Bona Fide Purchaser

Immelda Nassanga v Stanbic Bank and Another ((Civil Appeal No.10 of 2005)) [2007] UGSC 8 (21 September 2007);


Search Summary: 

This is a second appeal from the Court of
Appeal which dismissed the appellant’s
appeal against the judgment and orders of the
High Court. The background is that the
second respondent obtained a loan from UCB
and they were given a tractor and a trailer
which was attached and the first respondent
sued to recover on the claim that it had been
wrongly attached. The trial court and the court
of appeal dismissed the suit hence this further
appeal on the grounds that the sale and

auction was unlawful, the mode of recovering
the property and the holding that the plaintiff
wasn’t a bonafide purchaser for value.

Headnote and Holding: 

This case was a second appeal. Through a warrant of attachment and sale the appellant seized a tractor and trailer that formed part of a loan agreement between the respondents, the first respondent being the registered owner to the property until the loan was fully paid. This case illustrated that the rights of a registered owner can not be affected by a warrant of attachment against a judgment debtor.

The court considered (1) whether the sale and auction of the tractor and trailer was unlawful (2) whether the first respondent had the power to order the seizure of the tractor without instituting objector proceedings or a substantive suit and (3) whether the plaintiff was not a bona fide purchaser.

The court addressed this appeal by considering two factors. whether at the time of the sale by auction, the custodian of the tractor and trailer had the legal right to alienate the registered title to a third party and secondly, whether the auctioneer had authority to sell them. In this regard, the court took into account the Civil Procedure Act section 44 (1) that the property to be attached in execution of a court decree must be that of the judgment debtor. In this case, the tractor and the trailer remained vested in the first respondent according to the loan agreement. Therefore, without any lawful authority the property could not be attached or sold.

In dealing with the second issue, the court held that the order to auction the property had lapsed, and the rights of the first respondent were unaffected.

Lastly, the court found that the appellant was not a bona fide purchaser for value without notice because the property did not belong to the judgment debtor.

The court dismissed the appeal and awarded costs to the respondents.


Subscribe to RSS - Bona Fide Purchaser