FLOBBY ENTERPRISES NIGERIA LIMITED v. NIGERIAN DEPOSIT INSURANCE CORPORATION & ORS
(2019)LCN/12680(CA)
In The Court of Appeal of Nigeria
On Friday, the 8th day of February, 2019
RATIO
LAND LAW: WHERE REGISTRATABLE INSTRUMENT HAS NOT BEEN REGISTERED
“It is trite law that where a purchaser of land or a lessee is in possession of the land by virtue of a registrable instrument which has not been registered and has paid the purchase money or the rent to the vendor or the lessor, then in either case the purchaser or the lessee has acquired an equitable interest in the land which is as good as a legal estate and this equitable interest can only be defeated by a purchaser of the land for value without notice of the prior equity. A registrable instrument which has not been registered is admissible to prove such equitable interest and to prove payment of purchase of money or rent: Savage v. Sarrough (1937) 13 N.L. R. 141, Ogunbambi v. Abowab (1951) 13 W.A.C.A. 22, Fakoya v. St. Paul’s Church, Shagamu (1966) 1 All N.L.R. 74, Oni v. Arimoro (1973) 3 S.C. 163, Bucknor-MacLean v. Inlaks (1980) 8-11 S.C. 1 and Obijuru v. Ozims S.C. 482984 delivered on 4th April 1985, unreported yet.” PER JOSEPH SHAGBAOR IKYEGH, J.C.A.
MORTGAGE: POWER OF THE MORTGAGEE TO SELL
“…A.C.B. Ltd. v. Ihekwoaba (2003) 16 NWLR (pt. 846) 249 at 269 270 where the Supreme Court held inter alia that the obligation on the mortgagee selling under power of sale is to act in good faith most conducive to his own benefit, provided he observes reasonable precaution to obtain a proper price, not the best price, as sale undervalue alone is not enough to vitiate the exercise of a mortgagees power of sale, unless it is shown that the sale was made at a fraudulent or gross undervalue in collusion with the purchaser which was not the case here as collusion or fraud (grave allegations) or gross undervalue were not established. It was further held in A.C.B. Ltd. v. Ihekwoaba (supra) that the Court will not interfere even though the sale be very disadvantageous, unless the price is so low as in itself to be evidence of fraud following the case of Ekaeteh v. Nigeria Housing Development Society Limited (1973) 6 S.C. 183, which was not shown to be the case here. So the sale in this case was, in my considered opinion, proper and cannot be impeached on that ground.” PER JOSEPH SHAGBAOR IKYEGH, J.C.A.
JOSEPH SHAGBAOR IKYEGH, J.C.A. (Delivering the Leading Judgment):
The appeal is from the judgment of the High Court of Justice of Lagos State (the Court below) whereby it granted possession of property located at No. 25, Calcutta Crescent, Apapa, Lagos to the 1st respondent with perpetual injunction against the appellant and its agents, privies or assigns from collecting rent from tenants in occupation of the property.
The brief facts were that the appellant obtained a loan of N10million from Liberty Bank Plc (now in liquidation with the 1st respondent) on 07.03.91; the loan facility was increased at the instance of the appellant from tranches of N20million, N30million, N50million and N60million, respectively, over the years up until 13.03.98. The appellant did not repay the loan as scheduled; the loan accumulated to N377 million as at January, 2004; the 1st respondent after failed attempts to recover the outstanding loan exercised its right of sale contained in the registered deed of legal mortgage agreement contained in pages 49 56 or pages 299 – 307 of the record of appeal (the record) and sold the property used as security to the 2nd respondent which was communicated to the appellant and those in occupation of the property at the material time who were introduced to the 2nd respondent as the new owner of the property.
However, the appellant through its sister companies let out the property and refused to give up possession two years after the sale to the 2nd respondent vide pages 86 93 of the record; hence the action at the Court below for possession of the property in which the Court below decided on the merits or after plenary in its judgment that the 1st respondent established its case on the preponderance of evidence and issued an order granting the 1st respondent possession of the disputed property located at No. 25, Calcutta Crescent, Apapa, Lagos which is covered by Land Certificate Title No. MO 1556 and an order of perpetual injunction restraining the appellant either by itself, or acting through its agents, privies or assigns from collecting or further collecting rent from the tenants in occupation of the premises or letting or further letting the premises or any part thereof to any person whatsoever vide page 434 of the additional record of appeal (additional record); upon which the 1st respondent sold the property to the 2nd respondent.
Aggrieved with the decision, the appellant filed a notice of appeal with sundry grounds of appeal followed by a brief of argument filed on 13.10.15, but deemed duly filed on 05.03.16. The appellant submitted in the brief that it had raised the issue of jurisdiction of the Court below but the said Court ignored it, therefore the Court should consider the issue on appeal.
It was pointed out by the appellant in the brief that there was evidence before the Court below that Liberty Bank Plc was at all material times under liquidation by the 1st respondent qua Liquidator and that under Section 417 of the Companies and Allied Matters Act (CAMA) the winding up of the appellant by order of Court, or the appointment of a Receiver action, could not proceed against the company except by leave of the Court, or that no action shall be commenced against the company except by leave of the Court, and that Section 650 of CAMA defines Court as Federal High Court, Court of Appeal and Supreme Court.
