CFAO (LIBERIA) LIMITED, successor to CFAO of Monrovia, represented by its representative, M. S. TARAWALLY, Petitioner, v. ELLEN G. COOPER et al., Respondents.

APPEAL FROM THE RULING OF THE CHAMBERS JUSTICE GRANTING A PETITION FOR THE ISSUANCE OF A WRIT OF CERTIORARI.

Heard: April 8, 1999. Decided: July 1, 1999.

1. The word “equivalent” has been defined as (1) “equal in value, measure, force, effect, significance, etc. (2) corresponding in position, function. (3) having the same extent.”

2. Among the requisites to the formation of a contract is that there must have been the mutual assent of two or more persons competent to contract, founded on a sufficient and legal consideration to perform some legal act or to omit to do something, the performance of which is not enjoined by law.

3. The apparent mutual assent of the parties essential to the formation of a contract, must be gathered from their outward expressions and acts, and not from an unexpressed intention.

4. A written agreement should, in the case of doubt, be interpreted most strongly against the party who has drawn it.

5. The law of contracts does not judge a promissor’s obligation by what is in his mind, but by the objective test of what his promise would be understood to mean by a reasonable man in the situation of the promisee.

6. Certiorari will not ordinarily be granted to review an interlocutory ruling on a question of law.

These certiorari proceedings emanate from the ruling on law issues in an action of debt instituted by respondents in the debt Court for Montserrado County. According to the facts, petitioner in the certiorari proceedings was indebted to respondents in the amounts of US$96,000.00 representing rental arrears growing out of a lease agreement. The debt action was instituted upon the failure of the petitioner to make settlement of the arrears despite repeated demands. At trial petitioner did not deny the existence of the agreement or the provision that the rental should be paid in US dollars or its equivalent in the national currency in circulation. Hence, the only dispute between the parties was on the word “equivalent.” The petitioner contended that the rental should be paid in Liberian dollars in keeping with the Revenue and Finance Law, Rev. Code 36: 71.5 and Section 20 of the National Bank Act which state that the parity rate between the US Dollar and the Liberian Dollar is one to one. On the other hand, the respondents conceded the provision of US dollars or its equivalent in local currency, but contended that if payment is to be made in Liberian dollars, it should be at the prevailing rate of forty Liberian dollars to one United States dollar. (40:1).

In his ruling on the law issues, the trial judge held that the Revenue and Finance Law, Rev. Code 36:75.1 and section 20 of the National Bank Act were obsolete for non-use and therefore ceased to have the force of law. Petitioner excepted to this ruling and applied to the Chambers Justice for a writ of certiorari, contending, among other things, that by that ruling, the judge usurped the functions of the Legislature.

The Justice in Chambers held that certiorari will not lie to review a ruling on law issues where the petitioner has an adequate remedy by way of appeal. He therefore denied and dismissed the application. Petitioner noted exceptions to this ruling and announced an appeal to the Court en banc. The Supreme Court affirmed the ruling of the Chambers Justice.

Stephen B. Dunbar, Jr. and J Emmanuel Wureh of the Dunbar and Dunbar Law Firm appeared for petitioner. Henry Reed Cooper and Moses Kron Yangbe appeared for respondents.

MR. JUSTICE WRIGHT delivered the opinion of the Court.

This case is before the Full Bench on appeal from a ruling of our distinguished colleague, Mr. Justice John Nathaniel Morris, Associate Justice presiding in chambers, who heard and denied the petition for a writ of certiorari filed by petitioner CFAO, growing out of a ruling on the law issues made by His Honour John H. Mathies, judge of the Debt Court for Montserrado County.

In the petition, it is contended that the trial judge erred, when in ruling on the law issues, he illegally and erroneously ruled that section 71.5 of the Revenue and Finance Law and section 20 of the National Bank Act were obsolete for non-use and therefore ceased to have the force of law. The contention is that the Judge usurped the functions of the Legislature, in that, his ruling had the effect of repealing those laws, which act of the judge was repugnant to and inconsistent with the Constitution of Liberia.

Petitioner contends that the two laws now in question provide essentially that private or public obligation or other commercial transaction is dischargeable in Liberian currency declared to be legal tender and that any person who refuses to accept, at face value, Liberian currency as equivalent in value to United States currency is guilty of a misdemeanor and liable to a fine or imprisonment or both. In other words, the Liberian dollar is on a parity rate of one to one with the United States dollar, and that is the law which remains effective until amended or repealed by the National Legislature and the Judge exceeded his authority by assuming the function of the Legislature in making law, and not merely interpreting the law, which is the proper role of the judiciary.

