REPORTABLE
IN THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Case No:  294/99
In the matter between:
SOUTH AFRICAN EAGLE INSURANCE COMPANY LIMITED
Appellant
and
NBS BANK LIMITED
Respondent
CORAM:
NIENABER, MARAIS, SCHUTZ, NAVSA JJA et FRONEMAN
AJA
HEARD:
21 AUGUST 2001
DELIVERED:
28 SEPTEMBER 2001
Ostensible authority to contract – acknowledgements of debt
___________________________________________________________________________
JUDGMENT
________________________________________________________________
MARAIS JA

MARAIS JA:
[1] The  background  to  the claims which were dismissed in the Court a quo
and are the subject of this appeal appears in broad from the judgment of this
Court in NBS Bank Limited v Cape Produce Company (Pty) Ltd and Others
(Case No 281/99) and I shall not repeat it.  I shall refer to the case as the Cape
Produce case.  The appeal in that case was argued the day before the appeal in
this case was argued.  It goes without saying that the evidence adduced in either
of the cases cannot be taken into account in deciding the other but the broad
background described in the judgment in the Cape Produce case is common to
both cases and is also established by the evidence led in the present case.
[2] Appellant is a short term insurer which invests large sums of money for
which it has no immediate need.  It frequently invests by depositing money with
banking institutions at agreed interest rates.  Sometimes the sums deposited are

repayable on call;  sometimes they are deposited for fixed periods.  Respondent
is a banking institution.
[3] On 19 April 1996 appellant drew a cheque for R5 million in favour of
respondent.  It was crossed and marked “not transferable” and “not negotiable”
and deposited to the credit of respondent’s account at First National Bank.  It
was alleged by appellant that it was intended to be a fixed deposit with
respondent for a period of six months at an interest rate of 15%, the interest
payable upon maturity.  On the face of the cheque appeared the words “being
Fixed Dep 6 Mnths @15%”.  On the same day Mr Assante, in his capacity as
branch manager of respondent’s Kempton Park branch, wrote to appellant on an
NBS Bank letterhead in these terms:
“Dear Sir,
FINANCE – R5000 000,00
We hereby confirm that NBS Bank Ltd guarantees to repay the sum of
R5000 000,00 (Five Million Rand) on 23 October, 1996 to SA Eagle
Insurance Co Ltd upon presentation of this letter.”

The letter was handed to Ms Pollock, an employee of appellant’s, when she
handed over appellant’s cheque to an intermediary for delivery to respondent.  A
further letter bearing the same date and signed by Assante in his capacity as
branch manager was also delivered to appellant.  The details are unimportant.
What is of importance is that it related to the interest component of the deposit
and is headed “confirmation of your investment” and the opening sentence is
“Thank you for investing with us.”  On 23 October 1996 respondent repaid the
capital sum of R5 million to appellant by drawing two cheques for R3,5 million
and R1,5 million respectively and paying them into appellant’s bank account.
On the same date respondent drew a further cheque for R376 090,34 for the
interest owing to appellant and paid it into appellant’s bank account.  A deposit
slip reflecting that these cheques had been paid into that account was sent to
appellant.  I shall call this the first transaction.

[4] On 8 May 1996 appellant drew a cheque for R5 million in favour of
respondent.  It was crossed in the same manner and was credited to respondent’s
account.  It was intended by appellant to be a fixed deposit with respondent for
12 months at an interest rate of 15.10% p a.  On the face of the cheque appeared
the words “being Investment @ 15.10%.”  In exchange a letter dated 7 May
1996 in identical terms to the first of the two letters mentioned in para [3] (save
that the date of repayment was to be 7 May 1997) was given to appellant.  A
document broadly similar to the second of the letters referred to in that
paragraph and headed “confirmation of your investment” was also delivered to
appellant.  It was unsigned but was on NBS Bank stationery.  This was the
second transaction.
[5] Three more transactions took place in substantially the same manner.  The
third was on 10 June 1996 and involved a deposit of R10 million.  The fourth
was on 21 November 1996 and involved a deposit of R5 million.  The fifth was

on 5 December 1996 and also involved a deposit of R5 million.  The relevant
documentation was fundamentally the same as in the first two transactions.  I
shall return later to such variations as there were.
[6] As happened in the Cape Produce case, the sums invested by appellant
and deposited in respondent’s bank account found their way into the corporate
saver account of Nel, Oosthuizen & Kruger (“NOK”) and thence to third parties.
Appellant has been paid the interest due in respect of the second, third, fourth
and fifth deposits but has not been repaid the invested capital.  It was that, and
mora interest thereon, for which it sued in the Witwatersrand Local Division of
the High Court.  It failed in its claim.  Hence this appeal with leave granted by
the learned trial judge, Van Oosten J.
[7] A number of alternative causes of action were pleaded by appellant in
respect of each of the four transactions.  In the view I take of the matter it is
necessary to consider only two of them.  The main claim in each case was based

upon the alleged existence of an oral agreement between appellant and
respondent in terms of which appellant agreed to deposit the relevant sum of
money with respondent’s Kempton Park branch for a specified period at an
agreed interest rate and respondent undertook to repay the capital together with
the interest thereon on the date of maturity of the investment.  Respondent was
alleged to have been represented by one Jones and/or by one Bradley and/or by
Assante.  The alternative claim in each instance was based upon the letters of
“guarantee” signed by Assante, a prototype of which I have quoted in paragraph
[3].  They were said to constitute acknowledgments of debt upon which
appellant was entitled to sue.
[8] The trial judge found that neither of those causes of action had been
established.  As to the oral contracts pleaded, he assumed in appellant’s favour
that those who purported to act on its behalf had its authority to do so, but held
that none of the persons alleged by appellant to have had authority to represent

respondent, and to have done so by concluding such contracts, did in fact have
such authority or did in fact enter into such contracts.  While accepting that
appellant’s representatives intended to so contract, he concluded that no one
purporting to represent respondent “subjectively intended to conclude an
agreement of investment by which the [respondent] would be bound”.  That, so
he continued, precluded a finding that there had been a “direct meeting of minds
(‘wilsooreenstemming’)”.  An alternative contention advanced by appellant,
namely, that there was at least an objective appearance of consensus for the
existence of which respondent was responsible, was rejected both because the
pleadings were thought not to provide an adequate foundation for the contention
and because those responsible for creating the appearance of consensus were not
actors whose conduct could be laid at respondent’s door.
[9] An additional reason given by the trial judge for the dismissal of the
contractual claim was appellant’s failure to plead or prove that NOK had

respondent’s authority to accept deposits on its behalf from investors intending
to invest with it (as opposed to NOK) and that in as much as the cheques were
delivered by persons acting as appellant’s agents, not to respondent, but to NOK
by whom “they were deposited directly into [respondent’s] bank account as an
investment by NOK for the credit of their Corporate Savers’ account with
[respondent],” the consequence was that “consensus ad idem was never
reached.”
[10] In dealing with the claims based on the alleged acknowledgments of debt
signed by Assante, the trial judge assumed in appellant’s favour, but without
deciding, that the terms of the letters were sufficiently clear to constitute
acknowledgments of debt.  However, he dismissed the claims on four grounds.
The first was that appellant had neither pleaded nor proved “an acceptance of the
acknowledgments of debt” animo contrahendi.  The second was that it had been
formally admitted by appellant that Assante had neither express nor implied

authority to sign an acknowledgment of debt on behalf of respondent.  The third
was that a resort by appellant to estoppel in its replication could not succeed
because there was no evidence of any representation made by respondent to
appellant that Assante was authorised to sign an acknowledgment of debt.  The
fact that Assante was respondent’s branch manager was considered, in itself, to
be of no consequence.  The fourth ground was that the defence of non causa
debiti was available to respondent as there was no agreement of investment with
it and therefore no indebtedness to which the acknowledgment of debt could
have applied.  In this Court counsel for respondent supported these findings and
sought to provide yet further fortification for them.
[11] The alleged contracts.
The first contention here was that the evidence did not establish that the
persons named by appellant in its particulars of claim as having represented
appellant and respondent respectively did in fact have any dealings with one

another which could be said to have culminated in the coming into existence of
the oral contracts pleaded.  Alternatively, so it was argued, they had no authority
to enter into the contracts.
[12] The next contention was that in so far as appellant sought to rely upon
agreements constituted by conduct or “a doctrine of quasi-mutual assent”, it was
not open to it to do so, first, because no such case had been made in the
pleadings and secondly, because there was no evidence to support it.  It was
submitted that there was no evidence that appellant placed any reliance upon any
conduct of Assante (still less of respondent) in issuing the written guarantees
because those who were alleged by appellant to have contracted with respondent
on its behalf (Mr Lober, appellant’s investment manager, and Ms Pollock,
appellant’s investment administration clerk) did not do so.  Lober was unaware
of the existence of the guarantees until December 1996.  Ms Pollock had simply
received the guarantees and filed them away.  Alternatively, it was argued that