It was therefore argued that applying and obtaining an order to substitute NDIC for Liberty Bank Plc was not enough as the 1st respondent ought to have proceeded to the Federal High Court to seek leave to institute the action before proceeding with the action in respect of liquidation of the appellant, but not at the Court below which does not possess jurisdiction in a liquidation action; consequently, it was urged that the action should have been struck out for want of jurisdiction citing in support the cases of Madukolu v. Nkemdilim (1962) ANLR 587 at 595, Ume v. Nigerian Renowned (1997) 8 NWLR (pt.516) 344, NDIC v. A.-G., Nasarawa State and Ors. (2007) LPELR-4598, Oke v. Oke (2006) 17 NWLR (pt.1008) 224, Ezenwosu v. Ngonadi (1988) 3 NWLR (pt.81) 31 32, Saleh v. Monguno (1988) 3 NWLR (pt.81) 31 32, Saleh v. Monguno (2006) 15 NWLR (pt.1001) 26 at 74, Ezomo v. Oyakhire (1985) 1 NWLR (pt.2) 195, Ezomo v. Oyakhire (1985) 1 NWLR (pt.2) 195, Umanah v. Attah (2006) 17 NWLR (pt.1009) 503, Sections 7(1)(a)(e), 8(1), 251(1)(1) and (e) and 253 of the Federal High Court Act.
The appellant submitted that there was indeed an existing suit No. LD/937/2003 between Liberty Bank Plc, now the 1st respondent, and the Appellant where the High Court had refused the 1st respondents application for summary judgment and granted the appellant the leave to defend the action; that although on the prompting of the learned trial Judge, the 1st respondent claimed that the suit had been abandoned and struck out, but the 1st respondent never controverted the fact that the present action was instituted during the pendency of suit No. LD/937/2003 and that the purported sale of the appellants property to the 2nd respondent was also made during the pendency of suit No. LD/937/2003 which was mala fide and amounted to an abuse of the process of the Court citing in support the cases of Ojukwu v. Lagos State Government (1985) 2 NWLR (pt.10) 807, Arubo v. Aiyeleru (1993) 3 NWLR (pt.280) 126, Sofekun v. Akinyemi (1980) 5 7 S.C. 1 at 21, Donaghey v. P. O Brian and Co. and Orstime (1966) W.L.R. 1170.
The appellant submitted that the Court below erred in law when it granted the 1st and 2nd respondents possession of the property and, also, held that the power of sale had been properly exercised in that the Court below relied on a letter marked without prejudice to hold that the appellant was indebted to the 1st respondent; that as the 1st respondent claimed he had sold the property to the 2nd respondent, the latter cannot maintain a claim for possession or injunction over the same property; that statutory notices which are a condition precedent to the landlords right of action to recover possession were not issued on the appellant, the 3rd respondent and the other tenants, therefore the Court below lacked the jurisdiction to grant the claim of possession.
It was further argued that the Court below failed to consider and rule upon and sustain the plea that the respondents were not able to prove that the power of sale had arisen and that the power was not exercised bona fide under the deed of legal mortgage as the appellant had denied the indebtedness in a counter affidavit in pages 317 351 of the record of appeal (the record) which was uncontroverted by the 1st respondent and amounted to an admission.
It was therefore argued that the 1st respondent made the sale in bad faith by carrying it out during the pendency of suit No. LD/937/2003 for N100 million far below the over N350 million value of the property showing it was sold at a ridiculous price which in itself was evidence of fraud intended to overreach the appellant citing in support the cases of Iwuagolu v. Azyka (2007) Vol. 29 WRN 102, Akpokiniovo v. Air Liquide Nigeria Plc (2012) LPELR-9582, Nigerian Advertising Srvices and Anor. v. U.B.A. Plc and Anor. (1999) LPELR-5954, U.A.C. Ltd. v. Macfoy (1962) AC 152, Okelola v. Adeleke (1999) 1 NWLR (pt.585) 55, ACB Ltd. v. Ihekwoaba (2003) 15 NWLR (pt.846) 249, Vaswani v. Johnson (2000) NWLR (pt.679) 582, Gwani v. Ebule (1990) 5 NWLR (pt.149) 201, Iga v. Amakiri (1976) 11 SC 1; and that the deponent of the affidavit did not reveal the source of his information as he did not participate in any negotiations, so the affidavit offends Section 77 of the Evidence Act read with the cases of Ajiboye v. State (1994) 8 NWLR (pt.364) 539, Pharmacist Board of Nigeria v. Adegbesote (1986) 5 NWLR (pt.44) 707.
