ACMEL NIGERIA LIMITED & ANOR v. FIRST BANK OF NIGERIA PLC & ORS
(2014)LCN/6829(CA)
In The Court of Appeal of Nigeria
On Friday, the 7th day of February, 2014
CA/L/177/2011
RATIO
AN AGENT’S AUTHORITY TO BIND THE PRINCIPAL IN A CONTRACTUAL RELATIONSHIP
The law recognizes that in some circumstances, the agent can affect the principal’s legal position by certain acts which, though performed by the agent, are not really to be treated as the agent’s own acts but as acts of the principal. However, where the agent does not have the authority to bind the principal in a contractual relationship with third parties, a trial Court would be wrong to hold the supposed principal liable for the acts of the agent in the transaction – Edem V Canon Balls Ltd. (2005) 6 SC (Part II) 16 where Akintan, JSC, held that-
“An agency relationship exists only where a person called the agent has the authority to act on behalf of another called the principal the facts in this case are that the Respondent wrote to the company in Belgium from whom the Appellant claimed he bought the tractor, asking for information about the purchase price made by the Appellant to which there was no reply. That act is definitely not enough to reduce the relationship existing between the parties to that of principal and agent”. Per AMINA A. AUGIE, J.C.A.
WORDS AND PHRASES: SPECIFIC PERFORMANCE
An order of specific performance is an equitable remedy granted to a successful litigant constraining the losing party to carry out or fulfill his own part of the agreement which he had entered into with the successful litigant. Like all equitable remedies, it is at the discretion of the court, but the discretion must be exercised judicially according to settled rules and principles. See GAJI Vs PAYE (2003) 8 NWLR (PT 823) 583 and UNIVERSAL VULCANISING (NIG) LTD VS IJESHA UNITED TRADING AND TRANSPORT CO. LTD ((1992) 2 NWLR (PT 266) 388.
Black’s Law Dictionary 9th Edition at page 1529 defines Specific Performance as:-
“The rendering as nearly as practicable, of a promised performance through a judgment or decree. A court ordered remedy that requires precise fulfillment of legal or contractual obligation when monetary damages are inappropriate or inadequate, as when the sale of a real Estate or a rare article is involved.”
According to G.W Keeton, in his book, an introduction of Equity (5th Edition 1961) page 304.
“In essence, the remedy of specific performance is the execution of a contract according to its terms and it may therefore be contrasted with the remedy of damages which is compensation for non execution.”
To bring an action for specific performance presupposes the existence of valid and subsisting contract and therefore the insistence that it should be performed. See INTERNATIONAL TEXTILE INDUSTRIES (NIG) LTD VS ADEREMI (1999) 8 NWLR (PT 614) 268 at 303. Per SAMUEL CHUKWUDUMEBI OSEJI, J.C.A.
JUSTICES:
AMINA ADAMU AUGIE Justice of The Court of Appeal of Nigeria
RITA NOSAKHARE PEMU Justice of The Court of Appeal of Nigeria
SAMUEL CHUKWUDUMEBI OSEJI Justice of The Court of Appeal of Nigeria
Between
1. ACMEL NIGERIA LIMITED
2. BODE AYENI 1ST & 2ND APPELLANTS
AND
1. FIRST BANK OF NIGERIA PLC
2. BAYO ADELEKE 1ST & 2ND (CROSS) APPELLANTS – Appellant(s)
AND
1. FIRST BANK OF NIGERIA PLC
2. WEMI SHADA & ASSOCIATES
3. BAYO ADELEKE 1ST – 3RD RESPONDENTS
AND
1. ACMEL NIGERIA LIMITED
2. BODE AYENI
3. MR. SHADA (T/A WEMI SHADE & ASSOCIATES)
4. CONNAIR CARGO SERVICES LTD 1ST – 4TH (CROSS) RESPONDENTS – Respondent(s)
SAMUEL CHUKWUDUMEBI OSEJI, J.C.A. (Delivering the Leading Judgment): This appeal is against the judgment of the High Court of Lagos State delivered on the 13th day of October 2010 by Hon.Justice K.O. Alogba wherein the claim was dismissed while the counter-claim was granted in part.
1.1. By their Amended Writ of Summons and Statement of Claim dated 22nd July, 2008, the Claimants claimed against the 1st -3rd Defendants jointly and severally for:
“a) AN ORDER of Specific Performance compelling the 1st Defendant to execute the contract of sale and Assignment of property situate and known as plot 6G Cappa Estate Maryland, Lagos in favour of the Claimants in the suit herein.
“b) AN INJUNCTION restraining the 2nd and 3rd Defendants their Agents, Servants and/or privies from interfering in any way whatsoever with the sole transaction of Plot 6G, Cappa Estate, Maryland, Lagos between the 1st Defendant and the Claimants.
“c) AN ORDER of perpetual injunction restraining the Defendants whether by themselves or their agents, servants, and/or privies from taking any steps whatsoever to eject the Claimants or any of their family members from the property known as Plot 6G Cappa Estate Maryland, Lagos.”
In the “1st and 3rd Defendants Amended Statement of Defence and Counter-claim” dated the 6th day of August 2008, the 1st and 3rd Defendants who are the 1st and 2nd Counter-claimants counter-claimed thus:
“(a) The 1st Counter-claimant counter-claims against the 1st-4th Defendants to the Counter-claim as follows:
“(i) against the 3rd and 4th Defendants to the Counterclaim jointly and severally, a mandatory order to effect the payment of the stamp duties on the Tenancy Agreement dated the 20th day of October 2003 between the 1st counter-claimant and the 4th counter-claimant as shall be assessed by the Federal Inland Revenue Services, and to cause the said Tenancy Agreement to be duly stamped;
“(ii) against the 3rd and 4th Defendants to the Counterclaim jointly and severally special damages in the sum of N3,500,000.00 (Three Million Five Hundred Thousand Naira) per annum for the use and occupation of the property lying being and situate at Plot 6, G. Cappa Estate Maryland Estate, Onigbongbo, Lagos, from 20th October 2005 till 31st January, 2008 together with interest at the rate of 19% per annum with effect from 20th October 2005 until judgment and thereafter at the rate of 10% per annum until payment.
(iii) against the 1st and 2nd Defendants jointly and severally, general damages for trespass on the property lying being and situate at Plot 6G. Cappa Estate Maryland Estate, Onigbongbo, Lagos from 20th October 2005 till 31st January,2008; and
“(iv) the cost of this action.
(b) The 2nd Counterclaimant counter-claims against the 1st-2nd Defendants to the counter-claim, jointly and severally for:
“(i) possession of the property lying being and situate at Plot 6G. Cappa Estate Maryland Estate, Onigbongbo,Lagos and
(ii) special damages in the sum of N4,000,000.00 (Four Million Naira) per annum for trespass on, and/or (That is, alternatively) for use and occupation of the said property with effect from the 1st day of February, 2008 until abatement of the trespass, and/or (that is, alternatively) until possession is yielded up to the 2nd Counterclaimant, together with interest at the rate of 21% per annum with effect from the said 1st February 2008 until satisfaction”
1.3 The following were the pleadings on the basis of which trial was conducted in the suit, that is:
a. Claimants’ “Amended Statement of claim” dated 22nd July, 2008;
b. “1st and 3rd Defendants Amended Statement of Defence and Counterclaim” dated 6th August 2008;
c. 2nd Defendant’s Statement of Defence (“Statement of Defence of the second Defendant”) dated 14th May, 2008;
d. 2nd Defendant’s “Defence of the Third Defendant to Counter-claim …” dated 30th June, 2008;
e. Claimants’ “Reply to 1st and 3rd Defendants’ Statement of Defence and Defence to Counter Claim …” dated 11th June 2008;
f. “1st and 2nd Counterclaimants’ Reply to the “Defence of the Third Defendant to Counterclaim” dated 11th July,2008; and
g. “4th Defendant’s Statement of Defence to the Counter-Claim’ dated 10th Sept. 2008.
At the close of pleadings and conclusion of trial at the lower court, the learned trial judge in a judgment delivered on 13-10-2010 dismissed the claims of the appellants but ordered that the appellants who are currently in possession of the property should vacate the premises not later than 31-12-2011. The counter-claim of the 1st and 3rd defendants was also partly granted.
