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MOSES ASAFU ADJEI
V.
CHIEF YAW DABANKA AND ANOTHER
WEST AFRICAN COURT OF APPEAL, HOLDEN AT ACCRA, GOLD COAST
16TH DAY OF JUNE, 1930
2PLR/1930/5 (WACA)
OTHER CITATION(S)
2PLR/1930/5 (WACA)
(1930) I WACA PP. 63 – 69
LEX (1930) – I WACA 63 – 69
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BEFORE THEIR LORDSHIPS:
DEANE, C.J., THE GOLD COAST COLONY
MICHELIN, J.
SAWREY-COOKSON, J.
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BETWEEN:
MOSES ASAFU ADJEI — Appellant
AND
1. CHIEF YAW DABANKA
2. KWAMI AKOWUA — Respondents
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ORIGINATING COURT(S)
Appeal from the judgment of the Acting Circuit Judge of Ashanti (His Honour Francis John McDowell)
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REPRESENTATION
E. O. Asafu-Adjaye — for the Plaintiff-Appellant
A. M. Akiwumi — for the first Defendant-Respondent
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ISSUE(S) FROM THE CAUSE(S) OF ACTION
REAL ESTATE AND PROPERTY LAW — LAND:- Mortgage — Legal Mortgage — Distinction from customary mortgage — Essentials — Equitable mortgage — What constitutes — Where deemed to exist — Validity of sale of mortgaged property effected without order of court
REAL ESTATE AND PROPERTY LAW — LAND:- Equitable mortgage — Renewal of lease of property by mortgagee in own/agent’s name — Where undertaken under the belief that property had passed due to mortgagor failure to pay within agreed period — Where court deems property still vested in mortgagor — Proper order for court to make
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CASE SUMMARY
In consideration of a loan of £250 the plaintiff deposited with a predecessor of the defendant Akowua, by name Derkyi, his document of title to certain leasehold premises, and at the same time by an informal document purported to grant to the said defendant his interest in the said premises. The principal conditions in this document were that the plaintiff was to remain in possession and that the lease was to be the absolute property of Derkyi if the principal and interest were not paid within one year. The principal and interest were not paid within the time specified, and Derkyi sold the lease to the defendant Dabanka.
The plaintiff sued in the Circuit Court of Ashanti for the return of his premises, but his action failed.
On appeal it was held that the original transaction between plaintiff and Derkyi was not a native mortgage because the plaintiff was to remain in possession. The Court held it to be an equitable mortgage which plaintiff was still entitled to redeem, and ordered the sale to set aside and the premises to be assigned to the plaintiff.
As regards certain renewals of the lease which had been effected by Akowua, it was held that they were engrafted on the old lease and formed part of the security.
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DECISION OF THE WEST AFRICAN COURT OF APPEAL
1. The document executed between the mortgagor and mortgagee do not contain the essential requirements of a legal mortgage.
2. It cannot also be held to be a native mortgage in view of the fact that it is stated in the body of the deed “that the said building shall remain in the possession use and control of the mortgagor who shall also draw and receive all rents accruing therefrom until the end of one year from the date of these presents.”
3. It is an essential element of a native mortgage that possession of the mortgaged premises should be given to the mortgagee at the time when the transaction takes place between the parties.
4. Where a mortgage was executed between illiterate natives, which was irregularly drafted and could not be construed as a legal mortgage; and the possession of the mortgaged property remained in the mortgagor, the deed could not therefore be held to be a native mortgage. A sale under that mortgage without an order of foreclosure having been made by the Court was an invalid sale.
5. In the present case an Equitable Mortgage was created, not only by the informal document executed between the parties, but also by deposit with the creditor of the appellant’s title deed to the property mortgaged. It was essential therefore for the mortgagee or his successor to have come to the Court to obtain an order of foreclosure before a sale of the mortgaged property could have been legally effected. Not having done so, the sale of the property was an invalid sale, and amounts in law to a nullity.
6. The appellant was therefore entitled to come to the Court to seek redemption as against the second respondent and recovery of the mortgaged premises from the first respondent.
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MAIN JUDGMENT
The following judgments were delivered:
MICHELIN, J.
This is an appeal from the judgment of the Acting Circuit Judge of Ashanti (His Honour Francis John McDowell) dated the 5th October 1929, in favour of the defendants with costs.
