➥ CASE SUMMARY OF:
John A. Osagie V. Alhaji S.O. Oyeyinka & Erasmus Ogbeide (1987) – SC.194/1985
by Branham Chima.
John A. Osagie
Alhaji S.O. Oyeyinka
Supreme Court – SC.194/1985
➥ JUDGEMENT DELIVERED ON:
12 June 1987
➥ SUBJECT MATTER
Sale of property to another person while lis pendens;
Equitable interest in landed property.
➥ THIS CASE IS AUTHORITY FOR:
⦿ WHEN FINDINGS OF FACT OF TRIAL COURT ARE NOT APPEALED, THERE NO NEED FOR APPELLATE COURT TO REVIEW THEM
There was, with the greatest respect, no earthly reason for the Court of Appeal to review the pleadings and the evidence in view of the findings of fact of the trial Court at p.160 that EXS.D and E were not loan receipts but receipts for the sale of land and the conclusion of law at p.161 “that all the plaintiff got by virtue of the receipts Exhibits D and E was an equitable interest”. There was no cross-appeal by the 2nd Defendant challenging the above findings. What the Court below should have then concentrated on would have been the legal effect of the above findings on the relationship of the Plaintiff and the 2nd Defendant. — Oputa, JSC.
⦿ LIS PENDENS AND ITS EXCEPTION; DOES REGISTRATION OF LIS PENDENS APPLY TO NIGERIA?
The old doctrine of lis pendens was that if property was in question or dispute in a suit or action it could not be alienated during the pendecy of that suit or action, even to a purchaser or mortgagee without notice. There was however a change, or slight medication of this doctrine brought about by the Judgments Act 1839. By Section 7 of that Act no lis pendens binds a purchaser or mortgagee without express notice thereof, unless a Memorandum giving a description of the person whose estate is intended to be affected thereby, and particulars of the Suit, is registered in the Land Registry as a land charge (see Land Charges Act, 1925, S.3(1). One effect of such registration is to give intending purchasers or mortgagees notice of the litigation. By S.2(8) of the Land Charge Act of 1925 the registration ceases to have effect after five years unless renewed. The question now is – Are we in Nigeria bound by the doctrine of lis pendens? If the answer is yes then a further question arises – Are we also bound by the provisions of S.7 of the Judgment Act of 1839″ a statute of general application” which will apply to us here in Nigeria? This Court per Idigbe, J.S.C. answering the two questions posed above, in Ogundaini v. Araba and Barclays Bank of Nigeria Ltd. (1978) 6 and 7 S.C. 55 at p.80 thus (as it relates to registration of a lis pendens):- “At common law it was not compulsory to register a lis pendens. The Statutes which later made registration of a lis pendens compulsory in England do not come within the definition (in the frame-work of our local laws) of “Statutes of general application” in any event, those statutes which require, in England, compulsory registration of a lis pendens have no force and effect in Nigeria …. There is no local statutory provision requiring a lis pendens to be registered”. As it relates to the doctrine itself this Court at p. 78 of Ogundaini’s case supra stated categorically:- The doctrine of lis pendens prevents the effective transfer of rights in any property which is the subject matter of an action pending in Court during the pendency in Court of the action. In its application against any purchaser of such property the doctrine is not founded on the equitable doctrine of notice – actual or constructive – but upon the fact that the law does not allow to litigant parties or give to them, during the currency of the litigation involving any property rights in such property (i.e. the property in dispute) so as to prejudice any of the litigating parties”. — Oputa, JSC.
⦿ LIS PENDENS – ACTUAL OR CONSTRUCTIVE NOTICE IS IRRELEVANT
Simply put the doctrine of lis pendens operates to prevent the effective transfer of any property in dispute during the pendency of that dispute. It is quite irrelevant whether the purchaser has notice – actual or constructive. The doctrine is really designed to prevent the vendor from transferring any effective title to the purchaser by depriving him (the Vendor) of any rights over the property during the currency of the litigation or the pendency of the suit. That being so the principle of nemo dat quod non habet will apply to defeat any sale or transfer of such property made during the currency of litigation or the pendency of the action. — Oputa, JSC.
