GBADAMOSI v. WEMA BANK & ANOR
(2021)LCN/15113(CA)
In The Court Of Appeal
(IBADAN JUDICIAL DIVISION)
On Friday, March 19, 2021
CA/IB/M.14/2014
Before Our Lordships:
Jimi Olukayode Bada Justice of the Court of Appeal
Ugochukwu Anthony Ogakwu Justice of the Court of Appeal
Folasade Ayodeji Ojo Justice of the Court of Appeal
Between
ALHAJI MUSIBAU GBADAMOSI APPELANT(S)
And
1. WEMA BANK 2. ALHAJA TITILAYO BALOGUN RESPONDENT(S)
RATIO
CONDITIONS THAT MUST BE SATISFIED BEFORE A MORTGAGEE CAN PASS A GOOD TITLE TO A PURCHASER FREE FROM THE EQUITY OF REDEMPTION
The position of the Law on sale by public auction is fairly settled in that the only obligation incumbent on the mortgagee in the exercise of his power of sale is that he should act in good faith. And in furtherance to that, before a mortgagee can pass a good title to a purchaser free from the equity of redemption: (i) The mortgagor did mortgage the property in dispute to the mortgagee. (ii) The right to exercise the power of sale under a mortgage must have arisen. (iii) The mortgage debt must have fallen due. (iv) Notice of demand of repayment of loan from mortgagee to the mortgagor must be issued. See the following cases:- – GBADAMOSI VS KABO TRAVEL LIMITED (2000) 8 NWLR PART 668 PAGE 243.- OGUCHI VS F.M.B. NIG. LTD (1990) 6 NWLR PART 156 PAGE 330. – BANK OF THE NORTH VS ALHAJI MUMUNI MURI (1998) 2 NWLR PART 536 PAGE 153. – AKANDE VS F.B.N. (2004) 8 NWLR PART 875 PAGE 318. – AGBOOLA VS UNITED BANK FOR AFRICA PLC & ORS (2011) 11 NWLR PART 1259 PAGE 375. PER JIMI OLUKAYODE BADA, J.C.A.
WHETHER A 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; CONDITION FOR THE INTERFERENCE OF THE COURT WITH THE SALE OF A PROPERTY UNDER A MORTGAGE UPON A DEFAULT IN REPAYMENT OF A LOAN BY THE MORTGAGOR
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. Therefore once the condition 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, subsequently purchasers in good faith gets a good title and a Court will not interfere in the sale only because the sale did not meet the satisfaction of the mortgagor. See BABATUNDE VS BANK OF THE NORTH LTD (2012) ALL FWLR PART 608 PAGE 798. It must not be forgotten that a mortgagee 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 mortgaged debt. It has been established by decided authorities that undervalue alone is not enough to vitiate the exercise of a mortgagee’s power of sale. Before the Court can interfere, it must be shown that the sale was made at a fraudulent or gross undervalue. But if a mortgagee exercises his power of sale bonafide for the purpose of realizing his debt and without collusion with the purchaser, the Court will not interfere. See –ACB LTD VS IHEKWOABA (Supra) – EKAETEH VS NIGERIA HOUSING DEVELOPMENT SOCIETY LTD (Supra) – RAFUKKA VS KURFI (1996) 6 NWLR PART 453 PAGE 235. PER JIMI OLUKAYODE BADA, J.C.A.
WHEN IS THE STATUTORY POWER OF SALE CONFERRED UPON THE MORTGAGEE; WHETHER UNDERVALUE ALONE CAN BE ENOUGH REASON TO VITIATE THE EXERCISE OF A MORTGAGOR’S POWER OF SALE
The statutory power of sale is conferred upon the mortgagee when the mortgage debt is due and notice was served upon Appellant in this case before the sale. There was no evidence of undervalued in the sale of the Appellant’s property. See – DAROCHA VS HASSAIN (1958) 1 NSCC PAGE 58. In EKAETEH VS NIGERIA HOUSING DEVELOPMENT LTD (Supra), it was held among other as follows:- “We think that it is now beyond controversy that undervalue alone is not enough to vitiate the exercise of a mortgagor’s power of sale. It must be shown that the sale was made at a fraudulent or gross undervalue. Indeed it is well established that if a mortgagee exercise his power of sale bonafide 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, unless the price is so low as in itself to be evidence of fraud.” PER JIMI OLUKAYODE BADA, J.C.A.
