Sunday Abigbite Taiwo V. Serah Adegboro & Ors. (1997)

LawGlobal-Hub Lead Judgment Report

MOHAMMED, J.C.A.

By a Legal Mortgage Deed executed on 20/3/93 between Adegboro Construction (Nigeria) Limited of No. 245 Ibrahim Taiwo Road, Ilorin, Kwara State as the borrower and Mr. Michael Adegboro also of No. 245 Ibrahim Taiwo Road, Ilorin as the surety on one part, and Societe General Bank (Nig.) Ltd. of No. 126/128 Broad Street, Lagos as the lending bank on the other part, Mr. Michael Adegboro (now deceased) in order to secure a loan of N80,000.00 granted to his company by Societe General Bank, agreed to mortgage his property, a house in which he and his wife and children lived to the Bank as security to ensure the repayment of the loan. However Mr. Adegboro died on 16/9/84 leaving the loan still unpaid while his wife and children who lived in the mortgaged property were not aware of the existence of the transaction with the Bank affecting the property. Meanwhile the Bank as unpaid mortgagee decided to exercise its right of sale under the Deed of Mortgage by appointing an auctioneer to sell the property by public auction. The auctioneer in pursuance of his instruction to sell the property, visited the property on 16/6/89 and pasted his notice of sale of the property by public auction. The auction was conducted on 17/6189 and the property was sold to one Sunday Adegbite Taiwo for the sum of N140,000.00. On seeing that the house in which she and her children lived had been sold, Mrs. Serah Adegboro then instituted an action at the Ilorin High Court on 20/6/89 against the Bank, the Auctioneer and the purchaser of the property. The reliefs claimed in the action according to the amended writ of summons and amended statement of claim are as follows:

“1. A declaration that a purported sale by auction of property of M.A. Adegboro (deceased) at Gaa-Akanbi, Ilorin on 17th June, 1989 on behalf of the 1st defendant by 2nd defendant to a 3rd party is in violent breach of the Auctioneer’s Law (Cap. 10) and the Sheriffs and Civil Process Law (Cap 125) and therefore null and void.

2. A declaration that the 2nd defendant (Auctioneer) by letting the property which is worth N400,000.00 go for a paltry sum of N140,000.00 is negligent, reckless and had sold in bad faith.
3. An order setting aside the purported sale by auction of the said house.
4. A perpetual injunction restraining the defendants from transferring the title documents or ownership to a 3rd party until the determination of this case.”

The last and 4th relief being interlocutory in nature was heard and granted by the trial court before the remaining 3 reliefs went on trial before Ibiwoye J. of the Ilorin High Court of Justice, Kwara State after the exchange of pleadings. In the course of the trial, Mrs. Serah Adegboro as the plaintiff testified in support of her claims but did not call any other witness. Societe General Bank (Nig) Ltd. as the 1st defendant also called only one witness while the Auctioneer and the purchaser of the property who were 2nd and 3rd defendants respectively each gave evidence in support of their respective cases. At the end of the hearing, the learned trial Judge Ibiwoye J., in a considered judgment delivered on 6/10/93, found for the plaintiff and granted all her reliefs including the setting aside of the sale of the mortgaged property to the 3rd defendant.

The Bank in exercise of whose right of sale the property was sold by public auction and the auctioneer who sold the property who were the 1st and 2nd defendants respectively, apparently had no quarrel with this judgment because not only did they decide not to appeal against it but also decided to team up with the plaintiff in defending the judgment in this appeal as 2nd and 3rd respondents respectively with the plaintiff being the 1st respondent. However, the 3rd defendant as the purchaser of the mortgaged property who was not happy with the judgment of the trial court had appealed against it to this court. Thus, the 3rd defendant who is now the appellant in this appeal has challenged the judgment of the trial court by a notice of appeal dated 25/10/93 containing 10 grounds of appeal.

