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The End of Pledges in Ghana?
Published online by Cambridge University Press: 28 July 2009
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A pledge is a customary law transaction where the pledgor (borrower) surrenders possession of his property to the pledgee (creditor) “to hold and use until the debt due is paid, an article borrowed is returned or replaced, or obligation is discharged”. Like other customary transactions, pledges have not remained static: social and economic changes in Ghana as well as statutory intervention (which in itself is generally the result of such changes) have contributed to their development. In some respects, pledges are similar to the common law transaction known as mortgages but there are essential differences between the two. However, now the same law would seem to govern both transactions because by virtue of the Mortgages (Amendment) Decree, 1979 (A.F.R.C.D. 37):
Every customary loan transaction in respect of which any farm-land is given
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References
1 Hill, , The Gold Coast Cocoa Farmer p. 59Google Scholar citing from Minutes of Evidence and the Draft Report of the West African Lands Committee (1912–1914). Grey, W. H. represented Swanzy and Millers in the Gold CoastGoogle Scholar.
2 Commentaries on pledges in Ghana include the following: Ollennu, , Principles of Customary Land Law in Ghana pp. 94–107, 122–123, (London: Sweet and Maxwell, 1962)Google Scholar; Ollennu, and Woodman, (editors), Ollennu's Principles of Customary Land Law in Ghana, (2nd edition) pp. 101–115, 130–131 (corresponding to 1st ed., pp. 122–123) (CAL Press, Birmingham, 1985)Google Scholar; Bentsi-Enchill, Kwamena, Ghana Land Law pp. 372–391, (London: Sweet and Maxwell, 1964)Google Scholar: Hill, Polly, Migrant Cocoa Farmers of Southern Ghana pp. 186–187, (Cambridge University Press, 1963)Google Scholar; Hill, Polly, The Gold Coast Cocoa Farmer, Chapters, V, VI and VII, (London, Oxford University Press, 1956)Google Scholar; Rattray, R. S., Ashanti Law and Constitution passim esp. pp. 47–55, 355–369, (Oxford: Clarendon Press, 1929)Google Scholar; Danquah, J. B., Akan Laws and Customs pp. 219–220Google Scholar; Danquah, J. B., Cases in Akan Law pp. 98–99, (London: George Routledge and Sons Ltd., 1928)Google Scholar; Pogucki, , Gold Coast Land Tenure Vol. 2 Report on Land Tenure in Adangme Customary Law pp. 36–37 (155)Google Scholar; Pogucki, , “The Main Principles of Rural Land Tenure” in Wills, J. Brian (ed.) Agriculture and Land Use in Ghana, Chapter 13, (Oxford University Press, 1963)Google Scholar; Anyane, La, Ghana Agriculture pp. 179–190, (London: Oxford University Press, 1963)Google Scholar; Brokensha, David, Social Change at Larteh, p. 42, (Clarendon Press, 1966)Google Scholar; Sarbah, , Fanti Customary Law (3rd edition) pp. 82–84, (Frank Cass & Co. Ltd)Google ScholarOkali, Christine, Cocoa and Kinship in Ghana, (London: Kegan Paul, 1983)Google Scholar. Woodman, Gordon R., “Development in Pledges of Land in Ghanaian Customary Law” (1967) XI J.A.L. pp. 8–26Google Scholar and Kludze, A. K. P., “The Modern Ghanaian Law of Mortgages” (1974) II U.G.L.J. I at p. 6Google Scholar.
3 Ollennu, , Customary Land Law in Ghana, p. 94Google Scholar. Restricting it to land, Pogucki described it as follows: “A popular transaction is a well-known dealing in which the debtor retains ownership, but the creditor obtains possession and use of the langd. The dealing is referred to usually as pledging of land” Pogucki, in Wills, J. Brianop. cit. p. 184Google Scholar. Also see, Hill, , The Gold Coast Farmer p. 48 and Sarbah, op cit. p. 82)Google Scholar.
4 See, for instance, Woodman, op. cit.; Dankwa, “Progress and Regress in Samansiw” (1978–1981) 15 U.G.L.J. 97Google Scholar.
5 (a) Slave Dealing Abolition Ordinance, 1874, Cap. 109 Laws of the Gold Coast (1951 Rev.ed.)Google Scholar; Pawnbrokers Ordinance, Cap. 189 Laws of the Gold Coast (1951 Rev. ed.)Google Scholar; The Moneylenders Ordinance, 1940, Cap. 176 Laws of the Gold Coast (1951 Rev. ed.)Google Scholar; The Loans Recovery Ordinance, Cap. 175, Laws of the Gold Coast, (1951 Rev. ed.)Google Scholar.
(b) The effect of these laws on pledges have been examined more fully in some of the commentaries under n. 2 especially by Gordon R. Woodman, op. cit.
6 Armed Forces Revolutionary Council Decree (A.F.R.C.D.) 37.
7 Ibid., s. 1(1).
8 Sarbah, , op. cit. p. 83Google Scholar; Ollennu, , op. cit. p. 94Google Scholar; Rattray, , op. cit., passim esp. pp. 47–55, 357Google Scholar; Quashie Ottoo v. Anochie (07 22, 1844), Sarbah, op. cit. p. 238Google Scholar.