The appellant submitted that Exhibit 17 attached to the claimants affidavit in pages 282 284 of the record which the 1st respondent provided as evidence of sale of the property to the 2nd respondent purport to be an unregistered Deed of Assignment which the Court below ignored and held that the deed of legal mortgage itself was registered, therefore the appellant argued that the Deed of Assignment, Exhibit K17, cannot be pleaded admitted in evidence and relied upon by the Court below to grant the respondents claim for possession citing in support Section 15 of the Land Instrument Registration Law, Cap L58, Laws of Lagos State, Savannah Bank v. Ibrahim (2000) 6 NWLR (pt.662) 585 at 603, Oyekola v. Marinho (2000) 9 NWLR (pt. 671) at 77, Sections 22 and 26 of the Land Use Act, Savannah Bank v. Ajilo (1989) 1 NWLR (pt.97) 305, Adetuyi v. Agbojo (1997) 1 NWLR (pt.848) 705, U.B.N. Plc v. Ayo Dare and Sons Nig. Ltd. (2000) NWLR (pt.676) 644.
It was also submitted that the series of Exhibit K were dated 06.07.06 while the payment of the purchase price was made on 28.07.04, nor was the payment of N10 million entered in the statement of account, Exhibit K16, showing the purchase by the 2nd respondent is unproven on the balance of probabilities which, according to the contention of the appellant, further justified the appellants assertion that the 1st and 2nd respondents mismanaged the accounts as shown in Exhibit A02; that the failure of the 1st 2nd respondents to exhibit the instrument of payment for the property raised the presumption of law under Section 167(d) of the Evidence Act that they withheld unfavourable evidence citing in support Sonibare v. Ijale (1960) SCNLR 384.
It was submitted that the deed of legal mortgage in pages 299 307 of the record excluded the provisions of Section 20 of the Conveyancing and Property Act, 1881 and gives the bank the general power of sale exercisable through a Receiver properly appointed under clause 8 thereof; and that the combined effect of clauses 8, 9, 10, 11 and 12 of the deed of legal mortgage showed clearly that only a Receiver properly so appointed could sell the mortgaged property rendering the purported sale invalid and unenforceable.
The appellant submitted that by Exhibits K18, K19, K20 and K21 A B showing there were other tenants in the property who were necessary parties in the action, their non joinder robbed the Court below of the jurisdiction to grant the claim for possession citing in support the case of Awoniyi v.
Registered Trustees, AMORC (2000) 10 NWLR (pt.676) 522.
The appellant submitted that the Court below predicated the finding of indebtedness on the appellants letter, Exhibit K14, which was marked without prejudice vide page 269 of the record which was even rejected by the 1st respondent in Exhibit K15 dated 14.01.04, therefore Exhibit K14 which was written without prejudice should not have been relied upon by the Court below to ground the liability of the appellant when such letter is inadmissible in evidence citing in support the cases of Societe Commerciale de-L Ouest Africains v. Michael Olusoga and Anor. 13 N.L.R. 104 at 195, Ashibuogwu v. A.-G., Bendel State and Anor. (1988) 1 SCNJ 130 at 161 162, Chief Gani Fawehinmi v. N.B.A No.2 (1989) 2 NWLR (pt.105) 358 at 622 633, United World Ltd. Inc. v. MTS Ltd. (1998) 10 NWLR (pt.568) 106 at 118, U.B.N. Plc v. Okoror (2002) 10 NWLR (pt.774) 1 at 11, Phipson on Evidence, 12th Edition, 295 paragraph 676.
It was submitted by the appellant that the Court below failed to consider the weight of evidence and the persuasiveness of the Exhibits attached to the various affidavits of the parties showing the judgment is not only against the weight of evidence but that it is perverse and without necessary foundation citing in support Blacks Law Dictionary, 9th Edition, Section 34(1)(a) of the Evidence Act, 2011 (Evidence Act), Ayeni v. Dada (1978) 3 S.C. 35 at 61, Abalogu v. The Shell Petroleum Development Company of Nigeria (1999) 8 NWLR (pt.613) 544 at 622; upon which the appellant urged that the appeal should be allowed and the judgment of the Court below set aside and the case at the Court below be dismissed.
The 1st 2nd respondents filed brief of argument on 23.11.16, but deemed as properly filed on 21.06.18, in which it was contended that the appellant did not show evidence of repayment of the loan either by cheques or lodgments and being a banker-customer transaction tied to legal mortgage the parties were bound by the terms of the contract and the Court below had the jurisdiction to entertain the action at the instance of the 1st respondent upon non repayment of the loan by the appellant; and that the 1st respondent properly exercised its right to re-possession and sale of the mortgaged property at the proper price of N100 million as the appellant did not state a contrary higher estate valuers price of the property citing in support Order 51 Rule 1(d) of the High Court of Lagos State (Civil Procedure) Rules 2004 (the rules of the Court below) and the cases of Azubuike v. Government of Enugu State (2014) 5 NWLR (pt.1400) 410, Idufueko v. Pfizer Products Ltd. (2014) 12 NWLR (pt.1420) at 132, Golden Const. Co. Ltd. v. (Nig.) Ltd. (2004) NWLR (pt.1408) 195, Eka-Eteh v. N.H.D.S. and Anor. (1973) 6 S.C. 183, All States Trust Bank v. Nsofor (2004) All FWLR (pt.201) 1719, N.H.D.S. v. Yaya Mumuni (1977) 2 S.C. 57, ACB Ltd. v. Ihekwoaba (2003) 16 NWLR (pt.846) 249.
