Abdullahi & another v Naitore t/a Muna Cereals Store & 2 others (Civil Appeal E080 of 2022) [2024] KEHC 15678 (KLR) (11 December 2024) (Judgment)

Neutral citation: [2024] KEHC 15678 (KLR)

Republic of Kenya

In the High Court at Meru

Civil Appeal E080 of 2022

EM Muriithi, J

December 11, 2024

Between

Abdi Abdullahi

1^st Appellant

Ahmed Abdullahi Mohamed

2^nd Appellant

and

Esther Naitore t/a Muna Cereals Store

1^st Respondent

Issack Issack Adan Tulicha

2^nd Respondent

Shaban Mwenda Salim t/a Imenti North Muslim Girls Boarding High School

3^rd Respondent

(Being an appeal from the judgment delivered by Hon. E.A Mbicha (PM) on 8/6/2022 at Meru CMCC No. 214 of 2014)

Judgment

1.By a plaint dated 12/6/2014, the 1^st Respondent (the Plaintiff in the trial court) sued the 2^nd and 3^rd Respondents (the 1^st and 2^nd Defendants) for payment of Ksh. 213,300, payment of Ksh. 5,000, costs of the suit and interest. She pleaded that the 2^nd and 3^rd Respondents became her regular and trusted customers from 2008, as they used to purchase maize and beans for their school, Imenti North Muslim Girls High School. Between 2008 and 2013, at the behest and request of the 2^nd and 3^rd Respondents and following trust and an oral agreement, she supplied them with an assortment of maize and beans for their aforesaid school which they were repaying on credit, which as 11^th May 2013 had accumulated to Ksh. 213,380 and which amount they acknowledged in writing and equivocally promised to repay. In a blatant breach of the foregoing trust and oral agreement, the 2^nd and 3^rd Respondents failed to pay the said debt of Ksh. 231,380 consequential whereof, she has suffered continuing harm, loss and damage. By refusing to pay the aforesaid debt, the 2^nd and 3^rd Respondents have unjustly enriched themselves at her expense, wherefore she claims commensurate recompense.

2.The 2^nd and 3^rd Respondents denied the claim vide their joint statement of defence dated 31/8/2014 and averred that the Appellants being the new proprietors of the school were mandated to settle all its debts, claims and liabilities.

3.The 2^nd and 3^rd Respondents consequently issued a 3^rd Party Notice upon the current proprietors of Imenti North Muslim Boarding High School, the Appellants herein.

4.The Appellants filed their defence to the claim by the 2^nd and 3^rd Respondents on 20/3/2017.

5.Upon full hearing of the case, the trial court encapsulated that;“It was not made any better that the third parties were represented by counsel who was deep into the matter as he was the one who drafted the parent agreement dated 30^th August 2013 and was perhaps aware of the of the right appendages/addendum in this matter and could at the very best been a material witness to shade light on the same. It was little wonder that there was fireworks during the cross examination of the 1^st Defendan by the Third Party counsel which bordered on personal confrontation; The court was utterly surprised that it never crossed the mind of the Plaintiff and Defendant’s counsel, both who appear to be seasoned counsel, to have asked and requested the third parties’ counsel to recuse himself as he was a material witness/conflicted in participation in the matter. I find and hold that the third parties knew so well they participated in the preparation of the addendum where the debt of the plaintiff was included. It was clear it is the July salary for teachers was included in the addendum which the third parties were clearly aware; I find the evidence of the Defendant credible that the third parties had already become actively involved in taking over the school by the time the August agreement was being done. The third parties, perhaps in retrospect, having noted they never got a perfect deal, have now tried to sneak in the August salary as part of the debts agreed upon as owing in an attempt to knock off and cover the Plaintiff’s debt and have disingenuously further tried to cook and juxtapose amounts to try to add up to the figure of Kshs 519,300/= as debts in the parent amount which they dismally fail; This is the impression the court got from the evidence of the third parties’ witness. I thus find that both the Plaintiff and Defendants have proved their case to the requisite standard as against the third parties and make the following final orders;-1.That a judgment of Kshs 200,000/= be and is hereby entered in favour of the Plaintiff as against the Third Parties herein plus interest at Court Rates which shall be computed from the date of filing of this suit.2.That the Third Parties shall also pay the cost of the suit plus interest thereto for both the Plaintiff and Defendants herein.”

