In The Supreme Court of Nigeria
On Friday, the 7th day of April 2006
S.C. 278/2001
Before Their Lordships
|
Idris Legbo Kutigi |
...... |
Justice, Supreme Court |
|
Aloysius Iyorgyer Katsina-Alu |
...... |
Justice, Supreme Court |
|
Ignatius Chukwudi Pats-Acholonu |
...... |
Justice, Supreme Court |
|
George Adesola Oguntade |
...... |
Justice, Supreme Court |
|
Aloma Mariam Mukhtar |
...... |
Justice, Supreme Court |
Between
|
Prince Morrisson Olori Prince A Oharisi |
....... |
Appellants |
And
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Union Bank Of Nigeria Plc |
....... |
Respondents |
Judgement of the Court
Delivered by
Idris Legbo Kutigi. J.S.C.
The facts will be stated briefly. Judgment was entered in favour of the Plaintiff against the Defendants in the sum of N7, 949,273.00 and N84, 710.00 with interest by the Benin High Court. The Defendants without delay filed a Notice of Appeal simultaneously with a motion for stay of execution. The Plaintiff was never served. Meanwhile the Plaintiff levied execution by selling some of the Defendants' mortgaged properties. On becoming aware of the development, the Defendants applied to the High Court to set aside the execution. The application was granted and the execution was set aside. Dissatisfied with the Ruling setting aside the execution, the Plaintiff appealed to the Court of Appeal which allowed the appeal and dismissed Defendants' application to set aside the execution. The Defendants have now appealed to this Court against the decision of the Court of Appeal.
The Defendants/Appellants on page 2, paragraph 1.4 of their brief of argument in support of their appeal have stated as follows -
"This present appeal is against the decision of the Court of Appeal. It is worthy of note that the Court of Appeal has subsequently allowed the appeal against the judgment of the trial Court in the substantive suit."
(Emphasis mine)
It is clear to me therefore that this appeal is now lifeless, spent, academic, speculative and hypothetical, being an interlocutory appeal only, while the substantive suit or appeal itself has been disposed of and or completed (See for example Olale v. Ekwelendu (1989) 4 N.W.L.R. (PT. 115) 326, Union Bank of Nigeria v. Alhaja Bisi Qdionser (1985) 2 N.W.L.R. (PT. 74) 193. It must be emphasized here now that this Court does not issue opinions about potential cases. The Court hears appeals or cases that present actual threat to individual rights. A case must present a current problem that has yet to be resolved. It must be stressed also that a party bringing a case must have a vested interest in the issues raised and in its outcome. This appeal has failed all the tests. The Defendants/Appellants and or their Counsel should have taken steps to withdraw this appeal before now. They failed to do so. I am of the firm view that this appeal must fail on this ground as this Court is without jurisdiction. There is therefore no need for me to consider the issues raised in the appeal. It must in the circumstances therefore be struck-out, and I so order.
The appeal is struck-out. The Plaintiff/Respondent is entitled to his cost which is assessed at N10, 000.00 against the Defendants/Appellants.
Judgment delivered by
Aloysius Iyorgyer Katsina-Alu.J.S.C.
On 4 February 1994, judgment was entered in favour of the Plaintiff against the Defendants in the sum of N7, 9949.273.00 and N84, 710.00 with interest by the Benin High Court. Dissatisfied, the Defendants on 4 February 1994 filed a Notice of Appeal simultaneously with a motion for stay of execution. The Defendants paid for service. The Plaintiff was however not served.
In the meantime the Plaintiff levied execution by selling some of the Defendants' mortgaged property. Upon becoming aware of this development, the Defendants applied to the High Court to set aside the execution. The High Court granted the application and the execution was set aside. The Plaintiffs appeal to the Court of Appeal was allowed and the Defendants' application to set aside the execution was dismissed. Subsequently, the Court of Appeal allowed the appeal against the judgment of the trial court in the substantive suit.
