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WHERE MORTGAGE IS BY CHARGE

Dictum

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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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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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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DISPUTE AS TO AMOUNT OWNED IS NOT VALID GRANT FOR MORTGAGEE NOT TO SELL

A dispute as to volume of indebtedness is not a valid ground known to law such as can be relied upon to prohibit a mortgagee from exercising his right of sale. In other words, the mortgagee will not be restrained from exercising his power of sale because the amount due is in dispute. He will be restrained, however, if the mortgagor pays the amount claimed into court, that is the amount which the mortgagee swears to be due to him, unless on the terms of the mortgage the claim is exclusive. [Sabbagh v. Batik of West Africa (1962) 2 All NLR 225]

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

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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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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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ABSENCE OF A FORMAL CHARGE FILED IN A DISCIPLINARY PANEL DOES NOT NULLIFY THE PROCEEDING WHERE FAIR HEARING HAS BEEN OBSERVED

In Okike v L.P.D.C (No. 2) (2005) 7 SC (Part 111) 75 at pages 93, 113 and 116 as follows, Per Musdapher, JSC: “In my view, the word ‘charges’ used under the rule does not mean and cannot mean formal charges in a criminal trial before a criminal court . . . Therefore what needs to be known to the legal practitioner concerned is the substance of the allegations against him before the proceedings started: The precise nature of the allegations against the appellant were communicated to the appellant, he was well aware of the complaints against him. The appellant had fair notice of the allegations against him. Where the allegations contained in the petition before the disciplinary tribunal, as opposed to criminal tribunal, contains all the essential elements and enough information, it is not necessary to make reference to particular breaches of the rules as in a criminal case – See MDPDT v Okonkwo (supra) and Idowu v LPDC (1962) All NLR 128 as it will be necessary in a criminal trial. In my humble opinion, the absence of a formal charge did not occasion any miscarriage of justice, the appellant was well aware of the complaint against him.” …

Per Ejiwunmi, JSC: “… the reference to ‘charges’ in the above provisions should not be read to mean that only a formal charge or charges would suffice to bring home to the person concerned the complaint brought against that person . . . It is my view that it will amount to undue technicality to contend that because the word ‘charge’ was not used, the allegation against the appellant was not brought to his knowledge and therefore he was not made aware of the complaint against him. In this context, it must be borne in mind that the proceedings before the respondent is not expected and indeed not required to be conducted as a full scale criminal trial. If that then be the position, the word ‘charge’ read in that context is simply a ‘complaint’ that discloses a prima facie case that deserves to be investigated and determined by the respondent.”

Per Pats-Acholonu JSC: “…the characteristics or feature of a charge do not lie in procedural formalism but rather in the context of the unrighteous act being brought to the knowledge of the person so indicted in good lucid and really understandable English as in the present case. In the case before us now, the charge as I choose to call it, the document was couched in simple prose and he was requested to appear before the Peers of his profession. It is not an indictment wearing a criminal garb. The issue before us is as to whether the act of the appellant constituted a gross misconduct to affect his status in the profession of the Bar. Therefore to latch or clutch on the defence of improper charge laid, shows the inability of the appellant to fully grasp the nuance associated with the procedure in handling his case by the respondents.”

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