➥ CASE SUMMARY OF:
Julius Berger & Anor. v. Toki Rainbow (2019) – SC
by “PipAr” B.C. Chima
Supreme Court – SC.332/2009
➥ JUDGEMENT DELIVERED ON:
Friday, 18th January, 2019
➥ AREA(S) OF LAW
➥ NOTABLE DICTA
⦿ DOMICILIATION PAYMENT VS ASSIGNMENT
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 thirdparty on the loan agreement, when things do not work out as planned. “Assignment’, a legal term used in the context of the law of contract and of property, is the right to transfer “choses 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 2 K.B. 431 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 … 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. — A.A. Augie, JSC.
⦿ NATURE/HISTORY 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 chases 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. 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. 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 arising from the original transaction with the debtor. — A.A. Augie, JSC.
⦿ COURT WILL CONSIDER ALL DOCUMENTS BEFORE IT WHOLLY
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) 2 NWLR (Pt. 965) 600. — A.A. Augie, JSC.
⦿ STATEMENT OF CLAIM WHICH HAS BEEN AMENDED DOES NOT CEASE TO EXIST, BUT CANNOT DETERMINE LIVE ISSUES
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) 4 NWLR (Pt. 63)150, Agbaisi V. Ebikorefe (1997) 4 NWLR (Pt. 502) 630 SC, A.S.E.S.A. V. Ekwenem (2009)13 NWLR (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 Agbahomovo V. Eduyegbe (1999)3 NWLR (Pt. 594)170 SC. Thus, such original pleadings cannot be deemed to have been expunged or struck out. It certainly exists. — A.A. Augie, JSC.
⦿ AIM OF GROUND OF APPEAL IS TO OUT THE OPPOSING PARTY IN NOTICE OF COMPLAINT
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. — Tanko Muhammad, JSC.
⦿ INELEGANT GROUND OF APPEAL DOES NOT MAKE AN APPEAL INCOMPETENT
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. — Tanko Muhammad, JSC.
⦿ EXCEPTION TO DETERMINING JURISDICTION BY WRIT & STATEMENT OF CLAIM
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. Therefore the Court below erred in holding that the trial High Court was correct to determine the objection by reference solely on the writ of summons and statement of claim even though the oral and documentary evidence in proof of the relevant paragraphs of the statement of claim were staring it in the face of the Court. Indeed the Court below ought not to have closed its eyes to the record and the evidence already before it. See Okoroma v Uba (1999) 1 NWLR (Pt.587) 359; Onuorah v KRPC Ltd (2005) 6 NWLR (Pt.921) 393; NDIC v CBN (2002) 7 NWLR (Pt.766) 272; I.K. Martins (Nig.) Ltd v UPL (1992) 1 NWLR (Pt.217) 322; Agbareh v Mimra (2008) 2 NWLR (Pt.1071) 378; Osafile v Odi NO.1 (1990) 3 NWLR (Pt.137) 130; Nigergate Ltd v Niger State Government (2008) 13 NWLR (Pt. 1103) 111 (CA). — Tanko Muhammad, JSC.
⦿ COMPANY CANNOT ACT ON ITS OWN, BUT ACT THROUGH HUMAN BEINGS
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 in 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. SeeN.N.S.C. v Sabana 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. — Tanko Muhammad, JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
Amina Adamu Augie, JSC
⦿ FOR THE APPELLANT
A. A. Osara Esq.
⦿ FOR THE RESPONDENT
Ngozi J. Ogbomor Esq.
➥ CASE HISTORY
The Respondent had financed two Local Purchase Orders issued by the first Appellant to “Pit-a-Pat International Nigeria Limited”, and in the initial Writ of Summons and Statement of Claim it filed on 1/6/1999 at the Rivers State High Court, Respondent as Plaintiff claimed four Reliefs. The Respondent later amended its Writ of Summons and Statement of Claim wherein it claimed eight reliefs set out in paragraph 19 of the Amended Statement of Claim, inter alia, (1) The sum of N1, 900, 800, 00 due and payable to the Plaintiff by the 4th Defendant on 9/14/1997 following the assignment by the 2nd Defendant of the benefit of the contract between the 2nd Defendant and the 4th Defendant to the Plaintiff [the Respondent herein]. (2) Interest at the rate of 21% per annum for two months, that is to say, 26/3/1997 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.
