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Aliens and Real Property in Liberia

Published online by Cambridge University Press:  28 July 2009

Extract

Mosquitoes and a tropical climate have not been the only deterrents to alien settlement in certain parts of Anglophonic West Africa. In many countries, even before the independence movement, restrictions were placed upon non-African use and purchase of real estate. The general opposition to permanent colonization by large real estate holdings in the area supported this type of regulation.2 Now that insecticides and air conditioning units have reduced the effectiveness of the natural deterrents, only the laws remain.

Type
Research Article
Copyright
Copyright © School of Oriental and African Studies 1968

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References

2 In the former British colonies, this opposition did not forbid all European purchase and settlement entirely, but did limit it to some extent:

In Nigeria: “The second fundamental concept that shapes Nigerian land law is one originally fostered by Lord Lugard in the formative colonial days, which prevented the widespread acquisition of land by Europeans and thus, happily precluded the development of a ‘white settler’ problem in Nigeria, such as has plagued East Africa. Except for the minor exceptions noted with respect to the North, aliens can own land outright only in the Federal Territory of Lagos, which covers an area of only twenty-seven square miles, and in the Colony Province of Western Nigeria.”

Prochl, Foreign Enterprise in Nigeria, 140.

See also Meek, Land Tenure and Land Administration in Nigeria and the Cameroons, 85.

In Ghana restrictions against non-Africans were mainly in the former Northern territories and the “Togoland” area (now known as the Volta region): see Bentsi-Enchill, Ghana Land Law, 18. Restrictions applied to “non-natives” in what was reserved as a native area. Even Africans from other regions in the colony were classified as “non-natives”. See Land and Native Rights Ordinance (repealed by State Property and Contracts Act, 1960. This, however, has been substantially re-enacted in the Administration of Lands Act 1962).

In Sierra Leone: This country, as a colony, had difficulty not with white settlers, but with white absentee landlords. Today, in the provinces, all non-natives (including even citizens of the country who are not under tribal jurisdiction as well as aliens) are restricted to leasehold interests of not more than 50 years. 3 Laws of Sierra Leone ch. 121 s. 4. In 1966, aliens were forbidden from acquiring freehold interests in the Western area. Non-citizens (Interests in Land) Act, No. 30, s. 3 (1966).

3 2 Huberich, The Political and Legislative History of Liberia (1948), 1090: “The Instructions of June 26, 1820, provide that no person shall hold land or lots unless he actually resides in the Settlement … and that ‘no white person … shall ever hold land in the colony’.“

page 65 note 1 Liberian Const., art. V, s. 13: “The great object of forming these colonies, being to provide a home for the dispersed and oppressed children of Africa … none but Negroes or persons of Negro descent shall be eligible to citizenship in this Republic.”

page 65 note 2 See p. 64, n. 2, supra.

page 65 note 3 E.G., West v. Dunbar (1897); 1 L.L.R. 313; Bingham v. Oliver (1870), 1 L.L.R. 47, 49 (dictum).

page 65 note 4 A great percentage, if not the majority, of large apartment and office buildings are presently owned by aliens.

page 65 note 5 Opinions of the Attorney General of the Republic of Liberia (1964–65), 108.

page 65 note 6 During the 45th regular session (1967) of the Liberian Senate and House of Representatives nine such corporations were created.

page 66 note 1 See Op. Att'y Gen. p. 5 for comments upon a 1959 amendment of Title 3: “Section 115 of Title 3 … which provides that a Liberian woman who marries a foreigner takes the nationality of the husband is hereby repealed and such female may retain her Liberian citizenship unless she, by some affirmative act, renounces it.”

page 66 note 2 For a discussion of this special problem, see text infra, Part III.

page 66 note 3 State v. Hudson Land Co., 19 Wash. 85, 52 Pac. 574 (1898).

page 66 note 4 State v. Morrison, 18 Wash. 664, 52 Pac. 228 (1898).

page 66 note 5 3 Liberian Code of Laws title 29, s. 20 (1956): “Leases to foreigners.—A Liberian citizen shall not lease real estate to any foreign concern for a term longer than twenty-one years; provided, however, that the provisions of this section shall not prevent a citizen from granting to a foreigner or foreign concern a lease of real estate for two optional periods of twenty-one years each in addition to the twenty-one year period of a term certain, but for each additional term there shall be an increase of the rentals fixed for the term certain of not less than ten per cent.

