LAWSON NNAMDI CHUKWU & ANOR v. HON. LOLO STELLA C. CHUKWU & ORS
(2018)LCN/12045(CA)
In The Court of Appeal of Nigeria
On Friday, the 24th day of August, 2018
CA/OW/243/2017
RATIO
CONTRACT: THE PRINCIPLE OF CONTRACT
“It is an elementary principle of contract and indeed well settled, that parties are generally bound by the terms and or conditions of an agreement which they voluntarily entered into. Also, that the Courts are bound by the terms of an agreement which parties before it have freely and validly executed. Thus, if a Court is called upon to construe an agreement, the Court cannot but limit itself to the express terms of the agreement as indicated and/or specified by the parties. This is because where the parties have embodied the terms of their contract in a written document, extrinsic evidence is not admissible to add, vary, subtract from or contradict the written terms of the contract or agreement.” PER MASSOUD ABDULRAHMAN OREDOLA, J.C.A.
COURT AND PROCEDURE: WHETHER THE COURT CAN DECIDE ON MERE ASSUMPTION
“The principle is trite, that a trial Court is precluded and should not decide a case on mere assumption, conjecture or speculation. Indeed, Courts of law are Courts of both facts and laws. Hence, they decide issues placed before them on facts as pleaded and established by evidence adduced before them; predicated on applicable laws. They are enjoined to avoid speculation of whatever colouration. See Adefulu v. Okulaja (1996) 9 NWLR (Pt. 473) 668; Orhue v. N.E.P.A. (1998) 7 NWLR (Pt. 557) 187.” PER MASSOUD ABDULRAHMAN OREDOLA, J.C.A.
MORTGAGE: THE DIFFERENCE BETWEEN MORTGAGE AND A PLEDGE
“As an aside, it is to be noted, that there is a distinction between a mortgaged property and a pledged property. In the case of Prince Abdul Rasheed A. Adetona & Anor. v. Zenith International Bank Plc. (2011) 12 SC (Pt. IV) 44, (2011) 18 NWLR (Pt. 1279) 627, the Supreme Court resoundingly pronounced thus: ‘The main difference between a mortgage and a pledge is that in the former, the general title in the property is transferred to the mortgagee subject to be reversed by performance of the condition; whereas by the latter, the pledgor retains the general title and parts with possession. By a mortgage, the title is transferred by a pledge, possession is transferred.'” PER MASSOUD ABDULRAHMAN OREDOLA, J.C.A.
JUSTICES:
MASSOUD ABDULRAHMAN OREDOLA Justice of The Court of Appeal of Nigeria
AYOBODE OLUJIMI LOKULO-SODIPE Justice of The Court of Appeal of Nigeria
ITA GEORGE MBABA Justice of The Court of Appeal of Nigeria
Between
1. LAWSON NNAMDI CHUKWU
2. L. A. S. CHUKWU & SONS NIG. LTD. – Appellant(s)
AND
1. HON. LOLO STELLA C. CHUKWU
2. MR. MODESTUS O. OBIWURU
(By his Attorney Bartholomew Okafor)
3. UNION BANK OF NIGERIA PLC. – Respondent(s)
MASSOUD ABDULRAHMAN OREDOLA, J.C.A. (Delivering the Leading Judgment):
This appeal is against the judgment of the Imo State High Court sitting at Owerri, (hereinafter referred to as the lower court), delivered on the 26th day of January, 2017 by Hon. Justice P.O. Nnadi C.J., (hereinafter referred to as the learned trial judge).
The suit from where this appeal emanated was commenced by the 1st & 2nd plaintiffs/1st & 2nd respondents (hereinafter referred to as the 1st & 2nd respondents) vide a writ of summons and statement of claim filed on the 13th day of June, 2005. The 1st & 2nd respondents were by their further amended statement of claim sought for the grant of the following reliefs:
(a) N20,000,000.00 being special and general damages for the unlawful retention of the title deeds of Plot 178 E New Owerri, which property is the subject matter of this Suit, the 1st Claimant having paid for the said property.
(b) An order of this Honourable Court on the 1st Defendant bank to specifically perform the contract by releasing the title deeds relating to Plot 178 E New Owerri, and execute a deed of assignment in favour of the 1st Claimant in respect of the said property known as and called Plot 178 E New Owerri, Imo State, within jurisdiction.
(c) An injunction perpetually restraining the 1st Defendant from releasing the title deeds of the said property to any other person and/or dealing with the said property in any manner inconsistent with the rights of the Claimant.
(d) A Declaration by the Honourable Court that the contract of sale of the Plot 178 E New Owerri, entered into between the 1st Claimant and the 1st Defendant is subsisting, conclusive and binding on the 1st Defendant.
(e) An order of the Honourable Court compelling the 1st Defendant to deliver unto the 1st Claimant the title deeds of the property Plot 178 E New Owerri.
(See page 246 of the record of appeal)
BRIEF FACTS OF THE CASE.
The dispute between the parties is with regard to a landed property/building known and referred to as Plot 178 E New Owerri, Imo State (hereinafter referred to as the property).
The 1st & 2nd respondents stated that the 1st defendant/3rd respondent (hereinafter referred to as the 3rd respondent) advanced loan to one Chief L.A.S. Chukwu (now deceased) and the said loan was secured with the property. The 1st & 2nd respondents stated that the late Chief L.A.S. Chukwu was unable to fully liquidate the entire loan sum before he died. Thus, the 3rd respondent employed the services of the law firm of B. F. Omidina & Co. to recover the loan, among others. They stated that in the discharge of their duty, the said B. F. Omidina & Co., made a proposal to the estate of the late Chief L.A.S. Chukwu to exercise an option to buy the property at the rate of N5,791,747 (Five Million Seven Hundred and Ninety One Thousand, Seven Hundred and Forty Seven Naira), which represented the outstanding balance of the unliquidated loan sum. The proposal/agreement in the said Option to Buy was tendered and admitted as Exhibit A. The 1st & 2nd respondents further stated that the said proposal was made to the first wife of the said Late Chief L.A.S. Chukwu, his first son (the 1st appellant herein) and the second wife of the deceased, who is the 1st respondent herein.
The 1st respondent stated that all other persons to whom the proposal was made, rejected the same except her. She stated that she did not only accept the offer but made the payment promptly as proposed and agreed by the parties. The bank teller/deposit slip which evidenced the payment was tendered and admitted as Exhibit D.
Furthermore, it was the case of the 1st & 2nd respondents that the money paid for the purchase of the property was sourced from the 2nd respondent, who also charged N500,000.00 monthly interest thereon from the 1st respondent. The 1st respondent stated that a month after the payment was made and acknowledged by the 3rd respondent, the title deed to the said property was not released to her by the 3rd respondent, despite all efforts exerted and mounted by her. Thus, this suit was brought to compel the 3rd respondent to fulfill the agreement it had with the 1st respondent, by executing a proper and valid transfer agreement in favour of the 1st respondent; compel the 3rd respondent to release the title document to the 1st respondent, and claim for damages against the 3rd respondent for failing to release the title deeds in respect of the property to her.
During the course of proceedings in the case, the 2nd & 3rd defendants/appellants (hereinafter referred to as the appellants) applied and were joined as defendants by the order of the lower court. Consequently, they filed their statement of defence and counter claimed as follows:
(a) A declaration by the Court that the indebtedness of the 3rd Defendant to the 1st Defendant has been settled and the legal mortgage discharged.
(b) An order of Court to the 1st Defendant to release the title documents of Plot 178 Housing Area E, New Owerri (the mortgaged property) to the 3rd Defendant for onward transmission to the Estate of Late Chief L.A.S. Chukwu.
(c) An order of Court to the 1st Defendant to refund to the 3rd Defendant the sum of N1.5 Million being excess money which was paid by the 3rd Defendant and received by the 1st Defendant Bank.
The appellants case was that the property belonged to the 2nd appellant and not personal estate of Late Chief L.A.S. Chukwu. They stated that the property was mortgaged for a loan and the loan having been over-paid, they requested for the reimbursement of the over paid sum of N1,500,000.00 (One Million, Five Hundred Thousand Naira), deed of release in respect of the mortgage agreement and return of the title documents to the 2nd appellant, which is the rightful owner of the property. The appellants stated and led evidence to establish that the 1st respondent who paid off the remainder of the loan sum, is not a member of the 2nd appellants company nor a director, and she was also not authorized to discharge the debt of the 2nd appellants with the 3rd respondent.
Thus, the appellants regarded the payment made by the 1st respondent as gratuitous and also dissociated themselves from the transaction between the 1st & 2nd respondents and 3rd respondent. Therefore, the appellants contended and led evidence in a bid to establish that the 1st & 2nd respondents have no right whatsoever to the property and the 3rd respondent lacked the power to transfer any interest in the property to any other person other than the 2nd appellant, especially on the fact that the mortgage on the property was not foreclosed.
