Julius Noi Tetteyfio & Anor V. Daniel Christopher Awuku (1955)

LawGlobal Hub Judgment Report – West African Court of Appeal

Real Property—Mortgage—Subsequent sale by mortgagor and order for specific performance and conveyance—Sale by mortgagee—Neither purchaser aware of mortgagor’sfraud—Position as between purchaser from mortgagee and purchaser from mortgagor.

Facts

The owner first mortgaged the property to N.O. by deed; later he sold it to the respondent, who sued him for specific performance and obtained judgment and a conveyance. After that first mortgage to N.O., the first appellant paid the debt to N.O. and the owner gave the first appellant a mortgage by deed; the first appellant put up the property for sale and the second appellant bought it.

The order of events was as follows:—
(1) Mortgage by deed by the owner to N.O.;
(2) Sale by the owner (now mortgagor) to the respondent;
(3) Mortgage by deed by the owner to the first appellant;
(4) Order for specific performance of the sale mentioned in (2) and conveyance to the respondent.

The two appellants acted bona fide, so did the respondent; on the evidence none of them knew of the fraud perpetrated by the owner.

The respondent as plaintiff sued the original owner as defendant No. 1 and the two appellants as defendants No. 2 and No. 3, for a declaration of title and trespass and obtained judgment, and the defendants No. 2 and No. 3 appealed.

Briefly put, the trial Judge took the view that the order for specific performance overrode all other transactions.

Held

There being no evidence that the appellants acted otherwise than bona fide, the equities must be held to be equal and the law prevails: the owner had not the title either when he purported to sell the property to the respondent, or when the respondent in his earlier action against the owner obtained a decree for specific performance, or when the conveyance was made to the respondent under that decree; the first appellant had the legal estate and was within his rights in selling the property as mortgagee, and the second appellant was a bona fide purchaser for value without notice of any impediment on the title; therefore the appeal would be allowed.

Appeal allowed; judgment entered for the appellants.