The Court of Appeal, as can be seen, has created two situations here which run parallel. The first decision of that court relates to the motion to set aside the sale of the mortgaged property by the Plaintiff. The Court of Appeal dismissed the motion to set aside the sale brought by the Defendants. The effect of this is that the Plaintiff was right to sell the Defendants' property in question.
The second decision by the Court of Appeal relates to the substantive suit. The judgment of the trial High Court in the substantive action concludes as follows:
"Judgment is entered for the plaintiff in the sum of N7,947,273 as being the balance outstanding on the current account and loan account of the 1st defendant company as at 23rd August 1988 and which were guaranteed by 2nd defendant and 3rd defendant. Interest will be payable on these amounts at the rate of 21% per annum from 28th August 1988 until today's date and at the rate of 5% thereafter until the judgment debt is fully liquidated.
Subject to any necessary consent being obtained the Plaintiff is at liberty to sell the properties mortgaged by the defendants as securities for the various facilities granted by the plaintiff."
The defendants appeal to the Court of Appeal, as I have already indicated, wasallowed. This means that the Plaintiff was not at liberty and had no right to sell theMortgaged properties.
The trial High Court wittingly or unwittingly put the mortgaged property in dispute. Now in my view the judgment of the Court of Appeal allowing the defendants' appeal in the substantive action has not laid to rest the sale of the property in question by the Plaintiff. It must be borne in mind that the properties were sold after the judgment of the trial court in the substantive action. In other words it was not a subject for determination in the substantive suit. So that the appeal did not dispose of the issue of the sale of the mortgaged property during the pendency of that appeal.
The next point is whether the issue of the sale of the property is hypothetical or academic. I think not. The issue of the sale of the property is a live issue. It was the subject matter of a different action brought by way of a motion to set aside the sale.
The question I have to resolve now is whether the Court of Appeal was right when it dismissed the application to set aside the sale of the Defendants' property during the pendency of the appeal against the decision of the lower court and a motion for stay of execution of the said judgment.
So what is the doctrine of lis pendens and how does it operate. 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. In its application, the doctrine is not founded on the equitable doctrine of notice-actual or constructive. It is based on the principle 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 in dispute so as to prejudice any of the litigating parties. See Ogundaini v. Araba & Anor (1978) 6-7 SC 42. This is good law. For it would be plainly impossible that any action or suit could be brought to a successful termination if alienations pendente lite were allowed to prevail.
One more point. It has been said that the Plaintiff resorted to its power of sale under the mortgage and sold two of the Defendants' properties without going back to court. My short answer to that is simple. When the Plaintiff elected to go to court, it waived its power of sale under the mortgage.
In the circumstances I would allow this appeal and set aside the judgment of the Court of Appeal and restore the ruling of the trial court on 31 March 1995. I award costs of N10, 000.00 to the Defendants/Appellants.
Judgment delivered by
Ignatius Chukwudi Pats-Acholonu. J.S.C.
The appeal in this case revolves around an issue of law. But it is desirable and I dare say essential to give the synopsis of the facts giving rise to the appeal. The Plaintiff who is now the Respondent in this appeal obtained judgment of the High Court in the sum of N7,947,373.00 and another N84,710.00 odd being a further outstanding balance in the current account at the interest of 21% from 28th August, 1988 till the date of that Judgment, and further 5% until the whole sum was liquidated. It is the case of the Appellants that on the same date of the judgment the defendants now the Appellants filed a notice of appeal and followed it up with filing a motion for say of execution. I must have to say here that the case arose from the alleged inability of the Appellants to redeem his mortgaged property under the deed of a legal mortgage.
The story of the Appellants was that after judgment was delivered which necessitated the Appellants taking further steps such as filing an appeal and a stay of execution to have the judgment of the High Court reversed by the Court of Appeal, the Respondent went ahead and sold the mortgaged property. The case of the Respondent is that after the judgment of the High Court, without it in the least knowing that the Appellants had filed some processes in the Court to have the judgment of the High Court set aside it had as judgment creditor executed the judgment of the High Court on the 15th of April, 1994.
