank of Nigeria Limited, as the Collecting Banker, was negligent in the operation of the Current Account No 130722 in respect of cheques marked Exhibit P 5 and also the proceeds thereof credited to the said account and that the Bank is not entitled to any protection under section 2(2) of the Bills of Exchange Act, 1964.

 

The learned trial Judge finally concluded that the plaintiff company has locus standi to institute the present action against the two defendants because the cheques leaves were the properties of the plaintiff and also that the proceeds of the said cheques which were diverted to current account No 130722 for the use and benefit of the 1st defendant also belonged to the plaintiff.

 

While the learned trial Judge entered judgement in favour of the plaintiff against the defendants jointly and severally in the sum of N2,289,243.99 together with interest at the rate of 6% per annum from 27th June, 1986 to the date of judgement which is 1st August, 1989 and awarded cost of N2,000.00 to the plaintiff he refused to grant the claim for 13% compound interest sought by the plaintiff. He however did not volunteer any reasons (s) for not acceding to the claim of 13% compound interest sought by the plaintiff.

 

Dissatisfied with the above judgement the 2nd defendant (now appellant) has appealed to this court filing four grounds of appeal which without their particulars are set out as follows:-

 

(1)     The learned trial Judge erred in law in failing to dismiss the action of the plaintiff in its entirety on the ground that the plaintiff/respondent has failed to discharge the onus of proof of the liability of the 2nd defendant/appellant for negligence.

 

(2)     The learned trial Judge erred in law in admitting in evidence as Exhibit P5 the thirty five cheques of the International Bank for West Africa Limited amounting to N2,293,876.90 or N2,289,243.90 which were issued on the account of the plaintiff/respondent in favour of the Lion of Africa Insurance Co Ltd and paid into the account of the First Defendant with the second defendant/appellant.

 

(3)     The learned trial Judge erred in law in holding that the second defendant/appellant was negligent in paying to the Account No 130722 of the First defendant with the second defendant/appellant the thirty five cheques amounting to N2,289,243.90 or N2,293,876.90 and that the second defendant/appellant was liable to pay to the plaintiff/respondent the said sum of N2,289,243.90 and interest thereon at the rate of 6% per annum from 27th June, 1986 to 1st August, 1989 with costs of N2,000.00.

 

(4)     The judgement or decision of the learned trial Judge is speculative and unwarranted having regard to the totality of the evidence adduced at the trial of the case.

 

The successful plaintiff however also cross appealed against the ward of interest by the learned trial Judge and the refusal to condemn the 2nd defendant in punitive or exemplary damages.

 

It is also noteworthy to quote the reliefs sought by the appellant which are as follows:-

 

(1)     Judgement allowing the appeal of the 2nd defendant/appellant by dismissing, in its entirety, the judgment or decision of the learned trial Judge dated 1st August, 1989 in suit No LD/821/86.

 

(2)     Any further judgement or other orders as this Honourable appellate court may consider necessary to give in favour of the 2nd defendant/appellant in the interest of justice.

 

It is clear from these reliefs that no complaint is made against all the consequential orders made by the learned trial Judge. The sole complaint here is as to the findings that the appellant was liable in negligence and/or conversion. The reference to the reliefs sought becomes pertinent in that if the verdict of the learned trial Judge on the liability is upheld, then all the consequential orders made by him shall stand and remain unimpaired.

 

Learned counsel for the appellant thought it expedient to summarise the four grounds of appeal filed by him. But both in all the grounds of appeal and the formulated summary thereof nothing can be found referable to the issue of whether the respondent had locus standi to institute the action against the 2nd defendant/appellant or whether or not the respondent’s action disclosed any reasonable cause of action.

 

Even though the learned counsel for the respondent did not complain and failed to advert to the matter contained in the first issue (which is locus standi) posed, and did not submit that the matter of locus standi has no bearing in all the grounds of appeal filed it is trite that where a party to an appeal formulates an issue not arising from the grounds of appeal filed or based on it, such an issue is incompetent and will be struck out. In the instant case, I have no alternative than to regard such an issue a non sequitur. See Alade Toyinbo v Adewunmi (1990) 6 NWLR (pt 154) 98.

