National Bank Of Commerce Limited vs Festo Japhet Mkilana (Civil Appeal No. 1533 of 2024) [2026] TZCA 595 (20 May 2026)

IN THE COURT OF APPEAL OF TANZANIA AT ARUSHA fCORAM: LILA, 3.A.. RUMANYIKA J.A. And MANSOOR. J.A.1 ) CIVIL APPEAL NO. 1533 OF 2024 NATIONAL BANK OF COMMERCE LIMITED.. ............ ....................... APPELLANT VERSUS FESTO JAPHET MKILANA ...................................................... ...... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, at Dar es Salaam) fMaeta. J.^ dated the 18th day of August, 2023 in Civil Case No. 121 of 2015 JUDGMENT OF THE COURT 4th December, 2025 & 20th May, 2026 RUMANYIKA . 3.A.: The respondent, Festo Japhet Mkilana, was, at the material time a small-scale transporter. In due course, he successfully approached the appellant, National Bank of Commerce Limited (NBC) for a term loan for purchase of a truck in furtherance of the transport business. Therefore, the appellant advanced to him a loan facility of TZS. 45,000,000.00 which was directly disbursed to the respective motor vehicle dealer, a non-party to this 1 appeal, one Morocco Commission Agent Limited, as per clause 6(a) of the loan agreement (exhibit PI). Notably, the said credit facility was secured by way of a chattel mortgage over the intended truck, namely Mitsubishi Fuso allegedly of 2005 model. It was registered in the names of the respondent and the appellant jointly. According to the respondent, however, sometimes later, and upon taking full possession of the truck, it turned out to be of 1994 and not of the agreed 2005 model. H ie respondent claimed it to be worn-out by age, experiencing some related material defects mechanically causing the truck to be involved in several road accidents. In the respondent's view, this predicament impaired his ability to service the loan fully. The appellant, on his side exercised her right by repossessing the truck. Subsequently, she auctioned and sold it because the respondent defaulted to repay the loan. Being irked with the appellant's move, the respondent instituted Civil Case No. 121 of 2015 before the High Court of Tanzania at Dar es Salaam (the trial court). His claim partly succeeded, as he was awarded TZS. 50,000,000.00 being general damages for breach of the loan agreement. He also got compensation of TZS. 10,000,000.00 for the missing 200 bags of fertilizers which allegedly were loaded in the truck at the time of its impoundment. Also, he got costs of the suit. 2 The appellant, on her part, denied the liability maintaining that; one, she had no agency relationship with the said Morocco Commission Agent Limited, and two, the loan agreement bore no such terms, be it the alleged model on suitability of the truck. Also, she asserted that the truck was impounded without any cargo. At the end of it all, the respondent won the battle partly. The trial court ruled in his favour, being compensated for the missing 200 bags of fertilizers worth TZS. 10,000,000.00 attributing the loss to the appellant, as hinted before. Aggrieved by that decision, the appellant has lodged the present appeal which is premised on three grounds. They are paraphrased thus; one, the award of damages to the respondent was unjustified because, admittedly, the latter had himself defaulted to repay the loan, Two, the appellant should have not been condemned for damages as she had lawfully exercised her rights under a chattel mortgage. Three, failure of the trial court to evaluate the evidence regarding existence of the bags of fertilizers in the truck, which was not proved. At the scheduled hearing of the appeal Messrs. Japhet Ndazi and Erasmus Buberwa, learned counsel appeared for the appellant and the respondent, respectively. 3 Mr, Ndazi adopted the appellant's written submission fiied on 17/02/2025 as part of his oral arguments, without more. If anything, the learned counsel asserted, only the appellant was entitled to get general damages. In reply, Mr. Buberwa adopted the respondent's written submission filed on 14/03/2025 as part of his oral submission. Amplifying on them, it was contended that, upon the respondent's persistently defaulting to repay the loan money, the appellant may have no any other option but to attach and sell the truck, as she did. However, he argued, the appellant was not justified to seize the said bags of fertilizers which were in the truck at the time of its impoundment. It was also contended that, the evidence of the alleged owner of the cargo one Yusufu Arobaini (PW2) who testified in court was enough, and therefore, it was not compelling for the material driver to appear and testify in the circumstances. It is so, Mr. Buberwa, argued, the respondent's evidence weighed heavier than that of the appellant and, on that account, he rightly won the case. He cited our decisions in Hemed Said Mbilu (1984) T.L.R. 113 and China Henan International Group Co. Ltd v. Salvand K.A. Rwegasira (Civil Appeal No. 57 of 2011) [2012] TZCA 429 (7 November 2012; TanzLII) for a long-established legal principle that, there is no wrong without a remedy and also, regarding the degree of proof required in civil litigation. The Court was implored to dismiss the appeal with costs for being devoid of merits. We have considered the learned counsel's rival submissions, the authorities cited and the entire record. It is recalled that, the epicenter of the appellant's complaint in the first ground of appeal concerns the legality or otherwise of the damages being awarded to the respondent who also had defaulted to repay the loan. On set, we agree with the appellant's counsel on a contention that, the award of the damages was not justified because the respondent himself had risked it all. As such, admittedly, the respondent was in default, such that