[zRPz] HERSCH v NEL 1948 (3) SA 686 (A) 1948 (3) SA p686 Citation Court Judge Heard Judgment

1948 (3) SA 686 (A) Appellate Division Tindall ACJ , Centlivres JA , Greenberg JA , Schreiner JA and Davis AJA May 28, 1948 June 16, 1948

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[zFNz] Flynote : Sleutelwoorde Sale of Land - Option - Cession of - Whether valid - Acceptance by cessionary communicated by telegram - Whether sufficient - Ord . 12 of 1906 (O.F.S.), sec . 49 - Grantor agent without authority of principal - Action by cessionary against. [zHNz] Headnote : Kopnota Where there is nothing in an option to show the intentions of a party, an option to purchase for cash is ordinarily capable of being ceded. Defendant, a usufructuary of certain farms, had granted to E. H. and A. H. an option in writing to purchase (on the furnishing of a banker's guarantee) certain farms, falsely representing that he had the authority of the registered owner, M. E., to sell them and signing the option 'p.p. M. E.'. Thereafter E. H. and A. H. had ceded the option to plaintiff, who signed his acceptance on the option and sent a telegram to M. E. and to defendant stating that the option had been 'ceded to me and hereby accepted and exercised by me'. M. E. having repudiated the sale plaintiff sued defendant for damages. In an appeal from a 1948 (3) SA p687 decision of a Provincial Division upholding an exception to plaintiff's declaration as disclosing no cause of action on the ground that the option was not capable of cession, Held , there being nothing in the wording of the option to connote that it was given only to the option holders personally, that it was capable of being ceded. Held , further, the offer and acceptance being in writing, that the communication of the acceptance by telegram was sufficient compliance with the requirements of Ordinance 12 of 1906 (O.F.S.), section 49. Malk v Pergiordakis (1916, W.L.D. 40), approved.

Held , further, despite the use of the word 'hereby' in the telegram which implied that plaintiff was relying on the telegram as his acceptance - and not on his signature to such on the option, that, in the absence of any estoppel, his notification in this form was sufficient. Held , further, that the defendant's signature (p.p.) on the option represented that he was authorised by his principal in writing to grant the option as required by the Ordinance. Held , accordingly, that the appeal should be allowed with costs. The decision of the Orange Free State Provincial Division in Hersch v Nel (1947 (3) S.A.L.R. 365), reversed. [zCIz] Case Information Appeal from a decision in the Orange Free State Provincial Division (VAN DEN HEEVER, J.). The facts appear from the judgment of DAVIS, A.J.A. S. Kuper, K.C . (with him W. Oshry) , for the appellant: The option specifically made provision for cession to a third party. The true meaning of the word 'plaasvervangers' in the phrase 'op naam van die kopers of hul plaasvervangers' is that the 'plaasvervangers' are assigns of the option. If a contract of purchase and sale of immovable property is ceded there must be transfer first from the seller to the purchaser and then by him to the cessionary; there cannot be transfer direct from the seller to the cessionary; see sec. 14 of Act 47 of 1937, Crinklewood Investments (Pty.), Ltd v Rand Townships Registrar (1946, W.L.D. 381); it follows that the provision for transfer into the name of the purchasers or their 'plaasvervangers' is valid, in so far as the 'plaasvervangers' are concerned, only if they are the assigns of the option, for if an option to purchase is ceded, transfer may and indeed can only be effected to the cessionaries of the option who have become the buyers by the exercise of the option; the maxim res magis valeat quam pereat applies; see van der Linden's Institutes (1.14.4); Kotze v Frenkel & Co . (1929 AD 418 at p. 423); Comninos and Frangs v Couveras (1940 OPD 54); Annamma v Moodley (1943 AD 531 at p. 539); Burrows, 1948 (3) SA p688 Interpretation of Documents, Words & Phrases (Vol. 1, p. 41, para. 97); american Law Institute's Restatement of the Law of Contracts (Vol. 1, sec. 236); Hughes v Rademeyer (1947 (3) S.A.L.R. 133); once the word 'plaasvervangers' is capable of meaning the assigns of the option, it should be given that meaning; to give it the other meaning, that is, the assigns of the completed contract, renders the provision for transfer to the 'plaasvervangers' void and inoperative, or makes the word meaningless and unnecessary because the consent of the seller to the cession of the contract of sale is superfluous. In any event the option could be ceded apart from any question of agreement between the parties; an option is a unilateral contract; see Boyd v Nel (1922 AD at p. 420 - 1); Hughes v Rademeyer ( supra , at p. 138); as such it can be freely ceded without the consent of the grantor, unless the right is of so personal a nature that the grantor of the right can be said to have a delectus personae as against the grantee; see East Rand Exploration v Nel (1903, T.S. at p. 53); Friedlander v De Aar Municipality (1944 AD 79 at p. 93); Wessels Law of Contract in South Africa (Vol. 1, para. 1696 et seq.); there is nothing to suggest in the present

