Nig. Housing Dev. Society Ltd & Rasaq v. Mumuni (1997) – SC


Nig. Housing Dev. Society Ltd & Rasaq v. Mumuni (1997) – SC

by “PipAr” B.C. Chima

Supreme Court – SC 440/1975

18th February, 1977

Mortgagee selling.

It is a well established principle of law that a mortgagee will not be restrained on the exercise of his power of sale merely 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 Adams v. Scott (1859) 7 WR 213). But the mortgagee will be restrained if the mortgagor pays the amount claimed by the mortgagee into court. (See Hickson v. Darlow (1883) 23 Ch.D. 690). — Udoma, JSC.

As was said by Harman J. in Alliance Perpetual Building Society v. Belrum In-vestments Ltd. And Ors. (1957) 1 W.L.R. 720, at p. 722 – possession is a remedy to which a mortgagee is entitled as of right against a mortgagor, whether the principal or interest be due or not, unless there is some special clause in the mortgage excluding it. (See also Hughes v. Waite (1957) 1 W.L.R. 713; and Four Maids Ltd. v. Dudley Marshall (properties) Ltd. (1957) Ch. 317. — Udoma, JSC.

In any case, having declared the sale void, there was nothing to set aside. For if an act is void, then it is in law a nullity. It is not only bad but incurably bad and there is no need for an order to set it aside for there is nothing to set aside. See Macfoy v. United Africa Company Ltd. (1961) 3 W.L.R. 1405. — Udoma, JSC.

Udoma, J.S.C.

Chief Rotimi Williams.
Mr. Coker.

Mr. Sodipo.

On the pleadings and the evidence, the plaintiff by a mortgage deed dated 5th September, 1961, mortgaged his leasehold land and premises, described there-in as “all that piece or parcel of land situate at Onigbongbo near Ikorodu road, in Ikeja District with the buildings thereon, registered as No. 53 at page 53 in Volume 418 of the Lands Registry at Ibadan” to the first defendant, the Nigerian Housing Development Society, Limited, a Mortgage Company, as security for a loan of £3,000 on terms that the principal sum thereof and the interest due thereon be re-payable by regular monthly Instalments of £30:2:64 as from October, 1961 until the complete liquidation of the mortgage debt.

In terms of the mortgage deed, the plaintiff paid his instalments fairly regularly between 1961 and 1967, but markedly defaulted between 1967 and 1968 because “his business was bad” by reason “of the trouble in the country,” so that by March, 1968, the plaintiff was about some five months in arrear with his installmental payments. Consequently on the instruction in writing of the first defendant, Chief Ben Oluwole, a licensed Auctioneer, engaged by the first defendant for the purpose, duly advertised the mortgaged property for sale in the Daily Times newspaper issue of 27th March, 1968. Auction notices were also pasted at appropriate places advertising the proposed sale of the mortgaged property.

Then in April, 1968, the plaintiff, having learnt on inquiry that the instalments outstanding in arrear unpaid up to April, 1968 was of the order of the total sum of £210:17:64: paid a total sum of £240 on 26th April, 1968 for which he was, issued with two receipts marked “suspense”, indicating that the payments were received for a suspense account. The sum, according to the plaintiff, represented instalments up to and including May, 1968.

Available:  Asiru Gbadamosi & Ors. v. Alhaji Salami A. Bello & Ors. (1985)

In the meantime, the auctioneer proceeded with negotiations for the sale by private treaty of the mortgaged property and on 29th April, 1968, sold the same to the second defendant for the sum of £7,250.

This is an appeal from the judgment of Beckley J. in the High Court of Lagos State, Ikeja Judicial Division, in Suit No. IK/68/68, wherein the plaintiff, herein respondent, had sought against the first and second defendants, herein first and second appellants, an order of court to set aside a purported sale of the plaintiff’s house and landed property known as No. 14 Airport Road, Ikeja by the first defendant to the second defendant; and an Injunction to restrain the defendants, their agents and/or servants from interfering with the plaintiff’s possession of the said house and landed property.

At the hearing in the High Court, the plaintiff contended that he did not receive foreclosure notice or notice of sale, and that there was no sale either by public auction or by private treaty between the first and second defendant. And in the alternative, that if there was a sale (which was denied) such sale was null and void on the grounds of fraud, collusion and irregularities.

The learned trial Judge, after a lengthy review of the evidence, held that on the date of the sale of the mortgaged property, the plaintiff was not in default of his installmental payments due from him to the first defendant; that so long as the mortgagor had paid up his installmental arrears up to date, he was entitled to relief by equity because once he had done so, the mortgagee was bound to stop any in-tended sale of the property; that at the time of the sale, there was no power of sale vested in the first defendant; that the power of sale had not been exercised with-out irregularity, fraud or collusion on the part of the first defendant; that the exclusion of Section 20 of the “Law of Property and Conveyancing Act, 1881, from the mortgage deed whereby the first defendant was not bound to give prior notice of sale to the plaintiff was illegal; and that the second defendant was not a bona fide purchaser for value without notice and therefore that the sale and conveyance must be set aside.”

I. On the 29th April, 1968, when the mortgaged property was sold (assuming there was a sale) had the power of sale arisen?

