Mandera v Hyensi (Civil Suit 136 of 2021) [2024] UGHCCD 95 (10 June 2024)

Full Case Text

## **THE REPUBLIC OF UGANDA**

#### **IN THE HIGH COURT OF UGANDA AT KAMPALA**

## **[CIVIL DIVISION]**

## **CIVIL SUIT NO. 136 OF 2021.**

**AMOS MANDERA ============================== PLAINTIFF**

#### **VERSUS**

**BYENSI JAMESON ============================= DEFENDANT**

## **BEFORE: HON. JUSTICE EMMANUEL BAGUMA**

## **JUDGMENT**

#### **Background**

The plaintiff sued the defendant for recovery of a liquidated sum of 300,000,000/= (Three Hundred Million Shillings) being money had and received by the defendant, unjust or illicit earning by the defendant, breach of memorandum of undertaking payment of 50,000,000/= as money spent on trucking and arresting the defendant from Kabale, Kisoro, DRC, damages, interest and costs of the suit.

The defendant admitted the friendly loan of 300,000,000/= and stated that he has so far paid 90,000,000/= leaving a balance of 210,000,000/=. He however denied the commitment to pay extra 50,000,000/= entered at police stating that that memorandum was obtained through duress and coercion.

During scheduling both counsel agreed on 4 issues for court's determination to wit:-

- **1. Whether the Defendant Is indebted to the Plaintiff to the sum of Ugx. 210,000,000/= (Uganda Shillings Two Hundred and Ten Million Shillings Only) out of the 300, 000,000/= (Uganda Shillings Three Hundred Million Shillings Only).** - **2. Whether the land in Plot 322 Block 356 used as security was sold by the plaintiff to recover the loan of Ugx. 300,000,000/= (Uganda Shillings Three Hundred Million Only).** - **3. Whether the Defendant is bound by the settlement commitment dated 28th September 2020 and whether the Plaintiff is entitled to payment of**

# **the additional Ugx. 50,000,000/= (Uganda Shillings Fifty Million Only) arising out of the settlement commitment?**

# **4. What remedies are available to the parties?**

The case proceeded by way of witness statement and tendering in exhibits. At the end of the hearing parties agreed to file written submissions.

## **Representation.**

Counsel Ssebulime Willy represented the Plaintiff while Counsel Tumusiime Derrick represented the Defendant.

## **Plaintiff's case.**

PW1, the plaintiff himself testified that he advanced a friendly loan of 300,000,000/= to the defendant and an agreement to that effect was executed and exhibited as PEX 1 dated 10/03/2020. That the Defendant failed to pay back the sums as agreed and went into hiding in different parts of the country. The plaintiff employed police which traced him and arrested him. While at Police, the Defendant committed himself to pay an additional 50,000,000/= for the extra costs incurred in arresting him and delays in payment, a memorandum to this effect was executed and tendered in court as PEX4 dated 28th September 2020. The plaintiff further testified that the Defendant made part payment of 90,000,000/= and the balance is 210,000,000/=.

He denied ever selling the collateral and stated that it was the defendant who gave powers of attorney to his son to sell the same.

PW2, Kiconco Charity testified that she is a lawyer who was hired by the defendant's son one Mbabazi Vian to help them in the sale of the collateral security to one Zaamu Nankya. That she received the draft sale agreement, proof read it and witnessed the sale.

## **Defendant's case.**

DW1, Mbabazi Vian the defendant's son testified that he met the Plaintiff and other people at Silver springs Hotel and he was ordered to provide National Identity card and that of his father on whatsup and the plaintiff introduced some people who wanted to buy the land used as security for the loan. I was presented with papers by counsel Kisaky Patrick which was a sale agreement purporting to have sold land to one Nankya Zaamu Mukonzi to whom the Plaintiff had agreed to the land. I signed on the papers and money worth 900,000,000/= was handed directly to the Plaintiff, who then acknowledged receipt. He denied selling the collateral security and stated that the same was sold by the Plaintiff.

DW2 (the defendant) himself testified that the plaintiff advanced to him a friendly loan of 300,000,000/= using land comprised in Block 356 Plot 322 as security for the loan from the plaintiff. He stated that he had difficulties in paying back the money as agreed. The plaintiff caused his arrest and while I police custody he was coerced to sign a commitment agreement dated 28th September 2020 for 50, 000, 000/= as a condition to be released from custody.

The Defendant further testified that the plaintiff in 2021 caused another arrest and he was remanded to Kitalya Prison. While in prison, the plaintiff sold off the collateral Land at 90,000,000/= yet it was worthy 510,000,000/=. The plaintiff paid himself the 90,000,000/= and claimed 210,000,000/= as balance. I have never paid the 300,000,000/=. I expected the price of my land to be sufficient to pay the whole claim of 300,000,000/=.

