Wakilii

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

High Court · [2026] UGCOMMC 309 · 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 for plaintiffs with damages and costs awarded against defendants jointly and severally

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Following interlocutory judgment against defendants who failed to file defence, the court held that the principal borrower and guarantor are liable to indemnify the third-party mortgagor for loss arising from the sale of mortgaged property. The court awarded UGX 160,000,000 representing the balance after deducting the refund from the sale proceeds, but declined to award disturbance allowance where the mortgagor voluntarily offered the property as security with knowledge of the risk of sale upon default.

Outcome

Judgment entered for plaintiffs with damages and costs awarded against defendants jointly and severally

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 total obligations of 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 from the property.

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

Banking & Finance — Tripartite Mortgages — Obligations of Borrower and Third-Party Mortgagor
In a tripartite mortgage agreement, it is the obligation of the borrower, and not the third-party mortgagor, to pay the principal money on the day appointed in the mortgage agreement, and so long as the principal money or any of it remains unpaid, to pay interest on it at the rate and manner specified in the mortgage agreement.
Contract Law — Indemnity — Liability of Principal Borrower and Guarantor
Where a third party mortgages property as security for another's loan and the mortgagee sells the property upon default, the principal borrower is liable to indemnify the third-party mortgagor for the loss occasioned by the sale, and a guarantor who guaranteed the loan facilities is similarly liable to indemnify the mortgagor for losses arising from the borrower's default and consequent sale.
Damages & Quantum — Disturbance Allowance — Voluntary Mortgagors
A third-party mortgagor who voluntarily offers property as security for another's loan, with full knowledge of the possibility of sale by the mortgagee in case of default, cannot claim disturbance allowance upon the eventual sale of the property and is only entitled to indemnity for the actual loss occasioned by the sale.
Civil Procedure — Interlocutory Judgment — Effect on Issues for Determination
When an interlocutory judgment has been entered in favour of a party following the defendant's failure to file a written statement of defence, the breach of an agreement is no longer an issue and the only matters remaining for determination are the quantum of damages and available remedies.

Legislation cited (1)

Cases cited (5)

Full judgment

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

Oyuga Atiku Daniel and Another v Joseph Holdings Limited and Another (Civil Suit No. 442 of 2024) [2026] UGCommC 309 (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.