IMAD FARHAT, ARMED FARHAT and HUSSEIN EZZEDINE, Petitioners, v. WAJDI GEMAYEL and HER HONOUR C. AIMESA REEVES, Judge, People’s Debt Court for Montserrado County, Respondents.

APPEAL FROM THE RULING OF THE CHAMBERS JUSTICE DENYING THE PETITION FOR THE WRIT OF PROHIBITION.
Heard: April 9, 1986. Decided: May 30, 1986.

1. An action of debt is an action to enforce the payment of a sum of money which the defendant has contracted to pay to the plaintiff.
2. Where a contract has been fully performed and executed on the plaintiff’s part, an action of debt is the proper form of action to enforce payment due from defendant on the contract.
3. An action of debt is the proper form of action when the transaction is one growing out of contract expressed or implied, other than for non-performance, damages or injunction.
4. When rigidity of the law and legal technicalities prevent social justice, the Legislature will enact amendments so as to make way for equitable adjustment.
5. The fact that an appeal from a judgment in an action of debt is not a stay of enforcement does not mean that the principle or function of an appeal is thereby abolished by decree #12. Rather, the decree attempts to address the unnecessary delays occasioned by appeals in factual matters such as a debt action.
6. The losing party in an action of debt not only has the chance, but also the right, to recover against the successful party in the Debt Court if the decision of the said court is reversed upon determination of the appeal by the Supreme Court.
7. Courts should never declare a statute unconstitutional unless its invalidity is, in their judgment, beyond a reasonable doubt.

Wajdi Gemayel filed an action of debt against Imad Farhat et al., defendants, in the Debt Court of Montserrado County to recover funds to repair fire damages to his premises in keeping with an assurance promissory agreement between Gemayel and the others. The debt court judge rendered judgment on December 19, 1985 in favor of the plaintiff in the amount of $225,000. The defendants excepted and announced an appeal to the Supreme Court.

In the meantime, the debt court judge proceeded to enforce his judgment. In order to stay enforcement of the judgment, defendants petitioned the Justice in Chambers for a writ of prohibition. On the one hand, plaintiff/respondents maintained that the Interim National Assembly (INA) Decree #12 empowers the debt court judge to enforce a judgment while an appeal is pending. Defendant/petitioner, on the other hand, contended the decree was unconstitutional as it violated Article 20(b) of the Liberian Constitution of 1986 which essentially provides that “the right of an appeal from a judgment, decree, decision or ruling of any court or administrative board or agency, except the Supreme Court, should be held inviolable. Subsection (a) of the same article 20 also forbids the depriving of a person of life, liberty, security, property, privilege and right without due process of law. The Chambers Justice quashed the alternative writ and ordered the judge of the lower court to enforce his judgment. The petitioners appealed to the full bench.

In their brief before the full Bench, petitioners also raised the issue of whether or not the debt court judge had jurisdiction over the subject matter since the breach of the promissory assurance agreement is not necessarily a debt action. The Court observed that each petitioner owed respondent a certain amount for repairs under the promissory assurance agreement, and failure to make payment of the amount owed was proper matter for the debt court to resolve. The Court also affirmed the Chambers Justice ruling on the constitutionality of INA decree #12, adding that some legislations, such as the decree in question, are designed to provide equitable adjustment “when the rigidity of the law and legal technicalities prevent social justice.”

Toye C. Barnard appeared for the appellants/petitioners. Joseph P. Findley appeared for the appellees/respondents.

MR. CHIEF JUSTICE NAGBE delivered the opinion of the Court.

