Consideration Once Fulfilled Creates Contractual Relationship between Parties





The 1st Respondent instituted an action against the 1st-3rd Appellants at the High Court of Justice, Plateau, Jos Division praying the court to declare the property known as Kuru Cotton Ginnery as his. The 1st Respondent contended that it paid the consideration of N40m (Forty Million Naira) on the instruction of the 1st and 2nd Appellants to the 3rd Appellant. The 3rd Appellant in turn reciprocated by releasing all relevant title documents in relation to the property to the 1st Respondent. The 1st Respondent was in the process of applying for the title documents to reflect its name when the Appellants intervened in a bid to stop the title documents from being issued in the name of the 1st Respondent. The Appellants in their joint statement of defence and counterclaim stated that there was no valid contract between the 3rd Appellant and the 1st Respondent to warrant the title documents in the 1st Respondent's name.


The trial judge after evaluating all the witnesses and exhibits relied on by the parties dismissed the Appellants’ defence and counterclaim thereby delivering judgment in favour of the 1st Respondent. Dissatisfied with the judgment, the 1st-3rd Appellants appealed to the Court of Appeal, Jos Division praying that the court dismiss the claims of the 1st Respondent as granted by the trial court.   


Parties raised various grounds for the determination of the preliminary objection filed by Learned Silk for the 1st Respondent which succeeded in parts. The appeal court thereafter went on to consider the major issue between parties before the court which was to determine whether there was a contract between the 1st and 2nd Appellants on one part and the 1st Respondent on the other part.


Learned Counsel for the Appellants argued that the was no contractual relationship between them and the 1st Respondent to warrant the title documents relating to the subject matter being issued in the name of the 1st Respondent. Counsel argued that the trial judge on his own volition created a contract between the parties. Finally, Counsel argued that the trial court failed to properly evaluate the oral and documentary evidence before the court thereby permitting the 1st respondent to take benefit from the transaction he was not a party to.


Learned Silk for the Respondent argued that the facts before the trial court showed that a contractual relationship existed between the 1st Respondent and the Appellants. Learned Silk argued that the consideration for the subject matter was paid by the 1st Respondent through their bankers. The 2nd respondent acknowledged receiving the purchase price hence a legally binding contract came into existence. Learned Silk argued that there was no shred of evidence that the Appellants paid the said consideration and the learned silk urged this Court to resolve the issue against the appellants.


Unanimously dismissing the appeal, the court went on to state as follows:


By evaluation of the oral and documentary evidence the learned trial Judge arrived at the correct decision whether there was a contractual relationship between the parties regarding the purchase of the Kuru Cotton Ginnery. See also Adeyemo vs. Arokpo (1988) 2 NWLR (Pt.79) 717.


One may then ask: who paid the valuable consideration on the Kuru Cotton Ginnery? Was it 1st respondent or the appellants? In Principles of Contract, 13th edition, page 133 Sir Frederick Pollock described “consideration” simply as “the price for which the promise is bought.” This was approved in the House of the Lords in Dunlop Pneumatic Tyre Co. Ltd. vs. Selfridge Ltd. (1915) A.C. 847 at 855.


The documents tendered before the trial Court will be used as acid test to evaluate the pleadings and oral testimonies of the parties. This is more so that it is not in dispute that the appellants admitted writing the letters to the 1st respondent to join in purchasing the property in dispute claiming however that this was after they had completed paying valuable consideration on the contract. See Fashanu vs. Adekoya (1974) 9 NSCC 327 at 331; Olujinle vs. Adeagbo (1988) 2 NWLR (Pt.75) 238 at 253; Oscar Reynard vs. Williams Allan (1934) 2 WACA 52 at 53 and Kimdey vs. Military Governor, Gongola State (1988) 2 NWLR (Pt.77) 445 at 473. Without payment of valuable consideration namely, the purchase price for the Kuru Cotton Ginnery to the 2nd respondent, there would not have come into existence a valid contract between the appellants and the 2nd respondent regarding the purchase of the ginnery.


In my humble opinion the oral and documentary evidence established beyond a shadow of doubt that it was the 1st respondent that paid valuable consideration to acquire the Kuru Cotton Ginnery from the 2nd respondent and obtained title/documents/possession. I endorse the holding of the learned trial Judge at page 470 lines 17 to page 471 lines 1-23 of the printed record.


I hold that the learned trial Judge rightly relied on the contents of Exhibit “A” to arrive at a just decision in favour of the 1st respondent. Issues one and two are resolved against the appellants. On the whole, this appeal lacks merit and is dismissed. I hereby affirm the judgment of the learned trial Judge. I award N50,000.00 cost to the 1st respondent”.



F. N. Okafor, Esq. with Mrs. B B Okafor, Esq. – for the Appellant.

P.A. Akubo, SAN with S.Y. Tsok, Esq., N.H. Onukewe (Mrs), Esq. and K.A. Dandago – for 1st Respondent.


This summary is fully reported at (2015) 11 CLRN

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