Owena Bank Nigeria Ltd. & Anor V. Solnik Nigeria Ltd. & Anor (2002)

LawGlobal-Hub Lead Judgment Report

OKUNOLA, J.C.A.

This is an appeal against the ruling of the High Court of Justice, Ado Ekiti dated 3rd November, 1999 presided over by Aladejana, J. The facts which led to this appeal arose from an application of the plaintiffs/respondents dated 18th February, 1998 seeking an order of the lower court to commit the defendants/appellants for contempt for disobeying the order of the Benin Division of the Court of Appeal (hereinafter referred to as the court) dated 11th July, 1990 not to sell the 2nd plaintiff/respondent’s house at Ado Ekiti.

It will be recalled that in the original substantive action before the lower court respondent was second plaintiff while Solnik Nigeria Limited was first plaintiff. The claim of the said two plaintiffs is that:-

(i) There was no mortgage agreement between them and defendants, now appellants.

(ii) Interest payable by plaintiffs on the loan they took from defendant should be the original rate at which the loan was taken.

(iii) Determination of the real indebtedness of plaintiffs.

The defendant filed a counter claim.

In its judgment the lower court held that there was a mortgage agreement between the parties; that interest should be at the rate stipulated by the bank from time to time and an order that the property of the plaintiffs should not be sold but defendants got judgment for N403,766.07 as per their counter-claim. The plaintiffs appealed against the judgment and prayed for a stay of the execution of the judgment of the lower court. The Appeal Court granted a stay on the condition that first plaintiff deposited the judgment-debt into an interest yielding account in the name of first defendant. In respect of the second plaintiff, however, the Court of Appeal ordered that the judgment be stayed pending the determination of the Court of Appeal in the appeal before it but first plaintiff defaulted as it did not deposit the judgment/debt in any bank as ordered. In consequence the Court of Appeal vacated the order not to execute the judgment of the lower court. Thus, relying on the said vacation order, defendants sold the property of second plaintiff but not of the first plaintiff. Consequently, second plaintiff brought an action to commit defendants for contempt for selling second plaintiff’s property. In the end the lower court found defendants liable for selling second plaintiff’s property PENDENTE LITE.

According to the lower court, the order of the Court of Appeal Benin Division (The subject of complaints leading to the contempt proceeding) was to the effect that the respondents were granted a conditional stay of execution which was not complied with and later vacated by a subsequent order of the same Court of Appeal, Benin Division dated 4th March, 1991.

Consequently, the appellant sold the mortgaged property. Thus, in the said ruling of the lower court dated 3rd November, 1999 the court held that the order of the Court of Appeal Benin, Division given on 4th March, 1991 had vacated the earlier order of the same court given on 11th July, 1990 and that the appellant is not liable for any contempt but that it was wrongful of the appellant to have sold the mortgaged property. The lower court consequently ordered that the appellant return the mortgaged property to status quo ante the sale.

It is against the aspect of the ruling on the wrongful sale of the mortgaged property and the return of same to status quo ante the sale that the appellant has appealed to this court while the respondent cross-appealed on part of the ruling that the appellant is not liable for contempt of court.

From the ground of the main appeal, the appellants formulated a sole issue for determination in this appeal, viz:

Whether or not the lower court was right in holding that the appellant resorted to self-help in selling the mortgaged property.

Both learned counsel to the parties filed their brief of argument in respect of the main appeal. In the same breadth learned counsel to the respondent/cross-appellant also filed his brief of argument in respect of the cross-appeal to which the appellant/cross-respondent also replied. Both learned counsel to the parties adopted their respective briefs and addressed us viva voce to highlight some points in respect of their briefs.

Learned counsel to the appellants/cross-respondents, Mr. F. Owolabi adopted and relied on the appellants’ brief filed herein on 26th November, 2001 and the cross-respondents’ brief filed herein on the same date. Learned counsel urged the court to allow the main appeal and to dismiss the cross appeal. By way of conclusion on the last two pages of the appellants’ brief, learned appellants’ counsel submitted that the order of stay of execution of the judgment of the trial court against the respondents became vacated and no restriction was placed henceforth on the 1st appellant to realise the fruits of its judgment. He contended further that since the order of stay was duly vacated before the appellants sold the mortgaged property the appellants did not take any law into their hands or resort to any self-help. Once there was no longer any order of court hanging on the head of the appellants’ their action in selling the mortgaged property in realizing the judgment sum of N403,766.07 owed by the respondents cannot in any way be improper or illegal. Learned counsel further submitted that once an order of court is discharged or vacated it becomes ineffective. In conclusion learned counsel submitted that from the overwhelming affidavit evidence there was no appeal pending at the Court of Appeal, Benin Division hence there was no basis for the decision of the lower court that the sale was made pendete lite. Consequently, learned counsel contended that there was no basis for the order that the mortgaged property be restored to status quo ante the sale. He therefore urged the court to set aside that order of the lower court and resolve the sole issue for determination in the main appeal in favour of the appellants.

By way of reply learned counsel to the respondents/cross appellants Mr. A.O. Akanle, SAN leading Miss Emerhirhi adopted and relied on the respondents brief filed herein on 10th December, 2000 in which the issue of cross-appeal was raised. Learned respondents’ counsel also adopted and relied on the cross-appellants’ brief filed herein on 14th March, 2001.

