Samuel Makumbe v M.V. Mooljee & Sons (Pvt) Ltd and Others

The first respondent (M.V. Mooljee & Sons) obtained an eviction order under HC 10809/13 against the second respondent (Nyausaru) and all persons claiming occupation through him of stand 1092 Umtali Township. In November 2008, the second respondent leased the property from the first respondent, and in March 2009 offered to purchase it for US$140,000 payable in instalments. The second respondent failed to pay the full purchase price or service a bank loan secured against the property. In 2012, the applicant (Makumbe) approached the first respondent claiming he had purchased the property from the second respondent. The first respondent denied authorizing any such sale and advised the applicant to pursue the second respondent. After the second respondent failed to pay the balance owed, the first respondent cancelled the sale agreement and obtained an eviction order. When the first respondent sought to execute the eviction order in 2017, the applicant obtained a provisional order staying execution, claiming he occupied the property in his own right pursuant to a sale agreement with the first respondent (represented by the second respondent as agent) and that he had paid the full purchase price.

• Whether the second respondent had authority to act as agent for the first respondent in selling the property to the applicant
• Whether the applicant had a valid agreement of sale with the first respondent entitling him to occupy the property
• Whether the provisional order staying execution of the eviction order should be confirmed
• Whether payment made to entities controlled by the second respondent constituted payment to the first respondent

The provisional order staying execution was discharged with costs on the legal practitioner and client scale against the applicant.

A person claiming to have purchased property from a company through an agent must prove that the agent was duly authorized by proper company resolution to act on behalf of the company in the sale. In the absence of such proof of authorization, no valid sale agreement exists between the purported purchaser and the company, regardless of whether the purchaser acted in good faith. Payment made to a purported agent's personal or related entities does not constitute payment to the principal company in the absence of evidence that such funds were transferred to the company. A person who deals with an unauthorized agent has no claim against the principal and must seek remedies against the agent with whom they actually dealt.

The court observed that it was "folly" for the applicant and his legal practitioners to persist with the claim against the first respondent in the absence of proof of a company resolution authorizing the sale. The court suggested that the applicant should look to the second respondent for redress, not the first respondent, implying the applicant may have remedies against the second respondent for fraud or misrepresentation. The court also noted that the provisional order was granted in error and that the draft order filed was "totally defective," suggesting criticism of both the applicant's legal practitioners and possibly the judge who granted the provisional order.

This case demonstrates the importance of proper corporate authorization in property transactions involving companies, particularly the necessity of company resolutions when agents purport to act on behalf of a company in disposing of its property. It also reinforces the principle that payment must be made to the actual seller/owner of property for a valid sale to be concluded, and that parties cannot claim rights against property owners based on unauthorized dealings with third parties. The case further illustrates the court's willingness to impose costs on a higher scale where litigants persist with manifestly hopeless cases that lack legal merit.