case that the right is in any way of a personal nature, particularly as transfer is only to be given by the grantor against payment in cash against transfer; alternatively, the question as to whether a contract is of so personal a nature that it cannot be ceded without the consent of the grantor, is a matter for evidence and therefore for plea, unless this position clearly appears from the contract itself, and this is not the case in the present contract. There is ample authority which decides that an option can be ceded without the consent of the grantor; see Rourke v Gouws (3 S.A.R. 40); Cullinan v Pistorius (1903, O.R.C. 33); Hart v Wilson (12 C.T.R. 656); Bal v van Staden (1903, T.S. 70); van der Hoven v Cutting (1903, T.S. 299); Treadwell and Another v Roberts (1913, W.L.D. 54); Fram v Rimer (1935, W.L.D. 5). There is also authority for the proposition that an option to repurchase granted to the seller of property by a pactum de retrovendendo is capable of being ceded without the consent of the purchaser; see Voet 18.3.8; van Leeuwen Censura Forensis 4.20.4, Sande Cession of Actions , 5.29; Pothier Sale , para. 391; the majority view in the United States of America is that an option is ordinarily assignable; see Williston Contracts (2nd ed., Vol. II, sec. 415); Restatement of Law of Contracts ( supra , Vol. 1, sec. 155); there is every business reason for regarding options as being capable of being freely ceded, and in all the cases that is the view which has been adopted. 1948 (3) SA p689 C. P. Brink, K.C . (with him A. J. Smit, K.C.) , for the respondent: The option does not contain a provision permitting cession to a third party; the word 'plaasvervangers' means substitutes; in the context it means heirs, etc.; it does not mean assign; in Afrikaans an assign is a 'sessionaris' or 'regsverkrygende'; the option granted to Els and Hersch the right to 'koop', so that when the word 'kopers' is used it refers to them; the substitution is contemplated only after the 'kopers' have exercised the option; thus 'plaasvervangers' are substitutes to 'kopers' and not to the option holders. If the word 'plaasvervangers' is capable of a wide meaning which would include an assign, then in the context where it appears, it refers to assigns of purchasers and not of option holders; sec. 14, Act 47 of 1937 merely prescribes the procedure for effecting transfer in a Deeds Office; it is not absolute; the Court has a discretion in the matter. There is no need to invoke the maxim res magis valeat quam pereat , because the option is not invalidated, even if the meaning of the word 'plaasvervangers' is wide enough to include assigns of purchasers. The terms of the option contemplate an exercise of the option by the grantee personally and not by assignees. An option is not capable of cession in the absence of any agreement between the parties to that effect; an option consists of an offer to sell to the grantee and an agreement to keep this offer open for a stipulated time; prior to the exercise of the option the only agreement between the parties is that the grantor shall not revoke the offer to sell; this is a bilateral agreement but pending the exercise of the option there is a unilateral obligation on the part of the grantor not to revoke the offer to sell; if the offer to sell is accepted by the grantee, a bilateral contract of sale comes into existence; see Boyd v Nel (1922 AD at pp. 420 - 1); this offer to sell can only be accepted by the grantee; see Blew v Snoxell (1931 TPD at p. 229); Bala v van der Westhuizen and de Klerk (1941 TPD at p. 8); Halsbury's Laws of England (2nd ed., Vol. 7, sec. 125); Williston Contracts (Vol. 1, sec. 80 at p. 231); Wessels, Law of Contract in South Africa (Vol. 1, sec. 120). Contracts cannot be ceded in their entirety without the consent of the other party; rights of action may be ceded: see Voet (8.4.9); Sande Cession of Actions (Chap. 1, para. 3, Chap. 5, para. 2); Wessels, supra (Vol. 1, secs. 1696, 1702); Vangerow Pandekten (Vol. 3, 7th ed., Bk. 5, Chap. 1, sec. 574 at p. 107); obligations, on the other hand, cannot be ceded without the consent of the creditor; see Rolfes, Nebel & Co v Zweigenhaft (1903, T.S.

