[2005] UGCommC 54
The court found that the plaintiffs, as representatives of Enos Bagenda Foundation, advanced a loan of UGX 20,000,000 to the defendants, secured by deposit of the title deed to the specified property, thereby creating an equitable mortgage. The loan was to be repaid in three months, interest-free, but upon default,...
Source-derived case information.
- Citation
- [2005] UGCommC 54
- Parties
- Plaintiff: Kajoba George William, Sebagala Fred, Kajoba Patrick, Ndaka Enock for and on behalf of Enos Bagenda Foundation; Defendant: Stephen Kisitu; Defendant: Evelyn Kisitu
- Court
- Commercial Court of Uganda
- Jurisdiction
- Uganda
- Case Number
- HCT-00-CC-OS 5 of 2005
- Procedural Posture
- Originating Summons / Judgment
- Outcome
- judgment_for_plaintiff
- Legal Topics
- Equitable Mortgage, Loan Default, Enforcement of Security, Interest Calculation
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Kajoba George William, Sebagala Fred, Kajoba Patrick, Ndaka Enock for and on behalf of Enos Bagenda Foundation
Plaintiff
Stephen Kisitu
Defendant
Evelyn Kisitu
Defendant
Procedural Posture
Originating Summons / Judgment
Legal Issues
- 1 Whether the defendants are indebted to the plaintiffs under the mortgage and in what amount.
- 2 Whether the plaintiffs are entitled to a charge on the mortgaged property and right of access.
- 3 Whether the plaintiffs are entitled to enforce the mortgage by sale upon default.
Ratio Decidendi
The court found that the plaintiffs, as representatives of Enos Bagenda Foundation, advanced a loan of UGX 20,000,000 to the defendants, secured by deposit of the title deed to the specified property, thereby creating an equitable mortgage. The loan was to be repaid in three months, interest-free, but upon default, interest at 5% per month would accrue. The defendants failed to repay the principal and interest, and no evidence was adduced to the contrary. The court held that the plaintiffs were entitled to recover the outstanding sum of UGX 27,000,000 (principal plus accrued interest), to a charge on the mortgaged property, and to enforce the mortgage by sale if the debt was not paid...
Court Disposition
judgment_for_plaintiff
Orders
- The defendants shall pay the sum of UGX 27,000,000 to the plaintiffs, plus taxed costs occasioned by this application.
- The plaintiffs as mortgagees are entitled to a charge on the mortgaged property (Freehold Register Volume 326 folio 1 Kyadondo Block 269 Plot 158 Lubowa Estate) and are granted right of access to the mortgaged land.
Full Case Text
Judgment text and source record
2 paragraphs
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\fs32\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\insrsid6052352\charrsid3615869 THE REPUBLIC OF UGANDA \par }\pard\plain \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\insrsid6052352\charrsid3615869 \par IN THE HIGH COURT OF UGANDA AT KAMPALA \par COMMERCIAL }{\fs24\insrsid15212320\charrsid3615869 COURT }{\fs24\insrsid6052352\charrsid3615869 DIVISION \par \par }{\fs24\insrsid12134039\charrsid3615869 HCT-00-CC-OS-}{\fs24\insrsid3872569\charrsid3615869 000}{\fs24\insrsid6052352\charrsid3615869 5}{\fs24\insrsid3872569\charrsid3615869 -}{\fs24\insrsid6052352\charrsid3615869 2005 \par \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 KAJOBA GEORGE WILLIAM \par SEBAGALA FRED \par KAJOBA PATRICK \par NDAKA ENOCK FOR AND ON BEHALF OF \par }\pard\plain \s1\ql \li0\ri0\sl360\slmult1\keepn\widctlpar\aspalpha\aspnum\faauto\outlinelevel0\adjustright\rin0\lin0\itap0\pararsid3615869 \fs28\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\insrsid6052352\charrsid3615869 ENOS BAGENDA FOUNDATION \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85.. PLAINTIFF \par }\pard\plain \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\insrsid6052352\charrsid3615869 \par VERSUS \par \par }\pard\plain \s1\ql \li0\ri0\sl360\slmult1\keepn\widctlpar\aspalpha\aspnum\faauto\outlinelevel0\adjustright\rin0\lin0\itap0\pararsid3615869 \fs28\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\insrsid6052352\charrsid3615869 STEPHEN KISITU \par EVELYN KISITU \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85.\'85 DEFENDANTS \par }\pard\plain \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\insrsid6052352\charrsid3615869 \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 \par BEFORE: HON JUSTICE LAMECK N. MUKASA \par \par JUDGMENT: \par \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 The plaintiffs were by a Representative Order in Miscellaneous Application No. 12 of 2005 issued on 19}{ \fs24\super\insrsid6052352\charrsid3615869 th}{\fs24\insrsid6052352\charrsid3615869 April 2005 appointed to represent all memb ers of Enos Bagenda Foundation, a voluntary, non-profit making association with forty-nine members. The plaintiffs claimed to have interest as mortgagees of the land comprised in Freehold Registrar Volume 326, Folio, Kyadondo Block 269 Plot 158 Lubowa Es tate, and file his application against Stephen Kisitu and Evelyn Kisitu. By way of originating summons under Order 34 rules 3A and 7 of he Civil Procedure Rules for determination of the following questions:- \par \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \qj \fi-360\li720\ri0\sl360\slmult1\widctlpar \jclisttab\tx720\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin720\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 That the Defendants (mortgagors}{\b\fs24\insrsid6052352\charrsid3615869 )}{\fs24\insrsid6052352\charrsid3615869 pay all the money due and owing to the plaintiffs (mortgagees) under the mortgage. