Moll v Nedcor Bank

[1] Property - Sale in execution - Whether sale free of or subject to usufruct - Circumstances of case - Terms of agreement concluded at sale - Waiver of rights under usufruct.

[2] Property - Usufruct - Sale of property in execution - Whether transfer of property to take place free of, or subject to, usufruct.

[3] Usufruct - Sale of property in execution - Whether transfer of property to take place free of, or subject to, usufruct.

The applicants live on a portion of a farm which had been sold in execution to satisfy judgment obtained by the first respondent against the owner of the property occupied by the applicants. The second respondent had bought the property and had sold it on to the third respondent. The applicants sought an interdict, on an urgent basis, prohibiting the transfer of the property free from a usufruct registered in their favour.

The first respondent raised four points in limine, namely that (i) there was no basis for urgency; (ii) the applicants lacked locus standi as the usufruct might not have been registered in accordance with the provisions of section 3(3) of the Subdivision of Agricultural Land Act 70 of 1970; (iii) the applicants had waived all their rights under the usufruct in terms of a procuration and therefore could not rely thereon; and (iv) the sale had taken place free of the usufruct.

Held - (i) The applicants had made several attempts to ensure that the transfer of the property would not take place before the application had been made for the interdict, but had received no such undertaking from the first respondent. Whether a person's property right (whether in personam or in rem) was threatened, there was some degree of urgency.

(ii) The usufruct in respect of the homestead on the property was registered in favour of the applicants and formed part of the conditions of the title deed. This was proof of the fact that the usufruct was in favour of the applicants. In the face of such a clause in the title deed the first respondent could not question the validity of the usufruct, or contend that the term referring to the usufruct should be regarded as pro non scripto.

(iii) The wording of the procuration indicated that a sale and subsequent transfer of the property could or might be free of the usufruct. Thus, the first respondent was not compelled to sell the property free of the usufruct. The waiver had never been effected, in the mortgage bond, in the terms set out in the procuration. The waiver had merely given the first respondent the right to sell the property free of the usufruct. The first respondent was not competent to do so.

(iv) The applicant's waiver of certain rights flowing from the usufruct could not give any indication regarding whether or not the sale in execution had taken place free of the usufruct. This could only be established on a proper construction of the agreement concluded at the sale in execution. The agreement had included a standard non-variation clause, therefore the written conditions of sale was conclusive evidence of the contents of the agreement and no evidence relating to any oral communications between the parties was permissible. The agreement stated that the property was sold "as represented by the title deeds and diagram … and subject to the conditions specified in the deed of transfer". One of those conditions was that the usufruct was in favour of the applicants. In view of the fact that an acceptable price for the property had been secured, notwithstanding the fact that the sale was subject to the usufruct, the first respondent could not complain that there was any interference with the rights in terms of the mortgage bond. On a proper construction of the sale agreement, the sale had taken place subject to the usufruct. Thus, the applicants where entitled to the interdict sought.

October 2004 SA Deeds Journal - Republished with permission