1948 (3) SA p690 at p. 195); Henderson and Another v Hanekom (20, S.C. 513); Hattingh v Venter (1924 OPD at pp. 36 - 7); Colyvas v Standard Bank (1926 AD at pp. 57 - 8); it makes no difference whether the obligation is an existing one or one which will arise on the fulfilment of a condition; the obligations which arise on acceptance of the offer contained in the option are imposed on the grantee and to permit the grantee to cede the option would have the effect of substituting a new party to the contract without the consent of the grantor; see Wessels ( supra Vol. 1, secs. 1690, 2433, 2436); the right to accept the offer in the option within the stipulated time cannot be divorced from the obligations which arise on acceptance; prior to acceptance the only right conferred on the grantee by the option is that the grantor will not revoke his offer to sell within the stipulated time; if the grantor revokes the offer before acceptance, then the grantee's claim is an action for damages; see Boyd v Nel (1922 AD at pp. 421 - 2). The cases of van der Hoven v Cutting (1903, T.S. at p. 299) and Bal v van Staden (1903, T.S. at p. 70) were cases in which the option was entered into with the grantee or his assigns; in the case of Hart v Wilson (12 C.T.R. at p. 656) the Court held that the contract had been assigned with the consent of the grantor; the only cases which held that an option was capable of cession without the consent of the grantor are Bourke v Gouws (3 S.A.R. 40) and Fram v Rimer (1935, W.L.D. 5) and it is submitted with respect that these cases were wrongly decided. So far as the pactum de retrovendendo is concerned, the authorities do not say that such a pact may be assigned but only that the right arising on the pact may be assigned; see Voet (18.3.8); Sande, Cession of Actions (5.29); van Leeuwen, Censura Forensis (4.20.4); Nassau la Leck (s.v. 'Voorkoop', p. 958). Williston, Contracts (2nd ed., Vol. 2, sec. 425) whilst stating that an option is assignable, gives no convincing reason for this statement. The Declaration is also excipiable on the ground that ex facie there is no contract of sale in writing as is required by sec. 49, Ord. 12 of 1946 (O.F.S.); appellant relies on the telegram as constituting a valid acceptance in writing, but there was no notification to respondent in the telegram that appellant had accepted the option by signing the copy of the option; the telegram delivered to respondent does not constitute an acceptance in writing because (i) the telegram delivered to the respondent does not contain the signature of appellant nor is it signed by a person on behalf of appellant, duly authorised thereto in writing by appellant; cf. du Buisson v Bekker (1944, 1948 (3) SA p691 SCHREINER JA T.P.D. 342 at pp. 347 - 9); Godwin v Francis (L.R. 5 C.P. 293 at pp. 301, 303) and the English Statute of Frauds are distinguishable; the English Statute of Frauds differs from sec. 49 in that the former does not require the contract to be in writing, but only that it be evidenced in writing, the signature of both parties not being required; see Cheshire Contracts (p. 119); Halsbury, supra (Vol. 7, p. 112); (ii) according to our law communication in writing of the acceptance duly signed is essential to constitute the contract of sale of land; see Rex v Nel (1921 AD 399 at p. 344); McKenzie v Farmers' Co-operative Society (1922 AD at p. 22); Wessels, supra (Vol. 1, sec. 119); Dietrichsen v Dietrichsen (1911 TPD at pp. 493 - 5, 497, 499); Malk v Pergiondakis (1916, W.L.D. 40). Further the declaration does not disclose a cause of action in that respondent's signature 'p.p.' on the option does not constitute a representation that he was authorised in writing by his principal to sign; cf . sec. 49, Ord. 12 of 1906 (O.F.S.); a signature

by an agent 'p.p.' can be no more than a representation that the agent has authority to contract on behalf of the principal; cf . Bell, Legal Dictionary (p. 410); Faure v Louw (1 S.C. at 11); Story, Agency (sec. 3); a signature 'p.p.' cannot be construed as representing that the agent has authority in writing; see Rex v Blom (1939 AD at pp. 202 - 3); a signature like that written on an option which itself does not require to be in writing, or that the agent who signs it must be authorised in writing, cannot be construed as representing in itself that the agent who signed it was authorised to do so in writing; see Treadwell v Roberts (1913, W.L.D. at p. 58); if the contention is correct, then there has been no misrepresentation by respondent which can found an action and appellant has no claim for damages. Kuper, K.C. , in reply. Cur. adv. vult . Postea (June 16th). [zJDz] Judgment SCHREINER, J.A.: I agree with the conclusion arrived at by my brother DAVIS and with his reasons therefor; but I wish to mention a few further considerations on the general question of the cedability of offers and options, which have influenced me. It is sometimes said to be trite or elementary law that an offer can be accepted only by the person to whom it is made. (See, for 1948 (3) SA p692 SCHREINER JA instance, Blew v Snoxell (1931 TPD 226 at p. 229); Bala v Van der Westhuizen (1941 TPD 5 at p. 8); Williston, on Contract (revised ed. sec. 80); American Restatement, Contract sec. 54). It seems to me, however, that this statement may be misleading if 'the person to whom the offer is made' is understood in its ordinary sense as the person to whom the words of the offer are uttered or the letter or other writing is addressed; for what decides who can accept an offer is the intention of the offeror as proved by the terms of the offer and by any other evidence that may be admissible. It is not uncommon to support the statement that only the person to whom the offer is made can accept by a reference to Boulton v Jones (2 H and N 564; 157 E.R. 232); but I read the judgments in that case as meaning that on its proper construction in the circumstances the offer was intended to be an offer that Brocklehurst alone could accept. That the order was addressed to him was, of course, the most important factor in ascertaining that intention but it was the intention that was the factum probandum . In the great majority of cases an offer made by A to B is intended by A to be open to acceptance by B and by no-one else, but there is no notional or juristic obstacle to an offer addressed to B being acceptable by C; it is simply a question of interpretation of the offer. So if an offer is made by A to B and his assigns, A's intention is clear that B may pass the offer on to C, who may make a binding contract with A by notifying his acceptance to the latter (cf. Williston. loc. cit . at p. 232). If B merely told C that he had received such an offer this would not enable C, by notifying A of his acceptance, to bring a contract with the latter into existence. B would have had to convey or cede his right to accept to C before the latter could himself make a contract by accepting. So too if, instead of saying that the offer is to B and his assigns, A tells B that the offer is assignable the same result follows. And the position

would be the same if, for instance, the offer is contained in a letter which nowhere states that the offer is to the addressee and his assigns or that it is assignable but which on its proper construction shows that the offer is intended to be, and therefore is, assignable. Just as the proper construction of the whole contract may be that it is assignable although there is no express statement to that effect ( Tolhurst v Associated Portland Cement Manufacturers (1903, A.C. 414)) as explained in Nokes v Doncaster Amalgamated Collieries (1940, A.C. 1014 at p. 1020), so in the case of an offer. 1948 (3) SA p693 SCHREINER JA its terms and the relevant circumstances must be considered to see whether it must be accepted, if at all, by the party to whom it was addressed. An offer to the public generally, such as that in the smoke-ball case ( Carlill v Carbolic Smoke Ball Company (1893, 1 Q.B. 256)), illustrates the fact that an offer is not necessarily made only for acceptance by a particular person whom the offeror has in mind, as an identified individual, at the time when he makes the offer; and, similarly, when the offeror publishes his offer to a particular person it may appear that that person is not intended to be the only potential acceptor. It may, however, be assumed that, in general and in the absence of indications in its terms or in the circumstances to the contrary, an ordinary revocable offer is intended by the offeror to be acceptable only by the person to whom it is addressed. For although even such an offer, though it may be withdrawn at any time, may be of great value, it is not a normal basis for further dealings by the person to whom it is addressed. Because of its liability to vanish on withdrawal it would not be readily saleable; it could not, for instance, be used as a satisfactory foundation for financing the exploitation of the thing sold through the medium of a partnership or company. But in the case of an offer which the offeror has undertaken to keep open for a fixed or ascertainable time, which is usually called an option, no such assumption against assignability would accord with common practice or the needs of the community. On the contrary, in the absence of circumstances or language in the offer showing that the intention of the grantor was that only the person to whom the option was addressed, i.e. the grantee, should be entitled to accept it, the general assumption would be that the grantee may pass the right to accept on to other persons. All the circumstances would, of course, have to be taken into account. An important factor in considering whether the grantor intended the option to be personal to the grantee would be whether credit to the acceptor would be involved, for naturally it is not lightly to be supposed that the grantor would be prepared to give credit to a person whom he did not know. But again it would depend on the proper interpretation of the option in the light of the circumstances. In the present case it seems to me that if one approaches the option in question on the lines suggested above the only conclusion one can come to is that it could be effectively ceded. 1948 (3) SA p694 DAVIS, A.J.A.: The plaintiff (now the appellant) filed a declaration in the Orange Free State Provincial Division claiming damages from the defendant (now the respondent). He set out that

the defendant granted a month's option to Els and Abe Hersch to buy certain two farms. Defendant did so acting on his own behalf (he and his wife, to whom he is married in community of property, being the usufructuaries of the farms) and representing himself to be the duly authorised agent of a Mrs. Esterhuizen, the registered owner of the farms: that the said Els and Hersch believed this representation and entered into the contract on the faith of it. Els and Abe Hersch, the declaration continued, duly ceded the option to the plaintiff on 6th June, 1946, and on the same day he duly accepted and exercised the option and duly notified the defendant thereof, but the defendant had no authority from Mrs. Esterhuizen to grant the option and she refused to be bound by it. The defendant asked for certain particulars and received certain replies with which I shall deal later. The option was as follows: 'OPSIE OM TE KOOP. Ons, die ondergetekende: (1) Maria Magdalena Johanna Catharina Esterhuizen (gebore Nel), getroud met Josias Justus Esterhoven Esterhuizen, en deur hom bygestaan (as eienaar), en (2) Jan Johannes Nel (as vruggebruiker), gee hiermee aan: (1) Willem Anthonie Els, (2) Abe Hersch gesamentlik, die enige en uitsluitlike reg en opsie om ons plase, n.l. (a) Seker plaas 'Bandon' No. 634, distrik Hoopstad, groot 450 morge, 403 vk. roede; en (b) Sekere plaas 'Leclusa' No. 670, distrik Hoopstad, groot 555 morge, 599 vierkante roede; onderworpe aan die voorbehoud ten gunste van my, Jan Johannes Nel, van al die regte tot minerale soos omgeskryf in sekere Prospekteerkontrakte gedateer 30 Desember 1943 in naam van Rooderand Main Reef Mines Beperk, te koop vir die som van agt-en-twintigduisend tweehonderd nege-en-negentig pond (28,299) betaalbaar in kontant teen registrasie van transport op naam van die kopers, of hul plaasvervangers, 'n goedgekeurde bankwaarborg vir die koopsom sal aan verkopers verskaf word een maand na opsie uitgevoer word. Hierdie opsie sal van krag bly vir 'n periode van een maand vanaf datum. Geteken te Theunissen op hierdie 7e dag van Mei, 1946. p.p. M. M. J. C. ESTERHUIZEN. As getuies: 1. (Illegible.) 2. H. E. P. CILLIERS. En geteken te Klerksdorp op die As getuies: 1948 (3) SA p695 DAVIS AJA 1. .............. ................. (Sgd.) J. J. NEL. (Sgd.) J. J. NEL. dag van Mei 1946.