even if there had been reliance upon the guarantees issued by Assante, that
would not have availed appellant because it was admitted that he had no
authority, express or implied, to issue them and the doctrine of quasi-mutual
assent cannot be invoked by reason of the conduct of an admittedly unauthorised
representative of one of the parties to the putative transaction.  Reliance upon
conduct by the principal (respondent) is essential and no such conduct had been
pleaded or proved.
[13] Next it was contended that even if the existence of the contracts had been
established, appellant had not performed its obligation under the contracts and
could therefore have no claim against respondent.  Appellant’s obligation was to
deposit the relevant sum with respondent at its Kempton Park branch.  It was
submitted that it had failed to do so in that the cheques intended for the purpose
were not delivered to respondent at its Kempton Park branch but diverted by
persons for whose conduct respondent was not responsible to NOK and

deposited in respondent’s bank account not by appellant but by NOK.  It was
argued that there was no evidence that Assante knew of those deposits, or gave
any instructions as to how they were to be dealt with, or that, if he did, he had
any authority from respondent to do so.
[14] The alleged acknowledgments of debt.
The first contention raised by respondent relates to the true interpretation
of the relevant documents.  It was submitted that there is no express
acknowledgment of an existing indebtedness by respondent and that, at best, the
document adverts to the indebtedness of some undisclosed third party.  The use
of the word “guarantees” is the foundation for the submission.
[15] The second contention echoed the finding of the Court a quo that, if they
were acknowledgments of debt, they were not accepted by appellant animo
contrahendi prior to respondent’s repudiation of Assante’s authority.  The
factual basis for the submission was that appellant’s board of directors were

unaware of the letters.  So was its managing director, Mr Martin.  Lober made
the four investment decisions which give rise to these claims on the strength of
what he had been told by Jones, an intermediary, and not on the strength of any
of Assante’s letters of which he too was unaware.  Neither he nor Martin
expected to receive any such letter.  Ms Pollock received the letters only after
each of the investment decisions had been made and simply filed them away
without any intention of “accepting” the acknowledgements of debt which, in
any event, she had no authority to do.
[16] The third submission was that, as the Court a quo found, there was no
causa debiti for the acknowledgements of debt, appellant having failed to prove
the existence of the underlying contracts of investment.
[17] Before dealing with the issues raised I must sketch the specific
circumstances in which the payment into respondent’s bank account of the
cheques drawn by appellant came about.  Mr Jones was an accountant in private

practice.  He was the brother-in-law of Martin (appellant’s managing director).
While Lober was away on leave Jones telephoned Martin during April 1996 and
told him “that NBS was looking for some money”.   He was asked to fax to Ms
Pollock details of the investment opportunity and he did so.  His letter dated 18
April 1996 reads:
“Dear Miss Pollock
Re:  NBS Bank
We confirm that client required R2 mil – R5 mil tomorrow and is offering
the following:
(Details were set out of the interest rates offered for deposits for 6 months
and 12 months respectively.)
Kindly contact Tiny Jones ---------- or Steve Swanepoel ---------- in this
regard.  ----------“
[18] Martin was shown the letter by Ms Pollock.  He authorised Ms Pollock to
deposit R5 million with respondent for six months at an interest rate of 15% per
annum and he endorsed the letter to that effect.  She requisitioned an appropriate
cheque drawn in the manner described earlier.  Mr Bradley, a broker, arrived to

collect the cheque bearing the letter of guarantee described in para [3].  She read
the letter and was satisfied that it was “a confirmation, a guarantee that NBS
would repay a capital amount of R5 million on 23 October at maturity”.  She
knew Assante who had telephoned her on a previous occasion to obtain
appellant’s banking details so that respondent could repay appellant a previous
deposit which had matured.  She handed Bradley the cheque.  It was deposited,
as it had to be because of the manner in which it had been drawn and crossed, in
respondent’s bank account but it was then credited in respondent’s books of
account to NOK’s corporate saver account.  Ms Pollock subsequently received
the further letter referred to in para [3].  In due course both the capital and the
interest were paid to appellant by cheques drawn on respondent’s bank account.
[19] On his return from leave Lober was told of that transaction.  Prior to
receipt  by  appellant  of  the  payments  of  capital  and  interest  referred  to  in
para [18] appellant purported to make two more investments with respondent.