he should have not validly benefited from his own wrongs, much as his conduct expressly constituted a fundamental breach of the loan agreement. Therefore, award of the damages to the defaulter contravened section 73(1) of the Law of Contract Act. Saying so, we are fortified by a trite law that only a party who is adversely affected by breach of a contract, is entitled to compensation for the subsequent loss or damage caused. See- Fauzia Jamal Mohamed v. Lilian Onael Kileo (Civil Appeal 448) 2024 TZCA 628 (23 July 2024; TanzLII). Put in other words, the order awarding damages to the defaulting respondent defeated the logic and truth in the circumstances of the case. As such, the trial court respectfully blew hot and cold. It found the 5 respondent to be in default but yet awarded him the general damages which complaint we find to be merited. Therefore, the first ground of appeal is allowed. The second ground of appeal challenges the trial court for awarding the general damages in total disregard of the appellant who attached and sold the truck exercising her right in execution of a chattel mortgage. As such, the respondent cannot be heard so complaining for two main reasons; One, it is beyond any dispute that he charged his truck as security for the loan obtained from the appellant, on such terms and conditions, two, it is equally undeniable fact that, the respondent failed to repay the loan in full. Whatever the reasons for the failure, as appearing on page 305 of the record of appeal, it implied a self-admission of breach of the loan agreement. From the outset, therefore, the respondent foresaw its consequences, namely, the appellant attaching the truck and selling it as of right. We have taken this stance on a number of occasions such as in Diana Alex Kajumulo t/a M/S D.K. Agencies Co. v. Exim Bank (Tanzania) Limited (Civil Appeal No. 223 of 2023) [2025] TZCA 987 (23 September 2025; TanzLII). Yet other words, the defaulting respondent was not entitled to get the general damages under whatever circumstances. To find otherwise, it is tantamount to embracing unjustified enrichment causing the respondent to benefit from his own wrongs which cannot be accepted by the Court. In fact, 6 the respondent ought not to have come to equity with such dirty hands, just as he had not done equity in the first place. Therefore, too, the second complaint is founded and allowed. Tine third ground of appeal concerns the alleged improper evaluation of evidence by the trial court and arriving at a wrong conclusion, with respect to the compensatory order. It is recalled, allegedly, that, at the time of impoundment of the truck there was cargo of 200 bags full of fertilizers in it, worth TZS. 10,000,000.00, However, we agree with Mr. Ndanzi that the record reveals some significant evidentiary gaps and inconsistencies, as there was no sufficient evidence to show the existence of the said cargo. We are saying so for two main reasons; One, no paper trails were presented in court be it by the respondent or anybody else as proof of existence and quantity of the cargo, let alone its value. For instance, no any delivery notes, invoices, sale receipts, material consignment documents or form of inventory that was presented before the trial court. Two, it would have been a different scenario, which is not the case, if the material driver had appeared and tell the trial court that indeed, at the time of its impoundment the truck was loaded with the alleged bags of fertilizers. We note that, the said driver was such a material witness, whose absence and evidence rendered the respondent's case shaky, incredible and unproven, therefore bound to crumble, as the respondent did not assign any reason for that failure. The Court has so pronounced itself repeatedly, such as in Moshi Mustafa & Others v. Ilemela Municipal Council & Another (Civil Appeal 117 of 2020) [2022] TZCA 765 (2 December 2022; TanzLII). With respect, the learned trial Judge, in the present case accepted the respondent's evidence wholesale, attributing the purported loss of fertilizers valued at TZS. 10,000,000.00 to the appellant. As such, assertions of PW1 and PW2 regarding the alleged missing bags of fertilizers was hearsay evidence which is inconsequential. We note that, the findings of the trial court undermined a long settled legal principle that he who alleges must prove, the Latin Maxim; Affirm ant Non Negant Incum bit Propatio" See- Anthony M. Masanga v. Penina (Mama Mgesi) & Another, Civil Appeal No. 118 of 2014 (unreported). Equally associated with the impugned compensatory order, is the trite law that special damages must be specifically pleaded and strictly proved, in this case that, indeed at the time of its impoundment the truck it was loaded with the alleged missing bags of fertilizers valued as such. Unfortunately, the respondent did not meet the threshold required, as alluded to before. 8 In those premises, therefore, it is plain to us that, the learned trial Judge respectfully misapprehended the evidence and he failed to properly analyze the material placed before him. Too, the third ground of appeal is merited. In the upshot, and for the reasons that we have demonstrated above, the appeal is merited. It is allowed with costs. Consequently, we quash the impugned decision and set aside all the orders attached to it. DATED at DODOMA this 31st day of March, 2026. S. A. LILA JUSTICE OF APPEAL S. M. RUMANYIKA JUSTICE OF APPEAL L. A. MANSOOR JUSTICE OF APPEAL The Judgment delivered this 20th day of May, 2026 virtually in the presence of Ms. Josephine Safiel, learned counsel for the appellant also holding brief for Mr. Erasmus Buberwa, learned counsel for the respondent and Mr. John Gervas, the Court Clerk, is hereby certified as a true copy of