Paul N. Uzor & Ors V. Jannasons Company Limited (1989)
LawGlobal-Hub Lead Judgment Report
UWAIFO, J.C.A.
This interlocutory appeal questions the propriety of an order appointing a receiver made by Aneke, J., on 30 October, 1986 at the Onitsha High Court. The order was made following an application by the plaintiff who had originally sued the first to third defendants for damages of N100,000.00 for trespass and a perpetual injunction. The other defendants were later joined by order of court upon their application.
The plaintiff relies on the title of its vendor to the parcel of land which it alleges is situate at Onitsha-Owerri Road, Onitsha. On the other hand the second and third defendants deny that the land in dispute is situate at Onitsha-Owerri Road, and say that the other defendants who are members of the Mozie family of Obosi as owners from time immemorial granted them leases of the respective portions of the land.
The plaintiff seems to say that it brought the application for the appointment of a receiver to manage, control and collect rents and profits from the building the defendants were erecting on the land and in respect of which they were arranging to let the building to tenants. The defendants claim that they erected their building on the land well before the action was brought.
In considering the application and later making the order for the appointment of a receiver, the learned Judge said:
“Now as I say the court cannot and does not at this stage determine who is right or who is wrong, but one fact is clear and that is that whoever turns out to be the owner of the land becomes also the owner of all that is found on it…
In a case of this kind founded in trespass it is decided law that a receiver may be appointed – see Halsbury’s Laws of England Vol. 32, 3rd Edition at paragraph 633 (page 394) and the case of Cummins v. Perkins (1899) 1 CR. C.A. at p.20.”
He then appointed the firm of Akporiaye, Azukanma & Co. of 93 Upper New Market Road, Onitsha as the receiver.
The defendants/appellants have complained against the decision and have submitted the following issue for determination: “Whether the learned trial Judge was right in law, and considering the circumstances of this case, to have made an Order appointing a Receiver to manage and control the building on the land in dispute and to collect all the rents and profits accruing therefrom pending the determination of the suit.” The plaintiff/respondent raises five questions for determination but I think only the second one need be stated as the issue raised by the defendants/appellants appears to encompass all the others. The second issue by the respondent reads. “Is it a condition precedent to the appointment of a Receiver that the applicant applying for the appointment of a Receiver must first be declared the owner of the property in respect of which the application for the appointment of a Receiver was made before such an appointment could be made?”
The High Court has extensive jurisdiction to appoint a receiver upon interlocutory application, the only limitation being that the jurisdiction is to be exercised when it appears to be “just and convenient” per Jessel, M.R., in Gawthorpe v. Gawthorpe (1878) W.N. 91; Real and Personal Advance Co. v. M’Carthy and Smith (1879) 40 L.T. 878. I think a pertinent Issue to consider in the present case is whether the plaintiff/respondent can as of now claim to be entitled to the rent accruing from the buildings which the defendants/appellants erected on the land when there is a real dispute between them as to ownership. In other words, even if and when the plaintiff/respondent succeeds in the substantive suit and the defendants/appellants lose the buildings they erected on the land to it, can it rightly ask for all account from the defendants/appellants in respect of the rents received by them before judgment?
The defendants did not build the houses for the plaintiff; they may only lose them to him. There is no relationship of principal and agent or any other fiduciary, trusteeship, mortgage, partnership or similar relationship between them; the property in question is not a devise in a will which both parties are contesting; nor one shown to have been bought by the plaintiff from the true owner together with the buildings thereon and that the defendants are merely claiming some incumbrances thereon. There is no tenancy relationship under which the landlord is suing to recover possession and asks in the meantime for the appointment of a receiver of the rents and profits: see Gwatkin v. Bird (1882) 52 L.J.Q.B. 263. What seems to connect both parties is the tortious act of trespass alleged.
A trespasser who farms on another person’s land over a period is not under the common law accountable for the harvest from the land. That was a phenomenon of Roman law. There is no such thing in the modern law we practice. I say nothing about any customary law. A trespasser does not account for the mere use of land but he stands to pay damages and to forfeit whatever he plants or permanently erects on the land to the owner under the doctrine of quicquid plantatur solo, solo cedit. But where there is a contest as to whether there has been a trespass, that is to say, when the defendant claims to have title or right to the land, that doctrine cannot operate until the true ownership is determined and the equities are shown to be in favour of the plaintiff: see Solomon v. Mogaji (1982) 11 S.C. 1 at 45.
