Chief Belonwu Ugochukwu Vs Cooperative & Commerce Bank (Nigeria) Ltd (1996)
LAWGLOBAL HUB Lead Judgment Report
KUTIGI, JSC.
By paragraph 22 of his Amended Statement of Claim the plaintiff claimed against the defendant as follows:-
“A. Declaration that the Deed of Legal Mortgage purportedly made between the plaintiffs as Mortgagor end the defendant as Mortgagee registered as No. 39 at page 39 in volume 208 of the Land Registry in the office at Owerri is otiose, null and void or in any event unenforceable against the plaintiff’s property at No. 239 Cameroun Road Aba.
B. An injunction perpetually restraining the defendant by itself or through privies acting on its behalf from exercising any rights pursuant to the said mortgage by way of sale or otherwise of the plaintiff’s property known as No. 239 Cameroun Road, Aba.
C. Declaration that upon a proper account taken, the plaintiff is not owing the defendant the sum of N1, 047,249.00 as claimed by the defendant in its letter of the 22nd of July, 1988 addressed to the plaintiff.
D. The sum of N73, 217.54 being refund due to the plaintiff on account of cancelled letters of credit and excess debit on Letters of Credits processed by the defendants as plaintiff’s bankers on behalf of the plaintiff.
E. The sum of N4, 625,604.77 less any sum which the defendant may prove or which the Court may find due to the defendant arising from its loan or other charges against the plaintiff.”
After the filing and exchange of pleadings the case proceeded to trial. At the hearing the plaintiff gave evidence for himself while, one witness testified on behalf of the defendant bank.
The facts are quite simple. The plaintiff was a good customer of the defendant for many years who enjoyed overdraft and loan facilities amongst others. The plaintiff used the facilities to import goods from overseas and the defendant would raise Letters of Credit on behalf of the plaintiff in favour of the plaintiff’s overseas customers. It was also the practice for the defendant to debit plaintiff’s account with amount in excess of the invoice value of any consignment with the understanding that when the Bill of Exchange was raised in favour of the overseas customers, any balance not utilizes in the remittance was credited to the plaintiff as a refund. In aid of the above arrangement, the defendant sometime in 1978, granted the plaintiff at the plaintiff’s request, an overdraft or loan facility of N30, 000.00 at a fixed interest rate of 9 per centum per annum secured by a mortgage of the plaintiffs property at No. 239 Cameroun Road, Aba. The defendant realizing in 1988 that the plaintiff was owing it N1, 047,249.00 and that he was not repaying the loan, informed him of its intention to exercise its right under the Mortgage Deed to sell the plaintiff’s property at No. 239 Cameroun Road, Aba.
This prompted the plaintiff to file the suit claiming the reliefs set out above,
At the end of the trial, the learned trial judge gave judgment in favour of the plaintiff when he concluded on pages 109 – 110 of the record thus –
“(i) It is hereby declared that the Deed of Legal Mortgage, purportedly made between the plaintiff, as mortgagor, and the defendant, as mortgagee, registered as No. 99 at page 39 volume 208 of the Land Registry in the office at Owerri, is otiose, null and void and unenforceable against the plaintiff’s property at No. 239 Cameroun Road, Abe, registered as No. 26 at page 26 in volume 751 of the Lands Registry in the office at Enugu now Owerri.
(ii) The defendant, by itself or through privies acting on its behalf, is hereby restrained perpetually from exercising any rights pursuant to the said mortgage by way of sale or other wise of the plaintiff’s property known as No. 239 Cameroun Road, Aba.
(iii) It is hereby declared that the plaintiff is not owing the defendant the sum of N1, 047,249.00 or, subject to this judgment, any amount at all.
(iv) Taking into account the sum of N652,326.86, and after setting it off in favour of the defendant against the plaintiff, it is hereby declared that defendant owes the plaintiff the sum of N3,973,277.91 (Three million, nine hundred and seventy three thousand, two hundred and seventy seven naira ninety one kobo).
(v) Defendant will pay to plaintiff costs fixed at N1, 000.00 (One Thousand Naira) which costs include plaintiff’s out-of-pocket expenses and all court fees incidental to these proceedings.