The 1st defendant/3rd respondent (hereinafter referred to as the 3rd respondent) on its own part entered its defence against the 1st & 2nd respondents suit but did not contest the appellants counter claim. The 3rd respondents defence against the 1st & 2nd respondents claim was that the law firm of B. F. Omidina & Co. which allegedly entered into OPTION TO BUY agreement (Exhibit A) with the 1st respondent was merely appointed as a debt collector and nothing more. The 3rd respondent stated and/or was consistent in stating that, they did not authorize the law firm or any other person or organization to sell the property.
This is more so when the appellants already made payment of the sum of N1,500,000.00 in a bid to defray the outstanding loan sum, coupled with their pleas for waiver of interest and considerations being given thereto. The 3rd respondent also stated that the mortgage on the property was not foreclosed and in that circumstance, there could not have been authorization for it to be sold by them. And in the event, that the property is to be sold, the sale would have been by public auction and not by private arrangement/treaty.
With regard to the payment made by the 1st respondent, the 3rd respondent stated that the payment was made into the account of the 2nd appellant in the normal course of business transaction and there was nothing attached to the payment to suggest that it was made by another person or party for a different purpose. In addition, the 3rd respondent stated that the mandate given to the Law Firm of B. F. Omidina & Co. to recover outstanding debts from its debtors was for three months and the stated period had already elapsed when the law firm allegedly entered into the option to buy agreement with the 1st respondent. Finally, the 3rd respondent contended that there was no documentary evidence adduced by the 1st respondent to establish the fact that the property was transferred or sold to her, and that the option to buy agreement (Exhibit A) contained no clause transferring interest in the property to the 1st respondent. Thus, the 3rd respondent stated that the proper party entitled to be given the title document is the 2nd appellant and no one else.
At the close of pleadings, the matter proceeded to hearing. The 1st respondent and one Inalagwu Otokwula, a legal practitioner, testified (as PW1 and PW2, respectively) in an avowed bid to prove the 1st & 2nd respondents case.
They also tendered eight documents as exhibits. The appellants on their part called a sole witness in addition to the 1st appellant in defence of this suit and in a bid to prove their counter claim. They also tendered three documents during the course of hearing. The 3rd respondent called a single witness through whom a single document was tendered as exhibit.
After the close of hearing in the case, the learned counsel for the parties duly filed written addresses and adopted the same before the lower Court, the relative strength of their clients case and urged upon the court to enter judgment in favour of their respective clients. The learned trial judge after evaluating all the pieces of evidence adduced by the parties and legal arguments in support thereof, he found majorly in favour of the 1st & 2nd respondents and entered judgment in their favour. He also entered judgment partially in favour of the monetary claim in the counter-claim of the appellants. In the main, the learned trial judge held as follows:
From the entire evidence and documents tendered, this Court is not in any doubt that the 1st claimant liquidated or paid off the mortgage debt of the 3rd defendant to the 1st defendant vide the option to Buy as in Exhibit A and that the payment of the sum of N1,500,00.00 by the 2nd and 3rd defendants to 1st defendant which from evidence was put into a suspense account ought to go back to the 2nd and 3rd defendants and as such the 2nd and 3rd defendants are entitled to have the sum of N1,5000,00.00 which was not applied towards the liquidation of the mortgaged debt paid back to them.
On the right to the release of the mortgaged property, the 1st claimant is the person who has the right to the release for the mortgaged property and not the 2nd and 3rd defendants as the Court found that there was a valid sale of the mortgaged property to the 1st claimant through the option to Buy Agreement tenderedas Exhibit A.
The 1st defendant has not proved its entitlement to any reliefs in relation to any counter claims.
In conclusion, this Court holds that the claimants have proved their case and judgment is hereby entered in favour of the claimants as follows:
1. A Declaration by the Honourable Court that the contract of sale of Plot 178 E New Owerri, entered into between the 1st claimant and the 1st defendant vide Exhibit A option to purchase agreement is subsisting, conclusive and binding on the 1st defendant.
2. An order of this Honourable Court on the 1st defendant bank to specifically perform the contract by releasing the title deeds relating to Plot 178 E New Owerri, and execute a deed of assignment in favour of the 1st claimant in respect of the said property known as and called Plot 178 E New Owerri, Imo State, within the jurisdiction.
3. An order of the Honourable Court compelling the 1st defendant to deliver unto the 1st claimant the title deeds of the property, Plot 178 E New Owerri.
4. An injunction perpetually restraining the 1st defendant from releasing the title deeds of the said property to any other person and/or dealing with the said property in any manner inconsistent with the rights of the 1st claimant.
5. N500,000.00 (Five Hundred Thousand Naira) being general damages is made against the 1st defendant and in favour of the 1st claimant for the unlawful retention of the title deeds of Plot 178 E New Owerri, which property is the subject matter for this suit, the 1st claimant having paid for the said property.
6. The 1st defendant shall pay cost of N50,000.00 (Fifty Thousand Naira) to the claimants.
COUNTER CLAIM OF THE 2ND AND 3RD DEFENDANTS
On the 2nd and 3rd defendants counter claim the Court hereby orders as follows:
An order of Court on the 1st defendant to refund to the 3rd defendant the sum of N1.5 Million (One Million Five Hundred Thousand Naira) being money which was paid by the 3rd defendant and received by the 1st defendant bank and kept in a suspense account. (See pages 258260 of the record of appeal).
The appellants were thoroughly dissatisfied with the decision of the lower Court as rendered above and has thereby appealed against the same vide a notice of appeal dated and filed on the 27th day of January, 2017. The notice of appeal was subsequently amended with the leave of this Court and filed on the 12th day of March, 2018. It was deemed as properly filed by the order of this Court granted on the 19th day of March, 2018.
The appellants challenges against the decision of the lower Court were captured in their ten grounds of appeal. The said grounds of appeal shorn of their particulars are reproduced below as follows:
GROUND ONE: ERROR IN LAW
The learned Chief Judge erred in law when he held that the claimants (1st and 2nd Respondents) have locus standi to institute the action in suit No. HOW/266/2005 that led to this appeal.
GROUND TWO: ERROR IN LAW
The learned trial judge erred in law when he ordered the 3rd Respondent to release the title deeds relating to Plot 178 E New Owerri (Property in dispute) to the 1st Respondent and execute a deed of assignment in her favour.
GROUND THREE: ERROR IN LAW
The learned trial judge erred in law when he held that the claimants have proved their claim in this suit.
GROUND FOUR: ERROR IN LAW
The learned trial judge erred in law when he restrained the 3rd Respondent from releasing the title deed/documents over the property in dispute to any other person apart from the 1st Respondent.
GROUND FIVE: ERROR IN LAW
The learned trial judge erred in law when he refused to grant the Appellants counter claim to taking delivery and custody of the title deeds over the property in dispute.
GROUND SIX
The judgment of the lower Court is against the weight of evidence.
GROUND SEVEN: ERROR IN LAW
The learned trial judge erred in law when he awarded cost of N500,000.00 (Five Hundred Thousand Naira) against the Appellants.
GROUND EIGHT: ERROR IN LAW
The Learned Trial Chief Judge erred in law when he held that:
It follows therefore that when Exhibit F is considered along side Exhibit A and D the evidence of the claimants can be described as credible and believable especially as Exhibit H written on 12/1/2005 by the DW1 showed that the 1st, 2nd and 3rd defendants knew about the option to buy the mortgaged property which the 2nd defendant and DW1 failed to exercise. This strengthens the case of the claimants that the 1st defendant was part of the option to buy the mortgaged property extended to members of the family of the late Chief L.A.S. Chukwu in liquidation of the mortgage debt.
GROUND NINE: ERROR IN LAW
The Learned Trial Chief Judge erred in law when he held that:
The evidence of the 1st claimant (CW1) and that of the CW2 that the option to Buy the Mortgage property and the payment of the mortgage debt by the 1st claimant were authorized by the 1st defendant appears credible and probable considering that a staff of the 1st defendant of the Rank of Assistant Manager signed and executed the option to Buy agreement on behalf of the 1st defendant. The occupant of the position of Assistant Manager is high enough to have his actions binding on his employer the 1st defendant especially as there is nothing in the evidence to show that E. F. U. Maduabum who signed Exhibit A did so outside his official duties. There is nothing before the Court to show that E. F. U. Maduabum was not the person who signed Exhibit A as officer of the 1st defendant. The erasure before the clear insertion of the name of E. F. U. Maduabumdid not show in any material way that it was not E. F. U. Maduabum that signed as witness to Exhibit A.
