ABADA NIGERIA LIMITED v. UNITY BANK OF NIGERIA PLC & ORS (2018)

In The Court of Appeal of Nigeria

On Friday, the 19th day of January, 2018

CA/YL/94/2016

Before Their Lordships

OYEBISI FOLAYEMI OMOLEYE  Justice of The Court of Appeal of Nigeria
JAMES SHEHU ABIRIYI  Justice of The Court of Appeal of Nigeria
SAIDU TANKO HUSSAINI  Justice of The Court of Appeal of Nigeria


Between

ABADA NIGERIA LTD-Appellant

AND

1. UNITY BANK OF NIGERIA PLC
2. KWACHAM CONSTRUCTION CO. NIGERIA LIMITED
3. ABDULRAHMAN BUBA
KWACHAM-Respondents

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JAMES SHEHU ABIRIYI, J.C.A. (Delivering the Leading Judgment): The Claim of the Cross Appellant against the 1st Cross Respondent was for the following:
(a) An order of this Honourable Court directing the 1st Defendant to credit to the account of the Plaintiff No. 501155 the sum of N953,600.00 (Nine hundred and fifty-three thousand, six hundred naira only) lodged by the Plaintiff into its account with the Defendant by means of teller No. 689305 dated 29th June, 2000.
(b) The sum of N1, 000,000.00 (One Million Naira) being damages for wrongful dishonour of Plaintiff’s cheque dated 20th day of March, 2001 for N28, 000.00 (Twenty-six thousand naira only) issued to Bassy Nwakire.
(c) The sum of N1, 000,000.00 (One million naira only) being damages for wrongful dishonour of Plaintiff’s cheque dated 26th March, 2001 for N10, 000.00 (Ten thousand naira only) issued to Chief U.N Udechukwu.
(d) The sum of N1, 000,000.00 (One million naira only) being damages for wrongful dishonour of Plaintiff’s cheque dated 2nd April, 2001 for N3, 500.00 (Three thousand, five hundred naira only) issued to I.K Anya.
The case of the Cross  Appellant discernible from the evidence of the only witness called by it was that it lodged three cheques issued to it by its customer with the 1st Cross  Respondent in its account number 501155. Thereafter it issued three cheques for N26, 000, N3, 500 and N10, 000 and these cheques were returned unpaid. The 1st Cross  Respondent according to the Cross – Appellant did not inform it that there was no money in the account of its customer who issued to it three cheques amounting to N953,600. The Cross  Appellant therefore wanted the 1st Cross  Respondent to pay to them N953,600 the value of the cheques.
The 1st Cross Respondent on its part asserted that three cheques amounting to N953,600 bearing Kwacham Construction Company were returned immediately to the Cross  Appellant, with a covering letter bearing the name of the manager of the Cross  Appellant’s Company. The Cheques according to 1st Cross  Respondent’s only witness were returned because there were no funds to accommodate (them) the cheques.
After considering evidence led by parties, the Court below dismissed the claim of the Cross Appellant against the 1st Cross Respondent. The Court granted the alternative relief sought by the Cross  Appellant against the 2nd Cross Respondent.
With the leave of this Court granted on 19th May, 2016, the Cross Appellant cross – appealed to this Court by notice of Cross-Appeal dated and filed on 7th June, 2016. The notice of Cross Appeal contains three grounds of appeal.
From the three grounds of Cross Appeal, the Cross  Appellant presented the following two issues for determination:
1. Whether the learned trial Judge was justified in holding that the 3 (three) cheques issued by the 2nd defendant/cross-respondent to the plaintiff/cross appellant which were lodged into the plaintiff’s account by teller No. 689305 admitted in evidence as Exhibit ADSY/9/2001-1 were dishonoured for insufficiency of fund in the account of the drawer and in refusing to order the 1st defendant to credit the account of the plaintiff with the value thereof when the said 3 (three) cheques were not returned to the plaintiff for insufficiency of fund or at all?
2. Whether the 
learned trial Judge was justified in dismissing the claims of the plaintiff/cross appellant against the 1st defendant/cross-respondent for damages for wrongful dishonour of the three cheques the plaintiff issued to Bassey Nwakire, Chief U.N. Udechukwu and I.K Anya which were respectively admitted in evidence as Exhibits ADSY/9/2001-2, ADSY/9/2001-5 and ADSY/9/2001-3 in the circumstances of this case? 
The 1st Cross Respondent also presented the following two issues for determination:
1. Whether in the light of the evidences before the Court, the trial Court was in error in holding that the three (3) cheques issued by the 2nd defendant/cross-respondent in favour of the plaintiff/cross-appellant were dishonoured for insufficiency of fund in the drawer’s account with the 1st defendant/cross-respondent.
2. Whether the trial Court was justified in holding that the three (3) cheques issued by the plaintiff/cross-appellant were properly dishonoured for insufficiency of fund in his account with the 1st defendant/cross-respondent.

