Gold Trust Bank (U) Ltd (Now DFCU Bank Ltd) v Josephine Zalwango Nsimbe, Executirix of the Estate of Sam Nsimbe (Now Deceased) (Civil Suit No. 226 of 1992) (Civil Suit No. 226 of 1992) [2005] UGHC 65 (9 December 2005)

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.}}{\*\pnseclvl2\pnucltr\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang {\pntxta )}} {\*\pnseclvl5\pndec\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8919514 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\insrsid5253833\charrsid8919514 THE REPUBLIC OF UGANDA}{\insrsid657632\charrsid8919514 \par }{\insrsid5253833\charrsid8919514 IN THE HIGH COURT OF UGANDA AT KAMPALA \par }{\b\insrsid5253833\charrsid8919514 CIVIL SUIT NO. 226 OF 1992 \par }{\insrsid5253833\charrsid8919514 IN THE MATTER OF GUOSTAR ENTERPRISES (U) LTD \par }{\b\insrsid5253833\charrsid8919514 AND \par }{\insrsid5253833\charrsid8919514 IN THE MATTER OF THE LAND COMPRISED IN KYADONDO BLOCK 244 \par PLOT 2809 \par ARISING FROM AN EQUITABLE MORTGAGE \par }{\b\insrsid5253833\charrsid8919514 BETWEEN \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8919514 {\insrsid5253833\charrsid8919514 GOLD TRUST BANK (U) LTD}{\insrsid16464420\charrsid8919514 (Now DFCU BANK LTD) :::::::::}{ \insrsid5253833\charrsid8919514 :::::::::::: PLAINTIFF \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8919514 {\b\insrsid5253833\charrsid8919514 VERSUS \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8919514 {\insrsid16464420\charrsid8919514 JOSEPHINE ZALWANGO NSIMBE, ADMINISTRATRIX \par OF THE ESTATE OF }{\insrsid5253833\charrsid8919514 SAM NSIMBE }{\insrsid16464420\charrsid8919514 (Now Deceased) ::::::::::}{\insrsid5253833\charrsid8919514 ::::::::::: DEFENDANT \par \par }{\b\insrsid5253833\charrsid8919514 BEFORE: THE HONOURABLE AG. JUDGE REMMY KASULE \par }{\insrsid5253833\charrsid8919514 \par }{\b\insrsid5253833\charrsid8919514 JUDGMENT \par }{\insrsid5253833\charrsid8919514 \par This suit was originated in this Court by Originating Summons under Order 34 Rules 3A and 7 of the Civil Procedure Rules and also Under Section 2 of the Mortgage Decree, 1974. \par \par At first the suit was brought by Gold Trust Bank (U) Ltd as the Plaintiff. In the course of time, after the institution of the suit, Gold Trust Bank (U) ceased business and its affairs were taken over by DFCU Bank Limited, who thus became plaintiff.

\par \par There has also been change of Defendant. The Original Defendant was Sam Nsimbe. He unfortunately died after institution of the Suit. The surviving widow, Josephine Zalwango Nsimbe, }{\insrsid16464420\charrsid8919514 is }{ \insrsid5253833\charrsid8919514 now the administratrix of the deceased\rquote s estate}{\insrsid16464420\charrsid8919514 and in that capacity}{\insrsid5253833\charrsid8919514 she has become the Defendant to the Suit. \par }{\insrsid16464420\charrsid8919514 In the Suit, the plaintiff,}{\insrsid5253833\charrsid8919514 claims to be a mortgagee, of the property comprised in Kyadondo Block 244 Plot 2809, }{\insrsid3604988\charrsid8919514 land at Kis}{ \insrsid16464420\charrsid8919514 ugu, Kyadondo, Kampala District. The said land is}{\insrsid3604988\charrsid8919514 registered in the names of Sam Nsimbe, now deceased}{\insrsid16464420\charrsid8919514 ,}{\insrsid3604988\charrsid8919514 and}{ \insrsid16464420\charrsid8919514 was the o}{\insrsid3604988\charrsid8919514 riginal Defendant}{\insrsid16464420\charrsid8919514 to the suit. The said Sam Nsimbe }{\insrsid3604988\charrsid8919514 is alleged to have executed a power of attorney}{ \insrsid16543617\charrsid8919514 in favour of}{\insrsid3604988\charrsid8919514 Guo Star Enterprises}{\insrsid16464420\charrsid8919514 , who, in turn, mortgaged the }{\insrsid3604988\charrsid8919514 property to the plaintiff}{ \insrsid16464420\charrsid8919514 .}{\insrsid5253833\charrsid8919514 \par }{\insrsid16543617\charrsid8919514 \par The plaintiff applies by these Originating Summons for court to determine the following questions;- \par }{\insrsid3604988\charrsid8919514 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid3604988\charrsid8919514 \hich\af0\dbch\af0\loch\f0 a)\tab}}\pard \qj \fi-435\li1155\ri0\sl360\slmult1\widctlpar \jclisttab\tx1155\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin1155\itap0\pararsid8919514 {\insrsid3604988\charrsid8919514 Whether the Mortgagor has failed to pay the loan monies; and \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid3604988\charrsid8919514 \hich\af0\dbch\af0\loch\f0 b)\tab}Whether the plaintiff as the mortgagee of the property is entitled to foreclose and sale off the said property. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8919514 {\insrsid3604988\charrsid8919514 There are several affidavits filed in the Suit. Opio Anna, credit Manager of the plaintiff deponed t o an affidavit dated 3}{\super\insrsid3604988\charrsid8919514 rd}{\insrsid3604988\charrsid8919514 March 1999, accompanying the Originating Summons. \par \par Sam Nsimbe Tomusange, the original Defendant, deponed to an affidavit in reply to that of Opio Anna. The same is dated 7}{\super\insrsid3604988\charrsid8919514 th}{\insrsid3604988\charrsid8919514 July 2000. \par \par Each of the affidavits filed in the suit has a number of annexure}{\insrsid13064127\charrsid8919514 s}{\insrsid3604988\charrsid8919514 to it. \par \par No other evidence was adduced in the case apart from these affidavits. \par \par Counsel for both parties opted for written submissions. \par \par Before going into the merits of this case it is necessary to say a word about three other court civil actions pending in this court, having a bearing to this suit. \par The first of these is H. C. C. S No. 347 of 1997 at Kampala: Edward Kivumbi Mukasa V. Sam Nsimbe Tomusange. In this case judgment and Decree was entered}{\insrsid13064127\charrsid8919514 , on 18}{\super\insrsid13064127\charrsid8919514 th}{ \insrsid13064127\charrsid8919514 May 2000,}{\insrsid3604988\charrsid8919514 against the Defendant (Sam Nsimbe Tomusange) in favour of one Edward Kivumbi Mukasa for various amounts of money}{\insrsid13064127\charrsid8919514 . }{ \insrsid14952549\charrsid8919514 In}{\insrsid3604988\charrsid8919514 execution of the Court Decree, the Judgment creditor applied to}{\insrsid13064127\charrsid8919514 ,}{\insrsid3604988\charrsid8919514 and the court ordered}{ \insrsid13064127\charrsid8919514 ,}{\insrsid3604988\charrsid8919514 attachment and sale by public auction}{\insrsid13064127\charrsid8919514 ,}{\insrsid3604988\charrsid8919514 of the suit }{\insrsid14952549\charrsid8919514 property}{ \insrsid13064127\charrsid8919514 . T}{\insrsid14952549\charrsid8919514 he attachment is still pending.