Being dissatisfied with the said judgment, the claimants (now Appellants/1st and 2nd Cross respondents) appealed against it by their Notice of Appeal dated arid filed on the 30-11-2010. It contains five grounds of appeal.
Also dissatisfied with part of the judgment, the 1st and 3rd defendants/counter claimants (now 1st and 3rd Respondents/cross appellant) also cross appealed against it by filing a Notice of cross appeal dated and filed on 4-1-2011.
The said notice of cross appeal contains fourteen grounds of appeal.
The 2nd defendant in the appellants claim in the lower court and 3rd defendant in the counter claim (Mr. Wemi Shada) is now the 3rd Respondent in the Cross appeal, while the 4th defendant in the counter claim is now the 4th Respondent in the cross appeal.
Subsequently, in compliance with the Rules of this court, the parties filed and exchanged briefs of argument except for the 2nd Respondent in the Appeal and 3rd and 4th Respondents in the cross appeal. I will now first deal with the Main Appeal. Herein the appellants brief of argument dated and filed on 1/4/2011 was settled by Solomon Edoh Esq. The appellants reply brief is dated 6/6/2011 and filed on 8/6/2011 but deemed properly filed on 31-10-11.
The 1st and 3rd Respondents brief settled by Adeyinka Olumide-Fusika is dated and filed on 13-5-2011. In the Appellants brief of argument three issues were formulated from the ground of appeal as follows:-
(1) Whether the learned trial judge was right in not giving full weight and effect in law to Exhibit C10 on the ground that it was marked “Without Prejudice”.
(2) Whether the learned trial judge was right in refusing to grant an order of Specific Performance of the Contract of Sale of the Property known as Plot 6G, Cappa Estate, Maryland, Lagos in favour of the Appellant?
(3) Whether the learned trial judge was right in law in holding that the claimants destroyed the basis of a concluded agreement of Sale of the property by participating in a bidding process introduced by the 1st Respondent?
In the 1st and 3rd Respondents brief of argument, a Sole issue was distilled from, (according to them) the five grounds of appeal. It reads thus:-
“Whether or not upon the available legal evidence, the learned trial judge rightly dismissed the Appellants’ radical claim against the 1st Respondent for “An order of specific performance compelling the 1st defendant to execute the contract of sale and assignment of property situate and known as Plot 6G. Cappa Estate, Maryland, Lagos in favour of the claimants”…. And therefore, the consequential claims for injunctions against all the Respondents?
A perusal of the 1st and 3rd Respondents brief of argument reveals however that they wholly addressed all the three issues raised in the appellants brief. I am therefore inclined to consider this appeal on the basis of the appellants three issues.
ISSUE ONE
Dwelling on this issue, learned counsel for the appellants submitted that, had the learned trial judge properly appreciated the legal effect of a letter marked “without prejudice” he would have given full weight and effect to Exhibit C10 and this would have led him to hold that Exhibit C10 constituted a proper letter of offer of sale of the property to the appellants which they accepted through Exhibit D3.
He added that Exhibit C10 is a letter written by the 2nd Respondent to the appellants informing them that the 1st Respondent was willing to accept the sum of N25 million as the purchase price of the property known as Plot 6G Cappa Estate Maryland, Lagos, and it was marked “without prejudice”. Furthermore, he says, it was on receipt of the letter that the appellants issued two managers cheques for the sum of N25 million in favour of the 1st Respondent which cheque was passed to the `st Respondent under cover of the 2nd Respondents letter (Exhibit D3) dated 22-5-2006. Thereafter the 2nd Respondent handed the keys of the said property to the appellants who immediately spent huge sum of money to renovate it.
Learned counsel referred to the finding of the learned trial judge at page 491 of the record to submit that he misunderstood the legal effect of the phrase “without prejudice”. He referred further to Section 25 of the Evidence Act to submit that the import of it is that even if a document or letter is marked “without prejudice” it is still admissible provided it contains no admission adverse to the interest of the person against whom evidence of it is sought to be given and in so far as there is no condition or agreement that evidence of it is not to be given. He cited in support the case of JADESIMI VS. EGBE (2003) 10 NWLR (PT 827) 1 at 25 – 26.
Learned counsel added that Exhibit C10 though marked “without prejudice”, did not contain any admission against the interest of the 1st Respondent but, an innocuous document which merely communicated the lst Respondents offer of sale of the property to the appellants and which the latter duly accepted through Exhibit D3. He then urged this court to hold that Exhibit C10 ought to be given full weight and effect by the lower court and constitute offer of sale of the property to the appellants.
Responding on this issue learned counsel for the 1st and 3rd Respondents submitted as a preliminary issue that the appellants second issue suggest that what they claimed at the lower court was for an “order of specific performance of the contract of sale of the property” whereas what they actually claimed as per the writ of summons and statement of claim was for an order of specific performance compelling the 1st Defendant to execute the contract of sale and assignment of property situate and known as Plot 6G Cappa
Estate Maryland, Lagos in favour of the claimants. He added that there is a difference between asking for “EXECUTION of the contract of Sale and assignment” and asking for “PERFORMANCE of Contract of Sale”. Consequently he says, a party is not permitted on appeal to change what he claimed at the trial court because an appeal is a continuation of the case put forward in the lower court. He cited the case of OREDOYIN VS AROWOLO (1989) 4 NWLR (PT.144) 172; DAKUR VS DAPAL (1998) 10 NWLR (PT.571) 537 and OHIAERI VS AKABEZE (1992) 2 NWLR (PT 221) 1 at 20. Accordingly he added, appellants issue two did not reflect the claim in the lower court and should as such be discountenanced.
The second preliminary issue raised is that issue three does not arise from Ground 4 of appellants’ Notice of Appeal but can only be connected to Ground 3 which complained about misdirection of law. Therefore he argued, there is no issue properly formulated by the appellant on their ground 4 and it should as such be deemed abandoned. See OKORO VS. THE STATE (1998) NWLR (PT.544) 115 at 123.
Dwelling on issue one learned counsel submitted that it is not simply because Exhibit C10 was marked “without prejudice” that the learned trial judge held that there was no concluded contract by which the appellants purchased the subject property from the 1st Respondent for N25 million prior to when it was offered for sale through bidding. He added that it was for instance, found as of fact that the respective cheques of N20 million and N25 million which the appellants claimed they forwarded at different times as alleged purchase price for the property had been refunded to them and were in their own possession. It was also found that the appellants by their evidence and documents tendered in evidence acknowledged that there was no concluded contract for the sale of the property. He submitted that appellants ought to challenge the ratio decidendi of the judgment and not a statement which alone does not constitute a ratio decidendi. He cited SAUDI VS ABDULAHI (1989) 4 NWLR (PT 116) 387 and EDE VS OMEKE (1992) 5 NWLR (PT 242) 428.
Learned counsel further submitted that the learned trial judge did not refuse to admit Exhibit C10 in evidence despite the fact that it was marked “without prejudice” and having admitted it, he did not fail to take it into consideration in arriving at his judgment on the appellants claim because he correctly ascribed probative value to it in reaching a decision
In the Appellants reply brief, learned counsel for the appellants in addressing the preliminary issue raised by the 1st and 3rd Respondents counsel submitted that issue two in the appellants brief does not differ in any material particular from the first relief claimed in their amended statement of claim because it is for an order of specific performance to compel the defendant to execute the contract of sale and assignment of the property in dispute which means no more than the performance of the contract of sale.
On the competence of Ground 4 of the grounds of appeal, learned counsel submitted that appellants issue three as formulated and argued, covers ground 3 and 4 of the notice of appeal because the complaint made in ground 4 is a corollary to that made in ground 3 and moreso there is no law that disallows arguing two or more grounds of appeal under one issue formulated for determination.
Now on the preliminary issue of variation in the appellants claim in the lower court vis-a-vis issue two formulated in their brief of argument. The appellants first claim as per the writ of summons and amended statement of claim was for:-
“An order of specific performance compiling the 1st defendant to execute the contract of sale and assignment of property situate and known as Plot 6G Cappa Estate Maryland, Lagos in favour of the claimant”.
This the 1st and 3rd Respondents counsel has found to be at variance with the appellants issue No. 2 which reads thus:-
“Whether the learned trial judge was right in refusing to grant an order of specific performance of the contract of sale of the property known as Plot 6G Cappa Estate Maryland, Lagos in favour of the Appellant.”
I have carefully compared the two and to my humble mind there seem to be no radical or material difference between the two but rather boils down to a question of semantics. Since there was no agreement or assignment drawn up by the parties, the appellants would definitely not be referring to the execution or endorsement of such documents. This also found expression in the judgment of the lower court wherein the reasonings and conclusions on the issue relates to whether there was proof and therefore justification for the grant of the appellants claim for an order of specific performance and not to process a contract of sale or document. I therefore agree with the submission of learned counsel for the appellant that issue No. 2 in the appellants brief of argument and the first claim before the trial court are substantially the same.
On the second preliminary issue, that is to the effect that appellants Issue No. 4 does not arise from Ground 4 of their Notice of Appeal but rather relates to Ground 3 in which case Ground 4 should be deemed abandoned. I have read the said Ground 4 in the Notice of appeal and find that it relates to the statement of the learned trial judge to the effect that though he had held that though the appellants failed to prove that there was a concluded contract of sale and assignment of the property, he however notice that the appellants were unfairly treated by the 1st Respondent and having regard to the retention of their two cheques for ten and seven months respectively, the appellants deserves to be compensated by way of damages if they had so claimed. On the other hand, the Appellants issue No. 3 reads thus:-
3″ Whether the learned trial judge was right in low in holding that the claimants’ destroyed basis of a concluded agreement of Sale of the property by participating in a bidding introduced by the 1st Respondent?
Learned counsel for the appellant had insisted that their issue No 3 is not derived from only Ground 4 of the Notice of Appeal but that the said issue No. 3 covers the complaints raised in Ground 3 and 4 of the Notice of Appeal because the complaints raised in Ground 4 is a corollary of that of Ground 3.
I however find it difficult to agree with this stance because the complaint in Ground 4 is far removed from 3 as well as issue No 3. Ground 3 and Issue No. 3 deal with the finding of the lower court on the issue of bidding by the appellant while Ground 4 relate to the comment by the learned trial judge that the appellants deserve to be awarded damages for being unfairly treated if they had so claimed.
My view here therefore is that no issue was formulated from Ground 4 and it is accordingly deemed abandoned.
What is more, the said Ground 4 is not derived from any ratio decidendi of the trial court but rather from a comment made obiter in the judgment. This is not allowed.
It is trite law that grounds of appeal and issues formulated in an appeal must arise from the ratio decidendi of the decision appealed from as against the obiter dictum. See SAUDE VS ABDULAHI (1989) 3 NWLR (PT 116) 387; EDE VS OMEKE (1992) 5 NWLR (PT 242) 428 and DAKUR VS DAPAL (1998) 10 NWLR (PT 571) 573.
Now to the main issue, that is whether the learned trial judge was right in not giving full weight and effect in law to Exhibit C10 on the ground that it was marked “without prejudice”. Given the strategic relevance of the said Exhibit C10 it is germane to reproduce its content. It reads:
WEMI SHADE & ASSOCIATES
22nd May 2006
The Managing Director
ACMEL Nigeria Limited
75, Obafemi Awolowo Way, WITHOUT PREJUDICE
Ikeja,
Lagos.
Dear Sir,
RE: SALE OF HOUSE 6G. CAPPA ESTATE MARYLAND, LAGOS
Sequel to the discussion you had with the undersigned on the above subject matter, First Bank PLC has directed that the minimum sales price that can be recommended to their management for consideration is N25,000.000 (twenty five million naira only). This, we believe is reasonable. The photocopy of First Bank PLC letter is hereby attached for your action.
Kindly let us have your cheque for the appropriate sum for onward transmission to First Bank Plc for their management’s approval.
Thanks, while we wish to say that this letter supersedes earlier letters on this subject.
Yours faithfully,
for: WEMI SHADA & ASSOCIATES
SGD
WEMI SHADA
Black’s Law Dictionary 9th Edition at page 1740 defines the words “Without prejudice” as follows:-
“Without loss of any rights; in a way that does not harm or cancel the legal rights or privileges of a party”.
The rule of evidence that seem to be the admission of documents made “without prejudice” in evidence has a statutory backing from the provisions of Section 25 of the Evidence Act which made provision for when admission in civil proceedings are relevant and when not relevant. Thus where X party before the institution of a court action makes an offer to party Y and expressly states that the offer is “without prejudice”. The document wherein it is so indicated or marked is not admissible in evidence if eventually there is litigation between the parties on the subject matter of discuss or correspondence. It follows that statements in a correspondence marked “without prejudice” or evidence of facts emanating from offers of compromise or attempt at or negotiation for out of court settlement of disputes is not admissible in evidence. See KOLO VS FBN PLC (2003) 3 NWLR (PT 806) 216 and FAWEHINMI VS NBA (NO 2) (1989) 2 NWLR (PT 105) 558.
As earlier stated this found expression in Section 25 of the Evidence Act which provides that:-
25: In civil cases no admission is relevant if it is made either upon an express condition that evidence of it is not to be given or in circumstances from which the court can infer that the parties agreed together that evidence of it should be given;
Provided that nothing in this Section shall be taken to exempt a legal practitioner from giving evidence of any matter of which he may be compelled to give evidence under Section 170 of this Act”.
In JADESIMI VS EGBE (2005) 10 NWLR (PT 827) 1 this court in interpreting the provisions of Section 25 held that, the following ingredients must be present before the provision of the Section can be applied to exclude a piece of evidence. (a) The piece of evidence concerned must relate to an admission by the person against whom the evidence is to be given; (b) the admission must be made upon an expression or condition that evidence of it is not to be given; or (c) the admission must have been made in the circumstances from which the court can infer that the parties agreed together that evidence of it should not be given.
In the instant case there is no where either in the pleadings or evidence in court that it is shown that Exhibit C10 was made either expressly or impliedly as an offer of compromise in anticipation or likelihood of litigation between the parties. Rather, the 2nd Respondent in pursuit of his professional duties wrote to his client, that is the Appellants informing them of the outcome of the instruction he received from the 1st Respondent regarding the sale of the property. At the time of the letter (Exhibit C10) dated 22-5-2006, there was no likelihood or apprehension of a dispute between the parties either overtly or remotely.
The learned trial judge while considering the issue in his judgment held as follows at page 491 of the record:-
“When 2nd defendant wrote Exhibit C10 dated 22nd May 2006, informing the claimants of the new price of N25 million that could be recommended to 1st defendant’s management for consideration he marked that letter “without prejudice”
The effect of such marking in law is very well known that no liability was to be presumed from anything contained in the letter against the maker thereof”.
To my mind, had the learned trial judge considered the content of the letter and the circumstances surrounding the making of it vis-a-vis the provisions of Section 25 of the Evidence Act a different conclusion would have been reached because the said marking can best be deemed as a mere surplus age that has no relevance to the transaction given the fact that the 2nd Respondent occupied the status of a middleman protecting the interest of both the appellant and the 1st Respondent. It is however worthy of note that the said letter was admitted in evidence as Exhibit C10 which to my mind was rightly done-except for the finding of the learned trial judge that no liability was to be presumed ‘from it against the maker. Nevertheless I find that failure of the learned trial judge to attach weight to the content of Exhibit C10 did not work any injustice against the appellant because he duly took into consideration, all the surrounding circumstance of the case including the payment of the cheque for N25 million, (the subject matter in Exhibit C10) and the subsequent return of same by the 1st Respondent to reach his decision. In the circumstance this issue is partly resolved in favour of the appellant.
ISSUE TWO
Herein, learned counsel for the appellants submitted that it was wrong for the learned trial judge not to grant an order of specific performance of the contract of sale of the property known as Plot 6G Cappa Estate, Maryland, Lagos. He added that it is trite law that an order of specific performance is an equitable remedy issued by a court which constrains a party to do that which he promised to do. SeeUNIVERSAL VULCANIZING (NIG) LTD VS I.U.T.T.C. (1992) 9 NWLR (PT 266) 388 at 404. Thus the appellants are entitled to the grant of an order of specific performance because they have fully performed or done all that was required of them under the contract for the sale of the property. He cited the case of DOHERTY VS IGHODARO (1997) 11 NWLR (PT 530) 694 at 703 – 704. Learned counsel referred to Exhibit C10 which according to him, represents a binding offer of sale made by the 1st Respondent to the 1st appellant in respect of the property in dispute. He argued further that by withholding the cheques for N25 million, for seven months the 1st Respondent denied the appellants the use of the money for the period and also made them to believe that the contract of sale was concluded in which case 1st Respondent is estopped by its conduct from denying the existence of a contract of sale by virtue of Section 151 of the Evidence Act and the authority of TEMCO ENG. CO. LTD VS SAVANNAH BANK OF NIGERIA LTD (1995) 5 NWLR 607 at 623- 624.
Learned counsel also referred to EXHIBIT C10A to submit that the importance of it is that the management of the 1st Respondent had agreed in principle to sell the property to the Appellants but only needed the consent of the Central Bank of Nigeria before it could finally dispose of the property. He then submitted that where there is an agreement for the sale of land for which the purchaser has paid finally or in part the purchase price, and has taken either physical or constructive possession, he acquires a valid interest which supersedes any subsequent transaction in respect thereof. He cited the following cases:- AYINLA VS SIJUOLA (1984) NSCC 301; OBIJURU V SOZIMS (1985) 2 NWLR (PT 6) 167; OHAERI VS YUSUF (2009) 1 CLRN 20.
Learned counsel also contended that the stance of equity is that it would treat as done that which ought to be done or which was or has been agreed to be done. See SAVAGE VS SARROUGH (1937) 13 NLR 141 at 142, HALSBURY’S LAW OF ENGLAND 4TH EDITION VOL.16 877 – 878; WALSH VS LONSDALE (1882) 21 CHD.9; GRAY VS SPYER (1922) 2 CH 22 CA and OSAGIE VS OYEYINKA (1987) 3 NWLR (PT 59) 144 at 157.
Replying on this issue two, learned counsel for the Respondents referred to judgment of the lower court at page 491 of the record to submit that a careful reading of the said judgment will show that the holding of the learned trial judge was that the Appellants, on the strength of Exhibit C10 forwarded the cheques totaling N25 million as purchase price for the property but that the cheques were returned to and collected by the Appellants who did not claim at that time that a contract already existed and which the return of the cheques would have breached, moreso the finding of the lower court on this fact was not appealed against by the appellants.
Learned counsel also submitted that the learned trial judge did not make any finding relating to the renovation of the property to the tune of N5 million but it was only raised in the Appellants’ statement of claim and which the 1st and 3rd Respondents contested in their statement of defence but, the learned trial judge failed to make a finding on it, and which issue the appellants ought to have appealed against. See EJIKEME VS AMAECHI (1998) 3 NWLR (PT 542) 456 at 472 and ORIENT BANK (NIG) PIC VS BILANTE INTL. LTD (1997) 8 NWLR (PT.515) 37 at 73. Learned counsel then urged this court to discountenance the argument on the issue of renovation because it did not form part of Ground 2 of their appeal. On the law relating to specific performance, learned counsel cited the case of BEST (NIG) LTD VS BLACKWOOD HODGE LTD (1998) 10 NWLR (PT 569) 253 at 263 to submit that a contract must exist before it can be part performed, so a contract that does not exist cannot be enforced into existence on account of the voluntary acts done or carried out by one party without the knowledge, approval or concurrence of the other party, there must be consensus ad idem.
Learned counsel also referred to section 5(2) of the LAW REFORM (CONTRACTS) LAW CAP 163 Laws of Lagos State to submit that Exhibit C10 was not authored by the 1st Respondent but by the 2nd Respondent in which case it did not meet the requirement of Section 5(2) which provides that for a contract of sale of land to be enforceable by court action, it must be evinced by some memorandum or note in writing signed by the party to be charged or by some other person lawfully authorized by him.
Learned counsel also submitted that, beyond the fact that the 2nd Respondent marked Exhibit c10 “without prejudice”,the appellants saw, or ought to have seen clearly on the face of Exhibit D5 attached to Exhibit C10, that it was marked “subject to contract, thus indicating that no contract has been concluded. He added therefore that Exhibit D5 did not amount to an offer but an invitation to treat. Furthermore he says, the maker of Exhibit D5 does not claim to possess the power to determine whether or not to sell, the price to sell or to whom to sell the property but can only be seen as only having the power to recommend to the managements of the 1st defendant to consider the N25 million minimum price whenever it decides to sell the property, hence Exhibit D5 was marked “subject to contract”. Thus Exhibit D5 did not fix any specific price for the property or show that any agreement has been concluded and such there is no contract formed. See BIOKU VS LIGHT MACHINE (1985) NWLR (PT 39) 42; UDECHUKWU VS NGENE (1992) 8 NWLR (PT 261) 565 and UBN LTD VS…
Learned counsel also raised the question that, if there was a concluded contract for which specific performance is sought, why did the appellants submit another bid for the property (Exhibit D12) in the sum of (N27,515,000) different from the agreed price of N25,000,000 and why did they in Exhibit C5, seek to match the highest reasonable bidder?
The appellants response in their reply brief shall be addressed as the need arises.
An order of specific performance is an equitable remedy granted to a successful litigant constraining the losing party to carry out or fulfill his own part of the agreement which he had entered into with the successful litigant. Like all equitable remedies, it is at the discretion of the court, but the discretion must be exercised judicially according to settled rules and principles. See GAJI Vs PAYE (2003) 8 NWLR (PT 823) 583 and UNIVERSAL VULCANISING (NIG) LTD VS IJESHA UNITED TRADING AND TRANSPORT CO. LTD ((1992) 2 NWLR (PT 266) 388.
Black’s Law Dictionary 9th Edition at page 1529 defines Specific Performance as:-
“The rendering as nearly as practicable, of a promised performance through a judgment or decree. A court ordered remedy that requires precise fulfillment of legal or contractual obligation when monetary damages are inappropriate or inadequate, as when the sale of a real Estate or a rare article is involved.”
According to G.W Keeton, in his book, an introduction of Equity (5th Edition 1961) page 304.
“In essence, the remedy of specific performance is the execution of a contract according to its terms and it may therefore be contrasted with the remedy of damages which is compensation for non execution.”
To bring an action for specific performance presupposes the existence of valid and subsisting contract and therefore the insistence that it should be performed. See INTERNATIONAL TEXTILE INDUSTRIES (NIG) LTD VS ADEREMI (1999) 8 NWLR (PT 614) 268 at 303.
In the instance case, the appellants have hinged their claim for specific performance on the content of Exhibit C10 which according to them constitutes a proper offer by the 1st Respondent through the 2nd Respondent and Exhibit C10A showing that the management, of the 1st Respondent had agreed in principle to dispose of the property but only needed to wait for the approval of the Central Bank of Nigeria. Of equal importance is the fact the two cheques issued by them were retained by the 1st Respondent for about seven months in which case the said 1st Respondent should be stopped from reneging on the contract to sell the property.
I had earlier on in this judgment reproduced the content of Exhibit C10 which is a letter dated 22-5-2006 and written by the 2nd Respondent to the Appellants. Paragraph one of the said letter reads:-
“Sequel to the discussion you had with the undersigned on the above subject matter First Bank of Nigeria Plc. has directed that the minimum sales price that can be recommended to their management for consideration is N25,000,000.00 (Twenty Five Million Naira Only). This we believe is reasonable. The property of First Bank Plc. letter is hereby attached for your action.”
The First Bank of Nigeria Plc letter referred to is Exhibit D5 dated 22-5-2006 and addressed to the 2nd Respondent.
The content of the said Exhibit D5 is herein below reproduced:-
WEMI SHADA & ASSOCIATES
27th March, 2006
THE HEAD GENERAL SERVICE
FIRST BANK PLC
SAMUEL ASABI HOUSE
35, MARINA, LAGOS
Dear Sir,
RE: FBN PLC PROPERTY AT PLOT 6G CAPPA ESTATE MARYLAND, LAGOS.
Sequel to our letter dated 26th January, 2006 in respect of the above captioned property, please find enclosed a copy of the certified true copy of the Court’s Judgment on the perfection of title to the property. The new title will now be registered with the Lands Ministry.
Kindly let us have your cheque for the sum of N500,000.00 (five hundred thousand naira only) being our professional fees on the perfection of title while we await the registration of document with the Lands Ministry. Lagos.
Please, also that a client’s cheque of N20,000,000.00 (twenty million naira only) being agreed purchase price of the property is still with us. Kindly advise us on when to send in the cheque since the title issue has been resolved.
Thanks for Your cooperation.
Yours faithfully
for: WEMI SHADA & ASSOCIATES
SIGNED
WEMI SHADA
To my mind, a careful reading of Exhibit C10 will reveal that to all intent and purposes they cannot be regarded as an offer either from the 1st or 2nd respondent but could at best be seen as an invitation to treat, given the fact that it was clearly stated by the signatory to the letter Exhibit D5 that the minimum sales price they can recommend to their management for consideration is N25 million. The same stance was repeated in Exhibit C10 written by the 2nd Respondent in conveying the content of Exhibit D5 to the Appellants.
What I make of it is that until the management deliberate on it and approves the price for the sale of the property, ho amount will be deemed to have been fixed for the said property in which case it cannot be alluded to, that the parties are ad idem on the consideration which is an important element for a valid contract. The said Exhibit C10A was signed by one Abdu Abubakar, Head, General Service who did not give the impression that he has the power or authority to conclude the contract with the Appellant but rather laid his cards clearly on the table that whatever is to be done must be with the consideration and general approval of the management of the 1st Respondent. This impression was also reflected in exhibit C10 wherein it was indicated that: “First Bank Plc directed that the minimum sales price that can be recommended to their management for consideration is N25,000,000 (Twenty Five Million Naira Only).
What is more, the said Exhibit D5 upon which exhibit C10 is premised has the phrase “SUBJECT TO CONTRACT” clearly marked on it. The phrase “Subject to Contract” is one which makes it clear that the intention of the parties is that neither of them is to be contractually bound until a contract is signed in the usual way. When the phrase is employed in a appropriate situation, with a clear measure of intention, there can be no valid contract until formal contracts are exchanged. See INTERNATIONAL TEXTILE INDUSTRIES (NIG) LTD VS. ADEREMI (SUPRA) at 295 -296.
In the instant case, the intention is very clear that the final authority rests with the management of the 1st Respondent in the consideration and approval of the amount the property shall be sold as well as the sale. This was not done because the same management eventually resolved not to dispose of the property first, until their title to the property is perfected and subsequently as per Exhibit C10A until approval for such sale is contained from the Central Bank of Nigeria. In both cases, the Appellants cheques received through the 2nd Respondent was also returned to them through the same route.
The two cheques for N25 million was forwarded to the 1st Respondent through a letter dated 22-5-2006 (Exhibit D3). The cheques were returned back to the appellants through the 2nd Respondent via the 1st Respondent’s letter dated 14-12-2006. The 2nd Respondent however held on to the cheques till 23-8-2007 when it was returned to the Appellants.
Learned counsel for the Appellant had argued that by the long delay of about seven months the 1st Respondent should be stopped from reneging on the contract and an order of specific performance should be made because the appellants were let into possession of the property.
Learned counsel had also relied on Exhibit C10A to contend that it was neither marked “subject to Contract” nor “without prejudice” but was to the effect that although the 1st Respondent management had approved the sale of the property to the appellants, it needed only the approval of the Central Bank of Nigeria before the property could be finally disposed of. He added that the clear import of Exhibit C10A is that the management of the 1st Respondent had agreed in principle to sell the property to the appellants but only needed to get the consent of the Central Bank of Nigeria before it could finally disposed of the property.
This may sound logical on the face of it but sight should not be lost with regard to paragraph two of the letter in question (Exhibit 10A) wherein the cheques for the sum of N25 million being the amount proposed for recommendation to the management of 1st Respondent and issued by the appellants was returned back to the latter. I believe that the return of the cheques speaks volumes about the reality on the ground as at 14-2-2006 because as it stood then, the supposed consideration which constitutes an essential part of the tripod engendering a valid contract has been reneged on and the consequence of that is glaringly to the effect that no valid contract has been entered between the parties. It is my humble view that until a valid contract is established, either of the parties can opt to have a change of mind in the transaction.
The fact should not however be ignored that in the absence of a valid contract an order for specific performance cannot be made. See INTERNATIONAL TEXTILE INDUSTRIES (NIG) LTD VS. ADEREMI Supra.
The issue was also raised by learned counsel for the appellants that assuming without conceding that Exhibit C10 constitute an invitation to treat and Exhibit D3 constitutes an offer rather than an acceptance of Exhibit C10, the trial court ought to have held that there was a concluded contract of sale of the property between the parties. This is because having accepted the cheques and kept them for seven months and having let the appellants into possession, the 1st Respondent had impliedly accepted the appellants’ offer to purchase the property. This may be true and correct given the right state of affairs but in the instant case the question that should be asked is whether the letting of the appellants into possession and the delay of seven months before the return of the cheques for N25 million is the act of the 1st Respondent.
Now in Exhibit D5, dated 22-5-2006 the 1st Respondent’s servant wrote to the 2nd Respondent informing him that the minimum sales price that they can recommend to their management for consideration is N25 million (I underline the two words for emphasis). This message was relayed in Exhibit C10 by the 2nd Respondent to the Appellants, wherein the 2nd Respondent requested them to bring the cheque for the aforesaid sum. The said cheque dated 22-5-2006 was sent to the 1st Respondent by the 2nd Respondent via a letter dated 22-5-2006 also. By a letter dated 18-7-2006 (Exhibit C8) the 2nd Respondent sent the keys of the property to the appellants who also acknowledged receipt that day. The said Exhibit C8 written by the 2nd Respondent made no reference at all to the 1st Respondent as to whether the handing of the keys was with its approval. Subsequently, by a letter dated 14-12-2006, Exhibit C10A, the 1st Respondent wrote to the 2nd Respondent returning the cheques for the sum of N25 million, on the ground that, though the management had approved the sale of the property amongst others (not only the property in dispute), they now required to also obtain similar approval from the Central Bank of Nigeria. At this stage as earlier stated, any possibility of concluding a valid contract was frustrated by the return of the cheques.
The said cheques returned to the appellant via the 1st Respondents dated 14-12-2006 was retained by the latter until the 27-8 -2007. I have tried to but cannot see my way through to any justification for the 2nd Respondent to have retained the cheques for about seven months after it was returned to him for onward delivery to the appellants because there is no proof linking the 1st Respondent with such retention. The same goes for the handing over of the keys of the property to the appellants after they sent their cheques through the 2nd Respondent as earlier stated. It must be noted here that the 2nd Respondent literally acted as a double agent for the parties in the whole transaction this finding is also in the judgment of the lower court (see page 492). But also in this case there is nothing to link the 1st Respondent to the two acts of handing the keys to the Appellants and retention of the cheques by the 2nd Respondent. In both cases it is my view that he acted without the authority of the 1st Respondent as contended by it, in which case the 1st Respondent cannot be bound by those acts. See UNIVERSAL VULCANISING (NIG) LTD VS. IUTTC Supra at 403. And in LABODE VS. OTUBU (2001) 5 NSCQR 722 at 753, it was held by the Supreme Court that any unauthorized tortuous or contractual acts of the agent cannot bind the principal.
Consequently, there being no ground to justify that there was a valid and subsisting contract, the order of specific performance cannot avail the appellants.
This issue is therefore resolved against the Appellant.
