Liverpool and County Discount Company Ltd v A.B. Motor Company (Kilburn) Ltd

JurisdictionEngland & Wales
Judgment Date25 March 1963
Judgment citation (vLex)[1963] EWCA Civ J0325-2
CourtCourt of Appeal
Date25 March 1963

[1963] EWCA Civ J0325-2

In The Supreme Court of Judicature

Court of Appeal

From his Honour Judge McIntyre, Q.C.

Willesden County Court.


The Master of the Rolls

(Lord Denning)

Lord Justice Danckwerts and

Lord Justice Davies

Liverpool And County Discount Company Ltd
Plaintiffs Respondents
A.B. Motor Company (Kilburn) Limited
Defendants Appellants

MR M.J. ANWYL-DAVIES (instructed by Messrs William Charles Crocker) appeared as Counsel for the Appellants.

MR H. K. WOOLF (instructed by Mr H. Stock) appeared as Counsel for the Respondents.


This is a most unfortunate case for the two parties before the Court to-day. On the one hand there is a reputable finance company and, on the other hand, there is a reputable dealer. They have been defrauded by a fraudulent hirer. The question is: who is to bear the loss? The finance company have sued the dealers on a clause in an agreement whereby the dealer warrants to the finance company that certain statements made by the hirer are true. The finance company sue the dealer on that warranty.


On the 22nd November, 1960, a man calling himself Paul Jackson went to the dealers' premises and brought with him a Bedford van. He wanted to acquire a 1932 Hillman Minx van at a cash price of £259 and give in part exchange his Bedford van at £52, making a balance of £207. He had not got the money to pay that sura at the time, so he wanted it on hire purchase. The dealer got out the form of the finance company and took down particulars from the hirer. These particulars turned out afterwards to be "a cock and bull story". His name, he said, was "Paul Jackson", his address he gave as "14 Bosworth Road, Kensington, W.10". He said he was "married"; he had lived there "2½ years" and he was the "householder". His occupation was a "tally clerk" at the docks; and his employers were the "Port of London Authority, East India Dock", He had been in their employment for 22 years". Those were the particulars he gave. The dealer filled in the hire purchase form. The hirer asked the dealer to make arrangements about insuring the Hillman Minx. The dealer said he would get temporary insurance: and the hirer said he would bring in the money the next day. After all the details were filled in on the form, the dealer himself, in order to induce the finance company to enter into the contract, namely, to buy the car from him and to let it out on hire purchase to this man, filled in the "Sales Note". One has only to read the sales note to realise that finance companies arebecoming very anxious to protect themselves against the sort of frauds which have become familiar to anyone who sits in this Court. For instance, the price is not a genuine price or the vehicle taken in part exchange is not worth its value; or no cash is paid. This sales note is signed by the dealer in favour of the finance company and says this: "We agree to sell to you the vehicle at the total cash price shown and as described in the schedule above and upon your acceptance of this transaction the property in such vehicle shall immediately pass to you". Those are the important words: "In consideration of your agreeing to buy the vehicle we heroby oortify and warrant". I need not read the warranties in detail. The first is: "That the initial payment shown above has been received by us in cash". The second is: "That the total cash price shown in the schedule is the true and fair price", and so forth. Then No.4., which is the particular one that concerns us here, says: "That the statements contained in the above schedule and in this sales note are true and that the vehicle is correctly described in the schedule". Included in those statements are the particulars of the hirer, which I have already road, including his address, 14 Bosworth Road, his occupation, and so forth. That document being submitted to them, the finance company accepted it, signed it on the 24th November, 1960, and paid the £207 to the dealer.


"Mr Jackson", so called, if that was his name, took the Hillwan Minx away on the 22nd llovember immediately after he had signed those documents. He left his Bedford van with the dealers and has never been seen since. He did not come the next day to pay the insurance as he promised. He just disappeared. A representative of the dealers went round to see if he could find him, but when he wont round to this address which was given, 14 Bosworth Road, he could not find anyone there who knew of a Paul Jackson living in the house. They said the name did not "ring a bell". He asked the milkman. He did not know of PaulJackson either, but when the Bedford van was described, the milkman said he knew the Bedford van because it had boon parked there. Paul Jackson disappeared: and the Hillman Mink disappeared with him for a long time. No payments were mado of any instalments. Eventually the Sinanco company put the matter into the hands of two reputable collecting agents. But the car was not discovered until February 1962. It was then found in very bad condition in the possession of a Mr Bradburn from whom it was recovered. It has now been established, not only that Paul Jackson was not known at 14 Bosworth Road, but he had never been a householder there or lived there for 2½ years: he had never been a tally clerk in the docks and he had never been employed by the Port of London Authority. The particulars he gave were all wrong. hereupon the finance company sued the dealer under their warranty "that the statements contained in the above schedule are true".


Are the finance company entitled to recover on this warranty? It has been argued before us that this is only a warranty that the dealers have sot down accurately what "Paul Jackson" told them: that the dealers did not warrant the truth of what "Paul Jackson"...

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