Background
By a Further Amended Statement of Claim, Lizzy Amaghizemwen ("the Plaintiff"), an international businesswoman, sued Segun Aghahowa ("the Defendant"), the eldest son and personal representative of late Mr. Williams Enogieru Aghahowa, for possession of a mortgaged property at No. 5A, 2nd Ire Street, Off Wire Road, Benin City, or alternatively the sum of ₦25,000,000 as the value of the property.
In January 1991, the deceased approached the Plaintiff for an interest-free loan of ₦30,000 to execute a contract. He deposited title documents to the property as security. Thereafter he requested an additional ₦15,000, bringing the total loan to ₦45,000 repayable by 15 February 1991. On 14 February 1991, a Deed of Mortgage was executed. After default, an affidavit dated 4 April 1991 provided that failure to pay by 20 June 1991 would forfeit the property. The deceased died in 2000; the Defendant took possession and refused further repayment beyond ₦15,000 part-payment.
Issues
- Whether an equitable mortgage existed, and if so its terms and validity.
- Whether the amount borrowed was ₦45,000 or only ₦15,000 with the balance claimed as interest.
- Whether Exhibits C4 (Deed of Mortgage) and C5 (Affidavit) were procured under duress or fraud.
- Whether the Defendant retained an equity of redemption after default.
- What quantum of reparation, if any, the Plaintiff is entitled to given the depreciation of the naira.
Ratio Decidendi
- Equitable mortgages arise where title documents are deposited as security for a debt; intention to mortgage suffices even if formal interest terms are absent (Gwarzo v Mohammed (2013) 12 NWLR).
- Section 128(1) Evidence Act forbids oral evidence to contradict, vary or add to the terms of a written instrument such as a deed of mortgage.
- Equity of redemption is not indefinite; default for an unreasonable period and statutory or contractual powers of sale/foreclosure can extinguish it (Anambra State Housing Corporation v Emakwe (1996) 1 SCNJ 98).
- Courts may take judicial notice of currency depreciation when assessing monetary awards over long delays (Joseph O. Mayange v Punch Nig. Ltd (1994) 7 NWLR).
Court Findings
- Existence and Amount of Loan: The Deed of Mortgage (Exhibit C4) plainly states a ₦45,000 loan. The Defendant failed to produce documents contradicting this. Oral claims that only ₦15,000 was borrowed were rejected under Section 128.
- Part-Payment: Correspondence (Exhibit D4) and the Plaintiff’s testimony confirm ₦15,000 was paid, leaving ₦30,000 due.
- Validity of Mortgage Instruments: Exhibits C4 and C5 were duly executed; allegations of duress or fraud were not substantiated by evidence beyond assertion. No police reports or criminal proceedings were provided.
- Equity of Redemption: The deceased defaulted beyond reasonable time (since March–June 1991), triggering the Plaintiff’s power to foreclose under the Deed.
- Quantum of Award: A sale of an urban property to satisfy ₦30,000 would be unconscionable. Considering part-payment and 25 years’ delay, the Court assessed fair compensation at ₦1,500,000 instead of forced sale.
Conclusion
The Court entered judgment for the Plaintiff against the Defendant for ₦1,500,000 as damages, with interest at 20% per annum from the judgment date until payment. The Court declined to order immediate sale or foreclosure, choosing a fair monetary award in lieu of the mortgaged property.
Significance
This decision underscores critical principles in Nigerian equity and evidence law:
- Equitable mortgages are upheld based on substance, not form; courts will enforce security transactions where intent and deposit of title documents exist.
- Documentary supremacy under Section 128 prevents litigants from using oral testimony to alter clear written agreements.
- Mortgagors must act promptly to redeem; undue delay forfeits equity of redemption.
- Judicial notice of currency depreciation ensures just compensation where long-standing debts are enforced decades later.
The judgment balances strict enforcement of mortgage terms with equitable relief, favoring a fair monetary award over disproportionate property forfeiture.