Joe Anwasi V. Pade Chabasaya (2000)

LawGlobal-Hub Lead Judgment Report

D. MUHAMMAD, J.C.A.

The appellant and the respondent know each other very well. In fact, they could be described as friends. The appellant’s wife and the respondent used to teach in the same school. When the appellant was transferred from Kaduna to Katsina, he decided to sell his house situated at No.10 Kudendan Street, Nasarawa, Kaduna. The house has twenty seven rooms which were all occupied by tenants. The appellant approached the respondent to buy the house. The respondent agreed to buy the house but told the appellant that, at that time, he had no money with which to pay the appellant. The respondent then asked the appellant to assist him (the respondent) to obtain a bank loan with which to pay for the house. The appellant agreed to do so. On 12/3/90, the appellant agreed to sell to the respondent the house for N35,000.00. The agreement was reduced into writing. It was signed by the parties and their witnesses. The appellant then gave the respondent a photocopy of the Local Government Certificate of Occupancy in respect of the said house to enable the respondent process the loan from the bank in order to pay the appellant. Instead of using the photocopy of the said Certificate to obtain a bank loan the respondent used it to convert the Local Government Certificate of Occupancy into a Statutory Certificate of Occupancy issued by the State Government in respondent’s name. The appellant, on several occasions demanded the purchase price of the house. The respondent was unable to pay. The appellant then instituted an action before the Kaduna State High Court claiming the following reliefs:-

“(1) A declaration that the plaintiff is still the owner of the property situated and being at No, AL 10 Kudenda Road Alias No.36 Kigo Road Nassarawa Village, Kaduna covered by Certificate of Occupancy No. CHLG/B/000/194.

(2) A declaration that the Certificate of Occupancy purportedly procured by the defendant in respect of the said property is null and void and of no effect whatsoever.

(3) An Order restraining the defendant from parading himself as the landlord of the said premises.

(4) An Order directing the defendant to pay to the plaintiff arrears of rent of the two(2) rooms occupied by the defendant from March, 1991 at the rate of N25.00 per room until the date of his vacation from the said premises.

(5) An Account of all monies collected by the defendant in the said premises while parading himself as the landlord from the said four tenants at N25.00 per room from March to 16/1/92 and thereafter until the final determination of this suit.”

Pleadings were ordered, filed and exchanged. In his statement of defence, the respondent denied the appellant’s claim. The respondent also counter claimed as follows:-

“A declaration that the defendant is the rightful owner and the holder of the right of occupancy over the property situate and known as No.36 Kigo Road, Nassarawa Village, Kaduna.

(B) An Order of perpetual injunction restraining the plaintiff or his agent, servants from committing any act of trespass on the premises situate at No. 36, Kigo Road, Nassarawa Village, Kaduna (AL 10 Kudendan Village, Kaduna).

(C) An Order holding that the sale agreement between the plaintiff and the defendant dated the 12/3/90 is valid and subsisting.

(D) A declaration that the plaintiff is only entitled to the sum of Thirty Five Thousand Naira (N35,000.00),being the consideration for the sale and purchase of the said property less the sum of N12,220.00 (Twelve Thousand, Two Hundred and Twenty Naira), that had been collected by him as rent on the said property.

(E) An Order of perpetual injunction restraining the plaintiff from further publishing any other defamatory statement against the defendant.

(F) The sum of Fifty Thousand (N50,000.00) as damages for defamation and costs.”

