FIRST ALLIED SAVING & LOANS LIMITED vs. MICHAEL ADDAI & 2 ORS.
  • IN THE SUPERIOR COURT OF JUDICATURE
    IN THE HIGH COURT (COMMERCIAL DIVISION)
    KUMASI - A.D 2015
FIRST ALLIED SAVING & LOANS LIMITED
MICHAEL ADDAI & 2 ORS.

DATE:  2ND JULY, 2015
SUIT NO:  BFS/42/13
JUDGES:  HER LADYSHIP ANGELINA MENSAH-HOMIAH (MRS.) JUSTICE OF THE HIGH COURT
LAWYERS:  MR. ADU GYAMFI FOR PLAINTIFF
AUGUSTUS ANANE QUEBAH FOR 1ST AND 3RD DEFENDANTS
MICHAEL ATTA AGYEI FOR 2ND DEFENDANT
JUDGMENT

This seemingly simple case has travelled over two legal years and at last, the wheels of justice have come to a stop! There will certainly be a closure as the parties get to know their fate!

 

What has brought about this suit? From the endorsement on the writ of summons and statement of claim filed on 14/12/2012, the Plaintiff sought to recover the sum of GH¢ 10, 399.00 being the total amount collected from customers by the 1st Defendant but which he has failed to account for. The Plaintiff is also claiming interest on this amount as well as damages for fraud.

 

The Plaintiff's case is that the Company employed the 1st Defendant on 1st June, 2009 as a Customer Intermediary. His duties entailed collecting monies from customers specifically assigned to him, and after going through the laid down procedure, hand over the money to the Plaintiff. During an audit, the Plaintiff detected that the 1st Defendant could not account for figures totaling GH¢5229 standing to the credit of customers and he signed a document admitting responsibility for the shortages..

 

Besides that amount, the Plaintiff found out that 1st Defendant had collected customers pass books ostensibly for auditing purposes but had failed to return them to those customers. The amount standing to the credit of those customers which the 1st Defendant could not account for stands at GH¢5,170.00. The Plaintiff alleged that the 1st Defendant has perpetrated fraud on the Company and gave the particulars of fraud as follows:

a) The 1st Defendant's failure to account for the exact amount paid to him by the Plaintiff's customers.

b) The 1st Defendant's failure to return customers passbooks to them after collecting same for audit purposes.

 

The 2nd and 3rd Defendants have also been dragged to court because they are alleged to have committed to exert moral pressure on the 1st Defendant so as to ensure that he does not embezzle any fund and to repay any money that would be embezzled by the 1st Defendant.

 

A lawyer field a defence on behalf of the 1st and 3rd Defendants but the 2nd Defendant had a separate legal representation. The 1st and 3rd Defendants admitted the 1st Defendant's work schedule in the

 

Plaintiff's employment but denied all the allegations made by the Plaintiff. It is the 1st Defendant's case that the Plaintiff caused his arrest for allegedly stealing over GH¢99,000.00 and he was arraigned before a Circuit Court in Kumasi. The prosecution substituted the charge sheet with a lesser amount. He denied pocketing any money belonging to the Plaintiff.

 

On his part, the 2nd Defendant averred that when the Plaintiff employed the 1st Defendant, the 1st Defendant invited he and the 3rd Defendant to the offices of the Plaintiff to confirm or prove his address to the Plaintiff. During a discussion at the Plaintiff's office, the 2nd Defendant asserted that he was made to understand that if at any point the Plaintiff had difficulty in tracking or locating the 1st Defendant, they will fall on the 2nd Defendant to assist them to find him. Having assisted the Plaintiff to locate the 1st Defendant, the 2nd Defendant's position is that he has discharged his obligation towards the Plaintiff.

 

The issues to be determined are set out below:

 

Whether or not the 1st Defendant has failed to account for an amount of GH¢10,399.00 collected from Plaintiff's customers?

 

Whether or not the Defendants not being proficient in English understood the alleged guarantee executed by them?

 

Whether or not the Plaintiff has a cause of action against 2nd and 3rd Defendants?

