Month: September 2024

Hi LSP Readers! Bawoni, how far? Sannu, ndewo. I apologize for not publishing last week; a couple of things came up. But thankfully, everything is sorted out now! So, hop in the car, and let’s go!

Today, we’ll discuss an important topic: can someone claim payment for services rendered as an agent when there’s no clear contract of engagement? We’ll examine the Supreme Court decision in Osas v. Tuedor-Mathews (2024) 13 NWLR (Pt. 1956) 509, which addresses this issue in a dispute involving a property transaction.

To set the stage, let’s look at the facts of the matter. The appellants were tasked by the owner of a property in Lagos, to help find a buyer. They introduced the respondent to the property, who showed interest, even bringing her daughter for an inspection. After some back-and-forth, the respondent made an offer of ₦850 million, which the owner rejected, insisting on ₦960 million.At this point, communication between the appellants and the respondent broke down.

Suspicious of her silence, the appellants later discovered that the respondent had bypassed them and purchased the property directly from the owner. Feeling wronged, they demanded their commission which was ₦48 million but the respondent refused to pay, claiming there was no deal. The matter escalated to court, with the appellants initially winning some ground. However, the Court of Appeal disagreed, and when the case reached the Supreme Court, the final ruling was not in their favour.

Furthermore, one of the issues for determination was whether a contract existed between the parties. The Supreme Court held that without an agreement stating that the appellants were entitled to a commission if the respondent purchased the property, there was no basis for their claim.  As such, without a written agreement, it’s like working in the dark. You cannot demand payment for services you believe you rendered when no such contract exists.

Additionally, the court acknowledged that while an agent doesn’t have to be involved in every step of the negotiations, there must be a clear connection between their actions and the sale. In this case, there was a significant disconnect between the introduction of the property and the eventual sale. The breakdown in negotiations meant the appellants were no longer involved after the price disagreement. This indicated they could not claim they were the reason the sale occurred, as the transaction proceeded without their involvement.

Nevertheless, I feel an interesting point to consider is that the appellants might have succeeded had they been able to prove that this was not their first business transaction with the respondent and that past dealings had always been conducted without a written contract—relying instead on spoken instructions. This history could have established a pattern of expectation and trust that might have influenced the court’s decision. But without that, it’s just like explaining with no evidence.

In conclusion, Osas v. Tuedor-Mathews serves as a critical reminder to always formalize your agreements. Whether you’re acting as an agent or broker, don’t assume you’ll be paid unless it’s in writing or clearly agreed upon. Relying solely on good faith can easily leave you empty-handed when the dust settles. In the world of contracts, it is the agreement – not emotions – that speaks loudest.

Thank you for reading❤️. See you next week🙏

Good day, readers. Today, we’ll explore the concept of novation, which occurs when a new contract replaces an existing one, either by introducing new parties or altering the terms. This process discharges the old obligation and establishes a new, legally binding one. To prove novation, you need to show four key elements: a previous valid obligation, agreement from all parties to the new contract, extinguishment of the old obligation, and validity of the new obligation N.N.P.C. v. Klifco (Nig.) Ltd. (2011) 10 NWLR (Pt.1255) 209.


To illustrate the principle, we have examined the 2024 supreme court case of Heritage Bank Limited & Anor v. Ajugwo. (2024) 12 NWLR 473

In this case, the 1st appellant (formerly African Continental Bank) had a customer, Jerome Ajugwo (the respondent’s father), who acted as a guarantor for a loan of N10,000 given to S.B.C. Maduakolam, another customer of the bank. Ajugwo used his property as collateral for the loan. However, the borrower, Maduakolam, failed to repay the loan and later relocated to another town. He also took another loan from the bank’s Owerri branch, and his accounts were merged.

Upon realizing the complication, Ajugwo requested that the merged accounts be separated so he could repay the loan linked to his property and redeem it. The bank agreed to this under certain terms, and Ajugwo accepted. Afterward, he promptly repaid the loan as agreed. Despite this, the bank went ahead and sold Ajugwo’s property to a third party (the 2nd respondent), ignoring Ajugwo’s fulfillment of the repayment terms. This led to a lawsuit, which was later consolidated with a separate claim by the 2nd respondent( Sydney Obi), who purchased the property.

For ease of comprehension, the exhibits are:
• Exhibit J: Original deed of legal mortgage between Spring Bank Plc, S.B.C. Maduakolam, and Jerome Ajugwo.
• Exhibit C: Letter agreeing to separate Maduakolam’s accounts and waive interest on the loan.
• Exhibit D: Ajugwo’s acceptance of the new repayment terms.
• Exhibit E: Request for payment details under the new repayment plan.
• Exhibit F: Ajugwo’s response detailing his payments.
• Exhibit H: Letter requesting reconsideration of the property sale due to Ajugwo’s compliance with repayment terms.

