WALA v. WAE [1966] GLR 649

Division: HIGH COURT, SUNYANI

Date: 30 JUNE 1966

Before: HAYFRON-BENJAMIN J.

CASES REFERRED TO

(1) Appenteng v. Bank of West Africa Ltd., High Court, Accra, 16 February 1966, unreported.

(2) Kufuor v. Kwamin (1914) 2 Ren. 808; P.C. ‘74-’28, 28, P.C. NATURE OF PROCEEDINGS ACTION based on moneylending transaction. The facts are fully set out in the judgment.

COUNSEL

Kofi Acquaah for the plaintiff.

T. A. Totoe for the defendant.

JUDGMENT OF HAYFRON-BENJAMIN J.

The plaintiff who is a farmer living at Techimantia borrowed a sum of money from the defendant, also a farmer at Techimantia, and secured the payment of the loan with his cocoa farm which is at a place commonly known as Afranso. The farm has boundaries with the farms of Kwasi Adjei, Amma Paw, Kwasi Semidu, Kwame Banie and Kwame Nimrah. Both the plaintiff and the defendant are illiterate persons, but a document was caused to be prepared in English, and executed by both parties. This dispute has arisen in respect of the exact terms of the agreement and whether the document so prepared correctly set out the terms of the agreement.

The plaintiff ‘s case is that he borrowed £G300 from the defendant and that interest of £G150 was charged. He pledged his cocoa to the defendant to pluck for three years to pay off both principal and interest, after which the cocoa farm was to be released to him, the plaintiff. The defendant caused a document to be prepared purporting to set out the terms of the agreement; he, the plaintiff, executed this document but no copy was given to him. It is now claimed by the defendant that the document was a mortgage deed by which the plaintiff had mortgaged his farm to him for 22 years. The defendant therefore refuses to release the farm even though the three years agreed upon have elapsed. The plaintiff contends that the mortgage deed is fraudulent, and sets out the particulars of the fraud as follows:

(1) The plaintiff was not made to understand that he was executing a mortgage deed.

(2) The contents of the said mortgage deed were not properly or correctly interpreted to the plaintiff. He therefore claims a declaration of title to the cocoa farm, a declaration that the mortgage deed is null and void as it does not disclose the correct principal or interest charged, a nullification of the mortgage deed on the ground of fraud, and an order for account of the proceeds of the said cocoa farm from the date the defendant took

[p.651] of [1966] GLR 649 possession of it to the final determination of this case. The loan was in 1957.

The defendant denies all the material allegations of the plaintiff and states that he is not a moneylender. He denies that the plaintiff is the owner of the cocoa farm and states that by a mortgage deed dated 18 January 1957, the legal estate in the said farm was transferred from the plaintiff to the defendant for 22 years and the plaintiff is therefore only entitled now to the equity of redemption of the cocoa farm. This mortgage deed, he says was prepared by a practising solicitor at the instance of the plaintiff himself and the plaintiff knew and understood the nature of the transaction, was informed of the contents and had a copy of the deed of mortgage. By this mortgage deed executed between the plaintiff and the defendant the defendant lent the plaintiff £G450 without interest, and the plaintiff gave the defendant as security for the said loan the said cocoa farm to keep and pluck for 22 years.

At the outset I shall consider whether the plaintiff can be said to be bound by the mortgage deed which was executed on 18 January 1957. The law is clear and I have reviewed the authorities in the consolidated case of Appenteng v. Bank of West Africa Ltd.,1 that the burden of proof is on the party relying on a document written in English to show that it was read over, interpreted and explained, and that the illiterate person executing it understood and appreciated its contents before appending his mark to it. Here both parties are illiterate, and both agree that the document was read over and interpreted to them. They differ as to the interpretation that was rendered by the clerk who prepared the document. The defendant is relying on the document, and his illiteracy does not affect the burden of proof that is on him. In Kufuor v. Kwamin,2 which is the locus classicus of the point, both parties to the document were illiterate, and the defendant was the one relying on the document. The Privy Council held that the burden was on him to prove that the plaintiff understood the contents of the document.

