Bank of Lisbon and South Africa Ltd. v. De Ornelas and Another
South Africa Supreme Court, Appellate Division
1988 (3) SA 580 (AD) (1988)
- Written by Curtis Parvin, JD
Facts
Ornelas Fishing Company (Ornelas) (plaintiff) obtained a line of credit from the Bank of Lisbon and South Africa Ltd. (the bank) (defendant). The bank required that the line of credit be secured by a suretyship and a mortgage bond and applied terms for the security of the credit agreement that went well beyond covering the line of credit. Later, Ornelas sought a credit-line increase, which the bank refused. In response, Ornelas paid off its existing debt and closed the account. When Ornelas sought the return of the securities from the bank, the bank refused, asserting the existence of a contingent liability then in dispute between the parties. Ornelas brought an action against the bank, claiming the bank had improperly refused to return the securities. The trial court found that the bank acted in bad faith in creating the extended terms and ruled in favor of Ornelas. The bank appealed to the South Africa Supreme Court, Appellate Division.
Rule of Law
Issue
Holding and Reasoning (Joubert, J.)
Dissent (Jansen, J.)
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