Graf v Buechel (150/2002) [2003] ZASCA 29; [2003] 2 All SA 123 (SCA) (27 March 2003)

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[2003] ZASCA 29
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Graf v Buechel (150/2002) [2003] ZASCA 29; [2003] 2 All SA 123 (SCA); 2003 (4) SA 378 (SCA) (27 March 2003)

THE SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
Reportable
Case no: 150/2002
In
the matter between:
OTTO
FRIEDERICH GRAF APPELLANT
and
HANS JOACHIM WERNER BUECHEL RESPONDENT
CORAM:
HOWIE P, SCHUTZ, STREICHER, CLOETE and LEWIS JJA
HEARD:
13
MARCH 2003
DELIVERED:
27
MARCH 2003
Summary: A
pactum commissorium
in a contract of pledge is unenforceable
even if the pledgor is not the pledgee's debtor. The creditor may
keep the thing pledged
if the pledgor has at any time agreed that he
may do so, provided a fair price is given. If a rule of the common
law is clear and
unambiguous, it is a wrong approach to apply that
rule only if the policy considerations underlying the rule are
present. If the
reasons for the rule have fallen away then the rule
may have to be changed.
JUDGMENT
CLOETE JA
/
CLOETE
JA
:
INTRODUCTION
[1] The present appeal concerns primarily the question whether a
pactum commissorium
in a contract of pledge can be enforced if
the pledgor is not the pledgee’s debtor; and also the question
whether, if the value
of the pledge is less than the debt, the
contract should be regarded as being in the nature of a conditional
sale and therefore valid.
THE FACTS
[2] The respondent, the applicant in the Court below, was the sole
shareholder and director and the only loan account creditor of
Western Seaboard Development (then a close corporation but later a
company, and to which I shall refer as 'the company'). The company
purchased immovable property with the intention of developing a
sectional title hotel on it. The appellant, the respondent in the
Court below, lent the purchase price to the company against the
security of a mortgage bond registered in his favour over the
property.
It was a term of the loan agreement that if conditions
relating to the development of the property were not met by a fixed
date,
the appellant would become entitled to repayment of the capital
amount lent and interest thereon. The conditions were not met.
[3] Subsequently the appellant, the respondent and the company
entered into an agreement ('the extension agreement') in terms of
which the appellant granted the company an extension of time for
payment of its indebtedness. In terms of the extension agreement,
the
respondent and the company undertook to deposit with a firm of
attorneys a number of documents, including the share certificates
in
respect of the issued share capital of the company; share transfer
forms in respect of such shares signed by the respondent and
blank as
to transferee; a cession in respect of the respondent’s claim on
loan account against the company, duly signed by the
respondent; and
a power of attorney authorising the appellant to pass transfer of the
company’s immovable property to himself or
his nominee and to sign
all relevant transfer documentation on behalf of the company. Further
in terms of the extension agreement,
the company and the respondent
authorised the attorneys to release the documents to which I have
referred, to the appellant, if the
company had not paid its
indebtedness to the respondent timeously.
[4] Clause 9 of the extension agreement, which is central to the
issues in this appeal, provided
inter alia
:
‘
ELECTION:
In the event of default and on delivery of the documents
GRAF [the appellant] will be entitled, without prejudice to any other
rights
which GRAF may have, either to acquire the COMPANY by
transferring the shares in his own name or that of his nominee, and
accepting
cession of the loan claims, or alternatively to pass
transfer of the immovable property to himself or his nominee.
If GRAF elects to take
transfer of the immovable property, the transfer value of the
property will be equal to the market value thereof
as determined by
DAVID NEWHAM, or in the event of DAVID NEWHAM being unable or
unwilling to act, by GRAHAM ALEXANDER, or in the event
of both of
them being unable or unwilling to act then such valuer as will be
appointed by the President for the time being of the
SA Council of
Valuers whose decision, acting as expert and not as arbitrator, will
be final and binding on the parties.
GRAF’s claim against the COMPANY will
be reduced by the said value of the immovable property. Transfer will
be passed by GRAF’s
conveyancers.’
[5] The company failed to repay its indebtedness to the respondent.
It was in fact insolvent. A provisional order of winding-up was
issued at the suit of the appellant on 26 April 1999 and a final
order followed on 9 September of the same year.