These proceedings have grown out of an action of debt filed by one Wajdi Gemayel in the Debt Court for Montserrado County. The case was regularly tried and final judgment therein was rendered on December 19, 1985; appellants/petitioners herein, defendants below, excepted to said judgment and prayed for an appeal to this Honorable Court. Although the appeal was granted, the judge of the debt court proceeded to enforce the judgment. Whereupon, counsel for appellants filed before the Justice in Chambers, His Honor Elwood L. Jangaba, a petition for a writ of prohibition to prevent enforcement of the judgment. In order to make a long matter short, we hereby quote in its entirety the ruling of the Chambers Justice in order for the reader to fully appreciate what transpired: ” RULING “This Petition for a writ of prohibition emanated from an earlier action of debt heard and decided by the Debt Court of Montserrado County in the second half of the month of December, 1985. The regular trial commenced on December 16, 1985, and final judgment rendered on December 19, 1985, with the parties duly represented. It was against the judgment in that action that the alternative writ of prohibition was issued commencing the present action. The facts are that fire, originating from petitioners’ store, gutted down their own store at Waterside, along with that of the respondent in these prohibition proceedings. Believing that said fire had not been deliberately started by petitioners, and since all parties involved were Lebanese nationals, it was agreed before Lebanese Embassy officials that petitioners whose store was insured by an American insurance company should refund whatever expenditures are incurred by respondent in the repair and renovation if the said insurers honored their obligations to indemnify petitioners. But it was further agreed between the parties that should said insurance company refuse to honor said obligation, then the two parties, all together six (6) in number, were to share the total expenses involved in renovating and reconditioning respondent’s building, with each paying one-sixth (6) of the total cost. Two documents, both captioned promissory assurance, with one dated 7/5/84, signed by the parties and witnessed and issued by the Lebanese Ambassador, and another, also signed by the parties, witnessed and issued by the Consul of Lebanon, are proferted. According to those documents, Messrs. Imad Farhat, Abdel Karim Selman, Ahmed Farhat and Hassen Ezzedine are party of the first part, and Mr. Wajdi Gemayel signed as party of the second part.

The second promissory assurance agreement spells out the terms of the agreement more fully as to cost and the parties. It indicates the parties above and the total cost of reparation as $225,000.00 (TWO HUNDRED AND TWENTY-FIVE THOUSAND DOLLARS) only.

The first promissory assurance agreement, however, spells out their obligations much more fully as follows: It relates that the fire was caused by an unpremeditated explosion, that both parties met at His Excellency, the residence of the Ambassador of Lebanon and that they agreed in full conscience and responsibility to the following:

`1. Since the fire exploded spontaneously without premeditation, and since the first party has insured its properties; as the second party does not have insurance for constructing and restoring,’ the first party has undertaken on behalf of the second party to cover damages to build and restore.

`2. In the event the insurance is not paid, the losses will be divided equally between both parties in six portions.’

It was on the basis of said promissory assurance agreement that respondent sued petitioners in this case. It should be noted that Mr. Abdel Karim Selman had honored his part of obligations under said agreement by paying the one sixth (1/6) of the total obligations that each of the parties was expected to pay to respondent to defray the cost of repairs caused by the fire disaster originating from petitioners store.

The complaint filed by respondent in the debt action alleged that the petitioners had failed to honor their obligations under the promissory assurance agreement which, requires that the total indebtedness, if not paid due to the refusal of petitioners’ insurers to honor their obligations, would be divided into six parts, one-sixth to be paid by each of the parties involved.

But that up to the time of filing this suit petitioners had refused to “honor their own obligations under the agreement, while respondent had performed his obligation by rebuilding and making other necessary repairs contemplated by said agreement.

Defendants below, petitioners herein, did not deny their obligations especially as recalculated by the trial judge. However, they contended that payments under said agreement were only to be made if the insurers refused to honor their obligations to them, and that the suit of debt was premature since said petitioners were pursuing legal action in the United States of America to oblige said insurers to pay.

Therefore, they proferted a copy of each of the following: a subpoena issued by the court trying the matter in the United States; a telex message by petitioners legal counsel in the United States; and a covering letter confirming said telex message.

At the end of said debt action the court rendered judgment in favor of respondent, to which petitioners excepted and announced an appeal to this Court. The appeal was accordingly granted but the court shortly thereafter proceeded to start the enforcement of the said judgment despite the appeal, maintaining that the appeal does not serve as a stay to enforcement of its judgment under the law. But the petitioners were dissatisfied by the conduct of the court with regards to the enforcement of its judgment after an appeal had been announced and granted. Consequently, they filed this petition for a writ of prohibition to restrain said court from enforcing its judgment until the appeal has been heard and final judgment rendered.

