Agency

• Pages: 701-792

AGENCY

(1) AGENCY BY ESTOPPEL

1501. Agency by estoppel.

(1) “Although true agencies arise by agreement, there are circumstances in which

the law recognises agency by estoppel in which case the principal may be estopped

from denying that another is his agent and his relationship with third parties may be

affected by the acts of the other. Trenco Ltd. v. African Real Estate and Invest-

ment Co. & Anor. (1978) 4 S.C. 9, 25, 26.” - Per Ogundare, J.C.A. in Bamgboye v.

University of Ilorin Suit No. CA/K/203/90;(1991) 8 N.W.L.R. (Pt. 207) 1 at 30.

(2) “Normally, true agency arises by agreement only but there are circumstances in

which the law recognizes agency by estoppel in which case the principal may be

estopped from denying that another is his agent and his relationship with third parties

may be affected by the acts of that other.” - PerAniagolu, J.S.C. in Trenco Ltd. v.

African Real Estate Suit No. S.C. 206/1976;(1978) 11 N.S.C.C. 220 at 228.

(3) “With respect to the learned trial Judge, he did not take notice of the fact that in so

far as third parties are concerned, the conduct of the family constitute holding out of

those three people as their representatives for the sale of family land. When a person

behaves in such a way as to lead another person to believe that he has authorized a

third person to act on his behalf and that other in such belief, enters into transaction

with the third person within the scope of such ostensible authority, the first mentioned

person would be estopped from denying the fact of the third person’s agency. It

would be immaterial whether the ostensible agent had no authority whatever in fact.

It would also not matter whether the ostensible agent acted in excess of his usual

authority. The cases Mac Fisheries Ltd. v. Harrison (1924) 93 L.J.K.B. 811 and

Summers v. Solomon (1857) 26 L.J.Q.B. 301 were referred to by the Court as well

as paragraph 374 of Vol. 1 Halsbury’s, 3rd Edition..” - Per Ademola, C.J.N. in

Lukan v. Ogunsusi No. S.C. 228/68;(1972) 7 N.S.C.C. 316 at 318.

(2) AGENCY RELATIONSHIP

1502. A sub-agent is liable only to his employer in the absence of ratification

by principal.

“Thus, in relation to the plaintiff, the first defendant was a sub-agent. Between a

principal and a sub-agent, there is no privity of contract. As a general rule the sub-

agent is liable only to his employer, the agent.”– Per Jones, S.P.J. in.Onamusi v.

Ibrahim (1971) 2 N.C.L.R. 441 at 448.

Agency by estoppel Paras. 1501.1502

701

1503. Agent benefiting from information which is not of value to principal is

not liable.

“The mere use of any knowledge or opportunity which comes to the trustee or agent

in the course of his trusteeship or agency does not necessarily make him liable to

account.” In my opinion the facts of this case do not support the authorities cited by

Dr. Odje in aid of his contention that the defendant should be made to account for

payments made to him for work done at the campsite. The land at the campsite was

not the property of his plaintiffs, and even if it is assumed that it was after he had

signed Exhibit A that he got information about the work at the campsite, he cannot be

said to have used the plaintiffs’ property. It was held in Dean v. MacDowell (as

explained by Bowen, L.J., in Aas v. Benham, (1891) 2 Ch. 244 at 257-258; 65 L.T.

C.A. 25 at 29) that the use by a partner for his own benefit of information obtained by

him as a partner does not always render him liable to account to the firm for any

benefit he may have derived from such information, as long as he does not use the

property of the partnership. The information obtained by the agent from which he

obtained benefit for himself must be of some value to the principal.”– Per Ogbobine,

J. in Igben v. Etawarie (1971) 1 N.C.L.R. 85 at 98 - 99.

1504. Agent claiming commission must strictly prove contract entitling him

to it.

