LEGAL PRINCIPLE: COMMERCIAL LAW – Bill of Lading – Transfer to Agent – Effect on Principal’s Right to Sue
PRINCIPLE STATEMENT
It will be startling, if not absurd, that the law will, without more, allow an agent of a principal to arrogate to himself more claim of right to the goods in his possession to the chagrin of the principal by the mere fact or for a specified reason that he (the agent) has come in possession of the principal's bill of lading of which he (the principal) is the undoubted indorsee thereof.
RATIO DECIDENDI (SOURCE)
Per Achike, JSC, in Boothia Maritime Inc. & Ors v. Fareast Mercantile Co. Ltd. (2001) NLC-901999(SC) at p. 18; Paras A–C.
"It will be startling, if not absurd, that the law will, without more, allow an agent of a principal to arrogate to himself more claim of right to the goods in his possession to the chagrin of the principal by the mere fact or for a specified reason that he (the agent) has come in possession of the principal's bill of lading of which he (the principal) is the undoubted indorsee thereof."
EXPLANATION / SCOPE
An agent holding a principal’s bill of lading cannot claim greater rights than the principal. Mere possession of the bill does not entitle the agent to sue in their own name or arrogate rights to the principal’s detriment. The principal remains the undoubted indorsee. The agent’s possession is for the principal’s benefit. Allowing the agent to claim superior rights would be startling and absurd. The law respects the agency relationship—the agent cannot convert the principal’s property to their own use. The principal retains the right to sue. The agent cannot use possession of documents to defeat the principal’s interest. The agent’s authority is limited by the agency relationship.
