Andrew Nweke Okonkwo v. Cooperative & Commerce Bank (Nigeria) Plc & Ors.(2003) – SC



Andrew Nweke Okonkwo v. Cooperative & Commerce Bank (Nigeria) Plc & Ors.(2003) – SC

by PipAr Chima


Supreme Court




It was common ground that the relationship between the plaintiff and the 1st defendant is contractual and governed by exhibit B, the Deed of Legal Mortgage. That being so, extrinsic evidence will generally not be acceptable to vary the terms agreed upon (see for example U.B.N. v. Ozigi (1994) 3 NWLR (Pt. 333) 385). – Kutigi JSC. Okonkwo v. Cooperative Bank (2003)

It is trite law that persons of full age and sound mind are bound by any agreement lawfully entered into by them. – Kutigi JSC. Okonkwo v. Cooperative Bank (2003)

Although some aspects of this provision have become anachronistic owing to socio-political changes, it cannot be denied that the purpose of the provision is for the mortgagee to give adequate notice to the public of the proposed sale. It is not a notice intended to be given to the mortgagor. This is to ensure that a true public auction, where everyone interested in the property may have the opportunity to bid for it, is conducted for a fair deal, devoid of unconscionable bargain through connivance or collusion. This is not a notice which can be waived by the mortgagor. Actually, it does not lie with him to do so as it is not meant for him. – Uwaifo JSC. Okonkwo v. Cooperative Bank (2003)

I do not think it has been denied that the 3rd respondent is the mother of the said Chief Kalu. It is not also disputed that Chief Kalu was the Chairman of the Board of Directors of the bank. But I think a few matters ought to be put right. First, what gave rise to the auction sale was not the making of the Chairman, Board of Directors. It was the failure of the appellant to settle his indebtedness with the bank. Second, auction sale attracts all and sundry. It affords an opportunity for anyone able to meet the challenges of an auction sale to participate in it unless he is precluded by any regulation, agreement, undertaking or by virtue of his special position in relationship with the transaction from so participating. – Uwaifo JSC. Okonkwo v. Cooperative Bank (2003)

A counter claim to quote from Bairamien, JSC in Oyegbola v. Esso WA (1966) 1 All NLR 170 is a weapon of offence which enables a defendant to enforce a claim against the plaintiff as effectively as in an independent action. The counter-claim must be directly related to the principal claim but not outside of and independent of the subject matter of the claim. – Niki Tobi JSC. Okonkwo v. Cooperative Bank (2003)

The procedure for setting up a counter-claim is well established in law. It is the usual practice to commence a counter-claim immediately after the defence. It could be on the same page with the defence or on a fresh or separate page. There is no rule of the thumb. It depends upon the state of the individual pleadings. The important thing is that it should follow immediately after the defence and that is the meaning of the conjunction “and” found in most rules of court. – Niki Tobi JSC. Okonkwo v. Cooperative Bank (2003)

By our practice, a counter-claim is clearly marked “COUNTER-CLAIM” and the defendant, who in his apparently changed status of plaintiff, avers in numbered paragraphs his claim which finally ends in the relief or reliefs sought. A counter-claim, though related to the principal action, is a separate and independent action and our adjectival law requires that it must be filed separately. The separate and independent nature of a counter-claim is borne out from the fact that it allows the defendant to maintain an action against the plaintiff as profitably as in a separate suit. It is a weapon of defence which enables the defendant/to enforce a claim against the plaintiff as effectually as an independent action. As a matter of law, a counter-claim is a cross action with its separate pleadings, judgment and costs. It is almost in a world of its own. But a counter-claim cannot be inconsistent with the plaintiff’s claim in the sense that it cannot erect a totally different case from that of the plaintiff. – Niki Tobi JSC. Okonkwo v. Cooperative Bank (2003)

While the point is conceded that an advocate should be sensitive and loyal to his client’s case, such sensitivity and loyalty should not exceed required boundaries, particularly the duty the advocate owes the court to present the law correctly, even if it is against his client. – Niki Tobi JSC. Okonkwo v. Cooperative Bank (2003)

It is elementary law that parties are bound by their pleadings and facts not pleaded will go to no issue. In other words, evidence on facts not pleaded will not avail the party relying on the evidence. – Niki Tobi JSC. Okonkwo v. Cooperative Bank (2003)

