MAJOR GENERAL KAYODE ONI & ORS V GOVERNOR OF EKITI STATE & ANOR
April 9, 2025HUSSAIYU GARBA & ANOR v. THE STATE
April 9, 2025Legalpedia Citation: (2019) Legalpedia (SC) 45631
In the Supreme Court of Nigeria
HOLDEN AT ABUJA
Thu Jan 17, 2019
Suit Number: SC.332/2009
CORAM
PARTIES
JULIUS BERGER NIGERIA PLC & ANOR APPELLANTS
TOKI RAINBOW COMMUNITY BANK LIMITED RESPONDENTS
AREA(S) OF LAW
SUMMARY OF FACTS
The Plaintiff/Respondent had financed two Local Purchase Orders issued by the 1st Appellant to “Pit-a-Pat International Nigeria Limited”, and in its amended Writ of Summons and Statement of Claim, it claimed the sum of ?1, 900,800.00 due and payable to the Plaintiff by the 4th Defendant on 9/I4/I997 following the assignment by the 2nd Defendant of the benefit of the contract between the 2nd Defendant and the 4th Defendant to the Plaintiff; interest at the rate of 21% per annum for two months on the sum of N960.000.00 drawn by the 2nd Defendant from the said loan, and at the rate of 10% per month from 27/5/1997 until Judgment, among other reliefs. Upon being served, the 1st and 2nd Defendant entered appearance through counsel but did not appear to defend the case. The 1st and 2nd Appellants who were the 3rd and 4th Defendants entered appearance and filed a joint Statement of Defence which was amended severally and raised a preliminary objection to the Court to dismiss the case on grounds that there is no privity of contract between the Plaintiff and 3rd and 4th Defendants, that the 3rd Defendant is an agent of a disclosed principal and that the suit discloses no reasonable cause of action. After the parties had made their respective cases, the learned trial Judge, dismissed and/or struck out the Objection raised, and entered Judgment against the 1st and 2nd Defendants. Dissatisfied, the Appellants appealed to the Court of Appeal, wherein it set aside the decision of the trial Court on the first Local Purchase Order -LPO No. 4747 and affirmed its decision on the LPO No. 48303. So, the Court of Appeal allowed the Appeal in part. Dissatisfied with part of the Judgment by the lower court, the Appellants appealed to this Court contending that the said contract between the 2nd Defendant and Respondent was domiciliation of payment and not assignment. The Respondent on the other hand raised a preliminary objection against issue 5 and Ground 6 of the Grounds of Appeal.
HELD
Appeal Allowed, Cross Appeal Dismissed
ISSUES
1. Having regard to the pleadings and evidence before the Court whether the Court of Appeal was right to hold that there was an assignment of the proceeds of the contract in respect of LPO No. 48303.
2. Whether the Court of Appeal was right to hold that there was no assignment
RATIONES DECIDENDI
ISSUES IN AN APPEAL – ATTITUDE OF THE SUPREME COURT TO ISSUES IN AN APPEAL NOT EMANATING FROM THE COURT OF APPEAL
“Clearly, this question subsumed in Issue 5 is completely off base, because it is well settled that there is no nexus between this Court and the trial Court, and any appeal that comes to this Court must first of all pass through the Court of Appeal. This Court would only entertain an appeal against the decision of the Court of Appeal and not directly against that of the High Court – Akibu V. Oduntan (2000) 13NWLR(Pt. 685)446SC.”
DOMICILIATION PAYMENT- NATURE OF A DOMICILIATION PAYMENT
“There is a dearth of case law on domiciliation arrangements, but Oguntade, JCA (as he then was), in Peter Tiwell (Nig.) Ltd. V. Inland Bank (supra), while expounding on the difference between “domiciliation arrangement and “contract of guarantee stated;
A bank, who insists and accepts a domiciliation arrangement, only thereby reduces its risk and has an assurance that the third party who has agreed to domicile the payment due to a customer with the customer’s bank will not pay the money directly to the customer. A domiciliation arrangement does not specify when the payment will be made and the arrangement does not release the debtor/customer from its primary obligation to pay back the loan to the bank at the agreed time. It does not make the person agreeing to domicile the payment with the borrowers bank a party to the loan agreement such that the bank can sue him on the agreement, as he would under a contract of guarantee, it was, therefore, not a defence to the Plaintiffs suit for the Defendants to depose as they did that, they were owed an amount by the Bauchi State Government, since Plaintiff could not sue the Bauchi State Government directly for payment due under the contract, which the 1st Defendant had’ with the Bauchi State Government
So, a domiciliation payment is an arrangement between the bank and a borrower to domicile a payment due to the borrower from a third-party, with the bank. This arrangement does not release the borrower from his primary obligation to pay back the loan to the bank as at when due; and it does not make the third-party, a party to the loan agreement, such that the bank can sue the third-party on the loan agreement, when things do not work out as planned.”
