A banker-customer relationship is a special relationship that is founded on contract, governed by common law, equity and, in some limited respect, statutes such as Acts of the National Assembly, subsidiary legislations including several guidelines and circulars of the Central Bank of Nigeria. In providing financial services to the public members, a bank’s debit or movement of funds from the account of a bank’s customer without the latter’s permission raises several legal questions, touching on breach of contract, security of a person’s right to his property (money), commission of a crime of stealing or tort of conversion, amongst others. Some of the questions are as follows:
Does the bank have absolute power to move funds from a customer’s account without his consent or justification?
Are there special circumstances to override the need to obtain the customer’s consent?
Where such debit is without consent or justification, can the bank be liable for stealing or conversion?
Will a right of lien or charge be a sufficient basis for unauthorized debit of a customer’s account and defence to the allegation of stealing or conversion?
The answers to the foregoing questions as well as the approach to redressing a customer’s grievance will depend largely on the facts of each case leading to the debit transaction and the nature of the parties’ relationship, the form of debit transaction in question and the destination account to which the debited fund has been moved.
For instance, whilst an offence of stealing may attract punishment in terms of imprisonment, fine and/or restitution; a tort of conversion, according to the Supreme Court in C.D.C (Nig.) Ltd. v. SCOA (Nig.) Ltd. (2007) 6 NWLR (Pt. 1030) 300 can only result in a judgment for pecuniary damages, being a single sum representing the value of thing unlawfully converted.
Stealing and Conversion
There is an overlap in the meaning and usage of “stealing” and “conversion” in legal discourse though they represent different legal consequences in law. Stealing is an offence (criminal wrong) attracting penal sanctions, whilst conversion is a tort (civil wrong) that may result in damages. It is noteworthy that the Supreme Court (per Okoro, J.S.C.) held in Timothy v. The People of Lagos State (2021) 11 NWLR (Pt. 1787) 251 at page 288 paragraph B, that the appellant was guilty of “stealing by conversion” under Section 383 (f) of the Criminal Code Act. Also, in Ayeni v. State (2016) 12 NWLR (Pt. 1525) 51, the Supreme Court held that in order to convict a defendant for stealing, the prosecution must prove the taking, the conversion and the fraudulent intention in the taking and/or converting of the subject matter of the stealing.
By virtue of Section 383 (1) and (2) (a-e) of the Criminal Code Act, any person who fraudulently takes anything capable of being stolen, or fraudulently converts to his own use or to the use of any other person anything capable of being stolen, is said to steal that thing. To constitute conversion, according to the Supreme Court in the C.D.C. (Nig.) Ltd. v. SCOA (Nig.) Ltd. case at page 365 paragraph C, there must be a positive wrongful act of dealing with a thing in a manner inconsistent with the owner’s rights, and an intention in so doing, to deny the owner’s rights or to assert a right inconsistent with them.
By law, a thing includes money, which is capable of being stolen. But whether money can be converted will depend on the form or specie of the money in question. The Court of Appeal in Wema Bank Plc. V. Osilaru (2008) 10 NWLR (Pt. 1094) 150 at 170 at page 171 para B-C held as follows: “It has been held by this court that money in specie, for example, coins and notes can be converted while money in abstract, for example, money in a bank account cannot be converted. Thus, the former can be the subject in a claim for detinue or conversion, the latter cannot be. See Afribank (Nig.) Plc v. A.I. Investment Ltd. (2002) 7 NWLR (Pt. 765) 40 at 63 paragraph D-F; p.64, paragraph A).”
Sequel to the above to the above decision in Wema Bank Plc. V. Osilaru (supra), whilst a conversion claim cannot be made in respect unauthorized debit, an offence of stealing may be committed by a bank for unauthorized debit on a customer’s account. Also, the transfer, debit or movement of money out of a customer’s account or from a customer’s account to another person’s account qualifies as “taking” under Nigerian law. The only ingredient that needs to be proved is a “fraudulent intent” or “fraudulent conversion” in the alleged movement of fund.
In a case of conversion, it is immaterial whether the thing converted is taken for the purpose of conversion or whether it is at the time of the conversion in the possession of the person who converts it. It is also immaterial that the person who converts the property is the holder of a power of attorney for the disposition of it, or is authorized to dispose of the property. See Oyebanji v. State (2015) 14 NWLR (Pt.1479) 270;Clark v. State (1986) 4 NWLR (Pt.35) 381; Mohammed v. State(2000) 12 NWLR (Pt. 682) 596; Ayeni v. State (2016) 12 NWLR(Pt. 1525) 51.