[6] On 7 May 1999 and in terms of clause 9 of the extension
agreement, the shares of the company were transferred from the name
of
the respondent into the name of the appellant.
THE ISSUES
[7] In the Court below the respondent sought in motion proceedings to
undo the transfer on the basis that the provisions in clause
9 of the
extension agreement permitting the appellant to acquire his shares
and loan account, constituted a
pactum commissorium
and were
therefore invalid. The learned Judge (Selikowitz J) held in his
favour and gave the following order (together with an order
for
costs):
‘
1. Declaring that the portion of clause 9 of the
agreement concluded between Respondent, Applicant and Western
Seaboard Development
(Proprietary) Limited on 11 February 1999 which
reads, ‘
to acquire the COMPANY by transferring the shares in his
own name or that of his nominee, and accepting cession of the loan
claims’
is a pactum commissorium and accordingly invalid;
2. Declaring that the transfer during May 1999 to
Respondent of 1 000 (One Thousand) shares in Western Seaboard
Development (Proprietary)
Limited in terms of clause 9 of the
aforesaid agreement is invalid and of no force and effect.’
The learned Judge subsequently granted leave to appeal to this Court
against the order.
[8] On appeal the following two submissions which had been made by
the appellant in the Court below, and which were rejected by the
learned Judge, were repeated:
(1) that because the shares and loan account were 'pledged'
1
to the appellant by the respondent, and not by the appellant’s
debtor, the company, the provisions of clause 9 of the extension
agreement permitting the appellant to take transfer of the shares and
loan account did not amount to an invalid
pactum commissorium
;
and, in the alternative,
(2) that because the value of the property pledged did not exceed the
amount of the company’s indebtedness to the appellant, clause
9
must be construed as a conditional sale.
PACTUM COMMISSORIUM
[9] A
pactum commissorium
in the context of a pledge is an
agreement that if the pledgor defaults, the pledgee may keep the
security as his own property. Such
an agreement was prohibited in the
Roman law by the Emperor Constantine early in the fourth century AD.
The prohibition was perpetuated
by the Emperor Justinian in
C8.35(34).3, which reads:
‘
Quoniam inter alias captiones praecipue
commissoriae pignorum legis crescit asperitas, placet infimari eam et
in posterum omne eius
memoriam aboleri. Si quis igitur tali contractu
laborat, hac sanctione respiret, quae cum praeteritis praesentia
quoque depellit
2
et futura prohibet. Creditores enim re amissa iubemus recuperare quod
dederunt.
’
The passage may be translated as follows:
‘
Since amongst other harmful practices the severity of
the
lex commissorium
in pledges is on the increase, it has
been decided to invalidate it and abolish all memory of it for the
future. If therefore anyone
is oppressed by such a contract, he shall
find relief by this decree, which annuls such provisions past and
present and proscribes
them in future. For we decree that creditors
shall give up the thing pledged and recover what they have given.’
It is of importance for the purposes of the present appeal to note
that the second sentence begins '
si quis
' (if anyone) and not
'
si debitor
' (if a debtor).
[10] The prohibition against a
pactum commissorium
in a
contract of pledge was very much part of the Roman Dutch law. Grotius
Introduction
2.48.41
(
Maasdorp’s translation
2
nd
ed p 192) says:
‘
The effect of a mortgage is not that
a creditor may retain the mortgaged property for himself, or sell it
on his own authority; nay
more, he may not even stipulate by contract
for the right of forfeiture of the ownership in default of payment,
but he must, after
obtaining judgment, allow the sale to take place
according to the legal process and thus recover what is due to
himself.’
Simon van Leeuwen
Censura Forensis
1.4.8.7
(Barber and
Macfadyen’s translation pp 54-5) says:
‘
The other is the
pactum commissorium
, by which
it is agreed between the debtor and creditor that if the debtor does
not pay on the stipulated day, the thing pledged should
go to the
creditor, and this is prohibited by law.’
Voet in his
Commentary on the Pandects
20.1.25 (Gane’s
translation vol 3 p 502) says:
‘
As regards a commissory agreement, it
is true that it is correctly attached to a purchase; and that
according to the opinion of some
it was perhaps also tolerated of old
in pledges and hypothecs. Nevertheless it is found to have been later
discountenanced in the
latter by Constantine as being harsh and
fraught with unfairness.’
