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1989
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[1989] ZASCA 174
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Adendorff Auctioneers (Pty) Ltd. v Pretorius (300/88) [1989] ZASCA 174 (5 December 1989)
Case no 300/88 /MC
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
Between:
ADENDORFF AUCTIONEERS (PTY) LIMITED
Appellant
- and-
J. C. PRETORIUS
Respondent
CORAM:
JOUBERT, VIVIER
et KUMLEBEN JJA.
HEARD:
21 NOVEMBER 1989.
DELIVERED:
5 DECEMBER 1989.
JUDGMENT
VIVIER JA.
2/...
2.
VIVIER JA:
The appellant instituted a vindicatory action against the respondent in the
Orange Free State Provincial Division for the recovery
of two vehicles viz a
Mercedes Benz mechanical horse and a Hendred tip trailer. In the alternative the
appellant claimed the value
of the vehicles. I shall refer to the parties as the
plaintiff and the defendant respectively. The plaintiff alleged that it was
the
owner of the vehicles and that the defendant was in possession thereof. The
defendant in his plea admitted that he was in possession
of the vehicles but
denied that the plaintiff was the owner thereof. In the aiternative the
defendant pleaded that the piaintiff
was estopped from asserting its ownership
of the vehicles. At the pre-trial conference the parties agreed on a
3/...
3.
valuation of R18 000 for the vehicles, which were by then no longer in the
defendant's possession. Two issues accordingly remained
to be decided at the
trial: firstly whether the plaintiff could establish its ownership in the
vehicles and if so, whether it was
estopped from asserting its ownership. The
trial came before HATTINGH J who found that the plaintiff had failed to prove
that it
was the owner of the vehicles. Absolution from the instance with costs
was accordingly granted against the
plaintiff. With the leave of the Court a
quo
the
plaintiff now appeals to this Court.
The plaintiff carries on business as auctioneers.
It received instructions from the owner of the vehicles,
one Wobbe, to
sell the vehicles on his behalf at a public
auction which was to be conducted
by plaintiff's managing
director, Mr Montagu Martin Beytell, at the
plaintiff's
4/...
4.
Johannesburg premises on 30 August 1984. Beytell, who was the sole witness
for the plaintiff, told the trial Court that a few days
before the sale he
received a telephone call from one Barend Frederick Mostert, whom he did not
know, to the effect that he wanted
to purchase some vehicles at the auction in
order to start a transport business. Mostert said that he was unable to pay for
the vehicles
immediately but that he would be in a position to do so within a
few weeks, and that he therefore required credit. According to Beytell
his reply
to Mostert was that he would "consider his proposal provided that he could
furnish me with sufficient guarantees ensuring
that I received payment within
the three week or one month period after the sale". Immediately before the sale
Mostert presented
Beytell with a letter from his attorneys, a firm called Leslie
J Marx and Co., addressed
5/...
5.
to the plaintiff, to the effect that Mostert had on
6
August 1984 sold his fixed property at Roodepoort to
one Fourie for the
sum of R180 000 of which a deposit
of R40 000 had already been paid. The
letter stated
that Fourie had obtained a loan for the balance of
the
purchase price of which an amount of R90 000 would be
made available
to pay for any vehicles purchased by Mostert
at the auction. Beytell
testified that he regarded
the letter "more-or-less as a guarantee that there
were
funds that Mr Mostert would receive during the next three
to four weeks, so that he could pay me for any purchases
he would make at the sale". He accordingly informed
Mostert that he would
allow him to bid at the auction
but that "should he buy any vehicles, we
would have to
enter into a formal agreement whereby I could protect
my
rights". No details of the "formal agreement" were
6/...
6.
mentioned. Beytell's evidence was that the reason why he had acceded to
Mostert's request to purchase on credit was because he needed
the commission
since his company was in the middle of a recession and was battling for
customers. Prior to the commencement of the
sale a so-called buyer's card,
containing the conditions of sale, was handed to Mostert. The conditions of sale
were also read out
at the commencement of the sale. They provided,
inter
alia,
that the sale was for cash, unless otherwise stated by the auctioneer;
that the highest
accepted bidder would be the purchaser; that each item
sold would, at the fall of the hammer, be considered as delivered; that no
item sold could be removed until paid for without the sanction
of the auctioneer
and that the auctioneers acted merely as agents for the sellers. It is common
cause that Mostert bid at the
7/...
