The Law of Land Pledges in Nigeria: Rights, Redemption, and Customary Rules

Imagine a farmer in rural Oyo State in the 1950s who needs money urgently, perhaps to pay hospital bills or fund a child’s education, but has no bank account and no English law mortgage to turn to. The land his family has farmed for generations is his only asset. What does he do? He pledges it. He hands over possession to a creditor who farms it and takes the proceeds until the debt is repaid. No interest accumulates. No foreclosure threatens. And no matter how many years pass, that land remains his to reclaim the moment he produces the original sum.

That transaction is a customary law pledge, and it remains a recognised legal institution in Nigeria today. Understanding it is not just important for passing land law examinations. It is important for understanding why so many land disputes in southern Nigeria involve contested claims between families who gave land as security decades ago and creditors or their descendants who now claim the transaction was a sale.

What a Pledge Is and Where It Sits in the Law

A pledge of land under customary law is a transaction in which an owner of land transfers possession of the land to a creditor as security for a loan, with the intention that the creditor shall use and enjoy the land and take its proceeds until the debt is fully discharged, at which point the land reverts to the owner.

Elias defined it in Nigerian Land Law as a kind of indigenous mortgage by which the owner-occupier of land, in order to secure an advance of money or money’s worth, gives possession and use of the land to the pledgee-creditor until the debt is fully discharged.¹ Olawoye in Title to Land in Nigeria described it as created when an owner of land transfers possession to his creditor as security, with the object that the creditor should exploit the land and obtain maximum benefits as consideration for making the loan.²

The parties to a pledge have their own names. The person who owns the land and gives it as security is the pledgor. The creditor who receives possession is the pledgee. The pledgor gives up possession. The pledgee takes possession and enjoys the land. That basic structure distinguishes a pledge from every other land transaction in customary law.

How a Pledge Differs from an English Mortgage

This comparison is one of the most tested examination points on this topic, and it is one where students frequently get it wrong.

In an English law mortgage, the borrower (mortgagor) retains possession of the land. The lender (mortgagee) gets the legal title or a charge over the land as security, but does not go into physical possession unless the borrower defaults. The borrower lives on or uses the land throughout the mortgage term.

In a customary law pledge, the position is exactly reversed. The pledgor gives up possession to the pledgee. It is the creditor, not the debtor, who enters and uses the land. The pledgor retains the radical title, meaning the underlying ownership, but has no physical possession of the land until the debt is repaid and redemption takes place.

A second critical difference is what happens when the debt is not repaid. Under English mortgage law, if the mortgagor fails to repay, the mortgagee can exercise a power of sale or apply for foreclosure, ultimately becoming the outright owner of the land. Under customary law pledge, there is no equivalent of foreclosure. No matter how long the pledgor takes to repay, the land is always redeemable. The pledgee can never become the owner of the pledged land simply through the passage of time or through improvements made on it. This is captured in the maxim that is central to the entire institution: once a pledge always a pledge.

The Maxim: Once a Pledge Always a Pledge

This maxim is not merely a catchy phrase. It is the operating principle of customary pledge law and it has real legal consequences in every case touching on this institution.

The maxim means two things. First, a pledged land is perpetually redeemable regardless of how much time has passed since the pledge was created. Second, a pledgee who has been in possession for many years, even decades, cannot convert that possession into ownership through lapse of time alone.

The courts have applied this principle consistently and firmly. In Onobruchere v. Esegine (1986) 1 NWLR (Pt 19) 799, the court held that under customary law the pledgor retains the radical title, which is not extinguished by the pledge, and the pledgor has the right of redemption regardless of how long the land has been pledged.³ In Nuwagwu v. Okonkwo (1987) 3 NWLR (Pt 60) 314, the court reaffirmed that a pledgor’s right of redemption exists no matter how long the land has been pledged.⁴

The facts of Laregun & Ors v. Funlayo (1956) WRNLR 55 illustrate how far this principle reaches. The plaintiffs sued to recover land that had been pledged to the defendant for over thirty years. During those thirty years, the defendant had planted economic trees on the land. The court held that the mere planting of economic trees and the lapse of time did not defeat the plaintiffs’ right to recover the pledged land.⁵

Okoiki & Anor v. Esedalue & Ors (1974) 3 SC 15 pushed this even further. The plaintiff’s grandfather had pledged land to the defendant’s grandfather many years earlier to secure a loan of three pieces of cloth valued at thirty naira. When the plaintiffs sought to redeem the land, the defendants demanded two thousand naira and eventually claimed the transaction had been a sale all along. By the time of the case, the defendants had made vast rubber plantation improvements on the land.

