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When draws in postdated cheque amounts to overdraft

The case of the appellant before the High Court of Benue State, Makurdi was that on September 1, 2010, it lodged a Zenith Bank Plc cheque of N6, 212,350 into its account held with the respondent.


CITATION: (2020) LPELR-49949 (CA)
In the Court of Appeal
In the Makurdi Judicial Division
Holden at Makurdi

Suit No: CA/MK/190/2016

Before Their Lordships:


The case of the appellant before the High Court of Benue State, Makurdi was that on September 1, 2010, it lodged a Zenith Bank Plc cheque of N6, 212,350 into its account held with the respondent. After three working days clearing period, the appellant’s account was credited with the said sum and it began to make withdrawals from the account. However, on December 31, 2010, without any instruction from the appellant, the respondent debited the appellant’s account to the tune of N6, 212,350. The appellant through a letter from its solicitor, sought to recover the money. But the respondent refused to credit its account with the amount debited. Hence, it instituted a suit before the Court. The defence of the respondent was that the cheque lodged by the appellant was dishonoured. The appellant was notified and it promised to pay back. The respondent thereafter debited the appellant’s account. At the conclusion of hearing, the High Court dismissed the claims of the appellant. Aggrieved, the appellant appealed to the Court of Appeal, while the respondent filed a cross-appeal.

The Court determined the appeal on the following issues: Whether the learned trial Judge was right to have discountenanced the statement on oath of DW1 on the ground that she disowned same. Whether the learned trial Judge was right to admit Exhibit D1 in evidence and/or rely on same in the cause of the judgment and to thereby dismiss the case of the appellant predicated on same. Whether from the pleadings and totality of evidence adduced before the lower Court, the learned trial Judge was right to have dismissed the suit of the appellant.

Arguing the issues, counsel to the appellant argued that on September 1, 2010, the appellant lodged a cheque for the sum of N6, 212, 350 into its account held with the respondent. The respondent tendered a certified true copy of the cheque lodged with them, which was a Zenith Bank Cheque. The cheque was admitted in evidence as having the date September 1, 2010 and was marked Exhibit D1. Counsel to the appellant submitted that Exhibit D1 was a photocopy of the cheque and a bankers’ document which ought to comply with the provisions of Section 91(e) of the Evidence Act, 2011 to be admissible, relying on Oghoyone v Oghoyone (2010) ALL FWLR (PT. 543) 1844 at 1860-1862. Having failed to so comply, Exhibit D1 ought not to have been admitted in evidence and should be expunged.

The respondent had pleaded that consequent upon the appellant failed promises to collect the dishonoured cheque, it sent its dispatcher to deliver the returned cheque to the appellant at Makurdi through his approved representative and at his direction. The appellant denied the cheque was returned to it. It was submitted, assuming without conceding, that the alleged uncleared cheque was returned to the approved representative of the appellant by the respondent’s dispatcher and there was an endorsement acknowledging receipt of the returned cheque on the photocopy sought to be tendered, the same can only be tendered via the respondent’s said dispatcher who could be cross-examined on the delivery and on the photocopy. In the alternative, counsel to the appellant submitted that assuming without conceding that Exhibit D1 was properly admitted in evidence, the High Court ought not to have attached any weight to it for the reasons earlier given. The cases of Egesie v Elele (2000) FWLR (Pt 10) 1677 at 1687 and Nwabuoku v Onwordi (2006) 26 NSCQR (Vol II) 1161 at 1180-1181 were relied on.