JIMI OLUKAYODE BADA, J.C.A. (Delivering the Leading Judgment): This appeal emanated from the Judgment of Oyo State High Court of Justice, Ibadan Judicial Division in Suit No. I/241/2005: ALHAJI MUSIBAU GBADAMOSI VS (1) WEMA BANK PLC (2) ALHAJA TITILAYO BALOGUN delivered on 30th day of May, 2013 wherein the Appellant’s claim was dismissed.
The facts of this case are that by an amended Writ of Summons filed on 21/2/2007 the Claimant sought for the following reliefs:-
(1) “A Declaration that the Plaintiff is not owing the 1st Defendant the sum of N1,149,228.00 as it does not reflect the true position of the statement of account of the Plaintiff with the Defendant.
(2) A Declaration that the Plaintiff is not liable to pay any interest, commission or any charge on any entry illegally entered by the Defendant in the Plaintiff’s Account.
(3) An order directing the defendant to furnish the Plaintiff with a true and accurate Statement of Account.
(4) Injunction restraining the Defendant, its agents and servants from taking any step or further steps in selling auctioning or disposing off the Plaintiff mortgaged property at
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Plot 7 Block D, Busari Akande Layout, Bodija, Ibadan registered as No. 24 page 24 in Volume 3109 of the Lands Registry in Ibadan.
(5) A Declaration that any sale, disposition or alienation of the property at Plot 7 Block D, Busari Akande Layout, Bodija Ibadan registered as No. 24 page 24 in Volume 3109 of the Lands Registry in Ibadan made by the 1st Defendant to the 2nd Defendant on or about the 28th of February 2005 is Null, Void and of no effect.
(6) A Declaration that the purported auction of the mortgaged property to the 2nd Defendant on or about the 28th of February, 2005 was not in accordance with the Law.”
The 1st Respondent who was the 1st Defendant at the trial Court filed Statement of Defence and counter-claimed as follows:-
“(a) Declaration that the sale of the Plaintiff’s mortgaged property on the 28th day of February, 2005 to the 2nd Defendant by the 1st Defendant is valid and devoid of fraud.
(b) An Order directing the Plaintiff to deliver possession of the property lying and being at Plot 7 Block D, Busari Akande Layout, Bodija, Ibadan registered as No 24 in Volume 3109 of the Lands Registry in Ibadan to the 2nd Defendant.”
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The 2nd Respondent who was the 2nd Defendant at the trial Court also filed Statement of Defence and Counter Claimed as follows:-
“(1) Declaration that the sale of the Plaintiff’s property situate and being at Plot 7 Block D, Busari Akande Layout, Bodija, Ibadan to her by the 1st Defendant is lawful proper and valid.
(2) An Order granting the 2nd Defendant a peaceful possession of the said property forthwith.
(3) N30,000.00 damages for unlawful occupation of the 2nd Defendant’s property by the Plaintiff after a valid sale to her.”
The case went for trial. At the conclusion of hearing, the Learned trial Judge dismissed the Claimant’s Claim.
The Counter-Claims of the 1st Defendant were granted while the 1st and 2nd legs of the Counter-Claim of 2nd Defendant were granted and the 3rd leg refused.
The Appellant who was miffed by the decision of the trial Court appealed to this Court.
The Learned Counsel for the Appellant formulated a sole issue for the determination of this appeal. The said issue is reproduced as follows:-
“Whether the Court was right in
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upholding the sale of the mortgaged property by the 1st Respondent to the 2nd Respondent in view of the obvious lapses in the sale of the mortgaged property.”