The 1st 2nd respondents contended that clauses 8, 9, 10, 11 and 12 of the deed of legal mortgage make the appointment of a Receiver optional by the use of the word may in clause 8 thereof vide page 52 or 302 of the record; that the appellant was in possession of the property after its sale to the 2nd respondent and was collecting rent therefrom vide Exhibits K18, K19, K20, K21A, K21B, K21C, K22A and K22B attached to the appellants counter affidavit while Exhibits K18, K19 and K20, copies of letters from the 1st respondents solicitors, informed the occupant(s) of the mortgaged property of the sale of the property to the 2nd respondent, while Exhibits K21A, K21B, K21C are letters of demand of rent from the appellants proxies; that on the other hand, Exhibits K22A and K22B are receipts issued by the appellants proxies for rent for up to 5 years in advance vide pages 86 93 and 285 292 of the record; upon which the 1st 2nd respondents contended that the combined effect of Exhibits K18 K22B indicated that the appellant was in possession of the mortgaged property long after it had notice of its sale to the 2nd respondent and deliberately held on to same by collecting rent from tenants several years in advance against the convention of their tenancy tenure; therefore the 1st 2nd respondents contended that the Court below was right in granting possession of the property to the 1st 2nd respondents.
The 1st 2nd respondents added in argument that by the decision in the case of Onwuchekwa v. N.D.I.C. (2002) 5 NWLR (pt.760) 371 at 393 Section 417 of CAMA would not prohibit the company from proceeding against another person, but what the section prohibits, subject to the leave of the Court, is proceedings against the company. Consequently, the 1st 2nd respondents contended that the Court below was right to assume jurisdiction and continue with the trial of the action despite the fact that a liquidator had been appointed over the assets of the appellant.
The 1st 2nd respondents also contended that since the maker of the document marked without prejudice was a third party who at the time of making it did not anticipate likelihood of dispute between the parties it was rightly admitted and relied upon by the Court below citing in support the case of ACMEL (Nig.) Ltd. v. F.B.N. Plc (2014) 6 NWLR (pt. 1402) 156 at 181 following Jadesimi v. Egbe (2003) 10 NWLR (pt. 827) 1.
The 1st 2nd respondents contended that banking transactions are basically documentary and that in this case the 1st respondent exhibited documents showing letters of request, offer and acceptance of loan facilities, registered deed of legal mortgage, certified statement of accounts, demand letters for repayment of the loan, demand letters for rents and receipts issued by the appellant to tenants; while the appellant placed before the Court below facts admitting taking the loan, documents complaining of bloated interest rate, account reconciliation and request for reversal of excess charges without placing materials showing he made repayment of the loan by copies of bank tellers to that effect.
The 1st 2nd respondents therefore argued that it was based on these pieces of evidence that the Court below assessed and entered judgment for the 1st 2nd respondents against the appellant showing the Court below property evaluated the evidence citing in support the cases of Katto v. C.B.N. (1991) 12 S.C.N.J. (no pagination), Baba v. N.C.A.T.C. (1991) 5 NWLR (pt. 192) 388 and Odunukwe v. Ofomata (1999) 6 NWLR (pt. 607) 416 at 425, on account of which the 1st 2nd respondents concluded by urging that the appeal should be dismissed and the judgment of the Court below affirmed.
The reply brief filed on 26.06.18 stated that the 1st 2nd respondents failed to address the fact that a previous attempt to establish indebtedness by affidavit evidence failed in Suit No. LD/937/2003 between the Bank and the Appellant and that the fact that the Rules permitted a mortgagor to initiate an action by originating summons was not sufficient to discharge the onus establishing a claim by credible and uncontested facts citing in support the case of Obasanya v. Babafemi (2000) 15 NWLR (pt. 689) at 17.
It was also contended in the reply brief that the reference to a portion of the appellants letter dated 18.08.2000 in page 125 of the record by the 1st 2nd respondents failed to follow the rule of interpretation of documents that the document be read as a whole citing in support the case of Akaighe v. Idama (1964) ALL NLR 317 and that had the 1st 2nd respondents considered the said letter as a whole they would not have dismissed as insignificant the excess interest rate and charges on C.O.T. totaling N1,625,402.25.
The reply brief further contended that contrary to the assertion of the 1st 2nd respondents that the rate of interest is determined by cost of funds as obtained in the money market, the rate of interest is guided by the Central Bank Guidelines which, however, was not in evidence for the period for which the facilities were under review to justify the 1st respondents claim of indebtedness; that no Commercial Bank can charge interest at its own whims and caprices; that nothing was tendered to justify the capricious rate of interest charged; and that Section 15 of the Banking Act Cap. 28 Laws of the Federation 1990 read with the case ofF.B.N. Plc. v. Uwada (2003) 2 NWLR (pt. 805) 485 at 504 regulate the interest rate at any given circumstance.