GROUND TEN: ERROR IN LAW
The Learned Trial Chief Judge erred in law when he held that the claimants proved their case and thus entered judgment in their favour as well as decreed the (6) Six reliefs in their favour.
In accordance and compliance with the rules of this Court, the appellants compiled and transmitted the record of appeal to this Court on the 30th day of June, 2017. The said record of appeal was deemed as properly compiled, transmitted and served on the parties by the order of this Court made on the 19th day of March, 2018. Thereafter, the appellants proceeded and filed their respective briefs of argument. The appellants brief of argument was prepared by D. C. Denwigwe, SAN. The said appellants brief of argument was dated the 19th day of March, 2018 and filed on the 20th day of March, 2018.
On the 26th day of June, 2018 when this appeal came up for hearing, this Court confirmed and was satisfied that the respondents were all duly served with the said appellants brief of argument on the 21st day of March, 2018 and despite the service of the brief, the respondents failed and/or neglected to file their respective briefs of argument with regard to this appeal.
There was equally no application seeking for extension of time from the respondents to file their said briefs. Also, the respondents and their counsel were absent on the date fixed for the hearing of this appeal despite the proof of proper service hearing notice on them. Notwithstanding, the failure of the respondents to file their briefs of argument and their absence during the hearing; nevertheless, this appeal, will still be determined on its merit. See Fatokun v. Somade (2003) 1 NWLR (Pt. 802) 431; Echere v. Ezirike (2006) ALL FWLR (Pt. 323) 1597 and Cameroon Airlines v. Otutuizu (2011) LPELR 827 (SC).
Towards the determination of this appeal, the learned counsel for the appellants donated four issues for resolution. The issues are reproduced below as follows:
1. Whether the release of the title deed to the property was due from the bank (3rd respondent) to the 2nd appellant company as against any one else upon the liquidation of the companys indebtedness to the bank in the absence of any agreement on record for the deed to be released to the 1st respondent? (Ground 5).
2. Whether having regard to the status of 2nd appellant L.A.S. Chukwu & Sons Nig. Ltd. as a Limited Liability Company and the banker customer contractual relationship between the company and Union Bank of Nigeria Plc. The 1st respondent on record became entitled to the custody or ownership of the title deeds of that mortgaged property of the 2nd appellant from the bank (3rd respondent) upon liquidation of the debt owed to the bank? (Grounds 1, 2, 3 and 4).
3. Whether the conclusions and decisions of the trial Court are justified by the pleadings and evidence (Grounds 6, 8, 9 and 10).
4. Whether the award of N500,000.00 (Five Hundred Thousand Naira) to the 1st respondent against the appellants is justified? (Ground 7).”
I have given due considerations to the issues formulated by the learned senior counsel for the appellants vis-a-vis their grounds of appeal and judgment appealed against; and I am of the considered opinion that the main issue that calls for resolution in this appeal is:
WHETHER THE LOWER COURT IN GRANTING THE CLAIMS OF THE 1ST AND 2ND RESPONDENTS, WAS RIGHT AND THE DECISION BEING SUSTAINABLE, HAVING REGARD TO THE LOWER COURTS EVALUATION OF THE EVIDENCE ADDUCED IN RELATION TO THE PLEADINGS. (PUT DIFFERENTLY, WHETHER THE 1ST & 2ND RESPONDENTS PROVED THEIR CASE AND WERE THUS ENTITLED TO A FAVOURABLE JUDGMENT).
The issue distilled above in my firm viewpoint, completely captured the core essence or terra firma of this appeal and sufficiently covers the issues formulated by the learned senior counsel for the appellants.
ARGUMENTS ON ISSUE.
The learned senior counsel for the appellants set out by stating, that the property which is the subject matter of this appeal was acquired by and or belonged to the 2nd appellant which is a corporate entity with different legal personality from Late Chief L.A.S. Chukwu and that, that factual situation served as the basis why the property was not included in his Will. The learned senior counsel also stated, that the legal mortgage which has been charged on the property was entered into by the 2nd appellant in its corporate name with the 3rd respondents bank. Thus, no other party has any right to claim benefit thereon or use the mortgage as a means to secure the property.
The learned senior counsel continued by submitting, that by virtue of its incorporation, the 2nd appellant acquired a distinct legal and juristic personality as against every other juristic person. He called in aid the cases of AFRIBANK (NIG.) LTD. v. M. ENT. LTD. (2008) 12 NWLR (Pt. 1098) 223 at 241; SALOMON v. SALOMON (1897) AC22. It was thus submitted, that, in this case, it is not pleaded and there is no evidence that Chief L.A.S. Chukwu was a guarantor to the loan. The company remains distinct with nothing on record to make its property to be regarded as the property of Chief L.A.S. Chukwu.
Additionally, that it was with all due respect wrong for the Trial Court to mix up the 2nd Appellants juristic personality with that of the 1st respondent so as to enable the 1st respondent to supplant the 2nd appellant in the matter of the right to the release of the mortgaged property and its title document. Also, the learned counsel for the appellants argued, that, B. F. Omidina & Co., which purportedly sold the property to the 1st respondent, did not have any authority to transfer any interest in the property. He also pointed out to this Court that, in paragraphs 523 of 3rd respondents amended statement of defence which was filed on the 16th day of February, 2007, the 3rd respondent bank stridently denied giving any authority to B.F. Omidina & Co., to effect any sale of the mortgaged property to the 1st respondent.
It was thus submitted, that the burden of proving otherwise that the said B. F. Omidina & Co. was authorized to sell the property is placed on the 1st & 2nd respondents, who were the Claimants at the lower Court and they have failed to discharge the said burden. He called in aid the cases of Kala v. Potiskum (1998) 3 NWLR (Pt. 540) 1; Adeniran v. Alao (1992) 2 NWLR (Pt. 223) 350 and Agip (Nig.) Ltd. v. Agip Petroli International &Ors. (2010) 5 NWLR (Pt. 1187) 348. The learned appellants counsel further submitted, that in the absence of any legitimate authorization by the 3rd respondent bank, any purported sale of the property by B. F. OMIDINA & CO. is void and cannot transfer any right to the 1st respondent. He found support in the decisions in the cases of Madukolu v. Nkemdilim (1962) 2 SCNLR 341 and Esenowo v. Ukpong (1999) 6 NWLR (Pt. 608) 611.
In addition, the learned counsel for the appellants submitted that in law, a mortgagor reserves the right of ownership of the mortgaged property upon liquidation of the mortgage debt, in the exercise of the right to Equity of redemption. He referred us to the decision in the case of Jolasun v. Bamgboye (2010) 18 NWLR (Pt. 1225) 285. The learned counsel also maintained, that the 1st respondent in this case is admittedly a stranger to that contract of mortgage. The bank had not foreclosed the 2nd appellant from recovering the property upon liquidation of the debt at the material time The effect with all due respect is that any sale of the property other than within the well known power of sale under a mortgage transaction without prior recourse to the 1st appellant is void. No right under any contract accrued to the 1st respondent against the 2nd appellant to buy the property. The right to the return of the title deeds to the property vests in the 2nd appellant a going concern under that mortgage contract.
Once again, on the authority and/or power of B. F. Omidina & Co. with regard to the sale of the property, the learned senior counsel for the appellants submitted, that the said B. F. Omidina & Co., was only engaged as it was expressly stated on Exhibit F, to recover debt owed by the 2nd appellant alongside with other customers/account holders to the 3rd respondents bank and nothing more. He then submitted, that Any importation of any power into Exhibit F beyond the powers expressly set out therein will amount to the Court creating a new contract between the parties. This is beyond the powers of the Court. He referred this Court to the cases of Wema Bank Plc. V. Osilaru (2008) 10 NWLR (Pt. 1094) 150; Larmie v. D. P.M. & S. Ltd. (2005) 18 NWLR (Pt. 958) 538 and First Bank of Nigeria Plc. V. Songonuga (2007) 3 NWLR (Pt. 1021) 230, among others.
Furthermore, the learned counsel for the appellants argued that apart from the fact that B. F. Omidina & Co., or any other person whomsoever was not authorized to sell the property, the party the said B. F. Omidina & Co., acted and/or represented was L.A.S. CHUKWU (NIG.) LTD. which is different from L.A.S. CHUKWU & SONS NIG. LTD., the 2nd appellant who entered into the mortgage transaction in this case with the 3rd respondent. The learned appellants counsel then stated, that E.F.U. Maduabum (former staff of the 3rd respondent who allegedly signed as a witness on the document titled option to buy (Exhibit A), did so in his own personal capacity and there is no singular evidence to suggest otherwise.
