Francis Misiko v Timothy Misiko & Mumias Sugar Co. Ltd [2018] KEHC 3700 (KLR) | Privity Of Contract | Esheria

Francis Misiko v Timothy Misiko & Mumias Sugar Co. Ltd [2018] KEHC 3700 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT KAKAMEGA

CIVIL APPEAL NO. 27 OF 2015

FRANCIS  MISIKO............................APPELLANT

VERSUS

TIMOTHY MISIKO.................1ST RESPONDENT

MUMIAS SUGAR CO. LTD...2ND RESPONDENT

(from the judgment and decree of G.N. Sitati, R.M. in Mumias PMC Civil case No. 398 of 2012 dated 10/3/2015)

J U D G M E N T

1. The 1st respondent who was the plaintiff in the lower court had sued the appellant ( the 1st defendant)  and Mumias Sugar Company Limited (the 2nd defendant) seeking for orders that:-

1) He be paid half of sugar cane proceeds from account No. 40211 without deduction of Kshs.30,388 debited to the said account due to the fertilizer supplied to the 1st defendant.

2)  Costs of the suit.

3)  Interest.

2. On the 10th March 2015, the trial court entered judgment for the plaintiff/1st respondent to the effect that:

1) The 2nd defendant do pay both parties their respective proceeds out of account No. 40211 with the 1st defendant shouldering the fertilizer costs of Kshs.3,388. 00.

2)  The costs of the suit be borne by the 1st defendant.

1. The 1st defendant was aggrieved by the said judgment and filed this appeal.  The grounds of appeal are that:

1) Having found that there was no contract between the appellant and the 1st respondent, the learned trial magistrate erred in law by making judgment in favour of the 1st respondent and to the detriment of the appellant.

2) Having found that one Khadija was a key player in the subject matter yet she was not made a party to the suit, the learned trial magistrate erred in law by making judgment in favour of the 1st respondent and to the detriment of the appellant.

3) The learned trial magistrate erred in fact and in law by finding that the appellant and the 1st respondent were joint contract holders on account number 40211 without any evidence on the part of the 1st respondent establishing a contract between himself and the 2nd respondent, on the one hand, and in the wake of testimony to the contrary from the appellant.

4)  Having found that the 1st respondent joined the contract at the time of harvesting and in the absence of proof of planting the sugarcane so harvested, the learned trial magistrate erred in law by making judgment in favour of the 1st respondent.

5) The trial magistrate erred in law and in fact by shifting the burden of proof to the appellant to disprove the plaintiff’s case rather than to purely let the plaintiff establish his case on a balance of probabilities.

3. The appeal was strenuously opposed by the 1st respondent through the submissions of his advocates, Marisio Luchivya & Co. Advocates. The 2nd defendant/2nd respondent did not enter appearance either in the lower court nor in this court.

Case for the plaintiff/ 1st respondent:

4. The plaintiff’s case was that he had by an agreement, Pex 1 dated  31/6/2011  leased a parcel of land measuring 0. 04 Ha from one Khadija Rapando.  That the  appellant had also leased an adjacent parcel of land from the same person also measuring 0. 4 Ha.  The plaintiff planted sugar cane on his parcel of land.  He tendered it. When the cane was ready for harvesting he discovered that the appellant had entered into a sugarcane farming contract with Mumias Sugar Company for the entire field encompassing the plaintiff’s 0. 4 Ha.   The contract account with the company was No. 40211.  The plaintiff  thereupon  complained to the company  who then caused the said agreement to be registered in the joint names of the plaintiff and the appellant.  The plaintiff learnt that the appellant  had been supplied with fertilizer by the company worth Ksh.30,388. 00 that the  company was to debit from him on the appellant selling cane to the company.

6. The company then harvested the crop from the two parcels of land.  A dispute arose between the plaintiff and the appellant as to who was to pay for the fertilizer loan of Ksh 30,388. 00. The plaintiff contended that the fertilizer was not utilized on his parcel of land and that the appellant should singly shoulder the cost of Ksh 30,388. 00 to the company. The two parties could not agree on the issue.  The plaintiff then sued.

Case for the 1st Defendant/appellant

7. The appellant denied the plaintiff’s claim.  He said in his evidence in court that he had entered into a lease agreement with Khadija Rapando in the year 2005 to grow sugar cane on a parcel of land measuring one acre for a period of three harvests.  He planted cane on the land.  He and a partner called Ishmael Onyango then entered into a cane farming agreement with Mumias Sugar Company.  The plot No. was 416B and the account No. with the company was 40211.  Mr. Onyango later pulled out of the contract.  He completed his three harvests.  Later by a letter dated 29/8/2011, D ex 4, the company extended the farming contract for the 3rd and 4th ratoon   harvests. On 2/11/2011, the company supplied him with fertilizer as per the document, Dexh 4.  However that at the time of the harvest the company introduced the name of the plaintiff into the 3rd and 4th  ratoon agreement, D exh 4.  The company harvested the cane.  Delivery notes were issued in the joint names of both parties.

