Daniel Cobbina & Anor V. Kweku Edusei (1936)

LawGlobal Hub Judgment Report – West African Court of Appeal

Claim to rectify or rescind Deed of Mortgage and for an account, etc.— Appeal fromjgme ofmen Reference to referee—Deposit or payment by Surety without know-ud Supremeledge of principal debtor ?f—Finding in Lower Court that it was Court. part payment and mortgage rescinded.

Held : Money was deposited only. Appeal allowed ; order for rescission set aside ; redemption allowed.

The facts are sufficiently set out in the judgment.

E. C. Quist for Appellant.

E. 0. Asafu-Adjaye for Respondents.

The following judgment was delivered :—

KINGDON, C. J., NIGERIA.

In this case the plaintiffs by their writ claimed :—

” 1. To have a deed of mortgage dated the 28th day of February, 1934. and made between the plaintiffs of the one part and defendants of the other part rectified or rescinded on the ground of mistake and/or fraud.

2. For an account to be taken of what money if any is due by the plaintiffs to defendant in respect of a contract of loan or a loan transaction between plaintiffs and defendant which said loan transaction was to have been the subject-matter or consideration of the aforesaid deed of mortgage.

3. For redemption of the property of the plaintiffs comprised in the said mortgage to wit : One (1) cocoa farm situate at Mansu Road belonging to the first plaintiff and one (1) cocoa farm situate at Atobuasi belonging to the second plaintiff.
4. For an injunction to restrain the defendant his agents or servants from in any way interfering with or alienating or disposing of the said property comprised in the aforesaid deed of mortgage.”

On the case coming before the Divisional Court, Kumasi, the question of accounts between the parties was referred to Mr. Samuel Bannerman, Registrar of the Court, to report as referee, all questions of law being reserved for the Court.

The Referee found that the total liability of plaintiffs to defendant amounted to £181 5s. 6d., and that against this two sums, one of E34 17s. and the other of £50, had been paid, leaving a balance of £96 8s. 6d. due.

The Divisional Court on considering the report

1. Ordered the rescission of the mortgage on the following grounds :-

‘Hold that this mortgage should be rescinded £50 was paid to the creditor—defendant herein—by a surety to the original transaction, D. A. Edusei,

consideration for stay of execution on principal debtor—a plaintiff herein.

CobbinaThis I hold ought to have been disclosed.

& Ano.” This mortgage was executed to secure to defendant herein a debt for

v.which he had already obtained judgment—plus some additional interest.

KwekuThis practice of creating a new cause of action on a matter in which judgment

Edusei.is already entered is to be deprecated.”

Kingdon,2. Disallowed and ordered the sequestration of the promissory

j.

notes exhibited in the case and marked ” B ” and ” C “

respectively.

and 3. Found the balance due to defendant was £58 5s. 6d., the difference of £38 3s. between that sum and the £96 8s. 6d. found by the Referee being made up as follows :-

£20 further interest disallowed.

£15 difference between £34 17s. and

£49 17s. which the Judge found as fact had been paid.

£3 3s. fees on the mortgage which the Judge allowed on rescission of the mortgage.

By far the most important point in this case is the question of the £50 referred to above. Shortly the facts of the case are that in May 1933 a judgment was obtained by the defendant for £150 and £6 17s. costs againit the first plaintiff as principal debtor, and the second plaintiff and two other men, each named Edusei, as sureties. These two men named Edusei are not to be confused with the defendant Kweku Edusei. In 1984 the defendant, Kweku Edusei, endeavoured to enforce judgment of the debt due to him by writ of Ca. Sa. against the judgment debtors, and Yaw Derkyi the second plaintiff herein was actually arrested and imprisoned.

The two Edusei sureties in order to avoid a similar fate and to obtain Yaw Derkyi’s release, raised £50 between them, and one of them, D. A. Edusei, handed this sum to the defendant.

Now comes the vital conflict of fact as alleged by the respective parties. The defendant says that the £50 was handed to him with the express stipulation that it should not be applied towards payment of the judgment debt, but should be held on deposit and returned if and when he succeeded in extracting the full amount due from the principal debtor ; further that he was expressly enjoined not to mention this deposit to the principal debtor as the latter would, if he knew of it, take advantage of it to avoid payment in full.

The plaintiffs on the other hand contend that the £50 was paid as part of the two Eduseis’ liability on the judgment debtor and went to reduce the total debt due, and that, in consideration of the part payment the creditor stayed execution.

Anyway the fact of the deposit or payment was kept from the knowledge of the principal debtor and of the other surety Yaw Derkyi, and when they were further pressed for payment they gave the defendant the mortgage, Exhibit ” A,” which they brought this action to get rescinded or rectified on the ground of mistake and/or fraud—the mistake or fraud being in respect of the £50.

