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Home » Nigerian Cases » Supreme Court » Awojugbagbe Light Industries Limited V. P. N. Chinukwe & Anor (1995) LLJR-SC

Awojugbagbe Light Industries Limited V. P. N. Chinukwe & Anor (1995) LLJR-SC

Awojugbagbe Light Industries Limited V. P. N. Chinukwe & Anor (1995)

LAWGLOBAL HUB Lead Judgment Report

BELLO, C.J.N.

This appeal raises very important question of law, particularly to bankers, on the validity of a loan and mortgage agreement when the morgagee performed his obligation under the agreement by lending to the mortgagor the sum of N215,000.00 and the mortgagor charged by way of first legal mortgage his property, No. 60-64 Ijebu Road, Ibadan, as security for the loan before the Governor of Oyo State gave his consent for the mortgage under Section 22 of the Land Use Act. The section provides:

“22(i) It shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained:

Provided that the consent of the Governor:-

(a) shall not be required to the creation of a legal mortgage over a statutory right of occupancy in favour of a person in whose favour an equitable mortgage over the right of occupancy has already been created with the consent of the Governor;

(b) shall not be required to the reconveyance or release by a mortgagee to a holder or occupier of a statutory right of occupancy which that holder or occupier has mortgaged to that mortgagee with the consent of the Governor;

(c) to the renewal of a sub-lease shall not be presumed by reason only of his having consented to the grant of a sublease containing an option to renew the same.

(2) The Governor when giving his consent to an assignment, mortgage or sub-lease may require the holder of a statutory right of occupancy to submit an instrument executed in evidence of the assignment, mortgage or sub-lease and the holder shall when so required deliver the said instrument to the Governor in order that the consent given by the Governor under subsection (1) of this section may be signified by endorsement thereon.”

The fact of the case as found by the trial Judge are not in dispute. Between October 1979 and 1987, the 2nd respondent granted a loan of N215,000.00 to the appellant. The terms and condition of the loan were contained in a Loan and Mortgage Agreement, hereinafter referred to as the Mortgage Deed. It appeared from the documentary evidence that negotiation and granting of the loan were transacted long before the execution of the Mortgage Deed. Exhibit B, a letter from the 2nd respondent to the appellant, showed that the loan was approved on 11th October, 1979 and immediately thereafter the appellant started to use the facility.

By a letter dated the 20th of November, 1979, the 2nd respondent sent a draft of the Mortgage Deed to the appellant for his comments and approval. In his reply of 22nd November, 1979, the appellant approved the draft and returned it to the 2nd respondent. Again the 2nd respondent forwarded, by their letter of 13th February, 1980, the draft Mortgage Deed to the appellant for execution which he returned to the 2nd respondent duly executed under cover of his letter of 11th march, 1980. On 26th July, 1982, the 2nd respondent wrote to the appellant as follows:

“Loan and Mortgage Agreement

The above-mentioned document is yet to be registered because Oyo State Government has not given the necessary consent to the Mortgage transactions.

You will agree with us that this matter has dragged on for so long.

In view of our anxiety to complete the transactions as soon as possible, we now call on you to take all necessary steps to obtain and forward to us soonest consent of the State Government to the Mortgage transactions.”

It is evident from Exhibit B1, a letter from the Permanent Secretary, Ministry of Works that the appellant had submitted the application for consent on 30th January, 1984 and the Governor’s consent was given on 12th September, 1985. The Mortgage Deed was admitted in evidence as Exhibit E and it showed exfacie that it was made on 8th October, 1985. Accordingly, the trial Judge specifically found that the Deed was duly executed on the 8th of October, 1985 which was after the Governor had given his consent.

Furthermore, Exhibits F and G2, letters from the 2nd respondent to the appellant dated 3rd February, 1987 and 29th May, 1987, showed by that time the appellant’s indebtedness, principal and interest, had accumulated N364,142.08 and when the appellant failed to pay the said sum after demand for its payment, the 2nd respondent exercised its power under the Mortgaged Deed and appointed the 1st respondent as the receiver to the appellant. After he had served notice of his appointment on the appellant and the appellant had failed to comply with his request for the keys of the Mortgaged premises, the receiver with the aid of security dogs and their handlers to take over the possession of the said premises.

In consequence of the foregoing, the appellant instituted this suit in the High Court of Oyo State claiming from the respondents:-

“1. Declaration that the Property, and Conveyancing Law of Oyo State and the Mortgage Deed registered as No. 2(2/2632 and dated 8/10/85 to the extent that they provide for, confer or vest the 2nd defendant mortgagee with power to sell the mortgaged premises and/or without subjecting such sale to prior Governor’s consent are inconsistent with the provisions of the Land Use Act and therefore unconstitutional, illegal, unenforceable, invalid and null and void and of no effect.