}{\insrsid3604988\charrsid8919514 \par }{\insrsid14952549\charrsid8919514 \par The second Civil }{\insrsid13064127\charrsid8919514 action}{\insrsid14952549\charrsid8919514 is High Court Miscellaneous Application No. 1039 of 2004: Josephine Zalwango Nsimbe V. Edward Kivumbi Mukasa and DFCU Bank Ltd. \par \par In this application the applicant, now Defendant in this suit}{\insrsid13064127\charrsid8919514 ,}{\insrsid14952549\charrsid8919514 seeks a stay of execution of the Court Decree in C. S. No. 347 of 1997 until the final dispos}{ \insrsid13064127\charrsid8919514 al of this suit i.e. 226 of 1992; o}{\insrsid14952549\charrsid8919514 n the ground that the DFCU Bank Ltd,}{\insrsid13064127\charrsid8919514 is}{\insrsid14952549\charrsid8919514 illegally holding the title of Kyadondo Block 244 Plot 2809 because the same was mortgaged to the Bank Contrary to the powers of A}{\insrsid13064127\charrsid8919514 ttorney granted to the Mortgagor}{\insrsid14952549\charrsid8919514 . The }{ \insrsid13064127\charrsid8919514 holdi}{\insrsid14952549\charrsid8919514 ng of the title was depriving the applicant from raising money to satisfy the court decree in Civil Suit No. 347 of 1997. An interim Order to stay execution of the Decree in Civil Suit No. 347 of 1997, pending disposal of Civil Suit No. 226 of 199}{ \insrsid13064127\charrsid8919514 2}{\insrsid14952549\charrsid8919514 was granted to the applicant by this court on 15}{\super\insrsid14952549\charrsid8919514 th}{\insrsid14952549\charrsid8919514 December 2004. \par \par The third and last of the }{\insrsid13064127\charrsid8919514 court actions}{\insrsid14952549\charrsid8919514 is H. C. C. S No.}{\insrsid14636296\charrsid8919514 1043B of 1997: Gold Trust Bank Ltd V. Guo Dong filed in the Commerci al Division of the High Court, Kampala. The Plaintiff in this suit sues the Defendant as guarantor of a loan of shs.81,000,000/= advanced to Guo STAR Enterprises (U) Ltd by Gold Trust Bank Ltd, on 7}{\super\insrsid14636296\charrsid8919514 th}{ \insrsid14636296\charrsid8919514 July 1997}{\insrsid13064127\charrsid8919514 ,}{\insrsid14636296\charrsid8919514 which loan the borrower failed to pay. }{\insrsid13064127\charrsid8919514 The suit property}{\insrsid14636296\charrsid8919514 was the security tendered for repayment of this loan. \par \par The determination of the two questions stated in the Originating}{\insrsid13064127\charrsid8919514 Summons in Civil Suit No.226/1992}{\insrsid14636296\charrsid8919514 depends on resolving the issue of whether or not one Guo Dong was vested with powers by the power of Attorney}{\insrsid13064127\charrsid8919514 ,}{\insrsid14636296\charrsid8919514 dated 13}{\super\insrsid14636296\charrsid8919514 th}{ \insrsid14636296\charrsid8919514 May 1997 granted to him by Sam Nsimbe Tomusange}{\insrsid13064127\charrsid8919514 ,}{\insrsid14636296\charrsid8919514 to tender to G}{\insrsid13064127\charrsid8919514 old Trust Bank Ltd as security,}{ \insrsid14636296\charrsid8919514 Kyadondo Block 244 Plot 2809}{\insrsid13064127\charrsid8919514 ,}{\insrsid14636296\charrsid8919514 to guarantee repayment of a loan advanced to a}{\insrsid13064127\charrsid8919514 }{\insrsid14636296\charrsid8919514 company}{\insrsid13064127\charrsid8919514 ,}{\insrsid14636296\charrsid8919514 Guo STAR Enterprises Limited. \par \par }{\insrsid13064127\charrsid8919514 By the said power of Attorney, }{\insrsid14636296\charrsid8919514 Sam Nsimbe Tomusange, the donor, being Registered }{\insrsid13064127\charrsid8919514 Proprietor of}{\insrsid14636296\charrsid8919514 Kisugu Block 244 Plot 2809, appointed, Nominated, ordained and authorized, Mr. Duo Dong of Guo Star Enterprise}{\insrsid13064127\charrsid8919514 ,}{\insrsid14636296\charrsid8919514 P. O. Box}{\insrsid13064127\charrsid8919514 4289 Kampala, to be his }{ \insrsid14636296\charrsid8919514 true and lawful attorney to execute the following: \par \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid14636296\charrsid8919514 \hich\af0\dbch\af0\loch\f0 i)\tab}}\pard \qj \fi-720\li1440\ri0\sl360\slmult1\widctlpar \jclisttab\tx1440\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1440\itap0\pararsid8919514 {\insrsid14636296\charrsid8919514 To take possession of the Certificate of Title of the stated land; \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid14636296\charrsid8919514 \hich\af0\dbch\af0\loch\f0 ii)\tab} To pledge, mortgage or charge the said land to obtain a loan, overdraft, or any financial assistance whatsoever from any Bank or Financial Institution in Uganda. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid7153376\charrsid8919514 \hich\af0\dbch\af0\loch\f0 iii)\tab}}{\insrsid7153376\charrsid8919514 T o sign or execute all documents and deeds that may be necessary or expedient in obtaining the said loan \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid7153376\charrsid8919514 \hich\af0\dbch\af0\loch\f0 iv)\tab}To do any acts that may be necessary in executing the objects of the given powers. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8919514 {\insrsid7153376\charrsid8919514 The power of Attorney was duly witnessed and registered with the Registrar of Documents on 14}{ \super\insrsid7153376\charrsid8919514 th}{\insrsid7153376\charrsid8919514 May 1997}{\insrsid13064127\charrsid8919514 .