⦿ CONSTITUTIONAL RIGHT OF ONE PARTY CANNOT DEPRIVE ANOTHER OF HIS CONTRACTUAL RIGHT
It is unfortunate that the 2nd defendant/respondent felt satisfied with the conviction for stealing the N9,600 and failed to file notice of appeal against the judgment. There is no doubt that from the facts on record in Exhibit ‘T’, he would have secured an acquittal and discharge from the High Court in its appellate jurisdiction. The failure to take advantage of his constitutional right of appeal cannot deprive the appellant of his contractual rights. — Obaseki, JSC.
⦿ PAYMENT OF PURCHASE PRICE WITH DELIVERY OF POSSESSION CAN OUST SUBSEQUENT ANY CONVEYANCE
I think the most devastating evidence to the case of the respondent is that the 2nd respondent handed over the keys of the premises to him and put him in possession. Payment of purchase price coupled with delivery of possession can oust any subsequent conveyance of the legal estate to any subsequent purchaser. A diligent purchaser will certainly find out that there is someone in possession and be served with notice of his interest. — Obaseki, JSC.
⦿ LIS PENDENS IS PART OF OUR LAW
The doctrine of lis pendens is part of our law. See Ogundaini v. Araba and Barclays Bank of Nigeria Ltd. (1978) 6 and 8 SC. 55 at 80. It prevents the effective transfer of rights in any property which is the subject matter of an action pending in court during the pendency in court of the action. Any purchaser whether he has notice actual or constructive or not is bound by the doctrine and buys nothing from a litigant vendor. The 2nd respondent was a party to suit No. B/184/74 instituted in respect of the property now in dispute. He was barred by the doctrine of lis pendens from selling and conveying the property or any part thereof at the time he sold to 1st respondent. The 1st respondent therefore got nothing and the conveyance executed in his favour was null and void and conveyed nothing. The evidence shows that the suit was not determined till 31st October, 1977. It was pending from,23rd October, 1974 to 31st October 1977 and the 23rd day of June 1976 the date the 2nd respondent purported to have executed the conveyance Exhibit B in favour of 1st respondent fell within that period. — Obaseki, JSC.
⦿ PARTY WHO BOUGHT PROPERTY LIS PENDENS IS ON HIS OWN AND MUST LOSE EVERYTHING
The behaviour of the 2nd respondent left much to be desired. Knowing full well that he has sold the property to the appellant and received payment in full with an agreement to convey and a pending action for a specific performance, he proceeded to sell and convey what he no longer owns to the 1st respondent. Fortunately, for the appellant, his property rights are protected from the withering effect of the fraud. It is only the 1st respondent that is left defenceless against the fraud as he must in law lose the property bought with the money surrendered to the fraudulent vendor. He can however get back his money from the vendor. — Obaseki, JSC.
➥ LEAD JUDGEMENT DELIVERED BY:
⦿ FOR THE APPELLANT
⦿ FOR THE RESPONDENT
➥ CASE FACT/HISTORY
In the Court of first instance the Plaintiff who is now the Appellant sued the Defendants/Respondents claiming in his Amended Writ of Summons:- “(i) Declaration of Statutory Right of Occupancy of the premises situate at and known as No.12, 3rd Cemetery Road Benin City. (ii) An Order setting aside the Conveyance (of part of the said premises) registered as Instrument No. 14 at page 14 in Volume 379 of Land Registry in the office at Benin from the 2nd Defendant Erasmus Ihama Ogbeide to the 1st Defendant Alhaji S.O. Oyeyinka. (iii) N5,000 damages for trespass. (iv) Perpetual Injunction restraining the Defendants, their agents and anyone claiming through them from further trespassing on the said premises.”
Pleadings and plans were ordered filed and duly delivered. An Amended Statement of Claim was filed by the Plaintiff. The 1st Defendant also filed an Amended Statement of Defence while the 2nd Defendant filed his own Original Statement of Defence. The case was fought on these new Statement of Claim and Defence.
After due hearing the trial Court dismissed all the Claims against the 1st Defendant.
With regard to the 2nd Defendant the trial Court held:- “I must confess that I do not know the precise relief sought against the 2nd Defendant. …. ” The learned trial Judge however ended up thus:- “In sum, the reliefs sought by the Plaintiff against the defendants are hereby dismissed”.
