ADEBAYO V. WEMA BANK PLC. & ORS (2017)

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

AND

1. WEMA BANK PLC.
2. ALHAJI HAMSAT SANUSI
3. MR. AKEEM O. RAMONI –Respondents

…………………….A…………………….

NONYEREM OKORONKWO, J.C.A. (Delivering the Leading Judgment): 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.

Being dissatisfied, the appellant by Notice of Appeal dated 20th August, 2009 filed 21/8/09 filed this appeal upon three (3) grounds of appeal which complain as follows:
The learned trial judge erred in law when he held that the 3rd defendant/respondent in this case is a bonafide purchaser of the property without notice of non-compliance.
The learned trial judge erred in law when he held that the failure of the 1st defendant to give a demand notice did not show that the 1st defendant acted in bad faith.
Further grounds of appeal will be filed on receipt of the record of the proceedings.

No further ground of appeal was filed and the appeal was contended on the original ground of appeal filed.

The facts of the case as can be gleaned from the briefs of the parties and the judgment of the lower Court were that 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’s 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.
Specifically, in respect of the main issues in this case, the 1st respondent pleaded in Paragraph 27 of the statement of defence thus:
The 1st defendant specifically denied Paragraph 16, 17, 18, 19 and 20 of the Statement of Claim and state as follows:
i) The plaintiff was duly informed of the impending sale of his property by the defendant.
ii) The plaintiff was served all the required notice in law including Auction Notices.
iii) The Defendants avers that auction notices were properly issued and served on the plaintiff.
iv) The Auction Notices were generously pasted on the walls of the plaintiff’s building more than 7 days before the sale. The defendants shall at trial rely on the Auction Notices.
v) The Auction Notices were pasted long before the 22nd September, 2000 when the plaintiff’s property was eventually sold at a properly conducted auction.
vi) The sale took place in the presence of the plaintiff and same was sold to the highest bidder.
vii) The Auction Notices issued by the defendants were not dated 22nd September, 2000 but an early date.

…………………….B…………………….

In the statement of defence of 35 paragraphs, it was no where stated that the right of sale has arisen except to say that the appellant was aware of the state of his account as in Paragraph 26.
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.
On important issues of fact, firstly concerning the issue of pasting of auction notice on the property to be sold, the trial judge said at pages 12 , 13 of her judgment thus:
The contention of the plaintiff is that the Auction Notice was pasted on his property in the morning of 22nd September, 2009 and his property was sold on the same day. I have considered the evidence of PW1, PW2 and DW2 (2nd defendant and who is also the auctioneer). PW1 described what he saw vividly that morning and under vigorous cross-examination, he remained unshaken and his evidence that he saw someone pasting the auction notice on the property and someone ringing a bell that morning and that the whole event lasted about ten minutes. The 2nd defendant said the event lasted about thirty minutes. PW2 also impressed me as a witness of truth. He was unshaken in his evidence that the auction notice was pasted on the property on 22nd September, 2000. The 2nd defendant said the notice was pasted 3 days to the auction notice. I do not believe him because the plaintiff could not have ignored the notice and left his house on the day he was about to lose the roof over his and his family’s head. The 2nd defendant confirmed that the plaintiff was not at home when they started the auction but later met them there. I do not believe that evidence because he said the whole transaction lasted about thirty minutes. PW1 could not have gone to Gate Market from behind Ibadan Grammar School to inform the plaintiff of the sale of his house and the plaintiff could not have left his shop in Gate Area to the property behind Ibadan Grammar School, all within 30 minutes. Having considered the evidence of both parties, I do not have any difficulty in coming to the conclusion that the evidence of the plaintiff and his witnesses is more credible than that of the DW1 and DW2.
DW2 also said he published the Auction Notice in the Daily Sketch Newspaper submitted copies to the Local Government and the Ministry of Lands and housing and made some payments in respect of the submissions.
He did not tender a copy of the Newspaper or the receipts for payment. Nothing to show that any Form of Notice was given or published before the 22nd September, 2000 when the property was sold. Based on the above, I hereby find that no aspect of the provisions of Sections 19 and 20 of the Auctioneer’s Lawsupra was complied with in the sale of the plaintiff’s property. What then is the effect in law of the said non-compliance?

