The High Court of Bendel State having made a finding that all the shipment made by the Appellant were against irrevocable letters of credit and that the Respondents discounted the bills and shipping documents, and also that they did not accept the bills for collection, the Court declared that the Defendants (now Respondents) liable on the bills and made an award in favour of the Plaintiff (now Appellant). The Respondents appealed to the Federal Court of Appeal which allowed the appeal and set aside the award made by the High Court. In its judgment, the Federal Court of Appeal held, firstly, that although entries in a statement of account prepared by a banker were relevant and admissible in evidence by virtue of the provisions of section 37 of the Evidence Act, those entries were not by themselves sufficient to charge the banker with liability in the absence of any supporting evidence outside the entries; and secondly, that in the absence of evidence tending to show not only that the Appellant's account was wrongly debited with the figures involved but also showing that, in fact, the transactions represented by the entries should have been credit entries or, in other words, that the Appellant having not proved at the trial that any of the bills in question was backed by an irrevocable letter of credit, the claim of the Appellant ought to have been dismissed. On a further appeal to the Supreme Court-

HELD:

(i) that in strict commercial law, "discounting" is purchasing, not lending, and the discounter of a bill of lading becomes the owner so that if the bill turns out to be of less value than the price paid for it, the loss falls upon the discounter; and if a profit is made upon the transaction, it belongs wholly to the discounter;

(ii) that the question whether a bill of lading is taken from a Customer for collection or as security, or that it is discounted for him, is one of fact;

(iii) that where a banker discounts the bill of his Customer and credits the Customer's account with the discounted value of the bill, the banker is only entitled to debit the current account subsequently with the value of the bill if the bill is unpaid and the banker has returned it to the Customer. Where the banker retains the bill, he has no right to debit the current account of the Customer with the value of the bill;

(iv) that a banker's statement of Customer's account is a sufficient proof to establish the extent of the banker's financial liability to his Customer;

(v) that the debit entries against "differentials" and devaluation of pound sterling" were matters specially within the knowledge of the Respondents and that, consequently, the burden of providing what "differentials" meant and of proving that the Respondents were entitled to charge the Appellant with liability for both the "differentials" and the devaluation of pound sterling squarely rested on the Respondents and the Respondents had failed to discharge that burden.

Cases referred to:

(1)     African Continental Bank Ltd. v. Chief Festus Sumoila Yesufu, F.C.A. IB/98/77 of May 31, 1979, unreported.

(2)     African Continental Bank Ltd. v. Chief Festus Sumoila Yessufu (1978) 2 S.C. 93, pp. 102-6.

(3)     Foley v. Hill (1848) 2 H.L. Cas. 28.

(4)     Hirschorn v. Evans (Barclays Bank Ltd., garnishees) (1938) 3 ALL E.R. 491, at p. 498.

(5)     Joahimson v. Swiss Bank Corporation (1921) 3 K.B. 110.

(6)     Carstairs v. Bates (1812) 3 Camp. 301.

(7)     N.P. and London Financial Association v. Kelk (1884) 26 Ch.D. 107, at p. 134.

(8)     Ross T. Smythe and Co. Ltd. v. T.D. Bailey, Sons and Co. (1940) 3 ALL E.R. 60, at p. 68.

Statute referred to:

Evidence Act, Cap. 62 of the Laws of the Federation of Nigeria, sections 37 and 141.

APPEAL from the Federal Court of Appeal, sitting at Benin.

G.O.K. Ajayi, S.A.N. (K.O. Longe, Esq., with him) for the Appellant.

Chief O.I. Dafe (Plain Onakughotor and Chief C.O Nwabuokei with him) for the Respondents.

Bello, J.S.C.: In the High Court of Bendel State sitting at Benin City, the Plaintiff, who is the Appellant in this Court, took out a writ of summons against the Defendants, the African Continental Bank, who are the Respondents in this Court, claiming:

"1.     The sum of N610,942.52 being the value of bills of exchange or sight drafts for exported commodity negotiated and/or discounted by the plaintiff with the Ring Road, Benin City Branch of the defendant bank but which, the defendant bank FAILED or neglected to pay to the plaintiff or to credit to plaintiff's account with the defendant bank and/or CLAIMED TO HAVE SHORT-collected but without plaintiff's prior consent, authority or knowledge and to his prejudice. In the alternative.

