Hajia Umma Muktar Ahmed Mohammed vs Nigeria Deposit Insurance Corporation, Judgment Delivered by Abubakar Sadiq Umar JSC, In SC/958/2015

SC/958/2015

JUDGMENT DELIVERED BY ABUBAKAR SADIQ UMAR, JSC

This is an appeal against the judgment of the Court of Appeal, Kaduna Judicial Division (lower Court), delivered on 10th June, 2015. The judgment affirmed the decision of the Federal High Court, Kaduna Judicial Division (trial Court) which inured in favor of the Respondent. Dissatisfied with the decision of the lower court, this appeal challenged the judgment of the lower court.

FACTS
By an Amended Statement of Claim dated 19th September 2003, the Respondent as the Plaintiff claimed against the Defendants jointly and severally the sum of N14, 795, 399. 71k being the balance outstanding on the overdraft facilities granted to the 1st Defendant, interest, and other bank charges due from the 1st Defendant to the Commercial Trust Bank Limited at closure on 16th January 1998, and interest at the rate of 21% per annum from 17th January 1998 till Judgment and final liquidation of the debt.

The action was commenced at the Federal High Court, Lagos but subsequently transferred to the Federal High Court, Kaduna for determination. It was the Respondent’s grouse that in the exercise of its statutory duties as the liquidator of the defunct Commercial Trust Bank Limited (“the bank” or “the failed bank”), it discovered the indebtedness of Credit and Finance Limited (“the Company”) to the bank to the tune of N14, 795, 399, 71k (Fourteen Million, Seven Hundred and Ninety-five Thousand, Three hundred and Ninety-nine Naira and seventy-one kobo).

According to the Respondent, a credit facility had been granted by the failed bank to the Company and same had remained unpaid. The Respondent alleged that the credit facility granted to the Company was

approved by the bank due to the involvement of Alhaji Muktar Ahmed

Muhammed (“Appellant’s husband or Chairman of the failed Bank”) in his capacity as the Chairman of the Bank. The Respondent thereafter wrote a series of letters to the Appellant’s husband for the settlement of the indebtedness to no avail.

  Consequent upon the foregoing, the Respondent took out a Writ of Summons seeking jointly and severally against Credit and Finance Limited and Appellant’s husband, the payment of the outstanding sum

on the overdraft facilities granted to the Company.

 After hearing the parties, the trial court in its judgment delivered on 2nd May 2006, found in favour of the Respondent and granted all the reliefs sought by the Respondent. Dissatisfied with the judgment of the trial Court, the Appellant’s husband appealed to the lower Court. In the Judgment delivered on 10th June 2015, the lower court agreed with the decision of the trial Court to a substantial extent. The interest rate on the outstanding sum was reviewed by the lower court from 21% per annum as awarded by the trial court to 18% per annum.

 Dissatisfied with the Judgment of the lower Court, an appeal was commenced to upturn the Judgment of the lower court. The Notice of Appeal dated 4th September 2015 was replaced by an Amended Notice of Appeal filed on the 19th April 2022. The name of the Appellant’s husband was also substituted with the Appellant in the Amended Notice of Appeal. In the Amended Notice of Appeal, the Appellant raised 8 grounds of appeal and distilled 5 issues for determination therefrom. These issues are contained in the Appellant’s Amended

Brief of Argument, which is dated 14th April 2022 and settled by Ibrahim Gamdeh Adamu, Esq.

The Respondent, in its Brief of Argument dated 18th October 2023 and settled by Mustapha I. Abubakar, Esq., equally raised 5 issues for determination in this appeal. The Appellant subsequently filed a Reply to the Respondent’s Brief dated 26th February, 2024.

As stated afore, Appellant’s counsel formulated five issues for the determination of this appeal, to wit

1. Whether the learned Justices of the Court of Appeal were right in dismissing the Appellant’s appeal and affirming the Judgment of the trial Court holding that the participation of the Appellant at the trial amounted to a waiver of

violation of a statutory requirement of Section 97 of the Sheriff and Civil Process Act?

2. Whether Section 40 of the Nigerian Deposit

Insurance Corporation Act 1990 and the Failed

Bank (Recovery of Debts) and Financial Malpractice in Banks 1994 has a retroactive effect to empower the Respondent with the locus standi to sue and recover debts from transactions entered into

In 1988.

3. Whether, in the circumstances of the case, the Supreme Court can uphold the concurrent findings of fact that the Appellant guaranteed

The loan given to the 1st Defendant, and therefore

liable for its repayment.

4. Whether the learned Justices of the Court of

Appeal were right in holding that there was a valid and enforceable agreement between the 1st Defendant and the Bank in respect of the N2.5 million given to the 1st Defendant when at the time of disbursement the 1st Defendant was not a

customer of the Bank.

5. Whether the Court of Appeal was right when it

awarded interest on the money given to the 1st

Defendant, after it has merely stated that it claims a rate of interest of 21% without specifically pleading the rate and proving the same.”

