Derivative Acquisition

Question 1

Define “derivative acquisition of ownership”.

Answer 1

Derivative acquisition of ownership is the passing of ownership to a new owner with the cooperation of the previous owner, where the acquired ownership is derived from that of the previous owner.

Question 2

What is necessary for a valid transfer?

Answer 2

• The focus is on the judicial act of transfer (transfer of ownership) and not on the causa (judicial act of concluding contract).
• With transfer of ownership, a real agreement is essential.

Question 3

What are the two systems of transfer?

Answer 3

• Abstract system.
• Casual system.

Question 4

Discuss the abstract system.

Answer 4

• The underlying causa is separate from the requirements for transfer of ownership.
• This means that if underlying agreement is invalid, the transfer of ownership can still be valid if requirements of animus (intention to transfer and acquire) and corpus (actual delivery) are met.
• Contractual claims can be instituted as a remedy for invalid transactions, previous owner may not reclaim property.

Question 5

Discuss the casual system.

Answer 5

• Causa is included in essential requirements for valid transfer.
• This means that if contract of sale is invalid, the transfer is also invalid
• As a remedy, property can be reclaimed directly by original owner if sale agreement is invalid.

Question 6

What is the South African approach?

Answer 6

South Africa makes use of the abstract system.

Question 7

What are the prerequisites for transfer?

Answer 7

• The thing must be in commerce.
• Transferor must be the owner.
• Legal and contractual capacity.
• There must be a legal reason or cause for transfer.
• Payment of purchase price.

Question 8

What is the essential requirement for transfer?

Answer 8

• There must be a real agreement.
• Is represented by 2 interconnected requirements (animus and corpus).

Question 9

What are the two manifestations of intention, under the corpus element?

Answer 9

• Registration of deed of transfer for immovables.
• Delivery of movables.

Question 10

Briefly discuss delivery.

Answer 10

• In terms of movable property, delivery is essential for valid transfer of ownership.
• Delivery is the outward action that shows parties’ intention to transfer and receive ownership of movables.
• If animus element is absent, ownership doesn’t transfer upon delivery.
• “Delivery” and “animus” thus forms the real agreement for transfer.

Question 11

What are the two modes of delivery?

Answer 11

• Actual delivery.
• Constructive delivery.

Question 12

What are the different modes of constructive delivery?

Answer 12

• Symbolic delivery.
• Delivery with the long hand.
• Delivery with the short hand.
• Attornment.
• Constitutum possessorium.

Question 13

Discuss symbolic delivery.

Answer 13

• Is when a movable thing is delivered by handing over a symbol or instrument to transferee, for example, handing over keys for a car.
• Is used where due to nature or size of the thing, the thing cannot be literally handed over to the transferee.

Question 14

Discuss delivery with the long hand.

Answer 14

• Used when the object is too large or heavy for actual delivery.
• Transferor points out the object to the transferee in its presence, and the transferee must take effective control of it.

Question 15

Discuss delivery with the short hand.

Answer 15

• Occurs when transferee is already in possession of property but not as owner.
• Intention of transferee changes to now hold property with ownership intention.

Question 16

Discuss attornment.

Answer 16

Involves situation where 3rd party has physical control of movable on behalf of the owner, and ownership is transferred to new owner while movable remains with 3rd party.

Question 17

What are the requirments for a valid attornment as set out in Southern Tankers case?

Answer 17

There must be a tripartite agreement.

• Agreement must be in form of instruction received from transferor or transferee.
• Must be accompanied by corresponding declaration on the part of the detentor.
• Agreement must state that detentor must henceforth withhold the property on behalf of the transferee and no longer on part of the transferor.

Detentor must exercise direct physical control over the movable at conclusion of tripartite agreement.

Question 18

What if direct physical control is lost?

Attornment.

Answer 18

• If loss is voluntary, Bleiman case held that it is the impossible for detentor to hold the property (second requirement is then not met and there will be no attornment).
• If loss is involuntary (eg. The thing was stolen), but detentor retained right to retain (detentor has legal right over the thing), then argument can be made by detentor that they were still in physical control at the moment of tripartite agreement.

Question 19

Discuss constitutum possessorium.

Answer 19

• Refers to where delivery takes place without any physical handing over of the property.
• Person transferring ownership (transferor) gives legal control to new owner (transferee) but keeps physical control of property.
• The transferor keeps property not as an owner anymore but on behalf of the new owner, based on a legal reason different from ownership (e.g., leasing).

Question 20

What are the requirments for the use of constitutum possesorium?

Answer 20

• Transferor must be in physical control of the thing prior, during, and after transfer.
• Transferor’s intention must change from owner to mere holder (detentor).

Question 21

Which questions must be answered regarding the intention requirement?

Constitutum possessorium.

Answer 21

Is there causa detentionis?

• Causa detentionis is the agreement between the parties, providing for the basis on which the transferor retains control, which reflects the changed intention.
• It is essentially the basis for the changed intention of parties.

Is the causa detentionis genuine or simulated?

• This must be determined to prevent fraud and to prevent that parties use simulated transactions to mask their actual intention.
• Vasco Drycleaners case, genuine causa detentionis creates valid transaction with true
  intention.
• Simulated causa detentionis creates fake transaction with intention to hide property from creditors.