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

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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RIGHT TO REDEMPTION IN MORTGAGE CANNOT BE BARRED

It is a settled rule of equity that any agreement which directly bars the mortgagor’s right to redemption is ineffectual. – Iguh JSC. Ejikeme v. Okonkwo (1994)

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

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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EFFECT OF NOTICE ON PURCHASER OF AN EQUITABLE MORTGAGE

This brings us to the subject of the equitable doctrine of “Notice.” It is usually said that a purchaser of the legal estate in any property for value and without notice has an “absolute, unqualified and unanswerable defence” to any claim of a prior equitable owner or person having a prior equitable interest in the same property (see Pilcher Vs Rawlings (1872) 7 Ch. App. 259 at 269 per James L.J.). Where, however, the purchaser, as here, has notice of a prior equitable mortgage in the property in which he seeks to take a legal estate he has a duty, by himself or by his vendor, to get rid of that prior equitable interest otherwise he is taking unnecessary risk.

– Idigbe JSC. Ogundiani v. Araba (1978)

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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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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)

MORTGAGOR IS ENTITLED TO POSSESSION AS OF RIGHT

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

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RIGHT TO REDEMPTION IN MORTGAGE CANNOT BE BARRED

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

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EFFECT OF NOTICE ON PURCHASER OF AN EQUITABLE MORTGAGE

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

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WHERE MORTGAGE IS BY CHARGE

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