Wakilii

East African Estates Limited v Khalfan and Others (C.C. 126-30 (Mombasa).)

East African Court of Appeal · [1932] EACA 49 · 1932 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of unpaid instalments under land purchase agreement
Decision
Judgment entered for plaintiff with interest on unpaid instalments and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where under an agreement to purchase land by instalments the purchaser is let into possession before full payment, interest is payable on unpaid instalments by virtue of the equitable rule applied through the Order-in-Council 1921 Article 4(2), notwithstanding the absence of an express contractual provision for interest.

Outcome

Judgment entered for plaintiff with interest on unpaid instalments and costs

Facts

By agreement dated 20 January 1928, the plaintiff company agreed to sell an estate at Gazi containing 2,126 acres to the defendants for Sh. 400,000, payable by instalments. Sh. 8,000 was paid on execution and Sh. 20,000 on 1 November 1928. The defendants were let into possession. The defendants failed to pay the instalment of Sh. 40,000 due on 1 November 1929 and the subsequent instalment due on 1 November 1930. The plaintiff sued to recover these instalments plus interest at 9 per cent per annum. The agreement contained no express provision for payment of interest on unpaid instalments. The defendants initially objected that the contract was void for want of mutuality but did not resist the claims for the principal amounts after seeing the documents. The defendants objected to the interest claim on the ground that the agreement made no mention of interest.

Issues

  1. Whether interest is payable on unpaid instalments of purchase price under an agreement for sale of land where the agreement makes no provision for interest but the purchaser has been let into possession.

Orders

  • Judgment for the plaintiff company in each case for the instalment claimed.
  • Interest awarded at 8 per cent per annum from the date each instalment fell due until judgment.
  • Costs awarded to the plaintiff.
  • Interest on the decretal amount at 6 per cent until payment.

Rules and key headnotes

Contract Law — Sale of Land — Interest on Unpaid Purchase Price — Purchaser in Possession
Where under an agreement to purchase land and to pay the purchase price by instalments the purchaser is let into possession, interest is payable on the unpaid instalments by virtue of the equitable rule that a purchaser in possession must pay interest on unpaid purchase money, applied through the Order-in-Council 1921 Article 4(2), notwithstanding the absence of an express contractual provision for interest.
Land & Property — Transfer of Property — Seller's Rights — Interest on Unpaid Purchase Money
Section 55 of the Transfer of Property Act is not an exclusive dealing with the rights and liabilities of sellers and purchasers of land, and the mere non-reference to the right of a seller to interest on unpaid purchase money does not exclude the seller from recovering interest if that right is given by other means, including equitable principles.
Contract Law — Equitable Principles — Application through Order-in-Council
The omission of statutory provisions to deal with the question of interest on unpaid purchase money for land enables the seller to have recourse to the equitable rule under the Order-in-Council 1921 Article 4(2), which provides that jurisdiction shall be exercised in conformity with the doctrines of equity where Indian Acts do not extend or apply.

Legislation cited (5)

  • Order-in-Council 1921 Article 4(2)
  • Transfer of Property Act s.55(4)(5)
  • Civil Procedure Ordinance 1924
  • Indian Contract Act
  • Act XXXII of 1839

Cases cited (2)

  • Ballard v Shaw (15 Ch D 122)
  • General Manager of the Uganda Railway v Tarachand and Others (9 EALR 37)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

East African Estates Limited v Khalfan and Others (C.C. 126-30 (Mombasa).) [1932] EACA 49 (1 January 1932)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.