The Supreme Court held that the land was perpetually redeemable. The planting of rubber could only have been done by the pledgee at his own risk, unless there was an express agreement permitting him to do so. No such agreement existed. The original sum, not the inflated demand, was the redemption price.⁶

What the Pledgee Can and Cannot Do With the Land

Understanding the exact scope of the pledgee’s rights in possession is where students most often lose marks in problem questions on this topic.

The pledgee enters into possession lawfully and enjoys the land as if it were his own during the pledge period. He can farm it, harvest from it, receive its natural fruits, and collect any income it produces. That is the commercial logic of the transaction: the creditor receives the use of the land instead of interest on money.

What the pledgee cannot do is fundamentally alter the character of the land in a way that makes redemption more difficult or more expensive for the pledgor. He cannot plant permanent economic crops that the pledgor would be required to compensate him for as a precondition of redemption, unless there was an express agreement to that effect. He cannot claim additional compensation beyond the original loan as a condition of returning the land. He cannot clog the pledgor’s equity of redemption.

The courts have also held that the pledgee cannot transfer the pledged land to a third party without the consent of the pledgor. Since the pledgor never transferred title, only possession, the principle of nemo dat quod non habet applies: the pledgee has no title to give. A purported sale of pledged land by a pledgee without the pledgor’s consent will therefore be void.⁷

What the Pledgor Must Do to Redeem

Redemption is the act by which the pledgor repays the original loan and recovers possession of the pledged land. The pledgor simply needs to tender the original sum that was advanced when the pledge was created. Nothing more.

The pledgee cannot demand more than the original sum as a condition of returning the land. He cannot demand compensation for improvements he made, unless there was a specific agreement allowing those improvements and establishing their terms. He cannot claim that the market value of the land has increased and demand the difference. All such attempts to inflate the redemption price are impermissible as they would amount to clogging the pledgor’s right of redemption.

The pledgor’s right of redemption is also transmissible. If the pledgor dies before redeeming, his children or heirs can redeem the land. The right does not die with the original pledgor. Similarly, if the pledgee dies, the obligation to return the land upon redemption passes to his heirs. The generational aspect of pledge transactions is precisely why disputes like Okoiki v. Esedalue arise, where grandchildren are litigating over a pledge their grandparents created.

How a Pledge Is Distinguished From a Sale

This is one of the most practically important distinctions in customary land law because pledges are frequently disguised as sales, or pledgors later claim a sale was actually a pledge when they want to recover their land.

The courts look at several factors to determine which transaction actually occurred.

The first factor is the language and intention of the parties at the time of the transaction. Was the transfer described as permanent or temporary? Was a redemption price contemplated?

The second factor is the conduct of the original parties. Did the pledgor attempt to redeem at some point? Did the pledgee acknowledge the pledgor’s continuing interest? Did the pledgee pay tribute or in any way recognise the pledgor’s superior title?

The third factor is the consideration paid. A sale price is usually commensurate with the value of the land. A pledge sum is usually much smaller, representing a loan rather than full value.

The fourth factor is whether possession was exclusively transferred or whether the pledgor retained any continuing connection with the land. Where the evidence strongly supports a pledge, courts will not allow a pledgee to defeat that characterisation simply by asserting a sale, as the defendants in Okoiki v. Esedalue discovered.⁸

The Land Use Act Complication That Nobody Explains Clearly

This is the part of pledge law that student notes almost universally ignore, and it is the part that matters most when pledge transactions intersect with modern property dealings in Nigerian cities.

Since the Land Use Act 1978 came into force, all land in each state is vested in the Governor of that state. Section 22 of the Act prohibits the holder of a statutory right of occupancy from alienating that right by way of assignment, mortgage, transfer of possession, sublease or otherwise without the prior consent of the Governor.

The Supreme Court in Savannah Bank (Nig) Ltd v. Ajilo held that both actual and deemed grants of right of occupancy require the Governor’s consent for any valid alienation. Transactions purporting to transfer title or create a mortgage without the requisite consent are void ab initio.

The question this raises for pledge transactions is significant. A pledge involves a transfer of possession of land. Where the pledged land is held under a right of occupancy, whether statutory or deemed, that transfer of possession could be regarded as an alienation requiring the Governor’s consent under section 22. If consent is not obtained, the pledge transaction could be void ab initio, leaving both parties in a difficult position.

As Prof. Aina noted in his analysis of the Land Use Act, the consent provisions under section 22 have caused enormous practical complications for customary land transactions that were never designed with the statutory framework in mind.⁹ The pledge in particular sits awkwardly within the Act’s framework because it is not a mortgage in the English sense, it is not a lease, and it is not a sale, yet it involves a transfer of possession that the Act’s language arguably captures.

For students, the practical lesson is to always consider the Land Use Act dimension when answering a problem question on pledge that involves urban land or land that has been converted to a right of occupancy. The customary rules alone are not sufficient to give a complete answer.