On his part, Respondent’s counsel adopted the issues formulated by the Appellant, save for issue No. 2, which was reformulated thus:

“Whether the lower Court was right in holding

that the Respondent had locus standi to Institute the suit for the recovery of debt in issue in this suit and in relying on the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 1994 in finding the Appellant liable for the debt claimed.”

 Following a painstaking consideration of the grounds of appeal as

contained in the Appellant’s amended Notice of Appeal ditto the issues distilled by parties, it is my view that the issues distilled by the Appellant will exhaustively resolve the grouse of the parties to this appeal. The issues distilled by the Appellant are adopted for the determination of this appeal.

ISSUE ONE

WHETHER THE LEARNED JUSTICES OF THE COURT OF APPEAL WERE RIGHT IN DISMISSING THE APPELLANT’S APPEAL AND AFFIRMING THE JUDGMENT OF THE TRIAL COURT HOLDING THAT THE PARTICIPATION OF THE

APPELLANT AT THE TRIAL AMOUNTED TO A WAIVER OF VIOLATION OF A STATUTORY REQUIREMENT OF SECTION 97 OF THE SHERIFF AND CIVIL PROCESS ACT?

On this first issue, the Appellant contends that the failure of the

Respondent to endorse the writ of summon issued in Lagos State and served on the Chairman of the falled bank in Kaduna State as required by Section 97 of the Sheriff and Civil Process Act divested the Federal High Court, Lagos Judicial Division of jurisdiction to entertain the suit.

The Appellant relied on the cases of Owner of MV ARABELLA V Nigeria Agricultural Insurance Corporation (2008) All FWLR (Pt. 443) 1208 and Izeze v INEC & Ors (2018) ! NWLR (Pt. 1629) 110, 130, SLB Consortium Ltd v NNPC (2011) 9 NWLR (Pt. 1252) 317.

It was argued that the transfer of the suit to the Kaduna Division of the Federal High Court did not cure the defective service of the writ of summons on the Appellant’s husband. Learned Appellant’s counsel contended further that the participation of the Chairman of the failed bank in the proceedings at the trial court does not imply a waiver of the irregularity in the issuance and service of the writ. He argued that a violation of Section 97 of the Sheriff and Civil Process Act is a fundamental defect that deprives the trial Court of jurisdiction.

The Appellant relied on the cases of Braithwaite v. Skye Bank Plc (2013) 5 NWLR (Pt. 1346); Agip Nigeria Ltd v. Agip Petroli International & Ors (2010) 5 NWLR (PL 1187) 348; Gbile v. Addingi (2014) 15 NWLR (PL. 1433) 394.

The Respondent, in opposition to the Appellant’s argument, submitted that the territorial jurisdiction of the Federal High Court encompasses all the States of the Federation and that the provisions of Section 97 of the Sheriffs and Civil Process Act are inapplicable to the actions initiated at the Federal High Court. The Respondent relied on the cases of Biem v. SPD (2019) 12 NWLR (Pt. 1687) 377 and Adegoke Motors Ltd v. Babatunde Adesanya & Ors (1989) 5 SCNJ 80.

The Respondent submitted further that the participation of the Appellant’s husband in the proceedings at the trial Court constitutes a waiver of the alleged breach of Section 97 of the Sheriffs and Civil Process Act. The court was subsequently urged to uphold the decision of the lower Court on this issue.

RESOLUTION OF ISSUE ONE

The primary focus of the Appellant’s grievance on this issue is centered on the breach of the provisions of Section 97 of the Sheriffs and Civil Process Act and the effect of said breach on the proceedings of the trial court. It is contended by the Appellant that her husband’s participation in the proceedings at the trial court does not mitigate the violation of the fundamental provisions of the Sheriff and Civil Process Act.

Part VII of the Sheriff and Civil Process Act (“the Act”), which encompasses Section 97- the subject of contention in this appeal, deals with service of originating processes and the enforcement of the Judgments of the Courts of the Federal Capital Territory, Abuja, and the States throughout Nigeria. Sections 96 to 99 of the Act regulate the issuance, endorsement, and service of originating processes in instances where the processes are issued in one state and are required to be served in another state within Nigeria.

Part VII of the Act is designed to regulate the inter-state operation of the administration of justice to ensure that the legislative autonomy enjoyed by the states in judicial matters within the confine of their nrespective domains does not hamper the smooth running of the mechanism of law enforcement across the states’ political boundaries.

Having considered the scope and purpose of Part VIl of the Act, it remains to ascertain the applicability of Section 97 of the Act to this appeal. Now, Section 97 of the Act provides as follows:

“Every writ of summons for service under this part out of the state or the capital territory in which it was issued shall, in addition ton any other endorsement or notice required by law of such state or the capital territory, have endorsed thereon a notice to the following effect (that is to

say)

This summons (or as the case may be) is served out of the jurisdiction of the _____________ state (or as the case may be)__________ State (as the case may be).”

