THE COMMON LAW DOCTRINE OF A BONAFIDE PURCHASER

Ownership of land in Uganda is guaranteed under Art 26(1) which confers a

right on every person to own land individually or in association with others.
Nyakana Amooti v NEMA & AG. That land is owned subject to the rights
of others and statutory requirements like planning authorities
In law and practice, it is possible for two or more persons to adversely claim an
interest on the same piece of land. The question that arises is whose interest
prevails in such cases
The answer depends on the nature of interest, the law applicable to such
interest and the circumstances under which either party may have acquired
the given interest
Land law in Uganda is regulated principally by the Constitution, RTA, Land
Act as amended and the Mortgage Act among others. Where such
legislations are inexhausitive or contain a lacuna, recourse may be had too
common law and equity. In case of conflict between the two, equity will
prevail as stated in section 14 of the JA
Competing interests in land therefore maybe regulated by common law and
equity in so far as both are not inconsistent with written law., Barclays Bank
v Gulu Millers; The respondent company had deposited with the appellant
bank certain documents of title to leasehold land at Gulu and had at the same
time executed a “Memorandum of Deposit of Documents/Title” in which it
stated that it had deposited the title deeds “with intent to create a
Lien/Equitable Mortgage/Charge” upon all the property comprised therein for
securing the payment on demand of all the moneys due from the respondent
company to the appellant bank. By para. 2 of the memorandum the respondent
company undertook to execute on demand a legal mortgage with such powers
of sale as the appellant bank might require. In consequence of a failure by the
respondent company to pay the appellant bank the moneys due under the
mortgage, the appellant bank sued in the High Court for a declaration that it
was entitled to be considered as the legal mortgagee of the land comprised in
the Certificate of Title deposited, that the principal sum and the interest then
due and accruing due were a charge on the said land, an order for payment of
the amount due and in default that the land be sold and for possession of the
land. The defence was that the claim was unnecessary and premature, that the
appellant bank’s only remedy was to require the company to execute a legal
mortgage, which the respondent company had always been ready and willing to
give and that the appellant bank had no right to a sale or foreclosure or any
other relief. The trial judge dismissed the action holding that the English
Conveyancing Act, 1881, and in particular s. 25 (2) (which empowers the court
to order an immediate sale of mortgage property)

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did not apply in Uganda. He further held that where a clause such as para. 2 of
the memorandum exists and no request has been made for a legal mortgage to
be executed, the mortgagee cannot in the first instance ask the court for an
order for sale and the remedy was to obtain and enforce a legal mortgage. On
appeal by the bank it was argued that the Conveyancing Act, 1881, applied in
Uganda and that in absence of local provisions for the enforcement of such
mortgages, s. 25 of the Act should be called in aid, and that the trial judge was
wrong in holding that the appellant bank should have first called for a legal
mortgage. Alternatively, it was contended that even if the Conveyancing Act,
1881, did not apply, one of the remedies of an equitable mortgagee under the
doctrines of equity was sale by order of the court, and that the court should
apply the doctrines of equity and order a sale.
Held –
(i) under the doctrines of equity and irrespective of s. 25 of the
Conveyancing Act, 1881, where there is an equitable mortgage by deposit of
documents of title accompanied by a memorandum by the depositor agreeing to
execute a legal mortgage with an unqualified power of sale, the court has power
to order a sale and also a foreclosure;
(ii) it could not have been the intention of the legislature that equitable
mortgages created under s. 138 of the Registration of Titles Ordinance should
be unenforceable, and as no method of enforcement was enacted, it must have
been the intention that an equitable mortgagee should have any remedies open
to him under the general law, so far as these were not inconsistent with the
Registration of Titles Ordinance or other local enactment;
(iii) the doctrines of equity are part of the law of Uganda and when equitable
mortgages were permitted to be created, the doctrines of equity would regulate
the enforcement of such mortgages in the absence of express provision for their
enforcement;
(iv) the primary remedy of an equitable mortgagee is foreclosure under order
of the court;
(v) the provisions of s. 130 of the Registration of Titles Ordinance dealing
with foreclosure, were primarily intended to apply to mortgages made under s.
114, and not to equitable mortgages under s. 138;
(vi) the issue of a plaint in a suit to enforce an equitable mortgage would be
sufficient notice to satisfy the requirements of s. 115, s. 116 and s. 30 of the
Registration of Titles Ordinance.
Appeal allowed.
Olinda De Souza Figueiredo v Kassamali Nanji; The plaintiff signed a
mortgage of her property to secure an advance to her and the mortgage deed

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was duly registered. The mortgage deed was not signed by the mortgagee and
the plaintiff later sued for a declaration that the mortgage was void against her
on the ground that, lacking the signature of the mortgagee and attestation
thereof, the mortgage was a nullity and had been registered contrary to s. 114
and s. 156 of the Registration of Titles Ordinance. The defence was that the
mortgage, having been registered on the certificate of title to the property, could
not be impeached.
Held – once the mortgage had been registered it could not, in the absence of
fraud under s. 184 of the Registration of Titles Ordinance or in the exercise by
the High Court of its power under s. 185 of the Ordinance, be impeached. Suit
dismissed.
It follows therefore that where the interest in land and adverse claims therein
are not a subject of statutory regulation, any such conflict can be resolved by
reference to common law and equity
At common law, a person could only claim lawful acquisition of a legal interest
in land upon proof that the formal preliquisites at common law had been
satisfied. Any claim to a legal interest whose acquisition did not satisfy the
formal requirements was unsustainable at common law.
However with the evolution of equity, such interests which were not recognized
at common law for want of satisfaction of the formal requirements became
recognized under equity as equitable interests. The rationale for such
recognition was premised on two maxims;
1. That equity looks at substance rather than form
2. That equity looks at done that ought to be done
However, there still remained a dispute as to priority of competing legal and
equitable interests in the same piece of land or property. Because of the
principle that equity follows the law, a legal interest was given priority over a
prior existing equitable interest save where the owner of the legal interest had
notice of prior existing equitable interest at the time of the acquisition;
Kristopha Zimbe v Torkana Kamanza, the parties purported to buy the
same piece of land and the seller, who is now dead; no doubt a rascal gave the
respondent; who was the first to buy, a homemade agreement and he in fact
tried to register his interest with the registrar but never got the statutory
transfer of the land and probably would never have so without a great deal of
trouble because the agreement bore a wrong certificate number. The appellant
bought some 10 months later with the correct number and with commendable
promptitude obtained registration of a statutory instrument of transfer. Now,
the appellant can only be ousted if it is shown that he obtained registration by
fraud, his own fraud and not the seller’s. The onus has always fallen on the
respondent to prove so. The appellant went to the registry and found no

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evidence that the respondent was the registered owner. No man can become an
owner until statutory transfer of the land has been registered. He was required
to do no further inquiry. No attempt on the part of the respondent was made to
prove fraud in the court below and the court realized that the decision was
hard on the respondent but they said that he had been foolish and negligent
and had to pay the price. The judicial adviser suspected fraud which
unfortunately was not consistent with the available evidence.

Walsh v Lonsdale. Lonsdale agreed to lease Walsh a mill for seven years. Rent
varied with the number of looms being operated, but there was a minimum
dead rent paid yearly in advance on demand. The lease was not in fact granted
by deed (as was required for leases over three years), yet Walsh moved in and
began paying rent quarterly. Lonsdale demanded payment in advance and
levied distress for non-payment of rent. If the terms of the agreement were
enforceable, then Lonsdale had acted lawfully.
The Court of Appeal held that as it now had jurisdiction to apply equitable
principle, it would regard that as done which ought to be done, and so the
lease had been effective in absence of the formality. Lord Jessel MR said the
following. “There is only one court, and the equity rules prevail in it. The tenant
holds under an agreement for a lease. He holds, therefore, under the same
terms in equity as if a lease had been granted, it being a case in which both
parties admit that relief is capable of being given by specific performance. That
being so, he cannot complain of the exercise by the landlord of the same rights
as the landlord would have had if a lease had been granted. On the other hand,
he is protected in the same way as if a lease had been granted; he cannot be
turned out by six months’ notice as a tenant from year to year.
John Katarikawe v William Katwiremu (deceased Maria Nyamihanda-
administrator ad litem), Oneziforo Bakampata the plaintiff brought this suit
on a contract of sale of land. He was in occupation of suit land since 1971. The
1st defendant was the registered owner of the land in Rujumbura. Agreements
were produced to the effect that an agreement of sale at 5300/= was entered
between him and the first defendant and he proceeded to pay the same in
installments and had 800/= remaining when he discovered that the said land
had been transferred to the 2nd respondent. The balance was to be paid on
completion of the transfer which was never done. The p took immediate
possession of the land and has been the occupant since. The reason advanced
for the delay in transferring by the 1st respondent was that the original title
deeds had been stolen and was in the process of getting a duplicate title. This
however turned out to be a hoax as a search revealed that he had in fact
transferred the same to the 2nd respondent. The transfer was done after the
sale to the applicant. The 2nd respondent argued that he had in fact bought
this land in 1968 for 4600 but only delayed to transfer because he lacked

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funds. He could not produce any documents i.e. an agreement to prove this
contention alleging that the arrangement was oral though he alleged to have
taken possession of the title deeds. The issue was what effect the transfer to
the 2nd defendant had on the contract of sale between the 1st d and the p.
Held: In law, an oral contract is as effective as a written one. The contract is
not perfected until an effective transfer of title has been made but failure to do
so does not affect the contract until the land is transferred to other persons. A
purchaser would ordinarily protect his interests by filing a caveat or a charge.
Here, taking possession of title deeds is useless. In case of default however, he
is entitled to damages or sometimes specific performance. Before transfer, a
buyer under contract only acquires an equitable interest. On the land being
transferred to him, he acquires an indefeasible registered estate unless such is
done through fraud. In the instant case, the p contracted in writing to buy the
disputed land. The p took possession subsequent to the agreement and effected
improvements on it on the basis of the contract. His rights in law are that a
contract for sale was concluded although not perfected by transfer. He could
sue for damages. However, he also acquired rights in equity which rights are
good against all persons except a bonafide purchaser of a registered estate for
value sec145rta. His taking possession amounted to part performance and his
equitable interest was binding on the vendor as an overriding interest. Equity
will not intervene to provide a remedy to a party in case of an oral contract
unless there has been an act of part performance which act must have been
done by the p with the knowledge of the d and must have been unequivocally
referred to the land. Since in Uganda there is no difference between oral and
written contracts, specific performance would not be available to a party unless
there has been an act of part performance. The only remedy left would be to
sue on the contract. A sufficient act of part performance is must fall within the
categories enumerated by Meggary’s manual of the law of Real Property on
pg 229 where it is stated that more frequently, the act of part performance is
concerned with the possession of the land, it does not appear that mere
payment of the contract sum without taking actual possession of the land is
sufficient act of part performance even if the vendor surrenders the deeds so
long as no effective transfer of title is made or a caveat is effected on the
register. Mere payment is by itself no evidence that it was for the purchase of
land for it is explainable on a number of grounds. Possession is decisive as
evidence of a contract to part with ownership of land and will often operate as
notice to anyone dealing with the same land. The provisions of s61 are clear
that once a person is registered as the proprietor, his title is indefeasible except
for fraud. In a land system based on registration, there are basically two
interests, the registered estate and other registrable interests like mortgages
and other charges. Equity will however intervene to protect other unregistered
interests in limited circumstances. Registered interests especially the registered
estate are known as rights in remand bind the whole world. The other interests

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are rights in personam and such may arise from contracts for sale of land
before transfer. The purchaser acquires an equitable interest in nature of a
right in personam enforced against the vendor. If a purchaser despite the
knowledge of occupation of land under contract of sale proceed s with transfer
of title in order to defraud the occupier, this is evidence of fraud. Fraud though
not defined under the RTA covers dishonest dealings in land such as depriving
a purchaser for value in occupation of the land of the unregistered interest. In
the result, the 2nd d was guilty of fraud in terms of sec18 RTA and the transfer
of the land to him was void. Order of specific performance granted upon
payment of the balance. The administrator ad litem is ordered to transfer the
land into the names of plaintiff.
Mustafa Ndigejjerawa v Isaka Kizito & Sebane Kubulamwana; on
20th/2/1948, Isaka the proprietor of land situate at Busaka purported to sell
the same to Sebane at 320shs which was paid promptly. The document was
lodged with the registrar of titles two days later. On the 24 of the same month,
he declared in a document that he had sold the same land to Mustafa for
250shs which was also paid on the spot. This document was lodged with the
registrar on the 4/3/1948. Whichever of the dates is taken, it is clear that
lodgment of this document was done before Sebane’s. The problem arising from
the situation was that the lower courts concentrated on who the actual owner
of the land was and both found for Sebane because he bought first. Mustafa
now claims he lodged his documents first. The question this court thinks
should be; who is entitled to execution and registration of a statutory transfer
of the land. It should be remembered that mailo and any other land subject to
the RTO can be transferred only by the execution of an instrument which
fulfills certain statutory requirements and by the registration of that
instrument, no document can be registered unless it fulfils certain
requirements and no instrument however perfectly it fulfils the requirements is
effectual to transfer any interest in land until registered. It must be pointed out
that neither documents relied upon fulfilled the statutory requirements of the
RTO and that accordingly, neither is capable of registration. Lodgment of a
document contrary to popular belief is not registration. The RTO presents the
order in which instruments presented for registration shall be registered. No
doubt that the general rule is that instruments of transfer are to be registered
in order of their production for registration. Yet any rues contained in the RTO
must have reference only to instruments which are registrable. I entirely fail to
see how a man by merely presenting at the registry an instrument which is not
registrable can impose a duty on the registrar to do anything or create equity in
his favour. Very different of course for a man that produces an instrument
capable of registration; he no doubt gains priority over the competition. In the
circumstances of the case, what is relevant is the date the contracts were
made; Sebane gained the right to compel Kizito to transfer. Mustafa will go