It is instructive to note that the Court of Appeal in Wema Bank Plc. V. Osilaru (2008) 10 NWLR (Pt. 1094) 150, the money in a customer’s bank account is in a bank’s custody and belongs to the bank. According to the Court,
“It seems to me therefore that the customer’s monies in the hands of the banker are not in the custody or under the control of the customer. Such monies remain the property in the custody and control of the banker, and payable to the customer when a demand is made. This is so because if anything happens to the money thereafter e.g. theft of the money, it is the banker and not the customer that bears the loss. Where the customer makes a demand e.g. by issuing a cheque and the banker refuses to pay, it is my view that the customer’s cause of action is in damages under their contractual relationship. See Afribank (Nig.) Plc v. A.I. investment Ltd. (supra).”
The above dictum must be understood in the context of the factual peculiarities of the Wema Bank case in which the Court of Appeal upheld the bank’s right to apply any fund which came into the respondent’s account to settle his indebtedness. Whilst the bank, in that particular case, may be correctly regarded as the custodian of the money in a customer’s bank account, it is, in our view, misleading and contrary to the spirit of letters of the law (either contract law or criminal law in Section 383 of the Criminal Code Act and Section 37(3) of the Cyber Crimes (Prohibition, Prevention Act) 2015)for the Court of Appeal to hold in Wema Bank Plc v. Osilaru (supra)that the money in a customer’s bank account is a property of the bank.
If ownership of the money in a customer’s bank account is vested in the bank, as the Court of Appeal concluded in the Wema Bank Plc v. Osilaru’s case, it would therefore mean not only that a bank cannot be charged with an offence of stealing (as a person can rarely be guilty of stealing his property whilst in its custody) but also, a customer’s remedy can only lie in damages, nothing more. This, however, is not so, particularly in the light of Section 37(3) of the Cyber Crimes (Prohibition, Prevention Act) 2015, which clearly provides for an offence relating to unlawful debit, a customer’s remedy of restitution for the debited sum and a fine of N5,000,000 for failure to reverse the unauthorized debit. If the argument in favour of the bank’s ownership of the money in a customer’s account is sustained, then no bank can be successfully convicted for any offence under Section 383 of the Criminal Code Act or Section 37(3) of the Cyber Crimes (Prohibition, Prevention Act) 2015.
For clarity, by virtue of Section 383 of the Criminal Code Act, cited and relied on by the Supreme Court in convicting the appellant in Timothy v. The People of Lagos State (2021) 11 NWLR (Pt. 1787) 251, a person who takes or converts anything capable of being stolen is deemed to do so fraudulently, if he does so with any of the following intents:
1. An intent to permanently deprive the owner of the thing of it.
2. An intent to permanently deprive any person who has any special property in the thing of such property.
3. An intent to use the thing as a pledge or security.
4. An intent to part with it on a condition as to its return which the person taking or converting it may be unable to perform.
5. An intent to deal with it in such a manner that it cannot be returned in the condition in which it was at the time of the taking or conversion. In the case of money an intent to use it at the will of the person who takes or converts it, although he may intend afterwards to repay the amount to the owner.
In particular reference to unauthorized debit transactions, the better judicial position, in our view, is to deem a bank as the custodian of the money in its customer’s account whilst ownership of the fund vests in the bank’s customer contrary to the decision in Wema Bank Plc v. Osilaru’s case. A bank has no absolute power to debit its customer’s bank account without providing legal authorization or justification.
Permanent deprivation vs. Temporary deprivation
It would appear that permanent deprivation of a thing taken is a critical ingredient of stealing and conversion whereas a temporary deprivation appears to negate such allegation. It is interesting to note that the question of whether or not the taking of a “thing” amounts to stealing or conversion is largely dependent on the nature “thing” taken (as demonstrated in the Wema Bank Plc v. Osilaru’s case), irrespective of whether the manifest intention of the taker is to permanently or temporarily deprive the owner or interested person of that thing.
Generally, in proving “fraudulent intent” in taking a thing, the prosecutor will likely secure conviction for stealing if evidence can be led to show any intent to permanently deprive the owner or interested person of the thing or to use the thing as a pledge/security, to deal with the thing in a way that changes the condition of the thing in such a way that the thing cannot be restored by the taker to its original state. In convicting the appellant in Timothy v. The People of Lagos State (supra), the Supreme Court held that there was a clear case of stealing by conversion because the complainant (PW1) was permanently deprived of the use of the Toyota 4 Runner Jeep, as the car was never found since it was driven away by the appellant and his colleagues.
