MATZEN & TIMM (GHANA) LTD v. KISSI [1961] GLR 639

DIVISION: IN THE HIGH COURT, ACCRA

DATE: 7TH NOVEMBER, 1961

BEFORE: JIAGGE, J.

CASE REFERRED TO

Butler v. Rice [1910] 2 Ch. 277; 79 L.J. Ch. 652

NATURE OF PROCEEDINGS

ACTION by an assignee of a mortgage debt to recover the amount from the mortgagor. The facts are more fully set out in the judgment.

COUNSEL

E. N. P. Sowah for the plaintiffs. E. N. Moore for N. O. Annan for the defendant.

JUDGMENT OF JIAGGE J.

The defendant owns a house which he mortgaged to the Ghana Commercial Bank. The defendant let the same property to the plaintiff company at the rent of £G300 a year. The bank took steps to foreclose the mortgage, sell the house in question and recover the mortgage debt of £G1,500 that was still due and owing.

According to P.W.1 his company with the consent of the defendant offered to pay the mortgage debt.

This offer was accepted by the bank and the defendant’s property was transferred to the plaintiffs on the 26th July, 1960. The bank also handed over to the plaintiffs the mortgage deed between the defendant and the bank dated the 8th July, 1957. The defendant’s title deeds were also handed to the plaintiffs. The plaintiffs then notified the defendant about the transfer of the mortgage to them. According to the plaintiffs the defendant saw P.W.1 in his office several times about the mortgage debt but stated each time that he had no money to pay.

Upon the plaintiffs’ instructions their solicitor sent the letter exhibit D1 to the defendant on the 5th May, 1961, warning him that unless the debt was paid proceedings would be taken to foreclose the mortgage. The defendant sent his reply exhibit D2 in which he appealed to the plaintiffs “to suspend any legal measures” and assured them that he would redeem the mortgage on the 30th June, 1961.

The defendant’s solicitor then sent exhibit 1 dated the 20th May, 1961 to the plaintiffs’ solicitor claiming that the bank “negligently reconveyed the said property” and demanded the return of then“original title deeds together with the reconveyance executed by the Bank.” Then defendant’s solicitor in exhibit 1 offered to “set off the said amount against future rents and that he [defendant] is prepared to execute a lease for your clients for that purpose.” The defendant denied that the offer made to the bank by the plaintiffs for the payment of the mortgage debt was with his prior consent. He, however, stated that after having been informed by the bank that the property had been transferred to the plaintiffs he asked the plaintiffs whether they were prepared to continue occupation of the house to allow the rent to offset the mortgage debt, and that the plaintiffs had agreed.

The plaintiffs admitted that they had agreed to sign a further lease at the expiration of the old lease with the defendant and that they were willing to keep the rent as a set-off for the debt and that the rent due since July had been in fact used for that purpose. P.W.1 went on to state that he had drawn up a lease but that the defendant had refused to sign it and that the defendant had made another suggestion that the plaintiff-company should pay him in advance twenty years rent; that the proposition was quite unacceptable to the company and the company decided to give up the premises and foreclose the mortgage: hence this action.

The question posed by counsel for the defendant is whether a total stranger can ask that a mortgage be transferred to him and he to pay the mortgage debt. Counsel contended that the bank had no power to assign the mortgage debt and that any such assignment was void ab initio; further, that the bank could assign only the debt and not the mortgaged property, and even so the bank was bound by law to give notice, but no such notice was given. The assignment, he stated, was bad in law.

After a very careful consideration I have come to the conclusion that counsel has misled himself on a number of essential points. On the transfer of a mortgage Halsbury states: “Where a mortgagor is entitled to redeem, . . . he has, . . . power to require the mortgagee, instead of reconveying or surrendering, to assign the mortgage debt and convey the mortgaged property to any third person, as the mortgagor directs.” Laws of England (3rd ed.) Vol. 27, p. 261, para. 478.

In Butler v. Rice,1(1) a case similar to the one before the court, the following question was posed by Warrington, J., “is it material that the owner of the property, the mortgagor, has not requested the person who paid the money to make the payment?” His answer was: “there was an existing charge, and the only question is whether it has been paid off or kept alive. On such a question as that it appears to me that the concurrence of the mortgagor is immaterial. Her position is not affected. The only alteration in her position is that instead of owing the money to A. she will in future owe it to B. I have read the judgment of Kay J. in Patten v. Bond and of Romer J. in Chetwynd v. Allen, and in my opinion both those judgments are consistent with the view I have expressed, and in particular that of Romer J.; for in the case before him, as in this, the material payment was made without the knowledge and without any communication with the person who was the real owner of the mortgaged property, and, notwithstanding that, Romer J. held that the charge was still on foot.”

The case before me is even clearer than the one before Warrington, J. The plaintiffs here stated that they in fact made the offer to pay the mortgage debt to the bank with the defendant’s consent.

I have no reason to doubt that P.W.1 told the court the truth. This action is therefore well-founded. I give judgment to the plaintiffs to recover the total amount now due on the mortgage. There will be judgment for the plaintiffs for £G1,552 17s. 3d. with interest at five per cent. as from the 26th July, 1960. In default-the usual foreclosure. Costs 65 guineas inclusive.

DECISION

Judgment for plaintiffs.