The Appeal

6.On appeal, the Appellants filed their memorandum of appeal on 5/7/2022 raising 12 grounds as follows:1.The learned trial magistrate erred in law and fact in that he failed to decide the case between the Plaintiff and the Defendants and render judgment accordingly.2.The learned trial magistrate erred in law and fact in that he failed to frame the issues as between the Defendants and 3^rd parties and failed in any event to decide the case between the Defendants and 3^rd parties as distinct from that between the Plaintiff and the Defendants.3.The learned trial magistrate erred in rendering a judgment for the Plaintiff against the 3^rd parties which judgment is defective and amounts to a nullity and ought not be enforced given that the Plaintiff did not bring or maintain any suit against the 3^rd parties.4.The learned trial magistrate erred in law and fact in that he adopted proceedings and an earlier judgment which had, earlier, been set aside and nullified by the trial magistrate himself.5.The learned trial magistrate erred in law and fact in holding the 3^rd parties liable when the Defendants had not discharged their burden of proof to require the 3^rd parties to indemnify them.6.The learned trial magistrate erred in law and fact in descending into arena of conflict, framing issues outside of the proceedings and deciding the same notwithstanding the principle that parties are bound by their pleadings.7.The learned trial magistrate erred in law and fact in failing to determine the case between the Plaintiff and Defendants one way or the other.8.The learned trial magistrate erred in law and fact by abdicating his duty to prepare and render a reasoned judgment based on the facts and the relevant law as required under Order 21 Rules 4 and 5 of the Civil Procedure Rules.9.The learned trial magistrate erred in law and fact in abusing his discretion by ordering the 3^rd parties to pay costs for the Plaintiff and the Defendants yet there was only one case as against the 3^rd parties.10.The learned trial magistrate erred in law and fact in failing to bear in mind the import of the 3^rd party notice and remind himself that the Defendants’ claim against the 3^rd parties was for indemnity or contribution in the event that the Plaintiff succeeded against them.11.The learned trial magistrate erred in law and fact in finding that the 3^rd parties were involved in the running of the subject School prior to the contract date a finding that was not at all supported by evidence.12.The learned trial magistrate erred in law and fact in finding the so called list of debtors was prepared with participation of 3^rd parties and was page 5 of the subject sale agreement without any evidence at all in support of such finding.

Duty of the Court

7.This being a first appeal, this court is duty bound to delve at some length into factual details and revisit the facts as presented in the trial court, analyse the same and arrive at its own independent conclusions, but always remembering that, the trial court had the advantage of seeing the witnesses testify. (See Selle v Associated Motor Boat Co. & others [1968] E.A. 123).

Evidence

8.PW1 Esther Naitore (Muna), the 1^st Respondent herein testified that, “I come from Nthimbiri location Meru District. I do cereals business in Gakoromone. I trade as MUNA CEREALS STORE. I am the plaintiff in this case. I have sued 1^st and 2^nd defendant. I signed witness statement on 12/6/2016. I wish to adopt the same (adopted). I am claiming Kshs. 213,800/= from the 1^st and 2^nd defendants and Kshs. 5,000 for demand letter. I have exhibits in court. I have a receipt of Kshs. 5,000/= for demand letter (P Exh. 1). I have a demand notice to 1^st and 2^nd defendants dated 11/10/2013 (P Exh 2). The defendant acknowledged in writing owing the amount. I have documents to attest that (produced as P Exh 3 and P Exh 4). The defendants have not paid me the said amount. The same is outstanding. I pray for my Kshs. 213,800/= and the interest as my business has not been going well. I also pray for the Kshs. 5,000/=. I also pray for the costs of the case and interest at court rates.”

9.On cross examination by counsel for the 2^nd Respondent, she stated that, “Someone was to pay you. The said person called me and asked if I was Muna Stores. He stated he would come in the evening but he never called.”