A lease agreement between a citizen and a foreigner contrary to the provisions of this section shall be voidable, and the lessee shall lose all benefits of such agreement and the lessor shall forfeit to the Government his rights and title to such estate.”

page 66 note 6 It has been the experience of many aliens that it is, as a practical matter, difficult to obtain leases for terms longer than 20 years, despite the statutory approval.

page 67 note 1 An Act to amend Chapter 2 of the Property Law with Respect to Leases to Foreign Businessmen and Foreign Business Concerns (presented by House of Representatives, April 1966).

page 67 note 2 The constitutionality of this long-term lease provision might be subject to attack on constitutional grounds: see infra, p. 69, n. 1.

page 67 note 3 E.g., An Act to Amend the General Business Law to Regulate Foreigners Engaged in Commercial and Construction Business in Liberia (1967). This Act requires of aliens a minimum of $20,000 “paid-in” capital and an additional deposit of $10,000 to be deposited with the government as security.

page 67 note 4 See supra, p. 66, n. 3.

page 68 note 1 The majority of the cases in the area concerned alien businessmen and business concerns: see infra, p. 72, n. 7, for a list of these cases.

page 68 note 2 Liberian Const., Art. 1 s. 10 forbids the government from passing laws impairing contract rights. This would seem to apply to a statute altering the terms of a lease.

page 68 note 3 Cf. the 99-year lease to Firestone, infra p. 69, n. I; note also that the Investment Incentive Code, discussed infra p. 69, n. 5, involves leases of land from the government which therefore are within the statute.

page 68 note 4 An Act to Amend the Revenue and Finance Law with Respect to the Realty Lease Tax (Proposal, 1965; Executive Order No. VI, 1967). A study of the history of this tax reveals the different experiments attempted by the Bureau of Internal Revenue in an effort to arrive at an effective means of enforcing the tax. Earlier statutes [3 L.C.L. tit. 35 ss. 650–51 (1956)] placed the tax only on prime leases to which the government was a party, being payable by the lessor. In 1960–61, the tax was made applicable to all prime leases. Presently, the tax applies to all leases and sub-leases.

page 69 note 1 The concession agreement to Firestone was in the form of a lease. The length of the lease (99 years) was the object of much criticism. An (unpublished) opinion of the Attorney General, L. A. Grimes, was that the law granting the lease was unconstitutional: 2 Hub. 1098. The 1966 Investment Incentive Code also specifies a lease as the form of land use by the concessionaire: see infra, n. 5, and accompanying text.

page 69 note 2 For a more complete discussion of this area see Berlowitz, “Concessions and incentives in Liberia”, 2 Lib. Law. Journal III (1966).

page 69 note 3 2 L.C.L. tit. 15 ch. 10.

page 69 note 4 2 L.C.L. tit. 24 s. 160.

page 69 note 5 An Act Adopting the Investment Incentive Code of the Republic of Liberia (1966).

page 69 note 6 Investment Incentive Code s. 5 (a).

page 69 note 7 The following information is taken from Clower, Dalton, Harwitz & Walters, Growth Without Development (1966), 126–31. The length of the terms is set forth to illustrate the possibility of aliens establishing long-term rights in Liberian real property. Rubber concessions: B. F. Goodrich Co. (American Management) has a concession agreement for a rubber plantation of 600,000 acres for 80 years; Salala Rubber Corp. (Dutch) has the exclusive right to engage in agriculture, forestry and farming with 100,000 acres of land for 70 years; the African Fruit Company (German) was granted broad rights to establish and conduct agricultural developments over 600,000 acres for 80 years; Liberian Agricultural Co. (Dutch) has the right to use land for 70 years. Timber concessions: Maryland Logging Co. (German) and the Liberian Timber Industries (American) have agreements for 45 years + 25 year option; Sign Lumber Co. (Swiss/English) 60 years; Liberian Industrial Forestry Corp. (Spanish) 20 years.

page 70 note 1 See Clower et al., op. cit. p. 119 n.: “On the whole, Liberia has demonstrated that privileges and protections assured to foreign enterprise will be honoured … Liberia in the early 1960's appeared to be politically stable and secure; but one can only speculate on future transitions in leadership … In Liberia, the initiative of the president is decisive. A future president with views different from those of Mr Tubman could change the investment climate radically.”

