---

Case no: 81/85 E du P

IN THE SUPREME COURT OF SOUTH AFRICA

(APPELLATE DIVISION)

In the matter between

CARGO MOTORS Appellant
and
G L MOTORS Respondent

Coram: RABIE, CJ ,JOUBERT, HOEXTER, HEFER et

JACOBS, JJA.

Heard: Delivered

13 May 1986

JUDGMENT

RABIE, CJ: /

RABIE, CJ:

This case began as an application in the

Witwatersrand Local Division in which the present

appellant, a distributor of Mercedes Benz motor vehicles,

prayed for an order directing the respondent, a dealer

in motor vehicles, to hand over to it a 1984 model

Mercedes Benz 500 SEC motor car of which the appellant

alleged that it was the owner. The appellant's case,

of which fuller details will be given below, was that

it had on 17 May 1984 in a cash transaction sold and

delivered the aforesaid vehicle to one Lukas Malepe;

that the cheque which was given to it in payment of

the purchase price of the vehicle was a forgery, and

that, by reason of the fact that the purchase price

was/.........

3

was not paid, the ownership in the vehicle remained

vested in the appellant. The respondent company

(Crown Service Station (Pty) Ltd, which trades as G.L

Motors) denied that the appellant was the owner of the

vehicle and alleged that the respondent had on or

about 23 May 1984 purchased the vehicle in a cash

transaction from one Terror, who had, in turn, bought

the vehicle for cash from Lukas Malepe. The respondent

alleged, furthermore, that even if the appellant were

still the owner of the vehicle, it was estopped from

vindicating it from the respondent. After the

appellant had filed an affidavit in reply to the respondent's

opposing affidavit, the application was referred for

the hearing of oral evidence on certain issues as

defined/......

4

defined by the Court. At the conclusion of the hearing

Kriegler,J, dismissed the application with costs, holding

that the appellant had parted with its ownership in the

vehicle when it sold and delivered it to Malepe on 17

May 1984. The learned Judge went on to say that, if

it had been necessary to decide the matter on the basis

that the appellant had retained its ownership in the

vehicle,he would have held, for the reasons stated by

him in his judgment, that the appellant was estopped

from asserting its ownership as against the respondent

(The appeal is against the whole of the judgment of

the Court a quo.

The appellant called three witnesses. The

first/.......

5

first was Mr. R W Brien, who testified that he was the

manager, and "the person in charge", of the appellant's

branch in Rosebank, Johannesburg. (In a statement

made by him to the police on 24 May 1984 he referred to

himself as the "sales manager" at the appellant's Rosebank

branch.) The second witness was Mr. A D Venables, the

appellant's financial director, and the third was Mrs

Nielson, a credit control clerk at the appellant's

head-office in Johannesburg. The respondent called

only one witness, viz. Mr. J F E Tutt, its managing

director. The facts of the case, as they emerge

from the evidence, are, in so far as relevant, set

out below.

According to Brien, he heard on 14 May 1984

that/.....
6
that there were "negotiations in progress" with regard

to the sale of the above-mentioned Mercedes. (All

the dates mentioned below were dates in May 1984.)

One Müller, a salesman in the appellant's employ,

conducted the negotiations on behalf of the appellant

The prospective purchaser, Brien was informed, was one

Lukas Malepe. According to reports made to Brien,

Malepe was a Black man from Maseru, Lesotho, who stayed,

while in Johannesburg, at the Carlton Hotel. Staying

with Malepe at the Carl ton Hotel, Brien was told, was

a Mr. Hanley, who was said to be Malepe's adviser.

Brien assumed that Malepe visited the appellant's premises

and that Müller spoke to him there. Brien himself

never saw Malepe. Miiller, according to Brien, also

spoke/. .

7

spoke to Malepe on the telephone, and also went to

the Carlton Hotel, where (so Brien was told) he spoke

"to several people". Brien told Müller that, because

the would-be purchaser was from Lesotho, the appellant

would "require a bank guaranteed cheque before he could

deliver the vehicle to him." Subsequently, Brien

testified, Müller told him that they'd agreed they would

get the bank guaranteed cheque", and that the cheque was

"to be flown" to Johannesburg "on the daily service

from Maseru." The purchase price of the car was to be

R97 050. On 15 May Brien received a telephone call

from someone who, according to Brien, spoke in "an accent

from the Southern part of England". This man introduced

himself as "Hanley" and said to Brien that the delays

in/......

