Kisanga, Makame and Omar, JJ.A.: The appellant Selemani Sembiko and two C others were jointly charged in the District Court with obtaining a motor vehicle by false pretences from Messrs Cooper Motors Corporation Limited, hereinafter to be referred to simply as the Corporation. The three of them were also charged jointly on a related D count of making a false document, and the appellant alone was charged on yet a further related count of uttering a false document. After a full trial they were all acquitted on all the counts with an order, however, that the motor vehicle in question be restored to the Corporation. The appellant's appeal to the High Court against the said order was E unsuccessful, hence this second appeal.
The background to the case was briefly as follows: The appellant is a managing director of a firm known as Steadfast Tanzania Limited duly registered and operating in Tanzania. Some time in 1988 he approached the Corporation for the purchase of a F new Land Rover for his firm. He was given a quotation of US$ 33,145.00 for it, and it would appeal that the Corporation insisted on the payment being effected in foreign currency. Whereupon the appellant approached one Damas Nilah, a business G associate and co-accused at the trial, for help. This latter in turn approached a European friend of his called Danied Snadon who was operating a company called East African Sailing Safari duly registered with the Registrar of Business names with its place of business at the Yatch Club in Dar es Salaam. Between these three, an agreement was H reached whereby the owner of the East African Sailing Safari issued a cheque in foreign currency for the purchase of the motor vehicle and the appellant undertook to re-imburse him in local currency while Damas Nilah guaranteed the re-imbursement.
Upon the appellant presenting the cheque to the Corporation, it was made clear to him I that the motor vehicle would be released
KISANGA JJA, MAKAME JJA, OMAR JJA
to him only after the cheque was cleared and the proceeds thereof received by the A Land Rover Factory in England. After about one month the appellant was called by the Corporation to be informed that a telex message was received from the Land Rover Factory England stating that the money on the cheque was duly received, and that the Corporation could now proceed to process delivery of the motor vehicle to the B purchaser. This was yet followed by a letter by the Corporation by which the appellant was further assured that the cheques had been honoured and payment of it had been duly effected. In reliance of these assurances the appellant proceeded to re-imburse C the drawer of the cheque to the tune of Tsh. 4,000,000.00 being the equivalent in foreign currency of the purchase price of the motor vehicle. In the meantime the Corporation duly processed delivery of the motor vehicle in favour of the appellant's firm, the Steadfast Tanzania Limited.
Some time after delivering the motor vehicle, however, the Corporation claimed that D the Land Rover Factory in England sent information that the very cheque which earlier on was said to have been cleared and the proceeds thereof received in England had been dishonoured by an Australian bank with which the drawer once operated an account but had since closed it. Such revelation was followed by criminal proceedings E which, as stated before, ended up with the acquittal of the accused persons and the order now under review.
The basis for the concurrent decisions of both courts below to restore the motor F vehicle to the Corporation was that the Corporation had received no consideration for the motor vehicle, and that the appellant's remedy, if any, was to sue the East African Sailing Safari. Mr. Mkatte, learned advocate who represented the appellant both in this Court and in the High Court, however, submitted in effect that the Corporation was at G all material times the holder of the cheque in due course for value, and that as such it was the Corporation, not the appellant, which was to seek relief by suing the drawer of the cheque.
This matter is not free from difficulty. Admittedly the argument of both courts below H that the Corporation had received no consideration for the motor vehicle would have much force if there was nothing more to it. But that argument obviously overlooked or played down some important consideration, namely, that it was the Corporation itself which was the author of its own misfortune. The Corporation had made it clear to the I appellant that the motor vehicle would not be released until the foreign cheque
KISANGA JJA, MAKAME JJA, OMAR JJA
was cleared and the proceeds thereof were received by the LandRover Factory in A England. The appellant was agreeable to that and waited patiently for about one month after which the Corporation gave him repeated assurances that all was well, that the cheque had been honoured and that payment of it had been effected. It was on the strength of such repeated assurances that the motor vehicle was released or delivered B to him. In other words the Corporation had assured him that it had duly received consideration for its motor vehicle, otherwise it would certainly not have parted with it.
The appellant for his part, acting on the Corporation's repeated assurances, went ahead and re-imbursed the drawer of the foreign cheque in local currency in the amount C equivalent to what the Corporation made him believe that it had duly received as the price of the motor vehicle. That was clearly consideration for the motor vehicle on the part of the appellant. Then the question is: In these circumstances what further was required of the appellant to make his claim over the motor vehicle a valid one? Surely D once he was assured that the cheque was valid and had been duly honoured, it would be idle to expect him to turn to the drawer of the cheque for any questions regarding the cheque.
Once the Corporation had repeatedly assured the appellant that all was all right and E that it had duly received the proceeds of the cheque, it seems plain to us that the Corporation cannot validly be heard to come back to the appellant and allege that it has not received consideration for the motor vehicle, contrary to its own earlier assurances which were as clear and unambiguous as they could possibly be. Had the Corporation F not given those assurances, the transaction would not have been concluded. If as now claimed by the Corporation the drawer of the cheque had closed his account, the Corporation which was having the cheque ought to have brought this to the notice of the appellant who would then take up the matter with the drawer of the cheque in order G to prevent anyone being defrauded. But the Corporation was negligent. It did not care to establish or ascertain the true status of the cheque, i.e. whether it was drawn on an account that had since been closed,even though the Corporation had up to about one month to do this. Not only that. The Corporation went on to feed the appellant with H wrong information about the status of the cheque saying that it was valid and had duly been honoured, thereby inducing the appellant to part with his Tshs. 4,000,000.00 believing that he was reimbursing the drawer of the cheque for foreign currency in respect of the purchase price for the motor vehicle. All along it was the Corporation, I not
the appellant, which was to blame; in our view the Corporation must bear the A consequences that flow from there.
We are firmly of the view that the restoration order was wrongly made in as much as it purported to benefit the Corporation which was all along to blame. If the Corporation received no consideration for its motor vehicle from the appellant, this was because of B the Corporation's own misleading assurances that it had duly received such consideration. Had it not given such misleading assurances, appropriate steps would have been taken to ensure that the Corporation duly received consideration for its motor vehicle. On the other hand the appellant, acting on the Corporation misleading C assurance or information gave consideration for the motor vehicle by reimbursing the drawer of the cheque for the foreign currency which the Corporation made him believe that it had received from the said cheque as being the price of the motor vehicle. In D our view, the appellant had done all that was required of him to make his firm's claim over the motor vehicle valid.
In the result the appeal succeeds. We accordingly reverse the order in question, and direct that the motor vehicle in question shall remain in the name of the registered owner, The Steadfast Tanzania Limited. E
Appeal allowed.
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