The 1st and 2nd respondent’s in a respective capacity became engaged in a, legal tussle with the 2nd appellant in a respective capacity for ownership of the 1st appellant, First African Trust Bank Limited (hereinafter called”the Bank") each of the warring groups commenced on action against the other by originating summons in the Federal High Court. There were thus two such actions and these were consolidated. For this purpose the appeallants were treated as the plaintiffs while the respondents, the defendants. As a result of contentious issues of fact disclosed by the representative affidavits of the parties in support of the summons, the Federal High Court ordered pleading to be filled and the parties complied. After all the amendmcnt that followed, the appellants' claims as settled were seven in numbers including the following:-

The respondents in their statement of defense had counter claimed against the appellant and the reliefs they sought included the following:-s

The 1st respondent was the Managing Director of the Bank. The 2nd respondent is the leader of a section of the shareholders who oppose the removal of the 1st respondent as Managing Director. The 2nd appellant is the leader of the group of the shareholders who support the removal of 1st respondent as Managing Director. From the state of pleadings and the evidence led by the parties the following facts came to light.

The 2nd appellant had conceived the idea of forming the bank and invited 20 persons (including themselves) whom names would be used to make the necessary application to the Central Bank. The names of these 20 persons were secured, sent to the Central Bank and they were all cleared. These promoters who also described themselves as prospective shareholders" of the bank help a meeting on 14th April, 1988 where each of them agreed To take up 5% equity shares of the Bank but not less than N100.00 worth of shares. The minutes of the meeting was admitted in evidence as "Exhibit Z". The share capital of the Bank was to be N20 million as required by the Central Bank. In order to approve the formation of the Bank evidence payment for the shares of the Bank was demanded by the Central Bank. By this time the promoters had appointed Summit Finance Ltd their consultants to liaise with the Central Bank. It was agreed that the services of the consultants would include "raising from the capital market the shortfall between the contribution of the prospective shareholders and the amount to be paid to the Central Bank of Nigeria and additional sum for hiring and equipping the office". Evidence was led by the respondents to show that consultants prepared and provided receipts for each of the 20 original promoters as if each of them had paid N1 million so as to serve as evidence of payment in the Central Bank while at the same time giving all promoters time enough to raise their funds to buy shares in the Bank. Thus while following up the application in the Central Bank the consultants made up receipts (admitted in evidence as Exhibits G-G34 in the names of the 20 promoters whose names at the preliminary stage had been cleared by the authorities, as required by the procedure, to be worthy of holding shares D.W. I. (who is the 1st respondent) D.W. 4 and D.W. 8 testifying for the respondents led unchallenged and uncontroversial oral evidence to show that the receipts did not in actual fact represent the payment made by the promoters because none of them at the time had paid any more to consultants..

As at the time the services of the consultants were engaged the promoters had only contributed a total of N6.2 million. The consultant using their expertise then raised N17.5 million to add up to what was available and the pool, the N20 million required by the Central Bank was paid. Evidence showed that not all the 20 promoters had paid any money at the time of incorporation of the Bank. Of those who paid, some had upon request had their money refunded. Beside, two of the promoters had died before incorporation. The Bank was eventually incorporated on 21st of September, 1990. D.W.8 who is the Managing Director of Summit Finance Ltd (the consultants) in his testimony had explained that the money the consultants raised and paid to the Central Bank was not raised for any prospective shareholder to enable such a person pay a share contribution but that the shares money was raised to give "the promoters time to come up with their own funds to pay for the shares". He also said call up letters (a specimen was admitted in evidence as Exhibit T6) to all of promoters were issued thereafter. However the call up showed that the promoters were expected to pay interest on the sum borrowed on their behalf and as a result they were to pay for the share allotted to then at a premium. Explaining in his oral testimony how the money raised from the capital was to be repaid, D.W.8 interestingly said such was to come from the subscriptions "but in the event of shares not being full subscribed, we had the authority to recall the deposit from the Central Bank of Nigeria and to repay the Loan. It is to be noted that there were certain documentary evidence Exhibits "T25" "T29’’ and "T24" which reflected that the consultants borrowed the sum of N17.5 million for and on behalf of the 20 promoters. The case of the respondent at the trial was that only the 20 original promoters and whose names were reflected in the First Register of members prepared (admitted in evidence as "Exhibit B") are the shareholder of the Bank because it was for them that money was raised by the consultants in the capital market for the payment of the N20 million required by the Central Bank. They also contended that as soon as the N20million was paid to the Central Bank the share capital of the Bank they were forming became fully subscribed, leaving no room for additional prospective members by allotment of shares. For the appellants, however, the case was that there were in all 38 members and shareholders of the Bank as reflected second Register of members prepared (admitted in evidence as "Exhibit L"). Further in his evidence D W.8 said that the 38 names in Exhibit L are the names of all subscribers who actually paid money towards their shares in the bank and that these include not only the promoters but all others who actually paid up their shares. These 38 names include the appellants and all those they represented. There was no evidence to show that both Exhibit "B" and "L" were compiled pursuant to a resolution of the Board of Directors of the Bank. The Central Bank was said to have cancelled Exhibit "B" upon the prompting of the appellant who also made available to it Exhibit "L". As fallout of the factionalisation of the Board, the 1st appellant suspended the Secretary/Legal Adviser of the Bank.

In a reserved judgment, the Federal High Court held inter alia as follows:-

The court then lifted the suspension placed on the Secretary/Legal Adviser although neither of the parties specifically asked for the relief. It granted most of the claims sought by the respondents and dismissed substantially the claims sought by the appellants. Being dissatisfied with the judgment of the Federal High Court the appellants appealed to the Court of Appeal.