 

This being a civil suit, each party bears the burden of proof of all assertions made by that party and which have been denied by his opponent. in this case, the evidential burden as well as the burden of persuasion on issues (1) and (2) rest on the Plaintiff Company. This is the burden placed on the company who has made these positive assertions to that effect in its statement of claim. As was held in the case of Zambrama v Segbedzi (1991) 2 GLR 221:

“…a party who makes an averment or assertion, which is denied by his opponent, has the burden to establish that his averment or assertion is true. And he does not discharge this burden unless he leads admissible and credible evidence from which the fact or facts he asserts can properly and safely be inferred. The nature of each averment or assertion determines the degree and nature of that burden.”

 

This principle has been applied in cases such Continental Plastics v IMC Industries-Technik GMBH (2009) SCGLR 298 at 307. Having assumed the burden of proof as regards the said issues, the Plaintiff will be required to adduce credible evidence so that on the totality of the evidence, the court will find its case to be more probable than not. This is expressly stated under sections 11(4) and 12 of N.R.C.D. 323.

 

Section 11(4) states:

“In other circumstances the burden of producing evidence requires a party to produce sufficient evidence so that on all the evidence a reasonable mind could conclude that the existence of the fact was more probable than its non-existence.”

 

The evidence adduced by the parties will be weighed in terms of sections Section 12(1) and (2) of the Evidence Act, 1975 N.R.C.D 323 and the party whose case is found to be more favourable gets a deserving verdict. The evidential burden will only shift onto the Defendants after the Plaintiff has led credible and convincing evidence in support of the issues before the court.

 

With the legal burden on the party clearly set out, I will first determine whether or not the 1st Defendant has failed to account for an amount of GH¢10,399.00 collected from Plaintiff's customers?

 

On this issue, the Plaintiff's representative first outlined the duties of the 1st Defendant as a Customer

Intermediary. She said the 1st Defendant was supposed to open accounts for customers, collect their monies, write the amount collected in a pass book of the customers, write the same amount in a voucher provided by First Allied, and deposit the amount in the account of the customer after returning from the field. She added that occasionally, pass books are collected for the purpose of reconciliation to see whether the amount in customers pass books tallied with the bank. Further, she testified that the Plaintiff caused the arrest of the 1st Defendant and during an audit, he admitted the shortages by signing against a total of GH¢5,299.00. Referring to the criminal aspect, she said three customers testified against the 1st Defendant with respect to a total amount of GH¢ 5, 170.00. She

 

tendered in evidence a document bearing the signature of the 1st Defendant against the shortages as exhibit D and a statement of account of monies which 1st Defendant collected from customers but failed to account for as exhibit E. In cross-examination, Counsel for the 1st Defendant attempted to water down the evidence as regards the auditing by suggesting to the Plaintiff's representative that no proper audit was conducted and that the 1st Defendant was made to sign exhibit D under police escort. The Plaintiff's representative disagreed and insisted that the 1st Defendant was released from police custody to take part in the audit. Continuing, she said it was because of the unaccounted shortages which the 1st Defendant admitted in exhibit D that he was convicted and incarcerated by the Circuit Court. Counsel also indicated by way of cross-examination that the 1st Defendant's conviction was based on an amount of GH¢9,599.00 which is different from the amount endorsed on the writ of summons. To this question, the Plaintiff's representative explained that subsequent to the circuit court trial, more customers kept coming and raised issues about monies that had been stolen, hence the differences in the figures. Counsel again complained about the absence of a signature on exhibit E and its authenticity. The witness was quick to point out that the document has the company's stamp and logo and it is thus a document emanating from the Plaintiff.

 

Counsel for the 2nd Defendant also took his turn to cross-examine the Plaintiff's representative. In sum, his line of questioning was geared towards establishing that no customer complained to the Plaintiff about stolen monies in respect of which the instant action was instituted. He also suggested to the Plaintiff's representative that the witnesses who testified at the criminal trial are not customers of the Plaintiff but she disgreed.

 

After fruitless efforts to get some customers to testify, the Plaintiff subpoenaed the registrar of the Circuit Court, Adum, Kumasi. She produced the judgment of the Circuit Court in the case of The Republic v Michael Addai and the same was admitted in evidenced as exhibit F even though Counsel for the Defendants were of the view that exhibit F is of no relevance to the instant case.

