ADDAI v. DONKOR [1972] 1 GLR 209
COURT OF APPEAL
29 NOVEMBER, 1971
AZU CRABBE JSC LASSEY AND ARCHER JJA
CASES REFERRED TO
(1) Butler v. Rice [1910] 2 Ch. 277; 79 L.J. Ch. 652; 103 L.T. 94.
(2) Chetwynd v. Allen [1899] 1 Ch. 353; 68 L.J. CH. 160; 80 L.T. 110; 47 W.R. 200; 43 S.J. 140.
(3) Chandiram v. Ghana Commercial Bank [1960] G.L.R. 178; sub nom. Ghana Commercial Bank v. Chandiram [1960] A.C. 732; [1960] 3 W.L.R. 328; 104 S.J. 583; [1960] 2 All E.R. 865, P.C.
(4) Akyeampong v. Atakora (1952) 14 W.A.C.A. 4.
(5) Amoah v. Manu [1962] 1 G.L.R. 218, S.C.
(6) Kwabena v. Aninkora [1964] G.L.R. 299, S.C.
(7) Marfo v. Adusei [1964] G.L.R. 365, S.C.
(8) Farrar v. Farrars Ltd. (1888) 40 Ch.D. 395; 58 L.J. Ch. 185; 60 L.T. 121; 37 W.R. 196: 5 T.L.R.
164, C.A.
(9) Tagoe v. Nugent, Court of Appeal, 29 July 1969, unreported; digested in (1969) C.C. 148.
(10) Asare v. Donkor [1962] 2 GLR 176, S.C.
(11) Bennett v. Bennett (1876) 43 L.T. 246.
(12) In re Bloye’s Trust (1849) 1 Mac. & G. 488; 41 E.R. 1354.
(13) Downes v. Grazebrook (1817) 3 Mer. 200; 36 E.R. 77.
(14) Hodson v. Deans [1903] 2 Ch. 647; 72 L.J. Ch. 751; 89 L.T. 92; 52 W.R. 122; 19 T.L.R. 596: 47S.J. 750.
(15) In re Enock and Zaretzky, Bock & Co.’s Arbitration [1910] 1 K.B. 327; 79 L.J.K.B. 363; 101 L.T.
801, C.A.
(16) Coulson v. Disborough [1894] 2 Q.B. 316; 70 L.T. 617; 58 J.P. 784; 42 W.R. 449; 10 T.L.R. 429;
38 S.J. 416; 9 R. 390, C.A.
(17) R. v. Harris [1927] 2 K.B. 587; 96 L.J.K.B. 1069; 137 L.T. 535; 91 J.P. 152; 43 T.L.R. 774; 28
Cox C.C. 432; 20 Cr.App.R. 86, C.C.A.
(18) R. v. Oliva [1965] 1 W.L.R. 1028: 129 J.P. 500; 109 S.J. 453; [1965] 3 All E.R. 116; 49 Cr.App.R.
298, C.C.A.
(19) R. v. Bright [1916] 2 K.B. 441; 85 L.J.K.B. 1638; 115 L.T. 488; 80 J.P. 407; 32 T.L.R. 600; 25
Cox C.C. 540; 12 Cr.App.R. 69, C.C.A.
(20) R. V. Morris (1867) L.R. 1 C.C.R. 90; 36 L.J.M.C. 84; 16 L.T. 636: 15 W.R. 999; 10 Cox C.C.
(21) Lord Eldon v. Hedley Brothers [1935] 2 K.B. 1; 104 L.J.K.B. 334; 152 L.T. 507; 51 T.L.R. 313; 79
S.J. 270, C.A.
NATURE OF PROCEEDINGS
APPEAL from a judgment of the High Court, Sunyani, setting aside a sale by public auction of the respondent’s property. The facts are fully stated in the judgment of Archer J.A.
COUNSEL
v. Campbell (with him Mensah) for the appellant.
Pobee for the respondent.
JUDGMENT OF ARCHER J.A.
This is an appeal from a judgment of the High Court, Sunyani, which set aside a sale by public auction of two farms and a cottage originally belonging to the respondent. The properties were sold at the instance of the appellant, a money lender (acting under a power of sale vested in him by a deed of mortgage) to two co-defendants who have not appealed. Stripped of irrelevant minutiae, the facts of the dispute are as follows: Kwasi Donkor, the respondent, was the owner of a very big cocoa farm through which flowed a river called Subin, thus dividing this big farm into two identifiable farms, that is one large farm and a smaller farm. The respondent also had a cottage on the same farm land which became popularly known as Donkorkrom at Kenyasi No. 1 in the Brong-Ahafo Region.
Early in 1957, the respondent obtained a loan of £1,330 with interest from one Akomfohene in order to develop his cocoa farms. A deed of mortgage, exhibit 2, was therefore executed on 26 January 1957 in favour of Akomfohene. The property mortgaged was the larger of the two farms and by the terms of the mortgage (exhibit 2), the respondent agreed to repay the principal sum and interest on 31 January 1958. Notwithstanding exhibit 2, of which he was well aware, the respondent approached Opanin Kwaku Addai, the appellant, a money lender, for a loan of ¢3,350 with interest of ¢250. Accordingly, on 1 April 1957, the respondent executed another mortgage deed, exhibit G, in favour of the appellant. The properties mortgaged in exhibit G included the larger farm already mortgaged, the smaller farm and the respondent’s farm cottage. It should be mentioned now that although exhibit 2 (dated 26 January 1957) and exhibit G (dated 1 April 1957) appear to have been drafted by the same lawyer whose signature is endorsed on both documents it was never revealed to the appellant, the second mortgagee, that the larger cocoa Farm had already been mortgaged to one Akomfohene by exhibit 2 on 26 January 1957. The appellant therefore took exhibit G in the honest belief that the three properties were unencumbered although in fact one of them was. Indeed the respondent deceived the appellant when he swore an affidavit on 1 April 1957 attached to exhibit G that none of the three properties was already mortgaged. By the terms of exhibits G, the respondent was to repay the principal sum plus interest on 31 January 1958. Therefore on 31 January 1958, the respondent had to repay ¢1,500 under exhibit 2 to Akomfohene and £3,600 under exhibit G to the appellant.
