Suit Number:CA/I/247/2001
Judges:ALI ABUBAKAR BABANDI GUMEL JCA (Presided) OBIETONBARA DANIEL-KALIO JCA NONYEREM OKORONKWO JCA (Read the Lead Judgment)
Counsel:Oluseye Chukura - for the Appellant.
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J. O. Ebiteh - for the Respondents.
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OKORONKWO JCA (Delivering the Lead Judgment): The appeal in these proceedings stems from the judgment of the Oyo State High Court delivered by Honourable Justice A. Adeniran
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in suit No. 1/130/95 on 2 July 1999 whereby the trial judge A
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granted only part of the appellant’s claims and entered judgment for the respondents in their counterclaim.
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The facts of the case and the sequence thereof shall be
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give n in the manner outlined by the r esponde nts in the B
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respondents’ brief.
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The crux of the appellant’s case from his statement of claim and evidence is that there were irregularities in the handling of his account by the 1st respondent
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and that the 1st respondent’s (then) Branch Manager C
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interfered in his business.
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The irregularities according to the appellant were as follows:
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The payment by the appellant of a cheque for the sum of N2000.00 (two thousand naira) D
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issued by the appellant on 3 December 1987 to a person other than the drawee. The cheque had earlier been declared missing by the 1st
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respondent. E
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The sum of N10,000.00 (ten thousand naira) paid by the respondent into his account on 5 September 1995 was not credited to his account
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until 13 November 1995.
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The following sums paid into his account were F
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not credited to his account.
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N11,400.00 paid on 20 July 1992 vide
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teller No. 248420
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N741.00 paid on 2 November 1995 vide G
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teller No. 823479
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N500.00 paid on 5 September 1995 vide teller No. 823470 N1000.00 paid on 6 November 1995 vide teller No. 823480 H N300.00 paid on 8 November 1995 vide teller No. 823481
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iv. Imposition of compulsory savings scheme on
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him by the respondents by which certain sums of money were transferred from appellant’s overdraft current account to his saving account
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every month.
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He also claimed that his account was fraudulently
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manipulated by the 1st respondent’s officials thereby inflating his indebtedness to the 1st respondent, and that in fact, the amount being claimed against him by
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the 1st respondent was fake debts generated by manipulation of his account fraudulently by the 1st respondent’s officials.
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The appel ant alone testified on his own behalf while
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the 1st respondent called only one witness. One Mr.
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Yemi Osun who was the Advances Officer under the
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1st respondent.
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Exhibit Y, which is the statement of accounts of the appellant’s account No. FA 155 showed that all the
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above stated sums were credited to the appellant’s account, as was found by the learned trial judge (see page 169 of the record). Also, the 1st respondent’s only witness evidence showed that the compulsory savings scheme was part of the conditions for the granting of overdraft to the appellant and the
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appellant agreed and acquiesced in its operation since 1987 without any objection or compliant, and further that the proceeds of the savings scheme was
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applied to the appel ant’s overdraft account to reduce it when the appellant defaulted in the repayment. See page 123 of the records.
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In his judgment, the learned trial judge found for the appellant on the following:
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i. That the cheque for N2000.00 (two thousand
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naira) issued by the appellant on 3 December 1987 was wrongly paid.
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That the sum of N11,400.00 (eleven thousand, A four hundred naira) paid by the appellant to his account on 20 July 1997 vide teller No. 248420 was not credited to his account, and That the compulsory savings scheme was not B
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stated in any of the letters of approval of
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overdraft written by the 1st respondent to the appellant, he therefore he ld its ope ration wrongful.
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The trial judge therefore awarded to the plaintiff/ C appellant all his claims for special damages and N100,000.00 (one hundred thousand naira) as general damages. He however found the appel ant’s claim
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for fraudulent manipulation of his account not proved and the appellant’s claim for declaration to that effect D
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was therefore refused.
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The learned trial judge also found in favour of the 1st defendant/respondent on its counterclaim for the balance of the overdraft granted the appellant and E entered judgment in its favour for the sum of N321,460. 75 (thre e hundr ed and twe nty-one thousand, four hundred and sixty naira, seventy-five
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kobo) after deduction of the damages awarded to the appellant in the sum of N114,182.85 (one hundred F
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and fourteen thousand, one hundred and eighty-two naira, eighty-five kobo). The plaintiff/appellant not being satisfied now appeals against these findings.