Although on the face of the record and other processes before the Court the cross  appeal is

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between the Cross Appellant and three Cross???Respondents, the contest is only between the Cross Appellant and the 1st Cross Respondent. The 2nd and 3rd Cross Respondents for this reason did not file any briefs of argument.
On issue 1, learned counsel for the Cross Appellant submitted that one of the means of proving payment into a bank account is by the production of the teller by which the lodgement was made. We were referred to Ishola V. Societe General Bank (1997) 2 NWLR (Pt. 488) 405, Bank of the North V. Oniyo (2002) 20 WRN 83 and Aeroflot V. Uba (1986) 3 NWLR (Pt. 27) 188 at 190.

It was submitted that it amounts to a breach of a bank’s duty to its customer for a banker to retain a cheque lodged by its customer and at the same time refuse to credit the account of the customer with the value of the cheque.
It was contended that since the Cross  Appellant said that the cheques were not returned, the burden of proving that the cheques were returned to the Cross  Appellant for insufficiency of funds in the account of the drawer is on the 1st Cross Respondent.
Exhibit 6, it was pointed out, was addressed to Chief A. Obi as Manager of Cross Appellant and the 1st Cross Respondent did not plead or tender the duplicate copy of the Exhibit 6. The 1st Cross Respondent, it was further pointed out did not plead or tender the statement of account of the 2nd Cross Respondent to show that there was insufficient fund in the account of the 2nd Cross Respondent to accommodate the value of the three cheques in question when they were presented.
It was submitted that by addressing Exhibit 6 to Chief A. Obi instead of Abada Nigeria Limited, the account holder, failure to tender the duplicate copy of Exhibit 6 or any other document to show that Exhibit 6 by which the three cheques were allegedly returned to the plaintiff was received by anybody on behalf of the Cross Appellant and the testimony of DW1 that the cheques were not returned immediately, the 1st Cross  Respondent failed to prove that the said three cheques were returned to the Cross Appellant.
It was further submitted that by failing to also plead and tender the statement of account of the 2nd Cross-Respondent to show that there was insufficient fund in the account of the 2nd Cross  Respondent to cover the value of the said cheques when the cheques were presented, the 1st Cross  Respondent also failed to prove that there was insufficient fund in the account of the 2nd Cross  Respondent to cover the value of the said three cheques.
It was finally submitted on this issue that since there was no credible evidence before the Court below that the three cheques were returned to the Cross  Appellant and that there was insufficient fund in the account of the 2nd Cross  Respondent to cover the value of the said cheques, the Court below was not justified in its conclusion that the three cheques were dishonoured for insufficiency of funds and in not ordering the 1st Cross Respondent to credit the account of the Cross  Appellant with the value of the said cheques as claimed by the Cross  Appellant.
On issue 2, it was submitted that a customer of a bank is entitled to damages for wrongful dishonour of his cheque even without proof of actual damage because the law presumes injury. We were referred to Umoetuk V. Union Bank of Nig. Ltd. (2002) 3 WRN 62, Balogun V. National Bank of Nigeria Ltd (1978) 3 SC 155, Allied Bank of Nig. Ltd V. Akubueze(1997) 6 NWLR (Pt. 509) 374 and Salami V. Savannah Bank of Nig. Ltd (1990) 2 NWLR (Pt. 130) 106 at 127.

