Mr. Robert Ayoade Olaleye V. Wema Bank Limited & Anor (2010)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

STANLEY SHENKO ALAGOA, J.C.A. (Delivered the Leading Judgment)

In the High Court of Justice Oyo, Oyo State of Nigeria, the present Appellant as Plaintiff had in Suit No. HOY/47/90 claimed as per paragraph 37 of the amended statement of claim against the 1st & 2nd Respondents as follows –

1. An order setting aside the purported sale of the Plaintiffs property situated at Ogbomosho Road, Opposite the State Hospital, Oyo subject matter of a Certificate of Statutory Right of Occupancy of 7/9/81 registered as 34/34/2393 of the Lands Registry Ibadan, carried out on 15/5/89 by the agents of the 1st Defendant to the 2nd Defendant (a tenant in a shop in a building on the said property) on the grounds that it was fraudulent, irregular, not in compliance with the law, grossly below the market value in that not all the developments on the land was disclosed, it was not made in good faith and premature in that the 1st Defendant did nothing to satisfy the debt owed it by the principal debtor from him whom the Plaintiff stood surety for and that the Plaintiff was not allowed time to make good his promise made on 12/5/89 to pay the money owed by instalmental payment
2. A declaration that the purported sale of the Plaintiffs property situate at Ogbomosho Road, Opposite the State Hospital, Oyo, Oyo State subject matter of a certificate of Statutory Right of Occupancy dated 7th September 1981 and registered as No. 34 on page 34 in Volume 2393 at the Lands Registry Ibadan to the 2nd Defendant on the instructions of the 1st Defendant carried out on 15th May 1989 is null and void and of no effect as the purported sale was carried out without the consent of the Military/Governor of Oyo State which consent ought to have been first had and obtained before the purported sale could be carried out.
3. A declaration that the purported Deed of Assignment made between the 1st Defendant and the 2nd Defendant dated 7th June 1989 and registered as No. 17, Page 17 Volume 2761 at the Lands Registry Ibadan is null and void and of no effect as the same was based on the said purported sale by the 1st Defendant and in respect of which no consent of the Military Governor of Oyo State was obtained before the assignment of the Plaintiff’s property.
4. An injunction restraining the 2nd Defendant from laying any claim of ownership to the Plaintiff’s property subject matter of this action by virtue of the purported sale to him by the 1st Defendant carried out on 15/5/89.

Briefly the Plaintiff’s case is that he was a member of the Oyo State House of Assembly between 1979 and 1983 when sometime in 1979 he opened a current account with the 1st Defendant Bank at its Adamasingba branch, Ibadan in order to facilitate the receipt of allowances from the Oyo State Government. Sometime in 1982, he deposited his statutory certificate of occupancy dated 7th September 1981 and registered as No. 34 at page 34 in volume 2393 at the Lands Registry Ibadan with the 1st Defendant Bank to secure a credit facility in the sum of N5,000.00. The Plaintiff’s certificate of occupancy was in respect of the land on which stood a one storey building located along Oyo/Ogbomosho Road, opposite the State Hospital Oyo. The Plaintiff stopped operating the account with the 1st Defendant Bank sometime in 1984 when following the military takeover of government of Nigeria all bank accounts of the then politicians, a class to which he belonged were frozen on the orders of the Federal Military Government. Plaintiff averred that sometime in 1985, he went into bread baking business and came into contact with one Alhaji Sheu Alatewu, who traded in bread baking flour and they became friends. Alhaji Sheu Alatewu sometime approached the Plaintiff and informed the Plaintiff of his inability to secure a loan facility from his bankers to further finance his business because he did not have the type of landed property documents in the form of a certificate of occupancy that his bankers needed to advance him a loan. Alhaji Sheu Alateowo asked Plaintiff if he had any such document which he could lend to’ him. The Plaintiff told Alhaji Sheu Alateowo that although he had such a title document, he had deposited it with his bankers at Ibadan to secure a loan of N5,000.00.

