⦿ CASE SUMMARY OF:
Wema Bank Plc v. Alhaji Idowu Fasasi Solarin Osilaru (2007) – SC
Grounds of appeal;
Wema Bank Plc
Alhaji Idowu Fasasi Solarin Osilaru
Court of Appeal
⦿ LEAD JUDGEMENT DELIVERED BY:
John Inyang Okoro, J.C.A.
⦿ LAWYERS WHO ADVOCATED
* FOR THE APPELLANT
– Chief Wale Taiwo;
* FOR THE RESPONDENT
Tunde Ologunde Esq;
⦿ FACT (as relating to the issues)
The synopsis of the evidence adduced at the court below is that the Respondent is a customer of the Appellant bank and in March, 1998, the Respondent took two facilities from the Appellant as follows:
(1) Term loan;
(2) Overdraft facility.
For the term loan, there was one month moratorium and thereafter the Respondent was to liquidate the loan in 35 months at a monthly installment of N100,000.00. The overdraft facility was tenured for six months to expire September 1998. The term loan was to expire in April 2001 but subject to a default clause as stated in the offer letter Exhibit J. The Respondent’s real properties situate at 147 Akarigbo Street, Sabo, Sagamu were used as collateral to secure repayment. The said properties were insured against fire and burglary. The Respondent was in default of both the overdraft and loan and on 15th June, 1999, the Appellant by Exhibit C wrote a final demand request for the payment of the sum of N4,847,693.63k and threatened legal action against the respondent. A month after and specifically on 18th July, 1999 a communal clash broke out in Sagamu and the Respondents properties secured for the loan were looted and burnt.
The insurance company paid through the Appellant the sum of N5,793,319.60k for the repairs and renovation of the damaged property. The Respondent demanded for the payment of the insured sum but the Appellant refused to pay and further demanded for an outstanding sum of N172,335,84k from the Respondent after taking the N5,793,319.60k to defray the Respondent’s indebtedness to her.
At the lower court, the respondent therein as plaintiff took out a Writ of Summons against the appellant as defendant wherein he sought the under-mentioned reliefs viz:
1. A declaration that the defendant’s seizure and detention of the sum of five million, seven hundred and ninety three thousand, three hundred and nineteen naira, sixty kobo (N5,793,319.60k) the insured sum paid to the defendant on behalf of the plaintiff in respect of the latter’s buildings at 147 Akarigbo Street, Sabo, Sagamu for the purposes of repairing and renovating the plaintiffs buildings that were destroyed and damaged by fire and burglars on the 18th day of July, 1999 during communal clash in Sagamu is unlawful and illegal. The plaintiff also claims interest on the said sum of N5,793,319.60k at the rate of 21% monthly from the defendant from 1st May 2000 to 6th day of June 2000 and at the same interest rate of 21% monthly from 7th day of June, 2000, until final determination of the case.
2. A declaration that the conversion by the defendant to its own use of the insured sum of N5,793,319.60k paid to it on behalf of the plaintiff for the purposes of repairing and renovating plaintiffs building is improper, unlawful and in bad faith.
3. An order that the defendant’s continuous withholding of the sum of five million, seven hundred and ninety three thousand three hundred and nineteen naira, sixty kobo (N5,793,319.60k) insured sum paid through it for the repairs, replacement and renovation of plaintiffs damaged properties at 147 Akarigbo Street, Sabo, Sagamu is wrongful and irregular and defendant should repay same to plaintiff. Upon the receipt of the statement of claim which also contained the above reliefs, the Appellant filed his defence and counter claim.
Hearing commenced in earnest. The Respondent testified for himself and called no witness. The Appellant called one witness.
The learned trial judge assembled the evidence and at the end found for the Respondent in its entirety and dismissed the counter-claim of the Appellant.