10.DW1 Isaack Issack Adan Tulicha, the 2^nd Respondent herein testified that, “I have been sued alongside the 2^nd defendant. We instituted a case further against the 3^rd and 4^th defendant. I know the plaintiff testified. The plaintiff is claiming Kshs. 200,000/= from us. When we sold the school, we wrote an agreement with an advocate and indicated we have a debt of Kshs. 500,000/=. We sold the school to third parties alongside the school debt. We wrote an agreement dated 30^th August, 2013. The same is in court file (D Exh 1). We also talked about the unpaid items. The debt owed other people totaling Kshs. 513,000/= was to be paid by the third parties. The agreement was done before Arthur Ingutya advocates. The debts for Muna Cereals was Kshs. 200,000/=. We agreed on the list of debts and we signed. They paid all the debts but refused to pay the plaintiff. All the debtors were called and they were told that the debt had been taken over by the third parties. I wish to produce the sale agreement (P Exh 1) and the list of debtors (P Exh 1(b). All the other persons were paid except the plaintiff. The debt was Kshs. 200,000/= or thereabouts owed to the plaintiff. I never received a demand notice. There is a book we had indicated the amount due and owing to the plaintiff. I know the debt as Kshs. 200,000/=. I do not know about the Kshs. 13,380/= extra. It is the 3^rd parties who are supposed to pay that extra amount. There is a third parties list of documents filed. All the debts due and owing are to be found in the list of debtors and filed. I am not responsible for the extra debts incurred by the 3^rd party thereafter. My evidence with the 2^nd defendant is the same. We pray for judgment against the 3^rd parties. The 3^rd party Adan Tulicha & 3^rd Party Ahmed had promised to pay. We pray the 3^rd party to pay and cost of the suit. I have read the 3^rd party statement is dated 10.8.2013. The agreement was signed by Abdi Abdulahi and Ahmed Abdullahi in the presence of the advocate Arthur Ingutya. The 3^rd party are Ahmed and Abdi Abdulahi. The initial agreement had five (5) pages. In the statement of the 3^rd party, they have brought a schedule. It indicates debt to be paid by Abdi abdulahi and Ahmed. We signed with Shaban Salim of the Debts we owed. We gave them a list of debtors. The list is different from us. In our list, we had seven (7) debtors. Muna was one (1) of them. In paragraph 5 of the said agreement, they acknowledged payment of Kshs. 518,300/= to the said debtors. We annexed the debtors and was signed by me and Mr. Shaban is the coordinator of the said school. They have brought a statement indicating what considered Kshs. 581,999/=. Ours was Kshs. 519,300/= as indicated in the agreement. Theirs is coming up to Kshs. 518,999/=. In their list (a) and (b) is not included in our debts. (e) August 2013 salaries are also not indicated in our agreement. They have included new issues out of our agreement. The list indicating Kshs. 518,999/= we did not sign for the same. There is no agreement which indicated the breakdown of the debts owned. The outstanding electricity and water bill and August salary was not there. The list of debt only was for July salaries and this was indicated in our agreement. All the debts were paid by the 3^rd party and they paid but they refused to pay only the Muna debt. We are not the ones entitled to pay the Muna cereals debt. I had given all the debts to the 3^rd party. The total debts was Kshs. 519,300/=. It is the first debt which had not been paid which brought us to this court. The 3^rd party then flatly refused to pay the lady running Muna cereals.”

11.On cross examination by counsel for the 1^st Respondent, he stated that, “I know the plaintiff. We were managing the same school. The plaintiff was supplying cereals to us. She supplied while we were managing the school. We sold the school to the third parties and we shed light to him on the debt owing. When we signed the agreement, the plaintiff was not there. We signed one, the 2^nd defendant and the two (c) in third parties. I know the plaintiff used money to bring this matter to court. We used to pay when we were supplied. The Kshs. 200,000/= the plaintiff has never been paid to date. Before the matter was brought to court, we received a letter from the plaintiff’s advocate and we told her we had sold the school. The debt was Kshs. 519,300/=. I have been given an amount of Kshs. 518,333/=. This is as per paragraph 5 of the sale agreement. The debt of Muna stores is indicated in our list of documents to the 3^rd party. It is Abdi Abdulahi and Ahmed Abdullahi who are to pay. The list of Kshs. 519,300/=. They paid the six (6) Debtors and only excluded the lady, Muna.”

