Timothy Nyongesa Masinde & Aston Wamalwa Masinde v Humphrey Wachiye Machasio [2017] KEHC 2922 (KLR)

REPUBLIC OF KENYA.

IN THE HIGH COURT OF KENYA AT BUNGOMA.

LAND & ENVIRONMENT CASE NO. 30 OF 2012.

TIMOTHY NYONGESA MASINDE..................1ST PLAINTIFF

ASTON WAMALWA MASINDE.....................2ND PLAINTIFF

VERSUS.

HUMPHREY WACHIYE MACHASIO.................DEFENDANT

JUDGMENT.

[1]. On 15/8/2004, the plaintiffs and defendants came together, made a contribution and started a school known as Jethro Secondary Mixed Boarding and day School along Bungoma – Webuye Highway.

The plaintiffs claim that the defendant contributed his three acres of land on land parcel East Bukusu/North Sangalo/2084.  The shares of that partnership were determined as 188 with the first plaintiff contributing 108 shares and 2nd plaintiff contribution was 24 shares while the defendant contributed 56 shares.  The school was then a growing concern.  That on 19/4/2011 the defendant decided to terminate the partnership and the parties agreed that each partner should be given his own contribution back.

On 5/5/2011 the parties had the District Land Valuer for Bungoma, Busia and Teso Districts, value the said project.  The same was valued as follows:

(i)   Grand Total Kshs.8,005,400

(ii)  Value of the land Kshs.900,000/=

(iii) Total for the two plaintiffs Kshs.7,105,400/=

That the parties agreed that the value of their respective shares as follows, the 1st plaintiff Kshs.5,371,682/40, the second plaintiff Kshs.1,200,812/60 while the defendant’s share was Kshs.532,902.  The first and 2nd plaintiff were to be paid by the defendant.  It is the Plaintiffs claim that the defendant has refused to pay the defendants said total of Kshs.6,672,505.  The plaintiffs claim for the said amounts with costs of the suit.

[2]. The defendant filed a defence and said that land parcel E. Bukusu/N. Sangalo/2084 belongs to him and that the plaintiffs had promised to buy him another piece of land elsewhere.  That the plaintiffs did not honour their promise and since the defendant had no other place to settle his family he opted not to give the land until he was shown the land that was promised.  He states that the land was not shown so he breached the agreement.  He averred that the project was standing on his land and was over valued and that he cannot pay the plaintiffs contribution which came as a result of breach of agreement.

[3]. Timothy Nyongesa Masinde later died after filing this suit and his widow Irene Nyongesa took Letters of administration to administer his estate in Bungoma Probate and Administration Cause No. 194 of 2013.  She was granted Limited Grant of Letters of Administration ad Litem on 6th August, 2013 primarily to conduct Bungoma Civil Suit No. 138 of 2012.  She told the court that she knew the 2nd plaintiff Meshack Situma and Joseph Shikuku had agreed to start a school called Jethro Secondary School.  She produced a registration certificate of the said School with the three names.  She gave evidence that the defendant is the one who called a meeting to raise the share contribution to 500,000/= which forced the other shareholders of Jethro Schools, one Meshack Situma and Joseph Naweta to withdraw as partners of the said schools leaving Timothy, Aston and Humphrey as partners.  The witness said that the problem with the partnership started when the defendant refused to have the land registered in the names of the School.

[4]. The second plaintiff Aston Wamalwa Masinde said he knew Timothy Nyongesa the first plaintiff and the defendant in this case.  He also said he knew Meshack Situma and Joseph Shikuku.  That on 15/8/2004 they sat down and agreed to commence a business namely Jethro Schools.  The defendant land was chosen as it was near the road.  It was agreed that the defendant was to be compensated by having the partners buy him an alternative land.  They began operating in 2006 with about 60 pupils.  He said that the money they contributed were used to buy materials to build the school while the fees paid by the pupils went to pay the teachers salaries.

He stated that each persons contribution was recorded.  The first plaintiff had 108 shares, the defendant had 56 shares while he himself had 24 shares.  He said that in 2007 when the school board failed to buy the defendant’s shares, he asked that his land be treated as his shares.  This was on 9th January, 2007.  The defendant’s land was valued at Kshs.450,000/=.  The Plaintiff stated that in 2007 when the Government introduced free Primary School Education children left the school and the business started to fail and that is when they wanted to have the land in the name of the school, the defendant refused and said that he had to consult his family.

