March 1, 2024

RANO v. RANO: On Effect of Part-payment of Purchase Price of Property

An insight into the decision of the Court of Appeal therein.

Citation: (2021)12 NWLR PT. 1790 AT 292.
Courtesy: Moruff O. Balogun Esq.

Summary of facts:
The respondent put up his house situate at Kundilla Estate,Maiduguri Road, Taurari Local Government Area, Kano State for let. The appellant expressed interest. The respondent further told the appellant he could become the owner of the property if he was interested in the purchase of same.

Based on the preliminary discussion and promise made by the respondent to sell the house at a later date, the appellant moved the house first as a tenant. During the period of his tenancy, he effected extensive repairs on the property with the belief that one day he would become the owner of same. For that same reason, the appellant advanced monies to the respondent totaling N7.2million as part payment of consideration for the purchase of the house.

However, the respondent sold the house to someone else at the cost of N10million. The appellant confronted the respondent on the sale of the house to someone else other than himself as earlier promised. The respondent denied ever offering to sell the house to the appellant, and asserted that it was his house at Hausa Quarters, Kano that was the subject of offer and discussion between him and the appellant. The respondent went on to serve the appellant a notice of eviction from the house.

Aggrieved, the appellant instituted a suit against the respondent. The appellant sought an order of specific performance of the respondent’s promise to sell the house located at Kundilla Estate, Maiduguri Road, Taurari Local Government Area of Kano State to him; an order setting aside the purported sale to another person; and a declaration that the respondent’s receipt of the sum of N7.2million from him stood as a deposit for the sale of the house.

In his statement of defence, the respondent admitted and acknowledged the receipt of the sum of N7.2million from the appellant as part-payment for the purchase of the house.

After taking evidence of parties and hearing counsel’s final addresses, the trial court delivered its Judgment. It dismissed the appellant’s claim. It ordered the appellant to pay N1million as general damages to the respondent though the respondent did not
claim for damages. The trial court also ordered the appellant to pay
costs of N25,000 to the respondent. Aggrieved by the Judgment of the trail court, the appellant appealed to the Court of Appeal.

Held: (Unanimously allowing the appeal).
The following issues were raised and determined by the Court of Appeal:

On effect of part-payment of purchase price of property –
Where a part-payment is made, it shows that a contract for the purchase of the subject matter has been concluded and final, leaving the payment of the balance. In this case, after the part-payment of N7.2million to the respondent, the appellant acquired an equitable interest over the property that is as good as a legal estate. At that point, the respondent had nothing left of the property or interest to transfer or sell to a third party. So the subsequent transfer or sale of the property to a third party was void ab initio.

On effect of a promise-
A promise per se cannot be the basis for an action in the event of failure to abide by the promise. A valid promise can only be a ground for defence and cannot be a ground for a cause of action. In the instant case, the facts and evidence went beyond mere promise as both parties by the arrangement made between them shifted position.

On whether court can grant relief not sought or claimed-
The court lacks power to make an award that was not sought or claimed. In the instant case, there was no basis for the award of N1million damages against the appellant as there was no such claim or counter-claim by the respondent in his statement of defence. Therefore, the award was made without jurisdiction and was set aside.

On when order of specific performance will be made –
Where a plaintiff has wholly or in part executed his own part of the purchase of a property and already is in possession of the property even though no deed of sale or assignment has been executed, a court of equity will order specific performance.
In this case, the appellant had made part-payment of N7.2million to the respondent and was already a sitting tenant and in possession of the house. In the circumstances, he was entitled to a decree of specific performance by the trial court.

On elements of valid contract-
A contract is constituted by the elements of offer, acceptance, and consideration. And the parties are said to be ad idem over such concluded contract. In this case, apart from the initial expression of the respondent’s interest to sell, and the initial
expression of the appellant’s interest to buy, the parties, there is the evidence of the appellant’s part-payment of N7.2million to the respondent, the receipt of which the latter also acknowledged. In other words, the expression of interest by parties crystalized into offer, acceptance, and the part- payment of the consideration for the property.

On whether facts admitted need further proof-
By virtue of section 123 of the Evidence Act 2011, facts admitted need no further proof. In the instant case, the respondent admitted in his pleadings that certain sum of money was paid by the appellant and received by him pursuant to the agreement or understanding reached between them for the sale of a house.

Moruff O. Balogun Esq.
Ijebu Ode, Ogun State.
09121207712 [WhatsApp]

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