Milne, NO and Du Preez, NO v Diana Shoe and Glove Factory (Pty) Ltd and Another

• Jurisdiction: South Africa
• Court: Witwatersrand Local Division
• Judge: Ramsbottom J
• Judgment Date: 08 January 1957
• Citation: 1957 (3) SA 16 (W)

C Ramsbottom, J.:

In June, 1954, Schonwasser SA (Pty.) Ltd. was indebted to Rhodesian Timbers Ltd. for goods sold and delivered. Schonwasser Ltd. had its registered office in Johannesburg, and it carried on business in Natal as well as in the Transvaal. On 17th June, 1954, Schonwasser Ltd. executed a notarial bond in terms of which it 'declared to cede and assign to the creditor (Rhodesian Timbers Ltd.) in terms of Act 18 of 1932 as amended by Act 57 of 1937 as a pledge thereon the following movable property belonging to the debtor (Schonwasser Ltd.) and all situate in the Province of Natal'.

The movable property hypothecated was specified and described in detail.

E The bond was a covering bond to secure future as well as present indebtedness. The movables remained in possession of Schonwasser Ltd., and were not delivered to the mortgagee. The bond contained inter alia the following conditions:

'(4)

That as long as it shall be indebted to the creditor, the debtor agrees that the movables shall continue to be situated in Natal, F and it undertakes not to move any of such movables out of the Province of Natal.

(5)

That as long as it shall be indebted to the creditor, the debtor shall not without the consent in writing of the creditor, be entitled to sell or dispose of any of the movables mortgaged or pass any further bond or bonds over all or any of the said movables.

(13)

That anything to the contrary herein or elsewhere contained notwithstanding, all amounts which may at any time be owing to the creditor or other the legal holder of this bond shall be deemed to G be forthwith due and payable without notice: -

(a)

If the debtor shall fail on demand to pay or discharge to the creditor all its obligations;

(b)

If it shall be wound up either voluntarily or otherwise or make any composition or arrangement with its creditors or stop payment;

(c)

If any judgment (provisional or final) shall be recovered against it or any interdict be applied for over any portion of its assets;

(d)

If it shall commit any breach of any of the conditions herein H before written.

And in any such events aforesaid, the creditor, or other legal holder of this bond, shall be entitled irrevocably and in rem suam and with power of substitution without notice or process of law to take possession of such of the movables mortgaged as the creditor may think fit, to sell the same either privately or publicly by auction and to reimburse itself for all amounts owing to it by the debtor.'

Ramsbottom J

The movable property specified in the bond included a Mercedes Benz motor car, model 170 D, registration number N.D.22968. The 'motor number' of this car is by a clerical error wrongly stated in the copy of the bond attached to the petition, and it is alleged that the chassis A number which appears in the original bond as 1361601143/51 was also wrongly stated and ought to have been 13616011431/51. For the purposes of this judgment it will be assumed that the latter is the correct chassis number and that the correct motor number is 63691611755/51. The bond was duly registered in the Deeds Registry in Pietermaritzburg and B in the Deeds Registry at Pretoria. In February, 1955, certain of the movables specified in the bond were released, but the remainder, including the motor car referred to above, remained subject to the bond.

In March, 1955, at Johannesburg, Schonwasser Ltd. through its manager, one Berger, offered the said Mercedes Benz motor car for sale to Dr. S. C O. Rencken, the second respondent. The car was then in Johannesburg. Dr. Rencken accepted the offer and bought the car for £650. The necessary roadworthy certificate was obtained by Schonwasser Ltd., the car was delivered to Dr. Rencken, the purchase price was paid by him, and the car was registered in his name by the Johannesburg licensing D authorities. The sale and delivery took place in Johannesburg.

Dr. Rencken bought the car without knowledge that it had been hypothecated to Rhodesian Timbers Ltd. He effected repairs and spent money on the car. In October, 1955, in Johannesburg, he sold the car to the first respondent, for the sum of £735. The price was paid and the E car was delivered, in Johannesburg, and the transfer to the first respondent was duly registered. The first respondent, in turn, effected repairs and spent money on the car. The car is still in the...