On 6 May 1957, the respondent executed yet a third mortgage deed in favour of one Akwasiwa, another money lender in the sum of ¢270 plus ¢30 interest. The property mortgaged was the smaller farm which had already been mortgaged to the appellant. In this case too, the respondent never revealed to this third mortgagee that there was a prior mortgage in favour of the appellant in respect of this smaller farm. Under the terms of this third mortgage, exhibit 1 (prepared and endorsed by a different lawyer) the respondent convenanted to repay the total sum of ¢300 including interest within seven months from 6 May 1957, that is to say, on or before 5 December 1957.
The state of affairs after exhibit 1 had been executed was as follows:
(1) There was a first mortgage in favour of Akomfohene in respect of the larger cocoa farm.
(2) There was a second mortgage in favour of the appellant in respect of the larger cocoa farm but the appellant did not know of the first mortgage to Akomfohene.
(3) There was a first mortgage in favour of the appellant in respect of the smaller cocoa farm.
(4) There was a second mortgage in favour of Akwasiwa in respect of the smaller farm but Akwasiwa did not know of the first mortgage to the appellant.
(5) There was a mortgage of the farm cottage in favour of the appellant.
Subsequently, Akomfohene threatened to sell the larger cocoa farm and for the first time, the respondent revealed to the appellant that he had already mortgaged the larger farm to Akomfohene. The respondent also informed the appellant of the subsequent mortgage to Akwasiwa. By an oral agreement, the appellant paid off both Akomfohene and Akwasiwa and took possession of the mortgage deeds, exhibits 1 and 2. There was no legal assignment of these two mortgages and therefore the appellant became an equitable assignee.
On 5 January 1958, one Darkwa, an auctioneer acting on the instructions of the appellant, gave notice of demand to the respondent for the repayment of the principal sums due under the three mortgages, exhibits 1, 2 and G. It should be recalled that the money under exhibit 1 was due on 5 December 1957; that on exhibit 2 was due on 31 January 1958 and that on exhibit G was also due on 31 January 1958. It should also be noted that in each case, the mortgage deed gave the mortgagee power to sell after one month’s notice of intention to sell had expired after the date due for repayment. It is therefore obvious that the notice of demand that was given on 5 January 1957 could have operated regularly only in the case of exhibit 1 which was due for repayment in December 1957 and could not have operated regularly in the case of exhibits 2 and G because repayments under these mortgages were not due until 3 January 1958. The notice of demand in respect of exhibits 2 and G was therefore clearly premature. On 24 February an auction sale took place under the power of sale vested in the appellant under exhibit G. But the sale was nullified by the auctioneer because the purchaser could not pay the purchase price.
There was a second auction sale on 28 March 1958 conducted by the same auctioneer. On this occasion, the larger farm was sold to the first co-defendant, Burahima Kramo, who also bought the farm cottage. The smaller farm was also purchased by the second co-defendant, Kofi Nuamoah, who died during the proceedings in the High Court and was substituted by his nephew. Seven years later, on 29 July 1965, the respondent took out a writ of summons in the High Court, Sunyani, claiming an order to set aside the sale which took place on 28 March 1958 as illegal and invalid.
He also claimed an order that the appellant should account for all proceeds realised from the cocoa farms. After the writ had been issued, the purchasers at the auction sale, that is Kramo and Nuamoah were joined as co-defendants at their request. The issues set down for trial were as follows:
(1) Whether or not after the first sale a fresh notice should have been served on the plaintiff, and if so whether any such notice was served before the sale.
(2) Whether or not there was any sale at all after the first sale of the mortgage property.
(3) Whether or not the co-defendants were merely nominal purchasers for the first defendant.
(4) Whether or not the plaintiff is entitled to have the sale set aside and to an account.
After hearing lengthy oral evidence and legal submissions by learned counsel for all the parties, the learned trial judge found as follows:
(a) That the auctioneer contrary to the terms of exhibit G which fixed 31 January 1958 as the contractual date for the repayment of the mortgage debt, issued a demand notice on 2 January 1958 and accordingly the demand notice was null and void in law.
(b) That no further demand notice was ever issued calling in the mortgage.
(c) The only auction notice proved to have been posted up was the auction notice advertising the first auction sale which took place on 24 February 1958 and which was null and void in law.
Furthermore there was no satisfactory proof of any auction notice having been posted up advertising the second sale which was conducted in March 1958.
(d) The co-defendants, that is Kramo and Nuamoah, who bought the properties during the second auction sale were in truth acting as agents of the appellant Kwaku Addai on whose behalf they purported to buy the properties and as he could not in law as a mortgagee buy these properties through his agents, the sale must be set aside.
The learned trial judge held further that the respondent was entitled to an account of the cocoa proceeds which the court later fixed at N›8,105.26 and entered that sum as a judgment debt against the appellant. In this court, the grounds of appeal argued against the judgment of the court below were:
(1) That the learned trial judge erred in law and on the facts in holding that the notice served on the respondent, that is Donkor, on 2 January 1958 was null and void in law, by failing to consider exhibit 1 of which the appellant was an assignee in respect of which mortgage the date for repayment was on or about 6 December; and by failing to consider that the notice of demand related not only to the amount owing under exhibit G but also to amounts owing under exhibits 1 and 2.
(2) The learned trial judge misdirected himself on the onus of proof by shifting the onus on the apellant resulting in a critical appraisal of the appellant’s evidence, drawing inferences adverse to the appellant on facts either not in evidence or wholly irrelevant and failing completely to subject the respondent’s evidence to any such critical appraisal thereby rendering the whole judgment unsatisfactory.
