POWER OF ATTORNEY
PROVIDING ANSWERS TO CERTAIN FREQUENTLY ASKED QUESTIONS
RELATING TO USE OF POWER OF ATTORNEY IN PROPERTY TRANSACTIONS
(By Sylvester Udemezue)
A Power of attorney is disqualified as a good root of title is because, being no more than an instrument of delegation of authority, it is subject to a higher authority or interest --- the interest of the donor or grantor of the power. Besides, Power of Attorney does not confer any (legal or equitable) interest on the Donee (receiver of the Power) in respect of the property concerned. In conclusion, it is not an instrument of transfer of title, but merely of delegation of power/authority --- a formal legal instrument (usually but not necessarily under seal) by which one person, called the Donor/Principal, appoints another person, called the Donee/Attorney, to act on behalf of the Donor generally or for specific purposes. See UDE v, NWARA (supra) at page 664-665, where Nnaemeka-Agu, JSC, stated as follows:
“A Power of Attorney merely warrants and authorizes the donee to do certain acts in the stead of the donor and is not an instrument which confers, transfers, limits, charges, or alienates any title to the donee, rather it could be a vehicle whereby these acts could be done by the donee for and in the name of the donor to a third party. So, even if it authorizes the donee to do any of these acts to any person including himself, the mere issuance of such powers is not per se an alienation or parting with possession so far as it is categorized as a document of delegation; it is only after, by virtue of the power of attorney the donee leases or conveys the property the subject of the power to any person, including himself, then there is an alienation.’”
Confirming this position, the Court in AMADI v. NSIRIM (2004) 17 NWLR (PT. 901) 111 had this to say:
“In regard to exhibit F, the law is that a power of attorney transfers no interest from the donor to the donee. Mr Cornelius Ike Nwanne has no legal right to the property to entitle him to sell as his own even when the power authorizes him to sell. It is not an instrument which confers, transfers, limits, charges, or alienates any title to the done; rather, it could be a vehicle whereby these acts could be done by the donee for and in the name of the donor to a third party....See Ude v. Clement Nwara (1993) 2 NWLR (Pt 278) 638….”
See also CHIME V. CHIME (2001) 3 NWLR (PT. 701) 527 at 549.
Note however that a Power of Attorney may be used, indeed is often (mis)used to afford a purchaser who is yet to perfect his title to the property, but who has registered an irrevocable Power of Attorney in respect of the property, some measure of protection especially against subsequent transactions on the land. This is because registration of a Power of Attorney in respect of any piece of property is sufficient notice to the whole world; this notice is capable of defeating any plea of bona fide purchaser for value without notice. Hence, there is a rampant, lazy, practice among conveyancers and property law practitioners, to register a Power of Attorney in favour of a purchaser of land, to enable the purchaser to have dealings on the property, pending perfection of his title. In such situations, the purchaser is authorised by the vendor vide the power of attorney to do all that the vendor himself may lawfully do in respect of the property. However, this does not mean that the vendor has by the power of attorney transferred his interest in the property to the purchaser; the purchaser`s interest in the property emanates from the Deed of Assignment (the instrument of conveyance), which is yet not perfected, but which nevertheless transfers some interest, albeit equitable, to the purchaser. The power of attorney in this instance is at best described to be coupled with an interest or with a grant, with the result that the Power of Attorney is, and remains, irrevocable. It could therefore be concluded that Power of Attorney, standing alone, is incapable of transferring any interest in land to the donee. This position is further buttressed in the case of ACB v. IHEKWOABA (2004) FWLR (PT 194) 555 and EZEIGWE v. A
WUDU (2008) ALL FWLR (PT 434) 1529.
► Express Revocation
► Implied Revocation
► Revocation by operation of Law
Beside these three modes, it is important to note also that power of attorney could be invalidated or vitiated by mistake, fraud, duress or undue influence is established. See AGBO V. NWIKOLO (1973) 3 ESCLR.
IRREVOCABILITY OF POWER OF ATTORNEY. (STATUTORY EXCEPTIONS TO THE REVOCATION OF POWER OF ATTORNEY BY OPERATION OF LAW or MEASURES FOR PROTECTION OF THIRD PARTIES)
Revocation of power of attorney by operation of law may lead to serious injustice against, or impose difficulties or hardships upon, the donee or a third party with whom the donee transacts business pursuant to the donee`s powers under the power of attorney. Imagine that Mr Bola creates a power of attorney in favour of Miss Bimbo on 26 October 2017, to advertise and sell off Mr Bola`s blue-acre. In pursuance of the power, Miss Bimbo goes ahead, places paid adverts in newspapers and magazines, and even online, prints out hand bills and flyers to the same effect; engages security guards to secure blue-acre. Then, Mr Bakare agrees with Miss Bimbo to buy blue-acre. Prior to executing any agreement, Mr Bakare engages and pays a lawyer to conduct some preliminary investigations on blue-acre as well as to represent Mr Bakare in the transaction. Thereafter, a lawyer is paid by the parties (usually, it should be by Miss Bimbo) to prepare a formal Contract of Sale. Miss Bimbo and Mr Bakare then schedule to execute the contract on 10 November 2017. To this end, all the parties travel to the venue of the vendor`s law firm whereat the Contract is to be executed on payment of some deposit. All the parties and their solicitors arrive the city on 09 November 2017, pay for and lodge in a hotel. Unfortunately, at about 9.00pm on the same date (November 09, 2017), the Donee, Miss Bimbo is informed by an email of the death earlier in the day of Mr Bola. The power of attorney is therefore at an end. Imagine the hardships on the parties in this scenario!