The above provision of the Act is explicit on the requirement for a mandatory endorsement of an originating process issued in one state and to be served in another State. By the use of the word “shall”, it is deductible that any originating process to which Section 97 relates should be endorsed stating that its service is to be effected outside the jurisdiction of the state of its issuance. The question at this juncture is whether the issuance and service of the originating processes in this suit fall within the confines of the provisions of Section 97 of the Act.

The Respondent has strenuously argued that the territorial jurisdiction of the Federal High Court extends to all the States of the Federation. I am inclined to agree with the submissions of the Respondent on the territorial jurisdiction of the Federal High Court.

In simple terms, the territorial jurisdiction of the Federal High Court is nationwide and not limited to one State. The processes emanating from the Federal High Court apply as the processes of a single Court issued within its jurisdiction. See the case of Kida v Ogunmola (2006) 13 NWLR (Pt 997) p. 377.

Similar to the Court of Appeal, the Federal High Court is a single court with several judicial divisions for administrative convenience. In effect, the issuance of an originating process out of one Judicial Division of the Federal High Court for service in another Judicial Division of the Federal High Court does not require the mandatory endorsement prescribed by Section 97 of the Act.

I am not oblivious to the case of Owner of MV ARABELLA V Nigeria Agricultural Insurance Corporation (2008) All FWLR (Pt. 443) 1208 and other judicial authorities relied on by the Appellant to justify its submissions. I am, however, inclined to adopt the principle of law upheld by this court in recent cases, including the case of Samuel v APC (2023) 10 NWLR (Pt 1892) p 195, where this court succinctly held thus:

“The wordings of section 97 of the Sheriffs and Civil Process Act make it obvious that it is not applicable to originating processes issued by the Federal High Court for service outside the State of issuance… In

maintaining the position that section 97 of the Sheriffs and Civil Process Act applies to proceedings before the Federal High Court, the respondents relied on this court’s decisions in Owners of The MV Arabella v. N.A.1.C. (2008) 11 NWLR (Pt. 1097) 182;…. In these cases, it was the decision of this court that originating processes filed in the Federal High Court and which are to be served outside the State or the Federal Capital Territory in which it was issued, must be endorsed as prescribed in section 97 of the Sheriff and Civil Process Act, irrespective of the fact that the jurisdiction of the Federal High Court is nationwide and is not limited to any State of the Federation of Nigeria. There is another line of decisions of this court which have decided the issue differently, the latest of which is appeal No. SC/CV/1402/2022 between: P.D.P. v. Engr. John Ibrahim Uche & 2 reported in (2023) 9 NWLR (Pt. 1890) 523. In that case, the court followed decisions of this court in Bier v. S.D.P. (2019) 12 NWLR (Pt. 1687) 377:Boko v. Nungwa (2019) NWLR (Pt.

1654) 395. The case of P.D.P. v. Engr. John Ibrahim Uche & 2 Ors. delivered on 6th January, 2023 Reported in (2023) 9 NWLR (Pt. 1890) 523 is the latest in time and takes precedence. In view of this, I will toe the line of the latter set of cases.”

 On the strength of the foregoing, I find that the originating summons issued at the Federal High Court, Lagos and served on the Appellant’s husband in Kaduna State without the endorsement. stipulated by Section 97 of the Sheriff and Civil Process Act is competent and valid. Having taken this position, the question of whether the participation of the Appellant’s husband at trial amounts to a waiver of Section 97 of the Act becomes academic. Consequently, this issue is resolved against the Appellant.

ISSUE TWO

WHETHER SECTION 40 OF THE NIGERIAN DEPOSIT INSURANCE CORPORATION ACT 1990 AND THE FAILED BANK (RECOVERY OF DEBTS) AND FINANCIAL MALPRACTICE IN BANKS 1994 HAVE RETROACTIVE EFFECT TO EMPOWER THE RESPONDENT WITH THE LOCUS STANDI TO SUE AND RECOVER DEBTS FROM TRANSACTION ENTERED IN 1988.

 On the second issue, the Appellant challenged the competence of the Respondent to institute an action for recovery of loans due and payable to Commercial Trust Bank. It was contended that the Respondent did not plead or tender any evidence demonstrating its appointment as liquidator of the Bank.

According to the Appellant, the NDIC Act, which conferred the Respondent with the power to assume the role of liquidator of a failed bank, was not in force at the time of the commencement of the suit in 1999. it was argued that the powers of the NDIC to act as liquidator of a failed bank came into effect in 2006 and the same cannot operate retrospectively. Cases of Obiuebi v CBN (2011) 7 NWLR (Pt. 1247) 465 and Shell Petroleum Dev. Co. of Nig. Ltd v Chief Joel Anaro (2015) LPELR- 24750 (SC) was relied on to buttress the

submissions.

Opposing the Appellant’s submissions, the Respondent argued that the issue of locus standi was raised for the first time in this appeal, and the Appellant ought to obtain leave of court before raising a novel issue. It was submitted that the Appellant’s failure in obtaining the requisite leave before raising the issue of locus standi for the first time in this appeal renders the issue incompetent. The Respondent relied on Barbus & Co (Nig) Ltd v Okafor-Udej) (2018) LEPLR – 44501 (SC) 22; Dagaci of Dere & Ors v Dagaci of Ebwa & Ors (2006) All FWLR (Pt. 306) 786.