Finally, the learned counsel for the appellants submitted, that Exhibit A does not in any way indicate that any interest in the property has or was to be passed on to the 2nd respondent and there was no habendum attached or tendered in any evidence to show the purported agreement to sell the property allegedly entered and/or executed between the 1st respondent and 3rd respondent. Thus, the learned senior counsel contended, that the judgment of the lower Court is perverse and urged this Court to re-evaluate and review the evidence adduced by the parties and the decision of the lower Court.
He referred us to the cases of Abey v. Alex (1999) 14 NWLR (Pt. 637) 146; S. S. G. MBH V. TD Industrial Ltd. (2010) 11 NWLR (Pt. 1206) 589; Onwuzuruike v. Edoziem(2016) 6 NWLR (Pt. 1508) 215 and U. T.B. v. Ozoemena (2007) 3 NWLR (Pt. 1022) 448.
The learned senior counsel for the appellants thereby urged this Court to resolve this issue in favour of the appellants and allow this appeal.
From the facts of this case, the following points are well established and not in dispute:
(i) The 2nd appellant is a duly registered limited liability company and has its own legal personality completely different from that of the Late Chief L.A.S. Chukwu and every other persons.
(ii) The property in dispute was bought and or belonged to the 2nd appellant solely and completely.
(iii) The 1st respondent is not legally a member or director of the 2nd appellant.
(iv) The property was used by the 2nd appellant to secure a loan from the 3rd respondent.
(v) The loan referred to above was not completely liquidated during the life time of the Late Chief L.A.S. Chukwu.
(vi) The 1st respondent paid off the said loan borrowed/taken by the 2nd appellant and fully discharged the 2nd appellant from further obligation with regard to liquidation in respect of the said loan facility.
The 1st respondent pleaded and led evidence in a bid to establish the fact that the Law Firm of B. F. Omidina & Co., which she claimed represented itself as the agent of the 3rd respondent (and authorized by it) transferred the legal title or sold the property to her, vide a private treaty. The 1st respondent stated that the private treaty arrangement (option to buy-Exhibit A), was proposed and/or offered to her in order to prevent and or avert a situation whereby the property would be sold to a stranger. An accusing finger was pointed at one unnamed Director of the 3rd respondent. Howbeit and in refutal, the 3rd respondent in response to this allegation pleaded in categorical terms and maintained in evidence that it did not at any point in time foreclosed the 2nd appellant from redeeming the property in a determined bid to exercise its power of sale nor authorize anyone whomsoever to sell the property. To further buttress or establish its point, the 3rd respondent tendered Exhibit F & F1.
The question that now begs for answer includes: Whether the law firm of B. F. Omidina & Co. was duly authorized to sell the property or transfer any form of title to anyone? If the answer is found to be in the negative, the follow up question is:
”can the 1st respondent receive any valid legal or equitable title to the property based on her acclaimed agreement with the Law Firm of B. F. Omidina & Co.”
It is an elementary principle of contract and indeed well settled, that parties are generally bound by the terms and or conditions of an agreement which they voluntarily entered into. Also, that the Courts are bound by the terms of an agreement which parties before it have freely and validly executed. Thus, if a Court is called upon to construe an agreement, the Court cannot but limit itself to the express terms of the agreement as indicated and/or specified by the parties. This is because where the parties have embodied the terms of their contract in a written document, extrinsic evidence is not admissible to add, vary, subtract from or contradict the written terms of the contract or agreement.
Therefore, where a Court is faced with the task of interpreting a written instruction or agreement from one party to the other or between two or more parties (as the case may be), it is expected that it will carry out its duty within the walls or confines of the written and express terms of the instruction or agreement. See the cases of Babatunde & Anor. v. Bank of North Ltd. & Ors. (2011) LPELR 8249, (SC); and Kure v. K.S.L.C. (2003) 2 NWLR (Pt. 807) 322.
As found by the learned trial judge, that when consideration is given to Exhibit F alongside with Exhibits A and D; the evidence adduced by 1st and 2nd respondents can be described as more believable and credible, especially as Exhibit H written on the 12th day of January, 2005 by DW1 Mrs. Ehtel Chukwu, showed that the 3rd respondent and the appellants, knew about the option to buy the mortgaged property, which the 2nd appellant failed to exercise, and thereby strengthened the case of the 1st and 2nd respondents.
I think it is apposite at this juncture, to set out certain paragraphs of the 1st & 2nd respondents amended statement of claim; these read:
(8) While the Deceased lived, he wrote to the bank for waiver of the interest on the loan. After the death of the Deceased, the solicitors to the estate of the Deceased also wrote to the bank for the waiver of interest on the loan. The letters dated 31st January, 2002 and 8th October, 2004, are pleaded.
(9) The 1st Defendant replied to the letters on the 22nd day of November, 2004, and enclosed the Deceaseds statement of Account, urging the Solicitors to arrange to pay the debt. The bank assured the said solicitors that they had also reached the two wives of the Deceased on this matter of payment of the loan. The letters and the Deceaseds statement of Account shall be relied upon at the trial.
(10) On the 23rd day of February, 2005, the Defendant bank invited the 1st plaintiff to its office and gave her a document titled option to buy, by which document the 1st plaintiff was required to raise the sum of N5,791,747.00 between the 23rd day of February, 2005, and the 25th day of February, 2005, to pay for the property failing which the said property would be sold to another person. This document captioned option to buy signed by B. F. Omidina& Co., a firm of Solicitors acting on behalf of the 1st Defendant dated 23rd day of February, 2005, shall be relied upon at the trial.
(10a) The Deceaseds other wife and her children were also given the same option to pay for the property but they declined to do so stating that they had no interest in the property.
(11a) The 2nd plaintiff, the Managing Director of Bartho Oil Company Ltd was joined in these proceedings pursuant to the order of this Honourable Court made on the 23rd day of November, 2005. The 2nd plaintiff and his company provided the money to the 1st plaintiff which money was paid to the 1st Defendant, thereby exercising the option to buy given to 1st plaintiff. The 1st plaintiff issued to the 2nd plaintiff, a receipt and later a memorandum executed in favour of the 2nd plaintiff over and in respect of the said property. These documents shall be relied upon at the trial.
(11b) The document referred to in paragraph 10 herein, titled option to buy was given to the 1st plaintiff by the 1st Defendant bank at its office at No. 77 Douglas Road, Owerri, and the 1st plaintiff never knew or met any Barrister B. F. Omidina until the transaction with the 1st Defendant bank was concluded. The plaintiff shall rely on the judgment in Suit No. OW/54/2005. Barrister. B. F. Omidina vs. Union Bank Nigeria PLC. wherein Barrister B. F. Omidina sued the 1st Defendant herein claiming his fees for the transaction in proof of the fact that the transaction subject matter of this suit was made with the approval of the 1st Defendant. The 1st Defendant had since paid the judgment debt to the plaintiff in the said suit No. OW/54/2005.
(12) On the 24th day of February, 2005, the 1st Plaintiff on the instruction of the 1st Defendant paid the money aforesaid in draft to the 1st Defendant bank which accepted the same and issued the 1st Plaintiff with a receipt (teller No. 0332911) of the said 24th day of February, 2005. These documents shall be relied upon.
(13) When the 1st Defendant received the money aforesaid from the 1st Plaintiff, the 1st Defendant paid the same immediately into the indebted account of LAS CHUKWU & Sons Nig. Ltd. in satisfaction of the debt owed the 1st Defendant. Upon the foregoing, the 1st Defendant closed the said account and removed the ledger. The 1st Plaintiff was thereafter asked to await the release of the documents to her by the 1st Defendant.”
It is also pertinent to reproduce some relevant paragraphs in this regard, as contained in the 3rd respondents amended statement of defence. They read thus:
5. The allegation of facts in Paragraphs 10, 10a, 10b, and 11c of the Amended Statement of Claim are false and utterly without any basis whatsoever. In answer thereto, it is hereby asserted that the First Defendant on the 14th day of September, 2004 in writing appointed the Law Firm of Messrs B.F. Omidina & Co., as Debt Collectors (hereinafter called the Debt Collectors) to, inter alia, recover the aforementioned indebtedness of the Third Defendant to the First Defendant. The Debt Collectors Letter of Appointment is hereby pleaded and shall be relied upon at the trial.
6. The averment in paragraph 10b of the Amended Statement of Claim is false, mischievous and preposterous in that the First Defendant had not at all times material to this Suit earmarked the subject property for sale. The First Defendant hereby further states that no member of its Board of Directors had at all times material to this Suit, or at anytime whatsoever shown any interest to buy the property.
7. The First Defendant also hereby specifically state that the Debt Collectors were appointed for the particular purpose of recovering the aforementioned indebtedness of the Third Defendant, and discharged that duty upon the judgment hereinabove pleaded for which reason their remuneration was paid.
