Judiciary-Poetry-Logo
JPoetry

DEPOSIT OF TITLE DEED CREATES EQUITABLE MORTGAGE

Dictum

Kadiri v. Olusaga (1956) 1 FSC at p. 178: “It is the case, as stated by the learned trial Judge, that the security given was not the form of a legal mortgage, that is to say by deed, transferring the legal estate to the respondent, but the deposit of title deeds as security for a loan is an equitable mortgage, and I am unable to agree that the loan was an unsecured one within the meaning of the legislation in question. As Lord Macnaghten said when delivering the judgment of the Board in Bank of New South Wales v. O’Connor (1889) 14 AC page 273. ‘It is a well established rule of equity that a deposit of a document of title without either writing or word of mouth will create in equity a charge upon the property to which the document relates to the extent of the interest of the person who makes the deposit. In the absence of consent that charge can only be displaced by actual payment of the amount secured.'”

Was this dictum helpful?

SHARE ON

DEED: DELIVERY OF A DEED IN LAW

It has to be stressed however that the term delivery, in law, is not synonymous with the physical exchange of signed and sealed documents between the parties thereto. It does not also mean the handling over of a document to the other side. It does mean and has been judicially interpreted to connote an act done so as to evince an intention to be bound. Even though the possession of such deed still remains with the maker, or his solicitor, he is bound by it if he has had it delivered in law by doing some unequivocal act whether by words or action evincing an intention to be bound. – Iguh JSC. Awojugbagbe v. Chinukwe (1995)

Was this dictum helpful?

BENEFIT OF EARLIER REGISTRATION IN DEED

It cannot be disputed that where two competing deeds are registered, each takes effect as against the other from the date of registration and the benefit of earlier registration is preserved.

– Iguh JSC. Kayode v. Odutola (2001)

Was this dictum helpful?

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)

Was this dictum helpful?

DEED TAKING EFFECT: NATURE OF A DEED

A deed takes effect from the time of its delivery and not from the day on which it is therein stated to have been made or executed. Any other written instrument takes effect from the date of execution. Extrinsic evidence is, however, admissible to prove the date of delivery of a deed, or the execution of any other written instrument. The final and absolute transfer of a deed properly executed, to the grantee or to some person for his use in such a manner that it cannot be recalled by the grant or constitutes delivery. It is also not necessary that the person executing should part with physical possession of the instrument. – OGWUEGBU, JSC. Awojugbagbe v. Chinukwe (1995)

A deed takes effect when it is signed, sealed and delivered. In the circumstance, the date on which a deed is executed may not necessarily be the date on which it takes effect. Delivery in the case of a deed depends on the intention of parties. – Adio JSC. Awojugbagbe v. Chinukwe (1995)

It suffices for the present time to emphasize that a deed takes effect from the moment of delivery as against any other written instrument which takes effect from the date of execution, and although the date expressed in the instrument is prima facie taken as the date of delivery or execution, this docs not exclude extrinsic evidence of the actual date of such delivery or execution. – Iguh JSC. Awojugbagbe v. Chinukwe (1995)

Was this dictum helpful?

MORTGAGEE OR RECEIVER EXERCISING A POWER OF SALE ONLY HAS A DUTY TO ACT BONA FIDE

There is an abundance of authorities describing the obligations of a mortgagee and by extension, a receiver, exercising a power of sale. Thus, whether the mortgagee or receiver owes a duty of care in the conduct of the sale, the law seems sufficiently well settled that the mortgagee or receiver engaged in selling the mortgaged property has a duty to act bona fide. In EKA – ETEH V. NIGERIA HOUSING DEVELOPMENT SOCIETY LTD & ANOR (1973) NSCC 373, 380, at 381, the Supreme Court held that – “The only obligation incumbent on a mortgagee selling under and in pursuance of a power of sale in the mortgage deed is that he should act in good faith.”

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

Was this dictum helpful?

How Equitable Mortgage is created?

Now, equitable mortgages are created inter alia, (1) by mere deposit of title deeds with a clear intention that the deed should be taken or retained as security for the loan; (2) by an agreement to create a legal mortgage and (3) by mere equitable Charge of the mortgagor’s property. In passing we think that it should be pointed out that the last of the three classes of equitable mortgage i.e. that which is created merely by a charge on the property intended as security for the loan differs considerably from the first two in respect of the remedies it confers; and the property so charged is appropriated only to the discharge of a debt or some other burden in respect of which the property stands charged.

– Idigbe JSC. Ogundiani v. Araba (1978)

Was this dictum helpful?

No more related dictum to show.