Diab V. Quansah [1974] 1 GLR 101, Holding 1 @P.104, H.C..

DIAB v. QUANSAH [1974] 1 G.L.R. 101 @ PP. 104 & 105 HIGH COURT, ACCRA ABBAN J.
Ref.: Bills of Exchange Act, SS. 28(1)&(2) and 83(1)
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This action was commenced by a specially endorsed writ. The plaintiff’s claim is for the sum of ¢5,013.25 plus eight per cent interest, calculated from 15 June 1965 to the date of judgment. After the defendant had entered appearance, the plaintiff moved for final judgment under Order 14, r. 1 of the Supreme [High] Court (Civil Procedure) Rules, 1954 (L.N. 140A). Having regard to the nature of defence which the defendant raised in his affidavit opposing the said application, the court granted the defendant leave to defend the action.

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The claim of the plaintiff is founded on a document which both parties described as a promissory note. The note was dated 15 April 1965, and it contains the following statement:

“Received from N. Diab of Diab Building Co. the sum of two thousand five hundred and six pounds twelve shillings and six pence to be paid back within two months.
(Signed) John S. B. Quansah.”

The parties agree that they came to know each other through one Joe Welsing some time in 1965, and they became friends thereafter. The defendant owned a limited liability company—Comet Construction Co., Ltd. This company, according to the plaintiff, had at that time rented a dwelling-house at Kaneshie from one Mr. Quaye. The defendant arranged with his company to sub-let the house to the plaintiff, who is a foreigner. Around about the same time the plaintiff also floated a company, known as Diab Building Company, and it appears that that company experienced difficulty in obtaining contracts. Through the influence of the defendant, whose company could by that time be regarded as a well established enterprise, the plaintiff’s company obtained various building contracts.

The plaintiff alleged that some time in April 1965, the defendant was in financial difficulties and he approached the plaintiff for assistance. The plaintiff gave him the required assistance in the sum of £G2,506 12s. 6d. which is equivalent to ¢5,013.25. The defendant prepared a promissory note acknowledging his indebtedness and promised to repay the said debt within two months from 15 April 1965. The note was duly stamped. But on the due date the defendant failed to honour his promise and for more than two years he could not pay the amount or any part thereof. So on 27 February 1968, the plaintiff caused the present writ to be issued.

The defendant admitted that he prepared the said promissory note, but contended that there was no consideration for it. He said after his introduction to the plaintiff, the plaintiff became his business associate. Consequently, the defendant, for reasons not clear from his evidence, could cause moneys due to the defendant from other persons to be paid into the plaintiff’s banking account; and whenever the defendant needed those moneys the plaintiff would readily withdraw some for the defendant. The defendant said he executed building contracts for the erstwhile Ideological Institute, Winneba, and for Flagstaff House; and he directed the proceeds from those contracts to be paid into the banking account of the plaintiff. Payment was duly made and the plaintiff received the money on the defendant’s behalf, with the usual understanding that the plaintiff was to keep the money but to pay it over to the defendant on demand.

The total amount of money which the plaintiff received from various persons and organisations or institutions on behalf of the defendant was within the region of 20,000.00 old cedis. The defendant said from time to time he called upon the plaintiff who readily withdrew for the defendant any portion of the said amount which the defendant needed. But when 12,000.00 old cedis was still outstanding, to the defendant’s credit, the plaintiff refused to pay that amount to the defendant, on the

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pretext that the defendant was indebted to the plaintiff in the sum of £G3,600.

The defendant said he denied owing the plaintiff any money, but the plaintiff insisted that unless the defendant gave the plaintiff an I.O.U. the so-called debt of £G3,600, the plaintiff was not going to release the said 12,000.00 old cedis, or any part thereof, to the defendant. The defendant needed the money urgently for the execution of other building contracts, and since the plaintiff was threatening to forfeit the whole 12,000.00 old cedis, the defendant, after long discussion, in the presence of witnesses, reluctantly agreed to acknowledge his indebtedness of £G3.600 to the plaintiff. One thousand pounds was then deducted from 12,000.00 old cedis by the plaintiff as part-payment of the imaginary debt of £G3,600, and the defendant was forced to give a promissory note for the balance of £G2,600. He said he was forced and induced to prepare the promissory note in such a way as to give the impression that the defendant had actually received money from the plaintiff.

It was after the defendant had handed over the promissory note to the plaintiff that the plaintiff released to the defendant the said amount of 12,000.00 old cedis less £G1,000.

