Wakilii

Rebecca Musoke v M/S B.M. Enterprises Ltd and Others (Civil Suit No.337 of 2003) (Civil Suit No.337 of 2003)

High Court · [2005] UGHC 11 · 2005 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of property value
Decision
Plaintiff awarded damages totalling UGX 720,000,000 plus interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that defendants who induced the plaintiff to mortgage her property to secure their loan, then failed to repay, are liable for the full value of the property lost when the bank sold it to realize the mortgage. Liability was established despite revocation of the power of attorney before the loan was drawn, where defendants provided no substitute security as promised and gave no consideration to the plaintiff. Defendants who called no evidence failed to challenge the plaintiff's valuation.

Outcome

Plaintiff awarded damages totalling UGX 720,000,000 plus interest and costs

Facts

The plaintiff, a widow, agreed to sell a coffee plantation to the first defendant. She signed a power of attorney and deposited her land title with a bank as security for a mortgage to finance the defendants' horticulture business. The cheques given to her were dishonoured. She revoked the power of attorney when the cheques bounced. Despite the revocation, the defendants drew money from the bank using her property as security. The defendants promised to return her title and substitute the mortgage with alternative security but failed to do so. The bank sold the plaintiff's property in February 2000 to recover the loan. The property, valued at UGX 900 million by a surveyor in 1998, was sold at an undervalue. The defendants called no evidence and did not challenge the plaintiff's case.

Issues

  1. Whether the defendants are liable for the loss of the plaintiff's property mortgaged under a revoked power of attorney.
  2. What is the appropriate quantum of damages for the plaintiff's loss.

Orders

  • Judgment entered for the plaintiff against the defendants.
  • Special damages of UGX 700,000,000 awarded representing the value of the land.
  • General damages of UGX 20,000,000 awarded.
  • Interest on special and general damages at 15% per annum from 2000 to the date of payment in full.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Mortgage — Liability of Borrower and Guarantors — Loss of Mortgaged Property
Where defendants induce a plaintiff to mortgage her property to secure their loan and fail to repay, causing the mortgagee bank to sell the property, the defendants are liable to the plaintiff for the full value of the property lost, notwithstanding that the power of attorney under which the mortgage was executed was subsequently revoked.
Contract — Consideration — Gratuitous Security — Liability for Loss
Where a plaintiff provides her property as security for defendants' loan without receiving any consideration and the property is lost through forced sale, the defendants are liable for the loss where they failed to provide promised substitute security or repay the loan.
Evidence — Affidavit in Place of Oral Testimony — Defective Affidavit
An affidavit that is representative, contains hearsay, is narrative, opinionated and argumentative, and is not properly notarized or commissioned, is unacceptable as evidence in place of oral testimony and will be treated with extreme caution or rejected by the court.
Evidence — Burden of Proof — Defendants Calling No Evidence
Where defendants opt to call no evidence and do not challenge the plaintiff's evidence, the plaintiff's case will be accepted on a balance of probabilities if it establishes a prima facie claim.
Damages — Valuation — Forced Sale Value — Unchallenged Expert Evidence
Where a plaintiff's property has been sold in a forced sale, the court may accept the lower forced sale value from an unchallenged valuation report as the basis for assessing special damages, rather than the higher open market value.

Full judgment

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

Rebecca Musoke v M_S B.M. Enterprises Ltd and Others (Civil Suit No.337 of 2003) (Civil Suit No.337 of 2003) [2005] UGHC 11 (21 July 2005)
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.