3PLR – LABABEDI V. LAGOS METAL INDUSTRIES (NIG) LTD

POLICY, PRACTICE AND PUBLISHING, 3PLR, LAW REPORTS

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LABABEDI

V.

LAGOS METAL INDUSTRIES (NIG) LTD
SUPREME COURT OF NIGERIA

JANUARY 12, 1973.

SUIT NO.SC 304/1971

3PLR/1973/41  (SC)

OTHER CITATIONS

(1973) All N.L.R 1

 

BEFORE THEIR LORDSHIPS

ELIAS, C.J.N.

FATAI-WILLIAMS, J.S.C.

IRIKEFE, Ag. J.S.C.

BETWEEN

MOHAMOUD J. LABABEDI

AND

LAGOS METAL INDUSTRIES (NIG) LTD.

(By the Liquidator, Jonathan O. Osinuga) AND

THE REGISTRAR OF TITLES

REPRESENTATION

Mr. AA Ogunsanya, for Appellants.

Mr. L.V. Davies, for Respondents.

MAIN ISSUES

Land Law -Declaration of title-Rectification of Land Register – Cancellation of Certificate of Title – Purchaser for value without notice – S.54 Land Registration Act (Cap 181)

MAIN JUDMENT

ELIAS, C.J.N. (Delivering the Judgment of the Court): In suit No. LD/217/69 in the Lagos High Court judgment was given by Sowemimo, J. against the defendants, who are appellants in the present appeal. The present respondents as the plaintiffs had Instituted the action against the appellants claiming against them as follows:

 

  1. For a declaration of title in fee simple to the piece of land known as plot 30 in sub-area 3 of the Lagos Central Planning Scheme. 1951, situate at Gbajumo Street, Lagos, or in the alternative for a declaration that the plaintiffs are entitled to estate interest or right to the said piece of land.

 

  1. For an order directing the Registrar of Titles to rectify the Register kept at the Land Registry, Lagos, by expunging the name of the 1st defendant therefrom and inserting the name of the plaintiffs as the registered owners.

 

  1. For an order directing that the 1st defendant do surrender to the 2nd defendant for cancellation and/or destruction the Certificate of Title No. MO 4186, issued to him by the 2nd defendant in respect of the land.

 

  1. For an injunction restraining the 1st defendant, his servants and /or agents from entering the piece of land.

 

The relevant paragraphs of the defence are as follows:

 

“6.     This defendant says that when he was negotiating to buy the property in dispute he had no knowledge of any legal proceedings relating to the property. 7. This defendant conducted a search at the Lands Registry through his Solicitors who reported that his Vendor had a good title as there were no caution, charges or any encumbrances whatsoever on the property.

 

  1. This defendant says that he is a subsequent registered owner of the land in dispute and as a bona fide purchaser for value without notice he acquired an indefeasible title to the property.

 

  1. This defendant will challenge the validity of the purported sale of the said property to the plaintiffs and will aver that it confers no title whatsoever to the plaintiffs.

 

  1. WHEREOF the plaintiffs are not entitled as per their writ of summons.”

 

The material facts as pleaded by the plaintiffs in their Statement of Claim and as found by the learned trial Judge, may be summarized thus. Before the plaintiff company (hereinafter referred to as the plaintiffs) went into voluntary liquidation, it brought an action in the Lagos High Court (Suit No. LD/618/61) against one Akanji Lagunju, who was then the registered proprietor under the Registration of Titles Act of the piece of land now in dispute, for a sum of £9,163:5/- and contained judgment for it on June 9, 1962. Lagunju lodged an appeal which was dismissed latter on April 21, 1965.

 

While the appeal was still pending, the plaintiffs lodged a caution against any dealing in respect of the piece of land, and the relevant portion of the certified copy of the Caution (Exhibit J.) said as follows:

 

“We hereby solemnly and sincerely declare that we are the Judgment Creditors of approximately £9,500 and an application is pending to attach the property in Suit LD/618/61.”

 

By Suit LD/389/63, the Judgment Creditors [Lagos Metal Industries (Nig.) Ltd.] as plaintiffs, having failed to recover the judgment debt by levying execution on Lagunju’s movable property, instituted another action asking, among other things, for an order to set aside the purported transfer of the property to Haastrup because, 13 days after the judgment had been delivered against Lagunju in Suit No.LD/618/61, he (Lagunju) had purported to transfer the property to one Ade Haastrup. Adelaja, to whom Haastrup had in the meantime transferred the property, was later joined as the third defendant. Judgment was given on November 15, 1965 in favour of the plaintiffs and the purported transfers of the said property by Lagunju to Haastrup and by Haastrup to Adelaja were declared null and void and the Registrar of Titles was ordered to rectify the Register in accordance with the judgment of the court by expunging the names of Haastrup and Adelaja as proprietors of the piece of land in dispute. Meanwhile, the plaintiffs, in the earlier Suit LD/618/61, had obtained the leave of the court to levy execution on Lagunju’s property and also to take part in the sale of the property by public auction under the Deputy Sheriff who sold the property to the plaintiffs as the highest bidder on May 13, 1966. Ten days later, the plaintiffs then informed the Registrar of Titles of the sale of the property to them. Lagunju and Adelaja appealed against the judgment in Suit LD/389/63 but the appeal was dismissed by the Supreme Court in SC. 394/66 on February 1, 1967. On December 11, 1967, the necessary Certificate of Purchase was issued by the Deputy Sheriff to the plaintiffs which thereafter sought to register their title on the basis of the purchase receipt. It was at that point that the plaintiffs discovered that Adelaja had transferred it to the 1st defendant in the present case who was then duly registered as the proprietor of the land in question. In these circumstances, the plaintiffs drew the attention of the Registrar of Titles to (a) the Caution Notice (Exhibit C of 21/7/65, (b) the High Court judgment in Suit LD/389/63 (Exhibit L), and (c) the plaintiffs’ solicitor’s letter of May 23, 1966 (Exhibit M). It was clear that up to that date, the Registrar had not carried out the order of the court to rectify the Register and had not also registered the Caution filed by the plaintiffs. It would also seem that the Registrar was not aware of the judgment in Suit LD/389/63 or of the Caution Notice when he issued the Certificate to the 1st defendant on August 30, 1967. When he became aware of what had happened, he (Mr. Ojomo) requested Lababedi (1st defendant) to surrender the Land Certificate issued to him but he refused (see letter Exhibit ‘N’).

 

The plaintiffs thereupon brought the present action. The evidence showed that the Executive Officer in charge of the Proprietorship Register had misled the Registrar of Titles in the minutes by which he recommended the registration of the 1st defendant’s title for the latter’s approval.

 

The learned trial Judge observed as follows:

 

“The Deed of Transfer was executed between one Ajiboye and the 1st defendant. Before issuing the Certificate of Title, notices were served on Ajiboye, the 1st defendant, Mr. Ogunsanya by virtue of Exhibits V20, V21, and Exhibits V22, the reply to these notices to the effect that the parties had no objection to the registration of the 1st defendant, were tendered as Exhibits V23 to V25.”

 

After observing that the 1st defendant elected not to call evidence in support of his averments, the learned trial Judge put what he regarded as the important issues for decision in this case as follows:

 

‘The questions therefore which require a decision are whether the person who purported to sell to the 1st defendant had any title or estate in the piece of land, secondly whether the defendant as a subsequent registered owner of the Land, in dispute had acquired an indefeasible title to the property, and thirdly whether the Certificate of Purchase issued by the Deputy Sheriff confers any interest or estate registrable under the Registration of Titles Act Cap. 181.”

 

The learned trial Judge would appear to have taken two factors into consideration:

 

(a)     the Caution Notice which was prepared and filed in the Lands registry on July 21, 1965, but which was never registered on any part of the Register; and

 

(b)     the judgment of the High Court, ILD/389/65, by which the Register was ordered to be rectified by the removal therefrom of the names of Haastrup and Adelaja on the ground that the purported dispositions as a result of which the land passed from the first to the third were void for fraud.

 

The learned trial Judge, after stating without much discussion the provisions of sections 53 and 54 of the Registration of Titles Act Cap. 181 which were cited to him in argument by learned counsel for the defendants, found that the 1st defendant failed to discharge the onus on him to give evidence in support of his averments in paragraphs 6 and 7 of the Statement of Defence, and, rightly in our view, observed:

 

‘The 1st defendant elected not to call evidence to support above averments and so far as the facts alleged have not been proved the 1st defendant’s case would therefore have to be resolved on the question of law.”

 

As he was of the opinion that the purported transfers of the land to Haastrup and from the latter to Adelaja and finally from Adelaja to Ajiboye were void and that the title to the land still remained vested in Lagunju, all that the 1st defendant purported to purchase was a nullity. The learned trial Judge accordingly gave judgment for the plaintiffs against the 1st defendant in terms of the writ. As against the 2nd defendant, the Judge ordered that the Register be rectified by cancelling the names of Lagunju, Haastrup, Adelaja, Ajiboye and 1st defendant and inserting the names of the plaintiffs as proprietors of the land in dispute.

 

From this decision the appellant has appealed to this Court on the following six grounds, grounds 1-4 being those originally filed and grounds 5 and 6 being the additional ones:

 

“(1)   The learned trial Judge erred in law in merely referring to s. 53(1) and (2) of the Registration of Titles Act in passing, this being the main defence set up by the 1st defendant at the hearing and in his counsel’s address and In giving no consideration whatsoever to the effect of this section on the title of the 1st defendant as a subsequent registered owner, being a purchaser for value.

 

(2)     The limed trial Judge erred in law and in fact by giving no consideration to the following facts and applying the law to such facts:

 

(a)     That the Vendor of the 1st defendant, Ajiboye, was not a party to Suit No. LD/389/63 and no finding as to whether or not he had notice was made by the court

 

(b)     That he bought the property from Adelaja on 19th June, 1965 and Judgment in suit No. LD/389/63 was not delivered until 15th November, 1965.

 

(3)     The learned trial Judge erred in law when he laid undue emphasis in portions of his judgment on the fact that the 1st defendant did not call evidence to support the averments in paragraphs 6-10 of his statement of defence and hereby allowing the fact to influence his judgment when in law such evidence is riot necessary on the ground:

 

(a)     That in seeking the protection of s.53 of the Act proof of paragraph 6 of the Statement of Defence is not necessary.

 

(b)     That from the evidence before the court the averments in paragraph 7 had been proved conclusively.

 

(c)     That in relying on the protection given to a subsequent registered owner of land by s. 53(2) of the Act BONA FIDES and absence of NOTICE need not be proved by the defendant; and that the averment in paragraph 8 of the statement of defence to the effect that the 1st defendant is a registered owner and purchaser for value is conclusively proved by the tendering by consent of the Land Certificate No. MO 4186.

 

(d)     That paragraph 9 can only be raised through cross- examination which the 1st defendant did.

 

(e)     That paragraph 10 cannot be proved by the 1st defendant, this being the object of defending the action.

 

(4)     The learned trial Judge erred in law when he held as follows:

 

‘One would observe that even if one accepts the argument of the counsel with regards of the counsel with regards to section 54 there is no mention in that section of a judgment of a court of law as having no effect on registered land.’

 

when s. 54 relates only to effect of notice of facts and circumstances stated therein whereas in the evidence before the court there was no evidence that the 1st defendant had notice of any Judgment and there was no finding by the court itself that he had such notice.

 

(5)     That the learned trial Judge mis-directed himself when he stated at page 30 of the Records of Proceedings:

 

‘It became clear in this case that Mr. Ojomo was not aware of the previous judgment of the court in suit LD\389\63 nor the caution Notice that was filed by the Plaintiffs and registered by the second Defendant on the 26th day of June, 1965.’

 

when there was evidence that the caution was not in fact registered.

 

(6)     The learned trial Judge erred in law when he stated at page 35 of the Records:

 

‘The effect of the judgment in LD/389/63 Was to remove the names of Haastrup and Adelaja from the Proprietorship Register’

 

when the judgment merely set aside and declare void the transfer of the property by Lagunju to Haastrup and from Haastrup to Adelaja.”

 

Mr. A.A. Ogunsanya, learned counsel for the appellant, chose to argue ground 5 first. He submitted that there was no evidence before the caution was ever registered, the only reference to it being the averment in paragraph 14 of the statement of claim. He, therefore, contended that, since all the evidence pointed to the caution as not having been registered (for which see Exhibit C), the learned trial Judge clearly misdirected himself in basing his decision partly on the ground that the caution was in fact registered.

 

Mr. Ogunsanya, in arguing ground 6, contended that the judgment LD/389/63 merely set aside and declared void the transfer of the property by Lagunju to Haastrup and from Haastrup to Adelaja. We think that learned counsel is in error here, because that judgment shows that the court below did order rectification. Mr. Ogunsanya is, however, on stronger ground when he submitted that the learned trial Judge did not analyse and give due consideration to the provisions of section 54 and is in any case in error in holding that the section does not include judgment of a court among the matters of which a purchaser need not be affected with notice. It is his case that the judgment No. LD/389/63 ordering the rectification of the Register by the striking out of the names of Haastrup, Adelaja and Ajiboye should not have been held by the learned trial Judge against the appellant who is a purchaser for value within the Intendment of section 54 of the Act. He contended that “claim” in section 54 includes “judgment,” because, according to him, a judgment is an adjudication by a court on a claim. As regards section 53, learned counsel for the appellant insisted that while “bona fides” is material under section 53(1), it is not under section 53(2) and that, accordingly, vices such as fraud and forgery might affect the title of a first registered owner, but not that of a transferee from such owner or one deriving title under him. In support of his contention, learned counsel referred to Balogun v. Salami (1963) 1 All N.LR. 129 at p.138; Bashir Labadedi v. Beatrice A. Bejulaiye (S.C.547/65) delivered on June 12,1967. In both cases, he argued, the effects of sections 53. 54 and 10 of the Registration of Titles Act were considered in the sense of his submission. We do not think, however, that these cases are on all fours with the present one.

 

Mr. Ogunsanya’s next major contention under ground 2 is that it is not for the appellant to adduce evidence to prove that he is the registered owner of the land in dispute, since the Land certificate issued to him is prima facie evidence that he is such an owner and that the onus lies on the respondent to disprove 8. Learned counsel further contended that the failure of the Registrar duly to register the caution in accordance with sections 44 and 46 of the Registration of Titles Act, Cap. 181 is fatal to the respondent’s claim, and that R is not enough merely to have the draft caution kept in a file in the Lands Registry; the caution must have been duly entered upon the Register in order for a purchaser for value to be effected with notice of it.

 

Mr. Davis, learned counsel for the respondents, on the other hand, argued that the transactions leading to the purported acquisition by the appellant of his title to the land in dispute being void on the ground of fraud, the appellant had not acquired any valid title. We stopped learned counsel on this submission because the point, although pleaded, was never proved in evidence in the court below and there was no cross-appeal before us on the point. Learned counsel argued next that the appellant had failed to discharge the onus that lay upon him that he was a purchaser for value before he could invoke the provision of section 54 of the Registration of Titles Act. He submitted that the Land Certificate is not by itself proof of title and that the appellant, by failing to give evidence of his averments in paragraphs 6 and 7 of his Statement of Defence, has not established that he is a purchaser for value. We think that there is merit in this argument.

 

Learned counsel for the respondents trial unsuccessfully to urge it upon us that the appellant cannot now argue on the basis of sections 53 and 54 of the Act as these were not specifically pleaded. We do not think that the rules of practice and procedure require that these particular statutory provisions should be pleaded, especially as both sections were argued extensively before the trial court and referred to in the judgment appealed from.

 

Mr. Davis, learned counsel for the respondents, finally submitted that the appellant would have discovered the existence of both the judgment No.LD/389/63 and the draft caution notice had he conducted a proper search in the files in the Lands Registry. We do not consider that there is any legal requirements for a search to be conducted by a purchaser of registered land otherwise than in the register.

 

It seems to us that, in order to invoke section 53 of the Registration of Titles Act successfully, a plaintiff must prove that he is a purchaser for value of the registered land in question. We have said that, although the appellant in this appeal has expressly pleaded that he was a purchaser for value, he did not give any evidence at all at the trial. We are of the view that the mere production of the land certificate (exhibit P) could not be regarded as conclusive that he was a purchaser for value. Indeed, we think that he acquired no title to the land in question for the following reasons:

 

(a)     the land certificate (exhibit P), does not contain a complete record of the chain of titles from Livinia Forsythe as the first registered owner through subsequent transferees until the land came to be registered in the name of Ajiboye from whom he purported to derive his title by purchase. The land certificate merely records that the land was vested in Ajiboye in June 1966 and in the appellant in October 1966;

 

(b)     the record of the Lands Registry (exhibit C) shows clearly that the entries in respect of the three immediate predecessors in title of Ajiboye were stamped as cancelled. If any search had been duly carried out in the Proprietorship Register by the appellant through his solicitor, this fact would have been discovered;

 

(c)     the appellants instrument of transfer of the land to him (exhibit v19) shows clearly that whereas the land had been transferred to him only on August 28, 1967, the date of its receipt in the Lands Registry as shown on the Lands Registry stamp is October 29, 1966; in other words, about nearly a year before the document itself came into existence. This seems to be a clear case that the immediate disposition to the appellant involves as element of fraud or at least high irregularity.