Bygestaan deur 2. .............. ................. Haar eggenoot.'

At the foot of the document the following words were added: 'The above option is hereby accepted by me pursuant to a cession made in my favour this day. Dated at Johannesburg this 6th day of June, 1946. (Sgd.) I. HERSCH. The defendant excepted to the declaration as disclosing no cause of action. VAN DEN HEEVER, J., held that the option was not capable of cession and he consequently allowed the exception with costs. The plaintiff now appeals. I shall deal first with the question whether an option can be ceded. An option has been analysed into an offer to sell, together with an agreement to keep that offer open for a certain time - Boyd v Nel (1922 AD 414, at p. 421) and numerous other cases. But perhaps a better way is to look at it simply as an agreement between the giver and holder of the option by which the giver has bound himself to sell a certain thing to the holder at a certain price if the holder shall require him to do so within the time fixed by the option: by this agreement the giver grants and the holder acquires a right to buy. The matter is often obscured by speaking of an option as a unilateral contract, which becomes a bilateral contract of sale on its acceptance ( Boyd v Nel ( supra) and, again, numerous other cases). This is correct if by 'unilateral' is meant a contract by which one party is bound to do something and the other is not bound to do anything. But it clouds the issue; for it obscures the fact that an option, like any other agreement, has two parties to it. It is no mere offer to sell: it is an agreement seriously entered into ( Conradie v Rossouw (1919 AD 279)) - often for a very considerable money consideration - between two contracting parties, and from that agreement legal results flow before it is ever turned into a contract of sale by its exercise - see Boyd v Nel ( supra) . I have been at pains to analyse an option because the learned Judge a quo seems, notwithstanding Boyd v Nel , in one passage in his judgment to regard an option as not being a contract at all. There is very little or no authority to be found in the Roman and Roman-Dutch law on an ordinary option and only one, that I have found, on the question whether it is capable of being ceded; but there is a considerable amount to be found on the pactum de retrovendendo , which was 1948 (3) SA p696 DAVIS AJA nothing else than an option granted by the purchaser of a thing to the vendor to buy it back for cash should he wish to do so. Save that it always related to a previous sale, the option holder

being the vendor and the option giver being the purchaser in that previous sale, it is indistinguishable from an ordinary option and it seems to have been so regarded by this Court in Boyd v Nel , in which two of the three authorities cited at the top of p. 422 deal with this type of option: see also Mackeurtan (2nd ed., p. 30). The great majority of the authorities, where they deal with the subject at all, agree that such a pact was capable of cession. Let me first give the few that I have been able to find that are against this view. The most important, because it deals with what is ordinarily called an option, is a decision of the Supreme Court on appeal, which is reported in Holl. Cons . 2.158 and by Neostadius, Dec . 45. The facts were somewhat peculiar. Vos and one de Pottre were engaged in litigation about some ground and it was notarially agreed between Vos and (the Lord of) Villers that, when the litigation was finished, the former should be bound to sell this ground to the latter if the latter was pleased to accept it and that it should be solely for him to decide whether to do so or not. No time was expressly fixed within which the option had to be exercised. Villers died after the litigation had ended without having exercised his option, and the question arose whether his heirs could do so. ( Neostadius confines the decision to this point, but the opinion in the Holl. Cons . also mentions assigns.) The court of Middelburg answered the question in the negative; this decision was reversed on appeal by the Provincial Court but was restored on further appeal by the Supreme Court. The Supreme Court held that the election whether to take or not was one purely for Villers to make, and in the circumstances of this particular case and on the wording of the particular agreement this may perhaps be supported. But it also held that the condition was a potestative one and that potestative conditions are not transmissible to the heirs. (This is expressly controverted by, amongst others, Gail (2.2.4 and 5), dealing with the pactum de retrovendendo and jus retractus.) The decision was given as early as 1599, and consequently none of the later and better-known authorities are cited. Brunneman, ad. Cod . (4.54.2.6), in the course of a passage dealing with the question whether the pactum de retrovendendo is transmissible to the heirs, and holding that it is, seems to suggest, by a casual remark, that 1948 (3) SA p697 DAVIS AJA because they are not mentioned in C (4.54.2) it is not transmissible to third persons. Donellus, ad Cod . (4.54.2) denies the transmissibility of the pact to the heirs. Wissenbach, ad Cod . (4.54.2) denies this right to the cessionary, while allowing it to the heir or even to the singular successor; he cites more authorities against than in favour of his view, and the only reason that he gives is that a cessionary is neither the grantee nor his heir (these being alone mentioned in C (4.54.2). Bckelmann (infra) fully answers this point. Voet (18.3.8), after saying that, where some of the heirs of the option holder under the pactum de retrovendendo refuse to exercise the right to repurchase ( jus redimendi) , the remainder may do so, proceeds: ' Quid, quod et extraneo hoc jus ex pacto competens cedi possit, cum personale non sit, et omnis actio vendi cedique possit, quae nominatim excepta non est. ' (Nay more, this right - i.e. the jus redimendi to which he has just referred - arising from the pact can be ceded; since it is not personal and every right of action can be sold or ceded save those which are expressly excepted.) The words used by Voet make it certain that he is referring to a

