[2022] KEHC 14191 (KLR)

Ngetich v Kirui (Civil Appeal E046 of 2021) [2022] KEHC 14191 (KLR) (14 October 2022) (Judgment)

Neutral citation: [2022] KEHC 14191 (KLR)

Republic of Kenya

In the High Court at Kericho

Civil Appeal E046 of 2021

AN Ongeri, J

October 14, 2022

Between

Ernest Kipsigei Ngetich

Appellant

and

Moses Kirui

Respondent

(Being an appeal from the Judgment of Hon. Mokua (CM) in Kericho CMCC No.259 of 2017 delivered on 16/9/2020)

Judgment

1. The Appellant herein, Ernest Kipsigei Ngetich (hereafter referred to as the Appellant) filed CMCC 259 of 2017 seeking the refund of Kshs. 900,000 in respect of the purchase price of Tractor Registration No. KTCA xxxx Massey Furguson 240 which the Respondent Moses Kirui (hereafter referred to as the Respondent only) had sold to him together with a penalty of Kshs.450,000/= plus cost of the suit and interest.

2. The Appellant alleged in the Plaint filed in Kericho CMCC No. 259 of 2017 that on November 24, 2014, the Respondent by written agreement sold to him the said Tractor at an agreed purchase price of Kshs.900,000/=.

3. It was further stated in the Plaint that the appellant paid the purchase price and took possession of the said Tractor.

4. However, the Tractor was subsequently impounded by police from Litein Police Station as the same was subject to fraudulent deals and it was eventually returned to its rightful owners (the deceased person’s family and one Hillary Kipkosgei Kibionnet.)

5. The Agreement had a default clause which stated that whichever party would default would pay a penalty of 50% of the purchase price of the Tractor.

6. The Respondent filed his defence in the Chief Magistrate’s Court denying the Appellant’s claim.

7. The evidence before the Chief Magistrate was that the Respondent sold to the Appellant the suit Tractor at an agreed purchase price of Kshs. 900,000/=. The arrangement was put in writing and payment made by way of banker’s cheque. The sale agreement and banker’s cheque were produced as P. Exhibit 1 and P. Exhibit 2 respectively.

8. The Appellant further testified that the log book and transfer forms were not availed on the specified date as per the duly executed sale agreement and that the tractor was subsequently impounded.

9. The Respondent testified and availed a witness who confirmed that he acquired the tractor lawfully, he paid the owner (now deceased) the purchase price in two installments the first one to the deceased and another was made to offset a bank loan.

10. The Respondent further testified that upon payment of the purchase price he took over possession of the tractor and insured the tractor, however, the title documents for the tractor were never handed to him as the log book was being held at Kenya Women Finance Trust as security for money advanced to the deceased. Furthermore, the owner of the tractor died before transferring ownership.

11. The Respondent produced the following documents in support of his case sale agreement dated 16/6/2014 asD. Exhibit 1, loan repayment form as D. Exhibit 2 and the receipt for insurance as D. Exhibit 3.

12. The Trial Court in its judgment took cognizance of the fact that a third-party notice was served to the family of the deceased, they did not contest the suit.

13. The Trial Court entered judgment against third parties namely the estate of Estate of Paul Kipkemoi Mutai (deceased) and one Hillary Kiboinet Kipkosgei who was the initial owner of the tractor.

14. The Trial Court subsequently dismissed the Appellant’s case on the ground that the Appellant did not prove his case against the Respondent on a balance of probabilities.

15. The Appellant has now appealed to this Court on the following grounds;i.That the Trial Magistrate misdirected himself on the law relating to third party proceedings.ii.That the Trial Magistrate failed to appreciate that the applicant brought his suit within the time provided for by the statute of limitations, thereby arriving at a prejudicial and erroneous decision.iii.That the Trial Magistrate failed to apply the law in analyzing the evidence before him thereby arriving at an oppressive, illegal and unjust decision.iv.That the Trial Magistrate’s decision was against the weight of evidence.v.That the Trial Magistrate erred in finding that the Applicant had not proved his case on a balance of probabilities.

