Osapil v Kaddu and Another (Civil Suit 883 of 1996) [1998] UGHC 26 (1 December 1998)

Full Case Text

## THE REPUBLIC OF UGANDA

### IN THE HIGH COURT OF UGANDA AT KAMPALA

#### CIVIL SUIT NO, 883 OF 1996

JOHN NATHAN OSAPIL PLAINTIFF

*I*

#### VERSUS

1. IMMANUEL KADDU)

# 2. JANE BWIRIZA ) DEFENDANT 1 BEFORE: THE HON. MR. JUSTICE V. F. MUSOKE-KIBUUKA

#### JUDGMENT:

*I*

The Plaintiff instituted this action against both defendants jointly and severally. He seeks the following orders:-

- **' (a)** an order for specific performance or the return, to the plaintiff, of motor vehicle, registration No. UBN 108 or for repayment to the plaintiff, of the current value of the vehicle; - (b) and general damages for breach of contract, fraud, trespass, detinue and conversion and loss of earnings from the motor vehicle; and 'V an order for payment to the plaintiff, by the defendants, of exemplary - (e) judgment till payment in full. an order for payment of interest at 30% per annum from the date of

the testimony of the parties together with their pleadings appear to be as follows: The facts which gave rise to the institution of this action, as far as they can be gathered from

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The plaintiff, Mr. Nathan Osapil, was some kind ofmotor vehicle dealer in 1995. Apparently he was one of the several other persons, in Kampala at the time, who used to sell motor vehicles or other merchandise but having no permanent business offices of their own. They 10 could best be described as street merchants. On 7th November, 1995, the plaintiff purchased from one Mutebi Joseph, Toyota Mini-bus, registration No. 108 UBN. The consideration was shs. 13,200,000/= . Motor Vehicle, Registration No. 108 UBN is referred to in this judgment as "the vehicle".

**20** The first defendant Immanuel Kaddu, rightly describes himself as a sales agent. Indeed, he appears to have been some kind of motor vehicle sales agent or, simply, a salesman. That was in 1995. He had a small parking yard in the "container village" in Kampala where some street merchants took their vehicles so that the first defendant would sell the vehicles for them. It would appear that some unusual understanding was reached between the plaintiff and the first defendant whereby the plaintiff's Mini-bus registration 108 UBN would be sold 30 by the first defendant. The first defendant sold that vehicle to the second defendant on 20th December, 1995.

three of those, he got into problems with the plaintiff. It is not surprising, therefore, that when on 4th December, 1995, the first defendant secured the second defendant as a prospective purchaser of the vehicle, who deposited shs. 1,000,000/=, that a provisional According to the first defendant, he had sold a total of six vehicles for the plaintiff and on

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agreement was executed between the first defendant personally, as the prospective seller, .and the second." as the prospective buyer (exh. P2).

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The final agreement was executed between the first and second defendant on 20th December, 1995. The second defendant, Jane Bwiriza, was some kind of business woman carrying on business in Kampala. The vehicle was sold by the first defendant to the second defendant **IQ)** for a consideration of 12,800,000/= . The second defendant paid a total of shs. 9/m. by cash and draft. The draft was drawn against UCB, Katwe branch, in the sum ofshs. 5/= m. and in favour of the plaintiff (Exh. D2). A sum of shs. 3,800,000/= remained outstanding. It that condition. **20** March, 1996, and shs. 2,200,000/= on 19th September, 1996 (Exh. P2). The last payment being made almost ten months afterwards. was agree that it would be paid within three months. The second defendant failed to fulfil ' it She appears to have paid shs. 1.600,000/= to the first defendant on 8th

Probably because of the problems the plaintiff had experienced with the first defendant in relation to the motor vehicles earlier sold by the first defendant for the plaintiff and also because the proposed sale to of the vehicle to the second defendant was not for full cash **30,** payment, the plaintiff appears to have chosen to first sell the vehicle to the first defendant who, in turn, would sell it to the second defendant or to any other purchaser so that the responsibility of recovering any unpaid balance would be the that of the first defendant himself.