 

The 1st Defendant gave evidence with respect to the shortages complained of by the Plaintiff. He described the Plaintiff's audit procedure thus:

 

Anytime I go to take money from customers, I go alone. During audit, I go with the auditor. The auditor takes the books of the customers and take the balances. He records them and brings the records to the office. He compares the balances recorded in the system to see if they tally. He does it in my presence ... I was arrested by the police for allegedly stealing monies belonging to the Plaintiff. Before the arrest, I was not audited. After the arrest, I was not audited. I can identify my signature at the right hand side of exhibit D. An investigator in charge of the criminal case called me that First Allied needed me in the office. He told me to take the lead to the office, I met sister Joana and Eric Kwaku Appiah. Eric Kwaku Appiah told me exhibit D was evidence of the money i had taken and that was what they were going to use to conduct the case. He gave me a copy to be sent to my lawyer. I was made to sign the document and send same to my lawyer for his signature. I was also told the Plaintiff and its lawyer would also sign the document. That is why I signed. After signing, I was told the Plaintiff's lawyer was not available and that the company vehicle would bring me a copy. No copy was ever given to me."

 

Further , the 1st Defendant admitted that Eric K. Appiah is an auditor with the Plaintiff. However, he denied that exhibit D is a proper audit report and that he was not present when the alleged reconciliation was done by Eric K. Appiah. He put in evidence a writ of summons which was earlier filed at the Circuit Court and the statement of defence filed on his behalf as exhibits 2 and 3.

 

Counsel for the Plaintiff in his written submissions lamented over the Plaintiff's unsuccessful attempts to produce the auditor who conducted the audit and some of the customers who had complained about their stolen monies. Notwithstanding this handicap, he argued that per the evidence on record, the 1st Defendant embezzled an amount of GH¢5,229.00 as well as GH¢5,170.00 collected from customers of the Plaintiff. Counsel for the Defendants did not file any written submissions.

 

In the absence of any direct evidence from the auditor and the customers whose monies were allegedly stolen by the 1st defendant, I will proceed to analyze the evidence on record to see if on the balance of probabilities the 1st Defendant failed to account for the sum of money endorsed on the Plaintiff's writ of summons.

 

First, I will consider exhibits D and E. Exhibit E was generated from exhibit D which the 1st Defendant duly signed. However, exhibit E contains some additions not captured in exhibit D. I will revert to it in the course of my analysis. Read as a whole, exhibit D relates to shortages discovered in the reconciliation of accounts in the line of duty of the 1st Defendant as a Customer Intermediary. The names of customers, amounts recorded in the Plaintiffs' system as opposed to the entries in their pass books are recorded on exhibit D and the differences unaccounted for is also shown with the remarks "shortage". From the 1st Defendant's own testimony, he was released from police custody to go to the Plaintiff's office and that the investigator told him to take the lead to the place. He was made aware of the nature of the document before he signed. There is no credible evidence that the 1st Defendant signed exhibit D under any form of duress or undue influence. His explanation that he signed because he was told the Plaintiff and its lawyer will also sign is nothing to go by. I find as credible the Plaintiff's Representative's evidence that the 1st Defendant appended his signature to exhibit D as an admission of liability for the shortages stated therein i.e. the sum of GH¢ 5 229.00. When he mounted the witness box, the 1st Defendant could not offer any explanation for these shortages. There is strong evidence on record to show that the 1st Defendant collected these monies from customers of the plaintiff and since he is unable to account for the same, the only reasonable inference is that he has misappropriated the money and I so find. Just as the 1st defendant was made to indicate his acceptance of the contents of exhibit D, it will be reasonable to expect that the same would have been done in exhibit E which has some additional figures and discrepancies. It could be that some customers lodged various complaints but then, the second page of exhibit E would have carried more weight if the 1st Defendant had indicated his admission of the contents by appending his signature to the document. Regrettably, that did not happen. The second page of exhibit E is therefore of no probative value.

