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 MISCELLANEOUS CONTRACTS (CARRIAGE,
LOANS, PARTNERSHIP, SERVICE, SURETYSHIP)

P. M. NIENABER*

CARRIAGE

A. LEGISLATION
AVIATION
The Carriage by Air Act, No. 17 of 1946, was amended by
the Carriage by Air Amendment Act, No. 5 of 1964.
The Air Services Act, No. 51 of 1949, was amended in several
minor respects by the Air Services Amendment Act, No. 6 of
1964. In particular, section 17 of the principal Act is amended to
provide for the forfeiture of a licence if the holder thereof ' in the
opinion of the commission committed any act prejudicial to the
national security of the Republic ' or if the holder has a controlling
interest in another unlicensed company which has committed such
an act.
Proclamation No. R. 60, G.G.E. No. 752 of 26th March, 1964
(Reg. Gaz. No. 317) repealed Proclamation No. 263 of 1950 and
dispensed with the necessity of obtaining a licence in terms of
section 2(1) of the Air Services Act, No. 51 of 1949, in the case of
visiting aircraft upon compliance with certain prescribed
conditions.
The Civil Air Services Regulations of 1950 were repealed and
replaced by a new set of regulations promulgated by G.N. No.
R. 449, G.G.E. No. 752 of 26th March, 1964 (Reg. Gaz. No. 317).
The Air Navigation Regulations of 1963 were amended by
G.N. No. R. 614, G.G.E. No. 774 of 24th April, 1964 (Reg. Gaz.
No. 330), and the State Airport Regulations of 1963 by G.N. No.
R. 397, G.G.E. No. 748 of 20th March, 1964 (Reg. Gaz. No. 315).

RAILWAYS
The Railway and Harbours Acts Amendment Act, No. 54
of 1964, amended a number of Acts dealing with the affairs of
railways and railwaymen.
* B.A., LL.B.(Stel.), Ph.D.(Cantab.); Advocate of the Supreme Court of
South Africa; Professor of Private Law in the University of South Africa.
116
 CARRIAGE i/

The General Railway Regulations of 1963 were amended by

G.N. No. R. 340, G.G.E. No. 737 of 6th March, 1964 (Reg. Gaz.
No. 310), by G.N. No. R. 824, G.G.E. No. 811 of 5th June, 1964
(Reg. Gaz. No. 344) (prohibiting acceptance for transport under
the C.O.D. system of all explosives and dangerous goods, including
safety cartridges, safety fuses, fuse lighters, percussion caps and
fireworks), and by G.N. No. R. 1940, G.G.E. No. 958 of 27th
November, 1964 (Reg. Gaz. No. 418).
The Railway Board Regulations of 1962 were amended by
G.N. No. R. 1441, G.G.E. No. 901 of 18th September, 1964 (Reg.
Gaz. No. 390).

SHIPPING
The Annex to the Collision Regulations of 1961 was amended
in terms of section 356 of the Merchant Shipping Act, No. 57 of
1951, as amended, by G.N. No. R. 38, G.G.E. No. 691 of 10th
January, 1964 (Reg. Gaz. No. 278). The Courts of Marine Enquiry
Regulations of 1961, issued in terms of the same section, were
amended by G.N. No. R. 1419, G.G.E. No.897 of l1th September,
1964 (Reg. Gaz. No. 388).
The Regulations for the Harbours of the Republic of South
Africa and South West Africa of 1962 were amended by G.N. No.
R. 546, G.G.E. No. 764 of 10th April, 1964 (Reg. Gaz. No. 323).
The Official Harbour Tariff of Dues and Charges was amended
by G.N. Nos. 212, 213, and 215, G.G. No. 722 of 21st February,
1964, and by G.N. Nos. 541 and 542, G.G. No. 763 of 10th April,
1964.
MOTOR CARRIAGE
The Motor Carrier Transportation Regulations of 1956 were
repealed and replaced by a new set of regulations by G.N. No.
R. 45, G.G.E. No. 697 of 17th January, 1964 (Reg. Gaz. No. 282),
which in turn was amended by G.N. No. R. 934, G.G.E. No. 835
of 26th June, 1964 (Reg. Gaz. No. 355) and G.N. No. 2059, G.G.
No. 967 of 11th December, 1964.
The local transportation areas described in the Schedule to
Proclamation No. 334 of 1948, as amended, were further amended
by Proclamation No. 43, G.G. No. 743 of 13th March, 1964,
issued in terms of section 8 of the Motor Carrier Transportation
Act, No. 39 of 1930, as amended.
Notices in terms of the Native Transport Services Act, No. 53
of 1957, as amended, were issued by G.N. No. 866, G.G. No. 814
of 12th June, 1964, G.N. Nos. 593 and 594, G.G. No. 773 of 24th
April, 1964, and G.N. No. 719, G.G. No. 788 of 15th May, 1964.
 ANNUAL SURVEY OF S.A. LAW

B. CASE LAW

LIABILITY OF CARRIER

In Prinsloo v. Venter, 1964 (3) S.A. 626 (0), the Court dealt
with a matter but rarely raised in our courts these days: the
liability of a public carrier and depository respectively. The seller
of a steel frame, a farmer, agreed to deliver it to the purchaser
for reward. He failed to do so, however, and when the purchaser
eventually took steps to fetch it himself he discovered that a
number of struts were missing. His claim for the value of these
struts as damages was dismissed, but succeeded on appeal. The
Court accepted that a common or public carrier for reward is
absolutely liable-barring such loss as is due to damnum fatale
or vis maior-and that a depository is liable only for his own
negligence or for that of his servants. This liability commences
in both cases on the receptum of the goods. In the instant case it
was not found necessary to determine whether the defendant fell
into the first or the second category, for even if he fell within the
second category he had not discharged the onus of proving that
the loss occurred despite the exercise of due diligence by him.
The mere fact that the plaintiff had unsuccessfully attempted to
rely on an express assumption of risk for loss on the part of the
defendant did not bar the plaintiff's claim, for (unlike as in
Laidlaw v. Crowe, 1935 N.P.D. 241 at 244) an express acceptance
of risk irrespective of fault covers a wider liability than the
common-law liability imposed on a depository. He was thus not
precluded from reverting to such common-law liability. One may
add that the argument that an express term excludes reliance on
a parallel implied term should only hold good where the implied
term is a tacit term or term 'implied by the parties ', and not
where it is a term ' implied by law ' as in the instant case.
If a public carrier is absolutely liable (within the peculiar
meaning of that term), a private carrier, being a locator operis, is,
like a depository, only liable for his fault. According to Wessels
on Contract, 2nd ed. (1951), §2084, a depository is liable only for
culpa lata, gross negligence, but this point was not canvassed in
the judgment, although at first blush it might well have made a
difference had it been raised. In ignoring the mass of learning on
the various degrees of fault prescribed in particular circumstances,
the Court was continuing the healthy trend, which has become
apparent in a number of decisions (cf. Larter v. Daly, 1914 E.D.L.
23), whereby the ordinary test for negligence is made the sole
criterion in contracts of this nature.
 CARRIAGE I

