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IN MORTGAGE THERE IS IMPLIED PROMISE TO REPAY

Dictum

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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EQUITABLE MORTGAGE FIRST IN TIME TAKES PRIORITY

I have earlier set out the peculiar factors and circumstances not least being that the appellant has paid part of the purchase price of ₦2.3m to the tune of ₦1.8m leaving a balance of ₦500,000.00 and has been put in possession of the disputed property. There is a binding agreement of sale of the 1st respondent’s interest in the said property between the appellant and the 1st respondent. The appellant has thereby acquired an equitable interest to the extent of the 1st respondent’s interest in the equity of redemption and this is the interest which the mortgagor, the 1st respondent has had at all material times. The 1st respondent cannot give what it hasn’t got. And as I intimated earlier any attempt to pass the legal estate in the disputed property to the appellant will be of no effect and void not voidable because the 1st respondent as the mortgagor has bound itself to convey the legal estate to the mortgagee whenever it is called upon to do so until the principal, interest and costs are duly paid on the mortgage. See: Barclays Bank of Nigeria Ltd v. Ashiru and Anor. (supra) per ldigbe JSC, and Jared v. Clements (1903) 1 Ch. 428. Besides, the appellant is acquainted with notice of the mortgage and so cannot take priority to the 2nd respondent’s equitable mortgage which is first in time. – Chukwuma-Eneh JSC. Yaro v. Arewa CL (2007)

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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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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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WHERE MORTGAGE IS BY CHARGE

In other words where the mortgage is by way of charge, and not by conveyance, the mortgagee takes no estate whatsoever in the land or in the property but he has generally only an equitable interest to be enforced by sale upon an order of court. The equitable charge simpliciter only gives a right to payment out of the property; it does not amount to an agreement to give a legal mortgage at all. The strict mode of enforcing the charge is, however, by sale (or appointment of a receiver under an order of court) but never by foreclosure. On the other hand where, as here, the agreement is to create a legal mortgage when required following a default in the terms of the agreement, the agreement may be enforced according to its terms notwithstanding that the legal mortgage when executed will also confer on the mortgagee an immediate power of sale.

– Idigbe JSC. Ogundiani v. Araba (1978)

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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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ONCE MORTGAGE ALWAYS MORTGAGE

An important feature of mortgages both legal or equitable is that once a mortgage always a mortgage and nothing but a mortgage. – Chukwuma-Eneh JSC. Yaro v. Arewa CL (2007)

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