Darling v Registrar of Deeds Cape Town

• Jurisdiction: South Africa
• Judge: Coram Lord De Villiers CJ, Innes J and Solomon J
• Judgment Date: 12 February 1912
• Citation: 1912 AD 28
• Hearing Date: 03 February 1912
• Court: Appellate Division

Lord De Villiers, C.J.:

The applicant, being unable to pay either the capital or the interest due by him to Marais on a bond for £800, signed a power of attorney on the 19th September, 1911, by which he conferred on Marais very extensive powers of dealing with the land mortgaged. After reciting that he was unable to repay the capital and was still in arrear with the interest, in consequence of which the mortgagee was desirous of obtaining the full control over the management and disposal of the property, the power proceeded thus: "I do hereby appoint the said Marais to be my true and lawful attorney and agent with irrevocable power for me and in my name to sell and dispose of the property at any time hereafter in the sole discretion of the said mortgagee for whatever amount may be obtained at public auction or by private treaty without reference to or confirmation by me, or otherwise to deal with the same in his absolute discretion for his sole benefit, or to take transfer and conveyance in his name in full satisfaction of all claim whatsoever due under the aforesaid bond without reference to me for confirmation thereof . . . . . and generally to do and perform all such acts, matters and things, and to make, sign and deliver all such deeds and instruments as may be necessary or most for my advantage." Acting under the power, Marais advertised the property for sale at public auction, and on the 30th October, 1911, it was sold to Clark for £610. Transfer duty was duly paid on this amount, but the respondent, as Registrar of Deeds, refused to register the transfer from the applicant to Mrs. Clark on the ground that, as Marais had become entitled, according to the true meaning of section 2 of Act 5 of 1884, to the land described in the power, transfer duty ought also to have

Lord De Villiers, C.J.

been paid by him. An application to the Cape Provincial Division for an order compelling the respondent to register the transfer was refused with costs, and against that judgment the present appeal has been brought.

The learned JUDGE PRESIDENT in his reasons has quite accurately described the document upon the construction of which the decision must depend, as a power of attorney to enable the mortgagee to obtain satisfaction of his claim. Full authority is given to the mortgagee to sell the property on behalf of the mortgagor either by public or private sale, or otherwise to deal with the property in his absolute discretion for his sole benefit, or to take transfer of the property in full satisfaction of his claim under the bond, but, notwithstanding these large powers, there is nothing in the document to show that the mortgagee was intended to be more than the agent of the mortgagor for the purpose of realising the mortgaged property to the beat advantage of the mortgagee.

The power purports to be irrevocable, but until it was acted upon the mortgagor, as principal, could revoke it provided, of course, that he first discharged the debt, the payment of which in full or in part it was the sole object of the, power to secure. In the case of van Niekerk vs van Noorden (17 S.C. 63) the plaintiff had, in consideration of advances made by the defendant, given him a power of attorney to transfer certain property and receive the proceeds of his sales of such property. The power purported to be irrevocable and in rem suam until transfer was effected in favour of the purchasers and the price paid by them. It was held that the power was irrevocable until the advances made by the defendant were repaid to him, but the opinion was expressed that the plaintiff could at any time, by paying the whole amount of the debt due to the defendant, claim that the power given to him should be revoked. In the present case the power of attorney was given when the debt under the bond was already due. As mortgagor the applicant was entitled, before he gave the power, to pay the full amount due with interest and to claim the return of the bond duly cancelled. Did he lose that right by reason of his having given the power of attorney? He

Lord De Villiers, C.J.

would undoubtedly have lost that right if the effect of the document was to create a novation of the debt by the substitution of a fresh contract between the parties, but, as has so frequently been decided (e g., in Ewers v Resident Magistrate of Oudtshoorn, Foord, p. 32), a novation cannot, in the absence of any express declaration by the parties, be held to exist except by way of necessary inference from all the circumstances of the case. It is of the essence of every mortgage or pledge that the mortgagor or pledgor has the right of redemption, and this right can only be taken away by express words or by way of necessary inference. The power of attorney contains no such express words, and it would be difficult to draw such an inference from a document, the object of which admittedly was to enable the mortgagee to obtain satisfaction of his claim. The main ground, on which the JUDGE PRESIDENT based his finding that the transaction was in reality a sale to Marais, was that it amounted to a release of the mortgagor's debt. I regret that I am unable to concur in this view. It the parties had intended that such a release should be effected by reason of the mere giving of the power of attorney, they surely would have said so in the document itself. If the bond had been handed back by Marais to the applicant duly cancelled there would have been evidence of the release of the bond, but it does not appear from the evidence that the bond was handed back to the appellant even in an uncancelled condition. There would have been evidence of an informal release of the bond if Marais had undertaken not to sue on the bond, but such an undertaking was not given by him in the power, which was signed only by the applicant, and it cannot possibly be inferred from the power of attorney except in the event of...