The reply brief further stated that the 1st 2nd respondents brief did not address the issue of failure to serve statutory notices on person(s) in possession, therefore the 1st 2nd respondents are deemed to have conceded this point citing in support Okongwu v. N.N.P.C. (1989) 4 NWLR (pt. 115) 296, Fregene v. U.A.C. Nig. Ltd. (1997) 3 NWLR (pt. 493) 359, Akanbi v. Alatede (2000) FWLR (pt. 11) 1928, Obike Int. v. Ayi Electronics (2005) ALL FWLR (pt. 256) 1309, N.E.P.A. v. Arobieke (2006) 7 NWLR (pt. 979) 245.
The reply brief finally contended that a document marked without prejudice is inadmissible in evidence and extends to third parties who act as mediator with a view to enabling the parties to reach a settlement or compromise, whether or not the third party is a legal representative citing in support Fawehinmi v. N.B.A. (2) (1989) 20 NSCC (pt. 11) 43; upon which the appellant urged that the appeal be allowed.
The reliefs sought in the originating summons are stated in pages 203 204 of the record as follows
1) AN ORDER of this Honourable Court granting the Claimants possession of the property situate at No. 25, Calcutta Crescent, Apapa, Lagos which is covered by Land Certificate No. MO. 1556.
2) AN ORDER of this Honorable Court perpetually restraining the Defendant either by itself, or acting through its agents, proxies or assigns from collecting or further collecting rent from the tenants in occupation of the premises or letting or further letting the premises or any part thereof to any person whatsoever.
3) AN ORDER of this Honourable Court for the payment of sum of =N=8,400,000 (Eight Million Four Hundred Thousand Naira Only) by the Defendant to the 2nd Claimant being the rent collected by the Defendant from tenants occupying the property situate at No. 25, Calcutta Crescent, Apapa, Lagos which is covered by Land Certificate N0. MO. 1556 after having notice of its sale to the 2nd Claimant.
4) ANY FURTHER ORDER or other orders as this Honourable Court may deem fit to make in the circumstances of the case.
FURTHER TAKE NOTICE that the grounds for this application is that the Defendant mortgaged the property situate at No. 25, Calcutta Crescent to the 1st Claimant as security for a loan facility which it has refused to liquidate and has continued to occupy the premises and collect rent from other tenants after same has been sold to the 2nd Claimant.”
The ground upon which the reliefs (supra) are sought is stated in page 204 of the record as follows
FURTHER TAKE NOTICE that the grounds for this applications is that the Defendant mortgaged to the claimant as security for a loan facility which it has refused to liquidate and has continued to occupy the premises and collect rent from other tenants after same has been sold to the 2nd claimant.”
These reliefs and the ground upon which they are sought in the originating summons together with the affidavit in support of the action anchor on delivery of possession of the mortgaged property, or power-of-sale on the deed of legal mortgage, not proceedings for the winding-up of a company.
The jurisdiction of a Court is determined by the reliefs sought in the action by the claimant vide National Union of Road Transport Workers and Anor. v. Road Transport Employers Association of Nigeria and Ors. (2012) 10 NWLR (pt.1307) 170 at 197 and 209 210 to the effect that the claim of the plaintiff determines the jurisdiction of the Court and that in that case it was the claim in the originating summons of the appellant as initiated at the trial Court that a Court should examine to determine whether or not it has jurisdiction to entertain the action following the cases of Adeyemi v. Opeyori (1976) 9 10 SC 31, Savannah Bank Ltd. v. Pan Atlantic (1987) 1 NWLR (pt.49) 212, Ladoja v. I.N.E.C. (2007) 12 NWLR (pt.1047) 119, Anyah v. Iyayi (1993) 7 NWLR (pt.305) 290, Anigboro v. Sea Trucks Nig. Ltd. (1995) 6 NWLR (pt.399) 35. See also James v. I.N.E.C. and Ors. (2015) 12 NWLR (pt.1474) 538 at 584 and 586 following A.-G., Federation v. Guardian Newspapers Ltd. (1999) 9 NWLR (pt.618) 187, Uwaifo v. A.-G., Bendel State (1983) 4 NCLR 1, Amaechi v. I.N.E.C. (No.2) (2007) 18 NWLR (pt.1065) 98. The claim (supra) as disclosed is therefore within the original jurisdiction of the Court below under Section 272(1) of the Constitution of the Federal Republic of Nigeria 1999 (1999 Constitution) read with Order 51 Rule 1(d) of the rules of the Court below.
The affidavit in support of the originating summons opened with these introductory words I, Oluseun Odusanya, male, Christian and a Citizen of the Federal Republic of Nigeria whose address is NIPOST Building (6th Floor) Lafiaji, Lagos do hereby take oath and state as follows:
1. That I am a Solicitor in the law firm of O. Osarenren & Co. solicitors to the Claimants in this matter.
2. That by virtue of my position I am quite conversant with the facts of this case and I have the consent and authority of the Claimants to depose to this affidavit on their behalf.
(My emphasis)
The paragraphs of the affidavit (supra) are sufficient to credit the deponent with knowledge of the facts deposed to in the affidavit with the consent and the authority of the respondents, then claimants at the Court below, which rendered the affidavit evidence admissible. The contention of the appellant that the affidavit offends Section 77 of the Evidence Act is accordingly untenable and is hereby rejected vide Sodipo v. Lemninkainen OY and Anor. (1986) 1 S.C. 197 at 209.
