George Grant ‘& Co. V. J. P. Seraphim & Anor (1940)

LawGlobal Hub Judgment Report – West African Court of Appeal

Consolidated claims to set aside tivo attachments in execution of a decree—Appellant being a brother of the judgment-debtor produces a deed of assignment to himself as mortgagee in possession as security for a debt due to him—Decision of trial Judge that the deed of assignment was void affirmed.

Held : There was evidence upon which the Judge could have found that the assignment was not bona Os and the Court was not prepared to say his findings were wrong.

The facts are fully set out in the judgment.

J. H. Coussey (with him R. S. Slay) for Appellant. F. Awoonor Williams for Respondent.

The following judgment, with which the other members of the Court were in agreement, was delivered :—

DOORLY, J., GOLD COAST.

This is an appeal by the plaintiff-appellant in two so-called Interpleader actions (consolidated) under Order 44 Rule 5 of Schedule III to the Courts Ordinance in which the plaintiff-appellant made claims to set aside two attachments in exeeriion of a decree obtained by the present defendant-respondent in an action between the defendant-respondent as plaintiff (judgment-creditor) and J. P. Seraphim as defendant (judgment-debtor)

In support of his claims, the plaintiff-appellant, who is a brother of the judgment-debtor in the original action, produced a deed of assignment (Exhibit 2) to himself as ” mortgagee in possession ” dated the 11th January, 1939, by which the judgment-debtor assigned to him for one year various properties—viz. the unexpired term of a lease, a deed of mortgage, 2 partnership agreements, various choses in action and ” debts of pawn trinkets —as security for a debt by the judgment-debtor to the plaintiff-appellant of £3,890 4s. 6d. admitted by the judgment-debtor to be owing by him to the plaintiff-appellant. By. the terms of this

document the plaintiff-appellant agreed to use the proceeds of the Grant & Co. property thereby assigned, first in paying off sundry debts of the Seim debtor set out in a schedule to the document and after this was—

done in paying off the mortgage debt.Doody, J.,

Gold Coast

This deed of assignment was attacked by the judgment-creditor as being a bogus transaction and after hearing evidence and argument on both sides the trial Judge found .that the alleged debt to the plaintiff-appellant by the debtor was not a true debt and further, that if it was a true debt the assignment was made for the purpose of defeating, hindering or delaying creditors and was not bona fide. He accordingly declared the deed of assignment to be void and ordered that the attachments should proceed.

It is .to be observed that both findings of the trial Judge set out above are findings of fact.

Originally four grounds of appeal were filed, but the fourth was abandoned on the hearing of the appeal. The remaining three grounds were as follows :—

1. The Court was wrong in law in holding that the Mortgage to the Claimant-Appellant C. B. Seraphim was fraudulent.
2. As the Mortgage deed constituted C. B^–. Seraphim as trustee for the benefit of other creditors, the Court was wrong in setting it aside.
3. The judgment was against the weight of evidence as the Court failed to give proper weight and consideration to the Book of Account kept between the Claimant-Appellant and J. B. Seraphim “.

The first two grounds were argued together and it is to be noted at once that the first ground suggests that the Judge was wrong in law in deciding an issue of fact viz. whether or not the assignment was fraudulent.

All the arguments of Counsel for the appellant on these two grounds were directed to showing that on the face of it the assignment appears to be good and in the interests of several of the creditors and that, accordingly, it should not have been declared to be void under 13 Eliz. C. 5. That there is nothing on the face of the document which renders it void under the Statute of Elizabeth may readily be admitted, as also the fact that the appellant produced evidence tending to show that the judgment-debtor was indebted to him, at any rate to the extent of £377.

The findings of the trial Judge, however, show clearly that he did not accept the document of assignment at its face value and it is for this Court to decide whether there was evidence on the record to justify those findings or whether those findings were wrong.

In coining to his decision the trial Judge made the following points against the bona fides of the transaction of assignment :—

1. The writ in the original action was served on the judgment-debtor on the 7th January, 1939, and the assignment was made on the 11th January of the same year.
2. The appellant is a brother of the judgment-debtor.
3. There was no proof of the original transactions whereby the debt stated in the assignment came- to be owing save in respect of £377.
4. The appellant carried on the debtor’s business in Accra as his agent without charging expenses.
5. The debtor gave the appellant a Power of Attorney the day after the assignment.
6. The assignment was not registered.
7. The original title deeds of the debtor were not produced in Court.
8. The property assigned was said to be worth 15,000 while the debt alleged to be owing to the appellant was only £3,890.
9. The debtor offered his timber-business to the judgment-creditor (respondent) and did not assign it to the appellant.

In regard to these points, Counsel for the Appellant has urged :—

As to (1), the judgment-debtor was under order of deportation and it was necessary that^, he should make arrangements for his affairs before going away ;

As to (3), The reason why proof was not forthcoming was

due to the documents being unstamped ;

As to (4), there was evidence that appellant did keep some

accounts of his brother’s liability to him.

As to (5), the Power of Attorney was necessary in respect

of the other affairs of the debtor

As to (6), the assignment was not registrable because- it did not contain the particulars required by law before a document can be registered.

As to (7), the original title deeds were not disputed, in fact the judgment-creditor (respondent) had attached some of the lands referred to therein.

As to (8), the assignment required the appellant to pay off other creditors before paying himself.

As to (9), it does not count against the appellant.

It would seem that there is nothing in points (7) and (9) and I would ignore them as not affecting in any way the validity of the assignment ; but without doubt points (1), (2), (3) and (4) raise

grounds of suspicion and are borne out by evidence. As to point (5) the giving of a Power of Attorney to the appellant the day after the assignment. While the explanation given on behalf of the appellant is not to be brushed aside lightly, it is to be noticed that the effect of a grant of this Power of Attorney was that (so long as the Power of Attorney was in force) the appellant was the only party to the deed of assignment in the country after the debtor’s departure ; he was mortgagee in posses.sion in his own person and mortgagor as Attorney for his brother. This may be taken together with the admitted fact that the document of assignment-could not he registered. The fact that it was drafted in such a way that it could not be registered may be significant, for the only effect of registration in this Colony is that it is notice to all the world ; notice of the assignment could not be given by this means and the fact that the appellant was on both sides of the agreement made it unnecessary that he should give notice of the assignment to any person.

The transaction therefore cannot be considered one that was made in an open manner.

As to point (8), the explanation of Counsel for the appellant is quite just, provided that one is otherwise satisfied that the trust to pay other creditors was bona fide. On this question there is evidence on the record to show that two of the debts included in the schedule of debts attached to the mortgage, viz. one of £1,691 5s. 6d. to Barclays Bank and one of £207 to Francis Boulos (genuine debts) were actually paid off, the former from assets of the debtor other than the property assigned, the other by the appellant himself by Promissory Notes dated prior to the document of assignment.

These considerations greatly weaken the case for the bona fides of the document of assignment.

Taking into consideration the whole facts of the case as set out in the evidence and even admitting that the books of the appellant show that he kept accounts with the debtor, I am quite unable to say that there was no evidence on which the trial Judge could have found that this assignment was not bona fide nor am I prepared to say that his findings on the evidence were wrong.

As a result, I am of opinion that this appeal should be dismissed with costs.

The following Order was made :—

KINGDON, P.

The appeal is dismissed with costs assessed at £35 12s.