Secondly, on demand notice which in mortgage law is a condition for sale under a deed of legal mortgage, the learned trial judge at page 17 of her judgment said, of the demand notice;
The second complaint of the plaintiff is that no demand notice was served on him and no notice of the sale was given to him. From the entire evidence, before me, the last time a demand for payment was served on the plaintiff was in February, 1989 (see Exhibit E2 , E9). It was after the evidence of Exhibit E3 dated 7th February, 1989 that suit No. 1/445/92 was instituted against the plaintiff to recover the amount due then. It is my view that the 1st defendant cannot fall back on the notices given prior to the institution on the

…………………….C…………………….

suit. It is my view that the institution of that suit is a notice to the plaintiff that the mortgagee did not intend to exercise his right of sale under the DEED of Legal Mortgage as at that time. The suit having been withdrawn, it is my view that in law, the 1st defendant ought to have served a demand notice requiring payment of the amount due on the plaintiff. Such a demand notice would have served as a notice to the plaintiff that the Mortgagee may exercise his right of sale. Apart from the above, DW1 confirmed that the 1st defendants was at a point in distress, it was closed up and was only offering what DW1 called skeletal services like recovery of loans. He said the plaintiff met him twice; he promised to pay but did not pay. Even if his evidence is believed, it means inspite of the institution of the case against the plaintiff; he was still making effort to pay though he said the bank was locked up. Yet the 1st defendant did not deem if fit to serve the plaintiff with a demand for payment as required by law or give him notice of intention to sell his property. It my view and I so hold that based on the entire evidence before me, no notice was served on the plaintiff as required by Section 125 (1) of the Property and Conveyancing Law.
But inspite of all her findings as shown above, the learned trial judge concluded thus:
The contention of the plaintiff that the 1st defendant acted in bad faith is predicated on the non-compliance with the Auctioneer’s Law and the property and Conveyancing Law. It is my view that failure of the 1st Defendant to give a demand notice after the case was struck out and before the sale was carried out may be reprimandable, there is no evidence to show that the 1st defendant had any ulterior motive apart from recovering the loan. The authorities referred to above are very clear that non-compliance with the Property and Conveyancing Law will not render the sale void; the only remedy the law has prescribed is damages.
And thereafter dismissed appellant case
Appellant’s case
Learned counsel for the appellant formulated two terse issues namely:
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).

In arguing his first issue, learned appellant’s counsel argued thus in Paragraphs 3.01- 3.09.
The learned trial judge in the judgment particularly at page 103 of the record of proceedings said:-
Having considered the evidence of both parties, I do not have any difficulty in coming to the conclusion that the evidence of the plaintiff and his witnesses is more credible than that of the Dw1 and Dw2 .. based on the above, I hereby find that no aspect of the provisions of Section 19 and 20 of the Auctioneer’s Law Supra was complied with in the sale of the plaintiff’s property.
My lords, the learned trial judge also in the judgment particularly at page 108 of the record of proceedings said:-
It is my view and I so hold that based on the entire evidence before me, no notice was served on the plaintiff as required by Section 125(1) of the Property and Conveyance Law.
With respect is shows that there were two instances of non -compliance with statute firstly in respect of the Auctioneer’s Law and secondly in respect of a demand notice.
My lords, we submit that the 3rd respondent as a bonafide purchaser should plead and lead evidence that he is a bonafide purchaser for value without notice of the non-compliance. In ADENEKAN VS. OWOLEWA (2004) AFWLR (pt. 216) pg. 510 at 526 para. D – E where it was held:

However, firstly, in a claim of this nature it is incumbent on the respondent to plead that he was bonafide purchaser for value without notice as on the authority of Barclays Bank & Co. vs. Olofintuyi (1961) NWLR 47; (1961) ANLR 799 failure to do so and called evidence to that effect would raise the presumption that the purchaser had notice.
The 3rd respondent as the purchaser in paragraph 10 of his statement of defence at page 45 to 47 of the record of proceedings pleaded as follows:-
The 3rd defendant avers that he is the bonfide purchaser of the property without any notice and or knowledge of non-compliance (if any of which is denied) of any written Law on the part of 1st and 2nd defendants in the sale of the property to him.