2.      N700,000 being general damages for negligence or breach of duty by the defendant in their dealings with the plaintiff in the matter of the bills or drafts aforesaid.

PARTICULARS OF NEGLIENCE:

1.      Failure to get plaintiff's authorisation for any short collection on the said bills and debiting same to his account without his consent;

2.      Failure to notify the plaintiff or timely of the dishonour by non-payment or non-payment according to its tenor of any of the bills on which payment is still outstanding wholly or in part.

3.      Failure to return any bill allegedly not paid to the plaintiff and wrongfully debiting his account with the value thereof."

The case for the Applicant as the trial as averred in his copious pleadings may be summarised thus:

1.      That the Respondents negotiated and discounted his bills of lading specified in his pleadings and, with the exception of the bills reflected in Exhibits 7 to 27A inclusive, at the time of discounting the Respondents credited his account with the proceeds of the discounted bills but subsequently, without his knowledge and consent, the Respondents debited his account with what appeared to be the face value of some of the very bills and also with what appeared to be the difference between the realised values of some of the bills and their face values.

2.      That in the case of the bills reflected in Exhibits 7 to 27A negotiated and discounted by the Respondents, the Respondents failed to account for any of them at all and did not credit his account with the proceeds of their discounted values and failed to return the bills to him; and

3.      That the Respondents debited his account with the sum of £10,099.4s.5d (Nigerian pound then) for devaluation of Pound Sterling when the transactions between him and the Respondents, and between him and his overseas customers were transacted in U.S. Dollars and Naira and that there was no devaluation of either currency at the material time.

Paragraph 15 of the Amended Statement of Claim set out the particulars as follows:-

PARTICULARS OF CLAIM

Documents lodged with bank but not credited                        £                   s                d

                                               OBC                                                      22/69          15,393              7               -

                                                                                                             37/69          1,167                2               8

                                                                                                             38/69            313                10               -

                                                                                                             62/69             8,201             13             8

                                                 Unreturned OBC's                               16/67             9,471              -                -

                                                  Unreturned OBC's                               22/67           15,477            -                 -

                                                  Unreturned OBC's                               23/67             6,583             10             -

                                                      Unpaid Cheque                                                    15,580            -                -

                                  OBC debited without a previous credit                20/21          21,228             18              -

                                              Outstanding documents              

1968       £74,826.8s.4d

1969       £56,081.4s.8d                                      130,907                13              -

Devaluation                                                          10,099                   4               5

Price differentials OBC 1-38/68                            14,848                   3             10

Price differentials OBC 1-38/68-16/69                  51,799                   2               1

Wrong debit Entry                                                    1,649                   7               5                              

TOTAL                                                                   305,471                  5             3

OR N 610,942.52

Despite the verbosity of their pleadings, the Respondents' case at the trial court was a simple one. They denied having accepted any bill of the Appellants for negotiation and discounting but admitted accepting his bills, other than the bills specified in Exhibits 7 to 27A inclusive which they denied having accepted at all, for collection purposes; that in accordance with their arrangement with the Appellant they credited his account with the face values of the bills less one per cent as overdrafts at the time of acceptance to enable the Appellant to carry out his business; that in accordance with banking practice when any of the bills was under-collected or was dishonoured by non-payment, they debited his account with the short-fall. They averred that as collecting bankers, they always informed the appellant whenever there was under collection or non-payment. The Respondents offered no answer to the question of devaluation.

The Appellant testified at the trial that he had been a customer of the Respondents since 1965 and had been operating a current account which he maintained with the Respondents at their Benin City Branch. He also operated the account for negotiating and discounting his bills of lading and other shipping documents which were drawn on 'reasonable' letters of credit opened in his favour by his overseas customers to whom he exported rubber. He stated that whenever the Respondents discounted his bills, which was at less one per cent of the value of the goods shipped, they would credit his account with the discounted values of the bills in Nigerian currency. However, payments to the Respondents by his customers for goods shipped were made in the United States Dollars.

