Appeal Court
Appeal from Divisional
Court
Consolidated claims to set
aside two 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 fide 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. Blay) 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
plaintiffappellant made claims
to set aside two attachments in
excursion of a decree obtained
by the present
defendant-respondent in an
action between the
defendant-respondent as
plaintiff (judgmentcreditor)
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
judgmentdebtor 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 plaintiffappellant 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
property thereby assigned, first
in paying off sundry debts of
the debtor set out in a schedule
to the document and after this
was done in paying off the
mortgage debt.
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. H.
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 £5,000 while the debt
alleged to be owing to the
appellant was only £3,890.
(9) The
debtor offered his
timber-business to the
judgmentcreditor (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 payoff 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
possession 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 be
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 ill 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.
