Patel v Patel and Another

• Jurisdiction: South Africa
• Judge: Caney J
• Judgment Date: 23 July 1968
• Citation: 1968 (4) SA 51 (D)
• Hearing Date: 21 June 1968
• Court: Durban and Coast Local Division

Caney, J.:

This case came before me on two exceptions to the particulars C of claim in an action founded upon a guarantee. The plaintiff's case is based upon the averments that, having become a surety and joint principal debtor for two concerns, Trust Wholesalers and Royal Outfitters, of which the two defendants are respectively the sole proprietors, and having been called upon by the creditor, The Bombay D Bazaar Company (Pty.) Ltd., to do so, he paid to it, as he was obliged to do, the sum of R3,255.42, part of a debt for which the two defendants were jointly and severally liable to the creditor. He now claims to exercise his right of recourse against the two defendants as the principal debtors and seeks judgment against them jointly and severally for the sum he has paid, with interest and costs.

E The cause of the indebtedness of the defendants to the creditor, in all R10,748.12, is averred to have arisen from

'certain promissory notes made by the said Trust Wholesalers and endorsed by the said Royal Outfitters or second defendant and/or certain promissory notes made by the said Royal Outfitters and endorsed by the said Trust Wholesalers or first defendant',

of all of which notes, it is averred, the creditor became the holder and F all of which were duly presented for payment but were dishonoured by non-payment.

The opening clause of the guarantee reads as follows:

'We, the undersigned (and there follow the names of the three parties to the present action), all of 48, Commercial Road, Durban, Natal (hereinafter referred to as the guarantors), do hereby guarantee and bind the guarantors jointly and severally as joint principal debtors and G sureties in solidum with Messrs. E. G. Patel of . . ., Club Outfitters and Wholesalers of . . ., Trust Wholesalers of . . . and Royal Outfitters of . . .(hereinafter called the debtors) to the Bombay Bazaar Co. (Pty.) Ltd. No. U.C. 1799 (hereinafter referred to as the lenders) for the due payment of all such sum or sums of money which the said debtors may now or from time to time hereafter owe or be indebted to the lenders for moneys duly lent and advanced or to be lent and advanced, interest, costs or otherwise howsoever.'

H It should be said at this point that, at this stage of the litigation, no question arises out of the fact that, according to the document on its face, the two defendants appear to be not only, as sole proprietors of the concerns above-mentioned, co-principal debtors with each other and also with the plaintiff (who, it is alleged, is the sole proprietor of Club Outfitters and Wholesalers) and with E. G. Patel, but also co-sureties with the plaintiff and E. G. Patel.

Of the two exceptions, the second was expressly abandoned by Mr. Didcott (who appeared for the defendants) before the argument commenced.

Caney J

The first exception is that the particulars of claim lack an averment necessary to sustain the cause of action. The reason for this is stated to be that, upon a correct interpretation of the guarantee, the principal debt or debts guaranteed by its terms were (i) the obligation to repay to the creditor moneys lent by it; and (ii) the obligation to A pay to the creditor interest, costs or 'other debts, of the nature of interest and costs, which were incidental to or otherwise connected or associated with a loan or loans by it'. The particulars of claim, however, contain no allegation that the debt or debts owed to the creditor and partially discharged by the plaintiff were such as were so B embraced by the guarantee and consequently no allegation justifying the contention that the plaintiff was obliged to pay the creditor.

Indeed, I observe, there is no indication of what was the cause for which the promissory notes were given or to whom they were made payable; C so far as appears, they may have come to the creditor by negotiation (as indeed is suggested as a possibility by the fact of their having been endorsed) and may have no relation to any transaction between the makers and the creditor.

The argument revolved around the last three words of the clause I have quoted from the guarantee, namely 'or otherwise howsoever'. Mr. Didcott D contended for a limited meaning for them, as indicated in the exception; Mr. Friedman, who appeared to support the particulars of claim, for a wide meaning, without any limitation. Only if Mr. Friedman's contention is correct can the particulars of claim stand; if there is any limitation to be placed on the words under discussion, it is necessary for the plaintiff to make averments which show that his claim is within that limitation.

E Mr. Didcott said there were no extrinsic facts or circumstances which would be admissible to assist in interpretation, and Mr. Friedman did not refute this statement. Mr. Didcott submitted that the question must be resolved by linguistic treatment and referred to the statement of F INNES, C.J., in Glenn Bros v Commercial General Agency Co. Ltd., 1905 T.S. 737 at pp. 740, 741, namely:

'The right method is first to have regard to the words of the document, and if they are definite and clear we must give effect to them. In every case where a document has to be construed so as to arrive at the intention of the parties, if a meaning is apparent upon the face of the document, that is the meaning which should be given to it. The tendency G of the older authorities, Roman-Dutch and English, was to place a strict and adverse construction upon a document of suretyship. On the other hand, later cases - in England at any rate - rather tend in the opposite direction. I think the proper rule is that without bias - without prejudice one way or the other - we...