8

in the transaction concerning the vehicle "were causing

him perhaps to reconsider the purchase". "In other words",

Brien testified, "he was putting pressure on me to get

the car delivered to him - or to Malepe." The next day

(16 May) Brien dropped Müller off at the Carlton Hotel .

Müller was there given a cheque, which he took to the

appellant's premises in Rosebank, where Brien saw it.

The date on the cheque was 16 May 1986. It was not a

bank guaranteed cheque, but purported to be a bank cheque

for R97 050, drawn by Barclays Bank International Limited,

Maseru, Lesotho, on itself, in favour of "Cargo Motors."

On 17 May Brien was handed a document which purported

to contain an offer by Malepe to buy the vehicle

from /......

9

from the appellant for R97 050. It was a printed document,

headed "Offer to Purchase", on which Müller had written

the name "Lukas Malepe", and the address "Maseru, Lesotho"

Malepe did not sign the document. The space provided

in the document for the signature of the "purchaser"

was left vacant. Brien signed his name at the foot of

the document, next to the printed words "Authority to

Process". By giving this "authority", Brien testified,

he "authorised the deal". After he had given this

authprity, Brien said, he sent the "deal", with the

aforesaid cheque, to Mr. Niel Calder, the appellant's

credit manager. The credit manager, he testified,

is the person who determines the manner of payment and

who decides "whether ownership passes or not or whether

the/......

10

the deal goes through or anything else." Calder accepted

the aforesaid "Offer to Purchase" by signing his name

and writing the date 17.5.1984 below the printed words

"This Offer Accepted For And On Behalf Of Cargo Motors

Corporation Limited." Above these printed words, in

a space provided (so it seems) for the noting of "Other

Instructions", Calder wrote: "COD PD". Brien conceded

that these letters meant "Cash on Delivery Paid ".

After this document had been signed by Calder, it was

returned to Brien. On the same day (17 May) a "Vehicle

Invoice" relating to the sale of the vehicle was issued

by the appellant's Rosebank branch. The invoice

contained the name Lukas Malepe; the address "Maseru

Lesotho/.......

11

Lesotho"; particulars of the vehicle; the purchase

price and, also, next to the printed word "Terms",

the typwritten letters "C.O.D)."

According to Brien the vehicle was delivered

to the purchaser by Müller on 18 May. There were also

handed over, one gathers from Brien's evidence, the

aforesaid invoice; a temporary licence; a temporary

third party disc; the necessary registration papers;

a change of ownership form; "guarantee forms";

two sets of keys to the car, and an owner's manual.

On the morning of 23 May the aforesaid Tutt

called on Brien at the latter's office. The reason

for the visit, according to Tutt, was as follows.

On/......

12

On 21 May one Pienaar and a Black man, who was not

known to Tutt, came to Tutt's place of business to

inquire whether he (Tutt) would be interested in buying

a virtually new 500 SEC Mercedes Benz motor car. A price

of about R75 000 was mentioned. They did not have the

car with them, and Tutt said that he would like to see

it. They brought the car the next day (22 May).

There was then a third man with them who was introduced

to Tutt as Louis Ferror. Tutt was told that Ferror

was the owner of the car, and that he had paid Malepe

R80 000 for it. Tutt was interested in buying the

car, but he was suspicious of the offer because the

vehicle was virtually new (it had done only about 1 400

kilometres) and because the price asked for it was

much/......

13

much less than the price of a new car of that kind.

Tutt, who was shown the papers which the appellant had

over handed/when it delivered the vehicle, called for proof

of Ferror's title and also asked for a clearance by

the police to the effect that the vehicle was not

listed as stolen. Ferror thereafter produced an

affidavit, attested to before an attorney, wherein the

deponent, who said that he was Lukas Malepe, declared

that he had sold the vehicle to Ferror and that Ferror

had paid him the purchase price of R80 000 in full.

Ferror also produced a clearance by the police, as

requested. Tutt, still uneasy about the offer made to

him, then went to see Brien, whom he knew well. There

is/....

14

is little reason to doubt that Tutt wished to establish

whether it would be safe for him to buy the car from

Ferror, and that he put questions to Brien with a view

to discovering whether the appellant still had an interest

in the car which could be affected if he (Tutt) were

to buy the car. There is, however, a dispute on the

evidence as to precisely what questions Tutt put to

Brien and what answers he received in reply thereto.