 

Even if the issue of locus standi is properly canvassed, I would still have come to the same conclusion and it would not have made much difference or impact on the result of this case in that a bank which receives cheques for payment to be paid and disposes with the proceeds of such cheques wrongfully and in a negligent manner may be said to have committed and act of conversion rendering it liable to the owner of the amount in the cheques See Morison v London County & Westminister Bank (1914) 3 K B 356 and Gordon v London City and Midland Bank (1902) 1 KB 242.

 

Therefore, liability here is in tort of negligence and the duty placed in the Bank in the ordinary course of the discharge of its duties in conformity with its ordinary course of business and banking practice.

 

The second issue here is whether the appellant, that is the National Bank of Nigeria is liable or the International Bank for West Africa Ltd from which the cheques were issued was negligent and liable to pay for any loss that might be sustained by the paying of the proceeds of the 35 cheques in Exhibit P5 to a third party.

 

The submission of the learned counsel for the appellant was that it is the International Bank for West Africa Limited whom he termed the paying bank” and not the appellant (the National Bank of Nigeria) which is but a collecting bank” which should be made liable in negligence for any loss sustainable as a result of crediting the sum of money in the 35 cheques to the 1st defendant. He referred to the evidence of PW7, Alhaji Ibrahim Garuba an official of the Central Bank of Nigeria, who gave some prevaricated testimony in the following manner. Under cross examination he first said:-

 

“Any cheque specifically endorsed as in Exhibits P5 -P7 could not be endorsed to a third party. The paying bank will be responsible for any irregular payment on such cheques. The paying bank in this particular case is the National Bank of Nigeria Limited.”

 

The next line in the printed record contains the following:-

 

“It is an IBWA Limited Cheque the National Bank Limited is the Collecting Bank.”

 

The distinction made by PW7 Alhaji Ibrahim Garuba, in his capacity as an official of the Central Bank of Nigeria about the Paying Bank and the Collecting Bank to have persuaded learned counsel for the appellant and he was so enamored of the distinction to submit that the appellant, National Bank of Nigeria is but a Collecting Bank and should not be liable for irregular payment.

 

The distinction does not detract from the issue whether the appellant Bank is liable in negligence in receiving payments of the cheques payable to the endorsee to be wrongfully paid to the third party 1st defendant, and acting in a way as to suggest that the appellant assisted the 1st defendant in receiving the proceeds of the cheques without the appellant, as a bank, making any inquiry whether the 1st defendant was entitled to the cheques and thereby failing to exercise due care.

 

The duty of care towards the respondent in this case is derived from the principle of law succinctly enumerated by Lord Ellenborough in M Combie v Daneis (1805) 5 East 538 at 540 as follows:-

 

“That a man is guilty of conversion who takes my property by assignment from another who has no authority to dispose of it, for what is that but assisting that other in carrying his wrongful act into effect.”

 

This principle has been frequently applied in actions to recover the proceeds of cheques or other negotiable instruments for the payment of money, collected by a Bank without authority. See Gordon v London City & Midland Bank (1902) 1 K B 242 at 262/265 and Fine Art Society v Union Bank of London (1886 – 87) 17 Q B 705.

 

It is incontrovertible and the learned trial Judge held so, that the respondent was the true owner of the instruments the cheques and the 1st defendant had no authority to dispose of the cheques for his use and purpose or to pay the sum in the cheque into an account the 1st defendant solely operates. The appellants collected the proceeds of these cheques and their right to retain the money so collected must necessarily depend on the validity of 1st defendant’s title to the cheques. The appellant chose to deal with cheques reposed in it as a bank in a manner inconsistent with the rights of the respondent the rightful and true owner and the appellant becomes liable for the conversion of the property.

