Facts:

On the 10th of January 2005, one Soji Adedokun, an executive of Wema Insurance Brokers Ltd (a subsidiary of the Claimant/Respondent), visited the office of the Defendant/Appellant, wherein he met an executive of the Defendant/Appellant (Mrs. Victoria Nelson) to discuss the Claimant/Respondent (Wema Bank’s Plc’s) wish to have a “Keyman Term Assurance” on the life of one Ayokunle Dongo. In the discussion, he stated that the proposed sum to be assured would be between ₦100,000,000.00 and ₦200,000,000.00. That he requested that the Defendant/Appellant give him a quotation in this regard. On the instruction of the claimant’s broker (Soji Adedokun), a provisional letter of acceptance was made by the Defendant/Appellant and same was addressed to Ayokunle Dongo as directed by the claimant’s broker. The said Claimant’s broker (Soji Adedokun) was therefore given on that same day, a proposal form and financial statement questionnaires in which material facts are required to be disclosed by the proposed life assured (Ayokunle Dongo) and to be returned to the Defendant/Appellant. That this is to enable the Defendant assess the risks in order to ascertain the terms on which a formal contract of insurance may be considered between the Appellant and the proposed assured, as the contract of insurance comes into force only after the execution of the insurance contract by the parties involved. While expecting the proposed assured (Ayokunle Dongo) to timeously complete the information required on the proposer form sent to him through the claimant’s broker, to enable the Defendant/Appellant assess the risk and to draw up the appropriate terms of the insurance contract to be executed, the claimant’s broker and the proposed life assured (Ayokunle Dongo) failed to submit the said form for assessment, and while awaiting the material disclosures, which should be contained in the form, the Claimant/Respondent made payment into the Defendant’s/Appellant account in respect of the premium sum provisionally stated on the provisional acceptance letter dated 10th January 2005 written at the instance of the Claimant’s broker. Following the failure of the Claimant’s broker or the proposed life assured (Ayokunle Dongo) to provide the material information required to draw up the insurance contract, the Defendant/Appellant was constrained to write a letter dated 2nd of February 2005 to the proposed life assured (Ayokunle Dongo) reminding him that the completion of the proposal form and questionnaires earlier sent to him were a precondition for a formal contract of insurance and that in this regard, the Defendant/Appellant went an extra mile to attach a new proposal form and questionnaire to the letter for the proposed life assured to fill in case he has misplaced the one sent to him through the Claimant’s broker. That the Defendant/Appellant delivered to the Respondent another letter of reminder dated the 2nd February 2005. When a duly completed proposal form and the questionnaire was not forthcoming from the proposed assured, the Defendant/Appellant by its letter dated 28th February 2005 varied the terms of the Provisional acceptance dated the 27th January 2005, and substituted same with a cover that was limited to ₦750,000.00 (Seven Hundred and Fifty Thousand Naira) only or the initial deposit whichever was higher. Subsequently, the Defendant/Appellant learned that the proposed life assured (Ayokunle Dongo) died on the 8th of March 2005 while swimming in Calabar while the Claimant’s broker started demanding that the assured sum of ₦100,000,000.00 stated on the provisional acceptance letter issued by the Defendant/Appellant on the 10th of January 2005, be paid to the Claimant as beneficiary/assured of a purported life assurance policy on the life of the late Ayokunle Dongo. That in order to recover the ₦100,000,000.00 allegedly claimed by the Claimant as beneficiary/assured on the purported life assurance cover on the life of late Ayokunle Dango, the Claimant instituted an action against the Defendant at the Lagos High Court wherein judgment was entered in its favour by the trial judge.

Dissatisfied with the decision of the trial Court, the Appellant appealed to the Court of Appeal.