At the trial before the High Court, DW1 who was the respondent’s only witness tendered Exhibit D1 alongside other exhibits tendered by the respondent. Based on the contentions of the appellant that the DW1 did not swear to the statement on oath before the Commissioner for Oaths and that the signature on the statement on oath DW1 adopted as hers at the trial was not hers, the learned trial Judge in the judgment discountenanced the evidence of the DW1, relying on Chidubem v Ekenna (2009) ALL FWLR (Pt 455) 1652 at 1708 – 1722. Based on this, the appellant submitted that by discountenancing the evidence of DW1, the respondent had no evidence whatsoever in support of her statement of defence. Pleadings without evidence in support must be deemed abandoned, relying on Ajanaku v Osuma (2014) ALL FWLR (Pt 927) 695 at 735. In the absence of evidence at the trial tying the documents to the aspect of the tendering party’s case that it would want the documents to establish, the Court cannot, while considering the evidence for judgment, countenance such documents to discover the case of the party. Appellant relied on the cases of Maersk (Nig.) Ltd v ZATS International Ltd (2013) ALL FWLR (Pt 685) 336 at 403; C.P.C. v INEC (2013) ALL FWLR (Pt 665) 364 at 389. Having discountenanced the evidence of DW1, there was no oral evidence to support Exhibit D1. The appellant urged the Court to set aside the decision of the High Court.

Arguing the issues, counsel to the respondent submitted that at no point whether in her examination-in-chief or cross-examination before the High Court did the DW1 disown her written deposition. Counsel described the holding of the High Court in this regard as being perverse, citing Buhari v. INEC (2009) 7 WRN 1 at 174 and Adimora v. Ajufo (1988) 3 NWLR (Pt 80) at 45. It was argued that for the High Court to be able to rightly hold that the DW1 disowned her sworn deposition, DW1 must have unequivocally denied or disowned same, leaving no doubt about her denial of same. Counsel urged the court to hold that the High Court discountenancing the deposition of DW1 on the ground that she disowned same was perverse, based on assumptions and not backed by evidence and thereby occasioned a miscarriage of justice. An appellate court may interfere with finding of fact by a trial court that is wrong or perverse, citing CBN v Hydro Air Pty Ltd LER (2014) CA/L/235/2012. The Court was urged to reverse this finding.

Arguing further, counsel submitted that Exhibit D1 satisfied the provisions of the Evidence Act and was thereby rendered admissible. Exhibit D1 was a certified true copy of the original, which the appellant had been given notice to produce. The appellant having failed to produce the said original, which was primary evidence, the respondent was entitled to tender the copy of same in its possession, which was secondary evidence. Reliance was placed on the provisions of Sections 149 (d), 98, 221 and 222 of the Evidence Act, and Lawal v. Magaji & Ors (2009) LPELR – 4427. The Court was urged to hold that Exhibit D1 was rightly admitted.

In resolving issues 1 and 2, the court considered it germane to resolve first whether the respondents’ pleadings ought to be deemed to have been abandoned or not. This is because a statement on oath that has not been adopted by the witness cannot be used as evidence. See Nwalutu v. NBA & Anor (2019) LPELR-46916 (SC), Obeya v. Okpoga Microfinance Bank Ltd (2019) LPELR-47615 (CA) and Goar v. Dasun & Ors (2009) LPELR-4205 (CA). A fortiori, any documents pleaded and frontloaded but which have not been given life by a witness that fails to adopt his statement would have no evidential value. Pleadings are not evidence; rather, it is evidence, both oral and documentary that gives life to the pleadings. See FCDA v. Naibi (1990) LPELR-1262 (SC). The Court then went ahead to consider the record of proceedings at the High Court and came to the conclusion that the respondent did not abandon her pleading. She did not disown making the written statement neither did she disown her signature thereon. Rather, she acknowledged and adopted the deposition as her statement. The only thing left to determine, according to the court, was where the statement was signed. After considering the evidence contained in the record of proceedings and the position of the law as contained in relevant case laws and statutes, the court came to the conclusion that the Commissioner for Oaths signed and stamped the written depositions of DW1. It was not in evidence that the mark and stamp of the Commissioner for Oaths on the depositions in issue were forged. They have not been challenged.

Going further, the Court held that a challenge to the authenticity of the signature and stamp of the Commissioner for Oaths cannot be successfully raised via cross-examination. This is because it is trite law that evidence elicited under cross-examination can only advance the case of a party who has pleaded facts in line with the evidence. See Akomolafe & Anor v. Guardian Press Ltd & Ors (2010) LPELR-366 (SC) and MTN v. Corporate Communication Investment Ltd (2019) LPELR-47042 (SC). Thus the High Court was wrong to have discountenanced the depositions of DW1, which she did not disown, on account of evidence elicited under cross-examination, which was neither pleaded nor conclusive in nature.

