Introduction
When parents are planning their estate (whether in respect of moveable or immoveable assets), the age of their children is one of the fundamental considerations upon which they should seek 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. Although a child or being underage is defined by different ages, depending on the context and the applicable law. In politics, persons below the age of 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 18. In respect of labour and employment, section 91(1) of the Labour Act fixes the age of a child as below twelve years.
However, in real estate law, the age of majority is 21 years and above. This is because section 7 of the Land Use Act restricts any person below the age of 21 years from applying for the grant of (and the Governor is prohibited from granting to such person) a statutory right of occupancy or consent for assignment or subletting of a statutory right of occupancy except in limited exceptions, namely:
(a) 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
(b) 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 buy a land but also the invalidity of a purchase transaction completed by a father on behalf of his underage son.
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, which a tenant of the property (called as witness by the appellant) testified during cross-examination to have seen some unknown persons pasting the public auction notice on the property.
On 10th December 1991, the 2nd respondent sold the property by public auction to the highest bidder, 3rd respondent who presented himself as Musibau Kolawole Olaseni, for the sum of N100,000.00 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 from PW1 (a resident of Houston USA) for the same property. He insisted that the actual market value of the property was N210,000.
Key Issue for Judicial Determination
One of the issues for judicial determination was the identity and capacity of the buyer: between the 3rd respondent and his 8 days’ 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 18th December 1991.
Decision of the High Court
After hearing counsel to the parties, the High Court dismissed all the claims of the appellant. The learned trial Judge rejected the contention that the 3rd respondent bought the mortgaged property for his 8 days old son named in Exhibit Q. Without making any finding as to who was the actual purchaser 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 by 3rd respondent and with evidence of PW1 and PW4 that the property was bought for or on behalf of PW1 and that he was the only person within the family bearing Musibau Kolawole.
Appellant’s Appeal against the Trial Court’s Judgment to the Court of Appeal
Being aggrieved with the above judgment, the appellant then appealed to the Court of Appeal, Ibadan Division (coram: Sunday Akinola Akintan, JCA, who presided, Monronkeji Omotayo Onalaja, JCA, who read the Leading 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 was rejected by the learned trial Judge for lacking legal capacity to enter into a contract of 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 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. Since the operation of Land Use Act (“LUA”) the interest that can be created is 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 can only complain where the sale was tainted with fraud or collusion which does not exist in the instant appeal as no allegation of fraud or collusion was established as rightly found by the learned trial Judge, as they were not proved beyond reasonable doubt. He concluded that fraud or collusion must be pleaded under Order 25 rule 5(1) of the High Court Rules of Ogun State 1978 and strictly proved, which the learned trial judge held the appellant did not comply with, relying on Otteh v. Nwaweke (1990) 3 NWLR (Pt. 140) 550 at 560.
Parts of the above contentions appear to throw up not just the interplay of 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 chose to hold that section 17 is inapplicable to the sale by auction by 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 is the incapacity of the 3rd respondent’s son even if the 3rd respondent’s evidence that he bought the property for his child notwithstanding that he was the present buyer at the public auction. Given the absence of a valid trust, the only presumption that could be made in favour of the 3rd respondent and his son is that agency relationship (in which the 3rd respondent is treated as agent and the son, the 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. In order to avoid the fate of the 3rd respondent who purchased property for his underage son, it is advisable for the parent to set up a trust for the benefit of the child. Please 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 have only a life interest in the land and the last surviving donee reserves a residual interest in the property and can validly dispose them without the concurrence of the children of the other joint owners who may be deceased.