The appellant further testified that because of the paucity of staff brought about by the Nigerian Civil War, the Respondents did not send to him any statement of account from 1968 until August 1971 when, as the result of his insistent requests, he received the comprehensive statement of account covering the period 20th August, 1966 to 30th July, 1971, admitted in evidence as Exhibit 3. To his amazement, he discovered that some bills of lading which had been discounted and had been credited to the account since between 1967 and 1969 were in 1971 reversed and debited to the account. He also saw the account was debited with several sums against entries described as "differentials" in respect of some bills of lading he had discounted between 1967 and 1969. He showed severally to the trial court all the entries in Exhibit 3 in respect of the bills complained of. He identified each entry by the number of the bill, its value and the date it was credited, debited or reversed as the case may be. He said the Respondents did not inform him if any of the bills had been short paid or had been dishonoured by non-payment by his overseas customers. The Respondents did not return to him any of the bills reversed in Exhibit 3.

The Appellant produced counterfoils of bills of lading and shipping documents to the value of £130,907. 13s.0d. (N261,815.30) admitted in evidence as Exhibit 7-27A, the originals of which he said he had delivered to the Respondents for discounting in 1968 and 1969. An employee of the Respondents, whose duty was to receive all documents despatched to the branch bank and who gave evidence for the Appellant, confirmed having received all the bills in question and said that he handed the same to E.R. Oritseje, the then manager of the Respondents' Branch where the account of the Appellant was maintained. The Appellant said, since then the Respondents have not accounted for any of the bills to him and have not returned any to him either.

Finally, the Appellant showed to the trial court the debit entry in Exhibit 3 made on 9-8-69 for £10,099.4s.0d purporting to be devaluation of sterling. He said there was no devaluation of Naira or Dollar, which were the currency of their transactions at the material time.

Two witnesses gave evidence for the Respondents. One was the Controller of foreign business of the Respondents and the other was their manager at the time of the trial of the case of the Respondents' Branch at Benin City where the account of the Appellant was maintained. Apart from their conflicting evidence on the meaning of "O.B.C." neither witness said anything tangible in support of the Respondents' defence. Their Controller simply stated: "O.B.C. is not a general banking term. It may just be closer by the case (sic) and it may mean "outward bills for collection." It appears he knew nothing about the case.

According their manager, "O.B.C. (Outward Bills for Collection) is used as regards documents handed in on collection basis. In the case of an O.B.C. document (sic) is a document strictly on collection basis, we give it out (sic) our number and advise the customer of this number. If however, it was a document presented against a letter of credit, the letter of credit is quoted on the document. In the case of an O.B.C. we enter it up in our register and when payment is received the customer is advised."

The manager could not say whether they had received the originals of Exhibit 7-27A. On the issue as to whether the Respondents were discounting or collecting bankers of the Appellant, his evidence is equally consistent with the Appellant's case and with the Respondents' defence. He said:

"I know the plaintiff in this case, he was a customer of the A.C.B. He enjoyed facilities with the Bank and we were discounting bills and also accepting bills for collection from him." However, the witness did not say whether any of the bills complained of in Exhibit 3 had been accepted by his branch for discounting or collection. He was silent on all issues involved in the case.

I think it is pertinent to observe that the defence of the Respondents left much to be desired. Not an iota of evidence was adduced to explain any of the entries in Exhibit 3 complained of by the Appellant i.e. why some of the credit entries were reversed, what differential meant and the reasons for debiting his account with such differential and how devaluation of sterling, if any, affected the transactions in Nigerian currency and the American Dollars and to explain the non-accountability of the originals of the bills Exhibit 7-27A. No evidence whatever was led to show that any of the Appellant's bills was presented by the Respondents to the Appellant's overseas customers or the customers' Bankers for acceptance or payment. The Respondents did not give evidence of any under payment of the Appellant's bills by his customers or their bankers. Not a scintilla of evidence indicating what happened to his bills or their where about or why the Respondents did not return any of them to the Appellant if they were not accepted or not paid. Having regard to the totality of the evidence, it is not surprising therefore that in his meticulous and thorough judgment the learned trial Judge found as follows:-

(1)     that all the shipments made by the appellant were against irrevocable letters of credit and the Respondents discounted the bills and shipping documents and did not accept the bills for collection;

(2)     that the entries in Exhibit 3 correctly states what the Respondents did in operating the Appellant's account but that some of the entries did not correctly reflect the real transaction between the Appellant and the Respondents;

(3)     after having disregarded the values of some bills, which he found not pleaded by the Appellant, and the values of unpaid cheques, which he found not proved by the Appellant, he found the Respondents liable in the sum of N314,568.23 in respect of the claim founded on Exhibit 3 i.e. the differentials wrongly charged therein, the amounts short credited therein, the amounts wrongly reversed and the sum wrongly charged for devaluation which he found never took place; and

(4)     he also found the Respondents liable in the sum of N261,815.30 being the full value of the bills Exhibit 7-27A. He entered judgment for the Appellant in the sum of N576,383.53 with N1,500 costs.

