Drumond Investment Bank Limited v Muturia George Muriithi [2017] KEHC 1662 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL APPEAL NO. 574 OF 2009

DRUMOND INVESTMENT BANK LIMITED……………….APPELLANT

VERSUS

MUTURIA GEORGE MURIITHI …………………………..RESPONDENT

JUDGMENT

The Respondent who was the plaintiff in the Lower Court filed a plaint dated the 26th October, 2007 claiming a sum of ksh 250,000/= from the Appellant/defendant. He also sought costs of the suit and interest.

In the plaint, the plaintiff averred that he was the holder of a CDs Account number […] with the defendant whereby he bought and sold shares at the Nairobi stock Exchange through the defendant vide account client’s Code No. 110268. He further averred that on or about the 11th September, 2007, he deposited an amount of ksh. 250,000/= in cash for purposes of purchase of shares and was issued with receipt number 23781 but upon his visit to the defendant’s premises on the 13th September 2007 to place order for purchase of various shares, he was informed that there was only ksh 8. 544/= in his account hence could not do the transactions he intended.

That upon request for a statement, the same showed that only ksh. 250/= was credited in his account vide receipt No 23781 instead of ksh. 250,000/=. It was alleged that the defendant was in breach of trust to the plaintiff for failing to credit, refund or account for the plaintiff’s ksh.200,000/=  being the difference of what the plaintiff deposited and what was credited in his account. He set out the particulars of breach in paragraph 7 of the plaint.

He contended that as a result of the defendant’s acts, he has been greatly inconvenienced and has suffered loss and damage.

The defendant filed a statement of defence on the 10th January 2008 wherein it denied the claim and avers that on the 11th September 2007 the plaintiff infact deposited only ksh 250/= though he was issued with a receipt that erroneously indicated ksh.250,000/= as the amount credited in his account.

It was averred that the defendant asked the plaintiff to surrender the erroneous receipt in good faith, a request that he ignored but retained the same with the aim of fraudulently claiming ksh. 250,000/= from the defendant knowing fully well that he had deposited no such amount with the defendant. It has denied the allegations of breach of trust as particularized in (a)-(d) and put   the plaintiff to strict proof. It avers that the plaintiff’s suit lacks any merit, its frivolous, vexatious and otherwise an abuse of court process.

In his evidence, the plaintiff stated that on 11th September 2007, he went to the defendant for shares and deposited ksh, 9200/= and 250,000/=. He placed some orders and was to place other orders later but when he visited the defendant on 13th September, 2007 he found that his order had been rejected for insufficient funds. On the said date, his statement read that his account had ksh. 8,544/= the anomaly according to him, being that the defendant credited ksh.250/= in his account instead of ksh 250,000/=. He stated that he had been issued with a receipt for ksh 250,000/= which he produced as exhibit 1. He asked the defendant to look into the issue but they ignored, hence the suit in the lower court.

In cross examination, it was his evidence that he applied for 200 shares for Access Kenya Group though he did not place the orders immediately he deposited the money the reason being that he wanted to purchase KPLC shares but lacked sufficient information. He stated that the money was from his savings and farm activities and that he had sold some cows to raise the money. He denied having been issued with an erroneous receipt of ksh. 250,000.

The defendant called two witnesses, DW1 Kingori Gatenji, was at the material time working as an executive director with the defendant. It was his evidence that on the 11th September, 2007 they received ksh. 250/= from the plaintiff and a further ksh.9,200/= and that on the said date he bought 200 KCB at 28% making a total of ksh. 5600/= and 200 shares of Access Kenya at 18% for ksh.3,000/=, making a total of ksh.9,200/=. He produced a purchase order dated 11/9/2007 as exhibits 2(a) and (b). He stated that had they received ksh. 250,000/= they would have acted on a purchase order and if no purchase order lay, the client would have left further instructions which was not the case herein. He confirmed that the receipt of ksh. 250,000/= issued to the plaintiff was done in error and that it should read ksh. 250/=. That the cash collections for that day did not tally with such a receipt and that his cashier said he received ksh. 250/= and not 250,000/= as alleged. He stated that they contacted the plaintiff and informed him to return the wrong receipt.