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back to the lower court for assessment of damages and refund of money paid
for registration. The law therefore is;
a. Where one purchase a piece of land which is later sold by the original
vendor to another, the first purchaser keep the land in the absence of
other equities being the same.
b. The prior lodgment for registration of an instrument of transfer which is
unregistrable document cannot give a party better rights to a piece of
land than the person who purchased before him.
Where an equitable claimant is able to prove that at the time the legal
owner acquired the interest they had notice of the preexisting equitable
interest, the evidential burden of proof shifts to the legal owner to prove
that he is a bonafide purchaser for value without notice- Pilcher v
Rawlins, stemmed from a trust executed by his father, Jeremiah, on 23
August 1830, involved a mortgage transaction entered into by his brother
William Humphrey Pilcher, judgment of the court below was that the defence of
purchase for value without notice may be sustained, although the Defendant,
in order to make out his title to the legal estate, must rely on an instrument
which discloses the title of the Plaintiff, the Defendant not having had notice of
such instrument at the time of his purchase.
The trustees of a settlement advanced the trust money on the security of real
property which was conveyed to them by the mortgagor, the mortgage deed
noticing the trust. The surviving trustee of the settlement afterwards
reconveyed part of the property to the mortgagor on payment of part of the
mortgage money, which he appropriated. The mortgagor then conveyed that
part of the property to new mortgagees, concealing, with the connivance of the
trustee, both the prior mortgage and the reconveyance. When the fraud was
discovered, the cestuis que trust under the settlement filed a bill against the
new mortgagees claiming priority:
Held; that the Court would not interfere to take away the legal estate which
passed to the new mortgagees under the reconveyance. The trustees of a
settlement advanced the trust money on the security of real property which
was conveyed to them by the mortgagor, the mortgage deed noticing the trust.
The surviving trustee afterwards induced the mortgagor to execute a deed by
which the mortgaged property purported to be conveyed to the trustee as on a
purchase by him, though no money in fact passed. The trustee then,
concealing the prior mortgage, and shewing title under the pretended purchase
deed, conveyed the property to a mortgagee without notice: Held, that the
Court would not interfere to take away the legal estate from the mortgagee.
Decree of the Master of the Rolls reversed.

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A person who seeks to rely on the doctrine must adduce evidence to prove
the preconditions that constitute the said doctrine. Wilkes v Spooner,
Here, there was a restrictive covenant controlling the use of a butcher’s shop so
that only a certain type of meat could be sold in it. The original lessee was
bound by the covenant over the premises. He also ran a general butcher’s shop
at nearby premises which were not restricted in this way. The lease of the
general butcher’s shop was assigned to Spooner who took on the business
knowing that the other premises were restricted in their use and could not be a
general butcher’s and therefore would not be in direct competition. The lease
concerning the restrictive covenant was re-negotiated to young Mr Wilkes. This
time there was no restrictive covenant, although young Mr Wilkes knew all
about its previous existence as it had restricted his father. He set up as a
general butcher. Mr Spooner complained, claiming Wilkes had constructive
notice of the restrictive covenant. The court rejected this claim. It might also be
noted that there was no privity of estate or contract between Wilkes and
Spooner. Although Spooner had benefited from the restrictive covenant in so
far as there had previously been no trade competition, the lease granted over
his shop was distinct from the lease granted over Wilkes’s shop.

Grace Matovu v Topista Nabbale & Ors, The applicant is one of the
beneficiaries of the estate of the late Kevina Ajeru Nataya, the owner of an
equitable interest on land comprised in plot 541, Block 244 at Kisugu. The late
Kevina Ajeru Nataya acquired the said interest, first as a kibanja interest from
the late Nabagereka Christine in 1962, and she later paid for the value of the
legal interest of the said kibanja which payments were made to the then
registered proprietor through her lawyers, Mpungu & Co. Advocates. The late
Kevina Ajeru Nataya and her children occupied the suit premises since 1962
until her demise and to date the property is still under the possession and
custody of the beneficiaries of the estate of the late Kevina Ajeru Nataya.

In the year 2003, the beneficiaries of the estate of the late Kevina Nataya under
the title “Nataya Property” executed a tenancy agreement with Johnrich Cheap
Stores Limited to whom the Commercial Building on the premises was let until
today. The 1st respondent however, purports to have acquired proprietorship of
the suit land comprised in Block 244 plot 241, and to consequently have
purchased the equitable interest in the said land from one Auma Caroline
Nataya, a widow to the late Peter Nataya who she claims is the lawful owner of
the same. The 1st respondent now seeks to take vacant possession of the suit
premises and to take over Landlordship from the estate of the Kevina Nataya in
respect of the estate’s tenants on the suit premises, hence this application. The
applicant avers that at the time of registration, there subsisted a caveat in their
interest but that the respondents ignored such and proceeded to transfer and

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register as the proprietors of the suit land. As it is, the manner in which the
respondent ignored the said caveat speaks volumes of her conduct and in the
circumstances, fraud can be imputed on the respondents.

Features of the Doctrine at Common Law & Equity

a. The legal claimant invoking the doctrine must prove that he
acquired a legal interest in good faith. Oliver v Hinton on the
meaning of good faith, the deposit of title deeds to secure the repayment
of £400 was accompanied by a memorandum of the deposit, with an
undertaking to execute a legal mortgage if asked to do so. Held: When,
two years after the deposit of the title deeds, the owner executed a
conveyance of the property to a purchaser, whose agent (a former
solicitor’s clerk) never asked to see the deeds, the equities of the case
depended on whether the purchaser had acted with such with gross
negligence that she had to be postponed to the equitable rights of the
chargee. In order that a purchaser for value, who has acquired the legal
estate without notice of a prior equitable mortgage of the property, may
be postponed to that mortgage, it is not necessary to shew that he has
been guilty of fraud, or negligence amounting to fraud; it is sufficient
that he has been guilty of negligence so gross as to render it unjust to
deprive the prior mortgagee of his priority.

Kristopha Zimbe v Torkana Kamanza, Refer to notes above for facts

Belex Tours v Crane Bank & Fang Min; the appellant was 1st plaintiff
at the High Court and customer of the 1st respondent; the 1st and 2nd
respondents were defendants. The Appellant company obtained credit
facilities from the Bank (1st respondent) over a period of time between
1997 and 1999. As security for the credit facilities the appellant executed
a mortgage in favour of the 1st respondent in respect of property
comprised in LeaseHold Register Volume 2490, Folio 4 Plot 9 Sezibwa
Road Kampala.

At that time the appellant was operating a hotel business from the said
mortgaged property. The Hotel was known as HOLIDAY HOTEL (U) Ltd. It
seems the Hotel was operating as a business distinct from the appellant,
registered as Holiday Hotel (U) Ltd in which the appellant held one third
of the shares. Holiday Hotel (U) Ltd was the second plaintiff in the suit at
the High Court. The appellant in addition to the mortgage later executed
two further charges. It also executed a debenture in favour of the 1st
respondent. As at May 15, 1999 the amount due to the 1st respondent

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from the appellant had accumulated to US $ 704,829/=, which the
appellant conceded it had failed to pay.

On 21st May 1999 a deed of transfer of land was executed by the 1st
respondent in favour of the 2nd respondent for a consideration of US
Dollars 745,000/=. The deed was in respect of Leasehold Register
Volume 2490, Folio 4, Plot 9 Sezibwa Road, Kampala, the property that
had been mortgaged by the appellant.

Having realized US$ 745,000/= from the sale the 1st respondent with the
consent of the appellant applied the money to recover the loan which was
at US$ 704,829/=, together with legal charges and auctioneers fees
which was agreed at 5% thereof making a total of US$ 739,200/=, with a
balance of USD 5,800/=.

However the 1st respondent did not pay to appellant US$ 5,800/= which
the appellant was claiming as balance from the proceeds of the sale. In
addition, the appellant was claiming movable property or the value
thereof that was in the Hotel at the time of sale, including furniture,
equipment and other movables.

The 1st respondent did not comply with the said demands and as a
result the appellant sued, together with the Holiday Hotels (U) Ltd the
former claiming the balance on the purchase price of the mortgaged
property, the latter claiming return of movable property or their value.

At the hearing of the suit it was conceded by the appellant that the
movable property that was in the Hotel at the time of sale belonged to it
and not Holiday Hotels Ltd, the 2nd plaintiff. The 1st respondent
counter-claimed for USD 5,112.27/= being outstanding balance on the
loan. The 2nd respondent who was in possession of the movable property
at the time the suit was brought was sued for conversion in respect of
the movable property as she had taken over the Hotel together with all
the movable property therein.

The issues were;

1. Whether the USD 745,000/= included the price of moveable asset or it

was the price of the land only.
2. If so whether if the plaintiffs were entitled to the reliefs and from who?

The COA imputed fraud on the appellants viewing as strange the

transaction between the bank and the 2nd appellant for the transfer of
suit property when the 2nd defendant under the circumstances did not

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 have money to carry out such transaction. The bank allowed her to use
the same property as security whereas she did not have any interest in it.
The same money acquired was then used to pay off the property; a
transaction tainted with fraud from beginning to the end. The SC
however overturned this ruling avering that where the parties have not
pleaded the issue of fraud and led evidence to its proof, then such cannot
be the function of court. This in the Justices view would be against
principles of fair trial and justice.

b. Value- the legal claimant must also prove that they acquired their interest
for valuable consideration. It is not the role of court to investigate whether
the consideration was adequate or not as long as there is consideration.
Wormland v Maitland, It suggests that marriage is value. Value should
not be confused with consideration. S.91. Consideration need not be value,
you can have property transferred for natural love and affection, where
there is no value changing hands and property is transferred e.g gift,
bequeath then this defence is not available to the transferee.
Behange Jennifer v School Outfitters Ltd COA

However, where the consideration is too low compared to the market

value of the properties in the same area, a claim may be supported based
on undue influence or duress. Bonny Katatumba & Ors v Mukesh
Shukuran & Ors- here, court found as a fact that the vendor was
under so much pressure from creditors that he was compelled to
sign an agreement that had a rather low consideration, Behange
Jennifer v School Outfitters
c. The legal claimant must also prove that upon acquisition of the
legal interest, all formalities required for perfection for such an
interest were complied with. Mustafa v Sebane, refer to notes above
for facts. Pilcher v Rawlins-refer to notes above for case details
d. Notice- the legal claimant invoking the doctrine musty prove that at the
time of acquisition of the preexisting equitable interest, he had no notice
whatsoever of the preexisting equitable interest. Llyods v Banks- does not
include rumours.
Notice for this purpose may be actual, constructive or imputed. The
relevant time for such a notice is any time before the purchase or
acquisition. Mustafa v Sebane, Grace Matovu v Teopista Nabbale,
refer to notes above. Sinba (K) Ltd & Ors v UBC for what amounts to
notice that constitutes fraud-speed of transfers. This is an appeal against
the decision of the Court of Appeal whereby the Court ordered the

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cancellation of the 5th Appellant’s name from the title of land comprised
in Freehold Register Volume 211 Folio 18. By an agreement dated
14thFebruary 2011, the Respondent sold to the Haba Group (U) Ltd (the
2 nd Appellant) the suit property located at Bugolobi in Kampala for 11.5
billion shs. (Eleven point five billion shillings). Three months later, the 2
nd Appellant sold the said property to Deo & Sons, (the 3rd Appellant)
under a sale agreement dated 16th May, 2011 for 22 billion shs. (twenty
two billion 15 shillings). The 3rd Appellant was registered on the title on
the 31st May, 2011. Subsequently, the Respondent’s Managing Director,
then Mr. Paul Kihika, wrote a letter terminating the sale agreement
between the Respondent and the 2 nd Appellant and instructed the
Commissioner for Land Registration to de-register the 3rd Appellant from
the title to the suit land and to reinstate the Respondent. As a result, the
3rd Appellant instituted HCCS No. 326 of 2011 in the Land Division of
the High Court against the Respondent and its Managing Director for
general and exemplary damages for wrongfully terminating the sale
agreement and interference with its investment. The Respondent and its
Managing Director resisted the claim and raised a counterclaim that the
sale of the suit property to the 2 nd. Appellant was in contravention of
the UBC Act and thus illegal. They prayed for dismissal of the suit with
costs and judgment on the counterclaim with orders for cancellation of
all entries on the certificate of title of the suit property and reinstatement
of the Respondent there on. At the commencement of the hearing before
Murangira J, Counsel for the Respondent raised the said points of law
and made the same prayers. The learned judge upheld the objection and
dismissed the suit with costs to the Respondent. He then entered
judgment for the Respondent on the counterclaim and ordered the
cancellation of the 3rd Appellant’s name from the title and reinstatement
of the Respondent thereon. The two Appellants were dissatisfied with the
decision of the High Court and lodged an appeal vide Court of Appeal
Civil Appeal No. 107 of 2012. However, before the determination of the
appeal, the parties signed a Consent Judgment dated 16th April, 2013 in
effect settling the appeal amicably by reversing the orders of the High
Court. On the 17th of June 2013 the 2nd and 3rd Appellants executed a
Deed of Assignment with SINBA (K) Ltd, the 1st Appellant under which
they assigned the Consent judgment/ Decree to the said company.
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Subsequently, the 1st Appellant applied for execution of the Consent
Decree and a warrant of attachment was issued to the 4th Appellant,
who proceeded to attach and sell the suit property to the 5th Appellant
on the 30th December, 2013. The 5th Appellant was thereafter registered
on the certificate of title on the 10th January 2014. The Respondent was
aggrieved by the actions of the Appellants and in a bid to recover its land,
challenged the execution and sale of the suit property by
instituting Court of Appeal Misc. Application No 12 of 2014 on the
ground that they were illegal and therefore null and void. As stated
earlier in this judgment, the Court of Appeal by a majority of 2 to 1 ruled
in favour of the Respondent and made the order that has given rise to
this appeal. There are ten grounds set out in the Memorandum of
Appeal.
The appellant did not aver anywhere in her affidavit that she made
any effort to establish the ownership of the land. Further, the speed
with which the transaction was effected particularly at the land
Registry definitely raises suspicion of collusion. This is compounded
by the fact that the land had a checkered history right from the sale
to the 2nd Appellant. It is indeed inconceivable that she could part
with such a huge sum of money without ' carrying out a search in
the Lands Registry to verily the ownership of the said land. Besides,
this was a sale by a court appointed bailiff; it is even more
incredible that the 5th Appellant had no opportunity of establishing
the background suit that had led to the attachment of the said
property. This was not an ordinary sale, as rightly submitted by the
Appellants’ own counsel. It was the sale of very prime land in the
heart of Kampala. The suit property belonged to a Government
body, therefore there was need in my view for a valuation from the
Chief Government Valuer. It was a sale arising out of a court case.
The 5th Appellant had to verify the history of the court case and
scrutinize all the relevant documents before parting with the huge
sum of money, to avoid being sucked into litigation like she has
been. In the premises, I find that the learned Justices were
absolutely right to reject the plea of bona fide purchaser for value
without notice.

