Agency

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AGENCY.

(1) ACT OF AGENT.

Bindingness of action of agent on principal.

“The respondent could not ask the appellant to return its certificates of the shares to it after the

appellant had dealt with them in accordance with its instruction contained in exhibit G. The

appellant’s act of lodging the respondent’s shares with Central Security and Clearing System

binds the principal whether such acts are for the benefit of the principal or not, having acted

within the scope of its authority. The respondent, as the principal, is estoppedfrom denying

that appellant was acting as it’s agent. See Llovdv.Grace Smith & Co.(1912) A.C. 716 and

Trenco Nigeria Ltd.v.African Real Estate & Investment Co. Ltd.(1978) 1 L.R.N. 146. See

also the Bank of the North Ltd. v. Alhaji Bala Yau(2001) 4 M.J.S.C. 49, (2001) 10 N.W.L.R.

(Pt.721) 408 and Koikiv.Magnusson(1999) 8 N.W.L.R. (Pt. 615) 492 at 510 cited in the

appellant’s reply brief.” – Per Salami, J.C.A., in Summit Fin. Co. Ltd. v. Iron Baba & Sons Ltd.

Suit No. CA/K/343/2001; (2003) 17 N.W.L.R. (Pt. 848) 89 at 120.

Bindingness of acts of agent on principal.

(1) “The act of an agent for a particular purpose is the act of his principal. The correct

perspective of the law is as if it was the principal that did what the agent did or failed to do.

This view is enshrined in the maxim – qui peralium facit per seipsum facere videtur meaning

he who does an act through another is deemed in law to do it himself.” – Per Salami, J.C.A.,

in Akalonu v. Omokaro Suit No. CA/K/303/2001; (2003) 8 N.W.L.R. (Pt. 821) 190 at 208.

(2) “As argued by learned counsel for the respondent, he is bound by the acts of his agent

carried out on his instruction.” – PerNgwuta, J.S.C., in Yisi (Nig.) Ltd. v. Trade Bank Plc. Suit

No. S.C. 86/2005; (2013) 8 N.W.L.R. (Pt. 1357) 522 at 539.

Extent of liability of a principal for the acts of the agent.

“It has been held that a principal is liable on contracts made by his agent “within the usual

authority confided to an agent of that character, notwithstanding limitations, as between

principal and agent, put on that authority”. See Watteau v. Fenwick[1893] 1 Q.B. 346 at 348-

348 (referenced in Chitty on Contracts, Vol. II, Specific Contracts, 29th ed., Art. 31.062, p.

39).” – PerAffen, J.C.A., in Eagle Sight Ltd v. ROTBAMS (Nig.) LtdSuit No.

CA/L/1201/2016; (2022) L.P.E.L.R. 59321 at 34 – 35.

Liability of principal for act of agent.

“It is trite that where an agent acted on the authority of his principal, the principal is liable for

his act. But where an agent acted outside his authority, the principal cannot be held liable for

his act.” – Per Hassan, J.C.A., in Febson Fitness Centre v. Cappa H. Ltd. Suit No.

CA/A/276/2010; (2015) 6 N.W.L.R. (Pt. 1455) 263 at 279.

Nature of agency.

“The section does not admit the introduction or importation of the common law doctrine or

concept of agency expressed in the Latinmaxim “qui per alium facit, per seipsum facere

videtur”or more shortly, “qui facit per alium, facit per se”meaning. “He who acts by another

acts by himself.” – PerEdozie, J.S.C., in Ndoma-Egba v. Chukwuogor Suit No. S.C. 106/1998;

(2004) 6 N.W.L.R. (Pt. 869) 382 at 430.

Position of the law on acts of an agent acting under a power of attorney.