MARINE COURT. OF ENQUIRY

The proceedings of a court of marine enquiry (convened in
terms of the Merchant Shipping Act, No. 57 of 1951, as amended,
and the Courts of Marine Enquiry Regulations of 1961) must be
classified as civil proceedings for the purpose of section 9 of the
Supreme Court Act, No. 59 of 1959, according to Ying Woon
v. Secretary for Transport, 1964 (1) S.A. 103 (N). In this case the
Court refused to sanction the removal of an appeal against the
decision of a court of marine enquiry from the Natal Provincial
Division to the Durban and Coast Local Division, although it was
prepared to hold in favour of the respondent (who applied for the
removal) that in the case of an appeal from a court of marine
enquiry in terms of regulation 22(3), the institution of the appeal
in the superior court occurs as soon as security is given or
proceedings are initiated for a direction that security is dispensed
with. Further on the case, see the section on Conflict of Laws,
below, p. 428.
MOTOR CARRIER TRANSPORTATION ACT, No. 39 OF 1930
The year 1964 produced its usual crop of cases dealing with
various sections of this Act.
In S. v. Mbata and another, 1964 (2) S.A. 607 (N), the Court
in an extempore judgment allowed the appeals of the driver of
a bus and his employer against their convictions of contravening
section 9(l) of the Act (read with sections 11 and 18) in that they
had conveyed goods for reward in a bus without being exempted
from the necessity of holding the required certificate. The reasoning
of the judgment is not altogether clear and its language requires
a certain amount of analysis. Section 9(l) makes it an offence
inter alia for any person to carry on motor carrier transportation
unless he is the holder either of a certificate or .an exemption
from holding a certificate. The offence charged was that the first
accused, the driver, 'was carrying these goods without an exemp-
tion, and I interpolate here, I presume the intention was also to
aver alternatively without a certificate, he was said to have been
wrongfully and unlawfully carrying on motor carrier transporta-
tion' (per Caney A.J.P. (at 607)). In actual fact there was a
certificate in existence pertaining to the bus in question.
Accordingly ' [i]t was not correct to say as the charge did, that he
was not the holder of an exemption or, as I have implied, a
certificate, because he was driving a bus in respect of which there
was a certificate issued' (at 608). Now where a man is charged
with not having A, it seems on the face of it a little hard on the
prosecution to declare that this means that he is not in possession
120 ANNUAL SURVEY OF S.A. LAW

of B either, and then to dismiss the charge because the accused

can show that he does in fact have B. In the present circumstances,
however, it is submitted that the outcome was fully justified.
Section 9(1) clearly means that the offence is committed if the
accused can produce neither a certificate nor an exemption. To
have a certificate is a perfectly good answer to a charge of not
having an exemption: a certificate renders an exemption from
taking out a certificate entirely superfluous, since the exemption
would only state negatively what the certificate has already stated
positively. In casu, therefore, since a certificate could be produced,
it was not competent to convict the driver of operating a bus
without being in possession of an exemption. Admittedly the
certificate only authorized the carrying of passengers and their
personal effects, and not goods, but the accused were not charged
with contravening the conditions of an existing certificate.
Consequently the appeal was rightly allowed. The Court expressed
the opinion obiter that, since the goods were two and a half bags
of foodstuffs sent to one of the passengers by her husband from
Johannesburg and accompanying her on the bus, they were in
any event 'personal effects '. The question whether the driver
was entitled to charge separately for such personal effects was
expressly left open (see section 15 of the Act).
In S. v. Salama Taxis (Pty.) Ltd. and others, 1964 (1) S.A.
371 (C), a company, a director thereof and a servant of the com-
pany employed as a taxi-driver all appealed against their con-
victions of contravening section 9(1) of the Act read with section
11(1), in that the taxi owned by the company and driven by the
servant in effect carried a White passenger though only authorized
to carry non-White passengers. The appellants contended that
the conditions of the certificate (that the taxi was restricted to
conveying not more than four non-White passengers) were
ultra vires (a) because they exceeded the powers authorized by
statute, and (b) because of lack of certainty in what they meant.
The appeal was dismissed. With respect to (a), it was held that
section 7 (read with section 1) entitles the Board to authorize in
a particular case the carrying of all racial groups other than the
White group (in other words, the Board is not obliged to specify
the particular constituent racial groups covered by the general
description 'non-White') and that regulation 70(l)(ix), promul-
gated in terms of the Act, permits the Board to limit the number
of passengers. With respect to (b), it was held that the distinction
between 'White' and 'non-White' in this country refers to a
distinction between racial troups and as such falls within the
terms of the statute. The mere fact that border-line cases may
 CARRIAGE 121
occur in applying the distinction does not render the condition
void for vagueness.
The test propounded in various cases that, in order to deter-
mine whether a condition in a motor carrier certificate is void
for vagueness, the court must ask itself whether it indicates with
reasonable precision to those who are bound by it the act which
is enjoined or prohibited, was applied in S. v. Aziz, 1964 (4)
S.A. 83 (N).
In S. v. Ngcobo and Jhilmeet, 1964 (1) P.H., K. 41 (N), a
conflict between different statutory provisions was resolved by
deciding that a certificate authorizing delivery of goods within a
certain radius entitles the holder thereof to deliver goods purchased
at his store to a point within the prescribed area, despite section
1(b) of Proclamation No. 72 of 1958 (read with section 25(1) of
the Native Administration Act, No. 38 of 1927, and section 24 of
the Native Trust and Land Act, No. 18 of 1936), prohibiting any
unauthorized trading within a prescribed native area which
happens to cover the point of delivery.
Durban City Council v. Public Utility Transport Corporation,
Ltd., 1964 (1) S.A. 590 (T), and Durban City Council v. Local
Road Transportation Board, 1964 (3) S.A. 244 (D), both dealt
with different stages of the same dispute. In the former case the
full bench of the Transvaal Provincial Division decided, for
reasons that have little bearing on the Act itself, that an application
for a review of a decision of the National Transport Commission
postponing certain applications sine die (and affording the City
Council an opportunity of intervening as a competitor in terms of
section 13(3) of the Act) was premature. In the second case
Miller J. decided, with respect to a point taken in limine, that
although section 6(2) of the Act provides for an appeal from
(and in terms of regulation 57 a rehearing of) a decision of a local
board to the National Transport Commission, it is not necessary
to exhaust these remedies before approaching the court-applying
Welkom Village Management Board v. Leteno, 1958 (1) S.A. 490
(A.D.). Referring to the powers and duties of the local board the
Court said that it could not find in the Act ' any implied power in
a local board to decide disputed questions involving the inter-
pretation of other legislation and the determination of the powers,
rights and obligations of other statutorily created bodies or
associations. Nor am I able to interpret the Act to give local
boards the power to review their own previous decisions' (at
255). In deciding that certificates issued by itself were invalid
in law and cancelling them, the local board had accordingly
overreached itself and assumed the functions of a court of law.
lzz ANNUAL SURVEY OF S.A. LAW