It was submitted that it is not in dispute that three Bank of North now Unity Bank Plc cheques for N26, 000, N3, 500 and N10, 000 were dishonoured for insufficiency of funds in the account of the Cross  Appellant.
The statement of account, it was pointed out, was admitted in evidence and Exhibit ADSY/9/2000-4.
It was submitted that had the 1st Cross-Respondent credited the account of the Cross  Appellant with N953,600 value of the cheques issued by its customer, the account of the Cross Appellant would have had sufficient credit and the cheques Exhibits 2, 3 and 5 would not have been dishonoured for insufficiency of funds.
On issue 1, learned counsel for the 1st Cross-Respondent submitted that a banker only contracts with the customer to honour cheques when he has sufficient funds in hand. We were referred to F.A.T.B Ltd V. P.I.C Ltd(2003) 12 SC (Pt. 1) 90 at 123 124.
The defence of the

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1st Cross-Respondent, it was submitted, is that of insufficiency of funds in the account of the drawer who is the 2nd Cross  Respondent. We were referred to Exhibit 6.

It was submitted that the onus of proof that there is sufficient fund to honour the cheques rests on the drawer of the cheques. We were referred to Section 30 (1) of the Bill of Exchange Act, Cap B8 Laws of Federal Republic of Nigeria, 2004.
The onus, it was submitted, behoves on the 2nd Cross-Respondent to prove before the Court that at the time of drawing those cheques in favour of the Cross – Appellant, its account had sufficient fund to accommodate the value of the cheques. It was submitted that the person who asserts must prove. Reliance was placed on Section 132 of the Evidence Act 2011.
When the cheques were presented to the 1st Cross  Respondent on 29th June, 2000, it was discovered the same day that the drawer did not have sufficient fund to give value to the cheques. That the attention of the drawer was immediately drawn the same day that the cheques were being returned unpaid for reasons contained in the face of cheques.
It was submitted that Mr. Obi as Manager and Chairman of the Cross  Appellant was a proper person to be given notice of dishonour of the cheques on behalf of the Cross  Appellant and it was his duty to draw attention of the drawer of the cheques.
If the cheques were not returned, which cheques was the 2nd Cross Respondent through the 3rd Cross Respondent asking the Cross  Appellant by letter dated 19th October, 2000 to return? We were referred to Exhibit 8.
It was finally submitted that the Cross  Appellant had not established a case against the 1st Cross Respondent to warrant the Court disturbing the findings of the Court below.
On issue 2, it was submitted that the Cross Appellant knew at the time those cheques were issued that its account with the 1st Cross Respondent had been overdrawn.
It was contended that by the various correspondences between the Cross Appellant and the 1st Cross Respondent, the Cross  Appellant wilfully issued those cheques when it knew that its account was in red.
The Cross  Appellant, it was submitted, had a duty to prove that its account was duly funded as at the time it issued those three cheques in March and April 2001 and it failed to do so.
In the Cross  Appellants Reply brief, the only new point dealt with was the submission that neither Section 30 (1) nor Section 49 of the Bills of Exchange Act relied upon the 1st Cross Respondent is relevant to the facts of the case because the 1st Cross  Respondent failed to prove that the cheques were dishonoured for insufficiency of fund in the account of the drawer and returned by Exhibit 6.
A cheque is not money until it is presented and paid. Where a cheque is cleared, it puts the account of the customer in funds. See G.S. & F.C Ltd V. Obiekezie (1997) 10 NWLR (Pt. 526) 577 and Union Bank of Nigeria Ltd V. Nwoye (1996) 3 NWLR (Pt. 435) 135. Learned counsel for the Cross  Appellant sought to make heavy weather of the teller Exhibit ADSM/9/2001-1 as evidence of payment of N953, 600. Under Cross  Examination, the only witness called by the Cross Appellant pretended that by accepting the cheques and issuing them with a teller, it showed that there was money in the account. There can be nothing farther from the truth. Accepting a cheque which is not money is no evidence that the person who issued the cheque has money in his account. It is also not true that issuing of a teller to the depositor of the cheque is evidence that the issuer of the cheque has funds for the amount on the cheques issued in his account with the bank. It is only when the cheque is cleared that is puts funds in the customers account. In the instant case, no attempt was made by the Cross  Appellant to show that the cheques deposited via Exhibit 1 were  cleared.
Although the 1st Cross Respondent pleaded in paragraphs 4 and 5 of the statement of defence and the only defence witness called by the 1st Cross Respondent testified to the effect that the Cross Appellant was informed that there were no funds in the account of the 2nd Cross  Respondent who issued the cheques, the Cross Appellant nowhere controverted both the pleadings and evidence pointing to the lack of funds to clear the cheques. 1st Cross  Respondent tendered Exhibit ADSM/9/2001-6 and Exhibit ADSM/9/2001-8 showing that the cheques were