Van der Keessel
3
says:
‘
Dis oorbekend dat die regsgevolg van
'n pand nie is dat die skuldeiser, by wanbetaling van die skuld, die
pand vir hom behou nie;
meer nog, selfs indien dit d.m.v. 'n
uitdruklike ooreenkoms beoog is, is so 'n
lex commissoria
deur
die reg verwerp.’
[11] The prohibition has also been received into the modern South
African law
4
:
Mapenduka v Ashington
1919 AD 343
;
Sun Life Assurance Co of
Canada v Kuranda
supra
n 1;
Vasco Dry Cleaners v
Twycross
1979 (1) SA 603
(A) at 611G.
[12] The appellant’s counsel pointed to the reason why the
prohibition was introduced by Constantine. Voet
loc cit
says:
‘
The reason is that anyone with whom
the arrangement is made that, on the debt not being paid within a
definite time, the pledge shall
remain with the creditor for the
debt, would often find that things of the greatest import and value
would go to pay off a paltry
liability. A needy debtor, pressed by
tightness of ready cash, will readily allow any hard and inhuman
terms to be written down against
him. He promises himself smoother
times and better fortune before the day put into the commissory term,
and thus hopes to avert the
harshness of the agreement by payment;
though such a hope, quite slippery and deceptive as it is, not seldom
finds nothing at all
to encourage it in the aftermath.’
Solomon JA in
Sun Life Assurance Co of Canada v Kuranda,
supra
at 24 said of a
pactum commissorium
:
‘
[T]he very essence of that pact is that the creditor
is entitled to retain the article pledged, however great its value
may be, in
satisfaction of a debt, however small in amount. And it
was because of the harshness and injustice of such an arrangement
made with
the debtor in straitened circumstances that the Emperor
Constantine decreed that such pacts should for the future be
prohibited.’
5
[13] The appellant’s counsel also placed reliance on the following
dictum
of Mahomed AJA in
Meyer v Hessling
1992 (3) SA
851
(Nm SC) at 864I-865D:
‘
The reasons for the prohibition against a
pactum
commissorium
are nevertheless relevant in determining the ambit
and limits of the prohibition. The prohibition has therefore been
held not to extend
to various categories of circumstances in which
the reasons for the prohibition would be of no application. Thus, in
Simon van Leeuwen’s
Censura Forensis
(translated into
English by Barber and Macfadyen) part I book IV
6
,
the following is said:
“
But when, however, the reason of the prohibition
ceases, it is allowed so that the pledge may go to the creditor in
payment of the
debt, according to a fair valuation of the price.
(Costal.
ad l Titius
34, ff.
de Pignor. Act.
; Molin.
de
Usuris quaest.
52; Bronchorst
miscell. controv. cent.
1,
assert.
77; Neguzant
de Pignorib,
4
part princip.
num.
6,
vers. secundo fallit
; Covarruv,
Variar resolut.
lib.
3,
cap.
2.
num.
7,
vers. secundo.
) And
so it has been decided by the Senate of Paris, according to Gregor.
Tholosan. (
Syntagma Jur. Univers. lib.
22,
cap.
9,
num.
14), and by the Senate of Savoy, on the authority of Anton. Fab. (
ad.
Cod. de Pact. pignor. lib.
8,
tit.
23,
defin
1);
and the reason is that an agreement as to selling back is preferable,
and this is the sense of
l
.16 §
ult. ff
.
de
Pignorib, et l. ult. in pr. ff
.
de Contrah. empt.
, in
which the commissory clause appears, and no fraud is imputed to the
creation of the agreement, for a debtor can sell his pledge
not only
to a third party, but also to the creditor (
l
.12,
in pr.
ff
.
de Distract. pignor,
l
.9,
in pr. ff
.
Quib. Mod. pign.,
l
.20, § 3,
ff
.
de
pignor. act.)
