IN THE COURT OF APPEAL OF NIGERIA
IN THE LAGOS JUDICIAL DIVISION
HOLDEN AT LAGOS
ON WEDNESDAY, THE 19TH DAY OF JANUARY, 2022
BEFORE THEIR LORDSHIPS:
FESTUS OBANDE OGBUINYA JUSTICE, COURT OF APPEAL
MUHAMMAD IBRAHIM SIRAJO JUSTICE, COURT OF APPEAL
ADEBUKUNOLA ADEOTI BANJOKO JUSTICE, COURT OF APPEAL
APPEAL NO: CA/L/600/2010
BETWEEN:
MR. AKWAISA LEONARD IMOH-ITA -----------APPELLANT
(Substituted for Chief Peter Alfred
Imoh-Ita)
AND
MR. NURUDEEN OLALEKAN ANIMASHAUN----RESPONDENT
JUDGMENT
(DELIVERED BY MUHAMMAD IBRAHIM SIRAJO, JCA)
The Appellant claimed against the Respondent at the High Court of Lagos State, the reliefs hereunder:
Upon being served with the originating process, the Defendant, now Respondent, filed a Statement of Defence and Counter Claim. By his 2nd Amended Statement of Defence and Counter Claim at pages 169-179 of the Record of Appeal, the Defendant counter claimed against the Plaintiff as follows:
B. A declaration that the Defendant/Counter-claimant is entitle to the grant of a Certificate of Occupancy in respect of No. 38 Oladeinde Street Aguda, Surulere Lagos particularly covered by The Deed of Assignment Dated the 4th of November 1995 between the Defendant/Counterclaimant and the closed bank.
C. An order that the Claimant be called upon to render account of the rents collected from the Tenant of the property situate at no. 38 now 42 Oladeinde Street Aguda Surulere from 1st December 1995 till date and shall remit the rent collected to the Counter-claimant.
D. An order granting possession of the property known as no. 38 (now 42) Oladeinde Street Aguda Surulere presently being occupied by the Tenants of the Claimant.
E. General damages to the tune of N1,000,000.00 (One Million Naira) for trespass on the said property by the agents assigns and privies of the Defendant to the Counter claim.
At the end of the trial, the High court (lower court), found for the Defendant/Counter Claimant and dismissed the claim of the Plaintiff in a judgment delivered on 14/01/2010. Dissatisfied by the decision, the Plaintiff, now Appellant, appealed to this court vide a Notice of Appeal dated and filed on 10/02/2010, predicated on five grounds of appeal, hereunder reproduced without the particulars.
GROUND ONE
The learned trial judge erred in law and in fact when she held that the bank’s power of sale had arisen as at the date of the purported sale of the Appellant’s landed property to the Respondent, taking the letters of demand into consideration.
GROUND TWO
The learned trial judge erred in law and in fact when she held that the Appellant was duly notified of the bank’s intention to sell his landed property by reason of its publication in The Pioneer Newspaper of 1st July, 1991; and that the Bank did not need to issue another notice to that effect when the property was eventually sold to the Respondent in 1994.
GROUND THREE
The learned trial judge erred in law and in fact when she held that the Respondent is a bona fide purchaser for value without notice.
GROUND FOUR
The learned trial judge erred in law and in fact when she held that the Appellant is neither entitle to a declaration of title to the landed property in dispute nor to damage for trespass nor to an order of perpetual injunction against the Respondent, his agents, servants, privies and assigns.
GROUND FIVE
The learned trial judge erred in law and in fact when she held that the Respondent is entitled to a grant of a certificate of occupancy and possession of the Appellant’s landed property.
He sought for an order setting aside the judgment of the lower court, dismissing the Respondent’s case and setting aside the award of N700,000.00 general damages against him.
