LESSON 2

LAW OF PERSONS

10

LESSON 2

THE LAW OF PERSONS CONTENTS

1. 2. 3. 4. Read the Study Text provided below Assigned readings: Chapter 4 of Hussain Attempt the reinforcing questions given at the end of the lesson Compare your answers with those given in lesson 9

STUDY TEXT

CONTENTS
1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Legal personality Corporations Unincorporated associations Marriage Legitimation Adoption Guardianship Nationality Domicil and residence

1.1

INCORPORATED AND UNINCORPORATED ASSOCIATIONS Legal Personality From a legal point of view, a person is anything, which the laws of a particular country recognize as having a bundle of legal rights and obligations. Persons in this legal sense are of two types, namely, natural persons and legal persons, and they are said to possess "legal personality". Natural Persons Natural persons or human beings now have legal personality under the laws of probably all nations of the world. However, this was not so during the days of slave trade. A slave, though a human being, had no legal rights or obligations under the laws of those countries that recognized slavery. Legal Persons A legal person is known as a corporation, or a 'body corporate'. It has legal rights and obligations of its own which are distinct from those of the individuals who either constitute its membership or management. This attribute of legal personality has received considerable judicial exposition in relation to registered companies and the overall practical effects of the decided cases may be summarized as follows: (i) Limited Liability

The debts of the corporation are its own and a member of manager of the corporation cannot be sued on order to recover the debts. If a corporation such as a registered company is unable to pay its debts it may be wound-up and during the winding-up its members will be asked to 'contribute' what is required to pay the debts but a member cannot be asked to pay more than the amount , if any, that is unpaid on the shares held by him (or the amount he guaranteed if it is a company limited by guarantee). This was explained by the House of Lords in the case of Salomon v A. Salomon & Co. Ltd (ii) Perpetual Succession

The death of a member or members of the corporation does not result in the death of the corporation. Members come and go and are merely succeeded by other persons who become new members. The corporation 'dies' only when its legal life is brought to an end by a legal process known as liquidation. This is illustrated by the case of Lee v Lee's Air Farming Co. Ltd in

which the company's existence was not terminated by the death of Lee, who held all its shares. (iii) Owning of Property

The property of a body corporate such as a registered cooperative society or a registered company does not belong to its members. Consequently, a member cannot insure the property since he does not have insurable interest therein. This can be illustrated by the case of Macaura v Northern Assurance Co. Ltd. (see (1925) A.C. 619) in which Macaura, the majority shareholder in a 'one-man company,' insured the company's timber against fire. The insurance policy was effected in his name and not the company's name. When the timber was destroyed by fire, he made a claim but the insurance company refused to pay and contended that the policy was void because he had no insurable interest in the timber. The contention was upheld by the court. A person cannot, generally speaking, have insurable interest in the property of another person. The law regards a corporation and its member as separate persons for this purpose. (iv) Suing or being sued

Because of the legal separation between a corporation and its members, it follows that a wrong to, or by , the corporation is not a wrong to, or by, its members. It was therefore held in FOSS V HARBOTTLE (see (1843) 2 Hare 461) that the proper plaintiff to sue or the defendant to be sued in such cases is the corporation itself. In that case two of the company's members instituted proceedings against the directors and others, alleging that the company's property had been misapplied by them. However, the court dismissed the suit, holding that the company itself was the proper plaintiff to sue the defendants. (v) Capacity to contract Lee v. Lees Air Farming Co Ltd FORMATION OF CORPORATONS A corporation may be brought into existence by (a) Registration (b) Statute (c) Charter

1.2 TYPES OF CORPORTATIONS There are four types of corporation which are recognized by the Kenya Law. (a) Corporation Sole This is a legal office that is occupied by one human being only at any one time. If the person ceases to occupy the office, he is succeeded by another

person who will then discharge the duties and exercise the powers of the office. It is a legal person with peretual succession capacity to sue or be sued. Example are owning of property and limited liability. Examples are: (i) The Public Trustee

The Public Trustee Act, S.27(1) states that 'the Public Trustee shall be a corporation sole by the name of Public Trustee'. (ii) The Permanent Secretary to the Treasury of Kenya.