13
e. Actual notice means that the legal claimant was aware of the physical
or other encumbrances on the land in favour of the equitable owner but
ignored the same. Erisa Lukwago v Bawa Singh, in 1948, when he
died, the plaintiff’s father held a kibanja on land of the second defendant.
There was then a house on the plot. The plaintiff, as heir of his father,
succeeded to the kibanja, but since he was a minor the rent was paid for
him by his uncle and guardian. By 1952 the guardian’s sister was, by
permission of her brother, occupying the house. On June 17, 1952, the
second defendant sent a circular to all his tenants, including the
guardian, informing them that as from January 1, 1953, their rents
would be Shs. 400/- per annum, and asking them to state whether they
agreed to this rent and a new tenancy agreement. The guardian did not
agree. On June 10, 1952, the second defendant leased the kibanja of the
plaintiff to the first defendant. Towards the end of 1952 the second
defendant gave the guardian’s sister notice to vacate the house. She
replied, claiming compensation. The second defendant offered the
guardian Shs. 400/-, which he refused. On November 19, 1953, the
second defendant’s agent entered on the plot, with a gang and
demolished the house, assisted by the first defendant and his labourers.
No permission had been obtained from the gombolola chief to the land
being leased to the first defendant or anyone else. The plaintiff sued the
two defendants for damages for trespass. The first defendant admitted
the demolition of the house. The second defendant denied that the
plaintiff was in possession of the land and both defendants denied that
the plaintiff had any rights over the land. The second defendant did not
give evidence, but claimed that the court should infer from certain
admissions in the evidence of the plaintiff’s guardian and next friend that
there was a contractual tenancy, and that the plaintiff was not a mukopi.
Held – (i) it is of the essence of the relationship between a mailo owner
and the holder of a kibanja that the latter’s right of occupation inures for
an indeterminate period and is heritable by his heir and successor.
(ii) there was no evidence of a lease for a fixed term or any sufficient
evidence of a tenancy agreement; accordingly the plaintiff was, when the
house was demolished, a mukopi within the Busulu and Envujo Law,
and his rights could only be terminated under that law.
(iii) the plaintiff’s rights had never been extinguished when the house
was demolished and he was in lawful possession thereof.
(iv) whilst the first defendant had a valid lease over the plot, this title
was, under the Registration of Titles Ordinance (Cap. 123), s. 61, subject
to the plaintiff’s interest in the land.
(v) the plaintiff was entitled to damages for demolition of the house and
the loss of his rights as a kibanja holder.

14
Geofrey Ojwang v Wilson Bagonza; This is an appeal against the
decision of the High Court of Uganda dated the 16th August 2001 in
which the respondent’s claim against the appellant was allowed with
costs and the appellant’s counter-claim was dismissed with costs.
The suit arose out of a claim for recovery of land. The respondent by his
amended plaint filed on the 29th May 2001 sought an eviction order
against the appellant for trespass, special and general damages. The
facts that gave rise to the institution of the proceedings in the court
below were not seriously contested. On the 17th November 1992 the
appellant acquired a piece of land from one Francis Ndaga. The land was
a customary holding popularly known as Kibanja. It is situated at
Nsambya West Zone, Makindye Division Kampala District. On the 12th
April 1996 the appellant sold part of his customary holding to the
respondent for a consideration of shs 1,200,000/=. Subsequent to the
said purchase, the respondent wanted to acquire a registered interest
and in the process of doing so he discovered that the land was registered
in the names of the Registered Trustees of Kampala Archdiocese. The
officials of the diocese in charge of managing the estates told the
respondent that the appellant was a trespasser on the land and had
settled there without its knowledge and consent. The respondent went
ahead to acquire a lease for 49 years and a certificate of title (exhibit p.5)
was issued in his names. The title he acquired included the piece of land,
which the appellant had acquired from Francis Ndaga. After the
acquisition of the title the respondent requested the appellant to vacate
the land and offered him compensation of shs 9,000,000/= which the
latter rejected. Efforts to use auctioneers to evict him were futile and the
respondent filed a suit in the High Court at Kampala claiming the reliefs
I have stated earlier. In his written statement of defence and counter-
claim, the appellant averred that he had an equitable interest in the land
and that the respondent was not a bona fide lessee as he acquired his
interest with full knowledge of the defendant’s interest. He alleged that
the respondent’s acquisition was tainted with fraud. The particulars of
fraud were given as follows: “Registering the lease with knowledge of the
defendant’s unregistered interest on the said land as evidenced by the
structures erected on the land and the agreement of sale for a portion of
the land between the plaintiff and the defendant.” In the counter-claim,
the appellant averred that he had an interest in the land, which he
purchased from Francis Ndaga, and in turn sold a portion of it to the
plaintiff. It was averred that when the respondent registered himself, he
did so with full knowledge of the defendant's unregistered interest. In
doing so, the appellant averred that the respondent was fraudulent. He
therefore made the following prayers: -

15
 2. An order that the plaintiff is not a bona fide lessee as he
fraudulently registered his interest without due consideration of
the defendant’s interest.
3. A declaration that the defendant has an equitable interest in
the suit property.
4. A permanent injunction retraining the plaintiff, his servants
and or agents from evicting the defendant from the suit property or
otherwise interfering with his occupation of the same.

In the reply to the written statement of defence and counter-claim, the

respondent denied the allegations contained therein. He averred that the
appellant’s initial entry onto the suit land was illegal and a trespass and he
never acquired any equitable interest in the suit land. It was averred that the
plaintiff’s knowledge of the defendant’s illegal presence on the suit land before
the acquisition of the lease did not derogate from the plaintiff being a bona fide
lessee. He denied the particulars of fraud that were alleged in paragraph seven
of the defence.

Four issues were framed for court’s determination namely:

1. Whether the defendant has ever had any interest recognised under the
law in the suit land.
2. Whether the defendant was a trespasser on the suit land.
3. Whether the plaintiff is a bona fide lessee.
4. Remedies available to the parties if any.

"This land was acquired in 1992 by the defendant just 3 years before the 1995
Constitution came into force, and the Land Act of 1998 which was 7 years
before its enactment, consequently the law applicable to gives (sic) us clearly
what ought to have been done was the Land Reform Decree No.3/75 which was
the Law then and of course taking into consideration Interpretation Act Ss
13(2)(a)(b)(c)(d) and (e) there of section 1(1) of the Land Reform Decree having
converted all land in Uganda to be Public Land under Uganda Land
Commission and section 4(1) of the Decree having only allowed one to transfer
a customary tenure on land after notice to the prescribed authority, the

16
evidence reveal that there was no such notice. Section 4(2) of the Land Reform
Decree made the agreement or transfer without such notice void and of no
effect. It goes further to provide that even where notice is give the transfer (sic)
didn't acquire title or interest in that save for only improvements and or
developments on the land.

Because of the defendant's failure to obtain consent from the registered

proprietor in accordance with section 4(1) of the decree which was either
Kampala Archdiocese or the Uganda Land Commission when the land was
converted in Public land by the Land Reform Decree he doesn't qualify by the
specific provisions in section 30(1)(a) of the Land Act to be referred too (sic) as a
bonafide occupant. For the reason that he never entered on the land under the
Laws prescribed under Section 30(1)(a) of the Land Act. He entered the land in
1992 three years before coming into force of the Constitution of 1995
I was convinced by counsel for the plaintiff argument taking in consideration
the evidence on record which section 4 of the Land Act the defendant couldn't
be described as a lawful occupant either. Section 4(1) described what a
customary tenure is. There was no consent from the registered owner and he
was not settled on the land by owner and he was not settled on that land by
Government. In the matter now before us, the appellant in his own testimony
stated that he "had never recognised anyone having an overriding interest on
his kibanja" to use his own words. He also testified that he did not inquire
about the history ownership of the kibanja. The only information he obtained
from Ndaga who sold him the land was that he (Ndaga) was the son of Naku
Musana who had been given that land by the white fathers. The land had no
developments on it. The appellant's own admissions are clear testimony that he
had no direct or constructive knowledge about the ownership of the kibanja he
purchased from Ndaga. I think the appellant was being naïve when he testified
that he did not recognise anybody else who had a superior title than him.
Under the now repealed Land Reform Decree, all land was vested in the
Uganda Land Commission and therefore it was the controlling authority.
Furthermore, his admission that he did not make any inquiries as to the status
of the land he was purchasing shows lack of prudence on his part. On the
appraisal of the evidence on record, I would uphold the findings of the lower
court that the appellant did not acquire his kibanja lawfully and therefore his
acquisition was not protected by the provisions of section 29(5) of the Land Act
(Cap 227 Laws of Uganda 2000) as learned counsel for the appellant
submitted. The respondent cannot be said to have purchased land in
occupation of another in order for him to be bound by all equities that such
person might have in the land.

17
 f. Constructive notice on the other hand connotes circumstances that
would ordinarily put the purchaser on notice calling for further inquiry in
to actual ownership or encumbrances on the land. Katarikawe v
Katwiremu-refer above for case details

g. Imputed notice normally connotes notice through an agent of the

purchaser which is extended to the purchaser as if such a purchaser was
a direct party. Uganda Posts & Telecommunications v Abraham
Kitimba & Peter Mulangira Lutaaya is an exception to the above named
principle. The respondent leased a large piece of land from the mailo
owner, the 2nd respondent. Unknown to him, part of land was occupied by
the 1st appellant with the consent of the mailo owner. The respondent
successfully sued the 1st appellant in the HC for trespass. On appeal, the
decision was reversed. JSC Karokora said that the law is very clear that if
a person purchases an estate which he knows to be in the occupation of
another than the vendor, he is bound by all the equities which the parties
in such occupation may have in the land. That such occupation of the land
by a 3rd party constitutes constructive notice to the purchaser of any
equitable rights that the occupier might have in the land. Further, if a
purchaser employs an agent such as a lawyer to act on his or her behalf,
any actual or constructive notice that the agent receives is imputed on the
purchaser.

h. Where the legal claimant is unable to prove that the subsequent legal
interest was acquired in circumstances consisting him as a bonafide
purchaser, the legal interest cannot supersede a prior equitable interest.
Grace Matovu v Teopista Nabbale & Ors, Zimbe v Kamanza-refer to
notes above for case details
The doctrine extends to a successor in title implying that any person who
acquires from a bonafide purchaser for value without notice acquires good
title. Maria Nalikka Mpinga v Ernest Ssenkalire, Maria Nalikka Mpinga,
Joseph Kasoma, John Sseruma and Joachim Bamugye, herein after referred to
as the first, second, third and fourth appellants and jointly as the appellants
sued in their joint capacity as legal representatives of the late Joseph Mpinga.
They held letters of administration. The appellants sued Ernest S. Sensalire,
Maritin.B.S.Muyibwa, Joyce N. Galabuzi, Charles Segujja and Lodoviko
Mwanje, herein after referred to as the 1st, 2nd, 3rd, 4th and the 5th
respondents respectively and together as the respondents. The first, second
and third respondents were sued as joint legal representatives of Gabriel
Galabuzi (deceased). They too held letters of administration. The 4th
respondent, was the customary heir as well, as one of the administrators of the

18
said late Galabuzi and was sued as such. The 5th respondent was sued as the
registered transferee of the disputed land.
The suit land was KIBUGA BLOCK 7, PLOT 89, measuring 0.22 of an acre at
Mengo (Ndeeba Mutawe Zone). It was alleged in the plaint that by a lease
agreement dated 14/3/1957, the late Joseph Mpinga agreed to take a lease of
the late Gabriel Galabuzi’s aforementioned land. The terms of the lease were
contained in exhibit “P5 (1)” and its English translation “P5 (2)”.
The appellants’ claim against the first, second, third and fourth respondents
was for an order directing all of them to jointly specifically perform the
aforementioned lease agreement.
The claim against the 5th respondent was for a declaration that he acquired
the suit property subject to the lease interest of the appellants.
It was the appellants’ case that immediately after the execution of the lease the
lessee went into occupation constructed and continued to maintain a modern
commercial building. Furthermore, that during his lifetime, the lessee
promptly paid to the lessor the annual rent reserved. That on 22/10/1986 the
appellants paid to the 1st – 4th respondents, through the latter’s lawyers
shs.50,000/= (fifty thousand shillings only), to cover both the unexpired term
of seventeen years and prepaid ground rent in case they exercised the option of
renewing the lease. During 1988, the 1st – 3rd respondents threatened to
alienate the property alleging that the appellants had no interest in it. By
reason of that threat, the appellants lodged a caveat on 16/1/1989 and at the
same time, through their advocates, requested the respondent’s inter alia, to
execute a registrable lease in proper form in specific performance of the 1957
agreement. On or about 16/6/1989, the appellants filed their suit. But before
it was heard on 24/11/94 the 1st –3rd appellants with intent to defraud,
transferred the reversion to the 4th respondent and on 19/4/1995, the 4th
respondent wrongfully and fraudulently purported to transfer the said property
together with the commercial buildings thereon to the 5th respondent.
The 1st – 4th respondents filed a joint amended written statement of defence.
They contended that the alleged lease was in respect of Kibuga Block 7, Plot
67, but not plot 89. It was based on an agreement dated 22/1/1958 effective
from 14/3/1957. The 1st - 4th respondents further alleged that the purported
payment of shs.50,000/= was made only to justify the suit. They denied any
fraud. The 1st – 4th respondents counter – claimed for orders that the
appellants have no registrable interest and prayed for orders and damages on
that account.
The 5th respondent filed a written statement of defence. He alleged, inter alia,
that he was a bona fide purchaser for value without notice.
During the trial the following issues were framed for determination.

