Wakilii

Mayambala v Uganda Commercial Bank (S.C. Cause No. 160 of 1981)

High Court · [1992] UGHC 89 · 1992 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Originating summons seeking declaration that defendant bank's sale of mortgaged property was wrongful and order for possession
Decision
Suit dismissed; mortgagee's sale upheld as lawful; purchaser confirmed as having acquired irredeemable interest in the mortgaged property

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a mortgagee is entitled under the Mortgage Decree to pursue all remedies at law and in equity contemporaneously to recover principal and interest, and the sale of mortgaged property by public auction after obtaining summary judgment was perfectly lawful where the debt had not been fully discharged. The sale to a bona fide purchaser for value without notice of irregularity was valid and effectual, and the purchaser acquired irredeemable interest as against the mortgagor.

Outcome

Suit dismissed; mortgagee's sale upheld as lawful; purchaser confirmed as having acquired irredeemable interest in the mortgaged property

Facts

The plaintiff mortgaged property in Kampala Block 1 Plot 235 to the defendant bank. In 1978 the bank obtained summary judgment against the plaintiff in H.C.C.S. No. 1199 of 1978 for the principal sum and interest. After judgment the plaintiff made payments on the loan account. An unnamed bank official informed the plaintiff that an overdraft application had been approved, prompting him to draw funds. On 8 November 1980 the plaintiff was informed his security had been sold. The defendant sold the mortgaged property to James Musinguzi by public auction for Shs. 550,000 pursuant to its power of sale under the mortgage covenant and the Mortgage Decree. In November 1982 the plaintiff paid the judgment debt in court instalments. The plaintiff brought this action seeking a declaration that the sale was wrongful.

Issues

  1. Whether the purported sale of the plaintiff's mortgaged property by public auction at the instance of the defendant was lawful after summary judgment had been obtained in H.C.C.S. No. 1199 of 1978.
  2. Who is the lawful proprietor of the mortgaged property comprised in Kampala Block 1 Plot 235.

Orders

  • Suit dismissed with costs to the defendant bank.
  • Declarations sought by the plaintiff refused.
  • Order for possession of the property in favour of the plaintiff refused.

Rules and key headnotes

Mortgages — Power of Sale — Concurrent Remedies
A mortgagee is entitled both in law and in equity to pursue all remedies under the Mortgage Decree contemporaneously, including obtaining summary judgment and exercising the power of sale, where the debt has not been fully discharged.
Mortgages — Effect of Summary Judgment on Power of Sale
The entry of summary judgment in favour of a mortgagee does not extinguish the mortgage covenant or preclude the mortgagee from exercising the statutory power of sale under the mortgage where the debt remains unpaid.
Mortgages — Sale to Bona Fide Purchaser — Validity
A sale of mortgaged property under a power of sale to a bona fide purchaser for value without notice of impropriety or irregularity in the exercise of the power is valid and effectual, even if there was irregularity in the security, and the purchaser acquires irredeemable interest as against the mortgagor.
Mortgages — Exercise of Power of Sale — Good Faith
A mortgagee's sale is lawful so long as the mortgagee did not act in bad faith, did not wilfully and recklessly deal with the property in such manner that the mortgagor's interests were sacrificed, and did not sell at a manifestly undervalue.

Legislation cited (5)

Cases cited (16)

  • Ex parte Jenkins in re Snyd (1884) 25 Ch D 338
  • Shah v Attorney General II (1970) EA 523
  • Whitley v Charlton (1878) 8 Ch D 35
  • Keech v Goodwin (1732) 2 Atk 341
  • Cooth v Thompson (1794) 3 Atk 261
  • Edwards v Tredegold (1887) 1 NSW Eq
  • Layard v Andrew (1917) 35 DLR 42
  • Bhaskara v Brinell (1918) LPA 295
  • Holt v Carel (1843) 6 Bea OR 199
  • Kahar Singh v Bhatta Singh (1943) AIR Allahabad
  • Chandra v Mukri LR 54 IA 86
  • Dycer v Ange Stel (1875) 10 Ch D
  • Brooks v Bliss (1959) 14 NY 582
  • Farley v Reynolds (1928) SRA 81
  • Jenkins v Jones (1850) 1 Mer 225
  • Martin v Wright (1819) 3 Jur 977

Full judgment

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Mayambala v Uganda Commercial Bank (S.C. Cause No. 160 of 1981) [1992] UGHC 89 (9 January 1992)
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.