Albion Construction Company, the 3rd appellant/cross-respondent in this appeal was incorporated in 1976. The 1st and 2nd appellants were the subscribers to the Memorandum and Articles of Association of the company and in that capacity, each of them subscribed for one share in the 3rd appellant. On 30th June 1978, the 1st and 2nd appellants entered into a partnership agreement with the 1st and 2nd appellants by which they agreed to engage in the business of construction and development under the name of Albion Construction Limited. The parties agreed to share the profits on 50% for the 1st and 2nd appellants. 40% for the 1st and 2nd respondents and 10% for the technical staff. Subsequently, the Administrative Manager of the 3rd appellant company wrote in 1980 to the Permanent Secretary, Federal Ministry of Finance requesting for a grant of N100,000,00 to be transferred to the 3rd appellant company by the 1st and 2nd respondents from foreign sources to enable them pay for their 40% contribution to the company shares. The approval to transfer the money was granted and the 1st and 2nd respondents brought in through the Central Bank foreign exchange.
Albion Construction Company, the 3rd appellant/cross-respondent in this appeal was incorporated in 1976. The 1st and 2nd appellants were the subscribers to the Memorandum and Articles of Association of the company and in that capacity, each of them subscribed for one share in the 3rd appellant. On 30th June 1978, the 1st and 2nd appellants entered into a partnership agreement with the 1st and 2nd appellants by which they agreed to engage in the business of construction and development under the name of Albion Construction Limited. The parties agreed to share the profits on 50% for the 1st and 2nd appellants. 40% for the 1st and 2nd respondents and 10% for the technical staff. Subsequently, the Administrative Manager of the 3rd appellant company wrote in 1980 to the Permanent Secretary, Federal Ministry of Finance requesting for a grant of N100,000,00 to be transferred to the 3rd appellant company by the 1st and 2nd respondents from foreign sources to enable them pay for their 40% contribution to the company shares. The approval to transfer the money was granted and the 1st and 2nd respondents brought in through the Central Bank foreign exchange.:
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1
A declaration that the document described as Memorandum and Articles of Association of Albion Construction Limited dated 16.09.76 which the 1st and 2nd plaintiffs were subscribers is the only true memorandum and articles of association of the 3rd plaintiff Company
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2
In the alternative to claim (1) a declaration that the aforesaid document is a true and authentic copy of the only document submitted for registration to the Registrar of Companies by the promoters of the 3rd plaintiff Company.
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3
An injunction restraining the 1st. 2nd and 3rd defendants and/or any other person acting with or on their direction or authority from conducting the affairs of the 3rd plaintiff and in particular from operating the account of the 3rd plaintiff in any bank whatsoever on the basis of any Memorandum and Articles of Association other than that mentioned in paragraph (1) of this hereof.
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4
In the alternative to (3) an injunction restraining the 1st, 2nd and 3rd defendants and/or any other person acting with or on their direction or authority from conducting the affairs of the 3rd plaintiff company in any Bank whatsoever on the basis of the document purporting to be the Memorandum and Articles of Association of the 3rd plaintiff Company and carrying the signatures of the 1st and 2nd plaintiff as well as the three defendants as subscribers.
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5
A declaration that the nominal share capital of the 3rd plaintiff company is N200,000.00 divided into 200.00 shares of N1.00 each.
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6
A declaration that the 1st and 2nd defendants are not shareholder of the 3r plaintiff company.
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7
A declaration that all shares held by the 3rd defendant in the 3rd plaintiff company are held by him in trust for the 1st plaintiff and an order directing the 3rd defendant to execute and instrument of transfer in respect of the said shares in favour of the 1st plaintiff".
The respondents on their part first raised an objection albeit lamely, that the first and second appellants had no locus to sue as they were no longer members of the company and at any rate should not have joined the third appellant, the company as plaintiff These preliminary skirmishes were quickly dealt with the Odunowo J. the trial Judge who overruled the objection. Nothing more was hear of this. The appellants had earlier pleaded Clause 15 of Articles of the 3rd appellant that the "subscribers to the Memorandum of Association shall constitute the Original Board of Directors". At its first Annual General Meeting on 7th February 1980, it was resolved that 1st and 2nd appellants as well as 1st and 2nd respondents shall be Directors of the Company. The nominal capital of the third appellant would be N200.000 and without the knowledge of 1st and 2nd appellants a purported Extra - Ordinary General Meeting was held on 16th January, 1987 at which only the respondents were present whereby a resolution was passed to increase the nominal share capital of the Company to N500.000.00 of N1.00 each. The 1st and 2nd respondents who were not shareholders were invited to the meeting while the 1st and 2nd appellants were not invited or intimated of the meeting, the third respondent, assuming he was lawfully a shareholder could not form a quorum for the meeting. Up to 31st May 1980 when the audited account of the Company was approved only N2.00 worth of shares was fully paid up by 1st and 2nd appellants. However, by 31st May, 1981 the 200.000 shares had been fully paid up by the 1st appellant paying N199 998.00 for the remaining shares through Directors" current account to the share capital of the Company Thus no more shares were available for allotment.
The respondents in their statement of defence, denied the appellant's contention and stated that the 1st and 2nd respondents upon leaving Cappa and D Alberto Ltd sought to team up with Nigerian partners to go into the construction industry whereupon the 1st and 2nd appellants approached them with a proposal to set up business in partnership to be organised through Albion Construction Ltd.
Albion Construction Ltd. was then legally incorporated but was dormant and the 1st and 2nd appellants were the only shareholders and members. it was because of this that a partnership agreement was entered into between 1st and 2nd appellants, of the one part, and 1st and 2nd respondents of the other part. This partnership agreement was Exhibit SS. The respondents then averred in their statement of defence in paragraph 72 as follows.
