JOSEPH EFFIONG THOMPSON V THE STATE
March 8, 2025UNIVERSITY OF UYO V GODWIN UDO UDO
March 8, 2025Legalpedia Citation: (2023-12) Legalpedia 80698 (CA)
In the Court of Appeal
Holden At Lagos
Wed Dec 13, 2023
Suit Number: CA/LAG/CV/1305/2019
CORAM
Jimi Olukayode Bada Justice, Court of Appeal
Frederick Oziakpono Oho Justice, Court of Appeal
Abdullahi Mahmud Bayero Justice, Court of Appeal
PARTIES
TKM MAESTRO NIGERIA LIMITED
APPELLANTS
VERITAS KAPITAL ASSURANCE PLC
RESPONDENTS
AREA(S) OF LAW
APPEAL, CONSTITUTIONAL LAW, CONTRACT, CORPORATE LAW, EVIDENCE, PRACTICE AND PROCEDURE
SUMMARY OF FACTS
The Appellant approached the Respondent on 14/1/2013 for a loan facility of the sum of N100,000,000.00 (One Hundred Million Naira) to enable it invest in a commercial paper MTN project worth N1,500,000,000.00 (One Billion Five Hundred Million Naira).
The Respondent confirmed the existence of the contract between the Appellant and the MTN Nigeria and thereafter entered into a solid loan agreement with the Appellant before the Respondent disbursed the sum of N100,000,000.00 (One Hundred Million Naira) to the Appellant.
The clear terms of the relationship between the Appellant and the Respondent are the principal sum of N100,000,000.00 (One Hundred Million Naira) only, the interest at the rate of 19% per annum and the tenor was 180 days. The Loan Agreement was between the Respondent and the Appellant only.
The Appellant failed to meet up its financial obligation as per the agreement for the liquidation of the loan, applied to the Respondent and sought that the loan be rolled over for another 90 days at the same interest rate of 19% and the Respondent approved the Appellant’s request. But the Appellant again failed to pay the sum of N100,000,000.00 (One Hundred Million Naira) together with interest due to the Respondent within the 90 days of Rollover. By a Letter dated 9/1/2015 i.e. Exhibit 8, the Appellant again pleaded for more time to fulfill its financial obligation on the Loan Agreement to the Respondent. The Appellant claimed that MTN Nigeria failed to settle it and again promised to pay up the loan and interest before 31/12/2014. The Appellant also failed to make the payment of the loan which made the Respondent commence an action against the Appellant at the trial Court to recover its exposure from the Appellant.
The trial Court delivered Judgment and granted the four reliefs sought by the Respondent.
The Appellant who is dissatisfied with the Judgment of the trial Court appealed to this Court.
HELD
Appeal dismissed
ISSUES
The evidence before the trial Court reveals that the underlying contract between the Appellant and the Respondent was an investment contract and not a loan transaction agreement. Having failed to properly evaluate the documentary evidence before it, was the trial Court right when it held that the facility offered to the Appellant was a loan and not an investment?
The Claimant/Respondent’s request for the sum of N146,964,383.51 and accrued interest was unsupported by any document or statement of account showing the Defendant/Appellant’s indebtedness. Rather than make an Order of non-suit, was the trial Court right when it granted the reliefs sought by the Claimant/Respondent?
The Defendant/Appellant adduced evidence showing that the Claimant/Respondent was aware that any financial obligation under the Offer Letter will be satisfied from the proceeds of the contract with MTN Nigeria Communication Ltd. was the trial Court right when it held that there was no privity of contract between the Respondent and MTN Nigeria Communications Limited despite manifest evidence showing otherwise?
RATIONES DECIDENDI
COURTS – CONDUCT OF COURTS IN INTERPRETING DOCUMENTS
It is a settled principle of interpretation of document that where the Language used by parties in couching the contents of a document are clear and unambiguous, the Court must give the operative words in the document their simple, ordinary and actual grammatical meaning. See – ISHOLA VS UBN (2005) 6 NWLR PART 922 PAGE 422. – Per J. O. Bada, JCA
LOAN – MEANING AND NATURE OF LOAN CONTRACTS
Halsbury Laws of England, 4th Edition, Re-issue page 13 paragraph 16 (citing Blackburn Building Society Vs Cunlife Brooks & Co 188, 222 Chancery Division 61) held as follows:-
“A Loan Contract is an agreement by which one party (the Lender) agrees to pay money to another (the borrower) or to a 3rd party at the borrower’s request on terms that the borrower would repay the money together with an agreed interest.”– Per J. O. Bada, JCA
DEBT – WHEN A DEBT IS DEEMED TO HAVE ACCRUED
On the other hand, Debt has been stated to usually accrue when parties have a pre-existing contract that a party is obliged to pay over a particular amount of money and interest to the other party on a particular date…when the said party fails to pay the money after the said date… a debt has accrued. See – EMEKA ANTHONY ODIKPO in his book “Practice and Law of Debt Recovery in Nigeria 2015 Chapter 1 Page 1”. – Per J. O. Bada, JCA
INVESTMENT – THE MEANING AND NATURE OF INVESTMENT CONTRACTS
The Black’s Law Dictionary equally defines an Investment Contract as – “A contract in which money is invested in a common enterprise, with profit to come solely from the efforts of others, an agreement or transaction in which a party invests money in expectation of profits derived from the efforts of a promoter or other third party.”