Finally on issues 1 and 2, the Court held that the appellant was given notice to produce the original of Exhibit D1. The service of the notice to produce entitles the party serving the notice to adduce secondary evidence of the document in question by virtue of Section 91 of the Evidence Act 2011. See Nweke v. State (2017) LPELR-42103 (SC). Therefore, having failed to so produce, the respondent was entitled to produce and tender, as it did, the Certified True Copy of the said cheque, Exhibit D1.

Resolving issues 3, the Court started by agreeing with Counsel to the appellant that the appellant ought to be notified of the dishonour of Exhibit D1 within a reasonable time. The Court further held that what constitutes a reasonable time depends on the circumstances of each case. See Section 49(1) of the Bills of Exchange Act, Cap B8 LFN, 2004 and North Ltd v. Yau (2001) LPELR-746 (SC). The Court also held that by Section 49 (f) of the Bills of Exchange Act, the return of a dishonoured cheque is deemed sufficient notice of the dishonor.

Applying the above to the instant case, the Court considered the record of evidence and came to the conclusion that the submissions of counsel to the appellant to the effect that the learned trial Judge ought not to have held that Exhibit D1 was returned to the appellant do not hold any water in the face of the patent and clear-cut evidence that was before the trial Court. This is because the record shows that the respondent averred that the dishonoured cheque was returned to one Solomon, an agent of the appellant. The appellant did not deny having a staff by the name of Solomon neither did the appellant deny categorically that the respondent was authorised to return the cheque to the said Solomon. By way of denial, PW1 merely said that he did not recall directing the respondent to return the said cheque to Solomon. This, the Court held, did not amount to a denial.

Going further on the issue, the Court held that a postdated cheque is a cheque that bears a date after the date of its issue and is payable on or after the stated date. See Black’s Law Dictionary Ninth Edition, page 269. If a man gives a post-dated cheque it means that the cheque will be paid on the date on which the cheque is presented and not earlier. See Lawal v. Queen (1963) LPELR-15474 (SC). Until the cheque is honoured or cleared and the amount stated thereon is paid, it is not money. See Highgrade Maritime Services Ltd v. F.B.N Ltd (1991) LPELR-1364 (SC) and Abeke v. The State (2007) LPELR-31 (SC). Thus, while Exhibit D1 was yet uncleared, it was not money available for the use of the appellant. However, the respondent through its staff, despite the existing negative balance on the appellant’s account, permitted it to draw from the uncleared funds. The effect of that, the Court held, was that the appellant would be deemed to have been granted an overdraft by the respondent and would become a debtor to the respondent to the extent of the funds drawn. See Ishola v. Societe Generale Bank (Nig) Ltd (1997) LPELR-1547 (SC), Cuthbert v. Robarts Lubbock & Co (1909) 2 Ch. 226 at 233, A.C.B. Ltd. v. Egbunike & Anor (1988) 4 NWLR (Pt.88) 350 at 365, Lion Bank (Nig) Plc v. Amaikom (2008) ALL FWLR (Pt. 417) 85, Greentek Ltd & Anor v. Access Bank Plc (2015) LPELR-25999 (CA) and Obichi Investment & Management Consultant Ltd v. Oluchukwu Micro Finance Bank (2018) LPELR-44204 (CA). Thus, the Appellant who drew on uncleared funds from its account, which was already in negative balance, was deemed to have been granted an overdraft by the respondent Bank. In the absence of articulated and explicit terms for repayment, the respondent was entitled to debit the appellant’s account to recover the overdraft. See Bank of the North Ltd v. Yau (supra) per Ayoola, JSC at page 46.
In conclusion, the Court held that the appeal was unmeritorious and dismissed same. The cross appeal was however held to be meritorious and allowed.
S.O. Okpale, Esq., with him, O.M. Iyokpo, Esq.,
A.M. Owunna, Esq., J.U. Ezeokafor, Esq., – For Appellant/Cross Respondent
and D.O. Peace-Omenka, Esq.
Mrs. M.E. Fayomi – For Respondent/Cross Appellant
Compiled by LawPavilion

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