KHOURY v. AZAR (PC – Lord Morton of Henryton)

[CONSOLIDATED APPEALS]

1. & M. KHOURY

V.

PHILIP SAID AZAR

THE JUDICIAL COMMITTEE OF THE PRIVY COUNCIL

9TH DAY OF DECEMBER, 1952

2PLR/1952/20 (P. C.)

OTHER CITATION(S)

2PLR/1952/20 (P. C.)

(1952) P.C. 09/12

(1952) XII WACA PP. 268 – 276

LEX (1952) – P.C. 09/12

BEFORE THEIR LORDSHIPS:

LORD NORMAND,

LORD MORTON OF HENRYTON

LORD COHEN

BETWEEN:

1. & M. KHOURY – Appellants

AND

PHILIP SAID AZAR – Respondent

AND

SAME – Appellants

V.

SAME – Respondent

AND

1. & M. KHOURY – Appellants

AND

1. MASSOUD & SONS – Respondents

ORIGINATING COURT(S)

Appeals from the West African Court of Appeal

ISSUE(S) FROM THE CAUSE(S) OF ACTION

DEBTOR AND CREDITOR LAW:- Consolidated appeals — Interpleader — Written agreement to secure repayment of loan on chattels — Breach by debtor of covenant therein by assignment of chattels to secure further debt to third party without notice to first lender — Defence (Control of Transfer of Used Motor-Vehicles) Order 1943 (as amended) — Applicability thereof to transfer by way of mortgage — Whether mortgagor in possession of mortgaged chattels holds them as trustee for mortgagee — Effect of non-registration under Kumasi Lands Ordinance, 1943, section 22 — Position of person paying off registered equitable charge and obtaining similar charge (which he fails to register) in his own favour — Gold Coast Supreme Court Rules, Order, 44, rule 25 (1).

DECISION(S) OF THE JUDICIAL COMMITTEE OF THE PRIVY COUNCIL

Held:–

(i)     that a mortgage of motor-vehicles was not a sale or purchase thereof within the meaning of the Defence (Control of Transfer of Used Motor-Vehicles) Order, 1943 (as amended).

(ii)    a mortgagor in possession of mortgaged chattels does not hold them “not on his own account or as his own property but on account of or on trust for” the mortgagee, within the meaning of Order 44, rule 25(1) of the Gold Coast Supreme Court Rules, nor is the mortgagor, if he uses the chattels for profit, bound to account to the mortgagee;

(iii)    an equitable chargee must register his own charge under the Kumasi Lands Ordinance, 1943, in order to secure the validity thereof. Although he pays off, at the request of the debtor, a charge which is in fact registered and simultaneously takes a charge on the same property, he does not stand in the shoes of the paid-off chargee so as to be able to claim the benefit of that chargee’s registered charge.