Boateng vrs Ofori and Another (HI/116/2004) [2005] GHACA 1 (09 December 2005);
IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL, ACCRA – GHANA
CORAM - MRS. AKOTO BAMFO, JA [PRESIDING],
ASARE KORANG, JA
ASAMOAH, J
CIVIL APPEAL
HI/116/2004
9TH DEC., 2005
AGYENIM BOATENG … PLAINTIFF/RESPONDENT
V E R S U S
1. AKWASI OFORI
2. AKOSUA YEBOAH … DEFENDANTS/APPELLANTS
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ASARE KORANG, JA - Certain facts are undisputed in this case.`
The plaintiff/respondent (respondent for convenience) and the defendants/appellants (appellants for short) belong to one family whose originator was Akua Anokyewaa.
The family consists of two branches, namely the Akua Kone branch to which the respondent belongs and the Amma Biyaa branch to which the appellants belong.
Kone and Biyaa were female children of Akua Anokyewaa and she also begat Kwame Ako, Kwasi Tepa, Kwame Amuzu, Kwasi Nsiah and another female Akosua Ampoma who died childless. Kwasi Tepa and Kwame Amuzu were the uncles of Kwabena Attah (the original plaintiff in this suit, Kwabena Krah and Kwasi Wonoo. One Yaw Donkor succeeded Kwasi Wono and the 1st appellant herein also succeeded Yaw Donkor.
During his lifetime, Kwasi Wonoo purchased house No. K.O. 47, Ashanti New Town, Kumasi at a public auction. The sale of the said house was at the instance of Kwasi Tepa (one of the sons of Akua Anokyewaa), as Mortgagee in execution of a court decree dated 3rd May, 1934. Evidence of the sale was tendered as Exhibit E.
In the court below, the respondent testified to the effect that his predecessors of the Kone branch, namely Akwasi Nsiah, Kwame Amusu and Kwasi Teppa died possessed of cocoa farms and a house at MPATUAM. They also acquired cocoa farms and a house at BIEMSO and also House No. K.O. 47, Kumasi.
One of the Biemso cocoa farms was acquired in the name of Yaw Krah who belonged to the respondents Kone family and another farm in the name of Kwasi Wonoo who was of the appellants Obiyaa or Biya branch family. Tendered as Exhibits A and A1 were documents evidencing the sale of the farms. The respondent contended that House No. K.O. 47, Kumasi remained in the possession of his uncles, Kwasi Nsiah, Kwame Amusu and Kwasi Teppa all of whom were in occupation of the said house during their lifetime.
The respondent insisted that Kwasi Wonoo was only a nominal purchaser of House No. K.O. 47 and that the progenitors of the respondent and the appellants herein, that is, Kone and Obiyaa also lived in the said house.
The respondent further contended that the last of the male children of Anokyewaa to die was Kwame Amuzu and when he died he was succeeded by Kwasi Wonoo of the Obiyaa branch of the Anokyewaa family. Wonoo himself was succeeded by his maternal brother Yaw Donkor who in turn was succeeded by Kwabena Atta, the original plaintiff in this action. When Kwabena Attah died in the course of the trial of the action, the respondent was substituted for him.
The present action was precipitated because the appellants asserted that House No. K.O. 47 was purchased by Kwasi Wonoo and formed part of his self acquired property and on his death intestate, the house became the property of the Obiyaa branch of the Anokyewaa family.
The appellants made this claim because the Certificate of Purchase Exhibit E was in the name of Kwasi Wonoo who on 31st May 1946 obtained a Lease from the Asantehene, (tendered as Exhibit 1) of the land on which House No. K.O. 47 stands.
The Respondent denied that the house belongs to the Obiyaa branch and that it was property acquired by his uncle Kwasi Teppa in the name of Kwasi Wonoo for and on behalf of the wider Anokyewaa family.
The contentious claims ended up in court with the respondent suing for
“(1) A declaration that House No. K.O. 47, Kumasi is the property
of the entire Anokyewaa family of the Mpatuam.
(2) An order of perpetual injunction restraining the defendants…..
from interfering in any manner with the plaintiff’s possession
and control of House No. K.O. 47, Kumasi in his capacity of
head of Akua Anokyewaa family of Mpatuam.
In her judgment, the learned trial judge found as a fact that the originator of the respondent’s family and the appellants’ family was Akua Anokyewaa. She also found that Exhibit E, the Certificate of Purchase and Exhibit 1 (the Lease) were in the name of Kwasi Wonoo.