8. The alleged option to Buy was not exercised whereupon there was no agreement of sale of the property subject matter of this Suit executed in favour of the First Plaintiff. On the other hand, the First Plaintiff at all times material voluntarily paid off the indebtedness of the Third Defendant to the First Defendant.
9. The alleged Option to Buy was not exercised whereupon there was no agreement of sale of the property subject matter of this Suit executed in favour of the First Plaintiff. On the other hand, the First Plaintiff at all times material voluntarily paid of the indebtedness of the Third Defendant to the First Defendant.
12. The First Defendant also specifically assert that the Plaintiffs acted unreasonably, without caution and negligently by failing and omitting to determine the state of the Third Defendants indebtedness to the First Defendant at all times material to this Suit. It is hereby further stated that a cautionary inquiry would have disclosed the fact that the Third Defendant had paid the sum of N1.5m (One Million, Five Hundred Thousand Naira) in January 2005 to the First Defendant towards defraying the debt in issue in this Suit.
13. The First Defendant goes further to state that the First Plaintiff acted in bad faith, dishonestly and grossly unreasonably purporting to have bought the mortgaged property for N5,791,747.00 (Five Million Seven Hundred and Ninety One Thousand, Seven Hundred and Forty Seven Naira) on the 24th day of February, 2005 when her Counsel, Bonny Mbakwe Obi, Esq, had by letter dated 23rd February 2005 (Ref. BD/MS/23/2005) notified the First Defendant of a prospective buyer in the sum of N8. 5m (Eight Million, Five Hundred Thousand Naira). The First Defendant shall also at the trial rely on the Letter to establish bad faith and dishonesty against the First Plaintiff at all times material to this Suit.
14. The First Defendant hereby states in further answer to Paragraphs 11, 11a and 12 of the Amended Statement of Claim that the First Plaintiff in all the circumstances of the subject matter of this Suit acted most unreasonably and gross negligence so as to deny the Third Defendant the opportunity to fully redeem the mortgaged property.
The First Plaintiff entered into the alleged transaction without any legal basis whatsoever in that the Debt Collectors did not have the authority of the First Defendant to sell the subject property. The purported sale to the First Plaintiff, if at all, has not been ratified by the First Defendant at all times material to the suit.
22. The First Defendant goes further to state that the First Plaintiff is not entitled to the claim for specific performance of the alleged purchase of the property for the following reasons:
(a) There is no enforceable contract at all times material to this Suit the purported purchase of the property was entered into without the necessary authority of the First Defendant and has not been subsequently ratified by the First Defendant.
(b) The First Plaintiff acted in bad faith, gross dishonesty and without due diligence and thereby unfit and undeserving of the benefit of the relief or any other whatsoever under the rules or principles of equity.
(c) The purported purchase was not reduced into writing as required by Law.
(d) The First Plaintiff will be adequately compensated in Law by a claim against the Debt Collectors.
Furthermore, appellants in the following paragraphs of their statement of defence and counter claim, pleaded thus:
(10) In response to paragraph 8 of the Amended Statement of Claim the 2nd and 3rd Defendants plead that the deceased while alive applied for interest waiver on the loan and the 1st defendant Bank granted it but the deceased did not meet up with the conditions given to him due to his ill-health which resulted to his death in March, 2003.
(11) After the death of the deceased, the 2nd Defendant being the new Managing Director and Chief Executive Officer of the 3rd Defendant Company re-applied for waiver of interest on the loan to which request the 1st Defendant asked the 2nd Defendant to pay in the sum of N1.5 million (Naira) into the 3rd Defendants Account with the 1st Defendant. Earlier before then, the wife of the Deceased MRS ETHEL CHUKWU had applied in writing to the 1st Defendant for a waiver of interest on the loan and equally requested for a meeting between the 1st Defendant, the 3rd Defendant and the Deceaseds family. The said letter dated 12th of January, 2005 is hereby pleaded and shall be founded upon at the trial of this case. The 1st Defendant is hereby given notice to produce the original copy of the said letter dated 12/1/2005.
(12) The 2nd Defendant accordingly and promptly paid in N1.5 Million (Naira) in the 3rd Defendants account with the 1st defendant bank which sum the 1st Defendant acknowledged vide its letter of 3rd February, 2005. The said letter addressed to the 2nd Defendant is hereby pleaded and shall be founded upon at the trial of this case.
(13) The solicitors appointed by the Estate of the Deceased and by the 3rd Defendant are A. N. ONYEKA & ASSOCIATES only. Chief Barrister Bonny Mbakwe Obi is acting for himself and for the 1st Plaintiff i.e. Lolo Stella C. Ohiri.
(14) As at the time Mrs. Ethel C. Chukwu the wife of the Deceased and the 2nd Defendant were pleading with the 1st Defendant bank for interest waiver on the loan, the 1st plaintiff and her Lawyer were busy nominating buyers and pleading with the 1st Defendant to sell off the mortgaged property.
Precisely on 23rd of February 2005, the 1st Plaintiffs Lawyer wrote to the Bank and urged 1st Defendant to sell the mortgaged property. The 1st Plaintiffs Lawyer in the said letter stated, that he had brought somebody who has offered to buy the mortgaged property at N8.5 Million (Eight Million Five Hundred Thousand Naira). The said letter is hereby pleaded and shall be founded upon at the trial of this case.
(15) The 1st Defendant in its wisdom refused selling off the mortgaged property but insisted that the debt on the 3rd Defendants Account be paid off so that the mortgage will be discharged.
(17) The 2nd 3rd Defendants plead that the 1st Plaintiff paid the said sum on the unreasonable belief that the property is being sold to her. The said plot 178 Housing Area E, New Owerri at all material times to this suit was never for sale and was never advertised for sale either by the 1st Defendant mortgagee or by the Estate of the Deceased.
(18) The 1st Defendant never at any time material to this suit put up the mortgage property for sale and never advertised it for sale. The only interest of the 1st Defendant is the recovery of the debt and not the sale of the subject property.
(25) In reaction to paragraphs 11 and 11a of the Amended Statement of Claim, it is hereby pleaded that the 1st Plaintiff does not have the authority of the 2nd and 3rd Defendants to acquire, sell, alienate or in any manner deal with the property i.e Plot 178 Housing Area E, New Owerri. The purported agreement between the Plaintiffs were made for the purposes of this suit and to defeat the ends of justice.”
In the instant case, in coming to the conclusion that the 1st & 2nd respondents have proved that B. F. Omidina & Co. had the requisite authority to sell the mortgaged property by private treaty as it did, the learned trial judge among others, made the following observations and findings of facts on pages 255 256 of the record of appeal thus:
The intentions of the parties can be gathered from the terms of the agreement between the parties as presented in evidence before this Court Exhibit F the Debt Collection Assignment which authorized B. F. Omidina & Co., to recover the debt owed the 1st defendant by the 3rd defendant and Exhibit A which is the option to Buy agreement made between B. F. Omidina & Co., to recover the debts owed the 1st defendant by the 3rd defendant and Exhibit A which is the option to buy agreement made between B. F. Omidina & Co., and the 1st claimant toward the recover of the debt owed, the 1st defendant by the 3rd defendant and very relevant.
A close look at Exhibit F shows that it neither specifically included the sale of any property subject of the accounts to be recovered nor specifically excluded any sale of such property. It specifically stated that prior approval of the official department of the 1st defendant is required before litigation is embarked upon.
However, when the paragraph in Exhibit F which states:
Laise with the Branches for any relevant information on the account and keep us, the Area office and the Branch regularly informed of all developments. You should note that prior approval of the department is required before you can embark on litigation is construed together with paragraph 1 of Exhibit A the option to Buy which states as follows:
1. The seller has authority of Union Bank Plc. to dispose of the pledged property used as collateral by L. A. S. Chukwu (Nig.) Ltd which property is situate at Plot 178 Area E New Owerri. The evidence of the 1st claimant (CW1) and that of the CW 2 that the option to Buy the Mortgage Property and the payment of the mortgage debt by the 1st claimant were authorized by the 1st defendant appear credible and probable considering that a staff of the 1st defendant of the Rank of Assistant Manager signed and executed the option to Buy agreement on behalf of the 1st defendant. The occupant of the position of Assistant Manager is high enough to have his actions binding on his employer the 1st defendant especially as there is nothing in the evidence to show that E. F. U. Maduabum who signed Exhibit A did so outside his official duties. There is nothing before the Court to show that E. F. U Maduabum was not the person who signed Exhibit A as officer of the 1st defendant.”
The learned trial judge then continued and stated on page 257 of the record of appeal thus:
It follows therefore that when Exhibit F is considered along side Exhibit A and D the evidence of the claimants can be described as credible and believable especially as Exhibit H written on 12/1/2005 by the DW 1 showed that the 1st, 2nd and 3rd defendants knew about the option to buy the mortgaged property which the 2nd defendant and DW 1 failed to exercise.
