Bills of Exchange

• Pages: 287-302

Bank draft Paras. 801,802

BILLS OF EXCHANGE

(1) BANK DRAFT

801. Application of Common Law and Bills of Exchange Act to bank draft.

“The rights and obligations of the parties with regard to the draft, Exh. “P1” in this

matter have to be determined by the rules of common law relating to the bills of

exchange and the provisions of the Bills of Exchange Act, Cap. 35 Laws of the

Federation of Nigeria, 1990 herein referred to as the Act. See Union Bank of

Nigeria Plc. v. Scpok (Nig.) Ltd. (1998) 12 N.W.L.R. (Pt. 578) 439 at 468 E. The

other pertinent reason for so holding is that a draft subject to certain stipulations, is

affected by the provisions applying to bills of exchange payable on demand. By

virtue of the provisions of section 30(1) of the Act, therefore, the instant draft i.e.

Exh. “P1” like any other bills of exchange is presumed to stand on the basis of a

valuable considerations so that the probandi is on the person, in this matter the

appellant, alleging want of consideration to prove.” - Per Chukwuma-Eneh, J.C.A. in

F.A.T.B. Ltd. v. Partnership Inv. Co. Ltd. Suit No. CA/L/22/99; (2001) 1 N.W.L.R

(Pt. 695) 517 at 527.

(2) BILLS OF EXCHANGE

802. Action on dishonoured negotiable instrument by holder against imme-

diate party.

“The only case of some relevance to the case in hand referred to by Mr. Sonoiki in

support of his point is the case of Nigerian Concrete Indus. Ltd. v. Machado (1968

1 A.L.R. Comm. 10). That case decided that a plaintiff could elect to take his action

for goods sold and delivered instead of suing upon a dishonoured cheque notwith-

standing the provisions of the Bills of Exchange Act (Cap. 21), S. 47(2). The case did

not say that such an election is a bar to a subsequent action upon a dishonoured

cheque issued in payment for goods sold and delivered. And indeed the point did not

call for determination in the case. 15 Halsbury’s Laws of England, 3rd ed., at 171

states the common law principle which puts a man to this election between alterna-

tive inconsistent courses of conduct thus:- “The principle that a person may not ap-

probate and reprobate expresses two propositions, first, that the person in question,

having a choice between two courses of conduct, is to be treated as having made an

election from which he cannot resile, and, second, that he will not be regarded, in

general at any rate, as having so elected unless he has taken a benefit under or

arising out of the course of conduct which he has first pursued and with which his

subsequent conduct is inconsistent.” It will appear from this principle of law that the

mere fact that one pursues one of two alternative remedies in a Court of justice does

not by itself alone preclude one from pursuing the other remedy.” – Per Agbaje, J. in

Eso Standard (Nig.) Ltd. v. Akanbi (1970) N.C.L.R. 1 at 5 – 6.

287

Paras. 803,804 Vol. 3: BILLS OF EXCHANGE 288

803. Applicability of payment on demand draft where endorsement is forged

under S. 60 Bills of Exchange Act.

“From the appellant’s own showing the respondent had irregular signature and be-

cause of that they had to call for his passport photograph and his specimen signature

from Onitsha branch of their Bank to help them in paying him previous claims. In

respect of the claim for Exh I.D.W. I did not use the photograph to pay the person he

allegedly paid. This was contrary to their own procedure. The second serious lapse

was that D.W. I. Chose to keep Exh. 1 for a long time even when there was no

money to pay it. This clearly gave him an opportunity to tamper with the draft. Why

did he not ask the respondent to keep it until there was money to pay it. So that when

there was money he would collect it and pay its value at once. Their lapses clearly

showed that the bill was not paid in good faith and therefore the defence in S. 60 of

the Bill of Exchange Act 1882 could not avail the appellant.” - Per Ogebe, J.C.A. in

First Bank (Nig) Plc. v. Nwankwocha Suit No CA/K/109/95; (1998) 5 N.W.L.R.

(Pt. 551) 610 at 618.

804. Applicability of the Exchange Control Act to Non-Nigerians.

(1) “From the facts relied on by the plaintiff, some Nigerians resident in Nigeria took

loans of CFA Francs (i.e. borrowed foreign currency) from him in Cotonou. -That

clearly contravenes section 3(1) of the Exchange Control Act without the minister’s

permission, he not being an authorised dealer. Later, those Nigerians made payment

in respect of the said loans outside Nigeria by procuring 45 bank drafts encashable in

the U.K. This contravenes section 7(c) being without the minister’s permission.

Both acts are consequently illegal. The first act which contravenes section 3(1) and

the second act which contravenes section 7(c) apart from being illegal are now criminal

offences under sections 1(1)(e) and 1(1)(d)(iii) respectively of the Exchange Control

(Anti-Sabotage) Act, 1984 now in Cap. 1l4, Vol. II Laws of the Federation of Nige-

ria, 1990 and severely punishable. The illegality involved in this matter has been the

pith and substance of the defence in the Court below and the defendant/appellant’s

argument in this appeal.

I do not think, with due respect, that Mr. Nwadialo for the respondent has

any reply to that contention. He says in the respondent’s brief: “It was for the Nige-

rians who borrowed the moneys from the respondent in Benin Republic to obtain any

necessary permission required for such external loans under the law of their country.

This was certainly not the concern of the respondent” As already shown, the Ex-

change Control Act applies to both Nigerians and non-Nigerians. Once illegality is

committed a transaction under the Act is not spared simply because the plaintiff who

relies on it is not a Nigerian, or that the person who normally should ensure that the

minister’s permission was obtained did not do so. The transactions are simply tainted

with illegality and no action is available to any of the parties ex turpi causa non

oritur actio. All through the said brief I have been unable to find, with due respect,