Financings Ltd v Stimson

Mr. Anthony George Stimson saw an Austin motor car on the premises of the Stanmore Motor Co. advertised for sale at £50. On the 16th March, 1961, he signed a hire purchase agreement form which was produced by the Stanmore Motor Co. it was in law not an agreement but only an offer by Mr. Stimson to enter into a hire purchase agreement with a Company called Financings Ltd. I need not go into all the details except to say at once that there was a clause in it which made it clear that "this agreement shall become binding on the owner", that is on the Finance Company, "only upon acceptance by signature on behalf of the owner and the hiring shall be deemed to commence on such date of acceptance". Now, to go at once almost to the end of the story, the Finance Company did not sign the acceptance until the date which they put upon it, on the 25th March' 1961. The interval of time between the signing of the offer on the 16th March and the purported acceptance on the 25th March is most important because much happened in between.

Mr. Stimson was not allowed to take the car away on the 16th March even though he had signed the form. The reason was because he had not then got the required insurance cover for it. He produced the ordinary third-party insurance cover. This was not satisfactory because comprehensive cover was required. But on Saturday, 18th March, Mr. stimson did produce a comprehensive cover note. He produced it to the Stanmore Motor Co. They telephoned the Finance Company and got their assent. He paid the first instalment of £0 on the car and he was allowed to take the car away. No doubt both Mr. Stimson and the Finance Company thought at that time that an agreement had been concluded, but in fact it had not. Certainly a hire purchase agreement had not been concluded because, as I have said, on its wording it depended on a signature which did not take place until a week later. At all events, he took the car away. He had it on the Saturday and drove it on the Sunday. He was notsatisfied at all with its condition and performance. in the result on Monday, 20th March, he was so dissatisfied with it that he returned it to the stanmore Motor Co. He saw the manager and proprietor, Mr. Cousins Walker, and explained that he did not want the car after all, and in order to settle the matter, he offered to forfeit the £0 he had paid. it is not altogether clear what Mr. Cousins Walker said to him, but it seems that he told him that the Stanmore Motor Co. would get in touch with the Finance Company and let him know the outcome. Also I think it was suggested that Mr. Stimson should get in touch with the Finance Company himself. However, by some oversight, the stanmore Motor Co. did not get in touch with the Finance Company nor did Mr. Stimson. Nevertheless Mr. Stimson thought that, having returned the car, he had no longer any responsibility for it. Accordingly on Thursday, 23rd March he cancelled the insurance cover note.

Then the critical event happened. On the night of the 24/25th March Stanmore Motor Company's premises were broken into and the car was stolen, in the course of the theft the car was badly scratched and damaged. When it was recovered, it was obviously not worth the same money as it was before. The car having been recovered, the Finance Company were told about it. They had the car back and sold it by auction and got, I think, some £40 for it. Now they claim in this action damages from Mr. Stimson. They say he defaulted under the hire purchase agreement which he signed. Alternatively by an amendment they seek to claim damages against him as a bailee upon the terms of that hire purchase agreement.

Such is the outline of the facts. I need not at the moment go into the question of the condition and roadworthiness of the car because it seems to me that the crucial matter in the case is whether there was ever a binding agreement between Mr. Stimson and the Finance Company. The document which Mr. Stimson signed on the 16th March wag only an offer. Before it was accepted, Mr. Stimson returned the car to the dealer andmade it clear that he did not want the car any more. Was that a revocation of the offer? To my mind that was a clear revocation provided that it was made to a person having authority to receive it. But was the dealer a person authorised to receive the revocation? Was he the agent of the Finance Company far the purpose?

It was urged before the County Court judge, on the authority of the case in this Court of Campbell Discount Co. v. Gall (1961, 1 Q. B. 431) that the dealer is not the agent of the Finance Company; and the County Court Judge, to his regret, felt that he was bound to hold that there was insufficient evidence to show that the dealer was the agent of the Finance Company for the purpose of receiving back the motor car. I take a different view. I look upon the case of Campbell Discount Co. v. Gall as being a very special case on its own facts. it seems to me that in this transaction before us, as indeed in most of these hire purchase transactions, the dealer is for many purposes the agent of the Finance Company. Mr. Iwi in his argument pointed out a number of matters in which it cannot be denied that the dealer is the agent of the Finance Company. The dealer holds the necessary forms; he hands them over to the hirer to sign; he forwards them to the Finance Company; he receives the deposit as agent for the Finance Company: he receives from the Finance Company information that they are willing to accept the transaction; and he is authorised to pass on that communication to the hirer. He was in this very case the agent on behalf of the Finance Company to see that the insurance cover was all in proper order. He rejected the first cover which was offered and accepted the comprehensive cover which he said was satisfactory. Most important of all, he was the agent of the Finance Company to hand over the motor car to the hirer. it seems to me that, if we take, as we should, a realistic view of the position, the dealer is in many respects and for many purposes the agent of the Finance Company. I amaware, of course, that the Finance Companies often put clauses into their forms in which they say the dealer is not their agent. But these clauses are often not worth the paper they are written on. Nobody can make an assertion of that kind in an agreement so as to bind the Courts if it is contrary to the facts of the case. We all know that people often try to put clauses in a tenancy agreement so as to say it is a licence and not a tenancy. But the Courts take no notice of it if it is contrary to the truth. So also if they put into one of these agreements a clause that the dealer is not their agent, it does not bind the Courts if he is in fact their agent. in this case we are not troubled by any such clause: for there is none. And on the facts of this case I am clearly of opinion that the dealer was ostensibly authorised to receive communications on behalf of the Finance Company. just as he was authorised to deliver the car to the hirer in the first place, so he was ostensibly authorised to receive it back when it was returned. Just as he was authorised to receive the offer for the Finance Company, so also he was ostensibly authorised to receive the revocation! and to receive the communication that the hirer had no further use for it.

I am aware that the hirer did not in terms revoke the offer, for the simple reason that he thought the agreement was concluded. But he made it clear that he did not wish to proceed with the matter and that is all that was necessary. in my judgment, therefore, the offer was revoked on the 20th March and there was, for this reason, no concluded contract. Even if I am wrong on that point, there is the second point to be considered which appealed to the County Court Judge. He said: When this offer was made, it was made on the basis that the car was in good condition, or at all events in the condition in which Mr. Stimson had seen it, but before the offer was accepted (it was accepted on the 25th March) on the night of the 24th/25th March it suffered this extra damage which cost repair, having been scratched and dented by the thieves who stole it.Can a man accept an offer when the condition of the goods has deteriorated in a material respect since the date of the offer?

It seems to me that on the facts of this case, the offer made by Mr. Stimson was a conditional offer. it was conditional on the oar remaining in substantially the same condition until the moment of acceptance. Take the case put by my brother Donovan in the course of the argument) Suppose an offer is made to buy a Rolls Royce car at a high price on one day and before it is accepted, it suffers the next day severe damage. Can it be accepted and the offeror bound? My answer to that is: No, because the offer is conditional on the goods at the moment of acceptance remaining in substantially the same condition as at the time of the offer.

Mr. Rawley argued before us that there was an express...