Yiga v Maviri (Civil Appeal No. 34 of 2013)

Observed later treatment

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Holding

Held that a managing director who signs an agreement to pay commission on land purchased by his company acts as the directing mind and will of the corporation, not in his personal capacity. The company, not the director personally, is liable. Counsel acting for a party in litigation has apparent authority to compromise matters connected with the action. The trial magistrate erred in holding the director personally liable and in refusing to enforce the settlement agreement signed by counsel.

Outcome

Trial court judgment set aside; respondent not entitled to damages

Facts

On 7 June 2009, the respondent, a real estate agent, entered into an agreement with the appellant, a Director of Jomayi Property Consultants, whereby the appellant undertook to pay the respondent commission of UGX 40,000,000 within three months. Jomayi Property Consultants purchased the land and developed it, but the commission remained unpaid. The respondent sued Jomayi Property Consultants, then signed an out-of-court settlement. The respondent later sued the appellant personally for the commission. On 26 January 2010, a Memorandum of Understanding was signed on behalf of Jomayi Property Consultants by its counsel, Mr. Mukibi, wherein the respondent abandoned a larger claim of UGX 209,000,000. The trial magistrate awarded the respondent special damages of UGX 40,000,000, general damages of UGX 8,000,000, and interest at 20% per annum. The appellant appealed on grounds that he acted as agent of the company, not personally, and that the settlement extinguished the claim.

Issues

1. Whether the appellant could raise the issue of lack of consideration on appeal when it was not pleaded at trial.
2. Whether the trial magistrate properly evaluated the evidence regarding the capacity in which the appellant signed the agreement.
3. Whether the appellant signed the memorandum in his personal capacity or as a director acting on behalf of Jomayi Property Consultants Ltd.
4. Whether the Memorandum of Understanding of 26 January 2010 was enforceable against Jomayi Property Consultants Ltd and whether it extinguished the respondent's claim.
5. Whether counsel for a company has authority to execute a settlement agreement on behalf of the company without express powers of attorney.

Orders

• Appeal allowed.
• Judgment of the trial court set aside.
• Appellant awarded costs of the appeal and the lower court.

Rules and key headnotes

Legislation cited (2)

• Companies Act 2012 s.52(i)
• Civil Procedure Rules O.6 r.7

Cases cited (7)

• Bitarabeho v Kakonge (Supreme Court Civil Appeal No. 4 of 2000)
• North Staffordshire Railway Company v Edge [1920] AC 259
• Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705
• Stanbic Bank Uganda Ltd v Ducat Lubricants (U) Ltd and 3 Others (Miscellaneous Application No. 845 of 2013)
• HL Bolton Co v TJ Graham And Sons [1956] 3 All ER 624
• Goldstar Insurance Company Ltd v Attorney General and 2 Others (Civil Suit No. 132 of 2010)
• Betuco (U) Ltd and Another v Barclays Bank (U) Ltd and Another (HMA No. 507 of 2009)

Cases citing this judgment (1)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

• Magandazi v Maviri (Miscellaneous Application No. 990 of 2014)

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