“The law is clear that a person who claims to be entitled to commission must strictly

prove the contract which he alleges entitles him to it. Where an agent is promised a

commission on the happening of an event the agent will not be entitled to any com-

mission until the event has happened.”– Per Begho, C.J. in Omoregie v. Att. Gen. &

Mil. Gov., of Mid. – Western State (1971) 1 N.C.L.R. 397 at 407.

1505. Agent is accountable for profit made without principal’s consent.

“In the case of Phipps v. Boardman (II) a similar point arose for determination by

the Court of Appeal in England, and it was pointed out in the course of his judgment

by Lord Denning, M.R. (1965) Ch. at 1018; (1965) 1 All E.R. at 856) that in most of

these cases the persons being treated as fiduciaries had already some position or

connection which gave them the opportunity of assuming authority and control over

property legally in the ownership of another person or other persons. Further, Lord

Denning, M.R. observed as follows (ibid. at 1018, 856): - “Treating them as agents,

to what extent are they accountable? We have been through once again the cases

where an agent makes a profit for himself out of his agency. It is quite clear that if an

agent use property, with which he has been entrusted by his principal, so to make a

profit for himself out of it, without his principal’s consent, then he is accountable for

it to his principal……. So also if he uses a position of authority, to which he has

been appointed by his principal, so as to gain money by means of it for himself, then

Para. 1503-1505 Vol. 1: AGENCY 702

also he is accountable to the principal for it…..”

We are in agreement with these authorities, and we have come to the con-

clusion therefore that the respondents by their action or conduct in holding on to these

assets after the enactment of the Fifth Schedule to the Profits Act (Cap. 155) and

employing those assets in the way of their business have put themselves in a fidu-

ciary relationship to the appellants who are entitled by law to those assets and that

the respondents are therefore liable to account to the appellant s and to the conse-

quential orders of paying over to the appellants whatever in that capacity they have

acquired for themselves.”– Per Coker, J.S.C. in. N.P.A. v. Panalpina (1973) 8

N.S.C.C. 282 at 298 – 299; Suit No. S.C. 31/1973;(1973) N.C.L.R. 141 at 182 –

183.

1506. Agent is not entitled to quantum – meruit unless expressly or im-

pliedly agreed upon.

“Where an agent is promised a commission on the happening of an event, the agent

will not be entitled to any commission until the event has happened. In dealing with

the type of agency as alleged in this case, it is stated in 2 Chitty on Contracts, 23rd

ed., in para. 104 at 54 (1968): - “The remuneration of the agent frequently takes the

form of a commission, being a percentage of the value of the transaction the agent is

to bring about for the principal. In such cases, the agent does not become entitled to

his commission until the event has occurred upon which his entitlement arises. What

this event is must be ascertained from the terms of the agency contract. In most

cases where the agent is engaged to find a third party to enter into a contract with his

principal there will be little difficulty, because the event will occur when the principal

and the third party enter into a contract which the agent was engaged to bring about.”

And para. 111 of the same book reads, inter alia (at 59): - “Where the

contract makes express provision for the agent to be remunerated only upon the

happening of a certain event, he will not normally be entitled to claim reasonable

remuneration on a contractual quantum meruit.” The above is similar to what is

contained in Bowstead on Agency, 13th ed., at 182-183 (1968): - “(1) Where an agent

is entitled to his remuneration upon the happening of a future event, his entitlement

does not arise until that event has occurred. (2) The event upon which the agent’s

entitlement to remuneration arise is to be ascertained from the terms of the agency

contract. (3) Where the event upon which the agent’s entitlement to remuneration

arise does not occur, the agent will not be entitled to receive remuneration on a

quantum meruit unless provision for this is expressly made in the agency contract, or

unless a term to such effect can be implied into the agency contract in order to give

it business efficacy or otherwise to effect the intentions of the parties.”– Per Begho,

C.J. in Omoregie v. Att. Gen. & Mil. Gov. Mid-Western State (1971) 1 N.C.L.R.

397 at 407 – 408.

703 Agency relationship Paras. 1505,1506