(3) The learned trial judge erred in law in the exercise by him of his discretion in calling MusaWangara as a witness of the court and thereby precluded the defendant-appellant from having a fair trial. I think the first ground can be disposed of without much ado. the facts have been stated at length in this judgment and need not be repeated. It is clear from the evidence given by both the respondent and the appellant that when the appellant paid off the mortgage debts on exhibits 1 and 2 the intention of both parties was to enable the appellant to have full control of all the properties, namely, the larger farm which had been mortgaged to Akomfohene and the smaller farm mortgaged to Akwasiwa. The respondent himself testified in his evidence-in-chief that, “As I had given as securities for the two loans parts of the same farm I gave to the defendant, the defendant paid off the £800 so as to retain full control over the farm.” As already pointed out, when the appellant paid off the two loans, he did not take a legal assignment of the debts but the mortgage deeds, exhibits 1 and 2 were handed to him. What was the position of the appellant after paying off the two other mortgages? The law is succinctly stated at para. 497 at p. 270 of Vol. 27 of Halsbury’s Laws of England (3rd ed.), as follows:
“Although there has been no actual transfer of the mortgage, a person who advances money for the purpose of paying it off, and whose money is thus applied, becomes an equitable assignee of the mortgage and is entitled to have it kept alive for his benefit.”
See Butler v. Rice [1910] 2 Ch. 277 and Chetwynd v. Allen [1899] 1 Ch.353 applied in Chandiram v. Ghana Commercial Bank [1960] G.L.R. 178, P.C. This is the legal position although the person who pays the money has no interest in the mortgage property. But in the present appeal the appellant had an interest in the properties mortgaged in exhibits 1 and 2. What is the law in such a case? In this respect too, the law is briefly stated at p. 449 of Snell’s Principles of Equity (26th ed.), as follows:
“If, however, there are other incumbrances over which the mortgage has priority, an intention to keep it alive will be presumed for the sake of that priority: a man who pays off a first mortgage will be presumed to intend to keep it alive for his own benefit rather than discharge it and so elevate the second mortgage into first place (Whiteley v. Delavey [1914] A.C. 132). A first mortgagee who buys the equity of redemption when second mortgages exist will similarly be presumed to intend to keep his mortgage alive (Adams v. Angell (1877) 5 Ch.D. 634).”
In the present appeal, when the appellant paid off Akomfohene the debt in exhibit 2, both the appellant and the respondent intended that the appellant should step into the position of Akomfohene and keep the debt alive for his own benefit. The same intention was manifest when the appellant paid off Akwasiwa the debt in exhibit 1. As the appellant held these two equitable mortgages, he could not legally exercise the powers of sale conferred by these deeds except by an order of the court.
Nevertheless, the appellant himself had a power of sale vested in him under exhibit G and therefore the public auction conducted on 28 March 1958 was under exhibit G. This is clearly stated in the auction sale notice, exhibit 8. It follows therefore that the auction sale which took place on 28 March 1958 was not under any of the powers of sale in exhibits 1 and 2.
Moreover, as it was never the intention of the parties that when the appellant paid them off, the two mortgagees were to be discharged, the debts under these mortgages were still subsisting and the appellant was entitled to their benefit. But looking at the whole evidence and on the admission by the respondent himself, it is clear that the parties intended the appellant to add these paid-off debts to the amount owed under exhibit G. This is why the appellant instructed the auctioneer to sell for the amounts due under exhibits 1, 2 and G.
Now, was the notice given on 2 January 1958 null and void in law as the learned trial judge held? Certainly, the notice given on 2 January 1958 was not null and void. It was a premature notice, which had been given too early. Such notices given before the date due for repayment have always been regarded as irregular and wrongful. They are not null or void. In Akyeampong v. Atakora (1952) 14 W.A.C.A. 4, the notice was given before the date for repayment and the court held that the sale which took place nearly three months after the notice was wrongful yet refused to set it aside because the plaintiff had proved no damage. There is nothing in that judgement which described the notice as null or void. However, in Amoah v. Manu [1962] 1 G.L.R. 218, S.C. where a similar notice was given when the time for repayment was not due, certain expressions were used by the court, to which unfortunately I am unable to subscribe. Thus at pp. 220-221 the court held that:
“the defendant’s so-called notice of demand… is so grossly faulty, that the sale under it cannot but be unlawful. It is an improper and illegal notice, because principally it was given when the time fixed for giving it… had not arrived… It follows that the sale pursuant to that notice… must be and is hereby declared to be illegal.”
The court went further to set aside the judgment of the trial court and awarded damages for the “wrongful sale of his farm as claimed.” It seems that the court was using the words improper, illegal, wrongful and unlawful as synonyms. But in my view the words “illegal” or “unlawful” are inappropriate in such circumstances. An act is illegal or unlawful when it is expressly forbidden by the law of the land. A notice of demand under a mortgage deed prematurely given cannot be illegal or unlawful. It can only be wrongful, improper, irregular or grossly faulty. It constitutes nothing more than a breach of contract. The judgment in Amoah v. Manu was delivered by three judicial giants (Korsah C.J., van Lare and Adumua-Bossman JJ. S.C.) for whom I have the greatest respect but I don’t not think they were using the words “illegal” and “unlawful” in the strict acceptation of those words when they described the demand notice as such.
The learned trial judge also found as fact that when the first auction sale was nullified, no further notice was given to Donkor, the respondent. That may be so but it seems to me that nullification of the auction sale did not necessarily also avoid the earlier notice given on 2 January 1958 and that it was not necessary to give a second notice of demand.
As regards the second auction sale, there is evidence that publicity was given to it in the area and that potential bidders not only inspected the farms in question but returned to the village to make their bids. The learned trial judge placed no reliance on exhibit 8, the auction sale notice which was tendered by the auctioneers. Nevertheless, he accepted the contention of the appellant and the co-defendants that there was a second public auction. Assuming, therefore that the auctioneer did not post fresh notices as required by the Auction Sales Ordinance, Cap. 196 (1951 Rev.), there was evidence that publicity was given to the sale and that the sale was in public and that the properties were knocked down to the highest bidders. These are the objectives of the Auction Sales Ordinance and it cannot be said that these objectives were not achieved on 28 March 1958. The following is what the court below ruled on exhibit 8:
“The date of sale has clearly been changed from 21 to 28 March 1958 without initialling. This raises an uncertainty as to the date of sale as advertised. More important the date on which the auction notice was issued does not appear in the document as that portion has been mutilated and disappeared. These defects detract so much from the weight to be attached to the auction notice which is however accepted as exhibit 8 for what it is worth.”
