Wakilii

Oyuga Atiku Daniel and Another v Joseph Holdings Limited and Another (Civil Suit No. 442 of 2024)

High Court · [2026] UGCOMMC 299 · 2026 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract and fraud following property sale by mortgagee bank
Decision
Judgment entered in favour of plaintiffs with damages and costs awarded against defendants

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that where an interlocutory judgment has been entered, breach is no longer in issue. The principal borrower and guarantor are liable to indemnify the third-party mortgagor for loss occasioned by the sale of mortgaged property following default. The plaintiffs were entitled to recover UGX 160,000,000 being the balance from the property sale after refund, but not disturbance allowance, as they voluntarily offered the property as security with knowledge of the risk of sale upon default. General damages of UGX 10,000,000 awarded for inconvenience.

Outcome

Judgment entered in favour of plaintiffs with damages and costs awarded against defendants

Facts

The 1st plaintiff was registered proprietor of land at Kyadondo Block 230 Plot 600, Kireka. He executed a power of attorney authorising the 2nd defendant, acting through the 1st defendant, to obtain a UGX 60,000,000 credit facility from Eco Bank using the property as collateral. A tripartite mortgage was registered and the 2nd defendant issued a personal guarantee. Unknown to the plaintiffs, the defendants allegedly obtained two additional loans of UGX 25,000,000 and UGX 30,000,000 using forged consent forms. The defendants defaulted on repayment totalling UGX 137,107,077. The bank sold the property for UGX 280,000,000 and refunded the plaintiffs UGX 120,000,000. The plaintiffs' family was evicted. The plaintiffs sued for recovery of UGX 328,052,920 (property valuation plus disturbance allowance), declarations of breach and fraud, general damages, and costs. Interlocutory judgment was entered on 29 May 2025 after defendants failed to file defence.

Issues

  1. Whether the 1st defendant is in breach of the tripartite mortgage agreement between her and the plaintiffs?
  2. Whether the 2nd defendant, as guarantor is in breach of the personal indemnity agreement?
  3. Whether the defendants were fraudulent in obtaining the two further loans of UGX 25,000,000/- and UGX 30,000,000/- using the 1st plaintiff's certificate of title without the knowledge or prior consent of the plaintiffs?
  4. Whether the defendants are liable to pay to the plaintiffs as special damages, the sum of UGX 328,052,920/-?
  5. What remedies are available to the parties?

Orders

  • The plaintiff shall recover from the defendants a sum of UGX 160,000,000/- being the balance from the sale of the suit property.
  • The plaintiff is awarded general damages of UGX 10,000,000/-.
  • The defendants shall pay the costs of the suit.

Rules and key headnotes

Tripartite Mortgage Agreements — Liability of Borrower and Guarantor to Third-Party Mortgagor
In a tripartite mortgage agreement, it is the obligation of the borrower, not the third-party mortgagor, to repay the principal and interest. Where the borrower defaults and the mortgaged property is sold, both the principal borrower and the guarantor are liable to indemnify the third-party mortgagor for the loss occasioned by the sale.
Indemnity — Right to Indemnity Arising from Relationship Between Parties
A right to indemnity arises where the relation between the parties is such that either in law or in equity there is an obligation upon one party to indemnify the other. The right is not confined to cases of express contract but extends to situations where the state of circumstances attaches a legal or equitable duty to indemnify.
Disturbance Allowance — Voluntary Mortgagors Not Entitled
Where a plaintiff voluntarily offers property as security for a loan with full knowledge of the possibility of sale by the mortgagee in case of default, the plaintiff cannot claim disturbance allowance and is only entitled to indemnity for the actual loss occasioned by the sale of the property.
Interlocutory Judgment — Effect on Issues for Determination
When an interlocutory judgment has been entered in favour of a party following failure to file a defence, the breach of an agreement is no longer an issue for determination. The remaining issues are limited to quantum and remedies.

Legislation cited (1)

Cases cited (5)

Full judgment

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Oyuga Atiku Daniel and Another v Joseph Holdings Limited and Another (Civil Suit No. 442 of 2024) [2026] UGCommC 299 (9 June 2026)
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.