Difference between Payment of Deposit and Part Payment for the Purpose of a Valid Sale of Land/Property

CASE TITLE: MUHAMMAD v. ALBASU (2022) LPELR-58802(CA)

JUDGMENT DATE: 31ST OCTOBER, 2022

PRACTICE AREA: LAND LAW

LEAD JUDGMENT: ITA GEORGE MBABA, J.C.A.

SUMMARY OF JUDGMENT:

INTRODUCTION:

This appeal borders on the Contract of Sale of Land.

FACTS:

This is an appeal against the judgment of the Kano State High Court in Suit No. K/456/2016, delivered on 5th October 2018 by Hon. Justice A. R. D. Muhammad, whereof the learned trial Judge entered judgment for the plaintiff (now Respondent).

At the trial Court, the Respondent (as the plaintiff) had sought the following reliefs:

(a) A declaration that Defendant is only entitled to the sum of N1,090,000.00 being the consideration for the sale and purchase of the property at Unguwa Uku Tarauni Local Govt. Area, less the sum of N60,000.00 that has been collected by Defendant, through an agent.

(b) To pay the sum of N150,000.00, being the plaintiff’s solicitor professional fees, for prosecuting this action or.

(c) Alternatively, to pay the sum of N500,000.00 as general damages for breach of contract;

(d) Cost of action.

The Defendant (Appellant herein) filed a defence and staked some claims as follows:

(a) A declaration that there was no valid contract between the plaintiff and the Defendant.

(b) The entire action be dismissed as it is frivolous, mischievous and gold-digging exercise.

(c) To pay Defendant the sum of N500,000.00 as general damages for depression and trauma, caused to Defendant as a result of this suit.

(d) To pay the sum of N160,000, being the solicitors’ fee for prosecuting the suit.

PW1 (one Bala Mai Bulo) linked up the Appellant and the Respondent for the purpose of sale/purchase of a plot of land (No. 45c) situate at Ungwa-Uku Local Government Area, Kano State. The said PW1 had the authority of the Appellant to search for a buyer for this plot; PW1 said that the Appellant met him in 2007 in his block industry and mandated him to sell his plot by seeking a buyer.

There was no written authority given to him by the Appellant, but there was a verbal agreement between them, and the Appellant promised to pay him (PW1) 5% of the price of the land when sold. He (PW1) reached the Respondent, who established contact with the Appellant by phone calls, and they agreed on the price of the land. PW1 said the Respondent paid a deposit of N60,000.00 to him (PW1) for the land; that the Respondent was given one month within which to pay for the land. He (PW1) said the transaction was not concluded by phone; that the Respondent came and met the Appellant and they agreed. PW1 admitted he was the one that collected the N60,000.00 deposit; that the Appellant did not instruct him (PW1) to pay the said money to his (Appellant) bank account.

He also said there was no written agreement, as the Respondent did not pay the agreed amount (cost of the land). He (PW1) had, however, drafted an agreement with the Respondent in respect of the deposit he (PW1) collected from the Respondent. He said he prepared the said agreement in two copies, but the Appellant refused to collect his own copy.

The trial Court held that there was a conclusive sale of the property; that with the deposit of N60,000, it was sufficient consideration for the sale of the property, known as plot 45c; that no consideration is small to conclude a contract.

Being aggrieved, the appellant appealed to the Court of Appeal.

ISSUES FOR DETERMINATION:

The Court determined the appeal based on the following issues for determination:

“(1) Whether the giving of an occupancy permit of land and payment of deposit, as opposed to part payment by the Plaintiff/Respondent, could be a ground for inferring that a contract of sale of land has been concluded.

(2) Whether from the facts and circumstances of this case, the respondent proved her case to be entitled to the reliefs granted by the Honourable trial Court?”

DECISION/HELD:

In the final analysis, the Court allowed the appeal. The Court consequently set aside the decision of the trial Court.

RATIOS:

• CONTRACT – VALIDITY OF CONTRACT: Essential ingredients of a valid contract
• LAND LAW – CONTRACT OF SALE OF LAND/PROPERTY: Whether a deposit made towards negotiation for the purchase of land can be the consideration for the sale of the land
• LAND LAW – SALE OF LAND: Instance where an order of specific performance for the transfer of title to land cannot be made
• LATIN MAXIMS – “NEMO DAT QUOD NON HABET”: Instance(s) where the principle of “Nemo dat quod non habet” will apply
• LAND LAW- CONTRACT OF SALE OF LAND/PROPERTY: Whether a deposit made towards negotiation for purchase of land can be the consideration for the sale of the