There is no indication in the judgment that exhibit 8 was considered and if so what weight was attached to it in view of the strictures passed on it in the above quoted ruling. It was never suggested that exhibit 8 was a forged document or a contraption introduced purposely for the litigation. However, there was evidence that the sale took place nearly two months after the due date for the repayment of the principal sum and interest under exhibit G. The law in these matters has now crystallised as follows:
(a) Where the sale is illegal, then the sale is void ab initio and no title passed, See Kwabena v. Aninkora [1964] G.L.R. 299, S.C.
(b) Where the sale is irregular, then it is voidable at the instance of a debtor if he can prove that thealleged irregularity has caused him substantial injury. See Marfo v. Adusei [1964] G.L.R. 365, S.C.
In the present appeal, all that need be said is that even if there were irregularities (for instance, the premature notice given on 2 January 1958, the absence of a second notice of demand, and lack of proper proof of a second auction sale notice) the sale which took place on 28th March 1958, can only be held to be wrongful. The sale cannot be illegal. If it was wrongful then the respondent must prove the substantial injury which he suffered. There is no evidence of such injury and it seems to me that the sale which took place on 28 March 1958 cannot be set aside.
When the proceeds of sale were paid to the appellant, he was in possession of exhibit 2 as an equitable assignee and was entitled to pay himself first the amount under this assignment which ranked in priority to his own exhibit G. After having paid himself the amounts due under exhibits 2 and G, he was also an equitable assignee of exhibit 1 and he was entitled to recover the amount due thereunder before paying any balance to the respondent. In any case, looking at the whole evidence and the admissions by the respondent himself, there can be no doubt that the proper and most reasonable inference to draw was that the respondent intended to treat the sums paid off by the appellant under exhibits 1 and 2 as further advances and it seems to me that in such a case the appellant was entitled to pay himself the total amount under exhibits 1, 2 and G after the proceeds of sale had been handed to him by the auctioneer.
The next point to consider is whether the co-defendants bought the properties in question as agents or nominees of the appellant. The learned trial judge found that they bought as such and therefore declared the sale null and void. The law governing such matters was lucidly stated by Lindley L.J, in Farrar v. Farrars ltd. (1888) 40 Ch.D. 395 at pp. 409-411, C.A. as follows:
“It is perfectly well settled that a mortgagee with a power of sale cannot sell to himself either alone or with others, nor to a trustee for himself: Downes v. Grazebrook (3 Mer. 200); Robertson v. Norris (1 Giff. 421), nor to any one employed by him to conduct the sale: Whitcomb v. Minchin (5 Madd. 91); Martinson v. Clowes (21 Ch. Div. 857). A sale by a person to himself is no sale at all, and a power to sell does not authorize the donee of the power to take the property subject to it at a price fixed by himself, even although such a price be the full value of the property. Such a transaction is not an exercise of the power, and the inter-position of a trustee, although it gets over the difficulty so far as form is concerned, does not affect the substance of the transaction . . .
A mortgagee with a power of sale, though often called a trustee, is in a very different position from a trustee for sale. A mortgagee is under obligations to the mortgagor, but he has right s of his own, which he is entitled to exercise adversely to the mortgagor. A trustee for sale has no business to place himself in such a position as to give rise to a conflict of interest and duty. But every mortgage confers upon the mortgagee the right to realize his security and to find a purchaser if he can, and if in the exercise of his power, he acts bonafide and takes reasonable precautions to obtain a proper price, the mortgagor has no redress . . .”
In the present appeal, the learned trial judge thought that there was strong circumstantial evidence which irresistibly led to the only conclusion that the appellant and the co-defendants, Kramo and Nuamoah, acted in collusion to deprive the respondent of his properties. The word collusion is a very strong one carrying with it a great deal of opprobrium. It means a fraudulent secret understanding. What was the nature and essence of the evidence which irresistibly led the court below to this conclusion?
First of all, who is Kramo, the first co-defendant? He is the elder brother of Addai, the appellant. There is evidence that when the respondent first approached the appellant for the loan, the subject-matter of exhibit G, it was Kramo who at the request of the appellant, inspected the respondent’s farms as possible securities before exhibit G was executed. Secondly, it was Kramo who subsequently bought the larger farm and the cottage after the first abortive public auction sale. According to Kramo, after the sale, he appointed an old man known as Opanyin Kwaku Addai as caretaker but the latter also appointed one Kwabena Agyei as caretaker to look after the farms. However, all proceeds from the farms were paid to Opanyin kwaku Addai whose name appeared in the books of the Cocoa Marketing Board.Nuamoah, the second co-defendant, is neither related to Kramo nor to the appellant Addai. He bought the smaller farm and in concert with Kramo he also handed his farm to Opanyin Kwaku Addai for keeping.
Nuamoah died in the course of the proceedings in the court below and never gave evidence. Now, what was the complaint of the respondent? He maintained that Kramo and Nuamoah in fact bought as agents for the appellant. He testified that after the sale, the appellant exercised overt acts of ownership by bringing labourers to work on the farms, one of them being Dogo alias Musa Wangara. He contended that the name Opanyin kwaku Addai in the books of the Cocoa Marketing Board was not that of the deceased old man but the present appellant himself. He narrated how after the sale he made five attempts to retrieve his properties from the appellant.
On the first occasion, he went with his wife Adjoa Manu and Kweku Arku to see the appellant to make him a caretaker or a labourer to enable him to earn something but the appellant refused not only his request but also refused to reveal to him the purchasers of the farms. On the second occasion, about a year later, he was accompanied by one Naanim of Kumasi to see the appellant about the purchasers. Four years later, he accompanied the Chief of Kenyasi No. 1 to entreat the appellant to release the farms to him but the appellant first demanded £G16,000 and later reduced it to £G10,000 but the respondent could not afford that amount.