Alhaji Sheu Alateowo said he banked in the same bank as the Plaintiff at its Orile Iganmu branch Lagos and requested that the Plaintiff should assist him by arranging for the transfer of the title documents to Lagos to enable him enjoy the loan facility and return same after the loan must have been paid back in a year’s time. The Plaintiff agreed to do so but upon being informed that he would be required to depose to an affidavit authorizing the bank to transfer the documents to Lagos, the Plaintiff refused to be drawn into such a deposition. Alhaji Sheu Alateowo then requested that Plaintiff act as guarantor in respect of the loan to which the Plaintiff agreed. Sometime in 1986 the Plaintiff was invited to the Orile Iganmu branch of the 1st Defendant Bank by Alhaji Sheu Alateowo to sign the loan agreement as a guarantor. Plaintiff averred that although he signed the loan agreement as a guarantor, a copy was not given to him. Plaintiff averred that after signing the agreement as guarantor he heard nothing on the issue again until the 10th May 1989 when his attention was drawn to an auction notice dated 25th April 1989 pasted on the house the subject matter of this suit stating that the house would be sold on the 15th May 1989. On the 12th May 1989, Plaintiff went to the head office of the 1st Defendant Bank, where on inquiry he was informed that the said property was mortgaged by the said Alhaji Sheu Alateowo to the 1st Defendant Bank to secure a loan of N25,000.00 granted him by the bank and which money he had failed to pay back.

Plaintiff averred that he learnt same day that Alhaji Sheu Alateowo had earlier on represented an affidavit authorizing the transfer of his (Plaintiff’s) title documents from the Adamasingba branch Ibadan to the Orile Iganmu branch of the 1st Defendant purporting same to be sworn to by the Plaintiff. Plaintiff also averred that the 1st Defendant should have known that that affidavit was a forgery, and informed the legal officer of the 1st Defendant who requested him to make a proposal for the payment of the debt now incurred on the loan by Alhaji Sheu Alateowo which second or alternative proposal by him (Plaintiff) was acceptable to the legal officer of the 1st Defendant; but surprisingly the sale of the Plaintiffs house the subject matter of the suit was effected on the 15th May 1989 as planned. Plaintiff averred that he thereupon approached the 1st Defendant who informed him that the sale was in error. It was later he understood that the house was purchased by the 2nd Defendant who is one of the tenants in the house subject matter of this suit.

The 2nd Defendant carries on business as a dealer in pharmaceutical products under the name and style of Oloyin Pharmaceutical Chemists and Plaintiff averred that he bought the house worth over N450,000.00 for N27,300.00. Plaintiff averred that before the purported sale the Plaintiff received no demand note from the 1st Defendant and was never informed that Alhaji Sheu Alateowo had defaulted in the payment of the money he borrowed. Plaintiff averred that by accepting the proposals made by the Plaintiff, the effect of which was that the house would not be sold, the 1st Defendant was estopped from selling the Plaintiff’s house and the purported sale was in bad faith. The Plaintiff further averred that the purported sale of the property to the 2nd Defendant was without the consent of the Governor of Oyo State whose consent ought to have

been first had and obtained before the purported sale as required by the Land Use Act.

Plaintiff went on to further aver that the purported sale carried out on the instructions of the 1st Defendant to the 2nd Defendant is the basis of a purported Deed of Assignment between the 1st and 2nd Defendants dated 7th June 1989 and registered as No. 17 at page 17 in Volume 2761 at the Lands Registry without the consent of the Military Governor of Oyo State which ought to have been first had and obtained. It is the Plaintiff’s further averment that unless restrained, the 2nd Defendant will take further steps to eject all the other tenants who are not owing the Plaintiff any rent arrears from the house and take possession of it.

