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Court of AppealOtherNot stated in judgment· [1986] KECA 56 (KLR)

NYABWARI & SONS v NYARANGI NCHOGU [1986] KECA 56 (KLR)

High Court of Kenya
6 November 1986
314 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~1 min to read original · ~4 min brief

The bottom line

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Kenya's High Court confirmed that an agent who sells your goods must account for the proceeds, and courts can reject inflated expense claims.

What this practically means

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Executive summary

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This was a first-instance High Court suit (not an appeal) in which the plaintiff consigned 15 colour television sets, 1 projector and 2 video sets from Denmark to Kenya, and the defendant collected and sold them as the plaintiff's agent. The court held that the agent was under a duty to account for his stewardship, the only account being a letter of October 8, 1981 claiming sales of Kshs 210,000 against costs of Kshs 218,613.80. The judge found the defendant 'plainly a liar', but in the absence of any evidence from the plaintiff on the sale prices, accepted the Kshs 210,000 figure and added Kshs 40,000 for the videos and projector, making Kshs 250,000. Of the claimed expenses, the court allowed only freight charges of Kshs 18,615.40, handling and storage of Kshs 12,808 and customs and sales tax of Kshs 22,451, totalling Kshs 53,374.40, leaving Kshs 196,625.60 as the accountable sum. Deducting the goods' cost of Kshs 78,074.75 yielded net profits of Kshs 118,550.75, from which the defendant was allowed 10% commission of Kshs 11,855. Judgment was entered for the plaintiff for Kshs 106,695 with interest at court rates from October 1, 1981, the date payment should have been made, plus costs. The judgment establishes the agent's duty to account and the court's willingness to discount an agent's uncorroborated expense claims while accepting his sale figures where the principal leads no contrary evidence.

Key legal issues

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01

Agent's duty to account

Holding

The defendant, having collected and sold the consigned goods as the plaintiff's agent, was bound to account for the proceeds after allowable expenses and commission

Reasoning

The court treated the relationship as one of agency: the defendant collected and sold the plaintiff's goods and therefore owed a fiduciary duty of accounting. The only account rendered was an October 8, 1981 letter claiming the goods sold for Kshs 210,000 with costs of Kshs 218,613.80. The court assessed sale proceeds, allowed proven expenses of Kshs 53,374.40, deducted the goods' cost, allowed 10% commission, and gave judgment for the balance.

p. 2
02

Evidentiary weight of an agent's uncorroborated account

Holding

Where the plaintiff produces no evidence of the actual sale prices, the court may accept the agent's sale figure even where it disbelieves other parts of his evidence

Reasoning

The judge found the defendant 'plainly a liar', yet in the absence of any evidence from the plaintiff as to the sale prices, accepted the defendant's figure of Kshs 210,000 for the TV sets. However, the court scrutinised and rejected the defendant's claimed expense figures, allowing only Kshs 53,374.40 of the Kshs 218,613.80 claimed.

p. 2
03

Commission and interest on agency proceeds

Holding

The agent is entitled to 10% commission on net profits, and interest on the balance due runs from the date payment should have been made to the principal

Reasoning

From the accountable sum of Kshs 196,625.60 the court deducted the goods' cost of Kshs 78,074.85, producing net profits of Kshs 118,550.75, and allowed the defendant Kshs 11,855 as 10% commission. Judgment was entered for Kshs 106,695 with interest at court rates from October 1, 1981, the date the sum should have been paid.

p. 2

Legal principles established

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  • An agent who sells goods on behalf of a principal is under a duty to account to the principal for his stewardship

Court orders

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  1. 1.Judgment for the plaintiff in the sum of Kshs 106,695
  2. 2.Interest on that sum at court rates from October 1, 1981
  3. 3.Plaintiff awarded costs of the suit
Jurisdiction invoked
Original civil jurisdiction of the High Court (not stated by reference to a specific provision in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "NYABWARI & SONS v NYARANGI NCHOGU [1986] KECA 56 (KLR)", Case Analysis (1986). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1986/56/eng@1986-11-06

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.