12.On cross examination by counsel for the Appellants, he stated that, “The agreement is five (5) pages. The 5^th page, indicating school debts the debt we presented the list. The agreement has indicated the page numbers. Page 5 has no page number. Upon producing the list is when the advocate you put the amount of Kshs. 519,300/=. I gave you the list of debtors in your office. The pages are indicated in the agreement. Page 5 you told us the attached list. I prepared the list before writing the subject agreement. In the agreement I had indicated the people you were going to pay. Muna cereals is on page 5. Muna cereals amount is of Kshs. 200,000/= as indicated in the Kshs. 519,300 debt. Abdi and Ahmed have their own list. In my list there was Nyaga of Nkubu High School, the third parties too has the same. We were the sellers of the school, we knew our debtors. July salaries Kshs. 150,000/= is both in our list and third’s party’s list. Milk is in both list. Regional suppliers is also in both list. Paramount security services is also on both list. Meat supplier is also on both list. The amount is also the one with a difference. In Ahmed is Kshs. 14,000 and mine is Kshs. 6,700/=. It is only five (5) items which are similar. The total does not even tally with the amount in our agreement. For milk venders, the amount is Kshs. 8,960/= by third party whereas in our agreement mine was Kshs. 8,000/=. Four (4) items are okay, three of them he has made up. The third party are nine (9). It was only four (4) entries which are okay. The list was for 30.8.2013. In clause No. 5 the agreement the third party were to pay Kshs. 519,300 of our debtors. We agreed on the clause, anything outside the agreement, we are not liable for it. Industrial relationship were to be paid by the new buyer. I did not sign the replying affidavit dated 19.8.2016. The list was attached to the agreement. The said list was not signed by the third party. We were the ones who knew our debts. The third parties do not sign the list of the debtors because we are the ones as sellers who knew our debts. Ahmed’s list has no Muna stores. Our list did not have the August salary. It only had the July salary. We had already handed the school earlier than 31.8.2013 and we came to write the agreement later. When we signed the agreement, we had already given out the school prior to August. We had already left. July salary was part of the debt. The teacher used to be paid at the end of the month. I sold the school since I had debts. In august the third party had already taken over the school. The school had electricity and water. Prior, the water and electricity was to be paid by us. We had paid our electricity bill. We sold that school and handed it over before 30^th August. It is thereafter that we came to your office to write an agreement.”

13.In re-examination, he stated that, “We usually signed the documents with the 2^nd defendant. The handwriting on the document. P Exh 1 is for mama Muna. The book we were using with the plaintiff has not been brought to court. The book for debt was a booklet. We write the agreement on 30/8/2013. The letter P Exh 1 is indicates as 11/5/2013. The debt he knew he owe the plaintiff is Ksh. 200,000/=. The book had an original handwriting. By 8.8.2013 Abdi and Ahmed had already come to school and I handed over the school to them. They settled with Eco Bank. We had covered everything at the start of August and then later reduced the same to an agreement at the end of August. They told us they wanted to maintain the same teachers. The electricity and water bill they are the ones who were using the said utilities upon taking up the school. We signed the agreement with Shaban. The list they are providing was not signed by anyone. I have just seen it in court. The electricity bills, water bills except 4. I contest the same. In the third parties list, I agree with only (4). The figure of Kshs. 519,300/= which matches with the agreement. We had already given the debt to the vender and that is why it was included in the agreement. We were the ones selling the school hence we knew people who owed us money. We had settled all debts and that is the remaining money I owed. We even inquired from the third party on why they had not paid the said Muna cereals. The debt outstanding is the one we had signed. We did not have any other debt.”

14.Ahmed Abdullahi Mohamed and the 2^nd Appellant herein testified that, “Abdi Abdillahi is my elder brother and partner. I recorded a statement on 23.3.2021. That is my statement. I wish the same to be adopted (adopted) dated 23.3.2021. The agreement to buy the school, we bought the school in August, 2013. Prior to this date, we did not have any other agreement with the seller. We came to know each other when they came to buy the school. We took possession of the school on 30.8.2013. The agreement P Exh 1, the agreement indicates the agreement is made on 30.8.2013. Paragraph 5 indicates the list of the debts owned. The debts the school owed I was told by the seller it is the seller who introduced me to the debtors. They told me orally of the debts owned. They used to come with the people owed, tell us how much they owed and we used to pay. Isaack and Shaban have produced a list of the people who owed them. There is a debt owed to Muna. She was not in the list of debts and had not been mentioned in the agreement. The amount owed had not been broken down. It was just the total figures. The agreement included 519,300/=. We then paid Kshs. 518,999/=. It is not true that we made our own list. They could bring the people who owed money and told us the amount each owed. The August salary. It is not true we took over the school on 8^th August, 2013. The August salary was their debt as at August. We had not met them earlier and we agreed the debt to be paid by them. They are the ones who gave the amount owed as salary and the figures to be paid. The debts were to be paid up to end of August 2013. The plaintiff in the case, as the buyer, at the time of buying, he did not have any agreement in writing or in talk. I do not even knew them earlier. We met on 30^th August 2013 when we wrote an agreement. They told us the money we were to pay and we paid the said amount. The agreement indicates anything arising from 30^th August backwards; they were the ones who were to pay. In the amount we paid, there is no dispute which arose thereafter. In the figure of 519,300/= and 518,999/=. That is the figure they gave us the amount only when they brought debts for Kshs. 518,999/=.”