In accordance with the rules of this court, briefs of arguments were duly filed and served before the appeal came up for hearing on 10/6/97. From the 10 grounds of appeal filed by the appellant, the following 4 issues for determination were identified in the appellant’s brief.

“1. Whether having regard to the amended statement of claim the evidence of the plaintiff/1st respondent thereon, the plaintiff can be said to have the standing to maintain the action or be granted the reliefs endorsed on the amended writ of summons, when the deed of legal mortgage Exhibit D1 was not made for the benefit of the plaintiff nor was she a party thereto.

2. Whether having regard to the uncontroverted evidence of D.W.1 and D.W.2, the learned trial Judge was right to have declared the auction sale null and void under the provisions of section 19 of the Auctioneer’s Law moreover when the learned trial Judge misconstrued and misinterpreted the case of the defence especially that of the appellant
3. Whether the learned trial Judge was right in the view he held that the auction price was too low having regard to the valuation price when a sale by public auction like in this case is not governed by the current price of the auctioned property nor its real market value.
4. Whether having regard to the generality of the facts on record was the learned trial Judge right to have entered judgment in favour of the 1st respondent who failed to prove her case and when she abandoned the allegation of fraud which was the fulcrum of her claim.”

However, in the 1st respondent’s brief of argument, the following 4 issues were identified for the determination of the appeal. They are:-

“1. Whether the 1st respondent has the necessary locus standi to maintain this action (as the widow of the deceased title holder resident in the property with her children.

2. Whether the purported sale by Public Auction on 17/6/89 of the property could be held valid in view of the clear and unambiguous provisions of section 19 of the Auctioneer’s Law of Kwara State and the evidence before the trial lower court.
3. Whether in view of the time lag between 1980 when Exhibit D2 was prepared and 1989 when Exhibit 2 was prepared the finding of the trial lower court that the auction price of N140,000.00 was at a gross undervalue could be faulted (cognisance been taken of the eventual sale price of N500,000.00 in 1993).
4. Whether on the totality of the evidence before the trial court and the position of pleadings, the trial lower court could be said to have wrongly entered judgment for the 1st respondent.”

The 2nd and 3rd respondents who filed a joint brief of argument have formulated only 2 issues for the determination of the appeal. The 2 issues are:-

“1. Whether the plaintiff/respondent (widow of the mortgagor) has locus standi to maintain the suit.

2. Whether the auction exercise was conducted in accordance with the relevant provisions of the law.”

Learned counsel to the appellant had also filed a reply brief each in response to some of the arguments advanced in the 1st respondent’s brief and 2nd and 3rd respondents’ brief respectively but did not appear at the hearing of the appeal which was deemed argued.

Having carefully examined the various issues formulated by the parties in their respective briefs of argument and taking into consideration the substance of the judgment of the trial court being appealed against, I am of the view that there are only 2 real issues for determination in this appeal. These are the issue relating to the standing of the 1st respondent to maintain the action at the trial court and the issue relating to the validity or otherwise of the auction sale of the mortgaged property conducted by the 3rd respondent. These two issue will take care of all the 4 issues formulated in the appellant’s and the 1st respondent’s briefs of arguments respectively.

The first issue for determination therefore is whether the 1st respondent as the plaintiff at the trial court had the locus standi to maintain the action. It was submitted for the appellant by his learned counsel that there being no nexus between the deed of legal mortgage and the 1st respondent, the 1st respondent cannot be said to have proved her standing to prosecute the action at the trial court. That not being a party nor a beneficiary of the legal mortgage, the 1st respondent cannot be said to have recognisable interest to protect in the matter. Learned counsel then quoted section 6(6)(b) of the 1979 Constitution of Nigeria and referred to a number of cases notable of which are the leading cases of Adesanya v. President (1981) 2 NCLR 358 and Adigun v. Attorney General of Oyo State (1987) 1 NWLR (Pt.53) 678 and concluded that the 1st respondent had no locus standi to maintain the action at the lower court particularly when even the learned trial Judge in his judgment did not give any reason for finding the contrary.