To reduce the such difficulties, some statutory exceptions have been developed to make Power of Attorney irrevocable in certain circumstances, and thereby safeguard the interest of third parties dealing with the donee in such a situation. We now turn our attention to some of these situations. They include:
Where Power of Attorney is given for valuable consideration and in the instrument creating the power, the power is also expressed to be irrevocable, then in favour of the purchaser, the following rules shall apply—
Where a Power of Attorney is expressed to be irrevocable for a period fixed therein, not exceeding one year from the date of creation of the Power, whether or not the power is given for valuable consideration, then in favour of a purchaser, the following rules shall apply –
It must however be pointed out that these provisions do not affect rights against payee of any person interested in the money so paid, who shall have the like remedy against the payee as he would have had against the payer if the payment had not been made by him. The question left to be asked here is, “How then would the donee or the innocent third party establish that he (the donee or third party) acted in good faith and that he had no notice of such occurrence at the time of doing the act or making the payment?” In this respect, a statutory declaration by the person making the payment or doing the act immediately before the payment or within three months of such payment or act shall be conclusive proof that he had no such knowledge and of non-revocation of the Power before the payment or act. See section 142 (2) of the PCL. It is respectfully suggested that the provisions of section 142 (2) PCL which is quite commendable, could be complied with in any of two ways, namely –
(b) Does it need to be executed before a notary public or Magistrate?
(c) What is the effect of failure to observe any of these formalities?
FORMALITIES FOR EXECUTION OF A POWER OF ATTORNEY – Note following:
(see http://thelawdictionary.org/indenture/ accessed on 25 October 2017).
Are there instances in which it may be desirable to have the donee to also execute the Power of Attorney? Yes, even though this is not mandatory. Such instances include:
“For the purposes of this section, a statement in a document shall not be deemed to have been made by a person unless the document or the material part thereof was written, made or produced by him with his own hand, or was signed or initialed by him or otherwise recognized by him in writing as one for the accuracy of which he is responsible.”
Section 93 (1) of the same Evidence Act, 2011 states:
“If a document is alleged to be signed or to have been written wholly or in part by any person, the signature or the handwriting of so much of the document as is alleged to be in that person's handwriting must be proved to be in his handwriting.
As stated in KWARA INVESTMENT CO LTD v GARUBA (2000) 10 N.W.L.R. (Pt. 764) 25/39 paragraph G (per M. A. OREDOLA, J.C.A), “basically, an unsigned or irregularly signed document is worthless and entitled to ascription of no weight at all in law. What is more, such a document binds no one.” See also In Re Powe, Powe vs. Bardays Bank Ltd (1956) Ch 110. Note that a person cannot incur any obligation under a document unless he signed it: Faro Bottling Co Ltd v Osuji (2002) 1 NWLR (Pt 748) 311. In that case, the court held that "where a document contains nothing to show that it was executed and signed, it must retain its status as a worthless document. It is no document evidencing any valid and existing agreement. A court ought not to attach any probative value to it.” Note also that a person not being a party to a Deed (i.e., who does not sign the Deed) cannot ask that the same be set aside: Essi vs. Itsekiri Communal Land Trustees (1961) WNLR15. Moreover, section 97 PCL, 1959 provides that where an individual executes a Deed, he must sign or place a mark on it; sealing alone is not sufficient.
In the case of an illiterate he must sign or make a mark in the document in the presence of a Judge, Magistrate, Justice of the Peace, of a Notary Public or (in Lagos) a Commissioner for Oaths. Section 8(1) Land Instrument Registration Act, Cap 99 (not applicable in the PCL States) provides that where the vendor of land is an illiterate he should execute the instrument before a Magistrate or J.P. who shall attest it, i.e. there must be an Illiterate Jurat stating that the contents of the document were read and interpreted to him before he signed or made a mark on it. A similar practice is adopted in the case of a blind person. See Akingbade vs. Olayinka (1979) 1FNR 130. Where a corporation is the donor of a power of attorney, it is essential that the provisions of section 98 (1) PCL, 1959 relating to the affixing of the company`s seal and also to attestation thereof by the company`s “clerk, secretary, or other permanent officer or his deputy, and a member of the Board of Directors, council or other governing body of the corporation” are duly observed. See also Article II Table A of Part 1 of the Companies & Allied Matters Act, Cap C20, LFN, 2004. Section 163 (1) of the Evidence Act, 2011 (Nigeria) provides that a Deed shall be deemed duly executed by a corporation aggregate if its seal is duly affixed in the presence of its clerk, secretary or other permanent officer and a member of its Board of Directors, Council, or other governing body and is attested by him. However, it is important to take note of section 98 (3) PCL, 1959 which provides that where a person is authorized under a Power of Attorney to convey any interest in property in the name and on behalf of a company, he may as the attorney execute the conveyance by signing the name of the corporation in the presence of at least one witness, and in the case of a Deed affix his own seal.
Form of Execution of Power of Attorney in Lagos State (see sections 75, 76 (1) and 77, LRL, 2015, Lagos,
Every document shall be executed by all parties, and shall be deemed to have been executed in any of the following instances:
(f) ATTESTATION--- Just like in other instruments relating to real property, attestation
is not a sine-qua-non in a power of attorney; hence, Power of Attorney is valid and effective whether or not it is attested to. Note the exceptions, please:
(g) SEALING --- Requirement of sealing is unnecessary where the Power of Attorney is not by Deed. Where it is by Deed, the general requirement as to sealing would apply. At present, the practice of sealing is not of much importance, especially with respect to natural person. The law is that any indication of an attempt at sealing will be accepted for the purpose of the due execution of a Power of Attorney by Deed: Stromdale & Ball vs. Burden (1952) 1 AER, 59, 62, 1ER, 223, 230—in this case, Dankwest, LJ, said that “if a party signs a document bearing wax or wafer or other indication of a seal, with the intention of executing the document as a Deed, that is sufficient adoption as recognition of the seal to amount to due execution as a Deed.” See also First National Securities Ltd vs. Jones (1978) 2 WLR, 415. Section 80, Registration of Titles Act (RTA), provides that “An instrument which is expressed to be made or to operate as a Deed shall be deemed to be a Deed, and shall operate accordingly, but shall not on that account be required to be sealed.” Section 159 of the Evidence Act (EA) provides that “When any document purporting to be and stamped as a Deed appears or is proved to be or to have been signed and duly attested, it is presumed to have been sealed and delivered, though no impression of a seal appears thereon.” Note however that the above provision does not apply to companies, which are required to seal by section 74 of the CAMA, Cap C20, LFN, 2004. Sealing by a corporation must be done in strict conformity with the articles of association or the constitution of the corporation; where it is not provided, in conformity with Article II Table A of Part 1 of CAMA, 1990. See Containers Nigeria Ltd vs. Niglasco Nig Ltd (1979) 4 CCHCJ, 290 at 315. In that case, Balogun J. considered whether it is appropriate for a company to commit itself under hand or under seal, and that if a common seal is going to be affixed, it must be done strictly in accordance with its articles or else it will be void and of no effect. Note that a Deed must be in writing before it is signed. Therefore, a Deed left blank in some material particulars as to name of parties or property will be void for uncertainty.