In his returns to said prohibition proceedings, the respondent maintained that the prohibition should not be granted for the following reasons: firstly, because he contended that the ground alleged by petitioners is a proper ground for an appeal and not prohibition; secondly, that a fair trial was had since petitioners had their day in court, and they never denied the amount of indebtedness or their obligation to pay it; thirdly, they maintained that the Interim National Assembly (INA) Degree No. 12 provides that the announcement and granting of an appeal in an action of debt does not serve as a bar to enforcement of the court’s judgment; and finally, that the petition merely intended to delay the enforcement of judgment for the mere purpose of harassment and delay.

From the foregoing analysis of the said petition and returns thereto, we are of the conviction that the main issues for our determination are three:

1. Whether or not payment of said obligation under the promissory assurance agreement was for payment by petitioners’ insurers in the U. S?
2. Whether or not there has in fact been such a denial of payment by petitioners’ insurers?
3. Whether or not under our laws an appeal can serve as a supersedeas or a bar to the enfdrcement of judgment in debt action in Liberia?

Regarding the first issue in this petition, the promissory assurance agreement clearly indicates that each petitioner had promised to pay one sixth (1/6) of the total expenses incurred by respondent in case their insurers in the U. S. refused to honor their obligations under the insurance contract. That fact is not disputed by either side in this case.

On the second issue as to whether or not the insurers of petitioners in the U. S. had actually refused to honor their obligations under the insurance contract, we hereby cite relevant portion of the telex sent by attorneys of the petitioners who are litigating the latter’s insurance claims in the U. S., which form an important part of this action.

‘THE INSURANCE COMPANIES HAVE DECLINED PAYMENT AND ARE DEFENDING. NO PAYMENT HAS BEEN MADE TO DATE AND NONE IS ANTICI-PATED FOR THE FORESEEABLE FUTURE PENDING THE OUTCOME OF THE LITIGATION IN PROGRESS.’

The above citation leaves no doubt in the minds of reasonable people that, in fact, the insurers had declined to honor any obligations under their contracts with petitioners, and therefore the latter had to resort to an uncertain litigation on a foreign continent before he might obtain compensation. Our understanding of the promissory assurance agreement is that the expenses due respondent were to be paid to him upon the refusal of their insurers in the U. S. to honor their obligations to them. The payment was not contingent on the outcome of any uncertain litigation across the ocean. It was the mere refusal of obligations and not the conclusion of litigation growing out of said refusal that was to immediately obligate each of the petitioners to pay one sixth (1/6) each of the total indebtedness to respondent. And from the telex cited supra, it can in no way be denied that, in fact, the insurers have refused to pay and therefore the obligations of each of the petitioners to respondent for a sixth (1/6) of his expenses thereby matured since the date of that telex which was early last year.

Finally, we will next determine whether or not the announcement and granting of an appeal operate as a stay to the enforcement of a judgment of debt in this country. As of October 24, 1985, by the INA Decree No. 12, it became legitimate in this jurisdiction that in actions of debt, the announcement and granting of appeal serve as no bar to immediate enforcement of the judgment of the debt court. The Decree amended section 4.2 of the New Judiciary Law as earlier amended by Decree No. 6. The relevant position on appeal states: ‘Appeal from a judgment of the debt court in an action of debt shall not operate as a stay in the enforcement of the judgment thereof, except where the other party was denied his day in court, or where the amount of indebtedness is in dispute.’ (emphasis added)

From what we know, the announcement and granting of an appeal in an action of debt no longer operate as a stay to enforcement of judgment. It can only be a stay where the other party was denied his day in court or if the amount of indebtedness is uncertain.

There is nothing in the records of this case to indicate that any of the said exceptions obtained therein. The parties in this case had their day in the court below and the sum involved is certain to all intents and purposes. Therefore, it is our holding that the appeal granted below cannot serve as a stay of execution of the judgment in the circumstances of this particular case.

From the foregoing, we are of the opinion that the regular appeal announced by petitioners below should have been pursued instead of abandoning it for a writ of prohibition. The rationale is that there are options which, if exercised, and should petitioners succeed will, at the conclusion of the appeal, place the parties in their original position before enforcement. But the clear words of the said statute cannot be abandoned here for mere fancies.

