Rose Ngesa Aloo (Suing as a personal representative of the estate of Sospeter Ngesa Odalo - Deceased) v National Bank of Kenya Ltd & 2 others

The Appellant is the widow of the deceased. Unaware of the deceased's death, the 1st Respondent instructed the 2nd Respondent to sell the suit properties by public auction to recover the loan due from the deceased, which had accumulated to Kshs. 14,443,377.95 as at 21 st April 2021. On 28th April 2021, the 2nd Respondent served the Appellant with a 45-day redemption notice addressed to the deceased, demanding the payment of the said sum of Kshs. 14,443,377.95, within 45 days, in default of which the suit properties were to be sold by public auction to recover the same. The 2nd Respondent also served the Appellant with a Notification of Sale addressed to the deceased, notifying the deceased that the suit property would be sold by public auction on 9th July 2021, unless the deceased paid Kshs. 14,443,377.95. Upon receipt of the redemption notice and the notification of sale aforesaid, the Appellant personally wrote to the 1 st Respondent on 18th June 2021, acknowledging receipt of the same and notifying it of the death of the deceased. In the letter which was received by the 1 st Respondent at its Kisumu Branch on the same date, the Appellant informed the 1 st Respondent that she was not aware of the loan the deceased had taken and ELCA NO. E040 OF 2024 JUDGMENT Page 2

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requested that the 1st Respondent write it off as a bad debt, now that the deceased’s family had only learnt about it after his death. The Appellant again wrote to the 1st Respondent through her advocates on record on 29 th June 2021 on the same issue. In the letter, the Appellant’s advocates brought to the attention of the 1st Respondent the death of the deceased and demanded that the 1st Respondent should not deal adversely with the suit properties. I wish to point out at the outset that the letters were written long before the date that was fixed by the 2 nd Respondent for auctioning of the suit properties. There is no evidence on record that the 1 st Respondent responded to the said letters. Despite these letters, the 1 st and 2nd Respondents proceeded with the auction sale of the suit properties as scheduled on 9th July 2021. Plot No. 838 was sold to the 3 rd Respondent at Kshs. 2,300,000/- and transferred to his name on 23 rd August 2021. Plot No. 729, on the other hand, did not attract any bidder and, as such, was not sold. The Appellant filed a suit against the Respondents on 29 th September 2021, seeking a permanent injunction restraining the Respondents from alienating, transferring, disposing and/or interfering with the suit properties in any manner whatsoever; an order for the cancellation of the ELCA NO. E040 OF 2024 JUDGMENT Page 3

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registration of the 3rd Respondent as the owner of Plot No. 838; a declaration that the Appellant had a right to redeem the suit properties; a declaration that there existed a valid mortgage protection cover at the time of the deceased’s death and the deceased’s mortgage debt became redeemed in full upon his death; an order directing the 1 st Respondent to release forthwith the title deeds for the suit properties to the Appellant together with the discharge of charge; and the costs of the suit. In her plaint, the Appellant averred that the 1st Respondent took the suit properties, which were matrimonial properties, as security for the loan that it advanced to the deceased; that she was not privy to the loan and only learnt of the same after the death of the deceased, when the 1 st Respondent served her with the redemption notice and the notification of sale of the suit properties by public auction to recover the loan; that upon receipt of the said notices she informed the 1st Respondent of the death of the deceased and requested for the details of the loan; that the 1 st Respondent did not respond to the information she provided or the request for the loan particulars; that she later learnt that Plot No. 838 had been transferred to the 3 rd Respondent without notice to her and without following due process; that there was a ELCA NO. E040 OF 2024 JUDGMENT Page 4

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mortgage protection cover at the time of the death of the deceased which cleared the deceased’s debt and that she was entitled to redeem the suit properties. The 1st Respondent filed a defence to the Appellant’s claim on 8 th March 2023. The 1st Respondent averred that it advanced a loan to the deceased in 1984 and 1985 on the security of the suit properties, which loan the deceased failed to service. The 1st Respondent averred that it served the necessary statutory notices upon the Appellant before putting up the suit properties for sale by public auction. The 3rd Respondent filed a defence on 27 th October 2021, in which he averred that the 1st Respondent followed due process in putting up the suit properties for sale by public auction; that, as a purchaser of Plot No. 838 at a public auction, he was not obliged to enquire whether the 1 st Respondent’s statutory power of sale had arisen or whether the necessary notices had been served; that he was the highest bidder for Plot No. 838 at the auction conducted by the 2nd Respondent on 9th July 2021, and that the property was lawfully transferred and registered in his name on 23 rd August 2021; that Plot No. 838 was vacant and had not been developed as claimed by the ELCA NO. E040 OF 2024 JUDGMENT Page 5

