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HOME           14  WEST AFRICA COURT OF APPEAL

 

              

                    WEST AFRICA COURT OF APPEAL, GOLD COAST

                           Accra, 5th January, 1952

                 FOSTER-SUTTON, P COUSSEY AND  MANYO-PLANGE, J J.

KWASI AKYEAMPONG AS SUCCESSOR TO KWANBENA NKRUMAH      Appellant

v.

KWAKU ATAKORA AND THREE CO-DEFENDANTS

1.    KWAME EWUAH OF NKAWIE                                                              Respondent

2.    KWAKU ADDAE OF MPASATEA

3.    W. B. APHRAM, AUCTIONEER OF KUMASI

 
 

Mortgage - Sale without due notice

Appellant's predecessor in title (deceased K.N.) mortgaged three farms to the respondent Kwaku Atakora by deed containing a power of sale with a proviso that this power shall not be exercised unless there was default in payment" on demand, and also for ... one month next, after a notice in writing requiring such payment shall ... have been given" (full text in judgment below). The loan was £220, repayable after a certain tiine, but before that time was up the respondent (Kwaku Atakora) gave the appellant (as successor to the deceased) notice to pay, and without further notice the farms were sold, after the date o~ which payment was due, for £378.

There were two other mortgages already due for payment, one for £225 in favour of K.E., the first co-defendant, and the other for £48 in favour of K.A., the second co-defendant. The respondent Kwaku Atakora and the first co­defendant paid off the second co-defendant, and shared the proceeds of sale.

The appellant (as plaintiff below) sued the respondent Kwaku Atakora (as defendant) claiming £158 (viz. £378, the proceeds of sale, less £220 due to this defendant) which would have been the balance but for the other mortgages, or in the alternative to set aside the sale or to have damages. That defendant caused the other three co-defendants (the third being the auctioneer) to be joined. The trial Judge dismissed the claim.

The plaintiff appealed and his main ground was that the notice of intention to sell was not legal or proper in that when it was given the debt was not due for repayment under the mortgage deed, and the sale was therefore wrongful.

Held: The proviso in the deed meant that if on the date on which repayment was due, after demand, the debt was not paid, then the mortgagee, if he wished to exercise the power of sale, must give notice in writing requiring payment and could only sell if there was default for a month after notice. The sale was therefore wrongful, but as the sale took place about three months after the due date and there was no evidence that the appellant could have repaid the debt or that he suffered any damage from the wrongful sale, his appeal would be dismissed.

Case cited:

 Selwyn v. Carfit (1888), 38 eh. Div. 273.

Appeal from Supreme Court by plaintiff: No. 30/50. I<. Opoku-Akyeampong for Appellant.!

k A. Bossman for Respondents.

The following judgment was delivered:

Manyo-l(lange, J. This is an appeal from a judgment of the Divisional Court. Kumasi, dismissing the plaintiff-appellant's claim for £158, being balance or surplus of proceeds of sale of mortgaged property or to account for the said surplus or, in the alternative to set aside the sale of the mortgaged property.

three cocoa farms, on the grounds: [pg 4]

" (1) Invalidity of the sale due to sale taking place before power of sale  had arisen.                                                                        

(2) For not exercising the power of sale in accordance with the rules required by the law, or. in the alternative for £450 (Four hundred and fifty pounds) damages for wrongful sale of the said cocoa farms."

The facts in this case are brief! y as follows:

One Kwabena Nkromah by Exhibit" A ", a deed of mortgage dated the 15th August, 1947, mortgaged to the first defendant-respondent three cocoa farms on land, described as "Namon" at Kubin, to secure a loan of £220, repayable within a period of eight months from the date of the mortgage. Exhibit" A " contained the usual power of sale but the deed provided that " the power of sale herein before contained shall not be exercised unless and until default shall be made in payment of the total sum of £220 or any part thereof by the mortgagor to ·the mortgagee under this security as aforesaid on demand, and also for the space of one calendar month next, after a notice in writing requiring such payment shall by or on behalf of the mortgagee have been given to the mortgagor or left at the usual or last known place of abode of the mortgagor or one of his executors or left upon or affixed to some part of the said hereditaments or on some building thereon ... "

Kwabena Nkromah died before the due date and the plaintiff-appellant who became Kwabena Nkromah's successor according to native law and custom was served with a notice to pay; the notice is Exhibit" 3 " and is dated 2nd January, 1948. The notice although it was addressed to Kwabena Nkromah, was served on his successor, plaintiff-appellant: see page 7 of the record.

After the notice of 2nd January, 1948, no other notice was served on plaintiff­appellant and, the mortgage debt not having been paid on 16th April, 1948, the due date, the mortgaged farms were sold on the 22nd April, 1948.

When the notices of the sale were filed, Kwame Ewuah, first co-defendant­respondent notified the auctioneer that he was holding a prior mortgage on the farms advertised for sale; his mortgage is Exhibit" 1 ". Then Kwaku Addae, second co-defend ant-respondent sued plaintiff-appellant, defendant-respondent and the auctioneer, third co-defendant-respondent, claiming for a declaration that by a mortgage dated 3rd August, 1948, he was a mortgagee of one of the farms advertised for sale and for an injunction to restrain the sale, pending the hearing of his claim. Kwaku Addae's mortgage is Exhibit" 2 ".