The agreement of sale of tire vehicle to the first defendant was executed between the plaintiff 40 and the first defendant on the same day "QL20th.. Qe.c,emberJJ.995. The vehicle was sold by

the plaintiff to the first defendant for a consideration of shs. 12,500,000/= (Exh. Pl). This to the plaintiff, a bank draft in the sum of 5/= m, which had been prepared by the second defendant in favour of the plaintiff. He also paid cash in the sum of shs. 2,000,000/= and a cheque in the sum of shs. 500,000/=. The cheque was also drawn by the second defendant **10** in favour of the plaintiff. Thus the total payment was shs. 7,200,000/= was made leaving a balance of shs. 5,300,000/ = , which was agreed to be paid on or before 20th February, 1996, by the first defendant. \* allowed a profit margin of shs. 300,000/= for the first defendant. The first defendant paid

The plaintiff, thereupon, released possession of the vehicle to the first defendant, who in turn, gave possession ofit to the second defendant after concluding on agreement ofsale with **20** her.

The first defendant defaulted in paying the balance of shs. 5,300,000/= to the plaintiff. The plaintiff instructed his advocates, Messrs Emesu & Co. advocates, to cause the impounding of the vehicle by the police. The vehicle, which was now being operated as a taxi, by the police after only a couple of days of its retention. But soon, the road licence of the vehicle has since returned its registration number plates to the U. R. A in order to avoid payment of 40' second defendant, was impounded by the police in September, 1996, and kept at the C. P. S i ? in Kampala. The second defendant, however, managed to retrieve the vehicle from the expired. Her attempt to secure the vehicle's log book, from the plaintiff, to enable her renew the road licence failed. The vehicle has since been parked and the second defendant arrears for income tax and road licence fees.

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The two defendants filed a joint written statement of defence. The first defendant acknowledges, that he, indeed, after the sale, owed the plaintiff the balance of shs. 5,300,000/= as part of the consideration for the vehicle. He however, claims that the plaintiff had permitted him to utilise out of that balance shs. 2,100,000/= towards clearing f also states, in his evidence and pleadings, that he tendered the rest of the balance that is shs. 3,200,000/= to the plaintiff while the two were at C. P. S. in Kampala on 23rd September, 1996, but that the plaintiff declined to take the money. and preparing, by way of fixing seats, the vehicle and other vehicles which he sold for the plaintiff. The first

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The first plainfi disclaims any claim of fraud on his part alleged to have arisen by reason of selling the vehicle to the second defendant. Iso claims that the property in the vehicle passed over to him by virtue of the agreement of sale executed between him and the plaintiff, (Exh. Pl). As a buyer, he argues that it was within his authority to sell the vehicle to the second defendant. He

The second defendant admits buying the vehicle from the first defendant and also removing following the execution of the agreement of sale. She has presented a counter claim against the plaintiff in the sum ofshs. 15,000,000/ = as special damages for loss of income following the plaintiff's refusal to release the vehicle's log book to her to enable her renew the vehicle's road licence. 4C - *'* it from the central police station where it had been impounded. She claims to be the rightful owner of the vehicle the first piainu^having passed the property in the vehicle to her

Upon the insistence of learned counsel, Mr. Emesu, an unusually long list of issues was

- (a) whether there was breach of contract by the first defendant; - (b) whether, if there was such breach, the plaintiff was entitled to cause the seizure and detention of the vehicle by the police; - **(c)** whether the plaintiff authorised the first defendant to use part of the 10 purchase price of motor vehicle 108 UBN to clear other motor vehicles of the plaintiff; - (d) whether the first ptemtl tendered payment ^o-the balance and the plaintiff refused to accept it; **\* ;** - (e) whether the removal of vehicle 108 UBN by the second defendant **20** from the police was unlawful; - **(0** whether the retention of the log book, by the plaintiff was lawful, and if not, whether the retention of the log book occasioned any damage or loss the second defendant;

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- whether the plaintiff is entitled to the reliefs he seeks in the plaint; **30** (g) - (h) whether the second defendant is entitled to the relief prayed in the counter claim.

The plaintiff gave evidence in support of his own case. He called no evidence.

