CARNCO FOODS (NIG) LTD v. MAINSTREET BANK LIMITED & ANOR (2013)

CARNCO FOODS (NIG) LTD v. MAINSTREET BANK LIMITED & ANOR

(2013)LCN/6159(CA)

In The Court of Appeal of Nigeria

On Tuesday, the 7th day of May, 2013

CA/L/294/2011

RATIO

COMPANY LAW: RECEIVERS ARE PERSONALLY LIABLE FOR CONTRACTS ENTERED INTO BY THEM EXCEPT STATED OTHERWISE

AGENCY: ACTS DONE BY AN AGENT OF A DISCLOSED PRINCIPAL
Acts done by an agent of a disclosed principal, as is the relationship between the 1st Respondent (as disclosed principal) and 2nd Respondent (as agent), binds the principal and the principal is liable for such acts of his agents. This is because the act of the agent is that of the principal.
A cursory look at the Ruling of the lower Court, shows that it observed thus
“Section 393(1) and (2) of CAMA deal with the duties and powers of receivers and managers – See also NASHTEX INTERNATIONAL LTD. v. HABIB (NIG) BANK LTD. (2007) 17 NWLR (Pt. 1063) 308 at 318. The exercise of these powers does not mean that the receiver should be joined as the Claimant has done in this case. As agent of the 1st Defendant, the 2nd Defendant can defend the suit instituted against the debenture holder (the 1st Defendant). Since the Lease Agreement the Claimant is seeking to enforce was not entered into by the 1st Defendant cannot defend the action. Both the 1st and 2nd Defendants are not parties to the agreement…”
He went on
“While it is trite that in receivership, a company ceases to have right to deal with the assets, the company has not lost its legal personality and can sue or be sued. NEWSPIN Ltd. (in receivership) is the proper party to sue in respect of this claim not the 1st Defendant which is not a party to the Lease Agreement or the 2nd Defendant, the agent of the 1st Defendant.”PER RITA NOSAKHARE PEMU, J.C.A.

JUSTICES:

IBRAHIM MOHAMMED MUSA SAULAWA Justice of The Court of Appeal of Nigeria

JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria

RITA NOSAKHARE PEMU Justice of The Court of Appeal of Nigeria

Between

Appellant(s)

CARNCO FOODS (NIG) LTD –

AND

Respondent(s)

1. MAINSTREET BANK LIMITED
2. PRINCE ADESUPO ADETONA –

RITA NOSAKHARE PEMU, J.C.A. (Delivering the Leading Judgment): The Suit No.LD/502/2010, the subject matter of this appeal emanated from the High Court of Lagos State, by Writ of Summons and Statement of Claim dated 16th March, 2010.

The appeal is against the decision of M. O. Obadina J. (Mrs.) of the 20th day of January, 2011, contained in a Ruling, striking out the suit for failure to join the proper parties.

Simply put, the brief facts of the case is that, vide a Deed of Appointment by the 2nd Respondent, the 1st Respondent was appointed the Receiver/Manager of NEWSPIN LIMITED. This was pursuant to the provisions of a General Debenture dated 9th of March, 1995.
The 2nd Respondent offered to assign to the Appellant its interest in the property at Plot 14, Iganmu Industrial Estate, Surulere, Lagos for a period of 18 years. The sum of N37 Million was paid by the Appellant as consideration for the sublease, vide medium term loan facility.
The Appellant was put in physical possession of the property in December 2001.
In the same year NEWSPIN LIMITED, the Company in receivership instituted a suit at the Federal High Court Lagos, against the Defendants herein, and in which the Appellant was joined as a party.
In 2005, acting on the instruction of the Chief Executive Officer of NEWSPIN LIMITED, armed hoodlums broke into the property and locked up about 85% of the entire Warehouse complex.
Up till date, the Appellants and its tenants, having been denied access into the property.

