Sterling Bank PLC V. Mrs Victoria Modupe Suleiman & Ors (2016)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

UGOCHUKWU ANTHONY OGAKWU, J.C.A. (Delivering the Leading Judgment)

(EXORDIUM) This is an appeal against the decision of the High Court of Lagos State, Coram:Obadina, J. in Suit No M/311/2006: STERLING BANK PLC vs. MRS. VICTORIA MODUPE SULEIMAN & ORS delivered on 31st March, 2011. In precis, the background facts which led to this appeal are as follows:

The Appellant through its precursor, NAL MERCHANT BANK, gave a facility to the 2nd Respondent, SETONI INTERNATIONAL LIMITED.The facility was said to have been secured by the personal guarantee and third party legal mortgage on the property of the 1st Respondent. The 2nd Respondent defaulted in liquidating the facility and Appellant sought an order of foreclosure and sale of the said mortgaged property.

?The account of the 1st Respondent on the background facts are slightly different. By her account, the facility was for a period of one year and she agreed for her property to be used as collateral but that no personal guarantee or deed of legal mortgage was executed by her as the security was by a simple deposit of the title documents. She says that subsequently the 2nd Respondent informed

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her that they had fulfilled their obligation to the Appellant and that a security for the loan was no longer needed, whereupon her original title documents which she had deposited were returned to her.

?However, the controversy raged as to whether infact there was a deed of mortgage executed by the 1st Respondent. Consequent upon this, the 1st Respondent instituted proceedings at the High Court of Lagos State in Suit No. LD/11/2002: MRS. VICTORIA MODUPE SULEIMAN VS NAL MERCHANT BANK PLC & 2 ORS. claiming, inter alia, a declaration that the purported third party legal mortgage was illegal, unconstitutional, null and void. The Appellant filed its Statement of Defence in the said action and set up a Counterclaim, wherein it claimed special damages for the amount of the facility granted to the 2nd Respondent and general damages for the damage caused to it in its business by the recalcitrant attitude of the 1st and 2nd Respondents. The said action in Suit No. LD/115/2002 which was commenced on 30th January, 2002 is still pending.

The Appellant later withdrew its Counterclaim in the said Suit No. LD/115/2002 and on 10th July, 2006 it filed the Originating

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Summons in Suit No. M/311/2006 which has spawned this appeal. In the said Originating Summons, the Appellant claimed for the following reliefs:

?1. Foreclosure of 1st Defendant?s equity of redemption of the mortgaged property situate at Plot 1703, Violet Yough Close, Victoria-Island, Lagos by reason of failure of the 1st and 2nd Defendant to repay the loan facility.

2. Sale of mortgaged property situate at Plot 1703, Violet Yough Close, Victoria-Island, Lagos in satisfaction of the facility secured by Deed of Legal Mortgage registered as No 27 at page 27 in Volume 2049 kept at the Lands Registry Alausa Ikeja, Lagos.
3. An order to the 3rd Defendant for delivery of possession of the mortgaged property situate at Plot 1703, Violent Yough Close, Victoria-Island, Lagos to the Claimant/mortgagee.?

(See Page 1 of the Records)

The Originating Summons is at pages 1-67 of the Records.

?The 1st Respondent joined issues with the Appellant on the Originating Summons and filed her Counter Affidavit. The said Counter Affidavit is at pages 217-270 of the Records. The Appellant in turn filed a Reply Affidavit which is at pages