BARCLAYS BANK D.C.O. v MEMUNATU HASSAN (Abeokuta Suit No. AB/4/61) [1961] NGHC 42 (9 November 1961)

**BARCLAYS** **BANK** **D.C.O.** **(PLAINTIFF)** **_v_.** **MEMUNATU** **H****ASSAN** **(****DEFENDANT)** **(1961)** **All** **N.L.R.** **865** **Div****i****si****o****n****:** High Court (West) **D****at****e** **o****f** **Judgment:** 9th November, 1961 **C****as****e** **Num****b****er:** Abeokuta Suit No. AB/4/61 **Before:** Charles, J. Action by Bankers to recover overdraft and Interest; and for the execution of a Legal Mortgage by way of Specific Performance of an Equitable Mortgage. In this action the plaintiff Bank claimed from the defendant, the repayment of a loan with interest thereon at the rate of 10 per cent _per_ _annum_ and the execution of a legal mortgage of certain lands in favour of the plaintiff by way of Specific Performance of an equitable mortgage made by the defendant to the plaintiff to secure repayment of the loan. An officer of the plaintiff Bank deposed that the defendant opened an account with the bank in 1954 and that in March 1956, she executed a Memorandum of Deposit of Title Deeds to secure an overdraft with the bank. The Memorandum was prepared by the plaintiff's agent on behalf of the defendant. When the plaintiff tendered the Memorandum in evidence, an objection was raised against its admissibility on the ground that it was executed by an illiterate without compliance with the Illiterates Protection Ordinance, Cap. 88 (1948 Ed.) The document, which provided that interest would be charged on the overdraft "at the usual rate", was admitted subject to the objection. The officer further testified that although the defendant could and did sign her name, he did not know whether she was otherwise literate. Counsel for the plaintiff at first conceded, that if the Memorandum were invalid under the Illiterates Protection Ordinance, the court was bound to reject it whether or not the invalidity had been pleaded. He made that concession with reference to the admissibility of the document as evidence of the defendant's liability to pay compound interest at the rate of 10 per cent _per_ _annum_ ; a liability which arose independently of the document. When, however, the defence raised the objection that the Memorandum, which had been specifically pleaded by the plaintiff as the basis of its cause of action for Specific Performance, did not create an Equitable Mortgage, since it did not comply with the provisions of the Illiterates Protection Ordinance, the plaintiff submitted that that objection could not be raised at the hearing, since it had not been pleaded by the defendant in her Defence. The plaintiff tendered copies of the statements of defendant's account with the plaintiff, which were furnished to the defendant from time to time. Each showed the state of the defendant's account for the relevant month, with interest for each month in which the account was overdrawn as having been debited. **_HELD_**** _:_** (1) Compound interest, calculated at monthly rests, at 10 per cent _per_ _annum_ on an overdraft is not an unreasonable rate of interest for Bankers to charge in West Africa. (2) A party will be deemed to have accepted the rate at which interest on a bank overdraft was calculated, if he received from the bank periodic statements of account in which the interest charged was shown as a debit, and he did not dispute the account as shown by the statements. (3) Although objection to the validity of a document, which is merely evidentiary of a fact in issue, need not, and should not, generally, be pleaded; such objection must be pleaded if the document has been pleaded by the plaintiff as the basis of his Cause of Action. (4) Where a Memorandum of Deposit of Title Deeds is prepared by a mortgagee's agent on behalf of an illiterate mortgagor, failure to comply with the provisions of the Illiterates Protection Ordinance renders such document unenforceable against the illiterate, but not void. (5) Unenforceability of a document, unlike illegality, must always be pleaded; and where a party fails to plead the facts which render a document unenforceable against him, it is not open to the court to consider them. _J_ _ud_ _g_ _men_ _t_ _f_ _o_ _r_ _t_ _h_ _e_ _Pl_ _a_ _int_ _i_ _ff_ _:_ _sp_ _e_ _cif_ _i_ _c_ _Per_ _f_ _orm_ _a_ _nc_ _e_ _De_ _c_ _ree_ _d_ _a_ _s_ _p_ _ray_ _e_ _d_ _._ _C_ _a_ _s_ _e_ _s_ _re_ _f_ _e_ _r_ _r_ _e_ _d_ _t_ _o_ _:__-_ _P_ _a_ _p_ _po_ _e_ _v_ _._ _B_ _a_ _n_ _k_ _o_ _f_ _B_ _r_ _it_ _i_ _s_ _h_ _W_ _e_ _s_ _t_ _Af_ _r_ _i_ _c_ _a_ _,_ (1933) 1 W.A.C.A. 287. _Ntiashagwo_ _v_ _._ _Amo_ _du_ _and_ _an_ _other,_ (1959) W.R.N.L.R. 273. _A_ _ko_ _h_ _we_ _r_ _e_ _o_ _f_ _Oka_ _n_ _v_ _._ _Ema_ _y_ _ab_ _o_ _r_ _a_ _n_ _d_ _an_ _o_ _r.