## **Submissions by counsel for the Plaintiff.**

**Issue No. 1**

# **Whether the Defendant is indebted to the Plaintiff to the sum of Ugx. 210,000,000/= (Uganda Shillings Two Hundred and Ten Million Shillings Only) out of the 300, 000,000/= (Uganda Shillings Three Hundred Million Only).**

Counsel submitted that it is an agreed fact that the Defendant received a friendly loan of 300,000,000/= as seen from the plaintiff's exhibit PEX1 dated 10/3/2020 and PEX2 dated 10/03/2020 a fact that is reaffirmed by the defendant in his written statement of defence. The plaintiff's evidence to this effect was also not rebutted by the defendant.

Counsel referred to section 10 (5) of the Contract Act which is to the effect that a contract whose subject matter exceeds twenty-five currency point must be in writing and a suit for money and received is a form of a suit used by the claimant who seeks to recover from the defendant money which had been received by the defendant to which the consideration totally failed or as a result of imposition, extortion or

oppression among others. He referred to the case of *Gloria Kubajo & Oloya Venance Kolley Vs Francis Drate HCCS No. 889 of 2020.*

Counsel submitted that the plaintiff who testified as PW1 admitted receipt of 90,000,000/= (Ninety million shillings) as partial payment of the debt and the outstanding balance from the friendly loan is 210,000,000/= (Two Hundred and Ten Millions). None of the parties disputed the advancement of 300,000,000/= and the partial payment of 90,000,000/= leaving a balance of 210,000,000/=.

Counsel prayed that the defendant be ordered to pay the balance of 210,000,000/=.

## **Issue No. 2**

## **Whether the land in Plot 322 Block 356 used as security was sold by the plaintiff to recover the loan of Ugx. 300,000,000/= (Uganda Shillings Three Hundred Million Only).**

Counsel submitted that the plaintiff himself has never sold the land which was pledged as security of the loan and the alleged agreements PEX 6 and DEX 5 do not at all reflect the plaintiff as a party as DEX5 (power of attorney) indicated that DW2 (donor) authorized DW1 (donee) and subsequently DW1 sold the land in issue to another a third party by the names of Nankya Zaamu Makonzi. There is no statement in PEX5 and PEX6 that refers to the plaintiff as a party to the entire transaction of the land sale and purchase of Plot 322 Block 356.

Counsel contended that the land in issue was sold by DW1 a donee of DW2. The plaintiff never sold the pledged land hence the Defendant still owes the plaintiff 210,000,000/= as balance on a friendly loan advanced to him.

**Issue No. 3**

**Whether the Defendant is bound by the settlement commitment dated 28th September 2020 and whether the Plaintiff is entitled to payment of the additional Ugx. 50,000,000/= (Uganda Shillings Fifty Million Only) arising out of the settlement commitment?**

Counsel referred to the case of **William Kasozi Vs DFCU Bank Ltd HCCC No. 1326 of 2000** where court held that; -

*"once a contract is valid, it creates reciprocal right and obligation between the parties to it. I think when a document containing contractual terms is signed, then in the absence of fraud and misrepresentation the party signing it is bound by its terms".*

Counsel submitted that when the defendant defaulted in payment of the money advanced and went into hiding, the plaintiff involved police which retrieved him and upon discussions. The defendant signed PEX4 as a commitment for payment of the friendly loan together with an extra 50,000,000/=. Counsel stated that there was no fraud or misrepresentation on part of the plaintiff during the execution of the settlement commitment PEX4.

The defendant while executing PEX4 was intentional and deliberate and created legal obligations against him as a matter of law. He referred to section 144 of the Evidence Act Cap 6 which estoppes the defendant from denying P. EX4 having caused PW1 to believe in its execution and terms therein since the year 2020 as the defendant continues to default on repayment to date.

## **Issue No. 4**

## **What remedies are available to the parties?**

Counsel for the plaintiff prayed that this court be pleased to order for the payment of 210,000,000/= as balance on friendly loan advanced to the defendant, 50,000,000/= which the defendant committed to pay, general damages and costs of the suit.

## **Submissions by counsel for the Defendant.**

**Issue No. 1**

**Whether the Defendant is indebted to the Plaintiff to the sum of Ugx. 210,000,000/= (Uganda Shillings Two Hundred and Ten Million Shillings Only)**

## **out of the 300, 000,000/= (Uganda Shillings Three Hundred Million Shillings Only).**

Counsel submitted that the defendant admitted during cross examination that he got a friendly loan of 300,000,000/= from the plaintiff on 10/3/2020 and he owes the plaintiff 300,000,000/= which he has not paid. The defendant denied ever paying 90,000,000/= to the plaintiff.