The synopsis of the facts of the case which culminated into the appeal appears to be straight forward, except for the dispute leading to the action. Chief Peter Alfred Imoh-Ita was a long-standing customer of now defunct Mercantile Bank of Nigeria Limited, where he maintained an account each at Ikot Abasi and Calabar Road branches in 1977 and 1978 respectively, in the name of Peter Alfred & Sons. On 9th July, 1982, Chief Peter Alfred Imoh-Ita executed a Deed of Legal Mortgage in favour of Mercantile Bank of Nigeria Limited over his property situate at No. 38 (now No. 42), Oladeinde Street, Aguda, Surulere, Lagos State (the subject matter of this appeal), to secure over draft facilities extended to him by the Bank. It turned out that the Chief could not fully repay the principal sum and the accrued interest when same became due in December, 1982. In order to recover the outstanding debt, the Bank sold the house to the Respondent by private treaty for the sum of N700,000.00, and executed the Deed of Assignment transferring the property to the Respondent. The sale was conducted in 1994 even though the negotiation started in 1991. It was when the Respondent attempted to take possession of the property that the Appellant filed the action, leading to this appeal, against him. It also appears from the pleadings and evidence that prior to the action giving rise to this appeal, Chief Peter Alfred Imoh-Ita was sued by the Bank at Calabar High Court in suit No. C/174/89 and the court on 21/11/1990 made an order of foreclosure of the property as well as permitting the Bank to sell off the property which was mortgaged to it, situate at No. 38 Oladeinde Street, Itire, Lagos. On 01/07/1991, the suit was relisted on the application of the Defendant and shortly afterwards, it was withdrawn by the Bank and struck out by the court. The import of that case is to show that the Appellant was aware of the publication that the house was going to be sold. This much his counsel informed that court in Calabar on 01/07/1991 at page 107 of the Record. The Bank made that publication in The Pioneer Newspaper of 01/07/1991 as per page 84 of the Record. On 24/07/1991, Chief Peter Alfred Imoh-Ita proceeded to obtain an interim order of injunction restraining the Bank from selling the property in question in suit No. ID/1459/91 filed by him at the Lagos State High Court, Ikeja Division. That order was however vacated on 22/06/1992 and the suit struck out for want of prosecution. Another suit filed against the Bank and the Respondent herein by Chief Peter Alfred Imoh-Ita, Suit No. LD/581/97 was struck out for want of jurisdiction. While this appeal was pending, Chief Peter Alfred Imoh-Ita, the original Appellant, died on 12/03/2013 and was substituted by his son, Mr, Akwaisa Leonard Imoh-Ita by an order of this court made on 25/02/2021.
The parties filed and exchanged their Briefs of Argument in line with the Rules of this court. The appeal was heard on 27/10/2021. During the hearing, learned counsel for the Appellant, Gloria Abugo (Mrs.), adopted the Appellant’s Amended Brief of Argument filed on 30/06/2021 and prayed the court to allow the appeal. Similarly, learned counsel for the Respondent, B.O. Bosede Esq, adopted the Respondent’s Brief of Argument filed on 12/05/2011 and urged the court to dismiss the appeal.
In the Appellant’s Brief of Argument, five issues were formulated for determination, to wit:
1. Had the bank’s power of sale arisen and had it become exercisable as at the date of the purported sale of the Appellant’s property to the Respondent?
2. Was the Appellant entitled to a fresh and proper notice from the bank to the effect that his property was to be sold in 1994 after the bank’s initial attempt to sell the property in 1991 was aborted by an order of interim injunction which the Appellant had obtained against the bank as far back as 24th July, 1991?
3. Was the Respondent a bona fide purchaser for value without notice?
4. Was the Appellant entitled to an order of declaration of title to the property in dispute and to any award of general damages against the Respondent for trespass as well as an order or perpetual injunction against the Respondent, his agents, servants, privies and assigns?
5. Was the Respondent entitled to a grant of a certificate of occupancy and possession of the Appellant’s property?
On the other hand, the Respondent adopted issues 1 – 3 of the Appellant’s Brief as the issues calling for determination in this appeal. He only rephrased issue 2 thus:
“Whether the Bank needed to issue another notice to the Appellant in 1994 when the property was eventually sold to the Respondent having regards to its initial publication in Pioneer Newspaper of 1st July 1991.”
Upon a careful perusal of the issues formulated by the Appellant, I hold the view that issues 4 and 5 will automatically be resolved by the resolution of issues 1, 2 and 3. I am equally of the view that issue 5 is a repetition of issue 4 because declaration of title presupposes that the person so declared will also be entitled to the grant of Certificate of Occupancy. Conversely, where declaration of title is refused, grant of Certificate of Occupancy will also be refused. However, since the Appellant is the one aggrieved by the decision of the lower court, I will adopt the five issues formulated by him in the determination of this appeal.