Upon investigation by the auctioneer, it was discovered that the three farms mortgaged to defendant-respondent were also mortgaged to Kwame Ewuah, first co-defendant-respondent, and one of them to Kwaku Addae, second co­defendant-respondent. When this state of affairs was discovered, it was upon the advice of the auctioneer, agreed that defendant-respondent and first co-defendant­respondent should payoff the second co-defendant-respondent for him to with­draw his action, so as to enable the sale to proceed and for the defendant­respondent and first co-defendant-respondent to pay themselves out of the proceeds. This was done and, on the sale of the farms, net proceeds of £378 was realised and this the defendant-respondent and first co-defendant-respondent shared towards payment of their respective loans of £220 and £225 and the £48 paid to Kweku Addae second co-defendant-respondent.

Had there been no other incumbrances on the farms, the plaintiff-appellant should have been cntitled to a surplus of £158 and it was for this sum he claimed or in the alternative to set aside the sale. The plaintiff-appellant sue4 only the defendant-respondent;. at the relltest of the latter, the first, second and third co-defendants-respondents were joined. I should here point uut that on 22nd April, 1948, when the farms were sold, there had been default under all the three mortgages .[pg 5]

The learned trial Judge 4'hiS judgment in effect found as a fact the three farms mortgaged to thp defendant-respondent had been previously mortgaged to the first co-defend ant-respondent and one of them to the second co-defendant­respondent. He also found as a fact that there was nothing after the net proceeds of the sale had been used by the defendant-respondent to pay himself and the other two previous mortgagees. These findings in my view were supported by the evidence and on them he gave judgment for the defendant and co-defendants­respondents.

The learned trial Judge did not give his reasons for giving judgment against the plaintiff-appellant on his alternative claim to have the sale set aside or in the alternative for £450 damages.

The plaintiff-appellant filed seven grounds of appeal. The only grounds of any substance are grounds one, three and five which taken together, challenge the validity of the sale on the ground of the wrongful exercise of the power of sale, and ground six which alleges that the plaintiff-appellant should have been awarded damages for the wrongful sale of the farms. Ground six therefore depends on grounds one, three and five which were argued together. The real complaint is to be found in ground five which alleges as follows:

" That the alleged Notice of intention to exercise the power of sale by the auctioneer at the instance of the first defendant dated 2nd January, 1950, was not legal and proper, in that at that time the date of repayment under the mortgage deed was not due."

In support of this ground Counsel for the appellant referred to the requirement for written notice in the mortgage deed which was a condition precedent to the exercise of the power of sale. The deed required inter alia that the power of sale shall not be exercised unless default had been made " for the space of one calendar month next after a notice in writing requiring such payment shall by or on behalf of the mortgagee have been given to the mortgagor ... ". He con­tended that this requirement was not complied with, and that the letter Exhibit " 3 " was no compliance, because when the letter was served on the plaintiff­appellant, the repayment of the debt was not due; therefore when the farms were sold there had not been such a default as could give rise to the exercise of the power of sale and referred to the case of Selwyn v. Garfit.

Counsel for the defendant-respondent has endeavoured to distinguish Selwyn v. Garfit from this case. He submitted that in Selwyn v. Garfit the mortgagor was by virtue of the proviso to the power of sale given a further three months after the due date to pay and that the three months had not expired when the power was exercised. He contended that in this case the power became exercisable. the moment there was default on the due date provided one calendar month's notice had been given of the intention to exercise the power, no matter when that notice was given, and that exhibit "3" was a compliance with that provision.

I am unable to accede to this argument. There would have been some weight in the argument, if the provision had only required the mortgagee to give. the mortgagor notice of intention to sell. In this case, like Selwyn v. Garfit, the provision said, if on the due date that is 31st January, 1948, after demand, the debt were not paid, then the mortgagee if he wished to exercise the power of sale must give notice in writing requiring payment and could only sell if there were default for the space of one calendar month from the date of the notice.

The only distinction between the two cases is the period of grace after notice requiring payment; the period being three i1lrbnths in Selwyn v. Garfit and in this case one month. The letter exhibit" 3 " in my view is nothing more than notice of an intention to act in accordance with the mortgage deed if the debt were not paid on the due date. It follows, that the mortgagor was not given [pg 6]one month's notice requiring him to make payment, when the farms were sold,   and therefore the sale was wrongful.     ) .

                                                                                                           

For this wrongful sale, the plaintiff-appellant claimed £450 damages; but I find nowhere on the record evidence of any damage suffered by the plaintiff­appellant who, in his own evidence, admitted that after the receipt of exhibit ." 3 " he was unable to repay the loan. There is also evidence that plaintiff­appellant when invited to witness the sale which was on the 22nd April, 1948, nearly three months after the due date, refused to attend the sale stating, that his attendance would not prevent the sale.

There is no evidence that the plaintiff-appellant would have been in a position to repay the loan even if one month's due notice had been given before the power of sale was exercised. It follows that plaintiff-appellant could only have suffered . nominal damages and in fact he proved no damages as the result of the wrongful sale. This appeal in my view should be dismissed with costs assessed at £15 10s. 6d.

Foster-Sutton, P. I concur. Coussey, J. I concur.

Appeal dismissed.

 

 
 

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