That by the Deed of Sublease executed in 2001, between NEWSPIN LIMITED through the Receiver Manager, the 2nd Respondent and the Appellant, the sublessor covenanted that the sublessee shall peaceably exercise and quietly enjoy the demised premises, without any interruption or disturbance by the sublessor, or any other person or persons claiming under, or in trust for it. The Respondents have failed to pass a good title to the Appellant, who has suffered damages as a result of the various law suits which he did not envisage or intend. As a result of the forcible re-entry by the Respondent’s customer, Appellant lost all the rental income it was to have earned from the Warehouses.
As a result of this, the Appellant herein filed a suit at the High Court of Justice, Lagos State, claiming inter alia, general and special damages against the Respondents for breach of contract.

However, by motion on notice dated and filed on the 1st of April, 2010, the Respondents herein filed a motion on notice praying the Court to strike out the suit on the Ground that the proper parties were not before the Court pages 113 – 114 of the Record of Appeal. The Appellant filed a counter-affidavit to the Motion as well as a written address – pages 149 – 157 of the Record of Appeal.
The lower Court upheld the objection of the Respondents and struck out the suit.
The Appellant is dissatisfied with the Ruling and has appealed same.
Pursuant to this, the Appellant filed a Notice of Appeal on the 3rd of February, 2011 with just one Ground of Appeal which has this to say, shorn of its particulars viz:
“The learned trial judge erred in law when she held that the Defendants were not proper parties to the suit.”

Pursuant to motion on notice, filed on the 5th of September, 2011, for an Order substituting MAINSTREET BANK LIMITED as the 1st Respondent in the appeal before this Court, constituted as Appeal No.CA/L/294/11, this Honourable Court granted same on the 16th of November, 2011.
The Appellant filed an Amended Brief of Argument on the 18th of January, 2012 and same was deemed filed on the 13th of February, 2013. It is settled by Chief M. A. Agbamuche.

On their part, the Respondents filed their Brief of Argument on the 12th of November, 2012 but same was deemed filed on the 13th of February, 2013. It is settled by Olatunde Adejuyigbe.

At the trial, the 1st Respondent was Afribank Plc which is now Mainstreet Bank by virtue of the original 1st Defendant, being acquired by the Asset Management Corporation of Nigeria (AMCON). Sequel to this acquisition by AMCON, the 1st Respondent’s name was changed to Mainstreet Bank Limited.
The Appellant distilled just one issue for determination from the sole Ground of Appeal. It is
“Whether the acts or actions of a receiver manager in managing the company in receivership are binding on the appointing debenture holder as a disclosed principal and if so, the principal is the proper party to be sued and not the company in receivership.”

The Respondent distilled one issue for determination in this appeal viz:
“Whether the learned trial Judge was right when he struck out the suit on the premise that the proper parties are not before the Court.”

On the 13th of February, 2012, the parties adopted their respective Briefs of Argument.
The Appellant argued that Section 390 of the Companies and Matters Act 1990 not Cap C Laws of the Federation of Nigeria 2004 (hereinafter referred to as) CAMA provides thus
“A receiver or manager of any property or undertaking of a company appointed out of Court under a power contained in any instrument shall subject to Section 393 of this Act, be deemed to an agent of the person or persons on whose behalf he is appointed.”

And that from the above, a receiver appointed by a debenture holder shall be deemed its agent citing RE VIMBOS LTD. (1900) 1 CH. 470. He argues that in UNIBIZ (NIG) LTD. v. C.B.C.L LTD. (2003) 6 NWLR (Pt.816) 402, the Apex Court held that by virtue of the Provisions of Section 390 of CAMA, a receiver or manager of any property is deemed to be an agent of the person or persons on whose behalf he is appointed.
Referring to Section 393(1) of CAMA which stipulates thus
“A person appointed a receiver of any property of a company shall subject to the rights of prior encumbrances, take possession of and protect the property, receive the rents and profits and discharge all outgoings in respect thereof and realize the security for the benefit of those on whose behalf, he is appointed….”