ISSUE THREE
Dwelling on this issue, learned counsel for the Appellants referred to the finding of the learned trial judge at page 492 of the record to submit that he reached a wrong decision thereon because the purported bidding process introduced by the 1st Respondent for the sale of the property after obtaining approval from the Central Bank of Nigeria was of no equitable right in the property. He added that there is uncontradicted evidence before the lower court that the Appellants did not make any bid or authorize the 2nd Respondent to do so on their behalf given the fact also that the 2nd Appellant was outside the country at the time the bid was made in which case the said bid made by 2nd Respondent on behalf of the Appellants is null and void having been made without the authorization of the Appellants because any act of an agent done without the authority of his principal is null and void see UNIVERSAL VULCANISING (NIG) LTD VS. IUTTC Supra at 403.
On the other hand, learned counsel argued that even if the Appellants made a bid for the property. The trial court ought still to have made a finding that the Appellants made the only valid bid having found that the 3rd Respondent did not make any bid.
He further submitted that the learned trial judge ought to have invoked the maxim “ubi jus ibi remedium” in granting the appellant’s claim of specific performance having regard to her finding that they were unfairly treated by the 1st Respondent.
In his reply on this issue, learned counsel for the 1st and 3rd Respondents submitted that the maxim “ibi jus ibi Remedium” means that where there is a wrong there must be a remedy but it does mean that where a suitor has claimed a wrong remedy the court should award the suitor what In its own belief should have been the appropriate remedy but not claimed by the suitor. He referred to the Appellants’ first claim in the amended statement of claim which the court found not proved from the evidence adduced in the case. He added that the import of the statement of the learned trial judge at page 494 of the record is that if the Appellants had claimed for the detention of their cheques for seven months, respectively, he would have awarded them damages and this statement was made after he had dismissed the Appellants claim and is nothing more than an obiter dictum. He then urges this court to dismiss the appeal.
The judgment of the lower court as contained in page 492 of the Record reads thus:-
If the chain of transaction on the sale of the property had stopped at the payment by Claimant, the approval to sell by management und the Claimant following up with presentation of the repurchased cheque of N25 million as it the purchase price to 1st Defendant either directly or through 2nd Defendant, that argument could sail through.
However as the evidence showed from the Claimants witness themselves, when Claimants proceeded to acquiesce in the new consideration of sale by bidding introduced by 1st Defendant and actually proceeded to instruct 2nd Defendant to bid on their behalf, which he did by Exhibit – D12 aforementioned, the Claimants themselves destroyed the basis of any concluded agreement in the circumstances.
In other words they agreed that that was the new procedure negotiating sale of the property participated in the process, but lost as td Defendant’s bid on their behalf was allegedly lower thon the highest bid purportedly that of the 3rd Defendant.
It is therefore too late in the day to resile from the consequence and effect of that participation in the bidding process on their stand of a concluded contract before it.
Indeed I find that the denial by Claimants that they do not know of the bidding process or instructed the 2nd Defendant to bid and the statement of 2nd Defendant that he did so unilaterally without authority from Claimants but upon being cajoled by 1st Defendant that Claimants would lose out in the sale transaction if he did not, are not only contradictory with Claimant Witness 2’s testimony in Exhibit-C5 that he did instruct 2nd Defendant the Agent, to bid on his behalf, they amounted to an afterthought and totally incredible.
It is for the above reasons that I come to the conclusion based on the testimony of Claimant Witness 1, Claimant Witness 2, Defendant Witness 4 (2nd Defendant) and the exhibits above referred to, that the Claimants have failed to prove the existence of a concluded contract of sale of the property in dispute and I so hold.
I cannot but I agree with the above findings and conclusion of the learned trial judge especially as it relates to whether or not there was a bidding process in which the 2nd Respondent participated on the instruction of the Appellants. Their subsequent denial especially by the 2nd Appellant during cross examination does not only contradict his statement on oath but makes it a mere after thought. He probable forgot that he had earlier on deposed in his evidence on oath particularly at paragraphs 20, 24 and 25 as follows:-
20. Another twist was introduced by First Bank Plc claiming the sale of the property will be by bidding. The agent was instructed to bid on my behalf.
24. First Bank Plc claimed that a staff of First Bank Plc made a higher bid than the agent did on my behalf, and had made a deposit to purchase the property which may be sold to him subject to Board decision.
25. In pursuance of my consisted good faith I offered to match the highest reasonable bidding on the official proof of the claimed higher bidding
Under cross examination at page ….of the record he testified thus:-
I am not aware of any such bid. 1st Claimant was also not aware of any such bid. It’s a surprise to us.
In the light of the above, I cannot afford to disturb the finding of fact by the learned trial judge that the Appellant did in fact instruct the 2nd Respondent to participate in the bidding on their behalf. See BAMGBOYE VS. OLAREWAJU (1991) 5 SCNJ 88; OSHO VS. FOREIGN FINANCE CORP. (1991) 4 NWLR (PT. 184) 157 and LENGBE VS. IMALE (1959) SCNLR 540.
The claimants had both on the lower court and before this court strongly contended that there was a valid contract on which an order of specific performance ought to be made to compel the 1st Respondent to conclude the transfer of the property to them. But the finding of the lower court which this court agrees with to the effect that the Appellants actually participated in the bid through the 2nd Respondent puts an encl to this contention because it goes to support the earlier holding of this court that there was no valid contract to justify an order of specific performance and the Appellants are deemed to have accepted the reality of the situation hence they tried to make amends by participating in the bidding process. They were even by their evidence ready to march the highest bidder if given the chance. On this note I also resolve this issue against the Appellants.
On the whole, I hold that except for part of issue one for which this court held that Exhibit C10 is admissible in evidence, this appeal fails and is hereby dismissed.
The judgment of the lower court delivered on 13th day of October, 2010 is hereby affirmed.
Parties to bear their costs.
CROSS APPEAL
Being also aggrieved with part of the judgment of the lower court, the 1st and 3rd defendants/counterclaimants (now respondents/cross appellants also cross appealed against it on fourteen grounds in their Notice of Cross Appeal dated 4-10-2011 and filed on the same date.
The 1st and 2nd Appellant in the main appeal are now the 1st and 2nd cross respondents. The 2nd Respondent is now the 3rd Cross Respondent while the 4th Defendant in the counter claim is now the 4th cross respondent.
From the 14 grounds of appeal in the Notice of cross appeal the 1st and 3rd Cross Appellant distilled four issues for determination in their brief of argument settled by A. Olumide-Fusika and filed on 15-4-2011. The four issues reads thus:-
ISSUES FOR DETERMINATION
It is humbly submitted for the (Cross) Appellants that the issues arising for determination from the 14 grounds of Appeal in the Notice of (Cross) Appeal are:
(1) Whether or not the learned trial judge was right when he held that the 3rd Defendant to the Counter claim (Wemi Shada) acted as agent for the 1st Counter claimant (First Bank of Nigeria Plc) when he allegedly took possession of the subject property from the 4th Defendant to the counter claim (connair Cargo Services Ltd.) and gave it to the Claimants (Acmel Nig. Ltd/Bode Ayeni)? – Ground 2 of the Notice of (Cross) Appeal.
(2) Whether or not the learned trial judge rightly refused the 1st Counter claimant’s (First Bank of Nigeria Plc’s) counter claim against the Claimants (Acmel Nig/Bode Ayeni) for damages for trespass on the subject property with effect from the 18th day of July 2006, and instead awarded to them (that is, the Claimant – Acmel Nig. Ltd/Bode Ayeni) the right to continue an remain in free (of charge or consideration) use and occupation thereof up till 31st December, 2011? – Grounds 1, 6, 7, 8 and 15 of the Notice of (Cross) Appeal.
(3) Whether or not the learned trial judge rightly rejected the 1st Counter-claimant’s (First Bank of Nigeria PLC’s) counterclaim jointly and severally against the 3rd and 4th Defendants to the Counter-claim (Wemi Shada/Connair Cargo Service Ltd) for damages for use and occupation of the subject property for the period 20th October 2005 to 3lst January 2008? – Grounds 3, 4, 5 and 14 of the Notice of (Cross) Appeal.