It was submitted further that Section 7 of Failed Bank Act vests the Respondent with the requisite locus standi to commence the action at the trial Court Respondent submitted that pursuant to Section 7 of the Failed Bank Act, the Respondent had the mandate to recover all debts due to failed banks as in the instant case. The Respondent concluded that it had the legal standing to commence an action against the Chairman of the failed bank for the recovery of debts due to the Bank in the Reply Brief, the Appellant submitted that leave had been sought and obtained from the lower court to raise the issue of locus standi for determination. The Appellant referred to a Motion on Notice dated 18th September 2012 contained at page 187 of the record to support its argument.

RESOLUTION OF ISSUE TWO

This issue is double-pronged. The first aspect deals with the question of the Respondent’s locus standi to initiate the action at the trial court while the second aspect deals with whether the issue of locus standi was properly raised by the Appellant in this appeal. It is the Respondent’s contention that the issue of locus standi was raised by the Appellant for the first time before this court without the obtention of the requisite leave of court.

Generally, an appeal is regarded as a continuation of the original suit and not the inception of a new action. Parties in an appeal are therefore confined to their case as presented in the court of first instance and are not allowed to raise fresh issues on appeal.

Consequently, where an issue has not been raised at the court of first instance and duly determined, a party cannot unilaterally raise such an issue at the appellate court. See the case of Buhari v Yusuf (2003) 14 NWLR (Pt 841) 446. A party can, however, argue or raise a fresh issue on appeal where such a party has sought and obtained prior leave of the appeal court. The law frowns and abhors any fresh issue being raised on appeal without the leave of the court. See the case of

Onemu v. Comm. for Agric and N.R (2019) 11 NWLR (Pt. 1682) 1.

 Then, Appellant identified 8 (eight) grounds of appeal in its Amended Notice of Appeal. Ground 2 (two) of the Amended Notice of Appeal is premised on the Respondent’s lack of legal standing to commence the action, which has resulted in this appeal. The Respondent on its part holds the view that this issue is being raised for the first time in the lifespan of this case. I have carefully perused the record of this appeal to ascertain the correctness of the Respondent’s assertion and it is pertinent to state that the issue of locus standi was not raised by the Appellant for the first time in this court.

While it is correct that the issue of locus standi was not considered or determined by the trial court, leave of the lower court had been sought and obtained to raise and argue the novel issue before the Court of Appeal. By an application dated 18th September 2012 contained at page 187 of the records, the Appellant’s husband had sought inter alia from the lower court “An Order granting the Appellant/Applicant leave to raise for the first time in the Court of Appeal fresh issues as contained and arising from the

additional Grounds of Appeal No.3, 4, 5, 6 and 7 of the proposed amended Grounds of Appeal”. The proposed Amended Notice of Appeal was annexed as Exhibit D to the application. Ground 3 of the Proposed Amended Notice of Appeal reads thus “Plaintiff/Respondent has no locus standi and lacks the capacity to instruct (sic) this suit.”

On 15th January 2013, the lower court granted the application to raise fresh issues – one of which is the issue of the Respondent’s locus standi. By virtue of the leave granted by the lower court to the

Appellant’s husband. the argument of the Respondent that the question of locus standi was raised for the first time in this court is untenable and is hereby dismissed.

It remains to consider the second leg of this issue on whether the Respondent had the requisite legal standing to initiate the action at the trial court. Locus standi denotes the legal capacity to institute or commence an action in a competent court of law or tribunal.

Explaining the legal concept of locus standi, Adekeye, JSC in Ajayi v Adebiyi (2012) 11 NWLR (Pt. 1310) 137 brilliantly espoused

thus:

“Locus standi is the legal right of a party to an action to be heard in litigation before a court of law or tribunal. The term entails the legal capacity of instituting or commencing an action in a competent court of law or tribunal without any inhibition, obstruction, or hindrance from any person or body whatsoever. The issue of locus standi is a condition precedent to the determination of a case on merit. Where a plaintiff has no locus standi to bring a suit, the suit becomes incompetent and the court lacks the jurisdiction to

The entertain it, the only order the court can make in the circumstance is that of dismissal.”

 It can be extrapolated from the forgoing that the concept of locus standi is germane to the exercise of the court’s jurisdiction over an action. The implication being that in the absence of the requisite locus standi for the commencement of an action, the court is stripped of the jurisdiction to adjudicate over the action.

In the determination of whether the Respondent had the requisite locus standi to commence an action, the first point of call is the originating processes filed by the Respondent. I have painstakingly considered the Writ of Summons filed by the Respondent at the trial court. It is clear that the Respondent took out a Writ of Summons against the Appellant’s husband and Credit and Finance Ltd for the recovery of the outstanding debt due to a failed bank. 