The court will not appoint a receiver except in aid of existing rights: see Philips v. Jones (1884) 28 S.J. 360. Hence the court will appoint a receiver at the instance of a mortgagee whose principal is immediately payable or whose interest is in arrears, for the appointment of a receiver is necessary to enable the applicant to obtain that to which he is entitled: see Re Crompton & Co. Ltd. (1914) 1 Ch. 954.
The duty of the court upon a motion for a receiver is merely to protect the property for the benefit of the person to whom the court, when it has all the facts necessary for a determination, shall think it properly belongs: see Blackeney v. Dufaur (1851) 15 Beav. 42.
Having said that, it is necessary to consider some authorities based on section 25(1) of the High Court Law (Cap.61) Laws of Eastern Nigeria 1963 applicable in Anambra State at the material time. The provision of that section is substantially the same as that of section 25(8) of the Judicature Act 1873 upon which most of the English cases referred to here were decided, and it reads:
“The court may grant an injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the court to be just or convenient so to do.”
Before the said Judicature Act, the authorities established that in the absence of fraud, and where there was no privity between the parties, the court would not interfere, at the instance of a person so claiming, to appoint a receiver against parties in possession. This was exemplified by the case of Talbot (Earl) v. Hope Scott (1858) 70 E.R. 40. At page 47-48, Sir Page Wood V-C observed:
“With regard to the first point of the relief prayed by the bill, namely, the receiver, which is really the substantial part of the case, I apprehend that, as to the settled estates, it is too clear for any contention at the present day that this court will not interfere at the instance of a person alleging a mere legal title in himself against other persons in possession of the estates, to grant a receiver and put them out of possession I have known, and everybody must have known, numerous instances where ejectment has been brought for very valuable property upon a merely legal title; yet I think I may say that for the last twenty years, if not longer, no one has ever dreamt of approaching this court, however heavy the litigation between the parties, for the purpose of obtaining a receiver, until he had established his right at law to possession of the estates ….. Where there is an entire want of privity between the plaintiff and the defendant, and the defendant is simply a wrongdoer at law, this court does not take upon itself to interpose, unless in certain very exceptional cases.”
He then said at page 50:
“…. the result is that I can neither find semblance of authority, nor can I conceive of any rational ground upon principle, for holding that where one person is in possession of the rents and profits, claiming to be the holder by a simple legal title, and another person claims to hold by a like legal title, the former can be ousted in this court until that legal title has been finally determined at law.”
That case was restated in Carrow v. Ferrior (1868) 3 L.R. Ch. App. 719 by Sir Page Wood, L.J. But in Berry v Keen (1882) 51 L.J. Ch. D. 912 C.A., which was decided upon the authority of section 25 of the Judicature Act, Jessel, M.R., held that those two cases were no longer the law as they had been overruled by the said section 25. It seems to me, however, that what is considered overruled in the said authorities by section 25 is what they tend to state by way of limiting the substantive jurisdiction of the court to appoint a receiver in certain cases. The said section 25 made no exception to the jurisdiction of the court but that it could appoint in all cases where it is just and convenient. That makes it subject to the discretionary jurisdiction of the court. But the discretion as to the circumstances in which to appoint or not is obviously what the court can use effectively to put the nature of that substantive jurisdiction under proper control.
Foxwell v. Van Grutten (1897) 1 Ch. 64 C.A. was a case of ejectment brought against the defendant in respect of certain properties forming part of the estates of a deceased lunatic of whom the defendant was heir-at-law in possession and receiving the rents. The plaintiffs claimed to recover possession while the defendant claimed he was entitled to possession. In the end however an order for a receiver was refused on the ground that a case must be made to justify such appointment. The order made by the lower court for a receiver was discharged by the Court of Appeal. But Lord Russell, C.J., at page 68 expressed the view that there was no question as to the jurisdiction of the court to make such an order because section 25 of the Judicature Act clearly empowered the court to appoint a receiver where it was just or convenient that such an appointment be made.
In an action by a lessor to recover possession of an hotel, the deed in respect of the lease containing a covenant that the lessee keep the hotel continuously open and not do anything whereby the licence might be endangered, the court acting under section 25 of the Judicature Act appointed a receiver of the licence and of the rents and profits to secure the preservation of the Licence from forfeiture pending litigation and to keep the hotel continuously running: Leney & Sons Ltd. v Calling ham & anor (1908) 1 K.B. 79.