ARGUMENTS ON THE ISSUES.
Issue One
Learned counsel for the Appellant submitted that the trial court was wrong when it held at page 280 of the record that the amounts on the mortgage had become due as at the time the property was sold, when, according to counsel, there is no evidence before the court to show that the credit facilities advanced to the Appellant by the Bank had become due and had not been paid at the due date, just as no evidence was led to prove or establish when the legal date for redemption of the mortgaged property fell due. It was argued that the Deed of Legal Mortgage dated 9th July, 1982 (Exhibit M) did not contain any date of redemption and that even though DW2 stated in his evidence that the due date was 31/12/1982, the same witness stated under cross examination that the date was not on the Mortgage Deed, rather the date was on the application forms filled by the Appellant, which forms were not tendered in evidence. Learned counsel contended that even the amount of money that fell due by the due date of redemption has not been proved as the Statement of Account (Exhibit R), tendered by DW2 only showed a debit balance brought forward of N1,217,136.28 DR without explanation as to how the debit balance was arrived at. Appellant’s counsel submitted that the failure of the Respondent to prove the legal date of redemption of the mortgage as well as by how much the Appellant was purportedly indebted to the Bank as at the alleged due date is fatal to his case, as those facts must have been established before the Bank’s power of sale could have arisen. It was the further argument of learned counsel that the Bank lacks the statutory power of sale as the three conditions for the exercise of power of sale i.e., demand notice, amount of outstanding indebtedness and breach of some provision of the Mortgage Deed, have not been satisfied. Relying on the cases of African International Bank Ltd vs. Lee & Tee Ind. Ltd (2003) 7 NWLR (Pt.819) 366; Da Rocha vs. Hussain (1958) SCNLR 280; BON Ltd vs. Aliyu (1997) 7 NWLR (Pt.612) 398-399, learned counsel submitted that in the absence of proof of service of demand notice on the Appellant by the Bank, the Bank’s power of sale was wrongly exercised and therefore the sale is invalid. The court was urged to so hold in view of the huge discrepancies in the various figures alleged to be the outstanding indebtedness of the Appellant after the purported sale of the property to the Respondent.
For the Respondent, learned counsel submitted with reference to the Mortgage Deed, that clause 6 thereof provides that in the event of default for one month after demand for repayment, the Mortgagee’s power of sale becomes exercisable. On the main attributes of a legal mortgage, learned counsel cited and relied on A.I.B. Ltd vs, Lee & Tee Ind. Ltd (supra). He submitted that the credit facility granted the Appellant fell due on 31/12/1982 and that various demands as shown by exhibits O and P were made on the Appellant but he refused to repay the debt. It was argued for the Respondent that the Appellant was very much aware not only of his indebtedness to the Bank but also that the mortgaged property was going to be sold, hence his suit No. ID/1459/91 against the Bank in which he obtained an interim order of injunction in July, 1991 stopping the sale of the property. Placing reliance on the cases of U.B.N. Plc vs. Orharhuge (2000) 2 NWLR (Pt.645) 500; Abdullahi & Bros Ltd vs. Arewa Textiles Ltd (2004) 17 NWLR (Pt.901) 163 @ 179, Respondent’s counsel submitted that to stop the power of sale of a mortgaged property, the amount owed must be paid in full, and that the Appellant herein has failed to show any evidence of payment of the amount owed to the Bank vide exhibit M. Learned counsel contended that it is worthy of note that at no time before the institution of this action did the Appellant complain of lack of knowledge of the amount owed or demand for payment because he was aware that judgment was obtained against him for the sum of N615,404.17 and forfeiture and sale of the mortgaged property, at the Calabar High Court in 1989. On the argument of the Appellant that no demand notice was served on him by the Bank, the Respondent submitted that exhibits O and P were the demand notices served on him and that his son that testified for him said under cross examination that he was not in a position to know if those exhibits were received by his father. He urged the court to hold that demand notices were served on the Appellant. The court is also urged to discountenance the Appellant’s arguments as they are targeted at a wrong party, the Bank or its successor, not being a party in the action giving rise to this appeal.