On the other hand, the Learned Counsel for the Respondents also formulated a lone issue for the determination of the appeal. The said issue is reproduced as follows:-
“Whether the sale of the mortgaged property to the 2nd Respondent by the 1st Respondent was tainted with fraud or irregularity.”
At the hearing of this appeal on 8/2/2021, the learned Counsel for the Appellant stated that the appeal is against the Judgment of Oyo State High Court, Ibadan Judicial Division delivered on 30th day of May, 2013.
The Appellant’s notice of appeal was filed on 3/6/2013. The record of appeal was transmitted on 11/4/2018 and deemed as properly transmitted on 26/11/2018.
The Appellant’s brief of argument was filed on 10/5/2019 and it was deemed as properly filed on 20/5/2019.
The learned Counsel for the Appellant adopted and relied upon the said brief as his argument in urging that the appeal be allowed.
The learned Counsel for the 1st and 2nd Respondents
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in his own case also referred to the Respondents’ brief filed on 27/5/2019. He adopted and relied on the said brief as his argument in urging that the appeal be dismissed.
I have perused the issues formulated for the determination of the appeal by Counsel for both parties. Their issues are more or less the same. I will therefore rely on the sole issue formulated for the determination of the appeal on behalf of the Respondents.
ISSUE FOR THE DETERMINATION OF THE APPEAL
“Whether the sale of the mortgaged property to the 2nd Respondent by the 1st Respondent was tainted with fraud or irregularity.”
The learned Counsel for the Appellant argued that in deciding whether there was impropriety in the sale, the letter of instruction to the Auctioneer where the 1st Respondent had indicated a Reserve Price of N6,400,000.00 (Six Million, Four Hundred Thousand Naira) for the sale of the Appellant’s property must be examined, while it was indicated that the property was sold for N5,000,000.00 (Five Million Naira) only. He submitted that the sale is undervalued. It was submitted further that a Reserve Price is the minimum amount
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that the owner of an item put up for auction will accept as the winning bid in the auction. He relied on the following cases:-
– EKAETE VS NIGERIA HOUSING DEVELOPMENT SOCIETY LTD (1973) 6 S.C. PAGE 183 AT 198.
– WARNER VS JACOB (1882) 20 CH.D PAGE 220.
– HADDINGTON ISLAND QUARRY CO. LTD VS HUSON (1911) A. C. PAGE 772 AT 727.
– OKONKWO VS COOP & COMM. BANK NIG PLC & ORS (2003) 4 SCM PAGE 76.
The learned Counsel for the Appellant submitted that the price at which the property was sold was low. He referred to Exhibit “D” which is the Valuation Report on request by Claimant which puts the forced sale value of the property as at 13/2/2002 in the sum of N9,424,000.00 (Nine Million Four Hundred and Twenty-four Thousand Naira. He relied on ACB LTD & ORS VS IHEKWOABA & ORS (2003) 16 NWLR PART 846 PAGE 249. He argued that the property would have appreciated in 2005.
It was further submitted on behalf of the Appellant that when the mortgagor can prove that there is presumption of fraud or impropriety in the sale by the mortgagee of the property at an undervalue, that the sale will be rendered
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invalid. The cases of TAIWO VS ADEGBORO (1997) 11 NWLR PART 528 AT PAGE 224 and IDOWU VS JAIYEOLA (1970) 1 ALR COM. PAGE 289 were relied upon.
The learned Counsel for the Appellant also submitted that the 1st Defendant/Respondent through its auctioneer had acted unfairly and male fide and did not take reasonable precautions to obtain the proper price reasonably obtainable at the time of the sale. He went further that the letter of instruction with a stated reserve price has sufficiently connected the 1st Respondent to an obvious improper conduct having sold the mortgage property below the stated Reserve Price thereby evidencing bad faith and as such the sale is invalid. He referred to the case of TAIWO VS ADEGBORO (Supra) PAGE 236 PARAGRAPHS C-F.
– SECTION 19 OF AUCTIONEERS LAW CAP 10, LAWS OF OYO STATE.
On the conditions for validity of sale of property by auction sale, the following cases were referred to:
– OMIDIJI VS FMB (2001) 13 NWLR PART 731 AGE 646 AT 668.
