UNION BANK OF NIGERIA PLC & ORS. V. ALHAJI GANIU AJIBOLA OGUNSIJI

UNION BANK OF NIGERIA PLC & ORS. V. ALHAJI GANIU AJIBOLA OGUNSIJI

 final
In The Court of Appeal
Lagos Judicial Division
On Thursday, the 9th day of February, 2012
Suit No: CA/L/547/2008
 
Before Their Lordships
 
          HELEN MORONKEJI OGUNWUMIJU    ……. Justice, Court of Appeal
IBRAHIM MUHAMMED MUSA SAULAWA    ……. Justice, Court of Appeal
SIDI DAUDA BAGE    ……. Justice, Court of Appeal
    
 
 Between

UNION BANK OF NIGERIA PLC & ORS.  -Appellants
            
 
      And
                   
ALHAJI GANIU AJIBOLA OGUNSIJI    -Respondent

 


        
 
                  
     

COUNSEL:
                              
Ebelechukwu Odigwe and Emeka Ezeani    -For the Appelants
 
Taofeek Ola Opaleye         -  For the Respondent


JUDGMENT:         
          
        
SIDI DAUDA BAGE, J.C.A.:
(Delivering the Leading Judgment): This appeal is against the judgment of the High Court of Lagos State, presided by Hon. Justice Y.A. Adesanya, delivered on the 22nd of April, 2004. The Appellants were the Defendants at the lower court, while the Respondent was the plaintiff.

The Plaintiff/Respondents claim against the Defendants/Appellants jointly and severally as per his writ of summons and statement of claim both dated 01/03/96, are for:

(1) The sum of N1,500,000 (One Million, Five Hundred Thousand Naira) being money paid to the Defendants (all and singular) by the Plaintiff upon a consideration that has wholly failed and the said sum is repayable to the Plaintiff.

(2) Interest on the said sum of N1,500,000 (One Million, Five Hundred Thousand Naira) at the rate of 60% per annum from 19th day of March, 1993 until judgment is given in the matter and thereafter at the rate of 6% per annum until the whole amount/debt is finally liquidated.

(3) N1,000,000 (One Million Naira) damages for breach of contract made between the Plaintiff and the Defendants (all and singular) on 19th March, 1993 and 11th May, 1993 respectively.     

The background facts are that, the 1st Appellant is a Bank registered under the laws of the Federal Republic of Nigeria, carrying out all banking activities. One Alhaji Ajibade Babatola (Mortgagor) mortgaged some of his property with the 1st Appellant (Mortgagee) by depositing the Title Deeds of his property and he defaulted. By consent judgment and/or settlement between the Mortgagor and Mortgagee in an unknown suit to the Respondent (Suit No. ID/620/88), the Mortgagor empowered the 1st Appellant to sell all the property deposited on the Mortgage and use the proceeds of the sale to offset the loan taken by the Mortgagor.

The 1st Appellant as Mortgagee with the assistance of 2nd Appellant as Auctioneer issued Auction Notice for the sale of the property of the defaulting Mortgagor. The Auction was successfully carried out and the Respondent herein was the successful purchaser. A Purchase Agreement (Exhibits D1 and D2) was duly executed between the 1st and 2nd Appellants as Sellers of the one part, and the Respondent as purchaser of the other part.

The Respondent was referred to Chief T.A. Ezeobi S.A.N, solicitors to the Appellants (Mortgagee) in order to collect prepared Deed of Assignment and the Original Title Deed of the property. The Respondent exchanged several correspondences with the 1st Appellant through Chief T.A. Ezeobi S.A.N, their solicitor. When Chief T.A. Ezeobi finally delivered what was to be the Original Title Deed of the property purchased' it was found to be a wrong Title Deed rerating to another property other than the one purchased by the Respondent. The error in the Title Deed delivered to the Respondent was confirmed by the 1st Appellant and the Defendant's witness during the trial. When it was clear that the 1st Appellant was not in possession of the original Title Deed of the property they sold to the Respondent, the Respondent as Plaintiff instituted this action to recover money paid to the 1st Appellant for a consideration, which had totally failed. Judgment was entered in favour of the Respondent. Dissatisfied with the decision of the court, the Appellants filed this appeal.

