M. J. Eka-Eteh v. Nigerian Housing Development Society Ltd and Anor (1973)

LawGlobal-Hub Lead Judgment Report

IBEKWE, AG. J.S.C. 

In his claim before the Ikeja High Court in Suit IK/201/64, the plaintiff M. J. Eka-Eteh (now appellant) claimed by his amended writ of summons as follows:

“An order setting aside the sale of the plaintiff’s property at No.3 Eka-Eteh Street, Ikate, Mushin by the 1st defendants to the 2nd defendant on the ground of fraud, irregularity, non-compliance with the provisions of the Property and Conveyancing Law and that the purported sale was not made in good faith. In the alternative the plaintiff claims from the 1st defendant the sum of 10,000 pounds being damages for wrongful sale by the 1st defendant of his property to the 2nd defendant.”

It is common ground that the plaintiff was the owner of the property situate at No.2 Eka-Eteh Street, Mushin. In consideration of Property and Conveyancing Law 2,500 pounds advanced to him by the 1st defendant in September, 1962, the plaintiff mortgaged the said property to the 1st defendant (now 1st respondent), the Nigeria Housing Development Society Limited, by way of security for the loan. It is also not in dispute that in November, 1964, the 1st defendant, in exercise of their statutory powers of sale, sold and conveyed to J. A. Adewunmi the 2nd defendant (now 2nd respondent) the property in question for 2,850 pounds. In consequence thereof, the plaintiff M. J. Eka-Eteh as mortgagor, on the 28th day of November, 1964 brought this action against the mortgagees, the 1st defendant, and also against J. A. Adewunmi, the 2nd defendant who had bought from them, claiming that the sale be set aside “on the ground of fraud, irregularity, and non-compliance with the provisions of the Property and Conveyancing Law of Western Nigeria.”

In the alternative, the plaintiff claimed damages from the 1st defendant. The case therefore turns on the regularity or otherwise of the purported exercise of the power of sale by the 1st defendant as mortgagee.

Pleadings were ordered and filed. The plaintiff in the relevant paragraphs of his amended statement of claim averred as follows:

“28. The plaintiff states that the 1st defendant has no right of sale under the said deed of mortgage and purported to sell the property to the 2nd defendant to embarrass, defraud and put the business of the plaintiff in great disorder.

29. The plaintiff will contend at the trial that the mortgage is bad and/or unenforceable for non-compliance with the Property and Conveyancing Law.
30. The plaintiff states that the alleged sale of the property was grossly below its market value.
31. The plaintiff further states that the 1st defendant either concealed his state of account from the 2nd defendant at the time of the sale or was in collusion with the 2nd defendant in selling the property improperly and at such a ridiculous price.
32. That alleged power of sale of the 1st defendant was improperly and unreasonably exercised.”

The defendants, in their statement of defence, denied all the allegations. They claimed that they acted in good faith and in accordance with the law, as they averred in the following relevant paragraphs of their statement of defence:

“11. With regard to paragraph 28 of the statement of claim, the defendants admit in so far as the 2nd defendant is the purchaser of the said property but deny other allegations therein contained, and put the plaintiff to the strict proof of them.

14. The defendants aver that at the time they exercised their power of sale:

(i) The plaintiff was and has been in breach of the terms of the mortgage deed.

(ii) That notice in due form of law and under the said mortgage deed was served upon the plaintiff.

(iii) That thereupon their power of sale arose and

(iv) That it was exercised in due form of law and without any irregularity.

15. The defendants will contend at the trial of this action that the statement of claim does not support the writ of summons and that the whole action discloses no fraud on the part of the defendants.
16. The defendants will further contend that he (sic) will rely on all legal and equitable defences available and also the Property and Conveyancing Law of Western Nigeria.”

The case then proceeded to trial. The plaintiff testified and called four witnesses including one Mr John Wood Ekpeyong, an estate surveyor who valued the property for him in 1966. It is relevant to remark here that Mr Ekpeyong admitted under cross-examination that he did not see the building in its uncompleted state in 1964 when it was sold. He only saw and valued the completed building in 1966, roughly two years after the sale. On their part, the 1st and 2nd defendants gave evidence in their own behalf; and in addition, the 1st defendants called a Mr. Charles Williams, their Chief Surveyor, who valued the property for them in 1964. The valuation report produced by this witness was received in evidence, without objection, and marked exhibit A6. It reads as follows: