Kintu Bob v Sisye Misaili and Others (Misc.Application No. 112 of 2024)
Observed later treatment
No later-treatment classification is recorded for this judgment.
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Holding
Held that guarantors cannot be held liable for a judgment debt until the judgment creditor has exhausted all available modes of execution against the principal debtor. The liability of a guarantor under section 70(2) of the Contracts Act crystallizes only upon default by the principal debtor, which means failure to secure payment after exhausting all execution modes. Arresting guarantors before exhausting execution remedies is unlawful. Application dismissed.
Outcome
Application dismissed; guarantors not liable until all execution modes exhausted against principal debtor
Facts
The Applicant obtained a decree for UGX 20,600,000 plus interest against Muserwa James following a successful appeal. Muserwa James was arrested in execution and detained in civil prison. While in prison, the Respondents approached the Applicant and agreed to stand as guarantors for Muserwa James's release, paying UGX 10,000,000 and signing a consent on execution. Muserwa James was released but subsequently disappeared without paying the balance. The Applicant sought to hold the guarantors liable under the consent agreement. The Deputy Registrar issued warrants of arrest against the guarantors, but Justice Namundi directed their release on the ground that the Applicant had not exhausted all modes of execution. The Applicant then filed this application seeking to compel the guarantors to pay and to set aside Justice Namundi's directive.
Issues
- Whether the Respondents are liable and should be compelled to pay the judgment debt of Muserwa James arising out of the consent on execution dated 15 June 2023.
- Whether the directive by Justice Godfrey Namundi to the Deputy Registrar dated 20 March 2024 should be set aside.
- Whether the application was served within the time stipulated by law.
Orders
- Preliminary objection on service out of time overruled.
- Application dismissed.
- Costs awarded to the Respondents.
- Applicant directed to exhaust all modes of execution against the principal debtor before enforcing the consent on execution against the guarantors.
Rules and key headnotes
Legislation cited (18)
- Judicature Act Cap 13 s.33
- Judicature Act Cap 16 s.37
- Civil Procedure Act Cap 282 s.38
- Civil Procedure Act Cap 282 s.82
- Civil Procedure Act Cap 282 s.83
- Civil Procedure Act Cap 282 s.98
- Civil Procedure Rules SI.71-1 Order 5 rule 1(2)
- Civil Procedure Rules SI.71-1 Order 5 rule 2
- Civil Procedure Rules SI.71-1 Order 46
- Civil Procedure Rules SI.71-1 Order 49 rule 2
- Civil Procedure Rules SI.71-1 Order 52
- Contracts Act Cap 284 s.67
- Contracts Act Cap 284 s.70(1)
- Contracts Act Cap 284 s.70(2)
- Registration of Persons Act Cap 332 s.69(3)
- Registration of Persons Act Cap 332 s.77(e)
- Tier 4 Microfinance and Money Lenders (Money Lenders) Regulations 2018 Regulation 18(1)(a)
- Constitution of Uganda 1995 Article 126(2)(e)
Cases cited (3)
- Kanyabweru v Tumwebwa [2005] EA 86
- M.M.Sheikh Dawood v Kenshwala and Sons (HCCS No. 14 of 2009)
- Ejab Family Investment and Trading Company Limited v Centenary Rural Development Bank Limited (HCCS No. 0001 of 2004)
Full judgment
The original judgment as reported. Read the original PDF before relying on any passage.