16. The parties filed written submissions in the appeal which I have considered.

17. The Appellant submitted that he entered into a written sale agreement with the Respondent on 24/11/2014 for sale of tractor registration number KTCA xxxx Massey Ferguson at an agreed purchase price of Kshs. 900,000/=. The Appellant paid the full purchase price via a banker’s cheque.

18. The Respondent undertook to handover the log book and transfer form to the Appellant on or before December 10, 2014. The Respondent did not hand over the logbook and transfer forms on the agreed date.

19. TheTractor was subsequently impounded by police from Litein Police Station as the same was subject to fraudulent deals and it was eventually returned to its rightful owners (the deceased person’s family and one Hillary Kipkosgei Kiboinnet.)

20. The Appellant contended that the trial magistrate had misdirected himself in rendering the said sale agreement as unlawful yet the sale agreement was executed by both parties and terms and/or conditions of the sale were contained in the sale agreement.

21. The Appellant reiterated that the learned trial magistrate misdirected himself by relying on fatal third-party proceedings and illegally entering judgment against third parties yet the Appellant was not privy to any third-party agreements on the suit tractor. Furthermore, the Respondent had squandered Kshs. 900,000/= from the Appellant and knowingly breached the sale agreement dated November 24, 2014.

22. The Appellant submitted that contrary to the finding of the trial magistrate, the instant suit was brought within the six-year timeframe provided for by the statute of limitation. The sale agreement was executed on November 24, 2014 and the suit to recover Kshs. 900,000/= and damages for breach of agreement was filed in the lower court on November 20, 2017.

23. The Appellant reiterated that he had proven his case on a balance of probabilities, that there was a valid sale agreement between the parties for sale of the suit tractor dated November 24, 2014 which was executed by both parties.

24. There was no ambiguity in the terms and/or conditions of the said sale agreement. Furthermore, it was not disputed that the Appellant paid the consideration of Kshs. 900,000/= to the Respondent using a banker’s cheque.

25. The Appellant contended that there was uncontroverted evidence that the property in the goods did not pass to the Appellant as the Respondent did not avail the log book and transfer forms and subsequently DCIO officers from Litein Police Station impounded the tractor.

26. The Respondent contended that the Appellant was willing to purchase the suit tractor under conditions that were fully disclosed to him including the status of the log book and pursuant to this both parties agreed on the purchase price and executed a sale agreement.

27. The Respondent further contended that the Appellant did not exercise his right of repudiating and/or rescinding the sale agreement on account of effluxion of time as soon as the time specified for picking the logbook lapsed, rather, he continued to enjoy use of the tractor without the log book and waited to pursue the claim 3 ½ years later after the tractor was impounded.

28. The Respondent cited the High Court case of Sunrise Properties Limited v Fifty Investments Ltd & Another HCCC No. 1105 of 2006 [2007] eKLR where the Court stated that; “Equity cannot be called in to aid a Party who had been indolent in pursuing his rights.”

29. This being a first appeal, it is this court’s role to subject the whole of the evidence to a fresh and exhaustive scrutiny and make its own conclusions about it, bearing in mind that this Court did not have the opportunity of seeing and hearing the witnesses first hand.

30. This duty was well stated in Selle & Another v Associated Motor Boat Co. Ltd. & Others (1968) EA 123 in the following terms; “I accept counsel for the respondent’s proposition that this court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court from a trial by the High Court is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect.”

31. The issues for determination in this case as follows: -i.Whether the Appellant proved his case to the required standard.ii.Whether the Appellant was indolent in failing to pursue his rights.iii.Whether the appeal should be allowed.iv.Who pays the costs of the Appeal.

32. On the issue as to whether the Appellant proved his claim against the Respondent in the Trial Court, I find that the appellant’s claim was based on breach of contract.

33. The Appellant alleged that the Respondent was in breach of contract in that he sold a tractor to the Appellant but he did not avail a log book and subsequently the tractor was impounded by police and returned to the Estate of Paul Kipkemoi Mutai (deceased).

34. The Respondent’s evidence was that he bought the tractor from the deceased Paul Kipkemoi Mutai and further, that he issued a 3rd party notice to the family of the deceased and to one Hillary Kiboinet Kipkosgei who was the initial owner of the tractor.