}{\insrsid7153376\charrsid8919514 }{\insrsid13064127\charrsid8919514 \par \par }{\insrsid12333152\charrsid8919514 On 30}{\super\insrsid12333152\charrsid8919514 th}{\insrsid12333152\charrsid8919514 July 1997, the donor revoked t}{\insrsid7153376\charrsid8919514 he same; because the Donee had tried and failed to obtain a loan/overdraft from any bank or financial institution in Uganda. }{\insrsid14636296\charrsid8919514 }{\insrsid7153376\charrsid8919514 The revocation wa}{\insrsid12333152\charrsid8919514 s als} {\insrsid7153376\charrsid8919514 o registered with the Registrar of Documents. \par \par A power of Attorney is an Instrument conferring authority of the principal to the agent where such authority is required to be conferred by a deed, or where, in any other circumstances, it is desired formally to appoint an agent to act fo r the principal in one transaction or a series of transactions, or to manage the affairs of the principal generally. \par \par The person conferring the authority}{\insrsid12333152\charrsid8919514 is}{\insrsid7153376\charrsid8919514 the donor of the power, and the recipient of the authority, the donee. \par \par A power of attorney is construed strictly by the courts according to well recognized rules of construction: See}{\insrsid12333152\charrsid8919514 :}{\insrsid7153376\charrsid8919514 Halsbury\rquote s Laws of England, Fourth Edition: Re issue: Volume 1(2) }{\insrsid12333152\charrsid8919514 Butterworth\rquote s}{\insrsid7153376\charrsid8919514 , paragraph 46. \par \par In applying the strict construction regard is first had to the recitals in the power of Attorney which show the general object, and control the general terms in the operative part of the deed. General words are construed as limited by reference to the special powers conferred. \par \par Incidental powers }{\insrsid12333152\charrsid8919514 necessary f}{\insrsid7153376\charrsid8919514 o}{\insrsid12333152\charrsid8919514 r}{\insrsid7153376\charrsid8919514 carrying out the authority will be implied: See }{\b\insrsid7153376\charrsid8919514 Midland Bank Limited V. Reckitt [1933] AC 1 at 16}{\insrsid12333152\charrsid8919514 . }{\b\insrsid12333152\charrsid8919514 The Privy Council in the case}{\b\insrsid7153376\charrsid8919514 of BRYANT, POWIS, AND BRYAN}{\b\insrsid12333152\charrsid8919514 T }{\b\insrsid5067185\charrsid8919514 LIMITED V. LA BANQUE DU PEUPLE [1893] A. C.170 at 177}{\insrsid5067185\charrsid8919514 expounded the meaning of the phrase \'93Powers of Attorney are to be construe}{\insrsid12333152\charrsid8919514 d strictly.\'94 Their Lordships of the}{\insrsid5067185\charrsid8919514 Privy Council stated:- \par \par \tab }{\b\insrsid5067185\charrsid8919514 \'93Nor was it disputed that powers of Attorney are to be construed \tab }{\b\insrsid12333152\charrsid8919514 strictly ___}{\b\insrsid5067185\charrsid8919514 that is to say, that where an act purporting to be \tab done under a power of attorney is challenged as being in \tab excess of the authority conferred by the power,}{\b\insrsid12333152\charrsid8919514 it is necessary to \tab show that on a fair}{\b\insrsid5067185\charrsid8919514 construction of the whole instrument the \tab authority in question is \tab to be found within the four corners of the }{\b\insrsid12333152\charrsid8919514 \tab }{\b\insrsid5067185\charrsid8919514 instrument,}{\b\insrsid12333152\charrsid8919514 }{ \b\insrsid5067185\charrsid8919514 either in express terms or by necessary }{\b\insrsid12333152\charrsid8919514 \tab }{\b\insrsid5067185\charrsid8919514 implication.\'94}{\b\insrsid7153376\charrsid8919514 }{\b\insrsid14952549\charrsid8919514 \par }{\i\ul\insrsid5067185\charrsid8919514 In Jacobs V. Morris [1902] A. C.816, }{\insrsid5067185\charrsid8919514 a case where a loan to an agent was made on the basis of a power of Attorney that did not confer powers to borrow, and the principal was held not liable for the same, their Lordships of the court o f Appeal, England, expounded that there must be strict adherence to the authority conferred by a power of Attorney. If the agent in }{\insrsid3226341\charrsid8919514 pretended exercise of his authority acts in excess of and outside the reasonable scope of his special powers, the third party will be unable to make the principal liable.}{\insrsid5067185\charrsid8919514 \par }{\insrsid3226341\charrsid8919514 \par Bearin}{\insrsid12333152\charrsid8919514 g}{\insrsid3226341\charrsid8919514 the above principles in mind, the court will proceed to examine the power of Attorney, the subject of this }{\insrsid12333152\charrsid8919514 suit}{ \insrsid3226341\charrsid8919514 . \par \par The subject matter of the power of Attorney is land comprised in Kisugu Plot 2809 Block 244, 0.10 Hectares. \par \par The donor of the powers is Sam Nsimbe Tomusange of P. O. Box 125 Kampala; registered proprietor of the land. \par \par The donee is}{\insrsid12333152\charrsid8919514 an}{\insrsid3226341\charrsid8919514 individual person by the name of Duo Dong whose address is of Guostar Enterprises of P. O. Box 4289 Kampala. \par \par \tab The specific powers given to the attorney are:- \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid3226341\charrsid8919514 \hich\af0\dbch\af0\loch\f0 i)\tab}}\pard \qj \fi-720\li1440\ri0\sl360\slmult1\widctlpar \jclisttab\tx1440\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin1440\itap0\pararsid8919514 {\insrsid3226341\charrsid8919514 To take possession of the certificate of title of the land. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid3226341\charrsid8919514 \hich\af0\dbch\af0\loch\f0 ii)\tab} To pledge, mortgage or charge the land to obtain a loan, overdraft or any financial assistance whatsoever from any Bank or Financial institution in Uganda. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid3226341\charrsid8919514 \hich\af0\dbch\af0\loch\f0 iii)\tab}To sign or execute all documents and deeds that may be necessary or expedient in obtaining the said loan. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid3226341\charrsid8919514 \hich\af0\dbch\af0\loch\f0 iv)\tab}To do any acts that may be necessary in executing the objects of the powers. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8919514 {\insrsid3226341\charrsid8919514 The donor under }{\insrsid4074933\charrsid8919514 took to ratify and confirm all that the done e would lawfully do or cause to be done in execution of the powers given. }{\insrsid3226341\charrsid8919514 \par }{\insrsid4074933\charrsid8919514 \par The powers would remain effective until }{\insrsid12333152\charrsid8919514 expressly}{\insrsid4074933\charrsid8919514 revoked by the donor in writing. \par }{\insrsid12333152\charrsid8919514 \par }{\insrsid4074933\charrsid8919514 The main specific power of the powers of Attorney is the one of the donee pledging, mortgaging or charging the land as security to a Bank or Financial Institution in Uganda for the purpose of the donee obtaining a loan, overdraft or financial assistance. \par \par There is nothing in the power of Attorney vesting the Attorney with powers to tender as security the land, the subject of the power of }{\insrsid1338428\charrsid8919514 Attorney, to guarantee the repayment of a loan granted by the Bank to some other third party, other than the Attorney.}{\insrsid5253833\charrsid8919514 \par }{\insrsid1338428\charrsid8919514 \par The undisputed evidence on record is to the effect that on the 7}{\super\insrsid1338428\charrsid8919514 th}{\insrsid1338428\charrsid8919514 July 1997 the donee tendered the certificate of title of the land to the plaintiff as security guaranteeing the plaintiff to a limited liability company, GUOSTAR Enterprises (U) Limited. \par \par The said borrowing company failed to pay the loan and the plaintiff proceeded to dispose of the sec}{\insrsid12333152\charrsid8919514 urity land by way of sale of }{\insrsid1338428\charrsid8919514 same to recover the loan money. \par \par The defendant resists the sale of the land contending the power of Attorney donated to the donee never authorized the donee guaranteeing repayment of a loan taken by a third party from a bank. \par \par Counsel for the plaintiff has contended that although the land was securing a borrowing by Guo Star Enterprises (U) Limited, Guo}{\insrsid12333152\charrsid8919514 }{\insrsid1338428\charrsid8919514 Dong, the donee of the power of Attorney, was responsible for the loan. He deposited the title on behalf of Guo Star and we nt further to execute a guarantee undertaking to be liable for the full indebtedness of Guo Star. In the circumstances, counsel further submits, the corporate veil of Guo Star Enterprises Limited}{\insrsid12333152\charrsid8919514 should}{ \insrsid1338428\charrsid8919514 be lifted }{\insrsid7225413\charrsid8919514 to show that the plaintiff Bank }{\insrsid2043480\charrsid8919514 was essent ially dealing wish the same person Guo Dong of Guo Star who opted to conduct his borrowing through Guo Star. \par \par There are, with respect, serious flows, in plaintiff Counsel\rquote s above submission. \par \par The submission wrongly assumes that Guo Dong, the individual, is the same as Guo Star, an unregistered entity, and Guo Star Enterprises (Uganda) Limited, a company registered with lim}{\insrsid12333152\charrsid8919514 ited liability, and thus a dist}{ \insrsid2043480\charrsid8919514 i}{\insrsid12333152\charrsid8919514 nc}{\insrsid2043480\charrsid8919514 t legal entity. \par }{\insrsid13070760\charrsid8919514 \par The Defendant, as donor, donated specific powers of the use of his land as security only}{\insrsid12333152\charrsid8919514 to}{\insrsid13070760\charrsid8919514 the donee}{\insrsid12333152\charrsid8919514 ,}{\insrsid13070760\charrsid8919514 Guo Dong}{ \insrsid12333152\charrsid8919514 ,}{\insrsid13070760\charrsid8919514 and only in respect of a loan or financial security advanced by a bank to Guo Dong}{\insrsid12333152\charrsid8919514 ,}{\insrsid13070760\charrsid8919514 as an individual. It is Guo Dong, as an individual borrower, and beneficiary of the loan/financial facility that the Defend}{\insrsid12333152\charrsid8919514 ant trusted so as to give power}{\insrsid13070760\charrsid8919514 regarding dealing with his land, and no one else. \par \par If the Defendant intended that Guo Dong be able to use the land to guarantee repayment of other peoples\rquote loans, the power of Attorney would have expressely stated so. It did not. \par \par It is contended for the plaintiff that since the power of Attorney provided that:- \par \par \tab }{\b\insrsid13070760\charrsid8919514 \'93 -------- Do Hereby appoint, nominate, ordain and authorize Mr. \tab Guo \tab Dong of GUO STAR Enterprises of P. O. Box 4289, Kampala, \tab to be my true \tab and lawful attorney ------\'93,}{ \insrsid13070760\charrsid8919514 \par }{\insrsid12333152\charrsid8919514 t}{\insrsid13070760\charrsid8919514 he Defendant must be taken to have known}{\insrsid12333152\charrsid8919514 ,}{\insrsid13070760\charrsid8919514 and to have had it in mind}{\insrsid12333152\charrsid8919514 ,}{ \insrsid13070760\charrsid8919514 that Guo Dong was to borrow money through Guo Star Enterprises }{\insrsid2566228\charrsid8919514 and not in his personal capacity.}{\insrsid13070760\charrsid8919514 \par }{\insrsid2566228\charrsid8919514 \par This submission is not factually correct. There is no evidence that Guo Dong borrowed any moneys through the name and style of Guo Star Enterprises. The borrowing was by a distinct }{\insrsid668657\charrsid8919514 legal entity in the form of a Company with limited liability by the name of Guo Star Enterprises (Uganda) Limited. Guo Dong together with one JING HONG guaranteed the repay ment of this loan. There is no evidence that the Defendant was aware, let alone consented having his land used as security by way of guarantee to repay a loan taker by a third party over whom the Defendant, as donor of the power}{ \insrsid12333152\charrsid8919514 of Attorney, could not exercise any powers}{\insrsid668657\charrsid8919514 with regard to obligation}{\insrsid12333152\charrsid8919514 s}{\insrsid668657\charrsid8919514 to repay the said loan.