ADDAI v. DONKOR
1971
COURT OF APPEAL
CORAM
- AZU CRABBE J.S.C.
- LASSEY
- ARCHER JJ.A
Areas of Law
- Property and Real Estate Law
- Equity and Trusts
- Contract Law
- Civil Procedure
- Evidence Law
- Commercial Law
1971
COURT OF APPEAL
CORAM
AI Generated Summary
The Court of Appeal considered a dispute arising from an auction sale of cocoa farms and a cottage at Donkorkrom, Kenyasi No. 1. Kwasi Donkor had mortgaged the larger farm to Akomfohene, then both farms and the cottage to money lender Opanin Kwaku Addai, and later the smaller farm to Akwasiwa, concealing prior encumbrances. Addai later paid off Akomfohene and Akwasiwa, becoming an equitable assignee, and an auction under exhibit G sold the properties on 28 March 1958 to Burahima Kramo and Kofi Nuamoah. The High Court set aside the sale as illegal, found agency, and ordered an account. On appeal, Archer J.A. held the demand notice was premature (wrongful but not void), that the auction achieved statutory objectives, and that agency was not proven; he recognized equitable priorities and that proceeds could be applied accordingly. Azu Crabbe J.S.C. concurred, affirming the court’s power to call a witness and finding no unfairness. The appeal was allowed, restoring the sale.
JUDGMENT OF ARCHER J.A.
This is an appeal from a judgment of the High Court, Sunyani, which set aside a sale by public auction of two farms and a cottage originally belonging to the respondent. The properties were sold at the instance of the appellant, a money lender (acting under a power of sale vested in him by a deed of mortgage) to two co-defendants who have not appealed.
Stripped of irrelevant minutiae, the facts of the dispute are as follows: Kwasi Donkor, the respondent, was the owner of a very big cocoa farm through which flowed a river called Subin, thus dividing this big farm into two identifiable farms, that is one large farm and a smaller farm. The respondent also had a cottage on the same farm land which became popularly known as Donkorkrom at Kenyasi No. 1 in the Brong-Ahafo Region.
Early in 1957, the respondent obtained a loan of £1,330 with interest from one Akomfohene in order to develop his cocoa farms. A deed of mortgage, exhibit 2, was therefore executed on 26 January 1957 in favour of Akomfohene. The property mortgaged was the larger of the two farms and by the terms of the mortgage (exhibit 2), the respondent agreed to repay the principal sum and interest on 31 January 1958.
Notwithstanding exhibit 2, of which he was well aware, the respondent approached Opanin Kwaku Addai, the appellant, a money lender, for a loan of ¢3,350 with interest of ¢250. Accordingly, on 1 April 1957, the respondent executed another mortgage deed, exhibit G, in favour of the appellant. The properties mortgaged in exhibit G included the larger farm already mortgaged, the smaller farm and the respondent's farm cottage. It should be mentioned now that although exhibit 2 (dated 26 January 1957) and exhibit G (dated 1 April 1957) appear to have been drafted by the same lawyer whose signature is endorsed on both documents it was never revealed to the appellant, the second mortgagee, that the larger cocoa Farm had already been mortgaged to one Akomfohene by exhibit 2 on 26 January 1957. The appellant therefore took exhibit G in the honest belief that the three properties were unencumbered although in fact one of them was. Indeed the respondent deceived the appellant when he swore an affidavit on 1 April 1957 attached to exhibit G that none of the three properties was already mortgaged.
By the terms of exhibits G, the respondent was to repay the principal sum plus interest on 31 January 1958. Therefore on 31 January 1958, the respondent had to repay ¢1,500 under