Gbadamosi Baba-Egbe V. Patience Kasumu & Ors (1954)

LawGlobal Hub Judgment Report – West Africa Court of Appeal

Moneylenders’ Ordinance (Cap. 136), section 19 (2), (3), (4)—Moneylender’s duty to keep book and enter details—Moneylender’s default—Relief to borrower. Practice and Procedure—Averment and admission showing claim on a moneylender’s transaction unenforceable—Omission of borrower to plead the Moneylenders’ Ordinance in terms.

Facts

This was an appeal in consolidated cross-actions, the appellant being the mortgagor and the respondents being the administrators of the estate of the mortgagee.

The mortgagor claimed in his suit an order for redemption or, in the alternative, a declaration that the mortgage deed was void, an account of rents and profits, and recovery of possession. The administrators in their suit claimed specific performance of an agreement whereby the mortgagor, in consideration of a certain sum due on the mortgage, had agreed to assign his interest in the mortgaged property.

The mortgagor pleaded in his suit, on the alternative claim for a declaration that the mortgage deed was void, that the true state of the account could not be ascertained as the deceased had kept no book; that the administrators had assumed it was the amountstated in the mortgage deed as principal lent, whereas the deceased had advanced sums amounting to less on receipts as part payment towards purchase of the property.

In their defence the administrators admitted that no book had been kept in which the principal advanced was entered but relied on the recital in the mortgage of the agreement to loan a specified sum as proof that that sum had in fact been advanced.

In the administrators’ suit for specific performance the mortgagor did not
plead that a book was not kept by the deceased mortgagee.

The suits were consolidated. At the hearing it was contended for the mortgagor,
in view of his averment in his suit and the admission in the defence therein, that
the deceased being a moneylender and the mortgage a moneylending transaction, no claim on the mortgage was enforceable as the mortgagee, contrary to section 19 (2), (3), (4) of the Moneylenders’ Ordinance, had not kept a book or made entries of the loan.

For the administrators it was objected that the Ordinance had not been pleaded and therefore the point could not be raised. The trial Judge apparently upheld the objection: his judgment was for redemption upon payment of the amount found to be due after account taken, which amount was later incorporated in the judgment. It is the point raised in the mortgagor’s appeal.

(The text of section 19 (2), (3), (4) is given in the judgment infra. Paragraph (2) requires a moneylender to keep a book and enter in it, inter alia, the amount of the principal, and paragraph (3) to enter it forthwith on the making of the loan; paragraph (4) makes unenforceable any claim in case of non-compliance.)

Counsel for the administrators conceded that the claim for moneys due on the mortgage could not be enforced as the above section had not been complied with by the mortgagee, but invited the Court of Appeal to hold that the mortgagor had failed to plead the Ordinance and must be deemed to have waived its protection, and that in any event he should be put on terms of repaying the mortgage debt as he was invoking the equitable jurisdiction of the court.

Held

(1) In these cases, consolidated as they were for hearing, the administrator’s of the mortgagee’s estate had sufficient notice of a fact which rendered their claim on the mortgage unenforceable and themselves admitted that fact; they cannot have judgment to enforce a contract arising from a transaction which is declared to be unenforceable simply on the ground that the mortgagor had not in terms referred to the Moneylenders’ Ordinance.

(2) Where there has been non-compliance with section 19 of the Ordinance the borrower can apply to the Court for relief; he is not put upon terms as to repayment of the money that is due, but is entitled to keep the money he has received and nevertheless have a declaration that the contract under which he obtained the money is unenforceable and to delivery up and cancellation of any documents given by way of security in pursuance of the contract.

Appeal of the mortgagor allowed; consequential orders for relief.