Wakilii

Makabayi Nafuna v The cooperative bank Ltd (MISCELANOUS APPLICATION. NO. 32 93)

High Court · [1993] UGHCCD 11 · 1993 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for stay of execution and release from civil prison pending determination of application to set aside ex-parte judgment
Decision
Applicant ordered released from civil prison forthwith pending determination of application to set aside ex-parte judgment

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a registered co-operative society is a body corporate distinct from its members, and officers cannot be held personally liable for debts incurred by the society in its corporate capacity. Where an officer did not personally contract for a loan and was not sued jointly on a valid basis, committal to civil prison was improper. Stay of execution granted and applicant ordered released pending determination of the application to set aside ex-parte judgment.

Outcome

Applicant ordered released from civil prison forthwith pending determination of application to set aside ex-parte judgment

Facts

Gisingo Growers Co-operative Society Ltd, a body corporate registered under the Co-operative Societies Statute, applied for and was granted a loan of 5 million shillings by the respondent bank. The Society deposited land as security. The applicant, Dan Nafuna Makabayi, was the Chairman of the Society. The respondent bank obtained an ex-parte judgment against both the Society and the applicant personally, and the applicant was committed to civil prison for non-payment. The applicant had not personally contracted for the loan nor applied for it in his individual capacity. The applicant sought stay of execution and release from prison pending determination of an application to set aside the ex-parte judgment.

Issues

  1. Whether the applicant as Chairman of a co-operative society could be held personally liable for a debt incurred by the society in its corporate capacity.
  2. Whether the applicant was properly joined as a defendant with the co-operative society.
  3. Whether the applicant should be released from civil prison pending determination of the application to set aside ex-parte judgment.

Orders

  • Stay of execution in H.C.C.S. No. 4 of 1993 granted.
  • Applicant to be released from civil prison forthwith pending determination of application to set aside ex-parte judgment and decree.
  • Respondent to meet costs of the application.

Rules and key headnotes

Corporate Personality — Co-operative Societies — Separate Legal Entity
A co-operative society registered under the Co-operative Societies Statute is a body corporate and a legal entity distinct from its members, capable of owning property and suing or being sued in its own name.
Corporate Personality — Personal Liability of Officers
Members and officers of a body corporate are not personally liable for the debts of the corporation unless they personally contracted for those debts or there is a statutory provision imposing such liability.
Joinder of Parties — Misjoinder — Corporate Debts
Where a co-operative society as a body corporate contracts a loan in its own capacity, it is improper to join its officers as defendants unless they personally contracted for the debt or there is statutory basis for such joinder.
Stay of Execution — Civil Committal — Corporate Debts
It is contrary to natural justice for an officer of a body corporate to suffer imprisonment for a debt incurred by the corporation where the officer did not personally contract for the debt and was improperly joined as a defendant.

Legislation cited (7)

  • Co-operative Societies Statute No. 8 of 1991 s.27
  • Co-operative Societies Statute No. 8 of 1991 s.69
  • Co-operative Societies Statute No. 8 of 1991 s.69(2)
  • Co-operative Societies Statute No. 8 of 1991 s.83
  • Civil Procedure Rules O.19 r.26
  • Civil Procedure Rules O.1 r.3
  • Civil Procedure Rules O.1 r.4(b)

Cases cited (3)

  • Uganda Commercial Bank v Sali Balaba (1982) HCB 145
  • Muwumba Kabire and Another v H.H. Abdi & Sons Transporters Ltd (1989) KALR 156
  • Bishop v Attorney General and Another (1967) EA 93

Full judgment

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

Makabayi Nafuna v The cooperative bank Ltd (MISCELANOUS APPLICATION. NO. 32_93) [1993] UGHCCD 11 (16 July 1993)
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.