As could be deduced from the definition above, an investment involves the advancement of money in the expectation of some benefit or return in the certain or uncertain future. The expectation of the investor is not usually fixed as to which date in particular his invested funds together with returns on it would come to him, and it is usually based on percentage share of the profit (or loss) of a business. – Per J. O. Bada, JCA
CROSS-EXAMINATION – THE IMPORTANCE OF EVIDENCE OBTAINED DURING CROSS-EXAMINATION – WHERE EVIDENCE BEFORE A TRIAL COURT IS UNCHALLENGED
It is trite law that answers obtained from a witness under cross-examination, be it a witness of Claimant or a Co-defendant in a case, is as good and admissible as evidence obtained under examination in chief – See ADEOSUN VS. GOVERNOR OF EKITI STATE (2012) 4 NWLR PART. 1291 PAGE 581 AT 600 PARAGRAPHS A – B.
It is the law that where evidence before the trial Court is unchallenged, it is the duty of the trial Court to accept it and act on it as it constitutes sufficient proof of a party’s claim.
See – KOPEK CONSTRUCTION LTD. VS. EKISOLA (2010) 3 NWLR PART 1182 PAGE 618 AT 663 PARAGRAPHS C – D.
– BUNGE VS. GOVERNOR OF RIVERS STATE (2006) 12 NWLR PART 995 PAGE 573 AT 599 – 600 PARAGRAPHS H – A. – Per J. O. Bada, JCA
ADMISSION – WHERE THE DEBTOR ADMITS DEBT AS CLAIMED
…therefore where the debtor admits the debt as claimed, the debt is not denied, then the creditor as in this appeal will not need further proof since the debt has been admitted and facts admitted need no further proof.
See – CHIEF E. I. AKANINWO & OTHERS VS. CHIEF O. N. NSIRIM & OTHERS (2008) LPELR – 321 (SC). – Per J. O. Bada, JCA
PRIVITY OF CONTRCT – THE DOCTRINE OF PRIVITY OF CONTRACT
In UNITED BANK FOR AFRICA VS. ALHAJI BABANGIDA JAGABA (2017) LPELR – 3399 (SC), (2007) 11 NWLR PART 1045 PAGE 247, it was held amongst others as follows:-
“The doctrine of privity of contract is all about the sanctity of contract between the parties to it. It does not extend to others from outside. The doctrine will not apply to a non-party to the contract who may have, unwittingly, been dragged into the contract with a view to becoming a shield or scape-goat against the non-performance by one of the parties ……
Court of law do not make orders in vain or in vacuum. Court orders affect directly, those persons who have had course to be subjected to the litigation process before the Court either directly or by necessary extension of such processes.
See – EPEROKUN VS. UNIVERSITY OF LAGOS (1986) 4 NWLR PART 34 PAGE 162.
– UKEJIANYA VS. UCHENDU (1950) 13 WACA PAGE 45.
– KOKORO-OWO VS. LAGOS STATE GOVERNMENT (2001) 11 NWLR PART 723 PAGE 237 AT 246 PARAGRAPHS D – E”.
Also in – A. O. IDUFUEKO VS. PFIZER PRODUCTS LIMITED AND ANOTHER (2014) 12 NWLR PART 1420 PAGE 96.
The Supreme Court held amongst others that –
“This Appellants argument does not take into consideration the simple doctrine of privity of contract, which is that a contract cannot as a general rule, confer or impose obligations arising under it on any person, except the parties to it. In other words, only the parties to a contract can sue or be sued on the contract, a stranger to a contract can neither sue or be sued on the contract. See CHUKWUMA MAKWE VS. NWUKOH & ANOTHER (2001) 14 NWLR PART 733 PAGE 356, also – CHITTY ON CONTRACTS, VOLUME 1 PARAGRAPH 19.002 PAGE 961”. – Per J. O. Bada, JCA
PRELIMINARY OBJECTION – DUTY OF A RESPONDENT WITH A PRELIMINARY OBJECTION
A preliminary objection is a pre-emptive strike and its resolution determines whether or not to proceed and determine the appeal on its merit.
It is premised on this that the starting point ought to be the resolution of the said preliminary objection. Whereas in this appeal, the Respondent failed to draw the attention of the Court or seek leave to argue his preliminary objection before appellant argues his appeal, the preliminary objection shall be deemed and automatically becomes abandoned.
See – ONOCHIE & ANOTHER VS. ODOGWU & ANOTHER (2006) 17 WRN PAGE 1 AT 20.
– A. G. RIVERS STATE VS. UDE & OTHERS (2006) 17 NWLR PART 1008 PAGE 436.
– AGBAREH & ANOTHER VS. DR. ANTHONY MIMRA & OTHERS (2008) LPELR – 43211 (SC). – Per J. O. Bada, JCA
