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National Investment & Properties Company Limited & Anor V. Bank Of West Africa Ltd (1962) LLJR-SC

National Investment & Properties Company Limited & Anor V. Bank Of West Africa Ltd (1962)

LawGlobal-Hub Lead Judgment Report


This appeal is against the judgment of de Lestang, C.J., High Court of Lagos in favour of the plaintiff Bank.

The Bank’s case was that Mansour had deposited three certificates of leasehold property in Lagos registered in his name under the Registration of Titles Act, to secure monies advanced or to be advanced to him and to Ali Mansour and Sons Ltd., or to either of them; that in or about March, 1956, he undertook in a memorandum (referred to as Exhibit P.6) to execute a legal mortgage, but did not do so when called upon in or about July 1957; that in February, 1958, the Bank lodged the certificates with the Registrar of Titles for a purpose; that on the 1st March, Mansour purported to assign the leases to the N.I.P.C. who obtained the certificates and on the 25th were registered as owners,but as the N.I.P. C. were then unincorporated, the registration was void, and yet they would not hand over the certificates; and that both Mansour and Ali Mansour and Sons Ltd. were heavily indebted to the Bank: accordingly the Bank asked for a declaration that the N.I.P.C. did not obtain by registration any rights of priority over those of the Bank as equitable mortgagee, and certain forms of relief.

The Bank called evidence, the defendants did not: the learned Chief Justice found that the Bank’s case was proved, and granted the declaration; he also made orders on Mansour to execute a legal mortgage with the usual covenants, and on the N.I.P.C. to deliver the certificates to the Bank, together with an order for the Register to be rectified by deleting the N.I.P.C. and restoring Mansour as the owner of the leases.

The defendants have each appealed against the judgment. The hearing began with Mansour’s appeal, which was argued by Chief Okorodudu; Chief Williams argued for the N.I.P.C.; Mr. Goulding argued for the Bank. The dominant question arises under Mansour’s first ground of appeal, which complains that –

The learned trial Judge erred in law in admitting as evidence the document exhibit P.6., the said document being inadmissible by virtue of the provisions of the Land Registration Act.

For convenience that Act will be referred to as the 1924 Act. It provides for the registration of instruments and the filing of judgments affecting land in Nigeria. It sets up offices for registration and directs the Registrars to register instruments which satisfy the requisite conditions:

section 3; section 5. Every instrument (as defined in section 2) must be registered; if it is not, then, subject to the exemption, which will be discussed later, an instrument cannot be pleaded or given in evidence in court as affecting land; section 15; but registration does not cure defects: section 25.

It was doubtless to give a measure of security to dealings in land and reduce litigation, that in 1935 the Legislature enacted the Registration of Titles Act, to provide for the registration of titles to land, which is being applied step by step to more and more of Lagos, according as it becomes possible to create one and then another registration district: see Orders made under the Act in Vol. X of the  current Laws. The Act establishes registries and requires a separate Register to be kept in a certain form: section 4; section 69. If after the creation of a registration district a fee simple is conveyed, or a lease with forty years to run is granted or assigned, for a consideration which consists wholly or in part of money, the grant becomes, after two months (unless extended) after execution of the conveyance grant or assignment, void if the grantee does not apply for registration within that period: section 5. After first registration there are simple methods of dealing with registered land and having the dealing registered. On the other hand, the land can be dealt with as if it were not registered, but any such dealing is capable of being overridden by registered dispositions for valuable consideration: section 42(1). Mortgage by deposit of certificate is dealt with in section 58.

The point to note is that the Titles Act (section referred to for short) is based on a different conception and has another aim; that can easily be seen by looking at section 48 and on to section 54, which protects the registered purchaser for value from unregistered interests affecting the estate of any previous registered owner.

Much turns on section 86(1), which provides that –

(1)No document affecting land which originates an application for first registration and which is executed after the creation of the registration district in which land is situate and no document affecting registered land executed after first registration shall require to be registered under the Land Registration Act. No registered owner, being a purchaser for value subsequent to first registration shall be affected by notice of any document registered under such Act.

For such a purchaser the register kept under the Titles Act serves as a screen behind which he need not look. The first mentioned class of documents is dealt with in section 5; failure to apply for registration in time carries the penalty of making the document (conveyance of fee simple; grant or assignment of lease) void. The second class comprises all documents executed after first registration, whether the interest or right created by the document be registered or not; failure to register such interest or right carries the risk of its being overridden by registered dispositions for valuable consideration: section 42(1).

