Wakilii

Rosemary Kityo v Impala Commodities Ltd & Anor (HIGH COURT CIVIL SUIT NO. 1305 OF 1998. ) (HIGH COURT CIVIL SUIT NO. 1305 of 1998.)

High Court · [2003] UGHC 39 · 2003 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for declaration that mortgage foreclosure was unlawful and for injunctive relief
Decision
Plaintiff's suit dismissed. Plaintiff ordered to deliver vacant possession to first defendant for transfer to purchaser within 14 days.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that where mortgagors failed to honour supply and prefinancing obligations and defaulted on delivery of coffee as required under a mortgage agreement, the mortgagee was entitled to foreclose and sell the security by private treaty under the mortgage agreement and section 9 of the Mortgage Decree 1974 without first attempting to cash an additional post-dated cheque security or obtaining a valuation at the mortgagor's request.

Outcome

Plaintiff's suit dismissed. Plaintiff ordered to deliver vacant possession to first defendant for transfer to purchaser within 14 days.

Facts

On 13 March 1997, the plaintiff and second defendant entered into a coffee supply contract with the first defendant to supply 17 metric tons of coffee within 7 days against prefinancing of UGX 20,000,000. The plaintiff mortgaged her certificate of title as security and the second defendant provided a post-dated cheque for UGX 20,000,000 as additional security. Only 3.791 metric tons of coffee worth UGX 4,549,200 was delivered 46 days later by the second defendant, who then disappeared. After notice and extensions granted, the first defendant advertised the property for sale in August 1997. The property was sold by private treaty in October 1998 for UGX 24,000,000 to a purchaser. The plaintiff resisted eviction for over four years and filed suit in December 1998 seeking declarations that the foreclosure was unlawful.

Issues

  1. Whether the plaintiff and the second defendant honoured their obligations under the mortgage.
  2. Whether the first defendant lawfully sold the security under the mortgage.
  3. What remedies are available to the parties.

Orders

  • Plaintiff's case dismissed against both defendants.
  • Plaintiff to hand vacant possession of Kyaddondo Block 15, plot 310 to first defendant within 14 days from date of judgment.
  • Each party to meet its own costs.

Rules and key headnotes

Mortgage Law — Foreclosure — Multiple Securities — Mortgagee's Choice of Security
Where a mortgagor provides both a certificate of title and an additional post-dated cheque as securities, nothing in the mortgage agreement obliges the mortgagee to cash the cheque in preference to exercising its right of foreclosure against the principal security, particularly where the cheque has become stale and the co-mortgagor who drew it has absconded.
Mortgage Law — Sale of Security — No Duty to Value at Mortgagor's Request
A mortgagee exercising power of sale under a mortgage agreement and section 9 of the Mortgage Decree 1974 is not obliged to obtain a valuation at the mortgagor's request before selling the security, provided the sale is otherwise lawfully conducted.
Mortgage Law — Sale by Private Treaty — Validity
Sale of mortgaged security by private treaty is lawful under clause 3 of a mortgage agreement and section 9 of the Mortgage Decree 1974 where the mortgagors have defaulted on their contractual obligations and the sale is properly advertised with adequate notice.
Prefinancing Agreements — Default — Consequences
Where parties receiving prefinancing under a supply contract secured by mortgage fail to deliver the contracted goods within the stipulated period and deliver only a small fraction of the contracted quantity substantially late, they are in material breach entitling the financier to foreclose on the security.
Evidence — Burden of Proof — Credibility Assessment
In civil suits, the burden of proof lies on the plaintiff to establish the case on a balance of probabilities. Where a plaintiff gives contradictory evidence and tells demonstrable lies under oath, the court is entitled to reject the plaintiff's evidence as entirely suspect and unreliable.

Legislation cited (2)

Cases cited (1)

  • J.K Patel v Spear Motors Ltd (Supreme Court Civil Appeal No. 4 of 1991)

Full judgment

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

Rosemary Kityo v Impala Commodities Ltd & Anor (HIGH COURT CIVIL SUIT NO. 1305 OF 1998. ) (HIGH COURT CIVIL SUIT NO. 1305 of 1998.) [2003] UGHC 39 (19 May 2003)
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.