9 Cap. 109 Laws of the Gold Coast (1951 Rev. ed.).Google Scholar
10 See Sarbah, , op. cit. p. 83Google Scholar; Ollennu, , op. cit. p. 94Google Scholar; Bensti-Enchill, , op. cit. p. 373 n. 38Google Scholar.
11 Cap. 189 Laws of the Gold Coast (1951 Rev. ed.)Google Scholar.
12 Ibid., ss. 8 and 16.
13 See Ollennu, , op. cit. p. 94Google Scholar and Ollennu, and Woodman, , pp. 102–103Google Scholar.
14 However, according to Kludze, his field research shows “that in spite of the statute, moveables are still pledged today in the old way among the Ewe under the statutory limit(?) but without the statutory formality”. Ewe Law of Property p. 245Google Scholar.
15 (a) Cap. 175 section 3(1); and see Dapaah v. Poku (1950) reported Ollennu, op. cit. p. 173Google Scholar; Amusu v. Alogbe Fenuku (1952) D.C. (Land) 1952–1955, 75Google Scholar; and the cases cited under n. 30 p. 112. Ollennu and Woodman op. cit.
(b) As Dr. Woodman has rightly argued, if the Loans Recovery Ordinance had been taken fully into account much of the main features of customary pledge would have had to be modified. See Woodman op. cit.
16 Cap. 176 section 13(1); and see Awuku and Anor v. Abgemakpettor and ors. DC. (Land) 1948–1951, 137Google Scholar.
17 Some argue that its (pledge's) purpose essentially is not so much to hold the pledged property as security, as to have its use as interest on the amount borrowed or as mesne profit; Ollennu, and Woodman, , op. cit. p. 103Google Scholar.
18 Adusei v. Ofori (1926–1929) F.C. 87Google Scholar; Norh v. Gbedemah (1926–1929) F.C. 395Google Scholar; Moses AsafuAdjei v. Yaw Dabankwa (1930) 1 W.A.C.A. 63Google Scholar. But there are accounts of pledges where possession does not change. “Pledging of land strictu sensu is also becoming a popular way of providing security for debt, especially among cocoa farmers. In such a transaction, ownership, possession and use remain with the debtor. The creditor can however institute legal proceedings aiming at the sale of the land, if the debt is not repaid within the period described in the agreement”. (Pogucki, , in Brian Wills op. cit. p. 184Google Scholar); Naaka v. Doosey & ors., Ada Court 69'47 cited in Pogucki, , Gold Coast Land tenure Vol. 2 p. 90Google Scholar.
A similar situation obtains where the subject-matter is crops. Apart from the method of providing security for debt by pawning land, another form of security for debt is known in the form of attachment of crops. In those cases possession of land does not pass, but all proceeds from the sale of crops serve to cover the debt and interest. With the creditor's agreement the farmer can use such crops as he needs for subsistence. Pogucki, , Gold Coast Land Tenure, Vol. 2 p. 38Google Scholar.
19 The pledgor was required to pay off the principal and interest without getting credit for the income derived from the use of the land by the pledgee.
20 Pogucki, in Wills, Brian p. 184Google Scholar.
21 Pogucki, , Gold Coast Land Tenure, Vol. 2, p. 87Google Scholar.
22 Ashon v. Barng (1981) Sar. F.C.L. 153Google Scholar; Clarke v. Nkrumah Unreported judgment of Wilson, C. J., in the Land Court, Accra, delivered in 07 7, 1949 (noted by Woodman, , op. cit. p. ii n. 1)Google Scholar; Pogucki, , Gold Coast Land Tenure Vol. 2 p. 37Google Scholar.
23 Agbo Kofi v. Addo Kofi (1933) 1 W.A.C.A. 248Google Scholar; Kuma v. Kofi (1956) 1 W.A.L.R. 128Google Scholar; Dzanku v. Kwadwo (1960) G.L.R. 31 at p. 33Google Scholar; Aduwoh v. Ninson (1926–1929) F.C. 465Google Scholar; Ebbiassah v. Ababio (1946) 12 W.A.C.A. 106Google Scholar; Adobea v. Lassey (1956) 1 W.A.L.R. 181Google Scholar.
24 Sarbah, , op. cit. pp. 82–84Google Scholar; Bentsi-Enchill, , op. cit. p. 381Google Scholar; Adobea v. Lassey (1956) 1 W.A.L.R. 181Google Scholar, Norh v. Gbedemah (1926–1929) F.C. 395Google Scholar; Pogucki, in Wills, Brian op. cit. p. 184Google Scholar; Naaka v. Doosey and Others, Ada Court 69.47 (noted by Pogucki, , Gold Coast Land Tenure Vol. 2. p. 130Google Scholar; Hill, , The Gold Coast Cocoa Farmer pp. 48, 55 and 76Google Scholar.