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Appellant; that the Appellant’s matrimonial home was not on the property; and that he had commenced the construction of a house thereon. The lower court heard the parties and rendered judgment on 25 th June 2024, dismissing the Appellant’s suit with no order as to costs. In its judgment, the lower court framed five issues for determination, namely: whether the suit properties were matrimonial property; whether spousal consent was required when the deceased created charges over the suit properties in favour of the 1st Respondent; whether the 1st Respondent could sell land charged to it by a deceased debtor; whether the 3 rd Respondent was an innocent purchaser for value of Plot No. 838; and who should bear the costs of the suit. On the first issue, the lower court found that the Appellant had not proved that the suit properties were matrimonial properties. The court further found that the requirement for spousal consent was introduced by the Land Act 2012 and, as such, it was not applicable when the deceased charged the suit properties to the 1st Respondent in 1984 and 1985. On whether the 1 st Respondent could sell land given to it as security by a deceased debtor, the lower court cited two cases and stated that the 1 st Respondent had the ELCA NO. E040 OF 2024 JUDGMENT Page 6

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obligation to comply with the provisions of the Law of Succession Act, Chapter 160 of the Laws of Kenya before disposing of a property of a deceased debtor. The court stated that when the 1 st Respondent served the Appellant with the redemption notice and notification of sale of the suit property, the Appellant should have notified the 1 st Respondent of the death of the deceased, a notice that would have put the 1 st Respondent under a duty to follow the due process before putting up the suit properties for sale. The court found that the Appellant failed to disclose the death of the deceased to the 1st Respondent and that the sale of the suit properties proceeded without the 1st Respondent knowing of the death of the deceased. On whether the 3rd Respondent was an innocent purchaser of Plot No. 838 for value without notice of any defect in its title or the process through which it was put up for sale, the lower court found that the 3 rd Respondent was not under a duty to inquire whether the right of the 1 st Respondent to sell the suit properties had arisen. The court held that the 3 rd Respondent was an innocent purchaser of Plot No. 838 for value without notice of any ELCA NO. E040 OF 2024 JUDGMENT Page 7

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defect in its title. On costs, the court ordered that each party bear its own costs. The Appellant was aggrieved by the lower court's decision and preferred this appeal. In their Memorandum of Appeal dated 25 th June 2024, the Appellant challenged the lower court’s judgment and decree on the following main grounds: 1. The Learned Magistrate completely misunderstood the evidence before her, wrongly analysed the same, thus dismissing the Appellant’s case; 2. The Learned Magistrate ignored well established laws and authorities from superior courts that a bank cannot sell a property of a deceased person without following due process which included serving the administrators of the estate of the deceased with the necessary notices and where there is no administrator, the bank itself applying for a Grant of Letters of Administration in respect of the deceased’s estate; 3. The Learned Magistrate erred in law and fact in failing to appreciate the totality of the evidence before her and the submissions made on ELCA NO. E040 OF 2024 JUDGMENT Page 8

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behalf of the Appellant, thus reaching a conclusion that was contrary to the evidence; 4. The Learned Magistrate erred in law in failing to follow the law as established through judicial precedent; 5. The Learned Magistrate erred in law and fact in basing her decision on facts not pleaded; The Appellant prayed that the appeal be allowed and the judgment of the lower court be set aside, and substituted with a judgment in favour of the Appellant as prayed in the lower court suit. The Appellant also prayed for the costs of the appeal. Before the appeal was admitted and directions given for its hearing, the Appellant withdrew the appeal against the 3 rd Respondent on 30th January 2025. The appeal before the court is therefore only against the 1 st and 2nd Respondents. The parties argued the appeal by way of written submissions. The Appellant filed submissions dated 14th October 2025, while the 1 st Respondent filed submissions dated 2nd October 2025. I have considered the pleadings and the proceedings of the lower court, the judgment of the court, the grounds ELCA NO. E040 OF 2024 JUDGMENT Page 9

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of appeal filed by the Appellant and the submissions by the advocates for the parties. This being a first appeal, the Court must reconsider and reevaluate the evidence on record and draw its own conclusions on the issues that were raised for determination before the lower court. In Kenya Ports Authority v. Kuston (Kenya) Limited [2009] 2EA 212, the Court of Appeal stated that: “On a first appeal from the High Court, the Court of Appeal should reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in that respect. Secondly that the responsibility of the court is to rule on the evidence on record and not to introduce extraneous matters not dealt with by the parties in the evidence.” In Makube v. Nyamuro[1983] KLR 403, it was held that: “…a Court of Appeal will not normally interfere with a finding of fact by the trial court unless it is based on no evidence, or on a misapprehension of the evidence, or the judge is shown demonstrably to have acted on wrong principles in reaching the findings he did.” From the Appellant’s grounds of appeal, the only issue arising for determination by this court is whether the lower court erred in its finding that the 1st Respondent exercised its statutory power of sale regularly and ELCA NO. E040 OF 2024 JUDGMENT Page 10

