CASE DIGEST - CONTRACT: A CONTRACT PROHIBITED BY A STATUTE IS UNENFORCEABLE

MAZI ANTHONY SUNDAY O. NWANGWU v. FIRST BANK OF NIGERIA PLC.

SUPREME COURT

(MUHAMMAD; NWEZE; OGUNWUNMIJU; ABOKI; ABUBAKAR, JJ.SC)

Mazi Anthony Sunday O. Nwangwu (Appellant) was the sole agent of Horri & Co Ltd, Tokyo. On the 9th of August 1982, he instructed First Bank of Nigeria Plc. (Respondent), his bankers then in their Enugu main branch to open an irrevocable confirmed documentary credit (L.C) for the importation of Horri duplicating machine accessories from Horri & Co. Ltd, Tokyo, Japan. He paid 6,063.00 by cheque to cover the Respondent’s charges and commission and 125% of the value of the goods shown in the proforma invoice as Y1,839,000.00 or 7,45.00, whereby the Respondent undertook to pay the Japanese supplier through the chartered Bank of Tokyo upon presentation of the shipping documents for the goods to chartered Bank. The Appellant also duly completed the exchange control Form “M” which is an application, to the Central Bank of Nigeria (CBN) to purchase foreign currency, of which the Respondent signed and stamped. The seller of the machines also fully complied with the terms of the L.C., and informed the Respondent accordingly and demanded payment. The Respondent failed to pay contrary to its undertaking in the L.C. despite repeated demand letters by the Appellant. The Appellant was constrained to write to the Central Bank of Nigeria, but no response was received. He then consulted a lawyer who wrote letters to the Central Bank of Nigeria and received replies that the defendant informed him that the L.C. had been settled contrary to the Appellant’s letter. e Appellant alleged that following non-payment by the Respondent, the supplier decided to cut off further supplies to him, after shipment of the goods which was not paid for. He further alleged that if his business had not been interrupted by the Respondent’s failure to pay the seller on the L.C., he would have made a
profit o 6.7 million between 1983 and 2001.