ISLAMIC UNIVERSITY IN UGANDA
KAMPALA CAMPUS
COURSE : LLB
COURSE UNIT: LAW OF BANKING AND NEGOTIATABLE INSTRUMENTS
LECTURER; ASS. PROF. DR. CAPTAIN SHADAT MOHMED
YEAR: 3
SEMESTER: ONE
NAME: ODWIRO INNOCENT DERICK
REG NO: 219-05312-12496
MAKUA NAIRUBA MABEL V CRANE BANK LIMITED CIVIL SUIT NO. 380
OF 2009
Facts
The plaintiff sued the defendant bank for recovery of a sum of Shs. 57,000,000/= which
was allegedly illegally and negligently debited from her account held in the defendant
bank at Iganga Branch on the basis of her forged signature. The savings withdrawal slips
which bear her allegedly forged signature were attached to the plaint as annextures “A1”
to “A13”. She also claimed for special, general and punitive damages as well as interest
and costs of the suit.
The defendant in its written statement of defence denied all the allegations contained in
the plaint. It was instead contended that all the said sums of money were paid to the
plaintiff who personally signed the disputed savings withdrawal slips. Further that the
respondent’s staff always exercised due diligence and care while serving the plaintiff and
as such no regulations, ethics or duty was breached.
The brief facts agreed upon at the joint scheduling conference were that the plaintiff
opened and operated account number 01410050903500 with the defendant bank at
Iganga Branch. The account had a deposit of over Ug shs.70,000,000= by 2 nd of May
2008. The balance as at the 30th April 2009 was Shs. 11,583/=.1
ISSUES2
1. Whether the monies on account No.0141005093500 were withdrawn by the
plaintiff or under her mandate.
1
At page 1
2
At page 2
2. Whether the defendant acted negligently in making payments based on the
disputed payment vouchers thereby wrongly debiting the plaintiff’s account with
the amounts paid.
3. Whether the plaintiff is entitled to the remedies sought.
Decision.
In determining the 1st issue on whether the monies on account No.0141005093500 were
withdrawn by the plaintiff or under her mandate. Court observed that the obvious
distinctive features of the plaintiff’s handwriting was that she presses the pen on paper
with so much emphasis and therefore her strokes are thick as seen on the genuine
vouchers as well as the specimen handwriting and signatures.3
In that regard court followed its findings and disregarded the conflicting reports and
testimony of the handwriting experts as it stated that the handwriting experts were not
thorough in their reports.
Court then considered all the evidence on record and critically analysed all the signatures
that appeared on the genuine as well as questioned withdrawal slips and judge concluded
that the plaintiff signed all the questioned vouchers except one. She found that the
signature on Exhibit D 1 (ii) (f), particularly how the 3 rd last letter on the signature was
written, was distinct from the rest of the signatures on all the questioned vouchers as well
as the ones on the genuine vouchers. That particular voucher had other issues that she
considered at length.4
The Hon Lady Justice Hellen Obura then concluded that since since the plaintiff did not
sign that one voucher, she could not have presented it personally to the counter for
payment. This therefore implied that she did not withdraw the Shs. Ten Million indicated
on that one voucher. The defendant as the plaintiff’s banker owed her a duty to explain
3
At page 34
4
At page 38
how that money was paid on the basis of a forged signature. And thus held 1 st issue on
whether the monies on account No.0141005093500 were withdrawn by the plaintiff or
under her mandate in the negative in so far as this that particular voucher and in
affirmative for the rest of the questioned withdrawal slips.5
In determining the 2nd issue on Whether the defendant acted negligently in making
payments based on the disputed payment vouchers thereby wrongly debiting the
plaintiff’s account with the amounts paid.
Court cited with approval the case of Joachimson v Swiss Bank Corporation6 to define
the relationship between a banker and customer as one of contract. And stated that:-
Much as this relationship was stated in the context of a current account, I am of the
view that the same principal is applicable where a customer operates a savings
account.7
Court then held that that payment of withdrawal slip A9 (Exhibit D1 (ii) (i) where the
account name was written as Makau Nairuba Makau and A6 (Exhibit D1 (ii) (f) where
the plaintiff’s account name was wrongly written as “MAKA MABEL” was simply gross
negligence on the part of the defendant’s servants. Any prudent banker exercising due
care, caution and diligence would have noticed that there was a problem and not made
any payment against those withdrawal slips without requiring correction to be made just
as it was done on F3.8 And as a result found negligence on the part of the Bank
particularly in the manner in which transactions on the plaintiff’s account were handled
and specifically in so far as payment of (Exhibit D1 (ii) (i) and Exhibit D1 (ii) (f) are
concerned.
On the issue Whether the plaintiff is entitled to the remedies sought.
The plaintiff sought a number of remedies which included
5
At page 39
6
(1921) 3 KB 110
7
At page 42
8
At age 54
1. Shs. 57,000,000/= being money that was negligently paid out from the plaintiffs
account without her mandate,
2. special damages of Shs. 10,400,000/= being the expenses she incurred arising
from the defendant’s breach of duty,
3. general damages,
4. exemplary damages,
5. interests,
6. costs of the suit and any other relief.
Court cited principle governing award of special damages that it must be specifically
pleaded and strictly proved. relaying on the case Musoke v Departed Asians Property
Custodian Board & Anor9 [1990-1994] 1 EA 419 where it was stated that special
damages must always be explicitly claimed on the pleadings, and at the trial it must be
proved by evidence both that the loss was incurred and that it was the direct result of the
defendant’s conduct.10
Her lordship held that the plaintiff did not prove special damages and as such was not
entitled to special damages.11
On the issue of damages, court held since it had already found that the defendant
breached its duty of care and due diligence as the plaintiff’s banker by negligently paying
out money from her account. Court therefore awarded general damages of Shs.
20,000,000/=.12
On exemplary damages, court declined to award them.
Conclusion.
Court entered judgement in favour of the plaintiff against the defendant for orders that:-
9
[1990-1994] 1 EA 419
10
At page 55
11
At page 56
12
At page 56
(a) The defendant pays the plaintiff the Shs. 10,000,000/= (Ten million shillings only)
that was negligently paid out of her account.
(b) The defendants pays general damages of Shs. 20,000,000/= (Twenty million
shillings only).
(c) The defendant pays interest on (a) above at the rate of 22% per annum from the
date of filing the suit until payment in full.
(d) The defendant pays interest on (b) above at court rate from the date of this
judgment until payment in full.
(e) The defendant pays to the plaintiff costs of this suit.