19
(i) Whether plaintiffs have a valid lease on the suit property capable of being
enforced by specific performance?
ii) If there was any such lease, whether it can be enforced against 5th
defendant who is a registered proprietor?
(iii) Whether 5th defendant is bona fide purchaser for value without notice of
the alleged existence of the plaintiffs’ on registered lease?
(iv) Whether the commercial building on plot 89 is the property of Joseph
Lutti Musisi or the plaintiffs?
(v) What remedies are available to the parties?
“Whether the 5th respondent was a bona fide purchaser of the suit property or
not.” This covers ground 5 of the appeal.
Mr. Kulumba Kiingi, learned counsel for the appellant contended that the 5th
respondent was not a bona fide purchaser. Counsel submitted that according
to paragraph 9 of the 5th respondents written statement of defence, he had
pleaded that he was a bona fide purchaser. However, according to his
testimony in court, he was a resident of Ndeeba since 1969, when he was four
years old. He bought the said land in 1995. His lawyer, Mr. Kityo, at one time
represented Joseph Mpinga in matters concerning the suit land. Counsel
reasoned that, therefore, the 5th respondent knew that the building on the suit
land belonged to the appellants and not to one Joseph Luti Musisi from whom
he purported to buy it. He submitted that knowledge must impute to him
through his counsel. He prayed court to order for cancellation of 5th
respondent’s certificate of title.
In support of his submissions, he relied on the following authorities
David Sejjaka Nalima Vs Rebecca Musoke, Court of Appeal Civil Appeal No.12
of 1985.
Robert A.Lusweswe Vs G.W.Kasule and Another HCCS 10 of 1983 and Crayem
Vs Consolidated African Trust (1949) 12 W.A.L.A.443.
Mr. Nangwala for the 4th and 5th respondents submitted that bona fideness
must arise from the same interest. He contended that a lessee could not claim
that a purchaser of a mailo interest is not bona fide. He submitted that the
appellants’ arguments are misconceived.
The learned trial judge in his judgement held that the 5th respondent was a
bona fide purchaser. Firstly, there was no lease on Kibuga, Block 7, Plot 89 as
had been alleged. Additionally, the appellants had not followed the correct
procedure to prove fraud. They had merely alleged fraud in the amended
plaint. They did not plead fraud and particulars of the same. They did not
adduce evidence to prove fraud. Counsel for the appellants, simply submitted

20
that the transaction between the 2nd, the 4th and 5th respondents was tainted
with fraud. The 5th respondent was not, therefore, protected against ejectment
under sections 145, 185 and 189 of the Registration of Titles Act on the ground
that he was a bona fide purchaser of the suit property.
The law is that to impeach the title of a registered proprietor of land, fraud
must be attributable to the transferee, either directly or by necessary
implication. The transferee must be guilty of some fraudulent act or must have
known of some act by somebody else and taken advantage of such act.
The burden of proof of fraud must be heavier than a balance of probabilities
generally applied in civil matters. The particulars of fraud must always be
pleaded since it is a very serious allegation to make. Then the onus is on the
purchaser to prove that he was a bona fide purchaser.
See: Kampala Bottlers Ltd Vs Damanico (U) Ltd 1990-1994 E.A.141 and David
Sejjaka Nalima Vs Rebeca (supra).
In the appeal before Court, no particulars of fraud were pleaded.
I do not think that Mr. Kulumba Kiingi is quite correct in his submission that
pleadings do not matter as long as there is some semblance of evidence of
fraud on record. The 5th respondent claimed in his pleading and gave evidence
that he was a bona fide purchaser.
The learned judge found and I also agree with him that he was a bona fide
purchaser of plot 89. He made a search at the land office and found that
it was in the names of Galabuzi and there was no problem with the title.
There were buildings on the land but he believed they belonged to Alex
Babu because he used to see him running the restaurant. According to the
sale agreement between him and Lutti Musisi, he was to compensate the owner
of the building. He wrote exhibit D8 through his lawyer Kityo and Company
Advocates but the appellants did not respond. It was Lutti Musisi, who came
forward for negotiations.
Indeed there was a case between Joseph Mpinga and one Kasozi in 1974. I am
of the considered view that it would be too much to impute fraud on the 5th
respondent because his lawyer had acted for Mpinga in 1974 and more than
ten years down the road, he seeks services of the same lawyer. When one
engages a lawyer, he/she does not ask him who the current former clients are.
Society depends on the integrity of the lawyers and in the instant appeal, the
5th appellant is not to blame.
I now consider the 3rd issue whether the appellants were customary tenants.
This covers grounds 3, 4 and 5.
Mr. Kulumba Kiingi counsel for the appellants submitted that the appellants
were customary tenants. Counsel submitted that since the learned judge had

21
found that the appellant was a customary tenant he should have applied the
provisions of Article 237 (8) and 9 (a) of the Constitution read together with
sections 30 (1) (a) (i) and 30 (2) (a) of the Land Act 1998 which gave them
security of occupancy. Counsel reasoned that by the provisions of the law
above mentioned, the appellants’ customary tenancy had become tenancy by
occupancy. The judge should have set aside the 5th respondent’s transfer and
ordered cancellation of his title. He argued that the appellants were the ones to
have the first option to buy the suit land.
Counsel for the respondent submitted that the issue of customary occupancy
did not arise. In all their pleadings the appellants were claiming that they had
a lease over Kibuga Block7, Plot 89. They can not now turn round and say
that, they are customary tenants with security of tenure and with the first
option to buy the suit land.
The appeal before court is intriguing. The suit was filed in the High Court on
16/11/1989, before the coming into force of 1995 Constitution and the Land
Act. There was a dispute over the suit land. Be that as it may be, there is
evidence on record that the late Galabuzi allowed Mpinga to construct
buildings on plot 89 in 1950.
However, Galabuzi passed away in 1981 leaving a will and Mpinga passed away
on 1/121982. He was intestate.
According to Galabuzi’s Will, Exhibit D5, he bequeathed his property to his
relatives. In 1986 by the letter from Kulubya and Company Advocates, Exhibit
P9, the appellant’s occupation of Ndeeba, Block 7, Plot 89 was being queried. I
am unable to say that the appellants qualified as customary tenants or bona
fide occupants according to the provisions of the 1995 Constitution.
I appreciate that the appellant’s father was permitted by the late Galabuzi to
construct shops on plot 89. I agree with the learned judge that the shop
belongs to the appellants. The government valuer put their value at Shs
4,000,000/=.
From what I have stated above in the judgement, I am unable to fault the
learned judge on the orders he made.
I find that all the grounds of appeal are devoid of merit.
In the result, I would dismiss the appeal with costs to the respondent.

Wilkes v Spooner - refer to notes above for case details

22
 Modification of the Doctrine & the Entire Procedure of Acquisition of
Registrable Interest in Land in Uganda
The RTA is however subject to any other express provision to the contrary and
will not take precedence of these provisions are contrary with the specific
provisions. Barclays Bank v Gulu Millers-refer to notes above for case
details
Some of the other legislations include the Mortgage Act and the Land Act-the
Mortgage Act repeals a number of provisions of the RTA so they have to
be read together.
Common law and equity applicable by virtue of section 14 of the JA can only
be invoked where it does not offend the clear provisions of the RTA. The
concept of bonafide purchaser for value without notice for example is quite
different from the position in the RTA. If follows therefore that the claim of
bonafide cannot be sustained except where the claimant has satisfied the
preconditions to lawful acquisition of a legal interest under the RTA.
Under the RTA, an interest in registered land only passes upon registration of a
proper instrument. Sec54 RTA, Zimbe v Kamanza, Mustapha v Sebane,
Katarikawe v Katwiremu - discusses distinction between a legal and
equitable interest under the RTA-details of the cases in the notes above. It
follows therefore that where an interest in land is not registered in accordance
with the provisions of the RTA, such interest remains equitable in nature and
cannot override a registered interest except where the certificate of title of the
registered proprietor is incapable of being impeached on grounds set out in
Sec176 of the Act. Nyangire Karumu v Muhammed Kaliisa-Justice
Madrama
The RTA provides for priority of interests registered thereunder and this is
determined in terms of the date of registration. The rule in Dearle & Cave-
that first in time prevails does not apply. Sec46 & 48 of the RTA, Zimbe v
Kamanza-details of cases above.
Nevertheless, where a legal owner under the RTA acquires such interest with
an intention of defeating an unregistered interest, such title is capable of being
impeached but only on ground set out in sec176- Grace Matovu v Teopista
Nabbale-details of case in notes above

Acquisition of land under RTA

a. The intending purchaser must obtain the particulars constituting

the proper description of the land and if possible a copy of

23
 certificate of title. The purpose of such particulars is to enable
intended buyers or their legal counsel to cause a search at the land office
to confirm whether the particulars so provided correspond with the
particulars on the white page. Sec201(1 &2) on searches-nowadays, they
no longer give certified copies but rather a search letter save for police
and court. The purpose of a search is also to confirm if the land is
subject of any registered encumbrance. Sinba (K) LTD & 4 ORS V UBC-
the buyer did not search because she would have seen a red flag raised:
the property had a checkered history; it was registered in the name of
Deo & Sons and yet execution was being done by Haba, the 4th
respondent does not mention that she made a search at the land registry
to ascertain the proprietorship of the property the subject of sale. She
had all the time to do so. The advertisement in the newspaper, the
respondents were named in the advertisement as the Uganda
Broadcasting Corporation and Paul Kihika. At the time of “sale” there
was already available to her a valuation report indicating that the
registered proprietor was Deo &Sons Properties Ltd. The learned Justice
stated that she had a duty and obligation to ascertain the proprietor of
the property even before attempting to bid for it. Had she done so, she
would have found out that the property she was bidding for did not
belong to the respondents and that the advert was false and misleading.

b. Grace Matovu v Teopista Nabbale & Anor-land had a caveat. Where a

person carries out a search and ignores any encumbrance thereon, such
conduct may be construed as being fraudulent, the same applies where
no search is done. Maria Nalika Mpinga v Ernest Sensalire-details of
case above, Waimaiha Saw Milling Co. Ltd v Laine-where there are
facts that would put you on notice but then you ignore, then one is
fraudulent
c. Once the particulars of proprietorship and registered encumbrances
are confirmed, it is prudent for the intending purchaser to cause a
physical inspection of the land to ascertain whether there exists
some physical encumbrances. A seller also has to safeguard his own
white page. UPTC v Abraham Kitumba-land occupied by a 3rd party
without the knowledge of the buyer-facts in the notes above,
Godfrey Ojwang v Bagonzya-land leased from the province included
land that he had previously transacted in.

