LEGAL PRINCIPLE: PROPERTY LAW — Mortgage — Exercise of Power of Sale — Mortgagee’s Obligation to Obtain Proper Price
PRINCIPLE STATEMENT
The mortgagee selling under a power of sale must act in good faith and observe reasonable precautions to obtain not the "best price" but "a proper price." He may conduct the sale in such manner as he may think most conducive to his own benefit, provided he acts bona fide.
RATIO DECIDENDI (SOURCE)
Per Ogundare, JSC, in African Continental Bank Ltd v. Ihekwoaba (2003) NLC-1141999(SC) at pp. 14–15; Paras D–A.
"The only obligation incumbent on a mortgagee selling under a power of sale in his mortgage is that he should act in good faith. Whether selling under an express or statutory power, he may generally conduct the sale in such manner as he may think most conducive to his own benefit, unless the deed contains any restrictions as to the mode of exercising the power, provided he acts bona fide and observes reasonable precautions to obtain not the 'best price' but 'a proper price'."
EXPLANATION / SCOPE
The mortgagee’s obligation is good faith and reasonable precautions. He need not obtain the best price, only a proper price. The principle applies to mortgage law. The mortgagee may act in his own interest. The rule protects the mortgagee’s discretion. The mortgagor may challenge bad faith. The principle is well-established.