The witness said the profits were shared according to shares one held.  That thereafter, disagreement arose, a meeting was coordinated by the area Chief and the defendant agreed to refund the plaintiffs shares.  The plaintiffs demanded Kshs.10,000,000/= while the defendant offered to pay Kshs.2,000,000/=.    Whereupon the parties called a property valuer and the property was valued at Kshs.8,005,400  the plot was valued at Kshs.300,000/= and the list of sharing was put as follows;

1st plaintiff Kshs.5,371,682/40

Defendant  Kshs.532,905/=  and

The 2nd plaintiff  Kshs.1,200,812/60

The valuation was produced in Court as PExh.3 without any objection.  Joseph Shikuku Nameta and Meshack Njunukha gave evidence how they were partners in Jethro Schools together with the plaintiffs and defendants herein and how they left when the share capital was raised to Kshs.500,000/= because they were unable to pay the same and that their money was refunded.  Mr. Meshack Njunukha said that he knew the shares of Timothy as Kshs.1,080,885/=, Aston as having Kshs.241,810/= and the defendant as having Kshs.556,510/=.

The defendant gave evidence and said that Plot No. East Bukusu/North Sangalo/2084 was his land.  The title was produced as proof that the land was still in his name.  He produced a search of the same.  He said that on 15/8/2004, they formed a committee to start a School.  He explained that they started as Six people.  That they went to an advocate where an agreement was written and Jethro  Progressive Academy Committee was created.  He said that the plaintiffs were members of the Committee of the school.  He said that the agreement was that he was to give the school the whole of East Bukusu/North Sangalo/2084 and the Committee was to give him alternative land.  That the school was built and completed in December 2005 and that it started operating from 16th January, 2006.  That it ran up to February 2008.  Then it closed down.  That the Committee of the school failed to give him alternative land.

On cross examination the defendant admitted that they remained 3 people when others failed to attend meetings and failed to remit more funds and that those who were unable to remit further funds got their money back and left the partnership.

[5]. The point of determination is whether the plaintiffs are entitled to their claim.  There is no dispute that the parties herein sat and agreed to start a business called Jethro Secondary School.  They agreed to make contributions to that goal.  One of the things they had to do first was to look for land in which to construct the school.  The defendants land was identified as suitable for that purpose since it was near the tarmac road.

It was agreed that an agreement was to be made before a lawyer to buy land for the defendant of three acres or thereabouts in exchange of the land taken by Jethro Secondary school.  An agreement to that end was made by the parties on 22/12/2004.  The school started and the Plaintiffs and defendant made contributions on various proportions towards its construction.

In the meantime the share capital of the partnership was increased to Kshs.500,000/= and the other shareholders pulled out after refund of their shares leaving only the plaintiffs and the defendants as the only shareholders.  The school was constructed, it started operating with 61 pupils.  Thereafter the school failed to operate when the Government introduced free primary education.  It  turned out that the defendant never transferred the three acres comprised in parcel number E. Bukusu/North Sangalo/2084 to the partnership.  This land is agricultural land.  There is absolutely no evidence that the defendant attended the Land Control Board to transfer the same to his partnership Jethro Secondary School.

The plaintiffs did not look for an alternative land as per agreement of 22nd December, 2004.   The developments that were being made by the plaintiffs and the defendants in the name of Jethro Secondary Schools, were actually development to a private land parcel number E. Bukusu/N. Sangalo/2084 belonging to the defendant.  The parties then fell out of their partnership after the school failed.  The defendants then called a valuer to determine the value of the partnership and it was determined as follows;

1st plaintiff  Kshs.5,371,682/40

2nd plaintiff Kshs.1,200,812/60

Defendant  Kshs.532,902/=

The contribution of the plaintiffs were primarily cash contribution to the construction of the school while the contribution of the defendant was part cash contribution and land which was valued at Kshs.450,000/=.  In the final analysis the school buildings which are permanent now form part of land parcel E. Bukusu/N. Sangalo  2084 which belongs to the defendant.  Whatever is on the land belongs to the land.

It would be inquitable to allow the defendant to unjustly enrich himself from developments that are to a large extent have a large monetary component of his previous partners of Kshs.6,672,505 since the constructions now  form part of his land.  There would be no sense in destroying those buildings.  The defendant shall keep the buildings and he shall refund the plaintiffs contributions in the following proportions;

1st plaintiff Kshs.5,371,682/40

2nd defendant  Kshs.1,200,812/60

In essence the plaintiff(s) claim succeeds to that extent.  As the parties were Partners in a business that failed through no fault of their own each party shall bear their own costs.

It is so ordered.

Judgment read in Open Court before Mr. Anwar.

DATED at BUNGOMA this 3rd day ofOctober,  2017.

S. MUKUNYA

JUDGE

In the presence of:

Court Assistants:  Joy/Chemutai

Mr. Anwar for the Plaintiff -  Present

J.S. Khakula  for the defendant - Absent