…………………….D…………………….

My lords, the 3rd defendant did not call any evidence in support of this paragraph. We humbly refer to the 3rd defendants evidence at Paragraph 88 to 90 of the record of proceedings.
We humbly submit that the said averment in the 3rd respondent Statement of Defence is deemed abandoned. We refer to the case of ALL NIGERIA PEOPLES PARTY VS. ARGUNGUN (2009) AFWLR (pt. 467) pg 94 at 107 para. C where the Court held:-
In the same way, an averment in pleadings cannot be accepted as evidence simpliciter, without calling evidence to prove it, and if no such evidence is called, the averment is deemed abandoned.
We also submit that from authority of ADENEKAN Vs. OWOLEWA supra, the failure of the 3rd respondent to called evidence that he had no notice of the non-compliance will raise the presumption that the 3rd respondent had notice of the non-compliance.

Learned counsel for the appellant on the contrary refers to the evidence of PW1 and PW2 to show that 3rd respondent was complicit in the bad faith that characterized the auction sale and so cannot rely on Section 125(1) of the Property and Conveyancing Law the trial judge acted upon after her gracious findings. Counsel argues at paragraphs 3.10 -3. 14 counsel argue that 3rd respondent had actual and construction notice of the non-compliance and that such notice and knowledge will taint the title and deprive 3rd respondent of the benefit of Section 125 (1) of the Property and Conveyancing Law and concerning Section 125 (1) of the Property and Conveyancing Law learned counsel argue that a statute must not be set up as an engine of fraud and wherever conditions permit such oppressive results must be avoided restrictively. He, learned counsel argues thus in this regards at para. 3.17  3.19.
With respect in ADENEKAN VS. OWOLEWA supra at 525 to 526 paragraphs H-B the Court held:
To put the principle in the way the Court did here, that is to say,
I am of the view that such sale cannot be impeach whether it is irregular or improper; (ii) authorized or without due notice 

Is as admonished in Bailey vs. Barnes (1894) 1Ch.25 at 30 per stirlingid, to convert the provisions of the statute into an instrument of 
fraud. There can be no doubt that the section is not meant to serve as a blanket provision to cover and protect a purchaser against whatever manner of impropriety or irregularity irrespective of the facts of each cases. In this matter, the respondent as unequivocally demonstrated herein was not a bonafide purchaser for value without notice.
With respect My lords, in all the cases relied upon by the learned trial judge in the judgment to support the fact that the non-compliance will not affect the purchase by the 3rd respondent, the issue of a purchaser having actual or constructive notice and still seeking protection under the Law was not discussed.
We humbly urge My lords, to hold that the 3rd respondent had actual or constructive notice of the non-compliance and that the 3rd respondent is NOT a bonafide purchaser of the property of the appellant without notice of the non-compliance and cannot seek protection under the Law.

The above represents counsels submission in so far as the breach of Section 19 of the Auctioneers Law goes which is that 3rd respondent was complicit in that he (3rd respondent) was present when the pasting and the sale proceeded contemporaneously in his presence.
Another point raised by counsel for the appellant relates to the demand notice which the trial judge found was not given counsel then submit that these two principal issues of non-compliance with the Auctioneers Law contrary to Section 19 of the Auctioneers Law and the failure to issue a demand notice are instances of bad faith which combine to nullify the auction sale and subsequent conveyance. Counsel paints the scenario thus:
My lords, from the circumstances of this particular case and from the facts as presented as in this case where it has been found that the Auction Notice was not pasted before the date of auction but on the date of auction (and in the presence of the 3rd respondent) and no demand notice was issued to the appellant coupled with the fact that an unnamed friend of the 3rd respondent informed him of the sale on a day before the auction and described the place to the 3rd respondent when there was no publication and no notice was pasted and the 3rd respondent without any notice pasted or without any publication could trace the appellant house the following day of auction and paid immediately shows bad faith, malafides or collusion on the part of the respondents.