Wherefore and in view of the foregoing, the alternative writ of prohibition is hereby quashed, and the judge of the court below is hereby directed to resume jurisdiction in the debt action and enforce the judgment therein, without prejudice to petitioners herein to further pursue their appeal. AND IT IS HEREBY SO ORDERED.”

Appellants excepted to the ruling and announced an appeal to the bench en banc. Although the appeal was granted, the trial court was ordered to proceed with enforcement of the judgment in accordance with the ruling herein quoted. At this juncture, counsel for appellants, in order to stop the enforcement, filed before the Chambers Justice what he captioned “Motion to Stay Enforcement of Judgment,” raising constitutional issues to the effect that Decree no. 12 of the Interim National Assembly, amending section 4.2 of the Judiciary Law with respect to actions of debt, which provides, inter alia,that “Appeal from a judgment of the debt court in an action of debt shall not operate as a stay in the enforcement of the judgment thereof . . . “, is unconstitutional. The case was thereupon referred to the full bench for determination.

The issues ‘raised are contained in counts 5 and 6 of said motion, which are herewith quoted, as follows:

“5. That movants submit that Decree no. 12 violates Article 20(b) the Constitution of Liberia which provides that the right of an appeal from a judgment, decree, decision or ruling of any court or administrative board or agency, except the Supreme Court, shall be held inviolate.’ To enforce the judgment from which an appeal has been taken is unconstitutional and violates the constitutional rights of the movants in this case.

“6. Article 20 (a) of the Constitution also forbids depriving a person of his life, liberty, security, property, privilege and right without due process of the law. To deprive the movants of their right to appeal and to compel them to comply with the judgment of the lower court despite their announcement of an appeal, and the approval of their bill of exceptions by the trial judge, is in violation of their constitutional rights and a deprivation of their right and property without due process of the law.”

The Decree in question is quoted hereunder:

DECREE NO. 12 DECREE BY THE INTERIM NATIONAL ASSEMBLY OF THE REPUBLIC OF LIBERIA AMENDING SECTION 4.2 OF THE NEW JUDICIARY LAW WITH RESPECT TO ACTIONS OF DEBT It is hereby decreed by the Interim National Assembly of the Republic of Liberia as follows: SECTION 1. Section 4.2 of The New Judiciary Law, as last amended by Decree No. 6, is hereby further amended to read as follows:

SECTION 4.2 JURISDICTION AND PROCEDURE The Debt Court shall have exclusive original jurisdiction of all civil actions to obtain payment of a debt in which the amount is $2,000.01 or more. It shall not exercise original jurisdiction where the amount involved is less thin $2,000.01. The procedure of the Debt Court and the method of enforcement of its judgment shall be the same as the Circuit Court in civil actions. Appeal from a judgment of the Debt Court in an action of debt shall not operate as a stay in the enforcement of the judgment thereof, except where the other party was denied his day in court; or where the amount of the indebtedness is in dispute. Nor shall the institution of remedial proceedings operate as a stay in the enforcement of such judgment except where the other was denied his day in court or where the amount of the indebtedness is in dispute. And the Debt Court shall exercise concurrent jurisdiction with the Circuit Courts in the issuance of the writ of NE EXEAT REPUBLICA in matters arising out of debt cases.

Assignment for trial, or the hearing of law issues in debt cases shall be limited to two (2) and all interlocutory motions or pleadings shall be entertained only on the following grounds:

a) Illness of counsel (if there is only one) authenticated by a certificate from a licensed medical doctor.

b) Absence of material witnesses when verified or as provided by existing law.

SECTION 2. This Decree shall take effect immediately upon the signature of the Head of State and President of the Interim National Assembly, ANY LAW TO THE CONTRARY NOTWITHSTANDING.”

In their brief filed in this case and during arguments before Court, the appellants raised the question of lack of jurisdiction by the debt court over the subject matter. Appellee on the other hand contended that debt was the proper form of action in that the parties having agreed to “pay restoration fees” to appellee and a portion of such fees having already been paid by one of the parties, such action ought to be an action of debt.

Ballantine’s Law Dictionary defines debt as:

“A common law action for recovery of a fixed and definite sum of money or for a sum of money which can be ascertained from fixed date by computation or is capable of being readily reduced to certainty . . . or That thing which is owing to a person under any form of obligation or promise including obligations arising under contract, obligations imposed by law without contract, even judgment.”

