Standard Bank v Estate van Rhyn

• Jurisdiction: South Africa
• Judge: Innes CJ, Solomon JA and Wessels JA
• Judgment Date: 12 January 1925
• Citation: 1925 AD 266
• Hearing Date: 20 October 1924
• Court: Appellate Division

Standard Bank Appellant v Estate van Rhyn Respondent
1925 AD 266

1925 AD p266

Citation	1925 AD 266
Court	Appellate Division, Bloemfontein - Cape Town
Judge	Innes CJ, Solomon JA and Wessels JA
Heard	October 20, 1924
Judgment	January 12, 1925

Flynote : Sleutelwoorde

Appeal — Application for leave to omit documents from printed record — Costs — Peremption of appeal — Unsuccessful party proving claim in insolvent estate — Banker — Cheque drawn by executor in breach of trust — Liability of banker — Administration of estates — Cheque drawn on estate account in contravention of Act 24 of 1913, section 116 (1) — Whether cheque invalid — What amounts to compliance with section — Act 24 of 1913, sections 108, 116 (1).

Headnote : Kopnota

When application was made to the Appellate Division for leave to omit certain documents from the printed record and for an extension of time within which to file the record and the applicant was successful in the application.

Held, on the question of costs, that as the applicant had been the successful party in the application and as the application for an extension of time was necessitated by the refusal of the respondent to accede to the applicant's request to omit the documents in question, the ordinary rule should be followed as to the costs, which should be paid by the unsuccessful party, the respondent.

The appellant bank having been sued by the respondent, an executor in a deceased estate, for certain sums alleged to have been wrongly paid out on cheques drawn upon the estate account by one S., the trial Court gave judgment for the respondent. The bank noted an appeal and thereafter while the appeal was pending proved for the amount of the judgment on the insolvent estate of S. In an account lodged with the master a dividend had been awarded the bank in respect of its claim, but the account had not been confirmed and the dividend had therefore not been claimed.

Held that there had been no unequivocal act inconsistent with an intention to appeal, the proving of the claim being merely a measure of precaution and that the appeal had therefore not been perempted.

In order to hold a banker justified in refusing to pay a demand of his customer, the customer being an executor, and drawing a cheque as executor, there must, in the first place, be some misapplication, some breach of trust intended by the executor and there must, in the second place, be proof that the bankers are privy to the intent to make their misapplication of the trust funds. If it be shown that any personal benefit to the bankers themselves is designed or stipulated for, that circumstance, above all others will most readily establish the fact that the bankers are in privity with the breach of trust which is about to be committed.

Sub-sec. I of sec. 116, Act 24 of 1913, requires executors in deceased estates to open an account with a bank in the Union and then provides that "all cheques or orders for the payment of moneys out of such account shall truly

1925 AD p267

express the cause of payment and the names of the person in whose favour they are drawn." Sec. 108 of the Act provides that any person who fails to comply with the provisions of, among other sections, sec. 116 (1) shall be liable on conviction to certain penalties.

Held, that the effect of these sections was merely to penalize an executor who failed to comply with the directions of sec. 116 (1) and that a cheque drawn in contravention of the sub-section was not invalid.

Held, further, that the inclusion of the words "or bearer" in a cheque drawn in the following terms, "pay Mrs. R. (guano a/c advances) or bearer the sum of £50," did not constitute a contravention of the sub-section.

The decision of the Cape Provincial Division in Estate Van Rhyn v Standard Bank reversed.

Case Information

Appeal from a decision of the Cape Provincial Division (WATERMEYER, J.). The plaintiff, an executor in a deceased estate sued the defendant for certain money alleged to have been paid out wrongly by the bank on certain cheques drawn by one Schultz upon the banking account of the deceased estate. The trial Court gave judgment for the plaintiff and the defendant now appealed. The facts appear from the judgment of SOLOMON, J.A.

C. J. Ingram, for the respondent: I take the point in limine that as the appellant has elected to prove out and out on Schultz's estate under sec. 42 of Act 32 of 1916, the appeal is perempted.

Two other courses were open-namely to prove the claim as conditional under sec. 46 or take the risk by appealing and not proving.

[INNES, C.J.: Could the claim have been proved as a conditional claim?]

