BANK OF WEST AFRICA LTD. v. APPENTENG AND ANOTHER [1972] 1 GLR 153
COURT OF APPEAL
Date: 27 JULY, 1971
BEFORE: SIRIBOE AND AZU CRABBE JJ.S.C. AND LASSEY J.A
CASES REFERRED TO
(1) Foss v. Harbottle (1843) 2 Hare 461; 67 E.R. 189.
(2) Appenteng v. Bank of West Africa Ltd. [1961] G.L.R. 196.
(3) Appenteng v. Bank of West Africa Ltd., Court of Appeal, 8 June 1970, unreported.
(4) Turner v. M.G.M. Pictures [1950] W.N. 83; 66 T.L.R. (Pt.I) 342; [1950] 1 All E.R. 449, H.L.
(5) Clark v. Molyneux (1877) 3 Q.B.D. 237; 47 L.J.Q.B. 230: 37 L.T. 694; 42 J.P. 277; 14 Cox C.C.
10, C.C.A.
(6) Attorney-General v. Great Eastern Railway Co. (1880) 5 App.Cas. 473; 49 L.J.Ch. 545; 42 L.T.
810, 44 J.P. 648, H.L.
(7) Blackburn Building Society v. Gunliffe, Brooks & Co. (1883) 22 Ch.D. 61; 52 L.J.Ch. 92; 48 L.T.
33, C.A.
NATURE OF PROCEEDINGS
APPEAL from a decision of Hayfron-Benjamin J. wherein he gave judgment for the respondents in a
consolidated action against the appellants [p.157] of [1972] 1 GLR 153 for wrongful detention of documents, negligence, libel and deceit. The facts are sufficiently stated in the judgment of Siriboe J.S.C.
COUNSEL
Sir Edward Asafu-Adjaye (with him K. F. Asafu-Adjaye) for the appellants.
Nii Odoi Annan (with him Hansen) for the respondents.
JUDGMENT OF SIRIBOE J.S.C.
Siriboe J.S.C. delivered the judgment of the court. The trial of these four consolidated cases which may be aptly described as a marathon trial, in view of the length of time it took and the fact that the oral and documentary evidence ran into some 1,127 pages, was before Hayfron-Benjamin J. whose judgment covering 84 pages and dated the 16 February 1966, has been called in question on this appeal.
In each of these cases, lengthy pleadings with corresponding issues set out in the accompanying
summonses for directions were filed, with the result that for the purposes of this appeal, one can do no more than to refer to the salient averments that would lead to an understanding of the submissions advanced for and against the claims made.
Suit No. 12/61 filed on the 18 January 1961 by Kwabena Appenteng, contained the following averments: That in September 1957, at the request of Mpotima Ltd. ( a company of which as the evidence established the plaintiff Appenteng was a director) the plaintiff deposited the documents of his title to premises No. C.381/4, Kokomlemle, with the defendants to secure a loan of £G8,000 pounds.
The loan was repayable within four months, but as this promise could not be fulfilled, the plaintiff was requested to execute a mortgage to cover an extended period of repayment which he did. That after repayment had been made, the first defendants granted a further loan of £G11,000 to Mpotima Ltd. without the plaintiff’s request or knowledge.
That even though that amount also had been repaid, the defendants have refused to return his documents of title to him, thereby preventing him from using same. Accordingly, the plaintiff claimed:
(a) The return of the said documents of title, or the value thereof (which was not specified)
(b) £G10,000 damages for wrongful detention of the documents
(c) £5,000 damages for negligence, particulars of which the plaintiff gave as the defendants’ failure to notify him of the repayment of the two loans of £G8,000 and £G11,000 respectively, to enable him
to collect his documents of title. In suit No. 18/61 also instituted by Kwabena Appenteng, on 24 January 1961, he averred that during the latter part of the year 1958, at [p.158] of [1972] 1 GLR 153
the request of R. A. Darko (the first and principal witness for both plaintiffs in all the four consolidated suits, and also the managing director of Mpotima Ltd.), he (Appenteng) deposited the document of title to other properties of his (viz. premises No. C.834/4, Kokomlemle, and land at Christiansborg) with the defendants to secure a loan of about G80,000 to be made by the first defendants to Darko, repayable within twenty years. After executing a guarantee and later, a legal mortgage in respect of the loan, the granting of which Appenteng averred was confirmed by the second defendant, no such loan was in fact given. To his surprise, it later turned out that the documents he executed were intended to cover an existing debt due by R. A. Darko to the first defendants. Consequently, plaintiff claimed in that suit: (a) Return of his documents of title to the two properties afore-mentioned;
(b) £G10,000 damages for wrongful detention of the documents;
(c) £G5,000 damages for deceit.
An amendment which was later sought and granted, alleged that Kwabena Appenteng is an illiterate, yet the documents executed by him were never interpreted to him by the defendants. Secondly, that under the memorandum and articles of association of Mpotima Ltd., the latter had no authority to stand as surety for its managing director, i.e. R. A. Darko.
In suit No. 92/65 again filed by Kwabena Appenteng, this occasion, on 9th March 1965 (almost four
years after the two previous actions), he averred that in January 1959, he negotiated with two people,
Yaw Amoako and Kwadjo Sakyi in respect of the sale to them, of one of his properties, No. C.382/4,
Kokomlemle, for the sum of £G6,250. The title deeds of the said property, as will be recalled, were on
deposit with the defendants, the Bank of West Africa Ltd. That, following the said negotiations, Amoako and Sakyi approached the First Ghana Building Society for a sum of £G5,000 to assist them in paying off the purchase price. The society having approved their application, then wrote to inquire from the defendant bank whether they would be prepared to release the documents of title relating to that property upon payment of the amount of £G5,000, but in reply, they wrote stating that “K. A. not known to us. ”The plaintiff maintaining that “K. A.” referred to him as Kwabena Appenteng, and the words “not known to us” meant that he was a person who was not to be relied upon, for he had no title deeds which he claimed to possess, but said so only to deceive the two prospective purchasers and the building society. He therefore claimed the sum of £G40,000 damages against the defendant bank “for libel and/or negligence,” on the ground that “he had been greatly injured in his reputation, credit and in his business of receiver/managership. ”Suit No. 93/65 was instituted on 10 March 1965, by Janet Darko, wife of R. A. Darko, and also a shareholder of Mpotima Ltd. Her averments were to the following effect: [p.159] of [1972] 1 GLR 153 That at the time of instituting her action, she was a shareholder of Mpotima Ltd. then in official liquidation. On the 9 September 1957, she and Kwabena Appenteng (plaintiff in the three preceding suits, and a shareholder and director of Mpotima Ltd.) at the request of the company, deposited their documents of title to secure a loan of £G8,000 which the company wanted from the defendant bank. As a condition to the granting of the loan, the two of them executed guarantees on 12 November 1957, and later, mortgages as requested by the bank to cover repayment which was to be made within four months. That the defendants induced or advised the directors of Mpotima Ltd. to pursue a course of cross-firing of cheques, on the accounts of E. K. Aboagye also a director, and R. A. Darko with the defendant bank, and Mpotima’s account with the Ghana Commercial Bank.
