S. O. N. Okafor & Sons Ltd Vs Nigeria Housing Dev Society Ltd. & Anor (1972)
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Parties
APPELLANTS – S. O. N. OKAFOR & SONS LTD
RESPONDENTS
NIGERIA HOUSING DEVELOPMENT SOCIETY LIMITED
R. E. AGUNWAH
LEWIS, JSC.
In Suit 0/136/63 in the Onitsha High Court it was given in evidence that the Plaintiffs had on the 10th of September, 1960, entered into an indenture (Exhibit E) with the 1st Defendant in respect of land with buildings thereon numbered as Plot 21 within the Nkissi Road layout in the Government Residential Area, Onitsha, and the parts of that indenture material to this appeal read as follows:-
“THIS INDENTURE is made the 10th day of September, 1960 BETWEEN STEPHEN OKOYE NZEMALI OKAFOR & SONS LIMITED WHOSE REGISTERED OFFICE IS AT 42A, OGUTA ROAD ONITSHA, EASTERN REGION OF NIGERIA. (hereinafter called “the Borrower”) of the one part and NIGERIA HOUSING DEVELOPMENT SOCIETY LIMITED whose registered office is at Akuro House, 5 Custom Street, Lagos (hereinafter called “the Nigeria Building Society”) of the other part. WHEREAS:-
(A) The Borrower is entitled to the leasehold land and premises described in the Schedule hereto (hereinafter called “the mortgaged premises”) for the unexpired residue of the term of years created by the lease (hereinafter referred to as “the lease”) mentioned in the said Schedule, subject to the yearly rent and to the covenants on the part of the Lessee and the conditions by and in the Lease reserved and contained.
(B) The Nigeria Building Society at the request of the Borrower has agreed to advance to the Borrower the sum of £11330 (Eleven Thousand Three Hundred and Thirty Pounds), of which the sum of £10 (Ten pounds) is payable on the execution hereof and the balance shall, subject to hereinafter provided, be paid in accordance with the provisions hereinafter appearing upon having the repayment thereof together with payment of interest thereon secured in the manner hereinafter appearing:
NOW in pursuance of the said agreement and in consideration of the sum of £10 (Ten Pounds) paid by the Nigeria Building Society to the Borrower (the receipt whereof the Borrower hereby acknowledges) (and in consideration of the Covenant by the Nigeria Building Society hereinafter contained for making further advances.
THIS INDENTURE WITNESSETH:
1. The Borrower covenants with the Nigeria Building Society to pay to the Nigeria Building Society on the 10th day of March, 1961 the said sum of £10 (Ten Pounds) with interest thereon at the rate hereinafter prescribed from the date hereof AND ALSO to pay to the Nigeria Building Society the money which shall hereinafter be advanced to the Borrower pursuant to the covenant for that purpose hereinafter contained on the 31st day of December or the 30th day of June which next happens after the date of the advance, with interest thereon at the rate hereinafter prescribed from the date of each advance. AND ALSO so long as any principal money remains due hereunder after the date for payment thereof (and whether or not any order or judgment in respect thereof has been obtained) to pay to the Nigeria Building Society on the last day of every month interest calculated in the manner hereinafter appearing at the rate hereinafter prescribed.
2. The Borrower as Beneficial Owner hereby grants and demises unto the Nigeria Building Society ALL the mortgaged premises TO HOLD UNTO the Nigeria Building Society for the residue of the term granted by the Lease except the last three days thereof, but subject to the proviso for redemption hereinafter contained.
3. PROVIDED ALWAYS that on payment on the date hereinbefore fixed for payment thereof by the Borrower to the Nigeria Building Society of the principal sum hereinbefore convenanted to be paid with interest thereon from the date aforesaid at the rate hereinafter prescribed the mortgaged premises shall at the request and cost of the Borrower be duly surrendered to him.
4. The Nigeria Building Society hereby covenants with the Borrower that the Nigeria Building Society will, unless the power of sale applicable hereto shall have become exercisable, advance to the Borrower the balance of the said sum of £11330 (Eleven Thousand Three Hundred and Thirty Pounds) in one sum or by instalments if and when the Nigeria Building Society is satisfied that the state of the mortgaged premises justifies the advance.
