McKenzie v Farmers' Co-Operative Meat Industries Ltd

• Jurisdiction: South Africa
• Citation: 1922 AD 16

McKenzie Appellant v Farmers' Co-Operative Meat Industries Ltd Respondent
1922 AD 16

1922 AD p16

Citation	1922 AD 16
Court	Appellate Division, Bloemfontein
Judge	J Maasdorp JA, De Villiers JA, Juta JA and TER De Villiers AJA
Heard	November 1, 1921
Judgment	November 10, 1921

Flynote : Sleutelwoorde

Magistrate's court — Jurisdiction — Cause of action arising wholly within district — Act 32 of 1917, sec. 28 (1) (d) — Contract — Offer and acceptance.

Headnote : Kopnota

The expression "cause of action" in sec. 28 (1) (d) of Act 32 of 1917 means every fact which is material to be proved to entitle a plaintiff to in his claim The case of Belfort v Morton (1920 CPD 589) approved.

Plaintiff company brought action in the magistrate's court, Pietermaritzburg, to recover £120, being the balance due in respect of 1,000 shares in the company applied for by and allotted to defendant who neither resided nor carried on business in the Pietermaritzburg district. It appeared that defendant had applied for the shares by letter addressed to the secretary of the company at Pietermaritzburg and under the terms of such letter agreed to accept the number of shares allotted to him and to abide by the articles of association which he authorised the secretary to sign on his behalf. The shares were to be paid for at the company's office at Pietermaritzburg.

Held, that defendant by agreeing to take the number of shares allotted to him had indicated the manner in which his offer to buy the shares should be accepted and had thereby dispensed with communication of the acceptance as an essential to the conclusion of the contract, that the cause of action arose wholly within the district of Pietermaritzburg in terms of sec. 28 (1) (d) of Act 32 of 1917, and that the magistrate therefore had jurisdiction.

The decision of the Natal Provincial Division in Farmers' Co-operative Meat Industries Ltd. v McKenzie confirmed.

1922 AD p17

Case Information

Appeal from a decision of the Natal Provincial Division (DOVE-WILSON, J.P and TATHAM, J.), sitting as a Court of Appeal from a decision of the magistrate's court, Pietermaritzburg.

Plaintiff company sued defendant in the magistrate's court to recover £120, the purchase price of certain shares bought by defendant. Defendant excepted to the jurisdiction on the ground that he neither resided nor carried on business in the district of Pietermaritzburg and that there was no proof or allegation that the cause of action arose wholly within such district.

The magistrate upheld the exception and granted absolution from the instance, but on appeal to the Natal Provincial Division this decision was reversed.

Defendant now appealed.

The facts are stated in the judgment of MAASDORP, J.A.

C. L. Botha, K.C. (with him R. C. Streeten) for the appellant: The contract was concluded at Ixopo when the offer was made and when the acceptance was notified.

Acceptance is not complete till the offeror has been notified. See the authorities reviewed in Cape Explosives Works Ltd. v SA Oil and Fat Industries (1921, J.D.R. 115). The decision in that case was, I submit, wrong as it purported to be based on convenience. The decision is not in accordance with Roman law or Roman-Dutch law principles: see Moyle on Sale, p. 45; Digest, 47.7.1.14 and 15; 45.1.1 pr and 44.7.48; Goudsmit's Pandecten Systeem, Vol. II, sec. 225; Windscheid's Pandectensrechten, Vol. II, sec. 306; Vangerouw, Vol. III, sec. 603; Grotius De Jure Belli et pacis, 2.11.15; Voet, 5.1.73; Pothier on Sale, sec. 32; Muhlenbruch's Doctrina Pand, 3.2.331 of pars specialis; Fern Gold Mining Company v Tobias (3 S.A.R. 134); Bal v Van Staden (1902 T.S. 128, per SOLOMON, J.); Dietrichsen v Dietrichsen 1911, J.P.D at p. 995); R v Demboysky (1918, C.P.D at p. 241), and Opzoomer's Burgelijk Wet Boek, Vol. VI, p. 12.

As most of the Roman-Dutch authorities are in favour of the verneemings theory, see Cape Explosives' case (supra at p. 131), convenience is wholly a wrong basis for a decision. On the question of convenience: see BRAMWELL, L.J.'s dissenting judgments in British & American Telegraph Co. v Colson (L.R. 6 Exch at p. 117), and in Household Fire Insurance Co. v Grant (4 Exch. Div at p. 233); Pollock on Contracts (8th ed.), pp. 36 to 40 and

1922 AD p18

Traders' National Bank of Tullahoma v First National Bank of McMinneville (9 American Law Reports annotated 382 and annotation at p. 386).

Even if the contract was accepted at Pietermaritzburg, I submit the as the offer was made to the company's agent at Ixopo the cause of action did not wholly arise at Pietermaritzburg. If the legislature in sec. 28 of Act 32 of 1917 meant to include in the "whole cause of action" in a contract only the conclusion of a contract the word "wholly" would be superfluous. I submit that the whole cause of Action means all the elements that ultimately constitute a contract or a delict and that in the case of contract the legislature meant to include the offer and acceptance: see Halsbury's Laws of England, Vol. I, p. 6, para. 3; Jackson v Spittal (L.R. 5, C.P. 542); Vaughan v Weldon (L.R. 10, C.P. 47); Allhusen v Malgarejo (L.R. 3, Q.B. 340); Payn v Hogg (1900, 2, Q.B at p. 54); Cook v Gill (L.R. 8, C.P. 107); Read v Brown Q.B.D. 128). In view of the previous statutes in regard to jurisdiction of magistrates the words...