The Court of Appeal stated two reasons for setting aside the award of N314,563.23 made by the learned trial Judge in respect of the claim arising from Exhibit 3. The first reason was founded on the decision of that court in F.C.A. IB/98/77, African Continental Bank v. Chief Festus Sumoila Yusufu, delivered on 31st May 1979 (unreported), in which that Court held that although entries in a statement of account prepared by a banker were relevant and admissible in evidence by virtue of the provisions of section 37 of the Evidence Act, those entries were not by themselves sufficient to charge the banker's customer with liability in view of the qualifying provisions of the same section. Thinking that what is good for the goose is also good for the gander, the Court of Appeal found that the learned trial Judge had charged the Respondents with liability on the entries in Exhibit 3, and therefore following their former decision held that the trial Judge had erred in law in finding for the Appellant on the basis of Exhibit 3 alone.

The second reason was stated in the leading judgment of Agbaje J.C.A. (Omo-Eboh and Ete JJ.C.A. concurring) thus:-

"There is in my view another reason, besides the probative value of exhibit 3 as indicated by section 37 of the Evidence Act, why the plaintiff's claim based on exhibit 3 alone should not succeed. The plaintiff was complaining in part of wrong debit entries in exhibit 3. The relief the plaintiff was seeking about the wrong debit entries in exhibit 3. The relief the plaintiff was seeking about the wrong debit entries was not that the entries should disappear but that in fact they should be treated as credit entries. For how otherwise can one interpret the plaintiff's claim for payment to him of the amount represented by the debit entries? In the absence of evidence tending to show not only that he was wrongly debited with the figures involved but also showing that in fact the transactions represented by the entries should have been credit entries, I fail to see how the plaintiff could conceivably succeed on the mere proof that his account was wrongly debited with the amount. In this regard, I am talking of the following amounts: £10,099: 4s: said to be the devaluation, and £14,844: 3: 10d and £51,793: 2: 1d said to be price differentials on Overseas Bills for Collection 1-38/68 and on OBC 1-3/68-16/69 respectively. And in the case of proceeds of OBCs 22/69, 37/69, 38/69, 62/69, 22/67 and 23/67-I do not see how the plaintiff could possibly make the defendant bank liable to him for the proceeds of these bills without first proving at least that he gave them to the defendant bank for discounting or collection as the case might be, as the plaintiff did in the case of bills represented by exhibits 7 to 27A in these proceedings."

Purporting to follow the decision of this Court in the African Continental Bank v. Chief Festus Sumoila Yesufu (1978) 2 SC 93 at 102-4, the Court of Appeal set aside the award of N261,815.30 concerning the bills Exhibits 7-27A on the ground that the Appellant did not prove at the trial that any of the bills in question was backed by an irrevocable letter of credit. I think it is germane to the issue to set out a portion of the judgment of Agbaje J.C.A., concurred by the two other Justices:

"So following this case again since exhibits 7 to 27A are not bills of exchange properly so-called there was no duty on the defendant bank to give notice of their dishonour to the plaintiff. The duty of the defendant Bank in respect of the said documents is spelt out at page 112 of African Continental Bank Ltd v. Chief F.S. Yesufu supra);

'In the absence of any argument to the contrary, a collecting banker has a duty to collect the face value of a bill and if he collects any amount less than the value of the bill he may be liable to his customer for a breach of contract. This common law rule is founded on the liability of an agent exceeding his authority.'

