Mohamed B. Surath vs Andulile Mwakibete (DC Civil Appeal No. 7 of 1995) [2000] TZHC 601 (28 April 2000)

MOSHI1. J ._

IN THE HIGH COURT OF TANANIA AT f'lBEYA (DC) CIVIL APPEAL NO. 7 OF 1995 (F.rom Civil Case No. 108 of 1992 of the District Court of Mbeya at Mbeya Before: D.B.G. Safari - Resident 1'1agistrate) MOHAMED Bo SURATH ouoo-00000000 APPELLA1'1'i' Versus ANDULILE MWAKIBErE 0•00000000•• RESA.,J.'IDENT JUOOMEl'-JT 11his appeal ar·.1.ses from the decision of the district court of Nbeya in a suit p.refrred by the respondent against the appellant for f_irstly~ special, damages amounting to shs.3,50 1 000/= being respondent 1 s money embazzled by thQl appellant, and qondly, compensation of shs.115 1 000/= being purchase pri ~ •. a semi-completed house the respondent had bought for the appellant. 11he district court (D.B.G. Safari, RM) allowed the former, but not the latter. The decision aggrieved the appellant and his learned advocate at the trial, Mro Ndibalema, preferred this appeal which, however, was argued before me by Mr. Naali, learned advocate, and resisted by Hr. Mkumbe, learned a«vote for the respondent. A learned advocate, Mr. I(ayange, had represented the • respondent at the trialo The appellant was good at making breado But he was jobless and desparately looking for a job after a baery business of a certain 6omali in which he was engaged closed downo At that time the respondent was constructing his twn bakery at his homeplace. So the appellant approached him and requested for a job in the bakery. 'l 1 he respondent then verbally engaged . him to work in the bakery. The respondent also invited him to stay with him in his house as the money appellant had neither shelter norLfor foodo The appellant, therefore, stayed at, and fed from, the house of the respondento Btaying at the house of the respondent as well were Yusuf Mwamtegele (PW2), a gardener employed • o 9 • • o a o o • • /2

• 2 - by the respondent, a::_d l'atrick Yisigwa (h!4), a labourer employed at the bakery. The respondent \•1a.s providing all the raw .11aterials needed for the bakery business and he had supplied all the mate::.ials r..eeded for the construction of the bakeryo He would net, however, pay the appellant a salary as such. He would from now and then pay to him some pocket money and rewards depending on his performance and financial position of the business. 'rhe appellant claimed that he wu..s not employed by the respondent but that the bakery business was a joint venture in partrter$hip between them, and that they had agreed, again verbally,to share equally whatever was being realized. He agreed he had not invested a:ny property or mony in the business and that his income depended solely on the bakery business. Partnership is defined under section 190(1) of the Law of Contract Ordinance, Cap. 433, as the relation which subsists between persons carrying on business in common with a view of profit. Persons who have entered into partnership with one another are called collectively a ,;firm:,, and the name under which their business is carried on is called the 1 •firm name•'- S~ sectj.on 190(2) of Cap. 433. I shall at a later stage in this judgment have a closer look at some of the elements of partnership. But I need state the following at this stage .. The matter was devoid of a de.finite partnership agreement between the parties. The terms of their agreement were verbal and unwitnessed. It is often a very difficult matter to determine, in the absence of a definite partnership agreement, whether a partnership does ·or does not exist. In determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, a court must have regard to the real relations between the parties, as shown by all relevant acts taken together, and not merely on their expressed intention, for individuals cannot create a partnership merely by intending that partnership relation shall exist between them. 'file bakery business prosr-P,rr>r1 r:iri according to the respondent the daily production of bread gradually ro..e over a. period of a.bout one year to 45() loaves selling at shs.100/s~ per lr)a.fo In appreciation of the good work being •••••••ooe /3

I I done by the appellant the respondent bought for him a semi-finished house from I ! :: their cell leader, Kayamba Peter (PW3), at shs.115,000/=, intending to finish ,1 its construction for him. 'I'he appellant, ho/wever, were to claim that he had I .J 1' made the purchase himself from his share of i;the proceeds of the business. As already said, the claim based on this purchc=ise i 1 was disallowed by the trial court C I Ii on the ground that it was a reward made to the 'appellant for his good work which I could not be returned. i The respondent had a current account No. ·P/25/052 at the NBC Hwanjelwa I Branch Mbeya. '.!.'he account was in his own name. He was its sole signatory and operated it himself. But he was at times away I in his coffee farm at Mbozi and could not operate the account while away~ This to some extent was adversely a I af f t · th t f th - · , :/ h 11 r 1 1 · d t ec ing e managemen o _ e business w.aen e was away. .:.io 1e app ie o :1 the bank in writing (Ext A1) and filled in n pplication form (Ext A2) for the appellant to be allowed to operate the account for the purposes of the 'I I bakery business when the respondent was away. ': This was after about one year of the operation of the business and after the. appellant had won the trust of 'I ' So the si 6 natu.re of the appellant was introduced in the ; I the respondento Specimen Signature Card (l;;xt A3) of the acc?unt, thus authorizing hin1 to ,I ' operate the account in addition to the respondent. But the ownership of the account did not change. It remained in the 11 name of the respondent, its owner, and the letter of application (:Ext A1) made 1 iti very clea1. that the appellant 1! was to operate the account only in the absence of the respondent, and only for purposes connected with the bakery business'. He could bank money realized from the bakery business and withdraw money fr buying raw materials if out of stock only in the E,bsence of. the respondent. 'i'he arrangement therefore was f I only a contingency which WcJ.S conditional upon"the respondent being away and for ·i I business purposes only, and whenever that aμpened, the appellant were to enter I and record the transactions in the register for the bakery business. I Tinle came when the respo:1dent and hici f arnily had to leave for Mbozi to I i tend their coffee farm where they stayed for several rnonths It was in June II Uii>GIOOeoee•@· /4 ,,1

