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AFRICAN CONTINENTAL BANK
HIGH COURT, LAGOS
22ND AUGUST, 1966
SUIT NO. LD/300/66.
Munis and Balogun – for the Plaintiff
Opele – for the Defendant
BANKING AND FINANCE
PRACTICE AND PROCEDURE – CIVIL ACTION.
TAYLOR, C.J.:-The plaintiff was a trader with credit facilities with Messrs A. G. Leventis & Co. Ltd at the material time. He also has an account with the defendant Company. He complains of the defendant Company’s action in dishonouring two cheques for small sums issued by him in favour of Messrs A. G. Leventis & Co. Ltd, as a result of which the credit facilities granted to him were stopped. He urges that at the material time of presentation of the said cheques he had sufficient money with the defendant Company to cover the sums the subject matter of the cheques. The defendant Company on the other hand contend in their defence inter alia that the plaintiff had insufficient funds with them to cover the two cheques.
The first cheque is Exhibit “A” and is dated the 15th January, 1966. The sum involved is £24-5s-Od. It was received by the defendant Company on the 19th January, 1966 by Cashier No. 5 and it was marked “Return to Drawer.” The second cheque Exhibit “B” is for an even smaller sum, i.e., £6-5s-0d issued by the plaintiff on the 16th February, 1966 and marked in similar fashion to Exhibit “A” by Cashier No. 5 on the 18th February, 1966. It should be mentioned also that both of these cheques are crossed. The points that arise therefore are whether (1) on the 19th January, 1966 the plaintiff had £24-5s-0d standing to his credit at the defendant bank and (2) on the 18th February, 1966 he had £6-5s-1)d to his credit in the said bank ?
Now in addition to the oral evidence of the parties, Exhibit “E” the Statement of Account of the plaintiff with the defendant bank was tendered in evidence. It is undated but it must have been prepared some time after the 29th March, 1966, the last entry contained therein. According to this exhibit the plaintiff had to his credit the sum of £25-8s-Od on the 19th January, 1966 and the sum of, £ 19s-0d on the 18th February, 1966. It therefore seems that at first glance the plaintiff was in credit on the two material dates aforementioned.
The defendant Company’s contention goes a little deeper than that. They say that the 7th entry in Exhibit “E,” i.e., the entry of the payment of £25-0s-0d on the 17th January, 1966 is a wrong entry in point of time and that as per Exhibit “F” the sum of £25 was paid in on the 19th January, 1966. The cashier, i.e., No. 2 who recorded this sum was not called to give evidence nor was any explanation offered as to his inability to give evidence with the result that there is no evidence as to the hour of the day when this sum was paid in. I accept the defendant’s story that this sum was paid in on the 19th January, 1966 for had there been another sum of £25-0s-Od paid in on the 17th January, 1966 as per Exhibit “E,” the duty of rebutting the defendants’ story fell on the plaintiff and this he failed to do. The net result, therefore, is that the seventh entry, as far as the date is concerned, in Exhibit “E” is erroneous and should read 19-1-66. That being the case, was the sum of £25 paid in before the cheque Exhibit “A” was received by cashier No. 5 for crediting the account of Messrs A. G. Leventis & Co. Ltd ? Let us look at the evidence led by the defence to refute the plaintiffs’ evidence that he was in credit at the material time. The first defendants’ witness, Godwin Dike is a reference clerk and a ledger keeper in the defendant bank, and he gave evidence that he always checks the ledgers at the end of each day. He says that Exhibit “A” was presented to him in the morning of the 19th January, 1966 and on going through the plaintiffs account found that the plaintiff had no funds in the bank to meet this payment. He further said he went to the cashiers to check whether any payment-in had been made by the plaintiff and found that none had been made.
The sole point for determination as regards both exhibits is whether the payments-in on both days which put the plaintiffs account in credit preceded the receipt of the cheques Exhibits “A” and “B” by the defendant Bank in point of time. It should be mentioned that the payments-in on the relevant dates were cash payments as per Exhibit “E” and not payments by cheque. In the case of Capital & Counties Bank v. Gordon 1903 A.C. 240 at 249 Lord Lindley said:-
“It must never be forgotten that the moment a bank places money to its customer’s credit the customer is entitled to draw upon it, unless something occurs to deprive him of that right.”
