Gilbert Kabage & another v J. Njenga Gichuki & 2 Others [1995] KECA 64 (KLR)
The bottom line
#A Kenyan sub-agent who finds a buyer cannot sue the property vendor for commission unless he has a contract directly with the vendor.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the sub-agent, being a stranger to the vendor without privity of contract, could claim the suit commission directly from the vendor
- 2.Whether the agency agreement between the agent and the sub-agent was rendered void by the maxim delegata potestas non potest delegare
- 3.Whether the sub-agent had agreed to the reduction of the commission from Kshs. 1,120,000/= to Kshs. 613,040/=, defeating his claim for the balance
Key legal issues
#Liability of the vendor/principal to a sub-agent with whom he had no contract
The vendor, being a total stranger to the sub-agent and not party to the agency agreement, is not liable to the sub-agent for commission.
The delegated authority principle (delegata potestas non potest delegare) means a sub-agent's authority derives from the agent, not the principal. The sub-agent first saw the vendor only in court and there was no agreement between them. Privity of contract was only with the agent, who paid him the agreed 45% share. The sub-agent's claim, if any, lies only against the agent.
Whether the maxim delegata potestas non potest delegare voids the agent-sub-agent contract
The contract is not void; the agent by engaging the sub-agent entered into a direct contract with him.
The maxim prohibits an agent from delegating authority conferred on him, but it does not invalidate a direct contract the agent himself makes with a sub-agent. Here the agent agreed to share 45% of commission above Kshs. 5,000/= per acre with the sub-agent, who secured the able and willing buyer and was paid his share, which he accepted and banked.
Omission of crucial exhibits from the record of appeal
The record of appeal omitted the exhibits on which the case turned, but Rule 85(2A) did not permit a supplementary record; the court decided on the trial judge's assessment of witnesses.
The exhibits (agency agreement, banking slip, correspondence and receipt) upon which the case hinged were absent from the record, making it impossible for the Court of Appeal to decide where the truth lay. Rule 85(1)(f) obliges the party preparing the record to include all relevant documents, and Rule 85(2A) does not enable even a supplementary record with leave. The court deferred to the trial judge's advantage of seeing and hearing the witnesses.
Indemnity claim against the vendor without third-party proceedings
The agent, having taken out no third-party proceedings against the vendor for indemnity, cannot claim indemnity in the suit.
Procedural requirement: a party seeking indemnity from a non-party must bring third-party proceedings. The record showed none had been taken out, so the agent could not seek indemnity at trial or on appeal.
Costs following the event
The successful defendants in the court below should not have been deprived of their costs; costs follow the event.
While dismissing the appeal, the Court of Appeal disagreed with the trial judge's order on costs, since there was no reason to deprive the successful defendants below of their costs, and directed that both the costs of the appeal and of the suit in the superior court be paid by the appellant to the respondents.
Legal principles established
#- A sub-agent appointed by an agent cannot claim commission directly from the vendor/principal who is a stranger to him; his claim lies only against the agent with whom he has privity of contract.
- A contract between an agent and a sub-agent is not void by the maxim delegata potestas non potest delegare, because the agent thereby enters into a direct contract with the sub-agent.
- It is obligatory upon the party preparing a record of appeal to include all relevant documents put in evidence at the hearing pursuant to Rule 85(1)(f) of the Court of Appeal Rules.
Court orders
#- 1.The appeal is dismissed
- 2.The costs of this appeal and those occasioned by the appellant's suit in the superior court shall be payable to the respondents by the appellant
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nakuru
- H.C.C.C. No. 251 of 1991
- Jurisdiction invoked
- First appellate jurisdiction under the Court of Appeal Rules (appeal from the High Court)
Relief refused
#The appellant's claim to the balance of commission from the vendor (and the appeal as a whole)
The sub-agent had no privity of contract with the vendor, and the trial judge's finding that the sub-agent accepted the reduced commission could not be faulted
Costs
The costs of this appeal and those occasioned by the appellant's suit in the superior court shall be payable to the respondents by the appellant (the successful defendants below were deprived of their costs in the court below, which the Court of Appeal corrected)
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In end result we dismiss this appeal but would disagree with the learned judge’s orders as regards costs.
The costs of this appeal and those occasioned by the appellant’s suit in the superior court shall be payable to the respondents by the appellant.
Costs follow the event. There was no reason to deprive the successful defendants in the court below of their costs.
The sub-agent cannot therefore claim any commission from the vendor directly. His privity of contract however is with the agent who employed him.
It is obligatory upon the party preparing the record of appeal to include in that record all relevant documents put in evidence at the hearing pursuant to the provisions of Rule 85(1) (f) of the Rules of this court.
Issues in the judgment
#The coram/description of parties lists Wahome Gichachi as the 3rd respondent, but the body of the judgment refers to him as “The second respondent” (the vendor).
The name of the second appellant is printed as “Pata Commercial Enterprises” in the title while the body refers to the firm as “Pata Commercial Agencies”; the vendor's surname also appears as both “Gichachi” and “Gichachi/Gichahi” spellings.
The judgment records the authority to sell as “irremovable authority to sell” in one passage and as an “irrevocable authority to sell” which was nonetheless subject to seven days' notice of revocation in another - an internal tension, though the court explains it as a typographical reading.
Exhibit 1 (the agency agreement) is described in the text as “(not exhibited)” although the judgment elsewhere treats exhibits 1, 2, 3, A, B and C as having been produced before the superior court.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gilbert Kabage & another v J. Njenga Gichuki & 2 Others [1995] KECA 64 (KLR)", Case Analysis (1995). Civil Appeal 77 of 1994. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1995/64/eng@1995-11-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.