Two more were made thereafter.  On each of these four occasions Jones
approached Lober to enquire whether appellant had any money which it wished
to invest.  He told Lober that the money could be placed with either the NBS or
Syfrets (another well-known financial institution) and gave details of the rates
on offer.  The modus operandi followed thereafter remained essentially the
same.  However, in all four instances a further document was sent to appellant.
It was also a document headed “confirmation of your investment” but it was not
signed by Assante.  Nor did it relate to the capital sum deposited by appellant.  It
related to the interest component of the deposit.  I should explain here that the
nominal rate of interest payable upon the deposit was credited to appellant in
advance so that appellant would enjoy the benefit of interest upon interest for the
period of the deposit.  This particular document was the confirmation of the
investment of that nominal interest.  In each instance it ended with the statement:
“This confirmation is null and void unless validated below by an NBS
terminal.

----------------------------------------------------------------------------------------”
In each instance there appeared below the broken line in an obviously computer
terminal-generated format details of the investment of the interest component of
the deposit.  In two of the four instances there were additional letters of
“confirmation of your investment” signed by Assante which were in similar
terms to those referred to in para [3].
[21] Some attempt was made by respondent to rebut appellant’s assertion that
it believed itself to be contracting with respondent.  The argument rested upon
the same kind of considerations as were relied upon for the same proposition
advanced in the Cape Produce case.  In addition, there was reference to a
previous transaction between the parties involving a third party (referred to as
the Federal Credit transaction).  That transaction, so it was argued, amounted to
appellant investing its money with a third party via respondent and it was
suggested that appellant had done essentially the same here.  Notwithstanding

these considerations and for substantially similar reasons to those given in the
Cape Produce judgment I consider it to be in the highest degree unlikely that
appellant would have been content to lend millions of rands to a third party
whose identity was entirely unknown to it.  The evidence given by those who
testified on appellant’s behalf was inherently probable and it is abundantly clear
that they genuinely thought that the investments were being made with
respondent and that, objectively regarded, they had good reason to believe that
those purporting to represent respondent saw the matter in the same light.
[22] However, it is equally clear that the high command of respondent was
unaware of what was being done in its name.  Respondent’s stance is that it did
not in fact or in law contract with appellant;  that any contrary belief which
appellant may have had was not brought about by the doing of anybody for
whose actions it (respondent) can be held accountable;  that the sums of money
deposited in its bank account were not deposited by appellant in performance of

the contracts of deposit but by third parties for the credit of NOK;  that it
(respondent) did not accept the deposits as having emanated from appellant but
from NOK;  that it was contractually obliged in terms of the corporate saver
scheme to pay out the funds standing to the credit of NOK’s account when
requested to do so by NOK;  and that it had paid out those funds in good faith
and could not be required to, in effect, pay them out again to appellant.  That
respondent finds itself faced with these claims entitles it to considerable
sympathy but that is of course not conclusive of the issues raised.
[23] The contracts of deposit.
Some preliminary observations need to be made.  Assante was joined in the
litigation as a third party by respondent.  So too were Bradley and Stephenson.
They were brokers to whom Ms Pollock had handed the cheques and from
whom she received the written “guarantee” signed by Assante.  By consent, the

actions against them were separated and postponed sine die.  None of them
testified in this action.
[24] The probabilities are overwhelming that Assante was the instigator of the
overtures made by Jones to appellant and that he intended to create the
impression that appellant would be investing with respondent.  His
contemporaneously given letters of “guarantee” were obviously designed to
foster that impression.  He plainly purported to speak for respondent and it is
neither here nor there which particular representative or representatives of
appellant’s it was who may be said to have concluded the contracts.  It is as
plain as a pikestaff that, objectively regarded, they were concluded.
[25] Respondent’s attempt to confine appellant strictly to its characterisation in
its pleadings of the contracts as oral and as having been concluded by the
persons named in the particulars of claim is not, in my opinion, justified in the
circumstances of this case.  The requests for trial particulars filed by both parties