Later, the respondent sent another chief, this time the Chief of Kenyasi No.2 to approach the appellant to release the farms but he would not. Lastly, he sent the Baamuhene of Kumasi on a similar mission without success. Both Chiefs of Kenyasi No.1 and Kenyasi No.2 gave evidence confirming that they went to see the appellant and on each occasion, it was the appellant who stated the price he wanted to release the farms. These conversations took place either in the presence of Kramo or in the presence of both Kramo and Nuamoah. The chief farmer of Donkorkrom also gave evidence for the respondent and stated that after the sale the appellant came to Donkorkrom and introduced himself as the purchaser of the respondent’s cocoa farm including the cottage. Later, the appellant also granted the farmers society a piece of land at Donkorkrom on which a shed was built for the society. The appellant also contributed £G50 towards the cost.
The secretary-receiver of the local farmers co-operative society also testified that he had in his books the name of one Opanyin Kwaku Addai as owner of certain cocoa farms at Donkorkrom but this witness was not in a position to say categorically that the Opanyin Kwaku Addai was the appellant or the old man Addai who had died. This secretary-receiver in the course of his evidence mentioned one Dogo Wangara who was then sitting in the court-room. The learned trial judge upon hearing of Dogo’s presence, immediately decided to call him to give evidence. Dogo narrated how he was brought from Kumasi by the appellant and handed over to Kwabena Adjei at Donkorkrom to work on certain farms in the village. In one breath this witness said the owner of the farms was Addai. In another breath, he said he knew the old deceased Addai to whom all moneys from the farms were paid at Kenyasi No.1. When one reads Dogo’s evidence, one is driven to the conclusion that he was an inconsistent witness who was not sure of what he was saying, although the learned trial judge relied on this evidence.
The appellant on the other hand, denied that the co-defendants, Kramo and Nuamoah, were his agents or nominees. He admitted meeting the Chiefs of Kenyasi No. 1 and No. 2 but explained that on each occasion he made it clear who the purchasers were. He attributed his constant visits to Donkorkrom to other farms which he purchased from farmers in the area and tendered in evidence deeds of conveyance marked exhibits 3, 4, 5, 6 and 7. These purchases took place between 4 August 1961 and 31 December 1963. Dogo Wangara was sent there during this period and it is obvious that he could not have known what took place between 1957 and 1961 in connection with the respondent’s farms. The appellant denied that he granted the land for the shed. He explained that he was authorised by Kramo to grant the land for the construction of the cocoa shed. It is not disputed that the appellant had five farms at Donkorkrom andthat it was Kwabena Adjei who looked after these farms for him. Were the inferences drawn by the court below reasonable having regard to the evidence? Before answering that question it would be necessary to deal with two matters which learned counsel for the appellant stressed. First, he submitted that Dogo Wangara should not have been called by the court as a witness because it has been laid down in Tagoe v. Nugent, Court of Appeal, 29 July 1969, unreported; digested in (1969) C.C. 148, that the statutory power of the court to call a witness must be exercised judicially. Did the court exercise its power judicially? The answer must be yes. Dogo Wangara was a person who had been mentioned by a witness in the course of his evidence. Counsel for the first co-defendant who brought Dogo Wangara intimated to the court he did not intend to call him but the court felt that, as Dogo had been sitting in court and was available, he should be called to enable the court to ascertain the truth of the matter. There was no objection from any party to the suit when the court declared its intention. At common law, a court can, in a civil case, call a witness only with the consent of both parties. It follows that if one party objects, the court should refrain from calling the witness. Since 1876 when the first Courts Ordinance came into force in this country, the common law has been modified giving the court a statutory discretionary power whether to call or not to call a witness.
The case of Tagoe v. Nugent (supra) ruled that this power, like all discretionary powers must be exercised judicially; and it seems to me that this principle applies whether the witness is absent from the court-room or happens to be sitting in the court-room. Moreover, whether the power has been judicially exercised or not must be viewed in the light of the circumstances in each case. For instance, when one party objects to the calling of a witness by the court, the court must consider the objection. The court must not act arbitrarily. In the present appeal, no party objected and it is difficult to see how it can be said that the court below exercised its power unjudicially. In any case, the evidence of Dogo Wangara was not reliable because one has to read the evidence in cross-examination carefully and one can conclude that Dogo Wangara was not sure of what he was saying. Although the learned trial judge used it, that piece of evidence could not have operated prejudicially against the appellant because the court below also relied on the evidence of the Chiefs of Kenyasi Nos. 1 and 2 and the chief farmer.
The second submission raised was that Kweku Arku, the local treasurer, should have been called and that a failure to call him should be construed as an indication that, had he been called, he would have given unfavourable or adverse evidence against those who should have called him. Wigmore in his Treatise on Evidence supports this proposition with a variety of decided cases in the United States. But I doubt whether Wigmore intended to suggest that that was the only reasonable inference to draw. There are several reasons for not calling a person as a witness in court and each case must be considered in its own light without jumping to conclusions. Recently in Asare v. Donkor [1962] 2 G.L.R. 176 at p. 178, S.C. the then Supreme Court took the following view in a similar situation:
“The only way whereby that first issue can be determined is through the evidence of the said Matthew Anokye and evidence of any other eye witness to the separate grants. The parties were agreed that the only other eye witness to the two transactions was one Gyantutu. The appellants subpoenaed the said Gyantutu, and the respondent subpoenaed Matthew Anokye. But the appellants withdrew their said witness Gyantutu after Matthew Anokye had given evidence. The presumption to be drawn from the withdrawal of Gyantutu as a witness is that the evidence he would have given of the transaction would be the same as that given by Matthew Anokye the only other independent eye witness to each of the separate grants, that it would not derogate from it, and could not advance it any further.”