In their returns, the respondents contended that the judge did not commit any error in that it is the duty of the trial judge, when passing on law issues, to say which law will be applicable to the facts during the trial. In the instant case, the judge correctly interpreted the law and ruled out from applicability to the trial the subject sections.

Respondents in support of the judge’s ruling contended that section 71.5 of the Revenue and Finance Law is not applicable to a case where the parties have a lawful agreement which provides for use of a foreign currency; also, that this section is further not applicable in that it contains criminal sanctions for its violation and must therefore be strictly construed. In this connection, this section makes reference to “coins” only and not to any other form of currency.

Respondents further contended that petitioner has not challenged government’s non-enforcement of this law; nor government’s change of policy in respect of the said law; and nor the judge’s citation of the Legislature’s wisdom in enacting an amendment to chapter 11 of the said Revenue and Finance Law, requiring the payment of certain taxes in foreign currency, i.e. United States dollars.

It is respondents’ further contention that there is a prevailing legal view that where a statute is not used, coupled with a change in government policy and an enactment by the Legislature of a new statute which is irreconcilable and opposed to the old or existing law, then that old law is thereby repealed.

Respondents contended further that section 20 of the National Bank Act, and for that matter, the whole of this Act, although acceptable de facto, said Act never can be a law because it was never published in keeping with law,. for it is a universally acceptable and fundamental jurisprudential principle of law that no statute which has not been duly published shall be considered as law.

Respondents have contended that certiorari will not lie to have this Court review a case in piecemeal, and where an issue of law has been determined by the trial judge before trial and the ruling appears prejudicial, it is only after the trial of the facts has been concluded that a true determination of prejudice can be ascertained. Further, the written agreement between the parties, which is essential to the case has not yet been presented to the Court or ruled into evidence. Respondents contend that certiorari will not lie to review an interlocutory ruling on law issues.

The Justice in Chambers held that certiorari will not lie to review a ruling on law issues where the petitioner has an adequate remedy by way of appeal. Further, the Justice held that the ruling did not materially prejudice petitioner as the agreement, which is essential to the determination of the debt matter, has not been presented into evidence and rejected by the trial judge; that the rights of petitioner will be determined upon the presentation of the addendum, and that petitioner is not precluded to plead the other counts of its answer which also raised its defense in the count overruled by the judge.

The facts are that, in 1916, the Late James F. Cooper entered into a lease agreement as Lessor, with CFAO as Lessee, for his property situated on Water Street, Monrovia. In 1974 the parties met and renegotiated the rental contained in the lease since said rental was stated in British Pound Sterling, which was the currency in use in Liberia when the lease was executed in 1916;

On November 17, 1975 an addendum to the lease was executed wherein CFAO proposed to pay the Cooper family an annual rental of US$12,000.00 or its equivalent in the national currency in circulation in the country. The Cooper family accepted CFAO’s offer and CFAO drew up the addendum. After the expiration of the optional period November 17,1975 to April 30,1996, CFAO turned over the leased premises to the Cooper family but did not pay the rent agreed upon and therefore the Cooper family sued out an action of debt to recover the long overdue rent of US$96,000.00 which had not been paid for the years 1989 through April 30, 1996 at the rate of US$12,000.00 per annum, despite respondents demands for payment by petitioner.

When pleadings rested, with the defendant and plaintiff filing their answer and reply, the trial judge ruled on the law issues on October 15, 1996, to which defendant excepted and on November 14, 1996, filed a nine-count petition for a writ of certiorari. The alternative writ was issued and the proceedings stayed.

From a review of the pleadings before the trial court and the briefs filed by the parties, the Court observes that the defendant below did not deny the existence of the agreement or the provision that the rental to be paid shall be US$12,000.00 or its equivalent in the national currency in circulation. From the arguments by the parties, the only point of disagreement between the parties is on the word “equivalent.”

The petitioner contends that the rental should be paid in local currency and as such it should be L$12,000.00 (Twelve Thousand Liberian dollars) since under section 71.5 of the Revenue and Finance Law, and section 20 of the National Bank Act, a parity rate between the US dollars and the Liberian dollars is one to one and so the $12,000.00 stated in the addendum can be either US$12,000.00 or L$12,000.00. On the other hand, the respondents concede the provision of US$12,000.00 or its equivalent in local currency and also, they agree for it to be paid in Liberian dollars except that US$12,000.00 is not L$12,000.00 but rather is Liberian dollars at the prevailing market exchange rate of US dollars to Liberian dollars. In other words, according to respondents, the US$12,000.00 to be paid in Liberian dollars amount not to merely LD$12,000.00 but to LD$480,000.00 at the rate of 40 to 1 (forty to one).