Since as I said above exhibits 7 to 27A were not backed by irrevocable letters of credit for the plaintiff to succeed in his claim against the defendant bank based as it were on the delivery of the documents to the defendant for the collection of their proceeds, he had to prove that the defendant collected their face values and failed to pay them over to him or that the defendant collected less than the face value without his express instruction to do so and thereby caused him loss for which the defendant must be liable. There was no evidence from the plaintiff that the defendant collected anything on any of the documents referred to as exhibit 7 to 27A. In the circumstances I do not see how the plaintiff could ask the defendant to pay over to him the proceeds of the shipping documents. So the learned trial Judge in my view was in error in giving judgment for the plaintiff against the defendant for the proceeds of exhibits 7 to 27A. If the defendant did not collect the proceeds of any of the documents the defendant was not obliged as a matter of law to give the plaintiff notice of non-payment of the bill because as I have said earlier in this judgment the documents, exhibits 7 to 27A, are, none of the Bills of Exchange properly so called."

In his first ground of appeal, the Appellant attacked the decision of the Court of Appeal that the learned Justices of that court erred in law in holding that the statement of account, Exhibit 3, was not alone sufficient to charge the Respondents with liability when the statement, which was made and acknowledged by the Respondents, constituted an admission on the contents thereof by the Respondents. This ground was argued together with the second ground of appeal, which reads:-

"The Federal Court of Appeal misdirected itself in law and on the facts and failed to understand the plaintiff's case with regards to the wrong debit entries made in the Bank Statement Exhibit 3 when it said:

(the portion of the judgment of Agbaje J.C.A. which I have earlier on set out, stating the reason for quashing the award relating to Exhibit 3, was quoted in full and)

When:

(1)     The plaintiff's contention in respect of the said entries were that the debit entries complained of should not have been made at all as there was no basis for claiming and enforcing against the plaintiff a sum on account of devaluation and price differential.

(ii)     That by making the said debit entries the defendant had wrongly enhanced the plaintiff's liabilities to the defendant on its account and that the only way to rectify this is to either credit the plaintiff's account with the amounts wrongly debited or to leave the plaintiff's Account as it now is and pay to the plaintiff the amount by which his account had been wrongly debited.

(iii)    The oral and the documentary evidence in the proceedings show that OBCS 22/69, 37/69, 62/69, 16/67, 22/67, and 23/67 were in fact reflected in the Bank Statements Exhibit 3.

(iv)    The evidence and case of the plaintiff was that the Defendants had acknowledged the receipt of the aforesaid "OBCS" by giving him credit for them in Exhibit 3 but had later reversed the entries in respect of them and failed to make a subsequent credit entry in respect of the same."

Learned Counsel for the Appellant, Mr Ajayi, S.A.N., submitted that the Court of Appeal wrongly applied the provisions of section 37 of the Evidence Act having regard to the basis upon which the statement of account, Exhibit 3, was relied upon by Appellant. He conceded the proposition that where a document made by plaintiff seeking to rely upon it is produced in evidence, the court may consider the entry by itself insufficient by virtue of the section to charge the defendant with liability. But the provisions of the section, learned Counsel further contended, do not also ensure for the benefit of the maker of such statement when the entry therein is sought to be used against the maker as an admission: section 26 of the Act referred.

Reviewing the pleadings and the evidence upon which the trial Judge charged the Respondents with liability for the claim in Exhibit 3, learned Counsel pointed out that in his pleadings and evidence, the Appellant established that he had delivered his bills entered in Exhibit 3 to the Respondents who discounted them and credited his account with the discounted values of the bills but that some years later, without the knowledge and consent of the Appellant, the Respondents reversed some of those credits. He further pointed out that the Respondents did not in their pleadings deny having received the Appellants bills but admitted formerly discounting the bills and crediting his account with the discounted values of the bills and that subsequently, they altered that practice to merely giving the Appellant overdraft facilities and would only credit his account after they had collected payment from his overseas customers.

In respect of the bills that were reversed, learned Counsel contended, the onus was on the Respondents to show that the bills had been dishonoured by the Appellant's customers, which they failed to do, and they did not return the bills to the Appellant.

Referring to the sums debited as differentials, learned Counsel contended that the burden was on the Respondents to show that they were entitled to charge the Appellant with such sums and they also failed to do so.

Finally, learned Counsel contended that since the Appellant had proved the currency of their transactions not devalued, the burden was on the Respondent to show the basis for charging him with the alleged devaluation. The Respondents also failed to discharge the burden.