The said advice, she pleaded, was negligently given in that it was fraught with misrepresentation
calculated to deceive the company, its shareholders, directors and the Ghana Commercial Bank. This was because the defendants failed to make it known to the directors that the course advised by the bank would involve the company in the payment of large sums of money by way of charges and interest which ultimately came up to £G84,000, and for which the defendants had obtained a judgment in the High Court against the company and the plaintiffs.
Contending that by reason of the foregoing, she had “lost her prospects and profits with the company, the latter having gone into liquidation,” the plaintiff claimed:
(a) The return of her documents of title to premises No. C.152/7, Kokomlemle, wrongfully detained by the defendants or its value of £G8,500.
(b) £G5,000 damages for wrongful detention of the documents.
(c) £G5,000 damages for negligence, grounded on the defendants’ failure to notify her of the
repayment by Mpotima Ltd. of the loan of £G8,000 and also another loan of G11,000 granted
without her knowledge or consent.
(d) £G25,000 damages for the defendants’ negligent advice given in respect of the cross-firing.
As can be seen from the proceedings, the plaintiffs relied mostly on their first witness, R. A. Darko,
whose lengthy evidence may be summed up as follows:
That he was a shareholder and managing director of Mpotima Ltd. That the plaintiff in suits Nos. 12/61, 18/61 and 92/65, was also a shareholder and director of the company; and so was one E. K. Aboagye. The company was incorporated on 6 June 1952, after which it took over Mpotima Akwapim Trading Company which was a partnership firm.
In the early part of September 1957, Mpotima Ltd. approached the defendant bank for a loan. The
approach was made on behalf [p.160] of [1972] 1 GLR 153 of the company by E. K. Aboagye and himself (R. A. Darko) as chairman and managing director respectively of the company, and that the representatives of the defendant bank they met and discussed the question of the loan with, were Mr. Lindsay and Mr. Haymes, assistant manager and manager respectively of the defendant bank.
A formal application for the loan was thereafter submitted as suggested by Mr. Lindsay. Prior to this
(about 1952 or early 1953), Mpotima Ltd. was enjoying unsecured overdraft facilities with the
defendant’s High Street Branch, where both Lindsay and Haymes were. The limit was G5,000, although,on certain occasions, the company was allowed to overdraw that amount.
After handing in their application for the loan which they were told would be forwarded with the
necessary recommendation to the defendant’s head office in London, both Aboagye and Darko impressed upon Haymes and Davies, the urgency about the matter, because they needed money to cover certain contracts Darko said he had then entered into in Europe on behalf of the company. By this time, which was the end of September 1957, Darko said the company had exceeded its overdraft facilities to the tune of over £G5,000 and as they were still in dire need of further funds, they asked for £G11,000 additional overdraft. Haymes, who agreed to help, Darko continued, asked that the outstanding account should first be settled. This, they were not in a position to do, because, although Mpotima Ltd. kept an account with the Ghana Commercial Bank, it was not in funds at the time to enable it to meet the obligation. It was at that stage, so runs Darko’s evidence, that the advice to cross-fire cheques was first given by Mr. Haymes in the presence of Davies. It began with the issue of Mpotima’s cheque drawn on Ghana Commercial Bank to cover the outstanding overdraft. This was followed by another cheque drawn on the personal account of Darko with the defendant bank and made payable to Mpotima’s account at the Ghana Commercial Bank on 3 October 1957. Mpotima’s cheques, according to Darko, were signed by him and E. K. Aboagye.
The cross-firing in which Aboagye also later joined, operated from 2 October 1957 up to about 30 August1958, and involved the respective accounts of both Darko and Aboagye with the defendant bank and Mpotima’s with the Ghana Commercial Bank. These operations stopped because of the ledger fees Darkoand Aboagye later realised the defendants were charging on the amounts covered by the cross-firing. The fees came to about £G47,000 and together with the amounts drawn, the total was about £G91,000 all of which had in the process been passed onto Darko’s account at the end of the cross-firing activities. [p.161] of [1972] 1 GLR 153 Explaining how that came about, Darko said in May 1958, the defendant bank was charging heavy ledger fees as a result of the payments of large amounts it was making on behalf of Mpotima Ltd. The amount of the daily cheques in circulation had then reached about £G100,000. Therefore, on the advice of Mr. Davies, it was decided that Mpotima Ltd. should be relieved of that burden by transferring part of the amount of E. K. Aboagye, and the remaining part to Darko’s account. To achieve this objective Aboagye’s dormant account with the defendant bank was revived by the payment in of the sum of £G50, which enabled him to participate in that cross-firing operation. Following this, the loan on Mpotima Ltd. which amounted to about £G100,000 was, on 11 June 1958, passed on to the accounts of Aboagye and Darko in the proportions of £G44,000 and £G66,000 respectively.
Aboagye’s participation in the operation did not last long, for according to Darko, during the short period between 11 and 30 June, Aboagye received a debit note from the defendant bank showing an amount of £G735 10s. 11d. as ledger fees charged on cheques drawn by him. He therefore gave up and the amount of £G52,105 then standing to his debit, was passed on to Darko’s account which brought the latter’s indebtedness to about £G91,000 at the time the cross-firing operations ceased.
In respect of this amount of £G91,000, Mpotima Ltd., Kwabena Appenteng and E. K. Aboagye executed guarantees on behalf of R. A. Darko to the defendant bank. As further security, there were hypothecations signed by Aboagye, Darko and Appenteng as directors of Mpotima Ltd., on the saleable goods in the company’s stores to the tune of £G100,000.
Mpotima’s guarantee herein referred to, has been questioned on this appeal as being ultra vires the powers contained in the memorandum and articles of association of the company, particularly, article 19 thereof.
Thus as counsel for the respondent maintained, the resolution passed by the directors empowering such guarantee to be given and the guarantee itself were both void ab initio.
In suit No. 18/61 too, it will be observed that Kwabena Appenteng’s claim for damages for deceit and
other reliefs, were in respect of this same indebtedness of R. A. Darko. Both Appenteng and Darko in
their evidence alleged that, although Appenteng was asked to offer guarantee and other securities for a huge loan which the Bank per Mr. Haymes had promised to give to R. A. Darko for the purpose of
improving the business of the company, there was in fact no loan given as promised. What Appenteng said he later got to know, after executing the guarantee (exhibit Q) and also an equitable mortgage (exhibit R7) in respect of the deposit he made of two other properties as requested, was that they covered existing debt due by Darko to the bank. The plot to get Appenteng to enter into these transactions, Darko said, was hatched between him and Mr. Haymes and that when this fact and the system of cross-firing advised by Haymes were later made known to Appenteng, the latter became [p.162] of [1972] 1 GLR 153 enraged and threatened to write to withdraw his documents, but he, Darko, prevented him from doing so, on the ground that there was a bank official coming from London to settle the matter. The hope they entertained turned out to be a false one, and so, having demanded in vain for the return of his documents, suit No. 18/61 was brought by Appenteng.