By his writ of summons dated the 28th July, 1928, the plaintiff claimed from the first defendant:
“possession of plaintiff’s compound house situated at Kajatia on plot No. 387 which plot is known as Juabeng Stool land, and which house by a mortgage deed dated the 27th day of August, 1912, was mortgaged by the plaintiff to one Kojo Derkyi since deceased for a loan of £250 plus interest of £100, which said compound house the said Kojo Derkyi deceased transferred possession of to Chief Yaw Dabanka as Caretaker,”
On the action coming on for hearing before the Court on the 6th September, 1928, Kwami Akowua was on the application of the plaintiff joined as a co-defendant and the writ of summons was amended to read as follows:
“Plaintiff’s claim is to call upon:
(a) the second defendant Kwami Akowua to shew cause why he should refuse to accept repayment of an amount of £350 being as to £250 money lent to plaintiff by his predecessor Kwadjo Derkyi (since deceased) and as to £100 interest charged thereon, and which sum of £350 is due and payable under Deed of Mortgage dated 27–8–1912 and repayment of which amount was secured by plaintiff’s house situated at Kajatia Prison Road Kumasi.
(b) The first defendant Chief Yaw Dabanka to show cause why he alleged to have bought plaintiff’s house situated at Kajatia Prison Road Kumasi for the sum of £250, well knowing the same to have been mortgaged to one Kojo Derkyi (since deceased) and of whom Kwami Akowua is now the successor, and of which property the said Chief Yaw Dabanka was Caretaker who also signed as an attesting witness to the Mortgage Deed dated 27-8-1912 given to the said Kwadjo Derkyi (since deceased).”
The plaintiff not having had the advantage of the assistance of Counsel in preparing his writ of summons, these particulars are rather peculiarly worded, but it is clear that the action as against the first defendant was intended to be a claim for the recovery of the possession of the mortgaged premises on the ground of the sale to the first defendant being invalid, and as against the second defendant, it was a claim for redemption.
It will be as well at this stage to set out in detail the contents of the mortgage deed in respect of which this action has been brought, and which was admitted in evidence in the Court below as Exhibit “A”.
It reads as follows:
“This Indenture made the 27th day of August 1912 Between Moses Adjaye of Coomassie hereinafter called the Mortgagor which expression shall where the context so admits include his heirs, successors and representatives, of the one part, and Kojo Derkyi of Coomassie hereinafter called the Mortgagee which expression shall where the context so admits include his heirs, successors and representatives of the other part Witnesseth that whereas the Mortgagee hath at the request of the Mortgagor agreed to lend £250 to the Mortgagor the sum Two hundred and fifty pounds on repayment of the £100 same in one year from the date thereof with an interest of One Hundred Pounds and Whereas the Mortgagor is the owner in his own right of the building hereinafter charged with the payment of the Mortgage debt or intended so to be Now This lndenture Witnesseth that in consideration of the sum of Two Hundred and Fifty Pounds (£250) paid by the Mortgagee to the Mortgagor the receipt whereof the Mortgagor hereby acknowledges together with interest hereinbefore provided the Mortgagor hereby grants unto the Mortgagee All the Building situate in the town of Coomassie in the Market Road known as Moses Adjaye’s house under the following terms and conditions:
“1. That upon the Mortgagor failing to pay to the Mortgagee the sum of Three hundred and fifty Pounds £350 at the end of one year from the date hereof then the Mortgagee shall enter, take possession of and freely enjoy the use of the Building herein above referred to, which shall from that date and for ever be and remain the property of the Mortgagee absolutely and without any manner of condition.
“2. That the said Building shall remain in the possession, use and control of the Mortgagor who shall also draw and receive all rents accruing therefrom until the end of one year from the date of these presents,
“3. That the Mortgages shall not take possession of the Mortgaged building as herein provided until he shall have delivered such notice to any caretaker when the Mortgagor may put in charge of the said building, or left such notice on the said building or any conspicuous parts of it.
“As Witness the hand of Moses Adjaye at Coomassie the day and year first above written.
| Moses-Q. Adjaye Kojo Derkyi | His X Mark. |
“Signed by the mid Kojo Derkyi at Coomassie this Indenture having been first read over and explained to him in the Ashanti language by me when he seemed to understand the same and made his mark thereto in my presence
Harry Anaman
Licensed Letter Writer
Central District; No. 1091.
Witnesses
| Chief Yao Adabanka of Tafu | his X mark |
| Kwamin Mensah | his X mark. |
| Kofi Poku | his X mark.” |
Although not so stated in the Mortgage deed, it is apparent from the evidence that the land upon which the mortgaged house was erected was land which had been leased by the Mortgagor from the Chief of Juabin who in turn held this land under a lease from the Government of Ashanti.