Each of the two defendants also gave evidence in their respective defences. They too called no evidence.

defendant or not, it has to be established first whether or not a contract of sale existed 10 between the two. In order to answer the first issue, that is whether there was breach of contract by the first

agreement of sale (Exh. Pl). The first words of Exh. Pl state, The plaintiff states that he sold his vehicle to the first defendant. He has produced an

> "I, John Nathan Osapil, has sold my motor vehicle Reg. No, UBN **(f** 108, Engine No/ 3Y 0600028, Chassis No, YH6IV-0060028 -

> > 30

**1**

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Exh. Pl is dated 20/12/1995 and is duly executed by John Nathan Osapil as vender and *\_j* immanuel Kaddu, the first defendant, as the purchaser.

In his evidence in court, the first defendant has denied that he ever entered any agreement Exh. Pl, appears to me not to differ in any way from the signatures of the defendant on Exh. P2. Secondly, in his own words, the first defendant states that he executed Exh. P2. In Exh. P2, the first defendant states "Nze Immanuel Kaddu, Ntunze Motoka yange Ey'ekika with the plaintiff. He says that he never signed exh. Pl. I do not believe him. What the first plaintin says, in that respect, is totally untrue. The signature purported to be his, on

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#### kya Toyota Hiece Mini-Bus No. 108 UBN (white in colour) II

There could, certainly, have been no way the first defendant could have executed Exh. P2 between himself and the second defendant if Exh. Pl did not exist as he claims. He would between the plaintiff and the first defendant. I also find that it was a condition, in the 10 agreement of sale between the plaintiff and the 1st defendant, that the first defendant would pay the balance of shs. 5,300,000/ = , to the plaintiff, "on or before 20/2/1996". There is no doubt that that condition was breached by the first defendant. have had no ownership of the vehicle. I accordingly find that a contracfof sale did exist

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The first defendant testified that he was authorised to use shs. 2,100,000/= off the balance taken place between 4th and 20th December, 1995. That was before 20th December when exh. Pl was executed. If the plaintiff had authorised the first defendant to use part of the cost price of the vehicle to fix chairs in the vehicle, then Exh. Pl should have reflected that . position. It did not. The reason could well be that no such authorisation had been made by 30. the plaintiff. Shs. 2,100,000/= was such a big sum of money to be just left out of such a first defendant did not pay that balance to the plaintiff on or before 20/2/1996. He breached the contract of sale between himself and the plaintiff. Even when the plaintiff gave the first 40 defendant an extension of time in which to pay, that is up to 3rd June, 1996, he still failed to do so. in order to clear vehicles for the plaintiff and to fix chairs in the vehicle and other vehicles on behalf of the plaintiff. At least the fixing of the chairs in UBN 108 is supposed to have contract of sale. It is c,lear that there was no such understanding by that date. Therefore the first defendant'fr-ltabtHty to the plaintiff for the balance remained shs. 5,300,000/=. The

**20**

The second issue is whether, in view of the breach of contract by the first defendant, the plaintiff was entitled to cause the seizure and detention of the vehicle.

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Mr. Emesu, for the plaintiff has argued that the agreement between the plaintiff and the first defendant was some kind of hire purchase agreement, and as such, the property in the vehicle did not and could not pass to the first defendant until the entire sale price had been paid by **10** the first defendant. Mr. Emesu has relied on the authorities in Ex parte Crawcour in re Robertson (1878) C. D. 419 and McEntire And Another US. Crossley Bros. Ltd. (1895) Ac 457,

Mr. Tibesigwa, for the defendants,, on the other hand, has submitted that the agreement between the plaintiff and the first defendant, was an unconditional sale of a specific goods, **20** which was the vehicle. That agreement is, therefore, governed by section 20 (1) of the Sale Of Goods Act, Cap 79, which provides in effect that where there is an unconditional sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the • contract is made and it is immaterial whether the date of payment or delivery is postponed. Mr. Tibesigwa has relied on the decisions in John Magamboni vs. Uganda Hire Purchase Co. (1978) HCB 54 and F. X. Kayemba vs. Kyeyune Mbalangu Civil Suit No. 57 of 1990, both decisions of this court.

