CASE IDENTIFICATION
EDITORIAL SUMMARY
Editorial — not part of the judgment as delivered
Facts of the Case
The appellant, Haston (Nigeria) Limited, was a current account customer of the respondent, African Continental Bank Plc, maintaining Account No. 05604 at the respondent’s Calabar branch. The sole signatory to the account was one Victor Ndoma Egba, who was described on the mandate card as the appellant’s chairman. On 30th March, 1993, Victor Ndoma Egba discovered that the account had been debited with unauthorised withdrawals totalling N212,700.00 through three cheques dated 11th February, 1993 (N158,000.00), 16th February, 1993 (N52,200.00), and 8th March, 1993 (N2,500.00), which bore forged signatures purporting to be his.
Following the appellant’s demand for the account to be credited with the fraudulent withdrawals and the respondent’s failure to cooperate, the appellant instituted an action at the High Court claiming N212,700.00 being money fraudulently withdrawn, interest at 54% per annum from the date of withdrawal until judgment, and N5 million as general damages for breach of contract, negligence, and loss of reputation. The trial court entered judgment in favour of the appellant, awarding N212,700.00, interest at 54% per annum, and N3.5 million as general damages.
The respondent appealed to the Court of Appeal, Enugu Division, which allowed the appeal and set aside the trial court’s judgment. The Court of Appeal held, inter alia, that the appellant’s suit was a nullity for want of proper authorisation by a resolution of the board of directors or shareholders, that there was no proper demand made by the appellant, and that the award of general damages was unsustainable. The appellant appealed to the Supreme Court.
Issues for Determination
ISSUE 1:Â Whether the appellant’s suit was a nullity.
ISSUE 2:Â Whether there did not exist a relationship between the appellant as customer with the respondent as banker.
ISSUE 3:Â Whether the appellant was not entitled to the damages awarded by the trial court.
Decision / Holding
The Supreme Court allowed the appeal in part. The Court set aside the judgment of the Court of Appeal except as to the dismissal of the award of N3.5 million general damages. The awards of N212,700.00 and 54% interest made by the trial court were restored. The practical effect is that the appellant is entitled to recover the sum of N212,700.00 with interest at 54% per annum from the date of withdrawal until judgment, but the claim for general damages for breach of contract, negligence, and loss of reputation fails for lack of proof.
Ratio Decidendi / Principles
BANKING LAW — Banker-Customer Relationship — Duty of Care — Contractual Nature “This is so because the defendant owed the plaintiff a duty of care. Their relationship is contractual and has been described as that of debtor and creditor and principal and agent- see Yesufu v. A.C.B (1981) 1 SC 74, 98-99; Balogun v. N.B.N (1978) 3 SC 155, 163-164.” Per Ogundare, JSC, in Haston (Nigeria) Limited v. African Continental Bank Plc (2002) NLC-1091998(SC) at pp. 17–18; Paras A–B.
COMPANY LAW — Corporate Litigation — Authority to Institute Action — Requirement for Board or Shareholder Resolution “It is also firmly established that no person can institute an action in the name of a company unless it is so instituted on the authorisation of the company upon the resolution of the board of directors or the resolution of the shareholders. This is so because where an injury has been done to a company, it is the company that has the right of the action and not any of the members or group of shareholders, acting together. See Foss v. Harbottle (1843) 2 Hare 461. In the absence of aforesaid resolution any action so instituted on behalf of the company is a nullity. See Danish Merchantile Co. Ltd. & Ors. v. Beaumount & Anor. (1931) 1 All ER 925. But it is also open to the purported plaintiff company to ratify the unauthorised act of the person who constituted the action in a general meeting to give the authorisation by ordinary resolution. See Marshalls Valve Gear Co. Ltd. v. Manning, Wardle & Co. Ltd. (1909) 1 Ch. 267.” Per Ogundare, JSC, in Haston (Nigeria) Limited v. African Continental Bank Plc (2002) NLC-1091998(SC) at pp. 10–11; Paras D–E.
COMPANY LAW — Corporate Litigation — Authority to Institute Action — Presumption of Authority and Burden of Proof “The action was instituted by the plaintiff in her own name. This obviously is a proper cause. It has been the rule for a long time now since Foss v. Harbottle (supra) was decided that the proper plaintiff in an action for a wrong done to a company is the company itself. The contention of the defendant in the two courts below and in this court is that the company by a resolution of her board of directors, must authorise that an action be taken. But this must be presumed until the contrary is proved by the party that asserts the contrary. The defendant has not led a shred of evidence to support its contention that the action here was not authorised by the plaintiff’s board of directors.” Per Ogundare, JSC, in Haston (Nigeria) Limited v. African Continental Bank Plc (2002) NLC-1091998(SC) at pp. 15–16; Paras D–A.