cession of the right to buy and not, as Mr. Brink contended, to a cession of the rights flowing from the contract of sale after the right to buy had been exercised by the option holder. Voet bases his conclusion upon C (4.39.9) and gives as his authorities Sande, Cession of Actions (5.29), Carpzovius Jur. For . (2.32.20), Berlichius (2.39.52), van Leeuwen, Cens. For . (1.4.20.4); these all fully bear him out, and are also against Mr. Brink's contention. Thus van Leeuwen says that it is the retrahendi facultas which may be ceded. That he deals with the pactum de retrovendendo (option) and the conventional jus retractus (jus protimiseos; naasting; right of first refusal) together and uses the latter name for both, is immaterial: they are alike in the respect here under consideration. He, however, does draw a careful distinction between the right which arises from contract and that which in certain cases arises from law or custom - a distinction which must always be borne in mind in reading the authorities. To take one example, the passages in Nassau la Leck (s.v. Voorkoop) to which our attention was drawn by Mr. Brink , are at first sight contradictory until it is realised that the statement of Gail ( Obs . (2.19.10) to which la Leck refers is concerned with a legal or customary right and that in van Zutphen ( Ned. Prac . s.v. 1948 (3) SA p698 DAVIS AJA Voorcoop , n.l., p. 784) deals with a conventional right. Van Zutphen says that the common opinion of jurists is that the right can be ceded and that it has so been decided. He cites, in addition to the authorities I have already mentioned and some which are not available, Faber, Cod . (4.36.1 n. 9, and 14, n. 3), who, however, seems rather to leave the question open, and Molinaeus, Cons, Paris (1.20.1.20). Pothier, Sale (s. 391) is to the same effect; he rightly quotes in support Fachinaeus (2.11). ( Tiraqueau (Tiraquellus) , to whom he also refers, and who is constantly cited by various authors as being of the same view, is not available to me.) I may add to the above list Bckelmann, ad Dig . (18.5.4); Christinaeus (Vol. 3, dec. 95, n. 4); Bugnyon, Leg. Abr . (3.129); Treutler, Sel. Disp . (1.28.10) and Bachovius' note thereon; Perezius, ad Cod . (4.54, par. 13); Lauterbach (18.1.99); Zoesius, ad. Dig . 18.3.7 and ad Cod . 4.54. Q 6). I should here state that none of these authorities were cited to the Judge a quo though a few of them were cited to us. This is much to be regretted, as we are thus deprived of the benefit of his views on these authorities. This list is more impressive than is that of the decided cases in South African courts, for though Mr. Kuper , for the appellant, put forward seven, it is admitted that only two of these directly lay down that an option can be ceded without the consent of the grantor either expressed in the option itself or given subsequently. (One is forcibly reminded of the passage in Christinaeus to which I referred above; he says - the translation is mine 'But this pactum de retrovendendo can be validly ceded, especially when the person who has promised to resell has promised to resell not only to the vendor but to his assigns . . . and I remember many decisions to this effect.') In Bourke v Gouws (3 S.A.R. 40), KOTZE, C.J., delivering the considered judgment of the Full Bench of the South African Republic, unfortunately cited no authority; in Fram v Rimer (1935, W.L.D. 5) not even that case was quoted. But Bourke v Gouws is cited as good law by Wessels, Contracts (s. 1717). The American law is the same: see Restatement of Contracts (I, s. 155);

Williston, Contracts (II, s. 415); Planiol, Droit Civil (Vol. 2, s. 1402, n. 2) gives a French decision to the same effect. Notionally there seems to be no difficulty. It is trite law, needing no citation of authority, either ancient or modern, that ordinarily rights can be ceded but obligations cannot. In the case we are considering the right to buy is ceded; there are no 1948 (3) SA p699 DAVIS AJA obligations. It is true that upon the option being exercised, a contract of purchase and sale comes into existence, but in my opinion the reason why all the authorities disregard this factor is because that contract is for cash, and it consequently can make no difference to the vendor whether he is dealing with a millionaire or a pauper, with an honest man or a convicted thief. He will only part with his property on receipt of the purchase price; in such circumstances there is no dilectus personae whatever. But an option to obtain a loan would obviously stand on an entirely different footing from an option to buy for cash. And for the same reason an option to buy on credit also stands on a different footing, as is recognized in America (Williston, loc. cit.) . I come to the conclusion that where there is nothing in the option to show the intentions of the party, an option to purchase for cash is ordinarily capable of being ceded. The authorities draw no distinction between movables and immovables in this respect, and I draw none. It is true that in the case of an immovable some slight expense may be incurred and some short time may elapse before transfer (delivery) can be given by the grantor of the option. But that in my opinion must to a great extent have been the case in Holland also, where from very early times transfer of immovable property (other than feudal property) had to take place before the schepenen of the place where the property was situated, and in 1598 a transfer duty of 21/2 per cent. was imposed and registers had to be kept. See Wessels, History of Roman-Dutch Law (pp. 494 to 499). But had I felt any real difficulty on this aspect of the case, it would have been set at rest by the terms of the present option, which provides for the furnishing of an approved banker's guarantee within a month. This shows that the option giver was not prepared to rely on the financial standing and probity of the option holder even to the slight extent of engaging a conveyancer to get the necessary deed in order before he received an approved banker's guarantee. No time was fixed by the option by which he had to give transfer and he obviously would do nothing until he received the guarantee. And it obviously was of no interest to him who procured the guarantee. But it was suggested in argument that, by deliberately ceding the option to a man of straw the option holder would in effect be securing a two months' option in place of the one month's option to which he was entitled. The 1948 (3) SA p700 DAVIS AJA answer in my opinion is that such conduct would amount to dolus (see MacDuff & Co., Ltd v

