Facts:

The 1st respondent is the owner of the houseboat known as DUFAN VI which was hired by the appellant sometimes in 1994 for use in Port-Harcourt, Rivers State. The houseboat was stationed at Warri, Delta State.

The hire of the houseboat was for a period of two months and a hire contract was executed by the parties, whereupon the appellant took delivery of it. Few days after the appellant had taken possession of the houseboat, it got submerged.

Aggrieved with the news of its houseboat getting submerged, the 1st respondent demanded that the appellant returned its houseboat in good condition subject to contract and also the payment of outstanding accruing rents. The appellant failed to meet the demands and the 1st respondent proceeded to institute an action against the appellant at the Federal High Court. Upon been served with the originating process, the appellant filed its defence and counter-claim. It also applied for the joinder of the 2nd respondent, an insurance company. In its final decision, the lower court granted the reliefs sought by the 1st respondent but struck out appellant’s counter-claim.

Dissatisfied with the decision of the lower court, the appellant appealed to the Court of Appeal.