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 2.\tab} That an account be taken of what is due to the plaintiffs from the defendants under and by virtue of the said mortgage as principal sum, interest and costs thereon. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 3.\tab}That a declaration be m ade that the plaintiffs/mortgagees are entitled to a charge on the mortgaged property/land and order be made empowering the mortgagees or their agents to have a right of access to the mortgaged land. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 4.\tab}That failure to pay the sum due and owing, pursuant to t he mortgage within 14 days from the date of service hereof on the Defendants, the said mortgage be enforced by the sale of the mortgaged property and an order be made setting down the terms for such sale. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 5.\tab}That the plaintiffs be awarded costs of this suit. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 6.\tab}That the plaintiffs be granted any further and other relief as this Honourable Court may deem fit. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 \par Order 34 rule 3A CPRs provides: \par \par \'93Any mortgagee a mortgagor whether legal or equitable, or any person entitled to a legal or equitable charge, or any person having the right to foreclose or redeem any mortgage, whether legal or equitable, may take out of course an originating summons, returnable before a judge in chambers, for such relief of the nature or kind following as may be by the summons specified, an d as the circumstances of the case may require, that is to say, sale, foreclose, delivery of possession by the mortgagor, redemption, reconveyance or delivery of possession by the mortgagee\'94 \par \par The Originating Summons were by Order of Court served on the Defendants by way of substituted service. The Defendants did not file any affidavit in reply or attend the hearing. Therefore hearing proceeded exparte. \par \par The application is supported by an affidavit sworn by Kajoba George William the chairman of Enos Bagenda Foundation. The affidavit and anextures thereto give the background to this cause. By letter annexture F the said Kajoba George Bagenda in response to the Defendants loan, inquiries informed the Defendants, who are also members of the association, that
the association was in a position to lend the Defendants money free of interest for 3 months on condition that they repay the entire sum in one lump sum at the end of the 3 months, failure of which the amount advanced shall attract interest at 5% per mont h. By their letter dated 8}{\fs24\super\insrsid6052352\charrsid3615869 th}{\fs24\insrsid6052352\charrsid3615869 September 2004 (Annexture C) addressed to the association the Defendants requested for a loan of Ughs.20,000,000/= to be granted against the Defendants Certificate Title in respect of land comprised in Free hold Register Volum e 326, folio 1 area 0.202 Hectares Kyadondo Block 269 Plot 158 Lubowa Estate as security. In the letter the Defendants agreed on the terms and conditions of repayment of the association and undertook to pay the loan in three months from the date of recei ving the whole amount. They appointed William Kajoba the chairman in and deponent to the affidavit in support, to receive the money from the association on their behalf. \par \par In paragraph 4 of the affidavit Kajoba George William states that upon the defendants instructions, he passed the said sum of Shs20,000,000/= to the Defendants agent one Alice Kirunda. Annexture E shows that Shs.5,000,000 was paid out on 14}{ \fs24\super\insrsid6052352\charrsid3615869 th}{\fs24\insrsid6052352\charrsid3615869 September 2004, Shs.10,000,000/= on 22}{\fs24\super\insrsid6052352\charrsid3615869 nd}{\fs24\insrsid6052352\charrsid3615869 September 2004 and Shs.5,000,000/= on 13}{ \fs24\super\insrsid6052352\charrsid3615869 th}{\fs24\insrsid6052352\charrsid3615869 October 2004 and receipt acknowledged by one Alice Kirunda. The total advance was Shs.20,000,000/=. \par \par In paragraph 3 of the affidavit the deponent avers that the Defendant deposited the little deed to the above described property as security. In paragraph 6 the avers tha t no mortgage deed was executed in respect of he said mortgage but that the defendants deposited their title deed with the deponent in his capacity as chairman of the association as security for repayment of the loan. Photocopy of the Certificate of Titl e was annexed as annexture \'93D\'94. The evidence outlined above shows that M/S Enos Bagenda Foundation is an equitable mortgagee in respect of the Certificate Title to the above described land. \par \par In paragraphs 5,7and 9 the chairman avers that the loan was to be paid at the end of the third month interest free, but if unpaid thereafter, it was to attract interest of 5% per month if the sum remained unpaid. That the defendants have since defaulted in payment of the principle sum plus interest and finally that the amounts due are: \par \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 (a)\tab}}\pard \qj \fi-450\li810\ri0\sl360\slmult1\widctlpar \jclisttab\tx810\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin810\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 Amount of advance Shs.20,000,000/= \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 (b)\tab}Monthly interest of 5% (per month for four months) Shs.4,000,000/= \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 \par To make the total claim of Shs24,000,000/=. Annexture \'93C\'94 to the affidavit show that the terms and conditions of repayment were accepted by the Defendants. \par \par Annexture E shows that the final }{\fs24\insrsid13374349\charrsid3615869 installment}{\fs24\insrsid6052352\charrsid3615869 of the loaned money was paid to Alice Kirunda on 13}{\fs24\super\insrsid6052352\charrsid3615869 th}{ \fs24\insrsid6052352\charrsid3615869 October, 2004. According to the Defendants letter, annexture \'93C,\'94 the loan was to be repayable in three months from the date of re ceiving the whole amount and according to annexture F for the first three months the loan was interest free. Therefore the 5% monthly interest starting accruing after 13}{\fs24\super\insrsid6052352\charrsid3615869 th}{ \fs24\insrsid6052352\charrsid3615869 January 2005 and only on the principle sum. Therefore monthly, effective from 13}{\fs24\super\insrsid6052352\charrsid3615869 th}{\fs24\insrsid6052352\charrsid3615869 January 2005 the principle sum of Shs20,000,000/= is earning the plaintiff\rquote s an interest in the sum of Shs.1,000,000/=. By the hearing of this application on 19}{\fs24\super\insrsid6052352\charrsid3615869 th}{\fs24\insrsid6052352\charrsid3615869 September, 2005 the principle sum had earned interest in the total sum of Shs.7,000,00/=. In paragraph 10 of the affidavit the chairman avers that the plaintiffs have not received any money or anything of value as regards the realization of the said sum. In absence of any evidence to the contrary I find that defendants still owe money to the plaintiff on the loan advanced in the following sums:- \par \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \qj \fi-360\li720\ri0\sl360\slmult1\widctlpar \jclisttab\tx720\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin720\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 Principal sum Shs20,000,000/= \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 2.\tab}Monthly interest of 5% for 7 months Shs.7,000,000/= \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 Making a total of Shs.27,000,000/= due and owing from the Defendants to the Plaintiff. \par \par In the circumstances I find that the plaintiff are entitled to the orders below:- \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \qj \fi-360\li720\ri0\sl360\slmult1\widctlpar \jclisttab\tx720\aspalpha\aspnum\faauto\ls4\adjustright\rin0\lin720\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 The defendants pay all the money due and owing from the plaintiff under the mortgage in the sum of Shs.27,000,000/=, plus the taxed costs occasioned by this application. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 2.\tab}The plaintiffs as mortgagees are e ntitled to a charge on the mortgagee property situate and known as Freehold Register Volume 326 folio 1 Kyadondo Block 269 Plot 158 Lubowa Estate and the mortgages or their agents are hereby granted a right of access to the mortgaged land. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 3.\tab}In the event of failure to pay the sum due and owing, pursuant to the said equitable mortgage and the costs of this application within 21 days from the date of service of this order on the Defendants, the said mortgage be enforced by sale of the mortgaged property upon t he following terms:- \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 (i)\tab}}\pard \qj \fi-720\li1800\ri0\sl360\slmult1\widctlpar \jclisttab\tx1800\aspalpha\aspnum\faauto\ls4\ilvl1\adjustright\rin0\lin1800\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 The sale shall be by private treaty \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 (ii)\tab}The proceeds from the sale shall be used as follows:- \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 (a)\tab}}\pard \qj \fi-375\li2355\ri0\sl360\slmult1\widctlpar \jclisttab\tx2355\aspalpha\aspnum\faauto\ls4\ilvl2\adjustright\rin0\lin2355\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 Pay the costs and charges, if any, involved in the sale. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 (b)\tab}Pay the sum due and owing pursuant to the mortgage plus the costs of this application. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid6052352\charrsid3615869 \hich\af0\dbch\af0\loch\f0 (c)\tab}Any balance to the passed over to the Defendants \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 \par \par I so order. \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 \par \par \par \par \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 {\fs24\insrsid6052352\charrsid3615869 Hon. Lameck N. Mukasa \par }\pard\plain \s2\qc \li0\ri0\sl360\slmult1\keepn\widctlpar\aspalpha\aspnum\faauto\outlinelevel1\adjustright\rin0\lin0\itap0\pararsid3615869 \fs28\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\insrsid6052352\charrsid3615869 Judge \par }\pard\plain \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3615869 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\insrsid6052352\charrsid3615869 30}{ \fs24\super\insrsid6052352\charrsid3615869 th}{\fs24\insrsid6052352\charrsid3615869 September, 2005 \par }}