Section 35 of the Evidence Decree 1975 (NRCD 232 having been invoked and relied upon by counsel for the appellants, the learned trial judge ruled on the said piece of legislation in relation to this case as follows:-
“It is true Section 35 of the Evidence Decree NRCD 232 says ‘the owner
of the legal title to property is presumed to be the owner of the beneficial
title.’ In the instant case the presumption has been rebutted by the plaintiff
in Exhibit E. There is also evidence that both members of the Obiyaa and
Kone branch of Anokyewaa family live in the disputed house, so that the
Plaintiff has successfully rebut (sic) the presumption that Kwasi Wonoo is
the legal as well as the beneficial owner.”
From this finding, the trial judge concluded that Kwasi Wonoo was only a nominal purchaser of K.O. 47, Kumasi, the real owner of the premises being Kwasi Teppa and that being the case, the appellants cannot be heard to say that the property was the self acquired property of Wonoo whose immediate family then should succeed to it,
Aggrieved by this decision, the appellants have appealed alleging as their grounds of appeal that the judgment was against the weight of evidence and it was wrong in law.
On behalf of the appellants, it was argued that Exhibits E and 1 support the presumption, both legal and equitable that ownership of House No. K.O. 47, Kumasi, was vested in Kwasi Wonoo.
It was submitted that Exhibit 1, the Lease of the property obtained by Kwasi Wonoo in his own right in 1946, as owner and not in trust for Kwasi Teppa, as mortgagee, ten years after the auction sale, was an act of dominion/ownership by Kwasi Wonoo; that Kwasi Teppa, as mortgagee at the Auction sale, could not sell House No. K.O. 47 to himself, nor could he employ the name of Kwasi Wonoo to make illegal profit for himself.
The finding by the trial judge that the real owner of the property was Kwasi Teppa and that Kwasi Wonoo was only a nominal purchaser, a finding grounded on the explanation of counsel for the respondent that Kwasi Teppa as mortgagee was mindful of the consequences of selling the house to himself and that was the reason why he purchased it in the name of Kwasi Wonoo, was labeled by the appellants as a blatant attempt to make an illegal conduct legal and most untenable as it offends against Section 17 of the Auction Sales Ordinance (Cap 196) and the Auction Sales Law, 1989 (PNDCL 230).
For the respondent, it was submitted that it was not by sheer coincidence that at all times that Kwasi Teppa and Kwame Amuzu were exercising their right of sale as mortgagees by auction, the purchaser happened to be one of their nephews. Therefore it was right to conclude that the real purchaser of H/No. K.O. 47 was the mortgagee himself, purchasing in the name of his nephew.
Regarding the argument made by counsel for the appellants that if Kwasi Teppa and Kwame Amusu as mortgagees purchased property at an auction through surrogates or agents who were their nephews, then those transactions offended against the Auction Sales Ordinance (Cap 96) and the Auction Sales Law, 1989 (PNDCL 230), the respondent argued that it is not one of the grounds of appeal before this court and not being on issue, this court is not being called upon to determine the validity of the purchase of those properties particularly House No. K.O. 47, Kumasi.
The appellants, on their part, contend that the question is whether at the auction, the respondent or his privies or predecessors were entitled to derive illegal profit for themselves. And that is a point of law that may be raised at any time.
The issue brought up about the legality of the auction sale with particular reference to the sale to Wonoo as nominee of Kwasi Teppa is a perfectly valid legal issue and it is
Certainly not rendered irrelevant by the fact that it was not raised before the learned trial judge.
Being the judge of fact and law, the trial judge ought to have considered the point even if it was not brought to her attention by the parties. It is a point properly taken in this appeal as the respondent has had notice of it and has reacted or replied to it.
It was argued by the Respondent that if Kwasi Teppa’s purchase of House No. K.O. 47 was invalid it does not help the case of the appellants in any way and a declaration to that effect does not make Kwasi Wonoo the beneficial owner of that house.
This argument in my view is unhelpful to the case of the Respondent since the trial judge had in the first place found in favour of the presumption set down in Section 35 of NRCD 323 even though she declared that the presumption had been rebutted by evidence led by the Respondent. It is true that at the auction of House No. K.O. 47, the mortgagee exercising the right of sale by court order was Kwasi Teppa. On the evidence in the trial court, the purchaser of the property, Kwasi Wonoo, was the nephew of the mortgagee.
