Description
Cross-examination – notice of default – third party mortgage – bonafide purchaser of a mortgaged property – sale of mortgaged property – auction – S. 51 of the Land Registration Act – negative inference – sale and intended sale of mortgaged land – want of mandatory notice of default – nominal damages – breach of an implied term of contract – 12% interest.
- Evidence that passes without being questioned by way of cross examination, is deemed to have been proved (p. 7).
- No proof of service of notice of default upon the mortgagor (p. 7).
- Third party mortgage – where the mortgagor was not the borrower, notice of default has to be served on the mortgagor and not the borrower (p. 9).
- Notice of default – A letter purporting to be a notice of default to honour the mortgage terms was held not to be the requisite notice because the notice period indicated therein was 7 days instead of the requisite 60 days, it was not in the prescribed form, and it did not even describe the mortgaged property (p. 9).
- 14 days notice of sale of suit properties issued under S. 12(2) of the Auctioneers Act was disregarded since no prior proper notice of default had been issued to the mortgagor (p. 9).
- A bonafide purchaser of a mortgaged property cannot purchase a real property without establishing title of the vendor on the property (p. 12).
- Protection of purchaser of a mortgaged property auctioned in exercise of the mortgagee’s power of sale is subject to the transfer process under S. 51 of the Land Registration Act, and such protection accrues upon registration of the transfer (p. 14).
- Where the mortgagor does not raise any defect during the notice period under S. 51(1) of the Land Registration Act, the obvious presumption is that the mortgagee complied with the conditions precedent for the exercise of his power of sale under the mortgage. Once the transfer is registered the sale becomes absolute and it cannot be nullified at the instance of the mortgagor on account of any defect on the mortgagee’s title on the mortgaged property or any irregularities of any kind in the exercise of the power of sale except only where there is proof of fraud, collusion or misrepresentation in the transfer transaction (p. 15).
- One of the defendants did not produce an important document in support of his defence – the court drew a negative inference that had the document been produced, it would have operated against that defendant’s case (p. 16).
- Sale and intended sale of mortgaged land were held to be illegal and ineffectual for want of mandatory notice of default (p. 18).
- The plaintiff was awarded nominal damages in the sum of TShs. 5,000,000/- for breach of an implied term of contract (p. 20). The award went together with 12% interest from the date of judgment to the date when the decree shall be satisfied (pp. 20 – 21).