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• 4 - 19910 The respondent left the bakery business under the management ,of appellant assisted by P,!4. He left behind raw materials worth shs.350 ,000/:. but no cash. The account of what transpired while the respondent was away was given by the cell leader (PW3), PW2 and FW4. As soon as te respondent departed for Mbozi the appellant hurriedly built a house for himself close to the one bought for him using money realized from bakery business. fhe house took only one month to butld. The appellant denied to have built the house by money he was receiving fror.1 bakery business, but the denial was a clear contradiction in that he had said and a&nitted that the bakery business was his only source of income and that he had no other source of income. 'l'he product ion of bread at the bakery, according to PW4, doubled to 900 loaves a day at.the instance of the appellant selling at the same price of shso100/= per loaf, thus raising the income from the bakery business by one hundred per cent. At times, added PW4, the appellant would not bank any money from sales but would purchase such personal items as National 1:'anasonic Radio directly from sales proceedso 'l'he business thus thrived while the respondent WM away, but upon his return he found neither money in the bank or elsewhere nor raw materialsQ 'l'he business, according to respondent and PW4, had dwindle do ·i'he register was nov1here to be foundo :dence the suito The trial court affir1:1atively answered the issues whether or not the bakery business was the property of the respondent, and whether or not the appellant bad misappropriated money from the bakery business. Cm the evidence and in those circumstances, those findings could not be faulted.., fir;~_li, partnership is an association of two or more persons to carry on ~ co-owners a business for profit. These are definite elements which must be present in a pm-tnershipo But the element of co-ownership did not exist in the relation beb1een the parties in this caseo The bakery business was solely the property of the respondento He was its sole investor o '.J.'o.e appellant owned nothing in that business as he had contributed or invested nothing in it .. There was only the appellant's labour in its management which, however, would have at most earnerl him the status of 0 0 0 0 • 0 0 0 0 0 0 0 /5

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• 5 - an employee in the circumstances. With respect to Hro /aali, the mere fact that a servant in a business is given a share of the profits either in lieu of his remuneration or in addition to it doe not make him a partner with his employer. Sectfon 191(2) uf Cap. 433 makes it clear that the receipt of a share or part of profits or of payment contingent or varying with the profits does not itself make the recipient a partner in the business. There are the other elements of partnership to consider. The same section goes on to specify certain persons who may receive a share or part of profits and yet be no partners. Jong them is a servant receiving share or part of profits as his remuneration •. There was more in this. 'l1he respondent had introduced the appellant to their cell leader (PW3) as a person employed in the bakery business. He would not have thus introduced the appellant had the appellant been a partner in the busi:aess. Pl2 and PW4 regarded the a}Jpellant as their follow employee. In the bank application form filled by the respondent (Ex:t A2), the respondent introduced the appellant as, and called him, his young brother, and not his partner. de would not have done so were the appellant his partner in the business. And the appellant 9 s allegation of partnership was completely unsubstantiated .. His was the only word on it, and it thus remained an unsubstru1tiated allegation. For all the foregoing re/:;\Sons, I would respectfully agree with Mr. i'1kumbe, and uphold the trial court's finding, that the appellant was an employee, and not a partner, in the bakery business of the rspondent. Sec.<?ndl;r, I am satisfied that the trial court s finc1.ing that the appellant misappropriated the proceeds of the bakery business \vhen t:':le respondent was away was sufficiently deserving in the circumstances. The evidence of the respondent as supported by that of P~2, PW3 and PW4 amply demonstratec the misappropriation. The performance of the appellant when the respondent was away had swindle written all over it. He had doubled the income of the respondent's bakery business but denied him the advantage of it. He had ta~en undue advantage of the absence of the respondent, his benefactor, and spent the respondent's money without his authority to acquire personal property of diverse description. This was o o o o o o o o a .) o /6

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• 6 -I I i I. demonstrated by ample ahd believable evidenc~. It ~a.s an outrageous mannet- .of " I · i thanking the respondent for his hospitaliatpypeollCantutite clearly., _ 1 threfore, gratitute i! was not listed among the virtues of the - In the final analysis' therefore' I ai satisfied,. as w the trial court' ! . :1 I . and sustain :tfJr. Mkumbe ts submission, that tJe respondent I s cl,ai.m df shs.350,000/=: !1, I . . \ stood established on the balance of probabil/itieso In consequence I this appeal ' f ! stands " and ·in AT MBEYA. 28 April 2b00. For Appellant: Mr. Naali. For Respondent; Mr. Mkumbe. and the rJspondent is to hJve.his costs here I i j I 11 l1 Ii " I, l i I :1 I 'I I I I ' t /,,.- .. --····,, ,,--+- ,··./ ;' ,.' . .J,/ ._ .J...,. A'M ·---;,-2~ :r--==> -----=-' I B.Po HiDSHI JUook. -=---• ,cl /, r ~ :}Ji .. . · 'J C I 1 I; I ( I, ..... 1 I ,~,