Wakilii

Kaggwa v Bond Air Services Ltd and Others (Civil Suit No. 740 of 1994)

High Court · [2001] UGHC 123 · 2001 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for permanent injunction, return of title, and damages for misrepresentation, fraud, breach of contract, detinue and conversion
Decision
Suit dismissed with costs to the second defendant

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the plaintiff voluntarily executed a mortgage deed in favour of the second defendant to secure advances to the first defendant. The mortgage deed expressly included all sums already advanced before the date of security. The plaintiff failed to prove what amount was secured by his mortgage, and therefore the mortgage was presumed to secure the full sum claimed by the bank. No fraud was established. Any dispute regarding promised shares between the plaintiff and the first and third defendants did not affect the second defendant's rights derived from the mortgage deed.

Outcome

Suit dismissed with costs to the second defendant

Facts

The plaintiff was Operations Manager of the first defendant company. The third defendant, who was Chairman and Managing Director of the first defendant, allegedly promised the plaintiff shares in the company. The third defendant then asked the plaintiff to give him a Power of Attorney to mortgage the plaintiff's registered land comprised in LRV Block 216 Plot 750 at Buye, Ntinda, Kampala, measuring 0.85 hectares. The plaintiff executed a mortgage deed on 26 February 1991 in favour of the second defendant over the suit property to secure advances to the first defendant up to Shs.5,000,000. The mortgage deed expressly covered all sums already advanced before the date of security. In August 1991, the plaintiff received a letter from the second defendant threatening to sell the property by auction due to the first defendant's failure to pay a mortgage loan of Shs.24,708,724. The plaintiff alleged he was not given the promised shares and claimed he was defrauded. The plaintiff sought permanent injunction, return of his certificate of title, and various heads of damages.

Issues

  1. Whether the plaintiff was defrauded by the third defendant in relation to the mortgage of his property.
  2. Whether the plaintiff voluntarily executed the mortgage deed in favour of the second defendant.
  3. Whether the second defendant's claim for Shs.24,708,724/= was secured by the plaintiff's mortgage deed.

Orders

  • Suit dismissed with costs to the second defendant.
  • Court declined to make the orders prayed for in the plaint.

Rules and key headnotes

Contract Law — Mortgage — Voluntary Execution — Effect on Fraud Claims
Where a plaintiff voluntarily executes a mortgage deed to secure advances to a third party, alleged fraud in procuring the mortgage does not affect the mortgagee's rights derived from the mortgage deed where those rights are established by the deed itself.
Banking & Finance — Mortgage Security — Scope of Security — All Monies Clause
A mortgage deed providing that security covers advances up to a specified sum inclusive of all sums already advanced or incurred before the date of the security secures the full indebtedness unless the mortgagor proves what lesser amount was actually secured.
Contract Law — Third Party Disputes — Effect on Security Rights
A dispute between a mortgagor and a principal debtor regarding collateral promises such as shares does not affect the mortgagee's rights derived from a valid mortgage deed where the mortgagee was not party to those collateral arrangements.

Legislation cited (2)

Full judgment

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

Kaggwa v Bond Air Services Ltd and Others (Civil Suit No. 740 of 1994) [2001] UGHC 123 (20 June 2001)
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.