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MR. POPOOLA ADEBAYO v. WEMA BANK PLC. & ORS

(2017) LPELR-42426(CA)

In The Court of Appeal of Nigeria

On Monday, the 15th day of May, 2017

CA/IB/266/2010


Before Their Lordships

MODUPE FASANMI Justice of The Court of Appeal of Nigeria

HARUNA SIMON TSAMMANI Justice of The Court of Appeal of Nigeria

NONYEREM OKORONKWO Justice of The Court of Appeal of Nigeria


Between

MR. POPOOLA ADEBAYO - Appellant(s)

AND

1. WEMA BANK PLC.
2. ALHAJI HAMSAT SANUSI
3. MR. AKEEM O. RAMONI - Respondent(s)


Summary

INTRODUCTION:
This appeal borders on the validity of an Auction Sale in a Mortgage transaction. 
FACTS:
The appeal in this case arose from the judgment of the Oyo Stae High Court delivered 31st July, 2009 Coram M.O. Bolaji Yusuff (now JCA) wherein the appellants suit to set aside the sale of his (appellant house) by auction by the 1st respondent bank was dismissed.

The appellant Popoola Adebayo was a customer of the 1st respondent bank and in the course of their banking relations procured an overdraft facility of N15,000.00 sometime in 1981 and secured the loan by executing a deed of Legal Mortgage in respect of his property situate at Arowopoko near Ibadan Grammar School Odo-Oba Ibadan registered as No. 30 at page 30 in Volume 2161 of the land registry at Ibadan. The mortgage charge over the property was registered as NO. 35 at page 35 in Volume 2486. As the appellant alleged, he paid off the initial overdraft in 1982 and sought for another facility of N40,000.00 but the bank only granted him another N15,000.00 in 1982 to expire in 1983. Unfortunately, in the same year, there was a fire incident in his shop which gutted all his merchandise which incident he communicated to the 1st respondent Bank. The debt on the facility rose and by June 18th, 1992 stood N47,335.12k. In consequence, the bank brought a suit against the appellant in Suit No. 1/445/92 National Bank of Nigeria Limited vs. Popoola Adebayo which was later struck out in 1996. Appellant aver that the respondent bank became financially distressed and was put under the watch of the Nigeria Deposit Insurance Corporation and affected all communication with the respondent bank and that it became difficult to ascertain the exact indebtedness of the appellant.

On 22nd September, 2000 while appellant was at his place of business at Agodi Gate Ibadan, information from a neighbour PW1 got to appellant that the 2nd respondent auctioneer in company of officials of the bank 1st respondent, pasted an auction notice dated 22nd September, 2000 on the Mortgaged Property and purported to carry out the sale on the same date 22/9/2000. Appellant aver that no newspaper advertisement was made concerning the sale. Appellant insist that there was never any previous auction notice pasted on his house prior to 22nd September, 2000 when the purported sale was effected. For the 1st respondent bank, it was admitted that appellant was its customer and that the appellant had an overdraft facility which was secured by a legal mortgage over appellant%u2019s property earlier described. It was not its business if fire gutted the business of the appellant as the appellant ought to have insurers. The appellant was indebted to it and the debt rose to N47,335.12 as at 18th June, 1992 the appellant had by a hand written note promised to liquidate the indebtedness but never did.

The 3rd respondent in his defence claims to be a bonafide purchaser of the property and that the 2nd respondent auctioneer duly conducted the sale being an agent of the 1st respondent and that consequent upon the sale he (3rd respondent has perfected the deed of assignment and registered same as NO. 50, at page 50, in Volume 3353 of the Lands Registry Office at Ibadan.

At the hearing, the learned trial judge heard the evidence of PW1 and PW2 who testified that they saw the auctioneer and agents of the bank at the premises who were contemporaneously pasting the auction notice while conducting the sale, Evidence was also given by the appellant himself as PW3. The trial judge also heard the evidence of the DW1 for the 1st respondent who stated that he visited the premises three days earlier and saw the auction 
notice pasted. DW2, the auctioneer testified that he published notices in the Newspaper and also affixed printed notices on the property three days to the date of the auction. 3rd respondent testified also indicating that he won the bid and documents were issued to him.

The trial Court in a vexed judgment dismissed the Appellant's suit hence this appeal.



ISSUES:
Appellant formulated the following issues:
i. Whether the 3rd Respondent is a bonafide purchase of the property of the Appellant without notice of non compliance (relating to ground 1 of the grounds of appeal).
ii. Whether from the  circumstances of this case, the appellant had not shown that the 1st respondent acted in bad faith in the sale of the property of the appellant (relating to ground 2 of the grounds of appeal).


Respondent formulated the following issues:
1. Whether the 3rd Respondent is a bona fide purchaser of the property of the Appellant without notice of non-compliance (formulated from ground 1 of the grounds of appeal)
2. Whether from the circumstance of the case, the Appellant has shown that the 1st Respondent acted in bad faith in the sale of the property of the Appellant.

DECISION/HELD:
The appeal was found meritorious and was allowed. The judgment of the lower Court was set aside.


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