In The Supreme Court of Nigeria

On Thursday, the 9th day of March, 1978

Appeal NO: SC.244/1976

CITATION: (1978) 3 LLIR 1

Alternative Citation:

(1978) All N.L.R 63

Before Their Lordships












The facts which appear, from the record, to be not in dispute are as follows: the Appellant operates two banking accounts with the Respondents; one in her private and personal capacity at the Marina Lagos Branch of the Respondents company and the other her practice and clients account, at the 40 Balogun Street, Lagos Branch of the said company. On the 6th January, 1972 Appellant drew a cheque on the 40 Balogun Street Branch of the Respondents for N40 in favour of one of her clients a Mrs. Sidney of Ikeja in the Lagos State. A few days later, Mrs. Sidney returned to the appellant and produced to her the said cheque which had been marked “Refer to Drawer” by the Respondents who had refused to make payment of the sum of N40 forty Naira (i.e. the equivalent of 20pounds twenty Nigerian pounds) to the payee, Mrs. Sidney. At the time the cheque was presented to the Respondents for payment, the Appellant had enough money in fact, more than enough with the Respondents in her clients account to meet the cheque for N40 (forty Naira).

The facts given in evidence by the Appellant, and her witness and which have not, in any way, been challenged are:

(1) On the 31st day of December, 1971 the Appellant whose business account was in credit lodged with the bank for payment into the same account the sum of 93pounds,2s.6d (i.e N186.25k; one hundred and eighty six Naira and twenty five kobo, the equivalent of Ninetythree pounds two shillings and six pence).

(2) The Appellant has not a personal, private or other account with the Respondents i.e. at the 40 Balogun Street Branch of the company (hereafter referred to as “the Respondents’ Branch” or “the branch”).

(3) When, a few days after issue of the cheque Exhibit A which was dishonoured (hereafter also referred to as “the dishonoured cheque”) the Appellant immediately telephoned and spoke to the Manager of the branch, a Mr. Adeleke, and complained to him about the unmerited treatment she had received from the branch, Mr. Adeleke was not only impatient with the Appellant but treated the complaint with levity. It is just as well to mention here that on returning the dishonoured cheque to the Appellant, Mrs. Sidney had to say to the Appellant that she was surprised that “a cheque of only 20pounds from a lady of her type could bounce”; whereupon, annoyed and embarrassed the Appellant immediately paid the sum of 20pounds to Mrs. Sidney from her resources in the office.

(4) The Appellant thereafter went to the bank and on arrival there was, at her request, shown in the accounts department of the bank, her ledger card from which she was satisfied that she had more than enough money to meet the dishonoured cheque. Thereafter she went back to her office and later sent a written complaint, Exhibit B, to the Respondents which drew a reply Exhibit C; further to Exhibit C, the Appellant sent another letter, Exhibit D, to the Respondents.

(5) The Appellant was not allowed to operate her clients’ account until after “the matter was sorted out” as per Exhibit ‘F’, a letter dated 15th March, 1972 from the Respondents.

(6) When Mrs. Sidney gave evidence she also confirmed to the court that

(a) she read the endorsement “Refer to Drawer” on the cheque and (b) she not only was surprised that a cheque for a mere 20pounds from a lady of the Appellant’s type could bounce but told her so.

(7) At all times material to the issue of the dishonoured cheque the Appellant who practised under the name of “Balogun & Alatishe” kept her clients’ account at the Respondents Branch (i.e 40 Balogun Street, Lagos) under the name of” Balogun & Alatishe” & Co.:Solicitors.