The defendant therefore contended that the plaintiff cannot recover the amount endorsed on the promissory note since no value was ever given and inasmuch as the said promissory note on which the whole claim is founded was affected in its inception with duress. The defendant also put in a counterclaim which will be dealt with at a later stage.

The main issues which seem to emerge for determination are whether the defendant was under some kind of duress or force when he made the promissory note, and whether there was in fact no value for the said promissory note. In other words, was the plaintiff in possession of money belonging to the defendant and had he wrongfully detained that money without right or title so to do, and refused to give the said money to the defendant unless the defendant would make and deliver to the plaintiff the promissory note in question?

A promissory note is a type of a bill of exchange: see section 83 (1) of the Bills of Exchange Act, 1961 (Act 55). So that the existence of a promissory note signed by the defendant raises a presumption that the plaintiff has given value for it, and the promissory note will be enforced unless the defendant can show that there had in fact been no value for it. In fielding and Platt, Ltd. v. Najjar [1969] 2 All E..R. 150 at p. 152, C.A. Lord Denning M.R. observed, “We have repeatedly said in this court that a bill of exchange or a promissory note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary.” Undoubtedly, the defendant herein signed the promissory note, exhibit B. Consequently, he is prima facie liable to pay the amount endorsed thereon, unless he can prove the said duress and the absence of value.

The kind of defence being put up in this case obviously calls for the consideration of section 28 of the Bills of Exchange Act, 1961 (Act 55). That section provides as follows:

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“28. (1) Every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value.

(2) Every holder of a bill is prima facie deemed to be a holder in due course; but if in an action on a bill it is admitted or proved that the acceptance, issue, or subsequent negotiation of the bill is affected with fraud, duress, or force and fear, or illegality, the burden of proof is shifted unless and until the holder proves that, subsequent to the alleged fraud or illegality, value has in good faith been given for the bill.”

The effect of section 28 (2) of Act 55 is that although every holder of a bill is to be deemed to be a holder in due course, if evidence is given to show that there was fraud, illegality, or duress in the negotiation of the bill, the onus of proof that value has, in good faith, been given for the bill is shifted to the holder. The holder, in that situation, will no longer be deemed to be a holder in due course; and he will have to prove not only that value was given but also that it was given honestly and without suspicion of fraud, illegality, or duress.

It can therefore be seen that in an action on a promissory note, in order to throw upon the plaintiff the burden of proving that the plaintiff gave value honestly for the note, the defendant will have to do no more than produce evidence of circumstances from which it can be inferred that there was some fraud, dishonesty or duress in the making of the note: see Tatam v. Haslar (1889) 58 L.J.Q.B. 432. In that case, the defendant pleaded that the bill was accepted by him and delivered to one Leslie for the purpose only of getting it discounted for him; and that there was and there had been no value or consideration for the acceptance or payment of the said bill by him. At the trial, the onus of proof being on the defendant, the defendant gave evidence repeating his allegations as contained in the statement of defence. It was held that since the defendant had given evidence showing fraud in the negotiation of the bill the onus of proof shifted and that the plaintiff must show that he gave value bona fide for the bill. Charles J. in his judgment at p. 434 said:

“It seems to me that under the provisions of the Bills of Exchange Act, 1882, after the evidence of the defendant, the burden of proof was shifted in this case as to the value given by and the good faith of the plaintiff. That Act has settled the doubt expressed by Lord Blackburn in Jones v. Gordon 2 App.Cas. 616, and the effect of sections 29 and 30 is that every holder of a bill is prima facie to be deemed to be a holder in due course; but when evidence of fraud is given, he must prove that he is a holder in due course—that is to say, that he has given value for the bill, and has taken it in good faith as those words are defined by section 90.”

Denman J. at p. 433 of the report expressed the same opinion.

I should point out that the provisions of our section 28 (2) of the Bills of Exchange Act, 1961 (Act 55), which have been set out above are identical with the provisions of section 30 (2) of the United Kingdom

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Bills of Exchange Act, 1882 (45 & 46 Vict., c. 61) referred to in Tatam’s case just cited.