 

Second, I will consider the weight to put on exhibit F. I must say that the record of proceedings were not put in evidence and I am unable to conclude from the face of the judgment dated 14/02/2014 that the findings were borne out by the evidence. The Learned Judge relied on an audit report which was tendered as exhibit A to arrive at his decision that the accused person therein could not account for the sum of GH¢9, 549.00. If there was any such audit report why was it not tendered in this civil suit? I must be emphatic that the only "audit report" which can best be described as a reconciliation of accounts, and which this court had the benefit to peruse is exhibit D. The amount indicated as shortages is GH¢ 5 229.00. So, there is a real doubt as to the existence of an audit report whereby the 1st defendant admitted shortages beyond the GH¢5, 229.00.

 

The 1st Defendant has indeed admitted that Eric K. Appiah is an auditor. It is not the duty of this court to go into his professional qualification or academic credentials as Counsel for the 1st Defendant strenuously raised those issues in cross-examination. This auditor, whether qualified or not, did reconcile the accounts in issue but he was never called to give evidence in court. Counsel for the Plaintiff argued in his written submissions that a subpoena was served on Eric K. Appiah but he still did not come to testify. With all due respect to counsel, I am unable to trace a copy of that subpoena on the case docket. On record, counsel intended to call some of the customers but not the auditor whose evidence is so crucial. In exhibit F, the Learned trial Judge observed that three customers whose monies had been taken by the accused persons therein (now 1st Defendant herein) had not been paid to the bank. Without stating the amounts allegedly collected from these witnesses, he proceeded to say that the total amount which could not be accounted for was GH¢9, 549.00. Did this figure include the amount on exhibit D? In my opinion, these findings are porous as far as the Plaintiff's obligation to proof the second leg of the amount claimed is concerned. It would have been helpful if the auditor and all the customers whose monies amounting to GH¢5,170.00 which the 1st Defendant had allegedly collected without paying the same to the Plaintiff had given evidence. By the preponderance of the evidence on record, I find that the Plaintiff has failed to prove that the 1st Defendant collected monies amounting to GH¢5,170.00 from various customers without paying the same to the Plaintiff. I therefore conclude that the Plaintiff has been able to discharge its legal burden with respect to the sum of GH¢5, 229.00 only as the monies unaccounted for by the 1st Defendant who is now serving a prison term.

 

Next to be determined is whether or not the Defendants not being proficient in English understood the alleged guarantee executed by them?

 

The Risk Monitoring and Recovery Manager of the Plaintiff testified on its behalf. She tendered two guarantor's pledge documents executed by the 2nd and 3rd Defendants as exhibits B and C. According to her, the 2nd and 3rd Defendants undertook to pay any money embezzled by the 1st Defendant. The 1st Defendant had shortages which he has failed to pay and that is why the Plaintiff is claiming that money from the 2nd and 3rd Defendants. For the 3rd Defendant, Counsel in cross-examination challenged the execution of exhibit C on the basis that his client is illiterate and did not appreciate the contents of that document. Here again, the Plaintiff's representative was emphatic that the document was interpreted to the 3rd Defendant in Twi language before he executed the same.

Counsel for the 2nd Defendant also challenged the Plaintiff's representative's evidence that his client was made to understand the terms in exhibit B and that Henrietta Asamoah who witnessed the document was pursuing the interest of the Plaintiff Bank. To this line of questioning, the witness disagreed and said the 2nd Defendant could have opted to come along with his own witness and that he perfectly understood the contents before he signed.

 

The 3rd Defendant was to open his defence on 31/03/2015 after a the 1st Defendant had closed his case but he failed to come to court on that date and never showed up in court again. Thus, the 2nd Defendant took his turn to open his defence on 02/04/2015. His evidence was to the effect that the 1st Defendant who is his church member intimated to him that his employers had requested him to provide two guarantors. A week later, he accompanied the 1st Defendant to his employers where he met a female senior officer. The officer told him the 1st Defendant's father had signed his portion and confirmed what the 1st Defendant had told him. He testified further that the officer pulled out a paper from her table and asked him if he could read and write but he said no. She then read out the document and explained to him that if the Plaintiff could not trace the 1st Defendant, the 2nd and 3rd Defendants will be responsible to produce him. The officer then asked if he could sign or thumbprint.