DAMAGES AND REMEDIES — Special Damages — Proof — Strict Proof Achieved by Evidence “Surely, the law is trite that where a plaintiff claims more than he can prove, he is awarded the lesser amount. In the case on hand I cannot see any difference in the amount claimed and pleaded and the amount proved in evidence.” Per Ogundare, JSC, in Haston (Nigeria) Limited v. African Continental Bank Plc (2002) NLC-1091998(SC) at pp. 19–20; Paras B–C.
Orders of Court
The judgment of the Court of Appeal is set aside except as to the dismissal of the award of N3.5 million general damages.
The awards of N212,700.00 and 54% interest made by the trial court are affirmed.
The appellant is awarded N10,000.00 costs of the appeal in the Supreme Court.
No order as to the costs of the appeal in the Court of Appeal.
APPEARANCES
Counsel for the Appellant(s)
Victor Ndoma-Egba (with him, Tawo E. Tawo)
Counsel for the Respondent(s)
O. A. Obianwu
Amicus Curiae
None
JUDGMENTS / OPINIONS OF THE COURT
Authoritative judicial text as delivered
Lead / Majority Opinion
— (DELIVERED BY E. OGUNDARE, J.S.C.(DELIVERING THE LEAD JUDGMENT):)
 The plaintiff, who is now appellant before us, was at all time relevant to this case, a current account customer of the defendant bank, who is now the respondent; the plaintiff opened and maintained account No. 05604 at the calabar branch of the defendant bank. The sole signatory to the account was one Victor Ndoma Egba who was described on the mandate card lodged with the bank as the plaintiff’s chairman. Victor Ndoma Egba’s specimen signature was given to the bank, as well as his passport photograph. The said Ndoma Egba a legal practitioner was either sole or joint signatory to other accounts at the said calabar branch of the defendant Bank.
On 30th March, 1993, Victor Ndoma Egba discovered on his visit to the calabar branch of the bank that the account of Ndoma Egba. Ebri &. Co., legal practitioners, of which he was a joint signatory with his partner Richard David Ebri, had been debited with some unauthorized withdrawals. This prompted him (Ndoma Egba) to call for the ledgers of other accounts of which he was a signatory. On going through the ledger of plaintiff’s account No.05604 he discovered that that account too had been debited with some unauthorized withdrawals. He demanded for the cheques relating to the withdrawals. He discovered that the cheques dated 11th February, 1993 for N158,000.00, 16th February, 1993 for N52,000.00 and 8th March, 1993 for N2,500.00 respectively bore signatures purporting to be his but which were obviously forged.
P.1
The plaintiff demanded of the defendant bank that her account be credited with the said fraudulent withdrawals, and other instruments drawn on the account. Plaintiff also made a report to the police. The defendant bank appeared not to have given the plaintiff any cooperation in the matter as it ignored all the latter’s demands. This led the plaintiff to institute the action leading to this appeal, claiming:
“(i) N212,700.00 being money fraudulently withdrawn from the plaintiff’s account No. 05604 as a result of the defendant’s negligence and collusion.
(ii) Interest on the principal sum calculated at the rate of 54% per annum from the date of withdrawal until Judgment.
(iii) N2(two Million Naira) being general damages for breach of contract, negligence and loss of reputation.”
Pleadings were ordered, filed and exchanged and by orders of court amended and further amended. By its further amended statement of claim, plaintiff increased the damages claimed in claim (iii) to read:
“N5million being damages for breach of contract, negligence and loss of reputation.”
The action proceeded to trial at which Victor Ndoma Egba and one Paul Chidindu, a police handwriting expert testified for the plaintiff. An official of the defendant bank, Christian Uchechukwu Okwula testified for the defendant. After addresses by learned counsel for the parties the learned trial Judge, in a reserved judgment, found:
“1. I had during the course of this proceedings examined exhibits I-1d, I had no hesitation nor reservation whatsoever in coming to the con
Concurring Opinion(s)
— M. L. UWAIS, C.J.N.:
I have had the advantage of reading in draft the judgment read by my learned brother Ogundare, JSC. I entirely agree with the judgment and have nothing to add. Accordingly I too allow the appeal. I set aside the decision of the Court of Appeal and affirm the decision of the trial court. I adopt the order contained in the said judgment.