By their Notice of Appeal dated 28th April, 2004 filed on the same date, and containing six grounds of appeal, from which the Appellant distilled three issues for determination of this court.

The issues are:-

(1) Whether the learned trial Judge was right in holding that the 1st Defendant, Union Bank of Nigeria Plc. sold the subject property to the Plaintiff as the owner thereof through the 2nd Defendant as its agent and that the contract of sale pursuance to which the plaintiff sued was made between the 1st Defendant and the Plaintiff (Grounds 1, 2, 3 and 4 of the Notice of Appeal).

(2) Whether the trial court correctly assessed and evaluated the evidence before the court (Ground 6 of the Notice of Appeal).

(3) Whether the learned trial Judge was right in failing to consider and follow binding precedents cited to the court on the issue of privity of contract which was the very foundation of the defence case (Ground 5 of the Notice of Appeal).

On the other hand, Respondent's counsel, T.O. Opaleye distilled two (2) issues for determination as follows:-

(1) Whether the failure of the Appellants to compile records of appeal within time allowed by the rules of court is consistent with the property filing of a competent appeal. If it is so, the Appellants' appeal is incompetent. This court is urged to dismiss this appeal.

(2) Whether the learned trial Judge was right in holding that the 1st Appellant (the Mortgagee) was liable to refund the purchase price paid by the Plaintiff/Respondent on the Contract of Sale upon a consideration that has wholly failed when the Appellants were unable to deliver the subject matter of the Auction Sale to the Respondent.

I will adopt the Respondent's issues, for the following reasons:-

(1) It raises the issue of jurisdiction of this court, on the competency of this appeal.

(2) It has captured the main issue controversy between the parties.

It should be noted that the Respondent in his brief of argument raised a preliminary issue as to the competency of this appeal. The appeal itself was firstly heard on the 4/10/11 and reserved for judgment. In the course of writing the judgment, it was found that a point of preliminary objection as to the competency of the appeal was determination by the Respondent, in his brief of argument. It was found that this constituted an anomaly, as the Rules of this court, provided for, in such circumstances to be raised by a way of a preliminary objection.

The court invited back the parties to re-argue issue no. 1 in the Respondent's brief. The re-argument was taken on the 7/12/11. Both the learned counsel to the Appellants, Ezeobi and Opaleye for the Respondent, did not address the issue of whether a point of jurisdiction, can be made an issue for determination which did not spur from the grounds of appeal, as contained in the Notice of appeal filed.  

The point of concern to this court, in respect of issue No.1 in the Respondent's brief, is, when and how, should the issue of jurisdiction be raised. The simple answer is that, it must be raised in accordance with the provision of the Rules of this court. Order 10 Rule 1 of the Rules of this court, 2011 provides:-

"A Respondent intending to rely upon a preliminary objection to the hearing of the appeal, shall give the Appellant three clear days notice thereof before the hearing, setting out the grounds of objection and shall file such notice together with twenty (20) copies thereof with the registry within the some time".

It is trite that the Rules of Court are not made for fun. They are made to be obeyed. See:- Hart vs. Hart (1990) 1 NWLR (Pt.126) 276; Tom Ikimi vs. Godwin Omamuli (1995) 3 NWLR (Pt. 383) 356; Ibrahim  vs. Col. Cletus Emein & Ors. (1996) 2 NWLR (Pt. 430) 322; Tehat A.O. Sule vs. Nigerian Cotton Board (1985) All NLR 257; Odu vs. Jolaoso (2002) 37 WRN 115. The Respondent was duty bound to follow the procedure laid by the Rules of this court in raising his objection, to enjoy the favour of this court.