 

The 2nd Defendant said he told the officer that he could sign due to the nature of his work. About two to three years later, the 2nd Defendant said the Bank invited him to assist in tracing the 1st Defendant and he did assist them in finding him. Concluding, the 2nd Defendant said he is not literate and that he never undertook to pay he 1st Defendant's indebtedness. The fact of his illiteracy in English language was confirmed by his church member who gave evidence as DW1. Under cross-examination by Counsel for the Plaintiff, the 2nd Defendant insisted that the female officer only explained to him that if the Plaintiff was searching for the 1st Defendant, he will have to produce him. However, he admitted giving particulars of his business, residence and telephone number to the said officer. Even though the 2nd Defendant admitted signing one document, he denied that the signature on exhibit B is his signature. This can be gathered from the following line of cross-examination:

Q. It was after all that, that you signed exhibit B, the guarantors form?

A. I signed only one document.

Q. Exhibit B is the document you signed?

A. No. It is not my signature. I did not sign this form. At the time they needed me to sign exhibit B, Madam Joana called me on phone to come to the Bank with my passport picture to sign. I phoned my lawyer and he said I should not go. By that time, the 1st Defendant had already been arrested.

Q. I am suggesting to you that whatever you agreed with the Plaintiff on the 1st Defendant is contained in exhibit B which you duly signed?

A. Not true.

 

Counsel for the Plaintiff argued that if the content of a contract is explained to a party and he seems to understand it, there is no need for a JURAT. He further argued that the Sunday School teacher who testified for the 2nd  Defendant was not emphatic that the 2nd  Defendant could not read and understand the English Language. Counsel submitted that the fact that the 2nd Defendant conducts Sunday School in Twi does not mean he is not proficient in English. By virtue of the provisions in exhibits B and C executed by the 2nd and 3rd Defendants, Counsel argued that they had guaranteed the repayment of any amount belonging to the Plaintiff which the 1st Defendant is unable to account for. Counsel drew the court's attention to the fact that the 3rd Defendant failed to come to court to give evidence and is therefore bound by the evidence on record.

 

The Guarantor's Pledge documents (exhibits Band C) are in three sections, namely, (1) Staff Information, (2) Guarantor's Personal Information and (3) Declaration by Guarantor. The declaration reads:

"I declare that the information provided above is true and accurate. I commit herein to exert moral pressure on M. Addai so as to ensure he does not embezzle any fund. I also commit to utilize my financial resources to pay First Allied Savings & Loans Ltd on behalf of M. Addai in the event of any embezzlement. I authorize First Allied Savings & Loans to institute legal action against M. Addai and Myself in case of embezzlement."

 

The 2nd Defendant signed B on 01/06/09 and the 3rd Defendant thumb printed exhibit C on 30/05/09. Is the 3rd Defendant bound by exhibit C in the absence of a JURAT? What about the 2nd Defendant who signed but now claims to be illiterate in English Language? The guiding principle must be whether or not these persons understood the content before putting their marks on the documents. This can be determined by considering the entire circumstances of the case in line with the evidence on record. A case in point is Duodo & ors v Adomako & Adomako (unreported) Civil Appeal J4/29/2011 dated December 30, 2011. The court held thus:

 

The clear object of the illiterates Protection Act 1912 CAP 262 was to protect illiterates from whom a document was made against unscrupulous opponents and their fraudulent claims, i.e. those who might want to take advantage of their illiteracy to bind them to an executed document detrimental to their interests. At the same time, the Act could not and must not be permitted to be used as a subterfuge or cloak by illiterates against innocent persons...

 

Conversely, notwithstanding the absence of a jurat, the illiterate person who had fully appreciated the full contents of the freely -executed document, but feigned ignorance about the contents of the disputed document so as to escape legal responsibilities arising from such conduct, would not obtain relief. Thus, any evidence which would demonstrate that the illiterate knew and understood the contents of the disputed document i.e. the document which had been thumb printed or marked, as the case might be, should settle the issue in favour of the opponent."

 

In re Will of Bremansu; Akonu-Baffoe v Buaku & Vandyke (substituted by) Bremansu (2012) 2 SCGLR 1313 is also worth considering. The Supreme court commented on the absence of a Jurat as follows:

 

"While it was correct to state that the absence of a jurat (authentication or interpretation clause) would not in itself negate the validity of an otherwise valid Will, it must be pointed out that the law required the proponents of such a Will to lead evidence to show that even in the absence of a jurat, the testator had fully understood the contents of the Will."

