Ericsen v Germti Motor (Edms) Bpk. (70/1985) [1986] ZASCA 70; [1986] 2 All SA 495 (A) (29 May 1986)

Ericsen v Germti Motor (Edms) Bpk. (70/1985) [1986] ZASCA 70; [1986] 2 All SA 495 (A) (29 May 1986)

The Supreme Court of Appeal held that the trial court erred in finding the mandate from Fargher to Ericsen void due to Fargher’s fraudulent intent. The mandate was for a lawful act—the sale of a vehicle—and Ericsen, being unaware of the fraud, was not a party to any illegality. The reference to 'a third party' in the pleadings was to Fargher, who did grant a valid mandate. There was no evidence that Ericsen contractually warranted the authority of the true owner or the title to the vehicle. The court found that Ericsen was not negligent, as he had reasonable grounds to trust Fargher based on Neethling’s assurances and the circumstances of the transaction. The respondent’s claim based on...

Citation
[1986] ZASCA 70
Parties
Appellant: N.R. Ericsen; Respondent: Germie Motors (Edms) Beperk
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 May 1986
Case Number
70/1985
Procedural Posture
Civil Appeal / Appeal From the Provincial Division, Cape of Good Hope
Outcome
Appeal upheld; respondent’s claim dismissed.
Judges
Rabie, Hoexter, Botha, Boshoff, Nicholas
Legal Topics
Warranty of Authority, Agency, Sale of Stolen Goods, Contractual Liability, Negligent Misrepresentation
Commercial and Corporate Civil Procedure Warranty of Authority Agency Sale of Stolen Goods Contractual Liability Negligent Misrepresentation

Case Brief

Summary, issues, holding and outcome

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Parties

N.R. Ericsen

Appellant

Germie Motors (Edms) Beperk

Respondent

Procedural Posture

Civil Appeal / Appeal From the Provincial Division, Cape of Good Hope

Legal Issues

  1. 1 Whether the agent (Ericsen) is liable for breach of warranty of authority when selling a stolen vehicle.
  2. 2 Whether the mandate given by Fargher to Ericsen was void due to Fargher’s fraudulent intent.
  3. 3 Whether Ericsen was negligent in failing to investigate the provenance of the vehicle.

Ratio Decidendi

The Supreme Court of Appeal held that the trial court erred in finding the mandate from Fargher to Ericsen void due to Fargher’s fraudulent intent. The mandate was for a lawful act—the sale of a vehicle—and Ericsen, being unaware of the fraud, was not a party to any illegality. The reference to 'a third party' in the pleadings was to Fargher, who did grant a valid mandate. There was no evidence that Ericsen contractually warranted the authority of the true owner or the title to the vehicle. The court found that Ericsen was not negligent, as he had reasonable grounds to trust Fargher based on Neethling’s assurances and the circumstances of the transaction. The respondent’s claim based on...

Court Disposition

Appeal upheld; respondent’s claim dismissed.

Orders

  • The appeal is upheld with costs, including the costs of two counsel.
  • The order of the court a quo is set aside and replaced with: 'The plaintiff’s claim is dismissed and judgment is granted in favour of the defendant, with costs.'