Counsel submitted that the loan obtained from the plaintiff was secured by land comprised in Plot 322 Block 356 Kyagwe County Buikwe District measuring 6.4800 worth 510,000,000/= and certificate of title for this land was deposited with the Plaintiff as security for the 300,000,000/=. A friendly loan agreement was executed (PEX1) between the parties on 10/03/2020 and it was agreed that the plaintiff is entitled to sell the property to recover his money advanced to the defendant in case of default.

Counsel submitted that as a result of the default the plaintiff caused the defendant's arrest and while in prison, the plaintiff forced DW1 Mbabazi Vian the defendant's son to sign a sale agreement selling the collateral to a one Nankya Zaamu at a give away price of 90, 000,000/=. He contended that the defendant has never paid 90,000,000/= to the plaintiff.

Counsel submitted that the alleged departure from pleadings by the defendant that he never paid the 90,000,000/= is an irregularity which can be explained. That the statement in the WSD that the defendant has since paid 90,000,000/= to the plaintiff means that the same arose from sale of a collateral security and the plaintiff is liable to account for the balance.

**Issue No. 2**

**Whether the land in Plot 322 Block 356 used as security was sold by the plaintiff to recover the loan of Ugx. 300,000,000/= (Uganda Shillings Three Hundred Million Only).** Counsel submitted that it was the plaintiff who sold the collateral security comprised in Plot 322 Block 356 land at Kyaggwe County at a give-away price in order to fraudulently cheat the defendant.

He contended that the plaintiff after causing the defendant's arrest, detention and torture, he coerced the Defendant's son DW1 to sell off the collateral security contrary to section **13 of the Contract Act and the case of Printing and Numerical Registering Co. Vs Sampson [185] LR EQ 462 AT 467**. That this is evidenced by the fact that the sale took place on 25th April 2021 yet the alleged power of attorney was registered on 26th April 2021. The power of attorney must have existed prior to the sale. The Donee accordingly had no authority to sale the collateral security.

Further, the power of attorney was not executed according to the law as the officer in charge of Kitalya Main Prison did not commission it. Section 147 (1) of the RTA specifies people to attest powers of attorney and those include justice of peace and in this case this requirement was not followed. He referred to the case of *Makula international* on illegality.

Counsel submitted that to prove that the land was sold by the plaintiff, after the sale the money was handed to the plaintiff directly as stated by DW1 in his testimony. The sale agreement also states that the land is sold with the encumbrance of Mandela Amos only who has expressly consented to this sale by signing caveat withdrawal papers and availed his passport photos and photo copy of national ID to enable withdrawal process.

Counsel prayed that this court finds that the plaintiff illegally sold the collateral at give -away price.

## **Issue No. 3**

Counsel submitted that the defendant signed the commitment agreement under duress on condition that he can be released from police custody. That it offers no logic if the defendant had failed to pay 300,000,000/= to further make a commitment to pay 50,000,000/= to the plaintiff.

Counsel concluded since the defendant was coerced to sign the alleged commitment, this contravened section 13 of the Contracts Act.

## **Issue No. 4**

## **What remedies are available to the parties?**

Counsel prayed that this court rejects the plaintiff's claim of 210,000,000/= as balance of the friendly loan and 50,000,000/= as settlement commitment since the plaintiff sold off the Defendant's land which was sufficient to cover the whole claim. He prayed for costs of this suit.

### **Analysis of court.**

### **Issue No. 1**

## **Whether the Defendant is indebted to the Plaintiff to the sum of Ugx. 210,000,000/= (Uganda Shillings Two Hundred and Ten Million Shillings Only) out of the 300, 000,000/= (Uganda Shillings Three Hundred Million Only).**

In civil litigation, the burden of proof requires the plaintiff, who is the creditor, to prove to court on a balance of probability, the plaintiff's entitlement to the relief being sought. The plaintiff must prove each element of its claim, or cause of action, in order to recover. In other words, the initial burden of proof is on the plaintiff to show the court why the defendant / debtor owes the money claimed. *See section 101 and 103 of the Evidence Act.*

In the case of **Dr. James Kashugyera Tumwine and Anor vs Sr Willie Magara & Anor HCCS 576 OF 2004,** Where Bamwine J (as he then was) ruled on unjust enrichment as'

*"Money which is paid to one person which rightfully belongs to another, as where money paid by A to B on a consideration which has wholly failed, is said to be money had and received by B to use of A. It is recoverable by action by A. The paying of A to becomes a quasi – contract".*

A suit for money had and received is a form of suit used by claimants who seek to recover from the defendant among others money which had been paid to the defendant: upon a consideration which has totally failed.

