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ADMINISTRATION OF ESTATE AND THE CONTRACTUAL RELATIONSHIP BETWEEN A BANK AND ITS CUSTOMER BEFORE AND AFTER DEMISE.

INTRODUCTION
Estate administration is the legal system that governs the process of managing a deceased person's estate. The law verifies claims from people who believe they are entitled to the estate, and then grants authority to administer it. The properties of the deceased to be administered by an administrator or administratrix of the estate are usually clearly spelt out or covered by the grant of Letter of Administration.

An administrator is saddled with the responsibilities of managing and collecting the assets of a deceased person, paying debts and taxes, distributing the remaining assets to the beneficiaries, to hold the estate as a trustee and also to bear the liabilities of the estate. These responsibilities are outlined in the deceased's estate plan or by state law. One such asset that falls under the purview of an administrator in the administration of a deceased estate is the money deposited in the deceased’s bank account. Upon the account holder’s death, these funds do not automatically transfer to their heirs or beneficiaries; rather, they become part of the estate and are subject to legal and procedural requirements before they can be accessed or distributed. The bank, as a custodian of the funds, has a contractual relationship with the deceased during their lifetime, governed by the terms and conditions of the account agreement. However, upon the account holder’s demise, the nature of this relationship shifts, introducing legal complexities concerning access, control, and disbursement of the funds.

This article seeks to examine the administration of a deceased person's estate, with a particular focus on the management of bank deposits, and to explore the contractual relationship between the deceased, as a bank customer, and the bank—both before and after their demise. It will analyze the legal principles governing the release of funds to an administrator, the bank’s obligations, and the rights of beneficiaries, drawing insights from existing judicial authorities.

CASE STUDY OF DAURA v. U.B.N PLC
This case highlights the administration of an estate and the contractual relationship between a bank and its customer before and after the customer's demise. It discusses the responsibilities of administrators, the management of estate assets, and the implications of debts on beneficiaries.

The pronouncement of the Supreme Court settled the issues on the obligations of the administrators in identifying debts before asset distribution, the liability of beneficiaries to pay debts from distributed portions of the estate and that death does not terminate loan contracts; obligations survive.

SUMMARY OF FACT
The deceased in her lifetime between the 12th day of June 2008 and 24th July, 2008 applied for, obtained and utilized a loan of N6,000,000 from the respondent, with interest at 18% per annual monthly rate and she died shortly after on 1st August, 2008. The appellants as children of the deceased applied and obtained letters of administration over her estate. The Letters of Administration covered a total sum of N15,372,668.97 from her account where the loan sum was deposited before she died, they expended part of the money for her funeral and distributed the remainder to the beneficiaries of the estate, without defraying the indebtedness of their mother to the Respondent.

The Respondent instituted an action on the 18th of January, 2010 for the loan sum and the accrued interest of N4,934,616.90 as at December 2009, and 29% (percent) per annum of the principal sum and the accrued interest until judgment is given and/or when same was fully liquidated.

TRIAL COURT
The Court held that the Administrators had no prior knowledge of the loan until the respondent-initiated actions in 2010 and by which time the proceeds had been expended and so there is no money to offset the loan and as such the claimant has to pay for its failure to act on time to notifying the defendants of the loan their mother took from the bank.

The trial court dismissed the respondent’s claim citing lack of evidence, that the delay was a fundamental defect. Dissatisfied the Respondent herein appealed to the Court of Appeal.

ON APPEAL AT THE COURT OF APPEAL
The Court of Appeal held that Respondents failed to lay evidence as to how the estate of the deceased was administered and whether there remain assets which would in the circumstance satisfy the loan against the deceased, that apart from the monetary assets left by the deceased, they didn’t state whether they administered other assets left by their mother.

The holding of the trial court to the effect that the proceeds of the estate are all gone, and therefore where will the defendants get money to settle the liability of the deceased as a misapplication of the law and a travesty of justice. The first duty of the administrator is to settle debts against the estate of the deceased. It was also not right and equitably unjustified to hoodwink a creditor on the premise that the assets and estate of the debtor has been distributed amongst beneficiaries. This issue was resolved against the appellants herein.

The Court also held that upon the death of a customer, as in the present case, interest on the loan standing against the deceased person ceases to be charged against the loanee's account from the day, the Respondent became aware of the death of its customer.

Dissatisfied with judgment, the appellants herein appealed.

SUPREME COURT -Per Agim, J.S.C.

The findings and pronouncements of the Supreme Court settled the issues bothering on the obligations of the administrators in identifying debts before asset distribution, the liability of beneficiaries to pay debts from distributed portions of the estate and that death does not terminate loan contracts, and the legal relationship that arises between a bank and its customer in a loan transaction.

On duty on administrator of an estate to first identify any debts incurred by the deceased before distributing the estate to the beneficiaries.

An administrator of an estate has the duty to first take steps to find out or identify any debts incurred by the deceased in his life time, which debts have become due from the estate of the deceased, before distributing the estate to the beneficiaries of the estate. An administrator of an estate cannot avoid this duty by simply claiming or asserting that he or she is not aware of the existence of a particular debt and that, therefore, he or she is not bound to pay an estate debt he or she is not aware of. It is the duty of the administrator to take steps to identify and inventory both the assets and debts of the estate and pay the debts before distribution.

In the instant case, the evidence revealed that upon the death of their mother, the appellants proceeded to obtain letters to administer her estate and thereafter withdrew the sum of N15,372,668.77 in their late mother’s account in First Bank Plc. They expended part of the said money on burying their mother and distributed the remainder amongst themselves, and after burying their late mother, they did not, as the administrators of the estate, identify and inventory of her assets and debts before distributing the remainder of the amount they withdrew from First Bank Plc.

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