CIV/T/95/85

IN THE
HIGH COURT OF LESOTHO

In the
Matter of

BARCLAYS
BANK P.L.C. Plaintiff

V

ETHEL
THANDIWE MOTSETA Defendant

JUDGMENT

Delivered
by the Hon Acting Mr. Justice D.S. Levy on the 17th day of July,
1985.

Plaintiff
has instituted action for provisional sentence on a written
suretyship agreement by the defendant as surety and co-principal
in
solidum for all such sums of money that may be owing to the Plaintiff
by certain Likuiling Trading (Pty) Ltd (The company).

The
agreement, which is dated 16th September, 1982, was entered into by
the Defendant after the death of her husband (the deceased),
who died
on 3rd August, 1982, and who, until his death, was the Managing
Director of the company.

Before
his death, negotiations were in progress between the Plaintiff and
the deceased for the grant of overdraft facilities to
the company up
to an amount of R30.000-00. The Plaintiff was ready to grant such
facilities, as appears from its letter to the
company dated 11th
June, 1982, in which it is stated that the Plaintiff was agreeable to
overdraft facilities on a fluctuating
basis subject to the conditions
that

1. The
   deceased, who was then living, of course, sign a fresh guarantee for
   M30.000.00.

   
   

2. The
   bond over his house be increased to M30.000-00 as further security
   to the bank.

   
   

2

The
guarantee would of course have been in the form of suretyship, and
the house to which reference is made was the property of
the deceased
to whom the Defendant was married with the exclusion of community of
property. A previous letter dated 3rd of August,
1981 from Plaintiff
to the company also indicates that the registration of a bond over
the deceased's house in favour of the Plaintiff
was a condition
pre­cedent to the grant of such overdraft facilities to the
company.

The
Defendant has produced a letter dated 6th September, 1982, written by
Plaintiff's Attorney to Plaintiff in which reference is
made to the
death of the deceased and in which the Plaintiff is advised that
since the proposed surety bond can no longer be regis­tered
in
the name of the deceased because of his death, the Plaintiff should
call upon the person nominated by the Family Council as
heir of the
deceased, who died intestate in terms of Family Law to pass the bond
in favour of the Plaintiff The Plaintiff was also
advised that, in
the Attorney's opinion, the property would not devolve on the
Defendant

No bond
was registered over the house either by the deceased or his heirs, so
that the Plaintiff is without any security, other
than the
Defendant's surety­ship, for repayment of the overdraft which
notwith­standing the non-registration of a bond
was allowed to
the company.

The
certificate of the Plaintiff's manager on which the action is based
shows an amount of R36.673.86 owing by the company to the
Plaintiff,
of which amount the Plaintiff claims M30.000.00 from the Defendant.

The
Defendant has said that she is one of the Directors of the company
but raised a defence based upon the senatus consultum velleianum

which had not been re­nounced by her. This defence is still
available in this country to women sureties, and it prohibits every

woman whether married or not, whether

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with or
without capacity to contract, from interceding, and in particular as
surety, in respect of the ,debt of any other person
without
renunciation' of this bene-fit See the numerous cases in South
African law cited by Caney in Law of Suretyship 2nd Ed.
pp 163 -173

In
addition to renunciation, which as I have said did not take place in
casu, numerous exceptions have been grafted upon the defence.

The
Plaintiff has said that the Defendant is a public trader and hence
liable on the suretyship, notwithstanding the exception But
as a
public trader, the Defendant would lose the benefit of the exception
only when it can be shown that she personally obtained
some real even
though indirect benefit from the surety­ship. If, of course, she
signed the suretyship for the purpose of advancing
her business, she
would lose the benefit of the exception But the fact that she
conducts her own business as a public trader does
not deprive her of
the defence where she has gone surety for some 3rd party without any
benefit to herself. (See Kavnat v Kavnat
1946 W.L D 77 at 81 and
African Guarantee & Indemnity Co. Ltd v. Rabinowitz 1934 W.L D
141)

The onus
of proof that the Defendant herself has received a benefit from her
intercession is upon the Plaintiff (See Rabinowitz's
case supra at
157). The fact that she has bound herself as surety &
co-principal debtor in solidum is also no answer to the
exception.
(See Maasdorp v Graaff-Reinet Board of Executors (1909) 3 B.A.C.
482).

The only
fact emerging from the papers before me, upon which Plaintiff could
rely for proof of Defendant's personal interest in
the affairs of the
company, is that she is one of its directors and apparently is or may
have been also a shareholder in it. That
this is insufficient is
apparent from the

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decision
in National Industrial Credit Corp.Ltd. v. Zacharias 1949(4) S.A. L.R
790(W). To hold a woman liable on her suretyship,
it must be proved
by the Creditor that she received a direct benefit from the debt for
which she is surety.

There
would also appear to be some justifi­cation for the Defendant's
defence based upon failure of the Plaintiff to complete
its
securities by ob­taining the registration of the bond over the
decea­sed's house by his heirs before advancing the
over­draft
to the company

A surety
is entitled to a discharge from liability where the creditor has
failed to obtain the securities which the parties contemplated
would
be obtained and held by the creditor and on the basis of which the
suretyship contract was entered into. This situation arises
where the
surety has suffered pre­judice through the failure of the
creditor to perfect his security through his failure to
see to the
regi­stration of a surety bond. (See Business Buying and
Investment Co. Ltd v Linaae 1959(3) S.A. L R 93 T.

The
Defendant appears, therefore, to have raised two successful defences
which would disentitle the Plaintiff from provisional sentence
It may
be, however, that the Plaintiff can show at a trial of the action
that the Defendant received substantial benefit from her
intercession
and that the Plaintiff's failure to secure registration of the bond
does not entitle Defendant to a discharge of liability.

It seems
to be equitable that I should order the action to go to trial and
that the Defendant's affidavit stand as a plea and give
Plaintiff
leave to seek further particulars or take any further step within 14
days from date thereof. I also order the costs of
these preceedings
to be costs in the cause of action.

D S LEVY

ACTING
JUDGE

17th July
1985.

For
Plaintiff Mr Harley

For
Defendant Mr Mphutlane.