were extensive and the replies given fleshed out the respective stances of the
parties in considerable detail.  It became quite apparent during the trial that
appellant’s case upon the contracts rested upon a mosaic of letters, telephone
calls, conversations, and conduct.  Some of the actors named in the particulars of
claim such as Jones, Lober and Ms Pollock were involved throughout all four
transactions.  Some played an overt role in some of the transactions but not in
others.  Thus, Bradley delivered Assante’s letter of “guarantee” and collected
appellant’s cheque in two of the transactions.  Stephenson did so on the other
two occasions.  Assante was the eminence gris throughout.  Whether the
objectively plainly discernible resultant contractual consensus is rightly
described as constituting an oral contract (in contradistinction to one in writing)
or, more accurately, as being partly oral, partly in writing, and partly tacit in so
far as elements of the apparent consensus rested on conduct, is of little moment.
Respondent was not prejudiced by such broadening of the issues as occurred.

They were fully canvassed at the trial.  The entire premise upon which the trial
was conducted by respondent was not that there were no contracts of deposit at
all, but that they were not with respondent, and if they purported to be, they were
not binding upon respondent because of an absence of authority on the part of
those who purported to represent respondent.
[26] I have borne in mine that respondent was armed with a formal admission
by appellant that Assante had no actual authority (express or implied) to issue
the “guarantees” which he did and that he knew it.  It is also true that the
evidence established that he had no authority to contract in the terms alleged by
appellant.  However, it does not follow from either that he did not purport to do
so on respondent’s behalf.  A distinction must be drawn between a case in which
an unauthorised person does not even purport to contract on behalf of a principal
with a third party, and a case where he or she does so purport.  In the first class
of case the absence of authorisation is irrelevant;  there is simply no contract

either seemingly or in truth.  In the latter class of case, there is seemingly a
contract but in truth none because of the lack of authority.  Where, as here, the
initial question being addressed is whether the contracts of deposit were
seemingly concluded, the fact that Assante had no authority to conclude such
contracts is only relevant to the enquiry to the extent that it might throw some
light on whether it is probable that he would have purported to contract.  But the
lack of authority is in itself inconclusive as to whether he purported to contract.
Nor, as I see it, does it avail respondent to say that even if there was seeming
contractual consensus, it was not its conduct which gave rise to the appearance
of contractual consensus but Assante’s.  When the question of Assante’s
ostensible authority to contract is considered respondent will of course be
entitled to raise that contention.
[27] The reason for the distinction is this.  Where two parties negotiate with
one another directly and not through representatives they will be bound if,

objectively regarded, they appear to have reached contractual consensus.  That
one or other of the parties did not subjectively intend to do so will not matter.
The objective theory of our law of contract dictates that result.  Each party is
entitled to rely upon the objective manifestations of consensus which emanate
from the other.  And where each party is responsible for those which emanate
from him or her it seems right that such should be the result.  However, where
one of them purports to be acting in a representative capacity but has in fact no
authority to do so, the person whom he or she purports to represent can
obviously not be held bound to the contract simply because the unauthorised
party claimed to be authorised.  That person will only be held bound if his or her
own conduct justified the other party’s belief that authority existed.
[28] Did respondent hold Assante out as having authority to accept deposits of
the magnitudes here involved on the terms on which they were accepted?  That
is of course a question of fact to be decided on a balance of probability.  It is not

reducible to the question, posed in vacuo, of whether a branch manager of a
business has apparent authority to bind the business nor is it a question which
lends itself to a generalised answer.  The branch manager of a fast food outlet
cannot be regarded, simply because of his appointment as such, as having been
held out by the proprietor of the chain of outlets as having authority to open a
new branch, to buy or hire premises for it, or to engage staff for it.  That is
because these activities are so patently not within the ordinary purview of such a
manager.  On the other hand, the manager of a business the sole activity of
which is the buying and selling of used motor vehicles may well be justifiably
thought to have been empowered by the proprietor to negotiate purchases and
sales for that is the manager’s publicly proclaimed  raison d’etre.  (Reed N.O. v
Sager’s Motors (Pvt) Ltd 1970 (1) SA 521 (R., A.D.))  In each case, it is the
particular facts which will provide the answer.