5. (1) Subject to the provisions of clause 6 hereof, if the Borrower pays to the Nigeria Building Society on the 10th day of October, 1960 and on the last day of every succeeding month the sum of £143: 19:9d (One Hundred and Forty- Three Pounds Nineteen Shillings and Nine Pence) until the whole of the principal money hereby secured and interest calculated in accordance with clause 6 hereof has been fully paid, and if there shall not have been any breach of any obligation, statutory or otherwise, binding on the Borrower or of any of the covenants, whether express or implied, herein contained and on his part to be observed and performed (other than the covenants in clause 1 herein for payment of the principal money and interest thereby secured) than the Nigeria Building Society shall accept payment of the principal money and the interest thereon by instalments at the times and in manner aforesaid, and will not require payment of such Principal money otherwise than by such instalments.
(2) Notwithstanding the provision for the payment of the principal money thereby secured by instalments, but without prejudice to that provision, such principal money shall be deemed to become due within the meaning of the Conveyancing and Law of Property Act 1881, and for all the purpose of that Act, on the date or dates prescribed by clause 1 hereof’.
Interest was subsequently provided for at the rate of 81/1 per annum.
The 1st Defendants had advertised the property in question, and to which Exhibit “E” pertained, for sale and paragraphs 8, 9, 10, 11 and 18 of the Statement of Claim read:-
“8. By an Indenture dated the 10th day of September, 1960, the 1st Defendant agreed to advance the Plaintiffs, the sum of £ 11,330 to enable the Plaintiffs complete the building and made initial payment of £10 to the Plaintiffs. The Plaintiffs will rely on this agreement at the trial.
9. For this consideration of £10 and a covenant to pay the balance on instalmental basis, if and when the state of the mortgaged premises justifies the advance, the Plaintiffs mortgaged 21 Nkissi Road, Onitsha to the 1st Defendant, with a covenant by the Plaintiffs to pay £143.19 .9d every month until the principal money hereby secured and interest calculated at 81/2% had been fully paid.
10. That the 1st defendant had paid part only of the agreed loan leaving a balance of £330 and are still withholding the same despite repeated demands. By letter of 26th March 1962 to the first defendant, the plaintiffs unsucessfully demanded the said balance which was earmarked for furnishing part of the flats
.11. That by this, the 1st defendant are grossly in breach of the contract of mortgage, as a result of which the plaintiffs were unable to furnish the flats for occupation. The flats, therefore remained vacant for a period of 11 (eleven) months from March 1962 to February 1963, whereupon the plaintiffs fell in arrears of the monthly payment. .
18. The 1st defendant as the mortgagee without bringing a foreclosure action advertised the property for sale, thus causing the plaintiffs great embarrassment. The plaintiffs will found on this irregularity.”
And the plaintiffs then sought in the Statement of Claim reliefs in the following terms: – .
“Whereof the plaintiffs claim:
(a) An injunction to restrain the defendants their servants and/or agents from proceeding with the said sale, either by private contract or by public auction.
(b) Cancellation of the contract or mortgage dated the 10th day of September 1963, as a clog on the equity of redemption.
(c)(i) Special damages ………. £2,640 (being loss of rents occasioned by the defendants for 11 months at £60 per flat per month.)
(ii) General damages for the breach …………………£5,000
Total £7,640.”
Paragraphs 5, 6, 7 and 18 of the Statement of Defence read:-
“5. Defendants admit paragraphs 8 and 9 of the Statement of Claim. In further reply to paragraph 9 of the Statement of Claim, the 1st defendant states that under the indenture dated 10th September, 1960, the plaintiff was to start repayment of the loan and interest on the 10th October, 1960 and thereafter on the last day of every succeeding month at the rate of £143.19. 9d a month. The 1st defendant as an act of grace allowed the plaintiff to be paying only the interest on the amount advanced pending the drawing of the final instalment when the plaintiff will then start repaying as convenanted.
6. 1st defendant admits that the sum of £330 was not paid to the plaintiff but make no further admissions in respect of the paragraph 10 of the Statement of Claim. In further reply to paragraph 10 of the Statement of Claim the 1st defendant states that from 10th September 1960 to 10th June 1962 the 1st defendant advanced to the plaintiff the sum of £11,000. The interest due to be paid on this advance up to the 30th June, 1962 was £505: 19:9d out of which the plaintiff paid nothing.
7. In his letter dated the 30th August, 1962 to the plaintiff the 1st defendant drew the plaintiff’s attention to it and suggested that since the sum of £330 was payable to the plaintiff to complete the loan and as this could not be released to
Other Citation: (1972) LCN/1445(SC)