This strengthens the case of the claimants that the 1st defendant was part of the offer of the option to buy the mortgaged property extended to members of the family of the late Chief L. A. S. Chukwu in liquidation of the mortgaged debt.
Again, the learned trial judge found/held on page 257 of the record of appeal as follows:
This Court finds and so hold that from a combined reading of Exhibits F, A, D and H, the claimants have proved that B. F. Omedina & Co., had authority and approval of the 1st defendant to sell the mortgaged property in dispute to the 1st claimant through the private treaty of option to Buy as in Exhibit A
Finally and in conclusion, the learned trial judge held, that the Court found that there was a valid sale of the mortgaged property to the 1st Claimant through the option to buy agreement tendered as Exhibit A. He then went ahead and in essence granted the reliefs sought by the 1st & 2nd respondents.
The learned senior counsel for the appellants submitted, that, in the absence of any express clause in Exhibit F authorizing the sale, the burden is on 1st & 2nd Respondents (who claim the positive i.e. that such authority exists and that the mortgaged property was earmarked for sale by the bank/to prove that assertion. Decisions in Kala v. Potiskum (supra) and Adeniran v. Alao (1992) 2 NWLR (Pt. 223) 350 @ 369; were cited in support of the submission being made.
In the instant case, the law firm of B. F. Omidina & Co., was appointed by the 3rd respondent, pursuant to Exhibits F and F1 to recover debts owed to it from some debtors, whose names were listed in Exhibit F1. From the tenor of the said Exhibit F there is nothing in the slightest form, shape or degree that suggests, authorizes or in the least indicates that the Law Firm of B. F. Omidina & Co., (hereinafter referred to as the Law Firm) was given the requisite authority to sell the property.
The apparent and or manifest instruction given to B. F. Omidina & Co., as embodied in Exhibit F was explicit on the fact that the Law Firm was only engaged to recover the 3rd respondents loans/advances granted to some of its defaulting customers and as specified in Exhibit F1. It is trite principle of our law that in the construction of a contract, or any legal document, or written instruction (as the case may be), the Courts are bound to the words used in the said document or contract. Thus, where the words of a contract or document are clear and unambiguous, the operative words in it should be given their simple and ordinary grammatical meanings. See the cases of Dalek Nig. Ltd. v. OMPADEC (2007) 7 NWLR (Pt. 1033) 402, (2007) LPELR 916 and Rainy Sky S.A. & Ors. v. Kookmin Bank (2011) 1 WLR, 290. Exhibit F in the instant case, is clear, unambiguous, equivocal and devoid of any technical terms. The exhibit from its clear wordings, was used to authorize the Law Firm to undertake all legal means to recover the 3rd respondents monies in possession of some third parties as loans and no more.
There is nothing contained therein, which authorized the Law Firm to dispose of the property (if any) used by the listed debtors as collaterals. For convenience and ease of reference, Exhibit F is reproduced below:
UNION BANK OF NIGERIA PLC.
UNION BANK OF NIGERIA PLC.
RC 6262 Head Office
Stallion Plaza, 36 Marina,
P. M. B. 2027, Lagos.
Telephone: 2665439, 2665441,
266545
Telegrams: UNIONHEAD
Telex: 21222
Fax: 2669873
PRIVATE & CONFIDENTIAL
14th September, 2004
B. F. Omidina& Co.
Light Benchs Chambers
3 faith Avenue Woji
P. O; Box 1557 Diobu
Port-Harcourt
Dear Sir,
DEBT COLLECTION ASSIGNMENT
The Bank has reviewed the debt collection assignment and the accounts in the attached list are now assigned to you to recover within three months. This means that you are debriefed on all accounts previously assigned to you except if such accounts are in the current list.
We hereby instruct that you initiate the process of recovery in line with the letter of appointment as Debt collector given to you.
This assignment is subject to review in the next three months or at any time earlier and at the Banks discretion.
Note that you are required to PROMPTLY put up your claim for payment of commission on recoveries made along with proof of your involvement in the recovery which is subject to our confirmation.
Liaise with the Branches for any relevant information on the account and keep us, the Area Office and the Branch regularly informed of all developments. You should note that prior approval of this Department is required before you can embank on litigation.
To facilitate the achievement of the objective of this exercise, you are to appoint support staff who could follow up on your actions on the debtors by way of nuisance visits. The support staff are to be remunerated from commission paid to you.
Please acknowledge receipt.
Yours faithfully
(SGD.)
F. O. EZIKE
FOR: DEPUTY GENERAL MANAGER.”
From Exhibit F reproduced above, the instructions given to the Law Firm were explicit on the import and purport of the appointment which was mainly targeted at the task of debt collection. Period. Thus, I am of the considered and firm viewpoint that the B.F. Omidina & Co., was not authorized by 3rd respondent to sell the property to the 1st respondent or any other person for that matter.
Furthermore, the 3rd respondent pleaded and led evidence to the weighty effect that it did not at any point in time authorized the sale of the mortgaged property. Hence, such a purported sale vide Exhibit A cannot be said to be within the contemplation of 3rd respondent. Similarly, the said course of action embarked upon by the Law Firm of B. F. Omidina & Co. with the sale of the mortgaged property, cannot be located within the apparent, expressed, ostensible and or even implied authority of such an agent who was assigned and designated as a debt collector, with the sublime task of debt recovery. Indeed, the content of Exhibit F could not by the wildest imagination or widest interpretation be regarded as authorization given to B. F. Omidina & Co. by the 3rd respondent with regard to the sale of the mortgaged property.
The principle is trite, that a trial Court is precluded and should not decide a case on mere assumption, conjecture or speculation. Indeed, Courts of law are Courts of both facts and laws.
Hence, they decide issues placed before them on facts as pleaded and established by evidence adduced before them; predicated on applicable laws. They are enjoined to avoid speculation of whatever colouration. See Adefulu v. Okulaja (1996) 9 NWLR (Pt. 473) 668; Orhue v. N.E.P.A. (1998) 7 NWLR (Pt. 557) 187.
Exhibit K is straight forward and crystal clear. It inter alia states that the payment was accompanied by an appeal letter of waiver of the balance. It mentioned the placement of the payment which has been accepted as part payment of the outstanding debt. Hence, the decision by the 3rd respondent to place it in a suspense account pending further decision in respect of the property, which the company mortgaged to us. Finally, that the 3rd respondent would reach the 1st appellant, as soon as further decision is taken. Thus, as at the 24th of February, 2005 when the 1st respondent lodged/paid the sum of N5,791,747.00 into the 2nd appellants account maintained with the 3rd respondent, the actual outstanding debit balance at that point in time, could not have been the aforestated amount by whatever arithmetical calculation or stretch of imagination.
On the validity of the purported sale of the property by B. F. Omidina & Co., to the 1st respondent or validity of the OPTION TO BUY agreement. The general position of the law with regard to agency is that, a person may decide to act by another who he appointed to be his agent and get the benefit, or bear and/or suffer liability on that arrangement. The one who authorizes another person is known as the Principal, while the person authorized is known and or referred to as the Agent. Whenever an agent acts in his capacity as an agent, his acts are deemed to be that of his principal, provided he acts within the scope of his authority. In that circumstance, the principal would be bound by any contract, derive benefit and/or suffer liability as a consequence of his agents acts. However, the principal would be exempted from any consequence of his agents act (s), where the agent went beyond the authority granted to him by his principal. See the decision of the Supreme Court case of Cotecna Intl Ltd. v. Churchgate (Nig.) Ltd. (2010) 18 NWLR (Pt. 1225) 346, (2010) LPELR 879at page 20, where His Lordship Galadima, JSC, enunciated as follows: It is not in all situations that an agent will not be liable for the acts of a principal. An agent who exceeded the limit or bounds of its authority as is alleged in this case, such agent will be liable.
See also the case of First Bank of Nig. Plc. V. Ozokwere (2005) LPELR, 5646 where this Court, per Galadima, JCA (as he then was) held as follows:
When an agent abandons the instruction of the principal and acts unilaterally he cannot take benefits of the shield which the law affords that contractual relationship. See Bank of Scotland v. Dominim Bank (1891) AC 592.
Furthermore, the Supreme Court had earlier enunciated on this position of the law in the case of Labode v. Otubu & Anor (2001) LPELR 172/1995, where His Lordship, Achike, JSC, (of blessed memory) unequivocally at page 19, held as follows:
It is well settled that any unauthorized tortuous or contractual acts of the agent cannot bind the principal.