ASSIGNMENT AND “CHOSE IN ACTION” – DISTINCTION BETWEEN AN ASSIGNMENT AND “CHOSE IN ACTION”
“Assignment, a legal term used in the context of the law of contract and of property, is the right to transfer “chose in action”, and a chose in action is essentially the right to sue; it is defined as “all personal rights of property, which can only be claimed or enforced by action, and not by taking physical possession” – see Torkington v. Magee [1902] 2 K.B. 430. Thus, it is a proprietary right in property, which has no tangible or physical existence, and is, therefore, not capable of being possessed physically. Examples of choses in action include a contractual right, such as a debt, shares in a company, insurance policies, negotiable instruments, bills of lading, patents rights, copyrights, trademarks, rights of action arising from a contract e.g. right to damages for its breach.”
PARTIES IN AN ASSIGNMENT OF A CHOSE IN ACTION – DESIGNATION OF PARTIES IN AN ASSIGNMENT OF A CHOSE IN ACTION
“There are three parties in an assignment of a chose in action, the Assignor, the party liable to the Assignor, and the Assignee. The Assignor, is a person, company or entity, who transfers rights they hold to the Assignee. The Assignee is a person, company or entity, to which a transfer of property, rights or interest is made.”
ASSIGNABILITY OF CHOSES IN ACTION- HISTORICAL DEVELOPMENT OF THE ASSIGNABILITY OF CHOSES IN ACTION
“Choses in action were not originally assignable at Common Law to enable the Assignee sue in his own name because debts or choses in action were regarded as personal – see Lampet’s Case (1613) 10 Co-rep 46b, 48. Any attempted assignment was viewed as an intrusion by a third party into a dispute between two parties.
However, choses in action, which may be legal or equitable, were assignable in equity. If the choses in action were legal the Assignee could only sue in the name of the Assignor; if equitable, he could sue in his name. By Section 25 of the Judicature Act, 1873, legal choses in action were made assignable by law; and with the Law of Property Act of 1925, the usual way of assigning the benefit of a debt or other legal chose in action is as set out in Section 136.”
LEGAL ASSIGNMENT- REQUIREMENTS FOR AN EFFECTIVE LEGAL ASSIGNMENT
“Under Section 136 of the said Law of Property Act, the basic requirements for an effective legal assignment are as follows –
Only the benefit of an agreement may be assigned;
The assignment must be absolute;
The rights to be assigned must be wholly ascertainable and must not relate to part only of a debt;
The Assignment must be in writing and signed under hand by the Assignor debtor (no particular form of wording is necessary); and
Notice of the Assignment must be received by the other party or parties for the assignment to take effect.” –
LEGAL ASSIGNMENT- EFFECT OF A LEGAL OR EQUITABLE ASSIGNMENT
“An assignment that fails to comply with these formalities may still be effective as an equitable assignment. Thus, the effect of a legal or an equitable assignment is to put the Assignee in the same position as the Assignor, in respect of the benefits (not burdens) arising from the original transaction with the debtor.”
DOMICILIATION AGREEMENT AND ASSIGNMENT- DISTINCTION BETWEEN A DOMICILIATION AGREEMENT AND AN ASSIGNMENT
“The Appellants are right that there is a difference between a domiciliation arrangement and an assignment, and it boils down to the right to sue. A domiciliation arrangement is between the bank and the borrower. If the borrower fails to pay back the loan, the bank has no right to sue or take action against the third-party. With a legal assignment, the story is completely different as the Bank would have the right to sue the third-party, in its own name.”
COURT – DUTY OF COURT TO CONSIDER ALL CORRESPONDENCES BETWEEN PARTIES TO AN AGREEMENT
“It is settled that in the consideration of an agreement where there are series of correspondences between the Parties, it is the duty of the Court to consider all the correspondences in order to decipher what they are saying with regards to the arrangement –see Udeagu v Benue Cement Co. Plc. (2006) 2NWLR (Pt. 965) 600.”
PLEADINGS- WHETHER A COURT IS AT LIBERTY TO LOOK AT A PARTY’S ORIGINAL PLEADINGS AFTER AN AMENDMENT OF SAME
“Again, the Appellants are spot-on that this Court can look at the Respondent’s original pleadings because it is settled law that a statement of claim or defence, which has been duly amended, does not cease to exist; it still forms part of the proceedings and a Court cannot close its eyes to it -see Salami V. Oke (1987)4NWLR (Pt. 63)1 SC. Agbaisi V. Ebikorefe (1997) 4 NWLR (Pt. 502) 630 SC A.S.E.S.A.V. Ekwenem (2009)13NWLR (Pt. 1158) 370 at 436 SC.