  1. Declaration that the transaction including loan and the Mortgage Deed dated 8/10/85 between the plaintiff and the 2nd defendant is, for non-compliance with the terms of the consent annexed to the Deed, invalid, unenforceable, illegal, null and void.
  2. And/or alternatively, declaration that under and by virtue of the provisions of the Land Use Act 1978, the 2nd defendant cannot exercise its statutory right to above without power of same under the mortgage referred to above without complying with the said Act.
  3. Declaration that any sale by the defendants of the property comprised in the mortgage without complying with the Auctioneers Law of Oyo State, and the Land Use Act during the pendency of this action is illegal, ineffectual, null and void and of no effect.
  4. Declaration that the said mortgage is not in law a security for the loan advanced to the plaintiff by the 2nd defendant between 1980 and 1981.
  5. Declaration that the entry by the 1st defendant into the premises of the plaintiff situated at 60-64 Akobielemu Layout, Ijebu Road, Ibadan in June, 1987 is illegal, wrongful and unlawful.
  6. Declaration that the appointment of the 1st defendant as receiver pursuant to Clause 37 of the mortgage is invalid, illegal and unlawful. .
  7. Injunction restraining the defendants by themselves their agents, servants and or privies or otherwise howsoever from selling the morgaged premises or from taking any action or steps whatsoever in pursuance of the mortgage referred to above.
  8. N1,800,000.00 representing total damages for the trespass committed by the defendants by the forcible entry of the 1st defendant on the plaintiff’s premises and loss of business caused to the plaintiff by the said trespass.
  9. N500,000.00 representing damage caused to the plaintiff’s machineries.”

In their Statement of Defence and counter-claim, the respondents pleaded the indebtedness of the appellant, the appointment of the receiver in accordance with the terms of the Mortgage Deed after the appellant had failed to liquidate the debt when it had become due for payment and the 2nd respondent counter-claimed N364,142.08, being the appellant’s indebtedness, principal and interest.

After he had carefully considered the case of each party, the trial Judge concluded in respect of the issue of the validity of the Mortgage Deed as follows:

“On the evidence in this case after various letters in evidence of intentions to borrow and lend money by the plaintiff and second defendant respectively there was a culmination in Exhibit E setting out the terms of the loan agreement. The exhibit is the Mortgage Deed put in evidence for the plaintiff. The agreement is dated 8th October, 1985 but the Governor of the State had given his consent thereto on 12th September, 1985 before it was duly executed according to the date on it, (which was 8th October, 1985).

The Governor’s consent having been given before the Mortgage Deed is dated the deed is in my judgment valid and lawful by virtue of section 22 of the Land Use Act, 1978.

Exhibit E -the Mortgage Deed thus confirmed the intentions of the parties to the Mortgage Deed agreement giving retrospective effect to all the terms and conditions that have been primarily agreed on by all the parties. The property, indeed mortgaged in the deed, as well as all the terms in the deed can thus be enforced by either party. The 2nd defendant can thus fall on the security mortgage enforcement clause in paragraph 30 of the deed or appoint the receiver as in clause 37 of the deed.”

He thereafter proceeded to make the following findings:

“In the totality it appears the case of the defendants is more probable to me in view of their credible witnesses. I accept their evidence and find that they can enforce their rights under clause 37 of the mortgaged deed, sections 123, 125 and 131 of the Property and Conveyancing Law of Oyo State. I find that the 2nd defendant has been duly appointed a receiver accordingly, under clause 37 of the deed. He is not a corporate body or a bankrupt that cannot be appointed by virtue of sections 334 and 335 of the Companies Act 1968. He need not give notice of his appointment having not being appointed by a debenture holder of a company’s debenture secured by a floating charge. See Section 340 of the Companies Act. To prevent the receiver from performing his duties, the plaintiff should have paid all the money due under the mortgage. See Hickson v. Darlow (1883) 23 Ch.D 690 at 694.

Having accepted the case of the defendants, the plaintiffs case therefore fails on merits.”

He entered judgment for the 2nd respondent in the sum of N364,142.08 as counter-claimed.

Dissatisfied with the decision of the trial court, the appellant appealed to the Court of Appeal which dismissed his appeal. He has further appealed to this Court upon four issues formulated by Mr. Adelekun of counsel for the appellant who settled the appellant’s brief but did not appear before the Court to prosecute the appeal. Mr. Adejoro, appellant’s Managing Director represented the appellant at the hearing of the appeal. In his brief, learned counsel for the respondents described the four issues as “clumsy and the submission on them muddled up and should have entitled the respondents to move this Honourable Court to have been struck out.” Nevertheless, he adopted them in order to allow justice to take its course by hearing the appeal on the merit. I endorse the observation of learned counsel. The four issues for determination are:-

“1. Whether the learned appeal Judges were right in law in holding that the Mortgage Deed, Exhibit E is valid and lawful.

  1. Whether the learned appeal Judges were right in law in holding that evidence other than evidence before the Court including Exhibits L, D & M need to be adduced by the appellant to prove the collusion as to the date on Exhibit E when such collusion would defeat the object of any law.
  2. Whether the learned appeal Judges were right in law in not restricting themselves to the issues brought before them for adjudication.
  3. Whether the learned appeal Judges were right in law in failing to take into consideration the forcible take-over of the appellant’s assets and trespass by the 1st respondent and the evidence that the respondents have been mortgagees in possession since 1987 and on the basis of which consideration to assess the damages that should be due to the appellant, even if the judgment debt is upheld.”