Obel Muhira testified as DW2. He is a former employee of the defendant and he remembered having attended to the plaintiff on the 11th September, 2007. According to him, the plaintiff deposited ksh. 9200/= and that the receipt of ksh. 250,000/= was issued in error. He told the court that the plaintiff went to the office at 3. 30 pm when they were about to close and he was asked to top up with  ksh 250/=  so that he could purchase 100 shares. He went back to him (DW1) and deposited ksh. 250/=.

He stated that he keyed in, ksh 250,000/= in error as the computer had a hanging problem. That he did not confirm the amount on the receipt before giving him but only realized the error when he was reconciling the account. That the error/short that he had on that day was in that very receipt and when the plaintiff was called he confirmed having paid ksh. 250/=, he also confirmed that his receipt read ksh 250,000/=. He promised to take back the receipt but he failed to do so.

In cross examination, he stated that he did not confirm the amount deposited by the defendant as it was late and he was under pressure to clear his till for that day. It was his evidence that the plaintiff himself told him that he had been told to top up with ksh. 250/=. He confirmed that DW1 called the plaintiff in his presence to bring back the receipt and he also sent a text message to the plaintiff. He stated that one can only make a deposit and purchase the shares the same day but if purchase is made later it attracts certain charges.

In re-examination, he stated that the receipt of ksh. 250/= was a replacement of the one of ksh. 250,000/= and it was printed from the system on the 15/6/2009 by one Hillary but the posting was done on the 11/9/2007.

After hearing the case the learned magistrate entered judgment for the plaintiff for ksh. 249,750/= with interest from the date of filing. She also awarded costs to the plaintiff.

Being dissatisfied with the said judgment, the defendant/Appellant has appealed to this court and has listed five grounds of appeal namely that; the learned magistrate erred in law and in fact by failing to appreciate the triable issues raised in the Appellant’s defence, that the learned magistrate erred by failing to weigh the evidence and testimony off witnesses for the Appellant as against those of the Respondent, that the learned magistrate erred in failing to evaluate the documentary evidence adduced by the Respondent, that the learned magistrate erred in failing to evaluate the documentary evidence adduced by the Respondent, that the learned magistrate erred in finding that the Respondent was entitled to the sums claimed in the plaint and awarding costs to the Respondent.

The Appeal proceeded by way of written submissions. The court has considered the grounds of appeal, the evidence on record and the submissions by the respective parties. In my view, the following are the issues for determination.

1. Whether the learned magistrate properly evaluated the evidence adduced before her.

2. Whether the learned magistrate erred in entering judgment for the Respondent against the Appellant.

I will proceed to consider the two issues together.

The evidence on record is that on the 11/9/2007, the Respondent alleges that he went to the offices of the Appellant and deposited a sum of ksh. 9200/= and ksh 250,000/= in a CDs account that he held with the Appellant. He further alleges that he was issued with a receipt for the said amount clearly indicating the amount deposited.

On the other hand, the Appellant contended that the Respondent deposited a sum of ksh 250/= but he was erroneously issued with a receipt of ksh. 250,000/= and immediately the Appellant realized the error, DW1, in the presence of DW2 called the Respondent to inform him of the same. The Appellant sought to correct the error by issuing another receipt of the ksh 250/= being the correct amount that was deposited by the Respondent.

In the testimony given in the lower court by DW1 and DW2, the Respondent was asked to return the receipt and had promised to return the same but he failed to do so. DW2 is the cashier who attended to the Respondent on the 11th September 2007 and according to him the Respondent deposited ksh. 9200/= and a further ksh. 250/=.

