[2015] KECA 448 (KLR)

IN THE COURT OF APPEAL

AT NAIROBI

(CORAM: KARANJA, MWERA, & ODEK, JJ.A)

CIVIL APPEAL NO.7 OF 2012

BETWEEN

MAGDALENE JELAGAT CHEMIRMIR

JOEL KIPLIMO CHEMIRMIR

(In their capacity as Administrators of the Estate of

JONAH KIPLANGAT CHEMIRMIR)....................APPELLANTS

AND

DORA NYAMBURA MAINA........................1STRESPONDENT

ISAAC BOWEN SANG............................2NDRESPONDENT

(Appeal from the judgment and decree of the High Court of Kenya

at Nairobi (Muchelule, J.), dated 21stSeptember, 2011

in

ELC. Case No.2950 of 1997)

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JUDGMENT OF THE COURT

The appellants herein administer the estate of the late Jonah KiplangatChemirmir, hereinafter the deceased, who was the co-defendant of the present 2nd respondent in the High Court. They were sued by the 1st respondent in respect of Plot No.427/4 Type B, Umoja Phase II Nairobi, the suit property.

The 1st respondent averred in her plaint that by an agreement dated 9th June, 1988 the 2nd respondent sold to her the suit property for Sh.30,500/=. She paid the whole purchase price; the 2nd respondent gave her the original documents. She went into possession, paid the installments to clear the loan the then Nairobi City Council had advanced to the 2nd respondent on account of that plot. By doing that the 2nd respondent was expected to assign the suit property to the 1st respondent. While in possession, she finished the construction on the plot. Then on/about 30th October, 1997, City Hall informed the 1st respondent that although the loan advanced to the 2nd respondent had been fully repaid, the suit property had, nonetheless, been assigned to the deceased, and so she could not get transferred to her at all.

The 1st respondent took that assignment as fraudulent. In her plaint, she set out the particulars of fraud, mainly, on the basis that the 2nd respondent having sold the suit property in 1998 to her, he could not assign the same plot to the deceased. She had the agreement which had not been rescinded; the purchase price had fully been paid and therefore the deceased could not buy the same property as a bona fide purchaser for value. So the 1st respondent prayed the court to declare that the purported assignment by the 2nd respondent to the deceased was illegal, fraudulent, null and void. She also prayed that the suit property be registered in her name and a perpetual injunction do issue against the deceased and the 2nd respondent from interfering with her quiet enjoyment of the suit premises. The plaint was drafted by Mr. Timan Njugi, Advocate, whom we were told during the hearing of this appeal that he was the lawyer for both the 1st respondent and the 2nd respondent in the transaction.

M/S Wachira Mbuthia & Company Advocates filed a defence on behalf of the deceased in which he averred that he bought the suit premises from the 2nd respondent for Sh.120,000/= whereupon he was assigned the property by an instrument dated 22nd June, 1997. He denied any claims of fraud in his part in any event. The 2nd respondent did not enter appearance or file a defence. The trial began. The 1st respondent gave evidence with effect from 28th

October, 2009 before Onyancha, J., then, finished testifying beforeMuchelule, J., producing documents on either occasion.

The 1st appellant, Magdalene Chemirmir (DW1), gave evidence and also called Simon Kongori Ndirangu (DW2) in defence. Parties were heard in submissions and judgment (Muchelule, J.), now impugned followed without participation of the 2nd respondent. As stated earlier, he did not enter appearance despite being served with due summons or file a defence or be present at the trial.

In his judgment the learned judge was satisfied on evidence tendered that:

“…after the 2nddefendant sold the plot to the plaintiff and handed ownership documents to her, he lost the capacity with the same. He had no further interest in the plot that he could sell to the 1stdefendant.”

After observing that the agreement of sale between the deceased and the 2nd respondent stated that the plot was being sold in “its present state,” the trial judge noted that:

“By this time, according to the uncontroverted evidence of the plaintiff, she was in possession and had developed it. It follows that the 1stdefendant was buying, and the 2nddefendant was selling a plot that was already occupied and developed by the plaintiff. All those facts, taken together, would indicate to me that both defendants were engaging in acts of fraud when they entered into the agreement over the plot and subsequently obtained the assignment over it. The 1stdefendant cannot claim to be an innocent buyer for value without notice.”

Therefore the assignment of the property to the deceased was nullified and the plot declared to be the property of the 1st respondent, in whose name City Hall was required to register it. A perpetual injunction issued against the deceased and the 2nd respondent as had been prayed. They were also ordered to pay costs of the suit to the 1st respondent. That decision provoked the present appeal.