(4) Whether or not the learned trial judge rightly rejected the 2nd Counterclaimant’s (Bayo Adeleke’s) counter-claim against the Claimants (Acmel Nig Ltd/Bode Ayeni) for possession of the subject property, and for damages for its use and occupation with effect from 1st February 2008 when he (the 2nd Counter-claimant – Bayo Adeleke) become entitled thereto until the same is yield-up (by the Claimants –
Acmel Nig. Ltd/Bode Ayeni) to him (the 2nd Counter-claimant – Bayo Adeleke)? – Grounds 9, 10, 11, 12, 13, and 14.
For the 1st and 2nd Cross Respondents three issues were formulated in their brief of argument dated 6-6-2011 and filed on 8-6-2011. They read thus:-
ISSUES FOR DETERMINATION
(1) Whether the learned trial judge was right in low in holding that the 3rd Defendant to the Counter-claim (the 3rd Cress Respondent) acted as agent of the 1st Defendant/Counter-claimant (1st Cross-Appellant) when the former handed over the keys and gave possession of the property known as Plot 6G. Cappa Estate, Maryland, Lagos to the 1st and 2nd Claimants/Defendants to the Counter-claim (1st and 2nd Cross-Respondents) in realization of the sale transaction in respect of the said property between the 1st Defendant/Counter-claimant and the 1st and 2nd Claimants/Defendants to the counterclaim.
(2) Whether the learned trial judge was right in refusing to grant the 1st Defendant/Counter-Claimant’s against the 1st and 2nd Claimants/Defendants to the Counter-claim for damages for trespass on the property in dispute.
(3) Whether the learned trial judge was right in refusing to grant the 2nd Counter-claimant’s counter-claim the 1st and 2nd Claimants/Defendants to the Counter-claim for possession of the property in dispute and far damages for the use and occupation of the property.
The 3rd and 4th Cross Respondents did not file any brief of argument. Thus this cross appeal shall be resolved on the basis of the brief of argument filed by the 1st and 3rd cross appellants and the 1st and 2nd cross-respondents but with emphasis on the four issues formulated in the formers brief.
ISSUE ONE
Whether or not the learned trial judge was right when he held that the 3rd Defendant to the Counter claim (Wemi Shada) acted as agent for the 1st Counter claimant (First Bank of Nigeria Plc) when he allegedly took possession of the subject property from the 4th Defendant to the Counter claim (Connair Cargo Services Ltd.) and gave it to the Claimants (Acmel Nig. Ltd/Bode Ayeni)?
On the issue, the learned trial judge had this to hold in the judgment at page 492 of the Record (Vol. 2)
“On the status of 2nd defendant in the sole transaction in dispute, the preponderance of evidence in particular documentary, showed that he acted more as an agent of the Claimants, but in some other respect ostensibly as that of the 1st defendant, such us to possession of the property.”
I agree entirely with this finding of the learned trial judge and I did also address the issue while considering issue two in the main appeal wherein it was held that the 3rd cross respondent (Wemi Shada) acted as agent for the 1st cross appellant just as he did for the claimants. This clearly reflected in the sworn testimony of DW4 (2nd defendant) (Wemi Shada) and paragraphs 4 to 6 of the said testimony on oath is reproduced below:-
4. That further to the above paragraph, our capacity as Brokers/Middleman in the said transaction was, to the knowledge of both the First Counter-Claimant on one hand and the First and Second Defendants on the other and that the First Counter claimant, the First and second Defendants were all aware that they were arranging/facilitating the said sale transaction on their behalf respectively and that they acquiesced and approved of all the steps taken by the firm in respect of the transaction.
5. That by the conduct of the First Counter Claimant on one hand, the First and Second Defendant on the other, the First Counter Claimant on one hand, the First and Second Defendant on the other, had respectively held the our firm to be their brokers, facilitators, Middleman or go-between and are stopped from denying that our firm at any time material to this action acted as Agents for all the parties as mentioned.
6. That our firm at the material time to this action was disclosed agent of the First Counter Claimant on one hand, the First and Second Defendant on the other hand, that is to say respectively.
Under cross examination; the DW4 answered that:
“I know First Bank, sometimes in June 1998. I wrote to the Bank to be registered as an Estate Surveyor and valuer, they wrote to me in July 1998 confirming my registration as such and promised to call me whenever my service is required. It is incorrect to soy that I merely hang around the Bank to solicit for jobs. Pursuant to my registration with it; I had carried out jobs for First Bank to the property No. 6G. Cappa Estate.”
From the above testimony which the trial court readily accepted as well as the correspondence between the 1st cross appellant and the 2nd cross respondent as tendered in evidence during trial. I am of tire view that there is establish a principal/agent relationship between the two.
ISSUE TWO
Whether or not the learned trial judge rightly refused the 1st Counter claimant’s (First Bank of Nigeria Plc’s) counter claim against the Claimants (Acmel Nig/Bode Ayeni) for damages for trespass on the subject property with effect from the 18th day of July 2006, and instead awarded to them the right to continue and remain in free use and occupation thereof till 31st December, 2011.
Herein, the learned counsel for the 1st and 3rd cross appellants contended that the date of 20th October 2005 claimed by the 1st cross appellant to be the commencement date of the trespass was the date following the 19th day of October, 2005 when the tenancy (Exhibit D27) granted by the 1st cross appellant in tile property expired up to the 31st of January, 2008 date when the 1st cross appellants propriety interest over the property came to an end having sold it to the 2nd cross appellant.
Exhibit C8 dated 18-7-2006 is a letter written to the 1st and 2nd cross respondents wherein he handed the keys to the property to them. This shows that the 1st and 2nd cross respondents have nothing to do with the possession of the property till the 18-7-2006 when the keys giving access to it were handed to them. The 2nd cross respondent while testifying as CW2 at the trial court also testified that he received the keys to the property on 18-7-2006 from the 3rd cross respondent. In the light of the above there no doubt that it was the 2nd cross respondent acting as agent of the 1st cross appellant that let the 1st and 2nd cross respondents into the premises in question and under the false, albeit innocuous belief that having paid the cheques of N25 million the property has to all intents and purposes become theirs. Black Laws Dictionary 9th Edition defines trespass as “an unlawful act committed against the person or property of another especially wrongful entry on another real property. In the instant case the 1st and 2nd cross respondents cannot be said to have trespassed into the property in dispute but were rather invited to take it over having satisfied all the prerequisites prelude to the eventual ownership of the property and the invitation was at the instant of the 1st cross appellants agent with whom they had all along related with during negotiations for the purchase of the property. Even though some acts of the 3rd cross respondents were earlier held not to be binding on the 1st cross appellant, it does not translate to holding a party who acted under a genuine belief liable for trespass. However, I find the order of the trial court that the 1st and 2nd cross respondent should continue to stay on the property free of charge from the date of the judgment 13-10-2010 till 31-12-2011 rather strange and bothers on sentiments. Having found against them that the contract for the purchase of the property was not concluded and as such refusing their claim. The proper order to make in the circumstance is that of immediate vacation given the fact that they were not rent paying tenants on the property.
Thus issue two is partly resolved in favour of the cross appellants.
ISSUE THREE
Whether or not the learned trial judge rightly rejected the 1st Counterclaimant’s counterclaim jointly and severally against the 3rd and 4th Defendants for use and occupation of the subject property for the period 20th October 2005 to 31st January 2008?
The 4th defendant in question is the present 4th cross respondent. That is (CONNAIR CARGO SERVICE LTD).
Its link with this matter was that sometime in the year 2003 it entered into a two tenancy agreement with the 1st cross appellant for which the 3rd cross respondent acted as agent for the latter. Exhibit D10 is a letter from the 1st cross appellant to the 3rd cross respondent approving the lease of the property at House 6G. Cappa Estate Maryland, Lagos. The term is for two years with effect from 20-10-2003 and with an option to renew for another two years at a rent to be agreed. The annual rent was put at N750,000. Exhibit D7 is the tenancy agreement eventually signed by the parties. Evidence however abound that the 4th cross respondent did not stay on the property beyond the years agreed to by the parties. The unchallenged testimony of witness to the 4th cross respondent is clear and uncontradicted to the effect that CONNAIR
CARGO SERVICE LTD. entered into a two year tenancy agreement with the 1st cross appellant through its agent Messrs Wema Shada (3rd cross-respondent) for a period of two years from 20-10-2003 to 19-10-2005. They paid all the required money before being let into possession through the 3rd cross respondent and at the expiration of the period Connair Cargo Service Ltd voluntarily yield up the premises to the 1st cross appellants agent (Messrs Wemi Shada) through which the property was leased and it never assigned or part possession to anyone other than the 1st cross appellant’s agent.