He argues that this section provides that once a receiver to a company is appointed by its secure creditors, such a person takes control of the entire company’s property. That it is also his duty to collect rents and profits accruing on the property. The receiver acts in the interest and to the benefit of the debenture holder’s citing NASHTEX INT’L LTD. v. HABIB (NIG) BANK LTD. (2007) 17 NWLR (Pt. 1063) 308.

Learned counsel submits, that the general position of receivers and manager in respect of contract entered into by them, is that they are personally liable except in so far as the terms of the contract otherwise provides. He refers to Section 394 of CAMA which has this to say inter alia
1. “A receiver or manager of any property or undertaking of a company shall be personally liable on any contract entered into by him except in so far as the contract otherwise expressly provides”

He argues that in the case of a receiver appointed under a power in a debenture or trust deed, he is the agent of the debenture holder, and as such the debenture holders are liable as his principals, upon contracts he makes during the receivership, and that they are also accountable for his defaults.
Citing TANAREWA (NIG.) LTD. v. ARZAL (2005) 5 NWLR (Pt.919) 593, where the Court held that a receiver manager of any property or undertaking is deemed to be an agent of the person or persons on whose behalf he is appointed, he submits that in this present case, the 1st Respondent appointed the 2nd Respondent receiver over NEW SPIN LTD. as reflected on pages 51-54 of the Record of Appeal.

The Appellant contends that the Respondents were debenture holders by way of collateral security over all the assets including Plot 14, Iganmu Industrial Estate, Surulere Lagos of NEWSPIN LTD. – Suit 20 – 50 of the Record of Appeal. And by a deed of appointment dated 3rd February, 1997, the 1st Respondent appointed the 2nd Respondent as receiver manager of a company known as NEWSPIN LTD. over all the assets and property including the property at Plot 14, Iganmu Industrial Estate, Surulere, Lagos.

He submits that paragraph 1(c) of the Deed of Appointment stipulates thus
“To make any arrangement or compromise which the receiver shall think expedient in the discharge of his duties and responsibilities under the deed of appointment with the prior consent of the bank having been obtained and to do all such things that may be required of him…”

It is the Appellant’s contention that the 2nd Respondent having been made receiver, he entered into a sublease agreement with the Appellant. As at the time of the execution of the agreement, the Appellant was made to understand that the 2nd Respondent was acting as agent and on behalf of the 1st Respondent. That the consent and approval of the 1st Respondent was secured by 2nd Respondent before entering into the sublease agreement – pages 151 – 152 of the Record of Appeal.
Therefore he argues, the 2nd Respondent is the agent of the 1st Respondent referring to the letter of the 2nd Respondent to the 1st Respondent at pages 192 – 194 of the Record of Appeal.

By the deed of sub-lease, the receiver demised unto the Appellant all that property at Plot 14, IGANMU INDUSTRIAL ESTATE, SURULERE, Lagos for a term of 18 years, and that one of the covenants of the sublease was that the
“Sublessee shall peaceably and quietly enjoy the demised premises during the term hereby granted without any interruption or disturbance by the SUBLESSOR or any person or persons claiming under or in trust for it.”

The covenant in the sublease, having been breached, the Appellant then sued the Respondent for damages. This is because the 1st Respondent is the disclosed principal of the 2nd Respondent and for whose benefit the sublease was executed.

Referring to the doctrine of Privity of contract, which means that a person cannot acquire rights, or be subjected to liabilities, arising under a contract to which he is not a party, he submits that that doctrine is subject to exceptions, such as that, where a person enters into a contract in the capacity of an agent, and acting on behalf of his principal, indeed a disclosed principal, such a contract will be deemed to be between the principal and the other contracting party. A fortiori, the proper party to sue or be sued for any acts and omissions done by the agent is the principal – citing AMADIUME v. IBOK (2006) 6 NWLR (Pt. 975) 158.

