Segun Babatunde & Anor V. Bank Of North Ltd. & Ors (2011)
LAWGLOBAL HUB Lead Judgment Report
OLUFUNLOLA OYELOLA ADEKEYE, JSC,
By an order of this court made on the 10th of October 2011, the two appeals SC.350/2002 – Mr. Segun Babatunde v. Alhaja Bamidele Adepate & 2 Ors and SC.350A/2002 – Mr. Segun Babatunde v. Bank of the North and 2 Ors were consolidated with the consent of the counsel to the parties. The two appeals emanated from the same judgment of the trial court delivered on 3/12/99 and the contents of the Record Books are identical.
The brief facts of the case were that Mr. Julius Babatunde now deceased and substituted with the present appellant, Mr. Segun Babatunde, was a customer of the Bank of the North at the Muritala Mohammed Road Branch, Ilorin. He operated the current account No.400634. He was granted an overdraft facility of N12,000.00 on the 26th of October 1976. A Deed of Legal Mortgage was executed between the Bank and the customer to this effect. The collateral was a landed property of the customer at Mala Road, Isale Asa, Ilorin on which was erected a house containing four flats, of three bedrooms each. The land was covered by an Alienation permit No. 1120 dated 10-3-76 and issued by Ilorin Local Government. The Bank of the North increased the overdraft facility to N30,000.00 in September 1978. Another Deed of Legal Mortgage was executed based on that same collateral which was simply up stamped. The plaintiff/appellant’s case was that he bought an adjoining land which was covered by an Ilorin Local Government Customary Right of Occupancy No.248 dated 2nd June 1980 an area of 929.030 square meters. He erected a building of six flats of three bedrooms each besides the other building. In 1982, he mortgaged the house of six flats to the United Bank for Africa, Ilorin for a loan of N70,000.00. On the 4th of November 1992, an auctioneer, acting on behalf of the Bank of the North advertised for sale the building of six flats at Isale Asa Area, off Sabo Line, Ilorin. On the same day, Auction Notice was pasted on the building declaring that it would be disposed through public auction the next day the 5th of November 1992. The plaintiff/appellant was communicated about the sale of the building on the 30th of March 1993. On the 6th of April, the 3rd defendant/respondent, who purchased the building, served notice to vacate on the plaintiff/appellant’s tenants. Apparently distressed by the sale of the building with six flats which was a collateral for the mortgage to the United Bank for Africa for a loan, the plaintiff/appellant sued the respondents at the High court, Ilorin for the under mentioned reliefs: –
(1) Declaration that the 1st and 2nd defendants have no right to sell or advertise for sale the plaintiff’s house containing six flats at Isala Asa Area, off Sabo line, Ilorin, covered by Ilorin Local Government Customary Right of Occupancy No.248 dated 2nd June 1980 since the said house was not pledged as security on a deed of legal mortgage dated 26th October 1976 and the one dated 18th September 1978 between the plaintiff and the 1st defendant.
(2)A declaration that any sale or transfer of the plaintiff’s house of six flats at Isale Asa Area off Sabo line, Ilorin by the 1st and 2nd defendants to the 3rd defendant is illegal, null and void.
(3)An order to set aside the sale or transfer and any agreement thereto of the plaintiff’s house of six flats at Isale Asa Area, off Sabo line, Ilorin by the 1st and 2nd defendants to the 3rd defendant.
(4) A sum of N100,000.00 as damages for trespass committed by the defendants jointly and severally on the plaintiff’s house.
(5) A perpetual injunction restraining the defendants, their agents, servants and privies from further act of trespass on the plaintiff’s house.
(6) A declaration that the purported sale of the plaintiff’s house of six flats at Isale Asa Area, off Sabo Line, Ilorin carried out by way of public Auction on the 5th of November 1992 is invalid, null and void since the said sale was not in accordance with the Auctioneers Law, Cap 10 Laws of Northern Nigeria 1963 as applicable to Kwara State.
(7) A declaration that the two deeds of legal mortgage between the plaintiff and the 1st defendant has no valid consent and that the purported consent letter attached to it is not a consent required by the Land Use Act 1978.
(8) An order to nullify the two deeds of legal mortgage between the plaintiff and the 1’t defendant for not complying with the mandatory provisions of the Land Use Act 1978.
In the considered judgment of the trial court delivered on the 3rd day of December 1999, the learned trial judge found for the plaintiff/appellant, granted all the declarations and orders sought, and further awarded N50,000.00 as damages for trespass. The three respondents were dissatisfied with the judgment of the trial court. The 1st and 2nd respondents – The Bank of the North and A.T. Ayantunde (the Auctioneer) filed a separate notice and grounds of appeal against the decision of the trial court. The appeal was heard as No. CA/IL/44/2000. In the judgment of the lower court delivered by Patrick Ibe Amaizu, JCA on the 18th of October 2001, the lower court allowed the appeal and accordingly set aside the judgment of the trial court. The appellant, Mr. Segun Babatunde being aggrieved by the judgment of the lower court, lodged the appeal No. SC.350A/2002 to this court.
The 3rd respondent, Alhaja Bamidele Adepate filed a separate Notice and grounds of appeal. In another judgment of the lower court delivered by W.S.N. Onnoghen, JCA (as he then was) on the same 18th of October 2001, the appeal was allowed and the judgment of the trial court was set aside. The appellant being dissatisfied with this second judgment of the lower court appealed to this court in the appeal No. SC.350/2002. I shall now consider the two consolidated appeals. Since the events in the appeal No. 350A2002 preceded and actually led to the sale of the property to Alhaja Bamidele Adepate in appeal No. SC.350/2002, it is right and proper and for ease of reference to first consider appeal. No. SC.350A/2002. APPEAL NO. SC.350A/2002
In this appeal, the appellant adopted and relied on the brief filed on 13/1/03 in which four issues were formulated for determination as follows:-
(1) Whether the sale of the appellant’s property by the 2nd respondent to the 3rd respondent on the instructions of the 1st respondent was null and void having failed to comply with the mandatory provisions of the Auctioneers Law Cap 10 Laws of Northern Nigeria as applicable to Kwara State.
(2) Whether having regard to the provisions of the Delegation of Powers (Ministry of Lands, Survey and (Environment) Notice No. 8 of 1975 of Kwara State, the approval by the Commissioner for Lands dated 25/10/76 in relation to Exhibit 6 dated 27/10/76 was valid.
(3) Whether Exhibit 7 dated the 18th day of September 1978 is null and void and of no effect whatsoever as the consent of the appropriate authority was not obtained before the execution of same.