Paragraphs in pleadings are not read in isolation but read together to obtain the total story of the parties. – Niki Tobi JSC. Okonkwo v. Cooperative Bank (2003)

And what is more, fraud, as a crime must be specifically pleaded and proved. – Niki Tobi JSC. Okonkwo v. Cooperative Bank (2003)

Crime as an offence punishable by law must be specifically pleaded and proved. – Niki Tobi JSC. Okonkwo v. Cooperative Bank (2003)

The law of sale by auction or auction sale protects the purchaser and that is the basis of the principle of law that a mortgagor’s right essentially is in damages. The law has an important qualification and it is that the purchaser must have bought the mortgaged property in good faith, that is bona fide and not in bad faith, that is mala fide. The sympathies of the law on the purchaser will vanish the moment the court comes to the conclusion that the purchaser bought the property in bad faith. Bad faith on the part of the purchaser is a matter of fact to be deduced from the totality of the purchasing or buying conduct of the purchaser. Bad faith taints or better still, destroys a mortgage sale and therefore the property in the sale. – Niki Tobi JSC. Okonkwo v. Cooperative Bank (2003)


Andrew Nweke Okonkwo


Cooperative & Commerce Bank (Nigeria) Plc & Ors.


Kutigi, J.S.C.



– Mr. Obianwu.


– Ben Anachebe, Esq., for the 1st & 2nd respondent.
– Chief Uche, for 3rd respondent.


The plaintiff (mortgagor) had in 1981 mortgaged his building known as No. 133 Aba-Owerri Road, Aba to the 1st defendant (mortgagee) by virtue of a deed of mortgage (exhibit B in the proceedings) as security for a loan of N60,000.00. The loan was repayable within twelve (12) months. The plaintiff defaulted in complying with the terms of exhibit B and did not repay the loan for more than six years after the debt became due. Upon continued default by the plaintiff the 1st defendant/Bank sent relevant notices and statements of account to the plaintiff as evidenced by exhibits G, H, H.1 and H.2 in the proceedings. When the 1st defendant first wanted to sell the house in 1982, it was stopped by the payment of N21,000.00 by the plaintiff. Then on 30th January, 1988, the plaintiff saw a publication in the Nigerian Statesman Newspaper whereby the 2nd defendant (auctioneer) had advertised the mortgaged property for sale on behalf of the 1st defendant/Bank. The auction sale was scheduled to take place on Monday 1st February, 1988 at 8.00 a.m. The plaintiff said he was able to raise the sum of N96,000.00 from friends which he took to the 1st defendant in payment of the mortgage debt so as to stop the auction sale but without success. This was denied. His contention also that there was no auction sale because there was no notice to that effect was equally denied. The 1st defendant said in exercise of its power of sale under exhibit B, it gave notice of the intended sale by conspicuously pasting notices on the building and other public places in addition to the publication in the newspaper (exhibit A). That several people attended the auction sale including the plaintiff, his brother and agent who bidder for the property. The 3rd defendant who also attended the public auction bidder. She was the highest” bidder, and the property was duly sold to her and a deed of assignment executed in her favour as per exhibit K.

In the High Court of Justice holden at Aba, the plaintiff claims against the defendants jointly and severally as follows – “(a.) A declaration that the defendants are not entitled to sell the plaintiff’s property situate at and called No. 133 Aba-Owerri Road, Aba. (b.) An order to set aside any purported sale of the said property made by the defendants on the 1st day of February or thereabout as being illegal and a nullity and damages for the wrongful act. (c.) An order of the Honourable Court for a review of the account of the plaintiff in the 1st defendant bank to determine the amount (if any) outstanding against the plaintiff.” (d.) An injunction to restrain the defendants by themselves, their servants or agents from selling or purporting to sell the plaintiff’s aforesaid property.” Pleadings were ordered, filed and exchanged.

At the conclusion of hearing, counsel on both sides addressed the court and in a considered judgment, the learned trial Judge dismissed plaintiff’s claims. Aggrieved by the judgment of the trial court, the plaintiff appealed to the Court of Appeal holden at Port-Harcourt. In a unanimous judgment, the appeal was dismissed. The plaintiff has now further appealed to this court from the decision of the Court of Appeal.



