Wakilii

Sentumu v Lwanga Development Trust Limited (Civil Appeal 9 of 2007)

Court of Appeal · [2019] UGCA 2092 · 2019 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court judgment entered ex parte for the respondent in a summary suit for recovery of a debt
Decision
Appeal dismissed; High Court judgment for the respondent of Shs. 7,850,000/= with interest and costs upheld

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Cited — treatment unverified cited in 3 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions — always read the source judgment before relying on it.

Holding

The Court of Appeal dismissed the appeal, holding that the agreement for purchase of computer items was a sale, not an agreement to sell. Because the goods were ascertained and the parties' conduct (issuing a post-dated cheque securing all items) showed an intention that property pass at contract formation, title passed to the appellant when the contract was made, notwithstanding postponed payment and instalment delivery under sections 2(4), 18 and 19 of the Sale of Goods Act. A court cannot rewrite the parties' contract. The appellant remained liable for the full outstanding balance of Shs. 7,850,000/=, and a seller's failure to mitigate affects only quantum, not liability for breach.

Facts

The respondent agreed to sell the appellant all computer items in a store for Shs. 9,000,000/= under a written agreement dated 14 February 2004, payable over seven weeks. The appellant gave a post-dated cheque for Shs. 9,000,000/= and agreed to collect ten computers in instalments, paying Shs. 1,000,000/= to Shs. 1,500,000/= at a time, with the cheque amount to be altered as payments were made. The appellant took delivery of some items after paying Shs. 1,150,000/= but defaulted on further payments. The respondent filed a summary suit for the outstanding sum. The appellant obtained leave to defend, but at the hearing on 16 November 2006 only the respondent appeared; the matter proceeded ex parte and the High Court entered judgment awarding special damages of Shs. 7,850,000/= with interest and costs. The appellant appealed, arguing the agreement was an agreement to sell and that he was liable only for the goods actually taken.

Issues

  1. Whether the agreement of 14 February 2004 constituted a sale or merely an agreement to sell.
  2. Whether title in the computer goods passed to the appellant at the time the contract was made.
  3. Whether the trial Judge correctly held that the appellant took the most valuable items and that the respondent's remaining items were of little value.
  4. Whether the trial Judge erred in entering judgment for Shs. 7,850,000/= rather than limiting the claim to Shs. 470,000/=.

Orders

  • Appeal dismissed.
  • Decision of the trial court upheld.
  • Costs of the appeal awarded to the respondent.

Key headnotes

Sale of Goods — Distinction Between a Sale and an Agreement to Sell
Where goods are ascertained and the parties intend property to pass at the time the contract is made, the contract is a sale and not an agreement to sell under section 2(4) of the Sale of Goods Act, even though payment and delivery are postponed or made in instalments.
Sale of Goods — Passing of Property — Ascertaining Intention of the Parties
Under sections 18 and 19 of the Sale of Goods Act, property in specific or ascertained goods passes when the parties intend it to pass, and in ascertaining that intention regard is had to the terms of the contract, the conduct of the parties and the circumstances of the case; it is immaterial whether the time of payment or delivery is postponed.
Interpretation of Contracts — Objective Intention of the Parties
Courts must give effect to the objective intention of the parties as conveyed by the words of the contract to a reasonable person, and cannot revise the words used or read into the agreement provisions that do not exist in order to align it with what a party contends was intended.
Breach of Contract — Mitigation of Loss as Affecting Quantum Not Liability
A seller's failure to mitigate loss by selling retained goods after the buyer's default does not exonerate the buyer from contractual liability; failure to mitigate is relevant only to the assessment of damages and is not a defence to breach of contract.
Freedom of Contract — Enforcement of Freely Concluded Agreements
Where parties freely and voluntarily enter into a contract, they are bound by its terms and a court will not rewrite the contract absent coercion, fraud or undue influence pleaded and proved.

Legislation cited (11)

  • Sale of Goods Act s.2
  • Sale of Goods Act s.2(1)
  • Sale of Goods Act s.2(4)
  • Sale of Goods Act s.2(5)
  • Sale of Goods Act s.17
  • Sale of Goods Act s.18
  • Sale of Goods Act s.18(2)
  • Sale of Goods Act s.19
  • Sale of Goods Act s.19(a)
  • Sale of Goods Act s.31
  • Contracts Act

Cases cited (5)

  • Jane Bwiriza v John Osapil (Supreme Court Civil Appeal No. 5 of 2002)
  • Saleh vs Montgomery, 1972 ALR Commercial at 161
  • L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235
  • Printing and Numerical Registering Co v Sampson (1875) LR 19 Eq 462
  • National Bank of Kenya Ltd v Pipeplastics Samkolit (K) Ltd [2002] 2 EA 503
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.