(a) Whether having regard to the Deed of Legal Mortgage (Exhibit 1) executed between the appellant and United Bank for Africa Ltd, the sale of the appellant’s property by the 1st and 2nd respondents was valid.
In the 1st and 2nd respondent’s brief filed on 12/03/03, three issues were identified for determination which read as follows:-
(1) Whether the sale of the mortgaged property of the appellant to the 3rd respondent by the 2nd respondent on the instruction of the 1st respondent is assailable in view of the terms of the contract of mortgage between the appellant and the 1st respondent.
(2) Whether the deeds of legal mortgage between the appellant and the 1st respondent Exhibits 5, 6 and 7 are void for alleged want of appropriate consent/approval under the law.
(3) Whether Exhibit 1 (if valid at all) can stand in the way of Exhibits 5, 6 and 7 which were perfected earlier in time than Exhibit 1 such as to invalidate sale carried out pursuant to powers conferred by them.
The 3rd respondent adopted and relied on the brief filed on 6/2/03. Three issues were distilled therein for determination namely:-
(1) Whether the sale of the appellant’s property by the 2nd respondent on 5/11/92 to the 3rd respondent which sale was on the instruction of the 1st respondent was valid and whether the 1st and 2nd respondents on 5-11-92 were under any obligation to comply with the provision of the Auctioneers Law Cap 10 Laws of Northern Nigeria as applicable to Kwara.
(2) Whether the Commissioner for Lands vide the Approval dated 25/10/76 validly in law approved Exhibit 6 dated 27/10/76 in conformity with the provisions of Delegation of Power (Ministry of Lands, Survey and Environment) Notice No.8 of 1975.
(3) Whether Exhibit 7 dated 18th day of September 1978 is valid having regard to the fact that it was the Permanent Secretary that conveyed the fact of the grant of the consent.
(a) Whether the sale by the 1st and 2nd respondents of the appellant’s property to the 3rd respondent is valid and whether the appellant proved fraud by the respondents in the sale of his property.
In considering this appeal, I intend to be guided by the issues for determination as raised by the appellant.
ISSUE ONE
Whether the sale of the appellant’s property by the 2nd respondent to the 3rd respondent on the instructions of the 1st respondent was null and void having failed to comply with the mandatory provisions of the Auctioneers Law Cap 10 Laws of Northern Nigeria as applicable to Kwara State.
The crux of the argument and submission of the appellant on this issue is that the respondents failed to comply with the provisions of Sections 19 – 21 of the Auctioneers Law as applicable to Kwara State in the process of disposal of the appellant’s property; a building of six flats each with three bedrooms, situated at Amilegbe, Asa Area, llorin Kwara State. The 2nd respondent is an Auctioneer within the definition in Section 2 of the Auctioneer’s Law and he was authorized by the 1st respondent; the Bank of the North to whom the appellant was indebted at the material time to sell the property of the appellant. The publication about the sale in the Herald Newspapers Exhibit 2 dated 4/11/92 was meant to serve as notice at large. An auction notice was pasted on the appellant’s property on the 4th of November 1992 The actual sale of the properly took place on 5/11/92. There was no compliance with section 19 of the Auctioneer’s Law which stipulated that no sale by auction of any land shall take place until after at least seven days notice is made at the principal town and also at the place of the intended sale. The details about the sale were not submitted before and after the sale to the Chairman of Ilorin East Local Government contrary to section 20 of the Auctioneers law.
The provisions of Clause 3(b) of the Deeds of Legal Mortgage, Exhibits 6 and 7 executed by the appellant and 1st respondent Bank of the North cannot avail the respondents for reasons that:-
(a) There is nowhere in Exhibits 6 and 7 where reference was made to any statutory power of sale without regard to the provisions of the Auctioneers Law.
(b) The appellant further submitted that parties cannot contract out of a statute which makes provisions for punishment for non-compliance. Non-compliance with the provisions of the Auctioneers law constitutes a criminal act. Criminal acts cannot be compromised. Consequently the sale of the appellant’s property conducted on 5/11/92 is null and void under the Auctioneers law.
(c) Though the lower court held that Clause 3 (b) is not deceptive or fraudulent, the property was sold below the reserved price. It was sold for N240,000.00 whereas the reserved price was N250,000. Exhibit 3, the valuation report by Oladipo, Atoyebi & partners – put the forced sale value as at 1992 at N800.000.
The appellant cited cases –
Oseni v. American International Insurance Ltd. (1985) 1 NWLR (pt.11) pg.229 at pg.233
Fojule v. Federal Mortgage Bank of Nigeria Ltd. & 2 Ors (2001) FWLR (pt.3) pg.893.
The 1st and 2nd respondents submitted on this issue that the 2nd respondent is a licensed engineer and an agent of the 1st respondent. The appellant defaulted in repaying the facilities granted to it in 1976 and 1978 by the 1st respondent. In exercise of the right under the deeds of legal mortgage, the 1st respondent instructed the 2nd respondent to realize its facilities through the sale of the mortgaged property. The deeds of legal mortgage executed between the appellant and the 1st respondent are Exhibits 5, 6 and 7 and they constituted the contracts between the appellant and the 1st respondent. By Clause 3 (b) of Exhibits 5, 6 and 7, the parties excluded the operation of any statute that may limit or impede the exercise of the power of sale of the mortgagee – the 1st respondent. The appellant waived any protection or benefit any statute as in this case; the auctioneer’s law may afford him in relation to exercise of power of sale by the 1st respondent after he might have defaulted in any repayment due.
The 1st and 2nd respondents cited cases in support of waiver of right by the appellant –
Okonkwo v. CCB (Nig.) Plc (1997) 6 NWLR (pt.507) pg.48
Anori v. Elemo (1983) 1 SC NLR pg.1
Okwunakwe v. Opara (2000) FWLR (pt.13) pg.2282 at pg. 2287.
The complaint of the appellant about non-compliance with the Auctioneers Law is a non-issue in view of the contract of the parties particularly at Clause 3 (b) of the Deeds of Legal Mortgage. The doctrine of estoppel and the case of Iga v. Amakiri (1976) 6 UILR (pt.IV) pg.558
does not apply in the circumstance of this case.
The 1st and 2nd respondents contended further that the contract between the appellant and the 1st respondent is legal. The duty of the court is to give effect to the terms of contract between the parties except where the contract is illegal or against public policy or tainted with dishonesty or fraud or misrepresentation. None of the exceptions apply to this case. The respondents cited cases in support of the foregoing.
Niger Dam Authority v. Lajide (1973) 5 SC 203
Oduye v. Nigerian Airways Ltd. (1987) 2 NWLR (pt.55) pg.126
UBN Ltd. v. Ozigi (1994) 3 NWLR (pt.333) pg.385 pg.404.