Judgment for plaintiff.”
Aggrieved by the above decision, the defendant appealed to the Court of Appeal, Port Harcourt Judicial Division. In a unanimous judgment the Court of Appeal allowed the appeal. The judgment of the High Court and its order for costs were set aside. The plaintiff was ordered to pay the sum of N652, 326.86 to the defendant being the amount established by the defendant against the plaintiff at the trial.
Dissatisfied with the judgment of the Court of Appeal, the plaintiff has appealed to this court. The parties filed and exchanged briefs of argument which were adopted at the hearing.
Chief Udechukwu learned counsel for the plaintiff has submitted seven issues as arising for determination in this appeal. These issues can be conveniently reduced to five as follows –
(i) Whether upon a calm view of the pleadings, the evidence and the relevant statutory provisions, the Court of Appeal’s decision that appropriate and requisite consent had been obtained for the validation of defendants Deed of Legal Mortgage, Exhibit 3, is sustainable.
(ii) Whether the defendant’s Exhibit 3, the Legal Mortgage, is referable to the plaintiffs property at No. 239 Cameroun Road, Aba, so as to be enforceable against that property by way of exercise of a right of sale at the defendant’s instance based on defendant’s Exhibit 3, even if there was the requisite consent.
(iii) Whether upon a calm view of the pleadings and evidence the Court of Appeal was right to hold the plaintiff did not prove the defendant’s indebtedness to him as claimed.
(iv) Whether upon a calm view of the pleadings, the evidence and legal principles involved in the case the award of N652,326.86 made by the Court of Appeal in favour of the defendant is justifiable.
(v) Whether the decision reached by the Court of Appeal reversing the judgment of the High Court is not against the weight of evidence.
Issues (i) & (ii) which deal with the Deed of Mortgage (Exhibit 3), will be treated together. It was submitted that the Court of Appeal was in error when it held that the appropriate and requisite consent had been obtained to validate the Deed of Mortgage. Counsel said while the plaintiff pleaded noncompliance with the provisions of the Land Use Act as regards consent, the defendant pleaded compliance with the provisions of Imo State land Law in that regard. He referred to paragraph 10(3) of the Amended Statement of Claim and paragraph 4(ii) of the Statement of Defence. He said although the sole witness for the defendant said in evidence that “an application was made for Governor’s consent before Exhibit 3 was executed,” the witness did not say whether or not the consent was granted. That the Court of Appeal over-looked the fact that Exhibit 3 was made on 12th May 1978, and was therefore subject to the provisions of the Land Use Act No. 6 of 1978, which came into operation on 29th March, 1978. He said the consent which must therefore be obtained is the one prescribed under section 22 of the Land Use Act and not the Commissioner’s consent prescribed under the State Land Law. It was contended that on the authority of Savanah Bank v. Ajilo (1989) 1 NWLR: (Pt 97) 305, the Court of Appeal ought to have declared Exhibit 3 null and void as found by the trial court.
It was also contended that even if the requisite and appropriate consent was obtained to validate Exhibit 3, Exhibit 3 ex facie is not referable to the plaintiff’s property at No. 239 Cameroun Road, Aba. That there being no nexus between the Deed of Mortgage and No. 239 Cameroun Road, the defendant cannot exercise any right under the mortgage deed in respect of that property. He said Exhibit 3 relates only to No. 240 Cameroun Road, Abe, and not to No. 239 Cameroun Road. It was argued that once there is a document evidencing sale of land or a mortgage for that matter, oral evidence of the sale or mortgage would be excluded and the question as to what land was sold or mortgaged has to be settled by reference to the document only. He referred to the cases of Olaloye v. Balogun (1990) 5 NWLR (pt. 148) 24 at 26, Abiodun v. Adehin (1962) 2 SCNLR 305; (1962) 1 All NLR. 550 at 555. He said although the plaintiff did not deny that he offered his No.239 Cameroun Road to the defendant as security for the loan, the defendant can only exercise its right of sale under a Deed of Mortgage relating to No. 239 Cameroun Road only and no other. Exhibit 3 relates to No. 240 and not to No. 239 Cameroun Road, Aba.