In the case of Bank of New South Wales v. Laing 1954 1 A.E.R. 213 at 221 to which my attention was drawn by Mr Munis for the plaintiff, Lord Asquith said that:-
“But a further “peculiar incident” is that the Bank is only indebted to the customer for the amount (which may be called “a balance” when it is arrived at by deducting authorised withdrawals from sums paid in) standing to his credit as at the time of demand. Of course, if the customer can prove that at that time the “balance” suffices to pay his demand, he succeeds. If the ”balance” falls short of doing so, even by a penny, he fails altogether, another distinction which rails off the creditor-debtor relationship in the case of a customer and banker from that relationship in other cases; on this footing, did the plaintiff discharge the onus on him ? Their Lordships consider that he did not. If he had gone into the box and sworn that the eight disputed cheques were forged, and had been believed, he would unquestionably have discharged it. He would equally have shifted that onus to the bank if he had gone into the box and testified that only cheques A, B and C drawn on the account were genuine and that, after deducting these, there were still sufficient funds to meet the demand. He did neither.”
In the case before me as I had said the plaintiff did give evidence that: “My account was in credit when the cheques were returned.”
The fact as to whether Exhibits “A” and “B” were received from the Clearing House by the defendant Bank before the cash payments-in by the plaintiff which puts his account in credit is a matter wholly within the knowledge of the defendant Bank. The plaintiff would and could only be expected to know the time he paid in the various sums under consideration. The defendant Bank on the other hand must be aware not only of the time payments were made by the plaintiff but also of the time Exhibits “A” and “B” were received by their Bank from the Clearing House. I am of the view that the plaintiff has by the evidence given by him shifted the onus on the bank to show that in fact the cheques were received from the Clearing House before plaintiff made the payments-in to which reference has already been made. What have the defendants done to displace this onus ? Apart from the evidence of the Ledger Keeper, Godwin Dike to which I have already referred, one Bernard Peters gave evidence and he said this inter alia:-
“Plaintiff called on me and reported that we had wrongly returned one of his cheques and that because of this his customers A. G. Leventis had threatened to stop accepting his cheques, and that this was affecting his business. I called for the Ledger card, and as a result of what I saw I apologised to the plaintiff, and in view of what he told me about his business I promised to write a letter to him.”
A little later on in answer to a question from the Court, the witness, who, be it noted, was at the relevant period the Accountant in the defendant Bank, said this:-
“Before I wrote Exhibits “C” and “D” I called Defence Witness 1 (Godwin Dike) and told him “you must be careful in checking.” He said he checked before he returned the cheques and saw that the plaintiff had not paid in anything.”
It was after this that Mr Peters wrote the two letters Exhibits “C” and “D.” He wrote the first one on the 24th February, 1966 in respect of the cheque Exhibit “B” for £6-5s-0d and the second on the 1st March, 1966 in respect of the cheque Exhibit “A” for £24-5s-0d. The wording of the letters is identical and it is as follows:-
We wish to apologise for returning the abovementioned cheque unpaid when in actual fact there was sufficient funds to cover it. We deeply regret whatever embarrassment this might have caused you, and we assure you that such errors will not occur in the future.”
The facts as regards the cheque Exhibit “B” for £6-5s-0d differ a little from those in respect of the cheque Exhibit “A” to the extent that on the 18th February, 1966 the day on which the cheque Exhibit “B” was presented, the plaintiff made two separate payments into his account. The first payment was for £6 which put his account in credit to the tune of £6-19s-0d and later on in the same day he made a further payment of £5. Both these payments were cash payments.
