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A MORTGAGEE MAY CHOOSE EITHER TO: ENFORCE AGAINST THE PROPERTY OR SUE FOR PAYMENT

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Dictum

There is no doubt, and as earlier stated, the rights of a Mortgagee as the Appellant herein against the Mortgagor, the 3rd Respondents, is cumulative in the sense that it may decide either way, whether to enforce the security against the property or sue upon the personal covenant to the Mortgagor, for payment or go for both. Yet, it must be clearly stated in the pleadings which form the creditor has chosen, to recover its money. See Megany’s Manual of the Law of Real Property, 67th Edition page 484.

— O. Ariwoola, JSC. African Intl. Bank Ltd. v Integrated Dimensional System (2012) – SC.278/2002

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IN LEGAL MORTGAGE PROPERTY IS TRANSFERRED TO THE MORTGAGEE SUBJECT TO REDEMPTION

In a legal mortgage, title to the property is therefore transferred to the mortgagee subject to the proviso that the mortgage property would be reconveyed by the mortgagee to the mortgagor upon the performance of the conditions stipulated in the mortgage deed and upon payment of the debt at the time stipulated therein. In other words, the mortgagor is liable to repay the loan as stipulated; otherwise the mortgaged property is foreclosed. See BANK OF NORTH V. BELLO (2000) 7 NWLR (prt 664) 244, ADETONA V. ZENITH INTERNATIONAL BANK PLC (2011) 18 NWLR (prt 1278) 627 and ATIBA IYALAMU SAVINGS & LOANS LTD V. SUBERU (2018) 13 NWLR (prt 1637) 387 at 414.

— M.L. Shuaibu, JCA. FBN v Benlion (2021) – CA/C/31/2016

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FORECLOSURE IS A POWERFUL REMEDY FOR AN EQUITABLE MORTGAGE

The right to foreclosure is very powerful remedy in the hands of the equitable mortgagee and the vendor who takes a legal estate with notice of an equitable mortgage and therefore subject to this class of equitable interest should bear this in mind since, in certain circumstances, he may find in the end that he has bought a worthless legal estate.

– Idigbe JSC. Ogundiani v. Araba (1978)

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MORTGAGE DEBT HAS TO BE OUTSTANDING FOR MORTGAGEE TO TAKE POSSESSION

A deed of legal mortgage is said to have been created once an agreement exists between the parties, and the instrument signed by the parties which is described as a legal mortgage, provided it is under a seal. Therefore, the legal effect of a deed of legal mortgage is that it allows the mortgagee exercise its possessory rights over the mortgage property. It is to be noted however, that caveat in the position of a mortgagee remains that the mortgage debt has to be outstanding and unliquidated in order for the right of a mortgagee to immediate possession of the mortgaged property to become activated. See AFRIBANK V. ALADE (2000) LPELR – 10722 (CA) and S.W.V. (NIG) LTD V. AMCON (2020) 3 NWLR (prt 1710) 179.

— M.L. Shuaibu, JCA. FBN v Benlion (2021) – CA/C/31/2016

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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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EQUITY LOOKS AT SUBSTANCE NOT FORM IN MORTGAGES

In determining whether any given transaction is in the nature of a mortgage, equity looks at the substance of the matter and not merely at the form. – Iguh JSC. Ejikeme v. Okonkwo (1994)

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CONTINUING MORTGAGE NEEDS NO REGISTRATION

B.O.N Ltd. v. Akintoye (1999) 12 NWLR (Pt. 631) 392: “Where an original mortgage is a continuing security for raising a second mortgage, what is needed is to upstamp it. There is no need to obtain a fresh consent of the Governor for the second mortgage. In the instant case, where the wordings of the mortgage deeds relating to the security are clear and unambiguous and where the original deed was a continuing security, there was no need to obtain a fresh consent of the Governor for the second mortgage”.

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