Summary
Summary 9 Derivative Acquisition of Ownership
- Institution
- University Of The Freestate (UFS)
Complete summary of this chapter. Very important to be able to distinguish between the long hand and short hand delivery.
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9 Derivative Acquisition of OwnershipThe derivative transfer of ownership the co-operation of the transferor (current owner) is required.
A bilateral juridical act is required in terms of which the ownership is transferred by the current owner to
the new owner and accepted by the new owner.
As a result the new owner accept all the rights to derive from his predecessor’s ownership but he must also
accept certain obligations or limitations that exist in respect of ownership of the thing.
In terms of the nemo plus iuris rule no person can transfer more rights in respect of the thing then he
himself has and all limitations with real effect are transferred to the new owner.
Requirements for Transfer of Ownership:
(a) The thing must be negotiable (res in commercio):
it must be a thing in respect of which real rights can be acquired and transferred.
(b) The transferor must have contractual capacity:
Must have the capacity to transfer ownership.
The capacity of transferor is determined on the basis of factors like it’s age mental health and
marital status.
Owners with limited contract to capacity must be assisted by parent legal guardian curator.
(c) The transferor must be the owner of the things:
In terms of the nemo plus iuris rule no person can transfer more rights than he himself has and the
owner is therefore the only person who can transfer ownership - Desai NO v Desai.
The owner need not undertake the transfer himself and he can be undertaken on his behalf by an
agent or nominee.
(d) The transferee must have the contractual capacity to accept the transfer of ownership.
Factors like age, mental health and marital status play a role.
(e) The ownership must be accepted by the transferee or his nominee or his agent.
(f) Transfer of ownership in the case of movables take place only if the things is delivered to the
transferee in a legally accepted way.
In the case of immovable transfer of ownership takes place by means of registration in the deeds
registry.
This is known as the objective aspect of transfer of ownership and is a manifestation on the
common law requirement that publicity must be given to transfer of ownership.
(g) The delivery (movables) the registration (immovables) must take place with the intention of the
owner to transfer ownership and with intention of the transferee to accept ownership
, The subject of intention of the parties that transfer of ownership must take place be apparent from
the real agreement - Dreyer v AXZS Industries
Air-Kel h/a Merkel Motors v Bodenstein:
Mere agreement is insufficient for the transfer of ownership — traditio (delivery) is also required.
Conversely mere delivery is also insufficient - it must be accompanied by an agreement between
transferor and transferee that ownership is there by transferred and accepted. (Real agreement).
In Legator v McKenna v Shea:
It was held that it is important to distinguish between the preceding obligatory agreement (contract
of sale, donation / exchange) and the real agreement.
The real agreement there must be consensus between the parties in respect of the transfer in
receipt of ownership and the real agreement must meet all the common law requirements for a
valid contract it need not meet all the requirements for the preceding obligatory agreement.
In the case of credit agreements or the alienation of land the real agreement need not meet the
formal statutory requirements that is must be in writing
In the Legator case it was confirmed that the principles regarding the real agreement are also
applicable to the transfer of ownership of immovable property.
(h) They must be legal cause for the transfer of ownership.
(i) If ownership is transferred on the basis of a proceeding contract of sale it is transferred to the
buyer only if the full purchase price has been paid, unless credit was granted by the seller to the
buyer.
This indicates that the intention of the owner that ownership must be transferred can be made
subject to a suspensive condition.
Abstract System of Transfer of Ownership
Commissioner of Customs & Excise v Randles, Brothers and Hudson:
The abstract system of transfer of ownership has been followed in South African law.
This means that the in the invalidity of the preceding obligatory agreement (contract) does not affect the
validity of the transfer of ownership and ownership can be transferred in spite of the invalidity of the
obligatory agreement if there was a valid real agreement coupled with delivery (movables) or registration
(immovables).
This does not mean that there is no legal cause for the transfer of ownership.
Usually the cause will be continued in a preceding obligatory agreement such as a contract of sale,
exchange or donation.
A valid obligatory agreement is not required as legal cause.
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