Estate Wege v Strauss

• Jurisdiction: South Africa

Estate Wege Appellant v Strauss Respondent
1932 AD 76

1932 AD p76

Citation	1932 AD 76
Court	Appellate Division
Judge	Wessels ACJ, Stratford JA, Roos JA and Hutton AJA
Heard	October 22, 1931
Judgment	October 27, 1931

Flynote : Sleutelwoorde

Gaming and wagering — Horseracing — Legality of betting contract — Act 36 of 1902 (Cape) — Insolvency — Disposition without value — Payments to bookmaker in settlement of lost bets — Voidable preference — Payment of lost bets long overdue — Ordinary course of business — Act 32 of 1916 sections 24, 27 — Statute — Words taken from English statute — Construction.

Headnote : Kopnota

Section 11 of Act 36 of 1902 (Cape) which provides that wagering contracts shall be null and void does not make such contracts illegal, but merely makes them unenforceable between the parties to the contract. The payment of money to a bookmaker in settlement of bets on horseraces is not a disposition without value in terms of section 24 of the Insolvency Act 32 of 1916. It is not in the ordinary course of a bookmaker's business to allow the settlement of debts due by a client to stand over for an unlimited period; if this is done and a client whose liabilities exceed his assets pays a betting debt long overdue he does not do so in the ordinary course of business within the meaning of section 27 of Act 32 of 1916. The principles followed by the Court in construing a section of a statute taken over from an English statute discussed. The decision of the Cape Provincial Division in Estate Wege v Strauss, confirmed.

Case Information

Appeal from a decision of the Cape Provincial Division GARDINER, J.P.).

The facts appear from the judgment of WESSELS, A.C.J.

W. H. Mars, K.C. (with him J. E de Villiers) for the appellants: The payments attacked were dispositions not made for value in terms of sec. 24 of Act 32 of 1916, as they were null and void by virtue of sec, 11 of Act 36 of 1902 (Cape). See sec. 18 of 8 and 9 Vict. C. 109 (the Gaming Act of 1845); Anson on Contracts Chap. V sec. 1 (pp. 212-9 of the 12th Ed.) and authorities there cited; Halsbury's Laws of England (Vol. XV, pp. 271-2); Cocking v Ward (1 C.B at p. 870 and 68 R.R at p. 839); Fetch v Jones (5 E and B. 238 and 103 R.R. 455); Ward v Fry (85 L.T.R. 394); Garson v Cole (26 T.L.R at p. 469); Sutters v Briggs (1922, 1 A.C. 1); Joe Lee Ltd v Lord Dalmeny (1927, 1 Ch. 300); Saffery v Mayer (1901, 1 Q.B. 11); Hyams v Stuart-King (1908, 2 K.B 696 at p. 728); Chapman v Franklin (21 T.L.R. 515); Tatam v.

1932 AD p77

Reeve (1893, 1 Q.B. 44); Graham v Green (1925, 2 K.B. 37); sec. 83 of Ordinance 6 of 1843 (Cape); Mosley N. 0 v Meyer (1908, O.R.C. 93); Bloom's Trustee v Fourie (1921, TPD at p. 601); Silver v Standard Bank (1923 OPD 126); van Rensburg (1923, E.D.L. 200); Hurley v Muller (1924 NPD 121); Dickman v Flederman & Lazarus (1926 CPD 335); and Fisher v Straiton (1920, W.L.D at pp. 56-7).

R. B. Howes, K.C. (with him P. T. Lewis) for the respondent: A promise to pay on the happening of a particular event is value for a promise to pay if the event should happen and therefore betting transactions are dispositions for value. Moreover there is further value because such a promise could have been sold. See Salmon & Winfield on Contracts (p. 161); Sutter v Briggs (supra) was decided on an old statute. See In re O'Shea (1911, 2 K.B. 981).

The fact that a betting transaction is unenforceable at law does not deprive it of value. Unenforceability is not the test under sec. 24 of Act 32 of 1916. A donation at which the section is aimed is enforceable at law. Sale of liquor on credit for consumption on the premises was made unenforceable by sec. 68 of Act 28 of 1883 (Cape), but was nevertheless for value as it could be set off. See Gordon v Haefele (1914 CPD 909). The present liquor Act 30 of 1928 has similar provisions in secs. 109 and 111. There is at least a naturalis obligatio. See Voet (44.7.3) and Dodd v Hadley (1905, T.S. 439).

Our insolvency law differs from the English Bankruptcy Law and the meaning of the word "value" in our Act is not limited by the technical requirements of the phrase "valuable consideration" in English law, one of which is enforceability.

The betting transaction must be taken as a whole. See Hurley v Muller (supra).

Recovery of the payments under sec. 24 of Act 32 of 1916 would be in conflict with the provisions of sec. 11 of Act 36 of 1902 (Cape).

If the appellants' contention is correct, it would result in gross inequity for the following reasons: respondent could not recover what he had lost to Wege and would have to repay what he won; bets made by Wege for others merely as agent would unlawfully enrich Wege's estate; if a bookmaker became insolvent, the amount he had paid out on winning bets could be recovered by his estate and in practice the direct result of the sequestration of a bookmaker's estate would be to make his estate solvent; a debtor anticipating insolvency has only to bet extensively to assure that

1932 AD p78

his creditors will be paid in full, as what he wins he can keep and what he loses his estate can recover; a bookmaker's business is licensed and supervised by the Provincial authorities and heavily taxed, and taxes will have been paid by respondent on the amount which the appellants are seeking to recover in full.

Sec. 24 (1) is not imperative and the Court will not enforce an inequitable claim by the appellants who are officers of the Court.

On the cross appeal: A payment by a punter to a bookmaker is in the ordinary course of business even if not made on "settling day." See Fouries Trustee v van Rhyn (1922 OPD 1); Malherbe's Trustee v Dinner & Others (1922 OPD 18); Dreyer's Trustee v Hanekom (1919 CPD 196); Lewin's Trustee v Brenner (1930, E.D.L. 295).

As to costs respondent won in the court below on the main issue which was a test case and he should at least have been awarded costs in connection with the issue on which appellant failed, as the issues were severable. See Fripp v Gibbon & Co. (1913 AD 354); Clarke v Bethal Co-operative Society (1911 TPD 1152); Union Share Agency and Investment Ltd v Green (1926 CPD 129) and Bowhay v Ward (1903, T.S. 772 at p. 782 ad fin.).

Mars, K.C., on the cross appeal: The payments were not in the ordinary course of business. See Jacobson & Co's. Trustees v Jacobson (1920 AD 75); Sperryn's & Dommisse's Trustee v National Bank of SA Ltd. (1923 TPD 166); National Bank of SA Ltd v Hoffman's Trustee (1923 AD 247); Chin's Estate v National Bank of SA Ltd. (1915 AD 353); Fuller's Trustee v Standard Bank of SA Ltd. (1922 NPD 478 at p. 484); Estate van der Westhuizen v van der Westhuizen (1923 CPD 70).

The issues were not severable and no tender was made by respondent. See Natal Bank Ltd v Rood (1909, T.S. 243 at p. 262)...