The appellants didn’t go down without a fight. They brought up two contentions. First , they argued that there was no novation since S.B.C. Maduakolam was not a party to the subsequent agreements (Exhibits C, D, E, and F). This highlights the technicality the appellants relied on. Secondly, the appellant argued that the respondent’s father was not a guarantor but rather an equal partner in the block-making business with S.B.C. Maduakolam. This argument aimed to deny that there could have been a novation since the respondent’s father had equal responsibility and could not be treated as merely a party trying to protect his mortgaged property.

Deciding this matter, the trial court found that the bank had effectively replaced the original mortgage contract with a new agreement based on the repayment terms agreed between Ajugwo and the bank. As a result, the sale of the property was declared void, and the court ordered that the property title documents be returned to Ajugwo’s family.

On appeal, the Court of Appeal upheld the trial court’s decision, affirming that a Novation had taken place, where the original mortgage agreement was replaced by the new repayment terms. The appellants challenged this at the Supreme Court .

The Supreme Court found no merit in the appellants’ argument that novation could not have taken place because Maduakolam was not a party to the new agreements. As explained by Kekere-Ekun JSC (now CJN), the original mortgage agreement (item 2 of the exhibit J) allowed either the borrower or the mortgagor to repay the debt. Since the respondent’s father had fulfilled the repayment terms, the property should have been returned to him. The appellants could not exercise their rights under the original mortgage agreement (Exhibit J) because it had been replaced by the new terms in Exhibit C.

In conclusion, this case illustrates how novation can modify contractual obligations and the importance of adhering to agreed terms. Thank you for reading ❤️. See you next week🙏

Hello dear readers. Today, we are going to talk about the Doctrine of Recent Possession in law, a concept often used in criminal cases that involve stolen property. The idea behind this doctrine is pretty straightforward: if someone is found with stolen goods not long after they were stolen and can’t give a good reason for why they have them, the law assumes they were involved in the theft or were aware that the goods were stolen.

To successfully utilize this doctrine, four elements need to be in place: first, it must be proven that the goods were indeed stolen; second, the accused person must have been caught with the goods; third, they must have been caught shortly after the goods were stolen; and lastly, the accused can’t provide a reasonable explanation for why they had the stolen property. This doctrine is captured under Section 167(a) of the Evidence Act, 2011. It has been consistently applied and refined through various judicial interpretations. Let’s now explore how it has played out in some notable judgments

In Asuquo v. State of Lagos (2024) LPELR-62817(CA), the prosecution claimed that Asuquo was part of a group of young men who robbed a house in the early hours of the morning. A few hours later, Asuquo was found in possession of two laptops that had been stolen during the robbery. The prosecution tried to use the Doctrine of Recent Possession, arguing that Asuquo must have been one of the robbers. However, Asuquo explained that he found the laptops on the street while on his way to work and planned to turn them over to the police. His defense of alibi – that he wasn’t even near the scene of the crime – was not investigated by the police. Because of this, the Court of Appeal found his explanation reasonable and the doctrine wasn’t successfully applied. Asuquo was discharged and acquitted

On the other hand, in Yisa v State(2019) LPELR-47474(CA), the doctrine was applied successfully. In this case, the appellant was caught driving a car that had been stolen in a robbery just five hours earlier. The proximity of time between the robbery and the appellant’s possession of the stolen car left little room for doubt, and the court applied the Doctrine of Recent Possession, presuming the appellant to be either one of the robbers or someone who knowingly received stolen goods. The appellant failed to provide a satisfactory explanation for his possession, and the presumption stood, leading to his conviction

However, this doctrine isn’t absolute. In Ogogovie v. State (2016) LPELR-40501(SC), for example, the Supreme Court made it clear that if someone can give a reasonable and believable explanation for how they came to possess stolen property, the presumption doesn’t apply. In other words, just because someone has stolen goods doesn’t automatically mean they are guilty, especially if they can explain their possession in a way that makes sense.

In conclusion, the Doctrine of Recent Possession can be a powerful tool in criminal law when there’s no other explanation for why someone has stolen goods. But it’s also important to remember that it’s not foolproof. If the person can explain how they got the goods, like in Asuquo’s case, the doctrine won’t work against them. On the flip side, as seen in Yisa’s case, when no explanation is provided, the presumption of guilt is strong enough to secure a conviction.

Thank you for reading ❤️. See you next week🙏