In Maharajv. Rampersad, 1964 (4) S.A. 638 (A.D.), the Appellate

Division agreed with the court below that that part of regulation
4(2) of the Motor Carrier Transport Regulations of 1956 which
prescribed a plan or map tracing to accompany an application
for a certificate was directory and not peremptory, but the appeal
was allowed on the ground that that part of the same regulation
requiring a description of the exact route proposed to accompany
the application was peremptory and had not been complied with
in the application in question. It is interesting to note that the
present section 4(2) of the 1964 regulations dispenses with the
necessity of attaching any plan or map tracing to an application.

C. LITERATURE
The Law of Carriage of Goods by Railway in South Africa. By
A. M. Conradie. Durban: Butterworth & Co. (South Africa)
Ltd. 1964.

LOANS

A. LEGISLATION
The Land Bank Act, No. 13 of 1944, was amended by the
Land Bank Amendment Act, No. 14 of 1964. In particular a new
section 35 bis was enacted, enabling the bank to take cession of a
mortgage or notarial bond (passed by a co-operative society or
company in favour of a third party) as security :for an advance
made by the bank to such society or company and applied by
the latter to discharge the debt to the third party and to release
the bond. Prior to this amendment the procedure was to cancel the
old bond upon payment and to pass a new bond in favour of
the bank. The new section enables the bank to take over the old
bond which is then deemed, upon registration, to be a bond
securing the society's or company's debt to the bank. In addition
a new section 64 is substituted whereby the power of the Minister
of Agricultural Economics and Marketing to guarantee the
repayment to the bank of an approved loan is extended to loans
made to certain statutory agricultural institutions.
The Banking Amendment Act, No. 61 of 1964, amending the
Banking Act, No. 38 of 1942, also contains provisions applicable
to loans by and to banking institutions. In particular, section 1(k)
adds a new section 1(2)bis to the principal Act, which permits a
co-Operative society to borrow money from its members on
 LOANS 1Z1

certain conditions, e.g. that the loan shall not amount -to less
than RIO0 and shall not be repayable within twelve months after
receipt thereof.
Section 3(1) of the Financial Institutions (Investment of
Funds) Act, No. 56 of 1964, inter alia requires a director, official,
employee or agent of a financial institution to declare his direct
or indirect personal interest (as shareholder, debtor, creditor or
the like) in any company or firm, if he has part in any decision of
the institution to grant a loan to such company or firm.
The Building Societies Amendment Act, No. 62 of 1964, also
contains provisions applicable to loans by and to building societies.
Further on the above statutues, see the section on Banks,
etc., below, p. 282.
The National Study Loans and Bursaries Act, No. 89 of
1964, provides for the establishment and administration of a
National Study Loan and Bursary Fund to be employed for the
purpose of granting study loans and bursaries to students in
need of financial assistance. It contains nothing of particular
importance with respect to the contract of loan as such.

B. CASE LAW
USURY ACT, No. 37 oF 1926
Section 9(1) of the Usury Act, No. 37 of 1926, lays down that
a borrower is entitled to demand from a lender a statement in
respect of any loan of money at a rate of interest exceeding 10
per cent. In Gordon v. Pokroy, 1964 (2) S.A. 338 (T), it was held,
following Maitland Cattle Dealers (Pty.) Ltd. v. Lyons, 1943
W.L.D. 1, that a person who wishes to rely on this section must
allege (a) that the transaction was a loan of money, (b) that the
rate of interest exceeded 10 per cent, and (c) that a demand for
a statement has been made and refused. Section 11 of the Act
lays down that in general no provisional sentence or summary
judgment shall be granted forthwith if the defendant alleges
payment of interest in excess of the maximum rate and requests
that the plaintiff be examined as a witness to prove his claim.
In Suliman v. Rajarathenam, 1964 (3) S.A. 262 (N), the Court
followed a long line of decisions in holding that, once a party has
shown on a balance of probability that the claim is one for money
lent, a bare allegation that excessive interest was charged is
sufficient to entitle such party, upon request, to have the plaintiff
examined. The request, the Court continued, 'does not need to
be a request on oath in proceedings of this nature. . . . [A]ny
1.24 ANNUAL SURVEY OF S.A. LAW