15.On cross examination by counsel for the 1^st Respondent, he stated that, “The total amount of debts due was Kshs. 518,999/=. The agreement indicates Kshs. 519,300/=. That is the amount the defendant states I should give. These are the people the defendants brought to us to pay. At paragraph No. 9 indicates the debts to be handed over including paragraph (j) and (c). They excluded August salary and August salary. I have just seen the annexture in court. August salary, it was the seller to pay the school. We paid all the other remaining debts. The sellers/defendants brought the debtors for us to pay. The defendants brought the teachers for us to pay. They did not include the August salary, water and electricity bills. I do not know if my brother called Favour Recca saying he would pay the debt.”

16.On cross examination by counsel for the 2^nd and 3^rd Respondents, he stated that, “We did the agreement in 30.8.2013. The agreement was not in any clause indicate the date we were to take over the school. For clause 9 (J) and (K) indicated the following would form part of the agreement. It is not true that the defendant gave list of people to pay the whole total debts and said they would bring the people for us to pay. They brought the names of teachers to pay and electricity and water bills. It is the defendant who brought the list. When we pay the debtors, they would sign the debt payment vouchers. There were a list of debtors they would bring to us. We paid all the debts of the people brought to us. They would not bring Muna cereals. I do not even know or even seen her. The defendants have never denied that Muna cereals was their debtors. The Kshs. 519, 300/=. I know they were arrears. They told us they were debts, electricity bills. The statements and details of suppliers were to be brought later. We were not served with a demand notice. I just came to know the case from her advocate. The defendants were the ones who knew their debtors. They brought their debtors earlier and we have paid them. They did not sign anywhere on their debts. They could just bring them to the office and we would pay. I did not know what constituted the Kshs. 519,300/= as debt. The defendants just gave us the figure of the persons who owed them money. I do not know when supplies were made by Muna suppliers. I did not know the number of debtors the defendants owed. I have paid the amounts and it shows the people owed. I do not know if Muna suppliers even supplied anything to the school. They have never brought Muna cereals name. I can’t pay now as the figure has already reached the Kshs. 519,300/=. They have confirmed seven (7) and disputed the figure in two (2) items. I did not see the list. The others they brought the suppliers. We paid all the other debtors. We have not refused to pay the plaintiff. There is no name of any person/debtor indicated in the agreement. I do not know if the plaintiff supplied before we took over the school. When we wrote the agreement, it indicated we would pay all the debts arising.”

17.In re-examination, he stated that, “The agreement was for four (4) people. None of us was told to write the agreement. We had written an agreement, later I was brought people to pay. I did not ask the sellers to write the list as he was coming with them. We have not been having any conflict with the defendant on the agreement. The plaintiff has sued for Kshs. 200,000/=. If we proceed and pay the plaintiff Kshs. 200,000/= I would have paid a total of 719,000/=. As per the agreement and the money paid, I do not owe any money to the defendants. I owe them Kshs. 301/=. I am ready to pay the Kshs. 301/=. The agreement was signed on 30.8.2013. In the agreement it is not indicated the school was taken on 8.8.2013. The agreement does not indicate we took possession of the school earlier. Paragraph 5 of the subject agreement indicates the liability arises from 30.8.2013. The Kshs. 519,300/= indicates the debts meant to be paid before 30^th /8/2012 going backwards. There are payments we were making, there is no dispute concerning those payments. The salary of August, 2013, we could not pay since we were not in the school and had just taken over the subject school.”

Submissions

18.The Appellants urge that the trial court’s failure to render a decision on the 1^st Respondent’s case against the 2^nd and 3^rd Respondents was a grave error and a travesty of justice, and cite Stephen Psiwa Cheprot v Mary Mutheu Muia & Another (2018) eKLR and Sammy Ngigi Mwaura v John Mbugua Kagai & Another (2006) eKLR. They urge that the rather belated argument that they took possession of the school on 3/8/2013 was a preposterous statement which lacked any evidentiary backing and which was made as an afterthought. They posit that the 2^nd and 3^rd Respondents did not prove their case on a balance of probabilities and the alleged list of debtors was not signed by them. They urge that judgment against them without judgment against the 2^nd and 3^rd Respondents ran against every tenet that guides the courts in deciding cases involving 3^rd parties. They fault the trial court for condemning them to pay costs to the 1^st Respondent and to the 2^nd and 3^rd Respondents, which occasioned grave injustice to them, and urge the court to allow the appeal.