35. I find that the evidence that the Appellant bought the tractor from the Respondent was not rebutted by the Respondent.

36. I find that the Respondent sold the Tractor to the appellant knowing very well that the same had not been transferred to him by the initial owner.

37. There is undisputed evidence that the log book and transfer forms were not availed on the specified date as per the duly executed sale agreement and that the tractor was subsequently impounded.

38. I find that the Appellant proved his case to the required standard before the Trial Court. The Respondent could not pass a better title than he had, this is captured in the ‘nemo dat quod non habet’ rule. The Respondent was not the owner of the tractor and he had no right to sell the tractor to the Appellant.

39. In Republic v The Registrar of Titles, Mombasa & 2 others Ex Parte Emfil Limited (2012) eKLR the Court defined the nemo dat principle as follows: "Moreover, the private law principle of nemo dat quod non habet (see Brown's Legal Maxims, (1939) 10th at p. 546) is only a general principle that where goods are sold by a person who is not the owner and who does not sell under the authority of the owner or with the consent of the owner, the buyer acquires no better title to the goods than the seller and it has important exceptions including sale by apparent owner of the goods and usage of the market and the buyer acquires good title if he buys in a market overt, in good faith and without notice of defect or want of title of the part of the seller."

40. In the case of Daniel Kiprugut Maiywa v Rebecca Chepkurgat Maina (2019) EKLR the Honourable Court pronounced itself as follows; "The nemo dat principle means one cannot give what he does not have. This principle is intended to protect the title of the true owner. The rationale behind this principle is that whoever owns the legal title to property holds the title thereto until he or she decides to transfer it to someone else. Accordingly, an unauthorized transfer of the title by any person other than the owner generally has no legal effect, which means the owner continues to hold the title to the property while the person who received the invalid title owns nothing. However, the law provides some exceptions to this rule in the following certain circumstances; For example where a person buys the property in good faith believing that the person who sold it to him was the owner or authorized agent of the owner; where the property is sold by a mercantile agent who is in possession of the goods or documents of title; sale by a joint owner who sells the property with the permission of the co-owner or sale by a person in possession of goods or property under a voidable contract. This principle was applied in the case of Haul Mart Kenya limited vs Tata Africa Kenya Limited (2017) eKLR and Katana Kalume vs Municipal Council of Mombasa (2019) eKLR.”

41. I accordingly find that the Respondent was in breach of the condition of right to sell. This is breach of a condition of sale and the appellant was entitled to repudiate the contract and get back his purchase price and the agreed penalty for breach of contract.

42. There is evidence that the Respondent did not have the log book of the tractor when he sold it to the Appellant. The Respondent did not deliver the log book as agreed and since the Respondent was not selling as the agent of the owner, this case does not fall within any of the exceptions to the nemo dat rule.

43. I find that the Appellant proved to the required standard that the Respondent was in breach of Contract.

44. On the issue as to whether the Appellant was indolent in failing to pursue his rights, I find that this Court having made a finding that the Respondent was in breach of a condition of Sale of Goods namely right to sell, it was not necessary for the Appellant to pursue the 3rd parties.

45. I find that it was the duty of the Respondent to ensure that he was the rightful owner of the tractor before selling it to the appellant for value without notice of defect in title. The Respondent did not sell the tractor with the consent of the owner.

46. The tractor was impounded before the log book was availed by the Respondent and therefore the Appellant was not indolent in failing to pursue his rights.

47. On the issue as to whether the appeal should be allowed, I find that the answer is in the affirmative since the Respondent was in breach of a condition of sale of the tractor.

48. On the issue as to who pays the costs, it is trite law that costs follow the event. I accordingly order that the Respondent pays the costs of the suit filed in the Trial Court and also the costs of this appeal.

49. The Judgment of the Trial Court be and is hereby set aside and Judgment be and is hereby entered in favour of the Appellant in the sum of Kshs. 900,000 together with a penalty of Kshs 450,000 plus costs of the suit and interest from the date of filing the initial suit until payment in full at Court rates.

50. I accordingly allow the appeal with costs to the Appellant.

DELIVERED, DATED AND SIGNED AT KERICHO THIS 14TH DAY OF OCTOBER, 2022A. N. ONGERIJUDGE