24
 d. Where the land constitutes matrimonial home or family property
and that is ascertainable from the ground, any lawful acquisition of
such land must be subject to spousal consent. Lamulat Ssanyu
Nakanwagi v Hajj Asuman Jjumba-proof that the house claimed was
in fact matrimonial property, Olowo & Ors v Anthony Mupere-proof
that the land provided sustenance as to qualify to be matrimonial
property, Alice Okiror v Global Capital Save 2004 Ltd-land
mortgaged to money lender without consent of husband
e. The intending purchaser should also confirm the authenticity of the
title presented by comparing the particulars of the title with the
location of the subject land on the ground. Farther Narsensio
Begumisa v Eric Tibebaga-title given did not relate to the land
described, Edward Rurangaranga v Mbarara Municipal Council
f. The intending purchaser must also confirm the boundaries of the
subject land and its acreage-boundary opening. Sec59, Fr Narsensio
Begumisa v Eric Tibebaga-land described on title did not match the
one on the ground

Verification & Authenticity of a Title

The intending purchaser must verify the authenticity of the certificate of title
presented by the vendor to avoid any dealings premised on fake or forged titles.
Where the white page indicates that a special certificate of title was issued and
the vendor presents a duplicate title that should put the purchaser on notice
that such is an invalid title. Fr Nasensio Begumisa v Eric Tibebaga.
Where the title is in the names of a deceased person, the only person entitled to
deal with such property is the administrator or executor of the deceased’s estate
and not the customary heir. John Byekwaso & Anor v Yudaya Ndagire. The
background to the appeal is that the appellants, who were plaintiffs in the lower
court, filed civil suit no. 39 of 2007 against the defendant/respondent seeking
an order of eviction of the respondent from the suit land comprised in Busiro
Block 383 – 391 Plot 4183 situate at Kitende Kawoto, Kajjansi, Sissa Sub
County, and for general damages. The plaintiffs/appellants are the registered
proprietors of the said land having purchased it from Mukasa Bulega. The
plaintiffs alleged in the civil suit that the defendant/respondent entered part of
the said land in May 2007 without their permission and started carrying out
illegal activities. The defendant/respondent on the other hand pleaded that she
is a lawful occupant on the land for value of the kibanja with an old semi
permanent structure or building, having bought the same from a one Nababi
Damalie. She also counter claimed for an order restraining the

25
plaintiffs/appellants from evicting her from the suit land where she claims a
kibanja interest. The trial magistrate found for the defendant/respondent.
The appellants, being dissatisfied with the judgment, appealed against it on the
following grounds:-
The learned trial magistrate erred in law and fact when she held that the
respondent’s witness called Nababi Damali had the capacity to sell the respondent
the property which belonged to the late Charles Nkeera
Learned counsel for the appellants submitted on grounds 1 and 2 that the
respondent based her claim to the suit land on a sale agreement dated 4 th June
2006, marked D. ID. 1 stating she bought the land from Nababi Damali DW5.
The learned trial magistrate based her decision on the said sale agreement and
found DW5 to have had the capacity to sell the property belonging to the late
Charles Nkeera. He submitted that it was clear from the sale agreement marked
D. ID. 1, and from PW3’s testimony, that the property sold by DW5 to the
respondent belonged to the late Charles Nkeera. He contended that the property
is governed by section 180 of the Succession Act which vests ownership of such
property to the administrators of his estate; and that, in the instant case, where
no letters of administration were issued in respect of the late Nkeera’s estate,
DW5 or any other person reflected in the sale agreement did not have capacity
to sell the property.
In my opinion, there is ample evidence on record to show that the suit kibanja
belonged to the late Charles Nkeera. Once this factor was established, though
the family of the late Nkeera were not parties to this suit, the question of whether
whoever sold the said kibanja to the defendant/respondent had capacity to do
so was inevitable if the defendant’s claims on the property as spelt out in the
counter claim were to be determined. Since the said property belonged to the late
Nkeera it is governed by section 180 of the Succession Act, that in that respect
DW5, not being an administrator or executor of the estate of the late Nkeera had
no capacity to sell the late Nkeera’s kibanja to the defendant. The same counsel
also raised the factor of the sale agreement between Nababi and the defendant
being null by virtue of it having been executed or witnessed by minors.
Where the property is registered in the names of a minor, no dealing is
authorized in such property save where court has issued a guardianship
order appointing the applicant therein as the guardian of the minor with
authority to deal with the property. Such dealing must be shown to
benefit the minor. John Byekwaso v Yudaya Ndagire above

Where the property is registered in the names of a company, it cannot be

legally dealt with save where there is a company resolution together with
a power of attorney designating the person’s name therein as attorneys of
the company with power to execute any agreement or instrument on

26
behalf of the company. UBC v Haba Group of Companies, Matter arose on
an alleged breach of contract and fraudulent transfer of the said land,
including an attempt to take away 5.1 acres of its land. The property in
question is located on plots 8-10, 12-16 and 18-20, Faraday Road in Bugolobi.
The suit was brought against Haba Group, Deo and Sons Properties Limited
and in a counter claim, the Commissioner for Land Registration. It is alleged
that Haba Group sold 23.1 acres of UBC land to Deo and Sons Properties Ltd
without completing a Shs11.5 billion payment for the same property to UBC
within the agreed period of time. Documents indicate that on November 10,
2010, Haba Group approached UBC board chairman Chris Katuramu asking to
buy part of the Bugolobi property. A UBC board meeting on January 7
accepted an offer of Shs11.5 billion for 18 acres of the property. The two signed
a sale agreement on February 14. The agreement says Haba Group paid UBC
Shs1.1b up front and said the balance of Shs10.4b would be paid by the Bank
of Uganda in two installments of Shs5.5b and Shs4.9b. Earlier, on January 25,
Central Bank chief Tumusiime Mutebile wrote to Mr Kihika confirming BoU
owed Haba Group money. “I am writing to confirm that Haba Group Ltd has
receivables from government to the tune of Shs96b, which will be paid to them
within the current Financial Year,” It is alleged that BoU never made the
payments to Orient Bank in the stipulated 120 days. Haba Group lawyers
Niwagaba and Mwebesa Advocates said the company was never informed the
central bank had not honoured its guarantee.

Pirebhai Amash Plantations Ltd v Dr. Ssenabulya-what amounts to a

valid power of attorney

Capacity to Sell a Registrable Interest

Sec59 of the RTA recognizes a registered proprietor as a person whose name
appears on the certificate of title. That is the only person vested with the
capacity to sell save that such proprietor may transact through an appointed
attorney. The power has to be specific; if it says sell, then it does that and no
more.
In case of land owned by a statutory corporation, the mandate to sell
emanates from the provisions of the establishing legislation. UBC v Haba
Group of Companies-Section 6(a.) of the UBC Act stipulates that UBC could
only sale or otherwise dispose of property subject to ‘prior approval of the
Minister.
Where the property is subject to spousal consent, a registered proprietor’s
capacity to sell is subject to prior consent of the spouse. When the spouse
signs the sale’s agreement, then the consent will be implied. Consent has to be

27
given by the spouse in the property. Alice Okiror v Global Capital Save
2004 Ltd, Busonya & Others v Ebeke

Execution of a sales agreement

The Contracts Act would require an agreement of sale of land or goods be
reduced in writing. It is not an instrument under the RTA and is incapable of
passing an interest in registered land. M Buwule v Asuman Mugenyi.
A sale agreement must be executed by both the vendor and purchaser or
their authorized attorneys and should be witnessed. Must satisfy all the
perquisites of a valid contract. Must initial each page.
A sale agreement may be registered subject to payment of stamp duty at
the registry of documents. Rosemary Nalubega v Kikayira,
Lamusa Majidu v Alamanzani Nsadu- The brief facts upon which the appeal
is based are that the appellant and the first respondent were brothers, both the
sons of Byakika Badiru (PW2). The 2 nd respondent was the 1st respondent’s
mother. The appellant sued the respondents in the Land Tribunal at Iganga for
encroachment and trespass on a piece of land situated at Ndoya Village,
Bukanga sub-county in Iganga District. He claimed that the land, which was 10
acres in size, originally belonged to his father (Byakika), who acquired it by
purchase from one Bazibu of Ndoya. It was the appellant’s case that after
Byakika bought the land, he gave it to his half-brother, the 1st respondent but
subsequently, Byakika changed his mind and gave the land to the appellant. The
respondents did not acquiesce in Byakika’s change of heart. The appellant
alleged that they entered onto the land and destroyed his house and crops and
insisted on staying on the land; hence the suit to evict them.

The respondents’ case was that Byakika and the 2 nd respondent got married
customarily sometime before 1983. The 2 nd respondent testified that around
1983 they purchased a piece of land at Ndoya measuring 10 x 12 sticks from
one Erifereti Bazibu at a purchase price of shs 160,000/=. The 2 nd respondent
further testified that sometime in 1985, Byakika gave the land to their fast born
son, the 1st respondent, by a deed of gift in the presence of clan members. The
deed was admitted in evidence as Exh.D1. Further that in 2003 the 2 nd

28
respondent relocated from Naigobya to Ndoya where the appellant was in
occupation of the land which he had entered forcefully. It was also the
respondent’s case that by the time of filing the suit they were in occupation of
the land and the appellant was not on the land. Neither did have anything of
value thereon. The appellant had his own piece of land at Naigobya where his
home was located.

It was also the respondents’ case that the disputed land was the 2 nd respondent’s
matrimonial home and that it was inhabited by the respondents and the 2 nd
respondent’s other children with Byakika (PW2). That by virtue of Exh. D2, a
memorandum of understanding that was entered into by PW2 and the 2 nd
respondent on 16/03/2003 before a Probation Officer, PW2 had confirmed his
gift to the 1st respondent. Further that the appellant had come to the land after
the 1st respondent and her children took possession of the land. A deed of gift
was improperly admitted in evidence because of non-payment of stamp duty and
it would be disregarded

However, the failure to register an agreement does not render the

transaction illegal and payment of stamp duty can be effected at any time
before the agreement is admitted. Proline Soccer Academy v Lawrence
Mulindwa & Others-assignment of rights and duties arising out of Nalubaale
Football Club to Proline-deed of assignment never pays stamp duty, Kagwa
Yekoyada v Mary Kiwanuka,
Belex Tours & Travel v Crane Bank & Fang Min.

Where the agreement is drawn for the vendor or purchaser who is illiterate,
the agreement must contain a certificate of translation signed by the person
certifying that the contents therein were duly read and translated to the parties
who understood them before appending their respective signatures. Sec 3&4 of
the Illiterates Act-Kasala Growers cooperative society v Karemera
Jonathan - commissioner of oaths was shown to have translated and signed
as per the requirements above

29
Kabagenyi Teddy Onyango v Fina Bank (U) Ltd, The grounds of the
application as detailed in the notice of motion are firstly that the Applicant has
a good defence and a counterclaim to the Plaintiffs claim in HCCS number 395
of 2012. Secondly the mortgage upon which the main suit is grounded is a nullity
and unenforceable at law. Thirdly if the orders sought by the
Respondent/Plaintiff are granted, the Applicant would suffer double jeopardy.
Lastly the Applicant avers that it is just and equitable that leave is granted for
the Applicant to defend the suit. The affidavit in support of the grounds is
disposed to by the Applicant herself. She deposes that the main suit is grounded
on the mortgage deed dated 3rd of May 2012 allegedly between her and the
Respondent bank. The Respondent bank illegally created a mortgage as an
encumbrance on her property comprised in Plot 104 Block 447 at Kitinda, Abaita
Ababiri, and Busiro Wakiso district hereinafter referred to as the suit property.
The Respondent bank has not sought to foreclose her right to redeem the
property and she has not released the property as security from the alleged loan.
On the basis of information from her lawyers she deposes that the mortgage
executed between her and the Defendant bank does not comply with the law and
was unenforceable. She had made many payment to the Respondent bank
totalling to Uganda shillings 129,354,800/=. She claims that she is illiterate in
terms of banking terminologies and the Respondent bank never explained to her
the import of the terms of the loan facility as required by law. The Applicant
further claims that the Respondents claim is fraudulent because of the claim of
the principal sum plus accrued interest yet the Respondent bank still holds her
security by way of a mortgage. The Respondent bank abandoned her primary
remedy of sale or foreclosure of the mortgaged property and instead sought for
other remedies not envisaged under the mortgage deed/loan facility. The
Applicant claims to have a valid counterclaim against the Respondent bank for
declaratory orders that the mortgage deeds entered into between her and the
Respondent bank was invalid and unenforceable and that the mortgage
registered on the certificate of title as an encumbrance should be removed.
Furthermore on the basis of advice from her lawyers she deposes that the
Plaintiff’s suit is not a proper suit for trial by way of summary procedure. Her

30
suit raises triable issues of fact and law necessitating the adducing of evidence
according to an attached draft written statement of defence. The Applicant
reiterates the grounds in the notice of motion.

The affidavit in opposition is deposed to by Charles Nalyali, the Chief Executive

Officer of the Respondent bank. The deposition gives that facts and that the
Applicant applied for and was granted a loan of Uganda shillings 300,000,000/=
and she accepted the loan offer letter on the 5th of May 2011 by signing it. The
loan was to enable her pay off an existing loan she had with Barclays bank and
for working capital. The loan was granted with an interest rate of 23% per annum
and was repayable in 36 monthly instalments of Uganda shillings 11,612,916/=
each. The Applicants signed a demand promissory note and mortgagor’s
approval and consent. The loan amount was disbursed to the Applicant on the
26th of May 2011 less the processing fee of Uganda shillings 6,000,000/= which
was 2% agreed upon. All the payments made by the Applicant were correctly
noted in the statement of account and she is truly indebted to the bank in the
sum of Uganda shillings 250,319,930/= by 14 August 2011. The Applicant
previously acknowledged the debt in Bankruptcy Petition number 6 of 2012.
Copies of the title of the suit property comprising block 333 of 1293 are attached
to the affidavit in opposition. Furthermore appropriate stamp duty was paid
before the mortgages were released and the properties have not been sold by the
bank.