– OSENI VS A.I.I.C LTD (1985) 3 NWLR PART 11 PAGE 229 AT 233 – 234, 235-236 PARAGRAPHS F-A.
It was submitted further on behalf of the Appellant that
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Exhibit “R” which is the Notice of Auction pleaded by the Defendant/Respondent was undated. And that the Law is settled that the mortgagee or a receiver engaged in selling the mortgaged property has a duty to act bona fide. The following cases were relied upon:-OKONKWO VS COOP & COMM. BANK (NIG) PLC & ORS (Supra).
– BEXWELL VS CHRISTIE (1776) 1 COWP, 395 AT 396, 98 ER 1150.
– WEST AFRICAN BREWERIES VS SAVANAH VENTURES LTD & ORS (2002) 10 SCM PAGE 165 AT 184-186.
– UGWU & ANOR VS ARARUME & ANOR (2007) 6 SC PART 1 PAGE 88.
It was also submitted on behalf of the Appellant that no auction sale of the Appellant’s property took place on 28/2/2005, as there was no such date on the notice.
The following cases were relied upon:-GRACE MADU VS DR. BERTRAM MADU (2008) 6 NWLR PART 1083 PAGE 296 AT 302.
– ABIDOUN, BALAFF AND ORS VS CHIEF KOGUN OGUNYEMI (1962) 1 ALL NLR PART IV PAGE 550.
– BAMGBOYE VS UNILORIN (1999) 10 NWLR PART 622 RATIO 2 PAGES 383 – 384.
The learned Counsel for the Appellant also referred to the evidence of DW1 and DW3 that the property was sold through
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Public Auction whereas the Auction Notice Exhibit “R” states that the Auction was to be by private treaty. It was contended that the Appellant’s pleadings and the case put forward are at variance with the case championed by the Respondents. And evidence in conflict with a party’s pleading goes to no issue and should either be discountenanced or expunged by the trial Court.
The following cases were relied upon:-
– EMEGOKWUE VS OKADIGBO (1973) 4 SC PAGE 113 AT 117.
– UGO VS OBIEKWE (1989) 1 NWLR PART 99 PAGE 566 AT 583.
– NATIONAL INVESTMENT & PROPERTY CO. LTD VS THOMPSON ORGANIZATION LTD (1969) 1 ALL NLR PAGE 134.
– ADAKE VS AKUN (2003) 11 SCM PAGE 7 AT PAGE 12.
It was also submitted on behalf of the Appellant that the trial Court was bound to place reliance on evidence that had remained unshaken and un-contradicted. The following cases were relied upon:- OYETAYO VS MOSOJO (1997) 10 NWLR PART 526 PAGE 627.
– DIMLONG VS DIMLONG (1998) 2 NWLR PART 538 PAGE 381.
– IFEANYI CHUKWU OSONDU VS AKHIGBE (1999) 11 NWLR PART 625 PAGE 1 (SC).
The learned Counsel for the Appellant finally urged that the
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decision of the trial Court be set aside because the auction sale was not only fraught with improper conduct by the Respondents but also that there is no valid sale of the Appellant’s property on 28/2/2005.
In response to the submission of Counsel for the Appellant, the learned Counsel for the Respondents submitted that the only obligation incumbent on a mortgagee in the exercise of his power of sale is that he should act in good faith.
He submitted further that the Appellant received letters of demand, notification of the plan to sell the mortgaged property before it was sold.
It was contended on behalf of the Respondents that the Appellant was unable to establish collusion between the 1st and 2nd Respondents when the mortgage property was sold.
Exhibit “D” was referred to and Respondents’ Counsel stated that during cross examination the Appellant stated that Exhibit D was prepared after the filing of this case. It was submitted that the maker of Exhibit “D” was not called as a witness.
The learned Counsel for the Respondent referred to the following cases:-
– SURAKATU VS NIGERIAN HOUSING DEVELOPMENT LIMITED
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(1981) 1 FNLR PAGE 131 AT 141.
