CORAM

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ALEXANDER, JUSTICE, SUPREME COURT

SOWEMIMO, JUSTICE, SUPREME COURT

OKAY ACHIKE JUSTICE, SUPREME COURT

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PARTIES

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AFRICAN CONTINENTAL BANK LTD

APPELLANTS 

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FESTUS SUMIOLA YESUFU

RESPONDENTS 

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AREA(S) OF LAW

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BANKING – BILL OF EXCHANGE- LETTERS OF CREDIT

 

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SUMMARY OF FACTS

The appellants instituted action against the respondent in respect of all the bills in form of letters of credit that were dishonoured by non-payment. The lower court dismissed the suit on the ground that the appellants did not give the respondent notice of the dishonour of the bills.

 

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HELD

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The court allowed the appeal and held that the appellants were not bound to give notice of dishonour of letters of credit being a revocable instrument.

 

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ISSUES

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The court allowed the appeal and held that the appellants were not bound to give notice of dishonour of letters of credit being a revocable instrument.

 

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RATIONES DECIDENDI

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DUTY ON A BANKER TO GIVE NOTICE OF DISHONOUR OF A BILL, WHETHER APPLIES TO LETTERS OF CREDIT

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A banker has no legal duty to give notice of dishonour of a revocable credit to his customer – Bello J.S.C.

 

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DUTY ON A BANKER TO GIVE NOTICE OF DISHONOUR OF A BILL, WHETHER APPLIES TO LETTERS OF CREDIT

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the duty of a banker to give notice of dishonour of a bill to his customer relates to a bill which is a bill of exchange within the definitions of Sections 2 and 3 of the Bills of Exchange Act, 1882- Bello J.S.C

 

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LIABILITY OF A COLLECTING BANK WHO COLLECTS AMOUNT LESS THAN THE FACE VALUE OF A BILL

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a collecting banker has a duty to collect the face value of a bill and if he collects any amount less than the value of the bill he may be liable to his customer for a breach of contract – Bello J.S.C

 

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CASES CITED

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Cape Asbestos Co. Ltd. v. Lloyds Bank Ltd. (1921) WN 274 cited in 3 Digest (Replacement) p.285 para.855

 

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STATUTES REFERRED TO

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Not Available

 

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