[1983] KECA 107 (KLR)
The Court of Appeal held that the appellant, having admitted to withdrawing KES 44,000 from the partnership account and failing to prove that the funds were used for partnership purposes, was required to account to the respondent for half of the withdrawn sum in accordance with the terms of the consent order and the...
Source-derived case information.
- Citation
- [1983] KECA 107 (KLR)
- Parties
- Appellant: Joseph Ndungu; Respondent: Onesmus Mbugua
- Court
- Court of Appeal
- Court Station
- Court of Appeal at Nakuru
- Jurisdiction
- Kenya
- Case Number
- Civil Appeal 51 of 1983
- Procedural Posture
- Civil Appeal / Judgment
- Outcome
- appeal dismissed with costs
- Judges
- AA Kneller
- Legal Topics
- Partnership Accounts, Distribution of Assets, Fiduciary Duties, Breach of Trust
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Joseph Ndungu
Appellant
Onesmus Mbugua
Respondent
Procedural Posture
Civil Appeal / Judgment
Legal Issues
- 1 Whether the appellant was required to account for funds withdrawn from the partnership account.
- 2 Whether the High Court erred in ordering the appellant to pay half of the withdrawn sum to the respondent without formal partnership accounts being taken.
- 3 Whether the appellant's actions constituted a breach of partnership obligations.
Ratio Decidendi
The Court of Appeal held that the appellant, having admitted to withdrawing KES 44,000 from the partnership account and failing to prove that the funds were used for partnership purposes, was required to account to the respondent for half of the withdrawn sum in accordance with the terms of the consent order and the principle of equal partnership. The court found no merit in the appellant's argument that formal accounts needed to be taken before such an order could be made, as the advocates had reported that no accounts existed and the only issue remaining was the distribution of assets. The appellant's actions in depositing the partnership funds into his personal account without proper...
Court Disposition
appeal dismissed with costs
Orders
- The appeal is dismissed with costs to the respondent.
- The appellant shall account to the respondent for half of KES 44,000 withdrawn from the partnership account.
Full Case Text
Judgment text and source record
37 paragraphs
REPUBLIC OF KENYA
IN THE COURT OF APPEAL
AT NAKURU
civ app 51 of 83
JOSEPH NDUNGU …………………………..………… APPELLANT
AND
ONESMUS MBUGUA ……………………………….. RESPONDENT
(Appeal from the judgement of the High Court of Kenya at Nakuru (Masime, J) dated 28th April, 1983
In
Civil Suit No 164 of 1977
JUDGEMENT OF MADAN, J A
The respondent filed a suit against the appellant for accounts of the partnership between them to be taken, and impliedly or upon amendment, for all the usual necessary orders subsequently thereupon . At the request of the parties the learned judge recorded a consent order for the taking of the accounts including in particular the sum of shs. 43,000/= the proceeds of two cheques withdrawn by the appellant from the partnership account, by their advocates whose joint findings were to be final and binding upon them. The advocates reported back to the court that there were no accounts which could be taken as there were none, and the only issue left for determination was the distribution of the assets.
The appellant agreed that he withdrew two sums of shs. 24,000/= and shs. 20,000/= from the partnership account which he deposited in his personal savings bank account less shs. 1,000/= kept by him from the second sum of shs. 20,000/=. The learned judge not believing that the sum of shs. 19,000/= was the proceeds of the appellant’s wheat, he held that the appellant was bound to account to the respondent for half the sum shs. 22,000/= on the basis of their equal partnership. The learned judge entered judgement for the respondent accordingly, and also made a further order for the sale of the rest of the partnership assets, the proceeds thereof also to be divided equally between the parties.
The appellant has appealed. He says mainly that the learned judge erred in ordering him to account for the sum of shs. 44,000/= without the partnership accounts being first taken. The learned judge acted in accordance with the terms of the consent order recorded by the parties themselves. The sum of shs. 44,000/= was found to have been taken from the partnership banking account by the appellant upon his own admission. Only half that sum was lawfully his. He was fortunate in not having had to face other proceedings for withdrawing the money from the partnership account, and clandestinely depositing the whole amount in his personal account.
I would dismiss the appeal with costs.
As Kneller, J A and Chesoni J A agree it is so ordered.
Dated at Nakuru this 4th day of October 1983
C B MADAN
……….…………………
JUDGE OF APPEAL
JOSEPH NDUNGU ………………………………………… APPELLANT
AND
ONESMUS MBUGUA ……………………………….. RESPONDENT
(Appeal from the judgement of the High Court of Kenya at Nakuru (Masime, J) dated 28th April, 1983 In
Civil Suit No 164 of 1977
JUDGEMENT OF CHESONI, AG J A
The appellant and the respondent operated partnership business which broke down in 1977. The appellant admitted in his evidence in court that in April 1977 the respondent signed two blank cheques which the appellant used for withdrawing shs. 24,000/= and shs. 20,000/= respectively from the partnership account at the Barclays Bank of Kenya Ltd., Nakuru. As the learned Judge correctly found the appellant was unable to prove that the money was used for partnership to be distributed between the parties. It is true that the respondent asked for account of shs. 43,000/= but it came from the apellant’s own testimony that he in fact withdrew shs. 44,000/= altogether, whereupon the learned Judge held that the appellant was indebted to the respondent to the extent of shs. 22,000/=.
There is no merit in this appeal and I fully agree wit the judgement proposed by Madan J A which I have had the advantage of reading that this appeal should be dismissed with costs.
Delivered at Nakuru this 4th day of October, 1983
Z R CHESONI
AG. JUDGE OF APPEAL
I have read the judgements of Madan J A and Chesoni Ag J A and I respectfully agree with them and that the appeal should be dismissed with costs.
Delivered this 4th day of October 1983.
A A KNELLER
JUDGE OF APPEAL
I certify that this a true copy of the original.
DEPUTY REGISTRAR