…………………….E…………………….

These conducts, in counsel’s opinion and submissions are instances of bad faith for he argues thus:
My lords, respectively the word BAD FAITH was defined in BLACK’S LAW DICTIONARY EIGHTH EDITION as follows:-
Bad faith, No.1, Dishonesty of belief or purpose. Also termed malafides.
A complete catalogue of types of bad faith is impossible, but the following types are among those which have been recognized in judicial decisions: evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering of imperfect performance, abuse of a power to specify terms and interference with or failure to cooperate in other party’s performance.

We humbly submit that in the circumstances of this case, the appellant was able to establish evasion of the spirit of bargain, lack of diligence and slacking off, willful rendering of imperfect performance and abuse of a power to specify terms against the respondents.
We humbly urge My lords to hold that there was bad faith in the sale 
of the property of the appellant.

A new cruet in the case at the lower Court is that all the statements of defence of the 1st, 2nd and 3rd defendants were respectively signed by S.O. Sanni & Co. for 1st and 2nd defendant and N.D. Ayilara & Co. for the 3rd defendant. Counsel cites Okafor vs. Nweke (2007) 19 WRN 1 at 8-9 where the dicta appears that:
Bonafide is a Latin word, and is defined in the Dictionary of English Law by Earl Jowitt; second edition as in good faith, honestly without fraud, collusion or par Bonafide is defined as in good faith, collusion, or participation in wrong doing.
A bonafide purchaser for value is one who has purchased property for valuable consideration without notice of any prior right or title which if upheld, will derogate from the title which he has purported to acquire.
10. The 3rd Defendant avers that he is the bonafide purchaser of the property without notice and or knowledge of non-compliance (if any of which is denied) of any written law on the part of 1st and 2nd Defendants in the sale of the property to him.

The emphasis in the except above given is that JC Okolo SAN & Co. is not a legal practitioner recognized by law, it follows that the said JHC Okolo SAN & Co. cannot legally sign /or file any process in the Court.

Counsel for appellant submits thereby there being no valid statement of defence or the statement of defence being a nullity, there was no evidence on from the respondents to challenge the appellants case citing Ndulue vs.Ojiako (2013) AFWLR (Pt. 673) 1804 at 1824.
Respondents’ Arguments
Respondents in their composite brief formulated two issues namely
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.

Counsel for the respondents in arguing issue No. 1 refers to and adopt the Supreme Court case of Animashaun vs. Ojo (1990) 9-10 SC at 103 where Bonafide was defined thus:
Bonafide is a latin word, and is defined in the Dictionary of English Law by Earl Jowitt; second edition as in good faith, honestly without fraud, collusion or par Bonafide is defined as in good faith, collusion, or participation in wrong doing.
And again citing Best (Nigeria) Ltd vs. Blackwood Hodge (Nig) Ltd & 2 Ors (2011) 1-2 SC Pt. Page 55 defined bonafide purchaser for value to be:
A bonafide purchaser for value is one who has purchased property for valuable consideration without notice of any prior right or title which if upheld, will derogate from the title which he has purported to acquire.”
Learned counsel for respondent contend that the 3rd defendant sufficiently pleaded his bona fides;
10. The 3rd Defendant avers that he is the bonafide purchaser of the property without notice and or knowledge of non-compliance (if any of which is denied) of any written law on the part of 1st and 2nd Defendants in the sale of the property to him.