The cases Oseni v. American International Ins. Co. Ltd. (1955) 1 NWLR (pt.11) pg.229 and Fojule v. Federal Mortgage Bank of Nigeria Ltd. and 2 Ors. (2001) FWLR (pt.36) at pg.893 cited by the appellant are clearly distinguishable from the facts of this appeal.
The 3rd respondent submitted that compliance by the 2nd and 3rd respondents with the provisions of Sections 19, 20 and 21 of the Auctioneer’s Law is not mandatory as the provision of Auctioneers Law Cap 10 Laws of Northern Nigeria is not applicable to the subject of this suit at Amilegbe, lsale Asa Area of Ilorin, Kwara State. The applicable law is the Auctioneer (Application) Order in Council Cap 10 Laws of Northern Nigeria as applicable to Kwara State of Nigeria. The 3rd respondent going by Exhibits 6 and 7 have substantially complied with the provisions of Sections 19, 20 and 21 of the Auctioneer’s Law Cap 10 Laws of Northern Nigeria. The respondents urged this court to answer Issue One in the negative. All the parties in this appeal in the course of trial at the High Court called witnesses and tendered Exhibits.
Of particular importance to this case and this issue in this appeal by extension, are –
Exhibit 5 – Deed of legal Mortgage dated the 18th day of September 1978 between the appellant and the 1st respondent.
Exhibit 6 – Certified True Copy of the Deed of Legal Mortgage between Julius Babatunde and Bank of the North dated 26/10/76.
Exhibit 7 Certified True copy of the Deed of Legal Mortgage between Julius Babatunde and Bank of the North dated 18/9/1978. It is necessary to highlight that the appellant did not dispute the overdraft facilities of N12,000.00 granted to him by the 1st respondent in 1976 which was increased to N33,000.00 in 1978. He submitted that the two facilities were secured by two deeds of legal mortgage executed over the appellant’s property covered by customary right of occupancy No.248 titled Alienation Permit No. 1120 dated 10/3/76 granted by Ilorin Local Government. The appellant did not dispute that he defaulted in repaying the facilities or that the deeds of legal mortgage gave the 1st respondent the right to realize its facilities through the sale of the mortgaged properly. The 1st respondent exercised the right to sell through a licensed auctioneer – the 2nd respondent who became an agent of the 1st respondent for that purpose; the 3rd respondent was the purchaser of the mortgaged property through sale by auction on the 5/11/92. The bone of contention between the parties in this issue is whether the parties in invoking the terms of contract as embodied in the clauses of the Deeds of Legal Mortgage dated 26/10/76 and 18/9/78 respectively, failed to comply with the mandatory provisions of the Auctioneer’s Law Cap 10 Laws of Northern Nigeria as applicable to Kwara State.
Can the 1st respondent going by Exhibits 5, 6 and 7 exercise its statutory power of sale without regard to the Auctioneer’s Law In order to answer this poser exhaustively, this court must read the terms of the contract between the parties as embodied in Exhibits 5, 6 and 7.
The trump card of the 1st and 2nd respondents is Clause 3 (b) of Exhibits 5, 6 and 7.
The provisions of clause 3 (b) in all the three exhibits are identical and I quote from Exhibit 6 as follows:- Clause 3 (b) –
“The Statutory power of sale shall be exercisable at any time after the moneys owing on this security shall have become payable without regard to any statute law and in any such sale the bank may call the fixtures and machinery comprised herein either together with the property to which they are affixed or separately and detached therefrom.”
The parties did not subject any provision of the Deed or even made reference anywhere in the Deeds to the Auctioneer’s Law of Kwara State.
The appellant further argued that you cannot make reference to any power of sale in a mortgage Deed without reference to the provisions of the Auctioneer’s Law. Clause 3(b) of Exhibits 5, 6 and 7 cannot avail the respondents; in that sections 19, 20 and 21 of the Auctioneer’s Law confirm penal sanctions if the law is not complied with as non-compliance constitutes a criminal act. The appellant is firmly of the view that parties cannot contract out of a statute which makes provision for non compliance – as a criminal act cannot be compromised. I shall at this stage examine the issue of sanctity of contracts generally. It is however trite that a court of law must always respect the sanctity of the agreements reached by parties. It must not make a contract for them or re-write the one they have already made themselves.
Owoniboys Technical Services Ltd. v. U.B.N. Ltd. (2003) 15 NWLR (pt. 844) pg. 545.
S.E. Co. Ltd. v. N.B.C. 1 (2006) 7 NWLR (pt.978) pg.201.
The law is that written contract agreement freely entered into by the parties is binding on them. A court of law is equally bound by the terms of any written contract entered into by the parties. Where the intention of the parties to a contract is clearly expressed in a document, a contract agreement; the court cannot go outside that document to give effect to the intention of the parties. The general principle is that where the parties have embodied the terms of their contract in a written document, extrinsic evidence is not admissible to add to, vary, subtract from or contradict the terms of the written instrument,
Okonkwo v. C.C.B. (Nig.) Plc. (1997) 6 NWLR (pt.507) pg.48
Dalek (Nig) v. OMPADEC (2007) 7 NWLR (pt.1033) pg.402.
U.B.N. Ltd. v. Ozigi (1994) 3 NWLR (pt.333) pg.385 at pg.404.
Nneji v. Zakhem Con. (Nig) Ltd. (2006) 12 NWLR (pt.994) pg.297 SC.
U.B.N. Ltd. v. Sax (1994) 8 NWLR (pt.361) pg.402.The court in this appeal cannot resort to the Auctioneer’s Law of Northern Region as applicable to Kwara State which is not embodied in the Deeds of Legal Mortgage executed by the parties to effect the intention of the parties’ The Auctioneer’s Law does not form part of the agreement of the parties. A court will not however enforce an agreement between parties which is fraudulent or tainted with deceit or against public policy. This is not the case here and the court below was right to hold that Clause 3(b) is not prohibited by law. Since the Auctioneer’s Law Cap 10 Laws of Northern Nigeria as applicable to Kwara State does not form part of the agreement between the appellant and the respondents, this court has no business in considering the provisions of the Auctioneer’s Law or whether the parties can contract out of this statute which makes provision for punishment for non-compliance in its sections 19-21. It is practically a nonissue to the claim of the parties before the court. This court will not waste its time or engage in a futile exercise in going into any elaborate consideration of that point.
The appellant also disagreed with the decision of the lower court that Clause 3(b) is not deceptive or fraudulent as the respondent sold the property below the reserved price. The reserved price was N250,000.00 but the property was sold to the 3rd respondent for N240,000.00. The appellant alleged that the property was sold below its actual value – as Exhibit 3 a valuation report prepared by the appellant’s valuers – Oladipo, Atoyebi & Partners put the forced sale value as at 1992 at N800,000.00.
