T. O. Williams & Anor V. J. T. Nelson Cole & Ors. (1952)

LawGlobal Hub Judgment Report – West African Court of Appeal

Mortgage—Sale at auction—No conveyance—Purchaser not taking possession—Mortgagor’s Claim to possession against outsider in possession.

Facts

The owner mortgaged his property to one S; both mortgagor and mortgagee died later. One of the executors of the mortgagee’s estate took possession of the property and claimed title to it; and after his death the mortgagor’s children sued the executors of his estate.

The facts were as follows:—
The mortgagee’s executors, purporting to act under the power of sale, put the property up to auction and sold it to a bank for £750 but executed no conveyance to the bank. One of those executors, namely P. H. Williams, was a director of the bank; he allowed £100 to be paid and kept the balance of £650 on deposit with the bank. The bank did not take possession.

Later the bank went into liquidation, and the liquidators sued the executors of the mortgagee’s estate claiming specific performance of the contract of the sale of the property to the bank or repayment of the purchase price.

The action was settled by the executors paying the liquidators £400. Later still a beneficiary under the mortgagee’s will sued P. H. Williams for breach of trust in allowing the £650 to remain on deposit with the bank and obtained judgment.

Thereupon P. H. Williams taking advantage of his position as an executor of the mortgagee’s estate and of the situation created by the beneficiary’s action against him, took possession of the property and claimed title to it.

After his death the children of the mortgagor sued the executors of his estate claiming (i) a declaration of title to the property, and (ii) recovery of possession. They failed and appealed.

In the appeal it was argued for the executors of P. H. Williams that the mortgagor’s children were estopped from denying the sale to the bank, of which they must have known, and that they had lost any interest they might have had when the property was sold to the bank.

Held

(1) The bank did not take possession after the sale, nor was the property conveyed to the bank; and the sale was called off at the settlement of the suit brought by the liquidators of the bank against the mortgagee’s executors; so the legal estate remained in the mortgagee’s estate.

The executors of the mortgagee’s estate not being a party in this dispute, the mortgagor’s children could not have a declaration of title to the property.

(2) The mortgagor’s equity of redemption was not extinguished by any valid and effectual sale of the property; it was not a purchaser at the sale but P. H. Williams who was in possession, and as against him and his executors the appellants as children of the mortgagor had a better right to possession.

Appeal allowed: judgment for possession.