The Plaintiff lost in the trial Court. Dissatisfied and aggrieved he then appealed to the Court of Appeal Benin Division. That Court again dismissed the Plaintiff’s appeal with “costs assessed at N350.00 to the Respondent”. Further dissatisfied, the Plaintiff has finally appealed to the Supreme Court, the country’s Court of last resort.
From the pleadings of the parties, the evidence led and the findings of the learned trial Judge the facts were as follows:- 1. The 2nd Defendant on the 10th April 1974 issued EX.D being a receipt for an amount of N3,600.00 paid to him by the Plaintiff. Exhibit D is designated” Purchase Consideration “. 2. The 2nd Defendant also on the 10th June 1974 issued EX.E for the sum of N3,000.00 and the Plaintiff later paid another N3,000.00 to the 2nd Defendant. Exhibit E is also designated “Purchase Consideration”. These payments were not disputed by the 2nd Defendant. The only issue there, was the purpose for which the Plaintiff paid the 2nd Defendant all these sums of money totalling N9,600.00. The 2nd Defendant pleaded and testified that these sums represented a friendly loan he obtained from the Plaintiff. The Plaintiff on the other hand pleaded and testified that EX. D and EX.E were “Purchase Receipts” from the 2nd Defendant (undisputed owner thereof) for the sale to him of two plots of land marked A and B on EX. C.
➥ ISSUE(S) & RESOLUTION(S)
I. Whether the Appellant can still insist on having the said premises situate at Cemetry Road Benin City from the 2nd Respondent?
RULING: IN APPELLANT’S FAVOUR.
A. THE PLAINTIFF/APPELLANT GOT AN EQUITABLE INTEREST
[‘It is agreed on all sides that the Plaintiff at this point in time “certainly did not get a legal interest because no conveyance of the land was made to him” to use the ipsissima verba of the learned trial Judge. But that does not mean that he got nothing; that he had no rights at all in and over the two plots of land now in dispute. It must be conceded on all sides. (it was conceded at least by the learned trial Judge) that the Plaintiff got an equitable interest which could be enforced by an action for specific performance to compel the 2nd Defendant to execute a formal conveyance. There was such an action – Suit B/184/74 – and it was during the pendency of that action that the 2nd Defendant sold one portion of the land marked A in EX.C to the 1st Defendant. Before this sale and pending a formal conveyance to the Plaintiff, the 2nd Defendant was an implied trustee of the two plots of land described in EXS. D and E and marked” A” and “B” in EX.C, for the Plaintiff/Beneficiary. Any improper dealing with any of those two plots of land would constitute a breach of that trust.’
‘The trial Judge found there was a sale which in the absence of a legal conveyance gave the Plaintiff merely an equitable interest in the premises sold (EX.C). The 2nd Defendant could have brought a civil action against the Plaintiff for either false imprisonment or malicious prosecution if he wished to, but that is a very different thing from saying (as the 2nd Defendant is now saying) that the prosecution, EXT, dissolved and terminated all the rights of the Plaintiff over the premises in EX.C which he bought from the 2nd Defendant with a promise from the said 2nd Defendant:- “I shall execute a formal conveyance in favour of the said J.A. Osagie when I shall have redeemed the Conveyance of my said piece or parcel of land from the bank (National Bank) to which it is currently mortgaged”. (see EXS.D and E).’
‘With these two documents Exhibits D and E. the case the appellant has made against the respondent is formidable and I cannot see any legal except route from defeat for the respondents. The learned trial judge correctly found that “on the authorities all that the plaintiff got by virtue of the receipts Exhibits D and E was an equitable interest.” Furthermore, the evidence shows that 2nd respondent executed Exhibit H, Power of Attorney in favour of the appellant to enable him collect the Title Deeds deposited with the Bank of payment of N3,000.00 balance into his account. He did pay this amount into the account of the 2nd defendant but the Title Deeds were not released to him.’]