In the present case, there is evidence on record that Kweku Arku was subpoenaed and a “pursuant notice” was also ordered to be served on him. But there is no indication that he attended court or gave evidence. What is the inference to draw from such a case? The inference is in the air. Wigmore was therefore not laying down a dogma when he wrote his treatise. The next question was whether it was satisfactorily proved that the co-defendants, Kramo and Nuamoah,were nominees or agents of the appellant? Discarding the evidence of the secretary-receiver who merely assumed that Opanyin Addai was the appellant Addai, and the evidence of Dogo Wangara who was not sure of what he was saying, we are left with the evidence of the Kenyasi chiefs and the chief farmer. Was their evidence so formidable that the learned trial judge was led, without any resistance on his part, to the conclusion he arrived at? It seems to me that serious doubts were thrown into the arena when it was proved that an old man Opanyin Kwaku Addai had farms in the area and had his name in the books of the farmers council. This old man attended court when he was alive at the time Kramo and Nuamoah applied to be joined as co-defendants. Dogo Wangara knew this old man and said his share of cocoa proceeds were paid to him in the old man’s house. Furthermore, we have exhibits Y and Z, the deeds of assignment executed by the appellant in favour of Kramo and Nuamoah. I must confess that I do not understand why the court below refused to countenance these documents. When they were first tendered, no objection was raised by learned counsel for the respondent. A few moments later he raised objection that they were not stamped and an attempt was made to tender them at the resumed hearing. But on this occasion learned counsel for the respondent objected on the ground that there was no proof of execution as required by section 7 of the Land Registry Ordinance, Cap. 133 (1951 Rev.). This objection was welcomed by the court below and the two documents were accepted as exhibits Y and Z until execution was duly proved.
With the greatest respect of the learned trial judge, his approach and attitude to these documents disarmed him from considering the documents at all.
First of all, in 1958 when the documents were executed, there was no mandatory registration of documents affecting land in order to give the documents legal effect as required by section 24 of the Land Registry Act, 1962 (Act 122), which was then not in force. The documents therefore had legal effect from the date of execution without registration. Since registration was optional, proof of due execution under section 7 of Cap. 133 was not necessary. The appellant himself testified in court that he executed those documents in favour of the co-defendants, Kramo and Nuamoah, legally assigning the properties to them as purchasers. Exhibits 3, 4, 5, 6 and 7 were deeds of conveyance and exhibits 1, 2 and G were mortgage deeds. Not one of these documents was registered and when they were tendered, the court did not insist on formal proof of due execution. Yet in the case of exhibits Y and Z the court wanted such proof. There was no suggestion that these documents were prepared and executed not in 1958 but some time during the litigation. Such a suggestion would have been hollow because the two documents were assessed by the commissioner of stamps in 1958 and the official assessment certificate bears the date 10 June 1958: See exhibits Y and Z.
If these two deeds had been accepted and relied upon, the court below would have held that a mortgagee who clandestinely authorises persons to purchase property on his behalf at a public auction would not go further to execute deeds of assignment in favour of the nominees or the agents. The deeds speak for themselves and show who are the legal owners. I am convinced that this is one of the cases where mere suspicion should not be allowed to defeat the ostensible claims to ownership of the two purchasers who not only purchased openly at a public auction but also had in their favour deeds of assignment which cannot be impugned in any way.
Mere intimacy and consanguinity should not be the criteria for judging whether a purchaser is a nominee or an agent for another. Otherwise, no relation or friend of a mortgagee can bid at an auction sale authorised by him. In order to nullify such a sale, very strong evidence must be required to show that the purchaser was an agent or nominee for the mortgagee. If no direct proof is available, then circumstantial evidence may be relied upon but this indirect evidence must also be very strong indeed. The learned trial judge confessed that he was irresistibly led to his conclusion but I must say that if he had used exhibits Y and Z as weapons of resistance, he would not have been led irresistibly. A moneylender is not a philanthropist when he does business. Indeed Jessel M.R. in Bennett v. Bennett (1876) 43 L.T. 246 at p. 247 observed that, “He [a moneylender] carries on a most disreputable trade, which no respectable personwould carry on; therefore he must be paid for the loss of his character in carrying on such a business, as well as for the risk he runs of losing his money.” Nevertheless, it should be borne in mind that whenever a moneylender enters into a loan agreement, he means business and nothing more and provided he acts fairly and bona fide in realising his security, the borrower cannot complain. However, the law prevents the mortgagee or his agent from buying the property mortgaged. In the words of Lord Cottenham in In re Bloye’s Trust (1849) 1 Mac. & G. 488 at p.494, “If the principal is incapacitated, can the agent do that which the principal could not? Or as Lord Eldon asked in Downes v. Grazebrook (1817) 3 Mer. 200, as paraphrased by Lord Cottenham in In re Bloye’s Trust (supra) at p. 495, “whether, if a party is incapacitated from purchasing, he can employ an agent to do that which he could not do himself; and whether that agent had a power to purchase which his principal had not; – it would be the most absurd distinction in the world.”
Is mere suspicion enough in such matters to hold that the co-defendants were nominees or agents? In the case of Hodson v. Deans [1903] 2 Ch. 647 at p.653, Joyce J. had to consider one of such cases and he said:
“At all events, the principle laid down in Farrar v. Farrars, Limited applies … and the onus is on the defendants to shew that everything was done fairly and bona fide. Fraudulent conspiracy amongst all the defendants has not been proved but the result of the evidence has been to make me distrust all the persons who were mixed up in the sale. I think that the plaintiff has not been fairly and honestly dealt with. How can it be said that there was no collusion between the committee and the purchaser when he was an active member of their body – the only member who attended the sale? Further, where his interest was in conflict with that of the plaintiff, I have not the slightest doubt that he preferred his own. Upon the admitted facts the case was one of grave suspicion, and that suspicion has not been lessened by what has transpired in the course of the trial.”
In the present appeal, it seems to me that if there was any suspicion at all, it became evanescent after the appellant, the co-defendant Kramo and their witnesses had given evidence. The suspicion could not be said to be so grave. The respondent knew the auctioneer who conducted the public auction sale and if he really wanted to know the purchasers, the proper person from whom to ascertain would naturally be the auctioneer himself. There is no evidence that he made any attempt to see the auctioneer to disclose the identities of the purchasers. It seems the real purpose of the visits of the respondent and the Kenyasi chiefs to the appellant at Kumasi was to ask him to intercede so that the respondent could retrieve his properties.