This Court is now called upon to determine the applicability of the word “equivalent.” Both parties have a different interpretation or definition; petitioner says it bans the legal rate of one to one, whereas respondent says it means the ordinary market value. The word “equivalent has been defined as (1) “equal in value, measure, force, effect, significance, etc. (2) corresponding in position, function. (3) Having the same extent.” WEBSTER’S ENCYCLOPEDIA DICTIONARY OF THE ENGLISH LANGUAGE 482 (Unabridged rev. ed ).

The word equivalent imports the concept of equality, or oneness; in the dictionary definition above, the word equivalent means equal in value, effect and significance.

With this in mind, what can we say is the Liberian dollar equivalent of the US$12,000.00 owed to respondents by petitioner? Is US$12,000.00 one and the same with L$12,000.00? If these two currencies are one and the same or interchangeable as provided by law, how many people including petitioner would accept L$12,000.00 in settlement of an obligation of US$12,000:00? Are the currencies equal in value, equal in effect and equal in significance?

It is respondents’ contention that the word “equivalent” means the same value at the market level and that the two currencies must have the same purchasing power. This interpretation appears more plausible and convincing. This Court holds that the word “equivalent” in this case, refers to the actual value or purchasing power of the dollar, the significance and effect of the rate of exchange on the value of the dollar.

Note that when this addendum was executed in 1975, the US dollar was in free circulation in Liberia as the only bank note; the Liberian dollar was limited to coins. That must account for the only reference in the Revenue and Finance Law on which petitioner has relied (section 71.5) and the National Bank Act (Section 20) to Liberian currency as being in the form of “Coins”. There was no Liberian Bank Note in circulation at that time; in fact not until 1988/89 when former President Samuel K. Doe printed the L$5.00 bank note, having earlier in 1982 minted the L$5.00 Coin. Therefore, in 1975 the parties did not conceive or foresee that the day would (have) come when there would be a separate Liberian Dollar Bank Note on par with the US Dollar Bank Note.

Another thing to note is that in 1916, the medium of exchange was the British Pound Sterling. When the parties renegotiated in 1975, it was CFAO that proposed to pay US$12,000.00 or its equivalent in national currency, which proposal was accepted. It is further important to note that it was CFAO who drew up the addendum. This new agreement sought to upgrade the rental because it was clear that the rental under the original 1916 agreement was grossly inequitable and disproportionate as to the lessors-the Cooper family.

The question is, if in 1975 the parties sought to upgrade the value and quality of the rent, is it fair and reasonable to conclude that in 1996 they would seek to degrade and devalue it? One would think not.

To bring this point home, in 1975, US$12,000.00 was just what it said, $12,000.00; but in 1996 and certainly today, 1999, US$12,000.00 is not L$12,000.00. With the exchange rate at forty to one (40 to 1) US$12,000.00 is L$480,000.00. Even the Government of Liberia recognized the disparity in the actual purchasing power of the Liberian dollar and decided to collect certain taxes in United States dollars, by virtue of an amendment to the Revenue and Finance Law in 1982 and by Ministry of Finance Administrative Circular dated July 30, 1994.

So to answer the question of what is meant by equivalent, one must look to the intent of the parties at the time of the execution of the addendum. It is a settled principle of law that among the requisites to the formation of a contract is that there must have been the mutual assent of two or more persons competent to contract, founded on a sufficient and legal consideration to perform some legal act or to omit to do something, the performance of which is not enjoined by law. It is settled that the entry of parties into a contractual relationship must be manifested by some intelligible conduct, act, or sign. The apparent mutual assent of the parties, essential to the formation of a contract, must be gathered from their outward expressions and acts, and not from an unexpressed intention.

It is said that the meeting of minds, which is essential to the formation of a contract, is not determined by the secret intentions of the parties, but by their expressed intentions, which may be wholly at variance with the former. The question whether a contract has been made must be determined from a consideration of the expressed intention of the parties, that is, from consideration of their words and acts. Bestman v. Acolatse, [1975] LRSC 8; 24 LLR 126 (1975).

Construction of agreements to recover real property as a sale or a mortgage is depended upon the intention of the parties. The question is one of intention to be decided from a consideration of the whole transaction and not from any particular feature of it. Bryant v. Harmon, [1956] LRSC 18; 12 LLR 330 (1956).

Therefore , the intention of the parties in the instant case has to be gathered from their action. In 1975 they renegotiated the lease and executed the addendum with a view to improving the benefit that would come to the lessors. Therefore, it is not reasonable to conclude that by 1996 the value would go down. The agreement is clear when it specifically provided for US$12,000.00; the other half of the clause is where the interpretation is required, as to the “equivalent in circulation in the country.”

