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J.A. OBANOR & CO. LTD. v. CO-OPERATIVE BANK LTD. (1995)

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⦿ CASE SUMMARY OF:

J.A. OBANOR & CO. LTD. v. CO-OPERATIVE BANK LTD. (1995) – SC

by PipAr Chima

⦿ LITE HOLDING

Available:  Fasel Services Limited & Anor. v. Nigerian Ports Authority & Anor. (2009) - SC

⦿AREA OF LAW

⦿ TAG(S)

⦿ PARTIES

APPELLANT
J.A. Obanor & Co. Ltd.

v.

RESPONDENT
Co-operative Bank Ltd.

⦿ CITATION

(1995) JELR 43430 (SC)

⦿ COURT

Supreme Court

⦿ LEAD JUDGEMENT DELIVERED BY:

MOHAMMED, J.S.C.

⦿ APPEARANCES

* FOR THE APPELLANT

* FOR THE RESPONDENT

⦿ FINDING OF FACT

⦿ CLAIM

⦿ ISSUE(S)

1. Whether the Supreme Court can interfere with the two concurrent findings of facts by the trial court and the Court of Appeal.

2. Whether appellant did not benefit from the loan of N250,000.00 from respondent’s bank.

3. Having regard to the totality of the evidence and the finding of facts, was the Court of Appeal right in dismissing appellant’s appeal?

⦿ RESOLUTION OF ISSUE(S)

[APPEAL: DISMISSED WITH N1,000.COST]

1. ISSUE 1 WAS RESOLVED AGAINST THE APPELLANT BUT IN FAVOUR OF THE RESPONDENT.

RULING:
i. It is plain from the pleadings and evidence adduced that the case of the appellant hinged on the acceptance of the submission that Mr. J. A. Obanor was mentally unsound when he negotiated and signed Exhibit “B”. However since the two lower courts have both rejected the contention of the appellant that Mr. J. A. Obanor was insane when he negotiated with the respondent and signed Exhibit “B” can I disturb such concurrent findings? I do not want to repeat what is the established practice, that this court will not interfere with concurrent findings of fact of two court below unless a miscarriage of justice or a perverse decision or improper exercise of judicial discretion has been established in the lower courts’ judgment.

ii. Now, was there anything categorically established by the appellant’s counsel in respect of this issue showing any of the decisions of the two lower courts, in this appeal, falling within the exception to the general rule which would invite the interference of this court? The answer is definitely in the negative. The appeal in respect of this issue has therefore failed.

2. ISSUE 2 WAS RESOLVED AGAINST THE APPELLANT BUT IN FAVOUR OF THE RESPONDENT.

RULING:
i. The Court of Appeal pointed out that the tenor of the letter showed that the appellant company and its subsidiary were indebted to the total sum of N364,099.71 to the respondent’s bank. In the reply written by the appellant company in Exhibit “R1”, it admitted receiving Exhibit “R” and appealed for more facilities from the respondent for the running of the business of the appellant company. It is clear that the wording of Exhibit “R1” is indicative of the fact that the appellant was aware of the loan of N250,000.00 and that the amount had been used in the running of the business of the appellant company.
ii. I do not see how the appellant can run away from the liability of a loan advanced to the company, paid into the company’s account and used by the company to run its business. The argument made in respect of issue 2 is also not helpful to the appellant.

3. ISSUE 3 WAS RESOLVED AGAINST THE APPELLANT BUT IN FAVOUR OF THE RESPONDENT.

RULING:
i. J. A. Obanor validly entered into a loan agreement with the respondent in which N250,000.00 was advanced to J. A. Obanor and Company Limited. I have also accepted in this judgment that appellant company had benefited from the advance.

ii. In Trenco (Nigeria) Limited v. African Real Estate and Investment Co. Ltd. and Anor. (1978) 4 S.C. 9, this court referred to the case of Mantaignac v. Shitta (1890) 15 App Cases 357 where it was decided that where an agent under Power of Attorney possessed implied authority to raise money by loan for the purpose of carrying on the business affairs entrusted to him, which authority under circumstances of emergency must be deemed to include power to borrow in exceptional terms outside the ordinary course of business, the lender was not bound to inquire whether in the particular case the emergency had arisen or not, and that he was entitled to recover from the principal if he lent to the agent bona fide and without notice that the agent was exceeding his mandate. Following the above decision, this court resorted to the principles of equity and held that the plaintiffs, on the evidence, made out a case in equity against the 1st defendant who cannot be heard to deny the transaction evidenced by Exhibit “I”. This appeal falls within the ratio decided in the above cases and in equity the appellant cannot deny taking benefit from a loan paid into company’s account.

⦿ ENDING NOTE BY LEAD JUSTICE – Per Mohammed JSC

It is elementary to write about the relationship of equity and common law. It is plain however to say that the characteristic common to all equitable remedies and which distinguishes them from common law remedies is their discretionary nature. Courts in this country can have resort to equitable principles and establish a remedy where strict adherence to common law rules would cause injustice and hardship to parties. The Court of Appeal applied the principles of equity after being satisfied that appellant company had received and benefited from the N250,000.00 loan advanced by the respondents bank to the company following the agreement the respondent signed with Mr. J. A. Obanor. The learned Justice of the Court of Appeal, Ejiwunmi, J.C.A., who wrote the leading judgment supported his decision by reference to a very relevant English case to wit. Liggett (Liverpool) v. Barclays Bank (1927) A.E.R. Rep. 451 at 456. Ejiwunmi, J.C.A., summarised the facts of that decision in the following manner: “In that case the facts revolved round the payment by the respondent Bank of certain cheques which were signed by someone who described herself as a director of the plaintiff company. It was found in that case that the respondent Bank had notice that the persons who signed the cheques had not been properly appointed as a Director of the plaintiff company. In deciding whether the respondent Bank was entitled to succeed in its claim, in spite of the fact that the respondent Bank was found negligent by the payment of the sums of money represented on the various cheques presented to the respondent Bank, Wright J., at pages 457-458 said:- “But the matter must now be decided in a court which take congnisance of principles of both law and equity, and the question now is whether the equitable principle does apply to the facts of this case. The equitable principle has been applied beyond question over and over again to cases where an agent without the authority of his principal has borrowed money on behalf of his principal. In those circumstances at common law the principal cannot be sued and cannot be made to repay the amount so borrowed, but in equity it has been held that to the extent that the amount so borrowed has been applied in payment of the debts of the principal, the quasi lender is entitled to recover to that extent from the quasi borrower.”

⦿ REFERENCED (STATUTE)

⦿ REFERENCED (CASE)

⦿ REFERENCED (OTHERS)

⦿ NOTABLE DICTA

* PROCEDURAL

* SUBSTANTIVE

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