The Referee found that the £50 was handed over not as a deposit but as part payment, in the following terms :-

” The defendant admitted having received £50 from D. A. Edusei, but contended that it was an amount deposited for safe-keep and to be refunded without interest after the plaintiffs have settled the whole debt. This explanation is rather ridiculous when it is remembered that D. A. Edusei is himself a debtor to the defendant, and so I have come to the conclusion that it was a part-payment and I have accordingly allowed same in favour of plaintiffs,”

and the Judge, seemingly, accepted this finding.

Ought that finding to be upheld ? In considering that question there are two points which I think may legitimately be taken into account. The first is that precisely the same question was decided in the opposite sense by the native Tribunal of Kumasihene when the man D. A. Edusei sued Kweku Edusei for the return of this very £50.^–The Tribunal non-suited D. A. Edusei, but held that Kweku Edusei ” must however refund the £50 to plaintiff as arranged between them when the principal debtor repays the whole amount to him.” The second is that the Referee bases his finding not on the credibility of the respective witnesses but on his own idea that the explanation as to the deposit was rather ridiculous. I therefore consider myself entirely free to form my own opinion as to the truth of the matter and that it is my duty to give effect to that opinion.

I will say at once that I do not agree with the Referee that the transaction was rather ridiculous. On the contrary it seems to me precisely the kind of transaction which is beloved by persons of a particular mentality in this country. Further, apart from the evidence actually given, the mere fact that D. A. Edusei instituted proceedings to recover this sum- seems to raise a strong presumption in favour of the story. And as to the actual evidence I consider that the evidence in favour of the deposit is preferable to that against. For these reasons I disagree with the finding of the Referee and Judge on this point and hold that the £50 was deposited and is still on deposit with the defendant for safe-keeping under an agreement with D. A. Edusei to be returned to him if and when the judgment debt is fully discharged.

It follows that I am of opinion that the order of the Court below rescinding the mortgage should be set aside.

Turning to the question of the accounts I consider that the sum of £58 5s. 6d. found by the Judge as the balance due must be supplemented by the following sums :-

£50 the amount deposited but not paid.

£3 3s. fees on the mortgage, which are now properly included.

£15 the difference between £49 17s. and £34 17s. as cash paid. The

Referee found £34 17s. and I can see no reason for the Judge’s differing from

his finding on this point.

£5 which the Referee found as a fact was not paid.

The total addition is £73 3s., and makes the balance due £131 8s. 6d. I am of opinion that this sum should be substituted for the £58 5s. 6d. found by the Court below.

The order as to the sequestration of the promissory notes Exhibits ” B ” and ” C ” should stand.

The plaintiffs should be entitled to redeem the property comprised in the mortgage Exhibit ” A ” upon payment of the sum of £131 8s. 6d. and the costs awarded in this Court and the Court below, and should be allowed a period of six months to effect that redemption.

As the appellant has been substantially successful upon this appeal he should be awarded costs in this Court and in the Court below, the judgment of the Court below as to costs being set aside, and it should be made clear that the allocation of part of the costs due on the order of the Court below to payment of the judgment debt cannot be allowed to stand. The order granting six months for redemption of the mortgage should not operate as a stay of execution in respect of costs.

PETRIDES, C.J., GOLD COAST.

I concur.

WEBBER, C.J., SIERRA LEONE.

I concur.

The following Order was made :—

The appeal is allowed and the order of the Court below rescinding the mortgage is set aside.

The order of the Court below that the defendant is entitled to £58 5s. 6d. as balance due is varied by substituting £131 8s. 6d. for £58 5s. 6d. It is further ordered that the judgment of the Court below as to costs be set aside and that the allocation of part of the costs due on the order of the Court below to payment of the judgment debt be cancelled.

The appellant is awarded costs in this Court assessed at £45 2s. 3d. and in the Court below to be taxed. And it is further ordered that the respondents be given a declaration that the right of redemption of the mortgage is still subsisting and that upon the respondents paying to the appellant the sum of £131 8s. 6d. and the costs awarded in this Court and the Court below within six months from this date the appellant do reconvey the mortgaged properties free and clear of and from all incumbrances done by him or any person claiming by, from or under him, and deliver up all deeds relating thereto ; but in default of the respondents paying to the appellant the said sum and costs as aforesaid, by the time aforesaid, it is ordered that the action do stand dismissed. And it is further ordered that nothing in this order shall operate as a stay of execution in regard to costs.

The Court below to carry out.