On Exhibit “R” which was the notice placed on the house, learned Counsel for the Respondents’ referred to page 21 paragraph 18 of the Record of Appeal where the Appellant stated among others that – The Notice of the auction was not served on the Plaintiff until 18th day of January, 2005.
The learned Counsel for the Respondent submitted that this is an admission of the Respondents case that notice was given to the Appellant before the mortgaged property was eventually sold on the 28/2/2005.
He finally urged that this appeal be dismissed with substantial cost having been brought malafide.
RESOLUTION:
The position of the Law on sale by public auction is fairly settled in that the only obligation incumbent on the mortgagee in the exercise of his power of sale is that he should act in good faith. And in furtherance to that, before a mortgagee can pass a good title to a purchaser free from the equity of redemption:
(i) The mortgagor did mortgage the property in dispute to the mortgagee.
(ii) The right to exercise the power of sale under a mortgage must have arisen.
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(iii) The mortgage debt must have fallen due.
(iv) Notice of demand of repayment of loan from mortgagee to the mortgagor must be issued.
See the following cases:-
– GBADAMOSI VS KABO TRAVEL LIMITED (2000) 8 NWLR PART 668 PAGE 243.
– OGUCHI VS F.M.B. NIG. LTD (1990) 6 NWLR PART 156 PAGE 330.
– BANK OF THE NORTH VS ALHAJI MUMUNI MURI (1998) 2 NWLR PART 536 PAGE 153.
– AKANDE VS F.B.N. (2004) 8 NWLR PART 875 PAGE 318.
– AGBOOLA VS UNITED BANK FOR AFRICA PLC & ORS (2011) 11 NWLR PART 1259 PAGE 375.
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. Therefore once the condition 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, subsequently purchasers in good faith gets a good title and a Court will not interfere in the sale only because the sale did not meet the satisfaction of the mortgagor. See BABATUNDE VS BANK OF THE NORTH LTD
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(2012) ALL FWLR PART 608 PAGE 798.
It must not be forgotten that a mortgagee 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 mortgaged debt.
It has been established by decided authorities that undervalue alone is not enough to vitiate the exercise of a mortgagee’s power of sale.
Before the Court can interfere, it must be shown that the sale was made at a fraudulent or gross undervalue. But if a mortgagee exercises his power of sale bonafide for the purpose of realizing his debt and without collusion with the purchaser, the Court will not interfere.
See –ACB LTD VS IHEKWOABA (Supra)
– EKAETEH VS NIGERIA HOUSING DEVELOPMENT SOCIETY LTD (Supra)
– RAFUKKA VS KURFI (1996) 6 NWLR PART 453 PAGE 235.
In this appeal under consideration, the Appellant in his statement of claim (see page 20 paragraph 10 of the Record of Appeal) stated that:-
“The Plaintiff protested and all he got were letters from the 1st Defendant and his (sic) Auctioneer of threat to sell the mortgaged property.”
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The above pleading of the Appellant in my view constitute an admission that the Appellant got notice from both the 1st Respondent and its Auctioneer.
The Appellant on page 225 of the Record of Appeal also testified thus among others:-
“Before my house was auctioned, I have no cause to complain to the bank about how my account was being operated. The bank wrote me asking me to pay back the loans. The bank wrote me to say they wanted to sell my property which I used to secure the loan. I now say that the only letter received is from Mufutau Ibikunle an Auctioneer. I had notice that my property was going to be sold.”
A careful reading of the testimony of the Appellant before the trial Court set out above would reveal that the Appellant received letters of demand and notification of the plan to sell the mortgaged property before it was finally sold.
The DW1 before the trial Court Prince Mufutau Ibikunle Owolabi (for 1st Defendant) a licenced Surveyor under cross examination stated that he sold the property in question by private treaty according to the mortgage document. The witness stated also that about four or five people bided for the property.
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He stated that one Mr. Alabi bided and Mrs. Balogun bided among others. The bid price by Mr. Alabi was Two Million Naira (N2,000,000.00) and 2nd Respondent bided Five Million Naira (N5,000,000.00).