 

The learned trial Judge considered the protection afforded to any bank by the provisions of section 2(2) of the Bills of Exchange Act 1964 which provides thus:-

 

  1. Where a banker, in good faith and without negligence-

 

(a)     receives payment for a customer of a customer or a prescribed instrument to which the customer has no title or a defective title; or

 

(b)     having credited the customer’s account with the amount of such a prescribed instrument, receives payment of the instrument for himself, the banker does not incur any liability to the true owner of the instrument by reason only of his having receives payment of it; and a banker is not to be treated for the purpose of this subsection as having been negligent by reason only of his failure to concern himself with the absence of or irregularity in endorsement of a prescribed instrument of which the customer in question appears to be the payee and decided to the effect that if it could be presumed that the National Bank of Nigeria had good faith in collecting the sum of money in the 35 cheques in Exhibit P5 could it not be said that the Bank was negligent or in breach of its statutory duty to safe guard the interest of the true owners of those 35 cheques?.

 

The learned trial Judge found that the plaintiff took the precaution to specially cross the said 35 cheques with the words not negotiable and account payee only. But in the course of police investigation, PW1 discovered that the amount in these 35 cheques which were specially marked not negotiable and account payee only, and specifically crossed, were wrongfully paid into an account solely maintained and operated by the 1st appellant without the bank being suspicious of the fact that the name on the cheques is not the same name borne by the account into which the money was paid afortiori when the cheques were crossed,. This the learned trial Judge found suspicious and capable of putting the National Bank into inquiry and had it exercised good care and foresight in the interest of the owner of the amount in those cheques as a prudent bank ought to have done in the ordinary banking business and practice, it ought not to have paid the money meant for a particular individual or entity into the account of a different individual or entity.

 

Furthermore, the learned trial Judge specifically found that the Bank did not given any evidence to absolve it from culpability in negligence. For this reason, the learned trial Judge held that the appellant was not entitled to the protection afforded by section 2(2) of the Bills of Exchange Act, 1964.

 

The question posed here which is a question of fact is whether or not the Bank acts without negligence which should in strictness be determined in this particular case and the test of negligence is whether the transaction of paying in any given cheque was out of the ordinary course that it ought to have aroused doubt and suspicion in the bankers mind so as to cause them to make inquiry. In Gordon v London City and Midland Bank (1902) I K B 240 it was held that while bankers are entitled to protection given by section 82 (the English equivalent of our section 2(2) of the Bills of Exchange Act 1982 only in cases where they received payment of a cross cheque as agent for collection for a customer they are not so entitled to that protection where they received the cheque in such circumstances as to the constitute them holders of it on their own account. As for instance, where the banker credit a customer with the amount of cheques as soon as they are paid into his account and allow him to draw against the amount so credited before the cheques were cleared, they cannot be entitled to the protection under the Act, Or where the clerk forged the plaintiff’s indorsement on the cheques and paid them into his own account.

 

In these instances the bankers will be liable.

 

If bankers deal with cross cheques as if they were ordinary plain cheques by treating them as mere cash crediting the customer with the amount immediately on receipt of the cheques instead of making themselves a mere conduit pipe for conveying the cheque to the bank on which it was drawn and receiving from that bank for their customer, and if as in the peculiar state of the facts of the case under appeal, the bank would collect a cheque marked Not Negotiable and Account Payee only and when the cheque was in the name of a third party and pay into the account of an entity which maintained an account with them, a straightforward case of wrong or mistaken identity arose and I have no doubt in my mind that such a bank is collecting the money not merely for the customer but chiefly for itself and cannot claim protection under section 2(2) of the Bills of Exchange Act, 1964.

 

Ex hypothesis, if what the bank had done was only to collect the proceeds of the cheques for the customer and deals with the cheques in the ordinary banking business, it cannot be said to be negligent and can claim benefit of the protection afforded by the provisions of the statute. If, however, the bank has done more and appeared to hae assisted in defrauding or committed an act inconsistent with the title of the true owner or has treated or permitted to be treated cheques as if they are cash by paying wrongly to an entity not appearing in the cheques, an act which has the inevitable and ostensible appearance of a perfected trick or fraud the bank cannot claim protection of the statute and should not be absolved of the resulting liability.