Under Nigeria Law of Evidence any allegation of fraud must be proved beyond reasonable doubt. Section 138(1) of the Evidence Act 1990 states that “lf the commission of a crime by a party to any proceedings is directly in issue in any proceeding civil or criminal, it must be proved beyond reasonable doubt.,,In this case, the nature and extent of the fraud must be properly pleaded and evidence must be sufficiently adduced to establish it to the satisfaction of the court. If the evidence before the court does not properly expose the fraud the court will be left to rely on mere conjecture or speculation which to my mind is the position in this appeal. It is not disputed that a sum of N205,626.50k was outstanding on the appellant’s current account No. 400634 with the 1st respondent for which there were demands. The amount therefore fell due and unpaid – so that the condition precedent to invoking clause 3 (b) of Exhibits 5, 6 and 7 was on ground and the 1st respondent exercised its power of sale. This brings me to emphasize that a mortgagee – the 1st respondent in this appeal – is not a trustee of a power of sale for the mortgagor. It is a power given to him for his own benefit enabling him to protect the mortgage debt. Complaint of undervalue alone is not enough to vitiate the exercise of a mortgagee’s power of sale. It must be shown that the sale was made at a fraudulent or gross undervalue. lf a mortgagee exercises his power of sale bona fide for the purpose of realizing his debt and without collusion with the purchaser, the court will not interfere even though the sale be very disadvantageous to the mortgagor, unless the price is so low as in itself to be evidence of fraud. The court will always be on the lookout that mortgagee acts bona fide and observes reasonable precautions to obtain not the best price but a proper price,
A.C.B. Ltd. v. Ihekwoaba (2003) 16 NWLR (pt.846) pg.249.
Ekaeteh v. Nigeria Housing Development Society Ltd. (1973) 6 S.C. 183
Rafukka v. Kurfi (1990) 6 NWLR (pt.453) 235.In this appeal – the amount outstanding was N205,626.50k – and the mortgagee sold the property for N240,000.00. The mortgagor did not give evidence that the mortgagee exercised the power of sale mala fide for the purpose of realizing the debt or that there was collusion with the purchaser. In my candid view, the decision of the lower court gave effect to the terms of the contract between the parties and the sale of the property then was valid.
I resolve Issue Number One in the negative.
ISSUE NO. 2
Whether having regard to the provisions of the Delegation of Powers (Ministry of Lands, Survey and Environment) Notice No. 8 of 1975 of Kwara State, the approval by the Commissioner for Lands dated 25/10/76 in relation to Exhibit 6 dated 27/10/76 was valid.
The appellant submitted that the deed of mortgage dated the 26th of October 1976 was made before the promulgation of the Land Use Act 1978. The operational law at the material time was the Land Tenure Law Cap 59 Laws of Northern Nigeria as applicable to Kwara State. The approval of mortgage attached to this Deed was dated the 25th of October 1976. The approval was in respect of the landed property of the appellant at Mala Road, Isale Asa, Ilorin, Kwara State with Alienation Permit No, 1120 dated 10/3/76. The property had four flats of three bedrooms and was supposed to have been approved by the commissioner for N12,000.00 with effect from 7th day of October 1976 though signed by the Chief Lands Officer for permanent secretary. The Alienation Permit No. 1120 of 10/3/76 was granted by the Ilorin Local Government Authority and signed by the Resident, vide schedule to Exhibit 7 Form 1. The approval in the Deed of Mortgage was not granted by the Ilorin Local Government Authority as stipulated in Section 27(a) & (b) (1) & (II) of the Land Tenure Law Cap 59 Laws of Northern Nigeria. The approval of the mortgage by the commissioner and the endorsement by the Chief Lands Officer for Permanent Secretary is null and void. The appellant cited cases like:-
Savannah Bank Ltd & Anor v. Ajilo & Anor (1989) 1 SCJN pg.169
Adedeji v. N.B.N. Ltd. (1991) NWLR (pt.96) pg. 212 at pg. 215.
The 1st and 2nd respondents in their joint brief cleared the air that the deeds of legal mortgage are in fact two in number; Exhibits 6 and 7. The approval of the legal mortgage dated 26/10/76 was rightly granted by a commissioner under section 27 (a) of the Land Tenure Law of Kwara State. The Land Use Act came into force in March 1978. The 1st respondent; Bank of the North can only be referred to as non-native under the Land Tenure Law and it was the Minister and not the Ilorin Local Government that was the appropriate authority to approve the mortgage. On the creation of States in 1967, the State Executive Council Regional Ministers were replaced with State Commissioners and vested their functions in the commissioners by section 2(1) (b) (iii) of the Constitution (Miscellaneous Provisions) No, 2 Decree 1967. The power of consent created by section 27(a) and (b) of the Land Tenure Law vested in the commissioner in charge of land, The Kwara State Legal Notice of 1975 cannot override an existing law – as legal notice can only be made pursuant to powers created or vested by an existing law.
The Legal Notice No. 8 of 1975 of Kwara State was a law void ab initio – as it was under the Constitution
(Suspension and Modification) Decree 1966. The respondents submitted further that the appellant having consented to the Deed of Legal Mortgage dated 26/10/76 cannot turn round to question its validity for lack of appropriate consent. The commissioner granted the approval – and what the Chief Lands Officer or Principal Estate Officer did while signing for the permanent secretary was to simply convey approval. The act of conveying approval is different from the act of approval. The Deed of Legal Mortgage dated 18/9/78 and registered as No.139 at pg.139 Vol. III (Misc.) of the Lands Registry is valid in law without any further consent required. As this other Deed of Legal Mortgage perfected in 18/9/78 covered the same property, the mortgage of which had been consented to in the Deed of Mortgage dated 26/10/76 This was reflected in the First and 2nd Schedule of the Deed, and is even described as continuous security for overdraft of N33,000.00. The 1st and 2nd respondents supported their submission with the case Moses Ola & Sons v. Bank of the North Ltd. (1992) 3 NWLR (pt.229) pg. 377. It is apparent from the foregoing that Exhibits 6 and 7 are not void for lack of consent.
The 3rd respondent submitted that under Section 40(1) of the Land Tenure Law 1963, the Governor in Council or the Minister in charge of land matters can delegate his powers in section 28, which powers include the power to grant consent. Under the Legal Notice No. 8 of 1975, the Governor of Kwara State can delegate his power to the permanent secretary, Ministry of Lands, Survey and Environment. The 3rd respondent observed that some form of consent was obtained before Exhibit 6 was executed.