permissible form of request should suffice, including one from

the Bar' (per Harcourt J. at 266, 267).
Section 2(1) of the Act, making it an offence to exceed the
legally permissible rate of interest, punishes only the lender and
not the borrower, with the result that the latter cannot be regarded
as either an accomplice or a participant in terms of section 257
of the Criminal Procedure Act, No. 56 of 1955-though he may
still be regarded as a quasi-accomplice for purposes of giving
credence to his evidence, in terms of the decision in R. v. Mkoza,
1952 (3) S.A. 466 (N). This was decided in S. v. Van Heerden, 1964 (3)
S.A. 239 (T) (see the section on the Law of Evidence, below,
p. 386).
The Southern Rhodesian Usury Act (formerly Ch. 228,
now Ch. 243) came up for decision twice, in Knightsbridge
Investments (Pvt.) Ltd. v. Guyland, 1964 (4) S.A. 273 (S.R.),
1963 R. & N. 37 (S.R.), and in Netherlands Bank of South Africa,
Ltd. v. Anne Laws Fashions (Pvt.) Ltd., 1964 (4) S.A. 467 (S.R.
A.D.). The former case is discussed in Annual Survey, 1963, p. 194.
Both cases dealt with the meaning of section 13(1), which prescribes
certain formalities for ' every instrument of debt ... in respect of
a loan of money '. In the Anne Laws Fashions case the Court
expressed the opinion that the latter phrase could either mean
(as in Davis v. Schneider, 1932 W.L.D. 121) 'that the instrument
must be given for the purpose of obtaining the loan ' (at 470), or
that it could bear the wider meaning of 'in relation to ' or 'in
reference to ' a loan. In neither sense would the instruments in
issue in the present case be covered by these words, since they were
for the overwhelming part given in respect of the purchase of
goods -the loans in question forming but a small proportion of
the total sum involved and being in any event purely incidental
to the ordinary business transaction between the parties. (See
Woodburn Mansions (Pty.) Ltd. v. Dowell, 1961 (3) S.A. 893 (D).)

C. LITERATURE
There was no literature of importance on this branch of the
law during 1964.

PARTNERSHIP
A. LEGISLATION
A new section 38(7) of the Banking Act, No. 38 of 1942, as
amended, substituted by the Banking Amendment Act, No. 61
of 1964, provides that, where the auditor of a banking institution
 PARTNERSHIP 125
is a partnership, the appointment of such auditor shall not lapse
by reason of a change in the composition of the partnership as
long as at least half the partners continue in the partnership. A
similar provision is enacted with respect to the auditors of a
building society by section 17 of the Building Societies Amendment
Act, No. 62 of 1964.

B. CASE LAW
ESSENTIALS
Partnership is constituted by agreement and, like any other
agreement, is characterized by the intention of the parties. The
intention to enter into a partnership agreement is not, however,
the only requirement for the establishment of a partnership.
Following Pothier, our courts have long accepted that there are
four essentials to partnership (viz. that each of the partners
contributes something to the partnership, that the partnership is
carried on for the joint benefit of the parties, that the object is
to make a profit and that the contract is a legitimate contract).
These essentialia have come in for a good deal of criticism from
various sources (cf. J. C. de Wet and J. P. Yeats, Die Suid-
Afrikaanse Kontraktereg en Handelsreg, 3rd ed. (1964), p. 559;
F. P. van den Heever, The Partiarian Agricultural Lease in
South African Law (1943), p. 23; Bester v. Van Niekerk, 1960 (2)
S.A. 779 (A.D.)), but in Purdon v. Muller, 1961 (2) S.A. 211
(A.D.) at 218, Ogilvie Thompson J.A. said:' Whatever the theoreti-
cal deficiencies of the definition may, or may not, be, it is, I
think, a sound practical guide that where Pothier's four require-
ments are shown to be present the court will find a partnership
established unless such a conclusion is negatived by a contrary
intention disclosed on a correct construction of the agreement
between the parties.' This passage clearly shows that the intention
to enter into a partnership and the essentialia are separate and
distinct qualifications for the creation of a partnership. (See, too,
Deary v. Deputy Commissioner of Inland Revenue, 1920 C.P.D. 541
at 547; Dickenson & Brown v. Fisher's Executors, 1916 A.D. 374
at 382.) All the essentialia may be present and yet no partnership
ensues (Isaacs v. Isaacs, 1949 (1) S.A. 952 (C) at 956), simply
because the parties intend not to enter into a partnership but into
some other relationship, for example co-ownership, agency or
service (with the agent or servant sharing in the profits of the
enterprise), or loan (in circumstances where the capital sum is
employed for the joint benefit of the parties and the interest is
seen as a proportion of the profits), or the parties may have in
Izo ANNUAL SURVEY OF S.A. LAW

mind the floating of a company. Naturally the parties cannot, in

the guise of an intention to the contrary, deny for some ulterior
purpose that they have entered into a partnership, for the law
competely disregards a simulated intention. From the fact that
the intention and the essentials are separate though conjoined
requirements, it follows that no partnership arises either where
the essentials are present but the intention is lacking, or where
the parties genuinely wish to create a partnership but one of the
essentials is lacking-however much they may be bound to
each other by contract (Guardian Insurance & Trust Company.
v. Lovemore's Executors (1897) 5 S.C. 205 at 213).
Unfortunately this clear distinction between the intention
to form a partnership and the essentials thereof is not always
fully appreciated and the impression is sometimes created that
the essentials are merely aids for determining the real intention
of the parties (cf. De Wet and Yeats, op. cit., p. 558). This can
easily lead to some confusion, as is shown by S. v. Perth Dry
Cleaners & Launderers (Pty.) Ltd. and another, 1964 (1) S.A.
134 (T).
In this case one of the defences of the two accused (a private
company and a director thereof) turned on the question whether
certain former employees of the company remained employees or
had become partners of the company by virtue of documents
which they had signed. The Court (Van Wyk de Vries A.J., with
whom Hiemstra J. concurred on this point) concluded, for a
variety of reasons, that the purported partnership agreements
were in truth disguised service agreements especially designed to
evade restrictive provisions applicable to employees, and that
no partnership was ever created. Few would quarrel with the
outcome of this decision, but the manner in which it was reached
is not altogether satisfactory. At page 140 it is said: ' An analysis
of the partnership discloses a number of peculiar features, none
of them conclusive on its own, but in accumulation raising an
irresistible inference that the true relationship is not one of
partnership.' One of these features was ' the fact that the partner-
ship business was not capable of making profits in the normal
sense of the word. The making of profit is an essential element of
partnership ' (at 141). Now, assuming that the Court was correct
in its analysis that the arrangement between the parties concerned
only the distribution of revenues and that this did not satisfy the
partnership requirement as to the making of profit, it is only
too clear that one of the essential elements of a partnership was
lacking. For that reason alone no partnership ever originated,
and to term this solely a 'peculiar feature ', not conclusive in
 PARTNERSHIP LU
itself but merely indicative of the lack of an intention to form a
partnership (at 139), is to underplay the importance of the
essentialia to a very large extent and to confuse them with the
requirement that the parties must truly intend to form a partner-
ship. It is interesting to note that the Court also found, as a
' further peculiar feature inconsistent with partnership' (at 141),
that the 'business' and goodwill of the partnership remained
vested in the one 'partner'. According to De Wet and Yeats,
op. cit., p. 561, it is also of the essence of partnership that each
partner ' 'n mede-eienaar of reghebbende van die gemeenskaplike
saak moet wees ', a requirement which they claim will afford a
ready solution to many of the more problematic cases, as it
could well have done in the present instance.