page 70 note 2 Opinions of the Attorney-General of the Republic of Liberia (1964–65).

page 70 note 3 Liberian American Mining Company. The structure of the mining operation, which includes a 50% equity ownership in one of the units of the structure by the government of Liberia is described in Clower et al., op. cit. at 214.

page 70 note 4 Mining Concession Agreement between the Government of the Republic of Liberia and the Liberian American—Swedish Minerals Company and the Bethlehem Steel Corporation (April 1960) [hereafter cited as Act, 1960].

page 70 note 5 Act, 1960.

page 70 note 6 Act, 1960 s. 2 (K).

page 70 note 7 Act, 1960 s. 6.

page 70 note 8 2 L.C.L. tit. 24 s. 144. It is interesting to note a similar situation in oil lease cases in Nigeria: “It has been held that the acquisition of land for the purpose of leasing it to a commercial company is not a public purpose. This disability was overcome by amendment of the definition of ‘public purpose’ in order to permit the creation of industrial estates that may be leased … to private business.” Proehl, op. cit. at 142/43. Liberia has arrived at a similar definition without formal legislative action.

page 70 note 9 It is estimated that the Nimba ore reserves will be exhausted well within the term of the concession agreement.

page 71 note 1 See e.g. Meek, op. cit., at 206–212.

page 71 note 2 See e.g. Bryant v. Harmon (1956), 12 L.L.R. 330; Brown v. Settro (1944), 8 L.L.R. 284; In re Smallwood (1943), 8 L.L.R. 3; Saunders v. Grant (1930), 3 L.L.R. 152.

page 71 note 3 See Casner, 4 Am. Law of Prop. 32–35 (1952); Powell 1 Real Property 370 (1949).

page 71 note 4 Alien Mortgage Guaranty Act [hereafter cited as “Act”] 3 L.C.L. tit. 29 ch. 3.

page 71 note 5 Amended L. 1958–59, ch. II, s. I.

page 71 note 6 Act, s. 32 (Amended L. 1958–59, ch. II, s. I).

page 71 note 7 Act, s. 34 (Amended L. 1958–59, ch. II, s. I).

page 72 note 1 Act, s. 33 (Amended L. 1958–59, ch. II, s. I).

page 72 note 2 Act, s. 34 (Amended L. 1958–59, ch. II, s. I).

page 72 note 3 Act, s. 36 (Added L. 1958–59, ch. II, s. 2).

page 72 note 4 Problems of the “alien” corporation will be discussed infra, Part III.

page 72 note 5 The perils of the Liberian probate system must of course be carefully considered by aliens as well as citizens: see Bentsi-Enchill & Zarr, “The assurance of land titles and transactions in Liberia”, 2 Lib. Law Journal 94 (1966).

page 72 note 6 E.g. Hart v. Kanaye Nagasawa 218 Cal. 865, 24 P.2d 815 (1933); Madden v. State, 68 Kan. 658, 75 Pac. 1023 (1904); Casner, op. cit., at 331.

page 72 note 7 Van Ee v. Gabbidon (1960), II L.L.R. 159; Clarke v. Synder (1945), 9 L.L.R. 111; African Indus. Co. v. Cole (1942), 7 L.L.R. 381; Beavens v.Jurs (1926), 3 L.L.R. 28; Cowwenhaven v. Green (1918), 2 L.L.R. 301; West v. Dunbar (1897), 1 L.L.R. 313; Bingham v. Oliver (1870), 1 L.L.R. 47; East African Co. v. Dunbar (1895), 1 L.L.R. 279.

page 72 note 8 3 L.C.L. tit. 29, s. 20, quoted in full, supra, p. 66, n. 5.

page 73 note 1 See supra p. 72, n. 6.

page 73 note 2 (1870), 1 L.L.R. 47.

page 73 note 3 The nature of this deed was such that the grantee's title would not be perfected until he performed certain improvements within a certain length of time.

page 73 note 4 This point was directly overruled in Cowwnehaven v. Green (1918), 2 L.L.R. 301; see also Beavens v. Jurs (1928), 3 L.L.R. 28.

page 73 note 5 (1897), 1 L.L.R. 313.

page 74 note 1 Id., at 314.

page 74 note 2 (1918), 2 L.L.R. 301.