__,_ (1959) W.R.N.L.R. 83. _S_ _.C_ _.__O.__A_ _._ _v_ _._ _O_ _k_ _on_ _,_ (1959) 4 FSC 220. _Pau_ _l_ _v_ _._ _Mr_ _s_ _Geor_ _g_ _e_ _,_ (1959) 4 FSC 198. _O_ _rdinanc_ _e_ _an_ _d_ _La_ _w_ _referre_ _d_ _to:__-_ _Illi_ _t_ _era_ _t_ _e_ _s_ _Pr_ _o_ _tec_ _t_ _io_ _n_ _O_ _r_ _din_ _a_ _nce_ _,_ Cap. 88 (1948 Edition). [_W.__R_ _._ _i_ _l_ _lit_ _e_ _rat_ _e_ _s_ _P_ _r_ _ote_ _c_ _tio_ _n_ _Law_ _,_ W.R. Cap. 47; (1959 Edition)]. ACTION by Bankers to recover Overdraft and Interest and for Specific Performance. _O_ _._ _A_ _._ _Oke_ _n_ _l_ _a_ for the Plaintiff. _Ai_ _y_ _eo_ _l_ _a_ for the Defendant. Charles, J.:-This is a claim for (_a_) £2,268-19 _s_ -0 _d_ being the balance of money owing by the defendant by way of loan on overdraft up to the 4th December, 1960 (_b_) compound interest, calculated at monthly rests, at 10 per cent _per_ _annum_ , from the 5th December, 1960 until payment, and (_c_) execution of a legal mortgage in favour of the plaintiff in respect of certain land by way of specific performance of an equitable mortgage by the defendant to the plaintiff to secure repayment of the said overdraft. The defendant has admitted liability for so much of the sum of £2,268-19 _s_ -0 _d_ as represents principal but has denied liability for so much of that sum as represents compound interest, calculated at monthly rests at 10 per cent _per_ _annum_ , and for subsequent interest at that rate until payment, and has denied having granted an equitable mortgage on her landed property. The novel submission on her behalf was that the plaintiff should be non-suited so as to allow of negotiations for a settlement on the basis of a reduced rate of interest. It was common ground between the parties that the rate of compound interest charged on the overdraft was 10 per cent calculated at monthly rests. The evidence adduced, because of the defendant's admissions, was brief. An officer of the plaintiff bank deposed that the defendant opened an account with the bank in 1954 and that in March 1956 she executed a memorandum of deposit of deeds to secure an overdraft with the bank. The reception of that document was objected to on the ground that it had been executed by an illiterate and without compliance with the requirements of the Illiterates Protection Ordinance (Cap. 88 of the Laws of Nigeria 1948, which has since been replaced by Illiterates Protection Law, Cap. 47 of the Laws of the Western Region 1959). The document, which was admitted subject to the objection, provided that interest would be charged on the overdraft at the usual rate. The plaintiff's officer also tendered copies of statements of accounts which were furnished to the defendant from time to time. No objection was taken to those copies and they were admitted. They show the state of the defendant's account from time to time with interest for each month in which the account was overdrawn having been debited. The rate of interest does not appear in the statement but as the amount of overdraft increased the amount debited for interest rose appreciably. The officer also deposed that he knew that the defendant could sign her name but he did not know whether she was otherwise illiterate. The defendant's evidence was only that she cannot read and write, except to sign her name, and that she did not mortgage her property to the plaintiff or to any one else. In my Judgment the plaintiff was entitled to charge interest at 10 per cent, calculated by monthly rests, on the overdraft. That rate of interest is not unreasonable in West Africa (_Pappoe_ _v._ _B.B.W.A_. 1933, 1 W.A.C.A. 287). As the defendant has received accounts from time to time showing the appreciable amounts being charged for interest and, even if she were illiterate, had the means of being informed of the amounts debited against her in that respect, and as there is no evidence that she bothered to query those amounts in any way, she must be deemed to have accepted those charges and the rate at which they were calculated. The plaintiff, therefore, in my Judgment succeeds on the first item of claim. As to the second item of claim the plaintiff has conceded, whether rightly or wrongly that it cannot recover interest at a higher rate than simple interest of 5 per cent _per_ _annum_. As the plaintiff is entitled to interest from the date of the closing of the account until payment on the sum adjudged due at the date