These definitions concur with several opinions of this Court, among which are the following:

Dormah v. Pierce, [1951] LRSC 6; 10 LLR 420 (1951): “An action of debt is an action to enforce the payment of a sum of money which the defendant has contracted to pay to the plaintiff.”

Witherspoon v. Grigsby, [1939] LRSC 8; 7 LLR 6 (1939) “Where a contract has been fully performed and executed on the plaintiffs part, an action of debt is the proper form of action to enforce payment due from defendant on the contract.

Republic v. The Estate of W. S. Anderson, [1878] LRSC 6; 1 LLR 97 (1878). “An action of debt is the proper form of action to be chosen when the action in one growing of contract, expressed or implied, other than for non-performance, damages or injunction.”

According to the records already recounted herein, the parties agreed that each appellee will pay $37,500.00, representing one sixth (1/6) of $225,000.00 as restoration fees if appellants’ “insurance is not paid.” The agreement also provides that appellee should proceed with the work of restoration of his store pending settlement of appellants’ insurance claim. Appellee completed the restoration work and one of the parties to the agreement, Abdel Karim Selman, paid his portion of the amount, that is, one sixth (1/6) of the restoration amount to the appellee in keeping with the agreement. Hence, the action for recovery of the balance from the others, in keeping with the facts, has to be an action of debt over which the debt court has jurisdiction.

We now come to the issue of whether or not the Interim National Assembly Decree no. 12, which permits enforcement of a judgment in an action of debt despite the taking of an appeal is unconstitutional. Besides Decree no. 12, there are other statutes like the one on maintenance and support and another one on summary proceeding to recover possession of real property. In these two instances, appeals taken do not serve as supersedeas although the appeals are granted. The Maintenance and Support Statute was enacted since 1935.

In 1929 when the Legislature discovered that tenants at will were abusing the right of appeal by frustrating those having the right of possession to real property through the use of appeals, the statute on summary proceeding to recover possession of real property was passed. That Act provided that appeals in such proceedings should not stay enforcement of judgments pending determination of such appeals. The Act was amended in 1945 and in 1963, modified to provide that appeals from judgment in such actions, while permitted to operate as supersede as in justices of the peace and magistrate courts, can nevertheless not operate as such in judgments rendered in the circuit courts in said cases. And now comes Decree no. 12 which provides that an appeal from a judgment in an action of debt shall not operate as a stay in the enforcement of the judgment thereof.

During arguments in the case at bar, counsel for appellants argued that all these statutes providing for enforcement of judgment despite the granting of appeal are unconstitutional since such appeals do not operate as supersedeas.

The Constitution and statutory laws are made to serve the need of the people and for the benefit of society. As times progress, they are refined and made consistent. Thus, the Constitution and laws are usually amended for improvement in the lives and for better regulations of the affairs of people for whom they are made. As the need arises and as a result of experience, laws are adjusted to answer the needs of the people.

When rigidity of the law and legal technicalities prevent social justice, the Legislature will enact amendments so as to make way for equitable adjustment. Thus in 1935 the Legislature saw the need to amend the Maintenance and Support Statute to provide for the enforcement of a judgment thereunder while an appeal was pending, so that the abandoned mother with a child could receive support and have their basic needs met until the appeal was determined.

Prior to the passage of this amendment by the Legislature, irresponsible fathers abandoned wives with children, and when maintenance and support suits were instituted and judgments rendered against them, they took refuge in appeals while the children and their mothers starved. It was to curb this kind of problem in the society that the said legislation was passed. It appears that the circumstances and considerations which gave rise to the enactment of those statutes are similar to those which obtain in the passage of Decree no. 12.

It is general knowledge that the question of non-payment of debt has been a serious problem in our society. Many attempts were made in the past to arrest the situation but with very little success. This negative situation has always led to the unwillingness on the part of lending institutions and commercial houses to extend credit facilities to our citizens. Indeed, non-payment of debts has often been given as an excuse by banking institutions and trading corporations for denying loans and credits to people. Creditors and lenders have argued that the final determination of debt cases takes very long due to the procedural nature of appeals, and that they therefore find themselves frustrated when such matters for recovery of money due are submitted to the courts for adjudication. Hence, there is widespread reluctance on the part of these institutions and other creditors to provide lending facilities to enterprises and individuals.