Let me here digress a little and dwell tritely on some missing links. No date as it turned out was fixed for hearing of the motion for stay by the trial Judge before her retirement. Meanwhile of course execution had been levied. I have to state that by my calculation; from the date of the judgment to the actual date of sale was exactly 70 days. The Appellant applied to the High Court now presided over by another Judge to set aside the sale. The High court agreed and set aside the sale holding that the motion for stay of execution hitherto filed in the High Court has on the decision of Vaswani Trading Company v. Savalakh and Company (1972) 12 SC at P. 77 acted as a temporary restraining order.
As a matter of fact that property was sold by auction, the Respondent not relying squarely on the judgment of the Court by which the Appellants became judgment debtors. The High Court had held inter alia, that though the Respondent was not served with the processes, the Court was of the opinion that since the processes were filed early enough, the Respondents should be deemed and/or presumed to know about such filings, and, further holding that the Respondent acted recklessly and in utter bad faith.
On appeal to the Court of Appeal by the Respondent, that Court reversing the judgment of the High Court held:
(a) that the sale was made under the mortgage deed not under the judgment of the court.
(b) that it was wrong for the High Court to have imputed knowledge of the new processes filed in the Court without the benefit of the Respondent knowing about it and
(c) it blamed the Appellants for lack of diligence and thereupon allowedthe Appeal.
The Appellant having appealed to this Court stated that the bottom line of this case is "whether the sale was in exercise of the power of sale under the deed of mortgage or not the fact remains that the mortgage property is the subject of the suit pending in the Court of appeal".
In other words the scenario that presented itself before the Court was a case of lis alibi pendens. What lis pendens?. In vol. 54 page 570 of Corpus Juris Secundum which is the American Re-statement of the Law, the learned authors relying on numerous cases define the scope of this doctrine of Lis Pendensas follows:-
It denotes those principles and rules of law which define and limit the operation of the common law maxim, to the effect that nothing relating to the subject matter of a suit can be changed while it is pending; and, subject to certain limitations and qualifications considered infra one who, with actual or constructive notice of the pending action, acquires from a party thereto an interest in the property involved in a litigation in a court having jurisdiction of the subject matter and of the person of the one from whom the interest is acquired, takes subject to the rights of the parties to the litigation as finally determined by the judgment or decree."
See People ex rel O' Connor v. City of Chicago 20 NE. 2d 306, Massachusetts Bonding and Insurance Co. v. Knox 18 SE 2d 436, Mitchell v. Federal Land Bank of St. Louis 174 S.W. 2d 671 at 675. First Bank of Eureka Spring v. Cook go S.W. 2d 510.
There have been opinions to the effect that regardless of either implied notice or constructive notice since the doctrine is based empirically on public policy, that if a person acquires a property still a subject matter of court proceedings, he acquires only subject to the right of whoever becomes the victorious party. In considering the extent of the application of lis alibi pendens, the courts must be careful not to overly extend its application too wide as it could lead to all manner of problems and perhaps injustice for there must be an end to litigation. It will in my view not be quite in accord with prudence and even in the interest of public policy that an action cannot be regarded as having come to an end after the delivery of a judgment and when a party executing the judgment of the Court by way of sale commences such a sale more than 2 months after the determination of the action completely ignorant of any processes filed and yet be caught by the operation of this doctrine.