(b)

Section 2(1) of the Permanent Secretary to the Treasury (Incorporation) Act states that "the officer for the time being discharging the duties of the Permanent Secretary to the Treasury of Kenya and his successors in office, shall be a body corporate". It should be noted that the Constitution of Kenya which created the office of the President of Kenya does not have a provision that the office of President shall be a body corporate. Corporation Aggregate This is a legal entity formed by at least two people and whose membership at any one time legally consists of at least two people. Examples are private and public companies registered under the Companies Act, and cooperative societies registered under the co-operative societies Act 1966 (cap.490). It has a legal personality with perpetual succession, capacity to contract, own property and sue or be sued. The company acquires legal personality from the date of its registration by the registrar of companies. The Companies Act, S. 16 (2) provides that " from the date of incorporation ... the subscribers to the memorandum ... shall be a body corporate by the name contained in the memorandum". S.28 of the Co-operative Societies Act provides that "a society, on registration, shall be a body corporate".

(c)

Statutory Corporation This is created by an Act of Parliament and comes into existence from the date of commencement of the Act. An example of a statutory corporation is the Agricultural Finance Corporation". Section 3(1) of the Act states that "there is hereby established a corporation to be known as the Agricultural Finance Corporation". Section 3(3) of the Act states that "the corporation shall be a body corporate with perpetual succession and a common seal".

(d)

Chartered Corporation

A chartered corporation may be created under Section 14 of the Universities Act, 1985. Section 12 of the Act empowers the President of Kenya to grant a charter to any private university intended to be set up in Kenya if, in his opinion, the grant of the charter to the Institution concerned may be of benefit to the future development of university education in Kenya. S.14 of the Act provides for the publication of the charter in the Gazette and also states that 'with effect from the day of publication of the charter the Institute established by the charter shall be a body corporate by the name cited in the charter'. Examples are : (ii) (i) Baratton University, and Catholic University of Eastern Africa.

1.3

UNINCORPORATED ASSOCIATIONS

Characteristics of Unincorporated Associations These are associations of persons who associate to promote a common and lawful purpose. They have no legal existence of their own and property if any is jointly held or is held by trustees for the benefit of all members. The rights of the members are enshrined in the constitution of the association. Members are liable for debts and other obligations of the associations and in the event of dissolution, members are entitled to share in whatever remains. As a general rule it can only sue or be sued through its principal officers. The law governing these associations is the law which regulates the activities they engage in. In the FORT-HALL BAKERY SUPPLY CO. v WANGOE (un unreported High Court case) a group of forty-five people had carried on a bakery business under the name of 'Fort-Hall Bakery Supply Co'. The assumed business employed Wangoe as its manager but later on dismissed him. In proceedings brought in the High Court to recover a certain amount of money alleged to be owed by him to the business the court terminated the proceedings as soon as its attention was drawn to the fact that the association had not been registered under the Companies Act and had not been formed

under any Act of Parliament. The court held that the association must be treated as nonexistent from a legal point of view and could not therefore be allowed to sue. The commonest examples of unincorporated associations are trade unions, societies and partnerships. (a) Trade Unions

These are registered under S.11 of the Trade Unions Act 1952 with the primary object of regulating the relations between employees and employers. Section 27(1) of the Act provides that a registered trade union may sue or be sued under its registered name. However, S.23 provides that no suit or other legal proceedings shall be maintainable in any civil court against any registered trade union or an officer or member thereof in respect of any act done in contemplation or furtherance of a trade dispute. S.24 bars any such suits in respect of any tortious act alleged to have been committed by or on behalf of the trade union. Under S.25, a trade union is liable on any contract entered into by it or by an agent acting on its behalf. Because a trade union is not a body corporate, the reference to suits by or against it, and the word "agent" used in relation to it, are used by way of analogy only. Under S.41 of the Act, all property of a registered trade union are vested in its trustees for the use and benefit of the union and its members, and is under the control of the trustees. The property is vested in trustees because the union, being non-existent legally (i.e it being not a body corporate) cannot hold or own property in its name. (b) Societies