At the trial the appellant who was the plaintiff at the lower court, testified and also called another witness who testified on his behalf. The defendant testified on his own behalf. He too called another witness who testified on his behalf. In a reserved judgment the trial Judge, Dogara Mallam J. dismissed the appellant’s case in its entirety and upheld the respondent’s counter-claim. In dismissing the appellant’s claims, the trial Judge found as a fact the appellant sold his house to the respondent for the sum of N35,000.00. He also found that the sale agreement between the appellant and the respondent was an agreement under seal. This is what he said:-

“The learned counsel for the plaintiff contended that the sale agreement Exhibit 2 could not amount to a valid contract of sale between the plaintiff and the defendant because the defendant has not furnished any consideration. Exhibit 2 is like a conveyance and the contract between the parties was a contract under seal which derived its validity not from the fact that the agreement on the consideration to be furnished but from the mere form of its making i.e. an agreement under seal. In other words, the defendant did not need to furnish any consideration to Exhibit 2 before it could become valid. The contract was valid from the date of its making or execution. What remained was for the parties to carry out the terms of the contract agreement. A contract is a contract from the time it is made and not from the time performance of the contract is due.

The trial Judge then concluded his judgment as follows:-

“In conclusion therefore, the plaintiff’s case is hereby dismissed in its entirety, Judgment is hereby entered for the defendant against the plaintiff as follows:-

1. The plaintiff is entitled to the sum of N35,000.00 as the purchase price of the house.
2. The sale agreement entered into between the plaintiff and defendant dated 12/10/90 is valid and subsisting.
3. The defendant is the rightful owner and holder of C, of O, No. NC. 17828 over the property situate and known as No. 36 Kigo Road, Nassarawa Village, Kaduna. The plaintiff or his agents, servants are hereby restrained from committing any acts of trespass on the said property.”

Dissatisfied with this judgment, the appellant appealed to this court. The amended notice of appeal contained seven grounds of appeal.

Briefs were filed and exchanged. The appellant also filed a reply brief. The appellant formulated six issues for determination vis:-

“(1) Whether Exhibit 2 the said agreement between both parties is enforceable by the respondent against the appellant.

(2) Whether Exhibit 2 is a contract under seal which therefore needed no consideration.

(3) Whether Exhibit 2 is an Instrument and if so whether it is admissible evidence without registration.

(4) Whether the said transaction between appellant and respondent is not void and illegal by virtue of S.21 (b) of the Land Use Act, and S.27 of the Land Tenure Law.

(5) Whether the trial Judge was right to believe respondent’s name ipsi dixit in the face of the burden placed on him by the state of pleadings.

(6) Whether the decision of the lower court is supportable having regard to the weight of evidence.”

The respondent on the other hand formulated three issues for the determination of the appeal. The issues are:-

“(i) Whether in the pleadings filed by the appellant, the issues of enforceability of Exh. 2 & 1 or being a contract under seal, were pleaded in his statement of claim.

(ii) Whether the appellant is bound by the contract he willingly entered into with the respondent in the presence of witnesses.

(iii) Whether the trial Judge was right to believe the respondent before entering judgment in his favour in view of the state of pleadings and evidence adduced before him.”

The respondent raised in his brief a preliminary objection in respect of grounds 4 and 5 of the Notice of appeal. It was contended that the two grounds were incompetent and should be struck out on the grounds that the said grounds were based on issues not raised before the trial court and that there was no evidence in the record on which the said grounds could be based and that the leave of this court was not obtained before they were raised. At the hearing of the appeal learned counsel for the appellant conceded to the preliminary objection and urged the court to strike out the said grounds. The preliminary objection succeeds. Grounds 4 and 5 of the Notice of Appeal which are not based on any issue raised at the court below are incompetent; as such they are hereby struck out. Issues, 3 and 4 formulated in the appellant’s brief, which relate to grounds 4 and 5 are hereby discountenanced, because the court will not consider and pronounce on an issue which does not arise from the grounds of appeal filed. See: Aja v. Okoro (1991) 7 NWLR (Pt. 203) 260.

I have considered the issues formulated by both the appellant and the respondent. In my view only two issues are sufficient to effectively dispose of the appeal. The issues formulated by the respondent are not appropriate to the determination of this appeal. Issue No. 1 formulated by the respondent does not arise from any of the grounds of appeal. A respondent can only formulate an issue independent of the grounds of appeal filed by an appellant, if he has filed a cross-appeal or a respondent’s notice.