However, it must be borne in mind that the proviso to section 28 (2) of Act 55, which deals with the shifting of burden of proof on to the plaintiff, will not apply where the holder seeking to enforce the bill or the promissory note is the person to whom the promissory note or the bill was originally delivered and in whose hands it remains. Talbot v. Von Boris (1911) 104 L.T. 524, C.A. is the case in point. In the latter case, it will be recalled that the sums involved had been advanced to the husband by the plaintiff on the security of promissory notes signed by both the wife and her husband, the wife signing as a surety to her husband. In an action on the notes, the wife denied liability, contending that she was induced to sign the promissory notes by duress on the part of her husband, and that the plaintiff had notice of the duress. Evidence of the said duress was given at the trial and the jury found that there was such duress, even though there was nothing to show that the plaintiff was aware of the duress. It was held by the Court of Appeal (Vaughan Williams, Farwell and Kennedy L.JJ.) that the onus of proving that the plaintiff had knowledge of the duress lay on the defendant and was not shifted by section 30 (2) of the Bills of Exchange Act, 1882, but it remained with the defendant. Vaughan Williams L.J. in his judgment emphasized that the words which are found in the proviso—”unless and until the holder proves that, subsequent to the alleged fraud, or illegality, value has in good faith been given for the bill”—must be taken into consideration in construing the earlier words of the subsection. The learned lord at p. 526 went on:

“These latter words of the subsection to my mind how that the provisions of sub-sect. 2 were not intended to apply to a case where a document, whether it be a bill or a note or a cheque, remains in the hands of the person to whom it was originally delivered. According to my view, therefore, the practical result is that sub-sec. 2 of sect. 30 ought not to be applied to any case in which the holder who is seeking to enforce a negotiable instrument is the very person to whom it was originally delivered and in whose possession that instrument still remains.”

In the present case, the plaintiff was the person to whom the promissory note, exhibit B, was originally delivered; and the note has been in his possession all the time as the original holder. Thus, on the principles just outlined, the onus of proving that value was not given for the note and that there was duress in the issue of the note, as alleged by the defendant, lay on the defendant and rested entirely upon him throughout. In those words, the defendant’s case cannot be brought within the proviso to section 28 (2) of the Bills of Exchanging Act, 1961, so as to shift the burden of proof on to the plaintiff.

The next question is whether the defendant has been able to discharge the said burden. I think the defendant had failed to substantiate his allegations. He said there were witnesses present when he was forced or

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pressurised, so to speak, to issue the promissory note. He never called any of those witnesses to testify and to corroborate his story. The defendant depended solely on his own evidence to prove those allegations. The plaintiff denied any knowledge of duress and contended that he gave value for the note.

I think this is a case where corroborative evidence is required. I appreciate that there are circumstances where the court can accept the evidence of a single witness even though his testimony has been contradicted by the evidence of another witness. This was clearly explained by Adumua-Bossman J.S.C. who read the judgment of the then Supreme Court in Ayiwah v. Badu [1963] 1 G.L.R. 86 at p. 94:see also Atiga v. Vander Puije, Court of Appeal, 20 March 1969, unreported; digested in (1969) C.C. 57. But, in the particular circumstances of the present case, I am of the view that the defendant’s assertions cannot be sufficiently proved by his evidence alone. Corroborative evidence is certainly called for, but the defendant has signally failed to produce any. In the case of Khoury v. Richter, High Court, 8 December 1958, unreported, cited in Majolagbe v. Larbi [1959] G.L.R. 190 at p. 192, Ollennu J. (as he then was) stated the principle in these terms:

“Proof in law is the establishment of facts by proper legal means. Where a party makes an averment capable of proof in some positive way, e.g. by producing documents, description of things, reference to other facts, instances, or circumstances, and his averment is denied, he does not prove it by merely going into the witness box and repeating that averment on oath, or having it repeated on oath by his witness. He proves it by producing other evidence of facts and circumstances, from which the Court can be satisfied that what he avers is true’.”

This dictum received clear approval of the Court of Appeal in the judgment of Osmond v. Hughes, Court of Appeal 5 June 1967, unreported; digested in (1967) C.C. 108.

Apart from the question of corroboration, I do not believe that the defendant was forced or induced by duress to prepare the promissory note. The defendant, under cross-examination, described himself as “a shrewd business man,” and said he had on one occasion reported someone to the police when that person attempted to defraud him by selling him a plot of land which had already been sold to another person. By taking that prompt action, he was able to retrieve the purchase money from that fraudulent person. It may therefore be asked, why the defendant, “a shrewd businessman,” who knows his rights and who knew that the plaintiff had unlawfully induced and forced him to prepare a false promissory note, did not take any step, at least, to have the said note set aside, but should keep quiet all these years, that is, from 15 April 1965 (the date of the promissory note) until 1968 when the present action was instituted? I consider the defendant’s evidence too far fetched to be believed.

