Afribank Nigeria Plc. V. Alhaji Muraina Adeniyi Alade (2000)

LawGlobal-Hub Lead Judgment Report

OMAGE, J.C.A.

In his amended statement of claim, in the Court below, the plaintiff now Respondent in this appeal claimed as follows:-

“1. A declaration that the plot of land No. 826, which situates at No. 25 Link Road Nassarawa Quarters Gyadi Gyadi-Kano, which land is covered by a certificate of occupancy number LKN/CON/RES/81/471 on mortgage to the defendant, now Appellant in this appeal is not subject to, and does not confer on the defendant/appellant any statutory right of sale. That the defendant does not possess any right on the said property.

2. A declaration that the plaintiff/respondent is still the statutory occupier of the said landed property.
3. Perpetual injunction restraining the defendant now appellant from selling the landed property, and
4. General damages of N150,600 for loss of job, delay caused and unlawful refusal to hand over the plaintiff certificate of occupancy to the mortgage bank.”

The defendant in its statement of defence in the Court below, counter -claimed against the plaintiff “for an order of court to foreclose the property of the plaintiff, and for enforcement of the provision of the legal Mortgage which the Respondent executed in favour of the Appellant to secure a housing loan, and for which he has failed to make payment, thereby erasing the interest of the plaintiff/respondent from the property and conferring right of power of sale to the defendant/appellant. The Appellant also claimed in, the alternative the sum of N170,743.87 being money due and owed to the appellant by the respondents as at 10th December, 1991.” The counter-claim averred that the plaintiff has failed to make the said payment due despite repeated demands. The Court below dismissed the counter-claim, and entered judgment for the plaintiff by a declaration that the plaintiff is the legal owner of the property covered by the certificate of occupancy No. LKN/CON/RES/81/471. The claims of the plaintiff for general damages, and loss of job were refused. The Court also adjudged premature the plaintiff’s claim for a return of the certificate of occupancy. The defendant was dissatisfied with the judgment of the Court below, it filed one original ground of appeal, and seven additional grounds from which he distilled the four issues for determination as follows:-

“1. Whether or not the appellant’s right of foreclosure in respect of the respondent’s property situate at plot No.826, house No. 25, Link road Hausawa or Nassarawa Quarters Gyadi, Gyadi-Kano and covered by certificate of occupancy No.LKN/CON/RES/81/471 had arisen regard been had to the testimony of PW 1. The Respondents at page 35 of the printed record and Exhibits A, D, E and H at pages 76, 99, 106 – 118 and 102 of the printed record respectively?.

2. Whether the trial lower Court’s finding of fact conclusions and inferences that the Respondent’s claim is for a declaration that he was not indebted to the Appellant in any sum were right regard been had to the fact that they were inconsistent with facts, as disclosed by the Respondent’s testimony as PW1 and the respondent’s amended statement of claim?.
3. Whether the trial lower Court was right to have introduced extraneous consideration in interpreting the contractual relationship between the appellant and the respondent in utmost disregard of the evidence on the record?.
4. Whether the decision of the trial Court is not perverse and against the weight of evidence regard been had to its failure to consider relevant and established facts and his eventual error in evaluating evidence that resulted in his arrival at a wrong conclusion.”

For his formulated issues for determination, the Respondent in his brief submitted as follows:-

“(a) Whether the Appellant was right to have advertised the respondent’s property for sale under a public auction when the Appellant failed to ascertain the specific amount the respondent was owing?.”

(b) Whether the appellant was right to have charged interest rates higher than the 8% which was agreed upon, when the appellant granted housing loan facility of N45,000 to the respondent in 1983?.

(c) Whether it was right for the appellant to have urged the lower Court to give judgment in its favour against the Respondent when the counter-claim filed by the Appellant against the respondent was not proved on the preponderance of evidence as required by the law?