In other words the 4th cross appellant (Connair Cargo Service Ltd) had nothing to do with the property, after the 19-10-2005. In the circumstance, I find it hard to understand the basis for the claim for damages for occupation as sought against the 4th cross respondent when there is no evidence linking it with any further stay beyond the period or that it renewed it tenancy as required by Exhibit D7.
As touching the 3rd cross respondent, I need only state that there is no evidence to show that he used or occupied the premises in question. This issue is therefore resolved against the 1st and 3rd cross appellants.
ISSUE FOUR
Whether or the learned trial judge rightly rejected the 2nd counter-claimant’s counterclaim against the Claimants for possession of the subject property, and for damages for its use and occupation with effect from 1st February 2008 when he became entitled thereto until the same is yield-up.
The 2nd cross appellant’s claim in the trial court as per paragraphs 45(b) of the Amended State of Defence and counter claim is as follows:-
“(i) possession of the property lying being and situated at Plot 6G. Cappa Estate Maryland Estate, Onigbongbo, Lagos, and
“(ii) special damages in the sum of N4,000,000.00 (Four Million Naira) per annum for trespass on, and/or (that is, alternative) for use and occupation of the said property with effect from the 1st day of February, 2008 until abatement of the trespass, and/or (that is, alternatively) until possession is yield up to the 2nd Counterclaimant, together with interest at the rate of 21% per annum with effect from the said 1st February 2008 until satisfaction.”
The learned trial judge in his judgment at page 494 to 495 of the record held thus:-
I had held that Claimants could not be held as trespassers on the property after 4th Defendant vacated and 2nd Defendant gave 2nd Claimant the keys.
The evidence is that the keys were given to 2nd Claimant by 2nd Defendant on 18th July, 2006 per Exhibit- C8, after the payment of the N25 million on 22nd May, 2006 vide Exhibit- C4, in apparent realization of the sale transaction. It was 1st Defendant that aborted it seven months thereafter, so that in effect entry of Claimants on to the property was lawful and same was not even challenged, until after the purported sale to 3rd Defendant. Besides also Defendant Witness I had stated that 1st Defendant cared less about who was in occupation, of .the property since negotiations were on for/the sale of same.
1st Defendant is therefore stopped from coming back to claim for damages for trespass to the premises as it did above.
Likewise too, since it is trite that a purchaser of a landed property buys subject to or with all encumbrance thereon, 2nd Counter Claimant too cannot succeeds in a claim for use and occupation against the claimants as claimed: mare particularly also, even if it is proved that the property had been sold to him; he must still comply with the relevant provisions of the Rent Control and Recovery of Premises Law in Lagos State in seeking possession from the Claimants.
2nd Counter Claimant claimed to have purchased the property from the 1st Defendant through d competitive bidding process. He tendered in evidence Exhibit- D11 inviting the bids.
He did not tender any bid by him, or the acceptance thereof by 1st Defendant Counter Claimant. He however tendered in evidence Exhibit- D15 by which he allegedly deposited 10% of the purchase price – on 15th November, 2007 and Exhibit- D19 by which he made up the balance on 29th January, 2008.
I have carefully perused the evidence of the 2nd cross-appellant at the trial court as well as documents tendered in evidence in the whole proceedings for counterclaim. I however observed that though there is evidence of payment of cheques for a certain sum by the 2nd cross appellant to the 1st cross-appellant, there is however nothing to show that consequent upon that, title in the property was formally transferred to the 2nd cross-appellant. I believe that a transaction involving land of this nature and magnitude will involve the transfer of title documents evidencing shift of ownership from the 1st cross-appellant to the 2nd cross-appellant. What is more, as rightly pointed out by the trial court, the 2nd cross-appellant in his counter claim only tendered in evidence Exhibit D11 which is an invitation for bids but he failed to tender in evidence any proof of bid by him and the amount of the bid neither was there in evidence any letter of acceptance of the a bid by the 1st cross-appellant. All other documents tendered in evidence relate to his correspondence with an Estate Surveyor, and the monies paid as purchase price for the property. It is indeed strange that in spite of this no title document was tendered in evidence including even the receipt of purchase to show that the property has actually passed to the 1st cross-appellant.
However, there being no disputing the fact that ownership of the property inhers in the 1st cross-appellant, the contract of sale to the 1st and 2nd cross-respondents having been found not have seen concluded, it follows that the 1st cross-appellant is free to do what it desires with is property including a sale to the 2nd cross-appellant. But there being no proof of a formal transfer of the said property before the court, the claim for possession should rather rightly be by the 1st cross-appellant in which case I find the 2nd cross-appellant claim for possession and damages not proved and is accordingly dismissed.
This issue is also resolved against the 1st and 3rd cross-appellants.
On the whole, this cross appeal succeeds in part to the extent only that the 1st and 2nd cross-respondents shall vacate the property immediately.
Parties to bear their cost.
AMINA A. AUGIE, J.C.A.: I have read the lead Judgment just delivered by my learned brother, Oseji, JCA, and I agree with his reasoning and conclusion. He has covered the whole field, and I will only comment on the role of the 2nd Respondent in the transaction.
The law recognizes that in some circumstances, the agent can affect the principal’s legal position by certain acts which, though performed by the agent, are not really to be treated as the agent’s own acts but as acts of the principal. However, where the agent does not have the authority to bind the principal in a contractual relationship with third parties, a trial Court would be wrong to hold the supposed principal liable for the acts of the agent in the transaction – Edem V Canon Balls Ltd. (2005) 6 SC (Part II) 16 where Akintan, JSC, held that-
“An agency relationship exists only where a person called the agent has the authority to act on behalf of another called the principal the facts in this case are that the Respondent wrote to the company in Belgium from whom the Appellant claimed he bought the tractor, asking for information about the purchase price made by the Appellant to which there was no reply. That act is definitely not enough to reduce the relationship existing between the parties to that of principal and agent”.
And N.O.H.B. V. Ajogwu (2000) 12 NWLR (Pt. 682) 626 wherein it was held-
“Agency has been described as a relationship where one person confides the management of some affair, to be transacted on his account, to other party. Or where one party is authorized to do certain acts for, or in relation to the rights or the property of the other. But it means more than tacit permission and involves request, instruction or commands. [per Fabiyi, JCA (as he then was)]
In this case, there is nothing to link the 1st Respondent to the 2nd Respondent’s acts of handing over keys to the Appellants and holding on to the said cheques for seven months after it was returned to him for onward delivery to them. So, he must be taken to have acted without the authority of the 1st Respondent.
Thus, I also dismiss the appeal. I adopt my learned brother’s decision on the cross appeal and abide by the orders he made.
RITA NOSAKHARE PEMU, J.C.A.: I had the advantage of reading in draft the lead Judgment just delivered by my brother SAMUEL CHUKWUDUMEBI OSEJI, JCA.
He has dealt exhaustively with the issues in the Appeal that I have nothing to add but to adopt his reasoning and conclusion as mine.
I however have few words to say by way of emphasize on the main Appeal.
Where a party does an act, and subsequently reneges by way of saying he did not participate in the act, which subsequent denial contradicts his statement on oath, then the evidence adduced becomes at variance with the facts deposed to on oath. In such circumstances the Court is entitled to disregard the evidence altogether.
Where there is no valid contract, then an order of specific performance cannot be made. The Appeal is dismissed and the Judgment of the Court below delivered on the 13th of October 2010 is affirmed by me. I also allow the Cross Appeal in part.
I subscribe to the consequential order made as to costs that parties are to bear their costs.
Appearances
Tayo Oyetibo SAN with John Aga, S. Edoh and M. Tayo – Oyetibo For Appellant
AND
A. Olumide – Fusika with O.E. Jimoh (Mrs.) for 1st & 3rd Resp./Cross appellants. For Respondent