(h) STAMPING – Power of Attorney attracts a fixed stamp duty under the Stamp
Duties Law of each State. See for example the Schedule to the Stamp Duties Law of Lagos
(i) REGISTRATION --- Whether or not a power of attorney is registrable depends on
whether it qualifies as an instrument under the Land (Instrument) Registration applicable to the State where it is used: see Uzoechi vs. Alinnor (2002) 2 NWLR
(PT 753) 217 at 274. In some jurisdictions (such as in the FCT, Abuja), as a measure to prevent fraud, the Lands Registry may require a letter of consent from the Donor as a pre-condition for accepting a Power of Attorney for registration. Note that where Power of Attorney is registrable, non-registration renders it inadmissible as evidence in court: Ojugbele vs. Olasoji (1982) SC 71. In Lagos State, Power of Attorney authorizing any person to deal with any land, sublease or mortgage must be delivered to the Registrar for registration. Similarly, an irrevocable power of Attorney must be duly registered in the registry, else it is void. See sections 56, 57 and 94 of the Land Registration Law (LRL), 2015 (Lagos).
(j) GOVERNOR`S CONSENT --- Governor`s consent or Local Government`s approval is
mandatory for transactions involving alienation of legal interests in land. See sections 21, 22 and 26 of the Land use Act, 1978. See also section 7 (b) (iii) of the State Land Law of Lagos. Since a Power of attorney does not primarily transfer any interest in land, neither the consent of the Governor, nor the approval of the Local Government is required. See AMADI v. NSIRIM (supra); UDE v. NWARA (supra). However, in Lagos State, under the LRL, 2015, Governor’s consent and registration are mandatory for an Irrevocable Power of Attorney relating to any land in Lagos State, and the Registrar shall not accept such Power of Attorney for registration unless the consent of the Governor has been obtained in respect of the same. A document (of transfer – such as Deed of Assignment, Deed of Legal Mortgage or Deed of Sublease, etc) executed by an Attorney shall not be accepted for registration unless it there is an irrevocable power of attorney authorizing such attorney to execute the said document and the power of attorney has been duly registered or filed in the registry. (see section 56, 57, and 94, LRL, 2015).
(k) FRANKING OF POWER OF ATTORNEY – The term “Franking” is used to refers to
the endorsement on a Deed of the name and address of the legal practitioner who prepared the Deed. Rule 10 of the Rules of Professional Conduct (RPC), 2007, provides that a lawyer acting in his capacity as a legal practitioner… shall not sign or file a legal document unless there is affixed on any such document a seal and stamp approved by the Nigerian Bar Association.
Usefulness of Franking of Legal Documents –
(5) Can a donee of a power of attorney in exercise of the power under the instrument to convey title in the property to himself?
Our earlier discussions (on page 1 above) relating to the cases of UDE v. NWARA (supra) and AMADI v. NSIRIM (supra) have confirmed that where a Power of Attorney empowers the donee to, on behalf of the donor, alienate an interest in any particular parcel of land, the donee in such a case is entitled to execute an instrument, say a Deed (of Assignment/Lease/Mortgage/Gift) to transfer such interest to himself. A simple illustration will help to rest this position: Mr. Bola has just created a Power of Attorney in favour of Miss Bimbo, for the purpose of sale of Mr. Bola`s blue-acre located at 12, Lokoja, Street, Obalende, Lagos for N200 million. Miss Bimbo has two options in the circumstances. The first is to advertise the property to the public, get a buyer, any third party, and sell off blue-acre to the third party for N200 million, and remit the money to Mr. Bola. The second option is for Miss Bimbo to decide to purchase blue-acre for herself, in which case she can execute a Deed of Assignment in favour of herself to assign all of Mr. Bola`s interests in blue-acre to herself, provided she (Miss Bimbo) pays the purchase price of N200 million to Mr. Bola.
By
Sylvester Udemezue,
Nigerian Law School,
Victoria Island, Lagos.
udemezue@lawschoollagos.org
RELATING TO USE OF POWER OF ATTORNEY IN PROPERTY TRANSACTIONS
(By Sylvester Udemezue)
- Can a Power of Attorney be used to transfer title from the donor to the donee?