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lawfully. As stated earlier, the appeal was withdrawn as against the 3 rd Respondent. This means that the Appellant is not challenging the decision of the lower court as it concerns the sale by public auction and transfer of Plot No. 838 by the 1st and 2nd Respondents to the 3rd Respondent. The challenge is against the lower court's finding that the 1 st Respondent had the right to sell Plot No. 729, whose sale did not go through. It is not disputed that the deceased obtained loans from the 1 st Respondent in 1984 and 1985, secured by separate charges over the suit properties. It is also not disputed that the deceased did not service those loans. According to the demand letter from the 1 st Respondent to the deceased, the outstanding loan amount as at 28 th February 2021 was 14,433,377.95. The dispute is whether the 1st Respondent followed due process in realising its charges over the suit properties to recover the outstanding loan. Under the Land Act 2012, the 1st Respondent was required to serve the deceased with a notice giving him 3 months to pay the outstanding loan before it could put the suit properties up for sale by public auction. If the deceased failed to pay the debt, the 1st Respondent could instruct an auctioneer to sell the suit properties by public auction. Once instructed, the auctioneer was also ELCA NO. E040 OF 2024 JUDGMENT Page 11

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required under the Auctioneers Rules 1997 to serve the deceased with a 45day redemption notice and a notification of sale. It is not disputed that the deceased died on 12 th August 2020. The Appellant produced a copy of the Death Certificate in evidence. From the evidence adduced by the 1st Respondent, it purportedly served the deceased with a statutory notice dated 8th December 2020. When the payment did not come forth, it instructed the 2nd Respondent to sell the suit properties by public auction. From the evidence on record, the 2 nd Respondent purportedly served the deceased with a 45-day redemption notice, and a notification of sale on 28th April 2021. From the foregoing, it is clear that the statutory notice, redemption notice and the notification of sale were all issued and purportedly served after the deceased’s death. It is undisputed that, when the notices were issued and purportedly served, no legal representative of the deceased's estate had been appointed. The deceased was therefore not served with the notices as required by law, rendering the purported exercise of the 1 st Respondent’s statutory power of sale irregular and unlawful. ELCA NO. E040 OF 2024 JUDGMENT Page 12

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In its judgment, the lower court appeared to have agreed with the Appellant that, after the deceased’s death, the 1st Respondent became a creditor of the deceased’s estate and could only recover the outstanding debt as provided under the Law of Succession Act. The lower court cited two cases supporting that position, which the Appellant has cited before this court. In other words, the lower court agreed that, after the deceased’s death, the 1 st Respondent could not exercise its statutory power of sale over the charged properties without following the procedure laid down in the Law of Succession Act for the recovery of debts from estates of deceased persons. The court, however, did not follow this line of reasoning. In what appears to be an about-turn, the court stated that the 1 st Respondent was not aware of the deceased’s death when it put the suit properties up for sale. I agree with the Appellant that the issue was not pleaded, and in any event, the court's position was not supported by the evidence on record. As I mentioned earlier in the judgment, the 45-day redemption notice and the notification of sale were served upon the Appellant. Service was done on 28th April 2021, while the sale of the suit properties was fixed for 9 th July 2021. The Appellant took the earliest opportunity to notify the 1 st ELCA NO. E040 OF 2024 JUDGMENT Page 13

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Respondent of the death of the deceased. She followed her personal letter with another letter from her advocates on record. It was therefore not correct when the lower court stated that the 1 st Respondent was not aware of the death of the deceased. It is my finding that to the extent that the 1 st Respondent did not serve the estate of the deceased with the statutory notice, redemption notice and the notification of sale, the public auction of the suit properties conducted by the 1st and 2nd Respondent on 9th July 2021 was irregular and unlawful. Section 79 of the Law of Succession Act, Chapter 160 of the Laws of Kenya provides as follows: “The executor or administrator to whom representation has been granted shall be the personal representative of the deceased for all purposes of that grant, and, subject to any limitation imposed by the grant, all the property of the deceased shall vest in him as personal representative.” As was held by the Court of Appeal in Marteve Guest House Ltd. v. Njenga & 3 others, Civil Appeal No. 400 of 2018, cited by the Appellant, the 1st Respondent had the option of applying for a Grant of Letters of Administration in respect of the estate of the deceased, with a view to giving the estate of the deceased an opportunity to redeem the suit ELCA NO. E040 OF 2024 JUDGMENT Page 14