AcTIo PRO SOCIO

In De Abreu v. Silva, 1964 (2) S.A. 416 (T), application was
made for an order directing one of the members of a partnership
to restore property removed by the latter from the partnership
farm. Two questions in effect fell to be determined: (a) whether one
partner can institute a claim on behalf of himself and a second
partner against a third partner, and (b) whether one partner can
institute a claim against another as a spoliator.
With respect to (a) Colman J. observed, on the authority of
Shingadia Bros. v. Shingadia, 1958 (1) S.A. 582 (F.C.), that a
partnership cannot institute a claim against one partner since
one individual cannot figure both as plaintiff and defendant in
the same suit. The present case was different, so the Court held,
for the claim was not instituted by the partnership as a whole
but by one particular partner 'on his own behalf and on behalf
of the " disputed partners ", for the benefit of the partnership '
(at 418). Now this terminology, at first blush confusing, is borrowed
from Oosthuizen v. Swart, 1956 (2) S.A. 687 (S.W.A.) (on which
case the Court purported to rely), where the words 'for and on
behalf of ' were taken to mean not ' as agent of ' but simply as
'for the benefit of '. In Oosthuizen's case this construction was
perfectly feasible since there was no allegation in that case that
any authority had been given to the plaintiff; in the present case
a distinct authorization was alleged, however, which cannot
simply be explained away on the ground that the petition was
'clumsily and inelegantly drawn' (at 418). Oosthuizen's case is
therefore no real authority for the present case. Nevertheless,
it is submitted that the present decision does not necessarily run
counter to the rule as enunciated in Shingadia's case, inasmuch
as it illustrates a distinction, nice but real, between the situation
128 ANNUAL SURVEY OF S.A. LAW

where the one partner, being authorized thereto by all the other
partners, acts on behalf of the partnership as a whole (in which
case it is really the partnership which sues) and the situation
where one partner, being authorized thereto by one or more
partners, acts on behalf of each of them individually (in which
case it is each partner individually who sues through a common
agent, even though the partnership as a whole may eventually
benefit by the suit). In the present case the plaintiff did not
derive his alleged authority from all the partners, hence he
could not act on behalf of the partnership as a whole. The first
situation discussed above therefore did not arise; and the second,
even if it did arise, contains nothing which is contrary to Shingadia's
case, even if the action is instituted by some of the partners
against a remaining partner, since the Court held that it is perfectly
competent for one (or more) partners to proceed against another,
despite the impression created to the contrary in Ferreira v.
Fouche, 1949 (1) S.A. 67 (T).
With respect to (b) it was contended on behalf of the
respondent that, since each partner has an undivided interest in
every partnership asset, there can be no ' wrongfulness ' in any
removal of such an asset by one of the partners. The Court rightly
held that the removal might be in breach of the partnership
agreement and as such wrongful and that it could well be a
spoliation actionable by the actio pro socio. The Court did not
find it necessary to decide whether, in circumstances where this
action does lie, any aggrieved partner can bring it in his own
right without joining the other innocent partners.

DISSOLUTION
In Dube v. City Promotions, 1964 (1) P.H., A. 1 (D), it was
held that where a partnership is formed for a specific purpose-
such as the promotion of a boxing tournament-the achievement
of that purpose automatically dissolves the partnership, except
for winding-up purposes. In such an event it is unnecessary for
one partner specifically to allege a dissolution prior to instituting
an action against a co-partner for the balance due to him.
The point that a partnership continues, for purposes of
liquidating its affairs, beyond the formal date of its dissolution,
was also reiterated in R. G. Niemoller (Pty.) Ltd. v. Van der
ViJver, 1964 (1) P.H., F. 12 (C). The respondent objected in limine
to being sued by the plaintiff alone, contending that he had
entered into the agreement upon which he was being sued with
the plaintiff and the plaintiff's partner, and that the latter should
be joined as a plaintiff. The plaintiff countered that the partnership
 PARTNERSHIP IAz