The claim in suit 12/61 and 93/65, although separately instituted by Kwabena Appenteng and Janet E. Darko, were, as can be seen from the pleadings, based on the same grounds. The evidence given in
support of the two cases was also the same and was to the effect that the guarantees given or deposits
made, including the mortgages subsequently executed for the Bank covered only the £G8,000 loan
Mpotima Ltd. obtained and no more. Therefore, it was contended that since repayment had been made by Mpotima Ltd. of that amount as well as the further loan of £G11,000 unauthorised by the two plaintiffs, the bank’s failure to return their documents after demands had been made for these, was wrongful; hence the two actions were instituted.
With regard to the claim for libel in suit No. 92/65, Appenteng’s evidence was that, following
negotiations for the sale of one of his properties to one Amoako and another called Sakyi at the agreed price of £G6,250, a deposit of £G1,250 was paid by the purchasers to him. To help them raise the balance of £G5,000, they applied to the First Ghana Building Society for a loan which was approved, and as a result of which the society’s secretary wrote to inquire from the bank whether upon payment of the £G5,000, the document of title in respect of the property in question would be released.
In the reply to that letter, an official of the bank wrote “K. A. not known” Another letter written by the society’s secretary who thought the bank misunderstood the earlier one to mean a “status inquiry” received no reply. Because of the failure to secure for Amoako and Sakyi the said title deeds, Appenteng said he was made to refund the deposit of £G1,250 together with other expenses incurred by them, all amounting to £G1,400. This was at an arbitration held before a seven-man committee of his village, the result of which cost him the loss of his office as treasurer of that committee, hence he claimed as per his writ.
In spite of the defence denying the plaintiffs’ allegation with regard to the advice to the cross-firing of
cheques, the libel, deceit, negligence and wrongful detention of documents of title, the learned judge,
however, found for the plaintiffs in respect of all their reliefs except for the claim for negligence in suit No. 92/65. He thereupon made an order for the return of the plaintiffs’ documents of title in suits Nos. 12/61, 18/61 and 93/65, or their value; following which he proceeded to award damages by resorting to some arithmetical process which is hardly understood, and eventually arrived at the following figures: £G3,000 damages for negligent advice in suit No. 93/65, £G5,600 for wrongful detention of the plaintiffs’ documents of title and 1,500 guineas costs. In suit No. 12/61 £G5,400 for wrongful detention of documents of title. In suit No. 18/61, [p.163] of [1972] 1 GLR 153 £G6,000 for wrongful detention of documents of title and £G2,500 and 1,500 guineas respectively for costs. There was no damage awarded in respect of the libel in suit No. 92/65 even though the learned judge found for the plaintiff on that claim. He, however, awarded him costs of 500 guineas. It is from the above that the appeal has been brought and argued on a number of grounds.
On the question of negligent advice for which Janet Darko in suit No. 93/65 claimed and obtained
damages, the submission of learned counsel for the appellants is that, the learned judge erred in his
judgment in finding for her. Assigning his reasons for this submission, counsel contended that assuming the alleged advice was given by the defendants, which is denied, that would in no way vest in Janet Darko any cause of action for negligence, since the negligent advice was alleged to have been given to Mpotima Ltd. through its directors and not to Janet Darko. Furthermore, it was pleaded and substantiated by evidence (exhibit 11), tendered by the appellants, that in 1961, Kwabena Appenteng and three other shareholders of Mpotima Ltd., namely, Kwaku Oduro, Kwadjo Sakyi, senior, and Kwadjo Sakyi, junior, brought an action in the High Court, Accra (suit No. 1/1961 reported in [1961] G.L.R. 196), against the bank, the claim being identical with Janet Darko’s in the present suit, but they were unsuccessful.
In that case, which went before Ollennu J. (as he then was), the principle enunciated in Foss v. Harbottle (1843) 2 Hare 461, that, as a general rule, a shareholder cannot sue for wrong done to a company or to recover money as damages due to it, unless the action is taken by the company itself, and the exceptions to that principle were raised as has been done in the present suit. Then as now, it was submitted on behalf of the shareholders, that the shares held in the company are legal rights which, therefore, entitle the shareholders to sue for an invasion thereof.
It cannot be disputed that the purpose for which a shareholder invests money or, to be exact, buys shares in a company, is the hope that the company will be a going concern and, thereby, be able to declare profits and pay dividends. If that should so happily happen, then as Ollennu J. (as he then was) put it in the case of Appenteng v. Bank of West Africa Ltd. [1961] G.L.R. at p. 203, “good luck to him [the shareholder].” But if the opposite should be the case, that is, where a loss is declared and no dividends are payable, Ollennu J. (as he then was) continued at the same page, “then that’s just too bad, he cannot sue anyone to compel profits to be declared where none has been made.”
The reason Ollennu J. gave at p. 203 for this which seems logical, is that “a shareholder has no legal right that a company should always be a going concern.” That seems to be the basis for holding against the plaintiffs in suit 2/61: Appenteng v. Bank of West Africa Ltd. [1961] G.L.R. 196 at p. 203; “that loss of business interests and yearly profits and dividends do not constitute an invasion of any legal rights of the plaintiffs, shareholders of Mpotima Ltd.”[p.164] of [1972] 1 GLR 153 That judgment, given on 17 April 1961, against which there has not been any appeal, learned counsel for the appellants submitted, and rightly so in our view, estops Janet Darko from bringing a similar claim in the present suit, since her interests were identical with those of the other shareholders in Appenteng v.Bank of West Africa Ltd. [1961] G.L.R. 196 of which case she was aware, but did nothing.
This position was made clear in the recent judgment by Lassey J.A. delivered on 8 June 1970, in appeal No. 106/67, namely, Kwabena Appenteng v. Bank of West Africa Ltd., unreported.
It is significant to note that in his judgment, the trial judge in the present case appeared to have
misconceived the basis of Ollennu J.’s decision which he partly accepted but partly rejected, as if it was an appeal before him. For while he agreed with the decision that a shareholder cannot sue for wrong done to the company, he however, disagreed with the view expressed concerning the absence of a cause of action in the plaintiff to sue for loss of profits and dividends resulting from the liquidation of the company.
He fell into that error, because, he, like Janet Darko, seemed to hold the view that there was advice to
cross-fire cheques tendered by the defendants to the plaintiff which was negligent, and which resulted in the loss complained of. In the course of his judgment, the learned judge said:
The foundation of all tortious liability is damage which the law deems to have been caused by the act or fault of the defendant. If a person invests his money in a company and he loses it as a result of general market or business conditions, or due to no ascertainable reasons or causes, obviously he cannot sue for the simple reason that he cannot find defendants. If, however, it can be proved that the loss of his investment is due to the fault of a particular person, I do not see anything, short of a statutory prohibition,which can prevent him from maintaining his action.”
From this, the learned judge held that Janet Darko had the right to bring her action, and does so as a
natural person who has property which she claims to have been damaged, and not as a shareholder
seeking to redress a wrong done to the company.
The claim that the defendants gave the directors of Mpotima Ltd. advice to cross-fire cheques seems to bevery much against the weight of evidence. The evidence before the learned judge shows quite clearly that as far back as 1955 or 1956, Mpotima Ltd. per its directors or at least one of them in the person of R. A. Darko, was indulging in that practice already. This vital piece of evidence came out when Darko, under cross-examination by Mr. Davies for the appellants, said:
“It is true that I undertook a similar process before this one advised by Mr. Haymes, during the time the company was going to buy shares in the Ghana Guarantee Company. This was in the latter part of 1955 and not 1956. I did not know that it was called ‘cross-firing’.”[p.165] of [1972] 1 GLR 153
Darko went on to say that what he did in 1955 was on the advice of one Mr. Burgess, an employee of the defendant bank who, as the evidence further shows, left the services of the defendant bank and proceeded to Britain on 31 August 1955. It was on the strength of the admission apparently made by Darko, that counsel for the appellants made the following submissions of some great significance:
(a) That Burgess could not have tendered any advice to Darko to cross-fire cheques in late 1955,
because the former had left the shores of this country;
(b) That Darko, having been in the game of cross-firing cheques before 1957, could not be heard to say that it was Haymes or Lindsay who advised them to resort to that practice in the instant case;
(c) That if in 1955 or 1956 Mpotima Ltd. per Darko indulged in that system – whether or not on the
advice of Burgess, and the company incurred no loss, then cross-firing per se does not lead to a
loss. In the case of (c) the observation learned counsel made with such clarity was that the plaintiffs must show how and why the loss in the present transaction came about. The burden in this respect has not been discharged. For, as counsel further submitted, the cross-firing rather enabled the directors of Mpotima Ltd. to obtain large sums of money from the defendant bank (to the tune of about £G118,000) which became known at a rather very late stage.
The submission that the cross-firing enabled Mpotima’s directors to obtain large sums of money from the bank is supported by Kwasi Amoako Atta, third witness for the plaintiffs. As a former Governor of the Bank of Ghana, who claimed to his credit, over 25 years’ banking experience, Amoako Atta, in his evidence, stated that: “By the process of cross-firing, the customer concerned is enjoying an overdraft which is not reflected in the bank’s books. It is a risk to the bank and a benefit to the customer whose price for that benefit he enjoys is payment of ledger fees calculated at the rate of two shillings on every £G100. ”That being the evidence of the plaintiffs’ own witness, it is difficult to find any just cause for the claim made on the alleged cross-firing. Reference was, however, made to Mather on the Lending Banker, at pp. 28-30 in support of the proposition by counsel for the plaintiffs that cross-firing is not a normal incidence of banking, nor does it form part of the legitimate business of a bank. But to that, counsel for the appellants retorted that the quotation there means no more than an advice or warning to the banker to be on the lookout and guard against any such practice, in view of the dangers or risks involved in that system. It does not, counsel continued, entitle the customer who indulges in it [p.166] of [1972] 1 GLR 153 knowing very well what it entails, to turn round later and say that he disputes liability for any loss incurred by him simply because the system does not form part of the legitimate business of the bank on which the customer has practised that system. Nor would it give him any cause of action to sue for
negligent advice as has been done in this case, where the evidence overwhelmingly establishes that he had indulged in such a practice before without any loss to him.
In all the circumstances, the appellants’ ground alleging that the learned judge erred in finding for the plaintiff on her claim for negligent advice in suit No. 93/65 is well-founded and must be upheld.
Accordingly, the appeal is allowed and the judgment in respect of that claim and orders made consequent upon it should be set aside.
With respect to her claim for wrongful detention of documents in suit No. 93/65, it is considered
appropriate for the sake of convenience, to leave it for the time being and deal with same later along with similar claims made in the other suits, Nos. 12/61 and 18/61.
This means then that the next case to be considered is suit No. 92/65 in which two main claims were
made, negligence and libel. It will be recalled that the learned judge in his judgment dismissed the former claim, but found for the plaintiff on the latter, although, through an oversight as was submitted to us, he did not award the plaintiff any damages except costs. Dismissing the claim for negligence, the learned judge said: “The claim in negligence here is clearly misconceived. The only damage suffered by Appenteng is the loss in his reputation. This has never been a ground for claim in negligence. It is adequately covered by the action in defamation. I dismiss this claim. ”Having so held, it is of interest then to see how he dealt with the other claim for defamation.
That claim, as the evidence and counsel’s argument in support thereof show, was based on the ground that the bank were aware that they held in their possession certain documents of title belonging to the plaintiff Kwabena Appenteng; yet, when the building society wrote to inquire about the release of these documents, the bank’s reply was that “K. A. [meaning Kwabena Appenteng] not known to us.”
In upholding the plaintiff’s claim aforesaid, the learned judge rejected the bank’s defence that they
thought the society’s letter was a “status inquiry”; hence that reply: “K. A. not known” was sent by an
official of the bank to the building society’s secretary. The learned judge in his judgment, expressed the view that the contents of the society’s letter to the bank were explicit enough as to leave the bank officials in no doubt about what the subject-matter was. Consequently, said the learned judge, there was improper motive on the part of the bank for sending the reply in question which, in his opinion, “was written deliberately. ”That view held by the learned judge presupposed that whoever replied to the society’s letter did so with full knowledge of the contents of [p.167] of [1972] 1 GLR 153 that letter, but it does appear from the explanation given by the bank’s representative (Mr. Medcalf) in his evidence that this could not be so. According to Mr. Medcalf, the society’s letter which was dated 7 June 1960 (exhibit W1) – and wherein an inquiry was made as to the possibility of release of the plaintiff’s documents, had been referred to the bank’s solicitors to deal with it. As no action appeared to have been taken by the solicitors, the society’s secretary sent the following reminder (exhibit W2) to the bank on 28 June 1960:
28th June, 1960.
“Dear Sir,
MR. KWABENA APPENTENG
I refer to my letter dated 7th June, 1960, and shall be much obliged if you will now let me have your reply. Yours faithfully,
(Sgd.) R. A. M. Waters,
Secretary The Manager, Bank of West Africa, High Street, Accra. ”It was in reply to this reminder which had found its way to another department called the “Opinions Department” of the bank that, as Mr. Medcalf said, a Mr. Butcher from that department who received it, and believing that there was an inquiry for a status report, wrote to the secretary thus:
“STRICTLY PRIVATE AND CONFIDENTIAL Enquiry of 28th June, 1960, by First Ghana Building Society, Accra, respecting K. A. Opinion: K. A.- Not known to us.”
There can be no doubt that if Mr. Butcher who signed the confidential letter covering the above had been aware of the original correspondence (exhibit W1) from the building society, his reply thereto, would not have taken the form now complained of. This, as has already been stated, was made quite clear by the evidence of Medcalf, but whose explanation, it appears, failed to impress the trial judge as passages of his judgment indicate: “In this case malice would be negatived only if the writer of the statement thought that the society was making a status inquiry. From the correspondence exhibited there is nothing to show that he thought so. The writer has not been called to give evidence, and I am therefore compelled to hold, . . . that he was deliberate in the statement he made…and could not by any stretch of the imagination have considered the letter of 7 June 1960, as a status inquiry.”
The fact that Mr. Butcher was not called to give evidence did not justify the learned judge in coming to the conclusion that Butcher did not think that the society was making a status inquiry. From the sequence of [p.168] of [1972] 1 GLR 153 events already set out, it is obvious that Butcher could not have thought otherwise, because there is nothing on record to show that he was aware of exhibit W1, or that like Haymes and Lindsay, he had previous knowledge of any deposit of title deeds made by the plaintiffs with the bank.
What is more, the building society’s secretary who was called as the plaintiffs’ fourth witness, made it
clear that the reply, exhibit W3, he received to his reminder (exhibit W2), showed that the writer thereof thought he was making a status inquiry. It is therefore difficult to see how the learned judge could have come to the conclusion that Butcher did not think the society was making such an inquiry.
Concerning the expression “K. A. not known to us,” the secretary’s evidence, like that of Mr. Medcalf,
was to the effect that as understood in banking terminology, it means “K. A.” has no banking account
with the defendants. The secretary’s evidence in this respect is gathered from his answer to question put to him by counsel for the appellants: “That is not the first time we have received a report like exhibit W3. It is usually given in respect of persons who have no accounts with the bank.” That “K. A.” (meaning Kwabena Appenteng, the plaintiff), has no accounts with the defendant, is also borne out by the plaintiff’s own answer to a question put to him under cross-examination by defence counsel when the plaintiff said: “I have not got a bank account with the defendant bank.”
Now then, the non-existence of a banking account between the plaintiff and the defendant bank having been admitted by the plaintiff himself in such clear and unambiguous terms, the very state of affair which exhibit W3 sought to convey to the building society’s secretary, and who understood its meaning to be as such, it is highly inconceivable how a claim for libel founded upon it can be sustained.
The learned judge, however, felt that the words were capable of defamatory meaning and so found for the plaintiff, because in his opinion as he put it: “It is immaterial if the bank intended it to be an answer or reply to a status inquiry, or that it was understood by the First Ghana Building Society to be an answer erroneously given under the mistaken view that their request was a status inquiry. ”By so holding, the learned judge appeared to have given little or no consideration at all to the evidence of both Medcalf and the society’s secretary concerning exhibit W3 which formed the basis of the defence. Instead, he seemed to have directed his attention solely to previous communications between the plaintiff or his solicitors and agents and the bank with respect to the documents deposited with the bank, and he did so as if Butcher who wrote exhibit W3 was aware of these, which was not the case.
After making references to those communications including the original letter from the society to the
bank, the learned judge went on: [p.169] of [1972] 1 GLR 153 “The bank’s officer who wrote the statement [referring to exhibit W3] must have been fed up with this ‘blanket native’ who dares to challenge the bank. He wrote saying that ‘Kwabena Appenteng is not known.’ That, he thought was the end of the matter, and he was not going to carry on any more correspondence in the matter. Kwabena Appenteng could please himself. He did not care if he had created a wrong impression by the statement. He would not correct it even when his attention was drawn to it. This seems to me to be the attitude of the bank’s officer . . . ”All that derives no support from the record, and can only be regarded as inferences wrongly drawn by the learned judge to buttress what appears to be, with respect, a one-sided view he took of the reply in question. If he had given serious thought to the other side of the matter, namely, that the reply was or could have been intended to be an answer to a status inquiry as was understood by the society’s secretary, his decision, no doubt, would have been otherwise. The judgment would, in those circumstances, have been that the words in exhibit W3 were incapable of bearing the defamatory meaning attributed to them.
Putting the case for the plaintiff at its highest, and in terms of the learned judge’s view expressed above, it means that the defendants’ officer had given a wrong reply to an inquiry that had been made, and instead of him, when called upon to correct it, he would not. In other words, he was adamant. In that case he may well be described as “stupid” and “obstinate,” but neither of these would necessarily make what he had written libellous. For, as Lord Porter said in Turner v M. G. M. Pictures Ltd. [1950] 1 All E.R. 449 at p. 463, H.L.: “It is, I think, difficult for the uninstructed mind to guard against such a misconception, and to my mind the clearest direction is necessary to the effect that irrationality, stupidity or obstinacy do not constitute malice, though in an extreme case they may be some evidence of it. ”In the present case, it cannot be said that there is anything extreme about it. The trial judge, however, was of the view that the evidence raised a probability of malice, and that it was more consistent with its existence than with its non-existence. Accordingly, for the reasons contained in passages of his judgment already referred to, notably, that the writer of exhibit W3 had no genuine belief that he was replying to a status inquiry, the learned judge held that the defence plea of qualified privilege failed. But it is stated in the headnote to Clark v Molyneux (1877) 3 Q.B.D. 237, C.A. that “if the defendant made the statements believing them to be true, he will not lose the protection arising from the privilege occasion although he had no reasonable ground for his belief.” The rejection of the defence plea of qualified privilege was therefore unjustified, since from Medcalf’s evidence, exhibit W3 was written without any malice, but rather with a genuine belief that it was an answer to a status inquiry.
[p.170] of [1972] 1 GLR 153 While on this aspect of the case, it may be of advantage to consider the following passages which appear on pp. 793-794, para. 1503 of Clerk & Lindsell on Torts, (12th ed.) which read: “In construing the language of an alleged libel, two rules are to be observed. First, the whole matter is to be taken into account. The plaintiff is not permitted to pick out this or that sentence which he may consider defamatory, for there may be other passages which will take away their sting. Bane and antidote may be found together and it is for the jury to say whether, taking the publication as a whole, it is injurious to the plaintiff. Secondly, ‘words are to be taken in the sense that it is most natural and obvious, and in which those to whom they are spoken will be sure to understand them’.” It is clear from the judgment appealed from, that neither of the above rules was observed by the learned trial judge nor was the defence plea of qualified privilege given adequate consideration.
Accordingly, the ground argued that the innuendoes arrived at in support of the claim for libel are
unjustified, having regard to the evidence, in our view, succeeds and the judgment given in consequence thereof is hereby set aside together with the costs awarded.
For reasons assigned earlier on, consideration of the judgment given in respect of the claims for wrongful detention of title deeds, negligence and deceit in suits Nos. 12/61, 18/61 and 93/65 was deferred until the other claims had been disposed of. The latter having been done, it now remains to be seen how the former claims, that is, in suit Nos. 12/61, 18/61 and 93/65 were dealt with by the learned judge. Enough particulars of these claims and evidence given in support thereof have already been set out in this judgment. By way of emphasis, however, reference will be made to a few passages of the evidence and the judgment.
It is not disputed that in pursuance of some financial assistance the shareholders and directors of Mpotima Ltd. needed for the purpose of reviving the business activities for their company, they approached the defendant bank for a loan. Nor is it disputed that as security for the loan, certain guarantees, memoranda of deposit of title deeds, and later, mortgages were executed in favour of the bank.
Exhibit D which was the letter written to the bank for the loan omitting the formal parts, states:
“Dear Sir, Application for a Loan Secured with Properties on a Mortgage We wish to apply for a loan of eight thousand pounds (£8,000). This amount will be paid within 5 years by monthly instalments. To secure the loan we are offering with the concern [sic] of two of our shareholders their Properties namely Two Plots of Land with Buildings thereon at Accra. These properties are valued at Thirteen Thousand pounds (£13,000). We forward herewith the Documents on the Properties.
[p.171] of [1972] 1 GLR 153 We shall execute jointly with the owners of the Properties a deed of mortgage to cover you, immediately same is prepared.
We trust this will meet your approval in view of the volume of business we are doing through your medium and our wish to increase our business for the coming season.
Yours faithfully,
MPOTIMA LIMITED
(Sgd.) R. A. Darko, Managing Director.”
To that letter dated 9 September 1957, the bank replied on 28 October 1957 (per exhibit E), saying that they were prepared to place the facility required at the disposal of the applicants against the personal guarantees of the plaintiffs, E. K. Aboagye and R. A. Darko. They also called for memoranda of deposit of the plaintiffs’ title deeds. In consequence of this, exhibits F1, F2, F3 and F4 personal guarantees each to the limit of £G8,000 were given by Aboagye, Darko and the plaintiffs to the bank. In addition, the plaintiffs deposited their documents of title referred to in the suits with the bank—exhibit Q in respect of Janet Darko’s, Q1 and Q2 in respect of Kwabena Appenteng’s documents. At a later stage, the two plaintiffs executed in favour of the bank two legal mortgages exhibit G1 by Kwabena Appenteng andexhibit G2 by Janet Darko.
The two mortgages exhibits G1 and G2 which, as it were, came to supersede the guarantees and
memoranda of deposit, it should be observed, were limitless in point of the amount of Mpotima’s
indebtedness, either incurred by them alone or jointly with any person or persons, corporation or
company, and whether as principal or surety. As will be seen in due course, this constituted a very serious area of disagreement between learned counsel for the parties herein.
It is also important to bear in mind another guarantee (exhibit R) given by Kwabena Appenteng in favour of R. A. Darko to cover the amount of £G92,000. As far as the evidence extracted from the record goes, the £G92,000 represent the net amount resulting from the cross-firing which was eventually passed on to R. A. Darko by both Mpotima Ltd. and E. K. Aboagye, following which, by a resolution of the Board of Directors of Mpotima Ltd., the latter executed a guarantee in favour of the defendant bank. The said guarantee is exhibit 7 and reads thus;
“Extract from the Minutes of a Meeting of the Board of Directors of Mpotima Ltd. held on the 15th day of September, 1958, at Accra, Ghana.
RESOLUTION:
‘It is resolved that Mr. Edward Kofi Aboagye be and he is hereby authorised to sign on behalf of the
Company a Guarantee to Bank of British West Africa Limited (which was produced to the Board and
approved) in respect of all moneys and liabilities now or hereafter due, owning or incurred from or by Rexford Ayeh Darko to the Bank, with a limit on the amount recoverable [p.172] of [1972] 1 GLR 153 from the Company thereunder of a principal sum of Ninety Two Thousand Pounds and interest as therein provided. ’The above is certified to be a true extract from the Minutes of the Board of Directors.
(Sgd.) R. A. Darko, Director
(Sgd.) E. K. Aboagye (Secretary Director)
(Sgd.) K. Appenteng, Director.”
On the strength of this, a guarantee tendered as exhibit R7 with a limit of £G92,00, was executed by E. K. Aboagye on behalf of Mpotima Ltd. to the bank, who subsequently obtained judgment against Mpotima ltd. and R. A. Darko for non-payment of the outstanding balance of about £G84,000. Accordingly, the defendant bank have refused to surrender the documents of title to the plaintiffs until settlement of the amount due has been effected.
This has been resisted by the plaintiffs as already pointed out and the reasons for this, counsel for the
plaintiffs, in their submission, supported by the findings of the learned judge, maintain are these:
(1) That the original loan sought was £8,000, and since this is confirmed by the application for the
loan, exhibit D and the guarantees, exhibits F1 and F2 the defendant bank were not entitled to hold
on to the plaintiffs’ documents because the said loan has been repaid by Mpotima Ltd.
(2) That, it follows from (1) above, that the mortgages exhibits G1 and G2 later executed by the
plaintiffs were affected by mistake as there was no consideration; but assuming there was any at all,
by virtue of the grant of the loan of £G8,000, its subsequent repayment rendered the bank impotent
to hang on to the documents.
(3) That the plea of non est factum, and lack of mutuality between the parties were also raised and
relied upon, on the grounds that when the plaintiffs executed the various security documents, their
minds did not go with their pens, nor were the two sides ad idem as to what they were doing.
(4) That there was no interpretation of the various documents at the time of their execution, and that
since the evidence tended to support this, the burden was on the defendants to prove that there was
an interpretation which was understood by the plaintiffs, especially as Kwabena Appenteng is an
illiterate.
(5) That exhibits R and R7—the resolution and guarantee by Mpotima Ltd. on behalf of Darko are
void ab initio by virtue of the provisions of article 19 of the company’s regulations which render
the company powerless to guarantee any of its directors.
[p.173] of [1972] 1 GLR 153 (6) That Kwabena Appenteng’s guarantee on behalf of Darko for the £G92,000 was void for lack of consideration in so far as the debt in question was a past or pre-existing debt at the time of the execution of the guarantee.
In his judgment, the learned judge found for the plaintiffs not only on their claims for wrongful detention of the deeds of title, but also on the other claims for negligence and deceit. It is to be noted, however, that when he came to consider the question of damages, he expressed the following view:
“The damage suffered by the plaintiffs, for the deceit in suit No. 18/61, and the negligence in suit Nos. 12/61 and 93/65, is wrongful detention of their title deeds. There are substantive claims for damages for the wrongful detention. I propose therefore to assess damages suffered by the plaintiffs as a result of the wrongful detention of the title deeds and award that sum only.”
The ground of appeal against that judgment alleged, inter alia, that the learned judge erred in holding that the bank wrongfully detained the title deeds of the plaintiffs, and further that in finding for the plaintiffs on the claims for deceit and negligence, he erred, because there was not sufficient evidence to support such findings.
It follows from what the learned judge said, when dealing with the question of damages, that
consideration of the arguments by counsel should be centered around the primary finding in respect of the wrongful detention of the documents. This issue may, for the sake of convenience, be dealt with under two limbs, (a) how the documents came to the possession of the bank and (b) why they maintain they still have the right to retain them.
As to (a), can it be said, as was the contention on behalf of the plaintiffs, that it was for a loan of £8,000 and no more than the title deeds in suits Nos. 12/61 and 93/65 were offered as security on behalf of Mpotima Ltd. to the defendant bank, or was it for an unlimited amount as was the argument for the appellants.
To be able to answer the above effectively, it is necessary to consider not only the various documents, i.e. the guarantees, memoranda of deposits and the legal mortgages, but also the financial position of
Mpotima Ltd. at the time when the approach for the loan was made. Darko’s evidence, portions of which appear earlier in this judgment, puts the matter beyond doubt, that the financial position of the company was then quite an unhappy one. The unsecured overdraft facilities Mpotima Ltd. was enjoying from the defendant bank, Darko said, had at the time been exceeded to the tune of about £G5,000, yet, it was still in dire need of funds (additional overdraft of £G11,000) to cover certain contracts which he had entered into in Europe on behalf of Mpotima Ltd.
His evidence about the overdraft facilities the company was enjoying was confirmed by Aboagye and
Janet Darko, a fact which appeared to be well-known to other members of the company as can be made out from [p.174] of [1972] 1 GLR 153 what Janet Darko said, “I Knew that Mpotima Ltd. was enjoying an overdraft with the defendant bank. I got to know that before 1957 at a general meeting where Darko mentioned this.”
Therefore, if at the time the loan was sought, Mpotima Ltd was already indebted to the defendant bank to the knowledge of its members then the submission by counsel for the appellants that the security given to the defendant bank was not limited to the amount of £G8,000 as claimed by the plaintiffs, cannot be said to be baseless. That it was a continuing security they gave, also appears to be the case as contended on behalf of the appellants. These submissions are based on the evidence and the cumulative effect of the guarantees, memoranda of deposits and, lastly, the legal mortgages which were executed by the plaintiffs as mortgagors, R. A. Darko and Aboagye as directors of Mpotima Ltd. (the customer) and the defendant bank as mortgagees. Passages of the above on which reliance was placed for the submissions made on behalf of the appellants, were paragraphs (1) and (4) of the memorandum of deposits, the essential parts of the said paragraph (1) is as follows; “The documents deposited with the bank by the plaintiffs were with the intent to create an equitable mortgage . . . for securing the payment and discharge on demand, of all sums which now are or at any time or times hereafter may become due or owing…to the bank by the undersigned, [i.e. the plaintiffs], either alone or jointly with any other person or persons, company or companies . . . whether in the character of principal debtor or guarantor, or surety or otherwise howsoever and also all usual bank charges and commissions and interest at the interest of . . . per centum per annum or at such other rate as may be arranged from time to time to be calculated on the balance owing from day to day and to be payable by monthly instalments on the last of each month. ”Paragraph (4) also states that the deposit shall be a continuing security. Then paragraph (1) of the guarantee also states that in consideration of the bank agreeing to grant or continuing to grant banking accommodation at the request of the guarantors to Mpotima Ltd. (therein described as the customer), they guaranteed to pay to the bank on demand, all sums which now are or at anytime or times hereafter may become due or owing by the customer either alone or jointly with any person or persons etc., as in the case of the memorandum of deposit. And, lastly, in the legal mortgages too, similar provisions are contained in the covenant to pay, following closely after the consideration clause, couched in these words:
“AND WHEREAS the Customer has or may have accounts with the bank and the mortgagor has requested the bank to allow the customer to overdraw the same and to give it banking accommodation which the bank has agreed to do upon the mortgagor and the customer executing the security hereinafter contained.”
[p.175] of [1972] 1 GLR 153 Therefore, upon a proper construction of the various exhibits, coupled with the evidence on record, the contention of the appellants seems to be the correct view.
With regard to question (b), reasons have been given for the bank’s retention of the plaintiffs’ documents as security until the indebtedness of Mpotima Ltd. to the bank for which judgment has been obtained, has been cleared. Darko’s evidence makes the position quite clear as to how that debt came about, in consequence of which the various guarantees (one by Kwabena Appenteng and the other by Mpotima Ltd.), together with the hypothecations were executed in favour of the bank.
The evidence concerning the cross-firing resulting in the amount later passed on to Darko, if closely
examined, in no way exonerates Mpotima Ltd. from liability either under its articles and memorandum of association, or on grounds of lack of consideration, or any other ground on which the arguments on behalf of the plaintiffs are based. Under paragraph 3 (t) of the company’s articles and memorandum of association, the company could, “borrow or raise and secure the repayment of money in such manner as the company shall think fit, and in particular by overdraft or loan from bankers or others, . . .” And paragraph 19 on which the plea of ultra vires is based, also states that, “The Directors may exercise all the powers of the Company to borrow money, and to mortgage or charge its undertaking, property . . . as security for any debt, liability or obligation of the Company or of any third-party.”
When it is remembered that Darko in his evidence said that all the moneys went to Mpotima Ltd., and that he did not realise any benefit from the loan and cross-firing transactions, then it is difficult to accept counsel’s submission that the guarantee by Mpotima Ltd., on behalf of Darko in the ultimate result of those transactions was ultra vires. It seems rather more consistent with the contention for the appellants, that the combined effect of 3 (t) and 19 above, read in conjunction with Darko’s evidence, shows that what Darko did was intra vires.
This submission was based on the proposition that anything which may be regarded as incidental to or consequent upon the main objects specified in the memorandum or regulations of the company, may unless expressly forbidden, be regarded as intra vires. See Attorney-General v. Great Eastern Railway Co. (1880) 5 App.Cas. 473 at p. 478, H.L.
It is also a general principle of equity that those who pay legitimate demands which they are bound in some way or other to meet, and have had the benefit of other people’s money advanced to them for that purpose, shall not retain that benefit so as, in substance, to make those other people pay their debts. Thus, in Blackburn Building Society v. Gunliffe, Brooks & Co (1883) 22 Ch.D. 61 at p. 71, C.A. where a benefit building society which had no power to borrow money, were permitted by their bankers to overdraw their account to a large amount, it was held that this was ultra vires, but on the principle above stated, it was held that, “as far as it can be made out that the moneys which were advanced by the bankers simply went to pay legitimate debts and liabilities of the society, the
[p.176] of [1972] 1 GLR 153 bankers ought to have the benefit of their security.” From the peculiar circumstances of the present case, we think that the principle, no doubt, applies here with equal force as in the other cases just cited.
With regard to the plea that Kwabena Appenteng’s guarantee (exhibit R1) given to the bank on behalf of R. A. Darko was obtained by deceit because no loan of £G92,000 was granted to Darko as Haymes
allegedly made him to understand and so rendered the said guarantee void for lack of consideration,
attention should be directed to exhibit K1.
It will be remembered that the learned judge found for the plaintiff Appenteng on the question of deceit even though Haymes in his evidence denied telling Appenteng or Darko that the bank would grant any loan to Darko as alleged and for which he procured exhibit R1 from Appenteng. As to which of the two versions is more probable can be seen from exhibit K1 which Appenteng wrote on 23 September 1958, to the bank, when the latter threatened to recover the balance of the amount due to them. It states: “Dear Sir, MR. R. A. DARKO It has come to my notice that you have threatened our Company which has undermined the trust in your co-operation for the maintenance of Mr. R. A. Darko’s Good name and Credit worthiness as well as that of my Company. These are what I believed in and to co-operate deposited my Title Deeds and my Guarantee to Mr. Darko’s indebtedness with you on the understanding that if Mr. Darko shall fail his instalments of Five Hundred pounds (£500) a day or three thousand (£3,000) per week . . .”The rest of the letter went on to say that he was withdrawing his securities and guarantee given on behalf of Darko to the bank.