As I stated earlier the debt of the Appellant was due and according to the testimony of DW1, the Appellant was given adequate notice.
The statutory power of sale is conferred upon the mortgagee when the mortgage debt is due and notice was served upon Appellant in this case before the sale. There was no evidence of undervalued in the sale of the Appellant’s property.
See – DAROCHA VS HASSAIN (1958) 1 NSCC PAGE 58.
In EKAETEH VS NIGERIA HOUSING DEVELOPMENT LTD (Supra), it was held among other as follows:-
“We think that it is now beyond controversy that undervalue alone is not enough to vitiate the exercise of a mortgagor’s power of sale.
It must be shown that the sale was made at a fraudulent or gross undervalue. Indeed it is well established that if a mortgagee exercise his power of sale bonafide for the purpose of realizing his debt and without collusion with the purchaser, the Court will not interfere even though
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the sale be very disadvantageous, unless the price is so low as in itself to be evidence of fraud.”
In this appeal, there is no evidence to establish collusion between the 1st and 2nd Respondents when the mortgaged property was sold. The valuation report tendered in evidence Exhibit “D” which was prepared by the Office of Diya Fatimilehin was prepared after the filing of this action. But the maker of Exhibit “D” was not called as a witness. It is trite law that the maker of a document is the proper person to tender it in evidence. If a person who did not make a document tenders it, he is permitted to tender it in evidence but no probative value would be attached to such document because the person who tendered it not being the maker cannot be cross-examined on the contents of the document. The maker of Exhibit “D” was not called as a witness therefore the document lacks probative value.
See the following cases:-
– FLASH FIXED ODDS LTD VS. OKAGBE (2001) 9 NWLR PART 717. PAGE 146 AT 163.
– SURAKATU VS. NIGERIAN HOUSING DEVELOPMENT LIMITED (1981) 1 F.N.L.R. AT 131 AT 141.
– PAUL & ANOR VS. OWOLABI & ANOR
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(2020) LPELR – 51449 (CA).
The 1st Respondent through its witnesses stated that four people bided for the mortgaged property and that the best it got was ₦5,000,000,00 (Five Million Naira) which was paid by the 2nd Respondent.
There is no doubt in the fact that the claimant now Appellant had Notice of Intention to sell his property. The DW1 i.e. the Auctioneer testified among others as follows according to the 1st Defendant’s statement on oath thus:-
“Upon the receipt of full instructions from the 1st Defendant, I wrote divers letters of demand to the claimants urging him to liquidate his indebtedness to the 1st Defendant, I reported to the bank that I had given the claimant three months’ notice of the intention of the 1st Defendant to dispose of the property which he pledged in securing for the loan facility from the 1st Defendant. Throughout the period of the notice, the claimant did not take step to liquidate the debt.
(See Page 107 of the Record of Appeal)
The three months’ notice which the claimant signed for was tendered in evidence and marked as Exhibit “R”.
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The sale of the mortgaged property to the 2nd Respondent took place on the 28/2/2005 and the Appellant had notice of the sale, it is therefore my view that the auction sale was regular.
See – MAJEKODUNMI & ORS VS. COOP BANK LTD. (1997) 10 NWLR PART 524 AT PAGE 198.
The claimant/Appellant in my humble opinion cannot complain because he mortgaged his property situate lying and being at Busari Akande Layout, Bodija, Ibadan Oyo State to the 1st Respondent as security for the facilities granted to him. Part of the terms of the Deed of Legal mortgaged property is that the 1st Respondent will be at liberty to sell the mortgaged property either by Public Auction or Private Treaty upon default of payment and the Appellant defaulted in the payment despite the letters of demand served on him before the property was sold to the 2nd Respondent on the 28th day of February, 2005 and the property was transferred to the 2nd Respondent vide deed of Assignment dated 28/4/2005, registered as No. 47 Volume 3457 at the Land Registry Office Ibadan.