had been dissolved on the very day the agreement was concluded,
but the Court held that the deed of dissolution of the partnership
contemplated dissolution only after the division of the proceeds
of the agreement in question, and that in any event the partner-
ship continued in law for liquidation purposes. Accordingly, the
rule applied that a debt due to a partnership can be claimed
only by the partnership as a whole.
In Wiehahn and others v. Marais, 1964 (2) P.H., A. 73 (T)
(now also reported in 1965 (1) S.A. 398 (T)), one of six partners
resigned and commenced to practise on his own, whereupon the
other partners claimed inter alia an order pendente lite restraining
him from practising for his own account and from circulating
notices to former clients of the partnership to the effect that the
partnership had been dissolved. The Court (De Wet J.P.) refused
the order. Any partner, the Court said, can renounce any partner-
ship at any time, despite an agreement to the contrary. Admittedly
he might be liable in damages if the renunciation happened to be
wrongful, but this was no reason, in the Court's view, for restraining
him for practising on his own or for calling upon him to account
for his profits (which could more properly be dealt with in the
eventual action for damages). Now it will often be true that one
partner can effectively terminate a partnership whenever he is so
disposed, for although he may be exposing himself to a claim for
damages, he cannot as a rule be compelled by a decree of specific
performance to continue a relationship which was said to be
'very much the same as that between brothers' (Wegner v.
Surgeson, 1910 T.S. 571 at 579) -which means that the innocent
partner is obliged to acquiesce in the termination whether he
likes it or not. The mere fact that the guilty partner cannot be
forced to continue to implement the partnership agreement does
not, however, imply that he cannot be restrained from acting
adversely to the provisions of the agreement. An interdict is not
necessarily tantamount to a decree of specific performance. There
is ample authority in our law for the granting of an interdict
restraining a breach of contract in general (Fisher v. Harrison,
(1898) 15 S.C. 76; Adams v. North, 1933 C.P.D. 100) and the breach
of a partnership agreement in particular (Hitchins v. Chapman,
1932 N.P.D. 255; Adams v. Willcox, 1940 (2) P.H., A. 55 (W);
Spilg v. Walker, 1947 (3) S.A. 495 (E)), yet in the present case
the Court appeared to refuse this remedy not on a balance of
convenience but as a matter of principle.
C. LITERATURE
Die Suid-Afrikaanse Kontraktereg en Handeisreg. By J. C. de
Wet and J. P. Yeats. 3rd edition. Durban: Butterworth
1u ANNUAL SURVEY OF S.A. LAW

& Co. (South Africa) Ltd. 1964. Hoofstuk XVII-Vennoot-

skappe.

SERVICE (LOCATIO CONDUCTIO OPERIS)

A. LEGISLATION

The Architects and Quantity Surveyors Regulations of 1963

were amended by G.N. No. R. 699, G.G.E. No. 784 of 8th May,
1964 (Reg. Gaz. No. 334).
The Electrical Wiremen and Contractors Act, No. 20 of 1939,
as amended, came into operation on 1st January, 1940, by virtue
of Proc. No. 308 of 1939. This Proclamation was republished for
general information by G.N. No. R. 377, G.G.E. No. 744 of 13th
March, 1964 (Reg. Gaz. No. 313). Corrections to the regulations
of 1963, issued in terms of the same Act, were published by G.N.
No. R. 132, G.G.E. No. 711 of 31st January, 1964 (Reg. Gaz.
No. 293).
The Price Control Act, No. 25 of 1964, contains provisions
bearing on particular contracts of service. The Shops and Offices
Act, No. 75 of 1964, and the Bantu Labour Act, No. 67 of 1964,
deal mainly with the relationship of master and servant. The
former is discussed in the section on Industrial Law, below, p. 311.

B. CASE LAW
LIENS
To exercise a lien for money owing under a contract a
contractor must have not only the intention to hold possession
but also actual physical possession, either personally or through a
representative (Scholtz v. Faifer, 1910 T.S. 243). Applying this
test the Court in Ajax Awnings, Ltd. v. Elektro Vroomen (Pty.)
Ltd., 1964 (1) S.A. 244 (0), concluded that an electrical contractor,
a company, which had instructed its workmen to leave certain
premises before the work had been completed and which had
refused to complete two forms required for the connection of the
electrical current by the municipality, was not exercising a
lien vis-A-vis the owner of the premises. The electrical contractor
had been engaged by a building contractor and not by the owner
of the premises. On the ground that the building contractor
owed it certain sums, the electrical contractor refused to complete
the work, which inspired the owner of the premises to apply for
 SERVICE (LOCATIO CONDUCTIO OPERIS) 131
a mandamus to compel it to complete the balance of the work
and the two forms. This was refused. Between the owner and the
electrical contractor there was no privity of contract so that the
order could not be based on any breach of contract. Nor could
the order be made on the strength of any wrongful interference
with the owner's possession, as the owner contended, for, far
from exercising a supposed lien, the electrical contractor had
actually ordered its workmen to vacate the premises. The owner's
proper course of action would have been to engage another firm
of electrical contractors to complete the work and to debit the
building contractor with the cost thereof on the ground that the
latter had failed to ensure that the owner could obtain occupation
timeously.
In Beetge v. Drenka Investments (Isando) (Pty.) Ltd., 1964
(4) S.A. 62 (W), again, the question was whether an independent
contractor who, as one of several independent contractors,
completes part of a building enjoys a lien over the whole of the
building for the balance of payment owing to him.
The dispute arose when the applicant, a builder, contended
that he had completed a sufficient portion of a building to entitle
him to a further payment in terms of his contract of service,
whereas the respondent maintained that the work was defective.
The respondent eventually purported to cancel the contract and
barred the applicant from entering the building, but the applicant
insisted on proceeding with the work, forcing his way into the
building on one or two occasions before finally abandoning it.
He then approached the court for an order restoring possession
to him of the building and of his material, equipment and imple-
ments that were left on the premises. It transpired that applicant
had shared possession of the building with two other independent
contractors (who were fully compensated for their work) and
the question arose whether the builder had been wrongfully
deprived of the possession to which he was entitled by virtue of
a builder's lien. The respondent argued that, while a contractor
for a whole building certainly has such a lien and joint contractors
similarly have a lien, independent contractors, each of whom
completes a different part of the same building, do not each
enjoy an individual lien over the whole or even their part of the
building. Reliance for this proposition was placed on Maasdorp's
Institutes of South African Law, III, The Law of Contracts, 7th
ed. (1961), p. 236, which in turn relies on Insolvent Estate of
Israelson v. Harris and Black (1905) 22 S.C. 135, the headnote of
which certainly appears to lend some support to the respondent's
contention, but Ludorf J. rejected it:
 Iz ANNUAL SURVEY OF S.A. LAW