See also the cases of Essang v. Aureol Plastics Ltd. (2002) 17 NWLR (Pt. 795) 155, (2001) LPELR 6120 and Asafa Foods Factory v. Alraine Nig. Ltd. (2002) 12 NWLR (Pt. 781) 353, (2002) LPELR 570 (SC).
In the instant case, the property was mortgaged to secure a loan. The 3rd respondent had consistently, persistently, stridently and strenuously stated, that the property was not foreclosed and there was no evidence to the contrary in the record of appeal placed before us. See Paragraph 6 of the 3rd respondents amended statement of defence earlier reproduced in this judgment. Thus, both the 3rd respondent and its agent lacked the power to unilaterally sell the property to anybody, no matter who the buyer may be. If in any unlikely event the property was sold (as the 1st respondent contended herein), the sale would be set aside as being null and void. See the case of Africa Petroleum Plc. & Anor. v. Otunba Jonathan Olaniyan Farayola (2009) LPELR 8902 (CA), where this Court, per Omoleye, JCA at pages 32, 33 held as follows:
The law is trite that where, as in the instant case, the Vendor/Assignor of a property who does not possess the capacity to sell a property, the maxim nemodat quod non habet will apply to nullify the sale.
The above position held by me is further strengthened by the decision of the Supreme Court, per Niki Tobi, JSC (of blessed memory) in the case of Okonkwo v. Cooperative & Commerce Bank Nig. Plc & Ors. (2003) LPELR 2484, where the prolific eminent jurist; Law Lord at pages 69, 70 propounded as follows:
A mortgagor has a legal right to redeem a mortgaged property which is not yet liable to an auctioneers most unfriendly hammer and the mortgage who out-smarts or winningly out plays a mortgagor in the process of redemption of a mortgaged property will not be allowed by equity to sell the mortgaged property at his pleasure. This is because he has cruelly not considered the pains of the mortgagor in parting with his property in circumstances that are not legal. A mortgagee has no legal right to block the passage of redemption of a mortgaged property before auction. In other words, a mortgagee cannot place a clog on the mortgagors wheel of redemption. Redemption of the property is a legal right of the mortgagor which he is entitled to exercise in law until the property is auctioned.
See also the cases of Anyaduba v. Nigerian Renowned Trading Co. Ltd. (1992) 5 NWLR (Pt. 243) 535 and Polo v. Ojor (2003) 3 NWLR (Pt. 807) 344, (2002) LPELR 6086 (CA).
Relying on the position of the law as enunciated above and married with the facts of this case and judicial authorities cited in supported thereof. I am of the firm view point that the learned trial judge (with due respect) erred when he held that 1st respondent acquired a valid title to the property in dispute and that the 1st claimant (1st respondent) is the person who has the right to the release of the mortgaged property and not the 2nd and 3rd defendants (1st and 2nd appellants, respectively) (Bracket mine for clarification). This is because the alleged 3rd respondents agent who purportedly sold the property to the said 1st respondent lacked the power to make the purported sale.
Also, I have critically examined the OPTION TO BUY agreement (Exhibit A), which the 1st respondent placed heavy reliance to claim entitlement to the property, and I discovered that the party on behalf on which the Law Firm acted is legally different from the 2nd appellant who mortgaged the property to the 3rd respondent. The 2nd appellants name on record and which was confirmed by Exhibit J (its Certificate of Incorporation) is L.A.S. CHUKWU & SONS (NIGERIA) LIMITED; whereas the property which the Law Firm purportedly disposed of in Exhibit A was the pledged property used as collateral by L.A.S. CHUKWU (NIG.) LTD. There is a world of a difference between the two names. It is elementary principle of corporate practice that a company is known by the name contained in its Memorandum of Association, by which it was registered and or incorporated and none other.
Thus, if by any chance a company is sued or purported to have entered into any contract in a name different from its registered name, the contract would not be enforceable against the company, except the company by resolution ratifies it. See Section 37 of the Companies and Allied Matters, Act, 1990 and the case of Maersk Line v. Addide Investment Ltd. (2002) 11 NWLR (Pt. 778) 317. Thus, in the instant case, the party represented by the Law Firm having been found to be different from the 2nd appellant, that mortgaged its property to the 3rd respondent, Exhibit A cannot be held binding on both the 2nd appellant and 3rd respondent.
In addition, there is nothing contained in the said Exhibit A that suggests in any material respect, that it was done on behalf or authorized by the 3rd respondent. It is instructive to observe, that the 3rd respondents staff who allegedly signed as a witness in Exhibit A, did so in his personal capacity. The said 3rd respondents staff (E.F.U. Maduabum) did not by any means described himself or indicated that he was representing the 3rd respondent in the course of his signing Exhibit A. He signed as a witness for the 1st respondent and merely inserted the 3rd respondents branch address, at Owerri, presumably as his place of work and nothing more.
The whole circumstances surrounding the preparation and execution of Exhibit A befuddled the mind and raised a lot of bothersome questions. Basically, some questions should agitate the rational mind and thus became worrisome with regard to the weight and worth of Exhibit A. The questions include the followings:
a. The 3rd respondents letter (Exhibit B), was written to Bonny Mbakwe Obi & Co., as solicitors to 2nd appellant and executors to Late Chief L.A.S. CHUKWU, and not to the 1st respondent. Even the appellants pleaded and testified in denial of the representation. This letter was the basis upon which the 1st respondent stated that she became aware of the 2nd appellants debt, but further in evidence she became evasive with regard to the contents of the said Exhibit B. (See pages 132 and 134 of the record of appeal).
b. There is no letter or document tendered by the 1st respondent to substantiate that the 3rd respondent approached her to liquidate the debt of the 2nd appellant.
c. The 1st respondent admitted on record that she was not authorized by the 2nd appellant to pay its debt. (See page 132 of the record of appeal).
d. The 1st respondent admitted on record that she never met B.F. Omidina, who allegedly prepared Exhibit A or any of his staff. She also admitted that Mr. B.F. Omidina did not sign Exhibit A in her presence and she is unaware of who signed for him. (See page 135 of the record of appeal).
e. The 1st respondent confirmed that Exhibit A was mutilated, and correction made by E.F.U. Maduabum.
The said Maduabum neither counter-signed the document nor was he called to confirm or corroborate the version of the story put forward by the 1st respondent.
What baffles one the more, is how a person who was not authorized to pay off anothers debt, took it upon herself to settle the debt and claimed to have paid off the debt on the representation made by a third party whom she never met or interacted with directly. This is indeed why the scenario gets curiouser and curiouser, with confusion being made worse confounded.
The 1st respondent also claimed that the property was sold to her, but she tendered no document to show that any interest in the property was transferred to her except an ordinary bank teller and Exhibit A, which is more of an invitation to treat, and not a deed of assignment or transfer. The warning signal is more accentuated and pronounced when she admitted in evidence that, it is true there was an order by the High Court sitting at Mbano that no property of the deceased (my late husband) should be sold or transferred to any person. It is true that order is still subsisting and has not been discharged.
From this admission, she is aware that the property (which she claimed that it belonged to her late husband) was not to be sold or any interest thereon transferred, yet she still went ahead to pay money to purchase the same. Thus, by virtue of doctrine of lispendens, the purported sale of the property to the 1st respondent is null and void. See the case of Bamgboye v. Olusoga (1996) 4 NWLR (Pt. 444) 520, (1996) LPELR 736 (SC); Bua v. Dauda (2003) 13 NWLR (Pt. 338) 657, (2003) LPELR 810 (S.C.) and Alakija v. Abdulai (1998) 6 NWLR (Pt. 552) 1; (1998) LPELR 404 (S.C.).
In civil matter, such as in the instant case, the burden of proof is basically and or generally on the plaintiff. See Olowu v. Olowu (1985) 3 NWLR (Pt. 13) 372; Kokoro Owo v. Ogunbambi (1993) 8 NWLR (Pt. 313) 627. Apart from the general burden referred to above, the burden of proof of any material issue before evidence is gone into, rests squarely upon the party asserting the affirmative of the said issue. However, after all the evidence has been adduced, the burden will then rest on the party against whom the Court at that point in time, would give judgment if no further pieces of evidence were adduced. Again, the burden of proof on pleadings, will rest upon the party, whether plaintiff or defendant who substantially asserts the affirmative of the issue. The burden of proof is fixed at the beginning of the trial by the state of pleadings and it is settled as a question of law, remaining unchanged throughout the trial, exactly where the pleadings place it, and does not shift in any circumstances whatsoever. See Okechukwu & Sons v. Ndah (1967) NMLR 368; Imana v. Robinson (1979) 34 SC 1.
Howbeit, where a plaintiff fails to prove his case with regard to the relief(s) sought the action, no doubt about it, must fail. See Fashanu v. Adekoya (1974) 6 SC 83.
