Inyasi v. Shirima (PC) Civ. App. 40-A-71; 26/4/71; Bramble J.

 

Inyasi v. Shirima (PC) Civ. App. 40-A-71; 26/4/71; Bramble J.

            The respondent had bought shares from a Cooperative Society paying membership fees worth Shs. 1,090/- A manager of the business was appointed and he provided sureties who were under an obligation to refund the money lost to the Society. Appellant was the chairman and the person who had encouraged the respondent to join the Society. The manager then lost Shs. 4.600/- and the business stopped. Respondent then sued appellant for the refund of the money arguing that the appellant as chairman of the Society did not call any meeting to determine ways and means of recovering the loss. Respondent was successful in the lower courts. Appellant appealed.

            Held: (1) “The Society was a corporate body with limited liability and individual servants cannot be saddled in their personal capacity with liabilities of the society. There are remedies at law against a member of committee if he acts fraudulently but this does not give the right to any person to recover damages from him in relation to the Society’s affairs. The society itself must be sued. Although the appellant may have canvassed the respondent’s membership the money paid was for shares in the society and there is no law which says that the shareholder can demand his money back for shares in a company or a society which is a corporate body. He may sell them, if he wishes, or give them away and the recipient will be under the same liability as he was. A shareholder can only get a refund from a society when it is wound up and the amount will depend on the existing assets. If there are no assets, he gets nothing and if there is a liability against the society he will have to meet it in the proportion his shares bear to the total number of shares. The chairman of a society is only a servant. Neither of the lower courts directed itself on the law.” (2) Appeal allowed