The appellants filed a memorandum with seven grounds. At the hearing of the appeal Mr. A Odoyo learned counsel, condensed the grounds and argued them together. Ms. Muyai, learned counsel holding brief for Mr. Mugambi for the 1st respondent, opposed the appeal. The 2nd respondent who did not appear before the High Court was not represented.

Basically, Mr. Odoyo’s main point was that the deceased was wrongly found to have been engaged in acts of fraud when he bought the plot from the 2nd respondent. He entered into the sale agreement in 1994, he paid the purchase price and the suit property was assigned to him by the 2nd respondent. His position was that we should set aside the High Court decision so that the 1st respondent is directed to hand over vacant possession of the suit plot to the appellants. Counsel attempted to impeach the validity and completion of the sale agreement between the 1st respondent and the 2nd respondent with hardly any success since that agreement did not concern his clients.

On her part, Ms. Muyai told us that the sale transaction between the 1st respondent and the 2nd respondent was completed when the purchase sum was paid, the 2nd respondent handed over the original plot documents to the 1st respondent who then went into possession in accordance with their sale agreement. Full payment was acknowledged by Mr. Timan Njugi Advocate?s letter dated 7th January, 1997. Thus the payments the 1st respondent made to City Hall to clear the loan which had been advanced to the 2nd respondent, did not in any way impact on the sale agreement. The agreement between the two, we heard, was performed; it was never rescinded and so when the 2nd respondent purported to sell the same property to the deceased in 1994, he had nothing to give him.

This being the first appeal, we are cognizant of the principle that ours is a duty to conduct a fresh trial, based on the recorded evidence and we do not have to agree with the trial judge?s findings. In essence, we will arrive at our own conclusions (see Selle vs Associated Motor Board C. Ltd & Others [1968] EA 123. ) With that, we proceed to set out the evidence laid before the trial court.

The 1st respondent (PW1) told the trial court that she bought the subject plot from the 2nd respondent as per the sale agreement (Exh.P1) dated 9th June, 1988. He gave her the plot card No.1470 issued by the City Council, bearing the 2nd respondent?s photograph. She paid the purchase price of Sh.30,500/= through the advocate, and took possession. It was an empty undeveloped plot, except for a toilet. She began paying the monthly loan installments to City Hall (Exh.P3) because she was told that she could not get the plot transferred to her until the loan given to the 2nd respondent was fully repaid to City Hall. While in possession, the 1st respondent built 2 rooms on the plot. When she finished paying the installments of the loan that City Hall had advanced to the 2nd respondent, City Hall declined to transfer the plot to the 1st respondent:

“…on the basis that someone had purchased it.”

So she instructed a lawyer to sue. The 1st respondent, who did not know the deceased before, was firm that:

“I bought the plot and developed it before this subsequent sale.”

And in cross-examination, she told the trial court that:

“I deposited Sh.30,500/= with Timan Njugi who paid himSh.10,000/= before the agreement.”

Further, the 1st respondent testified that:

“I completed payment before 30thJune, 1988,”

And she paid the loan of Sh.47,600/= owed to the City Council by the 2nd respondent, in his name (Ex.P3).

The 1st appellant (DW1) told the court that she got a grant to administer the estate of the late Jonah Chemirmir and among the documents she came by, was the sale agreement dated 30th August, 1994 showing that he bought the suit property from the 2nd respondent (Exh.D2). She had also found the balloting number 1594, in favour of the deceased, together with other documents and receipts pertaining to the suit plot. DW1 acknowledged the document (Exh.4B) dated 1st December, 1999 which stated that the suit plot could not be transferred to the 1st respondent because the 2nd respondent had sold it to the deceased.

Simon King’ori Ndirangu(DW2), a community development officer at City Hall in his brief testimony, told the trial court that the subject plot was allotted to the 2nd respondent on 1st February, 1988. He complied with all conditions. The file DW2 brought to court contained the agreement of sale of the suit property between the 1st and the 2nd respondent dated 9th June, 1988 and it also had an instrument of assignment of the same plot between the 2nd respondent and the deceased. However, the plot still remained in the name of the former (Exh.D8).

In cross-examination DW2 told the trial judge that the property in issue was still in the name of the 2nd respondent and on the file, was a copy for assignment of the property. On 19th January, 1995 the assignment of the property from the 2nd respondent to the deceased Chemirmir was sanctioned by a minute entered in City Hall records. There was no clearance to effect that.

The trial closed; parties filed submissions and the judgment herein followed.

On our review of the evidence on record including exhibits and in light of the pleadings and submissions both in the High Court and before us, we are of the view that the grounds of appeal point to one main issue for determination: who between the estate of the late Jonah Kiplangat Chemiormir and the 1st respondent is the owner of the suit property?

We find that the allottee of the suit property was the 2nd respondent as per the letter dated 1st February, 1988 issued by the then Nairobi City Council.