In the case of John v John (1898) 2 Ch. 573 C.A., there was a dispute over inheritance under a Will. It appeared that the title claimed by the defendant under the Will was not shown to exist although the Will had not been proved. What the defendant seemed to rely on was mere possession founded on a claim which had no foundation. A receiver of the rents was appointed by the High Court on the ground that it was just and convenient to do so. The Court of Appeal affirmed the order, Lindley, M.R., saying that in each particular case the court has to look at (1) the person in possession (2) how long he has been in possession (3) whether he claims under any and what title (4) all the other circumstances which may be material, and (5) the risk to which the tenants may be exposed. He then concluded at page 579 that under those circumstances, “believing in the title of the plaintiff and not believing in the title of the defendant, and seeing that the rents are in jeopardy, it appears to me that it would be wrong to refuse a receiver.” This case attempted in its peculiar circumstances to examine what could be regarded as “just and convenient” in appointing a receiver.
It will be observed that the existence of a Will was likely to create a settlement subject to trust and therefore it seemed quite appropriate to protect the rents through a receiver particularly as the Will had not been proved and consequently no recognised trustees yet to whom the rents could lawfully be paid. The next case also appears to attempt a rationalisation of the discretionary jurisdiction of the court under section 25. It is a case where in fact title to property had been declared in the plaintiff but the defendant remained in occupation. This was the case of Marshall v. Charteris (1920) 1 Ch. 520 in which the defendant was in actual occupation of a house in an ejectment action but not in receipt of any rents and profits therefrom. The court refused an interlocutory application to exercise its discretionary jurisdiction by appointing a receiver of the rents and profits of the house.
It is necessary to state the facts in more detail. The vendor who was the husband of the defendant agreed to sell and the plaintiff, Margaret Marshall, agreed to buy a leasehold property. A deposit was made towards the agreement. The vendor neglected to complete and failed to deliver a statement of defence to an action for specific performance. An order for specific performance was made against him. He thereafter executed an assignment of the property to the plaintiff upon payment of the balance of the purchase money. The plaintiff then brought an action for possession and damages against the vendor’s wife (i.e. defendant) who was still residing in the property.
In the meantime the plaintiff brought a motion for the appointment of an interim receiver of the rents and profits. The defendant swore an affidavit that the husband who expressed an intention of leaving her had said that she could occupy the house for as long as it was convenient to her. She later issued a third party notice against the husband, asking to be indemnified by him against the claim in the action for damages, mesne profits, and costs on ground of desertion.
In the circumstances Eve, J., refused to appoint a receiver as asked for by the plaintiff and in the reasons he gave he said such appointment would:
(1) operate to the prejudice of the right of the defendant in possession to plead her possession as a statutory defence of the right of a deserted wife with no separate estate of her own; (2) impose on the defendant at a stage of the action before any pleading had been delivered the obligation of disclosing the title under which she claimed, and require her to defend that title without the usual protection afforded in cases which were ordinarily heard after pleadings; (3) put the court in difficulty in that the substantive issue in the action may by that procedure be determined in some degree upon evidence admissible on an interlocutory application but properly open to objection at the trial. He however agreed that these reasons did not dispute the jurisdiction of the court to appoint a receiver but only emphasised the care with which the jurisdiction must be exercised. An important point to note about the case is that the deserted wife’s right constituted an overriding interest against which a receiver could not justly and conveniently be made.
None of the cases considered above deals with a case where trespass is alleged against the person in occupation who himself is claiming to have lawfully entered the land. The cases either deal with inheritance where both parties claim to be beneficiaries or mortgages or leases, all of which have some interests or benefits that may be legally protected, known as existing rights, and to which the applicant for a receiver may be entitled. There is no doubt that the court has the jurisdiction to appoint a receiver since the Judicature Act in all cases where it is just and convenient to do so. But the exercise of that jurisdiction needs utmost care. It is impossible to enumerate all the circumstances in which that jurisdiction will be exercised but it will not be exercised in a case like this where the applicant cannot show that his interest in the rents and profits exists at the time of the application.
It seems also that even where that interest is shown to exist, the applicant cannot expect the court to intervene to appoint a receiver if his claim is not so endorsed or properly endorsed. This appears consistent with the authorities that no interim order will be granted for a relief not sought in a claim or which does not inevitably follow from the other relief or reliefs actually claimed. That is why the law is that at the hearing of an application for an interim relief, the case put forward must correspond with that set out in the writ or statement of claim, or the reliefs or any of the reliefs claimed on the writ: see Butts v Matthews (1836) 5 L.J. Ch. 134; Re Myer’s Patent (1882) 26 S.J. 371.