The Pledge Versus the Borrowing of Land

Another comparison that examinations sometimes require is between a pledge and the customary practice of borrowing land. They look similar on the surface because both involve temporary transfer of possession, but they are legally distinct in important ways.

A land loan or borrowing is a temporary arrangement, usually for the period of a farming season or at most a few years, after which the land reverts to the owner. No money is advanced. No debt is created. The borrower uses the land as a favour from the owner and returns it when the agreed period or purpose is accomplished. As Elias explained in Nigerian Land Law, such a loan is valid only for the period of fallow, usually two to seven years, and is thereafter returnable to the owner.¹⁰

A pledge, by contrast, involves a loan of money. The pledgee has a financial interest in retaining possession until the debt is repaid. The duration is indefinite: it lasts until redemption. The commercial logic is completely different. A land borrower is essentially a licensee for a fixed period. A pledgee is a creditor whose possession is the security for a debt.

Common Examination Mistakes on This Topic

Students consistently make three predictable errors in examination answers on pledge.

The first is confusing pledge with mortgage and getting the possession arrangement backwards. In a pledge, the creditor has possession. In a mortgage, the debtor retains possession. Getting this wrong in a problem question will mislead the entire analysis.

The second is failing to apply the once-a-pledge-always-a-pledge maxim when a problem question describes improvements made by the pledgee or a long period of time having passed. Those facts are almost always placed in the question specifically to test whether you know the maxim applies. Apply it.

The third is ignoring the Land Use Act when the land in a problem question is in an urban area or has been the subject of a certificate of occupancy. Always ask whether the Governor’s consent was obtained. If the facts are silent on this, flag it as an issue that would affect the validity of the pledge transaction under section 22 of the Act.

Quick Reference Table

Key Cases for This Topic

Onobruchere v. Esegine (1986) 1 NWLR (Pt 19) 799 — pledgor retains radical title; right of redemption exists regardless of length of time.

Nuwagwu v. Okonkwo (1987) 3 NWLR (Pt 60) 314 — once a pledge always a pledge; right of redemption cannot be defeated by lapse of time.

Laregun & Ors v. Funlayo (1956) WRNLR 55 — planting economic trees during a thirty-year pledge did not defeat the pledgor’s right to redeem.

Okoiki & Anor v. Esedalue & Ors (1974) 3 SC 15 — pledged land perpetually redeemable even after generations; pledgee’s improvements did not extinguish redemption right; redemption price is the original loan sum, not an inflated demand.

Akyirefie v. Breman-Esiam (1951) 13 WACA 311 — early authority confirming perpetual redeemability of pledged land.

Amoo v. Adigun (1957) 2 WNLR 55 — confirms the once-a-pledge-always-a-pledge principle.

Ikeanyi v. Adighogu (1957) 2 ENLR 38 — pledgor’s right of redemption subsists regardless of time elapsed.

---

Footnotes

¹ T.O. Elias, Nigerian Land Law (4th ed.) pp. 153-154.

² C.O. Olawoye, Title to Land in Nigeria (Evan Brothers Ltd, 1974) p. 4.

³ Onobruchere v. Esegine (1986) 1 NWLR (Pt 19) 799.

⁴ Nuwagwu v. Okonkwo (1987) 3 NWLR (Pt 60) 314.

⁵ Laregun & Ors v. Funlayo (1956) WRNLR 55.

⁶ Okoiki & Anor v. Esedalue & Ors (1974) 3 SC 15.

⁷ See the discussion in A.Y. Abdullahi, ‘Remodelling Customary Law Pledge of Land into a Viable Form of Security Transaction in Nigeria: A Legal Appraisal’ (2020) 7(1) Nnamdi Azikiwe University Journal of Commercial and Property Law 1.

⁸ Okoiki & Anor v. Esedalue & Ors (supra).

⁹ K. Aina, Land Use Act (lecture notes); see also Savannah Bank (Nig) Ltd v. Ajilo (1987) 2 NWLR (Pt 55) 37; Land Use Act 1978, ss. 22, 26.

¹⁰ T.O. Elias (n 1) pp. 157-159; N. Tobi, Cases and Materials on Nigerian Land Law (Mabrochi Books, Lagos, 1992) p. 64.

For a full understanding of how customary land relationships fit within the broader system of land tenure in Nigeria, see our note on Family Property in Nigerian Customary Law: Ownership, Control, and Legal Status. For an understanding of how the Land Use Act affects customary transactions generally, see our note on The Land Use Act 1978 and Its Effect on Customary Land Tenure. For a broader understanding of how customary law operates as a source of Nigerian law, see our note on Sources of Law in Nigeria.