A businessman travels abroad and grants his trusted associate a Power of Attorney over his property in Nigeria.
Years later, the associate begins acting as though the property belongs to him. After all, he holds a Power of Attorney. He can sign documents, negotiate transactions, and deal with third parties.
But does that make him the owner?
The Supreme Court’s answer is clear: No.
In Katagum v. Umar & Anor, the Supreme Court reaffirmed a long-standing principle of Nigerian law: a Power of Attorney is fundamentally an instrument of authority, not an instrument of ownership.
The Court emphasized that a Power of Attorney merely authorizes the donee to act on behalf of the donor. It empowers the donee to perform specified acts in the donor’s stead, but it does not, by itself, transfer title, ownership, or proprietary rights to the donee.
This distinction is critical.
Many people mistakenly assume that because a person holds a Power of Attorney over land, shares, or other assets, that person has acquired ownership. In reality, the donee is typically acting as an agent. The beneficial and legal interests remain with the donor unless there is a separate instrument that validly transfers those interests.
The practical implications are significant:
– A Power of Attorney is not a substitute for a Deed of Assignment.
– A Power of Attorney does not automatically transfer ownership of land.
– Poorly structured transactions can lead to costly disputes over title and ownership.
The Supreme Court’s decision serves as an important reminder that legal authority and legal ownership are not the same thing.
One of the most expensive assumptions in commercial and property transactions is believing that the power to act is the same as the right to own. The law draws a sharp distinction between the two, and overlooking that distinction can turn a seemingly straightforward transaction into years of litigation.
That is why careful transaction structuring and proper documentation remain indispensable in protecting property rights and commercial interests.