When the appeal came for hearing on the 4th of November, 1994 before the ordinary panel, it was adjourned for hearing by a full Court because an issue of apparent inconsistency in the decision of this Court in Savannah Bank Nig. Ltd. v. Ajilo (1989) 1 NWLR (pt.97) 305. On the one hand and the decision of the Federal Supreme Court in Solanke v. Abed (1962) NRNLR 92 on the other hand had been raised. The Court invited Chief Williams, SAN, Professor Kasumu, SAN and Professor Omotola to assist the Court as amici curiae in the determination of the said inconsistency.

See also  R. O. Ayodele Vs Dr. Olumide (1969) LLJR-SC

The thrust of the appeal on all the issues were predicated on the validity or invalidity of the Mortgage Deed under the Land Use Act. The appellant submitted that the Justices of the Court of Appeal having found that the Mortgage Deed had been executed by the parties before the Governor consented to the mortgage, the Court of Appeal erred in law by its failure to hold the Mortgage Deed void by virtue of Section 22 of the Act. He referred to the lead Judgment of Ogundere, J .C.A., where the learned Justice stated:-

“As can be seen from the issues formulated, the main issue was whether the deed of mortgage was in fact executed in 1980 before the Governor’s consent in 1985. In which case the Mortgage Deed will be caught by the provisions of the section 22 of the Land Use Act which stipulates that the prior consent of the Governor must be sought and obtained before the deed of mortgage is executed. Savannah Bank v. Ajilo (1989) 1 NWLR (Pt. 97) 305.

The crux of this appeal is that the consent of the Governor was obtained after the execution of the mortgage contrary to section 22(1) of the Land Use Act 1978. Looking closely at the exhibits, Exhibit E the deed of mortgage was dated by handwriting the 8th of October, 1985. The Governor’s consent Exhibit E1 was dated 17th September, 1985. By Exhibit L, a letter of 13th Feb., 1980 the 2nd respondent sent ten copies of the Loan and Mortgage Agreement to the Managing Director of the appellant company for execution. It specifically asked that the Company Seal be affixed and that all the ten copies be returned after execution. Again by letter dated 26th July, 1982, the 2nd respondent complained that the loan and mortgage agreement was yet to be registered because the Oyo State Government had not given the necessary consent to the Mortgage transactions. The appellant was then urged to take all necessary steps to obtain and forward the consent to the 2nd respondent soonest. It is therefore safe to conclude that the deed of mortgage was executed by both parties between 1980 and 1982.”

The appellant further submitted that contrary to the foregoing finding by the learned Justice, Ogundere, J.C.A. proceeded in his judgment to find as follows:

“The Governor’s consent was dated 17th September, 1985 prior to 8th October, 1985 when the deed of mortgage was executed. It was therefore in order and in compliance with section 22(1) of the Land Use Act 1978.”

The appellant also referred to the concurring judgment of Muhammad, J.C.A. where he wrote:-

“The Deed of Mortgage was executed sometime between 1980 and 1982. The Governor’s consent was obtained on 17th September, 1985. The deed was therefore executed three to five years before the Governor’s consent was obtained.”

The appellant further contended that inspite of this clear and unequivocal finding that the deed was executed before the Governor’s consent, nevertheless, the learned justice proceeded to examine some earlier authorities on which the instant judgment of the High Court had not been based and which were not relevant to the instant case and concluded his judgment as follows:-

“The mere fact that the Deed of Mortgage was executed in 1980 or 1982 and the Governor’s consent was obtained in 1985 does not affect the validity of the Deed. Before the Governor’s consent it was a lawful agreement to mortgage which could be enforced.”

The appellant also attacked the judgment of Salami, J .C.A. where in answer to the submission of the appellant in the Court of Appeal that the respondents had colluded and falsified the date of execution of the Mortgage Deed as 8th October, 1985 in order to defeat the provision of section 22 of the Act, the learned Justice observed as follows:-

“In the absence of any iota of evidence proving collusion as to the date nor of injury to any person being caused nor of defeating the purpose of any law, I think, the need for independent evidence as to the correctness of date is uncalled for or dispensed with………..Nor is there evidence showing that the respondent………..were in collusion with anyone to carry out a scheme that would defeat the purpose of Land Use Act or any other enactment.”

The learned Justice thereafter proceeded to state:

“The presumption created by section 125 of the Evidence Act is not a conclusive but a rebuttable presumption which occurs only where collusion or fraud is suspected. In the absence of evidence of fraud or collusion, notwithstanding non-production of evidence as to when Exhibit ‘E’ was executed, the learned trial Judge was perfectly entitled to presume 8th October, 1985 written on the Mortgage Deed as the date of execution of the document by virtue of the provisions of section 125 of the Evidence Act (supra) which allows a court to presume a document, such as Exhibit E, was executed on the date it bears.”