The appellant contended that the plaintiff/ 1st respondent gained entry into the contract fraudulently.  He contended that he was the sole contract holder.

Judgment of the court

8. The trial court found that there was no  privity  of  contract between the appellant and the 1st respondent.  That Khadija Rapando who was a key player was not enjoined in the proceedings.  That though the appellant alleged in his evidence that the 1st  respondent  was enjoined in the contract at the time of harvesting and contended that this was done fraudulently and forcefully, this was not pleaded in the defence of the appellant.  He accordingly dismissed the appellant’s defence.

The court found that the appellant conceded during the hearing that he solely received the fertilizer for the whole portion.  The court found that the plaintiff had proved his  case against the appellant and entered judgment for the plaintiff as prayed.

Submissions

9. The advocates for the appellant Mukhooli & Associates submitted that there was no privity of contract between the appellant and the 1st respondent. Therefore that  there was no cause of action against the appellant.  That the burden of proof rested on the 1st respondent who should have called the relevant witnesses.  That his failure to do so meant that his case ought to have failed.  That the documents produced by the appellant indicated that he was the sole account holder with Mumias Sugar Company.  That a handwriting by hand on top of the agreement dated 29th August 2011 cannot purport to alter the terms of the agreement.  That the trial magistrate thereby erred by finding that the 1st respondent and appellant were joint account holders.

10. That having found that the 1st respondent joined the contract at the time of harvesting and in the absence of evidence of planting the cane so harvested, the learned trial magistrate erred in law by finding for the 1st respondent. That a contract cannot be entered into at the conclusion of the subject matter but at the beginning and therefore that the magistrate should have found that the 1st respondent  was not a party to the agreement.

11. The advocates submitted that the trial magistrate misdirected herself when she assumed that by not amending the defence, the appellant had concurred with the allegations contained in the amended plaint.  That a party can only amend his pleadings if need be.  That in this case the appellant’s defence was to be deemed to be the one in record in opposition to the amended plaint.

12. The advocates for the 1st respondent on the other hand argued that the appellant  and the 1st  respondent were in an implied contract with respect to account number 40211 on how to share sugar cane proceeds proportional to their contribution of the said  cane proceeds as the account was registered in their joint names with  the 2nd respondent .

13. That Khadija Rapando had no role to play in respect to this suit as her name was not registered with the 2nd respondent  in respect to account No. 40211.  That the 1st respondent was not seeking for any relief from the said Khadija so as to make her a party to the suit.

14. Further that the appellant upon complaints by  1st respondent   wrote a  letter to the 2nd respondent  to include the 1st respondent as a joint holder of the account in issue.  That the two were therefore joint account holders.

15. That the 1st respondent proved in the lower court that he planted the sugar cane that was harvested by production of the lease agreement, delivery notes and farmers referral chits which documents would not have been issued by the 2nd respondent in the 1st respondent’s name if it found that he had not nurtured the sugar cane.  That the appellant did not rebut the evidence that the 1st respondent had tendered his crop.

16. That the appellant admitted that he received the fertilizer from the 2nd respondent and that it was delivered in his own name.  The trial court did not therefore err in making an order for the appellant to shoulder the cost of the fertilizer.

17. The advocate submitted that the 2nd respondent has no interest in the matter.  That order 1 Rule 5 of the Civil Procedure Rules provides that it is not necessary that every defendant shall be interested as to all the reliefs claimed in a suit against him.  That order 34 rule 2(c) provides that in an interpleader suit the applicant is willing to pay or transfer the subject matter into court or to dispose of it as the court may direct.  That the 2nd respondent was properly sued so as to effect the order of the court as to what amount of money to pay to the appellant and the 1st respondent.

Duty of a first appellate Court-

18. This is a first appeal.  It is the duty of a first appellate court to analyse and re-assess  the evidence adduced in the lower court and draw its own conclusions bearing in mind that it neither saw nor heard the witnesses testify- Selle Vs Associated Motor Boat Company (1968) E.A 123.

Questions for Determination

19. The questions for determination are:

1) Who between the appellant and the 1st respondent had a valid lease agreement with Khadija Rapado.

2) Who between the parties had the burden of proof in the case.

3) Whether the appellant and the 1st respondent were joint holders of account No. 40211.

4) Who between the parties worked on the land in dispute.

5) Whether the  1st respondent had proved his case against the appellant.

DETERMINATION

20. The appellant produced an undated agreement, Dex 1 between him and Khadija Rapando that indicated that he had leased cane land from the said Khadija measuring one acre.  The 1st respondent on the other hand produced an agreement dated 31/6/2011 that indicated that he had leased one acre of cane land from the said Khadija.  He said that the cane was due for ratoon 4 when he leased the land.  That Khadija showed him 2 parcels of land that had a boundary between them.  He was leased the upper portion.  He learnt that the 2nd portion measuring one acre was occupied by the appellant.  He said in cross examination that previously the appellant had leased the parcel of land but that his contract had expired.  However that he had no evidence to prove that the contract had   expired.