I have had occasion to read all those decisions. The general principle which appears to embrace all of them, is that whether a contract between any parties is one of sale or hire, must be ascertained from the construction of that particular contract itself by looking at the **'40** intentions of the parties. In the instant case, Exh. Pl is very clear. It constitutes a direct

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sale of the vehicle to the first defendant even though the sale price was short by 5,300,000/= , The first plaintiff undertook to pay the balance within a specified time. The plaintiff did not make the sale conditional upon the full payment of the balance.

follow the previous decisions of this court both in John Magamboni's Case (Supra) and in F. X. Kayemba vs. Kyeyune Mabalangu (also supra) which I consider to be correct decisions on the matter. I therefore, agree with Mr. Tibesigwa that the agreement in the instant case was one of sale governed by the Sale of Good Act and specifically section 20 (1) of that Act. I, accordingly,

**10**

Perhaps, borrowing tire words of Lord Ashbourne, in Alexander Knox McEntire And John Arthur Macopchy vs. Crossley Brothers Ltd. (1895) AC 457, I can state, that on the **20** construction of Exh. Pl, I can see no room for any reasonable doubt. The parties to that agreement expressed what they desired to be their contract in a language of reasonable clearness; and, in my opinion, their intentions are expressed in a way that leaves no room for doubt that the goods in the vehicle did, indeed, pass to the first defendant upon the execution of that agreement. The plaintiff lost his lien in the vehicle when he passed **30** possession of it to the first defendant. I must add that I do not believe the plaintiff when he vehicle. Plaintiff's only remedy lay in suing the first defendant for breach of contract and not in taking steps to impound the vehicle in which the plaintiff no longer had a lien. 40 says that he did not know that the second defendant purchased or was to purchase the He fully knew that the first defendant was going to resale the vehicle. The

I have already answered the third issue in the negative. I will not repeat what I have stated in respect of it.

The fourth issue is whether the first defendant tendered payment of the balance to the plaintiff and the plaintiff refused to accept it.

23rd September, 1996, at the Central Police Station in Kampala and that the plaintiff refused 10 to accept that amount. Since I have already held that the balance due to the plaintiff from the first defendant was shs. 5,300,000/= and not 3,200,000/ = , even if I were to believe that . what the first defendant says is correct, that he tendered shs. 3,200,000/= to the plaintiff at the C. P. S, I would still find that the balance due to the plaintiff which was shs. 5,300,000/ = plaintiff had the right to refuse any amount which did not correspond to what was due to defendant at CPS as claimed. The evidence of the first defendant was that he offered shs. 3,200,000/= to the plaintiff on was not tendered to him. What was tendered to the plaintiff was a lesser amount. The him. I am however convinced that no money was tendered to the plaintiff by the first

The next issue is whether the second defendant acted unlawfully in removing the vehicle **30** from C. P. S.

I have already held that the plaintiff passed the goods in the vehicle, to the first defendant when Exh. Pl was executed. Though the vehicle was not registered in the names of the first defendant by the time he resold it to the second defendant, that fact did not vitiate the first defendant's claim to the ownership of it. Akisoferi Biteremo vs. Attorney General (1994) III KALR88 and Agness Mukasa vs Akamba (U) Ltd. Civil Suit No. 197 of 1990, reported

40.

jn\_High Court Civil Suits Vol.2, 65, The first defendant accordingly, passed good title to 1 ' v, . \_ the second defendant. The second defendant obtained the goods in the vehicle. When Exhibit P2 was executed between the first plaintiff and herself.

The evidence in Exh. P2 shows that, in her turn, the second defendant also breached the contract between herself and the first defendant. Although the agreement was that the second 1Q defendant would pay to the first defendant the balance of shs. 3,800,000/= within three months from the 20th December, 1995, the second defendant did not do so. It appears, from Exh. P2, that out of shs. 3,800,000/ = , the second defendant paid shs. 1,600,000/= on 8th March, 1995 and shs. 2,200,000/= remained outstanding until 19th September, 1996, probably after the vehicle had been seized by the police. She paid that sum to the first **20** defendant qnjhat day.

