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MORTGAGEE’S RIGHT OF PROPERTY SALE

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Intercity Bank Plc. v. F and F F (Nig.) Ltd. (2001) 17 NWLR (Pt.742) 347, wherein Omage, J.C.A. stated as follows on page 365 “In my respectful opinion, the complaint of the mortgagor notwithstanding, about the actual sum owing on the mortgage, the court will not interfere or restrain the mortgagee from exercising his right of sale of the mortgaged property. To intervene is to seek to vary the terms of the mortgage agreement and the court will not rewrite the mortgage agreement for the parties. The right of sale of the mortgagee is the only certain shield of recovery of the mortgagee’s investment … and he should be allowed to sell, ceteris paribus (all things being equal)”.

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VOID FOR CONSENT OF MILITARY GOVERNOR

In the circumstances of this case, I would, as the two lower courts did, hold that the deed of mortgage dated 5th September, 1980 (marked Exhibit A in these proceedings) executed by the 1st plaintiff in favour of the 1st Defendant bank to secure money owed it by the 2nd plaintiff company (Respondents herein) is null and void, the consent of Military Governor of Lagos State having not been obtained before the execution of the Deed.

– Nnamani, JSC. Savannah v. Ajilo (1989)

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MORTGAGEE WILL ENTER POSSESSION ONCE MORTGAGOR’s PAYMENT OF INSTALLMENT IS IN ARREARS

In Robertson v. Cilia, (1956) 1 W.L.R. 1502, there a mortgagee applied by summons to the court for an order for pos-session of the mortgaged property on the ground that payment of instalments was in arrear. The mortgagor applied for the case to stand over generally. After certain interlocutory proceedings, the summons was adjourned into court in order that it might be determined to what extent the court had power to stand over generally a summon of that nature. At the time of the hearing, all arrears of instalments due under the mortgage had been paid up, but the right to repay by instalments had lapsed; and it was admitted that owing to general credit restrictions the mortgagor would not be in a position to redeem within any foreseen time. It was held that, an order for possession should be made as the mortgagee was entitled to possession, and in those circumstance, there was no power to stand the matter over generally without the consent of the mortgagee nor would it be a reasonable exercise of power to stand it over for a period when there was no prospect that the mortgagee would be in a position to make an acceptable offer. (See also Hinkley and South Leicester Permanent Benefit Building Society v. Freeman, (1941) Ch.32).

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RIGHT TO REDEEM A MORTGAGE

It is important to note that incident to every mortgage is a right of the mortgagor to redeem. This right is generally referred to as the right of redemption. The right to redeem is so inseparable an incident of a mortgage that it cannot be taken away even by an expressed agreement of the parties that the mortgage is not to be redeem or that the right is to be continued to a particular time or to a particular description of persons. The right continues unless and until the mortgagor’s title is extinguished or his interest is destroyed by sale either under the process of the court or of a power in the mortgage deed.

– Mohammed JCA. Rufukka v. Kurfi (1996)

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BAD FAITH ON THE PURCHASER OF MORTGAGE PROPERTY

The law of sale by auction or auction sale protects the purchaser and that is the basis of the principle of law that a mortgagor’s right essentially is in damages. The law has an important qualification and it is that the purchaser must have bought the mortgaged property in good faith, that is bona fide and not in bad faith, that is mala fide. The sympathies of the law on the purchaser will vanish the moment the court comes to the conclusion that the purchaser bought the property in bad faith. Bad faith on the part of the purchaser is a matter of fact to be deduced from the totality of the purchasing or buying conduct of the purchaser. Bad faith taints or better still, destroys a mortgage sale and therefore the property in the sale.

– Niki Tobi JSC. Okonkwo v. Cooperative Bank (2003)

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IN MORTGAGE THERE IS IMPLIED PROMISE TO REPAY

Exhibit ‘A’ does not contain a covenant to pay the principal’s debt and interest on a given date. On the authorities however, there is an implied promise to pay and as no date has been fixed for the repayment it is my view that a reasonable time will be implied. – Ogundare JSC. Ejikeme v. Okonkwo (1994)

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MORTGAGEE TO GIVE NOTICE BEFORE RESALE

In line with the provisions of section 125(1) of the Property and conveyancing Law, a mortgagee shall not exercise his power of sale unless and until a notice requiring payment of the mortgage money has been served on the mortgagor or one of several mortgagors and default has been made in payment of the mortgaged money or of part thereof for three months after such service. See B.O.N. Ltd. v. Aliyu (1999) 7 NWLR (Pt. 612) 622, where this court held that “the requirement of the law is that notice of intention to sell a mortgage property must be sent to the mortgagor as the words “shall not” are mandatory and not advisory. Consequently, any sale of any mortgage without the requisite notice is invalid ab initio and cannot convey any title to a subsequent purchaser”.

– Augie JSC. Bank v. TEE (2003)

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