The application for leave to appear and defend was dismissed on 3 July 2013
for want of appearance and judgment entered against the Applicant for a sum
of Uganda shillings 250,319,930/= with interest. Wherever a person cannot
read and understand the script or language in which a document is written or
printed, it is a mandatory requirement that the signature of illiterates is
verified by the person who read back the script to the illiterate on the very
document in which the illiterate appended his or her signature. The affidavit in
support of the application never complied with the mandatory requirements of
the Illiterates Protection Act (supra). I therefore believe that the Applicant is not
illiterate having duly endorsed both the loan offer and her own affidavit in
support of the application in total disregard of the Illiterates Protection Act
Mukibi v Elietek Technologies Intl Ltd, Saison v Fast Track Financial Services
Limited-same principle

31
 Execution of a transfer instrument
Section 54 of the RTA provides that no instrument shall pass interest in land
except upon registration. The instrument capable of passing an interest must be
in the form set out in the Schedule 2 of the Act. Sec92, Themi Nakibuuka
Sebalu v Peter Sematimba
Sec147 & 148 RTA, Frederick Zaabwe v Orient Bank, Belex Tours & Travel v
Crane Bank, Amash Plantations v Dr Ssenabulya
The transfer instrument must be properly attested by an attesting witness
under designated the Act. Alice Okiror v Global Save 2004 Ltd-the husband
did not attest as required by sec39 of the Land Act.
Where either the transferor or transferee is an illiterate, the attesting witness
must execute a certificate of attestation. Normally done for thumbprint
impressions. Kasala Growers cooperative society v Karemera Jonathan -
commissioner of oaths was shown to have translated and signed as per
the requirements above
Mwene Kahima’s case-money lent to lawyer
The signature of the transferor and the transferee must be presented in
Latin character or trans of the signature as provided in the Act. Sec 147 &
148 RTA, belex, zaabwe, General Parts v Npart.
Where the transfer form has been executed by the parties, it has to be
dated and attested (witnessed) by any of the persons authorized by law to
witness. Sec147 & 148 RTA.
147-attesattion of instruments & powers of attorney.
148-signatures to be in latin character
It is important for the instrument to be dated. Temi Nakibuuka Sebalu v
Peter Sematimba-Sec92 RTA.
Where the transfer instrument is executed outside Uganda, it is a
requirement that the same has to be attested to by a notary public or the
equivalent of a notary public in that country. Wilson kwesiga in Wakanyira
George v Ben Kavuya- amash planatations v dr ssenabulya.
Upon due execution of the instruments, a consent to transfer form setting
out the particulars of the vendor and purchaser (transferor & transferee)
as well as the consideration is also executed for purposes of valuation.
Taken to the chief government valuer to calculate the amount of stamp duty.
There is a difference between the price and value of the land. The same amount

32
should appear on both transfer forms and the agreement should be the same.
Because any discrepancy may constitute a ground for fraud that vitiates title.
Bwengye v Happy Konera. Art126(2)e.

The Chief Government Valuer is mandated to indicate the value of the

land property upon which stamp duty is payable. The transferee must then
pay through an authourised bank to URA and should equally pay registration
fees payable to the local authority where the land is situate. Justice Christine
Kitumba in Housing Finance Bank v Edward Musisi, It was appreciated that
there were irregularities in the sale agreement. However, that did not mean
that the sale agreement was a forgery made in order to defeat the respondent's
interest. The stamp duty for the agreement of sale had not been paid in
accordance with section 42 of the Stamps Act. That notwithstanding the land
could not be transferred into the names of the buyer without paying the stamp
duty and other taxes connected with land transfers. I do not, therefore, agree
with the holding of the learned Justices of the Court Appeal that the trial
judge's holding that stamp duty would have been paid at the time of transfer of
the land was speculative.

Under valuation of the land by the transferee deliberately intended to

defraud government of its revenue may constitute fraud and a ground for
cancellation of the title. Janet Diana Cope & 4 Ors v Janet Namubiru &
Anor. The mode of acquisition of the title deed in question was fainted with
fraud and illegality because bonafide includes without fraud or without
participation in wrong doing. When the 2nd Plaintiff inserted Shs.500,000/= the
consideration for the land and factory when he had paid Shs.2.4 million for it
the design was to defraud the government of its revenue by way of paying less
stamp duty. Furthermore by Public Policy, any transaction designed to defraud
the government of its revenue is illegal. The effect of this illegality was to
prevent the first Plaintiff from recovering under contract which he secured
illegally. The title procured by the 1st Plaintiff was therefore void because of
fraud.”
Mubiru v Bwensiba & Anor, Tobacco Commodities Trader Limited v
Mastermind Tobacco Uganda limited. Wakanyira George v Kavuya Ben, David
Arthur Bagambe v Commissioner of Land Registration-same principle
The transferee must then present the certificate or duplicate title
together with the transfer and consent form, id’s of parties as well as
photos for both and in case of a company, a resolution authorizing the
transfer to the relevant registry of lands for lodgment.
The legal position after registration, once the certificate of title is
registered in the name of the transferee, such person is deemed under 59
to be the indefeasible owner or proprietor of the land so described in the
certificate and such person takes precedence over any claimants of an
equitable interest. Jacob mutabazi v 7th day Adventist church-Section 59

33
of the Registration of Titles Act (RTA) provides that a certificate of title shall be
conclusive evidence of title and shall not be impeached on grounds of
informality or irregularity in the application for the issuance thereof or
processes leading to such issuance
Isaka Wamala v JH Muguluma, Themi nakibuuka sebalu v peter sematimba-
justice kisake, Katarikawe-same principle
Where a vendor sells land to a purchaser who takes possession of the land
and of the certificate of title but the vendor withholds execution of the
transfer instrument pending the payment of the balance of the
consideration, the position of the law is that property passes to the
purchaser and the vendor though currently registered on the title is
deemed to be a trustee of the purchaser and can be compelled by order of
specific performance to execute the transfer. The remedy available to the
vendor is an action for recovery of the balance and damages.
Asiimwe Mary v Ssemwanga Godfrey- There is impeccable evidence that an
agreement was reached between the Plaintiff and the Defendant whereby the
Defendant agreed to convey his proprietary rights in Block 411 Plot 5 land at
Ssisa, Musaale to the Plaintiff. The effect of that agreement was that property
passed to the Plaintiff and the Defendant held it as a trustee of the purchaser.
The above position was restated by JESSEL M. R. in Laysaght v Edwards [1876]
ChD 449. in that case it was held inter alia that, on completion of the contract
of sale the property passes to the purchaser and the vendor holds it as a trustee
for the purchaser. It was further held that whereas the legal title remains in the
vendor until the transfer to the purchaser, the equitable title transfers to the
purchaser and such title is considered in equity to be superior to the vendor’s
title which usually extinguished on the payment of the full purchase price.

The above position was overstated in Meggary and Wade, Law of Real Property
3rd Edition at page 582:- “The Purchaser as owner: If the purchaser is
potentially entitled to equitable remedy of specific performance he obtains an
immediate equitable interest in the property contracted to be sold, for he is or
soon will be in a position to call for it specifically: It does not matter that the
date for completion when the purchaser may pay his money and take possession
has not yet arrived. Equity looks upon that as done ought which to be done,

34
and from the date of the contract the purchaser becomes owner. The vendor
must therefore manage and preserve the property with the same case as....”

Lawrence lumu v lindo musoke, Somali democratic republic v treon-Same

principle
Sec59 provides that a certificate of title issued under the Act shall be
conclusive evidence that the person whose name appears therein is the
proprietor and the particulars in the certificate shall be received by any court of
law and treated as conclusive. 59. Certificate to be conclusive evidence of
title.
No certificate of title issued upon an application to bring land under this Act
shall be impeached or defeasible by reason or on account of any informality or
irregularity in the application or in the proceedings previous to the registration
of the certificate, and every certificate of title issued under this Act shall be
received in all courts as evidence of the particulars set forth in the certificate
and of the entry of the certificate in the Register Book, and shall be conclusive
evidence that the person named in the certificate as the proprietor of or having
any estate or interest in or power to appoint or dispose of the land described in
the certificate is seized or possessed of that estate or interest or has that power
M Buwule v Asumani Mugenyi, Lawrence Kitts v Bugisu Cooperative Union, fr
nasensio begumisa v eric tibebaga-must read

MORTGAGES
Mortgages in Uganda are regulated by a series of legislations inclusive of Art26
and 237 of the Constitution. The Mortgage Act 8 of 2009, RTA, LA as
amended, Civil Procedure Act & the Rules, the Mortgage Regulations and
the JA to the extent to which it allows applicability of common law and
equity.
The law governing mortgages is therefore statutory and non-statutory and its
applicability depends on whether the mortgage is on registered land or
unregistered and where there are competing interests of the same legal status.
Mutambulire v Yusuf Kimera-refer to notes above. The principle legislation
that governs legal. Equitable and informal mortgages in Uganda is the
Mortgage Act (hereto referred to as the MA) which came into force on 2nd Sep
2011.
In effect, it regulates the validity and enforceability of mortgages executed after
its commencement. The validity of mortgages executed before the
commencement of the current Mortgage Act is still regulated by the provisions

35
of the repealed Mortgage Act and the RTA save that enforceability of such
mortgages is regulated by the current Act. This is because the law does not act
retrospectively. But if it’s foreclosure or sale, it can only happen under the new
law. Wamono Shem v Equity Bank HCMA 6000 2012-Applied the Mortgage
Act of 2009 even when the 2011 Act had been passed.
Justice Tuhaise in Namuli v Mulwana HCCS 613 2004-same as above
The Act is inexhaustive in the regulation & enforceability of mortgages and
therefore is supplemented by other relevant legislation including Art26, the
RTA save for the provisions repealed by the MA. Other relevant legislations
include, the LA in so far as Mortgages in respect of land where they are lawful
or banafide occupants or customary tenants. Sec 2&3 of the mortgage act¸ 3&4
of the LA, 44 ma (repealed provisions of the RTA), sec54, 59, 134, 149, 148,
176 & 182 or RTA
Rehema Namuli v James Mulwana, Barclays Bank v Gulu Millers, Uganda
Ecumenical Church Fund v Nankabirwa.
A mortgage is defined sec2 MA as including any charge or lien on land or any
other estate or interest in land in Uganda for securing the payment of an
existing or future or contingent date or other money or money’s worth or the
performance of an obligation and includes a second subsequent mortgage, 3rd
party mortgage and a sub mortgage.
Commercial Micro Finance v David Edgar Kayondo HCCA 12 2006, East Africa
Foam Ltd v AG, Ecumenical,
From the foregoing definition, there has been a departure in terms of scope of
the mortgage from the repealed MA.
The new Act regulates both mortgages on registered and unregistered land. The
repealed act was on mortgages related only to registered land. (compare
mutambulire v Yusuf Kimera)
The Act has extended the scope of a mortgage to cover credit facilities other
than in monetary terms-money or money’s worth
The Act has also recognized and made specific provisions for a second or
subsequent mortgage and a third party mortgage. Stanley v Wilde
East Africa Form ltd v AG & 2 ors hccc 292 & 67 2002, General Parts U Ltd v
Npart, Frederick Zaabwe v Orient Bank. A legal mortgage is registered upon
payment of the requisite stamp duty and registration fees. Sec3(3).
3. Power to create mortgages.
(3) The power conferred by this section shall be exercisable subject to any
prohibition or limitation imposed by this Act, by any regulations made under

36
this Act or by any written law; or any restriction contained in an instrument
creating or affecting an interest in land which is to be the subject of a
mortgage.
Justice xtine Kitumba Housing Finance bANk v Musisi Edward, Wamono Shem
Equity Bank.
However, non-registration does not render a mortgage unenforceable as
between the parties thereto as it operates as a contract inter parties. Sec3(5),
3. Power to create mortgages.
(5) Notwithstanding subsection (4) an unregistered mortgage shall be
enforceable between the parties.
Somali demo republic v treon, Somali Democratic Republic v Treon- Treon
owned leasehold property before expropriation of 1972, he entered an agreement
of sale to Somali Republic. Some money was paid and before balance was paid,
Treon and others were expelled in Amin’s regime. After the expulsion, the
property was vested in the government and managed by the custodian Board.The
Board received the money(the balance) and transferred the property to the
embassy in1972. In 1972, law was made – the Expropriated Property Act which
allowed former owners of land to claim land from the government. Trion claimed
he got an expropriation certificate. He claimed that the transaction after 1972
had been nullified by that law. Courts had to clarify status of agreements before
1972 which agreement was not registered. Court said that even if there was no
registered transfer, there was an enforceable transfer perfected by the custodian

Board .

jutice Helen obura in alice okiror.

A mortgagee is entitled to carry out a due diligence before concluding the
mortgage transaction including a search, physical inspection and
valuation of the subject property this encompasses boundary opening. J
Bashaija in Amratlal Pushottam Bimjai & Ors v Singh Gian
A legal mortgage is created by registration on the encumbrance page of
the white page and the encumbrance page of the owner’s copy.
Uganda ecumenical 3(1) MA, Sec2) LA
Where the interest which is subject of a mortgage is one registered under the
provisions of the RTA, such interest must have been effected by proper
instruments as required by sec54 of RTA. Sec54, 59, sec3(3) MA.