A Power of attorney is disqualified as a good root of title is because, being no more than an instrument of delegation of authority, it is subject to a higher authority or interest --- the interest of the donor or grantor of the power. Besides, Power of Attorney does not confer any (legal or equitable) interest on the Donee (receiver of the Power) in respect of the property concerned. In conclusion, it is not an instrument of transfer of title, but merely of delegation of power/authority --- a formal legal instrument (usually but not necessarily under seal) by which one person, called the Donor/Principal, appoints another person, called the Donee/Attorney, to act on behalf of the Donor generally or for specific purposes. See UDE v, NWARA (supra) at page 664-665, where Nnaemeka-Agu, JSC, stated as follows:
“A Power of Attorney merely warrants and authorizes the donee to do certain acts in the stead of the donor and is not an instrument which confers, transfers, limits, charges, or alienates any title to the donee, rather it could be a vehicle whereby these acts could be done by the donee for and in the name of the donor to a third party. So, even if it authorizes the donee to do any of these acts to any person including himself, the mere issuance of such powers is not per se an alienation or parting with possession so far as it is categorized as a document of delegation; it is only after, by virtue of the power of attorney the donee leases or conveys the property the subject of the power to any person, including himself, then there is an alienation.’”
Confirming this position, the Court in AMADI v. NSIRIM (2004) 17 NWLR (PT. 901) 111 had this to say:
“In regard to exhibit F, the law is that a power of attorney transfers no interest from the donor to the donee. Mr Cornelius Ike Nwanne has no legal right to the property to entitle him to sell as his own even when the power authorizes him to sell. It is not an instrument which confers, transfers, limits, charges, or alienates any title to the done; rather, it could be a vehicle whereby these acts could be done by the donee for and in the name of the donor to a third party....See Ude v. Clement Nwara (1993) 2 NWLR (Pt 278) 638….”
See also CHIME V. CHIME (2001) 3 NWLR (PT. 701) 527 at 549.
Note however that a Power of Attorney may be used, indeed is often (mis)used to afford a purchaser who is yet to perfect his title to the property, but who has registered an irrevocable Power of Attorney in respect of the property, some measure of protection especially against subsequent transactions on the land. This is because registration of a Power of Attorney in respect of any piece of property is sufficient notice to the whole world; this notice is capable of defeating any plea of bona fide purchaser for value without notice. Hence, there is a rampant, lazy, practice among conveyancers and property law practitioners, to register a Power of Attorney in favour of a purchaser of land, to enable the purchaser to have dealings on the property, pending perfection of his title. In such situations, the purchaser is authorised by the vendor vide the power of attorney to do all that the vendor himself may lawfully do in respect of the property. However, this does not mean that the vendor has by the power of attorney transferred his interest in the property to the purchaser; the purchaser`s interest in the property emanates from the Deed of Assignment (the instrument of conveyance), which is yet not perfected, but which nevertheless transfers some interest, albeit equitable, to the purchaser. The power of attorney in this instance is at best described to be coupled with an interest or with a grant, with the result that the Power of Attorney is, and remains, irrevocable. It could therefore be concluded that Power of Attorney, standing alone, is incapable of transferring any interest in land to the donee. This position is further buttressed in the case of ACB v. IHEKWOABA (2004) FWLR (PT 194) 555 and EZEIGWE v. A
WUDU (2008) ALL FWLR (PT 434) 1529.
- Under what circumstances is a power of attorney irrevocable? Is it sufficient merely to state in the deed that it is?
► Express Revocation
► Implied Revocation
► Revocation by operation of Law
- Express Revocation -- Power of Attorney is a special form of agency; some rules of agency therefore apply. Accordingly, in keeping with the rule that he who hires reserves the right to fire, the Donor reserves the right remove the Donee or revoke the power. Note however that the mode of revocation must be either the same with, or higher than, the mode of creation of the power of attorney. Accordingly, if the creation or appointment (of the donee) is by deed, revocation or withdrawal of the power in order to be valid and effective must be by Deed. See ADEGBOKUN Vs. AKINSANYA (1976) 8 CCHCJ 2163; OJUGBELE V. OLASOJI (1982) SC 71. Note that where appointment is by word of mouth (orally), revocation in writing is effective, as this is higher than (superior to) the mode of appointment or creation. Same goes for revocation by Deed where appointment is by mere writing.
- Implied Revocation -- This occurs where the Donor, after giving a Power of Attorney to a Donee, still goes ahead and deals with the subject matter of the Power of Attorney in such a manner that now makes it impossible for the Donee to effect his authority or carry out his instructions under the Power of Attorney. In CHIME V. CHIME (SUPRA), the court held that the fact that a donor gave a Power of Attorney does not mean that the Donor cannot himself do the act. Accordingly, if Mr Bola, after creating a Power of Attorney in favour of Miss Bimbo, for the purpose of selling Mr Bola`s blue-acre (a piece of land), still goes behind and personally sells off the same blue-acre, Mr Bola is said to have impliedly revoked the power of attorney, since with the sale, Mr Bola has rendered it impossible for Miss Bimbo to exercise the power given to Miss Bimbo under the Power of Attorney.
- Revocation By operation of Law -- Power of Attorney is said to be revoked by operation of law if the Donor suffers death, insanity, bankruptcy or other legal incapacity during the subsistence of the power. See ABINA v.. FARHART(1938) 14 NLR 17; UBA v. REGISTRAR OF TITLES (1990) 4 NWLR (PT 1444) 407 AT 419
Beside these three modes, it is important to note also that power of attorney could be invalidated or vitiated by mistake, fraud, duress or undue influence is established. See AGBO V. NWIKOLO (1973) 3 ESCLR.