25 National Redemption Council Decree (N.R.C.D.) 96.
26 Ibid., s. 1(2).
27 See n. 18, supra.
28 Hill, , The Gold Coast Cocoa Farmer pp. 60, 62Google Scholar.
29 Op. cit. p. 17.
30 Hill, , The Gold Coast Cocoa Farmer p. 63Google Scholar. Also see pp. 65, 71 and 78.
31 See n. 18, supra.
32 Hill, , The Gold Coast Cocoa Farmer p. 65Google Scholar n. 2 citing Matson, J. N., Digest of the Minutes of the Ashanti Confederacy Council from 1935 to 1949Google Scholar.
33 According to Sarbah, a pledgee had such a right; and when exercised, it extinguished the pledgor's right to redeem, op. cit. pp. 82–84Google Scholar. Ollennu, , however, states that there is no implied power of sale and that a court's order of sale is required, op. cit. p. 103Google Scholar. Bentsi-Enchill, , on the other hand, expresses the view that a power of sale may be exercised without recourse to court, provided that due notice is given to the debtor, op. cit. 381Google Scholar. See also Adobea v. Lassey (1956) 1 W.A.L.R. 181Google Scholar; Norh v. Gbedemah (1926–1929) F.C. 395Google Scholar and Kuma v. Anane, noted by Woodman, , op. cit. p. 12Google Scholar.
34 N.R.C.D. 96 s. 18(1): Upon failure of performance of an act secured by the mortgage the mortgagee may apply to the court for an order for the judicial sale of the mortgaged property, and upon being satisfied as to the existence of grounds for the application the court shall, upon such conditions as it deems just and equitable, grant an order for judicial sale of all or part of the mortgaged property.
35 N.R.C.D. 96 s. 18(1): Proceeds from a judicial sale shall be distributed first, in payment of all expenses incurred as incident to the judicial sale or any prior attempted sale, secondly, in payment of all sums secured by the mortgage or with the same priority as the mortgage, thirdly, in payment in the order of priority of any encumbrances subsequent to that of the mortgagee who requested the judicial sale, and the residue to the mortgagor or his successors in interest.
36 Ibid., s. 18(14).
37 Ibid., s. 18(4).
38 N.R.C.D. 54.
39 Ibid., s. 10(1): No action shall be brought to recover any land after the expiration of twelve years from the date on which the right of action accrued to the person bringing it or, if it first accrued to some person through whom he claims, to that person.
(2) No right of action to recover land shall be deemed to accrue unless the land is in possession of some person in whose favour the period of limitation can run.
S. 12(4): At the expiration of the period fixed by this Decree for a mortgagor to bring an action to redeem land subject to a mortgage, the title of the mortgagor to the land shall be extinguished.
40 Ibid., s. 13(1).
41 A.F.R.C.D. 37 was made on 19 09, 1979Google Scholar; and the date of its Gazette notification was 21 September, 1979. It is not clear whether some of the provisions of N.R.C.D. 96 may not be applied to transactions which were entered into after A.F.R.C.D. 37 was made.
42 An earlier enactment, The Farm Lands (Protection) Act, 1962 (Act 107), which sought to protect farmers whose titles to land were found to be defective, has the following interpretation: s. 5, “farming” means “to plant and cultivate crops, and cognate expressions shall be construed accordingly.“
For commentaries on this legislation, see Woodman, Gordon R., “The Assessment of Compensation under The Farm Lands (Protection) Act, 1962 (Act 107)”, (1972) 4 R.G.L. 227Google Scholar; “The Court of Appeal On The Assessment of Compensation Under The Farm Lands (Protection) Act, 1962 (Act 107)”, (1973) 5 R.G.L. 129Google Scholar; “Palliatives for Uncertainty of Title: The Land Development (Protection of Purchasers) Act 1960 and The Farm Lands (Protection) Act, 1962” (1969) 6 U.G.L.J. 146Google Scholar; and Bentsi-Enchill, , op. cit. pp. 271–277Google Scholar.
43 I have in mind those who fish inland, in artificially-controlled waters.
44 Possession could be very profitable to the pledgee, but an evil to the pledgor. In some cases the pledgee used the land without accounting to the pledgor. Although long possession in itself did not change a pledge transaction into a sale, in the absence of credible evidence from the pledgor or his successors, a pledgee might claim successfully that the transaction was a sale. Pledgees had many subtle ways of cheating pledgors. See, for instance, Ollennu, and Woodman, , op. cit. pp. 111–113Google Scholar.
45 Unreported judgment ofWilson, C.J., in the Land Court, Accra, delivered on 07 7, 1949 (noted by Woodman, , “Development in Pledges of Land in Ghanaian Customary Law”, (1967) XI J.A.L. p. 8 at p. 11 n. 1)Google Scholar.
46 It would appear that most pledges are of farmland. Almost all the cases discussed under “Pledges” in Ollennu and Woodman, op. cit. relate to pledges of farmlands.
47 As the son, grandson and grandnephew of men who had cocoa and other farms; and later as a co-administrator of his late father's estate, the present writer has personal knowledge of the nature of and some of the issues arising out of pledges. But A.F.R.C.D. 37 compels him to undertake the type of study referred to in the conclusion of this article.