The complaint of the Appellant in grounds 3 and 4 is that the Federal Court of Appeal erred in law in holding that because the Appellant had failed to prove that Exhibit 7 to 27A had been backed by irrevocable letters of credit, in order to succeed in his claim based on those bills, the Appellant had to prove the Respondents had collected their face values and failed to pay them over to the Appellant or that the Respondents had collected less than their face values without his express authority. Learned Counsel for the Appellant submitted that bills of lading were title documents of the goods shipped and anyone in possession of them could convert them into money. He contended that since the Appellant had proved the delivery of the bills to the Respondents, the failure of the Respondents to credit his account with their values or to return the bills to him constituted a breach of their duty as bankers and the Respondents are consequently liable on the bills.

Although the grounds of appeal and the Appellant's brief run to 6 and 13 pages respectively, the Respondents brief is a mere 2-page affair. Learned Counsel for the Respondents did not improve their performance at the hearing of the appeal either. Their oral submissions were, in my opinion, an exposition of fishing expedition. The substance of their reply to the comprehensive and meticulous submissions of Mr Ajayi, S.A.N., in respect of the claim based on Exhibit 3, is that the Federal Court of Appeal rightly applied the provisions of Section 37 of the Evidence Act because the entries in Exhibit 3 were per se insufficient proof of the Respondents liability.

In respect of the claim founded on Exhibit 7 to 27A, learned Counsel for the Respondents submitted that the onus was on the Appellant to prove that the bills of lading upon which he based his claim were drawn against irrevocable letters of credit and that his failure to do so was fatal to his claim. Learned Counsel cited sections 134 and 135 of the Evidence Act; African Continental Bank v. Festus Sumoila Yusufu (1978) 2 S.C. 93 at page 106 and 3 Halsbury's Laws of England 4th Ed. page 104 purporting to buttress their contention. Finally learned Counsel submitted that mere presentation of the bills of lading, Exhibit 7 to 27A, to the Respondents did not fix the Respondents with liability to the Appellant for their face values or with any other legal duty to the Appellant. They relied on 3 Halsbury's Laws of England page 105 paragraph 138 and the Bills of Exchange Act but did not refer to any particular section of the Act.

I agree with the submissions of Mr Ajayi, S.A.N., but by setting aside the award based on Exhibit 3 on the grounds of the two reasons stated by the Federal Court of Appeal, that Court did not fully appreciate the quantum and purport of the evidence upon which the learned trial Judge charged the Respondents with liability in respect of the portion of the Appellant's claim relating to the entries in the statement of account, Exhibit 3. For the proper appreciation of the evidence, I consider it necessary to state elementary principles of banking law and practice.

Since the celebrated case of Foley v. Hill (1848) 2 H.L. Cas. 28 the relation in law between a banker and his customer has been that of debtor and creditor: see also Hirschorn v. Evans (Barclays Bank Ltd., garnishees) (1938) 3 All E.R. 491 at p. 498. When a bank credits the current account of its customer with a certain sum, the bank becomes a debtor to the customer in that sum: Joachimson v. Swiss Bank Corporation (1921) 3 K.B. 110; and conversely when a bank debits the current account of its customer with a certain sum, the customer becomes a debtor to the bank in that sum: see Paget Law of Banking, 8th Ed., p.84. Whichever party is the creditor is entitled to sue, if demand for payment was not complied with, the other party for money lent: see Joachimson v. Swiss Bank Corp. (supra).

It follows from the foregoing that when a bank reverses a credit entry of a certain sum in the current account of its customer by debiting the account with the same sum, such reversal in practical terms means that the bank has liquidated its liability as debtor to the customer.

It is also relevant to state the law relating to discounting of bills because from the incontrovertible evidence before him, the learned trial Judge found, quite rightly in my view, that the Appellant delivered all the bills of lading in question to Respondents, who accepted the same, for discounting.

