Bowman, De Wet and Du Plessis NO v Fidelity Bank Ltd 1997 2 SA 35 (A)

Bowman, De Wet and Du Plessis NO v Fidelity Bank Ltd 1997 2 SA 35 (A)

Issue: Whether the true owner of a stolen bank draft could recover its proceeds from an intermediate possessor of the draft who had innocently cashed it.

Facts:

In 1995, a bank draft in the amount of R150,000 was issued in favor of a company named Lombo. The bank draft was stolen from Lombo's offices.

The stolen bank draft was subsequently cashed at a branch of Fidelity Bank. The cashier at Fidelity Bank did not recognize the person who presented the bank draft for cashing and asked for identification. The person presented a false driver's license and a copy of Lombo's certificate of incorporation. The cashier then cashed the bank draft and paid the proceeds to the person who presented it.

Lombo later discovered that its bank draft had been stolen and that the proceeds had been cashed at Fidelity Bank. Lombo demanded that Fidelity Bank repay the proceeds of the bank draft. Fidelity Bank refused, arguing that it was not liable for the actions of the person who cashed the bank draft.

Held:

The Court held that Fidelity Bank was not liable to Lombo for the proceeds of the stolen bank draft. The Court reasoned that Fidelity Bank had acted innocently in cashing the bank draft and that it was not liable for the loss suffered by Lombo.

The Court also found that Lombo had been negligent in failing to take adequate steps to protect its bank draft from theft.

Key Facts:

• A bank draft was stolen from a company's offices.
• The stolen bank draft was cashed at a bank.
• The bank did not recognize the person who presented the bank draft for cashing and asked for identification.
• The person presented a false driver's license and a copy of the company's certificate of incorporation.
• The bank cashed the bank draft and paid the proceeds to the person who presented it.
• The company demanded that the bank repay the proceeds of the bank draft.
• The bank refused, arguing that it was not liable for the actions of the person who cashed the bank draft.

Reasons:

• The Court held that the bank was not liable to the company for the proceeds of the stolen bank draft.
• The Court reasoned that the bank had acted innocently in cashing the bank draft and that it was not liable for the loss suffered by the company.
• The Court also found that the company had been negligent in failing to take adequate steps to protect its bank draft from theft.

Conclusion:

The Court's decision in Bowman, De Wet and Du Plessis NO v Fidelity Bank Ltd 1997 2 SA 35 (A) is a significant case in South African law. The Court's decision clarified the law relating to the liability of banks for the cashing of stolen bank drafts.