NASR V. B. BEIRUT-RIYAD NIG. BANK LTD.

• Pages: 218-234

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NIGERIAN SUPREME COURT CASES

[1968] N.S.C.C.

NASR V. B. BEIRUT-RIYAD NIG. BANK LTD.

DIAB NASR

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APPELLANT

(By His Attorney

George Rossek)

V

SERIN! (BEIRUT-RIYAD)

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RESPONDENTS

(NIG.) BANK LIMITED

SUIT NO. SC 313/1967

SUPREME COURT OF NIGERIA

COKER,

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J.S.C.

LEWIS,

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J.S.C.

MADARIKAN,

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J.S.C.

25th October, 1968.

Civil Action - Claim for the recovery of title deeds - Plaintiff depositing title

deeds with defendant hank - Whether breach of S.7(1)(g) of the Banking

Act by bank

Company Law - Director - Cannot negotiate a contract as would put him in a

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position to profit at the expense of company - Directors failing to record in

official minutes of company transaction into which they had entered - Could

not complain if adverse inference drawn on their conduct by court

Evidence - Admissibility - Whether exhibit 23 should be regarded as evidence

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of its contents in view of S.90 of the Evidence Act

Equity - Trustees, agent and fiduciaries - Not to retain profit made in the course

of or by means of office - Restitution

Practice and Procedure - Where moral turpitude attaches to both sides of a

contest - Court not to assist one side at the expense of other - But where

no illegality ex facie court not entitled to speculate upon its incidence or

pronounce upon it unless expressly pleaded

Evidence - Civil action - Burden of proof - Where defendant satisfied that

plaintiff had failed to comply with subsection I of section 136 of Evidence

Act - Whether defendant entitled to rely on evidence of plaintiff without

calling any evidence himself.

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ISSUES:

1.

Whether a breach of S.7(1)(g) of the Banking Act can be said to have occurred,

where the p!aintiff in an action for recovery of title deeds was the one who

deposited his title deeds with the bank.

2.

Whether a director can negotiate a contract between himself and his company

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so as to put him in a position to profit at the expense of the company.

3.

Can directors who failed to record in their company's official minutes a

transaction into which they had entered, later complain if adverse inferences

are drawn on their conduct by a court of law.

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10

15

20

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NASR V. B. BEIRUT-RIYAD NIG. BANK LTD.

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4.

Can a court order a restitution of any amount a trustee, agent or fiduciary retains

as profit made in the course of, or by means of his office.

5.

Where there is moral turpitude attaching to both sides of a contest, should the

court assist one at the expense of the other.

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6. Where illegality does not appear

ex facie

and it is not expressly pleaded, is a

court entitled to speculate upon its incidence or pronounce upon it.

7. Where a defendant is satisfied that the plaintiff has failed to comply with S.136(1)

of the Evidence Act, is he entitled to rely on the plaintiff's evidence without calling

any evidence himself.

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FACTS:

The plaintiff sued the defendants in the Lagos High Court, claiming the return

of a deed of lease for which he had made several demands, but all to no avail.

The defendants filed a counter-claim, claiming from the plaintiff the sum of

£40,710:19s:4d, plus accrued interest. Four witnesses, including the plaintiff gave

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evidence in support of the plaintiff's case, but counsel for the defendants stated at

the close of the plaintiff's case that he would not call any evidence on the defend-

ants' behalf. The trial judge in reserved judgment, dismissed the plaintiff's claim

and gave judgment with costs against him in favour of the defendants on the

counter-claim, stating that he found the defendants entitled to the sum of

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£28,916:18s:3d and £6,377:15s:1d on their two heads of claim, plus interest at the

rate of 9% per annum up to the date of judgment. The plaintiff appealed to the

Supreme Court against both the dismissal of his claim, and the awards to the de-

fendants on the counter-claim. The controversy on appeal centred on the counter-

claim. The defendants had pleaded,

inter alia,

that the plaintiff, acting in concert

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with the former manager of the defendant bank had opened an account with the

defendants in the name of his nephew who did not reside in Nigeria or carry on

business therein, so as to enable the plaintiff obtain advances from the bank in

contravention of the provisions of the Banking Act. The defendants further pleaded

that the plaintiff was at the time of the transaction relating to the said advances, a

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director and deputy chairman of the defendant bank, and thus had a fiduciary duty

towards the defendants, which duty he acted in breach of.

HELD:

1. Section 7(1)(g) of the Banking AO gives a bank a period of three years within

which to deal with real assets which it was holding at the date of the Act. The

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evidence in this case was confusing and in any case it was the plaintiff who

alleged an illegality and it was for him to prove it. The document exhibit 15,

showed the plaintiff as the real lessee of both plots of land, and the inference

was, rightly, that no breach of section 7(1)(g) of the Banking Act by the bank

had been established.

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2. The lease of the land at Apapa was in the name of the plaintiff and the claim in

this case presupposed that. To hold that the deposit of the Title Deeds with the

Bank was in compliance with section 7(1)(g) of the Banking Act as against

section 7(1)(c) would have been incontrovertibly perverse and the judge rightly

rejected that contention.

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3. Whatever else might have been the intention of the framers of exhibit 25, it was

clearly contemplated that a director might not, even if he could contract with

the company, negotiate such a contract as would put him in a position to profit

at the expense of the company. In :his case it was clearly the duty of the plaintiff

to satisfy the court that he was entitled to enter into the particular contract with

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the bank and on the evidence he had not done so.

4. Where directors chose not to record in the official minutes or records of their

company, the transaction into which they had entered, they could not be heard

to complain that a court of law had drawn inference on their conduct which

were adverse to themselves. In this case, it was clear that the conduct of the