B. EVERYTHING BUT FORMAL CONVEYANCE TO THE PLAINTIFF WAS EFFECTED
[‘I devoted the earlier part of this Judgment on considering these legal effects because they will form the basis of any purposeful consideration of the issues in dispute in this case. For further emphasis, I will repeat that one of such effect or result is that pending the formal conveyance the 2nd Defendant held the land in dispute in trust for the Plaintiff who was now the beneficial owner. If one adds to this the uncontroverted evidence that the 2nd Defendant handed over the keys of the building on plot B in EX.C to the Plaintiff thus putting him into possession then the case of the Plaintiff against the 2nd Defendant becomes much stronger. There was also the handing over of EX.F from the 2nd Defendant to the Plaintiff. Everything to perfect the title of the Plaintiff was there except the formal conveyance which could not be validly made during the subsistence of the mortgage of the land in EX.C. to the National Bank. That mortgage had been discharged and redeemed. But instead of honouring his pledge in EXS.D and E “to execute a conveyance in favour of the said J.A. Osagie when I shall have redeemed the said conveyance from the National Bank” the 2nd Defendant denied selling any land to the Plaintiff (J.A. Osagie) and went forward to execute another conveyance, EX.B, in respect of plot A in EX.C in favour of the 1st Defendant. This was what the Court below should have considered. This is what it did not do. I entirely agree with learned counsel for the Plaintiff/Appellant in his criticism in Ground 1 that the Court below merely glossed over the main case the Plaintiff/Appellant had against the 2nd Defendant.’]
C. THE MATTER WAS LIS PENDENS, AND THIS THE 1ST DEFENDANT BOUGHT AT HIS OWN RISK
[‘In this case, again with the greatest respect, both the Court of Appeal and the Court of first instance failed to grasp the import and the purport of the doctrine. Both went off the rail in a wild goose chase looking for proof of notice to the 1st Defendant. It was sufficient for the doctrine to apply to establish that there was a pending case, involving the property in dispute between the Plaintiff/Appellant and the 2nd Defendant/Respondent and that during the pendency of that suit the 2nd Defendant/Respondent transferred the property to the 1st Defendant/Respondent. The outcome of the suit thus becomes immaterial. The important thing is pendente lite nihil innovetur (Co: Litt 344). Lord Coke that great or rather one of the greatest exponents of the Common Law was also of that view “that nothing should be changed during the pendency of an action”. Thus a pendente lite purchaser buys at his own risk.’
‘Let me now apply the above principles to the facts and surrounding circumstances of the case now on appeal. From paragraphs 21 and 23 of the Plaintiffs Amended Statement of Claim, it is clear:- (i) that “on the 23rd October 1974 the plaintiff instituted an action in the Benin High Court against the 2nd Defendant praying for an order of specific performance” to compel him to convey the parcels of land marked A and B in EX.C to him the plaintiff pursuant to EXS.D and E (the purchase receipts); (ii) that the Suit was no.B/184/74; (iii) that judgment was given in that Suit on the 31st October 1977, that is to say – the action B/184/74 lasted from 23rd October 1974 to 31st October 1977. This period was then the period of the pendency of the Suit. Any sale or transfer of any part of EX.C made during the period 23rd October 1974 to 31st October 1977 will be made pendente lite. In paragraph 26 of the Statement of Claim it was pleaded that in 1976 during the pendency of Suit No. B/184/74 the 2nd Defendant conveyed portions of the land in dispute in B/184/74 to the 1st Defendant. That Conveyance was tendered as EX.B which was executed on the 23rd June 1976 during the currency or pendency of Suit No.B/184/74. It is thus clear that EX.B was executed pendente lite and that the 1st Defendant was a pendente lite purchaser, buying at his own risk. The doctrine of lis pendens will thus automatically apply to nullify the conveyance to the 1st Defendant – (EX.B).’]