The whole story of the respondent was based on informal admissions allegedly made by the appellant to the Kenyasi chiefs and the chief farmer. The appellant denied making these admissions and therefore there must have been some other evidence on which to rely to test the veracity of the respondent’s story. Unfortunately, that other evidence was made up of a series of irrelevancies, for instance, that the appellant wanted to be made Odikro of Donkorkrom. I think the evidence adduced by the respondent was not only fragmented but also lacked the cohesion necessary to convince a court of law. His claim should have been dismissed by the court below because the appellant and the co-defendants satisfactorily discharged the onus on them that they acted fairly and bona fide and that the co-defendants did not purchase as agents or nominees of the appellant.
For the above reasons, I would allow the appeal and set aside the judgment of the court below. Azu Crabbe J.S.C. I have had the advantage of reading beforehand the judgment of Archer J.A. and I agree with the conclusion at which he has arrived. I only wish, however, to state my own views on the first of the additional grounds of appeal, namely:
“That learned trial judge erred in law in the exercise by him of his discretion in calling Musa Wangara as a witness of the court and thereby precluded the defendant-appellant from having a fair trial.” This additional ground of appeal, in my view, at once calls for a determination of the scope of the trial court’s powers under paragraphs 67 (1) and 72 of the Courts Decree, 1966 (NLCD 84). The provisions of paragraph 67 (1), which are so far relevant in this case, are as follows:
“In any cause or matter, and at any stage thereof, the Court, either of its own motion or … may summon any person to attend to give evidence … and may examine that person as a witness or expert … subject to any enactment or rule of law to the contrary.”
Paragraph 72 reads:
Any person present in Court, whether a party or not in a cause, may be compelled by the Court to give evidence, and produce any document in his possession, or in his power, in the same manner and subject to the same rules as if he had been summoned to attend and give evidence, or to produce such document, and may be punished in like manner for any refusal to obey the order of the Court.”
These two paragraphs of the Courts Decree, 1966, are reproductions of the statutory laws as they had existed in this country since 1876 when the first Courts Ordinance was passed. (See the Courts Ordinance, Cap. 4 (1951 Rev.). ss.90 and 94; and the Courts Act, 1960 (C.A. 9), ss. 68 and 74).
Paragraph 67 (1) of the Courts Decree, 1966, undoubtedly confers upon the court, either in a civil or criminal case, the power to call and examine any witness, who has not been called by either of the parties. It is a discretionary power and can be exercised where the judge is of the opinion that the witness is able to elucidate the evidence, although he should do nothing to interfere with the proper conduct of the case by counsel. As Fletcher Moulton L.J. said in In re Enoch and Zaretzky, Bock & Co.’s Arbitration [1910] 1 K.B. 327 at p. 332, “A judge has nothing to do with the getting up of a case.”
The function of a court in a civil suit, at common law, is to decide cases on the evidence that the parties themselves think fit to call before it. The judge acts as an umpire rather than an inquisitor, and in In re Enoch and Zaretzky, Bock & Co.’s Arbitration (supra) it was decided that a judge or an umpire had no right to call a witness in a civil action without the consent of the parties. Commenting on the previous case of Coulson v. Disborough [1894] 2 Q.B. 316, Fletcher Moulton L.J. said at pp. 332-333:
“It was a case where, after the counsel for both parties had spoken at the conclusion of the case, the jury intimated to the judge that there was a person present to whom frequent reference had been made, and they would like him to be called as a witness. The judge called him as a witness, but obviously without any objection being raised by either party. He asked him one or two questions, the answers to which were wholly immaterial to the issue. Counsel for one of the parties then asked leave to cross-examine, but the learned judge would not give him leave. When the case was brought before the Court of Appeal all the judges held that the answers were immaterial, and they held that under those circumstances there was no right to cross-examine. One of the learned judges, the Master of the Rolls, Lord Esher, does, however, give utterance to a dictum which has been relied on by counsel for the respondent. He says this: ([1894] 2 Q.B. at p. 318)
‘If there be a person whom neither party to an action chooses to call as a witness, and the judge thinks that that person is able to elucidate the truth, the judge, in my opinion, is himself entitled to call him.’ If that means to call him when either side objects, I am satisfied that there is no basis for that dictum; but it must be remembered that there is no suggestion in the report or the judgments that the witness was called by the judge against the will of either of the parties. It certainly was not necessary for the decision; and the consequences to which it would lead if so interpreted are such that I am satisfied that the Court of Appeal would never have given in the form of a mere dictum a decision so wide-reaching and so destructive of the fundamental principles of our laws of procedure. It does not purport to be based on any course of reasoning, and no authority was cited for it.”
In R. v. Harris [1927] 2 K.B. 587, the English Court of Criminal Appeal said at p. 594, C.C.A.:
“As to the first point, it has been clearly laid down by the Court of Appeal in In re Enoch and Zaretzky, Bock & Co. that in a civil suit the judge has no right to call a witness not called by either party, unless he does so with the consent of both of the parties. It also appears to be clearly established that that rule does not apply toa criminal trial where the liberty of a subject is at stake and where the sole object of the proceedings is to make certain that justice should be done as between the subject and the state.”
The common Law may thus be compendiously stated: In both civil and criminal cases, the judge may, for the discovery of the truth, call and examine any witness himself. Such witness cannot be cross-examined by the parties as of right, but where material evidence is given against either party, the judge should give leave to that party to cross-examine the witness. In a civil case, such a witness can only be called with the consent of the parties. The judge’s power in a criminal case is not so limited. The prosecution have a wide discretion with regard to the calling of their witnesses, and their discretion must be exercised in a manner calculated to further the interest of justice, and at the same time be fair to the defence. If the prosecution, therefore, appear to be exercising that discretion improperly it is open to the judge to interfere and in his discretion in turn to invite the prosecution to call a particular witness, and if they refuse to do so, the judge may on his own motion call the witness: See R.v. Oliva (1965) 49 Cr. App. R. 298, C.C.A. After the case for the accused is closed, the judge can only call a fresh witness when a new matter has arisen ex improviso, which could not have been foreseen.