The issue of an objection to the competency of a court, to determine a matter before it, which touches on its jurisdiction, is not raised at large. The Supreme Court in the case of: Jov. v. Dom (1999) 7 SC (Pt.111) 1 stated:-

"Although issue of jurisdiction can be raised at anytime in proceedings, it is not free for all procedure. The court can raise a matter of law and constitution at anytime, but in doing so the two sides must be afforded the opportunity of addressing on it. This basically goes to the spirit of fair hearing. Thus a party to an Appeal that intends to raise a new issue or introduce a novel matter into an Appeal must seek leave to do so. But to contend that issue of Law or Constitution can be raised at any time and do nothing more than raise it in argument is like laying a disrupting ambush for the opponent. Proper application must be made so that the other side will know clearly what he has to meet". It is very clear from the processes before this court, no such was sought leave for, by the Respondent, to raise his issue No. 1. No proper application was made by him in respect of this issue, to put the Appellants on notice. Respondent's issue No. 1 therefore fails.

On issue No. 2, as to whether the learned trial judge was right in holding that the 1st Appellant (the mortgagee) was liable to refund the purchase price paid by the Plaintiff/Respondent on the contract of sale upon a consideration that has wholly failed when the Appellant were unable to deliver the subject matter of the Auction sale to the Respondent.   

The Appellants in arguing this issue submitted that, the 2nd Appellant sold the property to the Respondent as agent of the mortgagor (i.e. one Alhaji Ajibade Babatola) a customer and debtor to the 1st Appellant. The 1st Appellant therefore contended that the contract of sale was with the mortgagor and the present action is not maintainable against it.

It was further submitted that, if Alhaji Ajibade Babatola the owner of 24 Olakunle Selesi Street the subject property, and who alone can pass title in it to a purchaser, instructed the sale of the said property  by auction with documented instructions as to the application of proceeds as in Exhibits D3 & D4 which were religiously compiled with, how then does the purchaser who knew at the facts and prayed his own roles by paying the proceeds into the mortgagor's account with the 1st Appellant through Exhibits P2 & P3 now turn around to claim that it was the 1st Appellant that sold as the owner and for the trial court to follow suit and so hold because the first name of the 1st Appellant also appears in the Auction Notice Exhibit P1 as the equitable mortgagee, such a conclusion by the court, is not only unsupportable, but perverse.

It was further submitted that parties to a contract cannot be decided upon by selection or declaration as both the Respondent and the trial court have attempted doing in this case; but a question of law. See:- Pneumatic Tyre Co. Ltd. vs. Selfridge & Co. Ltd. 1914/15 AER Rep. 333 at 334; A.G. Federation vs. AIC Ltd (2000) 10 NWLR (Pt. 675) 293; Ekuma & Anon vs. Silver Eagle Shipping Agencies (PH) & Anor (1987) 4 NWLR (Pt. 65) 472; ACB & Anor. vs. Victor Ndoma-Egba (2000) 10 NWLR (Pt.675) 229. The Respondent in reply submitted that, the agreement between the mortgagor and the Appellants was unknown to the Respondent. The Respondent came into the picture when the Auctioneer issued the Auction Notice for the sale of the properties of the mortgagor. The 2nd Appellant (Auctioneer) stated in the Auction Notice that the Auction Notice was issued on the instruction of Union Bank Plc (1st Appellant) the unpaid Mortgage. The Auction Notice issue can be found in page 18 of the Records of Appeal. The conditions of sale were listed.

It was further submitted that, the issue arising from this transaction, is whether the Respondent's cause of action was against the Mortgagor or the Mortgagee.

The (Purchaser) Respondent, decided to bring his action against the mortgagee who exercised its power of sale with the full consent of the Mortgagor. The Appellants are arguing that the mortgagor is the right person against whom action should have been brought at the lower court. The Respondent and the trial Judge are of the opinion that mortgagee (Appellants) are liable to the Purchaser for a consideration which had totally failed. See Boda vs. The Premier Thrift Society (1936) NLR 47.