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I am inclined to accept the plaintiff’s version that the defendant was financially embarrassed and the plaintiff lent the defendant the amount shown on the promissory note. The defendant voluntarily prepared and signed the note in which he acknowledged his indebtedness to the plaintiff and promised to refund the amount within two months from the date of the note. In my considered opinion, therefore, the note represents a genuine and valid transaction between the parties. I further hold that the plaintiff in fact gave value for the said note. The time the defendant appointed for the repayment of the amount had long expired, and at the time the present writ was issued the amount had become due and outstanding for more than three years. The plaintiff is therefore entitled to recover the ¢5,013.25.

I do not, however, think that the plaintiff is entitled to claim interest. The plaintiff in his pleadings and in his evidence did not indicate the basis for asking for that eight per cent interest. All that the plaintiff said in his evidence-in-chief about the interest is as follows: “Up to date, I have not received the money back or any part thereof. So I am asking the court to give me judgment for that amount. I am also claiming interest at eight per cent from 15 June 1965, till the amount is paid.” There is nothing in the promissory note to show that the parties agreed or contemplated that interest was to be paid in the event of failure to pay, on the due date, the amount lent or any part thereof. In short, I do not see any basis for making such a claim. The claim for interest will not therefore be allowed.

The counterclaim

The defendant’s counterclaim is based on (a) his alleged share of the profits which accrued from the construction of Adjancote Television Station, (b) the value of his furniture seized and sold in satisfaction of a judgment debt, and (c) the value of the defendant’s vehicle which was damaged by the plaintiff. The total amount involved in the counterclaim is ¢5,620.00.

The defendant maintained that through his influence the plaintiff obtained the contract for the construction of the Adjancote Television Station; and he provided not only building materials but also equipment for the execution of that contract. The understanding between him and the plaintiff was that the profits from that contract were to be shared equally. But the plaintiff refused to give any part of the said profits to the defendant. The defendant further contended that it was he who rented the unfurnished dwelling-house from Mr. Quaye, furnished it and sublet it to the plaintiff. But the plaintiff could not pay the rent reserved. He fell into arrears, and in consequence thereof, action was taken against the defendant, as head-tenant, by the said Mr. Quaye. Mr. Quaye after obtaining judgment caused the defendant’s furniture then in that house, and valued at ¢1,630.00, to be seized and sold under a writ of fi.fa. It is also the contention of the defendant that he lent his Taunus car, valued at £G720, i.e. ¢1,440.00, to the plaintiff. The plaintiff used the vehicle

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until it became a total wreck. The plaintiff denied using the defendant said vehicle. The defendant did not call any witness to testify as to the alleged lending and on the balance of probabilities, I think no such vehicle was ever given to the plaintiff by the defendant.

It appears to me that Mr. Quaye, the landlord, rented the unfurnished dwelling-house to the defendant personally; and it was that company which furnished the said house and sub-let it to the plaintiff. I also find that the defendant was not a party to the suit instituted by Mr. Quaye. The action was brought against the plaintiff and the said Comet Construction Co., Ltd. The plaintiff and Comet Construction Co. Ltd. were the judgment debtors, and the furniture which was sold in satisfaction of the said judgment debt belonged to that limited liability company. The defendant had no personal interest in the furniture; and that was the more reason why he did not put in any interpleader, even though he became aware of the attachment for some time before the auction sale took place.

Comet Construction Co., Ltd. whose furniture was sold is not a party to the present action and the defendant has not been sued in his capacity as the director or as the representative of that company. He has been sued in his personal capacity and for a personal debt. In the circumstances, even if the defendant’s story is true, the defendant cannot counterclaim for the value of the said furniture which belonged to a third person—Comet Construction Co., Ltd.

As regard the sharing of the profits from the Adjancote contract, I am of the opinion that the execution of that contract was carried out solely by the plaintiff and the defendant never supplied the plaintiff with any building materials, neither was there any agreement which should entitle the defendant to claim a share of the said profits. The counterclaim therefore has no legal basis and the same is hereby dismissed.

In view of my earlier findings, the plaintiff ought to recover the amount endorsed on the writ of summons, but of course, without any interest. Thus, judgment will be entered for the plaintiff for the sum of ¢5,013.25 with costs fixed at ¢400.00, inclusive.

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