Whoever granted the consent did so on behalf of the Governor for reason of administrative convenience. Presumption of regularity is in favour of ‘Exhibit 6. The 3rd respondent urged this court to do substantial justice in this matter’ The respondent observed that the two cases of Savannah Bank Limited and & v. Ajilo & Anor (1989) 1 SCNJ 169 and Adedeji v. N.B.N. Ltd. (i991) NWLR(pt.96) pg.212 at 215 are not relevant to the points raised in this issue. This court is urged to answer Issue Two in the affirmative
I agree with the 1st and 2nd respondents that the Deeds of Legal Mortgage for reference in this issue are marked Exhibits 6 and 7. Exhibit 5 is a replica of Exhibit 6. The letter: of consent is at page 6 of the Deed of Legal Mortgage dated 26/10/76. This letter dated the 25th of October 1976 was addressed to Mr. Julius Babatunde the appellant and it reads: –
“Dear Sir/Madam
Approval of Mortgage
Property at Ilorin under alienation Permit No. 1120.
I am directed to refer to your letter No _ of 17th September 1976 and to inform you that the mortgage of your property at Mala road, Ilorin and covered by alienation permit No. 1120 to the Bank of the North Ltd. Lagos at Kano has been approved by the Honourable Commissioner for N12,000 with effect from the 7th October 1976.
Yours faithfully
Signed
E.O. Toki
Principal Estate Officer”
The legal issue raised here is that the power to grant consent to the Deed cannot be delegated. Further that the consent granted was not by the Ilorin Local Government authority in compliance with Section 27(a) &
(b) (II) of the Land Tenure Law Cap 59 Laws of Northern Nigeria 1963, The Alienation Permit 1120 here is issued in favour of a native who wishes to alienate same by mortgage in favour of a non-native, the 1st respondent the Bank of the North Under the Land Tenure Law 1963, prior to the promulgation of the Land Use Act in March 1978 – such consent must be granted by a Minister. By virtue of Section 2(1)(b) (III) of the Constitution (Miscellaneous Provisions) Decree No.2 of 1967, at the creation of states in 1967, the regional ministers were replaced with state commissioners. The contention of the appellant is that under the Legal Notice No. 8 of 1975 that the approval should have been given by the Honourable Commissioner for Lands under the powers delegated to him by the Governor. The deed was signed at a period when regional ministers were already replaced by Commissioners by virtue of the Constitution (Miscellaneous Provisions) Decree No.2 of 1967. It is also noteworthy that the appropriate authority to approve or give consent at the operative time was the commissioner. However at page 6 of Exhibit 7, the approval was actually granted by the commissioner while the letter signed by the Principal Estate Officer for Chief Lands Officer dated 25/10/76 was meant to convey the approval to the applicant. The question of the validity of the approval would only arise if the commissioner for lands was not the authority who gave the consent. The cases of Savannah Bank v. Ajilo (1989) 1 NWLR pg.305; Adedeji v. N.B.N. Ltd (1991) (pt.96) pg.212 at 215 enjoining strict compliance with Section 21 of the Land Use Act 1978 as regards appropriate approval for validity of the legal mortgage is not applicable in the circumstance of this case. The deed of Legal Mortgage was executed on the 26th of October 1976 well before the Land Use Act 1978. The operation of the Land Use Act was not applicable.
Ojokolobo v. Alamu (1987) 7 SC page 124.
Salami Afolabi v. Government of Oyo State (1985) 9 SC pg.112.
Okafor v. Utomi (1964) 1 All NLR pg.348.
The letter of approval dated the 26110176 and signed by the Principal Estate Officer for the permanent secretary is valid having satisfied the provision of the Land Tenure Law 1963.
I resolve issue No.2 in favour of the respondents.
ISSUE NO. 3
Whether Exhibit 7 dated the 18th day of September 1978 is null and void and of no effect whatsoever as the consent of the appropriate authority was not obtained before the execution of same.
The appellant submitted that the Deed of Legal Mortgage dated 18/9/78 was made after the promulgation of the Land Use Act 1978. By virtue of the provisions of Section 21(b) of the Land Use Act, the consent of Ilorin Local Government that issued Alienation Permit No. 1120 ought to have been obtained to validate it – hence it is void and of no effect whatsoever. The appellant argued further that since the Deed of Legal Mortgage dated 26/10/76 was void; the deed dated 18/9/78 cannot rest on it as the consent of the appropriate authority was not obtained in accordance with Section 21(b) of the Land Use Act 1978. The appellant cited the case of Moses Ola & Sons Ltd. V. Bank of the North Ltd. (1992) 3 NWLR (pt.229) pg.377 in support of the foregoing submission.
The 1st and 2nd respondents submitted that the Deed of Legal Mortgage dated 18/9/78 which was duly registered as No.139 in Vol. VIII (Miscellaneous) of the Lands Registry in the office at Ilorin is valid in law without any further consent required. The Legal Mortgage perfected in this document covered the same property, the mortgage of which has been consented to in the Deed of Legal Mortgage dated 26/10/76. The respondents cited the case of Moses Ola & Sons v, Bank of the North (1992) 3 NWLR (pt.229) pg.377. The Deed of Legal Mortgage dated 18/9/78 was not void by lack of consent.
The 3rd respondent pointed out appellant being the mortgagor had the responsibility to obtain the appropriate consent before the execution of Exhibits 6 and 7 – the two Deeds of legal mortgage. The appellant ought not in equity to be allowed to succeed in annulling the two Deeds under which he had enjoyed credit facilities.
This issue is a follow up to Issue No.2 where this court held that the Deed of Legal Mortgage dated 26/10/76 had the consent of the appropriate authority – the Commissioner for Lands under the Land Tenure Law 1976. In the Deed of Legal Mortgage executed, Julius Babatunde and Bank of the North on the 18th of September 1978, the preamble at paragraph three reads as follows: –
“And whereas the mortgagor and the bank have agreed to increase the said overdraft of N12,000 to the sum of thirty-three thousand Naira (N33,000.00) Nigerian currency on the same security of landed property but with increased improvements and on the same terms and conditions mutatis mutandis and in addition as hereby agreed.”
The first schedule gave the description of the property which is same as that indicated in the first schedule of the legal mortgage dated 26/10/76. The back cover indicated that the Deed of Legal Mortgage was up stamped with N15.75 on the 18th of September 1978 and registered as No.139 at page 139 in volume VIII of the Lands Registry in the Office at Ilorin. The term of the Deed referred to it as “Continuous Security for overdraft of N33,000. The second schedule referred to the Deed registered as No.23 of page 23 in volume VI (Misc) of the Lands Registry in the office at Ilorin on 28/10/76.