The Respondent finally submitted that the learned trial Judge was right in holding that the mortgagee was liable to refund the purchase price to the Respondent on the Contract of Sale upon a consideration that has wholly failed.

The crux of this appeal is to determine whether there was a valid contract between the 1st Appellant and the Respondent.

The fact of this dispute is that, the 1st Appellant a Bank in the course of its business, with Alhaji Ajibade Babatola (mortgagor), entered a mortgage agreement. The mortgagor, mortgaged some of his property with the 1st Appellant (mortgagee). He deposited the Title Deeds of his property and he defaulted. By his consent, he empowered the 1st Appellant to sell all the property deposited on the mortgage, and use the proceeds of the sale to offset the loan taken by him.

The 1st Appellant as mortgagee with the assistance of the 2nd Appellant as Auctioneer issued Auction Notice for the sale of the property. The Auction was successfully carried out and the Respondent herein was the successful purchaser. A Purchase Agreement was duly executed between the 1st, 2nd Appellants and the Respondent. The 1st Appellant delivered what was to be the Original Title Deed of the property purchased, it was found to be a wrong Title Deed relating to another property. The Respondent instituted an action in the lower court, to recover money paid to the 1st Appellant for a consideration, which had totally failed .The lower court entered judgment in favour of the Respondent.

The main contention of the 1st Appellant in this appeal is that it is not liable to refund the money paid by the Respondent to it. It maintained that it had no existing contract with the Respondent. The contract that had existed was between the Respondent and the Mortgagor, Alhaji Babatola. By the agreement, the Respondent was to pay his money directly into the account of the Mortgagor with the 1st Appellant, which he did. The Appellants, position is that the Respondent, can only lay claim to recover the money paid by him for the successful bid in the Auction sale from the Mortgagor.

The Respondent on the contrary maintained that he had entered into a valid contract with the Appellants in respect of the Auction sale, and that since the consideration had totally failed, his claim is against the Appellants. The trial court in its judgment the subject of this appeal agreed with the Respondent.

What then are essentials of a binding contract? This court per Musdapher JCA (as he then was) now CJN, in Awaye Motors Co. Ltd vs. Adewunmi (1993) 5 NWLR (Pt. 292) 236 at 244, stated as follows:-

"Generally, there must be three (3) basic essentials to the creation of binding contract. There must be an offer, an acceptance and a consideration. Taking into account the negotiation between the parties and the series of correspondences between them…"

On the essentials of a binding contract, also see:- Amodu vs. Amode (1990) 5 NWLR (Pt. 150) 35; Olanlege vs. Agro Cont. (Nig.) Ltd. (1996) 7 NWLR (Pt.458) 29 at 44; L.R.C.I. vs. Ndejoh (1997) 3 NWLR (Pt.491) 72 at 78.Taking the facts of this case into perspective, there was the advertisement of the Auction which carried the name of the 1st Appellant, which constitute an offer. The response of the Respondent by bidding for the Auction was the acceptance. The passing of the Title Deed for the bid was the consideration. In the view of this court, a, the essentials of a valid contract in law, in this dispute are fulfilled. The argument of the Appellants that, the money for the bided property, was paid directly by the Respondent, to the account of the Mortgagor, did no harm to the validity of the contract. It was indeed the Appellants as part of the agreement for the sale that directed the Respondent to pay the purchase money into the account of the Mortgagor. The Respondent acted therefore only in the fulfillment of that agreement. The Appellants before this court have not denied that the consideration had failed.

They have not denied that, the Title Deed, other than those of the property purchased by the Respondent was given to him. Infact the wrong Title Deed was passed to the Respondent through the solicitor to the 1st Appellant, Chief T.A. Ezeobi, SAN. The fact here is simple, that even by the conduct of the Appellants above; they had entered into a binding contract with the Respondent. Again this court per Musdapher JCA (as he then was) now CJN, in Obayuwona vs. Ede (1998) 1 NWLR (Pt. 535) 670 at 679 held:-

"It is elementary law, that a contract may be demonstrated by the conduct of the parties as well as by their words and deeds or by the documents that has passed between them."

