⦿ CASE SUMMARY OF:
Edwin O.C. Ejikeme v. Veronica Okonkwo & Anor. (1994) – SC
by PipAr Chima
⦿ AREA(S) OF LAW
– Equity of redemption;
⦿ NOTABLE DICTA
* IN MORTGAGE THERE IS IMPLIED PROMISE TO REPAY
Exhibit ‘A’ does not contain a covenant to pay the principal’s debt and interest on a given date. On the authorities however, there is an implied promise to pay and as no date has been fixed for the repayment it is my view that a reasonable time will be implied. – Ogundare JSC. Ejikeme v. Okonkwo (1994)
* RIGHT TO REDEEM IS INCIDENTAL IN MORTGAGES
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)
* EQUITY LOOKS AT SUBSTANCE NOT FORM IN MORTGAGES
In determining whether any given transaction is in the nature of a mortgage, equity looks at the substance of the matter and not merely at the form. – Iguh JSC. Ejikeme v. Okonkwo (1994)
* 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)
Edwin O.C. Ejikeme
Veronica Okonkwo & Anor.
⦿ LEAD JUDGEMENT DELIVERED BY:
* FOR THE APPELLANT
– J.M.C. Agbu Esq.
* FOR THE RESPONDENT
– Chief J.C. Ifebunandu.
⦿ CASE HISTORY
Sometime in 1966, Lawrence Okonkwo and Samuel Okonkwo (both now deceased) borrowed from Edwin O. C. Ejikeme the sum of £3,700 (now N7,400) with which they developed a property at 3 Iweka Road, Onitsha. The parties entered into agreement under seal which agreement was registered in the Lands Registry in the office at Enugu. Part of the recitals of the agreement reads as follows:- “2. The Borrowers are in course of erecting on the said property dwelling house and has requested the mortgagee for the purpose of completing such dwelling house to lend to them the sum of £3,700 (N7,499). ‘And whereas the mortgagee has agreed with the borrowers to lend to them the sum of £3,700 out of the money belonging to his family upon having the repayment thereof as hereinafter mentioned and secured in a manner hereinafter appearing.’ ”
The agreement demised unto the lender: “All that plot of land with the dwelling house thereon situate at and known as and called No 3 Iweka Road, Onisha to hold the same unto the mortgagee for the term of 35 years from the first day of July 1966.”
Paragraph 6 of the agreement or deed provides:- “6. Provided always that if the said sum of £3,700 with compound interest thereon as aforesaid shall be paid to the mortgagee by way of half the rents collected from the secured property monthly for a period of 35 years and in accordance with the foregoing convenant, (sic) the said hereditaments comprised in this security shall at the request and cost of the Borrowers and Mortgagee be re-assigned to him at the end of 35 years from the date of this mortgage.”
In his judgment the learned trial Judge dismissed plaintiff’s claims.
Being dissatisfied with this judgment the plaintiff appealed to the Court of Appeal which latter Court dismissed the appeal and affirmed the judgment of the trial High Court.
This is a further appeal by the Plaintiff now Appellant.
⦿ ISSUE(S) & RESOLUTION
1. Whether the respondents are entitled under the transaction, Exhibit ‘A’, to redeem the mortgage by paying off the balance of money owed thereunder or whether the period of repayment must run the full term of 35 years therein provided.
i. The right to redeem is so inseparable an incident of a mortgage that it cannot be taken away by an expressed agreement of the parties that the mortgage is not to be redeemable or that the right is to be confined to a particular time or to a particular description of persons. The right continues unless and until the mortgagor’s title is extinguished or his interest is destroyed by sale either under the process of the court or of a power in the mortgage incident to the security. This is a very important provision of a legal mortgage. In view of the borrowers’ equity of redemption therefore, the plaintiff will not be right to claim that the defendant could not redeem the mortgage by paying for the principal sum and interest until the year 2001, that is, 35 years from 1966. For this reason, therefore, the learned trial Judge was right to dismiss his claims and the Court of Appeal was right to affirm that decision. In conclusion the plaintiff’s appeal fails and it is hereby dismissed.
⦿ ENDING NOTE BY LEAD JUSTICE – Per
⦿ REFERENCED (STATUTE)
⦿ REFERENCED (CASE)
⦿ REFERENCED (OTHERS)
To determine this issue, one must ask what are the provisions of a valid legal mortgage. The learned author of Halsbury’s Laws of England (4ed) Vol. 32 at paragraph 498 lists the provisions of a legal mortgage as follows:- “The main provisions of a legal mortgage are (1) a covenant to pay the principal debt and interest on a given date; (2) a covenant to pay interest in the event of default in payment of the principal on the day named; (3) the demise or sub-demise of, or the charge by way of legal mortgage on, the mortgaged property; (4) the proviso for cessor; and (5) such variations of the statutory provisions with regard to mortgages as the arrangement between the parties requires.”
On the date for repayment, the learned Author has this to say at paragraph 500:- “Fixing a day for payment does not generally indicate the parties’ intention that actual payment is to be made on the named date, but only that the mortgagee may call for payment on or at any time after that date if so minded, but not before. The date fixed is usually six months from the date of the loan or deed, but may be at the end of three months or any other period, or the loan may be made repayable upon demand. In general, the mortgagor may not repay prior to the date fixed for repayment.”
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