Standard Bank Nigeria Ltd. v. Chief Festus M. Ikomi (1972)

LawGlobal-Hub Lead Judgment Report

O. MADARIKAN, J.S.C.

The appellants before us were the plaintiffs in an action instituted in the High Court Warri (Suit No. W/29/65) and in which their writ was endorsed as follows:

“The plaintiffs’ claim against the defendant is for the specific performance on his undertaking given to the plaintiffs on the 11th July, 1960 to make and execute to the plaintiffs on demand a valid Legal Mortgage of Land situate at Ogbe-Ijoh, Delta Province and covered by Deeds registered as No. 21 at page 21 in Volume 550 of the Lands Registry in the Office at Lagos and No. 28 at page 28 in Volume 187 of the Lands Registry in the Office at Ibadan to secure the repayment on demand of all sums now or hereafter due and owing by him to the plaintiffs and whether as principal or surety or otherwise in such form and with such provisions and powers as the plaintiffs may require and which the defendant has refused to execute although requested to do so. And for the cost of this suit.”

As the main issues involved in the case were clearly set out in the pleadings, we propose to reproduce them in extenso.

The amended statement of claim read:

“1. The plaintiffs are Bankers and the defendant is an Auctioneer.

2. On the 11th July, 1960 the defendant in consideration of the plaintiffs granting or continuing banking accommodation to A. G. Yon Dan Kolo and Sons guaranteed the payment to the plaintiffs on demand of all sums then or at any time thereafter owning by the said firm to the plaintiffs up to a limit of 6,000pounds by a written guarantee the full terms whereof will be referred to at the trial of this action.
3. As security for the said Guarantee on the same date the defendant executed in favour of the plaintiffs a Memorandum of Deposit of Deeds which said Memorandum provided ‘inter alia’ that the documents referred to in the Schedule to the same were deposited with the intention of creating an Equitable Mortgage.
4. The said Memorandum has been registered as No. 14 at page 14 in Volume 412 of the Lands Registry in the Office at Ibadan and the full terms thereof will be referred to at the trial of this action as if they have herein been set out in extenso.
5. The documents deposited were declared by the said Memorandum to have been deposited with the intent to create an equitable mortgage upon all the property comprising therein for securing the payment and discharge on demand of all sums which may then or at any time thereafter be due from the defendant to the plaintiffs.
6. The Schedule to the said Memorandum reads:

Lands situated at Ogbe-Ijoh, Delta Province containing an area of approximately 5,329.04 square yards. Rent ‘a3340 per annum. Lease expires Indenture 21/21/550 dated 25th November, 1938. Indenture 28/28/187 dated 18th October, 1957 relating to the above.

7. The said Memorandum also provided inter alia that the defendant would on demand at his own cost make and execute to the plaintiffs a valid legal mortgage of or on the property covered by the documents deposited or any part thereof in such form and with such provisions and powers of sale leasing and appointing a receiver and otherwise as the plaintiffs may require.
8. The validity of the said Memorandum and of the said Guarantee were upheld by the High Court of Western Nigeria sitting at Warri on the 31st January, 1962 in Suit No. W/50/60 between the defendant and the plaintiffs and an appeal against the said decision by the defendant (F.S.C. 172/1963) was dismissed by the Supreme Court of Nigeria on the 18th January, 1965.
9. By a letter dated 27th May, 1965 the plaintiffs demanded of the defendant that he do execute a valid legal mortgage in accordance with the above recited covenant in the said Memorandum and the defendant in his reply to the said Letter stated that he with regret would not execute the same.
10. There is now due and owing from the said A. G. Yon Dan Kolo and Sons to the plaintiffs a sum of 7,182:11s:1d and the plaintiffs have demanded payment from the defendant in accordance with his afore cited guarantee but the defendant has neglected or failed to reply to the letter of demand or to make payment of the same or any part thereof and the plaintiffs claims as per writ of summons.”

The defendant in paragraphs 2 to 10 of his statement of defence averred as follows:

“2. Defendant admits paragraph 1 of the alleged amended statement of claim and adds that he is an Itsekiri and native of Nigeria while plaintiffs are an alien company incorporated in England.

3. Paragraphs 2, 3 and 5 of the alleged amended statement of claim are denied. Defendant states that the alleged guarantee and the said documents referred to therein were obtained from him by fraud and misrepresentation perpetrated by plaintiffs’ servant and manager, Mr. Knight.
4. In still further answer to paragraphs 2, 3 and 5 of the alleged amended statement of claim, the defendant avers that the alleged guarantee and documents were obtained from him in respect of a consideration that has totally failed or if there was any consideration in the regard, which is denied, the same was so grossly inadequate that fraud can and will be founded upon it.
5. Defendant is not in a position to admit or deny paragraphs 4 and 6 of the alleged amended statement of claim.
6. As regards paragraph 7 of the alleged amended statement of claim, defendant repeats paragraphs 3 and 4 hereof.
7. Defendant avers that Suit No. W/50/60 and F.S.C. 172/1963 referred to in paragraph 8 of the alleged amended statement of claim have no bearing on the relief now sought by the plaintiffs.
8. Paragraph 9 of the alleged amended statement of claim is admitted.
9. Regarding paragraph 10 of the alleged amended statement of claim, defendant states that he is not in a position to admit or deny whether A. G. Yon Dan Kolo & Sons are owing to the plaintiffs the sum alleged or any sum at all.
10. At the trial of this action the defendant will contend:

(a) That the alleged mortgage intended to be created by the transaction between plaintiffs, a company incorporated in England, and the defendant, an Itsekiri and native of Nigeria, is void and of no legal effect and cannot support the claim advanced by plaintiffs.

(b) That if valid, which is denied, the contract relied upon by plaintiffs is not one admitting of the relief sought by them.

(c) That clause or paragraph 4 of the alleged mortgage contains a provision clogging the defendant’s equity of redemption, which constitutes a bar to plaintiffs’ claim.”

The plaintiffs then filed a reply in the following terms:

“1. The plaintiff joins issue with the defendant on his statement of defence.