In strict commercial law, "discounting" is purchasing, not lending. The discounter of a bill becomes the owner. If it turns out to be of less value than the price paid for it, the loss falls upon the discounter; and if a profit is made upon the transaction, it belongs wholly to the discounter: Carstairs v. Bates (1812) 3 Camp. 301 N.P. and London Financial Association v. Kelk (1884) 26 Ch. D. 107 at 134. However, in the case of a banker discounting the bill of his customer, the law is stated to be in these terms:-

"When a banker discounts a bill he buys it for its face value less a sum representing interest for the period which the bill has to run. The banker takes the bill as transferee for value, and has the holder's normal right to sue on the bill if it is dishonoured. In the case of a customer the amount of the bill, less discount, is normally carried to current account, and if the bill is unpaid the current account is normally debited and the bill is returned to the customer. If the banker wishes to retain his right to recourse to other parties because his customer's account cannot meet the debit, the banker retains the bill and debits a suspense account. Whether the bill is taken from a customer for collection or as security, or is discounted for him, is a question of fact. The presumption in favour of a bill being taken by way of absolute transfer rather than of pledge or security is not so appropriate in the case of banker and customer as in other cases." (Underline mine): 3 Halsbury's Laws of England, 4th Ed. p. 112 paragraph 151.

From the foregoing it is clear that where a banker discounts the bill of his customer and credits the customer's current account with the discounted value of the bill, the banker is only entitled to debit the current account subsequently with the value of the bill if the bill is unpaid and the banker has returned it to the customer. Where the banker retains the bill, he has no right to debit the current account of the customer with the value of the bill.

I now proceed to consider the quantum and purport of the evidence upon which the trial Judge charged the Respondents with liability. In respect of the bills, which were reversed in Exhibit 3, the Appellant proved that he had delivered those bills to the Respondents for discounting; that the Respondents had entered those bills in Exhibit 3 and had given him credits for the amounts of the bills less discount. Such entries in law amount to admissions by the Respondents that they were debtors to the Appellants in respect of those bills: Joachimson v. Swiss Bank Corporation (supra). The Appellant also proved that later, without giving him any value or consideration and without returning the bills to him, the Respondents reversed those credit entries by debiting his current account, Exhibit 3, with the values of those bills. Such debit entries were tantamount to liquidating their liability as debtors to the Appellant: Paget's Law of Banking (supra). It is apparent that the Respondents were not entitled to debit the account with the values of those bills without having returned the bills to him. They were only entitled to debit the account with the values of those bills if they show that the bills had not been paid by the Appellant's overseas customers and the Respondents had returned the bills to the Appellant: 3 Halsbury pp. 112 paragraph 151. The Respondents failed to prove either.

The Appellant also proved that the Respondents debited his account with "differentials". He said he did not know what "differentials" meant but that if it meant that his bills were underpaid by his customers, he had not authorised the Respondents to collect underpayment. It is obvious that "differentials" is a matter specially within the knowledge of the Respondents and therefore the burden of proving what "differentials" meant and that they were entitled to charge the Appellant with liability for the differentials squarely rested on the Respondents and they failed to discharge the burden: see Section 141 of the Evidence Act.

Finally on the issues relating to the entries in Exhibit 3, the Appellant proved that the respondents charged him with liability for devaluation of sterling when the currency of his transactions with the Respondents and his overseas customers had not been devalued. In my opinion, having charged the Appellant with devaluation of sterling, the onus of proving how devaluation of sterling, if any affected the currency of the transactions between the Appellant and the Respondents and that they were entitled to charge him with such devaluation also lay on the Respondents as those facts were specially within their knowledge. The Respondents did not discharge the burden of proof imposed on them by Section 141 of the Evidence Act.

I think it is apparent from the foregoing that the Court of Appeal erred in quashing the finding of liability on the portion of the Appellant's claim based on Exhibit 3 on the grounds of section 37 of the Evidence Act and the burden or proof required of the Appellant. It seems that the Court of Appeal did not fully appreciate the totality of the evidence and did not assess it correctly. Proper assessment of the totality of the evidence would reveal, as I have shown in this judgment, that Respondents' liability for part of the Appellant's claim based on wrong entries in Exhibit 3 was not found on merely such entries alone as the Court of Appeal thought. Liability was founded on the oral testimony of the Appellant which proved the entries complained of to be wrong and unjustified and the failure of the Respondents to discharge the burden of proof that lay on them.