Moreover, the convenience and security of a person buying, or advancing money on land registered under the Titles Act, made it desirable to save him from having to look at anything other than the Register kept under the Act. There was no point in having registration under two Acts; hence the exemption of those two classes of documents from registration under the 1924 Act. When the Titles Act was passed in 1935, section 85(1) (now printed as 86(1)) began with the second class of document after “and” in line 4 of the text; early in 1956 the subsection was amplified to read as quoted above, by Act No. 8 of 1956, with effect from 1st March, 1956.

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To pass now to section 15 of the 1924 Act: in its original form it reads as follows:-

No instrument shall be pleaded or given in evidence in any Court as affecting any land unless the same shall have been registered in the proper office as specified in section 3: Provided that, etc.

The first proviso is irrelevant; the words “as specified in section 3” were added in 1954, but nothing hangs on that. In 1956, at the same time as section 85(1) (now 86(1)) of the Titles Act was amended and amplified, a further proviso was added to section 15 of the 1924 Act, by Act No. 9 of 1956, also with effect from 1st March, 1956, which reads –

Provided further that this section shall not apply in the case of any document which is exempted from registration under this Act by virtue of section 85 (now printed as section 86) of the Registration of Titles Act and which is registered under that Act.

Chief Okorodudu, the learned counsel for Mansour, relies on that proviso as making the memorandum (P.6) inadmissible in evidence on the ground that it is an instrument but was not registered under the Titles Act; the pith of his argument is that unless both arms of the proviso co-exist, the proviso is not effective.

Chief Williams, the learned counsel for the N.I.P.C., argues that an instrument cannot be given in evidence unless it is registered; that the memorandum in respect of the equitable mortgage should have been registered by notice given within two months under section 58 of the Titles Act; and that after that time, it could, and should have been registered under the 1924 Act for the sake only of making it admissible in evidence.

Both the learned counsel criticise the learned Chief Justice’s view that “REGISTERED” could, after first registration of title under the Titles Act, mean submitted for registration; they argue that it means entered in the register.

The learned Chief Justice, in an attempt to achieve some harmony between section 86(1) of the Titles Act and the proviso to section 15 of the 1924 Act, gave it as part of his view that when the Bank submitted a caution for registration under the Titles Act, that amounted to having the memorandum registered thereunder. That was in the Ruling of 10 November, 1960 where the learned Chief Justice gives a further reason thus –

In any case having regard to the scheme of the Act(s) and their objects, and in particular having regard to the recognition given to unregistered documents in the Registration of Titles Act I consider that without doubt it would cause injustice and favour fraud if a document which had been refused registration were rejected by the Court, in particular when the registration of that document is the very matter in issue in the action.

Mr. Goulding, the learned counsel for the Bank, points out that under section 86 of the Titles Act, a document which initiates registration thereunder is exempted from registration under the 1924 Act; which means that the Registrar appointed under the 1924 Act is not required to register it. The grantee applies for first registration under the Titles Act, if it is refused, on the interpretation argued for by the defendants, he cannot give his conveyance in evidence in Court because it is not registered under the Titles Act. Thus section 86(1) turns out to be a trap. He points out that, if in addition there must be registration, the exemption in section 86 becomes nugatory; that the Titles Act provides its own penalty, and there is no reason to add another penalty inadmissibility in evidence  in the 1924 Act.

The position in 1935, when the Titles Act was enacted, was that by virtue of section 86 certain documents were exempted from registration under the 1924 Act, section 15 of which made no mention of them; and learned counsel could not find any reason why that exemption should be cut down in the second proviso added to section 15 in 1956. The reply for Mansour is that admissibility is governed by that section and the memorandum is caught in the second proviso.

Replying for the N.I.P.C., Chief Williams agrees that “REGISTER” in section 5 of the 1924 Act means register under that Act and that between 1935 and 1956 there was a total exemption, by virtue of section 86 of the Titles Act; he argues that in 1956 that was qualified when the proviso was added to section 15 of the 1924 Act, the effect being that one could not put in a document unless it was registered under the one or the other Act.

The effect of that argument is that section 15 with the proviso should be understood as if the section read as follows:-

No instrument shall be pleaded or given in evidence in any court as affecting any lands unless the same shall have been registered in the proper office as specified in section 3  or, in the case of any document which is exempted from registration under this Act by virtue of section 86 of the Registration of Titles Act, unless such document is registered under that Act. That is also implicit in Chief Okorodudu’s argument.

Both arguments use the proviso as a means of enlarging the field of prohibition in the enactment, contrary to the intention of the proviso, which is plain from the words –

“Provided further that this section shall not apply” etc., and which is to reduce the field of prohibition. That odd result is achieved by overlooking the function of a proviso added to exclude certain cases from the operation of the enactment to which it is appended.