The Appellant has alleged that there was no existing legislation empowering the Respondent to commence an action for the recovery of debts due to a failed bank. It is on this basis that the Appellant has urged the court to hold that the Respondent lacks locus standi. I am unable to agree with the Appellant’s contention. The position held by the Appellant that the Respondent had no legal instrument conferring it with the right to commence an action to recover funds due to a failed bank is wrong.

For the purposes of clarity, it is apt to state that the Respondent commenced the action against the Appellant’s husband sometime in 1999 for the purpose of recovery of the debt due to the bank. Prior to the commencement of the action, the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Act, 1994 has been in force. The Respondent’s legal standing to commence an action against the Appellant’s husband is fortified by the provisions of the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Act, 1994.

More significantly, Section 7 of the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Act, 1994 unequivocally confers the Respondent with the right to recover debts owed to a failed bank. Section 7 of the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Act, 1994 provides thus:

“An Application for the recovery of debt owed to a failed Bank shall be brought before the Court by the Receiver or liquidator of the Failed Bank and where there is no Receiver or Liquidator, by a person appointed by the Central Bank of Nigeria or the Nigeria Deposit Insurance Corporation.”

The above provision leaves no room for doubt as to the legal standing of the Respondent to recover the debt owed to a bank which had failed. There is no controversy between the parties that Commercial Trust Bank was a failed bank. Thus, it is clear to me that the Respondent by virtue of Section 7 of the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Act, 1994 had the Requisite legal standing to apply for the recovery of debt from the debtors of the bank.

While I agree with the Appellant that the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Act, 1994 (“Failed Banks Act”) is not applicable retrospectively, I do not see the nexus of the Appellant’s submissions with this case as the Respondent’s action was initiated in 1999 after the commencement of the Failed Banks (Recovery of Debts) and Financial Malpractice in Banks Act.

In the circumstance, I hold that the Respondent had the locus to initiate the action against the Appellant. This issue is therefore resolved against the Appellant.

ISSUE THREE

WHETHER IN THE CIRCUMSTANCE OF THE CASE, THE SUPREME COURT CAN UPHOLD THE CONCURRENT FINDINGS OF THE FACT THAT THE APPELLANT GUARANTEED THE LOAN GIVEN TO THE 1ST DEFENDANT AND THEREFORE LIABLE FOR ITS REPAYMENT.

On this issue, the Applicant argued that the concurrent finding of the Courts below that the Appellant’s husband guaranteed the loan facility advanced to Credit and Finance Ltd is perverse and not supported by evidence. It was submitted that the Respondent’s Amended Statement of Claim is devoid of facts demonstrating that the Chairman of the failed bank guaranteed the loans granted to Credit and Finance Ltd. According to the Appellant, in the absence of pleadings establishing the Appellant’s husband’s guarantee of the facility granted to the Credit and Finance Ltd, there was no basis for The Courts below to hold that the Appellant’s husband is liable for the repayment of the loan advanced to the Credit and Finance Ltd.

Appellant submitted that Exhibit G titled “Credit Approval Form – Preliminary” and signed by the Appellant’s husband cannot be interpreted as a guarantee and if the court is inclined to construe Exhibit G as a guarantee form, the document ought to be expunged from the Records as the Respondent did not plead the issue of guarantee in its amended Statement of Claim. The Appellant relied on Emegokwe v. Okadigbo (1973) 4 SC 113, 119; Nsiegbe v Mgbemena (2007) 10 NWLR (Pt. 1042) 364.

The Respondent, on his part, submitted that the Appellant has failed to establish the incorrectness of the lower court’s decision as it relates to the Appellant’s husband’s liability for the credit facility granted to Credit and Finance Ltd. The Respondent contended further that the Courts below considered Exhibit G and found that the document disclosed that the Appellant’s husband issued an unconditional personal guarantee for the facility granted to Credit and Finance Ltd. According to the Respondent, the Courts below found the Chairman of the failed bank liable for the repayment of the loan by virtue of Section 12 of the Failed Bank Act.

 The Respondent argued that relevant facts relating to the Appellant’s personal guarantee of the facility were pleaded in Paragraphs 5, 6, 7, and 8 of its amended Statement of Claim. The Respondent consequently urged the court to resolve this issue in its favour.

RESOLUTION OF ISSUE THREE

The Appellant has, by this issue, urged the court to dismiss the concurrent findings of the trial court and the lower court. This court is usually very hesitant and wary to interfere with the concurrent findings of the two lower courts. Where there are concurrent findings of two lower courts, the Supreme Court will only interfere with such findings if they are perverse. The onus lies on an Appellant to show that there are special circumstances to warrant interference by the Supreme Court with concurrent findings of two lower courts. See. Isiaka v. Amosun (2016) 9 NWLR (Pt. 1518) 417.

Without any clear errors in law or fact leading to or occasioning miscarriage of justice, this Court will not interfere with the concurrent findings of lower courts. There must clear proof of error either of law or of fact on record, which has occasioned miscarriage of justice before the Supreme Court can upset or reverse concurrent findings.