 

I will conclude my discussion of the law with the case of Yalley v Kell (1995-96) 1 GLR 91, CA where the court stated:

“ in the absence of evidence to support the fact that a document thumb printed by an illiterate person had been correctly read over and explained to him and that he appreciated the meaning and contents of the document, in compliance with the mandatory provisions of the illiterates Protection Ordinance Cap 262 (1951 Rev), that document could not be held valid.

 

In the circumstances of the instant case, can it be said that the 2nd and 3rd Defendants understood the contents of exhibits B and C? The Plaintiff's representative introduced convincing oral evidence which point to the fact that the contents of the documents were read over and interpreted to the 2nd and 3rd Defendants in the Twi language by an officer of the Plaintiff and they understood the contents before they executed the same in the presence of the person who did the interpretation. Besides, the 2nd and 3rd Defendants gave details such as their monthly income, residential address, location of business, telephone number and the like in their respective guarantor's pledge, exhibits B and C. Why would the Plaintiff gather information on the income of these defendants if they were merely to assist in locating the 1st Defendant in the event the Plaintiff is unable to trace him? From the 2nd Defendant's testimony, he knew the exact role he was expected to play at the time he went to the

 

Plaintiff's office. He knew he was to act as a guarantor for the 1st Defendant as a requirement for his employment. At the beginning of his evidence, he said:

"Michael Addai is my church member. After church on one occasion, he told me his employers had requested him to provide b two guarantors. A week later, I accompanied him to his employers and met a female senior office of the plaintiff. after exchanging pleasantries, the officer told me the 1st

 

Defendant's father had come to sign his portion and that what the 1st Defendant had told me was true..."

 

Per exhibit A, the Plaintiff offered employment to the 1st Defendant on 22/05/2009. Exhibits B and C were executed by the 2nd and 3rdDefendants on 01/06/2009 and 30/05/2009 respectively. It cannot therefore be true that these documents were executed after the shortages had been detected. On a plain meaning of exhibits B and C as well as the totality of the evidence on record, it is abundantly clear that the 2nd and 3rd Defendants knew and perfectly understood their role as guarantors in the instant case. They were fully aware that the plaintiff would fall on them in case of any misappropriation of funds by the 1st Defendant. The absence of a jurat on exhibits B and C will not take away the obligations of the 2nd and 3rd Defendants towards the Plaintiff in the circumstances of this case and I so find.

 

Does the Plaintiff have a cause of action against the 2nd and 3rd Defendants? Generally, a guarantor is responsible for the precise obligations which are guaranteed. In the case before me, the 2nd and 3rd Defendants obligations are set out in section 3 of exhibits B and C which have been set out in the foregoing paragraphs. Guarantees are secondary obligations and the general principle is that the guarantor's liability is co-extensive with that of the principal debtor. The guarantor will only be discharged if the principal debtor is released. See Erlinger's Modern Banking Law (4th ed.), Oxford University Press pages 847 to 850. To the extent that the principal debtor, the 1st Defendant herein, has not settled the amount he has misappropriated, the Plaintiff has a cause of action against the 2nd and 3rd Defendants. They have been properly sued.

 

The 1st Defendant has already been sentenced to 4 years imprisonment on the same facts by the

Circuit Court, Kumasi and he is still serving the sentence. I do not think the 2nd and 3rd Defendants have perpetrated any fraud against the Plaintiff. The Defendants have been found liable for the GH¢ 5,229.00 which the 1st Defendant could not account for together with interest. I will therefore not award any damages against the Defendants.

 

Accordingly, I enter judgment against the defendants in the sum of GH¢ 5, 229.00. I award interest on the judgment debt of GH¢ 5, 229.00 at the prevailing Bank rate and at simple interest from the date of commencement of this suit, i.e. 14/12/2012, till date of final payment.

 

All the parties and their lawyers contributed to the many adjournments in this case which could have been disposed of with ease. I have adverted my mind to the provisions of order 74 of the High Court (Civil Procedure) rules, 2004 C.I. 47 on costs. I award cost of GH¢500 against the Defendants in favour of the Plaintiff.