 

In the present circumstance of the case on hand the bank (defendant/appellant) had gone beyond assisting the culprit; the bank being presented with the cheques meant for the Lion of Africa Insurance Co Ltd received the money from the Bank (International Bank for West Africa Limited) on which the cheques were drawn and proceeded to credit the amount to the account of a different entity dubiously coined Lion of Africa Insurance (Consultancy) Company Limited This is like pulling a wool on the eyes of the bank. The bank fell for it, which should not have been the case because it ought to have been put on enquiry instead of assisting in perfecting the trick to perpetrate the fraud. Cheques mean for the benefit of one entity was allowed to be collected and the proceeds of them paid into a different entity. This is an act that fell below the reasonable standard and expectation of a prudent finance house. it is outside the scope of the bank’s authority and I find no acts that can best or more constitute an act of gross negligence than these.

 

In the present case, the appellant was not just mere intermediary but holder of the cheques lawfully issued to it. The moment it converted the sum in them to the 2nd defendant, it has committed a wrong as it has no title to give because the title itself is defective. The cheques were at all times, until issued, the properties of the plaintiff/respondent. They were never the properties of the Lion of Africa Insurance (Consultancy) Company Limited which has not title to them and having presented the cheques for and collected the proceeds thereto, the appellant had opted to deal with the cheques in a manner inconsistent with the right of the plaintiff/respondent the true owner and therefore the appellant is liable to the respondent for the conversion of its properties.

 

The case of Ross v London County Westminister & Parr’s bank Limited (1919) 1 K B 678 is also instructive on this issue. In that case a banker to whom a private customer hands, for collection on his account, a cheque payable to and endorsed (in the name of a third party a public official) is put upon inquiry whether the customer is entitled to the cheque and acts negligently if he credits the customer with the proceeds of the cheque without having made any such inquiry.

 

The Overseas Military Forces of Canada engaged in the European war had an estates office in England authorised by the secretary of State for the colonies to perform in accordance with statutory conditions the duties of collecting and distributing the estates of members of these forces dying in Europe. A sergeant employed at the office misappropriated during a period of ten months thirty two cheques of the aggregate value of about 3,900 pounds representing money belonging to the estates of the deceased soldiers. Each of the cheques was drawn payable to “The Officer in Charge, Estates Office, Canadian Overseas Military Forces” and was endorsed generally by that officer under the same description with a view to its being sent to the paymaster General of these forces for payment of the amount to the beneficiaries, or in some cases directly to the beneficiary, and each cheques was crossed generally,. The Sergeant paid the first two cheques into a branch of the defendant’s bank at which he had a small private account of his own and the rest of them into another branch of the bank which passed hem on to the former branch. No inquiry was made at either branch whether he was entitled to the cheques, and at the former branch they were credited to his account and payment of them was received for him.

 

In an action by the Paymaster General against the defendants for damages for conversion of the cheques, it was held that the fact that the cheques were drawn, payable to and endorsed by a public official should have put the cashiers of the defendants upon inquiry whether their private customer was entitled to the cheques; that in crediting the cheques to him without any inquiry, the cashiers of both the branches had been guilty of negligence; and therefore that the defendants were not protected by s 82 of the Bills of Exchange Act, 1982 from liability to the plaintiff.

 

The above case seems to me if not on all fours with the case on hand, to be significantly similar to it and the conclusion to be reached is that the appellant in treating the Lion of Africa Insurance (Consultancy) Company Limited entitled to the proceeds of the cheques involved in this case and in receiving, assisting, and rendering money to be paid into the account of a different entity from the entity to which the cheques were addressed failed to exercise due care and was guilty of negligence and not entitled to any protection of the statute.

 

The third issue for determination of this appeal formulated by the learned counsel for the appellant is long and prolix. It is as follows:-

 

“Whether the plaintiff had discharged the burden of proof of the liability of the 2nd defendant/appellant when the commission of the criminal offence of conversion was made the basis of the plaintiff/respondent’s action and 35 photostat copies of the crossed cheques amounting to N2,289,243.90 instead of the originals thereof were tendered and admitted in evidence.”

 

Learned counsel for the appellant submitted that where a plaintiff makes the commission of a criminal offences the basis of a civil action, the provision of section 137(1) of the Evidence Act applies, to impose on the complainant strict burden of proof as in criminal cases beyond reasonable doubt.