IRREVOCABILITY OF POWER OF ATTORNEY. (STATUTORY EXCEPTIONS TO THE REVOCATION OF POWER OF ATTORNEY BY OPERATION OF LAW or MEASURES FOR PROTECTION OF THIRD PARTIES)
Revocation of power of attorney by operation of law may lead to serious injustice against, or impose difficulties or hardships upon, the donee or a third party with whom the donee transacts business pursuant to the donee`s powers under the power of attorney. Imagine that Mr Bola creates a power of attorney in favour of Miss Bimbo on 26 October 2017, to advertise and sell off Mr Bola`s blue-acre. In pursuance of the power, Miss Bimbo goes ahead, places paid adverts in newspapers and magazines, and even online, prints out hand bills and flyers to the same effect; engages security guards to secure blue-acre. Then, Mr Bakare agrees with Miss Bimbo to buy blue-acre. Prior to executing any agreement, Mr Bakare engages and pays a lawyer to conduct some preliminary investigations on blue-acre as well as to represent Mr Bakare in the transaction. Thereafter, a lawyer is paid by the parties (usually, it should be by Miss Bimbo) to prepare a formal Contract of Sale. Miss Bimbo and Mr Bakare then schedule to execute the contract on 10 November 2017. To this end, all the parties travel to the venue of the vendor`s law firm whereat the Contract is to be executed on payment of some deposit. All the parties and their solicitors arrive the city on 09 November 2017, pay for and lodge in a hotel. Unfortunately, at about 9.00pm on the same date (November 09, 2017), the Donee, Miss Bimbo is informed by an email of the death earlier in the day of Mr Bola. The power of attorney is therefore at an end. Imagine the hardships on the parties in this scenario!
To reduce the such difficulties, some statutory exceptions have been developed to make Power of Attorney irrevocable in certain circumstances, and thereby safeguard the interest of third parties dealing with the donee in such a situation. We now turn our attention to some of these situations. They include:
- Where a Power of Attorney is given for valuable consideration and also expressed to be irrevocable (see section 143, Property & Conveyancing Law, 1959; section 8, Conveyancing Act, 1882):
Where Power of Attorney is given for valuable consideration and in the instrument creating the power, the power is also expressed to be irrevocable, then in favour of the purchaser, the following rules shall apply—
- The power shall not be revoked by the donor, nor by the death, bankruptcy or other legal disability of the donor, except with the concurrence or consent of the Donee; See also UBA V. REGISTAR OF TITLES; LABABEDI Vs. ODULANA (1973) 4 CCHCJ 98;
- Any act done under such Power of Attorney shall be as valid as if done when no such things (i.e., death, bankruptcy or other legal disability, etc., of the donor) had happened; and
- Neither the donee nor the purchaser shall be affected by notice of anything done by the donor without donee`s consent, nor by the death or other incapacity of the Donor.
- Where a power of attorney is merely stated to be irrevocable for a fixed term not exceeding twelve months, whether or not it is given for valuable consideration (see section 144, Property & Conveyancing Law, 1959; section 9, Conveyancing Act, 1882):
Where a Power of Attorney is expressed to be irrevocable for a period fixed therein, not exceeding one year from the date of creation of the Power, whether or not the power is given for valuable consideration, then in favour of a purchaser, the following rules shall apply –
- The Power cannot be revoked by the Donor (or by his death or other legal incapacity) within the period so fixed, except with the consent of the Donee;
- Any act done under such PA within the period so fixed shall be as valid as if done when no such things had happened; and
- Neither the Donee nor the purchaser shall be affected by notice of anything done by the Donor within the period so fixed without Donee`s consent nor by the death or other incapacity of the Donor within the period so fixed
- Further Statutory Protection –By virtue of section 71 of the Conveyancing Act (CA), 1882; section 142 (1) of the Property & Conveyancing Law (PCL), 1959, and section 56 of the Land Registration Law (LRL), 2015 (Lagos), adequate protection is given to a bona fide purchaser for value without notice, whether or not the Power of Attorney is given for valuable consideration and whether or not the Power is expressed to be irrevocable. By the combined effect of the aforesaid provisions, the rule now is that any payment made, or act done by any person pursuant to a Power of Attorney remains valid and effective notwithstanding that before the making of the payment or doing of the act, the Donor had died or otherwise become incapacitated, provided that –
- The person making the payment or doing the act acted in good faith, and
- The person making the payment or doing the act had no notice of the donor`s death or other legal incapacity at the time of making the payment or doing the act.
It must however be pointed out that these provisions do not affect rights against payee of any person interested in the money so paid, who shall have the like remedy against the payee as he would have had against the payer if the payment had not been made by him. The question left to be asked here is, “How then would the donee or the innocent third party establish that he (the donee or third party) acted in good faith and that he had no notice of such occurrence at the time of doing the act or making the payment?” In this respect, a statutory declaration by the person making the payment or doing the act immediately before the payment or within three months of such payment or act shall be conclusive proof that he had no such knowledge and of non-revocation of the Power before the payment or act. See section 142 (2) of the PCL. It is respectfully suggested that the provisions of section 142 (2) PCL which is quite commendable, could be complied with in any of two ways, namely –
- The affected donee and the third party could agree to insert a clause to this effect in the Deed of Assignment or such other relevant document of transfer; or
- The parties or either of them could depose to an affidavit to this effect. Such an affidavit (statutory declaration) must be deposed to within the three month immediately succeeding the doing of the act or making of the payment. It is further suggested that it would serve the interest of the donee and the third party better if such affidavit is executed either on the same date as that of doing the act or making the payment, or so soon after that date; delay could be dangerous in this respect.
(b) Does it need to be executed before a notary public or Magistrate?
(c) What is the effect of failure to observe any of these formalities?
FORMALITIES FOR EXECUTION OF A POWER OF ATTORNEY – Note following:
- CAPACITY OF PARTIES TO A POWER OF ATTORNEY --- Parties to a power of attorney must be legal persons or persons with legal capacity. See NBN LTD. V. KORBAN BROTHERS NIGERIA (1975) 1 FNR 11; Ude vs. Nwara (supra); Chime vs. Chime (supra).