In other words, where there is sufficient evidence to support the concurrent findings of fact by two lower courts, such findings will not be disturbed unless there is significant error apparent on the record. See Saminu v. State (2019) 11 NWLR (Pt. 1683) 254, Layinka v. Makinde (2002) 10 NWLR (Pt. 775) 358, PML (Nig.) Ltd. v. F.R.N. (2018) 7 NWLR (Pt. 1619) 448.

It is the Appellant’s contention that the lower court’s findings that the Appellant personally guaranteed the facility granted to Credit and Finance Ltd is perverse and unsupported by evidence on the record.

On this basis, the Appellant has urged this court to set aside the finding of the lower court.

To my mind, the question as to whether the finding of the lower court was indeed perverse as contended by the Appellant can be resolved by Exhibit G. The lower court in its evaluation of Exhibit G made the following succinct observation:

“For instance, Exhibit G dated 20/12/1988

which contains the term of the facility shows that the Appellant, personally and unconditionally, guaranteed the loan facility. The disbursement of the loan was also subject to the receipt of Appellant’s personal guarantee.”

By virtue of the unambiguous content in Exhibit G, which establishes that the Chairman of the failed bank personally guaranteed the loan facility granted to the company, the Appellant’s contention that there is no evidence from which liability can be inferred, falls short. There is indeed ample evidence as deducible from Exhibit G that there was a personal guarantee by the Appellant’s husband prior to the advancement of the credit facility.

   This court therefore holds and finds that the Appellant’s husband was a guarantor for the loan advanced by the failed bank to the Company. A Guarantor is technically a debtor because, where the principal debtor fails to pay his debt, the Guarantor will be called upon to pay the money owed. CBN v Interstella Comm. Ltd (2018) 7 NWLR (Pt. 1618) 294. See also the case of Nwankwo v. E.D.C.S.U.A. (2007) 5 NWLR (Pt. 1027) 377, where this court held that:

“The liability of a Guarantor becomes due and mature immediately the debtor/borrower becomes unable to pay its/his outstanding debt. Then, the Guarantor’s liability is said to have crystallized.”

 Having personally guaranteed the loan advanced by the failed bank to the company, the liability of the Appellant’s husband crystallized upon the company’s failure to liquidate the credit facility. The Appellant’s husband, as a guarantor, is therefore liable for the repayment of the credit facility granted to Credit and Finance Ltd by the failed bank.

Quite apart from Exhibit G, which establishes the Appellant’s husband personal guarantee of the credit facility and the resultant liability, the Appellant’s husband’s liability is also derived from the provisions of

Section 12 of the Failed Banks Act provides thus:

(1) Where (a) the information and details on the security pledged for the loan filed before the Court is impossible to locate; or (b) no security is pledged at all; or (c) the identity of the debtor is difficult to locate; or (d) the debtor is found to be nonexistent, fake or fictitious or in any way unidentifiable. The Court shall hold liable, for the outstanding loan and interest thereon, the directors, shareholders,

partners, managers, officers and other employees of the failed bank who in the performance of their duties were found to have been connected in any way with the granting of the loan which has become irrecoverable.

(2) The Court shall proceed to recover from the persons referred to in subsection (1) of this section, jointly and severally the outstanding loan and interest thereon in accordance with the provisions of this Act, unless the Court is satisfied that the Debt was incurred without the consent of the director, partner, shareholder, manager, officer or employee and that he exercised all such diligence as ought to have exercised having regard to the nature of his functions and all the circumstances of the case”

 There is evidence on the record that all the conditions stipulated by the Failed Banks Act to invoke liability for unrecovered loans against bank officials are present in this case. Firstly, there was no security pledged by the company for the credit facility. Secondly, the Chairman of the failed bank was directly involved and connected with the grant of the loan. Finally, the loan has become irrecoverable. In view of the aforementioned facts and evidence before the court, it is clear that the provision of Section 12 of the Failed Bank Act is applicable to impose liability on the Appellant’s husband for the loan granted to Credit and Finance Ltd, and I so hold.

I am not unaware of the Appellant’s contention that Exhibit G

relied on by the lower court, ought to be expunged from the record of the court. I do not see any merit in this submission as there are no grounds of appeal challenging the admissibility of Exhibit G in the Appellant’s Amended Notice of Appeal. Neither the Appellant nor the

Respondent has the right to formulate and argue an issue in vacuo.

The Appellant’s argument urging this court to expunge Exhibit G from the records of the court is not derived from the Amended Notice of Appeal and is hereby dismissed.

In brief, the court finds that the Appellant’s husband personally guaranteed the loan advanced to Credit and Finance Ltd; and he is Therefore liable for the repayment of the loan following the company’s default in liquidating the loan. This issue is therefore resolved against the Appellant.