In view of the conclusion to which I have come regarding

the appeal, I do not propose to set out the evidence

relating to that dispute. Suffice it to say that the

learned Judge found that neither Brien nor Tutt was

a particularly satisfactory witness, but that there

were "overwhelming probabilities" that "Brien did

represent/.....

15

represent to Tutt that the applicant (appellant) had

no "further interest in the vehicle.

Tutt bought the vehicle from Ferror shortly

after midday on the day of his conversation with Brien,

He paid Ferror R30 000 in cash and delivered to him a

motor car valued at R40 000.

Following on his conversation with Tutt,

Brien telephoned Mrs. Nielson and Mr. Venables. He

told them about the transaction with Malepe and asked

them whether the cheque had been paid. They caused

inquiries to be made, and during the afternoon of the

next day (24 May) Brien was informed that the cheque

was a forgery.

Tutt succeeded in recovering the motor car

which/......

16

which he had delivered to Ferror, but not the R30 000

he had paid to him in cash.

The learned Judge found that the cheque that

had been given to the appellant in payment of the vehicle

was accepted by Calder "as being as good as cash", and

that in the absence of any evidence to the contrary by

Calder it should be concluded that he "intended to

transfer ownership in the vehicle, fondly believing

that the bank cheque was infallible and that he would

never see or have to concern himself with Malepe or the

vehicle again."

Mr Goldblatt, for the appellant, submitted

that the trial Court erred in holding that the onus was

oh the appellant to prove that it was the owner of the

vehicle/

17

vehicle, and, also, in finding on the evidence that the

appellant had parted with its ownership in the vehicle.

As to the question of onus, counsel submitted

that the trial Court should have held that the onus was

on the respondent to show that the appellant was not

the owner of the vehicle. His contention was, as I

understood it, that since the appellant was the owner

of the vehicle before the conclusion of its aforesaid

transaction with Malepe, the onus was on the respondent

to prove, if it wished to retain possession of the

vehicle as against the appellant, that the appellant

had parted with its ownership when it sold and delivered

the vehicle to Malepe. I do not agree with this

contention. The application constituted a rei vindicatio.

The/........

18

The appellant alleged that it was the owner of the

vehicle and it sought to recover it on the basis of its

ownership. The respondent denied that the appellant

was the owner, and in the circumstances the onus was on

the appellant to prove its ownership. There is ample

authority to the effect that in vindicatory proce

the onus is on the claimant to prove his ownership.

See e.g. Voet 6.1.20; Marcus v. Stamper and Zoutendyk

1910 AD 58 at 72, and Ruskin NO v. Thiergen 1962(3) SA

737 (A) at 744.A-F

In contending that the trial Court erred

in finding that Calder must be held to have accepted

the cheque "as being as good as cash" and to have intended

to part with the appellant's ownership in the vehicle,

Mr/......
19

Mr Goldblatt commenced his argument by referring to a number of decided, cases in support of the following legal submissions, viz.:

(i) that every sale is, in the absence of proof to the contrary, presumed to be a sale for cash;

(ii) that in a sale for cash ownership in the thing sold does not pass until the purchase price has been paid, even if delivery has meanwhile been made; and

(iii) that payment by cheque does not constitute payment until the cheque is met, and that the fact that a seller has taken a cheque in payment does not lead to an inference that he has given credit to the buyer.

(With regard to (i), counsel referred to Laing v. South African Milling. Co. Ltd 1921 AD 387 at 399; Lendalease Finance (Pty) Ltd v. Corporacion Mercadeo Agricola

and/.....

20

and Others 1976(4) SA 464(A) at 490 E-F; and, with

regard to ( ii ) and ( i ii ) , he relied on Grosvenor Motors

(Potchefstroom) Ltd v. Douglas 1956(3) SA 420 (A) at

423 H-425 A; Nowell v. Franzen 1956(4) SA 35(C) at; 38

G-39 C; Bold v. Cooper and Another 1949(1) SA 1195(W) at 1199 i.f. -

1200; Eriksen Motors (Welkom)Ltd v. Protea Motors,

Warrenton and Another 1973(3) SA 685(A) at 693 F-694 A,

and the Lendalease case, supra, at 490 A-F). The

transaction in the present case, counsel argued, was

a cash sale; ownership in the vehicle would, therefore,

have passed to Malepe only upon payment of the purchase.

price; the price was not paid, the cheque having been

a forgery, and consequently ownership in the vehicle

remained vested in the appellant. Thus the argument

The/.....

