NA TZHC Dar es Salaam 5

THE mnT.ED REi-'UBLIC OF T,i.NZiiNIA .,. IN THE HIGH COURT OF T.t·,Nz;.NrJI. A'r Uii.R ES Si,LlAM ~~.-,_;•--~~-=- ClVIL 'APPEiiL NO. 77 OF 1994 DONATI MASS.A.WE o • • • • • • • • • •. ,;,s •• o • • • • • • • • .1-lPPELLANT versus FESID KIMiiRIO ooooooooooao•oooooocoo('lao RESPONDENT JUDGMEN,L_ In a belief th.at the appellant DOifaTI PAULO MASSAWE, who WLS a surety in a contract of guarantee, and therefore a one w,:o had co-extensive li::-,bi:iity with the respondent, FESID ERNEST Klf1i~RI0 1 the principal d~btor, the Morogoro District Court(M.K.Do .Mhingo Senior Resident Magistrate (as he then was) sittingiat .. t MOROGORO, ordered and issued a decree to the effect that Ga ___ _ • plaintiff. No order ~s to cost~:~ (underlining supplied for emphasis). But if one may pause here and look at the amended plaint he will to his surprise not agree_with the trial court that any judgment was entered for the plaintiff. _,. This•is· . . because the plaintiff who had prayed that the defendant be .... - J .. ...• ,....., .... ... ordered to pay back the loan of shs.1,500 9 000/= immediately plus interest to CRDB as he ·ought tohave done; that the defendant should return to him his certificate of occupancy known as Title No 32745 plus costs never got any of those reliefso The appellant who was during trial before the Morogoro District Court represented by the late Professor Massawe is before this Court represented by Mr. Mbezi, learned advoe'ate, while the respondent was •".represented by Vir. s.;•. Massati and novl is represented by Mr. Kambamv✓ ene another learned advocate. From my understanding of the contents of the pleadings and the entire proceedings~ the main and foremost issue in this case was whether the defendant could be ord€red to return to the plaintiff his certificate of occupancy Title No.32745~ 0 oo ./2 ... 2 1 - This issue arises from the ~ollowing c.ircumsta.nces which form a background to the whole caseo The parties had entered into an oral contract on the 2907.1992 that the defendant was to use certificate of title No 32745 as a mortgage for securing a loan of shs 1,500,000/= from the Cooperative a~d Rural Development Ba?lk (CRDB) Morogoro Branch. The plaintiff who was the owner of the certificate stood between the defendant who was a 71 principal debtor" and CRDB the •1creditor1 2 as a 11 suretj 1c Tho following matters are therefore not held in dispute. That the plaintiff is the owner of the said certificate of Title No 32745. E4ually undisputed is a fact that while that certificate is currently in the custody of the CRDB, the defendant to whom CRDB had advanced the loan of shsol,500 9 000/= has not yet repaid the loan. Twice the plaintiff was asked by the defendant and he agreed to write to the CRDB authorising them to allow the defendant to borrow on the custodianship of that certificate. It is also not disputed that the CRDB has not made any efforts to redeem the loan from any of the partieso There was also undisputed evidence that the defendant pawned a refridgerator as an intefest for the surrender of the certificate in the presence of the plaintiff 9 s ten cell leader~ So, as we have pointed out above an issue is whether on the facts and the law, a contract of V,1.arantee has come into existence for purposes that the respondent by mortgaging the certificate the property of the plaintiff so that the defendant has a duty of ca.re to redeem the plaintiffs certificate which is mortgaged tc the CRDBo Before I may answer that question, I am of considered opinion that much as the parties upon entering into a i 1contract of quaranteen their liability, according to section So of the Law of Contract Ordinance Cape 433, is co-extensive, but that does not justify the importation of contribution of t,he parties in re- payment of the loan in order to redeem the· certificate of title. To my interpretation the parties co extensive liability affe9ts the surety after the creditor has failed repay the loan through exhaustion of the legal process. ·. A acontract of guarantee11 is defined in section 78 of the Law of Contract Ordinance Cap 433 as:- (I quote) - -12 a contract to perform the liability of a third person in case of his defaulto The person who gives the guarantee is called the nsuretu11 ; the person in • ee ooo/3 - 3 - :t-eO~t or whm,e defaultt~ gual'nntGe- ia gi~.n is called the aprincipal debtori 1 , and the person to whom the guarantee is