“It is the law that an agent must only act for and in the name of the donor and not in his own

name as the Respondent’s father did in Exhibit E purporting to convey title to the Appellant on

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behalf of and binding on the Respondent. In the case of United Nigeria Co. Ltd v. Nahman

(2000) 9 N.W.L.R. (Pt. 671) 177 @ 187-188 perSanusi J.C.A. (as he then was), this Court

stated: “An agent acting under a power of attorney should as a general rule act in the name of

the principal. If he is authorized to sue on the principal's behalf the action should be brought in

the principal's name. A deed executed in pursuance of such a power is properly executed in the

name of the principal or with words to show that the agent is signing for him, but the donee of

the power may, where so authorized by the donor of the power, to execute any instrument with

his own signature and, where sealing is required with his own seal, and act in his own name...

Thus, the purported conveyance in Exhibit E by the Respondent's father in his name and

without written authorization of the Respondent or his ratification is caught up by the latin

maxim “Nemo dat quod Non habet” ‘you cannot give what you do not have’ and same is void.

See Elewa v. Guffanti (Nig. Plc)(2017) 2 N.W.L.R. (Pt. 1549) 233, 251, G-H.”– PerWambai,

J.C.A. in Ikebudu v. Adali Suit No. CA/OW/352/2020; (2024) L.P.E.L.R. 62348 at 42 – 43.

When proper to join agent in an action against the principal.

“When an agent is sent by a principal to take a certain action and the agent acts beyond his

lawful instruction, in suing the principal, it is right to join the agent in order to afford both

principal and agent full opportunity to defend the agent’s action.” – Per Iyizoba, J.C.A., in N.F

& V.C.B. v. Adegboyega Suit No. CA/I/15/2005; (2012) 10 N.W.L.R. (Pt. 1307) 45 at 59.

Whether a principal can be liable/bound by unauthorized and/fraudulent acts of the

agent.

“In law, a principal cannot generally be liable for the fraud of his agent unless it is proved that

the 1st Respondent, being the principal, had a guilty mind in respect of that fraud and had

indeed participated in it, and none of which was proved by the Appellants against the 1st

Respondent. See Mirchandani v. Pinheiro(2001) F.W.L.R. (Pt. 48) 1323, Mandilas v.

Karabaris Ltd(Supra) and Fitton v. IGP(1958) 3 F.S.C. 20.” – PerGeorgewill, J.C.A., in

Salbodi Group Ltd & Anor v. Doyin Investment (Nig) Ltd & OrsSuit No. CA/A/625/2018;

(2022) L.P.E.L.R. 57458 at 47 – 47.

(2) ACTION FOR WRONG DONE TO COMPANY.

Principle of the rule in Foss v. Harbottle.

“Section 341 of the Companies and Allied Matters Act, 2020 (CAMA) provides: “Subject to

the provisions of this Act, where an irregularity is made in the course of a company’s affairs

or any wrong is done to the company, only the company can sue to remedy that wrong and only

the company can ratify the irregular conduct.” Section 341 of CAMA is a statutory prescription

of locus standi. It is a codification of the judicial principle known as the rule in Foss v

Harbottle, enunciated in the landmark decision in Foss v. Harbottle(1843) 67 ER 189. This

principle is now well grounded in Nigerian jurisprudence. See Multichoice (Nig.) Ltd. v.

M.C.S.N. Ltd. GTE.(2020) 13 N.W.L.R. (Pt. 1742) Pg. 415 at 516, Aso Motel Kaduna Ltd. v.

Deyemo(2006) 7 N.W.L.R. (Pt. 978) Pg. 87at 112, KLM Royal Dutch Airlines v. Taher (2014)

3 N.W.L.R. (Pt. 1393) Pg 137 at 206, Abdulkadir v. Mamman(2003) 14 N.W.L.R. (Pt. 839)

Pg. 1 at 30, Elufioye v. Halilu(1993) 6 N.W.L.R. (Pt. 301) Pg. 570 at 597, Ejikeme v. Amaechi

(1998) 3 N.W.L.R. (Pt. 452) Pg. 456 at 470. The essence of this rule is that it is the company

that is the proper party with locus standito sue in an action involving an alleged wrong to the

company. Companies are artificial persons that act through natural persons. See Section 87 (1)

of CAMA; Southbeach Co. Ltd v. Williams(2022) 8 N.W.L.R. (Pt. 1831) Pg. 147 at 182 -183.

