HIGH COURT, KUMASI
DATE: 7 FEBRUARY 1967
BEFORE: SOWAH J.
NATURE OF PROCEEDINGS
APPEAL from a decision of a local court magistrate dismissing the plaintiff’s action for recovery of his farm. The facts are fully stated in the judgment.
COUNSEL
Owusu-Ayim for Totoe for the appellant.
No appearance by or on behalf of the respondents.
JUDGMENT OF SOWAH J.
This is an appeal from the Amansie Local Magistrate’s Court dismissing the claim of the plaintiff for recovery of his farms on the ground that, “after carefully considering the evidence before it, the court is of the opinion that the plaintiff’s action has no legal foundation, since he [the mortgagor] was the cause of the breach of the terms in the mortgage.”
The history of this case is a short matter. The plaintiff’s predecessor in title and uncle pledged or mortgaged his cocoa farm to the first defendant. In this context the question whether the transaction is oneMof pledge under customary law or a mortgage within the meaning of English law is extremely important. The first defendant was to go into possession for seven years and to work the farm order to repay himself from the proceeds; thereafter he was to return the farm to the plaintiff. If during the period of seven years the plaintiff or his predecessor paid the sum of £G300 which was the loan, the farm would be returned to him and any proceeds obtained from the land would be regarded as interest. The terms of the agreement were embodied in a deed. It appears that in about 1956 the first defendant in alleged pursuance of the terms of the agreement sold the farm saying that the plaintiff had committed a breach of the term to give him exclusive possession of the land and further had partitioned the farm, the subject of the transaction.
The magistrate so found that the plaintiff and his predecessor committed such breaches. The issue in this appeal is one of law only. Before discussing the law on the matter I will set down in extenso portions of the deed which read: “WHEREAS the mortgagor is seised in fee simple absolute in possession free from all incumbrances and family claims of one (1) cocoa farm situate and lying at a place called Kwaemu in Mpreniase aforesaid hereinafter mentioned and intended to be hereby granted And Whereas the mortgagee hath at the request of the mortgagor and the sureties agreed to lend to the mortgagor the sum of three hundred pounds (£G300) with interest on having repayment thereof secured to him by way of the mortgagee entering into the said cocoa farm intended to be hereby
[p.52] of [1967] GLR 50
secured or granted and taking possession thereof with a view to plucking the crops and enjoying the profits thereof for seven years (7) in satisfaction of the said sum of three hundred pounds (£G300) so lent and interest thereon commencing from the date of these presents NOW THIS INDENTURE WITNESSETH that in pursuance of the said agreement and in consideration of the sum of three hundred pounds (£G300) paid to the mortgagor and the sureties on or before the execution of these presents (the receipt whereof the mortgagor and the sureties hereby acknowledge and from the same do hereby release the mortgagee), the mortgagor doth hereby grant unto the mortgagee his “executors administrators and successors according to native customary law and assigns the undermentioned property being the security to the said loan viz.: …AND IT IS HEREBY AGREED AND DECLARED that the mortgagor may at any time hereafter redeem the said cocoa farm by paying back to the mortgagee his “executors administrators successors according to native customary law or assigns the said sum of ;£G300, and in that case all the fruits of the said farm enjoyed by the mortgagee up to the date of redemption shall be regarded as interest and not to be accounted for by the mortgagee to the mortgagor.” (The emphasis is mine.) The evidence of a legal mortgage is that, the right title and interest of the mortgagor is conveyed to the mortgagee, he is therefore vested with title he can sell or alienate having regard to the terms of the agreement. The only title left in the original owner is the equity of redemption. “The essential nature of a mortgage is that it is a conveyance of a legal or equitable interest in property, with a provision for redemption, i.e., that upon repayment of a loan or the performance of some other obligation the conveyance shall become void ox the interest shall be reconveyed.” Vide Megarry and Wade, Law of Real Property (3rd ed.), p. 879.
In this deed the right, title and interest of the mortgagor were not conveyed or transferred to the mortgagee, he was merely given the power to enter into possession and recoup the loan from the proceeds obtained from the farm for a period of seven years. There is no power of sale’ or foreclosure in the deed if there were breaches of the terms of the agreement. This agreement or deed is not a mortgage. Thus counsel’s submission that there should be an implied term in the deed of power to sell if there were breaches is untenable.
[p.53] of [1967] GLR 50
It seems to me that the deed is evidence of an ordinary customary pledge. It gives the pledgee possession; it gives him power to recoup the loan from the proceeds without accounting to the pledgor; if within the seven years the capital was paid, whatever amounts had already been received from the farm would be regarded as interest. In passing, this provision offends against, the Moneylenders Ordinance, Cap. 176 (1951 Rev.).
The essence of a customary pledge is that the pledgee has no power of sale, and as the saying goes once a pledge always a pledge and the pledgor upon tender of the amount due can recover his property. In this transaction the pledgee had been granted a number of years within which to recoup him-self. In my view he had no power to sell the property within the period. If there had been any breach his only remedy was to institute an action for the recovery of the loan and if necessary to sell the property under a writ of fi. fa. if the judgment debt was not paid. The sale was therefore wrongful. I will therefore set aside the judgment of the local court magistrate and enter judgment against the first defendant, the pledgee and the second defendant the purchaser of the property and order recovery of the property and the ejectment of the second defendant.
The plaintiff will have his costs against the first defendant assessed at ¢84.00 in this court and the court below and against the second defendant fixed at ¢60.00.
DECISION
Appeal allowed.
S. O.