Generally, ambiguous language of a written agreement will be construed against a party by whom the agreement was drawn. A written agreement should in the case of doubt, be interpreted most strongly against the party who has drawn it. Sometimes the rule is stated to be that where doubt exists as to the interpretation of a instrument prepared by one party thereto, upon the faith of which the other has incurred an obligation, that interpretation will be adopted which will be favorable to the latter. Rached v. Knowlden, 13 LLR 60 (1957).

Common sense and good faith are the leading characteristics of all constructions of contracts and the rules for the interpretation of contracts are intended for persons of common understanding. It has accordingly been said that the construction of a contract as to its operation and effect will, after all, depend less on artificial rules than on the application of good sense and sound equity to the object and spirit of the contract in the given case. It is the substance of an agreement rather than its form that is, the spirit and purpose rather that the letter of the agreement—which must control its construction.

It has been said that the standard of interpretation of a written instrument, except where it produces an ambiguous result, or is excluded by a rule of law establishing a definite meaning, is the meaning that would be attached to such instrument by a reasonably intelligent person acquainted with all operative usages. It has been held that the law of contracts does not judge a promisor’s obligation by what is in his mind, but by the objective test of what his promise would be understood to mean by a reasonable man in the situation of the promisee. 17 AM. JUR. 2d, Contracts, § 243.

In the construction or interpretation of contracts, the primary purpose and guideline, and indeed the very foundation of all the rules for such construction or interpretation, is the intention of the parties and the fundamental and cardinal rule in the construction or interpretation of contracts is that the intention of the parties to be ascertained. /bid , § 244.

Construction is the process, or the art of determining the sense, real meaning, or proper explanation of obscure, complex or ambiguous terms or provisions in a statute, written instrument, or oral agreement, or the application of such subject to the case in question. BLACK’S LAW DICTIONARY 312 (6th. ed.1990).

The renegotiation of the lease in question was proposed by CFAO and it was CFAO who drew up the addendum and therefore in case of a doubt or ambiguity then the contract must be construed more favorably in favor of the Cooper Family, Lessors, and we so hold. This Court therefore interprets the word “equivalent” to mean the actual market value of the dollar and not necessarily the legal par value set in the Revenue and Finance Law, because that parity is unreasonable and unrealistic and impractical.

Now that we have decided the question of the interpretation of the word “equivalent”, we shall now turn to the basic question of whether or not certiorari would lie.

This Court has held over and again that certiorari will not ordinarily be granted to review an interlocutory ruling on a question of law. Raymond Concrete Pile Company v. Perry and Hamilton, 13 LLR 522 (1960).

The question sought to be reviewed is that the trial judge erred in his ruling that the relevant sections of the Revenue and Finance Law and the National Bank Act were obsolete. Petitioner contended that the judge assumed a legislative function. As determined by the Justice in Chambers, this Court holds that this issue is a fit subject for regular appeal. The Chambers Justice held, and we agree, that the disposition of law issues did not extinguish petitioner’s rights on the issue of the one to one parity rate of the US dollar to the Liberian dollar because the same issue is also raised in other counts of the answer ruled to trial. He ruled further that the addendum, which is the essence of this case, has not been presented into evidence and rejected by the trial judge and that the rights of petitioner will be determined upon the presentation of the addendum. Certiorari will not lie to review a case which did not proceed to trial, and that the interlocutory ruling in this case does not terminate the case in its finality as the main question of the debt action, which is to determine the intent of the parties in the addendum, remains undetermined by the trial court during the disposition of law issues and said intent of the parties will be determined at the trial. John v. Morris, 13 LLR 101 (1957); Farrow v. Decorsey, [1893] LRSC 2; 1 LLR 243 (1893).

This Court is in full harmony with the ruling of the Chambers Justice, for which reason, his said ruling will remain undisturbed, and is hereby affirmed, and the parties ordered to return to the trial court and proceed with the trial of the facts in this case since the issues have already been disposed of. Certiorari does not lie and the petition is hereby denied. The alternative writ is quashed and the peremptory writ refused and the proceedings dismissed. There are other issues raised by the parties which do not go to determining this case at this level and so the Court did not find it fit to comment on them.

The Clerk of this Court is hereby ordered to send a mandate to the Debt Court for Montserrado County ordering the presiding judge to resume jurisdiction and proceed with the trial of the facts in this case, since the law issues have already been disposed of. Costs to abide final determination. And it is hereby so ordered.

Petition denied; judgment affirmed.