It was the contention of the appellant that Salami, J.C.A., erred in law by failing to appreciate that section 124 of the Evidence Act allowed for independent proof of the correctness of falsity of the date on an instrument and that Exhibits L & M clearly established that the date, 8th October, 1985 on the Mortgage Deed was false and had been inserted by the 2nd respondent or its agents for the purpose of defeating the object of the Land Use Act which requires a consent first had and received.

Again, referring to the judgment of Salami, J.C.A., wherein the learned Justice considered the law relating to the exercise of the discretionary power of the court on declaration, the appellant contended that the judgment dwelt on the main issue as reformulated by the learned Justice who dismissed the appeal on that consideration. I italicize the sentence particularly complained of in the said judgment, which reads:

“The reliefs being sought in the proceedings that proceeded on appeal to this court are various declarations and the power to make binding declaration is discretionary remedy and the practice relating to declaration must be exercised with very great reserve and caution. It is not the practice to grant the reliefs sought if they are useless for any purpose or embarrassing or inequitable or unlawful for the court to grant. See Mellstrom v. Garner & Ors (1970) 2 All ER 9; Guaranty Trust Company of New York v. Hannay Co. (1914-15) All E.R. 24 and Vincent I Bello v. Magnus A. Eweka (1981) 1 SC 101 at 121 where the Supreme Court of Nigeria Per Eso, J.S.C. said:-

“This is more important as this is a declaratory action, and declaratory judgments are limited by the discretion of the court.

“In my opinion, said Lord Sterndale, M.R. the power of the court to make a declaration, where it is a question of defining the rights of two parties, is almost unlimited; I might say only limited by its own discretion. See Hanson v. Radcliffe Urban District Council (1922) 2 Ch. 490 at Page 507.”

Infact, whether or not the point is taken by the defendant, the Court is still not bound to make a declaration once it does not consider it a proper case, in its discretion, to make one.”

On the peculiar facts of this case, this is not a proper case to exercise the Court’s discretion in favour of appellant. It is not only embarrassing but also inequitable to exercise the discretion of this court infavour of the appellant who deliberately set out. on its own case, to cheat the second respondent.”

Concluding his submission, the appellant urged this Court, having regard to the findings of Ogundere and Muhammad, Justices of the Court of Appeal and the evidence, to hold the Mortgage Deed null and void by virtue of Section 22 of the Act and to grant the declarations sought and award damages for aggravated trespass. He distinguished the case of Solanke v. Abed (1962) NRNLR 92 from the present case in that Solanke’s case was decided in the con of the Land and Native Rights Ordinance, Cap. 105, Laws of Nigeria 1948 which did not prescribe alienation without consent as an illegal act whereas the present case was subject to Section 26 of the Land Use Act which renders null and void any transaction or any instrument which purports to confer on or vest in any person any interest or right over land without the consent of the Governor. He relied on the decision of this Court in Savannah Bank (Nigeria) Ltd. v. Ajilo (supra).

The appellant also did his best to distinguish the decision of the Privy Council in Denning v. Edwardes (1961) A.C. 245 which was based on the Law of Kenya and submitted that that Law was not inpari materia with our Land Use Act.

The contention of the appellant on the fourth issue for determination was rested on the alleged illegality of the Mortgage Deed which, according to the appellant, rendered the entry of the 1st respondent into the mortgaged premises as trespass and secondly, the manner of the forcible entry with the aid of security dogs and their handlers constituted aggravated trespass even if the Mortgage Deed was valid. He urged the Court to allow his appeal and to grant the reliefs sought in his claims which should be set off against the judgment debt, upheld by the Court below in favour of the 2nd respondent.

In response, learned counsel for the respondents stated the finding of Ogundere and Muhammad, Justices of the Court of Appeal, that the execution of the Mortgage Deed was prior to the Governor’s consent notwithstanding the Court of Appeal was perfectly right in holding that the Mortgage Deed was valid by virtue of section 22(2) of the Act. He contended that the decision of the Court of Appeal was consistent with the decision of the Privy Council in Denning v. Edwardes (supra) on the interpretation of the provision of the Land Ordinance of Kenya which was in pari materia with section 22 of our Land Use Act and recognised the need for some form of written agreement to be entered into before applying for the Governor’s consent. He referred to Doyle v. Continental Allns Co. & Otto (94 U.S.) 535 at 538; Evans v. U.S. 153 US 584 at 601 and Plant v. Wood 176 Mass 492 and submitted that in view of the provision of Section 22(2) of the Act, the prior execution of the Mortgage Deed was unimpeachable.