Chief Ifebunandu, learned counsel for the defendant responding said that the Court of Appeal gave adequate treatment and consideration to both the Imo State Land Law and the Land Use Act with regard to Exhibit 3 and rightly came to the conclusion that the necessary consent was obtained for the execution of Exhibit 3. He said it is common ground that the Commissioner for Works and Housing endorsed his consent as Exhibit 3. That it was properly done because by Legal Notice No. 4 of 1979 published in the Imo State Gazette, the Military Governor/Administrator of Imo State had delegated his authority to give consent under section 22 of the Land Use Act as empowered by section 45(1) of the same Act, to the Honourable Commissioner for Works and Housing of Imo State with effect from 29th March 1978. He said the plaintiff had failed to prove his alleged non-compliance with the Land Use Act. That the case of Savannah Bank v. Ajilo & Anor. (supra) relied upon by the plaintiff does not apply here because in that case no consent was obtained in respect of the deed in question. He said Exhibit 3 herein was valid and has got all the requirements of a deed of legal mortgage and was enforceable against the plaintiff. He referred to the case of Ejikeme v. Okonkwo (1994 8 NWLR (Pt.362) 266; (1994) SCNJ 131at 139.
It was also submitted that the argument of the plaintiff that the deed of mortgage does not refer to No. 239 Cameroun Road, Aba, is not tenable. That although the plaintiff pleaded that No. 239 was not the property mortgaged, he led no evidence to that effect, but rather admitted in his evidence on page 44 of the record that “No. 239 Cameroun Road is my property. I secured the loan from the bank by way of mortgage of the property.” He said this admission knocks the bottom out of the plaintiff’s claim that the deed does not refer to No. 239 but to No. 240 Cameroun Road. The Court of Appeal was therefore right in rejecting plaintiff’s claim that the deed, Exhibit 3, did not refer to property known as No. 239 Cameroun Road, Aba. There was no doubt in the mind of the parties that it was the property referred to as No. 239 Cameroun Road, Aba that was in issue in Exhibit 3.
It is true that while the plaintiff pleaded non-compliance with the provisions of the Land Use Act as regard consent for Exhibit 3, the defendant pleaded that consent of the Commissioner for Works and Housing was obtained in accordance with the provisions of the Imo State Land Law. But the learned trial judge in his judgment declared the Deed of Mortgage (Exhibit 3) as ‘null and void and unenforceable and of no effect whatsoever.’ What were his reasons? On page 101 of the record, he said thus –
“The law to force applicable to and relevant to the validity of defendant’s Exhibit 3, the Deed of Mortgage is the Land Use Act 1978. The consent which should be obtained was that of the Governor, not any Commissioner. There is no evidence that the Governor delegated the authority to give consent to the Commissioner. Any such delegation must be evidenced in writing or by Notice. The law providing that consent of the Governor must be had is mandatory. See Savannah Bank of Nigeria Ltd. & Anor v. Ajilo & Anor (1989)1 N.W.L.R. (pt.97) 305. Exhibit 3, the Deed of Mortgage is null and void and of no effect whatsoever. The Deed of mortgage is unenforceable against the plaintiffs property at No. 239 Cameroun Road, Aba, registered as No. 28 at page 28 in volume 751 of the Lands Registry in the Office at Enugu now Owerri.
On appeal to the Court of Appeal, it was observed thus –
It On the finding above that there is no evidence that the Governor delegated the authority to give consent to the Commissioner and that any such delegation must be evidenced in writing or by Notice, such a notice was published in the Into State of Nigeria Gazette as Into State Legal Notice No. 4 of 1979. In it the Military Governor (Military Administrator) of Imo State was empowered pursuant to action 45(1) of the Land Use Act to delegate his power to give the said consent to the Commissioner for Works and Housing with effect from 29th day of March, 1978 when the Land Use Act come into force………………………………………………………………………………………………………………………………………………….. It is Pertinent to Point out that section 73(1)(a) of the Evidence Act enjoins the trial court to take judicial notice of the said Imo State Legal Notice No. 4 of 1979.”