Learned counsel on the main appeal on page 3 of the respondents’ brief submitted that inspite of the vacation of order of stay of execution by the Court of Appeal, the order that the property of the 2nd plaintiff should not be sold as given by the lower court still remained as the vacation only affected the 1st plaintiff. This, according to learned counsel was why the lower court held and rightly too that the appellants were liable for selling the said property.

Learned counsel further submitted that the decision of the lower court on this point which cannot be faulted should have gone further to commit the appellants for contempt hence their cross-appeal.

Learned counsel urged the court to resolve the sole issue in the main appeal in favour of the respondents. He urged the court to dismiss the main appeal and confirm the decision of the lower court. Learned counsel cited the cases of Bamgboye v. Olusoga (1996) 4 NWLR (Pt.444) 520 pp. 541-542; Umoh v. Tita (1999) 12 NWLR (Pt.631) 427 pp. 435-436.

On this sole or main issue, I have considered the submissions of both learned counsel to the parties viz-a-viz the records and the prevailing law. The main submission of the appellants in my view is that since from the overwhelming evidence that the court of Appeal Benin had discharged or vacated the order of stay of execution there was no longer any order of court hanging on the head of the appellants, their action in selling the mortgaged property in realizing the judgment sum of N403,766.07 owed by the respondents cannot in any way be improper or illegal as the earlier order had by its vacation or discharge been rendered ineffective. In the absence of any appeal pending before the Court of Appeal, there was no basis for the decision of the lower court that the sale was made pendete lite. Against this submission was the respondents’ argument that inspite of the vacation of the order of stay of execution by the court of Appeal Benin, the order that the property of the 2nd plaintiff/respondent should not be sold until compliance with Auctioneer’s Law as given by the lower court still remained as the vacation only affected the 1st plaintiff.

A perusal of the records clearly showed that the appellants sold after the total vacation of stay by the Court of Appeal. Thus, since the appellants sold after the total vacation of stay of execution by the Court of Appeal the sale was lawful as there was no longer any issue as to whether or not it was not sold in accordance with Auctioneer’s Law but in violation of the order of the Court of Appeal.

By the vacation of the order of stay of execution, the earlier order had been rendered ineffective. Thus, in the absence of any appeal pending before the Court of Appeal, the pendulum on which the decision of the lower court rested that the sale was made pendete lite had collapsed. In effect there is no longer any basis for the order of the lower court that the mortgaged property be restored to status quo ante the sale. I hold that the order deserves to be set aside. In the circumstance this sole issue in the main appeal is resolved in favour of the appellants.

As regards the cross-appeal, learned counsel to the respondents/cross-appellants Mr. Akanle, SAN on pages 2-5 of the cross appellants’ brief addressed the main issue for the cross-appeal viz:

Whether or not the lower court is right in holding that cross-appellant did not establish beyond reasonable doubt that the respondents committed contempt of court.

Both learned counsel to the parties as reiterated supra adopted and relied on their briefs of argument filed in respect of their respective clients. I have considered the arguments of both learned counsel to the parties in their respective briefs and viva voce. Learned counsel to the cross-appellant repeated his argument to oppose the main appeal and urged the court at page 5 of the cross-appellants brief in summary, to find the appellants liable in contempt in addition to the decision of the lower court finding the appellants liable for selling cross-appellants’ landed property pendente lite. By way of reply, learned counsel to cross-respondents, Mr Wale Omotosho, at pages 1& 2 paragraph 3.1-3.5 of the cross-respondent’s brief submitted that the lower court in its ruling of 3/11/99 adopted the three essential elements to be proved beyond reasonable doubt before he could find the respondents/appellants liable for contempt as given in the case of Stericon (Nig.) Ltd. v. Downes (Nig.) Ltd. FRC/MB31 delivered on 27/5/77. He outlined the 3 essential elements thus:

(i) The term of the injunction must be clear

(ii) It must be proved that the defendant had proper notice of the terms of the injunction.

(iii) There must be a positive proof that the terms of the injunction have been broken.

In its conclusion the lower court found that the first 2 elements were proved beyond reasonable doubt. While on the 3rd element, the court found that the cross-appellants have not proved beyond reasonable doubt that the respondents broke the order of stay of execution given on 11/7/90. In view of the subsequent order of the same court given on 4/3/91 the court has given her conclusion thus:

“I will therefore come to the conclusion in respect of exhibit A attached to the counter-affidavit that by the last two sentences thereof, the Court of Appeal intended to and did set aside its decision as contained in exhibit B of the affidavit in support of this application.”

I have considered the submissions of both learned counsel to the parties on this sole issue in the cross-appeal which is similar to that in the main appeal viz-a-viz the affidavit evidence and the prevailing law. Having resolved the sole issue in the main appeal in favour of the appellants coupled with the fact that the cross-appellants, as rightly found by the lower court failed to prove beyond reasonable doubt a very essential ingredient of the offence of contempt all of which rendered the cross-respondents/appellants not liable for contempt in selling the mortgaged property, I resolve this sole issue in favour of cross-respondents and against the cross-appellants.

In sum, the main appeal succeeds and it is allowed. The cross-appeal fails and it is dismissed. I make no order as to costs.

Other Citations: (2002)LCN/1123(CA)