21

The fact that Calder wrote "COD PD" on the "Offer to

Purchase", counsel submitted, was no indication that

he believed that the cheque was as good as cash, but

merely meant that Malepe had complied with the request

(as testified to by Brien) that he should furnish the

appellant with a bank guaranteed cheque. Counsel

conceded that the appellant clearly believed that the

cheque would be met, but be submitted that that did

not mean that it was prepared to let its ownership in

the vehicle pass to the purchaser before the cheque

was paid.

I am not persuaded that the trial Court erred

in its aforesaid view of the matter. While it is no

doubt a rule of our law, as was submitted by Mr Goldblatt,

that/......

22

that a sale is usually, in the absence of evidence

pointing to a different conclusion , presumed to be a

cash sale, and that in a cash sale ownership in the thing

sold does not, despite delivery, pass to the purchaser

until the purchase price has been paid, one cannot,

on the evidence given in the present case, safely

conclude that the transaction in issue was a cash sale

in which the seller intended that its ownership in the

thing sold would not pass before the purchase price

was paid. The question as to when, in any particular

transaction, ownership is to pass, has to be determined

with reference to the intention of the contracting parties

as it emerges from the terms of their agreement, and,

where relevant, the surrounding circumstances and the

conduct/......

23

conduct of the parties. (See Weeks and Another v.

Amalgamated Agencies, Ltd 19 20 AD 218 at 230; Eriksen

Motors (Welkom) Ltd v. Protea Motors, Warrenton and

Another, supra, at 694 A, and the Lendalease case, supra,

at 489 i.f. - 490 A.) In the present case there is

no direct evidence as to all the terms on which the

parties contracted. Müller, who conducted the

negotiations leading up to the conclusion of the sale

on behalf of the appellant, did not give evidence.

Brien was called to testify, but he had no first-hand

knowledge of what passed between Müller and the purchaser

of the vehicle, and he could not testify as to Calder's

state of mind when he accepted the cheque and authorised

the/

24

the delivery of the vehicle to Malepe. With regard

to Brien's evidence, reference should perhaps be made

to the contents of a booklet, issued by the appellant

for use by its salesmen and staff, on which he was

examined by counsel for the respondent. In this booklet

employees of the appellant are told that in a cash

on delivery transaction the vehicle may only be handed

over after receipt of "cash for the full amount of the

invoice", or "a cheque, but not a post-dated cheque"

With regard to payments by cheque, the instruction

reads that "there are instances where a cheque will

not be acceptable until cleared by the bank or

guaranteed by the bank". The last-mentioned

note would seem to indicate - I put it no higher

than/......

25

than that - that a bank guaranteed cheque was considered

by the appellant to be as good a guarantee of payment

as a cheque "cleared by the bank". It may be added

in this connection that Brien stated that it was his

belief that a bank guaranteed cheque could not be

countermanded, and that a banker could not refuse to

pay such a cheque. With regard to the cheque in issue

in this case, he stated that "it wasn't cash", but that

he regarded it as suitable", i.e. that it "would be met",

and that he "felt that the interests of the company

were protected by this particular cheque."

As pointed out above, it was Calder, the appellant's

credit manager, who accepted the cheque, who signed

the "Offer to Purchase" form on behalf of the appellant

and/......

26

and wrote thereon the letters "COD PD", and who authorised

delivery of the vehicle to Malepe. This being so,

it is clear that it is the intention with which Calder

did these things which is decisive of the question

whether the appellant intended to transfer its ownership

in the vehicle to the purchaser. (It may be added

at this point that it was not disputed that Malepe wished

to make himself owner of the vehicle.) Calder, as

said before, was not called to testify and the trial

Court held that, in the absence of evidence by him

which could lead one to a different conclusion, the

inference to be drawn from all the evidence in the case

was that he considered the cheque to be tantamount to

cash and that he was prepared to let the ownership in

the vehicle pass to Malepe.

I/........

27

I have already indicated that I am not

persuaded that the trial Court's decision was wrong.

I think the inference is justified that Calder would

not have written the letters "COD PD" on the "Offer

to Purchase" form if he had"not regarded the cheque as

tantamount to cash. One may add in this connection

that Calder would have had good reason to believe

that the cheque was as good as cash. It was, on the

face of it, a cheque drawn by Barclays Bank International

on
Limited/itself, in favour of the appellant, and, there

being nothing which suggested that it was not a genuine

document, Calder would have good reason to believe that

it was as good as cash. If he held such a belief (as

it would seem that he did), it would explain why he

wrote/.......

28

wrote "COD PD" on the "Offer to Purchase" form and

why he authorised delivery of the vehicle to Malepe.

