Introduction
When parents plan their estate (whether in respect of moveable or immoveable assets), the age of their children is one of the fundamental considerations that requires proper legal guidance. Naturally, it should be a simple matter to buy assets in the name of one’s children. However, it is not the same with buying a real or landed property in Nigeria for a minor or an underage person for the simple reason that a minor lacks capacity to enter into such transactions. A child or being underage is defined by different ages, depending on the context and the applicable law. For instance, in politics, persons below the age of eighteen (18) years lack capacity to vote in Nigerian election. Also, under the Child’s Rights Act defines a child in section 277(1) as anyone below the age of eighteen (18) years. In respect of labour and employment, section 91(1) of the Labour Act fixes the age of a child as below twelve (12) years.
However, in real estate law, the age of majority is twenty-one (21) years and above. This is because section 7 of the Land Use Act restricts any person below the age of twenty-one (21) years from applying for the grant of (and the Governor is prohibited from granting to such person) a statutory right of occupancy, or from receiving consent for assignment or subletting of such rights, except in limited circumstances:
- Where a guardian or trustee of a person under the age of twenty-one years has been duly appointed for such person (in which case, the property transaction shall be completed in the name of the trustee or guardian); or
- Where the property devolves on the underage person following the death of the holder of statutory right of occupancy (in which case the law presumes that the underage successor-in-title bears all rights and liabilities of his predecessor-in-title).
The Facts of the Case of Dr. M. O. Omidiji V. Federal Mortgage Bank & 2 Ors. [2001] 13 NWLR (Pt. 731) 646
The case of Omidiji v. FMB & 2 Ors decided by the Court of Appeal Ibadan judicial Division represents a clear legal position not just on the general incapacity of a minor to purchase a land but also the invalidity of a purchase transaction completed by a father on behalf of his underage son.
In the case, the appellant took a loan from the 1st respondent and executed a deed of legal mortgage in respect of his property in Abeokuta, Ogun State, which was admitted during trial as “Exhibit A”. The appellant defaulted in the repayment obligation, following which the 1st respondent, purporting to exercise its power of sale under the mortgage, instructed the 2nd respondent to sell the mortgaged property by public auction.
Consequently, the 2nd respondent published in the Daily Sketch of 9th December, 1991, “Exhibit F“, a public auction notice of sale of the mortgaged property on 10th December 1991, and also pasted the auction notice on the mortgaged property and around the area of the said property. A tenant of the property, called as a witness by the appellant, testified during cross-examination that he had seen some unknown persons affixing the auction notice to the property.
On 10th December 1991, the 2nd respondent sold the property by public auction to the highest bidder, the 3rd respondent who presented himself as Musibau Kolawole Olaseni, for the sum of N100,000.00 (One Hundred Thousand Naira) and he issued a certificate of purchase on same day to him. The certificate was admitted as “Exhibit L“.
The appellant later sued the respondents at the High Court of Ogun State Abeokuta seeking, inter-alia, a declaration that the sale is illegal, fraudulent, null and void, an order setting the sale aside and injunctive reliefs. His main grouse was that he was unaware of the public auction and that the sale was undervalued because, according to him, he had earlier got and rejected an offer of N150,000 (One Hundred and Fifty-Thousand Naira) from PW1 (a resident of Houston USA) for the same property. He insisted that the actual market value of the property was N210,000 (Two Hundred and Ten Thousand Naira).
Key Issue for Judicial Determination
One of the issues for judicial determination was the identity and capacity of the buyer: whether it was the 3rd respondent himself or his 8-day-old son. It was contended on behalf of the appellant that the testimony of DW2 as to the identity of the 3rd respondent (i.e. Musibau Kolawole Olaseni) was clear and not in doubt as he testified as follows: “On 10/12/91 I went to the property and I met many willing buyers 4 people bidded for the property and one Mr. Musibau Kolawole Olaseni who bidded was the highest bidder and the property was sold to him.”
However, the 3rd respondent admitted that he purchased the mortgaged property for his child whose birth certificate was admitted as Exhibit Q registered as Olaseni Musibau Kolawole and born on 1st December 1991 and had his naming ceremony on 8th December 1991.
Decision of the High Court
After hearing the submissions of counsel for both parties, the High Court dismissed all the appellant’s claims. The learned trial judge rejected the argument that the 3rd respondent purchased the mortgaged property on behalf of his eight‑day‑old son, as alleged in Exhibit Q. Without making any finding as to who the actual purchaser was. On 10th December, 1991, the learned trial judge dismissed the appellant’s claims and held that the 3rd respondent was the buyer despite the categorical statement, supported by the testimony of PW1 and PW4, that the property had been bought for or on behalf of PW1, who was the only member of the family bearing the name Musibau Kolawole.
Appellant’s Appeal against the Trial Court’s Judgment to the Court of Appeal
Dissatisfied with the judgment of the trial court, the appellant filed an appeal before the Court of Appeal, Ibadan Division (coram: Sunday Akinola Akintan, JCA, presiding; Monronkeji Omotayo Onalaja, JCA, who delivered the lead judgment; and Olufunlola Oyelola Adekeye, JCA).