37
Any of the aforementioned persons may conclude a mortgage transaction
through an attorney duly appointed in the manner required under the RTA
Sec146. Sec148&149 0n attestation of signatures. Amash, Bamuje v Tropical
Africa Ltd CACA 48 2007, Fredrick Zaabwe v Orient Bank-Must read
A legal mortgage is created under sec3(1) MA through the execution of a proper
mortage deed or instrument which must registered and only takes effect as
such upon registration. Sebane, Rehema Namuli v James Mulwana Sec3(4)
The legal mortgage instrument must be properly executed and attested in the
manner required under sections 147 & 148. Oiror, Nile Bank v smond Kagwa,
Belex.
A mortgage instrument must be distinguished from a sale agreement or a loan
agreement and a court in the absence of any other evidence cannot treat a
sales agreement as a mortgage deed. Wakanyira.
Where the mortgager is an illiterate, the mortgage instrument must bear a
certificate of translation to abut any allegations of misrepresentation or any
reliance on non est factum. Elietek, Kabagenyi v fina bank,
EA Foam Ltd v AG & 2 Ors-must read-defines illiterate, explains mortgages of
companies. I have analysed the evidence and submissions made on this issue
and will start with the allegation of illiteracy. The evidence on record
particularly that of PW1shows that he had a full and real understanding that
the interactions between him and PTA Bank were of a business nature and that
the purpose of the documents presented to him were for loan and import
facilities. In my view, this knowledge removes him from the protective ambit of
the doctrine of non-est -factum. Thus, I do not find the doctrine of non-est–
factum applicable to PW1 in spite of his testimony that he does not understand
English. On the contrary there is overwhelming evidence on court record
showing that PW1 personally wrote and signed several documents prepared in
English and there is no statement that someone else wrote it for him in
accordance with section 3 of the Illiterates Protection Act. The effect of a power
of attorney which is duly signed and sealed in accordance with the regulations
of a corporation and granted to that corporation’s authorized agent is to enable
him/her to transact on behalf of the company without further authorisation
An equitable mortgage is created under the provisions of 3(1) & 8 of the MA by
deposit of certificate of title, certificate of customary ownership, lease
agreement or any document evidencing an interest in land (even a sale
agreement).
3. Power to create mortgages.
(1) A person holding land under any form of land tenure, may, by an
instrument in the prescribed form, mortgage his or her interest in the land or a

38
part of it to secure the payment of an existing or a future or a contingent debt
or other money or money’s worth or the fulfilment of a condition.
(8) Nothing in this section shall operate to prevent a borrower from
offering and a lender from accepting—
(a) an informal mortgage; or
(b) a deposit of any of the following—
(i) a certificate of customary ownership;
(ii) a certificate of title issued under the Registration of Titles Act;
(iii) a lease agreement;
(iv) any other document which may be agreed upon evidencing a right to an
interest in land; or
(v) any other documents which may be agreed upon, to secure any payments
which are referred to in subsection (1).
Commercial micro finance v davis edgar kaoyndo.
For an equitable mortgage to subsist, the deposit of the title or document of
ownership must be with an intention to create an equitable mortgage. Nile
bank v desmond kagwa
From the wording of 3(8), it appears not to be a mandatory requirement to
lodge a caveat as precondition for enforcement of an equitable mortgage. 3.
Power to create mortgages. (8) Nothing in this section shall operate to
prevent a borrower from offering and a lender from accepting—
(a) an informal mortgage; or
(b) a deposit of any of the following—
(i) a certificate of customary ownership;
(ii) a certificate of title issued under the Registration of Titles Act;
(iii) a lease agreement;
(iv) any other document which may be agreed upon evidencing a right to an
interest in land; or
(v) any other documents which may be agreed upon, to secure any payments
which are referred to in subsection (1).
Justice Tuhaise in Rehema namuli v James Mulwana, Nile Bank v Desmond
Kagwa.

39
 Other Preconditions to Mortgages
Where the mortgage is in respect of a matrimonial property or customary land
with a matrimonial home, the preconditions in Sec6 & 5 must be satisfied.
Spousal consent must be obtained and in case of customary land, consent of
the spouse and children must be obtained. Sec5, 6 &7.
5. Mortgage of matrimonial home.
(1) Notwithstanding section 39 of the Land Act, a mortgage of a matrimonial
home, including mortgage on customary land of a matrimonial home is valid
if—
(a) any document or form used in applying for the mortgage is signed by or
there is evidence from the document that it has been assented to by the
mortgagor and the spouse or spouses of the mortgagor living in that
matrimonial home;
(b) any document or form used to grant the mortgage is signed by or there is
evidence that it has been assented to by the mortgagor and the spouse or
spouses of the mortgagor living in that matrimonial home.
(2) For the -purposes of sub section (1)—
(a) an intending mortgagee shall take reasonable steps to ascertain whether an
intending mortgagor is married and whether or not the property to be
mortgaged is a matrimonial home;
(b) an intending mortgagor shall make full disclosure to the intending
mortgagee as to his or her marital status and whether or not the property to be
mortgaged comprises the matrimonial home.
(3) The mortgagee shall be deemed to have discharged the duty under
subsection (2), if the mortgagee obtains a marriage certificate issued in
accordance with the laws of Uganda, and in the absence of it, a statutory
declaration from the spouse or spouses of the mortgagor as proof of marriage.
6. Consent to mortgage of matrimonial home
(1) Where a matrimonial home is the subject of an application for a mortgage, a
mortgagee shall satisfy himself or herself that the consent of a spouse referred
to in section 5 is an informed and genuine consent and that duty is deemed to
have been complied with if—
(a) the mortgagee has—
(i) explained to the spouse or spouses of an applicant for a mortgage in the
presence of an independent person, the terms and conditions of the mortgage
which is being applied for; or

40
(ii) in writing, advised the applicant for a mortgage that he or she should
ensure that his or her spouse or spouses receive independent advice on the
terms and conditions of the mortgage which is being applied for; and
(b) the spouse or spouses, as the case may be, provide a signed and witnessed
document to the effect that they have received independent advice on the
mortgage which is being applied for and have understood and assented to the
terms and conditions of the mortgage or that they have, notwithstanding the
advice from the mortgagee, waived their right to take independent advice.
(2) In this section an “independent person” means any officer of the
Government, a Justice of the Peace, an advocate, a Notary public, bank
manager, a minister of any religion authorised to celebrate marriages, a
medical practitioner and any other person authorised in that behalf by the
Minister by Statutory instrument.
(3) A mortgagee may take such other steps in addition to the steps set out in
this section as he or she considers necessary and desirable to satisfy himself or
herself that the assent of the spouse or spouses is informed and genuine.
(4) Where a person holds out to be providing independent advice as provided
for under section 6(1)(a)(ii), such a person shall be liable on conviction to a fine
not exceeding one hundred twenty currency points or to imprisonment not
exceeding sixty months or both.
7. Application of this Act to mortgages on customary land.
(1) The creation and operation of mortgages on customary land shall, subject to
this Act, continue to be in accordance with the customary law applicable to the
land in respect of which the mortgage on customary land is created.
(2) Where the mortgagee under a mortgage on customary land seeks to exercise
any customary remedy which involves or may involve the mortgagor being
dispossessed or permanently deprived of the occupation of the mortgaged land,
the mortgagee shall, after using the services of the Mediator to try and mediate
on the application of the proposed or any other remedy, make an application to
the court for an order authorising the exercise of that remedy; and the court
shall, in determining whether to authorise the exercise of that remedy, be
guided by the provisions of sections 33.
(3) The mortgagor under a mortgage on customary land may, after making use
of the services of the Mediator to try and mediate on the matter with the
mortgagee, apply to a court for the mortgage to be reopened on the ground that
the terms of the mortgage are—
(a) unconscionable; or

41
(b) an unreasonable departure from the normal terms of a mortgage on
customary land applicable in the area where the land is located; or (c)
disadvantageous to the interests of the dependants of the mortgagor.
(4) In any case concerning a mortgage on customary land, the court
determining the case shall, where it appears to the court that—
(a) the customary law applicable to that mortgage is inadequate; and
(b) no other system of customary law makes adequate or any provision for the
matter in question, be guided by the relevant provisions of this Act, the
common law and the doctrines of equity.
(5) This section shall not apply to customary land which is owned by a
community.
(6) In the case of customary land which is owned by a family, the land may only
be mortgaged with the consent of the spouse or spouses and children of the
mortgagor.
Wamono shem v equity bank, alice okiror. Failure to obtain the consent
renders the mortgage unenforceable I so far as the matrimonial property is
concerned. One cant sell this property but rather sue he debtor as stated in
okiror, tumwebaze v mperirwe, busonya & ors v ebeke-decided before the act.

The legal effect of a mortgage

A mortgage executed pursuant to the provisions of the act only takes effect as
security and not a transfer. Any clause in the mortgage deed that confers a
right of transfer in favour of the mortgage is void. Sec8, Mortgage of land to
take effect as security only.
(1) On and after the date of the commencement of this Act, a mortgage shall
have effect as a security only and shall not operate as a transfer of any interest
or right in the land from the mortgagor to the mortgagee; but the mortgagee
shall have, subject to this Act, all the powers and remedies in case of default by
the mortgagor and be subject to all the obligations conferred or implied in a
transfer of an interest in land subject to redemption.
(2) Where a mortgagor signs a transfer as a condition for the grant of a
mortgage under this Act, the transfer shall have no effect.
(3) A mortgagee who requires a transfer as a condition for the grant of a
mortgage under this Act, commits an offence and is liable on conviction to a
fine not exceeding four thousand currency points.
(4) In the case of the mortgage of a lease, the mortgagee shall not be liable to
the lessor for rent or in respect of the covenants and conditions contained or

42
implied in the lease to any greater extent than he or she would have been if the
mortgage had been by way of a sublease.
Mubiru Epainato v Uganda Credit & Savings Bank-The right to possession
can be exercised against any other person deriving in the mortgaged property
through the mortgagor and the interest in the subsequent to the mortgage
Wakanyira George v kavuya ben-kiryabwire.
Priority of mortgages. In case of mortgages on registered land, priority is
conferred upon by order of registration- Sec3(6&9), Sec9(2) of MA & Sec48
RTA
3. Power to create mortgages.
(6) Where a second or subsequent mortgage is made by a mortgagor whose title
is registered under the Registration of Titles Act, the second or subsequent
mortgagee may, at his or her own expense, require the first mortgagee to
produce any duplicate certificate of title which he or she may hold to the
registrar so that the second or subsequent mortgage may be registered
(9) A sum secured by a mortgage shall be deemed to be a civil debt recoverable
summarily.
Sec9(2)
9. Priority.
(2) In respect of mortgages of land held for customary tenure under a certificate
of customary ownership, mortgages shall rank according to the order in which
they are registered by the recorder and the recorder shall register all such
mortgages in the order and as from the time they are presented to him or her
for registration.
Sec48 RTA. Instruments entitled to priority according to date of
registration.
(1) Every instrument, excepting a transfer, presented for registration may be in
duplicate and shall be registered in the order of and as from the time at which
the instrument is produced for that purpose, and instruments purporting to
affect the same estate or interest shall, notwithstanding any actual or
constructive notice, be entitled to priority as between themselves according to
the date of registration and not according to the date of the instrument.
(2) Upon the registration of any instrument not in duplicate, the registrar shall
file and retain it in the office of titles, and upon the registration of any
instrument in duplicate, the registrar shall file one original and shall deliver
the other, hereafter called the duplicate, to the person entitled to it.

43
Where there is a further advancement of money to the mortgager by the
mortgagee, a further charge maybe created and registered on the title to secure
the further credit extended. Sec10. Tacking.
(1) A mortgagee may, subject to this section, make provision in the mortgage
instrument to give further advances or to give credit to the mortgagor on a
current or continuing account.
(2) A further advance referred to in subsection (1) shall not rank in priority to
any subsequent mortgage unless—
(a) the provision for further advances is noted in the register in which the
mortgage is registered; or
(b) the subsequent mortgagee has consented in writing to the priority of the
further advance.
(3) Except as provided for in this section, there is no right to tack.
(4) Where a mortgage provides for the payment of a principal sum by way of
instalments, the payment of those instalments shall not be taken to be a
further advance and such payment shall rank in priority to all subsequent
mortgages.
Nurdin Bandali v Lombard Banking Tanganyika Ltd.
The parties to a mortgage are allowed to vary the interest rates and any other
terms and may equally consolidate two or more mortgages. Sections 11 & 12
11. Consolidation.
(1) Unless there is an express provision to the contrary clearly set out in the
mortgage instrument— (a) where a mortgagee has more than one mortgage
from a single mortgagor; or
(b) where the mortgagee has lent money or money’s worth to a single mortgagor
on two or more securities, the mortgagor may discharge any or some of the
mortgages or securities without having to redeem all the mortgages or
securities.
(2) Notwithstanding subsection (1), a right to consolidate shall not be
exercisable to the prejudice of any person acquiring land under any form of
land tenure or under a certificate of occupancy or any other interest in land
entitling that person to the occupation and use of that land prior to the
recording of that right to consolidate in the prescribed register.
(3) The rules of equity applicable to consolidation shall, from the
commencement of this Act, no longer apply to a mortgage.

44
(4) For purposes of this section, “consolidation” means the combination of two
or more mortgages or securities.
12. Variation of a mortgage.
(1) The rate of interest payable under a mortgage may be reduced or increased
by a notice served on the mortgagor by the mortgagee which shall—
(a) give the mortgagor not less than fifteen working days’ written notice of the
reduction or increase in the rate of interest;
(b) state clearly and in a manner which can be readily understood, the new rate
of interest to be paid in respect of the mortgage;
(c) state the responsibility of the mortgagor to take such action as he or she is
advised by the notice to take to ensure that the new interest rate is paid to the
mortgagee. (2) The amount secured by a mortgage may be reduced or increased
by a memorandum which— (a) complies with subsection (5); and
(b) is signed—
(i) in the case of a memorandum of reduction, by the mortgagee; or
(ii) in the case of a memorandum of increase, by the current mortgagor; and (c)
states that the principal moneys intended to be secured by the mortgage are
reduced or increased as the case may be, to the amount or in the manner
specified in the memorandum.
(3) The term or currency of a mortgage may be shortened, extended or renewed
by a memorandum which—
(a) complies with subsection (5);
(b) is signed by the current mortgagor and by the mortgagee; and
(c) states that the term or currency of the mortgage is shortened, extended or
renewed, as the case may be, to the date or in the manner specified in the
memorandum.
(4) The covenants, conditions and powers expressed or implied in a mortgage
may be varied, but not so as to impose any significantly greater burdens on the
borrower than those set out in section 17 by a memorandum which—
(a) complies with subsection (5);
(b) is signed by the current mortgagor and the mortgagee; and
(c) states that the covenants, conditions and powers expressed or implied in the
mortgage are varied in the manner specified in the memorandum. (5) A
memorandum for the purposes of subsections (2), (3) and (4)—
(a) shall be endorsed on or annexed to the mortgage instrument; and

45
(b) when so endorsed or annexed to the mortgage instrument, operates to vary
the mortgage in accordance with the terms of the memorandum.