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returned to the Cross Appellant. Exhibit ADSM/9/2001-7 is evidence that alternative arrangements were being made to pay the Cross Appellants. By all these pieces of evidence the 1st Cross  Respondent demonstrated that the Cross  Appellant was informed that the cheques were not cleared due to want of or inadequate funds. In the circumstances, the production of the teller by the Cross  Appellant was only evidence that cheques and not money were lodged in the 1st Cross Respondent’s bank. Ishola V. Societe Generale Bank (supra), Bank of the North Ltd V. Oniyo (supra) and Aeroflot V. UBA (supra) cited by learned counsel for the Cross  Appellant are irrelevant to the facts of the present case.
I agree entirely with learned counsel for the 1st Cross  Respondent that the Cross  Appellant failed to establish any cause of action against the 1st Cross  Respondent.
Issue 1 is therefore resolved against the Cross  Appellant and in favour of the 1st Cross Respondent.
A bank is obliged to pay cheques drawn on it by its customer provided that the customer has sufficient fund to satisfy the amount payable on the cheque and there are no legal bars to payment. A customer whose cheque has been wrongfully dishonoured is entitled to claim damages against the bank. The claim may be for breach of contract and/or for libel. See Allied Bank (Nig) Ltd V. Akubueze (1997) 6 NWLR (Pt. 509) 374 and F.A.T.B Ltd V. Partnership Inv. Co. Ltd (2003) 18 NWLR (Pt. 851) 35 SC.

From the statement of defence of the 1st Cross  Respondent and counterclaim, coupled with evidence of the only witness called by the 1st Cross  Respondent and Exhibit ADSM/9/2001-4 tendered by the Cross  Appellant, the Cross Appellant’s account with the 1st Cross Respondent was in debit at the time the three cheques Exhibits ADSM/9/2001-2, ADSM/9/2001-3 and ADSM/9/2001-5 were issued by the Cross Appellant. Therefore the dishonour of the cheques for N26, 000, N3, 500 and N10, 000 was not wrongful.
Issue 2 should therefore be resolved against the Cross  Appellant. I accordingly resolve issue 2 against the Cross  Appellant and in favour of the 1st Cross  Respondent.
Both issues having been resolved against the Cross Appellant and in favour of the 1st Cross Respondent, the Cross Appeal is dismissed.
1st Cross  Respondent is awarded N100, 000.00 costs to be paid by the Cross Appellant.
OYEBISI FOLAYEMI OMOLEYE, J.C.A.: I had the opportunity of reading in draft form the leading judgment just delivered in this cross appeal by my learned Brother, James Shehu Abiriyi, J.C.A.
I agree with my learned Brother that the cross-appeal is devoid of merit. I equally dismiss it and abide by the consequential orders made in the said leading judgment including that of costs.
SAIDU TANKO HUSSAINI, J.C.A.: I have read in advance the lead Judgment just delivered by my Lord, J. S. Abiriyi, JCA with whom I agree in toto that this cross appeal lacks merit and same ought to be dismissed. I so order.

Appearances

Roland C. Emem-For Appellant

AND

J. A. Udeagbala Esq. with him, M. S. Ibrahim and L. A. Leneke – for 1st Respondent

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