The appellant contended that there was no valid public auction sale as the purchaser turned out to be an infant which the learned trial Judge rejected on the ground that the an infant lacked the legal capacity to enter into a contract for the sale of land. In other words, given that the purchaser of the mortgaged property was a child of the 3rd respondent as shown in Exhibit Q and being an infant under the Property and Conveyancing Law CAP 100 (“PCL”), the purchaser lacked capacity unless the purchase was made in trust for the child as provided in section 17(5) of the Property and Conveyancing Law Cap 100 Laws of Ogun State.
Conversely, the 3rd respondent contended that section 17 of the PCL did not make the transaction null and void but that the conveyance shall only operate as a declaration of trust He further argued that under the Land Use Act (“LUA”), the interest that could be created was a deed of assignment. The 3rd respondent contended further in the alternative that 1st respondent by Exhibit A was vested with a legal estate whilst appellant had an equity of redemption citing RE WELLS 1933 1 CH 29 at 52 and that once the 1st respondent exercised its power of sale, the appellant cannot choose a purchaser for the 1st respondent as a mortgagee is not a trustee of a power of sale, relying on Ekaeteh v. Nigerian Housing Development & Ors. (1973) 6 SC 183.
According to the 3rd respondent, the mortgagor may only challenge a sale where fraud or collusion is established, which was not the case here. The trial judge had rightly found no evidence of fraud or collusion, which must be specifically pleaded under Order 25 Rule 5(1) of the High Court Rules of Ogun State 1978 and strictly proved, relying on Otteh v. Nwaweke (1990) 3 NWLR (Pt. 140) 550 at 560.
Parts of the above contentions raised not only the interplay between section 7 of the LUA and section 17 of the PCL but also the question of priority between the two statutory provisions.
Section 7 of the LUA provides as follows:
“It shall not be lawful for the Governor to grant a statutory right of occupancy or consent to the assignment or subletting of a statutory right of occupancy to a person under the age of twenty-one years:
Provided that –
(a) where a guardian or trustee of a person under the age of twenty-one years has been duly appointed for such purpose, the Governor may grant or consent to the assignment or subletting of a statutory right of occupancy to such guardian or trustee on behalf of such person under age;
(b) a person under the age of twenty-one years upon whom a statutory right of occupancy devolves on the death of the holder, shall have the same liabilities and obligations under and in respect of his right of occupancy as if he were of full age, notwithstanding the fact that no guardian or trustee has been appointed for him.”
Section 17(5) of the PCL states as follows:
“A grant or transfer of a legal mortgage of land to an infant shall operate only as an agreement for valuable consideration to execute a proper conveyance when the infant attains full age and in the meantime to hold any beneficial interest in the mortgage debt in trust for the persons for whose benefit the conveyance was intended to be made.
Provided that, if the conveyance is made to the infant and another person or other persons of full age it shall operate as if the infant had not been named therein, but without prejudice to any beneficial interest in the mortgage debt intended to be thereby provided for the infant.”
Interestingly, the Court of Appeal held that section 17 is inapplicable to the sale by auction, treating the Certificate of Purchase issued to the 3rd respondent (i.e. Exhibit “L”) not as a conveyance and that it does not fall within section 2 of PCL as a conveyance. The Court of Appeal held that the finding of fact by the High Court that the mortgaged property was not purchased for 3rd respondent’s son was perverse. (see page 665 para H., per Onalaja, JCA). His lordship held as follows:
“After considering the arguments of the parties on issues 1 and 2 of appellants’ brief of argument the actual purchaser from the evidence of 3rd respondent was his eight day old son and being an infant with the sale not made in trust for him and lack of capacity to contract on purchase of land coupled that Exhibit L was made before the public auction of 10th December, 1991 contrary to the provision of section 24 Auctioneers Law Cap 9 Laws of Ogun State rendered the public auction of 10th December 1991 invalid as the actual purchaser the 8th day old son of 3rd respondent lacked capacity to contract as the purchase was not made as trust under section 17(5) Property and Conveyancing Law Cap 100 of Ogun State Law.”
The rationale for the invalidity of the property purchase transaction stemmed from the incapacity of the 3rd respondent’s son, even if the 3rd Respondent was present as the buyer at the public auction, evidence shows he purchased the property on his child’s behalf. In the absence of a valid trust, the only conceivable presumption would be an agency relationship, with the 3rd respondent acting as agent and his son as principal. However, it is important to mention that agency relationship was neither pleaded nor canvassed by the 3rd respondent at the hearing of the case. It is nevertheless conceivably arguable that the case of the 3rd respondent would have suffered the same fate if agency was invoked given that the agent (i.e. the 3rd respondent) would invariably lack capacity to do what the principal (i.e. the infant) was statutorily incapable of doing based on the maxim nemo dat quod non habet (no one can give what he does not have).
Take Away Lessons for Anyone Seeking to Buy Land Property for his Child
Unless a buyer of real property is up to 21 years old, the transaction is void as seen in Omidiji v. F.M.B. To avoid the fate of the 3rd respondent who purchased property for his underage son, it is advisable for parents to set up a trust for the benefit of the child.
It is also important to note that gifting a real property by a deed of gift to children as joint owners has legal implications that may not achieve the intentions of the donor. For instance, in Udok v. Udoekong (2020) 12 NWLR (Pt. 1739) 492, the Court of Appeal held all beneficiaries of an un-partitioned land hold only a life interest in the land, with the last surviving donee retaining a residual interest and the power to dispose of the property without the consent of the children of deceased co-owners.