In Colebourne v. Colebourne (1876) 1 Ch. D 690, a brother and sister were entitled under a Will to personal estate each as to one half. The brother, who was sole executor, had advertised a large part of the assets for sale and had expressed an intention shortly to leave the country. Under those circumstances, the sister commenced an action for administration, and had indorsed her writ with a claim for administration only. She brought an application for an injunction or the appointment of a receiver. The court held that she should amend her indorsement by asking for an injunction restraining the defendant from receiving the proceeds of the sale of the property advertised for sale and for a receiver. Upon that amendment that court was prepared to grant an interim injunction against the defendant and that the auctioneer should not part with the money. In other words, the auctioneer should in the meantime act as a receiver.
The situation in Alao v. Omotayo (1979) 3 L.R.N. 314 was similar to that in the present case. The plaintiff there brought an action for a declaration of title to land, damages and injunction, which land was subject of dispute and upon which the defendant had erected a building. The plaintiff had brought an application for an interim injunction and lost. He then applied for the appointment of a receiver of the rents from the building.
The application was heard by Oshodi, J. He approved a passage from Kerr on Receivers 14th Edition at page 5 which reads:
“A receiver can only be properly appointed for the purpose of getting in and holding or securing funds or other property, which the court at the trial, or in the course of the action, will have the means of distributing amongst, or making over to, the persons or person entiled thereto. The object sought by such appointment is therefore the safeguarding of property for the benefit of those entitled to it. There are two main classes of cases in which the appointment is made: (1) to enable persons who possess rights over property to obtain the benefit of those rights and to preserve the property pending realisation, where ordinary legal remedies are defective; and (2) to preserve property from some danger which threatens it.”
The learned Judge held that in the circumstances of the case there was nothing to preserve for the plaintiff pending the determination of the case. That in my opinion was the right view of the law. It was not however because the defendant was in possession of the rents and profits that an order for a receiver could not be made as the Judge later said. He arrived at that on the authority of Talbot (Earl) v. Hope Scott (supra). But as I have shown, that authority was overruled by section 25 of the Judicature Act 1873. Therefore that authority no longer represents the law. To that extent, Alao v. Omotayo (supra) does not state the law correctly and to that extent must be overruled. But the decision itself was right on the facts.
My attention has been drawn to a decision of this court by the appellants in their reply brief. It is the case of Nwadiogbu & Ors v John Uwakwe & Ors, Suit No. CA/E/153/87 (unreported) delivered on 12 April, 1988. It arose from a similar order for a receiver by Aneke, J., in similar circumstances. The case of Alao v. Omotayo was cited to this court in that case and the actual decision there was impliedly approved. The case of Talbot v. Hope Scott was referred to by Ikwechegh, J.C.A., who delivered the lead judgment and in respect of which he said, “This case seems clearly to have laid it down that no one may come to ask for a receiver against a party in possession of property until he had established his rights at law to the possession of the estate.” That was of course the law before the Judicature Act 1873 as I earlier pointed out. The possession of a defendant is no longer an inhibiting factor from the jurisdiction of the court but it may be taken into account in determining in every application what the court considers just and convenient.
On the facts of that case, it was necessary for the plaintiffs to show that title had already been declared in them and this court so held. Accordingly the order of the lower court for a receiver was set aside.
In the present case on appeal, Aneke, J., wrongly applied Cummins v. Perkins (1899) 1 Ch. 16 at 20 which did no more than to emphasise that the court has jurisdiction under section 25 of the Judicature Act to appoint a receiver in all cases where it is just and convenient to do so. Just as in Alao v. Omotayo there is nothing to preserve for the plaintiff in the present case in respect of the rents as its right has not and cannot yet be shown to extend to them. It must first, in the circumstances, be declared the owner of the land and consequently whatever is on it, although it is not in every other situation this needs to be done as the law now stands. It will not be required in an appropriate case. But I cannot as yet see how that requirement can be circumvented in all circumstances similar to the present one where the rents and profits are sought to be protected. The only occasion I can think of is where the rents and profits are derived from actual waste of the property, e.g. digging laterite and other natural resources or cutting timber etc. for sale or at a rent: see Hyde v. Warden (1876) 1 EX.D. 309 C.A.
I hold that the order for a receiver was erroneously made in circumstances which were not just and convenient and must be set aside. This appeal succeeds. The order appointing a receiver made by the lower court is set aside and the application is dismissed. I assess costs in the court below at N100.00 and in this court at N250.00 in favour of the defendants/appellants.
Other Citations: (1989) LCN/0086(CA)