19.The 1^st Respondent urges that she was not privy to the sale agreement between the 2^nd and 3^rd Respondents and the Appellants, and cites Fredrick Masaghwe Mukasa v Director of Public Prosecutions & 3 Others (2019) eKLR and Jessie Mwangi Gachago v Attorney General (1981) eKLR. She urges the court to find in her favour and dismiss the appeal with costs.

20.The 2^nd and 3^rd Respondents did not file any submissions.

Analysis and Determination

21.From the grounds of appeal, the 2 issues that isolate themselves for determination are whether the Respondent proved his case on a balance of probabilities and whether the decision reached was just.

Proof of the case

22.The picture that emerges from the evidence on record is that the 1^st Respondent supplied maize and beans to a school owned by the 2^nd and 3^rd Respondents which debt remained unsettled despite persistent demands. The 2^nd and 3^rd Respondents subsequently instituted 3^rd party proceedings against the Appellants, who were the current proprietors of the subject school by dint of an agreement for sale dated 30/8/2013. It was a term of the said agreement that the Appellants would forthwith settle all unpaid debts of the previous proprietors with the suppliers. The Appellants admit having bought the subject school from the 2^nd and 3^rd Respondents but deny that they were obligated to settle the 1^st Respondent’s debt.

23.The 1^st Respondent herein testified that, “I trade as Muna Cereals Store. I am the plaintiff in this case. I have sued 1^st and 2^nd defendant. I am claiming Kshs. 213,800/= from the 1^st and 2^nd defendants and Kshs. 5,000 for demand letter. The defendant acknowledged in writing owing the amount. The defendants have not paid me the said amount. The same is outstanding.” Her testimony was not meaningfully challenged during cross examination.

24.The 2^nd Respondent herein corroborated the evidence tendered by the 1^st Respondent when he testified that, “The plaintiff is claiming Kshs. 200,000/= from us. When we sold the school, we wrote an agreement with an advocate and indicated we have a debt of Kshs. 500,000/=. We sold the school to third parties alongside the school debt. We wrote an agreement dated 30^th August, 2013. We also talked about the unpaid items. The debt owed other people totaling Kshs. 513,000/= was to be paid by the third parties. The debts for Muna Cereals was Kshs. 200,000/=. We agreed on the list of debts and we signed. They paid all the debts but refused to pay the plaintiff. All the debtors were called and they were told that the debt had been taken over by the third parties. It is the 3^rd parties who are supposed to pay that extra amount. There is a third parties list of documents filed. All the debts due and owing are to be found in the list of debtors and filed. I am not responsible for the extra debts incurred by the 3^rd party thereafter. My evidence with the 2^nd defendant is the same. We pray for judgment against the 3^rd parties. The 3^rd party Adan Tulicha & 3^rd Party Ahmed had promised to pay. We pray the 3^rd party to pay and cost of the suit. In the statement of the 3^rd party, they have brought a schedule. It indicates debt to be paid by Abdi abdulahi and Ahmed. We signed with Shaban Salim of the Debts we owed. We gave them a list of debtors. The list is different from us. In our list, we had seven (7) debtors. Muna was one (1) of them. We annexed the debtors and was signed by me and Mr. Shaban is the coordinator of the said school. They have brought a statement indicating what considered Kshs. 581,999/=. In their list (a) and (b) is not included in our debts. (e) August 2013 salaries are also not indicated in our agreement. They have included new issues out of our agreement. The outstanding electricity and water bill and August salary was not there. The list of debt only was for July salaries and this was indicated in our agreement. All the debts were paid by the 3^rd party and they paid but they refused to pay only the Muna debt.”

25.His evidence remained unshaken even on thorough cross examination by counsel for the Appellants, where he maintained that, “The agreement is five (5) pages. The 5^th page, indicating school debts the debt we presented the list. I gave you the list of debtors in your office. I prepared the list before writing the subject agreement. In the agreement I had indicated the people you were going to pay. Muna cereals is on page 5. Muna cereals amount is of Kshs. 200,000/= as indicated in the Kshs. 519,300 debt. Abdi and Ahmed have their own list. Four (4) items are okay, three of them he has made up. The third party are nine (9). It was only four (4) entries which are okay. The list was for 30.8.2013. In clause No. 5 the agreement the third party were to pay Kshs. 519,300 of our debtors. We agreed on the clause, anything outside the agreement, we are not liable for it. List was attached to the agreement. We were the ones who knew our debts. The third parties do not sign the list of the debtors because we are the ones as sellers who knew our debts. Ahmed’s list has no Muna stores. Our list did not have the August salary. It only had the July salary. We had already handed the school earlier than 31.8.2013 and we came to write the agreement later. When we signed the agreement, we had already given out the school prior to August. The school had electricity and water. Prior, the water and electricity was to be paid by us. We had paid our electricity bill. We sold that school and handed it over before 30^th August. It is thereafter that we came to your office to write an agreement.”