}{ \insrsid2566228\charrsid8919514 \par }{\insrsid668657\charrsid8919514 \par It is submitted by plaintiff\rquote s counsel, albeit without requisite evidence such as memorandum and Articles of Association, or any company Returns, that Guo Dong is a shareholder and Director of Guo Star Enterprises (U) Ltd}{ \insrsid12333152\charrsid8919514 ;}{\insrsid668657\charrsid8919514 and that therefore the Defendant knew while granting\rquote s the power of Attorney that the loan would be advanced to Guo Star Enterprises (Uganda) Limited. In the considered view of this court this submission is not tenable. First, there is no evidence from which to conclude that the Defendant knew }{ \insrsid12333152\charrsid8919514 the loan}{\insrsid668657\charrsid8919514 was to be advanced to the company. The Defendant himself, in his affidavit in reply of 7}{\super\insrsid668657\charrsid8919514 th}{\insrsid668657\charrsid8919514 July 2000, paragraph 9 thereof, emphatically denies ever giving power to the company to use his title to borrow money or for any other purpose.}{\insrsid12333152\charrsid8919514 }{\insrsid678148\charrsid8919514 Secondly, Guo Dong, the individual, is separate and different from Guo Star Enterprises (U) Ltd, the company. \par \par }{\insrsid2376229\charrsid8919514 The effec}{\insrsid668657\charrsid8919514 t of registration of a company is that from the date of incorporation, evidenced }{\insrsid678148\charrsid8919514 by issuance of a certificate of incorporation, the members of the company form a body corporate by the name contained in the Memorandum, capable of exersing all the functions of an incorporate company, having perpetual succession and a common seal. An incorporated company is a legal person separate and distinct from its share holders. }{\b\i\insrsid678148\charrsid8919514 See: MACA}{\b\i\insrsid2376229\charrsid8919514 U}{\b\i\insrsid678148\charrsid8919514 RA V. Nothern Assurance Co. Ltd [1925] AC 619}{\insrsid678148\charrsid8919514 . The property of the company belongs to the company itself; and not to the individual shareholders or directors. Thus }{\insrsid16538608\charrsid8919514 the company\rquote s debts are the obligations of the company alone and cannot be enforced against individual shareholders or directors. Likewise debts of individual shareholders/directors in their individual capacities cannot be automatically passed over to the company merely by virtue of one being a shareholder/director in the Company }{\b\i\insrsid16538608\charrsid8919514 : See Underwood Ltd V. Bank of liver pool and Martins Ltd [1924] 1KB 775.}{\insrsid668657\charrsid8919514 \par }{\insrsid16538608\charrsid8919514 \par For the above reasons, plaintiff Counsel\rquote s above submission cannot be accepted by Court. \par \par Plaintiff\rquote s Counsel then makes another submission. In paragraph 1 of \'93Plaintiff\rquote s Reply to Defendant\rquote s}{\insrsid2376229\charrsid8919514 submissions\'94}{\insrsid16538608\charrsid8919514 dated 4}{ \super\insrsid16538608\charrsid8919514 th}{\insrsid16538608\charrsid8919514 March 2005,}{\insrsid13376661\charrsid8919514 Counsel}{\insrsid2376229\charrsid8919514 invites the court to lift }{\insrsid13376661\charrsid8919514 the corporate veil of Guo Star Enterprises (Uganda) Limited so as \'93to show that the plaintiff bank was essentially dealing with the same person Guo Dong of Guo Star who opted to conduct his borrowing through Guo Star.\'94}{ \insrsid16538608\charrsid8919514 \par }{\insrsid13376661\charrsid8919514 \par Learned Counsel for the plaintiff does not explain whether in submitting as he does, the entity }{\b\insrsid13376661\charrsid8919514 \'93Guo Star\'94}{\insrsid13376661\charrsid8919514 means and is the same thing as \'93 Guo Star Enteprises (Uganda) Limited.\'94 \par \par In the considered view of the court the two cannot be one and the same thing. \par \par \'93Guo Star\'94 or }{\b\insrsid2376229\charrsid8919514 \'93Guostar}{\b\insrsid13376661\charrsid8919514 Enterprises\'94}{\insrsid13376661\charrsid8919514 (which is mentioned in the }{\insrsid2376229\charrsid8919514 Power}{ \insrsid13376661\charrsid8919514 of Attorney) may be the name and style of some unincorporated entity with no corporate status. The same however cannot be said of Guostar Enterprises (Uganda) Limited, }{\insrsid2376229\charrsid8919514 a }{ \insrsid13376661\charrsid8919514 company duly incorporated with limited liability and with corpo}{\insrsid13065159\charrsid8919514 rate status.}{\insrsid13376661\charrsid8919514 \par }{\insrsid13065159\charrsid8919514 \par While the lifting of the corporate veil would apply in case of Guostar Enterprises (Uganda}{\insrsid2376229\charrsid8919514 )}{\insrsid13065159\charrsid8919514 Limited, a corporate body, it cannot apply in cases of \'93Guo Star\rquote or \'93 Guo Star Enterprises\'94 which are unincorporated entities. \par \par Lifting the veil is to disregard the corporate entity of the company and go to the individual members owning the company, or in case of a controlling company, to the individual companies under the controlling company. \par \par Courts will lift the veil if a corporate personality is being used as a cloak for fraud or improper conduct, where agency can be established to ascertain whether the acts of agents have been ratified, in criminal or quasi-criminal cases, where the acts are contrary to public policy or where in the circumstances it is necessary to lift the Corporate veil. \par \par The court finds that the circumstances of this case do not warrant that the veil be lifted. It is not denied that the loan was given to a limited liability company, Guostar Enterprises (Uganda}{\insrsid2376229\charrsid8919514 ) Limited. The power}{ \insrsid13065159\charrsid8919514 of attorney }{\insrsid2376229\charrsid8919514 is}{\insrsid13065159\charrsid8919514 clear in }{\insrsid2376229\charrsid8919514 its}{\insrsid13065159\charrsid8919514 language and description as to who t he donee of the same is. There is no instance of fraud}{\insrsid2376229\charrsid8919514 ,}{\insrsid13065159\charrsid8919514 }{\insrsid1379067\charrsid8919514 deceit}{\insrsid2376229\charrsid8919514 , }{\insrsid13065159\charrsid8919514 Criminality or