— U. MOHAMMED, J.S.C.:
I agree with the opinion of my learned brother, Ogundare, JSC in the judgment read. I have had the advantage of reading the draft of the judgment before now. I agree that the award of damages of N3.5 million which the trial High Court granted to the appellant was rightly set aside by the Court of Appeal. That notwithstanding, the awards of N212,700.00 and 54% interest which the trial High Court made and were set aside by the Court of Appeal are hereby restored. I abide by the order made in the lead judgment on costs.
— U. A. KALGO, J.S.C.:
 I have had the privilege of reading in draft the  judgment of my learned brother Ogundare, JSC in this appeal. I entirely agree with his reasoning and the conclusions reached on all the issues which arose for determination therein. In the result, I find that there is merit in the appeal and I allow it in part to the extent set out in the leading judgment. Accordingly I set aside the decision of the Court of Appeal except as to the order made in respect of the award of the lump sum award of N3.5 million as general damages for breach of contract, negligence and loss of reputation. The award of N212,700.00 with 54% interest thereon made by the trial court in favour of the appellant is hereby restored. I award N10,000.00.
— E. O. AYOOLA, J.S.C.:
 I have read in draft the judgment delivered by my learned brother, Ogundare, JSC. For the reasons he gives, I too would allow the appeal in part. I abide by the consequential orders he makes and by the order as to costs. Appeal allowed in part.
P.23
Dissenting Opinion(s)
None
REFERENCES
Research enhancement — dynamically linked
Referenced Judgments
1. Abubakri & Ors. v. Smith & Ors (1969) NSCC 415 — cited at p. 12; Para D.
2. Ajao v. Sonola & Ors. — cited at p. 10; Paras C–D.
3. Balogun v. N.B.N (1978) 3 SC 155 — cited at pp. 17–18; Paras A–B.
4. Danish Merchantile Co. Ltd. & Ors. v. Beaumount & Anor. (1931) 1 All ER 925 — cited at p. 11; Paras B–C.
5. Edwards v. Halliwell (1950) 2 All ER 1064 — cited at p. 12; Para D.
6. Ejekam & Ors. v. Devon Industries Ltd. (1998) 1 NWLR (Pt.534) 417 — cited at p. 12; Paras B–C.
7. Emegokwue v. Okadigbo (1973) 4 S.C. 113 — cited at pp. 19–20; Paras D–E.
8. Foss v. Harbottle (1843) 2 Hare 461 — cited at pp. 11–12, 15–16; Paras A–B.
9. Marshalls Valve Gear Co. Ltd. v. Manning, Wardle & Co. Ltd. (1909) 1 Ch. 267 — cited at p. 11; Paras C–D.
10. Okoya v. Santilli (1990) 2 NWLR (Pt 131) p. 172 — cited at p. 9; Paras A–B.
11. Provincial Highway Chemist (Nig.) Ltd. v. S. S. Umaru & 2 Ors. (1986) FG.C.L.R. 196 — cited at p. 11; Para E.
12. PZ & Co. Ltd v. Ogedengbe (1972) 1 All NLR 202 — cited at p. 21; Paras B–C.
13. Trans Atlantic Shipping Agency Ltd. & Anor. v. Dan Trans. Nigeria Limited (1996) 10 NWLR (Pt.478) 360 — cited at p. 11; Paras D–E.
14. UBA v. TAAN (1993) 4 NWLR (Pt.287) 368 — cited at p. 18; Para E.
15. Woluchem v. Gudi (1981) 5 S.C. 291 — cited at p. 20; Para D.
16. Yesufu v. A.C.B (1981) 1 SC 74 — cited at pp. 17–18; Paras A–B.
Referenced Statutes
1. Companies and Allied Matters Act, 1990 — s. 65 — cited at pp. 15–16; Paras D–A.
2. Companies and Allied Matters Act, 1990 — s. 244(1) — cited at p. 11; Paras A–B.
3. Companies and Allied Matters Act, 1990 — s. 279(3) — cited at p. 15; Paras B–C.
4. Companies and Allied Matters Act, 1990 — s. 650 — cited at p. 14; Paras B–C.
5. Court of Appeal Act — s. 16 — cited at p. 3; Para D.