26.The 2^nd Appellant herein refutably insisted that they had settled all the debts as agreed, when he testified that, “Abdi Abdillahi is my elder brother and partner. The agreement to buy the school, we bought the school in August, 2013. We took possession of the school on 30.8.2013. The agreement P Exh 1, the agreement indicates the agreement is made on 30.8.2013. Paragraph 5 indicates the list of the debts owned. The debts the school owed I was told by the seller it is the seller who introduced me to the debtors. They told me orally of the debts owed. They used to come with the people owed, tell us how much they owed and we used to pay. Isaack and Shaban have produced a list of the people who owed them. There is a debt owed to Muna. She was not in the list of debts and had not been mentioned in the agreement. The August salary was their debt as at August. We had not met them earlier and we agreed the debt to be paid by them. The agreement indicates anything arising from 30^th August backwards; they were the ones who were to pay.”

27.On cross examination by counsel for the 1^st Respondent, he stated that, “The total amount of debts due was Kshs. 518,999/=. The agreement indicates Kshs. 519,300/=. That is the amount the defendant states I should give. These are the people the defendants brought to us to pay. At paragraph No. 9 indicates the debts to be handed over including paragraph (j) and (c). They excluded August salary and August salary. I have just seen the annexture in court. August salary, it was the seller to pay the school. We paid all the other remaining debts. The sellers/defendants brought the debtors for us to pay. The defendants brought the teachers for us to pay. They did not include the August salary, water and electricity bills.”

28.On cross examination by counsel for the 2^nd and 3^rd Respondents, he stated that, “For clause 9 (J) and (K) indicated the following would form part of the agreement. It is not true that the defendant gave list of people to pay the whole total debts and said they would bring the people for us to pay. They brought the names of teachers to pay and electricity and water bills. It is the defendant who brought the list. When we pay the debtors, they would sign the debt payment vouchers. There were a list of debtors they would bring to us. We paid all the debts of the people brought to us. They would not bring Muna cereals. The defendants have never denied that Muna cereals was their debtors. The Kshs. 519,300/=. I know they were arrears. They told us they were debts, electricity bills. The statements and details of suppliers were to be brought later. When we wrote the agreement, it indicated we would pay all the debts arising.”

29.Clause 5 of the agreement for sale dated 30/8/2013 between the 2^nd and 3^rd Respondents on one part and the Appellants on the other part provided as follows: “Notwithstanding the foregoing clause the Vendors undertake to fully indemnify the Purchasers for any liability or claims arising from their commissions or omissions prior to the date hereof whether such claims or liability arise from contractual obligation, industrial relation, tort law or otherwise howsoever save that the Purchasers shall offset the sum of Ksh. 519,300/= (Ksh. Five Hundred and Nineteen Thousand Three Hundred) due and outstanding to suppliers and provided further that school fees arrears due and outstanding upto the date of this agreement shall be payable to the Purchasers for their benefit and the Vendors have no claim whatsoever in that regard.”

30.Pursuant to clause 9 (j) and (k) of the agreement for sale of the school, statements and details of suppliers and contractors and details of all known or anticipated debits and credits, formed part of the annextures to the agreement and were required to be surrendered to the Appellants during execution thereof. The agreement was succinctly clear that the 2^nd and 3^rd Respondents’ waiver of their right to pursue payment of the outstanding fee arrears was incidental to the settlement of their unpaid debts by the Appellants.