These are associations registered under the Societies Act 1968. Section 2(1) of the Act defines a society very broadly as including any club, company, partnership or other association of ten or more persons, other than a registered company, corporation, trade union, co-operative society, registered school, bank or partnership of more than twenty persons. Examples of such societies are political associations such as K.A.N.U., welfare societies and football clubs. Although registration under the Act does not confer corporate personality on the association it provides a legal framework for proper management of what is colloquially called the association's affairs and the machinery for bringing those affairs to an orderly end. (c) Partnerships

Partnership is defined by S.3(1) of the Partnership Act as "the relation which subsists between persons carrying on a business in common with

a view of profit". It should be noted that this is a definition of the relationship that exists between the individual persons who are trading as partners rather than a definition of the apparent entity called a " partnership". A partnership is not a body corporate because it has no legal personality and does not exist as a as a legal entity. It cannot therefore, carry on a business. However, S.6 of the Act states that persons who have entered into partnership with one another are called collectively a firm, and the name under which their business is carried on is called the firm name. The following are the practical consequences of the fact that a firm is not a body corporate: (i) The debts of the firm are the debts of the individuals who are carrying on the business. S.11 of the Act states that: "every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while he is a partner." In the case of registered companies the company's debts are not the debts of its members. (ii) Section 37(1) of the Act provides that the death of any partner in a firm results in dissolution of the firm unless the partnership agreement, if any, provides otherwise. In the case of registered companies the death of a member does not cause the dissolution of the company. (iii) Because it is legally non-existent, a partnership cannot own property. In effect, the partnership property is the joint property of the partners who can therefore insure it individually. In the case of registered companies, members have no insurable interest in the company's property. (iv) for the firm's debts. Partners may sue or be sued in the firm's name

In the case of registered companies, a member or members cannot be sued for the company's debts 1.8 NATIONALITY OR CITIZENSHIP Nationality is the legal and political relationship between a person and a particular state which arises from what may loosely be described as that person's membership of the state. It depends almost exclusively on the state's domestic law and generally determines the political status and allegiance of the person concerned. Citizens enjoy certain rights and are subject to various obligations. The law relating to nationality in Kenya is contained in the Constitution and Citizenship Act under the

provisions of the constitution a person ay become a citizen of Kenya by birth, descent, registration or naturalization. (i) Birth A person may become a national of Kenya by birth in two different ways: (a) Birth in Kenya before 11-12-1963 Under s.87 (1) of the constitution any person who, having been born in Kenya, was on the 11th December, 1963 a citizen of the United Kingdom and colonies or a British Protected person, became a Kenya citizen on 12th December, 1963 if either of his parents was born in Kenya. If neither of the parents was born in Kenya the person concerned must apply for registration as a Kenya citizen if he wishes to become one. Birth in Kenya after 11-12-1963 The Constitution of Kenya (Amendment) Act 1985 deleted S.89 of the Kenya Constitution and inserted a new section with effect from 19th July 1985 which provides that 'every person born in Kenya after 11th December, 1963 shall become a citizen of Kenya if at the date of his birth one of his parents is a citizen of Kenya'. However, such a person shall not become a citizen of Kenya if at the date of his birth: 1. his father possesses immunity from suit and legal process as is accorded to the envoy of a foreign state accredited to Kenya,or 2. his father is a citizen of a country with which Kenya is at war and the birth occurs in a place then under occupation by that country. (ii) Descent A person may become a national of Kenya by descent as follows: (a) Birth outside Kenya before 11-12-63

(b)

Section 87(2) of the constitution provides that every person who, having been born outside of Kenya, was on 11th December, 1963 a citizen of he United Kingdom and Colonies or a British protected person, shall become a citizen of Kenya on 11th December, 1963 if his father became, or would but for his death have become, a citizen of Kenya by birth. (b) Birth outside Kenya after 11-12-63

(iii)

