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CaseLaw

Ezeonwu V. Onyechi (1996) CLR 2(p) (SC)

Judgement delivered on February 27th 1996

Brief

  • Concurrent finding of fact by lower courts
  • S.5 Companies Act
  • Memo and Articles of Association
  • Proof of allegation of crime

Facts

The appellant and the 1st respondent were among seven members of an organisation known as the Ufuma Practical Praying Band who agreed among themselves to plan and finance the formation of a company to manufacture biscuits. The financial burden of the formation of the company fell mostly on the appellant and 1st respondent.

Following the incorporation of the company, the members on a number of occasions met to raise fund to enable the company to go into business. The 1st respondent throughout acted as the Chairman, Managing Director and Secretary to the company for he summoned meetings, presided at such meetings and prepared and signed minutes of such meetings. By a circular letter dated 27th September 1980, the 1st respondent requested the other members to indicate in writing within the next two weeks whether they were continuing or withdrawing from the company. The appellant replied indicating his intention to continue his participation in the project, the other five members however discontinued.

The appellant made various contributions running into thousands of Naira and also secured land at Onitsha for the erection of the company's factory. The 2nd respondent needed loan for its take-off. The appellant mortgaged his house as security for the loan of N 1.000.000 granted by the 3rd respondent in favour of the 2n respondent company. The factory went into production in March, 1983.

From this stage on, the 1st respondent took complete control of the affairs of the 2nd respondent company. The appellant was no longer consulted or informed about the goings-on in the company. In September, 1985 the 3rd respondent at the behest of the 2nd respondent forwarded appellant's title deeds to the 2nd respondent. The documents were not released to the appellant but kept by the lst and 2nd respondents.

Displeased with the turn of events, the appellant, by originating summons issued in the Federal High Court, Enugu, instituted an action claiming from the 1st. 2nd and 3rd respondents as hereunder.

  • 1.
    A declaration that the Memorandum and Articles of Association with which the 2nd defendant City Biscuits Manufacturing Company Limited was registered and filed on the 28th day of September, 1978 with the Registrar of Companies at Lagos contains the only provisions regulating the operations of the 2nd defendant since incorporation till date.
  • 2.
    A declaration that the plaintiff together with the 1st defendant under and by virtue of the Memorandum and Articles of Association dated 14th September, 1978 and filed on the 29th September, 1978 with the Registrar of Companies at Lagos are joint members and owners of the 2nd defendant Company that is City Biscuits Manufacturing Company Limited.
  • 3.
    An order directing the 1st (and 3rd) defendant(s) (severally) to render an account of the management, operations as well as financial involvements of one and other with the 2nd defendant company since its incorporation in 1978.
  • 4.
    An order of this Honourable Court directing a meeting of the 2nd defendant/company to be held within 30 days of the Order for the sole purpose of appointing Secretary and Auditor outside the present subscribers/directors of the 2nd defendant/company.
  • 5.
    5. An order of this Honourable Court directing the 3rd defendant to release the following documents in respect of Plot No. 58 VIP Rest House GRA Onitsha Mortgaged on behalf of the 2nd defendant company by the plaintiff that is to say:
  • i.
    A Building lease registered as No. 93, at page 93 in Volume 675 at the Enugu Land Registry.
  • ii
    A power of attorney registered as No. 82 at page 82 in Volume 733 at the Enugu Land Registry; and
  • iii.
    Agreement for sale made on 19th February 1975 between Celestine Obi Olisa of 27 Venn Road, South Onitsha and Felix Ezeonwu of 23 Iboku Street, Odoakpu, Onitsha.

And for such further or further orders as the Honourable Court may deem fit to make in the circumstances.

The summons was supported by an affidavit sworn to by the appellant and a number of documents were annexed as exhibits which includes. Memorandum and Articles of Association (Exhibit FOE 15), a letter written by the 1st respondent to the appellant wherein he admitted that the appellant was a director, member and subscriber to Memorandum and Articles of Association of the 2nd respondent (Exhibit FOE 17) and FORM C07 (Particulars of Directors) Exhibit FOE 16. The 1st respondent sworn to and respondent also swore to and filed a counter-affidavit.

After the counsel for the parties addressed the Court, the trial court, in its judgment dismissed claims 1-4. He granted claim 5 against the 1st and 2nd respondents. Notwithstanding the dismissal of claims 1-4 however, the trial Judge awarded the appellant a total sum of N 129,065.37 which he ordered the 1st respondent to refund to the appellant being sum of various remittances made by the appellant to the 1st respondent with 5% simple interest.

Being dissatisfied with the judgment, the appellant appealed unsuccessfully to the Court of Appeal. The appellant further dissatisfied, appealed to the Supreme Court.

Issues

  • Whether the appellant was a subscriber to the Memorandum and...
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