The facts appear to be shortly as follows: On the 27th August, 1912, the plaintiff obtained a loan of £250 from one Kwadjo Derkyi the predecessor of the second defendant which he undertook to repay with interest agreed upon at the sum of £100, and at the same time he secured the payment of this debt by executing the document marked “A” which was deposited by him together with the lease of the premises with the said Kwadjo Derkyi. The plaintiff then apparently left Kumasi, and went to a place called Bana, finally returning to Kumasi in the year 1925. During his absence he had left the first defendant, as his caretaker, in charge of the house, and had authorised him to collect the rents thereon during his absence. On his return he endeavoured to redeem the house which he had mortgaged by offering payment of the sum of £350 to the second defendant, who in the meantime on the death of the Mortgagee had succeeded him, but the plaintiff was informed that during his absence the house had been sold, the purchaser being the first defendant, whom he had left in charge of the house in his absence. The first defendant refused, however, to give up the house to the plaintiff, and the redemption could not therefore be effected. The present action was therefore instituted.
The learned trial Judge held that the sale by the mortgagee was valid sale and refused to set aside such sale, and he also held that the action as against the second defendant was wrongly conceived, the plaintiff’s remedy being in damages.
The following grounds of appeal were filed by the Appellant:
(1) That the plaintiff took steps to impeach the sale at the earliest opportunity when the said sale came to his notice.
(2) That the alleged sale of the house by the successor of Kwame Akowua was not an absolute sale.
(3) That judgment was against the weight of evidence.
(4) That the judgment was inequitable.
(5) That the judgment was otherwise erroneous.
(6) Decision contrary to law and native custom.
In arguing the appeal, however, Mr. Asafu-Adjaye on behalf of the appellant confined his submissions to the sixth ground only
He referred the Court to the decision of the Full Court in the case of Adu Sei v. Ofori F.C. 1926–29, 87, in which it was held that in the case of an equitable mortgage it was not competent for the Mortgagee to sell without first coming to the Court for an order of foreclosure, which had not been done in the present case. He submitted therefore that the sale being invalid the plaintiff was entitled to redeem the mortgaged property.
Mr. Akiwumi on behalf of the first respondent contended however that the Mortgage deed, although prepared like an English mortgage was in reality a native mortgage, and that the sale under the mortgage was good and should not be set aside. In support of this contention he referred the Court to the judgment of the Full Court in the case of Teye Norh v. Gbedemah F.C. 1926-29, 395.
He also drew the attention of the Court to the fact that since the purchase by the first respondent of the mortgaged property, he had obtained from the Chief Commissioner of Ashanti an extension of the subsisting lease, which did not expire until the year 1933. This is shown by an Indenture of Lease which was put in evidence as Exhibit “E”.
The second respondent, who appeared in person and was not represented by Counsel, did not oppose the allowance of this appeal.
I shall in the first place consider the nature of the document which was admitted in evidence as Exhibit “A”.
It is clear from a perusal of this document that the essential requirements of a legal mortgage are wanting.
It cannot also be held to be a native mortgage in view of the fact that it is stated in the body of the deed “that the said building shall remain in the possession use and control of the mortgagor who shall also draw and receive all rents accruing therefrom until the end of one year from the date of these presents.”
It is an essential element of a native mortgage that possession of the mortgaged premises should be given to the mortgagee at the time when the transaction takes place between the parties. This is made clear from the following passage which appears in Sarbah’s Fanti Customary Law at page 261:-
“Mortgage or rather pledge of land is a transaction in the presence of witnesses, the possession of the land pledged being given to the lender of the money.”
In the case of Adu Sei v. Ofori, to which reference has been made, the facts were practically the same as in the present case. In that case a mortgage was executed between illiterate natives, which was irregularly drafted and could not be construed as a legal mortgage; the possession of the mortgaged property remained in the mortgagor and the deed could not therefore be held to be a native mortgage. The Full Court held that a sale under this mortgage without an order of foreclosure having been made by the Court was an invalid sale.
In the case of Toye Nork v. Gbedemah, to which reference has also been made, a mortgage deed was also executed between illiterate natives which could not be construed as a legal mortgage, but in view of the fact that it was proved that possession of the mortgaged property was given to the mortgagee at the time when the mortgage transaction took place between the parties and that all the other requirements to constitute a native mortgage had been fulfilled, it was held by the Full Court that this mortgage constituted a native mortgage. The Full Court in the course of their judgment distinguished between the facts in that case and the facts in the case of Adu Sei v. Ofori, to which I have referred.