being against public policy}{\insrsid2376229\charrsid8919514 against the donor of the power}{\insrsid13065159\charrsid8919514 of Attorney. }{\insrsid1379067\charrsid8919514 There is no evidence that the Defendant in any way used incorporation of Guostar Enterprises (Uganda) Limited as a cloak for fraud}{\insrsid2376229\charrsid8919514 ,}{\insrsid1379067\charrsid8919514 criminality or against public policy. See: }{ \b\insrsid1379067\charrsid8919514 SALIM JAMAL & TWO OTHERS V Uganda Oxygen Ltd & 2 others}{\insrsid1379067\charrsid8919514 : [}{\b\insrsid1379067\charrsid8919514 1997] II KALR 38}{\b\insrsid2376229\charrsid8919514 , }{\insrsid2376229\charrsid8919514 and also}{\b\insrsid1379067\charrsid8919514 H. M. B KAYONDO V. SOMA}{\b\insrsid2376229\charrsid8919514 NI AMIRALI [1995] IV KALR 78 as well as}{\b\insrsid1379067\charrsid8919514 NEC and 2 others V NILE BANK Ltd. [1995] 1 KALR 138. \par }{\insrsid1379067\charrsid8919514 \par }{\insrsid13065159\charrsid8919514 The court thus}{\insrsid1379067\charrsid8919514 }{\insrsid13065159\charrsid8919514 finds no basis }{\insrsid1379067\charrsid8919514 for lifting the corporate veil of Guostar Enterprises (Uganda) Limited for the purpose of making the Defendant liable for what he did not expressly or im}{\insrsid2376229\charrsid8919514 plied by authorize in the power}{\insrsid1379067\charrsid8919514 of attorney. \par \par One of the issues the court is asked to determine by these originating summons is whether the Mortgagor has failed to pay the loan monies. The mortgagor is Guostar Enterprises (Uganda) Limited.}{\insrsid13065159\charrsid8919514 \par }{\insrsid1379067\charrsid8919514 \par In order to resolve the above issue it is necessary to examine the evidence availed to court as regards the loan said to have been advanced by the plaintiff to Guostar}{\insrsid11613771\charrsid8919514 Enterprises (Uganda) Limited in respect of which loan the Defendant\rquote s land is purported to have been mortgaged. \par \par According to the affidavit of Opio Anna, credit manager, of the plaintiff, dated 3}{\super\insrsid11613771\charrsid8919514 rd}{\insrsid11613771\charrsid8919514 March 1999, and the statement of account showing the transactions of the loan annexure \'93D \'94 to the said affidavit, a sum of shs. 252, 000,000/= was credited to the debtor\rquote s i.e. Guo Star Enterprises, account with the plaintiff by UCB inwar}{\insrsid2376229\charrsid8919514 d cheque No. 832635 on 16}{ \super\insrsid2376229\charrsid8919514 th}{\insrsid2376229\charrsid8919514 July 1997.}{\insrsid11613771\charrsid8919514 \par \par However the said same amount was debited from the same account by way of return of the same cheque in the same amount on 17}{\super\insrsid2376229\charrsid8919514 th}{\insrsid2376229\charrsid8919514 July 19}{\insrsid11613771\charrsid8919514 97. }{ \insrsid2376229\charrsid8919514 On}{\insrsid11613771\charrsid8919514 the face of it therefore no loan money was ever passed over to the borrower because wh}{\insrsid2376229\charrsid8919514 at was credited on 16}{\super\insrsid2376229\charrsid8919514 th}{ \insrsid2376229\charrsid8919514 July 19}{\insrsid11613771\charrsid8919514 97 was }{\insrsid2376229\charrsid8919514 debited from the same account on 17}{\super\insrsid2376229\charrsid8919514 th}{\insrsid2376229\charrsid8919514 July 1997}{ \insrsid11613771\charrsid8919514 . }{\insrsid2376229\charrsid8919514 The}{\insrsid11613771\charrsid8919514 plaintiff has not given any explanation to throw light on this transaction. \par \par A memorandum of deposit of title by the borrower, Guo star Enterprises (Uganda) Limited, of P. O. Box 4289 Kampala, to the plaintiff bank is stated to have been executed on 7}{\super\insrsid11613771\charrsid8919514 th}{\insrsid11613771\charrsid8919514 July 1997. }{\insrsid2376229\charrsid8919514 The}{\insrsid11613771\charrsid8919514 same is annexure \'93B\'94 to the affidavit of Opio Anna. \par \par The Memorandum is \'93signed, sealed and Delivered by the said Guo Dong and JIng Hong in the presence of Guostar Ent. (U) Ltd}{\insrsid12597133\charrsid8919514 .}{\insrsid11613771\charrsid8919514 \'94 \par }{\insrsid12597133\charrsid8919514 \par If it is taken that Guo Dong and Jing Hong signed, sealed and delivered the Memorandum for and on behalf of Guo Star Enterprises (Uganda) Limited, then it is the same company that also witnessed its execution of the Memorandum}{ \insrsid2376229\charrsid8919514 because t}{\insrsid12597133\charrsid8919514 he space on the memorandum for the advocate to witness the execution is blank. \par \par There is}{\insrsid2376229\charrsid8919514 also }{\insrsid12597133\charrsid8919514 nothing in the Memorandum of Deposit to show that what was deposited to the plaintiff Bank was the Defendant\rquote s land title comprised in Kyadondo Block 244 Plot 2809, land at Kisugu.}{\insrsid2376229\charrsid8919514 The space where such particulars should be filled up in the Memorandum is blank and empty.}{\insrsid12597133\charrsid8919514 \par \par The said \'93Memorandum of Deposit\'94 on its page 2, first paragraph, third sentence states; \par \par \tab }{\b\insrsid12597133\charrsid8919514 \'93And I/we hereby declare that the document now deposited is all \tab that is in my possession or control relating to the property or \tab properties mentioned \tab in the schedule here under and that I \tab am/we are the owner(s) of the property or properties which \tab is/are not charged or encumbered in any way \tab whatsoever.\'94 \par }{\insrsid6243454\charrsid8919514 The above quoted part of the Memorandum of Deposit is false in two significant aspects. First, as already pointed out,}{\insrsid2376229\charrsid8919514 there was no property mentioned in the schedule}{ \insrsid6243454\charrsid8919514 to the Memorandum of Deposit.}{\insrsid2376229\charrsid8919514 }{\insrsid6243454\charrsid8919514 Second, Guostar Enterprises (Uganda) Limited either through the power of Attorney or otherwise, never }{ \insrsid4007748\charrsid8919514 owned }{\insrsid6243454\charrsid8919514 the Defendant\rquote s land, which the plaintiff Bank claims to have been the subject of the \'93Memorandum of Deposit.