Some formula might have been added to the proof of debt which would have made the bank's position clear if it wished to go on with the appeal. See Clarke v Bethal Co-operative Society (1911 T.P.D. 1152) quoted with approval in Hlatshwayo v Mare and Deas (1912, A.D at p. 249 -).

R. B. Howes, for the appellant was not called upon.

Judgment

Innes, C.J.:

The facts upon which this application to dismiss the appeal on the ground of peremption, is based have been very fairly stated by Mr. Ingram. On the 12th May, 1924, judgment was given against the bank for £175 5s.; and on the 2nd June an appeal was noted. Ten days later the bank applied to the trustee of the insolvent estate of Schultz to call a special meeting, so that a proof of debt might be filed. On the 20th August the

1925 AD p268

Innes, C.J.

bank proved a claim for the amount of the judgment, at a meeting convened in accordance with its request. A claim for costs was ruled out, on the ground that there had been no taxation. An amended account has been lodged by the trustee with the Master which shows a dividend of £26 5s. 9d. in respect of the bank's judgment debt. But the account has not been confirmed, and no dividend has been claimed, nor could it be. Now the rule which governs the matter has been laid down in a line of cases Hlatshwayo v Mare and Deas (1912, A.D., p. 242), Clay v Union Government (1913, A.D., p. 385), Middelburg Coal Agency v Solomon & Co. (1914, A.D., p. 417), and others. It comes to this, that if an unsuccessful litigant by unequivocal conduct, inconsistent with an intention to appeal, shows that he acquiesces in the judgment, then he cannot continue to prosecute his appeal. The principle was stated in Dabner's case (1920, A.D., p. 594), as follows -

"If the conduct of an unsuccessful litigant is such as to point indubitably and necessarily to the conclusion that he does not intend to attack the judgment, then he is held to have acquiesced in it. But the conduct relied upon must be unequivocal and must be inconsistent with any intention to appeal. And the onus of establishing that position is upon the party alleging it. In doubtful cases acquiescence, like waiver, must be held nonproven."

That is the doctrine. If a man has clearly and unconditionally acquiesced in and decided to abide by the judgment he cannot thereafter challenge it. Now the conduct relied upon here involved no representation to the opposite side; the other party was not involved in the transaction. That is an important aspect of the matter; but I do not pause to examine it, because I am satisfied that, apart from that consideration, the facts do not fall within the rule. There has been no unequivocal act inconsistent with an intention to appeal. Judgment having been given, an appeal was duly noted. The man who was clearly the cause of a loss arising either to the bank or the executrix, was Schultz, and his estate was in process of liquidation. The bank then took steps to file a claim against his estate, as a measure of precaution. Otherwise the assets would be distributed and neither party would obtain any redress. Mr. Ingram lays stress upon the fact that the proof was an absolute and not a conditional one. But that was a

1925 AD p269

Innes, C.J.

mere matter of form, because the judgment was subject to no condition. The hank clearly had no intention of abandoning its right to appeal; when the claim was proved, an application to this Court was pending in connection with the appeal, and that application was heard on the 25th August. The steps taken were taken in self-defence and to prevent the distribution of the assets without reference to the claim arising out of Schultz' conduct; and they were not, under the circumstances, inconsistent with the prosecution of the appeal. The application fails with costs and the hearing must proceed.

SOLOMON, J.A., and WESSELS, J.A., concurred.

Howes, for the appellant: Cheques drawn by executors are valid though they do not contain the name of the payee or the cause of payment as required by sec. 116 (1) of Act 24 of 1913, which does not require that they should be payable to order as sec. 65 of Act 32 of 1916 does. Sec. 100 of Ordinance 6 of 1843 (Cape) and sec. 88 of Law 13 of 1895 (Transvaal) are very similar to sec. 116 (1) of Act 24 of 1913.

The meaning of the section should be restricted rather than extended, as it throws a very great burden on banks because, if a bank does not pay a cheque drawn on it by a customer when there are funds available, it is liable to heavy damages,. See National Bank of SA v Paterson Ltd. (1909 T.P.D. 322), and Gray v Johnston (L.R. 3, H.L. 1 at p. 11).

Sec. 115 (1) does not render a cheque, which has not been drawn in conformity with it, illegal. Sec. 108 provides punishment for an executor who fails to comply with sec. 116 (1). Consequently there was no need for the Legislature to render the cheque illegal. The words do not sufficiently express such intention. The Legislature did not intend to interfere with the laws in...