3PLR – L.A. AYANLERE V. FEDERAL MORTGAGE BANK OF NIG. LTD
POLICY, PRACTICE AND PUBLISHING, LAW REPORTS – 3PLR
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L.A. AYANLERE
V.
FEDERAL MORTGAGE BANK OF NIG. LTD
COURT OF APPEAL
(KADUNA DIVISION)
CA/K/186/96
MONDAY, 21ST SEPTEMBER, 1998
3PLR/1998/65 (CA)
OTHER CITATIONS
11 NWLR PART PG 21
BEFORE THEIR LORDSHIPS:
UMARU ABDULLAHI;
JAMES OGENY1 OGEBE;
IBRAH1M TANKO MUHAMMAD
BETWEEN
- A. AYANLERE
AND
FEDERAL MORTGAGE BANK OF NIG. LTD.
ALHAR LAWAL
REPRESENTATION
MAIN ISSUES
BANKING AND FINANCE – Interest rate – Change in rate by banker- Duty of banker to bring same to the attention of customer – Where customer not so notified – Whether new rate recoverable.
DEBTOR AND CREDITOR – MORTGAGE – Mortgagee’s exercise of power of sale – When exercisable – When not exercisable When can be restrained by any dispute in amount due.
PRACTICE AND PROCEDURE – Pleadings – Bindingness of – Treatment of matters not raised in pleadings – Order 25, rule 6(1) Kwara State High Court (Civil Procedure) Rules.
Issues:
Whether the trial court was right in declaring the two mortgage documents valid when both parties pleaded the mortgage deed and when the appellant did not raise the issue of voiding the document in his pleading.
- Whether the trial court was right in applying to the case the principle that “the mortgagee will not be restrained from exercising his power of sale because the amount due is in dispute.”
- Whether the trial court was right in holding that changes in the interest rates contained in Exhibits 2 to 4 are invalid.
- Whether the decision of the trial court on the principles of waiver, applied against the case of the appellant/cross-respondent.
Facts:
The appellant filed an action against the 1st and 2nd respondents at the Kwara State High Court, llorin, seeking “an order (i) prohibiting the defendants both jointly and/or severally, their servants and/or agents and/or privies from alienating the plaintiff’s mortgaged property at Olorunsogo Estate opposite llorin Grammar School, llorin, covered by certificate of occupancy No. KW3833 of 7112/81 and (ii) a declaration that the 1st defendant can only lawfully charge a maximum of 8112 (or) eight and half per cent interest as per deed of mortgage dated 31/3182 between the parties”.
The appellant had mortgaged, under a deed of legal mortgage, his Transit Guest Inn, llorin, to the 1st respondent in order to secure a loan granted him by the 1st respondent. Terms of the loan contract were clearly stated in the deed of legal mortgage. However, it was alleged by the appellant that the 1st respondent unilaterally altered the rates of interest several times without the minimum three months advance notice to the appellant, as agreed. This resulted in an increase in the appellant’s indebtedness to the 1st respondent, five times more than the actual debt.
The appellant did not pay back the loan and the 1st respondent authorised the 2nd respondent to sell the mortgaged property; hence the appellant rushed to the court to stop the respondents from earring out the sale.
Pleadings were filed and exchanged. The case proceeded to trial. At the end of the trial the trial court found on the first relief sought that there was no sufficient reason to grant an order prohibiting the sale of the appellant’s property.
On the second relief the trial court found that the 1st respondent did not charge the interest rate in accordance with the provisions of the deed of mortgage and there was no waiver or acquiescence. The appellant was therefore granted the second relief sought.
Dissatisfied with the judgement, both the appellant and the 1st respondents appealed and cross-appealed respectively to the Court of Appeal.
MAIN JUDGEMENT
Held (Unanimously dismissing the appeal and the cross-appeal):
- Parties are bound by the terms of the agreement they have voluntarily entered into. The only function of the court is to interprete the agreement in enforceable terms without more.
[Kurubo v. Zach-Motison (Nig.) Ltd (1992) 5 NWLR (Pt. 239) 102; National Salt Co. (Nig.) Ltd v. Innis -Palnier (1992) 1 NWLR (Pt. 218) 422; Union Batik ofNigeria Ltd. v. Ozigi (1994) 3 NWLR (Pt. 333) 385; Shettiniari v. Nwokoye (1991) 9 NWLR (Pt. 213) 60 referred to].
- Any change in the rate of interest should be brought to the attention of the customer by the banker as a condition for the banker to change the agreed rate of interest. [Okolo v. U.B.N.Ltd (1998) 2 NWLR (Pt. 539) 618 referred to]
- A mortgagee, unless where a contrary intention is shown, has a power of sale provided:
(a) the mortgage was made by deed; and
(b) the mortgage money is due, that is the legal date for redemption has passed.
Where the money is payable by installments, the power of sale arises as soon as any installment is in arrears.
- A dispute as to volume of indebtedness is not a valid ground known to law such as can be relied upon to prohibit a mortgagee from exercising his right of sale. In other words, the mortgagee will not be restrained from exercising his power of sale because the amount due is in dispute. He will be restrained, however, if the mortgagor pays the amount claimed into court, that is the amount which the mortgagee swears to be due to him, unless on the terms of the mortgage the claim is exclusive.
[Sabbagh v. Batik of West Africa (1962) 2 All NLR 225 referred to]
- A party is bound by his pleading at the trial and cannot make a case different from this pleadings. This is because the object of pleading is to appraise the opposing party of the case the pleader is making so as to avoid any surprise at the hearing and to ascertain the issue or issues in controversy between the parties with a view to enabling each party settle before hand, the evidence it shall adduce at the hearing. Similarly, a court only gives to a party what he claims by way of pleading. In this case the trial court was right in not declaring Exhibits 1 and D1 null and void as this fact was not pleaded by the appellant.
[Olaopa v. O.A.U. Ile-Ife (1997) 7 NWLR (Pt. 512) 204 at page 225;Aderenii v. Adedire (1966) NMLR 398; A. C. 8. Ltd v. A. G. Northern Nigeria (1967) NMLR 231; Albion Const. Co. Ltd v. Rao Invest. AND Pro. Ltd (1992) 1 NWLR (Pt. 219) 583; Bakare v. L.S.C.C. (1992)8NWLR(Pt.262)641;Balogun v. Oshunkoya (1992) 3 NWLR (Pt. 232) 827 referred to]
- Acquiescence imports tacit consent. It is the giving of an implied consent to a transaction, to the accrual of a right, or to any act, by one’s mere silence or without express assent or acknowledgment. Waiver, on the other hand, is the intentional or voluntary relinquishment of a known right, or such conduct as warrants an inference of the relinquishment of such right or when one dispenses with the performance of something one is entitled to exact or when one in possession of any right, whether conferred by law or by contract, with full knowledge of the material facts does or forebears to do something, the doing of which or the failure or forbearance to do which is in consistent with the right or his intention to rely upon it. The party against whom the doctrine of waiver is raised must:
(a) be aware of the act or omission; and
(b) do some equivocal act adopting or recognising the act or omission.
In this case, the trial court was right in holding that the mere refusal or failure of the appellant to protest the alteration in the rate of interest when he received his statement of account could not amount to a waiver of his right to challenge same by action
[Ariori v. Elemo (1983) 1 SCNI,It 1 at 27; Adio v. A. G, 0yo State (1990) 7 NWLR (Pt. 163) 448; Odu’a Investment Co. Ltd v. Talabi (1991) 1 NWLR (Pt. 170) 761 referred to].