ISSUE FOUR

WHETHER THE LEARNED JUSTICES OF THE COURT OF APPEAL WERE RIGHT IN HOLDING THAT THERE WAS A VALID AND ENFORCEABLE AGREEMENT BETWEEN THE IST DEFENDANT AND THE BANK IN RESPECT OF THE N2.5

MILLION GIVEN TO THE 1ST DEFENDANT WHEN AT THE TIME OF DISBURSEMENT THE 1ST DEFENDANT WAS NOT A CUSTOMER OF THE BANK.

On this issue, the Appellant contended that the sum of N2,500, 000 (Two Million, Five Hundred Thousand Naira) advanced by the bank to Credit and Finance Ltd cannot be construed to be a loan as there was no banker-customer relationship between Credit and Finance Ltd and the bank. We were referred to the case of NDIC v Okem Enterprises (2014) 10 NWLR (Pt. 880) 107. The Appellant conceded that the only facility advanced to Credit and Finance Ltd was in the sum of N200, 000 (Two Hundred Thousand Naira) which was applied for and disbursed.

Relying on Adekunle v Adegboye (1992) 2 NWLR 305, 318.

The Appellant contended that the lower Court erroneously relied on an abandoned Statement of Defence to find that there was a valid contract between Credit and Finance Ltd and the Bank. The Appellant consequently urged the Court to resolve this issue in its favour.

In response to the Appellant’s argument on this issue, the Respondent referred the Court to paragraphs 4, 5, & 6 of the Statement of Defence wherein an admission was made that Credit and Finance Ltd maintained an account with the Respondent. Respondent submitted further that there was a valid contract between Credit and Finance Ltd and the failed Bank. We were referred to the case of Adewumi & Anor v A.G of Ekiti State & Ors (2002) LPELR 3106 (SC). Respondent thereafter urged the court to resolve this

issue in its favour.

RESOLUTION OF ISSUE FOUR

The Appellant’s principal contention on this issue is that there was No banker-customer relationship between the failed bank and Credit and Finance Limited to form the basis of any advancement of loan by

The former to the latter. In resolving this issue, the lower court made The following findings:

“The Defendant/Applicant has by the averments in paragraph 4(a) and (b) of the Statement of Defence, admitted not only the fact that the 1st Defendant maintained an account with the Commercial Trust Bank Ltd, but also that it applied for a facility and was upon the application granted same which is only logical and ordinary meaning of the phrase “applied for and was given the facility in paragraph 4(b)……

The Appellant must therefore be estopped from denying the facts that the 1st Defendant maintained an account with the Commercial Trust Bank and applied for a facility and was given…”

The Appellant strongly dis rees with the above finding of the lower court on the basis that the Court of Appeal relied on an abandoned Statement of Defence before it reached the erroneous conclusion that Credit and Finance Limited was a customer of the failed bank who sought and obtained a facility from the failed bank.

It has not been disputed by the Appellant that several germane averments as it relates to this issue were contained in the Statement of Defence filed by the Appellant’s husband at the trial court. At paragraph 4 of its Statement of Defence, the Chairman of the failed bank admitted that the Credit and Finance Limited maintained an account with the failed bank. It was further admitted that the company applied for and was granted a facility by the bank. Curiously, the Appellant in this appeal have contradicted this stance and contended that there was no relationship whatsoever between the Company and the bank. This in my view is a clear case of approbation and reprobation which the law frowns upon.

Parties as litigants are not permitted to approbate and reprobate in the conduct of their case. A party should not be allowed to make up a different case on appeal from what he pleaded before the trial court. See the case of Abeke v Odunsi (2013) 13 NWLR (Pt. 1370) 1.

A party should be consistent in stating his case and consistent in proving it. He will not be allowed to take one stance in his pleadings, then turn somersault during the trial, and then assume a completely different stance in the appellate court. Justice is not a game of hide and seek. Ezemba v. Ibeneme (2004) 14 NWLR (Pt. 894) 617.

Following the admission in the Statement of Defence that the Company was a customer of the bank who sought and obtained a facility from the bank, the Appellant is estopped from denying the contractual relationship between the Company and the failed bank.

Admittedly, the averments in the Statement of Defence filed at the trial court were not supported by evidence, the court is however, imbued with the powers to consider and utilize document in its record for the determination of a contentious issue even though the document was not tendered and admitted as an exhibit at the trial. Nothing forbids a court from looking into its records to resolve an issue, as the judge is required to dispassionately consider and determine every fact available. Thus, a court is entitled to look into any document in its records and make use of it in order to arrive at a just decision. Oladapo v. State (2020) 7 NWLR (Pt. 1723) 238.

Having regard to the admission made in the Statement of Defence filed at the trial court, I am of the considered view that the lower court was right in considering a document which formed part of the court’s record before reaching the conclusion that there was a contractual relationship between the failed bank and the company. I therefore have no difficulty in affirming the lower court’s decision that the company was a customer of the bank and here was an enforceable contract between the parties.