Section 90 of the Constitution states that `a person born outside Kenya after 11th December, 1963 shall become a citizen of Kenya at the date of his birth if at that date his father is a citizen of Kenya'. Registration A foreigner may become a citizen of Kenya in any of the

following ways: (a) Section 91 of the constitution provides that a woman who has been married to a citizen of Kenya shall be entitled, upon making application in such a manner as may be prescribed by or under the Citizenship Act, to be registered as a citizen of Kenya. She may apply for registration at any time during the lifetime of her husband. (b) Section 92(1) allows a person who is a Commonwealth citizen, or a citizen of any country in Africa which permits citizens of Kenya to become their citizens by registration, to register as a Kenyan citizen if he has been ordinarily resident in Kenya for a period of prescribed under the Kenya Citizenship Act. Section 17 of the Citizenship Act prescribes a period of five years immediately preceding the date of application for registration. (c) Section 92(2) states that a person shall be eligible, upon making application in such a manner as may be prescribed under the Kenya Citizenship Act, to be registered as a citizen of Kenya if one of his parents is a citizen of Kenya. (d) Section 88(1) of the constitution permits persons born in Kenya before 11th December, 1963 to be registered as a Kenya citizen if none of their parents was born in Kenya. (iv) Naturalization

This is the legal process by which an alien becomes a citizen in which he is resident. It is preceded by a formal application to the minister concerned. It is available to all aliens residents in Kenya. The constitution fixes the minimum conditions an applicant must fulfill. Under sec 93(1), the minister must be satisfied that the applicant: (a) has attained the age of twenty-one years;

(b) has been ordinarily and lawfully resident in Kenya for the period of twelve months immediately preceding his application; (c) has been ordinarily and lawfully resident in Kenya for a period of, or for periods amounting in the aggregate to, not less

than four years in the seven years immediately preceding the said period of twelve months; (d) character; (e) satisfies the minister that he has an adequate knowledge of the Swahili language, and (f) satisfies the Minister that he intends, if naturalized as a citizen of Kenya, to continue to reside in Kenya. However, he must apply for naturalization in such a manner as may be prescribed by or under the Citizenship Act. The Minister may grant a CERTIFICATE OF NATURALIZATION thereby constituting the applicant a citizen of Kenya. satisfies the minister that he is of good

LOSS OF NATIONALITY (a) Revocation or Deprivation of Citizenship

Section 94 of the Constitution provides that the Minister may, by order in the Gazette, deprive any person of his Kenya Citizenship acquired by registration or by naturalization if the Minister is satisfied that: (a) Disloyalty or disaffection

the citizen has shown himself by act or speech to be disloyal or disaffected towards Kenya; or (b) Engagement with alien enemies

the citizen has, during any war in which Kenya was engaged , unlawfully traded or communicated with the enemy or been engaged in or associated with any business that was to his knowledge carried on in such a manner as to assist an enemy in that war; or (c) Conviction for a criminal offence

within the period of five years commencing with the date of registration or naturalization, a sentence or imprisonment of or exceeding twelve months has been imposed on that citizen by a court in any country or has been substituted by competent authority for some other sentence imposed in him by such a court; or (d) Residence outside Kenya.

the citizen has, since becoming a citizen of Kenya, been ordinarily resident in countries other than Kenya for a continuous period of seven years and during that period has neither: (i) been at any time in the service of Kenya or of an international organization of which Kenya was member; or (ii) registered annually at a Kenya consulate his intention to retain his citizenship of Kenya; or (e) Fraud, Misrepresentation or Concealment.

The registration of naturalization was obtained by means or fraud, false representation or the concealment or any material fact. Section 7(1) of the Kenya Citizenship Act provides that the deprivation of citizenship shall be effective upon the making of the order in the Kenya Gazette. (b) Renunciation of Citizenship

Section 6(1) of the Kenya Citizenship Act allows any citizen of Kenya of full age and capacity who is also a citizen of another country to make a declaration of renunciation of citizenship of Kenya. The declaration is made on Form L and, upon registration of the form, that person shall cease to be a citizen of Kenya. Sub-section 2 of section 6 provides that the Minister may refuse to register any such declaration if it is made during any war in which Kenya is may be engaged in if, in his opinion, it is contrary to public policy. (c) Lapsing

Under section 97(1) of the constitution a person who jupon the attainment of 21 years, is a citizen of Kenya as well as a citizen of some other country, ceases to be a citizen of Kenya automatically if he does not within the prescribed duration, renounce the citizenship of that other country, take the oath of allegiance and register a declaration of his intention to continue residing in Kenya. 1.9 DOMICIL A person's domicil is that country in which he either has or is deemed by law to have, his permanent home. It is the country of permanent residence. The Kenya law relating to domicil is contained in the Law of Domicil Act, Cap 3. The Act codifies the common law rules relating to domicil with some amendments. Under the provisions of this Act these are the types of domicil, namely:

(a)

Domicil of Origin

Domicil of origin is acquired by a person at the moment of his birth. Section 3 of the Law of Domicil Act provides that every person shall be deemed to have acquired, at the date of his birth: (a) If he is born legitimate or deemed to be legitimate, the domicil of his father, or, if he is born posthumously, the domicil which his father had at the date of his death. (b) If he is born illegitimate, the domicil of his mother.

