CORAM

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A.B. WALI, JUSTICE SUPREME COURT

E.O. OGWUEGBU, JUSTICE SUPREME COURT

O. ACHIKE, JUSTICE SUPREME COURT

U.A. KALGO, JUSTICE SUPREME COURT

E.O. AYOOLA, JUSTICE SUPREME COURT

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PARTIES

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PAN BISBILDER (NIGERIA) LIMITED

APPELLANTS 

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FIRST BANK OF NIGERIA LIMITED

RESPONDENTS 

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AREA(S) OF LAW

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CONTRACT-ILLEGALITY- CONTRACT ILLEGAL UNDER STATUTE-WHETHER IT IS ENFORCEABLE

 

 

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SUMMARY OF FACTS

The appellant, as plaintiff, sued the respondent, as defendant, for breach of contract claiming a total of N429,869.00 comprising special and general damages; the said breach of contract had arisen from defendant’s failure to honour its loan agreement of N116,500.00 entered into with the plaintiff

 

 

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HELD

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It was held that neither party could enforce any provision of the loan agreement while the parties have contravened the provision of the statute

 

 

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ISSUES

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1. Whether the diversion of fund under the contract of loan between the parties subsumed under Agricultural Guarantee Credit Scheme Fund Act 1977 rendered the said contract illegal and void to the extent that neither the appellant nor the respondent can enforce the said loan contract.

2. Whether the Court of Appeal was right to have dismissed the appellant’s cross-appeal on all the heads of complaint as a matter of course

 

 

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RATIONES DECIDENDI

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ENFORCEMENT OF ILLEGAL CONTRACT

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“Generally, the consequence of illegality in relation to the parties’ contract is that the court will not come to the assistance of any party to an illegal contract who wishes to enforce it. This position of the law is founded on the principle of public policy and is expressed in the maxim ex turpi causa non oritur actio, meaning that an action does not arise from a base cause”… ACHIKE. J.S.C

 

 

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ANY PROPERTY TRANSFERRED IN AN ILLEGAL CONTRACT IS IRRECOVERABLE

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“The result is that generally money paid or property transferred under illegal contract is irrecoverable where both parties are equally guilty of the fact of illegality. This is also buttressed by the maxim, in pari delicto potior est conditio defendentis, which means that where the parties are both at fault, the condition of the defendant is better” … ACHIKE. J.S.C

 

 

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CASES CITED

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1. Fashina v. Odedina (1957) WRNLR. 45 and

2. Abesin & Anor, v. Iyaegbe (1958) WRNLR. 67.,

3. Cowan v. Milbourn (1867) LR 2 Ex 230, Herman v. Jeuchner (1985) 15 QBD. 561 Parkinson v. College of Ambulance (1925) KB

 

 

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STATUTES REFERRED TO

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Agricultural Guarantee Credit Scheme Fund Act 1977

 

 

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