The proviso is added on the assumption that, but for the proviso, the enacting clause would operate on those cases. That assumption may be correct, possibly correct, or mistaken. Sometimes the enacting clause is ambiguous; the proviso is useful; it excludes those cases and settles the ambiguity. But where the field within which the enacting clause operates is clear from its language, the adding of a proviso to exclude cases which do not fall within that field is both superfluous and apt to lead one astray.

Nevertheless, when someone fears that those cases fall within that field, a proviso is added to allay his fears; which saves argument but may create trouble. The fact may be overlooked that it is a proviso dependent on the enacting clause before it, and cannot be treated as if it were an independent enacting clause; when that fact is overlooked, the result is to read into the enactment itself words which are not to be found there and which would alter its operative effect. The mistake made in the arguments for the defendants has been illustrated by re-writing the enactment in section 15 with the proviso as an additional enacting clause.

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The proper construction of section 15 with the proviso is to read the enacting clause first. This embraces instruments which require registration under the 1924 Act, it does not embrace any that do not; consequently, it does not operate on documents which are exempted from such registration by virtue of section 86 of the Titles Act, whether registered or not registered under that Act. Quite unnecessarily, the second proviso was added to section 15 of the 1924 Act, to exempt such documents when registered under the Titles Act; being a proviso, it does not have the effect of extending the operation of the enacting clause, to such document when not registered under the Titles Act. The intention of the Legislature in 1956 when adding the proviso was to reduce the field of prohibition; it is a fallacy to impute to the Legislature an intention to enlarge that fields.

In my view the memorandum was admissible in evidence, and the first ground in Mansour’s appeal must fail. There is no need to discuss the various other points argued under that ground. Further, as Mansour’s 2nd ground hangs from the first, it need not be set out or discussed.

Grounds 3 to 7 were argued en bloc; they relate to a passage in a letter of 5 October, 1957, from the Bank to Ali Mansour and Sons Ltd., in answer to an inquiry from them, which states –

At the moment we are holding the securities mentioned in your letter against the following account, but we must point out that in the case of 128/130 Broad Street, this is also regarded as supporting the guarantee given by Mr. H. A. Mansour, to the company. Company’s Accounts

208/212 Broad Street, 9 Wiwo Onatere Street.

Life Policies:

Mr. H. A. Mansour:- 128/130 Broad Street.”

The judgment deals with it as follows:

This letter was never put to the witness and it does not deal with all the certificates of title. It is quite possible that it merely reflects the internal arrangements of the Bank in regard to the certificates and no more. Moreover, this is a special defence which ought to have been specifically pleaded and was not. It is not open to the second defendant.

(The topic was raised in argument, that there had been an appropriation of the securities by the Bank between Mansour and Ali Mansour and Sons Ltd.)

The grounds of appeal complain that the learned Chief Justice erred in not treating the Bank’s letter as an admission; in failing to apportion the indebtedness and securitIes; in depriving Mansour of a defence open to him in law; in ordering specific performance without a finding of fact on the amount of the debt; and in not directing his mind to the issue whether Mansour was liable on the evidence as a guarantor “of any indebtedness of Ali Mansour and Sons Ltd. sued upon and if so for what amount”.

The argument is that on the Bank’s evidence it is only 128/130 Broad Street which affects Mansour.For the Bank the argument is that 208/212 Broad Street was owned by Mansour, who by Exhibit P.10 guaranteed the company’s account, and there is finding (3) in the judgment that both he and the Company are still heavily indebted to the Bank. There should have been a specific defence, in view of 0.32, R.13, of the Supreme Court Rules; but in any event, the letter says “at the moment”, and was not a waiver: it was not under seal and Man-sour had not given any consideration for waiver; it was not addressed to him but to the Company for information: with P.6 (the memorandum) in evidence the matter was set out at length there.

The reply for Mansour is that the memorandum was abandoned by the Bank and superseded by the letter, which confined his liability; his title deeds are a security but limited to the letter as a contract.

A contract imports an offer and acceptance of it, but the Bank’s answer cannot be said to be an acceptance of an offer in the letter of the Company; nor can the answer to the inquiry from the Company have the effect of superseding the memorandum or of operating as an admission of waiver of the Bank’s rights. The argument for the Bank is in my view conclusive, and grounds 3 to 7 must fail.

Ground 8 was not argued.

