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EQUITABLE MORTGAGE TO CREATE A LEGAL MORTGAGE CAN SUE IN SPECIFIC PERFORMANCE

Dictum

The equitable mortgage by agreement to create a legal mortgage, therefore, entitles the equitable mortgagee to something more than a mere right to payment out of the property or premises mortgaged; under the general principles, his remedies correspond as nearly as possible with those of the legal mortgagee. Because equity regards that as done which ought to be done the equitable mortgagee, by agreement to create a legal mortgage, can enforce the execution of a legal mortgage by suing in equity for specific performance; if successful he obtains a legal term of years and can then pursue all the statutory remedies open to a legal mortgagee.

– Idigbe JSC. Ogundiani v. Araba (1978)

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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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DEFINITION OF MORTGAGE

A mortgage is defined as creation of an interest in a property defeasible, that is, annullable upon performing the condition of paying a given sum of money with interest at a certain time. Thus, the legal consequence of the above is that the owner of the mortgaged property becomes divested of the right to dispose of it until he has secured a release of the property from the mortgagee.

— 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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MORTGAGOR IS ENTITLED TO POSSESSION AS OF RIGHT

As was said by Harman J. in Alliance Perpetual Building Society v. Belrum In-vestments Ltd. And Ors. (1957) 1 W.L.R. 720, at p. 722 – possession is a remedy to which a mortgagee is entitled as of right against a mortgagor, whether the principal or interest be due or not, unless there is some special clause in the mortgage excluding it. (See also Hughes v. Waite (1957) 1 W.L.R. 713; and Four Maids Ltd. v. Dudley Marshall (properties) Ltd. (1957) Ch. 317.

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

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MORTGAGEE’S RIGHT OF PROPERTY SALE

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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WHAT IS SPECIFIC PERFORMANCE?

What then is specific performance? It is the rendering as nearly as practicable of a promised performance through a judgment or decrees; a court ordered remedy that requires precise fulfilment of a legal or contractual obligation when monetary damages are inappropriate or inadequate as when the sale of real estate or a rare article is involved. In essence the remedy of specific performance enforces the execution of a contract according to its terms. (Black’s Law Dictionary, Ninth Edition page 1528).

— J.A. Fabiyi, JSC. BFI v. Bureau PE (2012) – SC.12/2008

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