 

Learned counsel for the appellant made a feeble attempt to canvass the inadmissibility of Exhibit P5 when he said that only photocopies of them were tendered in evidence.

The record of appeal revealed that all the exhibits were sighted by all the counsel involved in the proceedings at the trial court. This could be possible in view of the fact that criminal prosecution was also pending at the time of the trial of this action and when Exhibit P5 was tendered no objection was raised by the appellant. So long as the exhibits were pleaded, nothing can be wrong if parties consequent to the photostat copies of them to be admitted in evidence as was done in this case.

 

Learned counsel for the respondent submitted in the replicando that the plaintiff has civil rights which debors the criminality of the breaches by the 1st defendant to protect and it is immaterial that the facts pleaded in support of the civil rights which the law appreciates under the concept of conversion may or may not further support criminal charges against the 1st defendant. To buttress this point he referred to the following cases:

 

(i)      Ikoku v Oki (1962) 1 All NLR (pt 1) 194

(ii)     Nwankwere v Adewunmi (1967) NMLR 45 at 48 and

(iii)    Nwobodo v Onoh (1984) 1 S C at 41 (1984) 1 SCNLR 1

 

Although the learned trial Judge stated that though there is no admissible evidence t prove the falsification or altering in procurement of the debit notes with the result that the allegation of forging or altering of the debit notes cannot be substantiated the claim of the plaintiff in my respectful view against the defendant formulated in the writ of summons and in the statement of claim is mainly for liability in conversion as opposed to criminal liability which need not be based on the commission of any criminal act of forgery of the debit notes.

 

For the better under standing of what operated in the mind of the learned trial Judge in ruling out the applicability of section 137(1) of Evidence Act it is pertinent to quote an excerpt from his judgment as follows:-

 

“And as I have already stated the plaintiff’s claim against the defendants as formulated on the Writ of Summons in this suit is for special and general damages resulting from the tort of conversion of certain cheques and their proceeds belonging to the plaintiff. In the circumstance I do not propose to deal in this judgement with such matters as the procurement of Debit Notes and the falsification and altering of the said Debit Notes which in my view are matters essentially for consideration and decision at the criminal proceedings which I understand is in progress at High Court No 17 Lagos.”

 

For section 137(1) of Evidence Act to apply the basis of the commission of the civil liability must be rooted or based in criminal conversion. In the present case liability is derived from the duty of care in negligence expected between the banker and the customer in the ordinary course of business and banking practice. All the cases cited by the learned counsel for the appellant in respect of section 137(1) of Evidence Act therefore, for the purpose of this appeal are inapposite.

 

The fourth and the last issue formulated for the determination of this appeal is whether the action of the plaintiff/respondent should have been dismissed on the ground that the evidence adduced was at variance with the pleadings.

 

Learned counsel for the appellant could not substantiate this proposition very well in his brief of argument. He only pointed out that while the plaintiff claimed for N2,293,876.90 the learned trial Judge entered judgement for the respondent for the sum of N2,289,243.99 instead of the actual amount claimed. There is nothing which shows that the evidence was at variance with the pleadings. The learned trial Judge here refused to award any compound interest He only awarded interest at 6% per annum from the time of the suit to the time of the judgment instead of 13% per annum compound interest demanded by the respondent.

 

It is trite law that the trial Judge can award less but certainly not more than what was claimed Merchantile Bank v Adama (1990) 5 NWLR (pt 153) 747 and Okubule v Oyagbola (1990) 4 NWLR (pt 147) 723 and what the learned trial Judge did was to award for a figure less than was claimed. I do not see any point canvassed which is worthy of consideration in the last issue formulated by the learned counsel for the appellant.

 

The bottomline in this appeal is whether the bank is liable in negligence any/or conversion for paying or assisting in paying a wrong person money belonging to a person rightfully claiming title over the cheques the proceeds of which have been controverted. And I hold it is liable.