\'94 \par \par On the same day of 7}{\super\insrsid6243454\charrsid8919514 th}{\insrsid6243454\charrsid8919514 July 1997, Guo Dong and Jing H ong executed a guarantee to the plaintiff bank the payment and satisfaction of any loan money not exceeding Shs. 250,000,000/= that may be loaned to Guostar Enterprises (Uganda) Limited. This guarantee does not in any way refer to the suit land of the De fendant being used as security for the guarantee. Indeed the }{\insrsid10505304\charrsid8919514 guarantee}{\insrsid6243454\charrsid8919514 states on its page one paragraph five, that:- \par \par }{\insrsid10505304\charrsid8919514 \tab }{\b\insrsid10505304\charrsid8919514 \'93This Guarantee is to be in addition and without prejudice to any \tab other securities or guarantees which you may now or hereafter \tab hold f rom or on account of the Debtor -----\'93 \par \par }{\insrsid10505304\charrsid8919514 The court deduces from the above that the quaranteeing of the loan repayment by Guo Dong and Jing Hong was a decision taken by the two}{\insrsid4007748\charrsid8919514 ,}{\insrsid10505304\charrsid8919514 independent of a consideration that the Defendant\rquote s land was to be used as security for the quarantee. }{\insrsid4007748\charrsid8919514 Were }{\insrsid11746831\charrsid8919514 it}{\insrsid4007748\charrsid8919514 to be}{ \insrsid11746831\charrsid8919514 otherwise}{\insrsid4007748\charrsid8919514 , the}{\insrsid11746831\charrsid8919514 guarantee document would have stated so.}{\insrsid10505304\charrsid8919514 \par }{\insrsid11746831\charrsid8919514 \par It has been further submitted for the Defendant that the plaintiff cannot rely on the Memorandum of deposit of title and the Guarantee because the two documents were not registered under the stamps Act, cap 342. \par \par To this submission counsel for the plaintiff has submitted to court}{\insrsid4007748\charrsid8919514 a}{\insrsid11746831\charrsid8919514 copy of the guarantee duly stamped under the stamps Act, cap. 342. He has also counter argued that failure to stamp a document is not fatal as the document can be stamped any time, depending on the directions of the court. \par \par The court is satisfied that stamp duty was paid in respect of the guarantee. As regards the Memorandum of deposit of title deed, the same,}{\insrsid818255\charrsid8919514 is part and parcel of the alleged contract of guarantee consisting of two documents: the memorandum of deposit of title and the Guarantee. To the extent that the two documents constitute the same contract, the law deems the guarantee contract to be duly stamped: See section 42 }{\insrsid4007748\charrsid8919514 }{\insrsid818255\charrsid8919514 (}{\insrsid4007748\charrsid8919514 c)}{\insrsid818255\charrsid8919514 Stamps Act, cap. 342. }{\insrsid11746831\charrsid8919514 \par }{\insrsid818255\charrsid8919514 \par The court thus accepts the Memorandum on deposit of title and the guarantee as proper documentary evidence. \par \par }{\insrsid4946923\charrsid8919514 Counsel for the Defendant has contended that the power of Attorney had already been revoked by the time the plaintiff bank received the title of land as security. Counsel bases this argument}{ \insrsid4007748\charrsid8919514 on}{\insrsid4946923\charrsid8919514 the fact that the deed of revocation of }{\insrsid1182814\charrsid8919514 the powers}{\insrsid4946923\charrsid8919514 of Attorney was executed on 30}{ \super\insrsid4946923\charrsid8919514 th}{\insrsid4946923\charrsid8919514 July, 1997, lodged and registered with the Registrar of Documents on the 30}{\super\insrsid4946923\charrsid8919514 th}{\insrsid4007748\charrsid8919514 October, 1997, u}{ \insrsid4946923\charrsid8919514 nder Instrument No. X 167965. }{\insrsid4007748\charrsid8919514 The}{\insrsid4946923\charrsid8919514 plaintiff bank registered the caveat on the title on the 5}{\super\insrsid4946923\charrsid8919514 th}{ \insrsid4946923\charrsid8919514 November 1997, Under Instrument Number 192056 after the deed of revocation had already been registered. \par \par From the evidence on record (paragraph 2 of Opio Anna\rquote s affidavit of 3}{\super\insrsid4946923\charrsid8919514 rd}{\insrsid4946923\charrsid8919514 March, 1999) which is not controverted, the certificate of title of the Defendant\rquote s land was deposited as security with the plaintiff bank on 7}{\super\insrsid4946923\charrsid8919514 th}{\insrsid4946923\charrsid8919514 July 1997.}{\insrsid4007748\charrsid8919514 }{\insrsid4946923\charrsid8919514 By this date the power of Attorney had not yet been revoked. The caveat by way of mortgage on the land title was registered on the 5}{\super\insrsid4946923\charrsid8919514 th}{\insrsid4946923\charrsid8919514 November, 1997, after the deed of revocation had been registered on the 30}{\super\insrsid4946923\charrsid8919514 th}{\insrsid4946923\charrsid8919514 October, 1997. Section 54 of the Registration of Titles Act, Cap 230 provides, in as much as it is relevant}{\insrsid4007748\charrsid8919514 to this case,}{\insrsid4946923\charrsid8919514 that:- \par \par \tab }{\b\insrsid4946923\charrsid8919514 \'93No instrument until registered in the manner herein provided }{\b\insrsid4007748\charrsid8919514 \tab }{\b\insrsid4946923\charrsid8919514 shall be effectual to pass any estate or interest in any land -------}{ \b\insrsid4007748\charrsid8919514 \tab }{\b\insrsid4946923\charrsid8919514 - or to render the land liable to any mortgage; but upon such }{\b\insrsid4007748\charrsid8919514 \tab }{\b\insrsid4946923\charrsid8919514 registration the estate or interest comprised in the instrument }{\b\insrsid4007748\charrsid8919514 \tab }{\b\insrsid4946923\charrsid8919514 shall pass or ----------- the land shall become liable in the manner }{\b\insrsid4007748\charrsid8919514 \tab }{ \b\insrsid4946923\charrsid8919514 and subject to the covenants and conditions set forth and }{\b\insrsid4007748\charrsid8919514 \tab }{\b\insrsid4946923\charrsid8919514 specified in the instrument --------------\'93. \par }{\insrsid4946923\charrsid8919514 \par Section 146 of the Registration of Titles Act requires every power o f Attorney, like the one in this suit, to be registered in accordance with the Registration of Documents Act, and once so registered the same is presumed to be in force at the time of its registration unless its revocation has been previously registered u nder that Act. \par \par }{\insrsid4608228\charrsid8919514 I}{\insrsid5446722\charrsid8919514 t follows from the above provisions of the law that as between the plaintiff bank and the Defendant, by the time the purported mortgage was registered by way of caveat on 5}{ \super\insrsid5446722\charrsid8919514 th}{\insrsid5446722\charrsid8919514 November 1997, so as to affect the interest of the Defendant in the suit land, the power of Attorney, upon which the mortgage was based had already been revoked on 30}{ \super\insrsid5446722\charrsid8919514 th}{\insrsid5446722\charrsid8919514 October 1997. The Defendant was no longer under obligation to be bound by the Attorney. \par \par The court is now in a position to answer the two questions of the}{\insrsid4007748\charrsid8919514 se Originating S}{\insrsid5446722\charrsid8919514 ummons. \par \par As to the question whether the mortgagor has failed to pay the loan monies, this Court leaves this issue to be resolved in H. C. C. S. No. 1043 B of 1997: Gold Trust Bank Ltd V. Guo Dong, now pending for resolution in the Commercial Division of this court}{ \insrsid4007748\charrsid8919514 ; a}{\insrsid5446722\charrsid8919514 nd/or in some other suit in which the mortgagor is a party to the suit. The Mortgagor is not a party to this suit and therefore this court cannot determine any issue concern}{ \insrsid4007748\charrsid8919514 ing him.}{\insrsid5446722\charrsid8919514 \par \par For reasons already stated}{\insrsid4007748\charrsid8919514 ,}{\insrsid5446722\charrsid8919514 the finding of this court is that at the material time and given the power}{\insrsid4007748\charrsid8919514 s}{\insrsid5446722\charrsid8919514 stipulated in the power of Attorney, no mortgage co}{\insrsid4007748\charrsid8919514 ul}{\insrsid5446722\charrsid8919514 d have been created with the Defendant\rquote s suit land as security on the basis of the said power of Attorney executed by the Defendant in favour of one Guo Dong. \par The second question of whether the plaintiff bank as the mortgagee of the property is entitled to foreclose and sell off the Defendant\rquote s land, the answer is that this court finds that the power of Attorney never authorized Guo Dong to use t he Defendant\rquote s land as security to guarantee a loan to a third party. The plaintiff ought to have found out this from the deed of}{\insrsid4007748\charrsid8919514 the}{\insrsid5446722\charrsid8919514 power of Attorney itself. \par \par Thus this court holds that no valid mortgage was ever created with the Defendant\rquote s land as security on the basis of the said power of Attorney between the plaintiff and Guostar Enterprises (Uganda) Limited. \par \par Further, but independent of the above}{\insrsid4007748\charrsid8919514 ,}{\insrsid5446722\charrsid8919514 the court holds that}{\insrsid4007748\charrsid8919514 ,}{\insrsid5446722\charrsid8919514 at any rate}{\insrsid4007748\charrsid8919514 ,}{ \insrsid5446722\charrsid8919514 by the time the mortgage was registered by way of caveat so as to af fect the interests of the Defendant in the suit land, the power of Attorney had already been revoked, and the revocation duly registered, thus fixing the plaintiff with notice of the re}{\insrsid1182814\charrsid8919514 voca}{ \insrsid5446722\charrsid8919514 tion. }{\insrsid4946923\charrsid8919514 }{\insrsid818255\charrsid8919514 \par }{\insrsid4007748\charrsid8919514 \par The plaintiff is thus not a legitimate mortgagee of the property and as such is not entitled to foreclose and sale off the said property. }{\insrsid4608228\charrsid8919514 \par \par }{\insrsid1182814\charrsid8919514 The end result of the holdings of this court is that the plaintiff has no legitimate right to have possession of the defendant\rquote s title to the land comprised in Kyadondo Blo ck 244 Plot 2809. This court orders that he relinquishes the same}{\insrsid4007748\charrsid8919514 to the Defendant free}{\insrsid1182814\charrsid8919514 of any encumbrances by him (plaintiff) on the basis of the alleged mortgage. \par \par This suit is decided in favour of the Defendant against the plaintiff. \par \par The defendant is to have the costs of the suit payable by the plaintiff. \par \par Before taking leave of this case the court wishes to express its concern at the most casual, unprofessional and careless way the predecessor to the plaintiff}{\insrsid4608228\charrsid8919514 , prepared, interpreted, }{\insrsid1182814\charrsid8919514 handled and treated the legal documents concerning this transaction. \par \par Hardly any attention was paid to the power of Attorney as to what powers the donor vested into the donee; and whether the same w}{\insrsid4608228\charrsid8919514 ere}{\insrsid1182814\charrsid8919514 still operative or revoked. \par \par The Memorandum of Deposit and the guarantee documents seem to have been drafted and executed in such}{\insrsid4007748\charrsid8919514 a careless and casual way}{\insrsid1182814\charrsid8919514 as if they were of no importance at all; and as if they were not affecting and affixing responsibilities to anyone. \par \par The court hopes }{\insrsid4007748\charrsid8919514 that }{\insrsid1182814\charrsid8919514 higher}{\insrsid4608228\charrsid8919514 professional}{\insrsid1182814\charrsid8919514 standards from financial institutions}{\insrsid4007748\charrsid8919514 will be exhibited in the future}{\insrsid1182814\charrsid8919514 in this regard. \par \par \par }{\b\insrsid1182814\charrsid8919514 Remmy Kasule \par Ag. Judge \par 9}{\b\super\insrsid1182814\charrsid8919514 th}{\b\insrsid1182814\charrsid8919514 December 2005}{\b\insrsid4608228\charrsid8919514 }{\insrsid5253833\charrsid8919514 \par }}