There is no evidence in this case that the sale by auction of House No. K.O. 47, Kumasi was without reserve or subject to a reserved price and whether a right to bid was reserved to the vendor, in this instance the vendor being the mortgagee, Kwasi Teppa.
If it had been stated that the sale would be without reserve or to that effect, then it would not be lawful for the vendor or any person on his behalf or employed by him to bid at the auction sale. See Section 17(2) of the Auction Sales Ordinance (Cap 196).
On the other hand if it had been expressed that the sale of the said K.O. 47 house would be subject to a reserved price, then it would have been lawful for the vendor or any person employed by him to bid. But it would have been required that any such bid should be openly declared at the auction: See Section 17(3) or Cap 196.
More importantly, in this case, I think since the mortgagee with the right of sale at the auction of House No. K.O. 47 was Kwasi Teppa and the purchaser his nephew Kwasi Wonoo, and because the respondent contends that legal ownership of the house at the time of sale was vested in Kwasi Teppa whose nephew Wonoo was only a nominal purchaser, evidence ought to have been led by the Respondent to show that the sale was subject to a right for the vendor, Kwasi Teppa to bid. This right should be an express and
explicit right as it would then have rendered it lawful for the vendor or any person on his behalf to bid and purchase the property in dispute.
In the absence of evidence as to any express stipulations concerning the terms and
conditions attending the auction sale of House No. K.O. 47, I consider it expedient and
perfectly in order to resort to general principles.
In this regard, the question to ask is, who is generally entitled to purchase where a
mortgagee exercising a right of sale puts up property for sale at an auction?
It was held in the Australian case of RE WHITE, Ex Parte GOGGS [1866] 1
QSCR 149 that a mortgagee with a power of sale is a trustee and cannot without the
express consent of his CESTUI QUE TRUST purchase an estate of which he is the
mortgagee.
Other cases that readily come to mind on persons disabled from purchasing at an
auction sale of mortgaged premises are NATIONAL BANK OF AUSTRALIA VRS.
UNITED HAND-IN-HAND & BAND OF HOPE CO. [1879] 4 App.Cas. 391, 40 L.T.
697; MARTINSON V. CLOWES [1882] 21 Ch. D. 857 and DOWNES V.
GRAZEBROOK [1871] 3 MER. 200; [1814-23] All E.R. Rep 300; 36 ER 77.
In the National Bank of Australia case (supra), mortgaged premises were put up for
sale under the powers of sale spelt out in the indenture of assignment and instrument of
mortgage and knocked down to ‘D’ who was merely a nominal purchaser on behalf of the
bank.
It was held that the bank as mortgagees selling under their power of sale could not sell
to the themselves.
The brief facts in Martinson v. Clowes (supra) were that at a sale by auction under the
direction of a building society as mortgagees, the secretary of the society openly bid for and
became the purchaser of two lots on his own account and there was no proof of under value
Held: in the circumstances, the sale to the secretary was not maintainable against the
Mortgagor.
In that case NORTH, J., stated the legal principle as follows:
“It is quite clear that a Mortgagee exercising his power of sale cannot
purchase the property on his own account and I think it clear also that the
Solicitor or Agent of such Mortagagee acting for him in the matter of the
Sale cannot do so either. (Emphasis mine).
The case of Downes v. Grazebrook (supra) was concerned with an estate being put up for sale by auction at which ’C’ as agent for ‘D’ was the only bidder and it was knocked down to him accordingly. The facts further showed that ‘D’ was a trustee of the estate and as such disabled from purchasing for himself as long as he continued to be a Trustee without the consent of his CESTUI QUE TRUST. It was held that although there was no evidence of fraud or undervalue, the sale of the estate could not stand.
Admittedly the facts in Downes v. Grazebrook (supra) related to a Trustee and his cestui que Trust and there was no evidence of fraud or undervalue but the court held that the sale was damaged on account of the agent of the Trustee being the only bidder.
In the present appeal, I find no evidence on record that the auction sale of House No. KO 47, Kumasi was conducted fraudulently or at an undervalue but on account of the sale of the property being knocked down to Kwasi Wonoo who on the facts was the nephew of the mortgagee, the sale in the circumstances, was impeachable.