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72
The defendants jointly and severally in response to the reliefs sought by the 1st and 2nd plaintiffs in their Statement of Claim shall seek the Court to find as follows:
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i
A declaration that the Memorandum and Articles of Association purportedly certified on the request of their solicitors by the office of the Registrar of Companies on 28th March 1988 was procured irregularly and in breach of laid down procedures without satisfying the Registrar of Companies as to the authenticity of the document.
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ii
That the defendants are lawful directors and shareholders of Albion Construction Ltd. and that from 1984 when the 1st and 2nd plaintiffs resigned their membership and directorship of Albion Construction Ltd. They automatically ceased to be members and directors of the Company and accordingly have no say in the affairs of the company.
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iii
That the authorised share capital of Albion Construction Ltd. is now N500.000.00
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iv
That no shares are held in trust for 1st plaintiff by the 3rd defendant".
They then sought the Court to dismiss the plaintiffs" case in its entirely.
The issues between the parties at the trial court through the Court of Appeal were:
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a
Which is the real memorandum and articles of association between the two competing ones?
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b
What is the share capital of the company?
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c
Construction Company Limited?
The Federal High Court resolved the questions (a) and (b) in favour of the appellants: but the question (c) was not resolved in their favour.
The Federal High Court held as follows:-
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1
"That the document described as Memorandum and Articles of Association of Albion Construction Company Limited dated 16/9/76 and admitted in evidence in this action as Exhibit A and to which the first and second plaintiffs were subscribers is the only true Memorandum and Articles of Association of the third plaintiff Company.
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2
That the nominal share capital of the third plaintiff Company is N200.000.00 divided into 200.00 share of Nl.OO each, and not 500.000 as alleged by the defendants.
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3
That all the parties to this action are shareholders of the third plaintiff Company namely (1) Chief R. a. Okoya - 50% or 100.000 shares (2) Mrs. K. Okoya - 1% or 2.000 shares." (3) Mr. S. Santilli - 20% or 40.000 shares. (4) Mr. A. Davanzo - 20% or 40.000 shares and (5) Prince D. A. Ademiluyi - 9% or 18.000 shares
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4
That the third defendant is hereby directed to execute an instrument of transfer in respect of 51% or 102,000 shares, which he holds on trust in favour of the first plaintiff.
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5
That the first, second and third defendants and or any other person or persons acting with or on their direction or authority are hereby restrained from conducting the affairs of the third plaintiff Company and in particular from operating the account of the said Company in any bank whatsoever on the basis of any Memorandum and Articles of Association other than that mentioned in paragraph (1) above.
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6
That each side shall bear its own costs.
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7
That an extra-ordinary general meeting of the third plaintiff Company shall be held on Wednesday the 21st day of December, 1988 at 4 p.m. at Albion premises 53/53 Onitiri Close. Surulere"
Dissatisfied with the above decision both parties appealed to the court of Appeal. At the court of Appeal, the reliefs sought by the respondents in their appeal are to set the orders of the Federal High Court relating to the shareholding of the 1st and 2nd appellants and the 3rd respondents in the company and substitute it with the following:
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a
A declaration that the 1st and 2nd plaintiffs are not members of the 3rd plaintiff and do not hold 51% of the shares of the 3rd plaintiff.
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b
A declaration that the 3rd defendant is entitled to hold 21% of the authorised share capital of the 3rd plaintiff.
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c
A declaration that as at 31/5/81 the paid up share capital of the 3rd plaintiff was N2.
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d
A declaration that the workers of the 3rd plaintiff are entitled to and hold 10% of the authorised share capital of the 3rd plaintiff.
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e
To adjudge that the disputed Minutes contained in the Minutes Book of the 3rd plaintiff are irregular and were never held".
The appellants were similarly dissatisfied with the decision of the Federal High Court and the relief sought at the Court of Appeal. They urged for their appeal to be allowed and the decision of Odunowo. J. be substituted with the following decision or orders:
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i
a decision that in this case it is unnecessary to plead the illegalities on which the plaintiffs rely:
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ii
a decision that by reason of the provisions of the enactments on which the plaintiffs rely neither the 1st nor the second defendants own any shares in the Company and the shares held by the 3rd defendant are held by him in trust for the 1st plaintiff:
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iii
a decision that as at 31st May 1981 the 1st plaintiff owned all the shares but one in the company:
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iv
a decision that the 1st and 2nd defendants do not own any shares in the Company.
In its judgment delivered on 5th April, 1990 the Court of Appeal held as follows:
"It is hereby declared that the shareholding of the respective members of the company are as follows.
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1st Plaintiff 19.9995% or N39,999,00
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2nd plaintiff .0005% or N1.00
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1st defendant 20% or N40,000,00
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2nd defendant 20% or N40,000,00
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3rd defendant 21% or N42,000,00
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L.S Balogun 10% or N20,000,00
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L.A Balogun 9% or N19,000,00
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N200,000,00
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2
The shareholding 19.9995% in favour of the 1st plaintiff is inclusive of the 14% held in trust for him by the 3rd defendant.
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3
It is hereby ordered that the 3rd defendant should execute and instrument of transfer of the 14% shares accordingly.
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4
The order restraining the defendants from conducting the affairs of the 3rd plaintiff Company and operating the account of the said company in any bank whatsoever is here by set aside. They are however not to conduct the affairs of the company or operate its account on the basis of the memorandum and articles of association Exhibit A 1 raising the share capital to N500.000.00.
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5
It is hereby declared that the nominal share capital of the 3rd plaintiff company as at the time this action was instituted remained at N200.000.00 divided into 200.000 shares of N1.00 each and not N500.000.00 as alleged by the defendants.
Both parties, being dissatisfied with the decision of the Court of Appeal appealed to the Supreme Court.
