Mohamed B. Surath vs Andulile Mwakibete (DC Civil Appeal No. 7 of 1995) [2000] TZHC 626 (28 April 2000)

HOSHI L. J:.

IN THE HIGH COURT OF 'rAN!6ANIA AT NBEYA (DC) CIVIL APPEAL NO. 7 OF 1995 (From Civil Case :No. 108 of 1992 of the District Court of r1beya at Mbeya Before: D.BoG. Safari - Resident Magistrate) MOHAMED B. SURATH ..lO!IOOOOOQOOoo APPELLAm.' Versus ANDULILE MWAKIBEl'E IJ.'his appeal arises from the decision of the district court of Mbeya. in a suit _preferred by the respondent against the appellant for, fi}:'stly. spe-cial. damages amounting to shs.350,000/= being respondent's money embazzled by the.: appellant, and SO!!.dll I compensation of shs. 115 1 000/= being purchase price .i a semi-completed house the respondent had bought for the appellant. The 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, Mr. Ndibalem, preferred this appeal which, however, was argued b~f-ore me by fl.tr. Naali, learned advocate, and resisted by t1r. Mkumbe, learned. - for the respondent. A learned advocate, Mr. Kayange, had represented the ~espondent at the trial. The appellant was good at making breado But he was jobless and desparately looking for a job after a bakery business of a certain bomali in which he was engaged closed down. At that' time the respondent was constructing his •wn bakery at his homaplaceo So the appellant approached him and requested for a job in the bakery. The 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 food. The appellant, therefore, stayed at, and fed from, the house of the respondent. 8taying at the house of the respondent as well were Yusuf Mwamtegele (PVJ2) , a gardener employed •••••oo•o•• /2

:J 2 - by the respondent, and Patrick· i:•'Jsi_;11a (f~'i4), a labourr employed at the bakery. The respondent was providins; cJ..l ·:·.r:.s raw materials needed for the bakery business and he had supplied all the mr--.tc:·:i.als needed. for the construction of the bakery. He would nl"t, however, pay the o.:;::,:-:.clJ.ant a salary as such. He would from now and then pay to him some pocket 1Lo:1eJ and rewards depending on his performance and financial position of the 1:usr.aLls. •rhe appellant claimed that h.0 v.a.s not employed by the respondent but that the bakery business was a joint ve1,tw.·e in partnershp between them, and that they had agreed, again verbally,to share equally whatever.was being realizedQ He agreed he had not invested any property or money in the business and that his income depended solely on· the bakery business. Partnership is defined under section 190(1) of·tne Law of Contract Ordinance, Cap. 433, as the relation which subsist's between persons carrying on business in common with a view of profit. Persons who have entered into partnersip with_' one another are called collectively a "firm:,, and the name under which their business is carried on is called the ''firm name;._ SE.I!,; section 190(2) of Capo 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 v,as devoid of. a definite partnership ae,Teement 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 io not a partner in a firm, a court must have regard to the real relations between the parties, as sho 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. 1 .f'he bakery business prosperAd and according to the respondent the daily production of bread gradually rose over a period of about one year to 450 loaves selling at shs .100/~: per loaf. In appreciation of the good work being •••••• 0 0 • • /3

• I.- done by the appellant the respondent bought for him a semi-finished house from their cell leader, Kayamba Peter (PW3), t,t shs.115,000/=, intending to finish its construction for him. 1 rhe appellant, however, were to claim that he had made the purchase himself from his share of the proceeds of the business. As already said, the claim based on this purchase was disallowed by the trial court on the ground that it was a reward made to the appellant for his good work which could not be returned. The respondent had a current account No. P/25/052 at the NBC Mwanjelwa Branch Mbeya. 'l'he account was in his own name. He was its sole signatory and operated it himself. But he was at times away in his coffee farm at Mbozi_and could not operate the account while awayu This to some extent was adversely a affecting the management of the business when he was away. So he applied to the bank in writing (Ext A1) and filled in an application form (Ex:t A2) for the appellant to be allowed to operate the account for the purposes of the bakery business when the respondent_ was away. ]:his was after about one year of the operation of the business and after the ·appellant had won the trust of the respondent. So the signature of the appella.t was introduced in the Specimen Signature Card_ (Bxt A3) of the account, thus authorizing him to operate the account in addition to the respondent. But the ownership of the. account did not change. It remained in the name of the respondent, its owner, and the letter of application (Ext A1) made it very clear that the appellant 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 reaiized I from the bakery business and withdraw ntoney for 1 buying raw materials if out of stock only in the absence of the respondent. 'i'he arrangement therefore was only a contingency which was conditional upon the respondent being away and for business purposes only, and whenever that haμpeJed, the appellant were to enter and record the transactions in the register for the bakery business. Time came when the respo1dent and his famtly had to leave for Mbozi to tend their coffee farm where they stayed for sev'eral months. It was in June U O O O O • 0 Cl O e @ • /4

I :,,·, r: •· J •• .... t 1:.. ,. , .