- REQUIREMENT OF WRITING – Although it is a form of agency and agency may be created orally or by conduct, yet a power of attorney, unlike an agency relationship, must be created in writing. Unless power of attorney is in writing, all the statutory and judicial provisions relating to attestation, signing, registration or sealing would be impossible to comply with since only a written document is capable of being signed, attested to or sealed, etc. Besides, powers conferred on the donee by virtue of any Power of Attorney are construed very strictly. This being the case, the Power of Attorney must be in writing and must be drawn exhaustively, such that all the authority or powers donated vide the Power of Attorney are expressly set out in the instrument. In this way, there would be no ambiguity in relation to the scope of the powers so created. Note that a general or omnibus clause in a Power of Attorney will not be interpreted to confer any additional powers on the Donee; such must be construed in terms of the specific powers expressly provided in the instrument creating the power: ABINA VS. FARHART (supra). Besides, extrinsic evidence is not admissible to establish the fact that the Donee ought to have any additional power other than, or that the donor had intended to donate any more powers than, those expressly set out in the instrument or which could be brought in by necessary implication. See RE BRYANT [1893] AC, 170; ABINA VS. FARHART (supra). In view of these strict rules of construction in relation to power of attorney as a peculiar form of agency, the parties to a power of attorney or their solicitor(s) should, while drafting or creating a Power of attorney, ensure that:
- that the Power of Attorney expressly confers on the Donee all powers necessary to achieve the object of the Power;
- that the Power of Attorney is drafted/prepared in such a manner as to ensure that no difficulty or confusion is experienced when dealing with third parties. See JACOBS VS. MORRIS ([1902] 1 Ch. 816
- MUST A POWER OF ATTORNEY BE BY DEED? -- Power of Attorney need not be by Deed. But, as stated above, it needs to be in writing in order to qualify as an instrument as defined in relevant enactments. Thus, Power of Attorney may take the form of a mere written document or a even letter. Also, based on provisions of the Evidence Act, 2011 relating to admissibility of online, computer or ICT-generated evidence, in deserving circumstances, a Power of Attorney may also take the form of an SMS, an email, a WhatsApp message, Facebook message or other similar written communication. But, where the instruction or authority the donee of a Power of Attorney is expected to execute includes execution (signing) of a Deed (contract under seal), the Power of Attorney (authorizing the donee to so execute) must be created by Deed. See ABINA V. FARHAT (1938) 14 NLR, 17; POWELL v. LONDON & Provincial Bank [1893] 2 Ch. 555.
- POWER OF ATTORNEY IS A DEED POLL -- Power of Attorney is usually a special instrument in the form of a Deed Poll, which in effect means that it is an instrument that is permitted to be executed by only one party--- the Donor. A DEED POLL is a term used to refer to an instrument that is made or executed by only one party, as opposed to an Indenture which is required to be executed by all the parties. The Black`s Law Dictionary gives further explanation on the distinction between an “Indenture” and “Deed Poll:”
(see http://thelawdictionary.org/indenture/ accessed on 25 October 2017).
Are there instances in which it may be desirable to have the donee to also execute the Power of Attorney? Yes, even though this is not mandatory. Such instances include:
- To prevent fraud and also to aid investigation into the property covered by the Power of Attorney --- Where the PA (power of attorney) is signed by both parties and thereafter registered, the signature of the donee is now in the file at the lands registry. A third party transacting any business with the donee in respect of the affected property can compare the donee`s signature in the registry with any document signed or purported to be signed by the donee pursuant to the PA, in the course of the transaction.
- Where the Power of Attorney imposes some obligations, or confers some benefits, on the donee -- Where beside the powers created therein, a Power of Attorney also imposes some obligations, or confers some benefits, on the donee, there is need for the donee to also execute the Power of Attorney, in order for the obligations so created to be binding on him, or to enable him to be able to enforce any such benefits conferred on him in the same instrument. This is based on the legal doctrine of privity; a person is not bound by any document not executed by him, nor is a person entitled to enforce any benefits conferred on him by a document to which he is not a party. Only parties to contracts should be able to sue to enforce their rights or claim damages as such. See Price v Easton[1833] 4 B & Ad 433.
- EXECUTION & SIGNING OF A POWER OF ATTORNEY --- Signing or signature is
“For the purposes of this section, a statement in a document shall not be deemed to have been made by a person unless the document or the material part thereof was written, made or produced by him with his own hand, or was signed or initialed by him or otherwise recognized by him in writing as one for the accuracy of which he is responsible.”
Section 93 (1) of the same Evidence Act, 2011 states:
“If a document is alleged to be signed or to have been written wholly or in part by any person, the signature or the handwriting of so much of the document as is alleged to be in that person's handwriting must be proved to be in his handwriting.
As stated in KWARA INVESTMENT CO LTD v GARUBA (2000) 10 N.W.L.R. (Pt. 764) 25/39 paragraph G (per M. A. OREDOLA, J.C.A), “basically, an unsigned or irregularly signed document is worthless and entitled to ascription of no weight at all in law. What is more, such a document binds no one.” See also In Re Powe, Powe vs. Bardays Bank Ltd (1956) Ch 110. Note that a person cannot incur any obligation under a document unless he signed it: Faro Bottling Co Ltd v Osuji (2002) 1 NWLR (Pt 748) 311. In that case, the court held that "where a document contains nothing to show that it was executed and signed, it must retain its status as a worthless document. It is no document evidencing any valid and existing agreement. A court ought not to attach any probative value to it.” Note also that a person not being a party to a Deed (i.e., who does not sign the Deed) cannot ask that the same be set aside: Essi vs. Itsekiri Communal Land Trustees (1961) WNLR15. Moreover, section 97 PCL, 1959 provides that where an individual executes a Deed, he must sign or place a mark on it; sealing alone is not sufficient.