 

This last point leads us to the conclusion that the appellant’s case is caught by section 61(3) (b) of the Registration of Titles Act which reads:

 

‘The Register shall not be rectified except for the purpose of giving effect to an overriding interest so as to affect the title of the proprietor who is in possession –

 

Unless the immediate disposition to him was void, or the disposition to any person through whom he claims otherwise than for valuable consideration was void;”

 

In this context, the expression “immediate disposition to him” must mean the document through which he claims title and, once it is shown that it is void, the appellant has failed to show that he was a purchaser for value within the meaning of section 53 of the Act, or that he was ever in possession of the land in question within the meaning of section 61(3) of the same Act.

 

We consider it of great importance to stress that section 53 of the Registration of Title Act, which has an organic relation to section 61(3), was not designed as an engine of fraud for the validation of spurious transfers of registered land. This court had occasion in Phillips v. Ogundipe (1967) 1 All N.L.R. 258 to observe as follows, at page 266:

 

“It is well to point out at this stage that section 53(2) is a section which is often quoted but equally often misunderstood. Sub-section (1) of section 53 states that registration of any person in the circumstances described therein confers no title to the land on such person and all that sub- section (2) does is to qualify the provisions of subsection (1) in relation to a subsequent registered owner – his estate shall not be invalidated by circumstances described in subsection (1) or he had not given value for the acquisition. The section does not validate spurious transfers.”

 

It cannot be too strongly emphasized that proof of fraud or forgery is fatal to any claim that a plaintiff may seek to establish under section 53, no matter at what stage this is shown to have occurred in the chain of transactions loading to the plaintiff’s dealing in registered land. It is as well to point out that the reference to the “registered owner” in section 53(1) does not necessarily mean the first registered owner; equally, the reference to ‘the subsequent registered owner’ in section 53(2) does not necessarily mean the second registered owner. In both cases the registered owner could be the third and fourth or indeed any other combination of registered owners. This interpretation is borne out by reference to the fact that section 61 (3) of our Registration of Titles Act is a carbon copy of section 82 (3) of the English Land Registration Act, 1925, and that our section 53 is compounded of the provisions of section 114 of the English Land Registration Act, 1925 and of section 82(1) (g) of the same English Act. Section 114 of that Act reads:

 

“Subject to the provisions in this Act contained with respect to indemnity and to registered dispositions for valuable consideration, any disposition of land or of a charge, which if unregistered would be fraudulent and void shall, notwithstanding registration, be fraudulent and void in like manner.”

 

And section 82 (1) (g) provides that the register may be rectified pursuant to an order of the court or by the Registrar in a case –

 

“Where a legal estate has been registered in the name of a person who if the land had not been registered, would not have been the estate owner.”

 

The result of this amalgam is to make section 53 as a whole not only inelegant in its drafting but also liable to misunderstanding unless it’s true import is grasped. It is, accordingly, incorrect to assume that fraud or forgery can under section 53 of the Act vitiate only the title of the first registered owner and not that of a second of subsequent registered owner.

 

We would nevertheless recommend that section 53 of the Registration of Titles Act is in need of recasting against the background both of its statutory origin and of its real intendment as just explained.

 

We think also that the register in this particular appeal ought to be rectified against the appellant, not only under section 53(1) but also under either section 61(1)(h) or section 61(2). Section 61(1)(h) provides that the register may bee rectified –

 

“in any other case where, by reason of any error or omission in the register, or by reason of any entry made under a mistake, it may be deemed just to rectify the register.”

 

Thus, the omission to register the caution if the instant case or the judgment of the court (in Suit No.LD/389/630 ordering rectification of the register ought to be put right by eventual rectification of the register. And this may be done as envisaged under section 61(2) which reads:

 

“the register may be rectified under this section, notwithstanding that the rectification may affect any estates, rights, charges or interests acquired or protected by registration or by any entry on the register or otherwise.”

 

We may observe in passing that the conduct of the entire land registry staff (from the Registrar downwards) in connection with the subject-matter of this appeal leaves very much to be desired, and suggest that there is an urgent need for tightening up discipline among them. The errors of omission and of commission disclosed in this case call for scrutiny and investigation on the part of the Chief Justice of the Lagos State.

 

We think that there should be introduced a system or “official searches” whereby counsel for intending purchasers of registered land can apply to the Registrar of Title for a certificate showing the exact state of the Register at any given moment, so that nothing is overlooked by the staff of the registry before issuing a search certificate. In England where this system has been found that the arrangement ensures that pending matters in the Registry files and elsewhere in proper custody are taken due note of when bringing the register up to date before issuing the search certificate for which a reasonable fee should be charged by the Registrar according to the requirements of each request.

 

In the result, this appeal fails and it is dismissed with costs assessed at 97 Naira in favour of each respondent.

 

Appeal dismissed.

 

 

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