given is called the creditor. A guarantee may be either oral or written" In this case there is enough and satisfactory evidence to support the existence of a contract of guarantee between the parties on an interest of a refridgerator on the one hand and the CRDB an the ether hando But much as the the mortgaged certificate was not tendered before the trial court, the PW3 told the trial court that it had neithGr bGen registered with the Registrar of Titles nor has there been a written between the C!IDB and the plaintiffc This was so ammitted in contravention of the provisions of the Land Regulations 1948 GN 232 the Land Registration Ordinance Registration of Documents Ordinance Capo 1170 As under the Land Regulations 1948 GN·232 a disposition is defined as: '~a conveyance or assignment other than by way of mortgage, or a gift, settlement deed of partition, asset vesting declaration or a sale in execution of an order11 , the plaintiff's mortgage of his certificate of title with the CRDB was an attempt to dispose of it ~ince he neither gave it out as a gift, settlement deed of partition, asset, vesting declaration or a salee The plaintiff's act was that of conveyancing or an assignment to the CRDBo Under those Regulations a disposition of a right of occupancy shall not be operative unless it is in writing and unless and until it is approved by the }'resident or oth0r officers to whom powers have been delegated under GN ~·78· of 1962. Under section 41 (2) of tho Lcrid Registr&tion Ordinance it is provided that: nNo disposition unless registered shall be effectual to create transfer, vary or extinguish any estate or interest in any registered land,. 11 and section 41 (I) reads that: 11 No disposition shall be registered unless it has been effected by deed - - - etc,.• 1 under section 2 of the Land Registration Ordinance disposition is defined as "--- any act performed inter vivos whereby the owner of a registered estate or inte.rest, transfer, mortgages thG.t estate or interest or any part thereof -~-11 . /4 \ - 4 - Under the Registr.:1tion of Documents Ordinance Ca:i;r~ 117 section 8 (I)(a) a certificate of title should be compulsorily registeredo ,'md under section 9 it is provided that (I quote) t 1No document of which the registration is compulsory shall be effectual to pass any land or any interest therein or render such land linble as security for the the payment of money, or be received as evidence of any dealing affecting such land unless and until it has been registered1i c I have no doubt in my mind that by the plaintiff mortgaging the certificate of occupancy to the CRDB, the plaintiff was making a disposition; albeit for securing a loan in favour of the defendanto The disposition ought to have been in writing and it ought to have been registerede As the deed was neither in writin8 nor reGistered then it became inoperative. As under section 23(2) of tho Law of Contract Ordinance Cap 433 it is provided that (I quote): nEvery agreement of which the object or consideration is unlawful is void 0 11 Subject to correction when a disposition is incperative because it was neither registered nor in writing it is unlawful. And as the consideration was void then it would defeat the provisions of the lawo Sinca the contract of guarantee was based on unlawful or inoperative consideration, it follows as day follows night and vice-versa the guarantee was nothing other than void. Had the trial court followed up this reasoning it would then not have involved itself in ordering each party to contribute in order to redeem the mortgaged certifi~ate of title No 327450 Instead it ought to have disallowed the prayer for ordering the defendant to pay back to CRDB the loan of shs.1,500/00O/= plus interest when CRDB was not a party to the suit. However I find difficulty in granting the return of the certificate of title to the plaintiff for hesitation and fear of making an order against a third party, the CoReDoB• who is custodian of the ~ertificate of title, The plaintiff may feel at liberty to file a fresh suit against both the CRDB and the defendant claiming for the redemption of the certificate of title from CRDB, _It is for these reasons that the appeal has to be dismissed •. '1 i. - 5 - Appeal dismissedo Each party to bear own costso MoG.Co KAJE.RI PRINCD?AL RESIDENT MiiGISTRATE • (EXT.JURISDICTION) AT D.a.R ES SALulM I certify that this is a true and correct copy of the original_, •