In the case of an illiterate he must sign or make a mark in the document in the presence of a Judge, Magistrate, Justice of the Peace, of a Notary Public or (in Lagos) a Commissioner for Oaths. Section 8(1) Land Instrument Registration Act, Cap 99 (not applicable in the PCL States) provides that where the vendor of land is an illiterate he should execute the instrument before a Magistrate or J.P. who shall attest it, i.e. there must be an Illiterate Jurat stating that the contents of the document were read and interpreted to him before he signed or made a mark on it. A similar practice is adopted in the case of a blind person. See Akingbade vs. Olayinka (1979) 1FNR 130. Where a corporation is the donor of a power of attorney, it is essential that the provisions of section 98 (1) PCL, 1959 relating to the affixing of the company`s seal and also to attestation thereof by the company`s “clerk, secretary, or other permanent officer or his deputy, and a member of the Board of Directors, council or other governing body of the corporation” are duly observed. See also Article II Table A of Part 1 of the Companies & Allied Matters Act, Cap C20, LFN, 2004. Section 163 (1) of the Evidence Act, 2011 (Nigeria) provides that a Deed shall be deemed duly executed by a corporation aggregate if its seal is duly affixed in the presence of its clerk, secretary or other permanent officer and a member of its Board of Directors, Council, or other governing body and is attested by him. However, it is important to take note of section 98 (3) PCL, 1959 which provides that where a person is authorized under a Power of Attorney to convey any interest in property in the name and on behalf of a company, he may as the attorney execute the conveyance by signing the name of the corporation in the presence of at least one witness, and in the case of a Deed affix his own seal.
Form of Execution of Power of Attorney in Lagos State (see sections 75, 76 (1) and 77, LRL, 2015, Lagos,
Every document shall be executed by all parties, and shall be deemed to have been executed in any of the following instances:
- If signed by a natural person;
- In the case of a corporation aggregate, if sealed with the seal of a corporation and attested to by its clerk, secretary, director or other officer;
- In the case of a corporation sole, if signed and the official seal affixed;
- In the case of a corporation not required by law to have a common seal, if signed by persons so authorized by law or the statute of the corporation or, in the absence of any such express provision, by two or more persons duly appointed for that purpose by the corporation;
- Documents required by this law to be stamped but which are not so stamped shall not be accepted for registration unless otherwise exempted under this law from such stamping
- For purposes of registration, a document includes all certificates and matters endorsed on or attached to it.
(f) ATTESTATION--- Just like in other instruments relating to real property, attestation
is not a sine-qua-non in a power of attorney; hence, Power of Attorney is valid and effective whether or not it is attested to. Note the exceptions, please:
- POWER OF ATTORNEY FOR USE IN A FOREIGN COUNTRY--- Power of attorney executed in Nigerian and intended for use in a foreign country should be attested to by a Notary Public, for easy acceptance in the country of use. This is because a Notary Public has credit all over the world. But the fact that such is not attested to by a Notary Public does not render the Power void.
- PRESUMPTION OF DUE EXECUTION OF POWER OF ATTORNEY --Power of Attorney attested to by a Court, Judge, Notary public or Magistrate is presumed to be duly executed: see section 150 Evidence Act, 2011; Ayiwoh v. Akorede (1951) 20 NLR, 4. Compliance with section 150 of the Evidence Act, 2011 is only one of the ways of proving due execution of a Power of Attorney; it is NOT the only way. Besides, that section deals with proof of execution and authentication and not with validity of the document. Thus, the fact that a power of attorney is not executed before any such persons does not affect the validity of the Power of Attorney. See MELWANI v. FIVE STAR LTD (2002) 2 NWLR (PT 753) 217 at 274
- POWER OF ATTORNEY EXECUTED BY ILLITERATES, BLIND PERSONS OR A FOREIGNER WHO DOES NOT UNDERSTAND THE ENGLISH LANGUAGE --- In any of these instances, the Power of attorney must contain a jurat, and must be attested by a judge, Notary Public, Magistrate. We already discussed this above. Failure to observe these formalities invalidates the power of attorney. Note the effect of franking on absence of a jurat in a document executed by illiterates or blind persons—it is discussed below.
- POWER OF ATTORNEY EXECUTED BY CORPORATE BODIES ---As earlier discussed, such Power of Attorney must be attested to by “clerk, secretary, or other permanent officer or his deputy, and a member of the Board of Directors, council or other governing body of the corporation.” See section 163 (1), Evidence Act, 2011 and section 98 (3) PCL, 1959. The same rule applies to power of attorney executed by public corporations, bodies and institutions established by law and given the contractual capacity --- examples: Corporate Affairs Commission, University of Lagos, Enugu State Property Development Corporation, Nigerian National Petroleum Corporation (NNPC), etc. Failure to observe these formalities renders execution of such power of attorney irregular.
- MANDATORY ATTESTATION BY MAGISTRATE, JP, JUDGE, NOTARY PUBLIC OR COMMISSIONER FOR OATHS IN LAGOS STATE - [s. 76 (2) & (3), Land Registration Law, 2015, Lagos] --- The following rules apply in Lagos:
- Any document executed outside Nigeria shall not be registered unless it has attached to it a certificate showing that it was attested to by a Nigerian or foreign judge, magistrate, JP or Notary Public
- Where a grantor is an illiterate, the document of transfer must be attested to by a judge, magistrate, JP, Notary Public or Commissioner for Oaths. The same thing applies to document to which a blind person is a party.