A. “In accordance with Clause 5(1) the plaintiff agreed to repay the first defendant the whole of the principal money and interest thereon by monthly Instalments of the sum of £30:2:64: each month, the first such instalment to be paid on 5th October, 1961, and thereafter on the last day of every succeeding month until the whole of the principal money and interest had been fully paid and completely liquidated. On those terms and subject thereto the first defendant also agreed to refrain from requiring the repayment of the principal money and interest thereon otherwise than by the prescribed instalments and in the prescribed manner so long as the instalments were paid regularly and the plaintiff did not commit any breach of any obligations, statutory or otherwise, binding upon him. Furthermore despite these arrangements it was specifically provided in Section 5(2) that the principal money shall be deemed to become due within the meaning of the Conveyancing and Law of Property Act, 1881, on the dates prescribed under Clause 1. The effect of the provisions of Clauses t and 5 of the mortgage deed would appear to be this: that repayment of the principal money with interest in full, although due as far back as 1962, was postponed in preference to repayment by monthly instalments of a fixed sum on terms as to regularity of such monthly payments and non-breaching of any other obligations, statutory or otherwise, binding upon the plaintiff. That being so, it is perfectly plain that the statutory power of sale vested in the first defendant by virtue of Section 19(1) of the Conveyancing and Law of Property Act, 1881, which confers upon a mortgagee “a power, when the mort-gage money has become due, to sell, or concur with any other person in selling the mortgaged property”, arose as far back as 1962, that is, long before the 26th April, 1968. This then provides the answer to the first question in the affirmative.”
II. On that date was the plaintiff legally in breach of the terms of his covenant to repay the principal money and interest by regular monthly instalments?

Available:  Vidah C. Ohochukwu V. Attorney-General of Rivers State & Ors. (SC.207/2004  • 17 February 2012)

A. “The answer to the second question must also be in the affirmative having regard to the peculiar situation disclosed by the mortgage deed and on the evidence. Obviously, it was the first defendant which postponed the payment in full by the plaintiff of the principal money and interest in 1962 in preference to the payment by monthly instalments of the sum of £30:2:64:, commencing from 5th October, 1961 and thereafter on the last day of every succeeding month. Payment of the instalments fell into arrear because the plaintiff’s business, on the evidence accepted by the learned trial Judge, was bad, so that by March 1968, the plaintiff was some five months in arrears, and on his own admission, by April, 1968, he was owing instalments totaling the sum of £210 odd. On his own showing there-fore, the plaintiff had committed a flagrant breach of his own covenant thereby throwing himself at the mercy of the first defendant and exposing himself to the rigours of such a breach.
In such circumstances, was it reasonable for the plaintiff, without reaching a proper agreement and understanding with, and obtaining the full consent of the first defendant, to rush at the last minute to pay the outstanding arrears after realising that the property was liable to be sold? We think not. The plaintiff, having defaulted in the payment of his instalments for so long, would appear to have deprived himself of the right to continue to liquidate his loan by the easy method of regular monthly instalments. That right had lapsed and could only have been preserved or revived with the consent of the first defendant, because the breach of his covenant caused the whole of the principal money with interest to become immediately due and payable in full.”

“And it seems to us, therefore, that if the first defendant had applied to the court in April, 1968 when the plaintiff was in arrear of his instalments for an order for possession, it would have been extremely difficult for the court to refuse to make such an order merely because the plaintiff had brought the total sum in arrears up to that date to court. That was the view taken in Robertson v. Cilia, (1956) 1 W.L.R. 1502.”
III. Whether the exclusion of Section 20 of the Conveyancing and Law of Property Act, 1881 from the mortgage is illegal and irregular?

Available:  A. U. Amadi v. Thomas Aplin & CO. LTD (1972)

“It would appear that by virtue of the above provisions [section 19(2) and (3) Conveyancing and Law of Property Act, 1881], since a contrary intention was expressed in the mortgage deed, Exhibit 2, the provisions of Section 20 of the Conveyancing and Law of Property Act, 1881, would have no application thereto. Furthermore, the exclusion of Section 20 of the Act from the mortgage deed was certainly a competent and lawful exercise of the statutory power conferred by the Conveyancing and Law of Property Act, 1881. The learned trial Judge was therefore in error in his assertion that there was no provision in the Conveyancing and Law of Property Act, 1881, permitting the exclusion of Section 20 of the Act from the mortgage deed. See also Halsbury’s Laws of England 3rd ed. para. 553 at p 295.”
“There is so much wrong with the judgment of the learned trial Judge that it would be unreasonable to allow it to stand. The appeals of the first and second appellants therefore succeed. Both are allowed. The judgment of the learned trial Judge (Beckley J.) dated 22nd December, 1970 together with the Order for costs is here-by set aside.”


Section 19(2) and (3) Conveyancing and Law of Property Act, 1881: “19(2)The provisions of this Act relating to the foregoing powers, comprised either in this Section or in any subsequent Section regulating the exercise of those powers, may be varied or extended by the mortgage deed, and, as so varied or extended, shall as far as may be, operate in the like manner and with all the like incidents, effects, and consequences, as If such variations or extensions were contained in this Act. 19(3) This Section applies only if and as far as a contrary intention is not expressed in the mortgage deed, and shall have effect subject to the terms of the mortgage deed and to the provisions therein contained.”

In Robertson v. Cilia, (1956) 1 W.L.R. 1502, there a mortgagee applied by summons to the court for an order for pos-session of the mortgaged property on the ground that payment of instalments was in arrear. The mortgagor applied for the case to stand over generally. After certain interlocutory proceedings, the summons was adjourned into court in order that it might be determined to what extent the court had power to stand over generally a summon of that nature. At the time of the hearing, all arrears of instalments due under the mortgage had been paid up, but the right to repay by instalments had lapsed; and it was admitted that owing to general credit restrictions the mortgagor would not be in a position to redeem within any foreseen time. It was held that, an order for possession should be made as the mortgagee was entitled to possession, and in those circumstance, there was no power to stand the matter over generally without the consent of the mortgagee nor would it be a reasonable exercise of power to stand it over for a period when there was no prospect that the mortgagee would be in a position to make an acceptable offer. (See also Hinkley and South Leicester Permanent Benefit Building Society v. Freeman, (1941) Ch.32).





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