Trans Bridge Company Limited V. Survey International Limited (1986)

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ESO, J.S.C.

This appeal touches on an important aspect of Company Law and though it is not new, the issues involved seldom arise in our courts.

The issues are in regard to enforceability vel non of pre-incorporation contracts and circumstances that could amount to what the Appellant chose to refer to as “equitable estoppel” and which the Respondents term “promisory estoppel” and “estoppel by conduct.”

Let me, however give the background to the case. The evidence is mostly documentary. Ibrahim Maina Damcida, a Company Director, and who later became the Chairman of Trans Bridge Company Ltd, the Appellants, entered into an arrangement with Survey International Ltd. (the Respondents in this case) for the sale of a landed property situate at 222/231 Apapa by the Respondents to the Appellants.

But it is not as simple as all that, as the documents would show presently. The Appellant Company was incorporated on 17th September 1976 but meanwhile the transaction in question had taken place before the incorporation.On 29th May 1976 Ibrahim Maina Damcida, hereinafter referred to simply as Damcida, had written a letter to the respondents, conveying to them the terms of the oral agreement they had had about the sale of the property. The letter of 29th May was not in evidence, but by 31st May, the Respondents replied, in a letter to Damcida, but addressed as the “Chairman” of Trans Bridge Co. Ltd., which was still unincorporated (Ex.P1) as follows –

“We are in receipt of your letter of the 29th May, 1976 on the above subject to confirm our acceptance to sell the property at the terms agreed between ourselves during the various meetings held some time ago.

We do agree to grant you the time required in order to allow you to finalise with your financiers all the transactions.

After the expiration of this time, stated by you as the first week in July, we will consider ourselves free to negotiate the sale with any other parties which might be interested in this property.

With best regards.

Yours faithfully,

SURVEY INTERNATIONAL LIMITED

(Sgd) ”

It is evident from EX.P1 that Damcida gave the end of the first week in July as the time limit within which to complete the terms of the agreement, as contained in Ex. P4 as follows –

“The Director,