Visser v Theodore Sassen & Son (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Van Heerden J, Baker J and Fagan J
• Judgment Date: 11 February 1982
• Citation: 1982 (2) SA 320 (C)
• Hearing Date: 30 November 1981
• Court: Cape Provincial Division

Fagan J:

Whether appellant could have been orally released from his obligations in terms of a deed of suretyship, was the first point argued in this appeal. The deed of suretyship was signed by appellant and one A J Jonker as 'sureties in solidum and co-principal debtors' with the principal debtor. It provided that the creditor

Fagan J

'may in its discretion release any one... of us in respect of our obligations as sureties'.

Appellant alleged that the creditor had released him verbally. Respondent contended that the release to be valid had to be in writing A by reason of s 6 of the General Law Amendment Act 50 of 1956 as amended.

Section 6, in so far as is material reads:

'No contract of suretyship entered into after the commencement of this Act, shall be valid, unless the terms thereof are embodied in a written document signed by or on behalf of the surety.'

B On the basis of this section, respondent's counsel argued that, as writing was essential in the conclusion of a contract of suretyship, it was likewise essential in the termination thereof. Alternatively it was argued that the release of a co-surety amounted to a variation of the C contract which had to be in writing. The argument was also addressed to the Court a quo. That Court upheld the alternative submission and hence found it unnecessary to deal with the first submission.

Whether oral cancellation of a contract of suretyship is valid :

Respondent's counsel submitted that it would be logically absurd to hold D that a contract which by statute has to be in writing may be cancelled but not varied orally. Any case deciding or suggesting the contrary is wrong in law, it was contended, including all the cases upholding oral cancellations of contracts for the sale of land.

The answer to this contention is as follows, and in this regard I acknowledge my indebtedness to counsel for appellant for the thorough and logical argument he presented.

E The basic question is one of interpretation of s 6 and in particular whether the Legislature intended to render an oral cancellation of a contract of suretyship invalid. Of importance in establishing the intention of the Legislature are the objects of the provision. The main F object, which is common to the enactments relating to contracts for the sale of land and to hire-purchase agreements, is to eliminate uncertainty as to the terms agreed upon and thus to reduce the possibility of misunderstanding and fraud and resultant litigation. A further object would appear to be the protection of would-be sureties. See Fourlamel (Pty) Ltd v Maddison 1977 (1) SA 333 (A) at 342H - 343C; G Northern Cape Co-operative Livestock Agency Ltd v John Roderick & Co Ltd 1965 (2) SA 64 (O) at 71A - H; Neethling v Klopper en Andere 1967 (4) SA 459 (A) at 464E - F. As the provision differs from the common law, it should be interpreted restrictively save in so far as such interpretation would run counter to the intention of the Legislature. See Neethling's case at 464H.

H The wording of s 6 does not cover cancellation. To include cancellation under the section would...