Generally, a claim for money had and received seeks to restore money where equity and good conscience require restitution; it is not premised on wrongdoing, but seeks to determine to which party the money rightfully belongs; and it seeks to prevent unconscionable loss to the payer and unjust enrichment to the payee. A cause of action for money had and received is not premised on wrongdoing, but looks only to the justice of the case and inquires whether the defendant has received money that rightfully belongs to another.

In the instant case, from the evidence on record, it is an agreed fact that the plaintiff extended a friendly loan of 300,000,000/= to the defendant. The defendant failed to pay as agreed in the agreement hence the filing of this suit. The defendant in his Written Statement of Defence in paragraph 4 (i) stated that it is true he acquired a loan of 300,000,000/= and he has since paid 90,000,000/= leaving a balance of 210,000,000/=

However, the defendant in his witness statement denied ever paying the Plaintiff the 90,000,000/=, he instead claimed that the Plaintiff sold the collateral security of land comprised in Block 536 Plot 322 at give -away price and paid himself 90,000,000/=.

This is different from what the Defendant stated in his Written Statement defence. Had he intended to state so he would have done so in his defence. The same amounts to a departure from pleadings.

Order 6 r.7 of the Civil Procedure Rules prohibits departure from pleadings by the parties and the court. Its states that; -

"*7. Departure from previous pleadings.*

*No pleading shall, not being a petition or application, except by way of amendment, raise any new ground of claim or contain any allegation of fact inconsistent with the previous pleadings of the party pleading that pleading."*

The position in the above provision was re- affirmed in the cases of *Jani Properties Ltd. vs. Dar es Salaam City Council [1966] EA 281;* and *Struggle Ltd vs. Pan African Insurance Co. Ltd. (1990) ALR 46 – 47,* that the parties in civil matters are bound by what they say in their pleadings which have the potential of forming the record and moreover, the court itself is also bound by what the parties have stated in their pleadings as to the facts relied on by them. No party can be allowed to depart from its pleadings.

This court accordingly rejects the argument by the Defendant that he never paid the 90,000,000/=. I accordingly find that the defendant is indebted to the plaintiff to the sum of 210,000,000/= as balance on the money he received from the plaintiff as a friendly loan on 10th March 2020.

Issue No. 1 is answered in the affirmative.

#### **Issue No. 2**

## **Whether the land in Plot 322 Block 356 used as security was sold by the plaintiff to recover the loan of Ugx. 300,000,000/= (Uganda Shillings Three Hundred Million Only).**

From the evidence on record, DW2 the defendant signed powers of attorney to DW1 his son PEX5 dated 23rd April 2021. DW1 proceeded to sale off the collateral and signed a sale agreement PEX6 dated 25th April 2021. This sale agreement was witnessed by PW2 who came to court and testified to that she was the transaction lawyer when DW1 was selling off the collateral. There was no evidence whatsoever to connect the plaintiff to that land transaction which was sold to Nankya Zaami Mukonzi.

There is no reasonable court or tribunal that would believe that the defendant's family specifically (DW1) did not participate in the land transaction.

In the view of the above its this court's finding that the Plaintiff did not sale the collateral security to recover his money which he had given to the defendant.

Issue No. 2 is resolved in the negative.

#### **Issue No. 3**

This court has very carefully examined the evidence in respected of the circumstances under which the settlement agreement of 50,000,000/= dated 28th September 2020 entitled criminal charge settlement commitment in respect of criminal case No. 29/05/08 of 2020 witnessed by one Katusimiraho Dan but the Plaintiff did not sign the same document himself.

It is this court's finding that this criminal charge settlement is far from the claim of the money the plaintiff advanced to the defendant. Since this agreement was in respect of the criminal charge this court is inclined to grant it.

Issue No. 3 is resolved in the negative.

# **Issue No. 4**

## **What remedies are available to the parties?**

The plaintiff has proved his claim of 210,000,000/= as balance on the friendly loan advanced to the defendant but failed to prove the claim of 50,000,000/= as a criminal settlement.

# **Conclusion.**

In the final result, this case succeeds with the following orders; -

- **1. The defendant is hereby ordered to pay 210,000,000/= (Two Hundred and Ten Million Shillings) as outstanding balance on the friendly loan to the plaintiff.** - **2. Costs of this suit are awarded to the plaintiff.**

Dated, signed and delivered by email on this **10 th** day of **June 2024**.

Emmanuel Baguma

Judge.