I believe that it accords with good sense that the losing party who after filing an appeal and also an application for stay of execution immediately the judgment was given should hasten to notify or inform in one way or the other the victorious party of his intention to pursue the case further. The doctrine of Lis alibi pendens should be understood to be a philosophical tenet which takes into consideration the realities of human society and the nature of the mobility of a vibrant society. Its application must reflect the times. For one to file a process in the court and abandons it for some months with same not being brought to the knowledge of the other party, in my opinion, should not in all fairness be allowed to invoke the doctrine of lis pendens. The common law or as we may say (jus commune) had its foundation on reasonableness of certain empirical elements. In its historic and organic form it avoids and detests abstractions or concepts that remove it from what it has become after the adventure of the Saxons in England by which time what we now regard as "Corpus juris angliae" manifested itself in a form that recommends itself in simple and readily understandable rules. From historical perspective the origin of the common law seemed to be traceable to first the culture of Germanic tribesmen who by their Saxon's conquest of England revamped that country's culture. They borrowed nothing from the Roman law or from any nation. They knew nothing of Greek or of Rome except that the Pope who was the head of the Church was said to live there. This situation was further embellished and I would add refined after the Norman Conquest in 1086 by William the Conqueror. By fashioning for themselves domestically grown or brewed laws they equally evolved certain principles and doctrines as times went by to help build a body of laws based on common sense, custom and reality of the day. Such doctrine as lis alibi pendens is one of such principles to deal with legal problems arising. Therefore the doctrines and principles which were developed to help us understand the nature of law and its applicability in relation to finding remedies should necessarily follow the development of the society as no society is static and doctrines relied on to remedy a wrong while seemingly immutable ought to be applied flexibly to reflect the growth and necessary bent of the society.
The expression lis pendens variously interpreted in different forms means a pending action or suit or a controversy in court particularly in relation to the subject matter of a property. There is implicit in the doctrine of lis pendens that a buyer who purchases a property still subject of a determination of the Court has bought for himself a big trouble as the outcome can be against the vendor.
It is really difficult for me to understand and effectively and duly appreciate an argument to the effect that if a process is filed in respect of an action, or to be more appropriate and factual, if such processes as filed after a judgment such as a stay of an execution on a matter subject of an appeal and for a period of 70 days such notices of stay and appeal were not brought to the notice of the judgment creditor, that he should be imputed to have known that such processes had been filed. It is in my respectful view an awkward thinking that fits only in the realm metaphysics. I would have thought that the party, who stands to lose if matters are not diligently handled, should have striven to ensure that all processes duly filed are served on the other party. Indeed it cannot be otherwise stated that in a matter of this nature, prudence dictates that the party to be effected adversely if nothing is done should have endeavoured to cause service to be made by going to the registry to alert them. It is no point waving the decision of this court in Vaswani Trading Co. v. Savalakh Supra as though it is a magic wand which possesses great powers and can solve all problems when the facts are not the same. Consider the following for example. In Vaswani Trading Co. v. SavalakhSupra the Supreme Court took time to state the following
"We are satisfied that in this case the respondents were aware that a motion was pending before this Court for a stay of execution".
(The italics is mine)
The unmentioned conclusion is that if the Respondents in that case had not known of the motion, the situation would have been different.
It is to my mind a twisted and oblique thinking to draw a conclusion that if a process is filed which is not to the notice of the other party for whom it is intended and he goes about his business totally ignorant of what might have taken place then he should be punished for it.
I cannot but help endorsing without any unequivocation and agreeing with the view expressed by Uwaifo JCA(as he then was) when he said in the case of Pavex Int. Co. Ltd v. I.B.W.A. (1994) 5 N.W.L.R. ( Pt. 347) 685 at 696.
"I think in matter like this where it is sought to show that execution of judgment took place while an application for stay of execution had already been brought, the argument must be that in spite of that application, the execution creditor went ahead with the execution.
In my respectful view the argument cannot be tenable without clear evidence that the execution creditor was aware as a fact of the pendency of that application in order to give the desired effect to the admonition in Vaswani Trading Co. v. Savalakh (1972) 1 All N.L.R. (Pt. 2) 483 at 490 where the Supreme Court said inter alia:
" We are satisfied that in this case the Respondents were aware that a motion was pending before this Court for a stay of execution duly filed in accordance with law at a time when the Respondents might not proceed to execution"
With due respect, I cannot find myself agreeing or endorsing the rather common place and seemingly pedestrian argument of the Appellants on this point. Generally the Court is disposed to assist a person who is awake and not the indolent.
On another level, there was indeed a deed of mortgage on which the Respondent based its sale. In other words it exercised another option open to it to secure the financial benefit due to it. Shall we blame the Respondent when it resorted to exercising the option of sale through the covenant or stipulation in the deed.