Issue Two
Learned counsel for the Appellant submitted that the lower court was in error when it held that the Appellant was duly notified of the Bank’s intention to sell his property by reason of its publication in The Pioneer Newspaper of 01/07/1991; and that there was no need on the Bank to issue another notice before the property was eventually sold to the Respondent in 1994. Learned counsel submitted that the notice placed in The Pioneer Newspaper was highly irregular, null and void as that Newspaper is a regional paper with limited circulation to Cross Rivers and Akwa Ibom States only; and that since the property is located in Lagos State, the publication to dispose of it ought to be made in a National Newspaper that circulates in Lagos. It was submitted that the mandatory requirements of sections 19 and 20 of the Sales by Auction Law, Cap S1, Laws of Lagos State, 2004, which requires seven days’ notice to be given in the City of Lagos and two days’ notice to be given to State Commissioner, were flouted by the Bank. Learned counsel took the view that it smacks of fraud and/or bad faith for the Bank to place the notice of sale in a regional Newspaper when the Appellant’s property is in Lagos. On a second pedestal, it is argued that the notice in Pioneer Newspaper of 01/07/1991 could not have been good and sufficient notice in respect of the sale that eventually took place in 1994. That after the interim injunction issued to stop the sale and the lifting of the injunction, a fresh notice ought to have been given and served on the Appellant before the sale in 1994. The case of Oseni vs. American International Insurance Company Ltd (1985) (Pt.11) 229, was cited in this regard. The court was urged to hold that the sale of the Appellant’s property in 1994 based on a notice placed in regional Newspaper outside Lagos in July, 1991 is irregular, null, void and of no effect whatsoever.
Contrariwise, learned counsel for the Respondent submitted that the contention of the Appellant that it was fraudulent for the Bank to put up a notice of sale in a regional Newspaper is baseless and unfounded as the said allegation has not been substantiated by evidence beyond reasonable doubt, allegation of fraud being a criminal allegation. On the standard of proof of criminal allegation, counsel cited the case of Akinkugbe vs. Ewulum Holdings Nig. Ltd (2008) 12 NWLR (Pt.1098) 380. It was argued that it is because the Pioneer Newspaper was widely circulated that is why the Appellant was able to know about the notice of sale of his house which was published in that Paper and which enabled him to go to court and obtain an interim order to stop the sale. The court was referred to the interim order (Exhibit Q) at page 95 of the Record. On the sale of the property by private treaty, learned Respondent’s counsel submitted, with reference to exhibit 2 at page 85 of the Record (Notice of auction), that the reference to auction is not a directive that the property should be sold by public auction as the Auctioneer was given the free option to sell by private treaty, in which case, the public would not be invited and there is no need for the Auctioneer and the Purchaser to go to the property physically as was the case here. He submitted with the aid of Oyebanji Building Materials Stores Ltd vs. United Bank for Africa Plc (20010 6 NWLR (Pt.708) 88, that it is not the requirement of the Auction Law that Mortgagees exercising their power of sale must at all event sell by public auction. It was counsel’s further argument that since the Appellant was notified of his failure to pay back his indebtedness as provided in the Mortgage Deed, there is nothing in law that requires the Bank to serve him with any further notice after the discharge of the interim order stopping the sale, as it was the order that stalled the sale in the first place. The court was urged to uphold the finding of the lower court at page 281 paragraph 2 of the Record and resolve issue two in favour of the Respondent.
Issue Three
Learned counsel for the Appellant submitted on this issue that the Respondent is not a bona fide purchaser for value without notice as he had actual and/or constructive notice of the various irregularities that were inherent in the sale of the property by the Bank, such as, publication of notice in a regional Newspaper that doesn’t circulate in Lagos and the non-service of fresh notice of sale after the initial notice was foiled by an interim order of court. Learned counsel submitted that the Respondent’s counsel that consummated the sale was aware that the only notice that was issued in respect thereof was the notice of 1st July, 1991, and that no subsequent notice was issued when she proceeded to pay for the property in 1994.