1. Having rightly held that the award made by the trial court in favour of the 3rd respondent was without jurisdiction, was the Court of Appeal right to proceed to declare the 3rd respondent the title holder of the rights, title and interest of the unexpired term of lease based on exhibit B?

i. I say straight away that this contention is baseless. All that the Court of Appeal said on page 281 of the record is this – “After a cool calm view of the facts there is much force in the contention of the appellant that invalid counterclaim was placed before the court; therefore any award by the learned trial Judge based on it was without jurisdiction. I am in complete agreement with the contention of the appellant so the award made on page 116 of the record of appeal having been made without jurisdiction is struck-out. Be that as it may, the claim in paragraph 24 of 3rd respondent’s amended statement of defence was unnecessary and superfluous having had a deed of assignment legally and validly executed in her favour she was a title holder of the rights, title and interest of the unexpired term of the lease based on exhibit B.”
By no stretch of imagination can it be said that the Court of Appeal has somersaulted in the above passage of its judgment. The Court of Appeal clearly struck-out the 3rd defendant/respondent’s counter-claim and then proceeded to state the legal consequence flowing from the Deed of Assignment (based on exhibit B) already executed in favour of the 3rd respondent. That is not making an award to the 3rd defendant.

2. Whether there was proper notice, public and personal, before the auction sale was conducted in the instant case?

i. Clause 7 of exhibit B above gave the 1st defendant the right to sell the mortgaged property if the plaintiff failed to repay the loan on the due date without I any further consent of the plaintiff. By Clause 8 of exhibit B, the plaintiff also waived his rights to be given any notice under any statute or customary law. The Court of Appeal was thus plainly giving effect to the agreement entered into by the plaintiff himself and nothing else when it said the plaintiff had waived his right to any notice of sale under section 19 of the Auctioneers Law of Eastern Nigeria. The 1st defendant/Bank was thus not bound under the lease (exhibit B) to have given the plaintiff any further notice of the proposed sale after the demand notices exhibits H, H1 and H2.

ii. The plaintiff also contended in paragraph 21(c) of the amended statement of claim that “the auction sale did not comply or conform with Auction Law of Eastern Nigeria 1963, and shall therefore contend at the trial that the purported sale of the said property is invalid in law and therefore of no effect.” But the plaintiff in his pleadings has failed to state the facts relied upon which render the auction sale not to have complied or conformed with the law. In other words the plaintiff did not state the facts which took the sale outside any statutory provision or provisions since a party cannot set out the conclusion of law in his pleadings. It is also trite law that evidence given on matters not pleaded goes to no issue and ought to be disregarded by the court.

3. Does the manner in which the Court of Appeal resolve the issue of fraud and lack of good faith on the part of the 1st respondent show an appreciation of the appellant’s complaints before that court? Was the Court of Appeal right not to have made any findings on issue whether Chief Orji Uzo Kalu was Chairman of the 1st respondent’s Bank at the material time and whether the sale to his mother the 3rd respondent was not against public policy?

i. The simple answer here is that the plaintiff did not in his pleadings specifically plead fraud or collusion and even where he alluded to them, he furnished no particulars. He again led no evidence whatsoever to prove any of the allegations. For example in his evidence he told the court that the 3rd defendant who purchased the property was the mother of the Chairman of the 1st defendant. Was that enough to prove collusion and or fraud between the 1st defendant and the 3rd defendant without more Certainly not! The plaintiff’s story was disbelieved by the trial court as well as the Court of Appeal. It will serve no useful purpose here repeating him all over again. There was no obligation on the part of the Court of Appeal to have made a finding on one Chief Orji Uzo Kalu who was not a party to the case. As I said since fraud was not specifically pleaded. and no evidence led on it, it is a non-issue in the case. There was thus nothing to be resolved by the Court of Appeal.

i. In sum, exhibit A was made in bad faith. I entirely agree with learned counsel for the appellant that exhibit A was “a devise to fetter the right of redemption”. Exhibit A, in my opinion, was a fiat accompli in so far as the redemption of the mortgaged property is concerned. A mortgagor has a legal right to redeem a mortgaged property which is not yet liable to an auctioneer’s most unfriendly hammer, and the mortgagee has a corresponding duty to open his doors for the mortgagor to redeem the property. A mortgagee who out-smarts or cunningly outplays 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 mortgagor’s 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. Putting it in another language, the mortgagor’s right of redemption is open till the sale of the property unless the deed of mortgage provides otherwise or to the contrary. It is clear to me that the 1st respondent did not act in good faith in its entire management of the purported sale of the mortgaged property as evidenced by exhibit A.