The presumption of withholding evidence under Section 167(d) of the Evidence Act arises only where it is established that the party accused of withholding the evidence has the piece of evidence in his possession and refused or neglected to produce it upon service of subpoena or notice on him to produce the piece of evidence vide the cases of Adisa v. State (2015) 4 NWLR (pt.1450) 475 and Aremu v. The State (1991) 17 NWLR (pt.210) page 1. Having not met these requirements the appellant cannot invoke the provisions of Section 167(d) of the Evidence Act on the alleged withholding of evidence of the instrument of payment for the property.
Moreover, the appellant did not dispute the say-so of the 1st ? 2nd respondents that the property was sold at N100 million; its grievance being it was sold at a ridiculous price.
The Court sitting in Jos (coram: Rhodes-Vivour, Ndukwe-Anyanwu and Yahaya, JJ.C.A.) had cause to throw light on the phrase without prejudice in the case of Obande Obeya v. First Bank of Nigeria Plc (2012) All FWLR (pt.636) 544 at 554 555 per the lead ruling prepared by Rhodes-Vivour, J.C.A., (now J.S.C.) thus –
The rule is restricted only to cases where there is a dispute or negotiation and not to just any letter emanating from a legal practitioners chambers. Letters marked, without prejudice are confidential overtures by the defendant to the plaintiff and are excluded from evidence in the Court on the ground of public policy. Amicable settlement of a dispute would be difficult to attain if documents marked without prejudice are subsequently admitted in advance. The defendant would be prejudiced.
The letter marked without prejudice which is in page 269 of the record, though from a third party or intermediary, was made in the course of negotiations between the appellant and the 1st respondents predecessor, Liberty Bank Plc (IN LIQUIDATION), for amicable settlement, therefore based on Obande Obeya (supra) and Fawehinmi v. N.B.A. (No. 2) (supra) it is inadmissible in evidence.
Moreover, the 1st respondents predecessor rejected the offer vide paragraphs 22 and 23 of the affidavit in support of the action in pages 6 7 of the record as well as the 1st respondents predecessors letter in page 270 thereof insisting not to take the offer to have only the property at No. 5, Calcuta Crescent Apapa, Lagos sold to satisfy the loan sticking to the stand that it was not enough, therefore the Court below erred in relying on the said letter as evidence of admission of indebtedness by the appellant.
The present action was instituted at the Court below for possession of property subject of a registered deed of legal mortgage and for rents on the mortgaged property together with a relief for perpetual injunction restraining the appellant and its proxies from collecting rent on the mortgaged Property vide pages 1 and 2 of the record. The other action in Suit No. LD/937/03 was a claim for N553,916,695.46 with 22% interest per annum on the aforesaid sum of money from 31st January, 2003 to the date of judgment and 20% interest post-judgment interest until full liquidation of the judgment debt against the appellant vide page 102 of the record.
The parties in Suit No: LD/937/03 were the 1st respondents predecessor, then Claimant, and the appellant plus one Madam Florence Anyamene, while the parties here are the appellant against the successor of the claimant in Suit No. LD/937/03 and one Alhaji Mahmoud Shittu as 2nd defendant, now 2nd respondent, and NAS SUPERMARKET (owner of Lafayat Supermarket).
The subject matter and the parties in both actions are therefore not the same or substantially the same, nor did the appellant demonstrate convincingly that Suit No. LD/937-03 is extant and going on simultaneously with the action now on appeal as to constitute an abuse of the process of the Court.
In other words, it was not shown that Suit No. LD/937/03 was still going on in Court as no evidence was placed to indicate the date it was adjourned and the extant steps taken in it while the present action was fought at the Court below.
See Saraki v. Kotoye (1992) 9 NWLR (pt. 264) 156 to the effect that an abuse of process would occur where two or more suits are instituted and pending simultaneously over the same subject matter/cause of action and with the same parties. See also R-Benkay (Nig.) Ltd. v. Cadbury Nigeria Plc. (2012) 9 NWLR (pt. 1306) 579, Dumez (Nig.) Plc. v. U.B.A. Plc (2006) 14 NWLR (pt. 1000) 515, Fasakin Foods (Nig.) Ltd. v. Shosanya (2003) 17 NWLR (pt. 849) 237 at 247-248, C.O.M. v. Cobham (2006) 15 NWLR (pt. 1002) 283, Ohakim v. Agbaso (2010) 19 NWLR (pt. 1226) 172.
The appellants contention that failure to join a necessary party in an action affects the jurisdiction of the Court is untenable having regard to decision of the Supreme Court in the case of Bello v. I.N.E.C. and Ors. (2010) 2 -3 S.C. (pt. 11) 128 at 156 to the effect that it does not affect the jurisdiction of the Court.
At any rate, the persons put in the property as tenants by the appellants proxies were said to have occupied the property two years after it was sold to the 2nd respondent and were informed in Exhibits K18, K19 and K20, the copies of the letters from the 1st respondents solicitors to the occupants of the premises, of the sale of the mortgaged property to the 2nd respondent.