21. Though the appellant’s lease agreement is undated, he stated that he entered into lease agreement with Khadija in the year 2005.  The agreement indicated that the lease period was for 3 harvests -the plant, the 1st ratoon and the  2nd  ratoon.  In his evidence in court he stated that by the year 2010 he had already done his three harvests.  However that he renewed the contract with Mumias Sugar Company for the 3rd and 4th ratoons.  He however did not produce any evidence that Khadija had extended his contract for the 3rd and 4th ratoons.  He said that he was not aware that the 1st respondent had leased one acre from Khadija.

22. In his written statement of defence the appellant had indicated that he would enjoin a third party with whom he had contracted but he never did so.

Section 108 of the Evidence Act states that:

“The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all is given on either side”.

The appellant in his statement of defence stated that his contract with Khadija was subsisting at the time of filing the defence.  The appellant did not produce any evidence to show that Khadija extended his contract after he completed the agreed period of 3 harvests.  He did not call the said Khadija to explain whether the contract was still subsisting in June 2011 when the 1st respondent leased the land from Khadija.  The burden of proof was on the appellant to call Khadija as a witness in his case.  In the absence of any subsisting agreement with Khadija, the trial court had no option than to go by the agreement of the 1st respondent that the 1st respondent had leased the one acre parcel of land from Khadija. It was apparent that the appellant’s lease period had expired and Khadija had not renewed the lease agreement.  The 1st respondent is therefore the one who had   proved that he had a valid lease agreement with Khadija. The appellant could not legally extend his cane agreement with the 2nd respondent before extending the lease agreement with Khadija.

Whether the 1st respondent and the appellant were joint holders of account No. 40211

23. The agreement between the appellant and the 2nd respondent for ratoon 3 and 4 was a typed one.  The name of the 1st respondent was inserted into the agreement by hand.  The 1st respondent contends that that act made him a joint account holder with the appellant. However, the 1st respondent did not call witnesses from the 2nd respondent to testify as to why they inserted his name into the agreement.  I should think that the 2nd respondent inserted the name of the 1st respondent into the agreement because there was a dispute between the 1st respondent and the appellant on the cane harvested by the 2nd respondent from their parcels of land.  The 2nd respondent was thereby protecting themselves from litigation by the two parties until when an independent body ruled as to who to be is paid the outstanding dues.  It seems that that is why the 2nd defendant did not defend the suit and treated it like an interpleader suit. The fact that the 2nd respondent inserted the name of the 1st respondent into the agreement does not prove anything against the two protagonists.

Who worked on the land

24. The 1st  respondent stated that on leasing the land he cut the stumps, ploughed  and weeded it . That the crop was ready for harvesting in July 2012.  The appellant on the other hand stated that the 1st respondent came into the scene at the time of harvesting.  So, who then between the two parties was telling the truth?

25. The agreement between the 1st respondent and Khadija was dated 31/6/2011.  The crop was harvested in September 2012 which was 14 months after the said agreement was made.  It is therefore possible that the 1st respondent had tendered the crop after his agreement with Khadija. There was no evidence on which the trial court could rely on to hold that the 1st respondent came in at the time of harvesting.

26. The 1st respondent stated in his amended plaint that at the time that he entered into the land lease agreement with Khadija, his parcel of land was clearly demarcated to distinguish it from the appellant’s land parcel.  That both of then utilized their respective land parcels to grow sugar cane.  He said that he never got fertilizer from Mumias Sugar Company.

27. The appellant’s agreement with Khadija indicated that he had leased one acre from Khadija.  He confirmed the same in cross- examination.  Where then did the extra one acre of cane come from if he had only leased one acre?  The appellant did not challenge the evidence of the 1st respondent that each of them was cultivating separate parcels of land that had a boundary.  All he said was  that the appellant entered into the agreement at the time of harvest.  He did not explain whether the appellant was claiming cane over the one acre that he had leased from Khadija or it was a separate parcel of land.  In the premises it was evident that the parties were cultivating separate parcels of land.  It was clear that the appellant had registered the two parcels of land with Mumias Sugar Company under his own name.  There was no dispute that the appellant had been supplied with fertilizer by Mumias Sugar Company.  There was no evidence that part of that fertilizer was utilized on the 1st respondent’s portion of land.  There was no reason for the 1st respondent to pay for fertilizer that he never utilized. The appellant should have singly shouldered for the fertilizer loan.

28. In the foregoing, the  1st respondent had proved that he had leased the land from Khadija Rapado. He had proved that he worked on the land without utilizing fertilizer from Mumias Sugar Company. The appellant had not established that he had a subsisting contract with Khadija Rapando as his contract with her had expired. The 1st respondent had proved his case against the appellant. The trial court did not err in entering judgment for the 1st respondent.   The appeal is unmerited.  The same is dismissed with costs to the 1st respondent.

Delivered, dated and signed at  Kakamega this 4th day of October, 2018.

J. NJAGI.

JUDGE.

In the presence of:-

No appearance ……………………………...........for appellant

No appearance ……………………………. for 1st respondent.

George ……………………………………….. Court Assistant.

Parties:

Appellant …………………………………….absent

1st Respondent ……………………………….absent

2nd Respondent…………………………….....absent