It is still the same deed that was up stamped to reflect the increase in overdraft. Generally where consent is required to a Deed of legal mortgage and such consent was obtained at the creation of the mortgage, no further consent would be required for the up stamping of the mortgage if further facility is granted on it.I resolve issue No. 3 in favour of the respondent.
ISSUE NO. 4
Whether having regard to the Deed of Legal Mortgage (Exhibit 1) executed between the appellant and United Bank for Africa Ltd. the sale of the appellant’s property by the 1st and 2nd respondents was valid.
The appellant gave the description of the property mortgaged to United Bank for Africa in the schedule of the Deed of Legal Mortgage dated the 6th of July 1982. The properly was registered as No.32 at page 32 in volume XX (Misc.) of the Lands Registry office at Ilorin and also of the property mortgaged to the 1st respondent. The document of title of both properties were issued at different times – the Alienation Permit No. 1120 for Exhibits 6 and 7, the Deeds of Legal Mortgage for the 1st respondent and Customary Right of Oc8upancy No. 248 in respect of Exhibit 5 – the Deed of Legal Mortgage for United Bank for Africa was issued by the Ilorin Local Government at different times. The lower court was wrong to hold that the respondents were right to have sold the block of six flats to the 3rd respondent as it was mortgaged on Exhibit 1 to the United Bank for Africa.
The court was wrong to have relied on the case of Awojugbagbe Light Industries Ltd v. P.N. Chinukwe (1995) 4 NWLR (pt.390) pg.379, to allow the 1st respondent to forcibly enter or trespass on a property upon which there was no mortgage in its favour.
The 1st and 2nd respondents submitted that Exhibits 6 and 7 were perfected over the appellant’s property covered by Permit Alienate Land No. 1120 – a customary right of occupancy in 1976 and 1978 respectively. The two Exhibits created collateral security for banking facility of N12,000.00 in 1976 which was increased to N33,000.00 in 1978. Exhibit 1, another Deed of Legal Mortgage was perfected in July 1982 over the same property covered by Alienation Permit No. 1120 in favour of United Bank for Africa Ltd. The mortgage in Exhibit 1 covered the same property already mortgaged to the 1st respondent by the appellant. No document had been exhibited by the appellant that he had approval of the appropriate authority to mortgage the customary right of occupancy No.248 to United Bank for Africa Ltd. The sale of the mortgaged property was validly carried out pursuant to powers conferred by Exhibits 6 and 7 and Exhibit 1 does not enjoy priority over Exhibits 6 and 7.
The 3rd respondent concluded that the sale of the appellant’s property to the 3rd respondent is valid in that the appellant failed to prove fraud in the transaction.
I cannot consider this issue without reference to relevant paragraphs of the pleadings of the appellant and the 1st and 2nd respondents. –
The appellant in the further and further Amended Statement of Claim averred as follows: –
Paragraph 10 –
“The plaintiff says that two years after he mortgaged his home containing 4 flats (3 bedrooms each) to the 1st defendant, he, plaintiff decided to build another house containing 6 flats on a separate land beside the mortgaged house at No.50 Isale Asa Area, off Sabo Line Street, Ilorin.”
Paragraph 11-
“The plaintiff says that the 6 flats (3 bedrooms each) built in 1980 was covered by Ilorin Local Government Customary Right of Occupancy, No.248 dated 2nd June 1980 and having an area of 929.030 square metres. The certificate is hereby pleaded. Also pleaded are relevant documents on the building.”
The 1st and 2nd respondents in their Amended joint Statement of Defence pleaded as follows, –
Paragraph 4
“As security for the facilities enjoyed from the 1st defendant, the plaintiff executed a deed at Mala Road, Isale Asa, Ilorin. The property is a piece of land measuring 10,000 square metres feet two plots with all the developments thereon since 1978. The defendants plead the two deeds of legal mortgage executed by the plaintiff in favour of the 1st defendant.”
Paragraph 5
“The plaintiff built another house on the same piece of land described on the schedule of the legal mortgage and not on a separate piece of land.”
Paragraph 6
“The defendants aver that the deed of legal mortgage referred to above covers the landed property and buildings thereon belonging to the plaintiff situates at Mala Road, Isale Asa, Ilorin, ..s security for overdraft facility since 1978.”
Paragraph 7
“The defendants deny paragraph 11 of the statement of claim and state that customary right of occupancy No.248 dated 2/6/80 covers the same piece of land as that covered by the deed of mortgage referred in paragraph 4 above.”
The schedule of Exhibits 6 and 7 aptly described the mortgage property as:
“All the property and premises comprised in or affected by all or any of the following –
The landed property with the buildings thereon of Mr. Julius Babatunde at Mala Road, Isale Asa, Ilorin, Kwara State of Nigeria on site plan signed by the supervisor of work, Ilorin Local Government Authority and dated 28/10/75 and Permit to Alienate Land No.1120 dated 10/3/76 and signed by the Resident, Ilorin Division. The land is on an area 10,000 square feet and contains four semi-self contained 3 bedroom flats, each flat contains sitting room, 3 bedrooms, kitchen, bathroom and W.C. and store.”
The foregoing was the security for overdraft raised in October 1976 a sum of N12,000.00. The Deed of Legal Mortgage was up stamped in September 1978, when the facility was increased to N33,000.00. The approval of the honourable Commissioner under the Land Tenure Law dated the 25th of October 1976 was in respect of the foregoing property.
The appellant executed another Deed of Legal Mortgage in favour of the United Bank for Africa on the 6th of July 1982 as security for a facility of N70,000.00. The description of the property in the Schedule of Exhibit l reads: –
“The landed property and the building thereon of Mr. Julius Babatunde of No.50 Sabo Line, Ilorin, situate and lying at Amilegbe Asa Area of Ilorin, Kwara State of Nigeria under Customary Right of Occupancy No.248 signed by the Secretary to Ilorin Local Government and dated 2nd June 1986. The landed property is having an area of 929.030 square metres and this is more particularly described in Approved Site plan signed by the Land Estate Officer to Ilorin Local Government and dated 2nd June 1980.”
However the approval of this mortgage by the Honourable Commissioner on the 12th of May 1982 made reference to the properly erected on land at Ilorin covered by Alienation Permit No. 1120. The appellant had already mortgaged this same properly to the 1st respondent in Exhibits 6 and 7 in 1976 and used it as a continuous security in 1978. The appellant did not satisfy the court as to the existence of the Customary Right of Occupancy No. 248 or the purchase of half a plot in addition to the existing plot of land – a plot 25 feet by 100 feet. He failed to exhibit an approval of the appropriate authority to mortgage the Customary Right of Occupancy No.248 to United Bank for Africa Ltd. It is clear that the mortgage in Exhibit 1 and the approval by Exhibit A1 covered the same property already mortgaged to the 1st respondent by the appellant.