page 74 note 3 Ibid., at 303.

page 74 note 4 Ibid., at 304.

page 74 note 5 (1960), 11 L.L.R. 159.

page 74 note 6 Ibid.

page 75 note 1 3 L.C.L. tit. 29; see also Bentsi-Enchill & Zarr, supra, at 95–98.

page 75 note 2 (1918), 2 L.L.R. 301.

page 75 note 3 (1870), 1 L.L.R. 47. The court's decision referred to the alien's right to receive some compensation for the improvements.

page 75 note 4 This section examines the possibility of incorporating affecting the alien's power to hold land. Other devices, such as a trust with a Liberian trustee and an alien beneficiary, while not expressly declared void by Liberian law, are void under common law principles. See 3 C.J.S. 560 (1936). A cautious alien will thus not expect to be protected by law if he uses this or similar devices.

page 76 note 1 Liberian Const., art V s. 13.

page 76 note 2 1 L.C.L. tit. 3 ss. 80–97.

page 76 note 3 1 L C L. tit. 4 ss. 1–48.

page 76 note 4 D. F. Vagts, “The corporation alien: definitional questions in Federal restraints on foreign enterprise,” 74 Harv. L. Rev. 1489 (1961).

page 76 note 5 A few American jurisdictions having alien land disability provisions have denied aliens the right to purchase stock in a domestic land holding corporation. See e.g., Frick v. Webb, 281 F. 407 (1922) Powell, op. cit., at 402.

page 76 note 6 For specific examples, see generally Liberia as a Corporate Domicile (The International Trust Company of Liberia, 1965); e.g., the Act to Amend the General Business Law to Regulate Foreigners Engaged in Commercial and Construction Business in Liberia, ss. 2–4 (1967), requires large amounts of capital of alien businesses. The Act is intended to force small alien businesses to incorporate and pool their resources. See also, the Liberian Age, January 9th, 1968, for article on alien business houses being “shaken by [the] new law”.

page 77 note 1 1 L.C.L. tit. 4, s. 5 (a).

page 77 note 2 This argument was advanced and rejected in a non-reported case in the circuit court for Montserrado County involving the Monrovia Brewing Corporation (a domestic corporation substantially owned by aliens). Although the case is being appealed to the Liberian Supreme Court, out-of-court settlement seems more likely than a decision (which would establish certainty in this area) due to the existence of problems indicated infra p. 78, n. 5, and accompanying text.

page 77 note 3 Vagts, supra, at 1531.

page 77 note 4 See supra, p. 71, nn. 4–7, p. 72, nn. 1–3.

page 78 note 1 Act, s. 36 (added L. 1958–59 ch. II, s. 2).

page 78 note 2 49 U.S.C. s. 1301 (13).

page 78 note 3 Act of July 15, 1918, ch. 152 s. 2, 40 stat. 900.

page 78 note 4 Vagts, at 1506, 1520; see also Powell, op. cit., at 402 n. 23.

page 78 note 5 Examples of domestic corporations with heavy alien ownership and which nonetheless hold real property are the Messerado Fishing Corporation, the Bank of Liberia, and the Liberian Produce Marketing Corporation.

page 78 note 6 Vagts, at 1538–48.

page 78 note 7 Ibid.

page 79 note 1 Vagts, at 1538–48.

page 79 note 2 This is the case with the Liberian Produce Marketing Corporation. See Liberian Acts 1959–60, ch XLVI, s. 1010 p. 75.

page 80 note 1 See Ollennu, Customary Land Law in Ghana (1965), 5, citing Amodu Tijani v. Secretary to the Government Southern Nigeria, [1921] 2 A.C. 399, at 404: “The next fact which it is important to bear in mind in order to understand the native land law is that the notion of individual ownership is quite foreign to native ideas.” Ollennu at pp. 29–32 qualifies this statement by arguing that an individual's right to use the land is far more important than the “technical legal” concept of absolute ownership. See also Bentsi-Enchill, op. cit. note I, at 229 “ … the expression ‘fee simple’, when used in relation to the interest for which allodial ownership is the more theoretically justified description, should be rejected”. And see Fliedner, “Some Legal Aspects of Land Reform in Kenya”, Proceedings of the East African Institute of Social Research Conference, 1963: “in the traditional tribal society the right of use is by far the most important.”