Facts:

Sometimes in 2003 the 2nd respondent through its Managing Director obtained a loan facility in the sum of N400,000.00 (Four Hundred Thousand Naira) from the 1st respondent which was guaranteed by the Appellant. The facility was to be repaid within 6 – 8 weeks on an interest rate of 12% per month. However, the 2nd respondent defaulted in repaying the facility with interest despite several demands. Aggrieved, the 1st respondent brought an action against the 2nd respondent and appellant, wherein he sought to enforce the terms of the loan contract.
Meanwhile, the appellant insisted that it did not guarantee the facility given to the 2nd respondent as its guarantee was personally to one Elder P. O. Ajani who was the Managing Director of the 2nd respondent. Parties filed their pleadings, trial commenced and the court below granted judgment in favour of the 1st respondent. The appellant’s defence was also dismissed as it was held jointly liable with the 2nd respondent to repay the loan facility with interest. Dissatisfied with the decision of the court below the appellant appealed to the Court of Appeal.