[29] Here we have this situation.  Respondent is a well-known financial
institution which conducts business countrywide through a network of branches
in South Africa’s cities.  It became known to the public at large as a building
society which had existed for many years before its reincarnation as a bank.  Its
activities remained fundamentally the same thereafter.  It solicited funds from
the public on which it paid interest.  It lent money to the public in return for the
payment of interest.  Much of that lending was on the security of mortgage
bonds registered over property which had been acquired by the borrower and
paid for with the money borrowed.  It advertised extensively.  The very essence
of its business was borrowing (for that is what the provision of savings accounts,
the acceptance of deposits of money on call or for fixed periods, and the like
amount to in law) and lending money.  The establishment of branches was
plainly to facilitate convenient access by the public to it as an institution and to
encourage the public living in the area concerned to make use of conveniently

situated branches.  These branches were the public face of the institution and
they were intended by respondent to be so regarded.  There was no suggestion
by respondent that its branches were not intended to be available to the public
for certain classes of lending and borrowing and that it made that generally
known.  There was no publicly proclaimed or advertised policy of dealing with
transactions of a particular magnitude only at its head office.  The branches were
held out by respondent as the places to which anyone wishing to deposit money
with it could and should repair.  The branch manager was held out to be the
person clothed with the most authority at a branch by his very designation as
branch manager.  Inherent in all that is that branch managers were being held out
as authorised to accept deposits whatever their magnitude.
[30] Indeed, particulars for trial furnished by respondent make it clear that
Assante, as branch manager, did in fact have authority to accept deposits of
more than R1 million.  It is true that his authority to do so was qualified in that

he could do so “only on [respondent’s] quoted terms for deposits of R1 million
or less” and that he “was obliged to report any deposits of more than R1 million
to [respondent’s] treasury department at its head office in Durban”.  But these
were limitations and obligations of which prospective depositors would be
unaware and the central fact remains that he was in fact permitted and authorised
to deal with the public in accepting deposits of the magnitude here in question
and to communicate to them the terms upon which such deposits would be and
were accepted.  Having actually clothed him with general authority to represent
to the public that he spoke for it in accepting deposits, respondent cannot shelter
behind the fact that he exceeded limitations placed upon the precise extent of his
authority in doing so, or the fact that he failed to report the deposits to the
treasury department, or that he failed to follow internally prescribed standard
procedures, or to use its standard documentation.  (Cf National and Overseas
Distributors Corporation v Potato Board 1958 (2) SA 473 (A) at 479C-480E.)

[31] In the nature of things it will seldom, if ever, be the case that, where no
actual authority exists, but the principal is held to be liable on the basis of
ostensible authority, the principal’s holding out of the agent’s authority will
have extended to each and every term of the contract which the agent has
purported to conclude.  It is sufficient for successful invocation of the doctrine
that the conduct of the principal was such as to entitle the party concerned to
believe that the person purporting to act on the principal’s behalf was authorised
to transact a contract of the kind in question.
[32] Appellant, through its functionaries, accepted that Assante was authorised
to accept these deposits by virtue of the circumstances sketched above and
respondent created those circumstances.  Its belief was reasonable.  It was
reasonably foreseeable that, on the strength of those circumstances, members of
the public would assume that Assante had authority to accept deposits of this

kind.  Assante must therefore be held to have had respondent’s ostensible
authority to conclude the contracts of deposit.
[33] The argument that those who purported to make these deposits on
appellant’s behalf have not been shown to have had authority to do so must be
rejected.  The evidence of Martin and Lober was that appellant’s board of
directors had approved recommendations by the investment committee of
appellant regarding the limits to be set upon how much money could be placed
with particular banks and that, provided the investment manager operated within
the parameters set by the board, he could use his discretion.  That evidence could
not be seriously challenged and it is clear that the deposits made with respondent
did not exceed those parameters.
[34] The contention that respondent did not receive the deposits from appellant
because they were diverted and credited to NOK’s account requires
consideration.  It seems to me to be unsound.  There can be no talk of appellant’s

cheques having been stolen before respondent, through its bank, could collect
the proceeds of them, or of the proceeds being stolen before respondent had
received them.  The cheques had been drawn in such a way that no one other
than respondent could present them for and obtain payment.  They were crossed,
marked “not negotiable” and “not transferable”, and made payable to
respondent.  They were deposited in respondent’s bank account;  the proceeds
were collected by respondent’s bank and credited to respondent’s account.  As a
fact, therefore, respondent received the deposits from appellant and from no one
else.  Respondent proceeded to credit NOK’s Corporate Saver account with an
equivalent sum of money because NOK claimed (falsely) that the proceeds of
the cheque were intended to be invested with it.  That is respondent’s
misfortune, not appellant’s.  Neither appellant’s cheque nor appellant’s money
was stolen.  If anything, it was respondent’s money (or, more accurately,