(d) Whether there was an enforceable legal Mortgage which the appellant, could fall back on in view of the contention of the Respondent that he did not sign the original copy of the deed of legal mortgage and no formal demand notice was given to him by the appellant before his house was advertised for sale by public auction and when there was no evidence to show either that the statement of accounts were sent to the respondent what is the effect of an unproved counter-claim filed by the appellant?”

Before I consider the arguments in the issues formulated, I wish to determine the appropriateness of the issues formulated by the Respondent in his brief. The appropriateness of the issues formulated by the Respondent is necessary because the rule must be embraced and observed that in the absence of a cross-appeal, the issues formulated by the respondent as indeed the issues distilled by the Appellant must be founded on the ground of appeal filed. See Emeghara v. Health Mgt. Board, Imo State (1987) 2 NWLR (Pt.56) P. 330. In this instant, I start with issue one of the Respondent’s brief. At the hearing of the appeal, the Respondent’s counsel informed the court that issue one is distilled from Appellant’s ground of appeal number 6. It reads thus: “The learned trial High Court erred in law when it held at page 58 of the printed record as follows:-

“Apart from the pleading there was no proof of any statement of the account showing either the amount of the loan actually granted to the plaintiff, the total amount paid by the plaintiff as instalmental payment and the balance remaining unpaid.”

There is nothing in the above ground of appeal of the appellant, or for that matter in any of the grounds of appeal which raised the issue of advertisement of respondent’s property as prepared in the respondent’s issue (A). Issue (a) in respondent’s brief is not founded on any ground of appeal filed in the Appellant amended notice of appeal filed on 8/12/99. No leave of the court has been granted to the Respondent to formulate the issue, and the Respondent did not file a cross-appeal in the Court below. His argument in the brief on issue A in the Respondent’s brief will not be countenanced Odife v. Aniemeka & 2 Ors. (1992) 7 NWLR (Pt.251) at 25. Issues B,C,D and A formulated by the Respondent in his brief do not directly answer to the numbered issue propounded in the appellant’s brief, but they will be considered where they are relevant to the ground of appeal filed by the Appellant, or to the issues formed by the Appellant. This is not the correct way to respond to issues on an appeal. The Respondent’s issues always never answer directly to the ground of appeal filed. In this appeal, the issue formulated by the appellant in his brief and those in the respondent’s brief are so awkwardly phrased that to describe the issue as inelegant is generous.

They were worse. I will however attempt to unravel the knot. The Appellant’s issue one is whether or not the Appellant’s right of foreclosure in respect of the Respondent’s property at 25 link road in Kano had arisen, regard being had to the testimony of PW1 at page 25 of the printed record and Exhibits A, D, E and H on the pages cited. The question must be asked, what did PW1 say on page 35 of the record? The Appellant did not supply the line or paragraph of page 35 relevant to his issue on appeal. However, the said page 35 contains the testimony of PW1 in the Court below, since the issue under consideration is on the question as to whether a valid contract of mortgage exists, the testimony of PW1 relevant thereto is as follows:-

“Defence the mortgage deed was prepared by one Mr Odiakpo came with a draft for me to see he went away with the same draft which he never brought back to me again. He asked me to sign the draft and I signed it….. though I signed the draft but the mortgage deed was not given to me until when my house was about to be auctioned I came to court.”

After signing the draft the 151 PW, who is the plaintiff/respondent said-

“afterwards I received another additional of N15,000.00 It was true I submitted my tax clearance” etc.

The appellant also referred to the contents of Exhibit A. This is contained on page 76 of the record. It is a letter from the Appellant to the respondent accepting to grant banking facility to the respondent of N45,000.00 Upon some conditions which include the drawing up between the parties of a legal mortgage. The letter is dated 21/7/83. Exhibit D is a letter from the solicitors to the Appellant addressed to the Respondent. It is dated 22nd November, 1988. The Solicitors are J. O. Adefila, they informed the Respondent of his liability to the appellant in the following sums N24,231,56 on account number 32003048, and N54,600 on account number 75000085. Exhibit E on pages 106-118 is the legal mortgage of a certificate of occupancy executed by the parties and registered at the registry in Kano as No.277 at page 277 in volume 5. Exhibit H is a letter of demand from the appellant to the respondent by which the former demanded from the respondent of banking facility on the two stated accounts, the sums are N16,495.45 and N54,600. The letter is dated 26th May, 1988.