(g) SEALING --- Requirement of sealing is unnecessary where the Power of Attorney is not by Deed. Where it is by Deed, the general requirement as to sealing would apply. At present, the practice of sealing is not of much importance, especially with respect to natural person. The law is that any indication of an attempt at sealing will be accepted for the purpose of the due execution of a Power of Attorney by Deed: Stromdale & Ball vs. Burden (1952) 1 AER, 59, 62, 1ER, 223, 230—in this case, Dankwest, LJ, said that “if a party signs a document bearing wax or wafer or other indication of a seal, with the intention of executing the document as a Deed, that is sufficient adoption as recognition of the seal to amount to due execution as a Deed.” See also First National Securities Ltd vs. Jones (1978) 2 WLR, 415. Section 80, Registration of Titles Act (RTA), provides that “An instrument which is expressed to be made or to operate as a Deed shall be deemed to be a Deed, and shall operate accordingly, but shall not on that account be required to be sealed.” Section 159 of the Evidence Act (EA) provides that “When any document purporting to be and stamped as a Deed appears or is proved to be or to have been signed and duly attested, it is presumed to have been sealed and delivered, though no impression of a seal appears thereon.” Note however that the above provision does not apply to companies, which are required to seal by section 74 of the CAMA, Cap C20, LFN, 2004. Sealing by a corporation must be done in strict conformity with the articles of association or the constitution of the corporation; where it is not provided, in conformity with Article II Table A of Part 1 of CAMA, 1990. See Containers Nigeria Ltd vs. Niglasco Nig Ltd (1979) 4 CCHCJ, 290 at 315. In that case, Balogun J. considered whether it is appropriate for a company to commit itself under hand or under seal, and that if a common seal is going to be affixed, it must be done strictly in accordance with its articles or else it will be void and of no effect. Note that a Deed must be in writing before it is signed. Therefore, a Deed left blank in some material particulars as to name of parties or property will be void for uncertainty.
(h) STAMPING – Power of Attorney attracts a fixed stamp duty under the Stamp
Duties Law of each State. See for example the Schedule to the Stamp Duties Law of Lagos
(i) REGISTRATION --- Whether or not a power of attorney is registrable depends on
whether it qualifies as an instrument under the Land (Instrument) Registration applicable to the State where it is used: see Uzoechi vs. Alinnor (2002) 2 NWLR
(PT 753) 217 at 274. In some jurisdictions (such as in the FCT, Abuja), as a measure to prevent fraud, the Lands Registry may require a letter of consent from the Donor as a pre-condition for accepting a Power of Attorney for registration. Note that where Power of Attorney is registrable, non-registration renders it inadmissible as evidence in court: Ojugbele vs. Olasoji (1982) SC 71. In Lagos State, Power of Attorney authorizing any person to deal with any land, sublease or mortgage must be delivered to the Registrar for registration. Similarly, an irrevocable power of Attorney must be duly registered in the registry, else it is void. See sections 56, 57 and 94 of the Land Registration Law (LRL), 2015 (Lagos).
(j) GOVERNOR`S CONSENT --- Governor`s consent or Local Government`s approval is
mandatory for transactions involving alienation of legal interests in land. See sections 21, 22 and 26 of the Land use Act, 1978. See also section 7 (b) (iii) of the State Land Law of Lagos. Since a Power of attorney does not primarily transfer any interest in land, neither the consent of the Governor, nor the approval of the Local Government is required. See AMADI v. NSIRIM (supra); UDE v. NWARA (supra). However, in Lagos State, under the LRL, 2015, Governor’s consent and registration are mandatory for an Irrevocable Power of Attorney relating to any land in Lagos State, and the Registrar shall not accept such Power of Attorney for registration unless the consent of the Governor has been obtained in respect of the same. A document (of transfer – such as Deed of Assignment, Deed of Legal Mortgage or Deed of Sublease, etc) executed by an Attorney shall not be accepted for registration unless it there is an irrevocable power of attorney authorizing such attorney to execute the said document and the power of attorney has been duly registered or filed in the registry. (see section 56, 57, and 94, LRL, 2015).
(k) FRANKING OF POWER OF ATTORNEY – The term “Franking” is used to refers to
the endorsement on a Deed of the name and address of the legal practitioner who prepared the Deed. Rule 10 of the Rules of Professional Conduct (RPC), 2007, provides that a lawyer acting in his capacity as a legal practitioner… shall not sign or file a legal document unless there is affixed on any such document a seal and stamp approved by the Nigerian Bar Association.
Usefulness of Franking of Legal Documents –
- Franking obviates the need for an illiterate jurat where an illiterate or blind person is a party to the document. If a document is franked by a legal practitioner, it is not invalidated by absence of the illiterate jurat;
- Deeds not duly franked may not be accepted for registration;
- Franking is evidence that the affected instrument or document was actually prepared by a Legal Practitioner, in satisfaction of the provisions of section 22 (d) of the Legal Practitioners Act, Cap L11, LFN, 2004, which provides that “… if any person other than a legal practitioner prepares for or in expectation of reward any instrument relating to immovable property, or relating to or with a view to the grant of probate or letters of administration, or relating to or with a view to proceedings in any court of record in Nigeria, he shall be guilty of an offence….” See also sections 4 and 5 of the Land Instrument Preparation Law (LIPL), Ogun State
- Franking could be useful in tracing the lawyer who prepared the document so franked, since the contact of the lawyer is contained in the document.
(5) Can a donee of a power of attorney in exercise of the power under the instrument to convey title in the property to himself?
Our earlier discussions (on page 1 above) relating to the cases of UDE v. NWARA (supra) and AMADI v. NSIRIM (supra) have confirmed that where a Power of Attorney empowers the donee to, on behalf of the donor, alienate an interest in any particular parcel of land, the donee in such a case is entitled to execute an instrument, say a Deed (of Assignment/Lease/Mortgage/Gift) to transfer such interest to himself. A simple illustration will help to rest this position: Mr. Bola has just created a Power of Attorney in favour of Miss Bimbo, for the purpose of sale of Mr. Bola`s blue-acre located at 12, Lokoja, Street, Obalende, Lagos for N200 million. Miss Bimbo has two options in the circumstances. The first is to advertise the property to the public, get a buyer, any third party, and sell off blue-acre to the third party for N200 million, and remit the money to Mr. Bola. The second option is for Miss Bimbo to decide to purchase blue-acre for herself, in which case she can execute a Deed of Assignment in favour of herself to assign all of Mr. Bola`s interests in blue-acre to herself, provided she (Miss Bimbo) pays the purchase price of N200 million to Mr. Bola.
By
Sylvester Udemezue,
Nigerian Law School,
Victoria Island, Lagos.
udemezue@lawschoollagos.org
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