Learned counsel further submitted that the Court of Appeal directly applied the principle of the interpretation of statutes laid down in James Orubu v. National Electoral Commission (1988) 5 NWLR (Pt.94) 323; (1988) 12 S.C. 275 and Pretty v. Solly (1859) 26 BEA V 606 at 610 to the effect that a statute which made a special provision in relation to a matter prevailed over another statute which made general provision on the same matter and accordingly, in the instant case, section 22(2) prevailed over section 22(1) of the Act. He urged the Court to hold that the decision

of the Court of Appeal was in consonance with the decision of the Federal Supreme Court in Solanke v. Abed (supra) and judicial adherence to precedence. He cited Hand Field’s case (1873) LR 8 Com. Pl. Ca. 313 at 320 and Merry v. Nickalis (1872) LR 7 Ch. Ap. Cas. 750.

With respect to the issue on collusion by the second respondent to defeat the provision of the Act by dating the Mortgage Deed “8th day of October, 1985”, learned counsel for the respondent furnished simple answer to the issue that it was the intention of the parties as provided by the Mortgage Deed, to wit, “take note that the date of commencement of the transaction should not predate this consent”. It is crystal clear that although the parties had executed the Mortgage Deed and the appellant had enjoyed the benefits and facilities of the agreement long before seeking the Governor’s consent, they had agreed to defer dating the commencement of the Mortgage Deed until after the consent had been obtained. Surely, the appellant cannot approbate and reprobate.

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On the third issue, which for ease of reference reads:-

“Whether the learned Judges were right in law in not restricting themselves to the issues brought before them for adjudication”

Learned counsel submitted that none of the three Justices of the Court of Appeal went beyond the issues presented to them for determination. He conceded, however, Salami, J.C.A. had reformulated the main issue, which was too vague as formulated by the appellant, in order to give it precision and clarity which the learned Justice was entitled to do: Latunde & Anor v. Bello Lajinfin (1989) 3 NWLR (Pt.108) 177; (1989) 5 S.C. 59; Okoro v. State (1988) 5 NWLR (Pt.94) 255; (1988) 12 S.C. 191 and Dahiru Sande v. Haliru Abdullahi (1989)4 NWLR (Pt.116) 387; (1989) 7 S.C. 216.

Finally, learned counsel for the respondents submitted that the fourth issue should be struck out because it was very clumsy and sought reliefs which had not been claimed and canvassed in the lower courts. A court does not award what had not been claimed: Obikoya v. Wema Bank (1989) 1 NWLR (Pt.96) 157; (1989) 1 S.C. 127; Awoyegbe v. Ogbeide (1988) 1 NWLR (Pt.73) 695; (1988) 3 SC 99; Onyia v. Oniah & Anor (1989) 1 NWLR (Pt.99) 514; (1989) 2 SC 20; Obayemi v. Obayemi (1967) 1 All NLR 161; National Insurance Corporation v. Power & Industrial Engineering Co. Ltd. (1986) 1 NWLR (Pt. 14) 1; Babalola v. State (1989) 4 NWLR (Pt. 115) 264 at 295 and Emmanuel Adedeji v. National Bank (1989) 1 NWLR (Pt. 96) 212 at 266. With respect to the claim for damages for forcible entry, learned counsel submitted that it is trite law that a mortgagee is not liable in civil action for forcible entry but may be liable under the criminal law. He relied on Fisher and Lightwood on Mortgage, 8th Ed. p. 271; Beddall v. Maitland (1881) 17 Ch. D 174; Hemmings v. The Stoke Poges Golf Club Limited (1920) 1 KB 720; Aglionby v. Cohen (1955) 1 QB 558.

For the purpose of proper comprehension of the major question for consideration in his brief and oral argument as amicus curiac, Chief Williams, SAN posed two questions:

“(i) Precisely what constitutes a contravention of the requirement of section 22 of the Land Use Decree.

(ii) What is the effect of a contravention of the requirement of section 22 of the Land Use Decree on the transaction to which it relates.”

He submitted that neither Solanke’ s case nor Ajilo’ s case provided any answer to question (i) but the correct answer to question (ii) was supported by the reasoning of this Court in Ajilo’ s case. He, however, prefaced his submission by stating that it was only when a contravention was identified or found to exist under question (i) that question (ii) would arise.

Referring to section 22 of the Act, the learned amicus curiae submitted that the section clearly prohibited transactions or instruments whereby the holder of a statutory right of occupancy alienated his right of occupancy “by assignment, mortgage, transfer of possession, sublease or otherwise howsoever” but, wide as the words appeared to be, they were not wide enough to include purported alienation which the parties did not intend to be effective. In his observation the section did not prohibit the holder from entering into a contract to participate in any of the transactions specified in the section or to a contract to be a party to any deed or instrument giving effect to such transaction. However, he indicated that it would be unlawful for the party to complete such transaction or deed or instrument without the consent of the Governor first had and obtained. He argued that in the case of an instrument which was a mortgage deed as in the present case, the section struck at the moment the deed became effective as such but not before. It followed, he concluded, that a person could not be said to have committed a contravention of section 22 until he brought into existence in the case of a Mortgage Deed an instrument which effectively enabled the mortgagee to exercise rights thereunder. Upon these premises, the learned Senior Advocate of Nigeria formulated the following question:

“At what point in the transaction relating to the Mortgage Deed (Exhibit E) did the plaintiff here in effectively put the 2nd defendant (mortgagee) in a position where, but for the want of the Governor’s Consent, he would have been able to exercise the rights of a mortgagee Was it at the time of the execution and sealing of Exhibit E as the Court of Appeal appears to think, or was it at the time of the delivery thereof as the Supreme Court is now urged to hold.”