Undoubtedly, the above exhibits and testimony of the PW1 quoted above indicate the existence of a legal mortgage in favour of the Appellant by the Respondent. The legal mortgage is dated 3151 October, 1986. It is over a certificate of occupancy registered as No.LKN/CON/RES/81/471 dated 20th day of July, 1982.

The testimony of the respondent on page 35 showed that he signed the said mortgage and the Exhibits show that the Respondent collected money from the appellant after the Respondent had signed the mortgage deed. The appellant by itself and through its counsel demanded from the Respondent the said sum with interest which had accrued at the time of the demand. In order to determine whether the right to foreclose had arisen as formulated in issue one of the Appellant’s brief, it is needed to look at the provisions of the Mortgage deed. Before I proceed with the provisions of the mortgage deed between the parties, I deem it right to entertain and consider with the appellant’s issue one, the Respondent’s rather verbose issue (d) where the respondent asked question as follows:-

“Whether there was an enforceable legal mortgage, which the appellant could fall back on in view of the contention, of the respondent that he did not sign the original copy of the deed of the legal mortgage, and no formal notice of demand was given to him by the appellant before his house was advertised for sale by public auction and when there was no evidence to show either that a statement of accounts were sent to the respondent.”

The first issue to be considered is the answer of the above question, is that, there are counterparts to a deed of legal mortgage, that no original, a duplicate or any draft. Once an agreement exists between the parties, and the instrument signed by the parties which is described as a legal mortgage, provided it is under a seal, a deed of legal mortgage is created between the parties. In the instant case, evidence exists and the Respondent did not deny it that he signed Exhibit A. Exhibit A made the signing of and the creation of a legal mortgage a condition precedent to the grant of the banking facility which commenced with the advance by the appellant of N45,000 to the Respondent. Offer and acceptance is complete between the parties. A legal mortgage completes it. The answer to the question contained in issue (d) of the Respondent is yes, the appellant has an enforceable legal mortgage to fall back on. There is evidence of formal demand made by the Appellant’s solicitors, see his exhibits referred to above.

On pages 106-118 of the printed record is contained the deed of legal mortgage. The word ‘foreclosure’ is a term of art used in conveyancy practices, particularly in a legal mortgage which means that the estate mortgaged or secured in, as the mortgaged property has become the property of the mortgagee by the order made in a foreclosure suit. Sometimes, the agreement of foreclosure is contained in the deed. The order of foreclosure is usually made upon the proved default of the mortgagor to observe the mortgage terms. Failing the institution of a suit, the terms of the mortgage may provide conditions upon which the mortgaged property may be sold if the mortgagor defaults in payment of the mortgage debt. See Stroud’s Judicial Dictionary volume 4 at page 1075.In this case, the deed of mortgage between the parties, the certificate of occupancy of the mortgagor Murauna Adeniyi Alabi, has been approved by the Military Governor of Kano State on 9/x/1986, see page 119 of the record. In the operative part of the said deed of mortgage, the mortgagor is shown to have covenanted with the mortgagee as follows see page 107 of the record viz: “All the moneys hereby secured shall immediately become payable in any of the following events.

(a) On demand being made in writing in a letter delivered by the bank or sent by post to the registered office of the mortgagor.

(b) Death, bankruptcy or liquidation of the mortgagor.

(c) If any execution or distress is levied upon or against any of the chattels or property of the mortgagor.

In the mortgagor’s covenant it is provided as follows:- See page 110 of the record.

“The mortgagor covenants with the bank as follows:-

(1) A demand for payment or any other demand by any notice under the security may be made or given by any manager or authorities, official of the bank or the bank’s lawyer.