Another irregularity affecting the sale, according to the Appellant’s counsel, is that the sale was conducted by public auction without complying with the mandatory requirements of sections 19 and 20 of the Sales by Auction Law. Learned counsel lampooned the evidence of DW1 and DW2 that the sale was by private treaty as a contradiction of all the documentary evidence from the Bank and NDIC which all stated that the sale was by auction. It is submitted that sale by private treaty is the exact opposite of sale by public auction and that the Respondent cannot be allowed to bring in oral evidence to contradict documentary evidence. It is further submitted that, having been instructed by the Bank to sell the property by auction as per page 109 of the Record, the Auctioneer cannot elect to sell by private treaty. The court was urged to hold that with the knowledge of all these irregularities, the Respondent is not a bona fide purchaser for value without notice, and the sale should be set aside.
In response to this issue, learned counsel for the Respondent submitted with reference to the evidence of DW1 at pages 66 - 71 of the Record and section 21 (2) of the Conveyancing Act, 1881 that there is no evidence to impute knowledge on the Respondent of any alleged wrong doing, if any, by the Bank in the disposition of the property to him. He contended that as the purchaser of the mortgaged property, the Respondent is the owner and therefore entitled to the grant of a certificate of occupancy. He argued on the authority of Akano vs. F.B.N. Plc (2004)8 NWLR (Pt.875) @ 322, that an innocent purchaser is not bound to enquire whether the right to sell the mortgage property has arisen. Relying on the case of Ejikeme vs. Okonkwo (1994) 8 NWLR (Pt.362) @ 269, learned counsel submitted that the property having been sold to the Respondent and a Deed of Assignment executed between the Bank and the Respondent with Governor’s consent obtained, the Appellant’s interest in the mortgage is extinguished. The court was urged to hold that the lower court was right when it held at page 286 of the record that the Respondent is a bona fide purchaser for value and he lawfully acquire the property, and to dismiss the appeal in its entirety.
Issues Four and Five
On these two issues, it was the argument of Appellant’s counsel that the Appellant has established his title to the property through production of documents of title, by acts of letting, payment of ground rents and tenement rates and by acts of long possession and enjoyment of the land, and therefore entitled to the declaration of title to the land. It is submitted that the Respondent has failed to prove that he is the owner of the property as the transaction that culminated in the sale of the property to him is fraught with bad faith and fundamental defects and irregularities. He urged the court to declare as invalid the Respondent’s root of title, set aside the judgment of the lower court, and dismiss the Respondent’s counter claim for the reasons stated in the preceding submissions of counsel.
RESOLUTION OF ISSUES
Issue One
That the Appellant was the owner of the property situate at No. 38 (now No. 42) Oladeinde Street, Itire/Aguda, Surulere, Lagos, which he acquired through a Deed of Lease in 1973, is not in dispute. That the Appellant mortgaged the said property to Mercantile Bank of Nigeria Limited vide a Deed of Legal Mortgage dated 9th July, 1982 to secure overdraft facilities of N300,000.00, is also not in dispute. That the Appellant has not repaid in full the principal sum and interest is also not in dispute as the Appellant has not stated anywhere in his pleading and evidence that he has repaid in full his total indebtedness to the Bank. As a result of the Appellant’s default to pay his indebtedness to the Bank after demands were made, the Bank published in the Pioneer Newspaper of 1st July, 1991 (Exhibit 2) that it was going to auction the said property situate at No. 38 (now No. 42), Oladeinde Street, Itire/Aguda, Surulere, Lagos. The Appellant who claimed that he was not served with the notice of sale of his property rushed to court within three weeks of the publication and obtained an interim order on 24/07/1991 stopping the planned sale of the property vide suit No. ID/1459/91. After obtaining the said order, the Appellant not only abandoned the case but he made no effort to offset the loan outstanding against him. It took eleven months for the interim order to be set aside on 22/06/1992, vide exhibit Q. Following the setting aside of the interim order in June, 1992, the Bank through the Auctioneer sold the property to the Respondent in 1994 by private treaty for the sum of N700,000.00. It was the contention of the Appellant that the Mortgagee’s power of sale has not arisen as at the date the mortgaged property was sold to the Respondent as there is no evidence before the lower court to show that the amount owed by the Appellant had become due and has not been paid. A careful look at exhibit M, the Deed of Legal Mortgage, shows that there is no specific date fixed therein for the maturity of the overdraft facility granted the Appellant by the Bank. This does not mean that the facility will continue ad infinitum or till thy Kingdom come. That certainly could not have been the intention of the Appellant himself who surrendered his title documents to secure the facility, nor could that be the intention of the Bank. That void was filled by the evidence of DW2, Eddie Akpan, a staff of Nigeria Deposit Insurance Corporation, the Liquidator that took over the defunct Mercantile Bank. He testified that the facility granted the Appellant fell due on 31/12/1982. But even if the maturity date of the facility is not stated, it is implied that repayment becomes due when a demand is made. The general rule is that a debt becomes repayable either (a) on demand, (b) on notice given, or (c) upon any other condition agreed upon by the parties. The law is settled that no right of action for recovery of an overdraft will accrue in a Banker/Customer relationship until there has been a demand or notice given. See N.D.I.C. vs. Oranu (2001) 18 NWLR (Pt.744) 183; Wema Bank Plc vs. Osilaru (2007) LPELR-8960; Uzor vs. Daewoo Nig.) Ltd (2019) 10 NWLR (Pt.1680) 207; Agbabiaka vs. F.B.N. Plc (2020) 6 NWLR (Pt.1719) 77 @ 101. It is implied by law that from the mortgage contract entered into by the parties, the Mortgagor’s equity of redemption is subject to repayment of the facility with the accrued interest. With respect to the exercise of Mortgagee’s power of sale, that power could be said to have arisen when a demand for the repayment of the facility is made and the Mortgagor defaulted in payment. In that situation, the Mortgagee can foreclose the mortgage and dispose of the property in order to recover the facility advanced to the Mortgagor. In the instant case, nowhere in the entire pleading and evidence adduced by the Appellant did he allude to the fact that he has repaid the overdraft facility advanced to him. The Appellant having defaulted in payment, all that the Bank is required to do before foreclosing him and disposing-off the mortgaged property, is to serve him with demand notice. This, the Bank has complied by serving the Appellant with demand notices dated 19/02/1985 and 15/12/1988 respectively. The said notices were admitted by the lower court and marked as exhibits O and P. The Appellant denied receiving the said notices and contended that in the absence of proof of service of the demand notices the Bank wrongly exercised its power of sale. Clause 4 of the Deed of Legal Mortgage (Exhibit M), provides that demand notice can be served either personally on the Mortgagor or sent by post to the address given in the Deed. The Appellant’s address given in the Deed of Mortgage is No. 4 Airport Road Calabar. Exhibit P was addressed to: “No. 4 New Airport Road, PMB 1287, Calabar.” Aside the demand notices, the Bank also filed an action against the Appellant at the High Court Calabar in suit No. C/174/89 claiming the sum of N515,405.17 being his indebtedness to the Bank, as well for an order of foreclose and sale of the property in question. On 21/11/1990 and in the presence of the 1st Defendant, now Appellant, the court entered judgment for the Bank as per its claim. The suit was later withdrawn after it was relisted on the application of the Appellant. That action filed before the High Court Calabar in 1989, five years before the sale of the property in 1994, in itself serves as demand notice on the Appellant, assuming there was none before the said action. By that suit, the Appellant was put on notice that a demand is made on him to pay up his indebtedness to the Bank, but the Appellant remained adamant and refused to pay. See the case of Pillars Nigeria Limited vs. Kojo Desbordes & Anor (2021) LPELR-55200 (SC). Even though the above cited case was not concern with demand notice on a Mortgagor, but I draw inspiration and analogy from the pronouncement of Ogunwumiju, JSC, that the filing of a suit by a landlord for recovery of possession is sufficient notice to the tenant where statutory notice is either not served or is defective. The net result of my analysis above is that the Appellant was aware of the demand for repayment of the overdraft facility not only through the demand letters which he is disputing, but also through the claim filed by the Bank against him at High Court, Calabar.
Learned counsel for the Appellant also argued under this issue that there were discrepancies in the amount the Appellant is alleged to be owing the Bank. The law is trite that a Mortgagee will not be restrained nor can his power of sale be affected merely because the amount due is in dispute or because the Mortgagor objects to the manner in which the sale is being arranged or because the Mortgagor has commenced a redemption action in court. See Nigerian Housing Development Society Ltd vs. Mumuni (1977) 2 SC 57; Okonkwo vs. C.C.B. (Nig.) Ltd (1997) 6 NWLR (Pt.507) 48; Diamond Mortgages vs. Azunna Enterprises Nigeria Ltd & Anor (2019) LPELR-48240 (CA). Therefore, the fact that there is dispute on the amount of indebtedness cannot stop the Mortgagee’s power of sale from arising. Accordingly, I resolve issue one against the Appellant.