Therefore he submits that in the light of the circumstances of the facts in this case, vis-a-vis the judicial authorities cited, the principal who is in this case the debenture holder/appointing bank is a proper party to the suit. That the 2nd Respondent was the agent of the 1st Respondent, and a necessary party to any suit, arising from the execution of his duties, and instructions as receiver manager. He was a necessary party in all its ramifications, to the effective resolution of any dispute arising following his actions as receiver manager.
He urges Court to allow the appeal and remit the suit for trial before another Judge.

At page 3 of the Amended Respondents’ Brief of Argument, the Respondent had submitted that the issue for determination proffered by the Appellant does not arise from the lone ground of appeal in the Notice of Appeal dated 3rd February, 2011, and that indeed the issue for determination is vague and imprecise.
The Respondents, sole issue for determination is
“Whether the learned trial Judge was right when he struck out the suit on the premise that the proper parties are not before the Court.”

Let me quickly say here that, the contention of the Respondent that the sole issue for determination of the Appellant does not flow from the sole Ground of Appeal is misconceived.
At the expense of repetition, I shall reproduce the Appellant’s sole Ground of Appeal and his sole issue for determination

SOLE GROUND OF APPEAL:
“The learned trial Judge erred in law when she held that the Defendants were not proper parties to the suit”
(underlined for emphasis)

SOLE ISSUE FOR DETERMINATION:
“Whether the acts or actions of a receive manager in managing the company in receivership are binding on the appointing debenture holder as a disclosed principal and if so, the principal is the proper party to be sued and not the company in receivership” (underlined for emphasis)
No doubt, the term “proper parties” is indicated on both the Appellant’s sole Ground of Appeal and his sole issue for determination. Indeed that Issue of “Proper Party” is the fulcrum of the Appellant’s appeal.
Accordingly the contention of the Respondent is misconceived and same is hereby discountenanced.

Again the sole issue for determination of the Respondent can safely be said to coarlesce with that of the Appellant as they more or less address the same issue.
I can safely adopt this issue by the simple question
“Were the proper parties before the Court below?”
At page 52 of the Record of Appeal is a Deed of Appointment made on the 3rd of February, 1997 between AFRIBANK PLC (hereinafter called “The Bank”) of the one part and PRINCE ABDUL RASHEED ADESUPO ADETONA of Messrs Adesupo Adetona Co., Chartered Accountant of 4, Bunmi Joseph Close, Gbagada Estate, Phase II, Lagos (Hereinafter called the “Receive”) of the other part.

In Clause 1 of same, the Bank appoints the 2nd Respondent – Prince Adesupo Adetona, to be receiver in accordance with the terms, and having the powers as set out, in the said debenture, in addition to any other power or powers conferred upon him by law including but not limited:
(a) To collect and take immediate possession of the assets of the Company.
(b) To dispose by public auction or private treaty, all assets of the company.
(c) To make any arrangement or compromise which the Receiver shall think expedient in the discharge of his duties and responsibilities under the Deed of Appointment with the prior consent of the Bank having been obtained and to do all such things that may be required of him and comply with all lawful instructions and directives that may be given to him from time to time by the Bank.
(d) To give valid receipts for all moneys realized from the sale of the Companies assets or received in pursuance of the receivership.
(e) To do all such other acts and things as may be considered to be conclusive to any of the terms and powers aforesaid and which the Receiver lawfully can do as “agent of the Company” pages 52 – 53 of the Record of Appeal.