31.The 2^nd and 3^rd Respondents herein properly issued a 3^rd party Notice against the Appellants pursuant to Order 1 Rule 15 of the Civil Procedure Rules as follows: “Where a defendant claims as against any other person not already a party to the suit (hereinafter called the third party)— (a) that he is entitled to contribution or indemnity; or (b) that he is entitled to any relief or remedy relating to or connected with the original subject-matter of the suit and substantially the same as some relief or remedy claimed by the plaintiff; or (c) that any question or issue relating to or connected with the said subject-matter is substantially the same question or issue arising between the plaintiff and the defendant and should properly be determined not only as between the plaintiff and the defendant but as between the plaintiff and defendant and the third party or between any or either of them, he shall apply to the Court within fourteen days after the close of pleadings for leave of the Court to issue a notice (hereinafter called a third party notice) to that effect, and such leave shall be applied for by summons in chambers ex parte supported by affidavit. (2) A copy of such notice shall be filed and shall be served on the third party according to the rules relating to the service of a summons. (3) The notice shall state the nature and grounds of the claim, and shall, unless otherwise ordered by the court, be filed and served within fourteen days of leave, and shall be in or to the effect of Form No. 1 of Appendix A with such variations as circumstances require and a copy of the plaint shall be served therewith. (4) Where a third party makes as against any person not already a party to the action such a claim as is mentioned in subrule (1), the provisions of this Order regulating the rights and procedure as between the defendant and the third party shall apply mutatis mutandis as between the third party and such person, and the court may give leave to such third party to issue a third party notice, and the preceding rules of this Order shall apply mutatis mutandis, and the expressions “third party notice” and “third party” shall respectively apply to and include every notice so issued and every person served with such notice. (5) Where a person served with a notice by a third party under subrule (4) makes such a claim as is mentioned in subrule (1) against another person not already a party to the action, such other person and any subsequent person made a party to the action shall comply mutatis mutandis with the provisions of this rule.”

32.The Appellants duly entered appearance on 15/2/2016 and the 2^nd and 3^rd Respondents consequently applied for directions in accordance with Order 1 Rule 22 of the Civil Procedure Rules as follows; “If a third party enters an appearance pursuant to the third-party notice, the defendant giving the notice may apply to the court by summons in chambers for directions, and the court upon the hearing of such application may, if satisfied that there is a proper question to be tried as to the liability of the third party, order the question of such liability as between the third party and the defendant giving the notice, to be tried in such manner, at or after the trial of the suit, as the court may direct; and, if not so satisfied, may order such judgment as the nature of the case may require to be entered in favour of the defendant giving the notice against the third party.”

33.The court directed that the question of liability as between the Appellants and the Respondents would be tried at the trial, subsequent to which the Appellants filed their defence to the 2^nd and 3^rd Respondent’s claim on 20/3/2017.

34.The import of the joinder of a 3^rd party was highlighted by the court (F. Gikonyo J) in Kenya Commercial Bank v Suntra Investment Bank Ltd (2015) eKLR, the court as follows;“In law, a third party is enjoined in a suit at the instance of the Defendant and through the set procedure under Order 1 rule 15 – 22 of the Civil Procedure Rules. And, liability between the Defendant and the third party is determined between the Defendant and the third party, but of course, after the court is satisfied that there is a proper question to be tried as to liability of the third party and the Defendant, and has given directions under Order 1 rule 22 of the Civil Procedure Rules.

35.In Jessie Mwangi Gachago v Attorney General [1981] eKLR relied on by the 1^st Respondent, the Court of Appeal, cited Atkins Court Forms, Vol 37, 2nd Ed p 266 thus:“From the time of the service of the third party notice the third party becomes a party to the action with the same rights in respect of his defence against any claims made against him in the action and otherwise as if he had been duly sued in the ordinary way by the defendant by whom the notice is issued. The defendant who issued the notice and the third party thus face each other in the relationship of plaintiff and defendant.”

36.It is clear that the 1^st Respondent proved her case against the 2^nd and 3^rd Respondents on a balance of probabilities. Once liability on the 2^nd and 3^rd Respondents had been proved, their claim against the Appellants for indemnity and/or contribution crystallized, and the 2^nd and 3^rd Respondents properly brought them in for indemnity.

37.The Appellants contend that the award of costs to the Respondents was erroneous because there was no case against them. The court is empowered by the provisions of Order 1 Rule 23 of the Civil Procedure Rules to award costs as follows:“The court may decide all questions of costs between a third party and the other parties to the suit, and may make such orders as to costs as the justice of the case may require.”

38.Suffice to state, it is trite that costs follow the event and the Respondents, as the successful parties, were entitled to costs.

Orders

39.Accordingly, for the reasons set out above, the Court finds the appeal to be without merit and it is dismissed.

40.The appellants shall pay the costs of the appeal to the Respondents.Order accordingly.

DATED AND DELIVERED ON THIS 11^TH DAY OF DECEMBER 2024.EDWARD M. MURIITHIJUDGEAppearancesMs. Arthur Ingutya for the AppellantsMs. Kaimenyi Kithinji for the 1^st RespondentMs. M. G Kaume for the 2^nd and 3^rd Respondents

Abdullahi & another v Naitore t/a Muna Cereals Store & 2 others (Civil Appeal E080 of 2022) [2024] KEHC 15678 (KLR) (11 December 2024) (Judgment)

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