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BANK OF AMERICA (NATIONAL TRUST & SAVINGSASSOCIATION)
HIGH COURT OF LAGOS
30TH OCTOBER, 1969
SUIT NO. LD/30A/69
BURKE, – for the Appellant
OYEWOLE, – for the Respondent
BANKING AND FINANCE – BANKER-CUSTOMER RELATIONS:- Dishonour of customer’s check – When amounts to breach of contract
The respondent in this case opened a current account with the appellant Bank in February, 1966. It was to be a joint account of respondent and his wife. As a matter of fact, however, it was never run as a joint account as the only signatory to the signature card and the person who operated the account was the respondent. Therefore, for all intents and purposes, and so far as the record of the Bank was concerned, the respondent was the only customer running the account and their liability is to the respondent only. That was the contract between Appellant Bank and respondent.
Sometime in the middle of August, around 16th August, 1966, the respondent requested his bankers in London, Messrs. Lloyds Bank to transfer a sum of £1,500 to his account with the Appellant Bank. The reason for this was that the respondent was in urgent need of money and this was communicated to the Manager of the appellant Bank a Mr. Owen. Respondent, inter alia, stated:-
“Following this I continually phoned Mr. Owen and he realising my anxiety agreed to phone me back as soon as the money arrived. On the 27th August, 1966, Mr. Owen phoned me that the money had at last arrived. On 29th August, 1966, I issued a cheque for £250 made out to Mr. W. Swannick for a business transaction. I was very surprised when Mr Swannick arrived in my office on the 30th August, in a very agitated way with my cheque, which I found on examination to have been dishonoured by the bank.”
He said that this caused him a considerable loss of business and he instructed a solicitor to write to the appellant.
There were different versions given as to what was to be done to the £1,500 from London when it arrived at appellants’ bank. The Learned Chief Magistrate in his judgment stated thus:-
“I believe the evidence of the plaintiff, and I find as a fact that he never told Mr. Owen that he intended to open a savings account with the money coming from London …. I hold also that knowing that the plaintiff had only one existing account, and that the London Bank’s instruction was that existing account be credited with the £1,500, and also having regard to the fact that the existing account, even though a joint account was operated solely by the plaintiff, the said £1,500 should have been credited to that account and I hold further that the defendant bank was in breach of their contract with the plaintiff by dishonouring exhibit `A’ and that the defendant is liable in damages.”
On the evidence before the Learned Chief Magistrate, and on his findings of facts, I am in complete agreement with his conclusions. This would dispose of the first ground of appeal which stated that the Chief Magistrate was wrong to have held that there was a breach of contract.
The second ground of appeal was that the Learned Magistrate was wrong in law in holding that the respondent was entitled to substantial damages. The Learned Chief Magistrate in his judgment stated as follows:-
“With regards to measure of damages, I hold that the plaintiff being a business man, which I find him to be, is entitled to substantial damages like a trader, without the necessity to allege and prove loss or damage and the plaintiff is awarded £200 as general damages.”
Counsel’s contention was that plaintiff/respondent was a company director and the cheque that was dishonoured was issued in respect of respondent’s personal account. There is the fact however, and this was not challenged, that the cheque was issued in payment for a business transaction between plaintiff and Mr. Swannick. It is very embarrassing to a man of the respondent’s status to have a cheque issued by him dishonoured when he had sufficient funds in his account. That is bound to affect his reputation in any case and have a detrimental effect on his trade.
The contention of counsel is that the occupation of the respondent does not come within the term trade. The word trade is defined “as business, especially mechanical or mercantile employment as opposed to a profession carried on as means of livelihood or profit”. Applying this definition, to the occupation of the respondent as described in the evidence before the Learned Chief Magistrate, it comes within the definition of the word trade. The Chief Magistrate was, therefore, right in assessing damages to have taken into consideration the occupation of the respondent. In Gibbons v. Westminster Bank Ltd. (1939) 3 A.E.R. page 477 the head note reads:-
“A bank wrongfully dishonoured a cheque of the plaintiff, who .was not a trader. The plaintiff did not, in the Statement of Claim, plead any matters showing a loss of credit, but proved that, after the cheque was dishonoured, her landlord had asked her to pay her rent in cash, and not by cheque – HELD
‘(1) The plaintiff not being a trader was entitled to only nominal dam-ages in respect of the wrongful dishonoured of a cheque by her bank.
‘(2) In the circumstances, the plaintiff was not entitled to leave to amend the Statement of Claim.”
In the judgment of Lawrence, 7., he stated the law as follows:-
“The authorities which have been cited to us laid it down that a trader is entitled to recover substantial damages without pleading and proving actual damage for the dishonour of his cheque, 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.”
Since it has been held that the respondent is a trader he is, therefore, en-titled to substantial damages. The amount awarded by the Learned Chief Magistrate has not been challenged and no reason had been given why it should be altered. The appellant, therefore, fails on the second ground of appeal.
With regards to the third ground of appeal, there does not seem to be any substance whatsoever. The appeal will, therefore, be dismissed with costs.