In answering the question, Chief Williams, SAN., submitted that the law was well settled that a transaction created by a deed did not come into effect prior to the delivery of the deed; that a deed only became effective upon its delivery and where it was intended by the parties that it would not have effect until a certain time had arrived or till some condition had been performed, then until the specified time had arrived or the condition had been performed, the instrument was not a deed but a mere escrow. He relied on Halsbury’s Law of England 4th Ed. Vol. 12 para. 1329; Goddard’s case (1584) 76 ER 396; Vincent v. Premo Enterprises Ltd. (1969) 2 QB 609 and Mowatt v. Castle Steel & Iron Works Company (1887) 34 Ch. D 58 in support of the contention. He pointed out that since the date of the delivery of the Mortgage Deed in the present case was not made an issue, the presumption in Halsbury’s Laws of England, 4th Ed. Vol. 12 para. 1486 and section 127 of the Evidence Act applied and it was presumed delivered on the 8th October, 1985, being the date of the Mortgage Deed.

Finally, Chief Williams SAN, answered question (1) that a contravention of the requirement of section 22 of the Act occurred, in the case of alienation of a right of occupancy carried out by a deed, at the time when the relevant deed was delivered and not at the time when it was executed or sealed and since the Mortgage Deed was delivered after the Governor’s consent, there was no contravention of the section.

In the same vein, Professor Kasumu SAN also distinguished the present appeal from the decisions in Solanke v. Abed and Ajilo’ s case in that the issues raised in those cases were not particularly relevant to the issue raised in the instant case. In the earlier cases there was no consent of the Governor at all to the transaction involved and the Court had to determine the effect of lack of consent to those transactions. In the present case, consent was obtained before the transaction became effective. The effect of section 22 of the Act, he contended, was that it did not matter when a deed was executed and alienation could only be said to have taken place after the Governor had given his consent and before the consent the deed was inchoate.

Learned counsel further submitted that the undue emphasis placed on the judgment of the Court of Appeal was as a result of the wrong formulations of the first issue for determination by that Court. He referred to the formulation in the lead judgment which reads:

“As can be seen from the issues formulated, the main issue was whether the deed of mortgage was in fact executed in 1980 before, the governor’s consent in 1985. In which case the Mortgage Deed will be caught by the provisions of Section 22 of the Land Use Act which stipulates that the prior consent of the governor must be sought and obtained before the deed of mortgage is executed. ”

and contended that this of course was not what the Act stated. No where did the Act state that consent must be given before execution of any document. On the contrary, sections 22(2) and 26 presupposed the existence of an agreement of a sort before the Governor’s consent.

As amicus curiae, Professor Omotola also made useful contribution for the determination of the issues. He pointed out that the fact that the consent of the Governor had been obtained was not in dispute but the controversy was whether the consent was obtained prior to the execution of the Mortgage Deed or after it had been executed and, if the consent was obtained after the execution, whether the Mortgage Deed was void. He referred the Court to the judgments of Ogundere and Salami, Justices of the Court of Appeal, who decided that the consent was given before the execution of the Mortgage Deed and therefore the provisions of section 22 of the Act relating to consent had been complied with.

The learned Professor submitted that for the appreciation of the proper interpretation of section 26 of the Act, the court ought to pay due attention to the provision of section 22(2). Citing the provision of the subsection, he contended that the provision was in line with the view of Viscount Simond in Denning v. Edwardes (supra) wherein their Lordships expressed the opinion that, there was nothing contrary to law in entering into a written agreement before the Governor’s consent was obtained. He surmised that the draftsman of the Act had anticipated the problem which might arise were it to be insisted upon that no document should be prepared in furtherance of a transaction or no agreement, should be reached in furtherance of a transaction on which the Governor’s consent would be endorsed.

The issue therefore for decision by the court was, at which stage the consent of the Governor must be obtained. He contended that the words “first had and obtained” within the con of section 22 must mean no more than an emphasis on the need to obtain consent. Practical reality must dictate the stage at which such consent should be obtained. He concluded that it could not seriously be suggested that section 22 be given a literal interpretation such as to require parties to a transaction to ask the Governor to approve their intention to enter into a transaction. It is note worthy that learned counsel for the respondents and amici curiae are in unanimous agreement in their submissions that upon the proper interpretation of sections 22 and 26 of the Land Use Act there was no breach or contravention of the provisions of the Act in this case on appeal. The relevant sections of the Act may be reproduced for ease of reference. They are:

“22. It shall not be unlawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease or otherwise howsoever without the consent of the Governor first had and obtained:

(2) The Governor when giving his consent to an assignment, mortgage or sublease may require the holder of a statutory right of occupancy to submit an instrument executed in evidence of the assignment, mortgage or sub-lease and the holder shall when so required deliver the said instrument to the Governor in order that the consent given by the Governor under subsection (1) of this section may be signified by endorsement thereon.