…………………….F…………………….

referring to the evidence led by the 3rd respondent raised the bonafides of 3rd resonpdent and it cannot be said that no evidence was led. Leaned counsels argue that there is nothing in the pleading of the appellant to show any knowledge of non-compliance on the part of the 3rd respondent. He further submit that the question of constructive knowledge was not before the lower court and was not supported by pleadings.
In Para 3.13-3.15, learned counsel for the appellants submits thus:
I humbly submit with due respect that the Appellant misconceived the effect of the non-compliance with the above two condition if there is any though; the issue of non-compliance with the auctioneer’s law has been clearly addressed in several judicial decisions among which are the following cases:
1. WEMA BANK VS. ABIODUN (2006) ALL FWLR (pt.201) 430.
2. OKWONKWO VS. COOP. & COMMERCE BANK VOL 14 NSCQR 688.
In the above highlighted cases, the Court of Appeal and the apex court in clear terms pronounced on the consequence of failure of an auctioneer to comply with the auctioneer’s law in the following manner:
WEMA BANK VS. ABIODUN (2006) ALL FWLR (pt.201) 430 at
The purpose of the sales by Auction Law as provided from the explanatory note is to provide for the licensing of the auctioneer and to regulate sales by auction. It is also plain that the law is not to regulate a mortgagee’s power of sale as rightly submitted by the learned appellant’s counsel. This is because nowhere in all the sections of the law is the mention made of mortgages. It follows therefore that a right of action by the mortgagor is not within the scope and wording of the sales by Auction Law. Upon a critical perusal and analyses of the relevant applicable, Sections 19,20 & 21 the deductive intendment s clear that the law creates duties which are to be performed by auctioneers in favour of public in general and not in favour of any individual person, or even an apparent that penalties have been provided for a breach of the said sections. To provide a remedy different from that clearly stated therefore would be going outside and violating that stipulated. Again, the authority in the case of Philips vs. Britainnia Hygienic Laundry (supra) at p. 838 is in point and states:
the principle that where a specific remedy is giving to a statute, it thereby deprives the person who insist upon a remedy of any other form of remedy that that given by the statue, is one which is 
very familiar and which runs through the law
Further still and in the absence of any breach against an individual, the remedy could only lie to the state who alone had the right to maintain an action. This has been propounded in the ancient English authority in the case of Bradlaugh vs. Clarke (1883) App case 354.
On the effect of the mortgagee’s non-compliance with provision of notice required under the Act, Adamu JCA among others held as follows in the case of Majekodunmi Vs. Cooperative Bank Ltd. (1997) 10 NWLR (PT. 524)198 at 217 & 218.
???As we have seen under the 2nd issue once the power of sales arises and becomes exercisable, its improper or irregular exercise will not make the purchaser’s title impeachable. The auctioneer in the present case was only invited as agent or independent contractor of the 1st Respondent for the purposes of the auction sale and since it was his field of expertise for which he had acquired a license to practice, he should be held responsible in damages for any injury suffered by the appellant for his (i.e auctioneer’s) non-compliance with the auctioneer’s 
law.In other words, any of such non-compliance therefore cannot affect the right and title of the purchaser.
OKONKWO VS. COOP. & COMMERCE BANK VOL.14 NSCQR 688 at 713-714:
Although some aspects of this provision have become anachronistic owing to social political changes, it cannot be denied that the purpose of the provision is for the mortgagees to given adequate notice to the public of the proposed sale. It is not a notice intended to be giving to the mortgagor. This is to ensure that a true public auction, where everyone interest in the property may have the opportunity to bid for it. Is conducted for a fear deal, devoid of unconscious bargain through connivance of collusion. This is not a notice which can be waived by the mortgagor. Actually, it does not lie with him to do so as it is not meant for him. The Court below was therefore in error to have held that the waiver constrained in Clause 8 of Exhibit B extended to of the mortgagor. The latter is to ensure that the auction, to borrow the words of Lord Mansfield in Baxwell vs. Christie (1776) 1 Comp. 395 at 396; 98 ER 1150. IS NOT
a fraud upon sale, and 
upon public.
In the light of the above cited authorities, I humbly submit that the non-compliance with the auctioneer’s law and nothing more will not affect the sale of the mortgaged property.

