Facts:

The claimant is in the business of clearing and forwarding. The 2nd defendant is a banking institution. The claimant alleged that sometime in 2008, its managing director applied to the 2nd defendant to be retained as its clearing and forwarding agent and that this request was granted. Consequent upon this approval, the claimant alleged that it performed several clearing and forwarding operations for the 2nd defendant. The claimant further alleged that sometime in 2009, the managing director of one of the branches of the 2nd defendant orally entered into an agreement with it to clear the goods of the 1st defendant who was a customer of the 2nd defendant who had guaranteed payment of the loan for the shipped goods. The consignment consisted of 21 truck heads and 25 tanks for which the
2nd defendant stood surety on behalf of the 1st defendant to US EXIM bank. The claimant alleged that the shipping documents from the bank manager were sent to it and that it was instructed to proceed and clear the goods with its funds and that the 2nd defendant would debit the 1st defendant’s account and pay the cost directly to the claimant. The claimant proceeded and incurred a total sum of N15,400,000.00 (Fifteen Million, Four Hundred Thousand Naira) in clearing the consignment. On the instruction of the 2nd defendant, the claimant released the goods to the 1st defendant without having any direct dealings with the 1st defendant apart from delivery. The claimant alleged that after the transaction was concluded, it made a demand to the branch manager of the 2nd defendant for payment. He declined and insisted that it was the 1st defendant who was liable to pay for the services rendered by the claimant. As a result of the denial of liability by the 2nd defendant, the claimant made a demand on the 1st defendant who subsequently issued two post-dated cheques of N13,500,000.00 (Thirteen Million, Five Hundred Thousand Naira) leaving a balance of N1,900,000.00 (One Million, Nine Hundred Thousand Naira).

The cheques were submitted to the 2nd defendant but were not honoured on the ground that the 1st defendant was indebted to the 2nd defendant and the funds in the 1st defendant’s account were insufficient. The claimant became aggrieved and filed a suit at the High Court of Lagos State against the defendants for the sum owed and accrued interest. The 1st defendant did not defend the suit nor did it participate in the suit. The 2nd defendant who defended the suit denied liability on the ground that it was not a party to the transaction between the claimant and any other party involved and that the branch manager and others who were purported to have acted on behalf of the 2nd defendant had no authority to do so and at best acted in personal capacity.