Are you a thief if you keep money mistakenly paid in your account?

2015-02-12 11:02

In this week’s newspapers, we hear of a worker who received payment in error of an amount of R500 000 into his bank account from his employer.

The employer intended to pay the worker the sum of about R5000,00 (five thousand rand) but mistakenly left out the comma resulting in the amount of R500 000 being paid into the worker's bank account.

When notified of the mistake, the worker allegedly refused to pay back the money, and transferred most of the money into his wife’s bank account.

The hapless employer had to approach the courts on an urgent basis to freeze the bank accounts of the employee and his wife, pending a determination by the court as to what should happen to the money.

Intuitively, it seems obvious to us that the worker should have to pay back the money. And if the worker transferred the money to his wife’s account, she should be made to pay back the money. But is he be guilty of theft?

Things are not always as simple as they seem.

In days gone by, the law maintained that only corporeal things could be stolen. These are things which are real and tangible, which one could feel and touch like cows or carts or gold coins. But money “paid” into your account is a credit entry. It is not corporeal, and was under our old common law not capable of being stolen.

Another complication was the idea of “commixtio”. According to this Roman law rule, when money (coins or notes) was stolen, the coins and notes became the property of the thief, because they mixed with his own money and it was impossible to distinguish which coins were the thief’s original coins and which were his victims’. The same idea applies to coal or wheat that was stolen and mixed with the thief’s own.

If it was proved that the thief took the money, he could be charged with and convicted of theft and the owner of the money could pursue a civil action in court for the return of the same value of money or coal or wheat. If the thief had spent the money and was a man of straw – penniless – the victim was left with a paper judgment which was practically unenforceable. But in this case, the worker did not take the money – it was paid into his account as a credit.

In banking law, when a deposit is made into a person’s bank account, the money actually belongs to the bank and not the account holder. The bank has an obligation to pay to the account holder whatever money is to his credit, on demand.

So what happens to the money in the worker’s bank account, and in his wife’s bank account, and what are the consequences of the worker keeping the money?

The employer cannot simply demand that the worker or his wife’s bank pay back the money. The employer’s bank, following instructions from the employer, paid the sum of R500 000 into the workers bank account. The worker’s bank cannot simply reverse it without the consent of the worker.

The worker may argue for reasons only known to him that he was entitled to the money. If the worker refuses to pay back the money then the employer would need to sue for the return of the money, alleging that it was paid in error, and that the worker had no entitlement to it because he was unjustifiably enriched.

This action would in all probability succeed.

Our courts have also over time decided that a person who receives money to which he is not entitled into his bank account, and spends it, is guilty of theft.

Even though legally the money strictly belongs to the bank, the person who suffers the loss is the employer (in our example) and so our courts have decided that the money was stolen from the employer and not from his bank.

Our courts have also decided that even though credit in an account is strictly speaking an incorporeal (not tangible) it is capable of being stolen and so the worker could also be found guilty of theft.

And his wife? If she knew that the money was stolen she may be guilty as an accessory after the fact to the crime of theft. She assisted her husband in concealing the money from the employer.

If the money was frozen in her bank account pending a determination of the true facts, it is likely that the court will order that she or her bank return the money to the employer.

» Tuson is a practising attorney at the Wits Law Clinic

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News
Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.