7.
auction and that eight vehicles, including the two in question, were knocked
down to him. Their owner Wobbe, was present at the auction
and Beytell said that
although Mostert's bids for the two vehicles, which were the highest received,
were slightly below Wobbe's
reserve prices the latter indicated to him during
the course of the bidding that he could accept Mostert's bid. Beytell said that
immediately after the auction he informed Wobbe and the sellers of the other
vehicles which had
been knocked down to Mostert that "Mostert had
purchased
these vehicles subject to a formal agreement being
concluded" between the plaintiff and Mostert. Beytell said that he also told
the sellers that he would, in the meantime,assume responsibility
for the
vehicles, acquire ownership thereof and pay for them. He did not say from whom
he proposed acquiring ownership. He paid Wobbe
8/...
8.
the following day.
Beytell further told the trial Court that he informed
Mostert after the sale that his attorney would prepare an agreement for Mostert
to sign the next day, after which he could take delivery of the vehicles.
Mostert came to his office the following day, 31 August
1984, and they then both
signed a written agreement which was entitled, "Agreement of Sale". This
document recorded that the eight
vehicles which had been knocked down to Mostert
at the sale, had been sold by the plaintiff to Mostert at the purchase prices
reflected
therein, which were the prices they fetched at the sale. It provided,
inter alia
, for the purchase price to be paid upon delivery of the
vehicles and for ownership in the vehicles to remain with the plaintiff until
such time as the full purchase price had been paid.
9/...
9.
The two vehicles in issue were subsequently removed by Mostert. Their
registration documents had been made out in blank and signed
by Wobbe and had
been delivered by Wobbe to Beytell at the auction sale. Beytell, in turn, had
handed them to Mostert on the occasion
when the written agreement was signed.
Beytell testified that he had given the registration documents to Mostert to
enable the latter
to register the vehicles in his name so that, he could start
his proposed transport
business. Mostert never paid for the two vehicles
but
caused them to be re-registered in the name of a firm called Eldorado
Motors at Krugersdorp. He later sold them on 5 October 1984
to the defendant for
the sum of R18 000. The defendant was ignorant of any claim the plaintiff had in
the vehicles.
By letter dated 3 October 1984 Mostert's
said
10/...
10.
attorneys notified the plaintiff that the sale of Mostert's fixed property at
Roodepoort had been cancelled. Mostert's estate was
subsequently sequestrated
and he was sentenced to lengthy periods of imprisonment on a number of fraud
charges unrelated to the present
facts.
Mostert testified on behalf of the
defendant and denied that he had told Beytell that he intended establishing a
transport business.
He said that he had informed Beytell that he was trading in
second-hand vehicles and that he was interested in acguiring the vehicles
in
question for that purpose. He admitted that he received a buyer's card at the
sale and that, although he did not read the conditions
of sale which were
printed on the back thereof, they were in any event read out by Beytell at the
commencement of the sale. When
Beytell informed him that he could bid at the
auction
11/...
11.
he accepted that the letter from his attorneys had satisfied Beytell's demand
for a guarantee in respect of the purchase price. When
the vehicles were knocked
down to him his understanding of the matter was that he had bought the vehicles
on credit.
Mostert further testified that he had nobody to help him drive the
vehicles away after the sale. He consequently asked Beytell's permission
to
leave the vehicles at the premises where the sale had been held until the next
day when he would remove them. Beytell replied
that this was in order and asked
him to collect the registration papers at his office the next day before
removing the vehicles.
When he arrived at Beytell's office the following day
Beytell told him that his attorney had prepared a document which he wanted
Mostert to sign to the effect that he was buying the vehicles on credit.
12/...
12.
Beytell assured him that it was a standard type of document and he thereupon
signed it without reading it, on the assumption that
it provided for the manner
of payment of the purchase price.