 

There is also a cross appeal in this matter. The respondent insists that in paragraph 11 of the amended statement of claim the plaintiff pleaded that the circumstances of the conversion entitled the plaintiff to claim special and/or punitive damages against both the defendants at the rate of 13% per annum from 26th June, 1986 to the date of judgement which is 1st august, 1989. Learned counsel for the respondent (now to be referred to here as cross appellant” while the main appellant will be called respondent to the cross appeal) submitted that the learned trial Judge simply refused the claim for 13% per annum compound interest but substituted therefor an award of 6% per annum from the date the writ of summons was filed until judgement.

 

Although the learned trial Judge did not give any detailed reason for his refusal to condemn the defendants in punitive or exemplary damages nor did he expantiate on his decision to fix interest at 6% per annum from the commencement of the action to judgement, there is consolation in the fact that the original appellant has never appealed against the ward of interest of 6% per annum from the commencement of the suit to judgement or indeed at all against the quantum of damages as awarded by the learned trial judge..

 

The respondent in noting that the appellant did not complain about the quantum of the award of 6% interest per annum ventured to take advantage of that lapse by insisting on a pound of flesh of its opponent in pressing the claim for 13% compound interest as punitive and exemplary damages in view of the circumstances of the case. Since the appellant did not appeal against the quantum of interest awarded, then it becomes incumbent on me to consider the nature of the claim in the cross appeal.

 

In the two issues for determination posed, which are as follows:-

 

  1. Following upon the pleadings of the plaintiffs as especially borne out by paragraph 11 of their Amended Statement of Claim and their testimony thereon, had the plaintiffs not established their claim to interest at 13% per annum as claimed by them and had the learned trial Judge any discretion to use other yard sticks that he even did not articulate?

 

  1. Is this not a proper case to condemn the defendants both of them but especially the second defendant in punitive or exemplary damages over and above the face value of the cheques they converted and their claims for interest thereon or indeed did the award of the interest by the learned trial Judge compensate the plaintiffs within the yardsticks of case authorities on the subject?.

 

What is being asked for is whether it is appropriate to condemn the respondent to the cross appeal in punitive or exemplary damages and whether or not the cross appellant has by pleadings and evidence established its claim to compound interest at 13% per annum which the learned trial Judge refused to award?. Learned counsel for the cross appellant submitted more authorities with a lot of quotations.

 

Apart from the fact that the cross appellant has misapplied the computation of compound interest on over draft in the course of ordinary business with interest awarded by the court in form of punitive and exemplary damages not so much has been urged to justify this court in varying the award made by the learned trial Judge.

 

It has been decided by the Supreme court in the case of Rickeu v BWA Ltd (1960) SCNLR 227; (1960) 5 FSC 113 at 118 to 119 that cross appeal of the plaintiff on a claim for compound interest should be dismissed because compound interest on an overdraft was chargeable only where the customers had agreed to it. It is not being suggested that there is agreement between the parties on compound interest chargeable in case of overdraft. That is not the case before this court. The only issue is whether the court has power to award compound interest instead of ordinary interest on an amount converted by the defaulting party for reason of rendering the award punitive or exemplary and this has not been properly developed in the argument both before us and as canvassed in the brief. The brief of argument contained so much authorities and quotations from decided cases on the award of punitive or exemplary damages by a court of first instance. It is not in any way related to the issue before this court.

 

I do not therefore find the cross appeal substantiated at all. It lacks merit and it is accordingly dismissed.

 

On the whole the main appeal is dismissed for lacking in substance and the respondent is entitled to the costs of this appeal assessed at N1,000.00 in its favour.

 

{Nigerian Cases referred to}

Aladetoyinbo v Adewunmi (1990) 6 NWLR (pt 154) 98

Merchantile Bank Ltd v Adalma (1990) 5 NWLR (pt 153) 747

Okubule v Oyagbola (1990) 4 NWLR (pt 147) 723

Rickett v B W A Ltd (1960) SCNLR 227

Ikoku v Oki (1962) 1 All NLR (pt 1) 194

Nwankwere v Adewunmi (1967) NMLR 45 at 48 and

Nwobodo v Onoh (1984) 1 S C at 41 (1984) 1 SCNLR 1

 

 

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