I am however, not in a position to hold the transaction void because the Mortgager is not party to this appeal and it does not appear that he has at any time complained about the circumstances under which the mortgagee exercised his power of sale. But on general principles it is against public policy for a mortgagee or his agent to bid. It is sufficient in this appeal to note that it has been strongly submitted that Kwesi Wonoo was a nominal purchaser of House No. KO 47, having had the property knocked down to him at the sale as the agent of his uncle – mortgagee Kwasi Teppa. And therefore, it has been argued that the successors of Kwasi Wonoo cannot claim that he was the real or legal owner of the disputed property, that person being Wonoo’s uncle Kwasi Teppa. But, I think, I have demonstrated that if Kwasi Wonoo purchased the disputed premises at the auction sale as the agent of his uncle mortgagee who was exercising a power of sale, then it was a damaged transaction or enterprise.
There is no indication that having purchased the property as the agent or nominee of his uncle, Kwasi Wonoo in whose name the certificate of purchase was issued, subsequently reconveyed the property to his principal, that is, his uncle.
On the contrary, there was evidence led in the court below that some ten years or so after Kwasi Wonoo had purchased the property, he took a lease of it in his name.
There is nothing to show that of other properties purchased in the name of other nephews of the male children of Akua Anokyewaa, steps were taken to reconvey the properties to those males or that the nephews later obtained conveyances of those properties in their names. Most probably those properties took on the character of family properties on the death of the uncles and their nephews.
In the case of the House K.O. 47, Kumasi, I am prepared to hold that because Kwasi Wonoo obtained an interest in the property by way of a lease ten years or thereabouts after he had purchased it at the auction he must be deemed to be both the legal and beneficial owner of the property and the presumption in his favour to that effect was not rebutted by the fact that members of the Anokyewaa family lived in that house or the submission to the effect that at the auction sale, Wonoo was merely a nominal purchaser of the property.
The finding by the trial judge that Kwasi Wonoo was only a nominal purchaser of “KO 47” and the real owner was Kwasi Teppa was not founded on any solid evidence and even if evidence to that effect had been adduced before the trial judge, she ought to have concluded that the auction sale was voided by Kwasi Teppa as mortgagee exercising a power of sale employing his nephew as his agent to bid and purchase the property.
To the extent that the relief sought by the respondent was “a declaration that H/No. KO 47 is the property of the entire Akua Anokyewaa family of Mpatuam,” a relief which was answered in the affirmative by the appellants in their pleadings, I concede that the learned trial judge was right in entering judgment for the Respondent in respect of that claim.
However, the question as I see it is, in what way may the judgment be interpreted as far as that claim or relief is concerned. Kwasi Wonoo was a member of the wider Akua Anokyewaa family and it being apparent that he died intestate, his wider family, in law, is entitled to succeed to his estate but the real issue in this case, in my view, is whether House No. K.O. 47 being the self acquired property of Kwasi Wonoo, the interest of the wider family was not postponed as there were in existence persons belonging to the immediate family of Kwasi Wonoo, the Amma Biyaa branch, those persons being the appellants herein.
I think, the evidence and the facts in this case ought not to have been put in a strait-jacket as relating only to the issue of whether House No. K.O. 47 is the property of the entire Akua Anokyewaa family.
The evidence went further than that and to my mind, it was of crucial importance for the learned trial judge to have found and determined on the law and the facts that the said House No. K.O. 47 was the self-acquired property of Kwasi Wonoo who took a lease of it in his name after it had been knocked down and purchased by him at an auction sale. If the learned trial judge had so found, she would not have agreed with the respondent that Kwasi Wonoo was only a nominal purchaser of the property.
In conclusion, I hold that Kwasi Wonoo was both the legal and beneficial owner of House No. K.O. 47 and on his death intestate, the persons entitled to succeed to that house are members of his immediate Biyaa family.
In my opinion the trial judge should have had regard to and pondered over the wider ramifications of the evidence led before her by the parties and having found that Section 35 of NRCD 232 was applicable to the facts and circumstances of the case before her, to have held that the presumption in the said section had not been successfully rebutted by the respondent’s evidence. The trial judge ought then to have dismissed respondent’s claim.
I shall myself therefore allow the appeal and set aside the judgment of the court below.
A. ASARE KORANG
JUSTICE OF APPEAL
I agree. V. AKOTO-BAMFO [MRS.]
JUSTICE OF APPEAL
COUNSEL - KORBIAH AMENFI FOR DEFENDANT/APPELLANT.
I.K. ANTWI FOR PLAINTIFF/RESPONDENT.
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