In its further amended statement of defence the 1st Defendant averred that the Plaintiff sometime in 1982 borrowed the sum of N5,000,000.00 (Five million Naira) from the 1st Defendant bank and mortgaged his house earlier referred to, to secure the said loan which by the 1st October 1985 had reached N8,559.63 since the loan was not being serviced or repaid by the Plaintiff. 1st Defendant averred that it did not act on any affidavit to transfer the property of the Plaintiff from Adamasingba branch to Orile Iganmu branch but rather acted throughout on other documents executed by the Plaintiff which include inter alia guarantee form and mortgage deed. It was further averred by the 1st Defendant that the Plaintiff apart from signing the guarantee form and mortgage deed insisted that the sum of N8,559.63 being his prior indebtedness to the 1st Defendant be deducted from the amount approved for Mr. Sheu Alateowo, the principal debtor. 1st Defendant averred that the mortgage deed was a further security on the Plaintiff’s property which had hitherto been mortgaged to the 1st Defendant in 1982 for a loan of N5,000.00 and that while the Plaintiff’s debt ought to have been paid sometime in 1983, the further mortgage which he guaranteed ought to have been paid on or before the 30th December 1986. 1st Defendant denied ever making a proposal to the Plaintiff on how the incurred debt was to be paid with respect to a house that was already slated for sale. 1st Defendant averred that the Plaintiffs property was mortgaged to the 1st Defendant bank with the consent of the Governor and there is no law including the Land Use Act that stipulates that the Defendant mortgagee must seek the consent of the Governor before the Plaintiff’s mortgaged property could be sold. 1st Defendant averred that the claim of the Plaintiff was not brought in time and also that the sale was done in good faith to the highest bidder which proceeds did not cover the indebtedness of the Plaintiff to the 1st Defendant bank as a result of the general depression in the property market arid the location of the property.

The 2nd Defendant by his further amended statement of defence and Counterclaim dated 22nd October 1997 averred that he was a former tenant in the house subject of this suit before buying the said house from the 1st Defendant in a public auction notice of which sale was advertised in a national newspaper. 2nd Defendant further averred that he had been carrying on with his Pharmaceutical business for ten years in the house subject matter of this suit and had acquired the goodwill of the public and had become embarrassed that the house was to be sold as people did not appear to differentiate between the sale pf the house subject matter of the suit and his business which was being carried on in the said house. He explained to the Plaintiff how he reliably learnt that some people in the pharmaceutical trade in Oyo town were already making moves to bid for and buy the house in order to set up a branch of their pharmacies therein. 2nd Defendant averred that he could not wait idly and watch his business and goodwill built over the years through hard work swept away by rivals who could throw him out of the house. Plaintiff assured him (2nd Defendant) that the house would be redeemed and would not be sold. When it became clear that the debt had not been settled by the Plaintiff after earlier assurances to him (2nd Defendant), he took steps to bid for the house and subsequently purchased same at a public auction. 2nd Defendant averred that he is a purchaser for value in good faith and that he had assurances from the 1st Defendant bank that the consent had been obtained on the mortgage transaction that culminated in the sale of the property subject of this suit. 2nd Defendant further averred that he was a purchaser for value without notice of any irregularity. He went on to contend that having not bought from a holder of a certificate of statutory right of occupancy he has no duty in law to obtain the consent of the Military Governor of Oyo State before buying 2nd Defendant further contended that the Plaintiff is estopped from challenging the sale and purchase of the house subject matter of this suit by reason of the fact that he had actual notice of the mortgage on the house and consented to it. It was the further averment of the 2nd Defendant that the Plaintiff had adequate notice of and every opportunity to stop the auction if he had good reasons but did not. The 2nd Defendant went further to contend that the sale to him (2nd Defendant) of the house the subject matter of this suit was lawful and valid. The 2nd Defendant therefore contended that the Plaintiff’s action in instituting this action is an afterthought, in bad faith and belated and therefore Counterclaimed against the Plaintiff as follows –

(a) A Declaration that the 2nd Defendant is entitled to possession of all that piece or parcel of land situate, lying and being at Ogbomoso Road, Opposite the State Hospital, Oyo subject matter of a Statutory Right of Occupancy dated 7th September 1981 registered as No. 34 at page 34 in volume 2393 of the Lands Registry in the office at Ibadan.

(b) AN ORDER for possession of the said v piece or parcel of land together with the building thereon.

(c) Injunction retraining the Plaintiff, his servants, agents, privies or any person or otherwise howsoever from remaining on or continuing in occupation of the said land and the building thereon.

(d) General damages from withholding possession to the 2nd Defendant.