The defendant has given evidence of the execution of the document, and what was translated to the parties by the clerk; he has called the clerk, and also his own son, who he says was present at the execution. They all testify that what was read over to the plaintiff was that the defendant was to give him a loan of £G450 and he was to secure his farm to the defendant to pluck for 22 years to pay off the debt. The plaintiff on the other hand has given evidence and also called his son to support his testimony that what was said by the clerk was that the plaintiff was to obtain a loan of £G300 with [p.652] of [1966] GLR 649

£G150 interest, and that the defendant was to pluck the cocoa for three years. The evidence of the plaintiff and his witness is therefore flatly contradicted by the evidence of the defendant and his witnesses. There is also a sharp conflict on what was agreed on during the antecedent negotiations. In such circumstances, if the parties had been literate, I would have placed great reliance on contemporaneous documents in order to resolve the conflict. In this case however the parties are illiterate and the only document extant is the document that has been called in question. I have therefore scrutinised the whole of the evidence including the circumstances and the conduct of the parties both prior to and subsequent to the execution of the said document. The plaintiff’s case is that the transaction was strictly business, and that no sentimental considerations influenced the conduct of the defendant. He the plaintiff was in dire circumstances, and the defendant was only prepared to advance to him the money on condition that he paid interest at the rate of 50 per cent and also mortgaged his property for 22 years. There is ample evidence that the plaintiff was in need of the money, and the defendant himself has testified to the number of times on which and the number of persons through whom the plaintiff begged for the money. Evidence is also on record that in those circumstances the plaintiff was prepared to accept any terms provided he got the money. The defendant however would have this court believe that even in those circumstances, he was not prepared to charge any interest on the money advanced, because of some family relationship. He only wanted to recoup himself from the proceeds of the cocoa farm without any prospect of profit. There is evidence that in the first year the cocoa farm yielded 38 loads of cocoa. There is also evidence that the defendant’s caretaker took one-third of the proceeds and gave the defendant two-thirds. The defendant says that he took the farm knowing that he could improve it, and recoup his expenses. Even if he had not improved it and had maintained the annual yield as it was he would have obtained at current cocoa prices of £G2 per load at least £G50 per annum. He would have recouped himself in nine years. Yet the defendant himself says that he rejected an offer that he should pluck the cocoa farm for twelve years only. Nevertheless, he contends that it was a friendly loan without interest. Even if it had not been for these circumstances, and I had to go by the demeanour of witnesses I would have preferred the plaintiff’s testimony. I am satisfied that the defendant gave out £G300 and charged £G150 interest as alleged by the plaintiff and that he obtained the services of a clerk who was under his control to prepare a document to read £G450 free of interest. [p.653] of [1966] GLR 649 Section 3 of the Moneylenders Ordinance3 provides that save as excepted in paragraphs (a), (b), (c), (d) and (e) of the definition of “moneylender” in section 2 includes any person who lends money at interest or who lends a sum of money in consideration of a larger sum being repaid shall be presumed to be a moneylender until the contrary be proved. It is not necessary here to consider the evidence which is required to rebut this statutory presumption. It is clear to me that a bare denial is not enough. I hold that the defendant is therefore presumed to be a moneylender. Section 12 (3) of the Moneylenders Ordinance provides that the memorandum for the loan must state the amount of principal and interest otherwise the loan and any security given for it is not enforceable. It also provides that a copy of the memorandum must be given to the borrower. In this case there is no evidence that any copy of the memorandum was given to the plaintiff, and it is clear that the memorandum does not correctly state the principal and interest. I must hold therefore that the defendant has no enforceable right to the cocoa farm, and I hold further that the mortgage deed is null and void as it was not properly interpreted and explained to the plaintiff. I give judgment for the plaintiff declaring the mortgage deed as null and void, and further declaring him the owner of the cocoa farm the subject-matter in dispute. There is no claim for the recovery of possession of the cocoa farm; since however I have declared the plaintiff the owner of the cocoa farm, and further found that the defendant has no enforceable right to it, the court of its own motion will amend the endorsement on the writ and add a claim for recovery of possession. I therefore order that the defendant give up possession of the farm forthwith to the plaintiff. The claim for accounts is in the equitable side of my jurisdiction. The plaintiff has admittedly obtained £G300 from the defendant, the defendant has enjoyed the proceeds of the farm since 1957. I consider that the defendant has had a fair return on his loan. I do not consider it would be fair if I were to make the defendant disgorge his gains. I therefore dismiss the claim for accounts. The plaintiff will have his costs which I assess at 200 guineas inclusive of 150 guineas for counsel.

DECISION

Judgment for the plaintiff.

E. D. K.