Aggrieved by the decision of the lower court, the Appellant has appealed to this court.
i. Whether the Respondent proved by credible evidence his entitlement to the reliefs granted by the learned trial judge.
ii. Whether the learned trial judge was right to have ordered the repayment to the Respondent of the insurance sum of N5,793,319.60k when no such relief is claimed on the statement of claim of the Respondent.
iii. Whether the Appellant was right to have appropriated the insurance sum by paying same into the account of the Respondent to defray his due indebtedness to the Appellant.
iv. Whether the Appellant adduced sufficient evidence in support of its counter-claim as to entitle it to judgment on the counter-claim.
⦿ HOLDING & RATIO DECIDENDI
[APPEAL: ALLOWED IN PART]
1. FOR ISSUE 1 THE COURT HELD IN FAVOUR OF THE APPELLANT BUT AGAINST THE RESPONDENT.
i. In my respectful view, I am inclined to say that the bank cannot seize, detain or convert something which is under its control and possession. It was the claim of the Respondent at the court below that the Appellant converted his money paid into his account by the insurance company. It was therefore incumbent upon him to prove that conversion. The burden was on the Respondent who was plaintiff to show that he is entitled to the relief sought from the court. The burden does not shift.
ii. In the instant case, the subject matter of the Respondent’s claim is money in the abstract. In the circumstance, it cannot ground an action for detinue or conversion. Where a banker refuses to pay a customer’s cheque as in the instant case, when the banker holds in hand an amount equivalent to that endorsed on the cheque belonging to the customer, such an act of refusal amounts to a breach of contract.
2. ISSUE 2 WAS DISMISSED BECAUSE THE GROUND IT CAME OUT FROM WAS NOT DISTILLED FROM THE JUDGEMENT OF THE HIGH COURT.
i. In the instant case, I have perused carefully the judgment of the learned trial judge on pp. 66-90 of the record of appeal and there is no order made against the appellant to pay to the Respondent the insurance sum of N5,793,319.60k. The learned trial judge merely said “I therefore hold that the plaintiff claim succeeds on its entirety”. Ground 2 On the notice of appeal as couched appears to have surfaced from the blues as it has no root in the decision of the learned trial judge. Issues were not joined on it in the court below and the learned trial judge did not make any pronouncement on it. No order was made for the repayment of the sum of N5,793,319.60k in the judgment of the court below. A valid ground of appeal is against the orders made by the trial judge rather than the reasons given in making the order.
3. ISSUE 3 WAS RESOLVED IN FAVOUR OF THE APPELLANT IN PART (THE APPELLANT IS ENTITLED TO ONLY THE AMOUNT IT IS OWED)
i. It is my well considered view that the interest of the bank endorsed on the insurance policy is the repayment of the facility granted the Respondent. When the Respondent defaulted in the repayment schedule, clause No 10 of the agreement i.e. Exhibit J had come into effect meaning that the totality of the indebtedness had become due and payable on demand. At the time a bank is granting a loan or overdraft facility to its customer, what is paramount in its mind, which makes it imperative to ask for and receive assurances or security for the loan, is that its interest which is the repayment of the facility must be protected. The bank’s interest on the mortgaged property cannot be anything other than security for the repayment of the loan.
ii. In the circumstance, I am strongly persuaded that the Appellant was right to appropriate the insured sum paid in respect of the damaged mortgaged property. My only disagreement is on the amount which the Appellant has appropriated. Generally, a debt is payable either on demand, or on notice given or upon any other condition agreed upon by the parties. It is also an implied term in the relationship between a banker and its customer that there should be no right of action for the repayment of an overdraft until there has been a demand or notice given… In the circumstance of this case therefore, only the sum of N4,847,693.63k as contained in Exhibit K, final demand notice is due and payable and as such only this amount can presently be appropriated by the Appellant. Any other indebtedness by the respondent to the appellant thereafter must be specifically demanded in accordance with the legal position postulated above. I have reached this conclusion since even the Respondent has admitted owing this amount and what is admitted needs no further proof.
