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22 Jan

PL-PRACTICE WEEK 13 (MORTGAGE AND CHARGES 3)

WEEK 13 — MORTGAGE & CHARGES 3

:: UP-STAMPING: where the same mortgagor uses the same property earlier used to presently secure an additional loan facility from the same mortgagee, he should stamp up to reflect the new/additional loan. He need not register again nor get another governor’s consent-Owoniboys Technical Services Ltd v Union Bank of Nigeria Plc.

DISCHARGE OF A MORTGAGE: Discharge of mortgage occurs after the redemption of the mortgaged property.

For legal mortgage under CA: by deed of discharge/release/surrender.

For Legal Charge under PCL: Discharge by way of statutory receipt[1], reassignment, release or surrender.

For equitable mortgages: by receipt of payment of principal and interest. (?? Where made to the mortgagee’s solicitor, it should be by deed??)

Lagos State/MPL: by –Statutory receipt (i.e. completion of specimen “Receipt for Discharge of Mortgage”)-Section 47MPL or by reconveyance/surrender.

If it is a company; by certificate of discharge. Then memorandum of satisfaction should be filed in the register of charges (Form CAC 9) at the CAC-204 CAMA.

Discharge by the court-Section 75 PCL.

RIGHTS AND REMEDIES OF MORTGAGOR:

Mortgagor has right of redemption which may be legal or equitable if on the due date or after the due date respectively- Yaro v Arewa Construction Ltd. Once a mortgage always a mortgage.

Mortgagor in possession may also lease the property. If he sells the property, the third party gest subject to the right of the mortgagor-Barclays Bank v Ashiru.

RIGHTS AND REMEDIES OF MORTGAGEE: Encapsulated in (and conferred by) Section 19 CA, 35 MPL.

– Action in Court.

– Taking possession. But must account to mortgagor.

– Appointment of a receiver-Awojugbagbe Light Industries v Chinukwe. 131 PCL. By power of deed or court if by deed or equitable respectively.

– Power of Sale: 20 CA: Where mortgagee transfers the legal estate in the property to a third party purchaser-Kotoye v CBN. automatically conferred by statute if mortgage is by deed and has no contrary intention. Exercisable once legal date for redemption has passed provided that; – Notice requiring payment has been served on Mortgagor but he still defaults for up to three months after notice OR some interest in the mortgage is two months or more in arrears OR there has been a breach of some provisions contained in the CA. NHDS v Mumuni.

Sale may be by private treaty or licensed auctioneer or by tender. It should be bonafide and proper market value obtained- Ihekwoaba v ACB, Taiwo v Adegboro. Proceeds should be used to satisfy principal, interest and expenses. Surplus must be given to mortgagor-Visioni (or is it Visions) Ltd v NBN

  • – Foreclosure: 21 LUA. Extinguishes equity of redemption and vests the property in the mortgagee 6 months after the foreclosure nisi order has elapsed to become foreclosure absolute. Though can be re-opened.
  • Possession of title deeds.

Right to consolidation except negated by the mortgage deed.

OWONIBOYS TECHNICAL SERVICES NIG LTD V UBN PLC (2003) 15 NWLR (PT 844) 545; OLORI MOTORS NIG LTD V UNION BANK PLC (1998) 5 NWLR (PT.551) 652.

[1] The name of the person who pays should be stated? And it is to be executed by the person in whom the mortgage is vested.

Isochukwu

Quite eccentric really

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