The respondent, as plaintiff in the High Court, claimed the sum of N2,603,090.40 against the 1st and 2nd defendants jointly and severally being the property of the respondent which the defendants converted to the use of the 1st defendant. The respondent also claimed compound interest at the rate of 13% per annum from 26th June, 1986 till payment. The 1st defendant was not a party to this appeal lodged by the 2nd defendant now referred to as the appellant.

The respondents case was that it opened an Insurance section in January, 1983 and made the 1st defendant whom it employed in November 1982 head of that section who was empowered to collect debit not directly from the Lion of Africa Insurance Company Limited. The 1st defendant then opened and operated a current account No 130722 in the name of Lion of Africa Insurance (Consultancy) Company Limited which he operated as the sole signatory with the appellant at its Davies Street Lagos Branch. The 1st defendant collected 35 cheques crossed with the words Account payee only" and "Not negotiable" in favour of Lion of Africa Insurance Company Limited and drawn on the respondent's account with International Bank for West Africa Limited. The value of the cheques was N2,293,876.90. They were all paid into the current account No 130722 opened and operated by the 1st defendant in the appellant's Davies Street Branch. The 1st defendant made series of withdrawals in the said current account, leaving a credit balance of N105,416.00 and opening another fixed deposit account in the sum of N240,000.00 with part of the sum taken from the current account No 130722.

The appellant's defence was that it acted in the ordinary course of banking business in opening and permitting the operation of current account No 130722. The appellant further contended that it was protected by section 2(2) of the Bills of Exchange Act 1964 from any liability resulting from the operation of the said account. Criminal proceedings were initiated against the 1st defendant but during the trial of this civil action, photocopies of the 35 cheques were admitted by consent after the original cheques were sighted. The learned trial Judge found that

The learned trial Judge therefore entered judgment in favour of the respondent against the 1st defendant and the appellant jointly and severally in the sum of N2,289,243.99. He refused to award 13% compound interest per annum on the judgment sum but instead awarded 6% simple interest per annum from 27th June, 1986 till date of judgment 1st August, 1989. The appellant being dissatisfied appealed against the judgment complaining only against the finding of negligence against it and the admissibility of the 35 cheques. However in its brief of argument, the issues for determination of the appellants include the issues of locus standi and reasonableness of the respondent's cause of action. The respondent also cross appealed complaining against the award of 6% interest instead of 13% compound interest as claimed.