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The appellant was dissatisfied with the judgment and G appealed to this court on a notice of appeal filed on 26 July 1999, wherein six grounds of appeal were filed with particulars
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Ground of appeal
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The learned trial judge erred in law by allowing H the 1st defendant to benefit from its wrongful acts.
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Particulars When it was proved with evidence before the court that the 1st defendant, through its agents, servants or privies stole, at sundry times, large sums of money from the plaintiff’s current account No. 155
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with the 1st plaintiff’s branch at Jericho, Ibadan.
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When it was proved with evidence before the court that the 1st defendant debited into the said account large sums of money without authority and for the purpose of defrauding the plaintiff. When the 1st de fenda nt on sever al occasions failed to credit the said account
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with money properly paid into it by the plaintiff.
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The learned trial judge erred in law by condoning E the 1st defendant’s failure to produce vital documentary evidence in court despite notice
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to produce same.
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When the 1st defendant withheld the
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statements of account covering over 50%
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of the period of transactions material to
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this case.
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When fake de bts discove re d in the statements of account tendered were not
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deducted from the sum the 1st defendants counterclaimed. When irr egular ities in the withheld documents will be mor e than those discovered in documents tendered in court. Whe n not a ll irr e gula rities in the statements of accounts tendered might
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have been discovered during the trial. A
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The learned trial judge misdirected himself giving rise to a miscarriage of justice by granting the 1st defendant’s relief which is not supported
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by any evidence. B
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When large sums of money stolen from
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the said account by the 1st defendant or his age nts we r e not ta ke n into c onside ra tion while computing the legitimate debt (if any) owned by the C plaintiff to the 1st defendant.
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When large sums of money paid into the account but not credited into it were not
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taken into account in determining whether the plaintiff is owing the 1st defendant D
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any money by way of overdraft.
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When unlawful deductions of large sums of money from the account into an alleged
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compulsory savings account were not E taken into account in computing the alleged debt owned by the plaintiff to the 1st defendant.
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Whe n ther e is no evide nce of the whereabouts of the money deducted into F
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the compulsory saving account.
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The learned trial judge misdirected himself by misconstruing fake debts highlighted in the 1st defendant’s accounting system for claims of G special damages by the plaintiff thus generating very serious miscarriage of justice. Whe n identific ation of fa ke de bts recorded in the said account was done so that such an amount could be deducted H from the alleged debt counterclaimed by the 1st defendant.
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(ii) When the special damages of N14,180.85 (fourteen thousand, one hundred and eighty naira, eighty-five kobo) granted the plaintiff was not deducted from the fake counterclaim by the 1st defendant.
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(iii) When the learned trial judge failed to
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deduct all other fake debts from the 1st defendant’s counterclaim.
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The learned trial judge misdirected himself by C holding that the letter written by the plaintiff to the defendant on 28 February 1995 was an
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admission that the plaintiff owed the 1st defendant.
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When it was after the writing of the said
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letter that the plaintiff discovered that the
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monies he had been pa ying into his ( pla intiff ’s) said a c c ount wer e not reflected by any corresponding reduction
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in the debt allegedly owed to the 1st defendant in the few released statements of account. When the plaintiff sue d in this suit
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purposely to compel the 1st defendant to
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produce al his statements of account to
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enable the plaintiff to verify the true state of his account.
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When the close examination of the few
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statements of account produced in court shows c olossa l ir re gula rities and fraudulent manipulations. The learned trial judge failed to refer the criminal acts perpetrated by the 1st defendant through its agents, servants and/or privies to
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the police for investigation and necessary prosecution of suspects.
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Particulars A
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When a copy of exhibit Y10 was falsified by the 1st defendant and tendered as exhibit Z. When the figure N1,400.00 (one thousand B
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four hundred naira) exhibit Y10 was
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altered manually to read N11,400.00 (eleven thousand, four hundred naira) and tendered by the 1st defendant as exhibit
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When the court found as a matter of facts, that neither of the figure in paragraph 3(6)( ii) above is tr ac ea ble into the plaintiff’s current account.