Now, an accountant in a Bank holds an important position and is generally regarded as a responsible officer. I have had to ask myself why should such an officer write these two letters, the first, some days after the presentation of the particular cheque to which it relates, and the second some 6 weeks or more after Exhibit “A” had been cleared from the Clearing House, if in fact the contents were untrue ? There can be no excuse that they were written in error as pleaded in the defence for they had had ample opportunity to check the account of the plaintiff and according to the evidence of Godwin Dike such checking had taken place. In fact he checks at the end of each day. Then again I have considered the amount of weight that should be attached to these two letters written ante !item motam and the evidence of the defendants given naturally, after litigation has commenced. In the final analysis I find myself holding that the plaintiffs evidence together with the weight attached to Exhibits “C” and “D” not to mention portions of the evidence of Bernard Peters to which I have already alluded tip the scales heavily in the plaintiffs favour. I therefore find as a fact that at the time the two cheques Exhibits “A” and “B” were presented the plaintiff, to use the wording of Exhibits “C” and “D,” had “sufficient funds to cover” them. I will put it in another way. I find as a fact that the payment-in of the £25-0s-0d by the plaintiff on the 19th January 1966 took place in point of time before the receipt of Exhibit “A.” Similarly the payments-in of £6 and ,£5 on the 18th February, 1966 took place before the receipt of Exhibit “B” by the defendant Bank. These sums being cash payments and having been placed to the plaintiffs credit he was entitled to draw upon them. The defendant Bank having dishonoured the cheques are liable to the plaintiff in damages which I shall now proceed to assess.
What is the principle governing assessment of damages in such cases ? In the case of Gibbins v. Westminster Bank Ltd 1939 2 K.B. 882 Lawrence, J. said this at page 888.
11 …………….and it remains only to consider whether the plaintiff, who, it is admitted, is not a trader, is entitled to recover more than nominal damages for the dishonour of her cheque without having pleaded or proved special damage. The authorities which have been cited in argument all lay down that a trader is entitled to recover substantial damages for the wrongful dishonour of his cheque without pleading and proving actual damage, but it has never been held that that exception to the general rule as to the measure of damages for breach of contract extends to anyone who is not a trader.”
In the case before me, that the plaintiff is a trader is well proven, and it would seem on this authority that he is entitled to substantial damages without even pleading and proving actual damage. That he has proved actual damage is beyond any dispute for the evidence of his witness, Victor Shoyinka which I accept, clearly shows that the plaintiff has lost the credit facilities he formerly enjoyed with Messrs A. G. Leventis & Co. as a result of the dishonour of these two cheques. He has also lost the commission he normally receives in his transactions with the said firm, i.e., one quarter per cent on the sales made. On the highest sales made in one month as per Exhibit “J,” the commission comes to no more than about ,£14-17s-0d approximately on £5,925-4s-3d. On his oral evidence he says he makes a daily gain of £25 to £4° and in his Statement of Claim he says it is between £35 and £4°. A profit of £35 per day for 6 days in the week amounts to £840 per month and £10,080 per year. I do not believe for one moment that the man who appeared before me has seen as profit in his best days as much as a tenth of that sum per year. It is very hard for me to believe that a man who takes as much as £5.9°° worth of goods in one month will only have in his bank account as per Exhibit “E” a credit of £57-8s-0d at the most. It is true he said that he also pays in cash and the witness called by him stated that the plaintiff pays by cheques on other banks. As to the former I want further evidence by way of receipts to support it before I accept it, and as for the latter the plaintiff himself never supported such evidence.
Be that as it may, he is on the authorities, entitled to substantial damages even in the absence of proof of special damages.
It is true that the amounts involved in the cheques, i.e., ,£24-5s-0d and £6-5s-0d are comparatively small sums but in the case of Marzetti v. William 109 E.R. 842, Lord Tenterden, C.J. said at page 845 that:-
“At the same time I cannot forbear to observe, that it is a discredit to a person, and therefore injurious in fact, to have a draft refused payment for so small a sum, for it shows that the banker had very little confidence in the customer. It is an act particularly calculated to be injurious to a person in trade.”
Bearing all these authorities in mind and applying them to the facts of the case before me I award the plaintiff substantial damages assessed at £250 and costs which I assess at 100 guineas inclusive.
Judgment for Plaintiff.