From records the Nigerian Weaving, Spinning and Printing Company Limited (In receivership) made a deed of sublease with the Appellant, whereby a sublease of the property at Plot 14, Iganmu Industrial Estate, Surulere, Lagos, was granted to Development Service Organization Ltd. was granted. In clause iii of the sublease agreement, by a general debenture dated the 9th day of March, 1995, the sublessor created a charge in favour of Afribank Nig. Plc over all its assets and property including the property at PLOT 14 IGANMU INDUSTRIAL ESTATE, SURULERE, LAGOS as security for the credit facilities granted to it by Afribank Nigeria Plc.
The following paragraphs of the Statement of Claim are apt. it is dated 15th March, 2010.
Paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 18, 19, 20, 21, 23, 24, 26, 34.
Paragraph 1: “The Claimant is a limited liability company incorporated in Nigeria and having its registered office at K.M. 35 Lagos-Badagry Expressway, Lagos.”
Paragraph 2: “The 1st Defendant is a company incorporated in Nigeria, carrying on the business of banking and having its Head office at 51/55 Broad Street, Lagos.”
Paragraph 3: “The 2nd Defendant is a Receiver/Manager appointed by the 1st Defendant by a deed of Appointment made the 3rd day of February, 1997 and having his address as 79A, Samuel Adedoyin Street, Victoria Island, Lagos State, Nigeria. The 2nd Defendant at all material times acted for and on behalf of the 1st Defendant.”
Paragraph 4: “By a Deed of Lease dated the 15th day of March, 1971 and registered as M09903, Lagos Executive Development Board granted a lease of the property situated at Plot 14, Iganmu Industrial Estate Surulere, Lagos to Development Services Organization Limited for term of 50 years commencing from the 1st day of January, 1971.”
Paragraph 5: “Development Services Organization Ltd. granted a sub-lease of the said property to Nigeria Weaving, Spinning and Printing Company Limited (NEWSPIN LTD.) for a term of 48 years by a Deed of Sub-lease dated 28th day of February, 1972.”
Paragraph 6: “NEWSPIN Ltd. is a customer of the Defendant to whom credit facilities were granted by the bank and it executed a general debenture dated the 9th day of March, 1995 whereby a charge was created in favour of the bank over all its assets and property including the property situated at Plot 14, Iganmu industrial Estate Surulere, Lagos.”
Paragraph 7: “Due to the inability and failure of NEWSPIN Ltd. to liquidate the debt to the Defendant, the bank vides a Deed of Appointment made the 3rd day of February, 1997 appointed Prince Adesupo Adetona, the 2nd Defendant as Receiver of NEWSPIN Ltd.”
Paragraph 8: The 2nd Defendant after his appointment took possession of all the assets of NEWSPIN Ltd. including the property at Plot 14, Iganmu Industrial Estate Surulere, Lagos from 1997 and was fully and solely responsible for all obligation pertaining to the property.”
Paragraph 9: “By his appointment as Receiver Manager, the 2nd Defendant became the alter ego of NEWSPIN Ltd. with statutory powers to realize the assets and property of NEWSPIN Ltd. including the property at Plot 14, Iganmu Industrial Estate, Surulere, Lagos for the benefit of Afribank Nigeria Plc., the 1st Defendant on whose behalf he was appointed.”
Paragraph 10: “The Claimant avers that the 2nd Defendant had no obligation to seek the consent and authority of NEWSPIN Ltd. or its Directors, Shareholders in the exercise of its power and performance of his function as Receiver of Afribank Plc.”
Paragraph 11: “The Claimant claims that the 2nd Defendant was vested with powers both by his Deed of Appointment and under statute to sell or otherwise dispose of the property of NEWSPIN Ltd. by public auction or private contract.”
Paragraph 12: “The Claimant avers that as a consequence of paragraph 5 to 10 here before, the Defendant by a letter of February 7, 2001 offered to assign to the Claimant its interest in the property at Plot 14, Iganmu Industrial Estate Surulere, Lagos for a period of 18 years from 1st March, 2001 to 28th February, 2009.”
Paragraph 18: “The terms of the agreement for the sub-lease of the NEWSPIN Ltd. interest to the Claimant are stipulated in a letter to the Claimant dated 20th December, 2001.”
Paragraph 19: The Claimant having paid the consideration for the Sub-lease was put in physical and effective possession of the property at Plot 14, Iganmu Industrial Estate Surulere, Lagos in December 2001.”
Paragraph 20: “Sequel to the instructions, a Deed of Sub-lease was prepared by Olatunde Adejuyigbe and Co., and duly executed by the Claimant and the 2nd Defendant.”
Paragraph 21: “The tenants in occupation of the warehouse on the property at the time Claimant took possession of the property in December 2001 who had all along paid their rents to the Receiver of NEWSPIN Ltd. the 2nd Defendant, agreed to continue their tenancy of their respective Warehouses and started dealing with the Claimant as their landlord.”
Paragraph 22: “That in 2002, NEWSPIN Ltd. instituted a suit at the Federal High Court Lagos with Suit No:FHC/L/CS/992/02 against the Defendants herein and in which the Claimant herein applied to be joined as a party.”
Paragraph 23: “Sometime in May 2005, some armed hoodlums and miscreant acting on the instructions of Mr. Hussein Mansour the Chief Executive Officer of NEWSPIN Ltd. and NEWSPIN Ltd. stormed the property and made a forcible entry into the premises and took over 58% of the entire warehouse complex.”
Paragraph 24: “The Claimant avers that sequel to the forcible entry made into the property in May 2005 by certain armed hoodlums acting on the instructions of NEWSPIN Ltd., some of the warehouses were double-locked by the hoodlums and the Claimant and its tenants have been denied access to them till date.”
Paragraph 26: “The Claimant avers that by a Writ of Summons dated 12th July, 2005, NEWSPIN Ltd. and its Chief Executive Officer, Mr. Hussein Mansour instituted a Suit ID/701/2005 claiming damages against the Claimant for acts of trespass and interference with exclusive possession and also an order of perpetual injunction.”
Paragraph 34: “That Claimant avers that by a Deed of Sub-lease executed in 2001 and made between NEWSPINE Ltd. through its Receiver/Manager, the 2nd Defendant and Carnco Foods (Nig) Ltd., the Sublessor covenanted that the Subleasee shall peaceably exercise and quietly enjoy the demised without any interruption or disturbance by the Sublessor or any person or persons claiming under or in trust for it.”