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Form those grounds of appeal; appellant in his brief has D
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raised the following issues for determination viz :
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Whether, in the circumstances of this case and having regard to the facts averred in the pleadings, proved
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in evidence before the lower court and accepted by E the learned trial judge, the respondent has not been allowed to reap the benefits of its wrong acts.
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Whether fake debts which the lower court was
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implored to demystify can be regarded as liquidated damages claimable only as special damages. F
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Whether the weight attached to the evidence of the sole defence witness is not out of proportion with his credibility and reliability. Whether damages are claimable by an appellant as G trader whose che que was dishonoured by the respondent, as a bank, for lack of fund caused by the
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respondent’s wrongful, criminal and une thical manipulation of the appellant’s account.
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Whether the learned presiding judge had not erred in H
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law by over-ruling the appellant’s application for amendment of his statement of claim to accommodate
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all the claims exposed during the proceedings before the final judgment. Whe the r a ll the irr e gular ities ave rr e d in the appellant’s pleadings and proved before the lower court in this case are sufficient to declare the r esponde nt’s a cc ounting system fa ulty and
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fraudulent.
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For the respondents, the issues formulated are as follows:
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Was the evidence before the court sufficient to C warrant declaring the 1st respondent’s accounting system faulty and fraudulent or whether there was
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proof of any criminal act against the 1st respondent’s or any of its officers. (Grounds 1, 5 and 8)
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Whether there was indeed any fake debts proved by
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the plaintiff/appellant and if there was, was the
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learned trial judge under a duty to award same to the plaintiff and de duct same from the plaintiff’s indebtedness to the defendant as found by the learned
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trial judge when same was not claimed by the plaintiff as special damages. (Grounds 2, 3 and 6). Whether the appellant’s cheque for N85,000.00 (eighty-five thousand naira) was wrongly dishonoured
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by the respondent and if so, was the appellant entitled
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to award of damages for same in the absence of
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claim for damages. (Ground 4)
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As the learned trial judge found at page 167 of the record, the substance of the appellant’s complaint at the High Court “is
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that there were various irregularities and manipulations in his account and that but for the irregularities and manipulations he (appellant) would not be indebted to the 1st respondent as
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claimed or at all.
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The tria l cour t the n pr oce eded to e xa mine those
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irregularities and to make specific findings on them as we will try to show.
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Firstly, concerning a cheque for N2000.00 (two thousand
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naira) which was issued by the appellant on 3 December 1987 A but which was not paid to the appellant yet appellant’s account was debited, the trial court said at page 168 of record thus:
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I therefore accept the evidence of the plaintiff on
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this point and hold that the cheque for the sum of B
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N2000.00 (two thousand naira) was paid to a wrong
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person and that the account of the plaintiff was debited with this amount thereby rendering him liable to interest thereon which he has calculated as
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N2,182.85 making a total of N14,184.85. On the C state of the evidence before me, I am of the view that the plaintiff is entitled to the amount claimed and I
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so hold.
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Secondly, it was alleged by the appellant that several lodgments were made into his account and that a cheque for the D
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sum of N11,400.00 (eleven thousand, four hundred naira) was paid into his account but not reflected in exhibit Y, statement of account. On these, learned trial judge found and held as follows:
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I find from exhibit V that a cheque for the sum of E N11,400.00 (eleven thousand, four hundred naira) was paid in by the plaintiff on 13 July 1992 sheet No. 11 of exhibit Y shows that this amount was recorded therein as N11,400.00 (eleven thousand,
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four hundred naira). The 1st defendant’s witness has F
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said in his evidence that it was a typographical error and that the actual sum of N11,400.00 (eleven thousand, four hundred naira) was credited to the account and that this can be seen by a comparison of G the balances before and after that credit. As per exhibit
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Y, sheet 11 thereof, the balance before that payment was N142,576.24k and was N142,876.24k offer the said credit. From this, I am of the view that it cannot
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be correct to say that the sum of N11,400.00 (eleven H
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thousand, four hundred naira) was actually credited to the account. If that was done, the balance
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outstanding after that credit would have been reduced by that amount. Instead the debits balance in the account increased by N300.00 (three hundred naira) after the said credit. I note a debit of N11,400.00 (eleven thousand, four hundred naira) appearing on the same sheet that this has not been reflected in the
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balances recorded in exhibit Y. I hold that the sum of N11,400.00 (eleven thousand, four hundred naira) paid by the plaintiff on 13 July 1992 was not credited
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to the plaintiff’s account at all. I find however that the sum of N900.00 (nine hundred naira) was credited to the plaintiff’s account instead of the sum of N500.00 (five hundred naira) paid by him on 20
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July 1992 by means of exhibit Q, exhibit X shows
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that N10,000.00 (ten thousand naira) cash was paid
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into the plaintiff’s account on 5 September 1995 but this amount was not credited to his account until 13 November 1995. The 1st defendant said the amount
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was credited into another persons account in error and when the error was discovered, the amount was transferred to the plaintiff’s account. He further stated that the interest on this amount was reserved. But from an examination of the statement of account, I cannot find anywhere in which the interest was
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reversed.
