Wakilii

Sheth and Another v Hussein Brothers (C.A. 18-1936.)

East African Court of Appeal · [1936] EACA 88 · 1936 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from Supreme Court of Kenya judgment on promissory note
Decision
Judgment on principal amount upheld; interest award set aside

Observed later treatment

No later-treatment classification is recorded for this judgment.

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AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

A money-lender registered in Zanzibar who made a single loan in Kenya was not carrying on the business of money-lending in Kenya within the meaning of the Money-lenders Ordinance. One isolated transaction, even coupled with registration as a money-lender in another jurisdiction, does not establish the system, repetition, and continuity required to constitute carrying on a money-lending business. The appeal on the principal amount was dismissed; the appeal on interest was allowed.

Outcome

Judgment on principal amount upheld; interest award set aside

Facts

M.N.J., a registered money-lender in Zanzibar but not in Kenya, visited Mombasa and lent the appellants Sh. 10,000. The appellants gave two promissory notes of Sh. 5,000 each. A collateral agreement provided for interest at 18 per cent per annum. One note was repaid. The other note was passed to the respondents for collection. The respondents obtained judgment in the Supreme Court of Kenya for Sh. 5,000 plus interest at 18 per cent per annum. The appellants appealed, arguing the loan was unenforceable as made by an unlicensed money-lender in Kenya and that interest should not have been awarded.

Issues

  1. Whether a money-lender registered in Zanzibar but not in Kenya, who effected one loan in Kenya, was carrying on the business of money-lending in Kenya as defined by the Money-lenders Ordinance.
  2. Whether interest at 18 per cent per annum on the promissory note was properly awarded.

Orders

  • Appeal dismissed in so far as the principal amount is concerned.
  • Appeal allowed on the point of interest.
  • Respondents to have costs of the appeal in respect of the issue on which they succeeded.
  • Appellants to have costs on the issue in respect of which they succeeded.
  • In the Supreme Court, respondents to have costs except costs of instructions and hearing on the interest item, which go to appellants.
  • Appellants to have Court costs in respect of the interest item.

Rules and key headnotes

Money-lending — Registration — Territorial Scope — Single Transaction
A person registered as a money-lender in one jurisdiction who effects a single loan in another jurisdiction does not thereby carry on the business of money-lending in the second jurisdiction where registration as a money-lender requires system, repetition, and continuity.
Money-lenders Ordinance — Definition of 'Business' — System, Repetition, and Continuity
The word 'business' in the context of money-lending imports the notion of system, repetition, and continuity; occasional and disconnected loans do not constitute carrying on a money-lending business.
Money-lending — Isolated Transaction — Evidentiary Burden
Evidence of all circumstances surrounding a loan transaction may be relevant to determining whether a person registered as a money-lender in one jurisdiction was carrying on a money-lending business in another jurisdiction on the occasion of an isolated transaction, but the bare fact of registration elsewhere and a single loan is insufficient.

Legislation cited (2)

  • Money-lenders Ordinance (Kenya) No. 45 of 1932 s.2(1)
  • Money-lenders Ordinance (Kenya) No. 45 of 1932 s.5

Cases cited (4)

  • Cornelius v Phillips [1918] AC 199
  • Smith v Anderson (1880) 15 Ch D 247
  • Newman v Oughton [1911] 1 KB 792
  • Edgelow v MacElwee [1918] 1 KB 205

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Sheth and Another v Hussein Brothers (C.A. 18-1936.) [1936] EACA 88 (1 January 1936)
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.