ii. From the totality of the evidence in this matter, it is my view that the property in No. 133 Aba/Owerri Road, Aba did not pass to the 3rd respondent. By way of recapitulation, I am inclined to allowing this appeal for the following reasons: (1) The Court of Appeal correctly came to the conclusion that the counter-claim was incompetent. Having come to that conclusion, and in view of the fact that what the court regarded as a counter-claim was the relief sought by the 3rd respondent, there was no relief available for the court to give judgment to the 3rd respondent, and so the Court of Appeal was not in a position to affirm the judgment of the learned trial Judge. (2) The waiver which both courts relied upon against the appellant in exhibit B was not pleaded, and even if it was pleaded, clause 8 therein was clearly restricted to the appellant and not the public. After all, the appellant cannot in law waive the right of members of the public to the seven days statutory notice required by section 19 of the Auctioneers Law. (3) And since section 19 was not complied with, the sale was null and void ab initio. (4) Exhibit A was made in bad faith as it was designed to outsmart the appellant. How else can one explain notice given on a Friday and sale taking place at 8.00a.m. on a Monday! (5) From the evidence, I do not think the 3rd respondent was an innocent purchaser.

iii. I am fortified by my conclusion above in respect of the relationship between the 3rd respondent and her son. In the light of the state of the pleadings, I have come to the inescapable conclusion that the son, Chief Kalu, was the Chairman of the 1st respondent at the material time when the 3rd respondent bought the property. Appellant contended that the 3rd respondent fronted for her son. I do not want to go to that aspect. Let me restrict myself to the aspect that is covered by the evidence. There is utmost bad faith and clearly unconscionable and against public policy for the 1st respondent to sell the property to the 3rd respondent, the mother of their Chairman. This is clear evidence of collusion and to the knowledge and acquiescence of the 3rd respondent.


Before I conclude I want to stress the fact that this is a case in which the evidence revealed that the plaintiff and his brother were present at the venue of the sale and indeed participated in the bidding. The plaintiff who allegedly had N96,000.00 with him, bidded and offered only N70,000.00 for his property. Clearly therefore he was not interested in redeeming his property. When the property was sold for N110,000.00 he said it was under valued, or that there was fraud and or collusion etc. The plaintiff clearly in my view has no case. All the issues having been resolved against the plaintiff, the appeal must fail.


Section 19 of the Auctioneers Law, Cap. 12, Laws of Eastern Nigeria, 1961: “no sale by auction of any land shall take place until after at least seven days’ public notice thereof made at the principal town of the district in which the land is situated and also at the place of the intended sale. The notice shall be made not only by printed or written documents, but also by beat of drum or such other method intelligible to uneducated persons as may be prescribed as the divisional officer of the district where such sale is to take place may direct, and shall state the name and place of residence of the seller.”

Section 21(1) of the Conveyancing Act, 1881 applicable in Abia State: “Where a conveyance is made in professed exercise of the power of sale conferred by this Act the title of the purchaser shall not be impeached on the ground that no case has arisen to authorise the sale, or that due notice was not given or that the power was otherwise improperly or irregularly exercised, but any person damnified by an unauthorised or improper or irregular exercise of the power shall have his remedy in damages against the person exercising the power.”


In Sanusi v. Daniel (1956) SCNLR 288, the Federal Supreme Court per Jibowu Ag. FCJ, after considering section 21(2) of the Conveyancing Act in almost similar situation as this case observed at page 291 thus: “The appellant’s complaint is against an irregular exercise of the power of sale on the ground that there was a contravention of section 19(1) of the Sales by Auction Ordinance. It seems to me that the title of the 2nd respondent cannot be impeached since the property was conveyed to him, and that the appellant’s remedy is in damages against the 1st respondent as provided by section 21(2) of the Conveyancing Act, 1881.”

United African Company Ltd. v. Taylor (1934) 2 WACA 67 at 71, the Judicial Committee of the Privy Council said: “In the opinion of their Lordships there is no rule which is less subject to exception than the rule that charges of fraud and afortiori charges of criminal malversation or felony, against a defendant ought not to be made at the hearing of an action unless, in a case where there are pleadings, those charges have been definitely and clearly alleged so that the defendant comes into court prepared to meet them.”


Available:  Nika Fishing Co. Ltd. V. Lavina Corporation (2008)



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