By the sale agreement dated 9th June, 1988, the 2nd respondent sold that property to the 1st respondent at Sh.30,500/=. Sh.10,000/= was paid directly to the seller/2nd respondent before the agreement was signed, in the presence or through the office of Mr. Timan Njugi, their joint advocate. The balance was paid before the date of completion, 30th June, 1988, and that, too, is not disputed. Also not disputed is the fact that on 7th January, 1997 Mr. Njugi in communication to City Hall by the letter copied to the 2nd respondent as well as the deceased, confirmed that the 1st respondent paid the full purchase price, moved into possession and paid off the loan that the 2nd owed City Hall.

Mr. Njugi’sletter required City Hall to explain why it had then transpired that as at the date of his letter, the suit property appeared to have been assigned to the deceased. There was no explanation, it seems, from City Hall and the present suit was filed.

From the evidence of DW1, the late Jonah Chemirmir’s widow, and DW2, the documents exhibited indicate that by the agreement dated 30th August, 1994 the deceased bought the suit property from the 2nd respondent and City Hall sanctioned that it be assigned and transferred to him. Apparently, that was not to be with the suit herein having been instituted. The sale agreement between these two stated, inter alia, that

“The vendor has agreed to sell the said plot and the purchaser has likewise agreed to buy the same it(sic)its present state…”(underlining added).

The foregoing, it can be taken, implies that both the 2nd respondent/seller and the deceased/purchaser had visited and inspected or knew “the present state” of Plot No.427/4 Type B, Umoja Phase II, the suit property. And that state can only be that the 1st respondent had taken possession and even done some development. In the instrument of assignment by which the 2nd respondent wished to relinquish all his interest „in all that piece of land? in issue, the plot would go:

“…together with the buildings and improvements erected and being thereon.”

Indeed, there were buildings and improvements on the plot which the 1st respondent effected when she bought and occupied the plot way back in 1988.

Again by this instrument, the 2nd respondent and the late Chemirmir knew that there were buildings on the plot. Chemirmir passed on before the hearing of the suit and so we need not speculate whether he asked the 2nd respondent about the buildings on the plot and the occupier thereon. However, all put together, we find that the 1st respondent by their sale agreement, was seised of the subject property long before the later sale agreement between the 2nd respondent and the deceased was entered into. We therefore, are unable to accept the argument that in the circumstances, late Chemirmir was a buyer for value without notice. The 2nd respondent was trying to sell him a plot in the state it was, and that state was with buildings and improvements of the 1st respondent who was in possession.

Accordingly, we conclude as the learned trial judge did, that as at the time of the later sale agreement of 30th August, 1994, the 2nd respondent had in 1988, sold off all his interest in the suit plot to the 1st respondent; he had been paid in full. Accordingly, he had no more interest to sell to the deceased.

And that the 2nd respondent knew that the property had long been sold to the 1st respondent and yet engaged in a second sale of the same property to the deceased, that constituted acts of fraud as against the 1st respondent. The trial judge found so and we agree with him, in the circumstances of this case.

As this Court said in the case of Benja Properties Ltd vs H. H. Dr.Syedna Mohammed Burhannudin Sahed & OthersC.A. NAI 79 of 2007:

“The alienation to the 1st, 2ndand 3rdrespondents is the grant that takes priority. At the time another grant was being made to the appellant, the suit land had already been alienated. There was nothing for the 5threspondent to allot and alienate to the original allottees.”

In the foregoing case, the Government gave a grant of lease over the suit land to the 1st to 3rd respondents many years ago. Then later, by whatever methods the said original allottees obtained a letter of allotment over the same land issued by the Commissioner of Lands (5th respondent). Those allottees sold “the letter” to the appellant company and that provoked the respondents to sue seeking orders including cancelling the title issued to the appellant over the land. The High Court decided and this Court agreed that the first grant to the respondents ranked in priority over the later allotment to the appellant. And by the operation of law, the allotment to the appellant was of no effect since there was no land to alienate, the respondents having been given the land long before.

In our context here, once the 2nd respondent sold the whole of the suit premises to the 1st respondent in 1988, he was paid in full and the 1st respondent took possession, he had nothing more to sell and therefore assign to the late Jonah Chemirmir. And so, have we found. In the result, we dismiss this appeal with costs to the 1st respondent. We therefore confirm the decision and orders of the High Court.

Dated and delivered at Nairobi this 31stday of July, 2015.

W. KARANJA

………….................

JUDGE OF APPEAL

J. W. MWERA

………….................

JUDGE OF APPEAL

J. OTIENO-ODEK

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JUDGE OF APPEAL

I certify that this is a true copy of the original.

DEPUTY REGISTRAR