When an Agent will be Liable for the Act of the Principal

CASE TITLE: UBONG v. UDO (2022) LPELR-56544(CA)

JUDGMENT DATE: 14TH JANUARY, 2022

PRACTICE AREA: COMMERCIAL LAW

LEAD JUDGMENT: MUHAMMED LAWAL SHUAIBU, J.C.A.

SUMMARY OF JUDGMENT:

INTRODUCTION

This appeal borders on Liability of an Agent.

FACTS

This is an appeal against the ruling of the High Court of Cross River State sitting in Calabar delivered on 11th December, 2015.

The appellant as claimant before the trial Court commenced a civil suit claiming against the defendant as follows: –

i. A mandatory order compelling the defendant to refund the sum of N1,650,000.00 (One Million, Six Hundred and Fifty Thousand Naira) only to the claimant, same being the total amount of contributions the claimant made to the defendant.

ii. The sum of N1,000,000.00 (One Million Naira) only for breach of contract.

iii. General damages of N5,000,000.00 (Five Million Naira) only.

iv. 10% post-judgment sum until final liquidation.

v. Cost of litigation assessed at N500,000 (Five Hundred Thousand Naira) only.

On being served with the originating process, the defendant filed a conditional appearance and thereafter a motion on notice on 20/8/2014 praying for –

​An order striking out this suit for lack of jurisdiction, as there is no statement of claim and that the defendant in this suit is not a proper party as the defendant in this suit.

Parties joined issues on the said application and after considering the respective affidavit evidence, learned trial judge in a considered ruling delivered on 10/12/2015 dismissed the application and held as follows:

“I therefore hold the view and a very potent one that an individual capacity is firmly established in the transaction. I further hold that she is rightly sued in that capacity. This second ground also fails. The application is grossly unmeritorious.”

Aggrieved by the decision of the trial Court, the Appellant appealed to the Court of Appeal.

ISSUES FOR DETERMINATION

The appeal was determined on the following issues viz:

1. Whether the appellant, an agent of the MEGA ASSETS MANAGEMENT LTD a disclosed principal could be sued in her private capacity.

2. Whether failure to consider the third party’s affidavit and consider the receipts issued in the name of the MEGA ASSETS MANAGERS LTD but relied on the affidavit of the respondent in considering the agency relationship has not violated the right of fair hearing of the appellant.

DECISION/HELD

On the whole, the Court of Appeal held that the appeal was unmeritorious and same was dismissed.

RATIOS:

• COMMERCIAL LAW – AGENCY: Whether an agent acting on behalf of a known and disclosed principal can incur liability
• COMMERCIAL LAW – LIABILITY OF AN AGENT: When an agent will be liable for the act of the principal
• COMMERCIAL LAW – AGENCY: Meaning and nature of agency relationship
• COMMERCIAL LAW – AGENCY: Ways in which principal and agent relationship may arise/can be created