Ground 9 complains that the order on Mansour to execute a legal mortgage with the usual convenants is vague and bad in law; the argument is that it presumes that the memorandum is admissible. For the Bank it is stated that the learned Chief Justice on 19 March, 1962, settled the form, and later also the figure. There is no reply. Ground 9 has no substance. Ground 10 complains that there was no evidence that Mansour refused to carry out his obligations, and that made the order for specific performance bad in law. Chief Okorodudu refers to para 2 of the memorandum (P.6), which stated that –

The undersigned will on demand at his or their own costs make and execute to you or as you may direct a valid legal Mortgage of or on the said property or any part thereof in such form and with such provisions and powers of sale leasing and appointing a receiver and otherwise as you may require.He argues that there were reasons for delay. For the Bank it is pointed out that para. 9 of the Statement of Claim does not allege refusal but failure and neglect to execute a legal mortgage. The witnesses Hawkins and Smith asked Mansour several times to execute the deed; he did not dispute the obligation to do so, but he told one that he was negotiating a sale, and the other that the Company’s seal was with the auditors, and he went off with the engrossment and did no more about it. That meets the complaint; and I would add that Mansour’s was a polite form of refusal. Ground 10 must fail.

The 11th and final ground was not argued.

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In my judgment Mansour’s appeal must fail.

The N.I.P.C. notice of appeal contains eleven grounds. Of these the 1st complains that the memorandum (P.6) was wrongly admitted; the argument for the N.I.P.C. has been discussed together with that for Mansour; the first ground fails.

The 2nd and the 11th complain that the learned Chief Justice erred in holding that the memorandum was registered, and that the Bank had registered a caution with the memorandum as its foundation. The caution had been submitted for registration, and in his Ruling of 10th November, 1960, when interpreting the proviso to section 15 of the 1924 Act, the learned Chief Justice thought the word “registered” should include something submitted for registration. In the judgment itself there is no finding that the memorandum was registered; so grounds 2 and 11 are beside the point.

Ground 3 is that the learned Chief Justice erred in holding that P.6 is the document referred to in para. 5 of the Statement of Claim (in its final form) which alleges that the memorandum was executed in or about March, 1956.It had been contended at the trial that P6 was not that document; the judgment says:-

I hold that it was executed as stated by Hawkins in the second half of 1956. In the absence of any evidence that there was another memorandum of equitable mortgage executed by the second defendant, I see no reason to doubt, however, that exhibit P.6 is the document referred to in the statement of claim. The discrepancy between the date pleaded and proved is probably attributable to the fact that it was not dated on the date it was executed.

The witness Hawkins testifying in November, 1960, said –

To the best of my knowledge exh. P.6 was signed some time in 1956. I think it was in later half of 1956 that exh. P.6 was executed, because it was after I relieved Mr. Sells that I signed it. I relieved Sells I think in April 1956 for approximately two and a half months. In 1956 1 was in Lagos for the whole of the year. After relieving Sells I was appointed joint Manager of Lagos Branch and held that post for rest of 1956.That evidence might mean any time between April and the end of 1956. If it was in April, the words “in or about March” would be near enough. Mansour, who might remember when it was, did not give evidence and has not complained. He executed only one memorandum, and it was P.6.

The most that ground 3 can mean is this – that the bank should pay the cost of amending its pleading. The mistake did not embarrass the defence. It could not be a ground for defeating a claim proved in substance.

The only other grounds argued are 4, 5 and 6. No. 6 raises the point in ground 4. Grounds 4 and 5 state that –

4.The learned Chief Justice erred in law in holding that a mortgagee who has failed to give notice of the mortgage to the registrar within the time prescribed by section 58(2) of the Registration of Titles Act could protect such interest by lodging a caution or by registration thereof as an encumbrance.

5. The learned Chief Justice erred in law in failing to observe that the interest of a mortgagee created off the Register is not an interest which is capable of being protected by caution or by registration thereof as an encumbrance.”

Mr. Goulding, for the Bank, has objected that the N. I. P.C. has no interest in those matters. Chief Williams has argued that as holding the land certificates, the N.I.P.C. has a locus standi. On the other hand, he concedes that as the assignment of the leases was void, the order to delete the registration in the name of the N.I.P.C. and to restore Mansour’s name is lawful. The N.I.P.C. did not show any reason which justified retention of the certificates: the Bank has proved its claim for having them back. It follows that it was lawful to order the N.I.P.C. to deliver them up; and thus it is clear that the N.I.P.C. has no interest in those matters. They are interesting questions, but the decision of them does not arise in the appeal of the N.I.P.C. in which they are raised. Consequently anything said on them would be in the nature of obiter dicta. To avoid those “proverbial chickens of destiny” coming back to roost, I shall not deal with those grounds of appeal, but confine myself to saying that they would not help in bringing success.

There is a complaint by the Bank that one of the land certificates was handed in by the N.I.P.C., but a wrong one put in instead. That should be taken up in the Court below.

In my judgment both the defendants fail, and it is proposed to order as follows-

The appeal of the defendants in the High Court of Lagos Suit No. 137/59 from the judgment of 12 December 1960 is hereby dismissed with two hundred guineas costs.

Other Citation: (1962) LCN/1011(SC)

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