To sum up there is no way I can reverse the judgment of the Court of Appeal from the facts and the applicable law available. In the circumstances I agree with the lead judgment of my learned and noble Lord Kutigi JSC, of which I have had the benefit of having read in draft. I allow the appeal and abide by the orders in the lead judgment.
Judgement delivered by
George Adesola Oguntade.J.S.C.
This appeal brings to the fore the ambit of the doctrine of lis pendens. The respondent, as the plaintiff at the Benin High Court, had sued the appellant, as the defendant claiming the sum of Eight million, thirty-one thousand, nine hundred and eighty three Naira (N18,031,988.00) being the balance due on overdraft and loan facilities (including interest) granted by the plaintiff to the defendant. It is important to add that the plaintiff had also sought an order of court empowering the plaintiff to sell the properties mortgaged to it by the defendant to secure the loan facilities.
On 4-2-94, Aiwerioghene J. gave judgment in favour of the plaintiff. The judgment was concluded in these words:
"Judgment is entered for the plaintiff in the sum of N7,947,273.00 and N84,710.00, being the balance outstanding on the current account and loan account of the 1st defendant company as at 23rd August, 1988 and which were guaranteed by the 2nd defendant and 3rd defendant. Interest will be payable on these amounts at the rate of 21% per annum from 28th August 1988 until today's date and at the rate of 5% thereafter until the judgment debt is fully liquidated.
Subject to any necessary consent being obtained, the plaintiff is at liberty to sell the properties mortgaged by the defendants as securities for the various facilities granted by the plaintiff.
[Underlining mine]
The counter-claimed is dismissed"
On 31-5-94, the 1st and 2nd defendants by their counsel filed an application praying
"(a) An order setting aside the execution by way of a purported sale of the judgment (sic) of this Honourable Court dated the 4th of February, 1994.
(b) And for such further or other orders as thisHonourable Court may deem fit to make in the circumstances."
In the affidavit in support of the application it was deposed thus:
"2. Judgment was given in this case on the 4th day of February, 1994. That same day the 1st and 2nd Defendants filed a notice of appeal against the judgment and a motion for stay of execution of the said judgment, both of which are in the court's file. The 1st and 2nd defendants also paid for service.
3. By their counter affidavit dated the 17th day of May, 1994 and filed in respect of the application for injunction dated 18/4/94 the plaintiff avers that in execution of the judgment dated the 4/2/94 they have sold 2 of the mortgaged properties. The sale was purportedly made duringthe pendency of the application for stay of execution and was aimed at foisting a fait a compli on the court. The Governor's consent was neither sought nor obtained before the purported sale."
The plaintiff, in reaction to the affidavit of the 1st and 2nd defendants deposed to a counter-affidavit. Paragraphs 3 to 8 of the said counter-affidavit read thus:
"3. That the Plaintiff/Respondent Bank sued the Defendant/Applicants in 1988 and judgment was delivered in favour of the Plaintiff/Respondent on 4/2/94.
4. That as soon as the Plaintiff/Respondent obtainedjudgment on 4/2/94 it wrote letters dated 7th February 1994 applying for consent to sell the mortgage properties of Messrs Olori Motors and Company Ltd., and delivered same to the Ministry of Lands on 7/2/94.
5. The Plaintiff/Respondent also paid the prescribed fees to the Ministry of Lands and obtained official receipts from the Ministry. The Plaintiff/ Respondents' letters with receipts dated 7th February 1994 issued by the Ministry of Lands now shown to me are attached and marked as Exhibit A - A3 and B - B3 respectively.
6. That thereafter the Plaintiff/Respondent proceeded to authorise its auctioneers to advertise the sale of the properties enumerated in the applications and the receipts.
7. That the Plaintiff/Respondent has explained the true position of things in its counter-affidavit dated 17/5/94 and filed in respect of the application for injunction dated 18/4/94 before this Honourable Court on 17/5/94.