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Thirdly, the appellant had complained that the sum of N60,00 was deducted from his account because the 1st
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respondent had alleged that money paid into his account on 13 February 1989 was short by N60.00. The notification to appellant was by exhibit E issued two months after on 7 April
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1989. On this issue, the trial judge held thus:
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I agree with learned counsel for the plaintiff that the H 1st defendant’s cashier is obliged to thoroughly check any money he/she received and any loss arising from
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failure to do so cannot be visited on the customer. I
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wonder if a customer two months after collecting A money from the bank can go back to the bank to complain that he was short-paid.
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Fourthly, the appellant complained that moneys were
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deducted from his loan account and allegedly transferred to a B
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savings account without his consent and that while he paid huge
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interest on his loan account at 28%, the savings account attracted interest of only 9% to his detriment. The 1st respondent had said it was part of the conditions for the loan. On this, the trial judge said at page 170 of the record thus: C
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I have examined exhibits B and C which contain conditions applicable to the facilities granted to the plaintiff but I cannot find any such condition attached
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to the facilities, I agree with learned counsel for the plaintiff that it is not prudent to put money in a savings D
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account which attract an interest rate of 9% and in our interest at the rate of 20% on the current account from which the money was withdrawn. Having regard
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to exhibits B and C, I am of the view that to withdraw E money from the current account thereby increasing the liability of the plaintiff as the 1st defendant has done in this case is wrongful.
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On this ground, the trial court found that the withdrawal from the current account of the plaintiff (i.e. appellant) thereby F
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increasing the liability of the plaintiff is wrongful without more. On this, the trial court said further at page 171 of the record thus:
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I have alrea dy held that the imposition of the G compulsory savings scheme is not in accordance with the conditions of the facilities granted to the plaintiff
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and that the same is wrongful.
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Having so held the declaration sought by the plaintiff
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in leg 4 of his claim is hereby granted. H
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On the aggregate, the trial court made an award of N114,182.85 (one hundred and fourteen thousand, one hundred
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and eighty-two naira, eighty-five kobo).
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The learned trial judge also awarded the 1st respondent the sum of N435,643.60 as judgment on its counterclaim but proceeded to set off the amount awarded the appellant from it
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and arrived at the sum of N321,460.75 as the amount due to the 1st respondent from the appellant. The trial judge concluded the
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matter thus:
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Accordingly, I hereby enter judgment in favour of the 1st defendant against the plaintiff in the sum of
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N321,460. 75 (thre e hundr ed and twe nty-one thousand, four hundred and sixty naira, seventy- five kobo), being the balance outstanding against the plaintiff in respect of loan/overdraft facilities
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granted to the plaintiff as at 13 November 1995. It is
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further adjudged that the plaintiff shall pay in rest on
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the said sum of N321,460.75 at the rate of 21% per annum from 14 November 1995 up till today 2 July 1999 and thereafter at the rate of 10% per annum
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until the whole debt is liquidated. (SGD.)
