[1999] KEHC 172 (KLR)

[1999] KEHC 172 (KLR)

The court found that the defendant signed the guarantee on the understanding that all proposed guarantors would also sign, and this was a condition precedent to his liability. Since not all guarantees were obtained, the contract the defendant entered into was not the one performed, entitling him to be relieved from liability. Additionally, the plaintiff's conduct in disposing of the company's assets, including delays in crediting sale proceeds and possible undervaluation of moveable assets, prejudiced the defendant's interests as guarantor. The law is protective of guarantors, especially where the creditor's actions may affect their liability. On both grounds—failure to obtain all...

Citation
[1999] KEHC 172 (KLR)
Parties
Plaintiff: Kenya Commercial Finance Co. Ltd; Defendant: John Matere Keriri
Court
High Court
Court Station
High Court at Nairobi (Milimani Law Courts)
Jurisdiction
Kenya
Judgment Date
14 October 1999
Case Number
? 4270 of 1989
Procedural Posture
Civil Case / Judgment
Outcome
plaintiff's suit dismissed with costs to the defendant
Legal Topics
Guarantee Liability, Joint and Several Guarantees, Creditor Duties, Discharge of Guarantor, Sale of Secured Assets
Source Language
English
Commercial and Corporate Civil Procedure Guarantee Liability Joint and Several Guarantees Creditor Duties Discharge of Guarantor Sale of Secured Assets

Case Brief

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Parties

Kenya Commercial Finance Co. Ltd

Plaintiff

John Matere Keriri

Defendant

Procedural Posture

Civil Case / Judgment

Legal Issues

  1. 1 Whether the defendant is liable under the guarantee when not all proposed guarantors executed guarantees.
  2. 2 Whether the plaintiff's conduct in disposing of the company's assets prejudiced the defendant as guarantor and discharged his liability.

Ratio Decidendi

The court found that the defendant signed the guarantee on the understanding that all proposed guarantors would also sign, and this was a condition precedent to his liability. Since not all guarantees were obtained, the contract the defendant entered into was not the one performed, entitling him to be relieved from liability. Additionally, the plaintiff's conduct in disposing of the company's assets, including delays in crediting sale proceeds and possible undervaluation of moveable assets, prejudiced the defendant's interests as guarantor. The law is protective of guarantors, especially where the creditor's actions may affect their liability. On both grounds—failure to obtain all...

Court Disposition

plaintiff's suit dismissed with costs to the defendant

Orders

  • The plaintiff's suit is dismissed.
  • The defendant is awarded costs.