The two issues which in my opinion are enough to dispose of the appeal are:-

1. Whether Exhibit 2 is a contract under seal.
2. If Exhibit 2 is not a contract under seal whether it is a valid contract which could be enforced.

The appellant submitted in his behalf that Exhibit 2 was not a contract under seal but a simple contract which required consideration and that the respondent must prove that consideration had moved from him before he could claim any right under Exhibit 2. It was also submitted that a contract under seal is a solemn deed which must be signed, sealed and delivered. These three requirements must all be present to constitute an agreement under seal. It was contended that Exhibit 2 did not purport to carry a seal.

In the respondent’s brief, it was submitted that the issue of Exhibit 2 not being a contract under seal had no foundation and should be struck out because the issue was not pleaded and as such could not be validly raised in this court or the court below.

The stand taken by the counsel for the respondent on this issue is misconceived. It was the trial Judge who held that Exhibit 2 was a contract under seal. It was the kernel of his decision because he based his decision on it. If he had held otherwise, he would not have entered judgment in favour of the respondent. The appellant is therefore right to have raised the issue because it arose from the judgment he is challenging.

A contract under seal is a written instrument which is required to be signed as well as sealed by the party bound thereby, and delivered by him to or for the benefit of the person to whom the liability is incurred. For a contract under seal to be valid, it must be in writing and it must be SIGNED, SEALED AND DELIVERED, failure to do any of the above will render the contract invalid.

I will now consider Exhibit 2 to see whether it is a document which has been signed, sealed and delivered. Exhibit 2 reads:”

TO WHOM IT MAY CONCERN

AN AGREEMENT BETWEEN MR. JOE

ANWASI AND PADA CHABASAYA

This is to certify that I Mr. Joe Anwasi of Nasarawa Village Kaduna South, signing below, sold my house at 36 Kigo Road, Nasarawa Kaduna South to Pastor Pada Chabasaya at the price of N35,000.00 (Thirty Five Thousand Naira only).

In the presence of:

Mr. Moses Kure…

Mr. Ruya Kudumi…

Mr. Hyacinth Udeh…

Mr. Idu Nmoye…

I, the seller agree that I will never claim back the house as soon as I receive the money and the buyer will not demand back his money as well.

1. The Seller’s Signature…

Date

2. The Buyer’s Signature…

Date

The above agreement is not a contract under seal simply because none of the parties affixed his seal to the agreement. The trial Judge was clearly in error when he held it was an agreement under seal. The document does not satisfy the requirements of a contract under seal. It is a sale agreement simpliciter. My answer to the first issue is therefore in the negative. Exhibit 2 is not a contract under seal.

The second issue is that whether Exhibit 2 is a valid contract which could be enforced. The contention of the appellant is that Exhibit 2 is not binding on the parties and as such could not be enforced. It was submitted that any agreement written or oral in which consideration has not been proved to move from the party seeking its enforcement is not binding on the other party. It was further submitted that since the respondent has not furnished any consideration, the agreement cannot be enforced. He relied on U.T.C. Ltd. v. Hauri (1940) 6 WACA 148; Dunlop Pneumatic Tyre Co. Ltd. v. Selfridges & Co. (1915) AC 847 and Younis v. Rasheed Chidiak (1970) 1 ALL NLR 188.

The respondent on the other hand submitted that Exhibit 2 is a valid and subsisting agreement between the parties. It was submitted that Exhibit 2 satisfied all the conditions necessary in a memorandum of sale, under the provision of S. 4 of the Statute of Fraud 1884 and in support referred to Rosenje v. Bakare (1973) ALL NLR 459, it was further submitted that Exhibit 2 contained the consideration to be given and that the consideration was executor and valid. It was also submitted that Exhibit 2 had satisfied all the requirements of a valid contract and as such is binding on all the parties.

