Wakilii

Victoria Printing Press Limited v Many (Civil Case No. 149 of 1939)

East African Court of Appeal · [1938] EACA 182 · 1938 Action Dismissed; Counterclaim Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil action seeking declaration that statutory memorandum of loan was unenforceable and cancellation of security; defendant counterclaimed for principal and interest
Decision
Plaintiff's action for declaration of unenforceability dismissed; defendant's counterclaim for principal and interest allowed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that where a memorandum of loan refers to a debenture and a copy of the debenture is attached to the memorandum and delivered to the borrower at the time of execution, the two documents may be read together as constituting the statutory memorandum required by section 10 of the Moneylenders Ordinance, 1932. The presence of onerous clauses in the debenture does not invalidate the memorandum where the borrower received a copy and was fully aware of all terms.

Outcome

Plaintiff's action for declaration of unenforceability dismissed; defendant's counterclaim for principal and interest allowed

Facts

The plaintiff company borrowed Sh. 4,000 from the defendant, a registered moneylender, on 1 May 1939. The loan was secured by a debenture agreement creating a floating charge on the plaintiff's undertaking and property. The memorandum of contract stated the amount, date of advance, interest rate of 24% per annum, and that security would be by debenture, with a copy attached and marked 'A'. The debenture contained various provisions including power to appoint a receiver and power of sale, which were not specifically set out in the memorandum. A copy of both the memorandum and the debenture were delivered to the plaintiff at the time of execution. The plaintiff company executed the debenture after signing the memorandum and acknowledged receipt of copies of both documents and the principal sum. The plaintiff sought a declaration that the memorandum was unenforceable for failing to comply with section 10 of the Moneylenders Ordinance, 1932, arguing that all material terms must be contained in a single document and that onerous terms in the debenture should have been specifically mentioned. The defendant counterclaimed for principal and interest.

Issues

  1. Whether the memorandum of agreement complies with section 10 of the Moneylenders Ordinance, 1932, by setting out the actual transaction in its terms between the parties.
  2. Whether the manner of repayment of the principal and interest is shown in the memorandum.
  3. Whether the memorandum shows the date on which the loan was actually made and sets out the nature of the security and the terms thereof.
  4. Whether the terms contained in the floating charge are onerous and material and as such should have been mentioned in the memorandum.
  5. Whether a memorandum of loan and a debenture agreement can be read together as constituting the statutory memorandum where a copy of the debenture is attached to the memorandum and delivered to the borrower.

Orders

  • Action dismissed with costs.
  • Counterclaim allowed with costs.

Rules and key headnotes

Moneylending — Statutory Memorandum — Multiple Documents — Incorporation by Reference
A memorandum of loan required by moneylending legislation may consist of more than one document where the memorandum clearly and unambiguously refers to another document executed simultaneously or immediately thereafter, and a copy of that document is delivered to the borrower at the time of execution.
Moneylending — Statutory Memorandum — Security Documents — Debentures
Where a memorandum of loan refers to a debenture as security and a copy of the debenture is attached to the memorandum and delivered to the borrower, the debenture and memorandum should be read together as constituting the statutory memorandum, and the borrower is taken to have been fully aware of all terms.
Moneylending — Statutory Memorandum — Onerous Terms in Security
The presence of onerous clauses in a security document (such as power to appoint a receiver or power of sale in a debenture) does not render a memorandum of loan non-compliant with statutory requirements where the borrower has received a copy of the security document and is aware of its terms.
Moneylenders Legislation — Purpose and Construction — Degree of Stringency
The requirements of moneylending legislation, while stringent upon the lender, must be interpreted with reasonable stringency and not in a manner that would bring the law into contempt. The true test is whether all the terms of the borrowing were brought to the notice of the borrower.
Formation — Memorandum of Contract — Parol Evidence
Parol evidence is admissible to identify a document referred to in a memorandum of contract, and once identified, the two documents may be read together as a complete memorandum, following principles analogous to those under the Statute of Frauds and Sale of Goods Act.

Legislation cited (6)

  • Moneylenders Ordinance, 1932 s.10
  • Moneylenders Act, 1927 s.6
  • Bills of Sale Act, 1878
  • Bills of Sale Amendment Act, 1882 s.7
  • Statute of Frauds
  • Sale of Goods Act, 1893

Cases cited (11)

  • Mitchener v Equitable Investment Co., Ltd (1938) 2 K.B. 559
  • Reading Trust Limited v Spero (1930) 1 K.B. 492
  • Hoare v Adam Smith (London) Ltd (1938) 4 All. E.R. 283
  • Tooke v T. W. Bennett & Co. Ltd (1939) 4 All. E.R. 200
  • Vaghjibhai Naranbhai Amin v C. F. Joanes and C. S. Rodrigues (Civil Case No. 159 of 1938)
  • Simmons v Russell Financiers, Ltd (1934) 2 K.B. 487
  • Gaskell Ltd v Askwith (1929) 45 T.L.R. 439
  • Egan v Langham Investments Ltd (1938) 1 K.B. 667
  • Central Advance and Discount Corporation Ltd v Marshall (1939) 3 All E.R. 695
  • Stewart-Naylor v. London and Westminster Loan and Discount Co., Ltd.
  • Long v. Millar

Full judgment

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Victoria Printing Press Limited v Many (Civil Case No. 149 of 1939) [1938] EACA 182 (1 January 1938)
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.