However, her subsequent breach of the contract between herself and the first defendant did not affect the fact that the property in the vehicle had already passed over to her. Like the first defendant, she became the owner of the vehicle even though she was in breach of the • statutory requirement in section 50 of the Traffic and Road Safety Act, 1970, which required - 30 remained the owner of the vehicle. Thus when she removed the vehicle, on 23rd September, 1996, from the C. P. S. she did so as a person who held full title of ownership of the vehicle. The removal was, therefore, lawful in spite of the plaintiff's claim of the unpaid balance **40** from the first plaintiff. a purchaser of a vehicle to register it within seven days from the date of purchase, she still

The next issue is whether the retention of the log book by the plaintiff was lawful and if not,

the counter claim. whether it occasioned any loss or damage to the second defendant. I will examine this issue *i* together with the last one which relates to the second defendant's reliefs which she seeks in

was an offence under section 53 (2) of the same Act, the plaintiff's argument that retaining the log book was an implied condition of the sale agreement (Exh. Pl) cannot stand. It was therefore, not lawful for the plaintiff to retain the log book after executing Exh. Pl. First, the retention of the log book was not an express condition in Exh. Pl. Secondly since *' --------------* **•** the law, as it then stood, (section 50 of the Traffic And Road Safety Act, 1970) required the " purchaser to register the vehicle within seven days from the date of sale and failure to do so

The second part of this issue is whether the fact of retaining the log book, by the plaintiff - **20** occasioned damage or. loss to the second defendant and if so, whether she is entitled to the reliefs which she seeks in the counter claim. *1*

There is no doubt that the second defendant lost income as a result of the fact that she could not renew the road licence of the vehicle. The plaintiff himself admits that the vehicle would earn shs. 60,000/= each day. He also testified that when he was coming from Gulu to 3C that loss of income is recoverable as special damages. The question, in the instant case, however, is, against whom can the second defendant recover special damages in that respect? — 40 Kampala in September 1996, he found the vehicle at Matugga along Gulu Kampala Road and that the vehicle was working as a taxi at the time. The first defendant says that he converted the vehicle into a taxi before he sold it to the second defendant. It is the position of the law

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executed a sale agreement. He is the one who ought to have given her the log book. It is written in the agreement (Exh. P2) ±at the second defendant did not give her the log book, at the time the vehicle was sold to her, because the vehicle was still in Joseph Mutebi's name. But it is clear, from the copy of the log book, (ID. DI) that the vehicle was transferred into the plaintiffs names on 11th December, 1995, some nine days before the plaintiff sold it to the first defendant and the first defendant to the second defendant. It is my view, that since the second defendant had not entered any agreement with the plaintiff, she can not claim special damages against him in this respect. Her legitimate claim can only be directed to the first defendant who sold the vehicle to her and with whom she

Thus when the second defendant purchased the vehicle from the first defendant, she appears **20** legitimately claim special damages from him in that respect is the first defendant who had sale as to when she would get the log book. She does not appear to me to have been' an innocent victim but, rather, an active, positive player in the entire unusual saga which resulted into her loss of earnings. Even though the plaintiff did retain the log book ------- unlawfully as I have stated earlier, it .steal appears to me that the only person who can to have agreed, or at least, to have duly known that she was not getting a log book from the first defendant. She does not even appear to have cared to put a clause in the agreement of a sale agreement with him in respect of the vehicle. She can not su^jhg^plaintifh\_who is. a\_ stranger to her agreement of sale. The second defendant's claim against the plaintiff, in her counter claim, for special damages, for loss of earnings, must accordingly, fail.

However the above notwithstanding, and taking into consideration the entire circumstances of this case, I would hold the view that the second defendant should have an order requiring 30

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the plaintiff to release the log book of the vehicle to her so as to enable her to operate the vehicle once again. The justice of the case, I think, so requires since the second defendant is now the legitimate owner of the vehicle. The log book is to be delivered by the plaintiff to the second defendant within seven days from the date of this judgment.

Lastly, I consider whether the plaintiff is himself entitled to the remedies which he seeks in the plaint.

I have already stated that the plaintiff's claim against the first defendant lies in recovery of the unpaid balance and damages for breach of contract. The plaintiff will, therefore, recover shs. $5,300,000/$ = from the first defendant as unpaid balance of the cost of the vehicle. He will also recover shs. $1,000,000/$ =, against the first defendant, as general damages for breach of contract. The plaintiff will recover his costs against the first defendant.

The plaintiff will also recover interest against the unpaid balance, at the rate of 25% per annum, from the date of filing the suit to the date of payment in full and on general damages, at court's rate, from the date of judgment to the date of payment in full.

