Mortgages in Ghana case law.

In the particular circumstances of the case having due regard to the plaintiffs’ undue delay in prosecuting this claim, they have themselves to blame and there will be no order for accounts of the proceeds of the said cocoa farm to be taken.

PAINSTIL AND ANOTHER v. ABA [1964] GLR 34 [1964] SLR (SC) 2 · Supreme Court · 1964 · SARKODEE-ADOO JSC

Thirdly, the finding of the learned judge that “Asani Yaw later surrendered his title deed exhibit 1 to Aduamoah” negatives any original intention by the parties to bargain for an absolute sale. Furthermore, there is no evidence of guaha (delivery of seisin) having been cut, and as such nothing was conveyed.

PAINSTIL AND ANOTHER v. ABA [1964] GLR 34 [1964] SLR (SC) 2 · Supreme Court · 1964 · SARKODEE-ADOO JSC

Certainly, the notice given on 2 January 1958 was not null and void. It was a premature notice, which had been given too early. Such notices given before the date due for repayment have always been regarded as irregular and wrongful. They are not null or void.

ADDAI v. DONKOR [1972] 1 GLR 209 [1971] SLR (CA) 42 · Court of Appeal · 1971 · ARCHER JA

An act is illegal or unlawful when it is expressly forbidden by the law of the land. A notice of demand under a mortgage deed prematurely given cannot be illegal or unlawful. It can only be wrongful, improper, irregular or grossly faulty. It constitutes nothing more than a breach of contract.

ADDAI v. DONKOR [1972] 1 GLR 209 [1971] SLR (CA) 42 · Court of Appeal · 1971 · ARCHER JA

The legal effect of those findings is that the mortgage was null and void, and of no effect. That being so, the 1st respondent (the mortgage-vendor) acquired no right over the family property under his mortgage, and his sale thereof was wrongful; and the 2nd respondent, the purchaser from the mortgagee, in the result acquired no right, title or interest in the said farms entitling him to enter thereon. The interference by the respondents with the family’s possession is therefore trespass.

KWAN v. NYIENI & ANOR. [1959] GLR 67 [1959] SLR (CA) 10 · Court of Appeal · 1959 · VAN LARE AG CJ

The essentials of a legal mortgage as pointed out above include mutuality of rights, i.e. a right in the creditor to foreclose, and a right in the debtor to redeem. The essentials of an equitable mortgage is deposit of title deeds by the debtor with the creditor. And the essentials of a pledge include the right of the creditor to possession and enjoyment of the property without liability to account, and a right in the debtor to redeem at any time by tendering the money lent.

BUCKLE v. BASSIL AND ANOTHER [1967] GLR 237 [1967] SLR (CA) 9 · Court of Appeal · 1967 · OLLENNU JA

One more observation should be made. In a sale either in execution or under a mortgage, a clear distinction should be drawn between an irregularity and an illegality. An irregular sale may be voidable or give cause for action in damages if certain conditions are proved to exist, e.g. substantial injury to debtor. On the other hand an illegal sale is void ab initio and no title passes under it. This point of law is fully discussed in Kwabena v. Aninkora.4 Applying the principle in that case and in Akyeampong v. Atakora (supra) to the present case, we would say that at its very best, the sale would merely be irregular, not illegal. Therefore the respondent’s remedy, if any, will depend upon proof of substantial injury. But the learned commissioner found upon the facts that the respondent proved no damage. Upon his said finding, the commissioner should have dismissed the respondent’s claim upon that ground also.

MARFO AND OTHERS v. ADUSEI [1964] GLR 365 [1964] SLR (SC) 36 · Supreme Court · 1964 · OLLENNU JSC

The law in these matters has now crystallised as follows: (a) Where the sale is illegal, then the sale is void ab initio and no title passed, See Kwabena v. Aninkora [1964] G.L.R. 299, S.C. (b) Where the sale is irregular, then it is voidable at the instance of a debtor if he can prove that thealleged irregularity has caused him substantial injury. See Marfo v. Adusei [1964] G.L.R. 365, S.C. In the present appeal, all that need be said is that even if there were irregularities (for instance, the premature notice given on 2 January 1958, the absence of a second notice of demand, and lack of proper proof of a second auction sale notice) the sale which took place on 28th March 1958, can only be held to be wrongful. The sale cannot be illegal. If it was wrongful then the respondent must prove the substantial injury which he suffered. There is no evidence of such injury and it seems to me that the sale which took place on 28 March 1958 cannot be set aside.

ADDAI v. DONKOR [1972] 1 GLR 209 [1971] SLR (CA) 42 · Court of Appeal · 1971 · ARCHER JA

In our opinion the principle of law is that a deed of conveyance, mortgage or lease of family land which is on the face of it executed by the head and another member, upon proof timeously made that its execution was without the knowledge and consent of all the principal members of the family, is null and void.