Issue Two
The Appellant attacked the “Notice of Auction Sales of Immoveable Properties”, which included the property in question, published in the Pioneer Newspaper of 1st July, 1991, on the ground that the said Newspaper is a regional Newspaper with limited circulation. The Appellant also argued that after the attempted sale of the property in 1991 was aborted by an interim order of the High Court, Ikeja, he is entitled to a fresh notice before the purported disposal of the property in 1994. The Respondent argued otherwise. I have stated under issue one that even though the Appellant argued that he has no notice of the publication, he rushed to court to obtain an interim order against the sale within three weeks of the publication. The implication of his action in rushing to court to stop the sale is that he has notice of the publication, directly or constructively. The sale could not be conducted because of the interim order made on 24/07/1991 by Holloway, J., of the Ikeja Division of the High Court of Lagos State. That interim order lasted till 22/06/1992 when it was lifted by the same Judge. The Appellant abandoned the case at that point and made no effort to pay up his debt to the Bank. While DW1 was being cross examined by learned counsel for the Claimant before the lower court, now Appellant, in an answer to a question on when the Respondent acquired the property, he stated that the process/negotiation commenced in 1991 and concluded in 1994 when the documents were handed over to the Respondent. The effect of the interim order was to suspend the negotiation and the sale, whose notice has been published in the Pioneer Newspaper of 1st July, 1991. With the lifting of the interim order, the suspension of the negotiation and sale was also lifted and the effectiveness of the Newspaper publication was restored. There was therefore no need for the Bank to issue fresh notice to the Appellant before proceeding/continuing with the process of sale.
Appellant’s counsel further submitted that the provisions of sections 19 and 20 of the Sales by Auction Law of Lagos State, 2004, which provides for at least 7 days’ public notice to be given in the City of Lagos before such sale, and two days’ notice to be delivered by the Auctioneer to the Commissioner, have not been complied with before the sale of the Appellant’s property. To start with, there is undisputed and uncontradicted evidence in the Record of Appeal to the effect that the sale of the property in question to the Respondent was not by auction sale, rather, it was by private treaty, the negotiation of which started in 1991 and terminated in 1994. In the light of this unchallenged evidence, the provisions of the Sales by Auction Law of Lagos State, 2004, which regulates sales by auction, is not applicable to sale by private treaty, such as the one in the instant case now on appeal. But, assuming that the Sales by Auction Law of Lagos State applies to this case, the Supreme Court has held that irregularities from auction sale by way of failure to give the statutory notices in sections 19 and 20 and sale of the property at a low price cannot vitiate sale of mortgaged property, except where fraud is established. See Okonkwo vs. Co-operative and Commerce Bank (Nig) Plc (2003) LPELR-2484 (SC); Ibiyeye vs. Foluje (2006) 2 SCNJ 1, where sections 19 and 20 of the Auctioneers Law of Eastern Nigeria and sections 19 and 20 of the Auctioneers Law of Kwara State, respectively, which are in pari materia with sections 19 and 20 of the Sales by Auction Law of Lagos State, came up for consideration. It remains to add that the allegation of fraud in the address of counsel without evidence to substantiate same beyond reasonable doubt is hereby discountenanced. I find that there is no fraud, collusion or bad faith from the facts of this case. Issue two is accordingly resolved against the Appellant.
