A. Onamade & Anor. V. African Continental Bank Ltd. (1997)

LAWGLOBAL HUB Lead Judgment Report

I. IGUH, J.S.C.

By a writ of summons issued on the 22nd day of May, 1986, the plaintiffs, who are appellants herein, instituted an action against the defendant, who is now respondent, at the High Court of Justice, Oyo State claiming as follows –

“1. The plaintiffs’ claim is against the defendant for an order directing the defendant to release

(a) The 1st plaintiff’s deed of title to the 2nd plaintiff.

(b) Document acknowledging the receipt of the sum of N29,912.53 (Twenty-nine thousand, nine hundred and twelve naira, fifty-three kobo) to the 2nd plaintiff duly executed.

2. The plaintiffs also claim against the defendant the sum of N50,000.00 (Fifty thousand naira) being special and general damages for the wrongful detention of or refusal to surrender the said documents.
3. The plaintiffs also claim N500.00 (Five hundred naira) per day from date of writ until documents are released.”

The facts of this case are not very much in dispute. In 1977, the 1st plaintiff obtained a loan from the defendant which was secured by legal mortgage over his landed property situate at Mokola, Ibadan. In February, 1986, the plaintiffs entered into an agreement, Exhibit B, whereby the 2nd plaintiff was to pay the defendant the balance, then outstanding, under the loan agreement and the 1st plaintiff agreed that the documents of title in respect of the mortgaged property deposited with the defendant should be released to the 2nd plaintiff. On the 26th February, 1986, the 1st plaintiff by his letter, Exhibit A, forwarded to the defendant, the 2nd plaintiff’s cheque for N29,912.53, Exhibit J, being the outstanding balance in respect of the said loan. Attached to Exhibit A, also, were Exhibit B, a copy of an agreement between the two plaintiffs regarding payment of the said outstanding balance and a draft deed, Exhibit C, headed “Form of Receipt of Discharge of a Mortgage” which ex-facie is a draft deed of acknowledgment in respect of the receipt of the said N29,912.53 by the defendant coupled with a transfer of the rights and all the benefits of the aforementioned mortgage by the defendant to the 2nd plaintiff.

The defendant duly cashed the cheque Exhibit J but refused to sign the Deed of release, Exhibit C in the form prepared by the plaintiffs or release the 1st plaintiff’ s documents of title to the 2nd plaintiff. It is as a result of this refusal that the plaintiffs filed this action against the defendant.

Pleadings were ordered in the suit and were duly settled, filed and exchanged.

By paragraphs 4, 11, 12 and 15 of the plaintiffs’ Statement of Claim, it was averred as follows –

4. Sometime in 1977 the 1st plaintiff took a revolving loan of N50,000.00(Fifty thousand naira) from the defendant for its business undertaking and mortgaged his property at N6/316C Oyo Road, Mokola, Ibadan with the defendant as per Deed of Mortgage dated 14th April, 1977 and registered as No.18 at page 18 in Volume 1142.
5. In order to save the 1st plaintiff’s house from going under the hammer of the defendant’s auctioneer the 1st plaintiff agreed that the 2nd plaintiff should payoff the outstanding mortgage debt by paying the sum of N29,912.53 to the defendant to redeem the mortgaged property.
6. On the 26th February, 1986 the 1st plaintiff wrote to the defendant, attaching a copy of the agreement between 1st and 2nd plaintiffs. 2nd plaintiff’s cheque for N29,912.53 (Twenty-nine thousand nine hundred and twelve naira fifty-three kobo) and a prepared document acknowledging the receipt of the said sum in triplicate to be executed by the defendant.
7. When after a while the defendant further refused to surrender the said documents to the 2nd plaintiff, the 2nd plaintiff went to meet the Manager of the defendant in his office at lbadan on several occasions and orally demanded the release of the said documents but the documents were not released.

The defendant, by paragraphs 4,5,6,7,11.12,13,14,15,16 and 17 of its Statement of Defence pleaded thus –

4. The defendant says with respect to paragraph 4 of the plaintiffs’ Statement of Claim that the Deed of Legal Mortgage dated 14th April, 1977, and registered as No.18 at page 18 in volume 1142, has not been released despite attempts by the defendant by preparation of a Deed of Release handed over to the plaintiffs through the second plaintiff for same to be executed, registered and released on payment of the defendant’s costs.
5. The defendant says the parties to the Deed of Legal Mortgage referred to above were the first plaintiff and the defendant.
6. The defendant says the second plaintiff did not secure the overdraft facilities granted to the first plaintiff by the defendant and thereby was and still (sic) no property of the second plaintiff under any mortgage to the defendant.
7. The defendant says with respect to paragraphs 12, 13, 14, 15, 16 and 17 of the plaintiff’s Statement of Claim it is not a party to any arrangement between the first plaintiff and the second plaintiff as to the payment of any indebtedness of the first plaintiff to the defendant.
8. The defendant avers that it has to prepare the Deed of Release in the name of the first plaintiff as the Mortgagor and not in the names of the first plaintiff and the second plaintiff together as no property of the second plaintiff was secured under the said Legal Mortgage.
9. The defendant avers that it prepared the Deed of Release in the name of the first plaintiff and sent same to the second plaintiff who by a letter dated 24th June, 1986 informed the defendant through his letter of that date that the Deed of Release sent to the plaintiff was unsuitable.
10. The defendant says that its Deed of Release referred to in paragraph 11 above is the appropriate document.
11. The defendant says the plaintiffs insist without justification that it ought to execute the plaintiffs’ document tilted “Form of Receipt of Discharge of a Mortgage” dated 28th February 1986; which provides that the said document shall “operate as a transfer of the benefit (if the Mortgage to” the second plaintiff.
12. The defendant avers that it cannot lawfully transfer the mortgage executed by the first plaintiff with it to the second plaintiff.
13. The defendant says it can only lawfully release the said Deed of Legal Mortgage by the Deed of Release sent to the 1st plaintiff.
14. The defendant says it refuses to execute a defective document.

The plaintiffs in paragraphs 2 and 3 of their reply to the defendant’s Statement of Defence, raised the issue of estoppel and averred as follows-

“2. The plaintiffs say, with reference to paragraphs 6 and 7 of the Statement of Defence, that the defendant is estopped from denying the right of the 2nd plaintiff having elected to take benefit under the letter dated 26th February, 1986 by accepting the repayment from 2nd plaintiff with knowledge of agreements dated 28th February, 1986, receipt for discharge of Mortgage sent to defendant for execution.

3. With reference to paragraphs 11-19 of the Statement of Defence, the plaintiffs say that the defendant is estopped from approbating and reprobating having elected to accept payment of the mortgaged debt by the 2nd plaintiff with knowledge of the agreement and its legal consequences.”

Following the averments in paragraphs 2 and 3 of the reply to the Statement of Defence, the plaintiffs on the 13th November, 1986 filed a motion on notice seeking the following reliefs-

“(i) …………………………