The Right of Redemption

A mortgager is entitled to redeem the mortgaged property by discharging the
obligation to pay the outstanding sums under the mortgage. Once a mortgagee,
is duly cleared, he or she or it is under obligation to surrender the security as
well as a release of mortgage.
Sec14; Right to discharge.
(1) Subject to this section and section 15, on the payment of all moneys and
the performance of all other conditions and obligations secured by the
mortgage, and on the payment of any costs and expenses properly incurred by
the mortgagee in exercising any of his or her rights under the mortgage, the
mortgagee shall at the request and cost of the mortgagor release the mortgage
at any time and any agreement or provision in the mortgage instrument or
otherwise which—
(a) purports to deprive the mortgagor of that right;
(b) seeks to fetter the exercise of that right; or
(c) stipulates for a collateral advantage which is unfair and unconscionable and
inconsistent with the right to discharge, is void.
(2) A discharge whether of the whole or a part of a mortgage shall be made in
the prescribed form.
Commercial Micro Finance v Davis Edgar Kayondo, belex, Barclays bank v
Livinstone Katenda Lutu. Where at the time of discharge of the obligation to
pay, the mortgagee is under disability or out of the country or his whereabouts
are unknown and no person is authorized to receive, the repayment, the
Secretary to the Treasury is entitled to receive the payment and interest ceases
upon such payment.

The Right to Transfer a Mortgage

A mortgager is allowed to cause a transfer of a mortgage and any rights
and obligations thereunder provided the consent of the mortgagee is
obtained.
Sec17. Transfer of mortgage.

46
(1) The current mortgagor or any person mentioned in subsection (3) may at
any time, other than a time when the mortgagee is in possession of the
mortgaged land, in writing request the mortgagee to transfer the mortgage to a
person named in the written request.
(2) The current mortgagee may at any time transfer the mortgage by a transfer
in a prescribed form and shall give notice of the transfer to the mortgagor.
(3) Subject to the consent of the mortgagor, which consent shall not be
unreasonably withheld, the persons who may make the written request under
subsection (1) are any—
(a) person who has an interest in the land which has been mortgaged;
(b) surety for the payment of the amount secured by the mortgage;
(c) creditor of the mortgagor who has obtained a decree of sale of the mortgaged
land.
(4) Where the consent required by subsection (3) is withheld, a person
aggrieved by the withholding of the consent may appeal to the court for an
order requiring the mortgagor to show cause why the mortgagor cannot give
consent, and the court may, in its discretion, dispense with the consent.
(5) The mortgagee, on receiving a written request made under subsection (1)
and on payment by the person or persons making the request of all monies
which would have been payable if the discharge of the mortgage had been
made under section 14, and the performance of all other obligations secured by
the mortgage, shall transfer the mortgage to the person named in the written
request.
(6) Any express or implied term in a mortgage instrument which conflicts with
this section is void.

TERMS IN A MORTGAGE
A mortgage being a contract between the parties is subject to express and
implied terms with the exception that any term that excludes the operation of
the principle that once a mortgage, always a mortgage is void. Sections 8 & 18
Sec8, Mortgage of land to take effect as security only.
(1) On and after the date of the commencement of this Act, a mortgage shall
have effect as a security only and shall not operate as a transfer of any interest
or right in the land from the mortgagor to the mortgagee; but the mortgagee
shall have, subject to this Act, all the powers and remedies in case of default by
the mortgagor and be subject to all the obligations conferred or implied in a
transfer of an interest in land subject to redemption.

47
(2) Where a mortgagor signs a transfer as a condition for the grant of a
mortgage under this Act, the transfer shall have no effect.
(3) A mortgagee who requires a transfer as a condition for the grant of a
mortgage under this Act, commits an offence and is liable on conviction to a
fine not exceeding four thousand currency points.
(4) In the case of the mortgage of a lease, the mortgagee shall not be liable to
the lessor for rent or in respect of the covenants and conditions contained or
implied in the lease to any greater extent than he or she would have been if the
mortgage had been by way of a sublease.
Sec18; Implied covenants by the mortgagor.
(1) There shall be implied in every mortgage the following covenants by the
mortgagor with the mortgagee binding the mortgagor—
(a) except in the case of a mortgagor under a third party mortgage, to pay the
principal money on the day appointed in the mortgage agreement, and, so long
as the principal money or any part of it remains unpaid, to pay interest on it or
on so much of it as for the time being remains unpaid at the rate and on the
days and in the manner specified in the mortgage agreement;
(b) to pay all rates, charges, rent, taxes and other outgoings which are at all
times payable in respect of the mortgaged land;
(c) to repair and keep in a reasonable state of repair all buildings and other
improvements upon the mortgaged land and to permit the mortgagee or his or
her agent at all reasonable times until the mortgage is discharged and after
reasonable notice to the mortgagor, to enter the land and examine the state
and condition of those buildings and improvements;
(d) to insure by insurance or any other means as may be prescribed or as are
appropriate, that resources will be available to make good any loss or damage
caused by fire to all buildings on the land, and where insurance is taken out, it
is done in the joint names of the mortgagor and mortgagee with insurers
approved by the mortgagee and to the full value of all the buildings; (e) in the
case of a mortgage of land used for agricultural or pastoral purposes, to use
and continue to use the land in a sustainable manner and in accordance with
the principles of good husbandry and any conditions subject to which the land
is held and to comply with all written laws and lawful orders applicable to that
use of the land;
(f) not to lease, or sublease the mortgaged land or any part of it without the
previous consent in writing of the mortgagee, but that consent shall not be
unreasonably withheld;

48
(g) not to transfer or assign a lease or a tenancy by occupation or part of it
without the previous consent in writing of the mortgagee, but that consent
shall not be unreasonably withheld;
(h) in the case of a mortgage of a lease, during the continuance of the mortgage,
to pay, perform and observe the rent, covenants and conditions contained and
implied in the lease, on the part of the lessee to be performed and observed and
to keep the mortgagee indemnified against all proceedings, expenses and
claims on account of non-payment of the rent or part of it or the breach or non-
observance of the covenants and conditions or any of them, and, if the lessee
has an enforceable right to renew the lease, to renew it;
(i) where the mortgage is a second or subsequent mortgage, that the mortgagor
will pay the interest from time to time accruing on each prior mortgage (not
being a third party mortgage) when it becomes due and will at the proper time
repay the principal money or part of it due on each prior mortgage;
(j) where the mortgagor fails to comply with any of the covenants implied by
paragraphs (b), (c), (d), (e) and (h) that the mortgagee may spend such money
as is reasonably necessary to remedy the breach and may add the amount so
spent to the principal money and that amount shall be deemed for all purposes
to be a part of the principal money secured by the mortgage. (2) The mortgagor
shall keep all buildings upon the mortgaged land in a reasonable state of
repair, but there shall not be read into any such covenant an undertaking by a
mortgagor to put any building or part of it into a better condition than it was in
at the commencement of the mortgage.
(3) The mortgagee shall not spend any money under subsection (1) (j) without
giving notice to the mortgagor of his or her intention to do so
Samuel v Jarrah Timber Paving Corporation, Lord Macnaghten; My Lords,
I regret that the state of the authorities leaves me no alternative other than to
affirm the judgment of Kekewich J. and the Court of Appeal. A perfectly fair
bargain made between two parties to it, each of whom was quite sensible of
what they were doing, is not to be performed because at the same time a
mortgage arrangement was made between them. If a day had intervened
between the two parts of the arrangement, the part of the bargain which the
appellant claims to be performed would have been perfectly good and capable
of being enforced; but a line of authorities going back for more than a century
has decided that such an arrangement as that which was here arrived at is
contrary to a principle of equity, the sense or reason of which I am not able to
appreciate, and very reluctantly I am compelled to acquiesce in the judgments
appealed from.
Default by a Mortgager & Powers of a Mortgagee

49
Where a mortgager fails to repay the principal and interest or any part thereof,
the mortgagee is entitled to invoke the default clauses for recovery of the
outstanding sums. Sec19(1) Notice on default. (1) Where money secured by a
mortgage under this Act is made payable on demand, a demand in writing shall
create a default in payment. The mortgagee must make a demand in writing to
the mortgagor for payment of the outstanding sum. Epaileto mubiru v Uganda
credit & savings bank, belex, housing finace v edddward msisi.
Where a demand is made and payment is not effected within 30days, the
mortgager is deemed to be in default.
Where the mortgager fails to discharge the obligation to pay, the mortgage is
entitled to serve the mortgager with a notice requiring rectification of the
default within 45 working days.
Where the 45 days lapse and the mortgager has not rectified the default and
the mortgagee wishes to exercise a right of sale, the mortgagee shall serve a
notice to sale and the sale shall not take place until the expiry of 21 working
days. Sec19(2 &4), 19. Notice on default;
(2) Where the mortgagor is in default of any obligation to pay the principal sum
on demand or interest or any other periodic payment or any part of it due
under any mortgage or in the fulfilment of any covenant or condition, express
or implied in any mortgage, the mortgagee may serve on the mortgagor a notice
in writing of the default and require the mortgagor to rectify the default within
forty five working days.
(4) A mortgagor will be deemed to be in default warranting the mortgagee to
serve upon him or her a notice in writing of the default requiring the mortgagor
to rectify the default within the prescribed number of days as stated in sub-
section (2) if the mortgagor fails to meet any obligation to pay the principal sum
on demand or interest or any other periodic payment or any part of it under the
mortgage after a period of 30 days from the date when the obligation to pay
becomes due.
Sec 36(1&2), 36. Exercise of powers under section 34 to review certain
mortgages.
(1) Upon an application made under section 34, the court may—
(a) declare the mortgage void;
(b) direct that the mortgage shall have effect subject to such modifications as
the court shall order; or
(c) require the mortgagee to repay the whole or part of any sum paid under the
mortgage or any related or collateral agreement by the mortgagor or any surety

50
or other person who assumed an obligation under the mortgage whether it was
paid to the mortgagee or any other person.
(2) The court shall not declare a mortgage void unless it is satisfied that the
circumstances justify it.
Nyangire karumu & 2 ors v dfcu leasing co ltd.
Where the sale of the property is to be by public auction, it is a mandatory
requirement that the property must be valued at least 6 months before the
sale. It must be advertised in colour in a newspaper of a wide circulation and
the auction shall not take place earlier than 30 days from the date of the first
advert. Sec28 on exercise of powers of sale by mortgagee. 28. Powers
incidental to the power of sale.
(1) Where a mortgagee becomes entitled to exercise the power of sale, that sale
may be—
(a) of the whole or a part of the mortgaged land;
(b) subject to or free of any mortgage or other encumbrance having priority to
the mortgagee’s mortgage;
(c) by way of subdivision or otherwise;
(d) by public auction, unless the mortgagor consents to a sale by private treaty;
(e) with or without reserve; and
(f) subject to such other conditions as the mortgagee shall think fit, having due
regard to the duty imposed by section 27(1).
(2) Where a sale is to proceed by public auction, it shall be the duty of the
mortgagee to ensure that the sale is publicly advertised in advance of the sale
by auction in such a manner and form as to bring it to the attention of persons
likely to be interested in bidding for the mortgaged land may include but not be
limited to the mortgagee placing an advert including a colour picture of the
mortgaged property, in a newspaper which has wide circulation in the area
concerned, specifying the place of the auction, and the date of the auction,
being no earlier than thirty days from the date of the first advert.
(3) A transfer of the mortgaged land by a mortgagee in exercise of his or her
power of sale shall be made in the prescribed form and the registrar or
recorder, shall accept that form as sufficient evidence that the power has been
duly exercised.
(4) Upon registration of the transfer by a registrar or recorder, the interest of
the mortgagor as described in it shall pass to and vest in the purchaser free of
all liability on account of the mortgage, or on account of any other mortgage or

51
encumbrance to which the mortgage has priority, other than a lease or
easement to which the mortgagee had consented in writing.
He is also required to exercise due diligence and take all reasonable steps
to obtain the best price save that the mortgagee cannot sale to him or
herself except with leave of court.
Once the property has been sold, the mortgager is entitled to execute a
transfer in favour of the purchaser who acquires good title except in case
of fraud, misrepresentation or other dishonest conduct which the
purchaser has actual or constructive notice of. Nyangire Karumu v DFCU
Bank-subject of a pending appeal in COA. Sec28(3) - refer to notes above for
details of the provision
29. Protection of purchaser.
(1) A purchaser in a sale effected by a mortgagee acquires good title except in a
case of fraud, misrepresentation or other dishonest conduct on the part of the
mortgagee of which the purchaser has actual or constructive notice.
(2) A purchaser is not—
(a) answerable for the loss, misapplication or non-application of the purchase
money paid for the mortgaged land; (b) obliged to see to the application of the
purchase price; or
(c) obliged to inquire whether there has been a default by the mortgagor or
whether any notice required to be given in connection with the exercise of the
power of sale has been duly given or whether the sale is otherwise necessary,
proper or regular.
(3) For the purposes of this section, a purchaser is—
(a) a person who purchases mortgaged land excluding the mortgagee when the
mortgagee is the purchaser; or
(b) a person claiming the mortgaged land through the person who purchases
mortgaged land from the mortgagee, but does not include the mortgagee where
the mortgagee is the subsequent purchaser.
(4) A purchaser prejudiced by unauthorised, improper or irregular exercise of
the power of sale shall have a remedy in damages against the mortgagee
exercising that power.

52