of the issue of the writ, but from the date of Judgment to payment at no higher rate than simple interest of 5 per cent _per_ _annum_ , I consider it proper to award, under the second item, interest at that rate on the amount awarded on the first item. As to third item of claim, apart from the memorandum of deposit of deeds, there is no evidence that the defendant did deposit deeds relating to her landed property. The existence of the equitable mortgage, therefore, depends on the validity or enforceability of the memorandum. Counsel for the defendant, in support of his objection to the admissibility of the memorandum, relied upon my Judgment in _Ntiashagwo_ _v_ _._ _Amodu_ _a_ _nd_ _an_ _other_ 1959 W.R.N.L.R. 273 where (at 276-277) I expressed the opinion that any document which had been prepared for an illiterate was void and inadmissible in evidence if the preparer had not signed it as required by the Illiterates Protection Ordinance. Learned Counsel for the plaintiff at first conceded that if the memorandum of deposit of deeds was invalid under the Illiterates Protection Ordinance the court was bound to reject it whether or not the invalidity had been pleaded. He made that concession with reference to the admissibility of the document as evidence of the defendant's liability to pay compound interest at the rate of 10 per cent per annum-a liability which arose independently of the document. On the question whether the memorandum could be considered as creating an equitable mortgage, learned Counsel submitted that the objection could not be considered as it had not been raised as a defence in the pleadings and he had been taken by surprise. The concession and subsequent submission savour of a blowing hot and cold, on the face of it, but no doubt learned Counsel had in mind what I think is the true principle, namely, that while objection to the validity of a document which is evidentiary only of a fact in issue need not, and should not, be pleaded, it must be pleaded if the document is one which has been pleaded by the party relying upon it as a basis of his cause of action, as is the case of the memorandum of deposit of deeds in respect of the claim for specific performance of an equitable mortgage. The latter obligation to plead invalidity is subject to the exception that when a document appears on its face or from the evidence adduced, clearly to be void for illegality the court will refuse to give effect to it although illegality has not been pleaded. I am satisfied from further consideration of my remarks in _Ntiashagwo's_ case, that non-compliance with the requirements of the Illiterates Protection Ordinance by the preparer of a document renders the document void, were too widely stated and inaccurate on that account. What is the exact general effect of such non-compliance on the enforceability of a document and its admissibility as evidence need not be considered here. It is sufficient to say that the document is not rendered void in the strict sense, as obviously the illiterate can rely upon it (_Akohwere_ _of_ _Okan_ _v_ _Emayabor_ _and_ _another_ 1959 W.R.N.L.R. 83) but it is unenforceable by the preparer against the illiterate in respect of legal rights created by it in favour of the former (_S.C.O.A._ _Zaria_ _v_ _Okon_ 1959, 4 FSC 220). The memorandum of deposit seems clearly to have been prepared by the plaintiff's agent on behalf of the defendant. Consequently, if the defendant were an illiterate the document would be unenforceable against her but not void. But, as the defendant has not pleaded the necessary facts which render the document unenforceable against her, it is not open to the court to consider them: unenforceability of a document, unlike illegality, must always be pleaded (_Paul_ _v_ _Mrs_ _George_ 1959, 4 FSC 198). I should perhaps add that even if the effect of non-compliance with the Illiterates Protection Ordinance were to render the memorandum of deposit void for illegality, which it was not, I do not think that this would have been a case for the court to hold the document void for illegality when illegality has not been pleaded. The plaintiff may have had evidence as to the defendant being literate which it was surprised into not calling so that all the relevant evidence as to illegality may not have been adduced. It follows that the plaintiff is entitled to Judgment on the third claim, that for specific performance. There will be Judgment for the plaintiff on all three items of claim with costs of the action. _J_ _udg_ _m_ _en_ _t_ _fo_ _r_ _pl_ _a_ _int_ _i_ _ff_ _._