When one pledges something to you in return for a loan that thing is still not yours so you cannot dispose of it as you want. This is the bitter lesson a Bulawayo businessman learnt after selling a Mercedes Benz belonging to a man who borrowed $23 000 from him and had failed to pay him back on agreed date.
High court Judge, Justice Muchechetere, declared the sale of the car null and void.
Munashe Xavier Wamambo lent Christopher Donald Sakala $23 000 on December 9, 1989. Sakala pledged his Mercedes Benz as security. The terms of the loan were that it would be payable on the same day without any interest.
The acknowledgement of debt also contained a clause which read: “In the event of the debtor failing for any reason whatsoever to make full payment on the due date the lender will at his sole discretion be entitled to have the car sold. Should there be any balance after paying off necessary expenses in connection with the sale the debtor will be entitled to such balance. If the car should fetch less than $23 000, the lender shall gave the right to proceed against the debtor and the debtor consents to the jurisdiction of the Magistrate’s Court and further consents to have this acknowledgement construed as a consent judgment.”
Sakala failed to pay the money as agreed. On January 5, Wamambo gave Sakala a written notice that he was going to sell his car if Sakala did not pay the full amount he owed within seven days. Once again Sakala failed to pay.
Wamambo sold the car for $25 000 to James Tagwira Manenji on February 16. On May 3, Sakala deposited just over $25 000 with his lawyers and instructed them to pay Wamambo what he owed. When the lawyers contacted Wamambo he told them he had already sold the car and therefore had no further interest in the matter.
On May 14, Sakala’s lawyers wrote Wamambo telling him that the sale of the car was illegal and was therefore null and void. They said Wamambo should have secured a judgment first and then attached the car.
They said if Wamambo had sold the car for $25 000 he was guilty of having sold it at a gross under value. This was prejudicial to Sakala as in his conservative view, they said, the vehicle should have sold for $130 000.
As such, the lawyers said, they had been instructed to recover the car keys from Wamambo.
When the matter was brought to court, Wamambo said he was perfectly entitled to sell the car. As far as he was concerned he had acted within his rights.
His lawyer said the sale of the car was valid and by purporting to exercise its jurisdiction to disallow the sale the Court would be offending the fundamental principle that binding contracts shall be enforceable.
In his view, the lawyer said, Wamambo had acted within his contractual rights and for Sakala to argue that the car had been sold at gross under value was a red herring which deserved no weight.
The lawyer also argued that Wamambo was not a car dealer so he could not be presumed to have knowledge about the value of motor vehicles.
Wamambo said Sakala’s car was practically a shell and Sakala himself had said the engine was so damaged that it required extensive repairs or replacement. Therefore he did not agree that the car was worth $130 000. Moreover, Wamambo said Sakala had told him at the time he pledged the car that it was worth $35 000.
Another Bulawayo businessman, Alias Andrew Nicholas Androliakos, testified that he was prepared to pay $130 000 for the car.
Sakala’s lawyer argued that the sale of movable property pledged by someone was lawful provided always that no prejudice was caused to pledger of the movable property.
He argued that a pledgee was only an agent and therefore he was not at liberty to deal with the property as if it were his own. He said Wamambo should have shown his bona fides by advertising the sale of the car through the press or by arranging to have it sold by public auction.
Justice Muchechetere agreed with Sakala’s lawyer and went on: “Speaking for myself Shylock may have his pound of flesh but without any drop of blood.”
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