Navigating the Nuances: Circumstances When the Defense of ‘Volenti Non Fit Injuria’ Will Be Inapplicable in a Banker-Customer Transaction

CASE TITLE: FIDELITY BANK PLC v. PETER (2024) LPELR-61551(CA)

JUDGMENT DATE: 5TH JANUARY, 2024

JUSTICES: HAMMA AKAWU BARKA, JCA
BALKISU BELLO ALIYU, JCA
PETER CHUDI OBIORAH, JCA

DIVISION: CALABAR

PRACTICE AREA: BANKING LAW

FACTS:
This is an appeal against the judgment of the High Court of Akwa Ibom State in Suit No. HU/330/2009 coram judice, Hon. Justice G. J. Abraham, delivered on March 21, 2013.

The respondent took action against the appellant and two other persons in respect of the banking transactions the respondent directly had with the second defendant in the action (Mr. Inyang Emmah), who was the branch manager of the appellant. The respondent had complained that she made fixed deposits of some money with the appellant, which the appellant later refused to pay her. The appellant basically maintained at the trial that the bank was not officially involved in the transaction with the respondent and that the respondent dealt with Mr. Inyang Emmah in his private capacity and as such, the appellant was not liable for the claims of the respondent.

At the end of the trial, the Court found in favour of the respondent. The appellant was dissatisfied with the judgment, hence this appeal.

ISSUE(S) FOR DETERMINATION:
The Court considered:

1. Whether, in the circumstances of this case, the trial court was right in holding the appellant liable for the actions of Mr. Inyang Emmah.
2. Whether the trial court was right in making the monetary awards it did.
3. Whether the trial court at any time raised the issue of negligence as a tort, and if he did, was his decision based thereon?
   

COUNSEL SUBMISSIONS:

The appellant’s counsel argued that Mr. Inyang Emmah, an employee of the appellant, acted beyond his authority in engaging in transactions with the respondent, which were private and personal. He contended that Mr. Emmah was not authorized to handle fixed deposits, and the respondent should have been aware of this. The counsel cited several cases to support the argument that unauthorized actions by an employee do not bind the employer.

Furthermore, the counsel argued that the respondent willingly entrusted her money to Mr. Emmah, thus absolving the appellant of liability under the principle of volenti non fit injuria. He emphasized that the respondent should have followed established procedures for depositing and receiving money rather than exclusively dealing with Mr. Emmah.

In response, the respondent’s counsel disputed the appellant’s assertions, stating that there was no credible evidence to prove that Mr. Emmah acted outside his scope of employment or that the transactions were private. It was argued that the appellant failed to provide evidence of Mr. Emmah’s authorized actions or inform the respondent of any limitations. Additionally, the application of the principle of volenti non fit injuria was rejected, stating that the respondent did not allege fraud but rather a breach of contract. The Court was urged to rule in favor of the respondent.

DECISION/HELD:
The appeal was dismissed.

RATIO:
TORT: VOLENTI NON-FIT INJURIA: When the defence of volenti non-fit injuria will not avail a party in a banker-customer transaction.

“The appellant’s contention that the principle of volenti non fit injuria afflicted the transaction between the respondent and Mr. Inyang Emmah is not tenable. It is not enough to cite principles or doctrines of law in isolation and without reference to the facts of a case. It is the facts and the evidence that led to establishing those facts that any principle of law can safely hang on. In other words, the facts of a case constitute the foundation upon which you build any principle of law and determine its applicability. In the instant case, where are the facts upon which the Court can say that the respondent, with her eyes wide open, voluntarily assumed the risk when she dealt with Mr. Inyang Emmah? I see none.

Can it be said that a customer who walked into the bank and transacted with the branch manager, who is the overall head of the branch, took a risk? Certainly, Not!

Can it be said that the respondent took risk when, upon the request of the manager, she handed over money to the manager for fixed deposit? No! After all, the manager gave her interests on the fixed deposit, albeit irregularly and though not up to the agreed percentage.

Can it be said that the respondent took a risk when she handed over the First Bank check of N678,841.03 in respect of her gratuity to Mr. Inyang Emmah with written instructions for the appellant to deposit N600,000.00, being part of the amount on the check, into her fixed deposit account? The answer is a capital NO. This is because the appellant took the check to the Central Bank of Nigeria for clearing and obtained the value of the check.

There is no iota of evidence that Mr. Inyang Emmah altered the check and made the proceeds go into his own personal account. If Mr. Inyang Emmah tampered with the check, then it is only the appellant and not the respondent who would know.

So, where did the respondent do anything to suggest that she knew that she was not dealing with Mr. Inyang Emmah in his official capacity as manager of the appellant? The appellant has not provided such evidence. There is nothing to show that in all the transactions the respondent had with the appellant through Mr. Inyang Emmah, they were done in a private location outside the bank premises of the appellant, so as to infer that the respondent assumed the risk of conducting a banking transaction with a staff member of the appellant outside the bank.

I do not see how the principle of volenti non fit injuria applies to this case at all. Rather, I commend the respondent that in her dealings with the appellant, she did so with the branch manager, who is the highest authority in the branch and whose words and actions should be believed and acted upon by a customer.

Accordingly, the trial court was on terra firma when it discountenanced the invocation of the principle of volenti non fit injuria by holding that the respondent “acted with the utmost care” by dealing directly with the appellant’s manager and “there is nothing to show that she (the respondent) acted negligently.” Per OBIORAH, J.C.A.

To read the full judgment or similar judgments, subscribe to Prime or Primsol