On appeal Mr Camp, who appeared on behalf
of the plaintiff, submitted that no contract of sale resulted from the
acceptance of Mostert's
bid at the auction. He submitted that Beytell's sole
intention in allowing Mostert to bid at the auction was to determine the price
at which he could, after the sale, sell the vehicles to Mostert in terms of an
agreement still to be negotiated. This submission
fiies in the face of Beytell's
clear and explicit evidence and was raised for the first time on appeai. I have
already referred to
Beytell's evidence that he told Mostert that he could buy at
the saie and that he toid the sellers after the sale that Mostert had
purchased
the vehicles at the sale. It
13/...
13.
is inconceivable that Beytell would have used such language had his intention
been merely to fix the purchase price at the auction
for a sale still to be
concluded. I have also referred to Beytell's evidence that when Mostert's bids
did not meet Wobbe's reserve
prices he first looked across at Wobbe to obtain
his consent before accepting Mostert's bids for the vehicles. Had Beytell's
intention
been merely to determine the price he would certainly not have
referred to Wobbe for instructions during the bidding but would have
waited
until after the auction. There is nothing . in Beytell's evidence to indicate
that his intention was not to sell the vehicles
to Mostert at the auction sale.
It was furthermore never put to Mostert in cross-examination that he was not
allowed to buy at the
auction and that the sole purpose of his bidding was to
determine the prices at which the vehicles
14/...
14.
would later be sold to him.
In my view it is clear from the evidence of
both Beytell and Mostert that the moment the vehicles were knocked down to
Mostert a binding
and enforceable oral contract of sale was concluded between
Wobbe as seller, and Mostert as purchaser. In Beytell's own words the
subsequent
written contract was intended to protect the auctioneer without involving Wobbe,
the seller, in any way. It was thus never
intended that the written contract
would be substituted for the oral contract which had been concluded at the
auction. Beytell's
evidencé that he wanted the plaintiff's rights to be
protected in a subsequent written contract and that he informed Mostert
accordingly, is not inconsistent with the conclusion of a binding contract of
sale at the auction. It would seem that it was Beytell's
responsibility to
15/...
15.
pay the purchase price of the vehicles sold at the auction to the sellers,
less his commission, so that if Beytell sold on credit,
as he did in this case,
it was his responsibility to recover the purchase price from the buyer. I shall
return to this aspect.
The oral contract of sale which was concluded between
Wobbe and Mostert at the fall of the hammer was subject to all the terms and
conditions set out in the conditions of sale which appeared on the buyer's card
and which had been read out at the commencement of
the sale (
Pledge
Investments (Pty) Ltd v Kramer, NO: In re Estate Selesnik
1975(3) SA 696(A)
at 703A;
Clark v C P Perks and Son
1965(3) SA 397 (EDC) at 400
C-D).
The conditions of sale provided for the sale to be for cash unless
otherwise stated by the auctioneer. According to Beytell he agreed
with Mostert
before the
16/...
16.
sale to grant the latter credit for at least three weeks so that the sale of
the vehicles to Mostert must be taken to have been a
credit sale (
Lendalease
Finance (Pty) Ltd v Corporacion De Mercadeo Agricola and Others
1976(4) SA
464(A) at 490 D). Beytell's authority to grant such credit was not in issue
either in the Court a
quo
or on appeal.
The question whether delivery
of the vehicles was given to Mostert after the sale must next be considered. The
Court a
quo
held that delivery to Mostert was effected in terms of the
provision of the oral contract of sale that each item sold would, at the
fall of
the hammer, be considered as delivered. It seems to me that the parties acted in
accordance with that provision when Mostert
asked Beytell whether he could leave
the vehicles on the premises where the sale had been held, as he had
17/...
17.
nobody to assist him in driving the vehlcles away, and Beytell agreed to this
request. Mostert's evidence to this effect was not challenged
in
cross-examination, and Beytell's evidence that he told Mostert that he could
take delivery the next day after he had signed the
formal agreement is, for the
reasons I have given, not inconsistent therewith. In my view delivery was thus
effected, if not at some
earlier stage, at the latest when Mostert, with
Beytell's consent, left the vehicles at the premises where the auction had taken
place.
The general rule is that ownership passes to
the
purchaser on delivery in the case of an unconditional sale on credit
(
Crockett v Lezard
1903 TS 590
at 592
in fine
;
Eriksen Motors
(Welkom) Ltd v Protea Motors
,
Warrenton and Another
1973(3) SA 685
(A)at 694 and the
Lendalease
case at 490 A-C). In the circumstances
of
18/...