On 10th January, 1972 the Appellant, as plaintiff, commenced these proceedings claiming from the Respondents as defendant the sum of “N50,000 damages suffered by the plaintiff as a result of the defendants’ breach of contract. “It is pertinent, we think, to note that in paragraph (12) of her statement of claim, the Appellant pleaded: “As a result of the defendants’ wrongful refusal to pay the sum of 20pounds the plaintiff suffered damages in the way of her profession.” In a reserved judgement by which the learned trial Judge in the court below awarded the sum of N10 (5pounds) as nominal damages he made the following observations in some of the passages of the said judgment:

“I think it is fair to say that by his address Mr. Falodu, learned counsel for the defendants, conceded that the plaintiff was entitled to succeed. He contended, however, that the plaintiff was entitled only to nominal damages especially as she pleaded no special damages. It was submitted that only a trader could obtain substantial damages in like circumstances. In support of Mr. Falodun’s submission. . .

reference was made to Gibbons Vs. WestBank Ltd. (1939) 2 K.B. 882 where Lawrence J. at (P.888) concluded: In my opinion this matter should be treated as covered by these authorities, and I hold accordingly that the corollary of the proposition laid down by them, in the law-namely, that a person who is not a trader is not entitled to recover the substantial damages for wrongful dishonour of his cheque, unless the damage which he suffered is alleged and proved as special damage.

That statement of the law is better understood when it is remembered that in an action for breach of contract, as this is, damages are not at large and a plaintiff must always plead and prove his actual loss otherwise he is entitled to nominal damages only. Two exceptions to this general rule are known. One is an action for breach of promise to marry and the other where a trader who is in funds at his bank has cheque dishonoured wrongfully. Lord Atkinson in Addis Vs. Gramophone Co. Ltd. (1909) A.C. 488 at 495 has said that these exceptions ought not to be extended. Taylor C.J. in OYEWOLE v STANDARD BANK OF WEST AFRICA LIMITED (1968) 2 All N. L. R. 32 at 35 felt unable to extend the exception to include persons other than a trader and I must refuse to so extend in this case. Mr. Osipitan, learned counsel for the Plaintiff, invited me to equate a solicitor issuing a cheque in the course of his practice to a trader but I regret that I must decline that invitation….”

The Supreme Court noted that; This appeal is from the said judgement of which the passages set out above in quotation form part. A number of grounds of appeal were filed but before us the Appellant had leave of this court to argue that it is erroneous in law to ascribe such a very narrow interpretation to the meaning of the word ‘trader’ as used in the case of Rolin Vs. Steward (1854) 14 C.B.595: 139 E.R.245. On the other hand the sum of the argument of learned counsel for the Respondent is that the interpretation given by the learned trial Judge in the court below in the case in hand is justified. A solicitor, learned counsel for the Respondent argued, is not a “trader” and, in accordance with the decision of Lawrence J. in Gibbons Vs. Westminster Bank Ltd. (Supra), he is not entitled to an award of substantial damages in an action, based on breach of contract against his Bankers for wrongful dishonour of a cheque issued by him on his clients’ account unless he alleges and proves actual damage.

The Supreme Court held;

On the view which we take in Rolins Vs. Steward (Supra) as indicated in this judgment and, applying the diction of Williams J. in Rollins Vs. Steward, we are satisfied that there is no need for the appellant to plead and prove actual damage in order to be entitled to substantial damage. We would, however, like to observe that although the Respondents in the end apologized for their negligence in dishonouring the Appellant’s cheque by their letter dated 15th March, 1972, Exhibit F some three months after the event, their attitude to the complaints of the Appellant had been extremely cavalier. This observation is only made as a passing remark and has no bearing on the damages that ought to be awarded to the Plaintiff Appellant.

The appeal succeeds on the question of damages. Accordingly the judgment of the High Court of Lagos State in Suit LD/23/73 dated 26th May, 1975, in so far only as it makes an award of N10 to the Appellant is hereby set aside and in substitution therefore it s ordered that judgment be entered in favour of the Plaintiff (Appellant herein) against the Defendants (Respondents herein) in the sum of N1, 000. The Appellant shall have costs in the High Court already fixed at N200 and, in this court assessed and fixed at N175.