But this does not mean that the original pleadings can be the basis of a Party’s case nor may a Court rely on it for its Judgment. It is just that the original pleadings that was amended “no longer determines or defines the live issues to be tried before the Court-not that it no longer exists”- see Aghahomovo V. Eduyegbe (1999) 3NWLR (Pt. 594) 170SC. Thus, such original pleadings cannot be deemed to have been expunged or struck out. It, certainly, exists.”
TERMS OF CONTRACT- WHETHER THE STRICT CONSTRUCTION OF THE TERMS OF A CONTRACT CAN OVERRIDE THE TERMS AGREED BY PARTIES
“It is settled that Parties to an agreement u retain the commercial freedom to determine their own terms -see Nika Fishing Ltd. V. Lavina Corp. (2008) 16NWLR (Pt 1114)509, wherein this Court per Tobi, JSC, eloquently explained as follows:
In [construing] documents, the question is not what the Parties to the documents may have intended to do by entering into that document, but what is the meaning of the word used in the document. While a contract must be strictly construed in accordance with well-known rules of construction, such strict construction cannot be a ground for departing from terms – – agreed by both Parties to the contract. It is the law that Parties to an agreement retain the commercial freedom to determine their own terms. No other person. Not even the Court can determine the terms of contract between the Parties thereto. The duty of the Court is to strictly interpret the terms of the agreement on its clear wordings. It is not the function of a Court of law either to make agreements for Parties or change their agreements as made.” –
TERMS OF CONTRACT- DUTY OF COURT IN CONSTRUING THE TERMS OF A CONTRACT BETWEEN PARTIES
“So, where there is a contract regulating an arrangement between the Parties, the main duty of the Court is to interpret that contract and give effect to the wishes of the Parties, as expressed therein. Where more than one document is involved, no single document should be considered in isolation or be the sole determinant, therefore, any interpretation done must take in all the documents.”
GROUND OF APPEAL- PURPOSE OF A GROUND OF APPEAL
“It is now trite in law that the aim or purpose of a ground of appeal is to give the opposing party notice of the case it has to meet at the appellate court and the particulars of error or misdirection alleged only intended to showcase the complaint against the decision appealed against. The particulars are not independent of the ground but must be in harmony and compatible with the grounds.”
GROUND OF APPEAL – CORRELATION OF GROUNDS OF APPEAL AND PARTICULARS OF GROUND OF APPEAL
“I shall refer to a few dicta of the Court of Appeal and the Apex Court on the purport of the particulars of grounds in relation to the ground itself. See the case of Access Bank Plc v Sijuade (2016) LPELR – 40188 (CA) per Danjuma JCA as follows:-
the sum total of all legal principles and judicial precedents on the relationship between ground of appeal and supporting particulars is that on reading a ground of appeal and its particulars, the adverse party must be left in no doubt as to what the complaint of the appellant is. In other words, a ground of appeal and its particulars go together. Where the particulars in support of ground are not related to the ground, the ground is incompetent. See Hembe v Hueze (2001) 2 SC 26.
In Waziri v Geidam (2016) 11 NWLR (Pt.1523) 230 at 256, I had in this court stated that:-
The functions which particulars to a ground of appeal are required to perform are to highlight the grouse of the appellants against the judgement on appeal. They are specifications of errors and misdirection which show the complaint the appellants are screaming about and the line of thought the appellants are going to canvass in their brief of argument. What is fundamental is that the ground of appeal are really explanatory notes on what is in contest and the particulars which open and exposed so that there is no attempt at an ambush or giving of room to which the respondent would say he was left in the dark of what he was to defend on appeal or that they are unable to understand or appreciate the complaint in the said ground.”
GROUNDS OF APPEAL- EFFECT OF A FAILURE TO ELEGANTLY PRESENT THE PARTICULARS OF GROUNDS OF APPEAL
“I would want to say in this appeal that where the presentation of the particulars are not elegantly presented that would not be used to punish a litigant to get the ground of appeal struck out for incompetence in a situation where the ground of appeal in substance is valid. See Ogboru v Okowa (2016) 11, NWLR (Pt.1522) 84, 146; Omisore v Aregbesola (2015) 15 NWLR (Pt.1482) 205; Dakolo v Dakolo (2011) 16 NWLR (Pt.1272) 22.”