Recognition of this problem and the effect it has on our society and economy can be readily seen from the recent “Report of The National Commission For The Review And Revitalization of the Economy.” After touching on the problem of debt collection and reviewing the situation, it says in part that:

“The Commission realizes that one of the basic underpinnings of the free market economy of Liberia is the granting of credit by financial institutions and other lenders to business enterprises and individuals to facilitate the undertaking of commercial, industrial and economic development activities. The Commission further observed that one of the major factors affecting loans to borrowers is the speedy and adequate recovery of overdue and outstanding debts. Unnecessary delay in the recovery of outstanding debt tends to impede economic activity . . . .”

Apart from the legal obligation created by a debt transaction, a debt obligation is also a moral one weighing on the conscience. In most instances, it deals with facts and figures which are usually not complex. Such contracts between two parties or individuals, being unambiguous, really do not require too much law to interpret them as would warrant prolonged litigation. But because of the principle of due process, which include the right of appeal, debtors have always taken advantage of that and have frustrated efforts of creditors and lenders to collect the debt by the use of remedial processes and appeals. A debt transaction, being one of conscience and of law, should not give rise to protracted litigation. Rather, the relationship between the parties should be based on honesty, confidence, faith, and mutual respect and understanding as befits such a contract based on trust. It is in order to arrest the situation and minimize the problem that the Interim National. Assembly passed Decree no. 12.

A closer look at Decree no. 12 shows that the right of appeal is therein preserved, but it merely does not serve as a stay pending final determination of the appeal. More significantly, the losing party in an action of debt who takes an appeal not only has a chance, but also the right to recover against the successful party in the debt court should the said court decision be reversed in his favor upon determination of the appeal by the Supreme Court. It means that the appealing party can regain his status quo ante as a result of the appeal. Consequently, the fact that an appeal from a judgment in an action of debt does not serve as a stay of enforcement of said judgment does not mean that the principle or function of the appeal process is thereby abolished by Decree no. 12. Rather, Decree no. 12 attempts to address the unnecessary delays occasioned by appeals in normally factual matters such as debt transactions. The problem should also be looked at as a social one which should be given some attention.

Does Decree no. 12 however violate Article 20 (a) or (b) of the Constitution relating to the right of appeal and therefore should be declared unconstitutional? In Bryant et al v. Republic[1937] LRSC 27; , 6 LLR 128 (1937), this Court laid down the principle that:

“Courts should never declare a statute unconstitutional unless its invalidity is in their judgment beyond a reasonable doubt.” Mr. Justice Tubman, speaking for the Court, expounded further on this principle at pages 135-136 of the text, as follows:

“while it is an axiomatic principle of the American system of constitutional law which has been incorporated into the body of our law that the courts have inherent authority to determine whether statutes enacted by the Legislature transcend the limits imposed by the Constitution and to determine whether such laws are not constitutional, courts in exercising this authority should give the most careful considerations to questions involving the interpretation and application of the Constitution, and approach constitutional questions with great deliberation, exercising their power in this respect with the greatest possible caution and even reluctance; they should never declare a statute void unless its invalidity is, in their judgment, beyond a reasonable doubt. It has been held that to justify a court in pronouncing a legislative act unconstitutional the case must be so clear as to be free from doubt, and the conflict of the statute with the Constitution must be irreconcilable, because it is a decent respect to the wisdom, the integrity, and the patriotism of the legislative body by which all law is passed to presume in favor of its validity until the contrary is shown beyond reasonable doubt. Therefore, in no doubtful case will the judiciary pronounce a legislative act to be contrary to the Constitution.”

In view of all that has been stated, as well as the authorities cited, and in light of the fact that Decree no. 12 does not deprive a party-litigant of his right to appeal, it is the opinion of this Court that said Decree does not violate Article 20(a) and (b) of the Constitution as contended by the appellant. The Decree is therefore not unconstitutional. Hence, the ruling of the Chambers Justice is affirmed. The court below is hereby ordered to resume jurisdiction over the case and enforce its judgment. Costs against the appellants. And it is so ordered.

Petition denied