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Hon. Justice A. Adeniran Judge
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2 July 1999
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The judgment of the trial court in my view is a fair effort
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of justice except that there is an important omission which must be addressed. It is that without the appellant’s consent, the 1st respondent was withdrawing money from the appellant’s account
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and transferring it into a so-called savings account operated by the 1st respondent for its own purpose. The total amount drawn from the appellant account is put by appellant thus:
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Money wrongly withdrawn from the said account into the
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unauthorized compulsory saving
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account at N250.00 N24,231.94K per month for 48 months plus
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interest (see paragraph 209) A
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Money wrongly withdrawn into
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the C.S.A. at N1,000.00 per month from 1 January 1992 to
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31 December 1995 N142,844.93 B
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plus interest
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Total sum of fake debt created via the unauthorized compulsory
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saving account. N167,166.87k The 1st respondent did not deny this. The trial judge had C
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held that it was wrongful and granted the declaration appellant sought against such conduct. In my view, not only is it wrongful, it is remediable and 1st respondent cannot enrich itself by its
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own wrong-doing or illegal act. Such sum which 1st respondent took from appellant’s account and put into a special account 1st D
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respondent alone operated, shall in my view be money had and received by the 1st respondent of the plaintiff and must be refunded. Of money had and received in such manner the legal position is as expressed in common law parlance in a position E described by lord Wright in Fibrosa Spolka Aklyjna v. Fairbain Lawson Combe Barbour Ltd (1943) AC 32 at 61 in this manner:
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“It is clear that any civilized system of law is bound
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to provide remedies for cases of what has been called unjust enrichment on unjust benefit, that is to prevent F
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a man from retaining the money of, or some benefit derived from another which it is against conscience that he should keep such remedies in English law are generically different from remedies in contract G or in tort and are now recognized to fall within a third category of common law which has been called quasi -contract or restitution”.
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Way back in 1760, lord Mansfield in Moses v. Macferlan (1760) 2 Burr. 1005 philosophized the principle of restitution as H it applied to money had and received to the use of the plaintiff
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in the following words.
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“This kind of equitable action to recover back money which ought not in justice to be kept is very beneficial and therefore much encouraged. It lies for money which ex ae quo ex bono the defendant ought to refund.”
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It has been given as a restatement that “a person who has
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been unjustly enriched is required to make restitution to the other”...See The American Law Institute-Restatement of the Law of Restitution, Quasi Contract and Constructive Trust.
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The same lord Mansfield in Towers v. Berretts (1786) 1
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T.R. 133 declared to be a great friend of the action for money had and received and described the action as “a very beneficial action and founded on principle external justice.”
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In the course of this work, I found as much encouragement
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in the judgment of the Supreme Court in Aeroflot Soviet Airline
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v. United Bank for Africa Ltd (1986) 5 SC 217, (1986) NSCC 698 to the effect that: (1) The common law action for money had and received has always been used wherever conversion lies,
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and money has been received on behalf of the plaintiff by the defendant, to compel the defendant to restore such money to its true owner. The action for money had and received on behalf of the plaintiff by the defendant lies even where the action for conversion may be unavailable.” Such money the 1st respondent transferred to a phony
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saving account operated only by itself truly belong to the appellant and it will be unjust under the principle of restitution to let the 1st respondent enrich itself by keeping it for its benefit.
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In this regard, the trial judge ought to have deducted such sum from the money adjudged payable by the appellant under the counterclaim. Having not done so, this court will do so in the
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interest of justice and subtract the said sum of N167,166.87 wrongfully deducted from appel ant’s account and deduct same
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from the judgment debt due to the 1st respondent which amounts
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to N154,293.98.
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Accordingly, the judgment of the lower court is herewith
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amended to read N151,293.98 as the amount due to the 1st A respondent from the appellant. The interest rate as fixed by the trial judge would remain but be based on the said sum of N151,293.98 less interest earned on the amount retained and
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kept by the 1st respondent. B
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The appeal therefore succeeds in part.
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GUMEL JCA: I have had the advantage of a preview of the lead judgment of my learned brother, Okoronkwo JCA. I agree C that this appeal ought to succeed and allowed in part. I abide by
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all the consequential orders of my learned brother.
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DANIEL-KALIO JCA: I have had the privilege of a preview D of the judgment of my learned brother, Nonyerem Okoronkwo JCA. I agree with the reasoning and conclusions reached by my lord. In the absence of any express agreement by the parties to withdraw money from the appellant’s account and place same in E a special account operated by the 1st respondent alone, the 1st respondent is liable to refund such money under the well- established principle of money had and received. A banker/
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customer relationship is based on uberrima fides (utmost good faith) and uberrima fides must always remain the watchword of F
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that relationship.
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Appeal allowed in part