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properties before they were put up for sale. In this case, the deceased had passed on, and no administrator of his estate had been appointed. The estate was therefore not given an opportunity to redeem the suit properties before they were put up for sale by public auction. The attempted sale of Plot No. 729 by public auction on 9 th July 2021 was in the circumstances irregular and unlawful. With regard to Plot No. 838 sold to the 3rd Respondent, I agree with the trial court that the sale could not be nullified. A purchaser of land for valuable consideration from a chargee exercising its statutory power of sale is protected by the law. Section 99 of the Land Act 2012 provides as follows: “(1) This section applies to— (a) a person who purchases charged land from the chargee or receiver, except where the chargee is the purchaser; or (b) a person claiming the charged land through the person who purchases charged land from the chargee or receiver, including a person claiming through the chargee if the chargee and the person so claiming obtained the charged land in good faith and for value. (2) A person to whom this section applies— ELCA NO. E040 OF 2024 JUDGMENT Page 15

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(a) is not answerable for the loss, misapplication or non-application of the purchase money paid for the charged land; (b) is not obliged to see to the application of the purchase price; (c) is not obliged to inquire whether there has been a default by the chargor or whether any notice required to be given in connection with the exercise of the power of sale has been duly given or whether the sale is otherwise necessary, proper or regular. (3) A person to whom this section applies is protected even if at any time before the completion of the sale, the person has actual notice that there has not been a default by the chargor, or that a notice has been duly served or that the sale is in some way, unnecessary, improper or irregular, except in the case of fraud, misrepresentation or other dishonest conduct on the part of the chargee, of which that person has actual or constructive notice. (4) A person prejudiced by an unauthorised, improper or irregular exercise of the power of sale shall have a remedy in damages against the person exercising that power.” In Joyce Wairimu Karanja v. James Mburu Ngure & 3 others [2018] eKLR , the court stated that: “29. Third, both statutory and decisional law have clearly stated that the remedy for a mortgagor who has suffered damages as a result of improper auction, is not to reverse the auction against an innocent purchaser – but in damages. Indeed, the statute immunizes a purchaser at a sale conducted by ELCA NO. E040 OF 2024 JUDGMENT Page 16

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a mortgagee in the exercise of the statutory power of sale in the following words in section 99 of the Land Act… 30. This section seems quite clear that a purchaser of property sold in the exercise of a chargee’s statutory power of sale is protected even in cases where the person had actual notice that the chargee had not properly realized that statutory power of sale in terms of procedure. In this case, there is no evidence to show that the Appellant had any notice of any irregularities in the planned sale and evidence suggests that there were none anyway. The point is that the Appellant is then inoculated by section 99 from any action to recover the Suit Property from her.” With regard to Plot No. 838, the Appellant could only claim damages from the 1st Respondent for the irregular and illegal exercise of the power of sale. The Appellant never sought such damages before the lower court. This Court cannot grant it, as it is not an issue before the court. Conclusion In the final analysis and for the foregoing reasons, the Appellant’s appeal partially succeeds. I make the following orders in the matter: 1. The judgment of the lower court delivered on 25 th June 2024 dismissing the Appellant’s suit against the 1st and 2nd Respondents is set aside and substituted with the following orders: ELCA NO. E040 OF 2024 JUDGMENT Page 17

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(a)An order of injunction is issued restraining the 1 st and 2nd Respondents, by themselves or through their agents or any other person acting through them, from selling, transferring or disposing of all that parcel of land known as Title No. Kisumu/Dago/729 in exercise of the 1st Respondent’s statutory power of sale, without following the due process provided for the recovery of debts from estates of deceased persons. (b) A declaration that the Appellant is entitled to redeem all that parcel of land known as Title No. Kisumu/Dago/729 upon payment of the debt lawfully due to the 1 st Respondent from the estate of Sospeter Ngesa Odalo. (c)The Appellant shall have the costs of the lower court suit to be paid by the 1st Respondent. 2. The Appellant shall have the costs of the appeal to be paid by the 1 st Respondent. Written and signed at Mombasa by S. OKONG’O JUDGE ELCA NO. E040 OF 2024 JUDGMENT Page 18

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Delivered, dated and countersigned at Kisumu on this September 2026 28 th day of E.K.WABWOTO JUDGE Judgment delivered virtually through Microsoft Teams Video Conferencing platform in the presence of; Mr. Sala for the Appellant Mr. Yogo for the 1st and 2nd Respondents Joanne Omondi; Court Assistant ELCA NO. E040 OF 2024 JUDGMENT Page 19

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