' In my view the whole question depends on the facts of

each case whether the workman is given possession for the
purpose of the work. In principle it matters not if there is a
plurality of workmen provided they possess and retain
possession and assert their right against the owner.
' If this is so I can see no reason why one of them should
not assert his possession while the others may relinquish it
either because they are paid and thereby lose thejus retentionis
or for other reasons ' (at 69).
From this it would also follow that one of several independent
contractors would be able to exercise a lien independently of the
others even if all or one of them had not relinquished joint posses-
sion. The crucial issue is possession, and possession, as Ludorf J.
remarked, need after all not be exclusive. Nor does the fact that
a contractor is placed in the position of holding more than his
portion of the work preclude a lien, just as a mechanic is not
prevented from exercising a lien over the whole of the car he has
repaired even though his own repairs may relate to only a small
part thereof.
There is one further point worth mentioning. According to
the Court the applicant had acted wrongly in insisting on pro-
ceeding with the work after the respondent's purported cancellation
of the contract, irrespective of whether the respondent's cancella-
tion was justified or wrongful. Now, it is a general rule of contract
that one party cannot without good cause unilaterally terminate
a bilateral contract. In the event of breach of contract, the
innocent party is not obliged to acquiesce in the termination of
the contract upon the guilty party's dictation (cf. De Wet and
Yeats, op. cit., p. 153). He has a 'right' to continue with the
contract on his side and to exact performance from the other
side (cf. Baragwanathv. Otifants Asbestos Co. (Ply.) Ltd., 1951 (3)
S.A. 222 (T); Abdeen v. Thaheer [1958] A.C. 116 (P.C.)). This
principle is sometimes consciously abandoned. In cases where, it
is submitted, it would be obviously wasteful from a point of
view of loss of money, manpower, time and effort to allow the
innocent party to insist on performance and counter-performance,
the law as a matter of policy regards the contract as terminated -
thus, for instance, the law does not permit a servant who was
wrongfully dismissed to tender his services over the entire con-
tractual period with a view to collecting his full wages at the
end thereof (see P. M. Nienaber in Cambridge L.J., 1962, p. 213).
The present case, though not in so many words, affords a further
illustration of the abandonment of the principle in favour of the
policy of avoiding waste.
 SERVICE (LOCATIO CONDUCTIO OPERIS) 133
INTERPRETATION

Aliwal North Municipality v. Crawford, 1964 (1) S.A. 344

(A.D.), turned purely on the construction of certain clauses in
a building contract and has presumably been reported for no
other reason than that it happens to be a decision of the Appellate
Division. Kerkraad van VanderbijIpark-Wes Gemeente van die
N.G. Kerk, Transvaal v. Van der Wath, 1964 (3) S.A. 64 (A.D.),
and Brook v. Jones, 1964 (1) S.A. 765 (N), similarly raise no
points of any great importance for the contract of service and
are dealt with more fully in the section on General Principles of
Contract, above, pp. 68 and 79.

TENDER

Has a tenderer a duty to satisfy himself as to the extent of

the work in respect of which he is submitting his tender? In
Felton Skead and Grant v. Port Elizabeth Municipality, 1964 (4)
S.A. 422 (E), the Court answered this question in the affirmative.
The applicants tendered to undertake certain work for a lump
sum. The tender was accepted but afterwards it transpired that
the applicants had underestimated the extent of the work involved,
and they now approached the court for an order that they were
entitled to additional remuneration. The application failed on the
ground that 'the applicants have overlooked their duty in
law (either the common law or in terms of their contractual
obligation) as tenderers to have satisfied themselves in common
procedure as to the extent of the work involved' (per Cloete J.
at 426). One certainly must agree that a tenderer whose tender
is accepted cannot afterwards escape the contract if he discovers
that he has miscalculated the relevant factors and submitted
too low a tender. The reason is simply that the submission of a
tender is tantamount to the making of an offer, which, upon
acceptance, grows into a contract (cf. Union Government v. Vianini
Ferro-Concrete Pipes, Ltd., 1938 A.D. 560). It is unnecessary to
construe any duty. Prior to the acceptance of the tender there is
no contract, which disposes of the possibility of any contractual
duty-it would be absurd, for instance, to accuse the tenderer of
a breach of contract if he submits a tender without first having
investigated the nature and extent of the work involved. As to a
common-law duty, the tenderer who tenders without prior
investigation simply runs the risk that he may be making a
bad bargain. He is no more under a common-law duty not to
submit such an unprepared tender than any other person is
burdened with a common-law duty not to make a bad bargain.
134 ANNUAL SURVEY OF S.A. LAW

C. LITERATURE
Die Suid-Afrikaanse Kontraktereg en Handelsreg. By J. C. de
Wet and J. P. Yeats. 3rd edition. Durban: Butterworth &
Co. (South Africa) Ltd. 1964. Hoofstuk XII-Die Diens-
kontrak en Lasgewingsooreenkoms.

SURETYSHIP

A. LEGISLATION

Section 6 of the General Law Amendment Act, No. 50 of

1956, required a contract of suretyship to be signed by the surety.
This was interpreted in Levitan N.O. v. PetrolConservation (Pty.)
Ltd., 1962 (3) S.A. 233 (W), to mean that the contract had to be
signed in person-in other words, that the section did not permit
such a contract to be signed by the agent of the surety. Section
34(1) of the General Law Amendment Act, No. 80 of 1964, now
amends section 6 to read: ' No contract of suretyship ... shall be
valid, unless the terms thereof are embodied in a written document
signed by or on behalf of the surety.' The amendment is made
retroactive to 22nd June, 1956 (section 34(2)).
Section 21 of the Building Societies Act, No. 62 of 1934, as
substituted by section 22 of the Building Societies Amendment
Act, No. 77 of 1961, provided that a woman who borrowed
money from a building society shall be bound as though the
benefits of the senatusconsultum Velleianum or the authentica si
qua mulier were renounced, whether or not either or both were
in fact renounced. Section 3 of the Building Societies Amendment
Act, No. 62 of 1964, now substitutes a new section 21(3) in the
principal Act whereby this legally implied renunciation is extended
to cases where a woman not only borrows money from a society
herself but ' guarantees or stands surety for or takes over or
assumes responsibility for the payment of the debt of any person
to any society '. This is an important, if rather narrow, alteration
of the common law. (See Annual Survey, 1961, p. 172.)