The elements of a valid contract are offer, acceptance, consideration and an intention to enter into legal relations. For a simple contract to be binding there must be consideration which must move from the promisee. In Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge & Co. Ltd. (1914-15) All ER 333 where Viscount Haldane L.C. stated at page 334 that:-

“A second principle is that if a person with whom a contract not under seal has been made is to be able to enforce it consideration must have been given by him to the promisor or to some other person at the promisor’s request.”

Consideration has been defined in the case of Currie v. Misa (1875) “LR 10 Exch. 153 at 162 as:-

“A valuable consideration in the eye of the law may consist either in some right interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other. Thus consideration does not only consist of profit by one party but also exists where the other party abandons some-legal right in the present, or limits his legal freedom of action in the future as an inducement for the promise of the first. So it is irrelevant whether one part benefits but enough that he accepts the consideration and that the party giving it does thereby undertake some burden or lose something which in contemplation of law may be of value.

In our present case, the consideration is N35,000.00 which the respondent promised to pay to the appellant. He failed to fulfill the promise. The respondent is therefore in breach of the term of the contract. He has failed to furnish the consideration. My answer to the second issue is that since the respondent has not furnished any consideration, he cannot enforce the contract against the appellant.

This matter is a dispute over sale of land. It has been held that to constitute a valid sale of land three essential ingredients are required. These are:-

1. Payment of the purchase price.
2. Purchaser is let into possession by [he vendor: and
3. In the presence of witnesses.

See: Cole v. Folami (1956) SCNLR 180; Ogunbambi v. Abowab (1951) 13 WACA 222 and Akingbade v. Elemosho (1964) 1 All NLR 154.

Where the purchaser of land under customary law failed to fully pay the purchase price, there can be no valid sale, notwithstanding that the purchaser is in possession. See: Odufuye v. Fatoke (1977) 4 SC 11 and Oloto v. Administrator-Generator (1946) 12 WACA 76.

In Odusoga v. Ricketts (1997) 7 NWLR (Pt.511) 1. The Supreme Court held that where the purchaser who made a part-payment of the purchase price is in default of payment of the balance, there is right in the vendor to rescind the contract of sale and re-sell the property. See page 17 where Ogundare J.S.C. said:-

“In an attempt to distinguish Howe v. Smith from the case on hand the court below, per Ademola J.C.A, was of the opinion that payment made by plaintiff and receipted for in Exhibit A was not a deposit but part-payment. I cannot see what difference this distinction makes in this case. The factual situation here is that plaintiff did not fully pay for the land he bought from the family of Jemi Alade in 1965 and the family in 1972 resold the undeveloped part of it to the 1st defendant, after repeated demands made to the plaintiff yielded no results. On the authorities, there was neither a valid sale in 1965 under customary law nor had the plaintiff in 1977 equitable title to the land under the common law, such as would entitle him to a decree of specific performance. The question of whether what was paid was a deposit or part-payment only becomes relevant when determining the right of the purchaser to a refund of what he paid….. The administrator of Jemi-Alade was entitled to sell and convey the land in dispute of the 1st defendant/appellant in 1972, following the failure of the plaintiff to pay the balance of the purchase price, despite repeated demands.”

If a vendor who has been paid part of the purchase price can rescind the contract of sale where the purchaser is in default of payment of the balance, what of the vendor who has not been paid anything at all? Failure to pay the purchase price is a fundamental breach which goes to the root of the contract of sale. The party not paid has an option. He may still treat the contract as existing and sue for specific performance; or he may elect to hold the contract at an end i.e. no longer binding on him. See: Mayson v. Clouet (1924) A.C. 980.

In the case at hand the respondent has failed to pay the purchase price and the appellant is entitled to rescind the contract.

In conclusion, this appeal has merit and it is hereby allowed. The judgment of the court below is set aside. In its stead, I enter judgment in favour of the plaintiff/appellant. The appellant is entitled to the cost at the court below which I assess at N3000 and N750 respectively.

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Other Citations: (2000)LCN/0673(CA)