(4) The power of sale conferred on the mortgagee by the Conveyancing and Property Act 1881, shall take effect as regards these presents etc, but the said power shall not be exercised unless default is made in payment of the money secured for one month, after the same has become payable under the foregoing covenant.”

The exhibits quoted and described above showed that the mortgagor last made payment for the banking facility granted him in 1986. The bank as the Appellant made demands for payment by itself and through its solicitors and the Respondent failed to make the payment many months of the payment becoming due. The Appellant was entitled to foreclose on the mortgaged property. The right to foreclose had arisen in 1987 when the Appellant foreclosed on the property mortgaged by the Respondent.

In issue ‘D’ of the respondents brief the Respondent had denied signing the mortgage deed, though he admitted in evidence that he signed a draft thereof. It is settled law that a literate adult of sound mind, and capacity is deemed to know the nature and contents of the document he signed. He is therefore presumed at law, to understand what he appended his signature upon whatever the contents of the document is. It will not avail him to deny it see Egbase v. Oriareghan (1985) 2 NWLR (Pt.10) 884 at 889; Okoya v. Santili (1994) 4 NWLR 257 (Pt. 338) at 256.The above explanation in part also answers issue 2 in the appellant’s brief which asked whether the findings and conclusions of the trial Court was right when he held that the respondent was not indebted to the Appellant in any sum. Clearly, the conclusions on the finding of facts by the trial Court is perverse. The facts in the case show that the plaintiff took a loan of N45,000 from the defendant, now appellant. In 1986, the Respondent now plaintiff in the Court below said because he lost his job, he could no longer pay his instalmental dues in repayment of the loan facility to the bank. He ignored all letters of demand sent to him, his complaints were:-

(i) The rate of interest agreed on was 8%, the bank had no right to increase it.

(ii) The letter of demand from the bank did not state the actual sum owing by him.”

In the mortgage agreement between the parties, the mortgagor had covenanted to “pay interest on the sum advanced at the prevailing rate of interest.” Any oral promise allegedly made to the mortgagee cannot derogate or be inconsistent with the terms of the written agreement in the mortgage deed. In answering issues 2, and 4 of the appellant’s brief that the conclusions of the trial Court was wrong from the facts, issue 2; the prayers of the appellant is issue 4 of Respondent’s requests that the Court should consider the conclusion reached by the Court below as perverse being that the trial is against the weight of evidence. As shown above, I find it convenient in the answer above, to consider and deal also with issue B of the Respondent’s brief and hold that the Appellant for the reasons state above was right to charge on the loan facility granted to the defendant/respondent, interest higher than 8%.

In dealing with issue 3 posed by the Appellant, I will deal also simultaneously with issue C of the Respondent. I quote first the respondent’s issue. (C) Whether it was right to have urged the court to award judgment in his favour in the counter claim, when the appellant’s counter-claim was not proved.

Infact, it was the counter-claim of the defendant/appellant which brought into focus the real issues before the court below in the plaintiff’s claim. In the counter claim the defendant/appellant sought a re-affirmation by the court of its accrued legal right while the plaintiff in his statement of claim succeeded in B misleading the court. The Court below without any evidence of the requisite description of the notice to be given to the plaintiff by the defendant introduced in his judgment the kind of notice receivable, in order to satisfy notice of foreclosure despite the mortgage deed. In effect, the conclusion of the Court in the judgment is perverse. I have read the testimony of the witnesses of both parties, together with the covenant in the deed of mortgage between the parties, I am of the view that the judgment of the Court below is not justified by the facts.

In my view, it is an occasion where an appellate Court should intervene and set aside the decision of the court below, and I do so, see Adegoke v. Adibi (1992) 5 NWLR (Pt.242) 420, where the Supreme Court made the pronouncement. In the event, I set aside the decision of the Court below, and order judgment in favour of the defendant/appellant. The appeal succeeds. The plaintiff claim in the Court below is dismissed. There will be costs of N2000 in the Court below, and N1000 in this court in favour of the Appellant.

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Other Citations: (2000)LCN/0837(CA)