Consistent with the general criminal law, there is no stealing of a thing if the manifest intent at the time of taking an item is merely to deprive the owner of it temporarily. The Supreme Court in Timothy v. The People of Lagos State (supra) at page 272, paragraphs C-F agreed with the appellant’s counsel that a mere conditional appropriation of a thing is not theft and that if the appropriator has in mind merely to temporarily deprive the owner of such property which, on examination, proves not worth taking and then finding the property useless to him, leaves it ready to hand over to be re-possessed by the owner, he has not committed theft. Although the Supreme Court nevertheless convicted the appellant in that case as his argument predicated on temporary taking of possession of the car in question was without any evidence to back up the submission. More importantly, the defence did not plead any lawful temporary taking of the possession of the Jeep for any legitimate purpose. According to the apex court, the Jeep seized from the PW1, PW2 and PW3 on 5th July 2008 had not been found, seen or returned.
However, with respect to money, including money in the account of a bank’s customer, a temporary deprivation may suffice to ground the offence of stealing if fraudulent intent is proved. In other words, stealing may be proved even if the taker has no intention to permanently deprive the owner but only fraudulently takes or converts the money with the intention to repay the amount to the owner of the money taken. The fundamental ingredient, in the case of money, is to prove fraudulent intention, not a permanent deprivation.
In Ajiboye v. State (1994) 8 NWLR (Pt. 364) 587 at 599 para H, the Court of Appeal held as follows:
“In this appeal, we are dealing with money, which is a movable property and no doubt capable of being stolen. Under S.383(l) above the fraudulent taking of money from someone is stealing, and the fraudulent conversion of money to the use of the taker or to the use of any other person is also stealing. What is essential here in both cases is that the taking or the conversion must be fraudulent. That is why s.383 (2) proceeded to explain or define what would amount to fraudulent act for the purpose of the offence of stealing.”
Please note that the taking or conversion of a thing may be fraudulent although it is effected without secrecy or attempt at concealment. See Ayeni v. State (supra). So, the fact that a bank’s customer receives a debit alert (which presupposes that the bank’s debit is not concealed or done secretly) does not exculpate the bank from the offence of stealing (if the debit is found to be fraudulent) or the tort of conversion (if it is intended to deny the customer’s right to the debited fund). It is also immaterial whether the thing converted is taken for the purpose of conversion or whether it is at the time of the conversion in the possession of the person who converts it. See Section 383(3) (4) of the Criminal Code Act.
Offence Relating to Unauthorized Debit Under the Cyber Crimes (Prohibition, Prevention Act) 2015
If there is any doubt about the potential culpability of a bank for an offence in relation to unauthorized debit on a customer’s bank account, the Cyber Crimes (Prohibition, Prevention Act) 2015 has explicitly cleared such doubt. Unlawful debit by banks on their customers’ account is undoubtedly an offence under the Cyber Crimes (Prohibition, Prevention Act) 2015 as shown in the case of U.B.A. Plc v. Vertex Agro Ltd (2020) 17 NWLR (Pt. 1754) 467.
Section 37(3) of the Cyber Crimes (Prohibition, Prevention Act) 2015, provides for an offence relating to unlawful debit, restitution for the debited sum and a fine of N5,000,000 for failure to reverse the unlawful debit. The exact text of S.37(3) of the Cyber Crimes (Prohibition Prevention) Act 2015 reads thusly-
“A financial institution that makes an unauthorized debit on a customer’s account shall, upon written notification by the customer, provide clear legal authorization for such debit to the customer or reverse such debit within 72 hours and any financial institution that fails to reverse such debit within 72 hours, commits an offence and is liable on conviction to restitution of the debit and a fine of N5,000,000.00.”.
It is important to add that by virtue of Section 390 of the Criminal Code Act, any person who steals anything capable of being stolen is guilty of a felony, and is liable, if no other punishment is provided, to imprisonment for three years. The foregoing presupposes that the punishment of restitution and fine of N5m in Section 37(3) of the Cyber Crimes (Prohibition, Prevention Act) 2015 will apply to offence of unauthorized debit on the account of a bank’s customer.