• 4 -

1991. The respondent left the bakery business under the management of appellant assited by PW4o He left behind raw materials worth shs.35O,OOO/=- but no casho The account of what transpired while the respondent was away was given by the cell leader (P\13), PW2 and PW4,, Al3 soon as the 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. The house took only one month to build. The appellant denied to have built the house by money he was receiving fror.i 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. i'he production of bread at the bakery, according to P\ti4, doubled to 900 loaves a day at the instance of the appellant selling at the same pr-ice of shs.1OO/= 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 1 rhe business thus thrived while the respondent was away, but upon his return he found neither money in the bank or elsewhere nor raw materials. 'l'h(• business, according to respondent and PW4, had dwindledo ·.£he register was nowhere to be foundo iience the suito , I The trial court affirmatively answered the issues whether or not the bakery business was the property of the respondent, and whether or not the appellant had misappropriated money from the bakery businesL 0n the evidence and in those . . I circumstances, those findings could not be faulte'Q firstl, partnership is an association of two or more persons to carry on as co-ovme;~s a business for profit. These are definite elements which must be present in a partnership. But the element of co-ownership did not exist in the relation between the parties in this case. The bakery business was solely the prterty of the respondent. He ·was its sole investorQ 'l'fle appellant owned nothing in that business as he had contributed or invested nothing in itu There was only the appellant 1 s labour in its management which, however, would have at most earned him the status of 0 0 O O Cl O ell O O O O O /5

I. • . l I J ,,·,·;

• ,_, I'

• 5 - an employee in the circumstanceso With respect to Hr. Naali, 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 hih1 a partner with his employer~ Sectin 191(2) of Capo 433 makes it elem- that the.receipt of a share or part of profits or of payment contingent or varying with the }J:rofits does not itself make the recipient a partner in the businesso There are the other elements of partnership to consider. The same section gues on to specify certain persons who may receive a share or part of profits and yet be no partners .. Among them is a servant receiving share or part of profits as his remunerat±<in •. There was more in this. The 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 busiesso PW2 and PW4 regarded the appellant as their fellow employee. In the bank application form filled by the respondent (Ext A2), the respondent introduced the appellant as, and called him, his young brother, and not his partner. 1{e would not have done so were the appellant his partner in the business. And the appellant 9 s allegation of partnership was completely unsubstantiated. }:Iis was the only word oh it, and it thus remained an unsubstantiated allegationo For all the foregoing rectSor.16, I would respectfully agTee with Mr. Mkumbe, and uphold the trial court's finding, that the appellant·was an employee, and not a partner, in the bakery business of the respondento ~~on~, I am satisfied that the trial court~ s finding that the appellant I misappropriated the proceeds of the bakery businJss waen the respondent was away was sufficiently deserving in the circu.mstancesoj The evidence of the respondent as supported by that of PW2, l?W3 and PW4 amply d monstrated the misappropriationc l The performance of the appellant when the respona.ent was awe:y had swindle \tJritten all over ito He had doubled the income of the rJspondent's bakery business but denied·him the advantage of it. He had taken un!ue advantage of the absence of the respondent, his benefactor, and spent the relpondent's money without his authority to acquire personal property of diversl descriptiono This was l 0 0 0 0 0 0 0 0 0 ~ 0 /6

I_·-

l i. , 6 l I I i1 . !1 demonstrated by ample and believable evidenceo iiit was an outrageous manner of thanking the respondent for his h0spitality. cJ\ite clearly., therefore, gratitute \ was not listed among the virtues of the appellant. " !! In the final·analysis, therefore; I am satisfied, as was the trial court, ' i and sustain ¥Jr. Mkumbe 1 s submission; that the re.4pondentvs claim of shs .. 350,000/= V I stood established on ·the balance of probabilities. I consequence, this appeal I 11 stands dismissed in its entirety, and the respondent is to have his costs here AT MBEYA. 28 April 2000. For Appellant: Mr .. Naali. For Respondent~ Mr. Mkumbe.