The Defendants had in their respective statement of defence denied some of these averments.

The question in this appeal is to determine whether from circumstances of the case, the 2nd Respondent can rightly be termed a proper party. The answer can only be given if one admits of the fact that he, in his status as an agent of the 1st Respondent, who can be safely termed a disclosed principal. And if so, whether the 2nd Respondent’s acts or omissions can be regarded as those of the 1st Respondent, thereby making the 2nd Respondent a proper party.

As rightly contended by the Appellant, receivers are personally liable in respect of contracts entered into by them except in so far as the terms of the contract otherwise provides.
There is no doubt here that the 1st Respondent appointed the 2nd Respondent receiver over NEWSPIN LTD pages 51-54 of the Record of Appeal. The 2nd Respondent having been appointed under a power in a debenture or trust deed (herein a debenture), he is the AGENT of the debenture holders, and as such the debenture holders are liable, as his principal, upon contracts he makes during the Receivership. They are also accountable for his defaults.
In TANAREWA (NIG.) LTD. v. ARZAI (2005) 5 NWLR (Pt.919) 593, a case cited by the Appellant, in his Brief of Argument (page 4 refers) the Court held that a receiver manager of any property or undertaking is deemed to be an agent of the person or persons on whose behalf he is appointed.
There is no doubt as gleaned from pages 51 – 54 of the Record of Appeal that the 1st Respondent appointed the 2nd Respondent receiver over NEWSPIN LTD.
A debenture holder is usually appointed a receiver manager to act on its behalf to realize the assets of the Company in receivership, and remit the proceeds to the debenture holders.
Acts done by an agent of a disclosed principal, as is the relationship between the 1st Respondent (as disclosed principal) and 2nd Respondent (as agent), binds the principal and the principal is liable for such acts of his agents. This is because the act of the agent is that of the principal.
A cursory look at the Ruling of the lower Court, shows that it observed thus
“Section 393(1) and (2) of CAMA deal with the duties and powers of receivers and managers – See also NASHTEX INTERNATIONAL LTD. v. HABIB (NIG) BANK LTD. (2007) 17 NWLR (Pt. 1063) 308 at 318. The exercise of these powers does not mean that the receiver should be joined as the Claimant has done in this case. As agent of the 1st Defendant, the 2nd Defendant can defend the suit instituted against the debenture holder (the 1st Defendant). Since the Lease Agreement the Claimant is seeking to enforce was not entered into by the 1st Defendant cannot defend the action. Both the 1st and 2nd Defendants are not parties to the agreement…”
He went on
“While it is trite that in receivership, a company ceases to have right to deal with the assets, the company has not lost its legal personality and can sue or be sued. NEWSPIN Ltd. (in receivership) is the proper party to sue in respect of this claim not the 1st Defendant which is not a party to the Lease Agreement or the 2nd Defendant, the agent of the 1st Defendant.”
With respect this is a total misconception. This is because when a receiver is appointed under power in a debenture or trust deed, he is the agent of the debenture holders and as such the debenture holders are liable as his principal upon contracts he makes during receivership. They are also accountable for his defaults.
The relationship between debenture holder viz-a-viz receiver/manager and their acts or omissions pursuant to the receivership is an exception to the doctrine privity of contract.
Where a principal is disclosed, with regard to contract, such a contract will generally be deemed to be between the principal and the, other contracting party. In such an instance, the proper party to sue or be sued for anything done or omitted to be done by the agent is the principal.
AMADIUME v. IBOK (2006) 6 NWLR (Pt.975) 158.