…………………….G…………………….

Respondents’ counsels refer to West African Brewries vs. Savannah Bank 10 NSCQR 875 at 88 and argue that collusion on the part of a purchaser is essential to be proved in an action to set aside a sale of a mortgaged property and that there was no pleading to that effect.
On regards to the submissions of learned counsel for the appellant that the statements of defence filed for the respondents are nullifies, Learned counsel for the respondent agreed and submitted thus at Para 3.25 thus:
My Nobel Lord, the Appellant at Paragraphs 3.27 to 3.30 of his Appellant’s brief of Argument copiously argued that the Respondents who were Defendants at the trial Court did not filed any process known to law. I humbly agreed with the submission of the Appellant’s counsel in this regards but with further poser to the effect that what is the effect of the evidence/testimonies called by the 1st to 3rd Respondents at the trial Court in respect of this case.
But contend that respondents can rely on the pleading and evidence and documents pleaded and tendered for the appellants.
Resolution of issues
In resolving these issues, a starting platform would be the finding of fact made by the trial judge.
Firstly, the trial judge found as a fact that there was a breach of the auctioneers Law Section 19 which declares that:
(1) No sale by auction of any land shall take place until after at least seven days public notice thereof made at the principal town of the district in which the land is situated, and also at the place of the intended sale. The notice shall be made not only by printed or written documents, but also by beat of drum or such other method intelligible to uneducated persons as may be prescribed, or, if not prescribed, as the Secretary to the Local Government of the area where such sale is to take place may direct, and shall state the name and place of residence of the seller.
(2) Any person contravening any of the provisions of Sub-section (1) of this section shall be liable to a fine of ten thousand naira.
What this means is that contrary to the law, the auctioneer, 2nd respondent went with officials of the 1st respondent and evidence indicates that 3rd respondent was present and while they pasted the auction Notice on the property and at the same time purported to conduct the auction sale to the 3rd respondent.
The import of the Auctioneers law is to publicize the notice of sale in order to make it truly competitive and draw the largest possible participation. It is for the benefit of the public and of course the Mortgagor is not excluded from that public. If the mortgagor is Present, he may bid in his own behalf.
Secondly a large participation at the auction sale may ensure a fairer price even though the mortgagor is not a trustee for that purpose.
Thirdly it is to ensure fairness and eliminate fraud because fraud will in equity vitiate the provision of a statute like Section 125 (1) of the Property and Conveyancing Law because equity will not allow a statute to be used as an instrument of fraud. See L. A. Sheridan, Fraud in equity.
In this case, as the trial judge found, no statutory notice was issued for the auction. No Newspaper advertisement was published. The purported notice was pasted on the property as the auction sale was going on and evidence show that the purchaser 3rd respondent was present. How did he get notice of the intended auction sale if no Public Notice was issued or published? If the purchaser, 3rd respondent could only have known about the sale by the 1st and 2nd respondents i.e. the bank and the auctioneer which is collusion. This is the natural inference to be drawn in the circumstance according to Section 168 of the Evidence Law because there not being any public notice issued as the Law requires, only the 1st and 2nd respondent knew of the impending sale and arranged for the 3rd respondent to attend and purchase. Collusion and fraud.In such circumstance, it is doubtful whether Section 125 (1) of the Property and Conveyancing Law will operate. Collusion of the respondents is sufficient to taint the sale because the Supreme Court has held that where the action is to set aside a sale of the Mortgaged Property by reason of lack of good faith of the mortgagee or receiver, collusion with the purchaser must be established West African Breweries vs. Savanna Ventures Ltd & Ors (2002) 10 SCM 180.
Collusion in this sense is a fraud and in equity, upon the equitable Principles which are now applicable in any Court, Fraud may be described as an infraction of the rules of fair, dealing an advantage gained by unfair means. See Jowitts Dictionary of English Law.