Furthermore, I have carefully perused the processes filed by the Respondent at the trial court and extrapolate therefrom that the Respondent also pleaded facts relating to the banker-customer relationship between the parties. The Respondent further averred that the Company sought and obtained a loan facility of N2,500,000 (Two Million, Five Hundred Thousand Naira) from the failed bank. These averments are contained at paragraphs 4 & 5 of the Respondent’s amended Statement of Claim, reproduced hereunder:

“4. The 1st Defendant maintained a current account No. 114000010 with the Commercial Trust Bank Limited, at Ahmadu Bello Way, Kaduna State.

“5. The Defendant in December 1988, applied for a loan facility of N2.5 Million Naira only from Commercial Trust Bank Ltd, for the purpose of financing Commodity Trade Business.”

The above averments were not refuted or challenged at the trial Court. It is trite that uncontroverted facts need no further proof as such uncontested facts are regarded as admissions. Danbaba v State (2018) 11 NWLR (Pt 1631) 426. Since the Appellant’s husband did not dispute, controvert, or challenge the Respondent’s averments on the relationship between the failed bank and the company, the court is entitled to act on and rely on same.

I therefore find that there was a banker-customer relationship between the failed bank and the company. I also hold that the credit facility was granted by the failed bank to the company in furtherance of the banker-customer relationship between the parties. Accordingly.

I resolve this issue in against the Appellant.

ISSUE FIVE

WHETHER THE COURT OF APPEAL WAS RIGHT WHEN IT AWARDED INTEREST ON THE MONEY GIVEN TO

THE 1ST DEFENDANT AFTER IT HAS MERELY STATED THAT IT CLAIM A RATE OF INTEREST OF 21% WITHOUT SPECIFICALLY PLEADING THE RATE AND PROVING SAME.

 On this final issue, the Appellant contends that the Respondent in its amended Statement of Claim dated 19 September 2003, did not plead any fact as to its entitlement to interest at the rate of 21% per annum till the judgment debt is liquidated. It was submitted that the lower Court was in error when it relied on Exhibit G to review the interest rate to 18% per annum. The Appellant argued that the Respondent’s failure to plead any fact to justify its claim for interest disentitled the Respondent to an award of interest. The Appellant relied on Himma Merchant Ltd v Alhaji Inuwa Aliyu (1994) 6 SCNJ (Pt. 1) 87.

The Respondent on its part submitted that the interest rate of 21%was pleaded in its Amended Statement of Claim. According to the Respondent, Exhibit G discloses an interest rate of 18% per annum and the lower court was right to have relied on same. The Respondent concluded by urging this Court to dismiss the contention of the Appellant on this issue.

RESOLUTION OF ISSUE FIVE

By this issue, the Appellant is challenging the award of interest by the lower court. Parties are ad idem, that the trial court awarded interest on the outstanding debt at the rate of 21% per annum. On appeal, the lower court reviewed the interest rate awarded by the trial court and reduced same to 18% per annum. It is the Appellant’s contention that the Respondent is not entitled to any interest whatsoever on the outstanding debt.

In the resolution of the quantum of interest to be awarded on the outstanding debt, the lower court painstakingly considered Exhibit G. “the Credit Approval Form” and made the following findings:

“Exhibit G, contains the terms of agreement, including the term as to the rate of interest payable.

At column 6, it states the interest rate as follows:

“Interest Rate: 2% per Annum above Commercial Trust Bank Prime Lending Rate, currently 16.03 per annum GIV (sic) A gross rate of 18% per annum, interest shall be payable in arrears”

This was the interest rate that was agreed between the parties at the time of the application for and grant of the loan facility to which paragraph relates”

It is clear from the foregoing that Exhibit G formed the fulcrum of the lower court’s decision to award 18% interest per annum on the outstanding debt. I have carefully considered Exhibit G which contained the terms and conditions for the grant of the facility including the interest rate. The parties had by Exhibit G agreed that a gross interest rate of 18% per annum shall be applicable when payments are in arrears.

The law is firmly settled that parties are bound by the terms of their agreement, thus all parties are mandated by law to honour the terms of their agreement. Isheno v Julius Berger (Nig) Plc (2008) 6 NWLR (Pt. 1984) 582; Aminu Ishola Investment Ltd v Afri Bank Nig. Ltd (2013) 9 NWLR (Pt. 1359) 380; Edilcon (Nig) Ltd v UBA Pic (2017) 18 NWLR (Pt.1596) 74; see also McDonald v John Twiname Ltd (1953) 2 QB. 304, 3141.

Since the parties had agreed on the interest rate applicable on payments made in arrears, this court will not rewrite the contract for the parties. I am therefore in agreement with the findings of the lower court on this issue. Accordingly, this issue is resolved against the Appellant.

In summary, I find this appeal to be unmeritorious. This appeal is hereby dismissed for lacking in merit.

I award the sum of N500,000.00 as cost in favour of the Respondent.

ABUBAKAR SADIQ UMAR

JUSTICE, SUPREME COURT

APPEARANCES:

Ibrahim Gamdeh Adamu, Esq. with him, Fatima Zara Mohammed, for the Appellant.

Mustapha I. Abubakar, Esq. with him, Isah D. Haruna for the Re