. And in like manner the reason of the prohibition
of the commissory clause also ceases if the debtor has expressly
renounced the
protection of the law found in
l
.
fin. Cod.
de Pact. pignor
, as if, with full knowledge of his rights, he has
knowingly and willingly given up to the creditor the thing, subject
to the burden
of the pledge, for the amount of the debt (
arg. l
.1,
§ 5
ff.
de Injur. Junct. l.
pen.
;
Cod.
de Pact. l
. 41,
ff
de Minorib.
; Anton. Fab.
ad
Cod. d. tit. defin.
5).’
7
[14] The crux of the submission on
behalf of the appellant was (I quote from the heads of argument):
‘
There was a very clear, single policy which underlay
the prohibition of
pacta commissioria
… That policy finds no
application in the case of a third-party pledgor, who cannot be
presumed to be labouring under the same
disadvantages as a debtor at
the time of entering into the agreement.’
[15] The approach adopted by the appellant’s counsel is fallacious
because it postulates that whether or not a rule of the common
law
which is clear and unambiguous applies to a given situation, depends
upon an examination of whether the policy considerations
which led to
the law being enacted, are present. Such an approach has already been
rejected by this Court:
Langeberg Voedsel Bpk v Sarculum Boerdery
Bpk
[1995] ZASCA 148
;
1996 (2) SA 565
(A) at 570E-571F, where it was held
8
that where a rule of law is clear and in general terms, it is
unnecessary to enquire in each instance whether the considerations
which motivated the rule are present. Such an enquiry, apart from
constituting a juridically unsound approach, leads to casuistic
reasoning and uncertainty in the law particularly where, as in the
case of the rule under discussion in the matter just cited, the
reasons which motivated the rule do not accord with modern conditions
prevailing when the rule is sought to be enforced.
[16] The rule laid down by Constantine is quite clear: a
lex
commissorium
in a contract of pledge is prohibited both in the
case of the poor man in acute need of money and in the case of the
rich man who
is not. The rule is aimed at a dangerous tendency, not
only at particular cases. The rule is also in general terms: it is
not limited
to a pledge made by the debtor.
9
In such circumstances it is simply not permissible to allow the
policy behind the rule to dictate its applicability, any more than
it
is permissible as the law presently stands
10
to have regard to views expressed during debate in Parliament during
the passage of a bill in order to interpret a modern statute
which is
clear and unambiguous in its terms. Both are laws; both apply to all
situations to which they, in terms, relate; and - absent
constitutional considerations - that is an end of the matter. Of
course, if it can be established that things have so changed since
the rule was instituted as to render the rule no longer appropriate,
that may be reason to change the rule or abolish it altogether.
11
I shall return to the constitutional aspect shortly.
[17] The passage from Van Leeuwen quoted in
Meyer v Hessling,
supra
explains why the prohibition does not apply in the
particular cases referred to. But that passage is not authority for
excluding
the prohibition where the particular facts do not accord
with the policy considerations behind the prohibition; and it is in
that
sense that the passage of the judgment in
Meyer v Hessling,
supra
relied on by the appellant’s counsel and which precedes
the quotation from Van Leeuwen, must be understood.
[18] The appellant’s counsel submitted that there was indeed a
constitutional consideration present, namely, that contracts should
be enforced:
Brisley v Drotsky
2002 (4) SA 1
(SCA) at 15G-16F;
and that ‘contractual autonomy is a part of freedom’ (
ibid
at
35F).
[19] I do not consider that the common law requires development to
limit the general prohibition on
pacta commissoria
so as to
exclude its operation where the pledge is made by a third party. It
may be that the third party is the corporate alter ego
of the debtor,
as in the present case, or subject to the same pressures as the
debtor (eg the debtor’s spouse or parent), or a
person whom the
debtor will be obliged to compensate in full if the pledged article
is forfeited.
12
But in any event, the potential for injustice ─ particularly usury
and an unfair distribution of an insolvent pledgor's assets
─
remains, regardless of whether the pledgor is also the debtor.
Accordingly, the limitation on contractual freedom is, in my view,
justifiable especially in the light of the constitutional protection
of the
values of dignity and
equality.
[20] Furthermore, the Civil Codes of France, Germany, Belgium and the
Netherlands, all countries which had a common law similar to
our own,
contain a prohibition in general terms.
