THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
CIVIL SUIT NO. 226 OF 1992
IN THE MATTER OF GUOSTAR ENTERPRISES (U) LTD
IN THE MATTER OF THE LAND COMPRISED IN KYADONDO BLOCK 244
ARISING FROM AN EQUITABLE MORTGAGE
OF THE ESTATE OF SAM NSIMBE (Now Deceased) ::::::::::::::::::::: DEFENDANT
BEFORE: THE HONOURABLE AG. JUDGE REMMY KASULE
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.
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.
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, is now the administratrix of the deceased’s estate and in that capacity she has become the Defendant to the Suit.
In the Suit, the plaintiff, claims to be a mortgagee, of the property comprised in Kyadondo Block 244 Plot 2809, land at Kisugu, Kyadondo, Kampala District. The said land is registered in the names of Sam Nsimbe, now deceased, and was the original Defendant to the suit. The said Sam Nsimbe is alleged to have executed a power of attorney in favour of Guo Star Enterprises, who, in turn, mortgaged the property to the plaintiff.
The plaintiff applies by these Originating Summons for court to determine the following questions;-
b) Whether the plaintiff as the mortgagee of the property is entitled to foreclose and sale off the said property.
Sam Nsimbe Tomusange, the original Defendant, deponed to an affidavit in reply to that of Opio Anna. The same is dated 7th July 2000.
Each of the affidavits filed in the suit has a number of annexures to it.
No other evidence was adduced in the case apart from these affidavits.
Counsel for both parties opted for written submissions.
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.
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, on 18th May 2000, against the Defendant (Sam Nsimbe Tomusange) in favour of one Edward Kivumbi Mukasa for various amounts of money. In execution of the Court Decree, the Judgment creditor applied to, and the court ordered, attachment and sale by public auction, of the suit property. The attachment is still pending.
The second Civil action is High Court Miscellaneous Application No. 1039 of 2004: Josephine Zalwango Nsimbe V. Edward Kivumbi Mukasa and DFCU Bank Ltd.
In this application the applicant, now Defendant in this suit, seeks a stay of execution of the Court Decree in C.S. No. 347 of 1997 until the final disposal of this suit i.e. 226 of 1992; on the ground that the DFCU Bank Ltd, is illegally holding the title of Kyadondo Block 244 Plot 2809 because the same was mortgaged to the Bank Contrary to the powers of Attorney granted to the Mortgagor. The holding 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 1992 was granted to the applicant by this court on 15th December 2004.
The third and last of the court actions is H.C.C.S No. 1043B of 1997: Gold Trust Bank Ltd V. Guo Dong filed in the Commercial 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 7th July 1997, which loan the borrower failed to pay. The suit property was the security tendered for repayment of this loan.
The determination of the two questions stated in the Originating Summons in Civil Suit No.226/1992 depends on resolving the issue of whether or not one Guo Dong was vested with powers by the power of Attorney, dated 13th May 1997 granted to him by Sam Nsimbe Tomusange, to tender to Gold Trust Bank Ltd as security, Kyadondo Block 244 Plot 2809, to guarantee repayment of a loan advanced to a company, Guo STAR Enterprises Limited.
By the said power of Attorney, Sam Nsimbe Tomusange, the donor, being Registered Proprietor of Kisugu Block 244 Plot 2809, appointed, Nominated, ordained and authorized, Mr. Duo Dong of Guo Star Enterprise, P.O.Box 4289 Kampala, to be his true and lawful attorney to execute the following:
ii) 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.
iii) To sign or execute all documents and deeds that may be necessary or expedient in obtaining the said loan
iv) To do any acts that may be necessary in executing the objects of the given powers.
On 30th July 1997, the donor revoked the same; because the Donee had tried and failed to obtain a loan/overdraft from any bank or financial institution in Uganda. The revocation was also registered with the Registrar of Documents.
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 for the principal in one transaction or a series of transactions, or to manage the affairs of the principal generally.
The person conferring the authority is the donor of the power, and the recipient of the authority, the donee.
A power of attorney is construed strictly by the courts according to well recognized rules of construction: See: