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RIGHT TO REDEEM IS INCIDENTAL IN MORTGAGES

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Dictum

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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A MORTGAGEE HAS A POWER OF SALE AS OF RIGHT IN THIS INSTANCE

A mortgagee, unless where a contrary intention is shown, has a power of sale provided: (a) the mortgage was made by deed; and (b) the mortgage money is due, that is the legal date for redemption has passed. Where the money is payable by installments, the power of sale arises as soon as any installment is in arrears.

– L.A. Ayanlere v. Federal Mortgage Bank of Nig. Ltd. (1998) – CA/K/186/96

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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)

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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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READY BUILT HOUSES TO BE PAID FOR INSTALLMENTALLY ARE MORTGAGES

I will have to state clearly that the statutory corporations, with authority to build houses and sell on terms to people who otherwise would be unable to build on their own, are in someway mortgages to the buyers. But instead of outright loan to the buyer they provide ready built houses to be paid for on certain terms. The terms range according to the laid down policy of each corporation. Some require a certain percentage of the full price to be paid as first deposit and the remainder to be paid in certain instalments. They are in some cases flexible as to time but in most cases spell out when and how to liquidate the full price. All these terms are without prejudice to mortgagor’s right to pay the full price outright; or if he defaults for just a few days or even weeks in a reasonable way he still retains his equity of redemption, i.e. even if the contractual date had passed. Howard V Harris (1683) 1 Vern 190; Spurgeon V Collier (1578) 1 Eden 55; Jennings V Ward (1705) 5 Vern 520. What found its way into our statutes is no more than the historical Common Law Practice of protecting the weak borrowing from the overbearing lender. Once the lender (mortgagee) was adequately protected to recover his money in full plus interest at reasonable time even if somewhat outside the contracted period the mortgagor’s equity of redemption should not be vitiated. What is essentially a mortgage in this case is dressed up as a conveyance with the right to withhold possession from the mortgagor until he liquidated the debt; but should he fail to liquidate by unreasonably defaulting in payment and was in arrears for long the mortgagee’s right of foreclosure should also not be vitiated.

— Belgore, JSC. A.S.H.D.C. v Emekwue (1996) – SC. 282/1989

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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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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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