The presence of the appellant in the action who brought the said persons on the premises through its proxies also covered the interest of said persons as privies in estate of the appellant and the decision in the action would be binding on them on that basis, therefore they were not necessary parties in the action, but desirable parties, consequently, the action could be determined effectually and completely without their presence as the appellant fought the action behind the hedge (so to speak) for them.
There was no evidence of fraud or of collusion of the 1st respondent with the purchaser of the property, the 2nd respondent, as particulars of fraud or collusion which are serious allegations requiring proof to the hilt or letter were not put in evidence, so the fact that the property was sold at N100 million without evidence of higher valuation by a valuer given by the appellant would not make the sale bad as undervalue per se even where proved does not vitiate the sale vide A.C.B. Ltd. v. Ihekwoaba (2003) 16 NWLR (pt. 846) 249 at 269 270 where the Supreme Court held inter alia that the obligation on the mortgagee selling under power of sale is to act in good faith most conducive to his own benefit, provided he observes reasonable precaution to obtain a proper price, not the best price, as sale undervalue alone is not enough to vitiate the exercise of a mortgagees power of sale, unless it is shown that the sale was made at a fraudulent or gross undervalue in collusion with the purchaser which was not the case here as collusion or fraud (grave allegations) or gross undervalue were not established.
It was further held in A.C.B. Ltd. v. Ihekwoaba (supra) that the Court will not interfere even though the sale be very disadvantageous, unless the price is so low as in itself to be evidence of fraud following the case of Ekaeteh v. Nigeria Housing Development Society Limited (1973) 6 S.C. 183, which was not shown to be the case here. So the sale in this case was, in my considered opinion, proper and cannot be impeached on that ground.
Breach of statutory notice to sell and, also, breach of the Conveyancing Act where a conveyance is made in the exercise of the power of sale would not vitiate the sale and the title of the purchaser cannot be impeached on the ground that no case has arisen to authorise the sale, or that due notice was not given, or that the power was otherwise improperly or irregularly exercised, but any person damnified by an unauthorised or improper or irregular exercise of the power of sale shall have his remedy in damages, not in the setting aside of the sale, so held the Supreme Court in the case of A.C.B. Ltd. v. Ihekwoaba (supra) at 271 272 following Okonkwo v. Co-operative and Commerce Bank (Nig.) Plc (2003) 8 NWLR (pt.822) 347 and Sanusi v. Daniel (1956) SCNLR 288.
The sale was made under a deed of legal mortgage which by its nature transferred the legal estate to the mortgagee, now the 1st respondent, and once a mortgage is created, it is always a mortgage and nothing but a mortgage leaving the mortgagor with the equity of redemption which can only be redeemed by repayment of the outstanding mortgage debt on the date the repayment must have fallen due, as a mortgagee cannot be compelled by a Court order to part with the mortgaged security, unless there has been complete payment of the loan sum.
An equitable relief cannot therefore be granted in the face of an outstanding debt on the mortgage; and, as the 2nd respondent paid the purchase price coupled with possession of the property it acquired an equitable interest in the property vide Yaro v. Arewa Construction Limited and Ors. (2012) 1 BFLR 718 at 740 ? 743, Adetona and Anor. v. First Bank Plc (2012) 3 BFLR 208.
The fact that the deed of assignment was not registered would not vitiate the sale which would vest equitable interest in the 2nd respondent as the purchaser in possession vide Okoye v. Dumez Nigeria Ltd. (1985) 1 N.W.L.R. (pt.4) 783 at 790 where the great jurist, Bello, J.S.C., (later CJN, now of blessed memory) delivering the lead judgment of the Supreme Court held inter alia (unedited) that –
It is trite law that where a purchaser of land or a lessee is in possession of the land by virtue of a registrable instrument which has not been registered and has paid the purchase money or the rent to the vendor or the lessor, then in either case the purchaser or the lessee has acquired an equitable interest in the land which is as good as a legal estate and this equitable interest can only be defeated by a purchaser of the land for value without notice of the prior equity. A registrable instrument which has not been registered is admissible to prove such equitable interest and to prove payment of purchase of money or rent: Savage v. Sarrough (1937) 13 N.L. R. 141, Ogunbambi v. Abowab (1951) 13 W.A.C.A. 22, Fakoya v. St. Paul’s Church, Shagamu (1966) 1 All N.L.R. 74, Oni v. Arimoro (1973) 3 S.C. 163, Bucknor-MacLean v. Inlaks (1980) 8-11 S.C. 1 and Obijuru v. Ozims S.C. 482984 delivered on 4th April 1985, unreported yet.
Besides, the non-registration of the deed of assignment would not vitiate the sale itself as the sale was done under a registered deed of legal mortgage within the terms of the deed of legal mortgage.