It was also clearly pointed out in the judgment that even before Legal Notice No. 4 of 1979 was enacted, section 4(b) of the Land Use Act empowered the Military Governors until other provisions were made in that behalf, to administer land under their control and management, in accordance with the provisions of the applicable State Land Law or Land Tenure Law as the case may be, with such modifications as would bring those laws into conformity with the Land Use Act or its general intendment. To that extent, the consent given under the Imo State Land Law would equally have been validly given. Section 4 of the Land Use Act reads –
“4. Until other provisions are made in that behalf and subject to the provisions of this Act, land under the control and management of the Governor under this Act shall be administered –
(a) in the case of any state where the Land Tenure Law of the former Northern Nigeria applies, in accordance with the provisions of that law, and
(b) in every other case, in accordance with the provisions of the State Land Law applicable in respect of the State Land in the State, and the provisions of the Land Tenure Law or the State Land Law, as the case may be, shall have effect with such modifications as would bring those laws into conformity with this Act or its general intendment”
And Section 45(1) of the same Act provides-
“45.(1) The Governor may delegate to the State Commissioner all or any of the powers conferred on the Governor by this Act, subject to such restrictions, conditions and qualifications, not being inconsistent with the provisions, or general intendment, of this Act as the Governor may specify.”
So that in whichever way one looks at it in the circumstances of this case, the consent endorsed on the legal Mortgage, Exhibit 3 by the Commissioner of Works and Housing of Into State on the 12th May, 1978 was validly and properly made. It is ironic that the plaintiff who is the beneficiary under the said deed of mortgage is the one seeking to declare same a nullity. He pleaded amongst others that –
(1) The contents of the mortgage deed were not explained to him;
(2) He was an illiterate, and that the provisions of the Illiterates Protection Law were not complied with;
(3) Undue influence; and
(4) Non-compliance with the provisions of the Land Use Act, 1978.
The trial court found against him on all except (4) above. On appeal, the Court of Appeal overruled the High Court on (4) as explained above. I think the Court of Appeal was right.
As to whether or not Exhibit 3 is referable to the plaintiff property at No. 239 Cameroun Road, Aba, it is sufficient to say although the plaintiff pleaded in paragraph 11 of his Amended Statement of Claim that Exhibit 3 is not referable to premises at No. 239 Cameroun Road, Aba, he led no evidence to that effect at the trial. He did not say it is referable to No. 240 or to any property at all. In his evidence before the High Court he said –
“The defendant gave me a loan of N30, 000.00 (Thirty Thousand Naira) to finance the Letters of Credit. The loan was by way of overdraft facilities. I executed documents to that effect No.239 Cameroun Road, Aba, is my property. I secured the loan from the bank by way of mortgage of the property.”
Under cross-examination he said –
“I took the title deed to the bank because of the N30, 000.00 credit facility the bank granted me. I did not make any valuation report of the property. It was the bank who made it. I knew when the bank was making it the bank gave me N30, 000.00 as a result of the valuation report.”
The plaintiff therefore definitely knew that he was mortgaging No. 239 Cameroun Road, Aba, to the defendant.
Defendant’s single witness also testified on page 45 of the record and said as follows-
“I know the plaintiff. He is our customer at the Milverton Branch of the bank. The bank granted him an overdraft of N30, 000.00 first. The grant was in 1978. To secure the facility he mortgaged his property at No. 239 Cameroun Road, Aba.’
And the High Court in its judgment on page 95 found thus –
“I do not believe the plaintiff that he was such a stark illiterate as he purported to paint himself. He was literate. He executed defendants Exhibit 3 with the full knowledge that he was using his property as a security for the loan of N30,000.00 he applied for from the defendant.”
The High Court therefore rightly found on the evidence before it that the plaintiff mortgaged the property No. 239 Cameroun Road, Aba, when he executed Exhibit 3. The Court of Appeal agreed with that fording and nothing has been advanced before us to disturb it. I will accept it too.
Issues (i) & (ii) are therefore both answered in the affirmative. Issues (iii) & (iv) deal with proof of indebtedness by the parties herein. They will be considered together.
Other Citation: (1996) LCN/2675(SC)