KWAN v. NYIENI & ANOR. [1959] GLR 67 [1959] SLR (CA) 10 · Court of Appeal · 1959 · VAN LARE AG CJ

The object of this Ordinance, as stated in the Bill, is to extend “the powers of the Courts to re-open moneylending transactions brought before them, in order to afford more effective equitable relief to debtors victimised by harsh and unconscionable bargains.”

BUCKLE v. BASSIL AND ANOTHER [1967] GLR 237 [1967] SLR (CA) 9 · Court of Appeal · 1967 · OLLENNU JA

It appears clearly enough therefore that in the view of equity, the mortgagor, notwithstanding that he has divested himself of the legal estate or title in or to his land, remains nonetheless the owner of his land while mortgaged, at least until such time as he is duly divested of his right to redeem or of his equity of redemption, also.

KWANTRENG v. AMASSAH AND OTHERS [1962] 1 GLR 241 [1962] SLR (SC) 14 · Supreme Court · 1962 · VAN LARE JSC

Mere intimacy and consanguinity should not be the criteria for judging whether a purchaser is a nominee or an agent for another. Otherwise, no relation or friend of a mortgagee can bid at an auction sale authorised by him. In order to nullify such a sale, very strong evidence must be required to show that the purchaser was an agent or nominee for the mortgagee. If no direct proof is available, then circumstantial evidence may be relied upon but this indirect evidence must also be very strong indeed.

ADDAI v. DONKOR [1972] 1 GLR 209 [1971] SLR (CA) 42 · Court of Appeal · 1971 · ARCHER JA

“Where conditions are imposed upon the exercise by a mortgagee of his power of sale, the right of mortgagor to restrain a sale on the ground that the conditions have not been complied with is frequently to a great extent neutralized by the insertion of a provision, usually called the purchaser’s protection clause,’ declaring that, upon any sale purporting to be made in pursuance of the power, the purchaser shall not be bound to inquire whether the conditions have been performed or observed. In such a case the mortgagee can sell, and make a good title to a bona fide purchaser without notice of the breach of the conditions, and the contract for sale will bind the mortgagor, whose only remedy will be in damages against the mortgagee . . .”

MARFO AND OTHERS v. ADUSEI [1964] GLR 365 [1964] SLR (SC) 36 · Supreme Court · 1964 · OLLENNU JSC

Now having found as a fact that the first appellant failed to give the respondent notice as required under the mortgage, exhibit B, it was incumbent upon the learned commissioner then to consider the “purchaser’s protection clause” provided in the mortgage and to give effect to it as the law requires. This the learned commissioner failed to do. If he had done so, he would have been obliged upon the authorities to dismiss the respondent’s case. The law makes it incumbent upon us to do that which the trial court ought to have done but failed to do, i.e. in this instance, to dismiss the plaintiff’s case.

MARFO AND OTHERS v. ADUSEI [1964] GLR 365 [1964] SLR (SC) 36 · Supreme Court · 1964 · OLLENNU JSC

Now and again attempts have been made to circumvent one or, other of these three forms of moneylending transaction to the advantage of the creditor, and to the detriment of the debtor. And people in financial distress have been compelled to execute deeds in respect of unconscionable transactions which do not represent the true nature of the transaction between them. It is to meet such harsh cases and other matters connected with moneylending transactions that the Loans Recovery Ordinance, Cap. 175 (1951 Rev.), was enacted, to give the court jurisdiction to determine the real nature of a transaction, despite the form in which the transaction is recorded in writing. The courts are bound to give effect to that enactment so long as it remains on the statute book.

BUCKLE v. BASSIL AND ANOTHER [1967] GLR 237 [1967] SLR (CA) 9 · Court of Appeal · 1967 · OLLENNU JA

“It seems to me that nothing can be clearer than that a man does not lose his right to protect his property against wrong doing by a stranger, simply because he has mortgaged it. . . . It is clear that a mortgagor does not lose his right to protect what is his own because he has created a debt and secured the debt by a mortgage of the property which he seeks to protect.

KWANTRENG v. AMASSAH AND OTHERS [1962] 1 GLR 241 [1962] SLR (SC) 14 · Supreme Court · 1962 · VAN LARE JSC

The test which the court applies in determining this question is whether the transaction is in substance a mortgage; if it is, the court will in equity treat it as such, and it is irrelevant if the transaction is clothed in some other guise.

BUCKLE v. BASSIL AND ANOTHER [1967] GLR 237 [1967] SLR (CA) 9 · Court of Appeal · 1967 · OLLENNU JA