[21] The French Civil Code
13
provides in art 2077 that 'A pawn may be given by a third party for
the debtor'. The immediately following article, art 2078, provides:
‘
A creditor cannot, in case of non-payment, dispose of
the pawn: but he can apply to the Court to be authorized to retain
the pawn
as payment to the extent of its value, according to an
appraisal made by experts, or to have it sold at auction.
All covenants allowing a creditor to
appropriate the pawn, or to dispose of it without complying with the
formalities above set forth,
shall be void.’
[22] The German Civil Code
14
contemplates that the pledgor may not be the debtor ─ for example,
§ 1225 says, inter alia: 'If the pledgor is not the personal
debtor, the claim passes to him, to the extent that he satisfies the
pledgee'. §1229 provides:
‘
An agreement made
before the existence of the right to sell, by which the ownership of
the thing falls to the pledgee or is transferred
to him, in case he
does not, or does not in due time, receive satisfaction, is void.’
[23] The Belgian Civil Code provides
in art 2077 that 'A gage may be given by a third party for the
debtor', and in the immediately
following article, art 2078:
'A creditor may not, in
default of payment, dispose of the gage except for obtaining an order
at law whereby such gage will remain
with him in payment and up to
the amounts due, according to a valuation made by experts, or will be
sold at auction.
Any clause is void which
authorizes the creditor to appropriate the gage for himself or to
dispose of it without the above procedures.'
15
[24] The New Netherlands Civil Code
16
which came into operation on 1 January 1992 also contemplates a
person other than the debtor pledging property. For example, arts
233.1 and 234.1 provide:
'233.1. The grantor of a
pledge or hypothec, who is not himself the debtor, is liable for
depreciation of the property to the extent
that the security of the
creditor is endangered by this depreciation and that he or a person
for whom he is responsible can be blamed
therefor.
234.1. If property of
both the debtor and a third person has been pledged or hypothecated
to secure one and the same debt, the third
person can demand from the
creditor who proceeds to execution that the property of the debtor be
included in the sale as well and
that it be sold first.'
Article 235 then follows, and that
article is not limited to pledges given by debtors. It provides:
'Any stipulation whereby
the pledgee or the hypothecary creditor is given the power to
appropriate the pledged or hypothecated property
is null [original
text: 'is nietig'].'
[25] In conclusion on the comparative
survey of the law of some Western European countries, I can do no
better than quote what Maasdorp
JA said in the minority judgment in
Mapenduka v Ashington, supra
at 358:
'The reasons on which
this law is grounded are as sound to-day as they were in the times of
Constantine.'
That position remains.
17
[26] There is accordingly no merit in the first argument advanced on
behalf of the appellant. Nor is there any merit in the second
argument.
CONDITIONAL SALE
[27] Despite the provisions of the
Code to which I have already referred, D 20.1.16.9 provided that 'It
can be a term of a
pignus
or
hypotheca
that if the
money is not paid by a certain date, the creditor can have the
property as buyer at a fair price then to be assessed’
because ‘in
this case, there is, as it were, a conditional sale’.
18
[28] In
Mapenduka v Ashington, supra,
De Villiers
AJA, in whose judgment Wessels AAJA concurred, analysed the common
law authorities and concluded by stating the law as
follows (at 352
in fine–353):
'The language of the Digest is designedly indefinite. It
is not a real sale, for the transaction does not lose the character
of a
pledge and the debtor retains the right to claim his property
against payment of the debt. But if when the time for payment arrives
the debtor is willing that the creditor should retain the pledge as
his own, there can be no objection to this provided a fair price
is
given.'
Maasdorp JA said at 357 that:
‘
[W]e may take it that
these two laws [C 8.35(34).3 and D 20.1.16.9] existed side by side,
and that while the
lex commissoria
was invalid in pledges, the
parties could still agree that if the debt was not paid on the due
date, the pledgees could take over
as purchaser the subject of the
pledge at a price to be fixed at the time the debt became due. To
that extent C
onstantine’s
strict law in the
Code
condemning the
lex commissoria
is relaxed’,
and the learned Judge of Appeal goes
on to show that both the provisions of the Code and the Digest were
received into the law of
Holland, Germany and France.
19
[29] The passage quoted from the
judgment of De Villiers AJA
20
in the previous paragraph of this judgment must be read in context.
