S. O. N. Okafor & Sons Ltd v. Nigeria Housing Development Society Limited & Anor. (1972) – SC

⦿ CASE SUMMARY OF:

S. O. N. Okafor & Sons Ltd v. Nigeria Housing Development Society Limited & Anor. (1972) – SC

by PipAr Chima

⦿ COURT:

Supreme Court

⦿ AREA(S) OF LAW

Mortgagee right to sell
Set-off
By mortgage by installment

⦿ NOTABLE DICTA

*

⦿ PARTIES

APPELLANT
S. O. N. Okafor & Sons Ltd

v.

DEFENDANT
Nigeria Housing Development Society Limited & Anor.

⦿ LEAD JUDGEMENT DELIVERED BY:

SIR I. Lewis, J.S.C

⦿ APPEARANCES

* FOR THE APPELLANT

– Chief F.R.A Williams.

* FOR THE RESPONDENT

– Mr Coker.

⦿ CASE HISTORY

At the Trial Court, on the 21st of December, 1962, Kaine, J., dismissed with 100 guineas costs the Plaintiff’s (now Appellant) claim saying inter alia in his judgment: “The Counsel for the Plaintiff-company also contended that since the Defendant-company is still owing the Plaintiffs the sum of 330(pounds), they cannot exercise their statutory power to sell. I have to say that there is evidence before me that when the Plaintiff-company was owing about 505(pounds) by way of interest alone the Defendant company wrote to them the letter Exhibit “L” saying that the balance of 330(pounds) has been deducted from the amount and requested the Plaintiff’s company to pay the balance. There is also evidence before me that after several letters written by the Defendant company had been received, the Plaintiff company paid the sum of 200(pounds) in Exhibit “L5” and then promised to continue to pay and the amount then remaining unpaid by way of interest shows that the sum of 330(pounds) has been taken into consideration. I am of opinion that the Plaintiff’s company cannot now be heard to say that the sum of 330(pounds) had not been paid to them for it can be said from Exhibit “L5″ that they agreed to the arrangement. I therefore see no breach on the part of the Defendant’s company with regard to the total sum of 11,330(pounds) which they promised to advance to the Plaintiff company. Also there is evidence before me that when the Plaintiff company could not afford to pay the instalments due the Defendant company gave them the concession to pay only the interest due on the amount already advanced and they also failed to do so. I am satisfied that at the time the Defendant’s company decided to exercise their statutory power to sell the house that the Plaintiff company was in arrears of the instalments due and that they were given due notice before the property was advertised for sale. I do not see any justifiable reason why this court should then grant the Plaintiff company the injunction sought to prevent the Defendant company from exercising their power to sell the house. I am therefore of opinion that the claim for an order of injunction must fail”.

It was solely as to this refusal of an injunction that the plaintiffs have appealed from the decision of Kaine, J., to this court.

⦿ ISSUE(S) & RESOLUTION

[APPEAL: DISMISSED]

1. Whether, where three instalments of the mortgage money had become due and not the whole, the mortgagees had power to sell?

RULING: IN RESPONDENT’S FAVOUR.
i. There is a restriction on the exercise of that power to sell imposed by Section 103, which requires a notice to be served on the mortgagor in certain cases, but under sub.1.2 it is not required if some interest under the mortgage is in arrears and unpaid two months after becoming due. Now the interest which is claimed here is the interest which has accrued due in respect of the three instalments which ought to have been paid in the successive years after the apportionment had been made, in accordance with the terms of the apportionment and the order to pay by instalments. Therefore, there was at the date when these proceedings were taken for sale undoubtedly more than two months interest in arrears. But it is said that having regard to the terms of Section 101 the mortgagees had no power to sell in respect of the part of the mortgage money due; that what the section contemplates is that the power of sale shall only arise when the whole of the mortgage money is due – a sum in this case of over 48pounds so that the Rural District Council had no right to exercise the power of sale conferred by Section 13 of the Act of 1892. In a few words the point we have got to decide is whether, where three instalments of the mortgage money had become due and not the whole, the mortgagees had power to sell. I find it impossible to attribute to the words which I have read a negation of the right to sell where the whole of the mortgage money has not become due. We are to treat the power to sell as if it had been one of the terms conferred by the mortgage deed. It is really admitted that if there is no power to proceed to a sale in respect of the instalments due and unpaid, and if the right of the mortgagee are postponed until such time as the total mortgage debt has become due, the mortgagee has no power to exercise any of the rights of a mortgagee in the interval. That would be an unfortunate and almost grotesque result. It seems quite clear that the purpose of the words of Section 101 of the Act of 1925 is not to cut down a mortgagee’s rights, but, just as in precedents providing for payment by instalments to which our attention has been called, if power is given to pay by instalments, so also there is power to sell when any instalment of the mortgage money has become due in the manner provided for in the mortgage deed. In the circumstances of this case the mortgagor had covenanted to pay it by instalments, and the right, therefore, of the Rural District Council to proceed seems to be established.

ii. It is our view the 1st Defendants could have set off without agreement but in any case as we have indicated quite apart from this the 1st Defendants had for the reasons we have earlier given the power of sale under Section 19 of the Conveyance Act, 1881.

⦿ ENDING NOTE BY LEAD JUSTICE – Per

⦿ REFERENCED (STATUTE)

Section 19 Conveyancing Act 1881.

⦿ REFERENCED (CASE)

⦿ REFERENCED (OTHERS)