The clause in the deed of legal mortgage for the appointment of a Receiver is contained in page 52 of the record as follows:
AT ANY TIME after the principal monies secured become payable to the Bank the Bank may by instrument in writing under the hand of any Director or Manager of the Bank in Lagos or elsewhere in the Federal Republic of Nigeria appoint any persons or persons to be a Receiver or Receivers of the property charged by this security and may remove such Receiver or Receivers. Any Receiver or Receivers so appointed shall be deemed to be the Agent or Agents of the Bank and the Bank shall be solely responsible for his or their acts or defaults and for his or their remuneration and such Receiver or Receivers so appointed shall have powers.
The underlined phrase may is used two times in the clause on the appointment of a Receiver showing the phrase was deliberately used and in ordinary grammatical parlance following the standard canon of interpretation of contracts and other instruments the word may (supra) would carry its plain meaning of discretion, option, permission or directory; consequently by the tenor of the clause (supra) the 1st respondent was not bound to appoint a Receiver in the circumstance: It had a discretion in the matter.
The contention of the appellant that there was an infraction of the said permissive clause dealing with the appointment of a Receiver is therefore untenable and is hereby rejected vide Ugwanyi v. F.R.N. (2012) 8 NWLR (pt. 1302) 384, Nigerian Navy v. Labinjo (2012) 17 NWLR (pt. 1328) 56 to the effect that where the word may is used it is ordinarily construed to mean option or permission, discretion.
Complaints on excessive bank charges and arbitrary interest on the account made by the appellant were not tied to any claim by the appellant and as such could not have affected the consequences of default in repayment of at least the capital of the loan by possession and sale of the mortgaged property in terms of the registered deed of legal mortgage covering it.
The counter affidavit challenging the originating summons which is in pages 317 320 of the record did not positively deny the appellant taking the loan from the 1st respondents predecessor secured by registered deed of legal mortgage of property. Had the appellant fully repaid the loan it would have sought for the release of the property from the mortgagee. It did not do so, showing the loan was outstanding at the time the action was litigated at the Court below.
Repayment of bank loan is usually demonstrated by showing entry of lodgments either by cheques or cash, or bank drafts by the customer or his agent in the account and honoured or credited by the bank; or by exhibiting bank tellers evidencing the lodgments to that effect. Thus it was held in the case of Okpoko Community Bank Ltd. and Anor. v. Igwe (2013) 15 NWLR (pt.1376) 167 at 186 per the lead judgment prepared by Okoro, J.C.A., (now J.S.C.) that the best way of proving payment of money into a bank account is by the production of a bank teller or an acknowledgement showing on the face of it that the bank received the payment; or that proof of payment may also be made where money is deposited in a bank and a certificate is issued to the customer and that the certificate when produced in evidence would suffice.
The counter affidavit did not condescend to particulars as it failed to deal specifically and clearly whether the appellant owed the whole or part of the debt and in the latter case the exact or specified part of the debt owed. The general denial that the appellant is not indebted to the 1st respondents predecessor will not suffice, unless the grounds on which the appellant relied upon as showing that it is not owing are specifically stated in the counter affidavit vide by analogy the Supreme Court case of Thor Ltd. v. First City Merchant Bank Ltd. (2005) 14 NWLR (pt.946) 696 at 712 714.
Blanket or general denial of indebtedness and/or evasive deposition in a affidavit such as the counter affidavit of the appellant that repayment of the loan had been made would not suffice to prove repayment of the loan.
Indeed, the action was on the enforcement of the registered deed of legal mortgage by possession of the mortgaged property which depended on whether the appellant was indebted to the 1st respondent to entitle the 1st respondent to the reliefs sought. The indebtedness having not been effectively denied by the appellant, the Court below was entitled to act on the materials placed before it by the 1st respondent to enter judgment for the 1st 2nd respondents.
In summation, the appellant having not denied persuasively or frontally the indebtedness to the 1st respondent and, also, having not shown evidence of repayment of the legal mortgage debt the Court below was right in entering judgment for the respondents on the preponderance of affidavit evidence which was not irreconcilably in conflict.
On the whole, I see no merit in the appeal and hereby dismiss it and affirm the decision of the Court below (Taiwo, J.). The appellant shall pay N300,000 costs to the respondents.
MOHAMMED LAWAL GARBA, J.C.A.: After reading a draft of the lead judgment written by my learned brother Joseph Shagbaor Ikegh, JCA. I agree that the appeal is lacking in merit and join him in dismissing it in the terms set out therein.
JAMILU YAMMAMA TUKUR, J.C.A.: My learned brother JOSEPH SHAGBAOR IKYEH JCA afforded me the opportunity of reading before today a draft copy of the lead judgment just delivered.
I adopt the judgment as mine with nothing further to add.
Appearances:
Mr. O. A. Owolabi with him, Mr. F. D. OloruntobaFor Appellant(s)
Mr. O. Osarenren with him, Mr. A.C. Onuoha for the 1st-2nd Respondents.
The 3rd Respondent was served hearing notice but was unrepresented
For Respondent(s)
Appearances
Mr. O. A. Owolabi with him, Mr. F. D. OloruntobaFor Appellant
AND
Mr. O. Osarenren with him, Mr. A.C. Onuoha for the 1st-2nd Respondents.
The 3rd Respondent was served hearing notice but was unrepresentedFor Respondent