…………………….H…………………….

Learned respondents’ counsel has made heavy weather about absence of pleadings on fraud or collusion or Constructive Fraud, the answer is that constructive notice is knowledge which is imputed to a Party if he omits to make the usual inquiry into the matter or title of the property See again Jowitts Dictionary of English Law. So the Notice is here imputed by law on the state of the proven facts.
There is a very good authority that before a Mortgagee can pass a good title to a purchaser free from the equity of redemption, the right to the exercise the power of sale under a mortgage must have arisen. See Mr. Segun Babatunde vs. Bank of the North Ltd & 2 Ors (2011) 12 SC (Pt.V) 1.
In a mortgage, the right of sale arises when the Mortgagee has given notice to recall the mortgage by sale. In this case, the trial judge found as a fact that no such notice was given and so the power of sale has not arisen.
In Majekodunmi vs. Co-operative Bank Ltd (1997) 10 NWLR (Pt. 524) 198 at 217 -218 the Court of Appeal Per Adamu JCA Posited thus:-
“As we have seen under the 2nd issue once the power of sales arises and becomes exercisable, its improper or irregular exercise will not make the purchaser’s title impeachable… The auctioneer in the present case was only invited as agent or independent contractor of the 1st Respondent for the purposes of the auction sale and since it was his field of expertise for which he had acquired a license to practice, he should be held responsible in damages for any injury suffered by the appellant for his (i.e. auctioneer) non-compliance with the auctioneer’s law.”
The operative words here are “Once the Power of Sale arises and becomes exercisable.”
This means the Power of Sale must first arise and become exercisable before Section 126 (2) of the Property and Conveyancing Law of Oyo State Cap. 30 can come into operation to protect the sale.
That Section, i.e. Section 126 (2) of the PCL Oyo State provides thus;-
“Where a conveyance is made in exercise of power of sale conferred by this law, or any enactment replaced by this law, the title of the purchaser shall be impeachable on the ground:
a. That no case had arisen to authorize the sale; or
b. That due notice was not given: or
c. Whether the mortgage was made before or after the commencement of this law, that the power was otherwise improperly or irregularly exercised;
And a purchaser is not, either before or no conveyance concerned to see or inquire whether a case has arisen to authorize the sale, or due notice has been given, or the power or otherwise been properly and regularly exercised; but any person damnified by an unauthorized, or improper, or irregular exercise of the power of shall have his remedy in damages against the person exercising the power.
Where a Conveyance is made in the exercise of a power of sale conferred by this Law, means that the conveyance must have been made pursuant to the power of sale and so where the of sale has not arisen, there can be no conveyance. It is for this reason that it was held in Mr. Segun Babatunde vs. Bank of the North Ltd & 2 Ors (2011) 12 SC (Pt.V)1 that once the Precondition of notice of sale is given to the mortgage or by the Mortgagee or his agent, preceded by a notice of demand of repayment of money lent to the Mortgagor and the Mortgagee proceeds to sell in good faith, subsequent purchaser in good faith gets a good title and a Court will not interfere in the sale only because the sale did not meet the satisfaction of the Mortgagor. The preconditions must be met before Section 126 (2) of the Property and Conveyancing Act can be set up. It is not otherwise.
Concerning the infraction of Section 19 of the Auctioneers Law of Oyo State, I think the cases refers to by the trial Court are apposite and relevant to the facts of this case where bad faith and collusion surround the entire transaction. Those cases include:-
Oseni vs. AIIC Ltd (1985) 3 NWLR (pt. 11) 229 and Fojule FMBN (2001) 2 NWLR (Pt. 697) at 384. FMB Vs. Babatunde (1999) 12 NWLR (Pt. 632) 683. In these cases, non-compliance with Section 19 of the Auctioneers Law in the sale of Mortgage Property where Seven days??? notice was required but not given were held to render the sales in valid because beyond the non-compliance the omission or non-feasance is indicative of fraud and collusion.

