MAHAMA vs. SOLI AND ANOTHER [1977]DLCA1354

Date	1977-07-30
Suit No.
Citation No.	[1977]DLCA1354

APALOO JA

LASSEY JA

ANIN J.A.

PETER ALA ADJETEY FOR THE APPELLANT.

NANA AKUFO-ADDO FOR THE RESPONDENTS.

[1977]DLCA1354
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													<main id="main" class="content" style="min-height: 60rem" >MAHAMA <o:p></o:p>vs. <o:p></o:p>SOLI AND ANOTHER <o:p></o:p>[COURT OF APPEAL, ACCRA]<o:p></o:p>[1977] GLR 215<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">

DATE:
30 JULY 1976<o:p></o:p>

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

PETER ALA ADJETEY FOR THE APPELLANT.<o:p></o:p>

NANA AKUFO-ADDO FOR THE RESPONDENTS.<o:p></o:p>

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

APALOO, LASSEY AND ANIN JJ.A.<o:p></o:p>

</div><o:p>&nbsp;</o:p>JUDGMENT OF APALOO J.A.<o:p></o:p>Apaloo
J.A. delivered the judgment of the court. The appellant was before the change
of government in February 1966, a member of the then civilian government.
Between 1962-64 he held office as Deputy Minister of Industries and implied
that he acquired some business expertise in that ministry.<o:p></o:p><o:p>&nbsp;</o:p>On
leaving government, the appellant commenced farming at a place called Yapei. He
did not have enough funds to do this by himself, so he raised a loan of
¢10,000.00 from the Agricultural Development Bank. He was doing rice farming.
He said in evidence that he farmed all by himself. In 1968 he decided to put
the venture on a formal business footing. So he turned this one-man business
into a company limited by shares. The company was incorporated under the
Companies Code, 1963 (Act 179), and christened Mencilo &amp; Co., Ltd. The
regulations of the company show that it took over the assets and liabilities of
the one-man business. The assets seem to include the land at Yapei on which the
appellant was then farming. The liabilities taken over by the company include a
debt of ¢5,000.00 then owed to the Agricultural Development Bank by the
appellant. The company has since paid off that debt.<o:p></o:p><o:p>&nbsp;</o:p>The
evidence shows that the appellant made the acquaintance of the first respondent
when he was in government. He described him as a fisherman and said he was
carrying on fishing business. There is other evidence which suggests that the
first respondent is an experienced businessman. He and the appellant seem to
have got on well together and both trusted each other enough to feel they could
co-operate together in a joint business venture. The second respondent’s
association with the appellant seems to have been closer - at any rate at the
earlier stages. Indeed he and the appellant did business together as partners
in an enterprise which did not seem to have flourished. The second respondent
is one of the founding directors of the company and has held that office ever
since.<o:p></o:p><o:p>&nbsp;</o:p>Between
1968 and 1970, all three parties made contributions to the company. The appellant’s
contribution in cash and kind came to ¢28,480.00 that of the first respondent
was ¢14,367.00 and the second respondent’s came to ¢15,185.00. These sums were
converted into shares of that number. A. Mr. Patel also advanced some money to
the company and seems to have been allotted a number of shares. The evidence
shows that he relinquished these shares and these were re-allotted to the
appellant and the second respondent at 5,000 shares each.<o:p></o:p><o:p>&nbsp;</o:p>One of
the objects which the company was formed to carry out, was the “business of
farmers and manufacturers of food and other agricultural products.” The company
purposed to mill rice but had no funds to do this.<o:p></o:p><o:p>&nbsp;</o:p>It
therefore sought and obtained a loan of ¢163,000.00 from the National
Investment Bank. To secure the repayment of this loan, the company mortgaged
all its machinery and its entire assets to that bank. Presumably as a
collateral, the bank also sought security of not less than ¢60,000.00. The
appellant accordingly granted a mortgage of three houses belonging to him to
the bank for this purpose. Some time in 1973, the company sought a further loan
from the National Investment Bank. The latter agreed to make further advances
to the company on condition that it was allotted shares up to ten per cent of the
paid up capital of the company. The latter agreed.<o:p></o:p>Accordingly,
as at 17 September 1973, the issued shares of the company were as follows:<o:p></o:p>