These provisions codify the common law rules regarding acquisition of domicil of origin. The Act also makes the following provisions: (i) An infant who is legitimated by the marriage of his parents shall acquire the father's domicil at the date of legitimation. (ii) Section 4 states that an infant who is a foundling shall be deemed to have acquired the domicil of the country where he is found. (iii) Section 5 provides that an infant whose adoption has been authorized by a court shall acquire the domicil of the adopter or, if adopted by two spouses, that of the husband. (b) by The domicil of the other person. Domicil of Dependence

This is the domicil a person acquires by virtue of legal dependency. It is determined

The common law rule that a married woman acquires, on marriage, her husband's domicol known as the domicol of dependence is codified by Section 7 of the Act. However, the common law rule that a married woman cannot acquire an independent domicol of choices is modified by S.8(3) of the Act which provides that `an adult married woman shall not, by reason of being married, be incapable of acquiring an independent domicil of choice'. This means that a married woman who is an adult can acquire a domicil of choice separate from that of her husband, whereas a married woman who is an infant (i.e. one who is not yet eighteen years old) cannot do so. Domicil of Choice

This is the domicil a person acquires by choosing which country to make his permanent home. S.8(1) of the Act provides that where a person, not being under any disability, takes up residence in another country other than that of his domicil with the intention of making that country his permanent home, or where, being resident in a country other than that of his domicil, he decides to make that country his permanent home, he shall as from the date of so taking up residence or of such decision, acquire domicil in that country and shall cease to have his former domicil. The domicil so acquired is known at common law as the domicil of choice. The components of domicil of choice are actual residence and animus manendi (i.e. the intention of making the place of residence the permanent home). S.8(4) provides that the acquisition of a domicil of choice by a married man shall not, of itself, change the domicil of his adult wife or wives. Section 9(2) however, provides that the domicil of an infant female who is married shall change with that of her husband. Unity and continuity of domicil S.10 of the Act provides that no person may have more than one domicil at any one time and no person shall be deemed to be without a domicil. Although a person may have left the country of his domicil with the intention of never returning, he will retain that domicil until he acquires a new domicil of choice. The domicil of origin is, however, not destroyed but is merely put in abeyance during the continuance of a domicil of choice and is revived by loss of the domicil of choice. Importance of domicil It may become necessary to ascertain a person's domicil in order to determine the country whose laws will govern the validity of his Will relating to moveable property and such other matters like legitimation, validity of marriage and divorce.

REINFORCING QUESTIONS
1. Examine the concept of legal personality and describe the various kinds of corporations, giving examples of each. 2. Explain the difference between nationality and domicile and describe the various ways in which a person may acquire Kenya nationality. . Check your answer with that in Lesson 9 of the Study Pack

COMPREHENSIVE ASSIGNMENT No.1

TO BE SUBMITTED AFTER LESSON 2
To be carried out under examination conditions and sent to the Distance Learning Administrator for marking by the College. EXAMINATION PAPER. TIME ALLOWED: THREE HOURS. ANSWER FIVE QUESTIONS ALL QUESTIONS CARRY EQUAL MARKS. 1. courts 2. (a) (b) (c) 3. Explain the statutory provisions relating to the application of African Customary law by Kenya

To what extent are the following applicable as sources of Kenya law; Statutes Common law, and Equity? (a) (b) (c) When does a custom become a law? What is the relationship between customary laws and the Acts of Parliament? What are the main advantages of case laws?

4. 5. 6.

Explain the procedures by which an Act of Parliament is made. When can, or should, a court refrain from following a binding precedent? What are the advantages and disadvantages of delegated legislation as a source of law?

END OF COMPREHENSIVE ASSIGNMENT No.1

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