Calder's conduct, one may add, would not seem to have

been in conflict with the appellant's aforementioned

policy regarding delivery of a vehicle when payment

is made by cheque. Counsel for the appellant submitted,

as stated above, that by writing "COD PD" on the "Offer-

to Purchase" form, Calder intended to indicate no more

than that Malepe had complied with Brien's request

that a bank guaranteed cheque should be furnished.

This submission does not, in my view, afford a

satisfactory explanation for Calder's use of

the word "paid" ("PD"), and I find myself unable to

agree with it.

There/......

29

There are, as pointed out in the judgment

of the Court a quo, various considerations which support

the view that Calder regarded the cheque as tantamount

to cash, and that, when he authorised the delivery of

the vehicle, his intention was that ownership in the

vehicle should pass to Malepe. According to inforniation

available to Brien at the time of the transaction,

Malepe was going to take the vehicle to Lesotho. It

was for this reason, Brien said, that no sales tax was

payable in respect of the sale of the vehicle. Calder,

too, would have seen on the "Offer to Purchase" form

that Malepe was said to be a resident of Maseru, and,

also, that no sales tax was payable in respect of the

sale. It seems to me that if Calder had not regarded

the/......

30

the cheque as being as good as cash and had not intended

that ownership in the vehicle should pass to Malepe ,

the appellant would, at the very least, have taken steps

to establish precisely where in Maseru Malepe resided,

and what his business or occupation was. No attempt

was made to do so. This is not all. It does not

even appear from the evidence that there ever was a

person called Lukas Malepe. Brien never saw anyone

by that name, and it does not appear from his evidence

whether Müller saw such a man or whether he merely

negotiated with Hanley, who was said to be Malepe's

adviser, or someone else. (It is not strange, in the

circumstances, that the learned trial Judge said that,

for all the appellant knew, Malepe was "merely the

figment/......

31

figment of some criminal's ingenuity".) One should add,

also, that various documents which served to suggest that

Malepe was the owner of the vehicle, were handed over

by the appellant when the vehicle was delivered to the

purchaser. A final point to note is that the appellant

received the cheque on 17 May, but that it never made

any inquiries as to whether it was a good cheque or

whether it had been met until after Tutt had spoken to

Brien on 23 May. Evidence given by Venables shows,

it seems to me, that the necessary information could

have been obtained in less than an hour.

Mr Goldblatt submitted that motor dealers
do not always exercise the
caution about

receiving payment when they make delivery of vehicles

sold/......

32

sold by them, and that the appellant's failure to take

precautions of the kind mentioned above should not be taken

to indicate in any way that Calder believed that the cheque was as good

as cash and that the appellant could, therefore, safely part with its

ownership in the vehicle. The submission as to the

lack of caution sometimes displayed by motor dealers is

not based on any evidence on record. Furthermore,

as far as the present case is concerned, it should be

noted that Brien agreed with cross-examining counsel's

suggestion that steps by the appellant to establish

Malepe's identity and his residential address, etc.,

were thought to be ''unnecessary once you had a Barclays cheque."

In conclusion I should say that Mr Goldblatt

contended that the trial Court was not entitled to draw

the/........

33

the inference it did from the fact that Calder was not

called to give evidence. Counsel contended, if I under-

stood him correctly, that the rule that an adverse

inference may be drawn against a party for not

calling an available witness applies

only to the case where there are two likely versions

concerning an issue before the Court, and that the

present case is not one where the Court was called upon

to decide between two such versions. I do not agree

with the argument. The fact that Calder wrote "COD PD"

on the "Offer to Purchase" form, coupled with the fact

that the appellant did not take precautions (as referred

to above) which it would probably have taken if it had

believed/......

34

believed that it remained vested with the ownership

of the vehicle, strongly suggests that Calder considered

the cheque to be as good as cash and that he was accordingly-

prepared to let ownership in the vehicle pass to Malepe,

and in the absence of evidence by Calder showing

that the drawing of such an inference would not be

warranted, I am of the opinion that one cannot say

that the trial Court erred in coming to the conclusion

that it did.

In view of what I have said above, I do

not find it necessary to discuss the defence of estoppel

that was raised by the respondent.

The/.......

35

The appeal is dismissed with costs, including

the costs of two counsel.

P J RABIE CHIEF JUSTICE

JOUBERT, JA.

HOEXTER, JA.
Concur HEFER, JA.

JACOBS, JA.

---