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BLOOM v. THE AMERICAN SWISS WATCH COMPANY,

On 19 March, 1913, a robbery was perpetrated at the Cape Town premises of the defendant
company and jewellery to the value of £5,000 was forcibly removed. In the press of the
following day appeared a notice in these terms':
“Mr. J. Hirsch-sohn of the American Swis8 Watch Company called at the Argus
office this afternoon and stated that be was prepared to pay to any person a
reward of £500 for information to be given to the C.I.D. which would lead to the
arrest of the thieves and the recovery of the diamonds, jewellery, etc., stolen from
his premises on the 19th instant. If the information leads to the recovery of a
portion only of the property, the reward will be paid proportionately."
Information reached the police authorities from various sources; the culprits were arrested, and
the bulk of the property was recovered. Various persons, including the plaintiff, (now appellant),
initiated legal proceedings, claiming the reward. The actions were heard together before
HOPLEY, J. who found as a fact that. it was the information given by the plaintiff which led to
the arrest of the thieves and the recovery of the stolen property. But he also found as a fact that
the plaintiff, when he gave the information to the police, was unaware of the fact that a reward
had been offered, and on that ground he gave judgment for defendants. On appeal the Appellate
division held that the right to recover the reward was dependent on contractual privity, which did
not exist if the plaintiff gave the information without knowledge of the offer. The decision of the
Provincial Division was affirmed.

INNES, C.J: [102] “… Now the plaintiff’s case, as presented in the Court below and to us,
depends upon the establishment of a contractual relationship between himself and the defendant.
And it is necessary, therefore, to enquire what was the legal effect of the published offer, and
under what circumstances its acceptance would constitute a contract between the parties. The
offer was to all the world to pay. £500 to any person giving to the C.I.D. information which
should lead to the arrest of the criminals and the recovery of the property. In order that it might
ripen into a contract it was necessary that the offer should be accepted. Under ordinary
circumstances the direct communication of the acceptance to the [103] person making the offer is
essential to the constitution of a contractual vinculum Rut it is always open to the offeror to
indicate any special channel of communication, or any special mode in which acceptance may be
manifested. And that is what the defendant company in effect did. It promised to pay any person
who gave information of a certain kind to the C.I.D. In other words, it announced that the offer
might be accepted by communicating the information to the proper quarter. But this indication of
a special mode of acceptance did not do away with the necessity for acceptance itself. In order to
establish a legal tie between the parties, the information would have to be given, in consequence
of the advertisement, by a person acting on the faith of the offer. Otherwise there could be no
contractual privity; the animus contrahendi on the part of the person giving the information
would be wanting; and he could not be the acceptor of the offer because he did not under the
circumstances intend to accept anything. This position results from an application of the
fundamental principles of our law; and the same conclusion is reached by Eng1ish Courts (see.
Carlill v Carbolic Company (1 Q.B.D., 1893, p. 256). Reliance was placed by the plaintiff on
Gibbons v. Proctor (64 L.T., p, 594). There information was despatched to the person authorised
to receive it on the morning of the day on which hand- bills offering a reward were published, but
before publication had been effected. The information was transmitted through a certain channel
and reached its destination after the publication of the hand bills. It was he1d that the reward
cou1d be claimed. The reasons given are short and do not deal with the legal difficulty now under
consideration. The decision has been subject to severe criticism; and with great respect for the
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Divisional Court I do not think that we should be justified in accepting it as an authority for the
proposition that a man may in law be considered to accept an offer of the existence of which he is
ignorant, and thereby be regarded as establishing a binding contract between himself and the
person making the offer.
It follows from what has been said that if the trial Judge was right in holding that the
plaintiff when he communicated 'with the C.I.D. had no knowledge of the offer o£ a reward, then
no legal obligation was created between himself and the defendant. The plaintiff deposed that he
had heard o£ the reward, and called several witnesses to corroborate him. But the learned Judge
was [104] not satisfied as to their credibility, and in view of the fact that the plaintiff in a letter
addressed to the Attorney General distinctly stated that he knew of no reward when he went to the
C.I,D., he found against him on that issue. Arguments were addressed to us by the plaintiff at
some length on this part of the case; ingenious explanations were suggested as to the meaning of
the statements in the letter; and it was contended that the evidence adduced by the plaintiff should
not have been rejected. But the words of the letter are clear and unambiguous and admit of only
one construction; and there is no justification here for an interference with the conclusion of fact
reached by the lower Court depending upon the credibility of witnesses whom we have not seen
It was argued that even if there had been no acceptance when the information was
communicated to the police, the subsequent claiming of the reward might be regarded as the
acceptance of an offer then known and still open. But by that time the plaintiff had already parted
with his information without meaning to claim payment for it; the police were in possession of
the facts and offer could not be regarded as still open for acceptance.
The result is that the judgement below must stand. In some respects the case is a hard
one for the plaintiff, who parted with information from a sense of public duty for which, if he had
waited a little longer, he might have been handsomely rewarded. On the other hand it is only right
to say that the defendant company’s position is not so fortunate as might appear at first sight. It
could not decide which of the various complainants was entitled to be paid; anti it offered to
deposit the reward for distribution by the Court. This arrangement was not agreed to and the
company was, therefore, compelled to incur heavy legal expenditure in connection with the
various actions brought against it. The result may well turn out to be not very different, from the
company’s point of view, than if it had paid the reward in full in the first instance. But however
that may be, the law is clear; and the appeal must be dismissed with costs”

SOLOMON, J.A. and DE VILLIERS, A.JA. agreed that the appeal should be dismissed

DE VILLIERS, A.J.A. also held: [106] “According to the notice in the “Argus”, the respondents
promised to pay a reward of £500 to any person who gave information to the Criminal
Investigation Department [107] leading to the arrest of the thieves and the recovery of the
diamonds and jewellery. It might be thought that any person who satisfied this condition would,
as a matter of course, be entitled to the reward. And as according to the finding of HOPLEY, J.,
the appellant was such person, that he would have received the reward. Under the German Civil
Code this would certainly be the case. Section 657 provides that a person who by public notice
announces a reward for the performance of an act, e.g. for the production of a result is bound to
pay the reward to any person who has performed the act, even if he did not act with a view to the
reward. It appears that the person who gave the information contemplated should obtain the
reward. But in the absence of legislation I am afraid this is not our law. The great weight of
authority is in favour of the view that the transaction is to be brought under the category of
contract. Now it is true such a notice constitutes an offer to pay the amount of the award to the
person who has performed the act, but on elementary principles the offer does not become
binding unless there is acceptance, i.e. unless the person who performs the act knows of the
reward and performs the act with the intention of obtaining the reward. It is only the doing of
such act animo contrahendi which gives rise to the obligation to pay the reward on the part of the
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person who offered it. If the information be given in ignorance that a reward has been offered, it
can give rise to no obligation, for the person who gave the information, when giving it, had no
intention of binding the other. Only if he knew of the reward and performed the act an eye to it
can it be construed to be an acceptance of the offer. Without such on acceptance there is no
contract between the parties, and consequently no obligation on the part of the one to pay the
reward.
As in the present case there are no grounds for interfering with the finding of fact that
appellant did not know of the reward at the time he gave the information to the Criminal
Investigation Department, I have reluctantly come to the conclusion that the appeal must be
dismissed with costs.