GWIRA vs. STATE INSURANCE CORPORATION [1991]DLSC2246

Date	1991-03-21
Suit No.
Citation No.	[1991]DLSC2246

AMUA-SEKYI JSC

OSEI-HWERE JSC

AIKINS JSC

EDWARD WIREDU JJ.S.C.

ESSIEM J.A.

W.A. N. ADUMUA-BOSSMAN (WITH HIM G. W. MENSAH) FOR THE DEFENDANTS.

J. K. AGYEMAN (WITH HIM J. M. LAMPTEY AND OSEI-BOATENG) FOR THE PLAINTIFF.

[1991]DLSC2246
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													<main id="main" class="content" style="min-height: 60rem" >GWIRA<o:p></o:p>vs.<o:p></o:p>STATE
INSURANCE CORPORATION<o:p></o:p>[SUPREME
COURT, ACCRA]<o:p></o:p>[1991] 1
GLR 398<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="right" style="margin-bottom:5.0pt;text-align:right;
mso-pagination:none;border:none;mso-border-bottom-alt:solid windowtext 1.5pt;
padding:0in;mso-padding-alt:0in 0in 1.0pt 0in">Date: 21 MARCH 1991<o:p></o:p>

</div>COUNSEL:<o:p></o:p>W.A. N.
ADUMUA-BOSSMAN (WITH HIM G. W. MENSAH) FOR THE DEFENDANTS.<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">

J. K.
AGYEMAN (WITH HIM J. M. LAMPTEY AND OSEI-BOATENG) FOR THE PLAINTIFF. <o:p></o:p>

AMUA-SEKYI,
OSEI-HWERE, AIKINS AND EDWARD WIREDU JJ.S.C. AND ESSIEM J.A. <o:p></o:p>

</div>JUDGMENT
OF AMUA-SEKYI J.S.C.<o:p></o:p>In 1965
the plaintiff, a lawyer and a diplomat, borrowed the large sum of £10,000 from
the State Insurance Corporation for the purpose of erecting a dwelling-house on
a plot of land at East Cantonments, Accra. As security for the due repayment of
the loan the plaintiff deposited his title deeds with the corporation. He
failed to honour his promise, and in 1971 the corporation took him to court.
His answer, it seems, was that he had not the means with which to pay back the
loan. This sounded rather hollow as the building had been completed and rented
out to a reputable company.<o:p></o:p>Both the
plaintiff and his counsel, the late Amoo-Lamptey, must have realised that there
was no way the corporation could be denied relief. The record shows that when
the case was called before Aboagye J. the plaintiff through his counsel
submitted to judgment. On their writ the corporation had asked for foreclosure
or sale. The court granted both, leaving them to choose whichever they found
the most efficacious. The corporation had the premises sold by public auction.<o:p></o:p>A year
later, the plaintiff issued the present writ asking that the sale be set aside.
His main grounds of complaint were that Amoo-Lamptey submitted to judgment
without his knowledge or consent and that the court ought to have made an order
nisi and given him the usual six months within which to find the money. Apaloo
C.J. sitting as an additional judge of the High Court, who tried the suit,
examined those grounds at length and dismissed them both. On appeal to the
Court of Appeal, the plaintiff shifted his ground and argued that the remedy of
sale was not available to an equitable mortgagee. Again, he failed to persuade
the court and his appeal was dismissed. He now appeals to this court.<o:p></o:p>The
submission that the remedy of an equitable mortgagee is foreclosure, and not
sale, implies that there was jurisdiction in the court to grant the remedy of
foreclosure. If that is so then the order of foreclosure, right or wrong, is
binding on the parties as there was no appeal from the judgment. It follows
that even if this court finds that the order for sale was made without
jurisdiction and sets it aside this would avail the plaintiff nothing; the
order of foreclosure would prevent him from recovering the property. However,
the contention having been made, it is desirable that it be examined to see if
it is sound.<o:p></o:p>The cases
relied on are James v. James (1773,) 42 L.J.Ch. 386 and Backhouse v. Charlton
(1878) 8 Ch.D. 444. But, as the report in James v. James (supra) shows, between
1783 and 1866, there were as many decisions going the other way as there were
in support of the view that the proper remedy of an equitable mortgagee by
deposit of title deeds was foreclosure, and not sale.<o:p></o:p>Before
the Mortgages Decree, 1972 (N.R.C.D. 96,), our law on mortgages was that which
existed in England as on 24 July 1874. The statutory provisions included the
Mortgages Act, 1733 (7 Geo. 2, c. 20), the Chancery Procedure Act, 1852 (15
&amp; 16 Vict, c. 86) and the Powers of Trustees, &amp; Mortgagees, etc Act,
1860 (23 &amp; 24 Vict, c.145), otherwise known as Lord Cramworth’s Act.
Section 48 of the Chancery Procedure Act, 1852 provided as follows:<o:p></o:p><p class="MsoNormal" style="margin-top:0in;margin-right:0in;margin-bottom:5.0pt;
margin-left:.5in;text-align:justify;mso-pagination:none;border:none;mso-padding-alt:
31.0pt 31.0pt 31.0pt 31.0pt;mso-border-shadow:yes">“It shall
be lawful for the Court in any Suit for the Foreclosure of the Equity of
Redemption in any mortgaged Property, upon the Request of the Mortgagor, or of
any subsequent Incumbrancer, or the Mortgagee, or any Person claiming under
them respectively, to direct a Sale of such Property, instead of a Foreclosure
of such Equity of Redemption, on such terms as the Court may think fit to
direct, and if the Court shall so think fit, without previously determining the
Priorities of Incumbrances, or giving the usual or any Time to redeem; provided
that if such Request shall be made by any such subsequent Incumbrancer, or by
the Mortgagor, or by any Person claiming under them respectively, the Court
shall not direct any such Sale, without the Consent of the Mortgagee or the
Persons claiming under him, unless the Party making such Request shall deposit
in Court a reasonable sum of Money, to be fixed by the Court, for the Purpose
of securing the Performance of such Terms as the Court may think fit to impose
on the Party making such Request.”<o:p></o:p>(The
emphasis is mine.) This provision was replaced by section 25 of the
Conveyancing Act, 1881 (44 &amp; 45 Vict, c. 41) which has since been replaced
by section 91 of the Law of Property Act, 1925 (15 &amp; 16 Geo, c. 20). Each
of these provisions gave the court power to order a sale in actions for
foreclosure whether the mortgage was by deed, written memorandum or mere
deposit of title deeds.</main>