It remains to deal with the other part of the Appellant's claim relating to Exhibit 7 to 27A which, as I have earlier pointed out, the Court of Appeal purporting to follow the decision of this Court in the African Continental Bank v. Chief F.S. Yusufu (supra) set aside on the ground that the Appellant failed to prove the bills to have been drawn against irrevocable letters of credit. The facts of that case were that Chief Yusufu, who was a customer of the bank, delivered letters of credit and shipping documents for collection to the bank which lent him money against the documents. The bank presented the bills to the New York bankers of the Appellant's customers and some of the bills were paid and some were not paid. Later the bank claimed the values of the unpaid bills against Chief Yusufu as owing to them by way of overdraft. On the question whether the bank's claim was defeated by reason of the bank's failure to inform Chief Yusufu of the dishonour of the bills, this Court held that the fact that the bills were not paid raised the presumption that they were revocable, that the onus which lay on Chief Yusufu to show otherwise had not been discharged and accordingly the bank was under no duty to give notice of non-payment to Chief Yusufu. To put it briefly, that case dealt with the question as to whether a collecting banker has a duty to give notice of dishonour of a bill of his customer drawn against a revocable credit. This Court said he has no such duty.

The facts of the case in so far as they related to Exhibit 7 to 27A are palpably different from the former case. The facts of the case in hand are concerned with the liability of a discounting banker, NOT a collecting banker, who fails to give an account to his customer whose bills he accepted for discounting. To reiterate the evidence: the Appellant proved at the trial that he shipped his rubber to the values of the bills, Exhibit 7 to 27A, to his overseas customers and discounted the bills to the Respondents; that the Respondents failed to credit his account with the discounted values of the bills as they ought to have; that the Respondents did not give any value to him and did not return the bills to him. Except for their denial in their statement of defence of having received the bills, the Respondents did not adduce any evidence concerning the bills. For the reasons I have stated in my consideration of the reversed entries in Exhibit 3, the learned trial Judge was perfectly right in finding the Respondents liable for the values of the bills.

For the avoidance of doubt, I may emphasize that a banker has a duty to give an account to this customer of the customer's bill he discounted irrespective of whether the bill was drawn against a revocable or irrevocable credit, confirmed or unconfirmed credit or no credit at all. The Respondents failed to discharge that duty in respect of the bills in question.

I may as well point out that sound common sense and business prudence demand such accountability. This is so because if the transaction is really one of discounting, the banker must pay the purchase price of the bill to the seller for in that case the banker becomes the owner: London Financial Association v. Kelk (supra). However if the transaction is a pledge, the banker has only control over the bill, which is merely "the symbol of the goods" while the general property in the goods remains with the seller who is the true owner: per Lord Wright in Ross T. Smythe & Co. Ltd. v. T. D. Bailey, Sons & Co. (1940) 3 All E.R. 60 at p. 68. It is for these reasons that the law imposes a duty on a banker to whom his customer has entrusted his bill for negotiation and collection to account as to the fate of the bill.

I would accordingly allow the appeal and set aside the decision of the Court of Appeal including the order as to costs. In its stead the judgment of the trial court is hereby restored, to wit, the judgment shall be entered for the Appellant in the sum of N576,383.53 (Five hundred and seventy six thousand three hundred and eighty three Naira fifty three kobo) with N1,500 costs.

The Respondents shall pay the Appellant's costs in the Court of Appeal assessed at N200 and the costs in this Court assessed at N300.

Sowemimo, J.S.C.: I agree with the judgement of my brother Bello, J.S.C., and the Order made by him, allowing the appeal against the judgment of the Federal Court of Appeal, Benin City and restoring the judgment of the Bendel State High Court. I also agree with his Order as to costs.

Idigbe, J.S.C.: My Lords, I have had the advantage of reading in draft the judgment just delivered by my brother, Bello, J.S.C. I agree with it and for the reasons expressed in that judgment, I too would allow this appeal.

Kayode Eso, J.S.C.: I agree with the judgment just read by my Lord Bello, J.S.C. I have had a preview of the judgment and I have nothing to add.

Nnamani, J.S.C.: My Lords, I am in entire agreement with the judgment just delivered by my learned brother my Lord Bello, J.S.C., a draft of which I had the advantage of reading. I am also of the view that the appellant is entitled to succeed on all the main issues argued before us in this appeal. I would therefore allow the appeal and set aside the judgment of the Federal Court of Appeal, Benin Judicial Division dated 28th February, 1980. I am in agreement with the orders proposed in the judgments of my Lords, Bello, and Sowemimo, J.S.C.