Further, a judge may, in a criminal case, call a witness by himself in order to be informed as to the proper sentence to pass: R.v. Bright [1916] 2K.B. 441, C.C.A. I regret that I am unable to concur in the view expressed in Tagoe v. Nugent, Court of Appeal, 29 july 1969, unreported; digested in (1969) C.C. 148, that the common law has been altered or abrogated by paragraph 67(1) of the Courts Decree, 1966 (NLCD 84). Neither do I think, with all due deference to Archer J.A., that legislation in this country since 1876 has in any way modified the common law power of the judge to call a witness suo motu at any stage of a trial. Section 90 of the Courts Ordinance, Cap. 4 (1951 Rev.), which is reproduced in section 68 of the Courts Act, 1960 (C.A. 9), and paragraph 67 (1) of NLCD 84 is a codifying enactment and it embraces the common law.
The general power given to the judge to call a witness under section 90 of the Courts Ordinance was subject to “just exceptions” in the common law; and in section 68 of the Courts Act, 1960 (C.A.9), and paragraph 67(1) of NLCD 84 it was also subject to “any enactment or rule of law to the contrary.” In the interpretation of statutes there is a fundamental principle that a legislative enactment ought to be construed more in harmony with the established common law principles than in opposition to it, for, as Dr. Carleton K. Allen states in his famous book Law in the Making (1964) (7th ed.) (Oxford Paperbacks),
- 456, “A general intention is presumed in the legislature to fit new enactments into the general structure of the law and to effect no more change than the occasion strictly demands. “In R.v. Morris (1876) 10 Cox C.C. 480, Byles J. said at p. 485, “[I]t is a sound rule to construe a statute in conformity with the common law, rather than against it, except where or so far as the statute is plainly intended to alter the course of the common law.” (See also Lord Eldon v. Hedley Brothers [1935] 2 K.B. 1, per Slesser L.J. at
- 24 C.A.)
In my view, the relevant provisions of paragraph 67(1) of the Courts Decree, 1966 (NLCD 84), quoted above, do not derogate in any degree from the common law rule governing the power of a judge to call a witness on his own motion to give evidence. The power conferred by the sub-paragraph can only be exercised in relation to a person who is absent from court.
The power conferred by paragraph 72 of the Courts Decree, 1966 (NLCD 84), on the other hand, is exercised to compel persons present in court to give evidence and produce documents in their custody. Compellability in this paragraph relates, in my view, to the swearing of the persons called to give evidence. Refusal to be sworn, or when sworn, to answer an admissible question constitutes a contempt of court. The exercise of this power by the court is, however also “subject to any enactment or rule of law to the contrary.” Thus, apart from any statutory exceptions, the court can only exercise the power under paragraph 72 in relation to person legally competent to give evidence in judicial proceedings; and,although a witness may be compelled to give evidence, he may still refuse to answer certain questions, or to produce certain documents, on the well-recognised grounds of public policy or personal privilege.
One further observation, which I think I ought to make, is that the power in paragraph 72 is, unlike paragraph 67(1) exercisable only in a “cause.” In this case one of the matters in controversy was whether the co-defendant-appellants were merely nominees or agents for the defendant-appellant. If they were, the principle in Farrar v. Farrars Ltd. (1888) 40 Ch.D. 395, C.A. would apply, and the sale to them of the respondent’s securities would be a nullity.
The real point that arose at the trial was the identity of the actual owner or owners of the farms in dispute. In the course of his evidence the secretary-receiver of the local farmers’ co-operative society stated that the cocoa farm in dispute was owned by one Opanin Kwaku Addai, the defendant-appellant, and that the defendant-appellant had a house at Donkorkrom where his caretakers and labourers lived, one of whom was a Dogo Wangara. It was further disclosed in the evidence of this witness that there had been recorded in his book two different persons by the same name of Opanin Kwaku Addai, who both owned cocoa farms in the area. And it was suggested to the witness by counsel for the co-defendant-appellant that the Opanin Kwaku Addai who owned the farms in dispute was not the defendant-appellant, but an elderly person who lived and died at Kenyasi. At this stage the evidence started getting confused, and the learned trial judge intervened and himself put questions to the witness who testified as follows, “I know the farm very well, and I have seen Dogo Wangara working on it a number of times. Dogo Wangara and Kwasi Gyaaman and others used to bring the cocoa.” After this evidence by the witness the learned trial judge recorded the following notes:
“By Court’s attention has been called to the fact that Dogo Wangara has been seated in court at all the time. Mr. Lutterodt therefore states he will not call him as witness, although his client brought him to court. Order: Let this Dogo Wangara be called as a witness by the court.” Dogo Wangara then mounted the witness-box. He was sworn and he gave evidence and was cross-examined by counsel for the parties. Referring in his judgment to the circumstances which led him to call Dogo Wangara as a witness, the learned trial judge said:
“The court’s attention was at that stage called to the fact that Dogo Wangara, the principal labourer for the defendant whose evidence was so vital to the case, had been seated in court all the time listening to the evidence despite the warning given for all witnesses to get out. Co-defendants’ counsel intimated that it was his intention to call Dogo as witness ultimately but as he had failed to get out from the court room he would not call him as witness as originally intended. It was difficult to tell whether Dogo Wangara had been deliberately planted in the court room so early in the proceedings when it had not reached the turn of the defendant or co-defendants to testify. However the court in the circumstances thought it fit to let this witness tell the court at once all what he knew about the matter. The court therefore at that stage called upon Dogo Wangara alias Musa Wangara to give evidence as the court’s witness acting under paragraphs 67 and 72 of the Courts Decree, 1966 (NLCD 84), and so Dogo Wangara was sworn and he did give his evidence.
It is clear that counsel for the appellants did not raise any objection to the calling of Dogo Wangara as a witness by the court. Indeed, counsel for the appellants were given ample opportunity to cross-examine the witness, and they availed themselves of it fully. This was in itself an advantage to the defence. Though the learned trial judge states in his judgment that he exercised his powers under both paragraphs 67 and 72 of the Courts Decree, 1966 (NLCD 84), to call Dogo Wangara as a witness, I think it is more correct to say that the power was exercised only under paragraph 72. In my view, the learned trial judge properly exercised his power, and accordingly I do not think there is any merit in the complaint that the appellant did not have a fair trial. Subject to the above observations, I would allow the appeal.
DECISION
Appeal allowed.