That passage is preceded by a discussion of the old authorities
for
the purpose of determining when the valuation of the thing pledged
must be made. It must not, as was suggested in argument, be
taken as
authority for the proposition that the pledgor cannot, at the time
the pledge is concluded, agree with the creditor that
the latter may
keep the thing pledged if the debt is not paid, provided a fair
valuation of the thing is made when the debt falls
due; nor must it
be taken as authority for the proposition that such agreement is not
binding on the pledgor if he is unwilling when
the debt becomes due
that the creditor retain the thing. What is decisive is the proviso
that a fair price is to be given when the
debt falls due, not the
time when the agreement is concluded. Indeed, it is evident from D
20.1.16.9 (quoted in para [27] above)
that such an agreement may be a
term of the pledge; and an agreement made at that time was upheld in
Sun Life Assurance Co of Canada v Kuranda, supra,
because it
was found that the requirements of the proviso were satisfied (see
25-26). It is perhaps desirable to emphasize that to
the extent that
the valuation exceeds the amount owing to the debtor, the excess
belongs to the pledgor.
[30] In the present case there never
was an agreement, whether express or tacit, that the security pledged
could be taken over at
a just price. Clause 9 of the extension
agreement provides that if the appellant elects to take transfer of
the immovable property
owned by the company, the property will be
valued at its market value and the appellant’s claim against the
company will be reduced
accordingly. By way of contrast, no such
valuation provision is included if the appellant elects to acquire
the shares and the respondent’s
loan accounts in the company.
[31] The submission on behalf of the
appellant that if the value of the article pledged in the event
proves to be less than the debt,
D 20.1.16.9 governs the position,
cannot be upheld. Contracts against public policy are judged
objectively, regard being had to ‘the
tendency of the proposed
transaction, not its actually proved
result’
21
- per Innes CJ in
Eastwood v Shepstone
1902 TS 294
at 302.
22
Here,
the contract provided that in the event of default, the
appellant would be entitled to elect to acquire the respondent’s
shares
and loan account in the company. The contract did not provide
that a fair valuation (or indeed that any valuation) would be made
of
the shares and loan account. The present facts are accordingly
distinguishable from the facts in
Sun Life Assurance Co of Canada
v Kuranda, supra,
where the basis of the valuation was agreed
upon and the question at issue was whether such basis would result in
a fair valuation
at the time the security was realised. That part of
clause 9 which deals with the acquisition of the shares and loan
account is nothing
other than an invalid
pactum commissorium
,
as the learned Judge in the Court below correctly held.
ORDER
[32] The appeal is dismissed with
costs, including the costs of two counsel.
..…………….
T D CLOETE
JUDGE OF APPEAL
Concur
:
HOWIE P
SCHUTZ JA
STREICHER JA
LEWIS JA
1
Put more accurately, the rights in the shares and the loan account
were ceded
in sercuritatem debiti
; but where a right is ceded
with the object of securing a debt, the cession is regarded as a
pledge of the right in question:
Millman NO v Twiggs and Another
[1995] ZASCA 62
;
1995 (3) SA 674
(A) at 676H-J and cases there quoted. No reason,
commercial or otherwise, requires in a case such as the present that
such a cession
of incorporeal rights should be dealt with
differently from a pledge of a movable and it was so dealt with in
the context of a
pactum commissorium
in
Sun Life Assurance
Co of Canada v Kuranda
1924 AD 20.
2
The Latin text is taken from the Krueger version of the
Corpus
Iuris
. Other texts have '
repellit
'. The difference is
not significant.
3
Praelectiones Iuris Hodierni ad Hugonis Grotii Introductionem ad
Iurisprudentiam Hollandicam
edited by Van Warmelo, Coertze,
Gonin and Pont, and translated into Afrikaans by Gonin, vol 3 p 473
(ad Grotius 2.48.41).
4
There is one statutory exception in the Cape: s 14 of Act 36 of
1889 (C) provides: ‘A pledge pawned for ten shillings, or under,
if not redeemed within the year of redemption, shall become and be
the pawnbroker’s absolute property.’ Successive sections
provide, however, that pledges pawned for above ten shillings shall
be disposed of by sale by public auction and not otherwise
(although the pawnbroker may bid and purchase the pledge) - s 16;
and that any surplus above the amount of the loan and profit
due at
the time of the sale, less the cost of the sale, shall be paid by
the pawnbroker to the holder of the pawn ticket on demand
made
within three years after the sale - s 19.