In Coote on Mortgages (9th Edition) at page 71, it is stated as follows:-
An Equitable Mortgage to secure a past debt or a private advance may be made:-
“(1) By a formal mortgage of the equity of redemption in property.
“(2) By an agreement of any charge or other writing, however informal, which indicates with sufficient certainty the intention to create a mortgage security
“(3) By a deposit with the creditor of deeds, or other documents of title, by way of security for payment of the debt or loan.”
It is clear therefore that in the present case an Equitable Mortgage was created, not only by the informal document (Exhibit “A”) executed between the parties, but also by deposit with the creditor of the appellant’s title deed to the property mortgaged.”
It was essential therefore for the mortgagee or his successor to have come to the Court to obtain an order of foreclosure before a sale of the mortgaged property could have been legally effected.
Not having done so, I am compelled to hold that the sale to the first respondent was an invalid sale, and amounts in law to a nullity.
The appellant was therefore entitled to come to the Court to seek redemption as against the second respondent and recovery of the mortgaged premises from the first respondent.
I shall now consider the question as to the renewals of the mortgagor’s leasehold, since the late of the execution of the mortgage.
Three such renewals are proved to have taken place:
(1) By sub-lease dated the 8th August, 1914, between the Omanhene of Juabeng of the one part and Kojo Derkyi (the original mortgagee) of the other part.
(2) By sub-lease dated the 19th August 1918 between the Omanhene of Juabeng of the one part and Yaw Dabanka (the first respondent) of the other part.
(3) By lease dated the 27th May 1926 between the Chief Commissioner of Ashanti of the one part and Yaw Dabanka (the first respondent) of the other part.
In Coote on Mortgages (9th Edition) at page 190 it is stated as follows:
“It has been decided that if the mortgagee of a leasehold estate obtains a renewal of the lease, although there subsisted only a tenant right, the renewed lease would be held subject to the like equity as subsisted in the old lease and would be redeemable accordingly; the mortgagee, however, being not bound to renew, would be entitled, in case he did, to his costs in effecting the renewal.”
“The rule was that the renewed lease must be treated as engrafted on the old and as forming part of the mortgage security.” (See ve Biss (1903) 2 Ch. 40 per Romer L.J.)
In my opinion therefore the costs incurred in effecting the renewals of the lease originally held by the mortgagee, since the execution of the mortgagee, should be added by the mortgagor to the amount due in respect of the mortgage, before a redemption of the mortgaged property can be effected.
In view of the conclusions at which I have arrived, the learned trial Judge was in my opinion wrong in dismissing the action as against both respondents.
This appeal must therefore be allowed and the judgment of the Court below set aside and the following judgment substituted in lieu thereof:
“Judgment for the plaintiff as against the first defendant for the recovery of the house, mortgaged to the second defendant’s predecessor Kojo Derkyi under the mortgage dated the 27th August, 1912, such possession to be deferred however until the conditions hereinafter provided by this judgment have been fulfilled by the plaintiff within the time specified, and as against the second defendant for the redemption of the mortgaged premises upon payment by the plaintiff to the second defendant of the sum of £350, together with the amount expended by him on the renewal of the lease held by the plaintiff on the mortgaged premises. Out of the aggregate sum so payable by the plaintiff to the second defendant, the second defendant must reimburse to the first defendant the sum of £256 being the amount paid by him as purchase money for the mortgaged premises, and the first defendant must also recover from the plaintiff the amount expended by him in respect of the renewals by him of the lease on such premises, and on such payment being made, the first defendant must, at his own cost, subject to the consent of his lessor (the Chief Commissioner of Ashanti) execute in favour of the plaintiff an assignment of the remaining term of the lease now held by him on the mortgaged premises such redemption to take place within three months from date hereof, that is from the 16th day of June, 1930. In default, the plaintiff to forfeit his right to redeem.
“The plaintiff to have the costs of this action, as against both defendants.”
The appellant must also have the costs of this appeal as against the first respondent only, assessed at the sum of £24 17s, the second respondent not having been represented by Counsel at the bearing of this appeal and not having opposed the allowance of this appeal.
The Court below to carry out.
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DEANE, C.J. THE GOLD COAST COLONY
I concur.
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SAWREY-COOKSON, J.
I concur.
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