According to the rule of equity that the first in time prevails – Exhibits 6 and 7 made in 1976 and 1978 enjoy priority over Exhibit 1 which was made in 1982. Exhibits 6 and 7 were duly registered as No.23 at page 23 in volume (VI) (miscellaneous) of the Lands Registry in the office at Ilorin on 28th October 1976 under the land registration law Cap 58 Laws of Northern Nigeria – then applicable in Ilorin.
Section 16 of the Land Registration Law reads: –
“Subject to the provisions of this law every instrument registered under this law shall, so far as it affects any land, take effect as against other instruments affecting the same land from the date of its registration.”
In the instant appeal, the three deeds of legal mortgage were perfected over the same property covered by permit to Alienate No.1120. The appellant’s bone of contention is the building of six flats of three bedrooms each was covered by the Deed of Legal Mortgage Exhibit I executed in favour of United Bank for Africa. A building erected on a mortgaged land during the life span of the mortgage forms part of the mortgaged property by virtue of the maxim quic quid plaintatur solo solo cedit meaning he owns a land owns what is on it.
This maxim is applicable to the land covered by Alienation Permit No. 1120 the security for Exhibits 6 and 7. The six flats become part of the property mortgaged to the 1st respondent – the Bank of the North in 1976 and in 1978 by operation of law. The sale of the mortgage property was validly carried out pursuant to the powers conferred on the mortgagee in Clause 3(b) of Exhibits 6 and 7, while Exhibits 1 is null and void.
I resolve Issue No. 4 in favour of the respondent.
In sum, having resolved all the four issues in this appeal in favour of the respondents. I find that this appeal lacks merit and it is accordingly dismissed.
APPEAL NO SC.350/2002
This appeal is against another judgment of the Court of Appeal, Ilorin Division delivered on the 18th of October 2001. The judgment was delivered in the appeal filed by the 1st respondent, Alhaja Bamidele Adepate against the judgment of the trial court delivered on the 3rd of December 1999. The 1st respondent was the purchaser of the property of the appellant – the six flats of 3 bedrooms each at the public auction that was conducted by the 3rd respondent, A.I.A. Ayantunde on the 5th of November 1992. The 3rd respondent acted as an agent of the 2nd respondent – the Bank of the North. This appeal is the other appeal consolidated pursuant to the order of this court made on 10/10/11.
The background facts are similar to the facts in appeal No. SC.350A/2002. The bone of contention of the appellant in this appeal is that the 3rd respondent on the instructions of the 2nd respondent advertised the appellant’s property for sale – the building of six flats mortgaged to the United Bank for Africa Ltd in Exhibit 1 and sold on 5/11/92. The property was sold according to the appellant without compliance with the provisions of the Auctioneer’s Law of Northern Nigeria as applicable to Kwara State. The parties relied on both oral and documentary evidence at the trial court. The trial judge granted the reliefs of the plaintiff/appellant. The three respondents appealed to the Court of Appeal Ilorin division – which allowed their appeals. Being aggrieved with the two judgments of the Court of Appeal, the appellant made a further appeal to this court.
In the appellant’s brief filed on 15/1/03, the appellant distilled five issues for determination as follows: –
(1) Whether the sale of the appellant’s property by the 3rd respondent to the 1st respondent on the instruction of the 2nd respondent was null and void having failed to comply with the mandatory provisions of the Auctioneers Law Cap 10 Laws of Northern Nigeria as applicable to Kwara State.
(2) Whether having regard to the provisions of the Delegation of Powers (Ministry of Lands, Surveys and Environment) Notice No.8 of 1975 of Kwara State, the approval by the Commissioner for Lands dated 25/10/76 in relation to Exhibit 6 dated 27/10/76 was valid.
(3) Whether Exhibit 7 dated the 18th day of September 1978 is null and void and of no effect whatsoever as the consent of the appropriate authority was not obtained before the execution of same.
(4) Whether having regard to the Deed of Legal Mortgage (Exhibit 1) executed between the appellant and United Bank for Africa Ltd, the sale of the appellant’s property by the 1st and 2nd respondents was valid.
(5) Whether from the totality of the pleadings of the appellant and the documents tendered the appellant proved fraud by the respondents in the sale of his property.
The 1st respondent in the brief filed 6/2/03 adopted and relied on four issues for determination as follows:-
(1) Whether the sale of the appellant’s property by the 3rd respondent on 5/11/92 to the 1st respondent which sale was on the instruction of the 2no respondent was valid and whether the 2nd and 3rd respondents on 5/11/92 were under any obligation to comply with the provision of the Auctioneer’s Law Cap 10 Laws of Northern Nigeria as applicable to Kwara State.
(2) Whether the Commissioner for Lands vide the approval dated 25/10/76 validly in law approved Exhibit 6 dated 27/10/76 in conformity with the provisions of Delegation of Power (Ministry of Lands, survey and Environment) Notice No.8 of 1975.
(3) Whether Exhibit 7 dated 18th day of September 1978 is valid having regard to the fact that it was the permanent secretary that conveyed the fact of the grant of the consent.
(4) Whether the sale by the 2nd and 3rd respondents is valid and whether the appellant proved fraud by the respondents in the sale of his property.
In the 2nd and 3rd respondents’ brief filed on 12/3/03, the respondents adopted and relied on four issues for determination as follows. –
(1) Whether the sale of mortgaged property of the appellant to the 1st respondent by the 3rd respondent on the instruction of the 2nd respondent is assailable in view of the terms of the contract of mortgage between the appellant and the 2nd respondent.
(2) Whether the deeds of legal mortgage between the appellant and the 2nd respondent Exhibits 5, 6 and 7 are void for any alleged want of appropriate consent/approval under the law.
(3)Whether Exhibit 1 (if valid at all) can stand in the way of Exhibits 5, 6 and 7 which were perfected earlier in time than Exhibit 1 such as to invalidate sale carried out pursuant to power conferred by them.
(4) Whether fraud was properly pleaded or raised and proved by the appellant.
On gleaning through the briefs of the parties, I find that in the two appeals SC.350A/2002 and SC.350/2002, the first four issues raised by the appellants are identical. I have dealt with them exhaustively in appeal SC.350A/2002. It will amount to undue repetition and tautology to deal with each of the first four issues raised by the appellant in the instant appeal. I therefore adopt and rely in this appeal on my findings and conclusion in each of the first four issues raised for determination in appeal No. 350A/2002.