Issue Three
On whether the Respondent is a bona fide purchaser for value without notice. Learned counsel for Appellant argued that the Respondent had constructive notice of the numerous irregularities that bedeviled the sale of the property to him. Fraud was also alleged by counsel. A bona fide purchaser for value without notice is one who has purchased property for valuable consideration without notice of any prior right or title, which if upheld, will derogate from the title which he has purported to acquire. See Young Shall Grow Motors Ltd vs. Onalada & Ors. (2020) LPELR-51706 (SC). Before a person can raise the plea of being a bona fide purchaser for value without notice, there must be a valid transfer of the property to him. There is evidence to the effect that after the purchase of the property in question, the Mortgagee executed a Deed of Assignment in favour of the Respondent. The Governor’s consent was also obtained for the transaction. The transaction was duly registered as required by law. The question now is whether the Respondent was aware of the irregularities in the process leading to the sale of the property to him as to rob him of the defence of bona fide purchaser for value without notice. In my handling of issues one and two supra, I held that the Appellant had both actual and constructive notice of demand for repayment of the facility granted to him by the Mortgagee. I also held that the Notice of sale of the property published in the Pioneer Newspaper was proper. Equally, I find that the Sales by Auction Law of Lagos State which provides for seven days’ notice to be given in the City of Lagos and two days’ notice to the Commissioner, does not apply to the transaction giving rise to this case as the sale was by private treaty. With these findings, I fail to see any irregularity in the sale warranting the Respondent to seek cover under the plea of bona fide purchaser for value without notice. Assuming, however, that there were irregularities in the sale, was the Respondent aware? Again, the evidence on the printed Record shows that upon seeing the publication, CW1 instructed his Lawyer to go to the Bank at Calabar to check the documents concerning the property. After due diligence on the documents, the Respondent bought the property by private treaty, which was part of the instruction given to the Auctioneer by the Bank. No evidence has been led by the Appellant to show that the Respondent knew that the Mortgagee’s power of foreclosure and sale had not arisen at the time of the sale nor was there evidence to show that the Respondent knew that demand notice has not been served on the Appellant before the sale. All the noise about irregularities concerning the sale, are the mere ipse dixit of the Appellant and his counsel without shred of evidence in support.
My lords, authorities are legion on the point that once a mortgage debt has fallen due, even where stipulated notice has not been given, a purchaser from the Mortgagee acquires an unimpeachable title, provided he is not aware that the power of sale has not become exercisable. See Gbadamosi vs Kabo Travels Ltd (2000) 8 NWLR (Pt.668)243 @ 274-276. Similarly, where the sale is not tainted by fraud or collusion, and the purchaser is not aware of any irregular circumstances surrounding the sale, any defect in notice cannot impeach the title of the purchaser. The remedy the Appellant may have could only be in damages against the Mortgagee. See Sanusi vs. Daniel (1956) 1 PSC93 @ 95; A.C.B. vs. Ihekwoaba (2003) 16 NWLR (Pt.846) 249 @ 271-272: Ibiyeye vs. Foluje (supra); Okonkwo vs. C.C.B. (Nig) Plc (supra). Unfortunately, the Mortgagee has not been made a party in this action by the same Appellant, who it was that ignited the jurisdiction of the lower court in the first place. Based on the foregoing discourse, I resolve issue three against the Appellant by holding that the Respondent is a bona fide purchaser for value without notice.
Consequent upon my resolution of issues 1, 2 and 3 against the Appellant, it follows that the Respondent is entitled to declaration of title to the property situate at No. 38 (now No. 42), Oladeinde Street, Aguda, Surulere, Lagos State as well as possession of same, thereby resolving issues 4 and 5 against the Appellant.
Before I conclude this judgment, it is apposite to observe that throughout the Appellant’s Brief of Argument, heaps of allegations were made against the Mortgagee. Learned counsel for the Appellant seems to have forgotten that the suit leading to this appeal was not filed against the Mortgagee, whose duty it is to prove the due date of redemption and the outstanding indebtedness of the Appellant as at the due date. The Appellant had earlier filed a suit against the Mortgagee but abandoned it. He cannot now expect the Respondent to provide answers to questions that only the Mortgagee is in a position to answer. If he was disputing the due date of the facilities granted him by the Mortgagee, a suit against the Mortgagee would have been the appropriate thing for him to do. But for reasons best known to him, the Appellant avoided meeting the Mortgagee in court. I say no more. Having resolved all the issues in this appeal against the Appellant, I hereby dismiss this appeal and affirm the judgment of B.A. Oke-Lawal, J., of the High Court of Lagos State delivered on 14th January, 2010. Considering the circumstances of this case, I make no order as to costs.
MUHAMMAD IBRAHIM SIRAJO
JUSTICE, COURT OF APPEAL
APPEARANCES:
CA/L/600/2010 M.I. SIRAJO JCA,Page