4. ISSUE 4 WAS RESOLVED IN FAVOUR OF THE RESPONDENT BUT AGAINST THE APPELLANT.
i. It is trite that a bank statement of account is not sufficient explanation of debit and lodgments in a customer’s account to charge the customer with liability for the overall debit balance shown in the statement of account. Any bank which is claiming a sum of money on the basis of the overall debit balance of a statement of account must adduce both documentary and oral evidence to show how the overall debit balance was arrived at.
ii. In the instant case it was not sufficient for the DW1 to dump the statement of accounts on the court without explaining clearly the entries therein particularly since the debt is constituted by interest charged after the final demand notice i.e. Exhibit K for the sum of N4,847,697.63k.
Bailment in Osborn’s Concise Law Dictionary 9th Edition as follows: “A Bailment is the transfer of possession of goods to a bailee not the ownership of it by the bailor the owner of the goods or condition, expressed or implied, that the goods shall be returned by the bailee to the bailor, or according to his bailor’s directions as’ soon as the purpose for which they are bailed has been fulfilled. For example a bailment includes: hire or lease pf goods like a vehicle delivered for repair to a repairer or under a pledge. See Coggs v. Bernard (1703) 2 Ld R aym 909 is the celebrated judgment of classification of bailment by Holt CJ as essentially two, either gratuitous Or contractual i.e for good consideration. Here ownership does not pass only possession of the bailor to the bailee.”
⦿ SOME PROVISIONS
⦿ RELEVANT CASES
⦿ NOTABLE DICTA
The cardinal principle in the practice of brief writing in our legal system is that for an issue formulated for determination to be valid, it must of necessity derive from the grounds of appeal which in turn must relate to the decision of the court against which the appeal is lodged. A ground of appeal and/or issue for determination which does not derive from the judgment appealed against is incompetent. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
A valid ground of appeal is against the orders made by the trial judge rather than the reasons given in making the order. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
Since it is the statement of claim that supercedes the Writ, it is the rendition in the statement of claim which is vague that is to be considered by the court. It is trite that for a claim to be considered, it must be straight forward, factual and unequivocal and should not be vague as no court will grant a relief which is vague. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
Having properly couched the relief in the writ, I do not know why it was rendered inconclusive in the statement of claim. It has long been held that it is unfair and unjust to punish litigants for the mistake of their counsel and that courts should as much as it practicable refuse to be bug down by mere technicalities since it leads to injustice. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
This does not take away from counsel the need to be thorough in the drafting of claims and the reliefs therein. Counsel should not be heard to say it was his secretary who made the slip as all documents emanating from his chambers and signed by him must be proof read by him. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
I need to say at this stage that a counter-claim, which is a claim presented by a defendant in opposition to or deduction from the claim of the plaintiff is a distinct, separate and independent action from the action in which it is raised. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
It is now settled that the relationship between a banker and customer where a bank accepts money either in current or deposit account from its customer, is a relationship of debtor and creditor. The relationship is essentially contractual. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
Now, in view of the nature of relationship between the banker and its customer and of the contract that exists between them, the customer has neither the “custody” nor “the control” of monies standing in his credit in an account with the bank. What the customer has is a contractual right to demand repayment of such monies. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
Where the customer makes a demand e.g. by issuing a cheque and the banker refuses to pay, it is my view that the customer’s cause of action is in damages under their contractual relationship. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
A plaintiff is not to rely on the weakness of the defendant’s case but rather on the strength of his own case as proved in court. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
It has been held by this court that money in specie, for example, coins and notes can be converted while money in abstract, for example, money in a bank account cannot be converted. Thus, the former can be the subject in a claim for detinue or conversion, the latter cannot be. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
It is trite that a bank statement of account is not sufficient explanation of debit and lodgments in a customer’s account to charge the customer with liability for the overall debit balance shown in the statement of account. Any bank which is claiming a sum of money on the basis of the overall debit balance of a statement of account must adduce both documentary and oral evidence to show how the overall debit balance was arrived at. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
Let me emphasize once again that investigation is not the function of a court. Therefore, it is not the duty of the court to embark on a voyage of discovery. – Okoro, J.C.A. Wema Bank v. Osilaru (2007)
In my view, any fund which comes into the customer’s account does not belong to the customer where he is indebted to the Bank; it goes to settle the indebtedness. – Alfred P. E. Awala, J.C.A.