➥ ISSUE(S) & RESOLUTION
I. Whether there was an assignment of the proceeds of the contract?
RULING: IN APPELLANT’S FAVOUR. The Court ruled there was no assignment.
A. “Obviously, the Exhibits speak for themselves, and what they say clearly in Exhibit after Exhibit is that the directive in Exhibit G is in respect of a domiciliation arrangement between the Respondent and the second Defendant, Pit-a- Pat International Nig. Ltd., only, and to confirm that the Appellants understood that to be the case, Exhibit G, first Appellant’s letter to second Defendant, is headed: Ref: Your letter dated 28/5/97 request for Domiciliation of Account to Toki-Rainbow Bank. Our LPO No. 48303 dated 02.05.57. The Appellants also urged this Court to look at averments in the first Statement of Claim, which strengthens its case that what the Parties initially conceived, was domiciliation and not assignment. 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) 4 NWLR (Pt. 63)150, Agbaisi V. Ebikorefe (1997) 4 NWLR (Pt. 502) 630 SC, A.S.E.S.A. V. Ekwenem (2009)13 NWLR (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 Agbahomovo V. Eduyegbe (1999)3 NWLR (Pt. 594)170 SC. Thus, such original pleadings cannot be deemed to have been expunged or struck out. It certainly exists.”
B. “The truth of the matter is that the Court of Appeal narrowed its vision to Exhibit G only, and thereby failed to see the big picture, which is that the Parties never intended to create an assignment. What the second Defendant and Respondent clearly agreed upon is domiciliation of the payment to be made by the first Appellant, and not assignment of the benefit of the proceeds of the contract.”
I. Whether the Court of Appeal was right to hold that there was no assignment?
RULING: IN CROSS-RESPONDENT’S FAVOUR.
A. “The second Defendant did not even mention “domiciliation” in Exhibit D, not to talk of “assignment” of benefits of the contract. The second Defendant merely instructed the first Appellant not to release the cheque, “without prior knowledge of the Manager” of the Respondent; and as the Court of Appeal very aptly observed: The letter has expressly stated what the mandate is and no other thing or word outside it ought to be imported in ascertaining what the intention of the company was. The indisputable intention and instruction or mandate was that the cheque should not be paid to it by the 1st Appellant without the prior knowledge of the Respondent’s Manager. It cannot seriously be argued that the letter conveyed an irrevocable mandate, instruction or order to the 1st Appellant to pay the payment cheque to either the Respondent or its Manager. There is nothing I can say or add; it hit the nail squarely on the head and there is no question that Court of Appeal is totally in the right. The said instructions in Exhibit D did not convey any transfer of the benefits of the contract from second Defendant to Respondent.”
“In the final analysis, the main Appeal succeeds; it is allowed, and I set aside the Court of Appeal’s decision on LPO No. 48303. However, the Cross-Appeal lacks merit; it is dismissed and I hereby affirm the Court of Appeal’s decision on the LPO No.4747. The Parties are to bear their own costs.”
➥ MISCELLANEOUS POINTS
➥ REFERENCED (STATUTE)
➥ REFERENCED (CASE)
⦿ WHERE PARTICULARS NOT IN SUPPORT OF GROUND, GROUND IS INCOMPETENT
Access Bank Plc v Sijuwade (2016) LPELR 40188 (CA) per Danjuma JCA: “… 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 Hambe v Hueze (2001) 2 SC 26.”
⦿ GROUNDS OF APPEAL ARE EXPLANATORY NOTES OF WHAT IS IN CONTEST
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”.
➥ REFERENCED (OTHERS)