COMPETENCE AND JURISDICTION OF COURT- WHETHER THE WRIT OF SUMMONS AND STATEMENT OF CLAIM ARE MATERIALS ON WHICH THE ISSUE OF COMPETENCE AND JURISDICTION OF COURT CAN BE RAISED
“The point has to be cleared without delay that the law though well settled is that the writ of summons and statement of claim are the materials on which the issue of competence and jurisdiction of court is raised, however it is not a principle cast in stone or regarded as immutable as circumstances could arise where, when an objection is made by means of a motion on notice, facts deposed to in affidavit in support as well as the counter affidavits and attached exhibits are also utilised to resolve the question. In the same vein could come up the use of evidence already adduced in the resolution of the question of jurisdiction as was the case in the instant matter which came up at the close of evidence and in the final addresses of counsel.”
PRIVITY OF CONTRACT- PRINCIPLE OF PRIVITY OF CONTRACT
“In this matter of privity of contract, the principle is age long and that is that a beneficiary of a contract to which he is not a party cannot sue on such a contract nor would a stranger to a contract sue to enforce the contract. See Dunlop Pneumatic Tyre Co Ltd v Selfride & Co Ltd (1915) AC 847 at 853; Ikpeazu v ACB limited (1965) NMLR page 374; A. G. Federation v A. I. C. Ltd (2000) 10 NWLR (675) 293; C. A. P. Plc v Vital Inv. Ltd (2006) 6 NWLR (Pt.976) 200.”
COMPANY- WHETHER THE MANAGERS OR OPERATORS OF A COMPANY CAN BE HELD PERSONALLY LIABLE FOR ACTS DONE ON BEHALF OF THE COMPANY
“It is now trite in law that a company or corporate body not being a human being cannot act on its own and so carries out activities through human beings who are the operators or managers of the corporate body and so the manager or operators do not become personally liable for acts carried out for and on behalf of the company and in the course of the management or day to day business of the company. The follow up is that the company is an abstraction and operates through living persons and so an officer of the company takes an action in furtherance of the affairs of the company who is the principal and it is that principal that is liable for any infraction occasioned by those acts and not the official or employee. See N. N. S.C. v Savanna Company Ltd (1988) 2 NWLR (Pt.74) 23; Yusuf v Kupper International NV (1996) 4 NWLR (Pt.446) 17; UBN Ltd v Edet (1993) 4 NWLR (Pt.287) 288; Niger Progress Limited v North East Line Corporation (1989) 3 NWLR (Pt.107) 68.”
AWARD OF PRE-JUDGMENT INTEREST – BASIS OF THE POWER OF COURT TO AWARD PRE-JUDGMENT INTEREST
“With respect to the power to award interest before judgment it is to be reiterated that it is based on statute or a right based on common law or some equitable principle or contract.”
AWARD OF PRE-JUDGMENT INTEREST – PRE-REQUISITE FOR A CLAIM OF AN AWARD OF A PRE-JUDGMENT INTEREST
“It is because of the peculiar or special nature of this interest that it is mandatory that before such an award can be claimed, the facts in support must be pleaded and evidence led to support the head of claim and in the same vein the rate of interest and date to calculate from, specified in evidence clearly and that rate being the prevailing rate of bank interest at the time of judgment or award. That is to say that the need for evidence establishing that rate cannot be over-emphasised. Therefore in this instant case where the respondent neither pleaded nor led evidence to show any custom, agreement or statute under which it founded its claim of interest against the appellants the court erred in awarding the pre-judgment interest against the appellants. See Section 97 (i) (h) and 2 (e) of the Evidence Act 1990; Habib Nig. Bank Ltd v Gifts Unique (Nig.) Limited (2004) 15 NWLR (Pt.896) 406; Yusuf v ACB (1980) 1-2 SC 49; Sections 38f 97 (i) (h) and 2 (e) of the Evidence Act Laws of the Federation of Nigeria 1990 applicable at the time of trial; E. I B. Building Society Ltd v Adebayo (2003) 11 NWLR (Pt.832) 497.”
JUDGMENT OF COURT- ADMONITION TO COURTS TO EXERCISE ITS DISCRETION JUDICIALLY AND JUDICIOUSLY IN ITS JUDGMENT
“Every judgment or decision of a court of law entails exercise of judicial discretion. Such exercise of judicial discretion must be judicial and judicious.”
DEFENCES – DUTY OF COURT TO CONSIDER ALL DEFENCE PLEADED BEFORE IT NO MATTER HOW FEEBLE IT MAY BE
“The courts below, particularly the trial court, owed the Appellants, as the defendants, a duty to consider whatever defence they had pleaded, no matter how weak or feeble it may appear, before the determination of their obligation. Section 36(1) of the 1999 Constitution, as amended, like the rules of natural justice, imposes that basic and fundamental obligation on every court of justice established by law.”
CASES CITED
None
STATUTES REFERRED TO
1. Constitution of the Federal Republic of Nigeria, 1999 (as amended)
2. Evidence Act
3. Laws of the Federation of Nigeria 1990 (now 2011)
4. Judicature Act, 1873
5. Law of Property Act of 1925
