B.B.C. TRADING CO., LTD v. BASSIL [1963] 1 GLR 209

DIVISION: IN THE HIGH COURT, ACCRA

DATE: 2ND MARCH, 1963

BEFORE: PREMPEH J.

CASES REFERRED TO

(1) Alagbade v. Akyeampong (1956) 1 W.A.L.R. 205, W.A.C.A.

(2) Welford v. Beazely (1747) 3 Atk. 503; 26 E.R. 1090

(3) Harburg India Rubber Comb Co. v. Martin [1902] 1 K.B. 778; 71 L.J.K.B. 529; 86 L.T. 505; 18 T.L.R. 428, C.A.

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(4) Holmes (J. W.) & Co. v. Durkee (1883) 1 Cab & E. 23

(5) James v. Williams (1834) 5 B. & Ad. 1109; 110 E.R. 1103

(6) Coldham v. Showler (1846) 3 C.B. 312; 15 L.J.C.P. 261; 136 E.R. 126

NATURE OF PROCEEDINGS

COUNTER-CLAIM for the recovery from the plaintiffs of sums lent by the defendants the payment of which the plaintiffs guaranteed.

COUNSEL

Nii Odoi Annan for the plaintiffs.

Twum Barima for the defendant.

JUDGMENT OF PREMPEH J.

In this action, the plaintiffs claimed against the defendant the sum of £G1,076 11s. 7d being an amount due to them for the goods sold and delivered to the defendant. The defendant by his lawful attorney filed a defence admitting the plaintiffs’ claim, but counter-claimed from the plaintiffs the sum of £G2,000 being an amount the payment of which was guaranteed by the plaintiffs.

In the counter-claim, it was pleaded that the defendant lent the sum of £G1,000 to one Mr. Nakouzi for which two cheques each for £G500 were issued by him in favour of the defendant for the payment of the debt, and that the repayment of this amount was guaranteed by the plaintiffs. It was further pleaded that the defendant lent also to one Mr. Koudsi the sum of £G1,000 for which a cheque for the sum of £G1,000 was issued by him in favour of the defendant for the payment of the debt, and that the repayment of this amount was guaranteed by the plaintiffs. He averred those cheques were dishonoured on presentation, but that in spite of repeated demands the plaintiffs had failed to make payment of the total sum of £G2,000. In answer to this counter-claim the plaintiffs—apart from denying having guaranteed the payment of the debts due by Nakouzi and Koudsi—averred that the transactions were unlawful in so far as the sums of money in both cases were lent at interest of £G50 per month per G1,000. They averred further that if there was any guarantee—which they denied—the alleged guarantee did not comply with the Statute of Frauds, 1677, s. 41 and was therefore unenforceable. On the 6th September, 1962, judgment was entered with costs for the plaintiffs on their claim and the hearing of the counter-claim was then adjourned. In these circumstances I called upon the defendant to begin.

According to the evidence of the defendant’s lawful attorney in Ghana, the defendant has been deported from the country but his business continues by his attorney and the chief clerk of the business was called as the first defence witness. This man has impressed me as a witness of truth, and I accept his evidence that he was present when the two friendly loans were given by the defendant to Nakouzi and Koudsi on which he charged no interest, and that he was the person who wrote out the cheques which

[p.211] of [1963] 1 GLR 209 were post-dated for the said friendly loans which were signed by the defendant. I accept his further evidence that he was present when Elia Bou Chedid, one of the managing directors of the plaintiff-company, wrote at the back of the two post-dated cheques issued in favour of the defendant by Mr. Nakouzi and marked exhibits A and A1, guaranteeing the payment of the said debt, that he then signed his name underneath the writing and then put the plaintiff-company’s stamp over his signature. I accept also his evidence that he was present when the said Elia Bou Chedid wrote at the back of the cheque issued in favour of the defendant by Mr. Koudsi and marked exhibit B, guaranteeing payment of the said debt, and that he then signed his name underneath the writing.

It has been admitted on behalf of the plaintiffs that Elia Bou Chedid is one of the managing directors of their company and can transact business to bind that company. Some questions were put to D.W.1., purporting to show that he did not witness any of the transactions, but P.W.1, Mr. Nakouzi, quite frankly admitted that this witness did see him write the two cheques exhibits A and A1. In defence of the counter-claim, the plaintiffs centered their attack mainly on exhibits A and A1. They did not in fact call any evidence in respect of the cheque marked exhibit B. They sought to contend that their company’s stamp was not put on exhibits A and A1 by the managing director, the said Elia Bou Chedid, but that those cheques were so stamped by the defendant himself. This indeed is a serious imputation against the defendant.

However, in seeking to substantiate that contention, the plaintiffs called one of their storekeeper-employees, P.W. 2, who deposed that the defendant went to his store and after showing him two cheques the defendant told him that Elia Bou Chedid had directed that it should be stamped, and that although it was to his full knowledge that the said Elia Bou Chedid had one of those stamps in his office it did not strike him that that was an odd situation, but rather he permitted the defendant to pick the stamp which was then on his table and then with impunity he stamped those cheques and went away. He further deposed that he did not even ask to be given the cheques to examine them, nor did he ever at any time thereafter check up with Elia Bou Chedid whether he had directed the defendant to him to stamp those cheques.

Now I consider this evidence too fantastic to be believed and I do reject it in its entirety. I disbelieve also the evidence of P.W. 3 that when he saw exhibits A and A1 with the defendant for the first time they did not bear the company’s stamp. I consider that the evidence of these witnesses is framed in order to avoid being met with the pertinent question as to why criminal proceedings or any proceedings had not since been taken by them having regard to the alleged conduct of the defendant. On these facts, I find that Elia Bou Chedid, managing director for the plaintiff-company wrote at the back of exhibits A and A1 guaranteeing payment of the amount on the face of those cheques, that he signed his name thereunder—and then affixed on it the company’s stamp thereby clearly binding the plaintiff-company to the amount on those cheques.

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I find also that the said Elia Bou Chedid – managing director of the plaintiff-company wrote at the back of exhibit B guaranteeing payment of the amount on the face of that cheque, and that he then signed his name thereunder.

Counsel for the plaintiffs has referred to section 3 of the Money-lenders Ordinance,2 and submitted that once interest was paid, the transaction in connection with exhibits A and A1 was a moneylending one and that by virtue of section 12 (1) and section 26 (2) of the Money-lenders Ordinance, the said transaction was void and unenforceable. In making this submission he relied on the evidence of P.W.1, but I amunable to see how that evidence could afford any basis for that contention. This witness started off bysaying that this was a friendly loan of £G2,000 given to him by the defendant, that he paid £G1,000 on account—and that in respect of the balance of £G1,000, he made exhibits A and A1 in favour of the defendant. He then purported to say that he had paid some interest but how much it was he could not say. I am unable to accept this part of his evidence because apart from being uncertain and illusory, it does not fit in his clear evidence as to how much loan was obtained, how much he had paid on account and as to the exact balance for which he gave those cheques to the defendant. Although there is evidence that the defendant is a moneylender, I do not see how it can be said that because he is a moneylender he is precluded from giving away financial assistance to anyone. On the evidence I am satisfied that the defendant charged no interest at all on these transactions, and that therefore neither of the transactions in connection with exhibits A, A1 and B can come within sections 3 and 12 (1) and 26 (2) of the Moneylenders Ordinance. Consequently the case of Alagbade v. Akyeampong3 and the other cases cited cannot apply.

I have given careful consideration to the other submission of counsel which is to the effect that the counter-claim cannot succeed because there was no sufficient memorandum for the alleged guarantee, but I am unable to accede to that contention. It was held in the case of Welford v. Beazely4 that for the purpose of satisfying section 4 of the Statute of Frauds no special form of a memorandum is required, and that any document or documents read together containing the essential terms of the contract will be a sufficient memorandum. The case of Harburg India Rubber Comb Company v. Martin5 is also in point. In that case Lord Justice Vaughan Williams delivering the judgment of the court stated that the form of the promise given by the promisor has never been held to be conclusive of the matter. The promisor may or may not promise in terms to answer for

[p.213] of [1963] 1 GLR 209 the debt of another, but whether he does so or not, it is the substance which is regarded and not the form of the writing. And in the case of Holmes (J.W.) & Co. v. Durkee6 it was there held that a bill of exchange may be a sufficient memorandum if the liability sought to be enforced is apparent on the face of the bill. It is my view therefore having regard to the cases referred to above that the writing at the back of the cheques amounts to sufficient memorandum.

It was further contended that the cheques were not enforceable on account of the fact that there was no consideration for the guarantee, but again I am unable to accept that contention. In the case of James v. Williams7 it was settled that consideration need not be stated in express words on the face of the instrument, it may be collected or implied from the instrument itself. The case of Coldham v. Showler8 is also in point. There the following memorandum written and signed by C., appeared at the back of the document after the execution of the agreement by A. and B.:

“I hereby undertake that my daughter, B., shall perform all the covenants and conditions named in the agreement, and hold and consider myself responsible.”

In an action against C. to recover back the deposit, it was held that the agreement by A. and B. and the endorsement by C. might be looked at together as one transaction for the purpose of making out a consideration for the promise.

In the instant case, there is evidence that the cheques were post-dated and the defendant was therefore not to be paid their value until some time later, and it is necessarily to be implied from the promise of the surety or guarantor (the plaintiffs) to pay at a future time that the consideration for so doing was forbearance towards the principal debtor in the meantime. In the result I find that the plaintiffs are bound by their guarantee on exhibits A and A1 for the payment of the amount of £G1,000 which is still unpaid. I find also that Elia Bou Chedid is in fact bound by the guarantee on exhibit B for the payment of the amount of £G1,000 which is still unpaid.

In all the circumstances I am unable to find that liability can also be attached to the plaintiffs in respect of exhibit B. There shall therefore be judgment for the defendant and against the plaintiffs for the sum of £G1,000 on his counter-claim with costs fixed at 100 guineas.

DECISION

Judgment for the defendant on the counter-claim.

[Reported by S.A. BROBBEY, ESQ., Barrister-at-Law.]