8. That the Notice of Appeal against the judgment and motion for stay of execution of the said judgment both of which are in the court' file, were not served on the Plaintiff/Respondent nor its counsel till 17/5/94 in this Honourable Court long after the sale of the 2 mortgaged properties."
[Underlining mine]
It is manifest from the extracts of the affidavit and counter-affidavit reproduced above that -
(1) The plaintiff had filed a notice of appeal on 4-2-94, the same date the judgment was given.
(2) The plaintiff had also filed on the same date a motion for stay of execution of the terms of the judgment given on 4-2-94.
(3) The defendant had not been served the Notice of Appeal and the Motion for stay of execution until 17-5-94 although the two processes were by common agreement in the court file.
The application to set aside the execution levied by the plaintiff was heard by Idahosa. J., who on 31-03-95 delivered his ruling thereupon. The learned Judge in his ruling said at pages 32-33 -
"In the instant case, judgment was delivered on 4th February, 1994. On the same day, the 1st Defendant /Applicant filed a Notice of Appeal and also filed a Motion for Stay of Execution. The 2nd Defendant/ Applicant did not file any Motion for stay of execution.
From the judgment, I have seen that the Court gave the Plaintiff authority, subject to any necessary consent being obtained 'to sell the properties mortgaged by the Defendants as securities for the various facilities granted by the Plaintiff.
It is, perhaps, for this reason that Plaintiff did not bother to file an application for a writ of fife. This is where in my view the action of the plaintiff overtook the application filed by 1st defendant for a stay of execution, and it explains why the sale was not stopped by the Court Registrars when a Motion for stay had been filed as Plaintiff used the services of an auctioneer.
In spite of this particular situation, I am of the firm view, that the Plaintiff having taken upon itself the responsibility of conducting the sale by its agent, ought to have kept in close touch with the Court Registrar for any information as to any development by way of an appeal or an application for a stay of execution. In this case, the Plaintiff will be deemed to have known about the Motion as it was timeously filed through the Deputy Sheriff of the Court who is deemed to have known about it, and he is taken as the agent of the Plaintiff for execution purposes. See Order 2 Rule 29 of the Judgment Enforcement Rules and page 85 of the Report in the case of Vaswani v Savalkh (supra)
It is also my view that Plaintiff acted recklessly by not making inquiries from the court before carrying out the sale as it had taken the sale (which would ordinarily have been conducted by a Court Bailiff) from the Court. It was therefore its duty to ensure that there was no procedural hindrance to any sale. This is why I decline to agree with learned counsel for Plaintiff that the sale was made in good faith.
In the case of Vaswani v. Savalakh (supra) and the case of Sanni v. Otesanya cited at page 80 of the Report of Vaswanis case, the Supreme Court set aside a writ of possession already executed and returned the parties to the original status quo, pending the determination of the Motion for Stay of Execution. The situation in this instant application is similar to that in Vaswanis case.
The sale which had been carried out by the Plaintiff and its agents cannot be allowed to stand, in view of the fact that was made while a Motion for Stay of Execution regularly filed had not been resolved. In the words of G.B.A. Coker, JSC.-
'More important, however, is the duty of this Court, as indeed that of other Courts, to ensure that its orders are not nugatory'.
See page 85 of the case of Vaswani's report.
In view of all that I have said, I will make the following order i.e. the sale carried out by the Plaintiff or its agents on the 15th day of April, 1994 is hereby set aside pending the hearing and determination of the Motion for a stay of execution by the 1st Defendant on 4/2/94. Plaintiff shall pay N25.00 to 1st Defendant as costs."
[Underlining mine]
The plaintiff was dissatisfied with the ruling of Idahosa J. It brought an appeal against it before the Court of Appeal, Benin Division (i.e. the court below). The court below on 23-4-98, in a unanimous judgment allowed the appeal and set aside the ruling of the High Court. The court below anchored its reasoning on the fact that the plaintiff had not been served the Notice of Appeal and the motion for stay of executio