D. ONCE THERE IS AN EQUITABLE INTEREST, A CESTUI QUI TRUST, IS CREATED IN FAVOUR OF THE PERSON WITH EQUITABLE INTEREST
[‘This case has even gone much more than the doctrine of lis pendens. With the surrounding circumstances of the 2nd Defendant denying the sale of the land in dispute per EXS.D and E; with him conveying part of the self same land in dispute to the 1st Defendant during the pendency of the Plaintiff’s action for specific performance, one can easily smell a rat or sense some fraudulent dealing. It is this feeling of being defrauded that moved the Plaintiff to report to the Police “that the 2nd Defendant and the Bank Manager were conspiring to dupe him”. This led to the prosecution of the 2nd Defendant in EX.T. Also if as was found by the trial Court there was a sale of the land in dispute to the Plaintiff, a sale which will have to be perfected by the 2nd Defendant executing a conveyance in favour of the Plaintiff, then before that conveyance was executed by the 2nd Defendant he (2nd Defendant) held the property in trust for the Plaintiff. The circumstances as I observed earlier on in this judgment created an implied trust. It will be highly fraudulent to sell part of such property held in trust to the detriment of the Plaintiff the cestui que trust. And in a fraudulent transaction justice demands that parties must be put, as far as possible on the basis existing before the transaction: see Ram Tuhuh Sing v. Biseswar Lall Sahoo (1875) L.R. 2 Ind. App.139; see also Bellamy v. Sabine (1847) S.C.5 L.J. Ch. (N.S) 36; 17 L.J. Ch. 105 41 E.R. 1007. Also by the Purchase Receipt EXS.D and E the 2nd Defendant obligated himself to “execute a formal Conveyance in favour of the said J.A. Osagie” – the Plaintiff. The maxim that Equity looks upon that as done which ought to be done applies here to compel the 2nd Defendant not to derogate from the sale but to complete same. In re Anstio Chetioynd v. Morgan (1882 A1751) Morgan v. Chetioynd (1882) A (19299 (1886) 31 L.R. Ch. D. 596. All these principles reinforce the doctrine of lis pendens and together they will all cry out against the Conveyance to the 1st Defendant EX.B.’]
E. EVEN THE 1ST DEFENDANT KNEW THE MATTER WAS LIS PENDENS
[‘In this case the Plaintiff clearly pleaded Suit No. B/184/74 in paragraphs 21 and 23 (see p.60 of the record of proceedings) of his Amended Statement of Claim. These paragraphs were positively and unequivocally admitted in paragraph 11 of the 2nd Defendant’s Statement of Defence (see p. 74 of the record of proceedings). Even the 1st Defendant the purchaser pendente lite admitted the same paragraph 18 of his Amended Statement of Defence (p.88 of the record). He also at p.89 of the record of proeeedings admitted paragraphs 23 and 24 of the Plaintiff’s Amended Statement of Claim. This he did in his paragrapph 20. The 1st Defendant therefore admitted that he knew of the pendency of Suit No.B/184/74. He knew when it was started on 23rd October 1974 (as pleaded in paragraph 21 of the Statement of Claim); he knew when judgment in the said Suit was delivered on 31st October 1977. By looking at his Conveyance EX.B dated 23rd June 1976 it will not need a mathematical pundit to know that he bought part of the land in dispute during the pendency of Suit No. B/184/74 … Knowing fully well that there was this pending Suit the 1st Defendant still went along with his purchase of the land involved in that litigation – his reason being (to quote paragraph 18 0f his Statement of Defence) that “the Plaintiff is estopped from praying any Court of law for an order for specific performance when the Plaintiff had prosecuted the said 2nd Defendant to conviction for stealing his (plaintiffs) N9,600.00 (Nine thousand, six hundred naira) representing the proceeds of an alleged sale of the premises known as No. 12, 3rd Cemetery Road, Benin City”. The 1st Defendant took a big gamble. It misfired and he lost.’]
‘In the final result the appeal succeeds. The judgment and consequential orders of the Court below as well as those of the trial Court are both, all set aside. In their place I make the following orders:-
(i) An Order of declaration in favour of the Plaintiff/Appellant of Statutory Right of Occupancy of the premises delienated and marked “A” and “B” in plan EX.C.
(ii) An Order ,citing aside the conveyance EX.B made by the 2nd Defendant/Respondent in favour of the 1st Defendant/Respondent.
(iii) N100.00 damages for trespass against the 1st Defendant/Respondent only.
(iv) An Order for perpetual injunction restraining the two, the Defendants/ Respondents, their agents and anyone claiming through them from further trespassing on the Plaintiff/ Appellant’s land shown in plan EX.C.
There will be costs to the Plaintiff/Appellant which I assess as follows:- (i) N300.00 against both Defendants/Respondents in this Court. (ii) N250.00 costs in the Court of Appeal. (iii) N200.00 costs in the Court of first instance.’
➥ MISCELLANEOUS POINTS
➥ REFERENCED (LEGISLATION)
➥ REFERENCED (CASE)
➥ REFERENCED (OTHERS)