In a more specific moment, the issue arising from the transaction which is the subject matter of this appeal, is the Respondent's cause of action maintainable against the Mortgagor or the Mortgagee. The Appellants are arguing through their appeal that the Mortgagor is the right person against whom action should have been brought at the lower court. The Respondent and the trial court are of fervent opinion that the Mortgagee (Appellants) are liable to the purchaser for a consideration which had totally failed. The facts of the case in Bada vs. The Premier Thrift Society (1936) NLR 47 cited at page 295 of Prof. B.O. Nwabueze book "Nigerian Land Law" 1972 edition is quite apposite to the present situation in this appeal. It was held in that case:-

"The legal effect of conveyance by a Mortgage, on sale under a Mortgage is to pass to the purchaser, not only the Mortgagor's right, title and interest in the property, but also the Mortgagees right to claim against the Mortgagor under the covenant for title implied in the Mortgage. So long as the conveyance stood, the  plaintiff could sue the forging Mortgogor under the Mortgage covenant. Now that the conveyance is set aside, that course is not open to the plaintiff. With the conveyance set aside, where is the privity of contract between the plaintiff and the forging Mortgogor? To that Extent the consideration for the purchase price might be said to have failed.

Moreover the English decision seem to be based on the principle that where there is a conveyance, it is the conveyance and not the contract of sale on which the conveyance proceeded that determines the rights of a purchaser in this connection. Where the conveyance is set aside, it would appear that the purchaser is thrown back to the contract of sale for his remedy. And on that view of the law there may be a good claim by the purchaser here for the rescission of the contract of sale on fact which there certainly was and for the return of the money paid under the contract of sale."The opinion of the court in the case cited above, which this court completely agrees with, as cited at pages 295-296 of "Nigeria Land Law" by Prof. B.O. Nwabueze best explain the case at hand. The Appellants (Mortgagee) who sold to the purchaser (Respondent) was in possession of a wrong conveyance, when they were receiving the conveyance from the Mortgagor as deposit for the loan and they did not realize they were receiving a wrong Deed of lease that was not capable of transferring any Title to them. There is no privity of contract between the Respondent (Purchaser) and the Mortgagor, because the Deed of lease which could have created the privity of contract was defective. The only remedy available to the purchaser (Respondent) in law is against the mortgagee on the contract of sale.

In view of the above therefore, this court has no reason to disturb the finding of the learned trial Judge that the Mortgagee was liable to refund the purchase price to the Respondent on the contract of sale upon a consideration that has wholly failed.

In the final analysis, this appeal is unmeritorious, and it is hereby dismissed by this court.

The judgment of Hon. Justice Y.A. Adesanya of the High Court of Lagos State, delivered on the 22nd April 2004, in Suit No. ID/732/97 is hereby affirmed by this court.

Parties to bear their own costs.

 

 

HELEN MORONKEJI OGUNWUMIJU J.C.A.: I have read the judgment just delivered by my learned brother SIDI DAUDA BAGE JCA. I am in complete agreement that the appeal is unmeritorious and should be dismissed. I abide by all orders as set out in the led judgment.

 

IBRAHIM MOHAMMED MUSA SAULAWA, J.C.A.: I have read, before now, the draft of the lead judgment just delivered by my learned brother, Bage, JCA and the records of appeal as a whole. I concur with the reasoning and conclusion reached in the lead judgment, to the effect that the appeal is unmeritorious. I adopt both reasoning and conclusion as mine.

Hence, the appeal is hereby dismissed by me, for being unmeritorious. I affirm the judgment of the lower court delivered on 22/4/04 in Suit No. ID/732/97 in question.

No orders as to costs.