respondent’s  bank’s  money)  that  was  stolen  from  it  by  false  pretences.
(Cf R v Stanbridge 1959 (3) SA 274 (C) at 277F-279E.)
[35] In my view appellant’s claims based upon the oral contracts of deposit
should have been upheld
[36] The alleged acknowledgments of debt.
Are the letters indeed acknowledgments of debt which can ground an
additional  independent cause of action?  On the face of them they are just that.
(Adams v SA Motor Industry Employers Association 1981 (3) SA 1189 (A) at
1198A-1199C.)  They use the words “confirm” and “repay” which connote both
an existing indebtedness and that respondent is the debtor.  The document is
invested with more significance than a merely confirmatory letter or a receipt for
its presentation is required when repayment is made.  These factors outweigh the
use of the potentially ambiguous word “guarantees”.  It is a word which, while
often used in the context of guaranteeing the performance of a contractual

obligation by a third party, is also frequently used as a synonym for “warrants”
or “undertakes”.  In the entire context of these letters in which no reference at all
is made to any third party, the latter meaning is clearly the meaning intended to
be conveyed.  That being so, the documents are acknowledgments of debt which
can independently ground a cause of action.  (The Law of Negotiable
Instruments in South Africa, 5 ed, Cowen and Gering, p 28 n 97.)
[37] The submission that the acknowledgments of debt had not been accepted
animo contrahendi by appellant cannot be upheld.  They were delivered to
appellant against delivery by appellant of its cheques.  Ms Pollock had been
instructed to attend to the implementation of the agreements of deposit on
appellant’s behalf.  Her evidence was that she read the letters, found them to be
in accordance with what had been agreed, and filed them.  The clear implication
is that, if they had not been, she would have queried them.  They were obviously
filed for future use when the deposits fell due for repayment.  The cheques were

thereafter permitted to be paid (in the sense that payment of them was not
stopped by appellant) and, in so far as acceptance may have been necessary (as
to which see  Volkskas Spaarbank Bpk v Van Aswegen 1990 (3) SA 978 (A) at
985F-986D), it is idle to suggest that there was no acceptance by respondent of
them as acknowledgments of debt.
[38] It is so that Assante had no actual authority (express or implied) to issue
the letters and that he knew that, but the question whether he had ostensible
authority to do so remains.  For the reasons given earlier in this judgment when
the contracts pleaded were considered, I conclude that he did have ostensible
authority to issue and sign the letters.  That seems to me to be a necessary and
inescapable consequence of the finding that he had ostensible authority to accept
the deposits.  To conclude that he had ostensible authority to bind respondent by
contracting to accept a deposit but none to undertake to repay it in writing
amounts to unjustifiable hairsplitting.

[39] The final contention, namely, that no underlying causa debiti existed for
the acknowledgments of debt, must, in my view, also fail.  The onus of
establishing that no antecedent causa debiti existed was upon respondent.  To
hold otherwise would render appellant’s right to rely upon the written
acknowledgments of debt as an independent cause of action nugatory.  Not only
has it failed to discharge that onus, but, as I have found earlier in this judgment,
appellant has proved the contrary.  Appellant was therefore also entitled to
succeed in its claims on the strength of the acknowledgments of debt.
[40] The appeal is upheld with costs, including the costs of two counsel.  The
orders of the Court a quo are set aside and the following orders are substituted
for them:

1.
Defendant is ordered to pay to plaintiff:
1.1
R5 million and mora interest thereon at the rate of 15,5% per
annum from 9 May 1997 to date of payment;
1.2
R10 million and mora interest thereon at the rate of 15,5%
per annum from 11 June 1997 to date of payment;
1.3
R5 million and mora interest thereon at the rate of 15,5% per
annum from 22 November 1997 to date of payment;
1.4
R5 million and mora interest thereon at the rate of 15,5% per
annum from 6 December 1997 to date of payment.
2.
Defendant is ordered to pay the costs of the action, including the
costs of two counsel.
_______________________
R M MARAIS
JUDGE OF APPEAL
NIENABER      JA
)
SCHUTZ           JA
)
NAVSA              JA )
FRONEMAN AJA
)     CONCUR