Johannesburg Consolidated Investment Co., Ltd . (1924 AD 573 at p. 610)), and would be actionable as such. Bachavius note on Treutler deals with this very point; it allows the right to be ceded only dum tamen absit simulatio et fraus . It was also contended on behalf of the defendant that the words 'die enige en uitsluitlike reg' show that this option could not be ceded. I am satisfied that these by no means unusual words were inserted merely to emphasize that the option giver was not entitled in derogation of the option and during its currency to sell or even give an option to anyone else - they were not intended to connote that the option was given only to the option holders personally. For the plaintiff, on the other hand, it was argued that the words 'of hul plaasvervangers' clearly showed that it was contemplated that the option might be ceded. There is considerable force in this contention, for if the contract were to be read as contemplating only transfer into the name of assigns (literally 'substitutes'), who had become such after the exercise of the option, such a provision would be in conflict with the Deed Registries Act, 47 of 1937. sec. 14. it was held by the Judge a quo that the words only mean in case they die, then to their heirs. But this would be a most unusual use of the word 'plaasvervangers', and in any case the words 'of plaasvervangers' would obviously then be superfluous. Against these considerations are to be weighed the facts that the mention of substitutes occurs, not as would be usual, at the beginning, but only towards the end and in relation to transfer into the name of the 'kopers': before the option holders could become 'kopers' they must have exercised the option. The arguments seem to me to be somewhat evenly balanced and I prefer to base nothing on this word 'plaasvervangers'; it is unnecessary for me to do so as I hold in any case that the option is capable of being ceded. It follows that the exception should not have been allowed upon the ground on which it was allowed in the Court a quo . But two other points were there taken, and were taken before us, on behalf of the excipient. The first of these is that ex facie the declaration, as supplemented by the further particulars, there is no contract in writing as required by sec. 49 of Ord. 12 of 1906 (O.F.S.), which reads: 'No contract of sale of fixed property shall be of any force and effect unless it be in writing and signed by the parties thereto or by their agents duly authorised thereto in writing.' 1948 (3) SA p701 DAVIS AJA Upon this point the learned Judge a quo found against the excipient. It was contended, in the first place, that the copy of the option with the endorsement of his acceptance signed by the plaintiff on it is immaterial because the plaintiff does not rely upon that in his pleading. But, as it seems to me, this contention is based on a misreading of the plaintiff's answers to the particulars requested. Defendant's request for particulars was as follows: '1 (a) Was the representation referred to therein made verbally or in writing? If in writing defendant requires a copy thereof. (b) Defendant requires a copy of the said option.

2 (a) What was the manner of plaintiff's acceptance of the said option and his notification thereof to defendant? (b) When and where was defendant notified of plaintiff's acceptance of the said option? (c) If the acceptance of the said option and the notification thereof were in writing defendant requires copies thereof.' The following answer was given: '1 (a) The representation was made in writing as per copy of the option attached. (b) Copy of the option is attached hereto. 2 (a) , (b) and (c) . Plaintiff's acceptance of the option was communicated to defendant by telegram, copy of which is attached hereto.' The option annexed I have already set out: the telegram was, so far as is material, as follows: 'To/Aan: Mrs. M. M. J. C. Esterhuizen and J. J. Nel, c/o J. J. Nel, Welgelee Station, O.F.S. Option to purchase Bandon 634 and Leclusa 670 both district Hoopstad granted by you to Willem Anthonie Els and Abe Hersch ceded to me and hereby accepted and exercised by me. From/Van: Isaac Hersch. Not to be telegraphed/Moenie oorgesein word nie. Signature of sender/Handtekening van afsender ................... Address/Adres ..............................' In answer to the first paragraph of the request for particulars, plaintiff's legal advisers set out the option including the acceptance thereon by the plaintiff. Having done so, they apparently considered it necessary to answer only the question how the acceptance, which was already revealed on the option, had been communicated to the defendant, and this is all that they did; they replied that the acceptance had been communicated by telegram and they annexed the telegram. If the defendant's legal advisers were not satisfied with this reply they could have asked for its amplification, so as specifically to deal with all the questions they had asked in the second paragraph. But as it stands, I can read the reply of the plaintiff in no other way than in the way I have indicated. 1948 (3) SA p702 DAVIS AJA But it was contended that there could be no contract, written or otherwise, without a notification of plaintiff's acceptance to the defendant. This I take to be correct law; if authority be needed, see Rex v Nel (1921 AD 339, at p. 344), Dietrichsen v Dietrichsen (1911 TPD 106); it was not disputed by plaintiff's counsel. Then it was said that such acceptance could only be communicated by delivery to the defendant of a copy of the signed document constituting the contract, or at any rate, by a signed acceptance in writing. This is directly opposed to what was held by WESSELS, J., in Malk v Pergiondakis (1916, W.L.D. 40), a case in which an oral communication of acceptance was held sufficient under the corresponding Transvaal Proclamation. In my opinion that decision was correct and it is in accord with Dietrichsen's case. It seems to be enough if the offer and acceptance are in writing and the acceptance is communicated by telegram, by telephone or verbally.