18.
the present case there is no ground for departing from the
general rulé, so that it must be held that ownership passed to Mostert
after the auction sale on delivery of the vehicles.
This brings me to
Beytell's evidence that immediately after the sale he informed Wobbe and the
other sellers that Mostert had purchased
the vehicles subject to a formal
agreement being concluded but that he (Beytell) would in the meantime assume
responsibility for
the vehicles, pay for them and acquire ownership thereof. I
have already dealt with the effect of Beytell's stipulation to Mostert
before
the sale relating to the completion of a formal document after the sale and
nothing which Beytell said to the sellers after
the sale could alter the fact
that a binding and enforceable oral contract of sale had been concluded at the
fall of the hammer.
19/...
19.
Beytell's statement to the sellers that he would accept responsibility for
the vehicles, pay for them and acquire ownership thereof
could not, in any way,
effect the passing of ownership to Mostert and simply accords with what seems to
be the custom or usage viz
that it was the auctioneer's responsibility to pay
the purchase price to the sellers, less his charges, whether he had received the
purchase price from the buyers or not (
Meikle and Co Ltd v Van Eyssen
1950(2) SA 403 at 410-412 and of
Estate Duminy v Hofmeyr and Son Ltd
1925
CPD 115
at 117-118).
Ownership of the vehicles accordingly never vested in
the plaintiff so that the written agreement, which was signed on 31 August 1984,
in terms of which the plaintiff purported to sell the vehicles to Mostert
reserving ownership to itself until the purchase price
had been paid in full,
did not affect the dominium which
20/...
20.
Mostert had previously acquired in the vehicles.
An alternative argument
advanced on behalf of the plaintiff in both the Court a
quo
and in this
Court was that, even if Mostert had acquired ownership in the vehicles from
Wobbe, he, in turn, transferred ownership
to the plaintiff in terms of the
written agreement of 31 August 1984. The learned Judge a
quo
held that
ownership did not pass to the plaintiff pursuant to the written agreement since
no delivery was effected from Mostert to
the plaintiff. Regarding the
circumstances under which the agreement was signed the learned Judge said the
following:
"(A)lhoewel ek nie Mostert se getuienis in geheel as geloofwaardig kan aanvaar
nie, aanvaar ek nietemin sy getuienis van hoe dit
gebeur het dat hy Bewysstuk D
geteken het, daar is niks onwaarskynlik in sy weergawe
daaromtrent
21/...
21 .
nie en vind dit bowendien aansluiting met die getuienis van Beytell. Na my
mening was daar geen werklike bedoeling by Mostert aanwesig
om deur Bewysstuk D
te onderteken eiendpmsreg aan eiser oor te dra
nie."
The simple answer to the alternative
submission is that it runs counter to the express terms of the written
agreement, which purported
to be a sale, not by Mostert to the plaintiff, but by
the latter to Mostert. And there is simply no evidence to support the rather
far-fetched proposition that Mostert transferred ownership in the vehicle, it
being at that stage his property, in order that it
could be "sold" back to him.
The plaintiff could accordingly not have acquired ownership in the vehicles
pursuant to the written
agreement.
For these reasons the learned Judge a
quo
was correct in holding that
the plaintiff had failed to
22/...
22.
establish its. ownership in the vehicles.
With regard to costs Mr Camp
submitted that the trial Court should have made a special order disallowing that
portion of the trial
costs occasioned by the evidence given by the defendant
relating to the defence of estoppel which, Mr Camp submitted, was a defence
without substance.
The learned Judge a
quo
did not deal with this
aspect in his judgment but, in my view, there are no grounds for interfering
with the exercise of his discretion
in not depriving the successful party of
portion of his
costs. The defendant's evidence-in-chief comprises
a total
of only six pages of the record whereas Mr Camp's cross-examination of this
witness runs to 43 pages. In the circumstances
the trial Judge had good reason,
in my view, for not making the special order sought by Mr Camp.
23/...
23.
In the result the appeal is dismissed with costs.
W. VIVIER JA.
JOUBERT JA)
Concurred.
KUMLEBEN JA)