[2001] KEHC 521 (KLR)
The court found that the defendants executed valid personal guarantees for the indebtedness of Mbuta Limited and that the company was indebted to the plaintiff in the stated sum. The court accepted the plaintiff's evidence that the property charged as security had not been sold and that payments made by the Receiver...
Source-derived case information.
- Citation
- [2001] KEHC 521 (KLR)
- Parties
- Plaintiff: National Bank of Kenya; Defendant: Gemma Gelmetti & Another
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- ? 3624 of 1995
- Procedural Posture
- Civil Case / Judgment
- Outcome
- judgment for the plaintiff as prayed in the plaint against the defendants jointly and severally.
- Legal Topics
- Personal Guarantees, Company Debt, Secured Transactions, Joint and Several Liability
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
National Bank of Kenya
Plaintiff
Gemma Gelmetti & Another
Defendant
Procedural Posture
Civil Case / Judgment
Legal Issues
- 1 Whether the defendants are liable under the personal guarantees for the indebtedness of Mbuta Limited.
- 2 Whether the defendants suffered prejudice due to the plaintiff's failure to recover the full value of the company's assets.
- 3 Whether the payments made by the Receiver affect the defendants' liability under the guarantees.
Ratio Decidendi
The court found that the defendants executed valid personal guarantees for the indebtedness of Mbuta Limited and that the company was indebted to the plaintiff in the stated sum. The court accepted the plaintiff's evidence that the property charged as security had not been sold and that payments made by the Receiver were from assets not charged to the plaintiff. The defendants did not appear or provide any defence. The court held that the defendants had no valid defence and were jointly and severally liable under the guarantees for the company's debt to the plaintiff.
Court Disposition
judgment for the plaintiff as prayed in the plaint against the defendants jointly and severally.
Orders
- Judgment is entered for the plaintiff against the defendants jointly and severally for the sum claimed in the plaint.
Full Case Text
Judgment text and source record
8 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI MILIMANI COMMERCIAL COURTS CIVIL CASE NO. 3624 OF 1995
NATIONAL BANK OF KENYA.............................................PLAINTIFF VERSUS GEMMA GELMETTI & ANOTHER.....................................DEFENDANT
JUDGMENT
The Plaintiff’s suit against the Defendant is in respect of written personal guarantees dated the 29 December 1996 in which thry undertook payment jointly and severally of the indebtedness of Mbuta Limited of which they were both shareholders and directors. It is not denied that the company is indebted to the Plaintiff in the sum of Shs.34,290,846. 25 as at the 1st September 1995 together with further interest thereon. When this matter came for summary judgment I allowed the Defendant to defend the suit on the basis that it appeared, at that time that, the land which was for security for the company’s loan had not been sold and despite the appointment of a Receiver by one of the Company’s Creditors a first and final dividend was paid rateably to all creditors including the Plaintiff despite the plaintiff having a debenture and priority charge over the company’s assets.
When the matter came for hearing Mr. Otieno for the Plaintiff gave evidence of the loan and the guarantees signed by the Defendants which I accept as fully valid in respect of the debt of the company. He also stated that the plaintiff attempted to sell the property charged to it but as yet without success. With regard to the monies paid by the Receiver this was in respect of the sale of assets of the company which were not charged to the Plaintiff and thus the Defendants were not entitled to the benefit of the whole of these assets. And as such they have suffered no prejudice by the Plaintiff not recovering the full value thereof.
The Defendant did not appear to give evidence and in my view they have no valid defence to the suit. I therefore give judgment to the Plaintiff as prayed in the plaint against the Defendants jointly and severally.
Dated and delivered at Nairobi this 23rd day of May, 2001.
PHILIP J. RANSLEY COMMISSIONER OF ASSIZE.