As I stated earlier in this Judgment, the sale of the mortgaged property to the 2nd Respondent was proper and regular in
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that all conditions precedent for a valid sale of the mortgaged property was compiled with by the 1st Respondent.
The sole issue for determination in this Appeal is therefore resolved in favour of the 1st and 2nd Respondents and against the Appellant.
I am of the view that this Appeal lacks merit and it is hereby dismissed.
Consequent upon the foregoing, the Judgment of the Trial Court delivered in Suit No: I/241/2005: ALHAJI MUSIBAU GBADAMOSI VS. (1) WEMA BANK PLC. (2) ALHAJA TITILAYO BALOGUN delivered on 30th day of May, 2013 is hereby affirmed.
There shall be (N100,000.00) One Hundred Thousand Naira cost in favour of both the 1st and 2nd Respondents jointly and against the Appellant.
UGOCHUKWU ANTHONY OGAKWU, J.C.A.: The sale of a mortgaged property is not to be vitiated if it is shown to the satisfaction of the Court that:
i. The mortgagor did mortgage the property in dispute to the mortgagee.
ii. The loan or any instalment thereof has become payable.
iii. The power of sale under the mortgage agreement has arisen; and
iv. The power of the sale was in fact exercised and that the title in the property passed to the Purchaser.
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Where the sale of the mortgaged property is not tainted with any fraud or collusion, and the buyer bought in good faith and is not aware of any irregular circumstances surrounding the sale or anything likely to affect the propriety of the sale, the sale is valid and must subsist. See generally OKONKWO vs. CO-OPERATIVE & COMMERCE BANK (NIG) PLC (2003) 8 NWLR (PT 822) 347, ACB vs. IHEKWOABA (2003) 16 NWLR (PT 846) 249, IBIYEYE vs. FOJULE (2006) LPELR (1399) 1 at 23, GBADAMOSI vs. KABO TRAVELS LIMITED (2000) 8 NWLR (PT 668) 247 and AKINSELURE vs. AYENI (2018) LPELR (43481) 1 at 35.
Having insightfully considered the Records of Appeal, I find that all the conditions for a valid sale of a mortgaged property are present in this matter. There is therefore no basis on which to interfere with the decision of the lower Court upholding the sale of the mortgaged property.
In the circumstances, I am allegiant to the manner in which the issue for determination was resolved in the leading judgment of my learned brother, Jimi Olukayode Bada, JCA, which I read in draft. I therefore join in dismissing the appeal on the same terms as set out in the leading judgment.
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FOLASADE AYODEJI OJO, J.C.A.: I have had the privilege of reading in draft the Judgment just delivered by my learned brother, JIMI OLUKAYODE BADA, JCA. I agree with the reasoning and conclusion reached therein.
I agree that the law is well established that if a mortgagee exercises his power of sale bona fide for the purpose of realising his debt without collusion with the purchaser, the Court will not interfere unless the price is so low as in itself to be evidence of fraud. In other words, once the sale is done in good faith, the Mortgagee is exonerated even where the sale price is not the “best price.” See ABDULKADIR VS. MUHAMMED (2019) 12 NWLR (PT. 1687) 450; IBIYEYE VS. FOJULE (2006) 3 NWLR (PT. 968) 640; WEST AFRICAN BREWERIES LIMITED VS. SAVANNAH VENTURES LIMITED (2002) 10 NWLR (PT. 775) 401.
In the instant appeal, there is evidence that the mortgaged property was sold to the highest bidder. The Appellant failed to prove fraud on the part of the mortgagee. The learned trial Judge was therefore right when he held that sale of Appellant’s mortgaged property to the 2nd Respondent was proper and valid in law and in fact.
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It is for this reason and the fuller reasons elucidated by my learned brother in the lead Judgment that I also hold that this appeal lacks merit and should be dismissed. It is also dismissed by me. I abide by all the consequential orders made in the lead judgment including the order as to costs.
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Appearances:
ADENIYI UTHMAN, with him, MR. A. S. ADENUGA For Appellant(s)
ADESINA A. for 1st & 2nd Respondents For Respondent(s)
