Courtesy: Moruff O. Balogun Esq.
Parties in full:
YEMOLE NIGERIA LIMITED
ARCH ADEYEMI OMOLE
ACCESS BANK PLC.
Summary of Facts:
The 1ST appellant took a loan from the respondent, and the loan was secured by an equitable mortgage of the 2nd appellant’s property in New Bodija, Ibadan registered as No.5 at page 5 in Volume 2476 of the Lands Registry Office at Ibadan, Oyo State, Nigeria. The loan agreement provided for interest at 18% per annum subject to upward or downward review. It also provided for a default fee of 1% flat per month on any amount outstanding if the facility was not liquidated on or before its maturity date.
The appellants could not pay the loan in accordance with its terms and conditions. By their solicitor’s letter, they admitted their indebtedness to the respondent and offered to pay the respondent N4million as full payment of the loan. But the respondent demanded N6.5million and fixed a date for payment otherwise the concession would lapse.
The appellants did not accept the respondent’s counter offer.
Instead, they filed an action against the respondent. They sought several reliefs that they did not owe the respondent N8,738,731.96; that the respondent had no right to sell the mortgaged property and that the court should determine how much they owed the respondent. They denied owing the respondent N8,738,731.96 because, as they alleged, there was no agreement on the interest charged by the respondent.
In response, the respondent withdrew the offer of concession it gave the appellants and counter-claimed for N8,898,000 as amount owed by the appellants at 31st December 2008. The respondent also claimed for interest.
At trial, the loan agreement was tendered in evidence as exhibit B1. The respondent’s witness (DWI) testified that the appellants owed N8,898,000 at 31 December 2008. He tendered the appellant’s statement of account. Before doing so, he identified the statement; he stated that it was generated during the course of normal banking transactions between the 1st appellant and the respondent; that the original was in the custody of the respondent; that he studied the entries in the 1st appellant’s interest; and that he compared the statement with the original records.
The appellants objected to the admissibility of the statement of account on the grounds that it was not certified and that the conditions specified in section 97(1)(h) and 2(e) of the repealed Evidence Act was not complied with, and relied on 4.C.B. v. Oba (1993) 1 NWLR (Pt. 304) 173. The trial court, however, admitted the statement of account in evidence as exhibit D.
After the trial, the trial court delivered its judgment. It dismissed the appellants’ suit and granted the respondent’s counter-claim. The appellants appealed to the Court of Appeal.
Held: Unanimously dismissing the appeal
The following issues were raised and determined by the Court of Appeal:
On Liability of guarantor of loan-
The liability of the guarantor of a loan is both direct and collateral in the sense that the lender can proceed against either the borrower or the guarantor or both of them. In other words, a contract of guarantee can be enforced against the guarantor directly or independently without the necessity of joining the principal debtor in the proceedings to enforce same. The right of a creditor is not conditional as he is entitled to proceed against the guarantor without or independently on the default of the principal debtor. In this case, the 2nd appellant guaranteed the loan to the 1st appellant by depositing his title deeds and creating an equitable mortgage.
On right of bank to charge interest on loan and whether rate of interest chargeable is fixed-
Except where excluded by agreement or otherwise, courts have taken judicial notice of the universal custom of banks to charge interest and also of the fact that interest rates vary from time to time as Central Bank of Nigeria guidelines stipulate. In this case, the agreement between the parties (exhibit B1) provided for:
(a) interest at 18% per annum subject to upward or downward review; and
(b) a default fee of 1% flat per month on any amount outstanding if the facility was not liquidated on or before its maturity date.
In the circumstances, the trial court rightly relied on exhibit B1 in finding that interest rate was charged based on the agreement between the parties.
On whether banker’s statement of customer’s account is an entry in a banker’s book-
A banker’s statement of its customer’s account is an entry in a banker’s book under section 89 of the Evidence Act. So secondary evidence of its content or existence or condition may be given by virtue of section 89(h) of the Act. In this case, the appellant’s statement of account with the respondent (exhibit “D”) is an entry in a banker’s book.
On conditions for admissibility of secondary evidence of entry in a banker’s book –
By section 89(h) of the Evidence Act, 2011, secondary evidence may be given of the existence, condition or contents of a document, when such document is an entry in a banker’s book. And section 90(1)(e) of the Evidence Act 2011 specify the conditions for the admissibility of secondary evidence of an entry in a banker’s book. Therefore, once copies of a document are shown to be from the book in which the entries were made was at the time of making, one of the ordinary books of the bank and that the entry was made in the usual and ordinary course of business of the bank; and that the book is in the custody and control of the bank, evidence of which may be given orally or by affidavit, by an officer of the bank to the effect that he has examined the copy sought to be tendered with the original and has found same to be correct, the copy of such document is admissible.
In this case, the evidence of DWI, an officer of the respondent, duly satisfied the conditions stipulated by the Evidence Act 2011 for the admissibility of the 1st appellant’s statement of account before he tendered the secondary evidence of the appellant’s statement of account. Therefore, the trial court was right when it admitted that statement of account in evidence.
On Conditions for admissibility of secondary evidence of entry in a banker’s book-
It is not the length of evidence given in tendering a copy of entries in a banker’s book that determines its admissibility or otherwise under section 90(1)(e) of the Evidence Act 2011. What matters is whether the substance of such evidence covers the requirements set out in the Act. The evidence needs not be in the precise language of section 90(1)(e) of the Evidence Act 2011 so long as it is in substance in compliance with the provision of the subsection. In other words, once the evidence substantially covers the requirements of section 90(1)(e) of the Act, the secondary evidence in question will become admissible in proof of the existence, condition and contents of the entries in the bankers book. In this case, the trial court rightly admitted the secondary evidence of entries in the respondent’s book (exhibit D) in evidence.
On determination of meaning of words used in statutes or judgments of court-
Words used in a judgment or even Acts and other enactment take meanings from the context in which they are used. Accordingly, the import of the words “certified copy” used in the decision of A.C.B. Ltd. v. Oba (1993) 7 NWLR (Pt.304) 173 in respect of the requirements for the admissibility of a secondary evidence of an entry in a banker’s book implies verification and not certification, which relates to public documents under section 104 of the Evidence Act 2011. Put differently, the use of the phrase must be confined to the context of section 97 of the repealed Evidence Act now section 90(1)(e) of the Evidence Act 2011. It must, not be confused with certification of public documents then provided for under section 109 of the repealed Evidence Act, and now in section 104 of the Evidence Act 2011. In this case, the evidence of DW1 met the requirements
for the admissibility of exhibit D under of section 90(1)(e) of the Evidence Act, 2011 and the trial court rightly held that contrary to the appellants objection, it was not necessary for exhibit D to be a certified true copy to be admissible because it is not a public document.
About the Author
Moruff O. Balogun is a legal practitioner and writes from IJEBU ODE, OGUN STATE.