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AWUME v. DONYA


  • appeal
  • 1962-05-15
  • HIGH COURT
  • 1 GLR 357-360
  • Print

PREMPEH, J.


Summary

Land law?-Equitable mortgage?-Mortgagee cannot exercise right of entry without order of court.Estoppel?-Res judicata?-Judgement which is bad in law cannot operate as estoppel per rem judicatam.

Headnotes

In June 1954 the plaintiff pledged a piece of land to the defendant to secure the repayment of a loan of G60. The said loan was repayable by the 31st December, 1954. In the document evidencing the transaction, exhibit 1, it was expressly agreed that if the plaintiff should fail to re-pay the loan on the appointed date, the defendant was to take the land in settlement of the loan, and vest title in himself. The plaintiff defaulted, and so the defendant seized the land.[p.358]In 1961, a Dorothea Awume a relation of the plaintiff, sued the plaintiff and the defendant in the local court claiming that the land is family property and that the plaintiff herein had no authority to pledge it to the defendant. The plaintiff as first defendant, pleaded liable, but the defendant, who was second defendant in that case, contested the case, and won, the court holding that the land was the personal property of the plaintiff, and that in accordance with the terms of the document, exhibit 1, the defendant herein became the legal owner upon exercising his right of entry. The proceedings and judgment in that case were tendered in the instant case as exhibit 2.The plaintiff instituted the present action in the local court for what is in substance a declaration that he is the owner of the property, and he is entitled to repay the loan and redeem the mortgage. The local court dismissed the action on the ground that in view of exhibit 2 the matter was res judicata. The plaintiff appealed.

Judgement

APPEAL against a judgment of a local court in an action for redemption of an equitable mortgage.

This is an appeal from the decision of the Kpandu Local Court Division "1" given on the 9th June, 1961, in favour of the defendant-respondent herein.

By his amended claim, the plaintiff-appellant claimed against the respondent an order upon the respondent to show cause why he had refused to allow the respondent to redeem his property commonly called Anokpete land, which he pledged to the respondent for the sum of G60, which sum he had tendered for the redemption of the land and which the respondent had refused to accept.

The short facts of the case are that by a document dated the 3rd June, 1954, the appellant obtained a loan of G60 from the respondent which he promised to repay on the 31st December, 1954, and by way of security therefor, the appellant pledged to the respondent a portion of land known as the Anokpete land. It was a term of the said transaction that if the appellant failed to repay the amount at the fixed date, the respondent was at liberty to take possession of the said land without a court order, and to vest title thereof in himself. [p.359]

No evidence was led by the parties in the trial court, but in an affidavit sworn to by the appellant which is part of the proceedings herein, he stated that he tendered some payment to the respondent for the redemption of the land but he refused to accept it, and he consequently took possession of the land.

Sometime during the year 1961, one Dorothea Yawa Awume brought an action against both the appellant and the respondent herein in the Kpandu Local Court Division "1" in which she claimed that the Anokpete land was family property which the appellant herein had wrongfully pledged to the respondent herein. The appellant who was the first defendant in the action pleaded liable, but the respondent who was therein the second defendant contested the claim. After hearing the parties in that action the local court magistrate made the following finding of fact:

"From the evidence on record there is not the least doubt that first defendant is the bona fide owner of the land in question and that first defendant entered into agreement with second defendant for the loan by second defendant with the full knowledge and consent of members of plaintiff's and first defendant's family.

I am satisfied that the first defendant was the bona fide owner of the land in question and that by the agreement which was mutually concluded between first defendant and second defendant ownership of the land has been legally transferred to the second defendant who is now to be recognised as the bona fide owner of the land in question."

After making this finding, the trial court then dismissed the claim of Dorothea Yawa Awume and entered judgment for the second defendant, i.e. the respondent herein.

When the present case came up for hearing, the respondent moved the trial court for an order to dismiss the appellant's claim on the ground that the matter was res judicata, and in support of this plea he relied solely upon their judgment already referred to in the case Dorothea Yawa Awume versus the appellant and himself, the respondent.

As I have already indicated, the trial court did not hear evidence, but decided this case upon the affidavits filed by the parties and upon the loan document and the judgment already referred to. The said loan document and the said judgment were not made part of the appeal record as they ought to have been, but when the appeal came on for hearing, they were admitted by consent. The document was marked exhibit 1 and the proceedings and judgment of the case referred to marked exhibit 2.

One of the main grounds of appeal argued in this court is that the magistrate erred in law in holding that the subject-matter of the suit was res judicata. Now there is no doubt that the document exhibit 1 evidences nothing more than an equitable mortgage by the appellant of his real property to the respondent.

In Fisher's Law of Mortgages (5th ed.) para. 24, the following passage appears:

"An equitable mortgage is a contract operating as a security, but which, for want of a transfer of the legal estate, can only be enforced under the equitable jurisdiction of the Court, which carries it into effect either by giving the creditor immediately the appropriate remedies, or by compelling the debtor to execute a Security in accordance with the contract." [p.360]

In the case of Kwaku Adu Sei and Kwaku Ansah v. Johnson Ofori1 the first plaintiff executed a document promising repayment of a loan on the security of his land, and authorising the defendant, in default of repayment, to have the property disposed of by public auction. The loan was not repaid when due, and the defendant by his auctioneer, entered upon the land and had the property sold by auction. It was held that the document was an equitable mortgage, but that as the defendant had not applied for and obtained an order of the court, the sale was invalid.

It is clear that the basis for that judgement is that in an equitable mortgage of real property the mortgagee cannot sell without the intervention of the court, because the legal title is not in him, and on the same basis it is my view that although it is inserted in the document exhibit 1 that in default of payment the lender should take possession of the property for himself, he cannot do so without an order of the court. It seems to me also that in these circumstances until a court order had been made to the contrary as between the appellant and the respondent, the appellant reserved the right to redeem his property.

I must now consider what effect the judgment in exhibit 2 could have upon the appellant's right to redeem the property. It is true that in that case the appellant pleaded liable to the claim, but that court did not hold that the land was family property; it found as a fact that it was the bona fide property of the appellant which he had pledged to the respondent as security for the loan. But having so found it is my view that the trial court erred in holding that the respondent had become the owner of that property, because as a matter of law, in the case to which I have already referred, notwithstanding the insertion in exhibit 1 (which was to a legal mortgage) that the respondent could take property for himself without a court order, he could not in law become the owner of that property as such.

Having pleaded liable in that case, the appellant could not appeal against the decision in exhibit 2, and although I do not consider his conduct satisfactory in pleading liable in that case when he knew that the property was his, it is my view that since that decision was bad in law, it cannot be permitted in this court to operate to estop the appellant from exercising his right of redemption of that property under the loan agreement exhibit 1.

For the above reasons I must allow this appeal and set aside the decisions of the trial court and I do enter judgment for the plaintiff-appellant as follows: Judgment is entered for the plaintiff-appellant on his claim. The plaintiff-appellant shall within fourteen days repay to the respondent the sum of G60 plus five per cent. interest thereon computed from the 1st January, 1955, up to this date, and the respondent shall then forthwith surrender to the plaintiff-appellant the possession of the said land. In all the circumstances I award the appellant fifteen guineas costs in this court. The parties shall bear their own costs in the trial court.

Decision

<P>Appeal allowed.</P>

Plaintiff / Appellant

E.D. Kom

Defendant / Respondent

G.S. Lassey

Referals

Sei v. Ofori (1926) F.C. '26-'29, 87.
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