The Respondent visited the offices of the Appellant between 3. 30 pm and 4. 00 pm and he was served past closing time. He went to the customer service and was asked to top up with ksh. 250/= to get 100 shares. He went back to DW2 and deposited the ksh 250/=. DW2 told the court that he keyed in, ksh 250,000/= in error as the computer was hanging. He further stated that he did not confirm the amount on the  receipt as it was late and he was under pressure to clear his till for the day.

DW2 stated that he realized the error when he went to reconcile the accounts and the error/ short was in the same receipt that he issued to the Respondent. That he called the Respondent who confirmed that he paid ksh 250/= but his receipt read ksh. 250,000/= and he promised to take it back but he failed to do so.

Though the Respondent avers that the allegation by DW2 that ksh 250,000/= was keyed in the computer by mistake cannot hold water because the disparity between Ksh. 250,000/= and ksh 250/= is so huge and that the ksh 250,000/= was also written in words clearly confirming the amount, this court is not persuaded by that argument for the following reasons.

First, it is not clear why the Respondent would have deposited ksh. 9200/= and ksh 250,000/= as different amounts and in the same CDs account. If what he told the court was true he would have deposited it together in lump sum.

Secondly, the Respondent told the court that he did not place an order immediately, the reason being that he wanted to purchase KPLC shares but lacked sufficient information. On the other hand, DW2, in his testimony stated that the procedure for depositing the money was to go to the customer care first  or if one is aware of the cost of the share , he would pay directly.

This then, meant that any customer who wished to seek information on any shares would visit the customer care desk for such information. The Respondent had been a client of the Appellant for 5 years before the 11th September 2007 and was therefore aware of the procedures to follow when he visited their officers. It is not therefore true that he lacked sufficient information on the KPLC shares.

Thirdly, the evidence on record by DW1 is that a customer could only make a deposit and purchase the same day and one could not come the following day to purchase but in the event that a customer deposited and failed to make an order the same day, this would attract certain charges. On the material day, the Respondent placed orders for purchase of shares for ksh. 9200/= 200 KCB shares at 28% which were selling at ksh. 5600/= while 200 shares of Access Kenya at 18% per share were selling at ksh. 3600/= making a total of ksh. 9200/= which he deposited on the said date. This purchase was made through purchase orders dated 11/9/2007 which were produced and marked as exhibits 2(a) and (2b). This court is persuaded by the evidence of DW1 and DW2 that the reason why the Respondent placed an order for shares worth ksh 9200/= is because that is the amount that he deposited on that day. Had he deposited ksh. 250,000/= as alleged, he could have placed orders for shares worth the same amount as any information he  required about the shares was readily available at the customer care desk.

I also find the evidence by the Appellant’s witnesses more credible when they told the court that ksh. 250/= was a top by the Respondent so that he could purchase 100 shares. If the Respondent’s evidence is to be believed, he would have been charged some interest for failure to place an order for shares for the ksh 250,000/= when he deposited it on 11/9/2007 and failed to place an orders for shares until the 13/9/2007 when he visited the Appellant’s offices. No such evidence was placed before the court. Instead, the statement of accounts reflected ksh. 8,544/= and not the alleged ksh. 250,000/=. I am prepared to find, which I hereby do, that the receipt of ksh. 250,000/= was issued in error and that the correct amount that the Respondent deposited with the Appellant on 11/9/2007 was ksh 250/= which he was advised to top with the ksh 9200/= which he had deposited so that he could buy 100 shares.

Having been of that view, I find that the learned magistrate erred in evaluating the evidence on record and thus arrived at a wrong conclusion. The order that commends itself to this court is that the Appeal has merits and its allowed with costs. The Judgment of the learned magistrate in CMCC No. 9421 of 2007 is hereby set aside and its replaced with an order dismissing the suit. Costs of the Appeal and those of the lower court are awarded to the Appellant.

It is so ordered.

Dated, Signed and Delivered at Nairobi this 1stDay of November 2017.

…………………………….

L. NJUGUNA

JUDGE

In the Presence of

…………………………. For the Appellant

………………………For the Respondent