It will be observed that nowhere did Appenteng say in exhibit K1 that the purpose of the deposit of his title deeds and the guarantee on behalf of Darko, was in pursuance of any fresh loan Haymes had told him the bank were going to grant to Darko. Both the letter and the guarantee Appenteng executed, to his knowledge, made no reference to anything of the sort. His letter (exhibit K1), would surely have been so worded, namely, if the contrary had been the case, that the withdrawal of the guarantee and deposit was being made on grounds of the bank’s failure to grant the loan as allegedly promised and not that the bank had in any way threatened the company.
In the circumstances, Haymes’ version denying having told Appenteng anything about the grant of a loan to Darko seems to be the truth, thereby rendering the finding on deceit very much against the weight of the evidence, and also counsel’s submission on Appenteng’s guarantee quite untenable.
Like Kwabena Appenteng, Mpotima’s letter (exhibit K2), written on the same date as exhibit K1 to theNbank complaining about the attitude of the bank threatening to enforce recovery of the amount due, by seeking [p.177] of [1972] 1 GLR 153 to place an official of the defendant bank in the store of Mpotima Ltd. not a word was said about any promise to grant a loan to Darko. It was obvious from the contents of exhibit K2, that the complaint related to arrangements concerning payment of debt already incurred.
The same applies to R. A. Darko’s letter of 4 September 1958, apparently written in reply to one from the defendant bank, calling attention to the amount due of £G90,000 odd and inviting proposals as to its clearance. Darko’s reply (exhibit H2), in which he made the proposal of paying £G500 per day or £G3,000 per week, also stated that he was offering as guarantee, Mpotima Ltd.’s hypothecation on the latter’s goods to the value of £G100,000, and the deposit of title deeds of two other properties of one of the directors in addition to the documents already in the possession of the bank. It ended with the hope that the bank would co-operate with Darko and their company to maintain their good name and credit-worthiness. The director there referred to was Kwabena Appenteng.
The significant thing to note about exhibit H2, as well as Appenteng’s and Mpotima Ltd.’s letters
(exhibits K1 and K2), is the fact that at their request, the defendant bank, for some period, agreed to stay their hands from enforcing payment of the debt due, hence the guarantees were given to the bank. That, in the view of the court, was forbearance and constitute consideration for the guarantees and other documents executed to cover the debt of £G90,000 odd. Support for this proposition can be found in Halsbury’s Laws of England (3rd ed.), Vol. 18, p. 420, paras. 782-783 as follows:
“The consideration for the surety’s promise does not move from the principal debtor, but from the creditor . .. The consideration may take the form of forbearance on the part of the creditor, at the surety’s request, to sue the principal debtor or of the actual suspension of pending legal proceedings against the latter. ”Then, at p. 421, para. 784, it goes on to say that: “The consideration for a promise of guarantee need not appear in writing. ”It seems quite clear, therefore, that the submission that there was no consideration for the execution of the guarantees and the mortgage (exhibit 21), on behalf of Darko, or that there was no consensus between Appenteng and the bank cannot be sustained.
A person who seeks to bind another with a document must prove (a) that it was read over and interpreted to him in a language he understands, and (b), that he understood the nature of the document before he signed it. On this principle, it was submitted by counsel for the plaintiffs, that the burden was upon the bank to prove that before Kwabena Appenteng (an illiterate, though he can sign his name), executed the mortgage (exhibit 21), it was read over and interpreted to him. The only way to prove this, counsel further pointed out, was to have called one Kwatia whose name appears in the attestation clause as the interpreter, [p.178] of [1972] 1 GLR 153 but that was not done. In the circumstances as Kwabena Appenteng denied knowledge of what the contents purported to be, he cannot be bound by the document because it was not interpreted to him. It is true that Kwatia who happened to be an employee of Mpotima Ltd. at the material time was not called. It is also true that Mr. Haymes, under cross-examination, said that when Darko and Appenteng went to his office to sign exhibit 21, Kwatia was not present, and it appears this bit is being used in support of Appenteng’s denial of the interpretation to him of the document.
That, however, cannot strictly speaking, avail him much, in view of Haymes’ further evidence in answer to a question under cross-examination that before exhibit 21 was signed, it had been collected from Mr. Medcalf by Darko and Appenteng a day or two previously. When they brought it back with them to execute it, Haymes said he found that E. O. Kwatia had signed his name in the attestation clause.
In these circumstances, the question which naturally arises is: For what purpose was the document
collected by the two people? To that question, the logical reason that can be given is that, in the state
which Haymes found the documents, it was taken to Kwatia to interpret it to Appenteng and, on
completion thereof, Kwatia signed the attestation clause as evidence of what he had done. This also
appears to be the reason why both Darko and Appenteng signed the document without any interpretation in Haymes’ office; an incident which Haymes said was not lacking in precedent as it had happened before. Of some importance also, is a question put to Haymes by learned counsel for the plaintiffs and the answer given which, in our view, deserve some observation:
Q. You will be surprised to learn that Mr. E. O. Kwatia wrote his name there. Giles Hunt called him and he went there and wrote that he had interpreted the document long after the document had been
executed by the bank and so on and so forth; you do know that? A. That is the first I heard of it.”
If that was the case of the plaintiff, namely, that Kwatia (admittedly an employee of their company), had been induced by Giles Hunt to do what is attributed to him, then, the burden shifted upon the plaintiffs to prove that assertion they made. It was the only course open to them if they wanted to question the genuineness of exhibit 21, which on the face of it, appears to be in order. Surprisingly enough, however, not only did they fail to call Kwatia or any other person who could testify to what was alleged, but that issue was even not pleaded by the plaintiffs.
It follows, therefore, that the plaintiffs rather failed to discharge the heavy burden of establishing that the attestation clause did not truly represent what it contains. Consequently, the submission that the document was not interpreted to Appenteng and the finding made on it to [p.179] of [1972] 1 GLR 153 that effect by the learned judge cannot be sustained. Taking all the surrounding circumstances of the case into consideration, the ground argued that the finding made for the plaintiffs on deceit, negligence and wrongful detention of their title deeds in suits Nos.12/61, 18/61 and 93/65 was against the weight of evidence, we think, should be upheld.
The appeals are, therefore, allowed and those judgments appealed from are set aside together with the consequential orders made as to the return of the title deeds, damages and costs.
The appeals in each of the four consolidated cases having been allowed and the judgments appealed from together with all consequential orders made set aside, there will be substituted therefore, judgments dismissing the plaintiffs’ claim against the defendants with costs in this court assessed at N¢1,850.74 and costs in the High Court to be taxed.
It is ordered that if any amount has been paid by the appellants to the plaintiffs-respondents by way of damages or costs in pursuance of the judgments appealed from such amount should be refunded.
DECISION
Appeal allowed
K. T.
