Wakilii

Muhuri and Others v Kiriu and Others (Civil Appeal No. 28 of 1968)

East African Court of Appeal · [1968] EACA 16 · 1968 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from a ruling of the High Court of Kenya on a preliminary issue of illegality in a partnership dissolution suit
Decision
Appeal dismissed; High Court ruling affirmed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal held that a partnership agreement to operate a transport business under a road service licence issued to one partner was neither illegal in itself nor incapable of lawful performance. Where the licensed partner managed the business on behalf of the partnership, no contravention of the Transport Licensing Act occurred. The appeal was dismissed.

Outcome

Appeal dismissed; High Court ruling affirmed

Facts

In 1959, Godfrey Muhuri applied for and obtained a road service licence under the Transport Licensing Act. He invited others to contribute money to purchase a bus for operating a transport service under the licence, with contributors to receive proportionate shares of profits. Muhuri was to manage the business. This arrangement constituted a partnership. The bus was purchased and registered in Muhuri's name, and the licence was issued in his name. The business operated, and the original bus was later sold and replaced with another, again registered in Muhuri's name. A dispute arose among the partners, and some sued for dissolution of the partnership and sale of assets. The defendants raised a preliminary objection that the partnership agreement was illegal or could not be performed without contravening the Transport Licensing Act. The High Court rejected this defence, and the defendants appealed.

Issues

  1. Whether the partnership agreement was illegal in itself.
  2. Whether the partnership agreement, though legal in itself, could only be performed in a manner contrary to the Transport Licensing Act and was therefore unenforceable.
  3. Whether operation of a transport business by a partnership under a road service licence issued to one partner alone contravened section 4(1)(b) of the Transport Licensing Act.
  4. Whether use of a partnership-owned bus under a licence issued to one partner contravened section 5(5)(a)(i) of the Transport Licensing Act.

Orders

  • Appeal dismissed.
  • Costs awarded to the respondents.
  • Decision of Miles J. in Mwangi v Mwangi overruled.

Rules and key headnotes

Partnership — Transport Licensing — Legality of Partnership Agreement
An agreement between persons to purchase a bus and operate a transport service under a road service licence is not an illegal agreement merely because the licence is issued to one partner alone.
Transport Licensing — Section 4(1)(b) — Operation by Partnership
Where a licensed person manages a transport business on behalf of a partnership, the licensed person is the one conveying passengers under the licence, and no contravention of section 4(1)(b) of the Transport Licensing Act occurs.
Transport Licensing — Section 5(5)(a)(i) — Vehicle Ownership
A vehicle registered in the name of the licence holder belongs to that holder for the purposes of section 5(5)(a)(i) of the Transport Licensing Act, even if the vehicle is partnership property subject to equities in favour of other partners.
Partnership — Taking of Partners — Transfer of Business
The taking of partners by the manager of a licensed transport business does not amount to a transfer or sale of the business for the purposes of sections 12 or 14 of the Transport Licensing Act.

Legislation cited (6)

  • Transport Licensing Act s.4(1)(b)
  • Transport Licensing Act s.5(5)(a)(i)
  • Transport Licensing Act s.12
  • Transport Licensing Act s.14
  • Transport Licensing Act s.16
  • Transport Licensing Act s.17

Cases cited (1)

  • Mwangi v. Mwangi, Civil Case No. 1303 of 1961

Full judgment

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Muhuri and Others v Kiriu and Others (Civil Appeal No. 28 of 1968) [1968] EACA 16 (13 December 1968)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.