“26. Any transaction or any instrument which purports to confer on or vest in any person any interest or right over land other than in accordance with the provisions of this Act shall be null and void.”

In Ajilo’ s case which dealt with alienation of a mortgaged property by the mortgagee under a Mortgage Deed when there was no consent of the Governor to the mortgage, this Court declared the mortgage to be null and void by virtue of lack of the Governor’s consent.

See also  Oba Adeyinka Oyekan v. BP Nigeria Ltd. (1972) LLJR-SC

There is no doubt that the Governor gave consent to the mortgage in the instant case, but he did so after the Mortgage Deed had been executed. Accordingly, unlike Ajilo’ s case, the controversy docs not revolve on lack of consent but on consent given after the execution of the Mortgage’ Deed. It was the contention of the appellant that the Governor’s consent must be obtained before the mortgage and since the consent was obtained after the execution of the Mortgage Deed, the deed was null and void by virtue of section 26. On the contrary, the respondents’ counsel and amici curiae contended that since the parties had intended the Mortgage Deed to be effective after the Governor’s consent, its prior execution and physical delivery did not make it effective but rendered it inchoate and a mere escrow. The Mortgage Deed did not therefore come into effect between 1980 and 1982 when it was executed but it became effective on 8th October, 1985 when it was dated after the Governor’s consent in accordance with the intention of the parties.

The foregoing contention of the learned amici curiae is supported by relevant authorities they cited. The importance of the intention of the parties to be bound by its terms for the purpose of rendering a deed effective in law is clearly set out in Halsbury’s Laws of England 4th Ed. Vol. 12 para. 1329 which reads:

“1329. Delivery of deed: In order to be effective a deed must be delivered as the act and deed of the party expressed to be bound by it, as well as sealed. No special form or observance is necessary for the delivery of a deed, and it may be made in words or by conduct. The usual form of delivering a deed by words is for the executing party to say, while pulling his finger on the seal, “I deliver this as my act and deed”. It is not necessary, however, to follow this form of execution; nor is it necessary that the deed should actually be delivered over into the possession or custody either of the person intended to take the benefit of the deed, or to a third person to the use of the party taking the benefit of the deed; though if the party to be bound so hands over the deed that is sufficient delivery without any words.

What is essential to delivery of the document as a deed is that the party whose deed the document is expressed to be (having first sealed it) shall by words or conduct expressly or impliedly acknowledge his intention to be immediately and unconditionally bound by the provisions contained in it.” (Italics is mine)

In Vincent v. Premo Enterprises Ltd. (supra) at p. 619 Lord Denning, M.R. aptly Stated the effect in law of a deed which a party did not acknowledge his intention to be immediately and unconditionally bound by the provisions contained therein. It is pertinent to set it out extensively.

“The law as to “delivery” of a deed is of ancient date. But it is reasonably clear. A deed is very different from a contract. On a contract for the sale of land, the contract is not binding on the parties until they have exchanged their parts. But with a deed it is different. A deed is binding on the maker of it, even though the parts have not been exchanged, as long as it has been signed, sealed and delivered. “Delivery” in this connection does not mean “handed over” to the other side. It means delivered in the old legal sense, namely an act done so as to evince an intention to be bound. Even though the deed remains in the possession of the maker, or of his solicitor, he is bound by it if he has done some act evincing an intention to be bound, as by saying “I deliver this my act and deed.” He may, however, make the “delivery” conditional: in which case the deed is called an “escrow” which becomes binding when the condition is fulfilled.

The law was much considered by the House of Lords in the leading case of Xenos v. Wickham (1866) LR 2 HL 296. After the judges had been brought together to advise the House, Lord Cranworth said at p. 323:-

“In the first place, the efficacy of a deed depends on its being sealed and delivered by the maker of it; not on his ceasing to retain possession of it. This, as a general proposition of law, cannot be controverted. It is not affected by the circumstance that the maker may so deliver it as to suspend or qualify its binding effect. He may declare that it shall have no effect until a certain time has arrived, or till some condition has been performed, but when the time has arrived or the condition has been performed, the delivery becomes absolute and the maker of the deed is absolutely bound by it, whether he has parted with the possession or not. Until the specified time

has arrived, or the condition has been performed, the instrument is not a deed. It is a mere escrow.”

That was applied recently by this court in Beesly v. Hallwood Estates Ltd. (1961) Ch. 105, where a company was held to be bound by a lease which had been signed, scaled and delivered by the company, even though it had not been sent to the other side at all. It was delivered as an escrow, subject to a condition that the tenant should hand over the counterpart. He did hand it over and the company was held bound accordingly because the condition had been fulfilled.” (italics mine)

The observation of Viscount Simond in Denning v. Edwardes (supra) on the efficacy of a conditional agreement is also relevant. In interpreting section 88 of the Kenyan Land Ordinance 1948, which is in pari materia with section 22 of our Land Use Act he stated:

“It has been argued that the consent of the Governor must be obtained before the agreement is entered into and that subsequent consent is insufficient. Some form of agreement is inescapably necessary before the Governor is approached for his consent. Otherwise negotiation would be impossible. Successful negotiation ends with an agreement to which the consent of the Governor cannot be obtained before it is reached. Their Lordships are of opinion that there was nothing contrary to law in entering into a written agreement before the Governor’s consent was obtained.

The legal consequences that ensued was that the agreement was inchoate till that consent was obtained. After it was obtained the agreement was complete and completely effective.”

The law relating to the effective date of a decd is stated by Halsbury’s Law of England, 4th Ed. para. 1486 as follows:

“Extrinsic evidence to prove date. Extrinsic evidence is admissible to prove the date of delivery of a deed, or of the execution of any other written instrument A deed takes effect from delivery, and any other written instrument from the date of execution, and though the date expressed in the instrument is prima facie to be taken as the date of delivery or execution, this does not exclude extrinsic evidence of the actual date; and the actual date when proved, prevails in case of variance, over the apparent date.”

Also section 127 of our Evidence Act provides:

“127 When any document purporting to be, and stamped as, a deed, appears or is proved to be or to have been signed and duly attested, it is presumed to have been sealed and delivered although no impression of a seal appears thereon.”

Now, reverting to the Mortgage Deed in issue, it is transparently clear that the parties did not intend it to be effective at the date of its execution and the letter, Exhibit E1, conveying the Governor’s consent reflected that intention by its directive which reads:

“Please take note that the date of commencement of the transaction should not predate that of this consent.”

In compliance with their intention the deed was not dated at its execution but was dated 8th October, 1985 after the Governor’s consent. Since the date of delivery of the Mortgage Deed was not made an issue and in the circumstances of the case, having regard to the evidence and the findings of the trial court, it is to be presumed that the deed was delivered on the date it was dated, to wit, the 8th of October, 1985. Accordingly, on the authority of Vincent v. Premo Enterprises Ltd. (supra) and Denning v. Edwardes (supra), the Mortgage Deed, a conditional deed, was a mere escrow at its execution and it only became binding and effective after the condition, which was the Governor’s consent, had been fulfilled. It follows that the Mortgage Deed did not breach or contravene section 22 of the Act. The deed is valid. Since the appeal in respect of all the appellant’s claims other than the claim for trespass for forcible entry was based on the purported invalidity of the Mortgage Deed, the appeal failed. The issue relating to forcible entry of the mortgaged premises which according to the submission of the appellant amounted to a trespass, even if the Mortgage Deed was valid, may be summarily dismissed. A mortgagee, like a landlord exercising his right to possess after the expiry of his tenant’s lease, or his agent who entered and took possession of the mortgaged property in exercise of his right under the mortgage agreement is not liable for damages for forcible entry because the right to possess the property had become vested in the mortgage and his agent, the receiver, and the forcible entry was done in furtherance of their rights to possess: See Beddall v. Maitland(1881) 17 Ch.D.174;Hemmingsv. Stoke Poges Gold Club (1920) 1 KB 720 CCA and Aglionby v. Cohen (1955) 1 QB 558. The submission is therefore untenable.

I should like to reiterate our appreciation for the commendable assistance given to the Court by the learned amici curiae which enabled us to reach decisions on the issues. They have put up a lot of learning and research for the purpose of the resolution of the apparent conflict in the decisions of the Federal Supreme Court and of this court in Solanke v. Abed (supra) and Savannah Bank v. Ajilo (supra) which were founded on the absence of the Governor’s consent under section 11 of the Land and Native Rights Ordinance and section 22 of the Land Use Act respectively. In the instant case, there is the consent of the Governor and for this reason the decisions in the two previous cases are not relevant for its determination. The resolution of the apparent conflict is therefore not necessary and it has become an academic question. This court has in numerous cases established that it would not indulge itself in the luxury of academic exercise.

The appeal is accordingly dismissed. The decision of the Court of Appeal is affirmed. N1,000.00 costs to the respondents.

KUTIGI, J.S.C.: I have had the privilege of reading in advance the judgment just delivered by my learned brother Bello, Chief Justice of Nigeria. He has ably and fully set out the facts, the issues and the law. I am in complete agreement with the reasons comprehensively and lucidly stated therein for dismissing the appeal. I have nothing to add. I will also dismiss the appeal and hereby confirm the judgment of the two lower courts. I abide by the order for costs made in the lead judgment.

OGUNDARE, J.S.C.: I have had the advantage of reading in draft the judgment of the Honourable the Chief Justice just delivered. For the reasons given by him in the said judgment which I hereby adopt as mine, I too dismiss this appeal with cost as assessed in the lead judgment of my learned brother the Chief Justice.


SC.243/1992

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