It is my view that the rest of the plaintiff's prayers i.e. for the return of the vehicle or for payment of current value of the vehicle and for general damages for fraud, trespass, detinue, conversion and loss of earnings from the vehicle, are all not well founded and can, therefore, not be granted. They are rejected.

As to the plaintiff's claim against the second defendant, I am in total agreement with Mr.

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Tibesigwa that the plaintiff has nothing he does legitimately claim • against the second defendant. His claim for special damages, for loss of earnings is, therefore, rejected. The **v r I-** *'* plaintiff's case against the second defendant is dismissed with costs to the seeond defendant.

In the final result, I enter judgment in favour of the plaintiff against the first defendant. I dismiss the plaintiff's claim against the second defendant with costs. Except for an order 10 granting the log book to the second defendant, I dismiss the second defendant's counter claim against the plaintiff. I make the following orders

- (a) an order compelling the first defendant to pay shs. 5,300,000/= to the plaintiff as due balance of the cost price of the vehicle; - (b) **20** damages to the plaintiff; an order for the first plaintiff to pay shs. 1,000,000/= general - (c) an order awarding interest on (a) above, at 25% per annum, to the plaintiff from the date of the filing of the case to the date of payment in full; \* *■>* - an order awarding interest to the plaintiff on (b) above, at court's rate (d) **50** from the date of judgement in full; **'■1/** - (e) defendant; an order awarding cost of the suit to the plaintiff against the first

,,(f) an order dismissing the plaintiff's case against the second defendant with costs to the second defendant;

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- (h) an order dismissing the second defendant's counter claim; and **'■v'** - (i) an order compelling the plaintiff to hand over the original log book for motor vehicle 108 UBN to the second defendant within seven days 10 from the date of the delivery of this judgment.

V.-ft? kiY-kibuuka

JUDGE.

*O!*

*1C /x* **s**

THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA HOLDEN AT KAMPALA

$C9$

## CIVIL SUIT NO. 883 OF 1996

## JOHN NATHAN OSAPIL :::::::::::::::: \*PLAINTIFF Versus

1. EMMANUEL KADDU

DEFENDANTS 111111111111111111 2. JANE BWIRIZA $\mathfrak{g}^{\bullet} \mathfrak{g}^{\bullet} \mathfrak{g}^{\bullet}$

## DECREE IN ORIGINAL SUIT:

(Under 018 $r.6$ and $r.7$ of Civil Procedure Rules)

SUIT FOR: Special and general damages for breach of contract.

This suft coming this day for final disposal before HIS LORDSHIP JUSTICE V. F MUSOKE KIBUUKA.

In the presence of the Plaintiff and his Counsel MR. GEORGE . O. EMESU and in the presence of the 1st Defendant appearing in person and in the presence of the 2nd Defendant and her Counsel MR. BENARD TIBESIGWA.

## IT IS ORDERED:

- That the Plaintiff is legally entitled to recover sh. 5,300,000/= being unpaid balance of the purchase price of the suit $\texttt{M}/\texttt{v}$ from the 1st Defendant who had purchased the said motor vehicle from the Plaintiff. - 2. That the 2st Defendant should pay to the Plaintiff interest on the unpaid balance at the rate of 25% per annum from the date of filing of the suit until payment in full. - 3. That the 1st Defendant being guilty of a breach of contract should pay to the Plaintiff sh. 1,000,000/= as general damages - 4. That the 1st Defendant should pay to the Plaintiff interest on general damages at court rate from the date of judgement until payment in full. - 5. That the 1st Defendant should pay to the Plaintiff the costs of the suit.

6. That the suit of the Plaintiff against the 2nd Defendant is dismissed with costs to the 2nd Defendant.

- counter claim against the Plaintiff is 7« That the 2nd Defendant's dismissed. - 8. That the Plaintiff should hand over the original log book in respect of the suit M/v Registration No. 108 UBN to the 2nd Defendant within 7 days from the date of the judgement.

*i.*

Given under my hand and the seal of the court this 16th day of ... 199&

D^S-P UM REGISTRAR.

EXTRACTED & FILED BY: EMESU & CO. ADVOCATES, PLOT NO.4, JOHNSTONE STREET, P. O Box 10613, KAMPALA.