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EQUITABLE MORTGAGE HAS PART PERFORMANCE

Dictum

“An equitable mortgage is an agreement that has arisen out of the deposit of the mortgagor’s title deeds with the mortgagee for loan as security. The essence of an equitable mortgage by deposit of title deeds is an agreement, between parties concerned, followed by an act of part performance. Where a party pursuant to an oral agreement deposits his title deeds with a bank as here, the act of depositing the title deeds is regarded as part performance of an agreement, which removes the transaction from the provisions of the Statute of Frauds 1677.” as per Barclays Bank of Nigeria Ltd. v. Alhaji Adamu B. Ashiru and Anor. (1978) 6-7 S.C. (Reprint) 70; (1978) 6-7 S.C. 70

– Chukwuma-Eneh JSC. Yaro v. Arewa CL (2007)

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OBJECTION TO MANNER OF SALE WILL NOT STOP A MORTGAGOR FROM SELLING

It is a well established principle of law that a mortgagee will not be restrained on the exercise of his power of sale merely because the mortgagor objects to the manner in which the sale is being arranged or because the mortgagor has commenced a redemption action in court. (See Adams v. Scott (1859) 7 WR 213). But the mortgagee will be restrained if the mortgagor pays the amount claimed by the mortgagee into court. (See Hickson v. Darlow (1883) 23 Ch.D. 690).

— Udoma, JSC. Nig. Housing Dev. Society v. Mumuni (1997) – SC 440/1975

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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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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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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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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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RIGHT TO REDEEM IS INCIDENTAL IN MORTGAGES

Incident to every mortgage is a right of the mortgagor to redeem – this right is generally referred to as the equity of redemption. – Ogundare JSC. Ejikeme v. Okonkwo (1994)

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