Wakilii

Crane Bank Ltd v Mrs. Anke Alemoyehu, Rainbow Intern.School (H.C.C.S NO. 927 OF 1999 ) (H.C.C.S NO. 927 of 1999)

High Court · [2003] UGHC 76 · 2003 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of money on dishonoured cheques
Decision
Judgment entered jointly and severally against both defendants for the amount claimed with interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that a cause of action existed against both the drawer of dishonoured cheques and the account holder. Under the Bills of Exchange Act, a drawer is liable to compensate the holder of a dishonoured cheque, and consideration is presumed under s.30(1). The defendant who issued cheques on the school account after investing borrowed money in the school created liability for both herself and the school. No evidence was adduced to prove duress or countermand. Judgment was entered jointly and severally for the full amount with interest.

Outcome

Judgment entered jointly and severally against both defendants for the amount claimed with interest and costs

Facts

The plaintiff bank purchased a cheque worth US$21,773 from the first defendant and paid her the equivalent Uganda shillings before clearance. The cheque was dishonoured. The first defendant, proprietor and director of the second defendant school, explained she had invested the money in the school and issued three replacement cheques totalling US$23,159 drawn on the school's account. She was the sole authorised signatory. All three cheques were dishonoured with "Refer to Drawer" notations. The first defendant did not attend the hearing despite summons.

Issues

  1. Whether there is a cause of action against both defendants for the dishonoured cheques.
  2. Whether the cheques were issued under duress.
  3. Whether the cheques were countermanded.
  4. What remedies are available to the plaintiff.

Orders

  • Judgment entered against the defendants jointly and severally for US$23,159.
  • Interest at 15% per annum from the date of filing until payment in full.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Banking & Finance — Bills of Exchange — Dishonoured Cheques — Drawer's Liability
Under s.55(1) of the Bills of Exchange Act, the drawer of a bill engages that on due presentment it shall be accepted and paid according to its tenor, and if it be dishonoured the drawer must compensate the holder provided the requisite proceedings on dishonour are duly taken.
Contract Law — Consideration — Presumption of Value on Bills of Exchange
Under s.30(1) of the Bills of Exchange Act, every party whose signature appears on a bill is prima facie deemed to have become a party thereto for value, shifting the burden to the defendant to rebut this presumption by proving absence or failure of consideration or that the consideration was illegal.
Banking & Finance — Payment by Cheque — Conditional Discharge
Payment by cheque or other negotiable instrument is conditional upon payment and the debtor is not discharged unless and until the cheque is honoured.
Contract Law — Consideration — Indirect Consideration
Consideration sufficient to support a simple contract need not move directly from the promisee as long as some right, interest, profit or benefit accrues to the promisor or some forbearance, detriment, loss or responsibility is given, suffered or undertaken by the promisee.
Banking & Finance — Joint and Several Liability — Drawer and Account Holder
Where a defendant issues post-dated cheques on an entity's account after investing borrowed money in that entity, both the individual drawer and the account-holding entity may be held jointly and severally liable for the dishonoured cheques.

Legislation cited (4)

Cases cited (6)

  • Auto Garage v Motokov [1971] EA 151
  • Currie v Misa (1875) LR 10 Exch 162
  • Edward -Vs- Chancellor (1885) CR 52
  • Patel Brothers v Hasmani (1952) 19 EACA 170
  • Shirley v Tanganyika Tegry Plastics Ltd [1968] EA 528
  • Lombard Banking Ltd v Ghandi [1949] 2 KB 727

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Crane Bank Ltd v Mrs. Anke Alemoyehu, Rainbow Intern.School (H.C.C.S NO. 927 OF 1999 ) (H.C.C.S NO. 927 of 1999) [2003] UGHC 76 (23 April 2003)
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.