Instructively, in Elufioye v. Halilu (Supra), it was put aptly thus by Karibi Whyte J.S.C.: “The

common law principle which has been long settled in Foss v. Harbottle... states that where a

wrong is done to a company or where there is an irregularity in its internal management, which

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is capable of being rectified by a single majority of the members, the Court will not interfere

at the suit of a minority of the members to rectify the wrong or regularise the irregularity. This

principle is founded on the rationale that since the rectification of the wrong or irregularity is

intra vires the company or association which can ratify the act complained of by the majority

who have the powers to do so, it is an idle exercise for the Court to interfere. The ultimate

authority being the decision of the majority, it can always get its wishes done.” (Underlining

for emphasis). The rule in Foss v. Harbottle(supra) emphasises majority rule, which is the

underpinning of decision making and action taking in company law. Resolutions of General

Meetings, whether ordinary or special, may not be reached without the majority. See Section

258 of CAMA. The operationsof a company are principally by the will of the majority. See

Tanimola v. Mapping Geodata Ltd(1995) 6 N.W.L.R. (Pt. 403) Pg. 617 at 627. While the

majority of shareholders can exercise the powers under Section 341 of CAMA, such powers

can only be exercised in the company's name. Put succinctly, the majority may sue to remedy

a wrong, but only by using the company as the proper plaintiff. Invariably, the general effect

and purport of Section 341 of CAMA is that shareholders (majority or minority) may not sue

in their individual capacities for wrongs done to the company. From the ordinary operation of

the trite rule in Foss v. Harbottle, as codified in Section 341 of CAMA, none of the appellants

has the locus standito institute the suit at the trial Court. Generally, it is only the company -

Pan Ocean, that has the requisite locus standi to institute the action. From the wordings of

Sections 343, 346 and 353 - 355 of CAMA, it is clear that none of the actions contemplated

thereunder may be brought without the company as a party, whether as plaintiff/petitioner or

defendant/respondent. Since the company is not a party in this case, it is logical to conclude

that none of these sections is applicable to confer locus standi on any of the appellants.” – Per

Ogunwumiju, J.S.C., in Inter Ocean Oil Development Co. (Nig) & Ors v. Fadeyi & AnorSuit

No. SC.697/2018; (2024) L.P.E.L.R. 62449 at 57 – 60.

When officer of company can institute action on behalf of company.

“In Sotiminu’s case (supra) this Court held that in cases requiring urgency to act, an officer of

a company may act to institute proceedings to protect the assets of the company, in which

situation, it will be left to the company at any time to ratify the act of such an officer who

initiated the proceedings and to adopt the proceedings or rescind it, if it does not desire to

continue with the proceedings.” – Per Dongban-Mensem, J.C.A., in Virgin Tech. Ltd. v.

Mohammed Suit No. CA/L/170/2004; (2009) 11 N.W.L.R. (Pt. 1151) 136 at 150.

Whether it is only a company that can sue where any wrong has been done to the

company.

“It is instructive to further note that in the present Appeal (and at the lower Court) the ‘real

complaint is that the property of the 3rd Respondent has been sold in circumstances the

Appellants consider to be wrongful. In other words, the Appellants are contending that a wrong

has been done to the 3rd Respondent. This appears to be a classical case in which the

Appellants, literarily so to speak appear to be more: “Catholic than the Pope” and which in

agreement with learned Counsel for the 2nd Respondent is abjured by Section 299, Companies

and Allied Matters Act (cap C20 LFN 2004) which provides thus:- “Subject to the provisions

of this Act, where an irregularity has been committed in the course of a company’s affairs or

any wrong has been done to the company, only the company can sue to remedy that wrong and

only the company can ratify the irregular conduct.” See also Onuekwusi v. RTCMZC(2011) 6

N.W.L.R. (Pt. 1243) 341 at 361 H where it was held that:- “(b) In the realm of

company/corporate law, the principle of law enunciated in the case of Foss v. Harbottle (1843)

2 Hare 461, in relation to locus standi, that, subject to certain exceptions, the proper plaintiff

in an action in respect of a wrong alleged to be done to a company or an association of persons