It is my view that the 2nd Respondent as receiver manager was at all material times a necessary party to any suit which has to do with issues of his instructions as receiver/manager.

It is not the Deed of Sublease that conferred powers on in 2nd Respondent, but the Deed of Debenture. By that he was vested with powers from the 1st Respondent as principal.

I am of the view that the Defendants are proper parties to the suit and indeed their being made parties would enable the Court effectually determine the case.
The sole issue is resolved in favour of the Appellant and against the Respondents
The consequence is that this appeal is hereby allowed. The Ruling of the lower Court delivered on the 20/01/11 is hereby set aside and this suit shall be remitted to the lower court for trial before another Judge.
No order as to costs.

MOHAMMED MUSA SAULAWA, J.C.A.: I agree with the reasoning and conclusion reached in the judgment, just delivered by my learned brother, Pemu, J.C.A., to the effect that the instant appeal has merits. Thus, the appeal is hereby allowed by me.

The ruling of the High Court of Lagos State, delivered by M. O. Obadina, J. in suit No.LD/502/2010 on January 20, 2011, is hereby set aside. I abide by the consequential order, remitting the said ruling to the lower court for, reassignment by the State Chief Judge to another Judge for trial on the merits.

JOSEPH SHAGBAOR IKYEGH, J.C.A.: I read in advance the judgment prepared by my learned brother, Pemu, J.C.A., with which I agree and add that, although as a general rule a disclosed principal may be sued without joining the agent of the disclosed principal as a party to the action, the fact that the agent is the Receiver/Manager of the disclosed principal as in this case would, in the exceptional circumstances of the case, make the Receiver/Manager who is in temporary charge of the res of the litigation a necessary party to the action whose joinder in the action may, out of abundance of caution, complete the composition of the action as to parties thereto.

Because a Receiver/Manager being a disinterested or neutral person appointed by a court, or by a corporate body as in the case, for the protection, management and collection of property that is the subject matter of diverse claims (see Black’s Law Dictionary, Eighth Edition page 1296) is thus in control of the property and should not have litigation over the property conducted behind his back, so that the outcome of the litigation would be binding on both the disclosed principal and the agent qua Receiver/Manager.

For the reason given above and the more elaborate reasons stated in the lucid lead judgment (supra), I too would allow the appeal and abide by the consequential orders contained in the said judgment.

Appearances

For Appellant

Chief M. A. Agbamuche Esq. and with M. C. Popoola (Mrs.)

AND

For Respondent

Olatunde Adejuyigbe Esq. with him O. T. Oyebanjo Esq. and O. J. Akokaike Esq.