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In cases where the decisions were otherwise as in Okwunnakwe vs. Oparah (2000) 16 NWLR (Pt. 687) 334 at 339 -340 Oguchi vs. FMB (1990) 6 NWLR (Pt.156) at 343, the conditions for sale were duly reached and satisfied and the conveyances were made after the right of sale has arisen and so cannot be authority for this case.
The Auctioneers Law in Section 19 Provides thus:
(3) No sale by auction of any land shall take place until after at least seven days public notice thereof made at the principal town of the district in which the land is situated, and also at the place of the intended sale. The notice shall be made not only by printed or written documents, but also by beat of drum or such other method intelligible to uneducated persons as may be prescribed, or, if not prescribed, as the Secretary to the Local Government of the area where such sale is to take place may direct, and shall state the name and place of residence of the seller.
(4) Any person contravening any of the provisions of Sub-section (1) of this section shall be liable to a fine of ten thousand naira.
The Principal word of the Section is No which is also the subject Predicated upon sale not to hold until after seven days Public notice. It is so important for public purposes for it enact that a criminal sanction for defaulting auctioneers. The presumed purpose of the Law is extraneous to the Law itself and does not form part of its normative stipulations. The normative stipulation of a very important regulatory statute as the Auctioneers Law deserves proper interpretation and application to obviate fraud and collusion.
On the issues raised in this appeal which are (1) whether the 3rd respondent is a bonafide purchaser of the Property of the appellant without notice of noncompliance, I hold that there is no bonafides on the part of the 3rd respondent as 3rd respondent appear to be in collusion with the 1st and 2nd respondent in the malfeasance narrated hereinbefore. And as to whether in the circumstances of this case, the appellant had to shown that the 1st respondent acted in bad faith in the sale of the property of the appellant, I agree and hold that the appellant duly established bad faith on the part of 1st respondent in not issuing and serving a demand notice prior to sale and in colluding with the 2nd and 3rd respondent in pasting an auction notice on the property on 22nd September, 2000 and carrying on the sale at the same time, contemporaneously, with the pasting  an aggregation of fraud.
For these reasons, the appeal succeeds and is allowed. The judgment of the Oyo State High Court in suit No.1/676/2000 Coram Hon. Justice M.O. Bolaji Yusuff is hereby set aside.
In its place, it is ordered as follows:-
1. The Sale of the appellants property situate, lying and being at 37/3037 Arowopoko Village, near Ibadan Grammar School, Odo-oba, Ibadan which sale was purportedly carried out by the 2nd respondent on behalf of the 1st respondent on Friday, 22nd day of September, 2000 be and is hereby set aside for reasons set out in this appeal.
There shall be cost in favour of the appellant assessed at N100, 000.00 against the respondents.
MODUPE FASANMI, J.C.A.: I had the opportunity of reading in draft the lead judgment of my learned brother Nonyerem Okoronkwo, JCA.
I agree entirely with the reasoning and conclusion that the appeal is meritorious.I too allow the appeal and abide by the consequential orders contained therein.
HARUNA SIMON TSAMMANI, J.C.A.: I agree with the judgment of my learned brother Nonyerem Okoronkwo, JCA which I had the advantage of reading in advance.
There was a clear breach of the provisions of the Auctioneers Law of Oyo State which requires that there be publication before mortgaged property is auctioned in the exercise of the lender’s power to sell under Property and Conveyancing Law. There is also the need to give the mortgagee notice of impending sale of the mortgaged property. In the instant case, the evidence on record discloses that no such publication and notice were issued. The sale consequent thereon was therefore invalid and should be set aside.
It is for this reason that I agreed with the reasoning and conclusion of my learned brother that this appeal be allowed. I therefore allow same and set aside the decision of the Court below delivered on the 31/7/2009. I abide by the order on costs.
Appearances

Olakunle Faokunla For Appellant

AND

F.B. Ayodele –For Respondents

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