Court upholds appeal over sale of mortgaged property

Justice Ebiowei Tobi of the Court of Appeal, Lagos has upheld the appeal filed by Polaris Bank Limited and two others against the decision of a Lagos high court, which nullified the right of occupancy of a buyer of mortgaged property.

Aside Polaris Bank, the other appellants were Ade Shodipo (2nd appellant) and Adedoyin Abiodun (3rd appellant).

The respondent in the case was Olanrewaju Oladipo, who was substituted for Rafiu Kolawole Oladipo, now deceased at the lower court.

The late Oladipo had obtained a facility from the 1st appellant and executed a deed of legal mortgage in favour of the 1st appellant with his property at 14, Araromi Street, Oshodi, Lagos State.

When he failed to repay the loan, the 1st appellant sold the property in dispute through the 2nd appellant to the 3rd appellant (Abidoun).

Consequently, Oladipo sued the bank, its agent and the buyer, challenging the sale of the mortgaged property on the ground that it was sold without proper notice.

He also claimed that no account of the sale was rendered to him and that the property was sold at undervalue price, which according to him, is prima facie evidence of fraud and collision on the part of the appellants.

In his judgment, Justice O.M. Akerele-Ayeni of the Lagos High Court, Ikeja, ruled in favour of Oladipo.

He declared that Oladipo was still entitled to the right of occupancy and gave an injunction restraining the appellants from further dealing with the property.

Dissatisfied with the decision, the respondents at the lower court, now appellants, filed five grounds of appeal, challenging the judgment at the Court of Appeal, Lagos division.

According to the appellants, the trial judge erred in law in granting a declaration that the respondent is entitled to a right of occupancy over the house (mortgage property) when declaration is an equitable relief that ought not to have been granted to him, who had taken benefit under a transaction, which he claimed to be ineffectual.

They also said the trial court erred in law in holding that the mortgage deed, having been entered into without governor’s consent is null and void by virtue of section 26 of the Land Use Act.

In his lead judgment on Friday, Justice Tobi quashed the decision of the lower court, upheld the appeal of the appellants and declared that the respondent is not entitled to the right of occupancy.

“At all times material to this case, there is no evidence that the respondent has paid back the loan facility and in the circumstance, I do not think justice will be served by allowing the judgment of the lower court as it relates to granting reliefs 2 & 3.

“I am fortified in this decision as it will be most unfair and portray a mark of injustice to allow the respondent who has enjoyed the loan and has not paid back to still have the right of occupancy over a property used as security.”

The day when the respondent will eat his cake and have it on the grounds of technicality will not come in our judicial system, as that will promote injustice.

“I resolve issues 3 & 4 in favour of the appellants. On a whole, this appeal is meritorious and same is hereby allowed. The judgment of Hon. Justice O.M. Akerele-Ayeni of the High Court of Lagos State, Ikeja Division, suit No. ID/824/1988 between Rafiu Kolawole Oladipo vs. Cooperative Bank Limited & 2 others delivered on May 31, 2000 is hereby set aside.

“The claim of the respondent in the lower court is dismissed and judgment is therefore entered for the 3rd appellant for the sum of N30, 800 for rent between February 1988 and March 1989. As there is no evidence before the lower court as to when possession was actually given to the 3rd appellant, I cannot make any order as to rent after March 1989. Parties are to bear their own cost,” he declared.

Justices Ugochukwu Ogakwu and Jamilu Tukur agreed with the decision.