Once again, on the authority of the Law Firm vis-a-vis the validity of Exhibit A, it is trite and indeed well settled that parties are bound by the terms and or conditions of their agreement, and Court when saddled with the responsibility to construing the agreements it is enjoined to do so by giving meaning in a manner that will give verve to the intention of the parties as contained within the four walls of the contract.
See Isheno v. Julius Berger (Nig.)Plc. (2008) 6 NWLR (Pt. 1084) 582 and Hilary Farms Ltd. v. M/V Mahtra (2007) 14 NWLR (Pt. 1054) 210.
In Unilife Development Co. Ltd. v. K. Adeshigbin & Ors. (2007) 3 SCM 151 (2001) 4 NWLR (2001) 4 NWLR (Pt. 704) 609, the Supreme Court held thus: The main object of interpretation and construction of documents is to discover the intention of the parties which is deducible from the language used. That role is the responsibility of a Court of law which cannot under any guise whatsoever, defeat the meaning of the document which clearly or expressly embodies the terms both parties have agreed to bind them. In which case, all the Court has to do in the case in hand, is to interpret the document to bring out its intended meaning and no more.”
In the instant case, the Law Firm was appointed by the 3rd respondent by Exhibit F and F1 to serve as its debt collector. From the express terms of the said Exhibit F & F1, the Law Firm was appointed to act for only three months, which started from 14th September, 2004, and expected to expire on 14th December, 2004.
Thus, from the time the Law Firms authoritys expired, all actions or step(s) taken by it cannot be held binding on the 3rd respondent unless and until, they are ratified by the 3rd respondent. See the cases of Febson Fitness Centre & Anor. v. Cappa Holdings Ltd. &Anor. (2014) LPELR 24055; Universal Vulcanizing Nig. Ltd v. Ijesha United Trading & Transport Co. Ltd. & Ors. (1992) LPELR 3415 (SC); Vulcan Gases Ltd. v. Gesellscheft Fur Industries A.G. (2001) 9 NWLR (Pt. 719) 610 and Carlen Nig. V. University of Jos & Anor. (1994) 1 NWLR (Pt. 323) 631, (1994) LPELR 832 (SC). This is because, the Law Firm in the eyes of the law ceased to be the 3rd respondents agent from 14th day of December, 2004 and the Law Firm was only acting at its own behest/peril.
From the date clearly written on Exhibit A, that is 23rd February, 2005, the Law Firms appointment had expired before the said date and there is nothing before the lower Court to show that the Law Firms appointment was extended to that period. Thus, the Law Firm is deemed as having acted on its own behalf and could not by so doing bind the 3rd respondent.
In essence, if by any stretch of imagination, the Law firm sold the property in dispute to the 1st respondent, the said contract or contract of sale (as the case may be) cannot be held binding on the 3rd respondent, more especially when the 3rd respondent has consistently, forcefully stated and or maintained that it did not sell the property; or instructed any one to sell; or ratified any in that regard sale. See the case of GTB v. Ekemezie (2015) LPELR 40732, where this Court per Alkali, JCA in a similar case at page 39 enunciated as follows:
When an act done by an agent which is not within the scope of the agents express or implied authority, the principal is not bound by or liable for that act even if the opportunity to do so arose out of the agency and it was purported to be done on his behalf unless he expressly adopted it by taking benefit of it otherwise.
See also the case of Akin-Taylor v. Boja Investment & Development Company Ltd. & Ors. (2013) LPELR CA/L/440/1997, where this Court, Per Iyizoba, JCA, in a case with similar circumstances held at page 19 as follows: a disclosed principal, in law is not bound by any act of his agent which is outside the agents implied or apparent authority unless the principal in fact authorized the agent to do the particular act. See Ezenwa v. Ekong (1999) 11 NWLR (Pt. 623) 5 at 27.
With utmost and due respect, the finding by the learned trial judge referred to above sounds rather assumptive and simplistic. This is more so, because 1st & 2nd respondents who asserted affirmatively that B. F. Omidina & Co. was authorized by the 3rd respondent to sell the mortgaged property failed excruciatingly to prove the said assertion. Exhibits F, A, D and H relied upon by the learned trial judge to find the missing approval and authority, do not substantiate and cannot sustain such a finding. For instance, Exhibit F categorically and emphatically, warned B. F. Omidina & Co. not to embark on litigation, without prior approval of the 3rd respondent. Again, Exhibit H did not contain any hint or whiff about awareness or knowledge on the part of the appellants and 3rd respondent with regard to the option to buy the mortgaged property and the failure to exercise such an option as found by the learned trial judge.
The question be asked: if an agent has been precluded, prohibited and directed in a categoric, emphatic and instructive manner, not to attempt the doing of a lesser evil without prior approval of/from the principal; how on earth (in the name of tarnation) can such an agent, be acclaimed to have been clothed with the toga of vested authority to perpetrate a greater evil with monumental reverberations/repercussions. In the instant case, B. F. Omidina & Co. was assigned the innocuous task of debt recovery from some debtors listed and or identified in Exhibit F1, with circumscribed powers. Thus, the trillion naira question is; where is the authority being brandished by the 1st and 2nd respondents, for this outlandish act of bravado. I must say, and without hesitation whatsoever, that ominously, the 1st & 2nd respondents failed abysmally to proffer cogent, concrete and credible evidence which pertained to the said authority.
In the instant case, I have come to the inescapable conclusion, that from the pleaded facts and evidence led thereon by the respective parties, that the 1st and 2nd respondents did not discharge the burden of proof squarely placed on them, with regard to authorization purportedly and or supposedly given by the 3rd respondent for the sale of the mortgaged property. 1st and 2nd respondents failed abysmally to establish due compliance with Exhibit F. Judgment of the lower Court did not flow from the evidence led by the 1st & 2nd respondents and it was thus perverse.
As an aside, it is to be noted, that there is a distinction between a mortgaged property and a pledged property. In the case of Prince Abdul Rasheed A. Adetona & Anor. v. Zenith International Bank Plc. (2011) 12 SC (Pt. IV) 44, (2011) 18 NWLR (Pt. 1279) 627, the Supreme Court resoundingly pronounced thus:
The main difference between a mortgage and a pledge is that in the former, the general title in the property is transferred to the mortgagee subject to be reversed by performance of the condition; whereas by the latter, the pledgor retains the general title and parts with possession. By a mortgage, the title is transferred by a pledge, possession is transferred.”
Exhibit A pertained to a pledged property and not a mortgaged property.
Based on all that have been said above, I do agree with the learned counsel for the appellants that the material and relevant conclusions and decisions which the trial Court reached which led to its final judgment in favour of the 1st and 2nd respondents are not supported by the evidence on record and applicable law. They are thus perverse and ought to be set aside. This is because the property the subject matter of dispute in this case was mortgaged to the 3rd respondent, whereas, Exhibit A represented that the property the subject matter of the said agreement was on pledge to the 3rd respondent. There is a great world of difference between a mortgaged property and a pledged property. The two types of transactions are completely different, and cannot by any stretch of imagination held to be interchangeable. Thus, the issue formulated for resolution and the determination of this appeal is resolved positively in favour of the appellants.
Having resolved the issue formulated in the manner as done above, this appeal is found by me to be meritorious and it is accordingly allowed. Consequently, the part of the judgment of the lower Court delivered on the 26th day of January, 2017 in Suit No. HOW/266/2005, in favour of the 1st & 2nd respondents, wherein the lower Court validated the sale of the Property by the Law Firm to the 1st respondent and the consequential orders in respect thereof are set aside by me and thus the claims of the 1st and 2nd respondents are hereby dismissed. In its place, judgment is hereby entered for the appellants in terms of their counter-claim. In specific terms, judgment is entered in favour of the appellants in the following terms.
1. It is hereby declared that the 2nd appellants indebtedness to the 3rd respondent has been settled and the legal mortgage executed between the parties is accordingly discharged.
2. The 3rd respondent is hereby ordered to release the title documents of Plot 178, Housing Area E, New Owerri (the mortgaged property) to the 2nd appellant for onward transmission to the Estate of Late Chief L. A. S. Chukwu.
3. The 3rd respondent is hereby ordered to refund to the 2nd appellant the sum of N1.5 Million Naira being excess money which was paid by the 2nd appellant and the receipt duly acknowledged by the 3rd respondent bank.
Costs in the sum of N50,000.00 is awarded against the 1st & 2nd respondents and in favour of the appellants.
AYOBODE OLUJIMI LOKULO-SODIPE, J.C.A.: I agree
ITA GEORGE MBABA, J.C.A.: I agree
Appearances:
D.C. Denwigwe, SAN with him, O. O. Okonkwo, Esq. For Appellant(s)
Respondents duly served with requisite hearing notices but absent. For Respondent(s)
