GRUMAH vs. NATIONAL INVESTMENT BANK AND ANOTHER [1978]DLHC1143

Date	1978-05-10
Suit No.
Citation No.	[1978]DLHC1143

ROGER KORSAH J.

OWUSU FOR THE PLAINTIFF.

MUSTAPHA FOR THE DEFENDANTS.

[1978]DLHC1143
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													<main id="main" class="content" style="min-height: 60rem" >GRUMAH <o:p></o:p>vs. <o:p></o:p>NATIONAL INVESTMENT BANK AND ANOTHER<o:p></o:p>[HIGH COURT, KUMASI]<o:p></o:p>&nbsp;[1979] GLR 187<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:
10 MAY 1978<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">

OWUSU FOR THE PLAINTIFF.<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">

ROGER KORSAH J.<o:p></o:p>

</div><o:p>&nbsp;</o:p>JUDGMENT OF ROGER KORSAH J.<o:p></o:p>On 19
February 1971, a deed of mortgage and a general charge were made and executed
on the one part by the plaintiff as mortgagor and Gum Trading Co., Ltd., a
company of which the plaintiff was the managing director and majority
shareholder, as chargor, and on the other part, by the first defendant as
mortgagee and chargee.<o:p></o:p><o:p>&nbsp;</o:p>Under the
said deed of mortgage and general charge, the plaintiff sub-demised to the
first defendant, his leasehold property with buildings thereon, situate at
Bawku in the Kusasi District of the Upper Region of Ghana, for all the residue
of the term created by the said lease except the last day thereof, as part of
the security for a loan of ¢70,000 granted to the plaintiff by the first
defendants. As a collateral security for the said loan, Gum Trading Co., Ltd.
created in favour of the first defendants, firstly, a specific charge on all
its plant, machinery, vehicles and stocks involved in and engaged upon its
undertaking and business, and secondly a floating charge on all other assets
not detailed in the second schedule to the said deed of mortgage, but which
were nonetheless involved in and engaged upon the undertaking and business of
the company.<o:p></o:p><o:p>&nbsp;</o:p>The loan
so granted together with interest and any further advances with interest
thereon was, by the terms of the said deed of mortgage, to be repaid on or before
30 June 1975; upon which payment the sub-demise to the first defendant shall
determine and the property so mortgaged, be redeemed. Clause 8 of the deed of
mortgage conferred on the first defendants the power to sell and convert into
money, all or any part of the mortgaged premises or charged assets, etc., by
public auction or private contract, when the legal date for redemption has
passed and the moneys secured, or any part thereof, or interest remains unpaid.<o:p></o:p><o:p>&nbsp;</o:p><o:p>&nbsp;</o:p>The first
defendants, upon the plaintiff’s failure to repay the loan together with
interest after the legal date for redemption had passed, sought to exercise the
power of sale conferred on them by the deed of mortgage and general charge by
affixing auction notices on the plaintiff’s properties listed in the schedule
attached to the writ herein.<o:p></o:p><o:p>&nbsp;</o:p>The
plaintiff, in his writ of summons and statement of claim, does not dispute the
fact that circumstances have arisen rendering exercisable the first defendants’
power of sale, but contends that such power of sale whether or not contained in
a deed of mortgage, is exercisable only in respect of a legal mortgage. Having
regard therefore to the equitable nature of the mortgage transaction between
the parties in February 1971 says he, the first defendants cannot lawfully
exercise the power of sale contained in the deed of mortgage.<o:p></o:p><o:p>&nbsp;</o:p>It seemed
to me, when the summons of directions came on for hearing, that the
determination of two points of law, neither requiring evidence except for the
rendering of the deed of mortgage dated 19 February 1971, would resolve the
dispute between the parties. These two legal issues are:<o:p></o:p>(a)
Whether or not the mortgage transaction between the parties evidenced by the
deed of mortgage dated 19 February 1971 was of an equitable nature; and<o:p></o:p>