Group
The purchaser on the other hand, save in those extreme and exceptional cases where he is indeed oppressed by the seller and might avail himself of the doctrine of "undue influence", is generally speaking not in such a position at all. The purchaser is a free contracting party and there is no basis for assuming that he enters into the contract of sale because he is in a weak financial position. Moreover, if the property he purchases disproportionately exceeds in value the purchase price, this is to his distinct advantage both at the time of concluding the contract as well as at any later stage should he seek financial assistance from other quarters to pay the purchase price of the res vendita.
Such public policy considerations as might dictate the prohibition in the case of pledge and mortgage simp. Lie .iter are simply not present in the case of sale, where payment of the purchase price is secured by a pledge or mortgage of the res vendita. It would therefore, in my view, require compelling authority to persuade a court to extend the Drohibition against a pactum commissorium to a contract of sale such as the present.
My brother MAHOMED has rightly, in my view, rejected the reliance placed by appellant's counsel on Grotius, Introduction 2.40.40 and 41, as authority for extending or applying the prohibition to a contract of sale coupled with a
7
pledge. I agree with his reasons for so doing and would add only one further observation in this regard.
A "kustingsbrief", that is to say a special hypothec constituted over immoveable property to secure the purchase price, or part of the purchase price of such property, refers not only to such a hypothec in favour of the seller of the property in question but also one in favour of any other person for money lent by such third party to the purchaser in order to enable the purchaser to pay the price of the property
hypothecated. See:In Re Insolvent Estate of Buissinne, Van der Byl and Meyer V. Sequestrator( 1 828 )
1 Menz 318 at 327. Silberberg and Schoeman .The Law of Property
(2nd ed.) 440 and v.d. Merwe Sakejieg (2nd ed.) 640.
The latter form of "kustingsbrief" (i.e. in favour of a third party to secure a loan by such third party to the purchaser) may well be subject to the prohibition against a pactum commissoria. This is not relevant, however, to the present case. The fact that the expression "kustingsbrief" can relate to two substantially different hypothecs warrants caution when considering the use of the concept by common law writers. This is a further reason for finding that Grotius, Introduction 2.48.41, is not dealing with the case of a seller seeking to recover mortgaged property pursuant to the cancellation of the underlying sales agreement which gave rise to the mortgage.
Reliance was also placed by appellant's counsel on Bechmann,Der Kauf nach gemeinen Recht vol 2 p. 528 to 529 in support of
the proposition that the actio empti for the return of the property which results from the exercise of the lex commissoria in the sale is excluded once the pactum reservatae hypothacae is implemented. The passage referred to does not support the proposition advanced. The question being addressed in the passage is whether a lax commissoria, seen as a type of condition (which.is not a construction which finds favour today) has "dinglich wirkung", i.e. whether on breach of contract ownership of the property sold automatically vests
8
in the seller again without delivery or transfer. In
thecited passage the author considers the implications of
"dingliche wirkung" and its merits, matters which are
not
relevant to the present argument.
The reference in de Blecour and Fischer, pp
c}t?i., to "18e-relevant to the present argument.
eeuwse Groningse jurisprudence" is therefore the only-authority which might support the argument advanced. I say "might" because in the passage cited a provision in the deed (of sale) is being considered which provides that, on breach, the purchaser not only had to restore the res vendita to the seller but also forfeited everything he had paid on account of the purchase price ("en zelfs alles, wat hij op de hoofdsom reeds had afbetaald, kwijt was, zonder recht van terugvordering"). From the passage it is not clear whether "13e eeuwse Groningse Jurisprudensie" applied the prohibition to the recovery of the res vendita simpl iciter or to recovery of the property as well as retention of monies paid on account of the purchase price. Even if it means the former I do not think we ought to adopt this authority. As already indicated it is a false analogy to extend the prohibition against the pactum commissorium in the case of mortgage and pledge sJ.n.).pJ..i..CJ?ter to a lex commissoria where the res vendita is mortgaged to secure payment to the seller. The rationale of equity, fairness and public policy which justify the prohibition in the case of pledge and mortgage is absent in the case of sale. There is no good reason for limiting in this manner the lex commissoria which is generally held to be enforceable in contracts of sale.
For these reasons as well as those stated by my brother MAHOMED I am of the view that clause 7 of the deed of sale in question does not constitute a prohibited pactum commissorium which is unenforceable in law.
9
I agree that the appeal be dismissed vnth costs including the costs of the respondent consequent upon the employment of two counsel.
L.W.H. ACKERMANN ACTING JUDGE OF APPEAL