5
See also Zimmerman
The Law of Obligations Roman Foundations of
the Civilian Tradition
pp 223-5 s.v. ‘The consequences of
non-redemption of the pledge’, where the development of the Roman
law is set out.
6
Chapter 8 para 7.
7
The punctuation as it appears in the translation quoted, and the
original text, has been inserted.
8
At 570I and 571D-E.
9
There
is, with respect, no warrant for Schiller
Selected Texts and
Cases on the Roman Law of Things with an excurses on the Roman Law
of slavery
to translate '
commissoria pignorum legis crescit
asperitas
' in C8.34(35)3 as 'the hardship which the agreed
foreclosure of the pledge imposes upon
the debtor
grows'
(underlining supplied). There is similarly no justification for Van
Leeuwen loc cit (quoted in para [10] above) and Schorer
(note 266 to
Grotius 2.48.41) to limit the pactum commissorium to an agreement
between
a debtor
and a creditor. Schorer’s note begins
'Grotius disapproves of an agreement (pactum commissorium) between a
debtor and creditor
to the extent that, if the debt be not paid at
the proper time, the mortgaged property is to become the property of
the creditor
in full ownership for the amount of the debt …’
(Maasdorp’s translation, 2
nd
ed p 546). All three
authors are plainly dealing with the factual situation which would
most commonly arise and must not be understood
as placing a
restrictive interpretation on the phrase '
si quis
' emphasised
in para [9] above.
10
See the minority judgment of Mokgoro J in
Case and
Another v Minister of Safety and Security and Others
[1996] ZACC 7
;
1996 (3) SA
617
(CC) 624-5, n 18.
11
Cf the remarks of Schutz JA in
Langeberg Voedsel Bpk v Sarculum
Boerdery Bpk, supra,
at 572G-H and Howie P in para [30] of the
as yet unreported judgment in
Wagener v Pharmacare Ltd; Cuttings
v Pharmacare Ltd
, case 32/2002.
12
Cf Voet
loc cit
‘Nor does it matter either whether an
agreement of this sort takes place between debtor and creditor, or
between a debtor and
his surety; nor whether the debtor has given
this safeguard when assigning pledge and surety together, or has
established the
pledge for the surety himself to secure his
indemnity. We know that the surety himself is also a creditor of him
for whom he went
surety; and thus there is alike the same
opportunity for unfairness and the same reason to prompt the
discountenancing of such
an agreement.’
13
Translation by Henry Cachard in the revised edition at pp 543-4.
14
Translation by Simon L Goren at p 222.
15
The Constitution of Belgium and the Belgian Civil Code as amended to
September 1, 1982 by John H. Crabb.
16
The quotations which follow are taken from the translation by
Haanappel made under the auspices of the Ministry of Justice of the
Netherlands at the Quebec Centre of Private and Comparative Law.
17
See also what Kotze JA said of the
actio de pauperie
in O'Callaghan NO v Chaplin
1927 AD 310
at 366:
'The doctrine, therefore,
which they [the common law authors] state was observed in actual
practice in their time, has since been
accepted by the more modern
and maturer jurisprudence, and still prevails as existing law in
several civilised European countries
as well as our own.'
18
Watson’s translation in
The Digest of Justinian
by Mommsen, Krueger and Watson (eds.) vol 2 p 585.
19
As I have already pointed out, the judgment is a minority judgment
but it is consistent with the majority on this point.
20
Followed in
Van der Westhuizen v Sibiya
1961 (4) SA 413
(N)
at 436D.
21
And for that reason it was, with respect, incorrect for Lange AJP to
have had regard to the facts in
Dawson v Eckstein
(1905) 10
HCG 15 at 19.
22
Approved in
Sasfin (Pty) Ltd v Beukes
1989 (1) SA 1
(A) at
8J-9A/B and
Botha (now Griessel) and Another v Finanscredit (Pty)
Ltd
1989 (3) SA 773
(A) at 783C.