3PLR – M.A. OKUPE & CO. LTD. V LIGALI ALLI SARUMI alias ABDUL RAHEEM LIGALI (NO. 2)

POLICY, PRACTICE AND PUBLISHING, 3PLR, LAW REPORTS

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M.A. OKUPE & CO. LTD.

V

LIGALI ALLI SARUMI alias ABDUL RAHEEM LIGALI (NO. 2)

FEDERAL SUPREME COURT OF NIGERIA

31ST MAY, 1960.

F.S.C. 348/1959

3PLR/1960/64 (SC)

OTHER CITATIONS

BEFORE THEIR LORDSHIPS

MYLES JOHN ABBOTT, AG. C.J.F. (Presided and read the Judgment of the Court)

LIONEL BRETT, F.J.

PERCIVAL CYRIL HUBBARD, AG. F.J.

REPRESENTATION

Mr. O. Moore -for the Appellants.

Mr. A. K. I. Makanju -for the Respondent.

MAIN ISSUES

PRACTICE AND PROCEDURE – COURT – EQUITY: Attitude of courts to fraudulent contracts –  Parties in pari delicto –

REAL ESTATE- MORTGAGE: Validity of mortgage entered into by parties for the purpose of defrauding third parties – attitude of court to enforcing such a mortgage for the benefit of either party to the wrong-doing to the prejudice of the other wrong-doer

MAIN JUDGMENT

ABBOTT, AG. C.J.F. (Delivering the Judgment of the Court):

This is an appeal by the defendants against the judgment of the High Court of Lagos. The plaintiff’s claim in the court below was as follows:

1. A Declaration that the Deed of mortgage dated the 5th day of October, 1953, and registered as No. 11 at page 11 in Volume 972 of the Federal land Registry at Lagos and purporting to be made between the Plaintiff and the Defendants is void and unenforce­able.

2. Perpetual Injunction restraining the defendants their servants/ agents from alienating or attempting to alienate the property comprised in the above-recited Deed of Mortgage.

3. Return of title deed dated the 27th August, 1951, and registered as No. 71 at page 71 in volume 898 of the Register of Deeds in the Federal Land Registry, Lagos.

and the trial Judge, after dismissing the claim for an injunction, gave judg­ment for the plaintiff for items 1 and 3 of the claim, holding that the transac­tion effected by the mortgage was a money-lending transaction and that, as the mortgagees, who are registered money-lenders, had not complied with the provisions of the Money-Lenders Ordinance, the contract for the loan, i.e. the mortgage, was unenforceable.

The defendants appealed to this court and the following three grounds were those argued, and they were argued together:

1. The learned trial Judge was wrong in law when he failed to con­sider the effect of the plaintiff’s evidence as to the purpose of the mortgage in relation to the claim before the court.

2. The learned trial Judge was wrong in law when he failed to draw a distinction between the case of Gbadamosi Baba Egbe v Pati­ence Kasunmu (1956) A.C. 539, and this case.

3. The learned trial Judge was wrong in law when he ordered that the title deed registered as No. 71 at page 71 in Volume 898 of the Register of Deeds be returned to the plaintiff.

While he claimed relief on the ground that the Money-lenders Ordi­nance had not been complied with, it was the plaintiff’s case that the so-cal­led mortgage was merely a blind, and that in fact the loan which the mortgage purported to secure was never made. He himself gave evidence to this effect, which was not contradicted. There seemed, if I may say so, to be some confusion in the mind of counsel for both sides, in this court, as to what the consequences would be in law if this plea were found to have been proved, and after hearing the arguments of counsel for both sides we came to the conclusion that it would be impossible to come to a decision on the ap­peal without a definite finding from the learned Judge of the court below, whether or not any money passed on the creation of the mortgage. The case was therefore remitted to Bennett, J., to make this finding, and the learned Judge, having called the parties before him, ascertained that neither wished to adduce any further evidence, and then found that no money passed on the creation of the mortgage. In consequence I am of the opinion that this was not a money-lending transaction.

Having disposed of that point there remains really very little to be said. It is perfectly clear, and is now frankly admitted by both sides, that the ob­ject of entering into the mortgage was to defraud the creditors of the mortgagor. Such a mortgage is void as against the creditors. But one of two persons who enter into a fraudulent transaction, well knowing what they are doing cannot come to the court and obtain relief from his wrong-doing to the prejudice of his partner in that wrong-doing. Such a proposition seems to me to be apart from anything else, an abuse of the process of the court, and I do not find it possible to assent to it for a moment. Support for this view is to be found in the judgment of Jessel M. R. in Sykes v. Beadon 1879 L. R. 11 Ch. D.170.

In these circumstances it follows that this appeal must be allowed and the judgment of the court below set aside, with the order for costs, and also the further order made on the 18th March , 1958, for the return to the re­spondent of the title deed. If that last mentioned order has already been complied with the respondent must return the title deed to the appellants. The appellants are entitled to their costs in the court below, which I would assess at 50 guineas, and to their costs of this appeal, which I would assess at 30 guineas.

BRETT, F.J.:

I concur.

HUBBARD, AG. F.J.:

I concur.

Appeal Allowed.