There remains a point which has given me considerable difficulty. I assume that the telegram, as written out, for despatch by the postal authorities, was not signed: there is nothing upon the copy before us to indicate that it was. The telegram stated that the option was 'hereby accepted and exercised'. Is that a proper notification of an acceptance by a written endorsement on the option? Now if the recipient of a telegram in such a form were to ascertain that the original telegraph form bore no signature and were to act in the belief that he was not bound, as there was no valid contract in terms of the Ordinance, and sell the property to someone else, then it may well be that the sender of the telegram would be estopped, by his use of the word 'hereby' in that telegram, from putting forward his signature on the option. (I leave out of consideration whether in law a telegram signed by the option holder at his desk, and telephoned by him or on his behalf to the postal authorities for transmission to the option giver might not be sufficient to satisfy the Ordinance.) But in the absence of any estoppel, I am of opinion that the notification in this form is sufficient. When he receives the telegram the recipient would naturally understand that there is a contract in writing, constituted by a signed option signed by him and a telegram of acceptance, signed by the option holder for he would know that, in terms of the Ordinance, a signature was necessary; when he was notified that the other party had accepted he would take that notification to mean that he had validly, not invalidly, accepted. (And cf . what I say later on the last point raised by this exception.) It can, as it seems to me, make no 1948 (3) SA p703 DAVIS AJA difference to him that he is told that the telegram has been signed when in fact only the option itself has been signed; there is still a contract in writing in terms of the Ordinance. What is required for a valid concluded contract is a document (or documents) signed by the parties and a clear notification within the prescribed time by the party exercising the option that there is a union of their wills. If the telegram had merely stated that the option had been exercised, that might in my opinion well be taken to imply that it had been validly exercised, that is to say, in writing. The implication of writing is even clearer when the telegram contains the word 'hereby', and, as I have already shown, it can make no difference that the implication attaches to the wrong document, that is to say, to the telegram instead of to the option. No South African authority was cited to us which would in any way support the opposite contention save viz.: ' a dictum ' in Dietrichsen's case ( supra) , at 499 in which this point was not in issue and there are dicta which look the other way (at pp. 494, 495, 497 and 499). Indeed, even if notification be necessary that there has been some writing and some signature so as to comply with the Ordinance, then in my opinion it is supplied, by clear implication, by this telegram. Any view to the contrary seems to me to be highly technical, and the whole trend of South African decisions would appear to be against any unnecessary extension of the limits of the requirements of the statutory provisions in regard to contracts for the sale of land - while, of course, scrupulously observing those requirements within their proper limits. In my opinion the decision of the learned Judge in the Court a quo in dismissing the exception on this point was correct. It was further argued that the signature of the defendant 'p.p. M. M. J. C. Esterhuizen', appearing on the option, did not constitute a representation that he was authorized by his principal in writing as required by the Ordinance. In an Irish case quoted by Stroud, s.v. ' per procuration'

and by Roland Burrows, Words and Phrases , s.v. ' per pro' , it was held that p.p. ( per procurationem) expresses an authority created by procuration or power of attorney. If this be correct, cadit quaestio . But in view of what was said in Faure v Louw (1 J. 3) I shall content myself with adopting, as sufficient for the purposes of this case, the words of POLLOCK, C.B. in Smith v M'Guire (27 L.J. (EXch.) 465, at p. 468); 'All that the expression ' per procuration' means is this - 'I am an agent, not acting on any authority of my own in the case, but authorised by my principal to enter into this contract.' 1948 (3) SA p704 DAVIS AJA Now in the present case the option had to be in writing and, if it were signed by an agent, that agent had to have authority in writing for the document to be of any practical value whatever. The representation was that the agent had authority to grant this option, so that it should be a valid and effective option - not a mere scrap of waste paper. The appeal is allowed with costs and the judgment in the Court below altered to one dismissing the exception with costs. TINDALL, A.C.J., CENTLIVRES, J.A., and GREENBERG, J.A., concurred in the judgment of DAVIS, A.J.A. Appellant's Attorneys: Mendelow, Browde & Bauman , Johannesburg; S. Rosendorff , Bloemfontein. Respondent's Attorneys: J. H. van Heerden , Theunissen; McIntyre & Watkeys , Bloemfontein.