BARCLAYS BANK (D.C.O.) LTD. vs. PERSEVERANCE TRANSPORT SERVICES LTD. [1961]DLHC5354

Date	1961-11-15
Suit No.
Citation No.	[1961]DLHC5354

APALOO J.

G. DAVEY FOR THE PLAINTIFF-BANK.

J. REINDORF FOR THE DEFENDANT-COMPANY.

[1961]DLHC5354
																																						<div class="restriction-wrapper">
														<div class="container-lg">
															<div class="row">
																<div class="col-md-12 restricted-content">
																	<div class="restricted-content-img-wrapper">
																		<div class="lock-icon bounce-7">
																			<img class=""
																				src="https://www.dennislawgh.com/dl-assets/dl-images/lock-content.png"
																				alt="Subscription based content">
																		</div>
																	</div>
																	 
																		<a href="https://www.dennislawgh.com/login"
																		class="btn btn-primary btn-lg"
																		style="font-family: 'open sans'; text-transform: capitalize; border-radius: 8px"> 
																		Login to Read Full Case </a>
																	 
																	
																</div>
															</div>
														</div>
													</div>
													<main id="main" class="content" style="min-height: 60rem" ><span style="font-size:12.0pt;line-height:115%;font-family:&quot;Book Antiqua&quot;,&quot;serif&quot;;
mso-fareast-font-family:&quot;Book Antiqua&quot;;mso-bidi-font-family:&quot;Book Antiqua&quot;;
color:#548DD4">BARCLAYS BANK (D.C.O.) LTD.<o:p></o:p><span style="font-size:12.0pt;line-height:115%;font-family:&quot;Book Antiqua&quot;,&quot;serif&quot;;
mso-fareast-font-family:&quot;Book Antiqua&quot;;mso-bidi-font-family:&quot;Book Antiqua&quot;;
color:#548DD4">&nbsp;vs. <o:p></o:p><span style="font-size:12.0pt;line-height:115%;font-family:&quot;Book Antiqua&quot;,&quot;serif&quot;;
mso-fareast-font-family:&quot;Book Antiqua&quot;;mso-bidi-font-family:&quot;Book Antiqua&quot;;
color:#548DD4">PERSEVERANCE TRANSPORT SERVICES LTD.<o:p></o:p><span style="font-size:10.0pt;line-height:115%;font-family:&quot;Book Antiqua&quot;,&quot;serif&quot;;
mso-fareast-font-family:&quot;Book Antiqua&quot;;mso-bidi-font-family:&quot;Book Antiqua&quot;;
color:#548DD4">&nbsp;[HIGH COURT, KUMASI]<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

<p class="MsoNormal" align="center" style="margin-bottom:5.0pt;text-align:center;
mso-pagination:none;border:none;mso-border-bottom-alt:solid windowtext 1.5pt;
padding:0in;mso-padding-alt:0in 0in 1.0pt 0in">[1961] GLR 665&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;DATE:<span style="font-size:10.0pt;line-height:
115%;font-family:&quot;Book Antiqua&quot;,&quot;serif&quot;;mso-fareast-font-family:&quot;Book Antiqua&quot;;
mso-bidi-font-family:&quot;Book Antiqua&quot;;color:#00B0F0"> 15TH NOVEMBER, 1961.<o:p></o:p>

</div>COUNSEL:&nbsp;&nbsp; <o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid black 1.5pt;
padding:0in 0in 0in 0in">

G.
DAVEY FOR THE PLAINTIFF-BANK.<o:p></o:p>

J.
REINDORF FOR THE DEFENDANT-COMPANY.<o:p></o:p>

</div>CORAM: <o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid black 1.5pt;
padding:0in 0in 0in 0in">

APALOO J.<o:p></o:p>

</div><o:p>&nbsp;</o:p>JUDGMENT OF
APALOO, J.<o:p></o:p>By an originating summons taken out of this court on the 15th
August, 1960, the plaintiff-bank sought a declaration that by virtue of a
memorandum and deposit of an equitable charge the plaintiff-bank are entitled
to be considered as mortgagees of the lands and hereditaments comprised in the
memorandum and sought an order to have the same enforced by sale or
foreclosure. There were also sought some other consequential reliefs which it
is unnecessary to set out at great length.<o:p></o:p><o:p>&nbsp;</o:p>The plaintiff-bank is a well-known banking company. The defendant
is a limited liability company. I have no evidence when it was incorporated or
what the nature of its business is. Neither its memorandum of association or
articles have been put in evidence. Its name, however, suggests that its
business is that of running transport. It appears that it was at sometime prior
to 1953 one of the customers of the plaintiff-bank. The evidence shows that
credit facilities were extended to it before 1953. In that year, the
defendant-company applied to the bank for a loan. It was asked to produce its
authority to borrow. Accordingly, one of its officers produced to the bank what
purports to be a resolution of its directors at a meeting held at Kumasi on the
15th December, 1953. It purports to have been signed by the chairman of the
board of directors and the secretary. The seal of the company was duly affixed
to it. It was put in evidence as exhibit A. This authorised the manager to
raise on behalf of the company £G5,000 for the expansion of the company’s
activities. I am satisfied that on the faith of this the plaintiff-bank
advanced various sums to the company. I am not able to determine what specific
sum was advanced to the defendant-company on its production of exhibit A, but
it seems clear however that sometime in 1954 or presumably before it, the
plaintiff-bank asked for security for the repayment of the various sums it had
advanced to the defendant-company. The evidence satisfies me that in compliance
with this request the defendant-company executed in favour of the
plaintiff-bank the memorandum of equitable deposit which the plaintiff-bank now
seeks to enforce. That memorandum was, it is to be noted, executed on behalf of
the defendant-company by its director and secretary and the company’s seal was
duly affixed to it. It is not disputed in these proceedings that the execution
of the equitable deposit was the act of the defendant-company.<o:p></o:p><o:p>&nbsp;</o:p>As I have said, although the memorandum of association and
articles of the defendant-company were not produced in evidence, it is agreed
that the defendant-company was operating under Table A of the Companies
Ordinance.1(1) Section 65 of Table A forbids the defendant-company borrowing
monies in excess of its issued capital without the sanction of the company in
general meeting. At the time that the facilities were extended to the
defendant-company on or about January, 1954, its paid up capital was £G1,438.
The loan it sought by exhibit A was £G5,000. Accordingly, a general meeting of
the company was necessary to sanction the said borrowing. Mr Reindorf has
contended with great force that as there is no evidence that any such meeting
was held, the loan was ultra vires the company and was on that account
irrecoverable. He said the security given by the company to secure the
repayment of that loan was equally unenforceable. To this, I shall later
return.<o:p></o:p><o:p>&nbsp;</o:p>In July 1955, the defendant-company informed the plaintiff-bank
that it had arranged a loan with the Industrial Development Corporation (I.D.C.)
and that the said I.D.C. would pay to the plaintiff-bank the debt outstanding
against it in return for a transfer to the latter of the defendant-company’s
security in the hands of the plaintiff-bank. The plaintiff-bank was agreeable
to this proposal and in furtherance of it executed a memorandum of discharge of
the equitable mortgage. This is exhibit C. This document was forwarded to the
Accra branch of the plaintiff-bank with instructions that it be held against
the payment to it by the I.D.C. of the sum then owing to it by the
defendant-company. In September 1956, the I.D.C. through its solicitors
informed the plaintiff-bank that it did not intend to g</main>