I shall now consider lssue No.5 which reads:-
ISSUE 5
Whether from the totality of the pleadings of the appellant and the documents tendered the appellant proved fraud by the respondents in the sale of his property.
The appellant submitted that the 1st and 2nd respondents failed to comply with the provisions of the Auctioneers Law before the sale of the appellant’s property a building with six flats of 3 bedrooms each lying and being at Amilegbe, Asa Area, Ilorin, Kwara State particularly the provisions of Sections 19, 20 and 21 – as to give the proper notice about the sale of the property. There is nowhere in Exhibits 6 and 7 – the Deeds of Legal Mortgage where reference was made to any statutory power of sale without regard to the provisions of the Auctioneers Law. The appellant challenged as follows: –
(a) The nature of the notice given for the sale of the property whether it was in accordance with the Auctioneers Law.
(b) The reserved sale price of the property which was N250,000.00 – as same was sold to the 3rd respondent for N240,000.00
(c) The property was sold below its actual value as the Valuation report Exhibit 3 prepared by Oladipo, Atoyebi & Partners put the forced sale value as at 1992 at N800,000.00. This court is urged to hold that in view of the foregoing the sale was null and void.
The 1st respondent submitted that the 2nd and 3rd respondents validly sold the appellant’s property to the 1st respondent. The sale was carried out in accordance with Clause 3(b) of the Deeds of Legal Mortgage Exhibits 6 and 7. The parties have subjected themselves to this clause in their Deeds and that it shall apply to their transaction to the exclusion of any other law including the Auctioneers Law. It was the duty of the court to interpret their agreement. The 1st respondent referred to the decision of this court in the case of Union Bank Ltd. V. Sax (Nig.) Limited (1994) SCNJ pg.1.
The lower court properly evaluated the evidence on record before arriving at the conclusion that the sale of the appellant’s property by the 2nd and 3rd respondents to the 1st respondent was valid. The 1st respondent submitted further that the appellant failed to prove fraud – as (a) the 2nd and 3rd respondents advertised the sale of the property.
(b) The 1st respondent was a bona fide purchaser for value and she was the highest bidder during the Auction Sale when she purchased the property on 5/11/92. The lower court thereby rightly concluded that the appellant did not prove fraud, as there was substantial compliance with Clause 3(b) of the Deed of Legal Mortgage.
The 2nd and 3rd respondents submitted that fraud was not properly pleaded nor proved beyond reasonable doubt against the 2nd and 3rd respondents. No evidence was called in support of the purported value indicated in Exhibit 3 – a Valuation Report. They further contended that the appellant cannot substitute pleadings with the appellant’s brief. Neither did the steps taken by the 2nd and 3rd respondents in selling the property to the 1st respondent deceive the appellant in line with the definition of crime under the penal code. This court is urged to affirm the decision of the Court of Appeal that issue of fraud was not properly pleaded with particulars, as to affect the validity of the sale of the mortgaged property to the 1st respondent.
I have considered the issue of fraud as it affected the sale of the appellant’s property to the 1st respondent by the 2nd and 3rd respondents. Fraud is a criminal offence under the penal code of Kwara State. The law is that any allegation of fraud must be proved beyond reasonable doubt. Section 138(1) of the Evidence Act and by virtue of Section 138(2), the burden of proving that any person has been guilty of a crime or wrongful act is subject to the provisions of Section 141 of this Act on the person who asserts it, whether the commission of such act is or is not directly an issue in the action.Any allegation of crime in a civil proceeding must be pleaded and particulars of such a crime must be expressly pleaded. The appellant failed to substantiate the Valuation Report tendered as Exhibit 3. The submission in an appellant’s brief can never take the place of evidence in proving an allegation of crime in a civil proceeding. The onus of proof beyond reasonable doubt rested of the appellant. The appellant and the 1st respondent subjected themselves to the clauses in their deeds of legal mortgage, Exhibits 6 and 7 which shall apply to their transaction to the exclusion of any other statute law including the Auctioneers Law. By so, the appellant had contractually waived compliance with the Auctioneers Law by Clause 3 (b) of Exhibits 6 and 7.
In the interpretation of contractual transaction court will always hold parties bound by the terms of their agreements when construed according to the strict, plain and common meaning of the words in the instrument as they stand.
Solicitor-General Western Nigeria v. Adebonojo (1971) 1 All NLR pg.178.
U.B.N. v. Ozigi (1994) 3 NWLR (pt.333) pg.385.
The only obligation incumbent on a mortgagee in the exercise of his power of sale is that he should act in good faith. Whether selling under an express agreement as in this case in accordance with Clause 3(b) of the Deeds of Legal Mortgage made on 26/10/76 and 18/9/78 or statutory power, he may generally conduct the sale in such manner as he may think most conducive to his own benefit unless the deed contains any restrictions as to the mode of exercising the power, provided he acts bona fide and observes reasonable precautions to obtain not the “best price” but “a proper price”. Undervalue alone is not enough to vitiate the exercise of a mortgagee’s power of sale, it must be shown that the sale was made at a fraudulent or gross undervalue.
A.C.B. Ltd. v. Ihekwoaba (2003) 16 NWLR (pt.846) pg.249.
Ekaeteh v. Nigeria Housing Development Society Ltd. (1973) 6 SC 183.
Rafukka v. Kurfi (1996) 6 NWLR (pt.453) pg.235.
Before a mortgagee can pass a good title to a purchaser free from the equity of redemption – the right to exercise the power of sale under a mortgage must have arisen, the mortgage debt must have fallen due. Any purchaser who bought a property sold by a legal mortgagee in exercise of his power of sale under a mortgage upon a default in repayment of a loan by the mortgagor is not a trespasser.
Hence, once the precondition of notice of sale is given to the mortgagor by the mortgagee or his agent, preceded by a notice of demand of repayment of money lent to the mortgagor and the mortgagee proceeds to sell in good faith, subsequent purchaser in good faith gets a good title and a court will not intervene in the sale only because the sale did not meet with the satisfaction of the mortgagor. In my view the sale of the appellant’s property by the 2nd and 3rd respondents to the 1st respondent was not tainted with fraud so as to affect the validity of the sale. The mortgagee, the 2nd respondent after exercising his power of sale rightly executed a deed of transfer in favour of the 1st respondent – as Exhibit 3(1).
All the five issues in this appeal are resolved in favour of the respondents. The appeal lacks merit and it is accordingly dismissed. In the final analysis, the two appeals lack merit and they are accordingly dismissed. Judgments of the lower court are affirmed. The cost of this consolidated appeal N50,000.00 is awarded in favour of the respondents.
SC.350A/2002, SC.350/2002