B. CASE LAW
ACCESSORY CHARACTER
Several cases afford further illustration of the principle that
if the principal debt is void for any reason the surety is not
liable.
 SURETYSHIP 133

In Albert v. Papenfus, 1964 (2) S.A. 713 (E), the plaintiff was
the manager of an hotel, the sole asset of a company of which the
plaintiff was the holder of all but two shares. These he wished to
sell to the defendant in such a manner as to ensure for himself a
certain monthly income. To this end the parties came to an
ingenious arrangement whereby the liabilities of the company
would reflect an amount of R90,000 in respect of personal goodwill
of the plaintiff, which debt was to be secured by a second mortgage
bond over the property, the defendant binding herself as surety
for the payment of capital (which would not be demanded except
upon a breach of contract) and interest at the rate of 8 per cent
per annum. Unfortunately the company went into liquidation
afterwards and defaulted, whereupon the plaintiff sued the
defendant for provisional sentence on the suretyship. His claim was
dismissed. The exact basis for the dismissal is not altogether
clear since several reasons were advanced without a clear distinc-
tion being drawn between them, but the gist of it seems to be as
follows: To begin with, the plaintiff had no legally enforceable
claim against the company for goodwill, hence the surety was also
not liable. According to the Court a general manager of a business
cannot in law enforce a claim for goodwill in connection with the
business-his managerial magnetism presumably being reflected
in his salary. Furthermore, the debt of R90,000 was artificially
contrived to ensure the required monthly income, and did not
represent a true liability of the company towards the plaintiff.
The entire transaction was merely a ploy to secure payment of
the purchase price and as such was a contravention of section
82 bis (2) of the Companies Act, No. 46 of 1926, as amended,
forbidding a company from inter alia furnishing security in
connection with the purchase of its own shares. Accordingly the
principal obligation was not only legally impossible, it was also
legally prohibited, and the suretyship had to suffer a similar
fate.
Knightsbridge Investments (Pvt.) Ltd. v. Gurland, 1964 (4)
S.A. 273 (S.R.), emphasizes the same point. In addition it was
also pointed out that the mere fact that a creditor may with
success entertain a condictio against the principal debtor for
repayment of money advanced does not entitle him to institute a
similar claim for such repayment against the surety. The latter's
liability, after all, is grounded and circumscribed by the agreement
between the surety and the creditor, not by the agreement between
the creditor and the debtor.
In Trans-Drakensberg Bank, Ltd. v. Guy, 1964 (1) S.A. 790
(D), the Court, it is submitted, somewhat exaggerated the accessory
1 0 ANNUAL SURVEY OF S.A. LAW

nature of the surety's liability. It held that where a surety believed

that he was guaranteeing a hire-purchase debt whereas the debt
was in fact a loan, he was not liable at all. ' If the surety guaran-
teed payment of the purchase price of goods sold and delivered to
the principal debtor in the sum of R1,000, his undertaking will
not cover the debtor's obligation to pay the same creditor R1,000
in respect of a loan ' (at 796). This is taking matters too far. The
surety was, after all, fully aware that he was entering into a
contract of suretyship in respect of a particular debt. The fact
that he was mistaken as to its origin is surely an error in motive
which should not affect his liability in the absence of some lawful
excuse such as misrepresentation, or in the absence of a clear
stipulation that he is assuming liability for a debt of a particular
nature. (This case is more fully discussed in (1964) 27 T.H.R.-H.R.
262 at 275.)

MEANING OF CO-PRINCIPAL DEBTOR

In National Industrial Credit Corporation (Rhod.) Ltd. v.
Gumede (2), 1964 (4) S.A. 258 (S.R.), Fieldsend J. held that the
proviso to section 6(3)(b) of the Federal Hire-Purchase Act, 1956,
cannot be invoked against a surety, even when he has undertaken
liability as a ' surety and co-principal debtor '. The Court empha-
sized the distinction between a contract of suretyship and a
contract of indemnity which exists as a separate contract indepen-
dent of any principal obligation. (The reference to ' any principle
of obligation ' at 260 is obviously a mistake.) With respect to the
liability of a 'surety and co-principal debtor ' the learned Judge
said: 'In my view a contract of suretyship is none the less a
contract of suretyship although the surety undertakes liability
as a co-principal debtor, and is not to be regarded as a contract of
any other nature ' (at 263). This, with respect, is the correct
approach. A surety and co-principal debtor is not liable in solidum
with the principal debtor (cf. Trans-DrakensbergBank, Ltd. v. The
Master, 1962 (4) S.A. 417 (N) at 422) -that would render the word
' surety ' superfluous. A surety and co-principal debtor is, in the
first instance, a surety, for all that he is described as a principal
debtor. He should therefore escape liability if the principal
obligation happens to be void or if it has been extinguished. In
Union Government v. Van der Merwe, 1921 T.P.D. 318 at 322,
Wessels J.P. said: 'That the addition of these words [co-principal
debtor] operate [sic] as a renunciation of the benefits of the
surety is clear, but they have a still greater force. The addition of
these words shows that the surety intends that his obligation
shall be co-equal in extent with that of the principle [sic] debtor:
 SURETYSHIP 137
or otherwise expressed, that his obligation shall be of the same
scope and nature as that of the principal debtor.' Co-equal
does not imply greater strength. If the principal debt is void, so
is the co-principal debt. (Cf. Business Buying & Investment Co.,
Ltd. v. Linaae, 1959 (3) S.A. 93 (T).) The function of the words
I co-principal debtor ' is not, therefore, to raise the surety to the
status of a co-debtor in solidum, but simply to indicate that vis-A-
vis the creditor he stands on the same footing as the principal
debtor with respect to the collection of the debt. He cannot,
therefore, raise the usual benefits.

C. LITERATURE
Die Suid-Afrikaanse Kontrakiereg en Handesreg. By J. C. de Wet
and J. P. Yeats. 3rd edition. Durban: Butterworth & Co.
(South Africa) Ltd. 1964. Hoofstuk XIII-Sekerheidstelling.
lets oor Verdiskontering, Estoppel en Borgtog. ' By P. M.
Nienaber. (1964) 27 T.H.R.-H.R. 262.