National Employers Mutual General Insurance Association Ltd v Jones

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Bridge of Harwich,Lord Lowry,Lord Brandon of Oakbrook,Lord Griffiths,Lord Goff of Chieveley
Judgment Date21 April 1988
Judgment citation (vLex)[1988] UKHL J0421-1
Date21 April 1988

[1988] UKHL J0421-1

House of Lords

Lord Bridge of Harwich

Lord Lowry

Lord Brandon of Oakbrook

Lord Griffiths

Lord Goff of Chieveley

National Employers' Mutual General Insurance Association Limited
(Respondents)
and
Jones
(Appellant)
Lord Bridge of Harwich

My Lords,

1

I have had the advantage of reading in draft the speech of my noble and learned friend Lord Goff of Chieveley. I agree with it and for the reasons he gives I would dismiss the appeal.

Lord Lowry

My Lords,

2

I have had the advantage of reading in draft the speech of my noble and learned friend Lord Goff of Chieveley. I agree with it and for the reasons he gives I would dismiss the appeal.

Lord Brandon of Oakbrook

My Lords,

3

I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Goff of Chieveley. I agree with it, and for the reasons which he gives I would dismiss the appeal.

Lord Griffiths

My Lords,

4

I have had the advantage of reading in draft the speech of my noble and learned friend Lord Goff of Chieveley. I agree with it and for the reasons he gives I would dismiss the appeal.

Lord Goff of Chieveley

My Lords,

5

This appeal raises a short, but nevertheless important, point of construction of two parallel statutory provisions, section 9 of the Factors Act 1889, and section 25(1) of the Sale of Goods Act 1979 (formerly section 25(2) of the Sale of Goods Act 1893).

6

The facts can be very briefly stated. The case is concerned with the title to a Ford Fiesta car. The car belonged to Miss Hopkin. On 3 February 1983 it was stolen. The thieves were later caught and convicted, but they had already sold the car, shortly after the theft, to a man called Lacey; the price is unknown. Lacey sold the car almost immediately to a man called Thomas; again the price is not known. On 7 February 1983 Thomas sold the car to Autochoice (Bridgend) Ltd. for £2,100. Five weeks later, on 14 March 1983, Autochoice (Bridgend) Ltd. sold the car to Mid-Glamorgan Motors Ltd. for £2,350; and on 17 March 1983 that company sold it on to the defendant, Mr. Jones for £2,650. It is accepted that Mr. Jones acted in good faith in buying the car.

7

The plaintiffs, National Employers' Mutual General Insurance Associated Ltd., were Miss Hopkin's insurers. They bought out her interest after the theft, for £2,750, and so acquired the rights to the car. By a letter dated 6 January 1984, they demanded the car back from Mr. Jones; he refused to return it to them. They then commenced proceedings against Mr. Jones in the Bridgend County Court on 27 September 1984, claiming damages from him representing the value of the car. They succeeded in their claim. Mr. Jones then appealed to the Court of Appeal [1987] 3 W.L.R. 901. The Court of Appeal, by a majority (May and Croom-Johnson L.JJ., Sir Denys Buckley dissenting) dismissed the appeal. Mr. Jones now appeals to this House, by leave of the Court of Appeal.

8

Since the decision of the case turns on the construction of the two sections to which I have referred, I think it desirable first to set out the relevant statutory provisions. I take first the Factors Act 1889. The statute is expressed to be an Act to amend and consolidate the Factors Acts. For present purposes, the most relevant sections are sections 2, 8 and 9. Section 2 falls under the sub-heading "Dispositions by Mercantile Agents;" sections 8 and 9 fall under the sub-heading "Dispositions by Sellers and Buyers of Goods." The sections provide as follows:

"2. (1) Where a mercantile agent is, with the consent of the owner, in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition of the goods, made by him when acting in the ordinary course of business of a mercantile agent, shall, subject to the provisions of this Act, be as valid as if he were expressly authorised by the owner of the goods to make the same; provided that the person taking under the disposition acts in good faith, and has not at the time of the disposition notice that the person making the disposition has not authority to make the same.

(2) Where a mercantile agent has, with the consent of the owner, been in possession of goods or of the documents of title to goods, any sale, pledge, or other disposition, which would have been valid if the consent had continued, shall be valid notwithstanding the determination of the consent: provided that the person taking under the disposition has not at the time thereof notice that the consent has been determined.

(3) Where a mercantile agent has obtained possession of any documents of title to goods by reason of his being or having been, with the consent of the owner, in possession of the goods represented thereby, or of any other documents of title to the goods, his possession of the first-mentioned documents shall, for the purposes of this Act, be deemed to be with the consent of the owner.

(4) For the purposes of this Act the consent of the owner shall be presumed in the absence of evidence to the contrary."

"8. Where a person, having sold goods, continues, or is, in possession of the goods or of the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title under any sale, pledge, or other disposition thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of the previous sale, shall have the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same."

"9. Where a person, having bought or agreed to buy goods, obtains with the consent of the seller possession of the goods or the documents of title to the goods, the delivery or transfer, by that person or by a mercantile agent acting for him, of the goods or documents of title, under any sale, pledge, or other disposition thereof, or under any agreement for sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods, shall have the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner."

9

Turning next to the Sale of Goods Act 1979, the most relevant sections are sections 21, 22(1), 24 and 25(1). These all fall under the sub-heading "Transfer of Title," and provide as follows:

"21. (1) Subject to this Act, where goods are sold by a person who is not their owner, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell.

(2) Nothing in this Act affects -

( a) the provisions of the Factors Acts or any enactment enabling the apparent owner of goods to dispose of them as if he were their true owner;

( b) the validity of any contract of sale under any special common law or statutory power of sale or under the order of a court of competent jurisdiction.

22. (1) Where goods are sold in market overt, according to the usage of the market, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of any defect or want of title on the part of the seller.

24. Where a person having sold goods continues or is in possession of the goods, or of the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title under any sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of the previous sale, has the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same.

25. (1) Where a person having bought or agreed to buy goods obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or document of title, under any sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods, has the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner."

10

For the purposes of the present case, the sections directly in point are, as I have indicated, section 9 of the Factors Act 1889 and section 25(1) of the Sale of Goods Act 1979. These are in almost identical terms; the difference is not relevant to the decision in the present case. The argument of the appellant has been founded upon these sections. I shall for convenience refer to section 9 of the Factors Act 1889. The submission was that Mid-Glamorgan Motors Ltd. bought the car from Autochoice (Bridgend) Ltd., who gave possession of the car to them; and that Mid-Glamorgan Motors Ltd. then delivered the car to the appellant under a sale, and the appellant received the same in good faith without notice of any lien or other right of the original seller in respect of the goods. Accordingly, by virtue of the section, such delivery shall have the same effect as if Mid-Glamorgan Motors Ltd. were a mercantile agent in possession of the goods with the consent of the owner, i.e. (see section 2(1)) such sale shall be as valid as if Mid-Glamorgan Motors Ltd. were expressly authorised by the owner to make the sale. It followed, submitted the appellant, that he acquired a good title to the car. This was the argument which found favour with Sir Denys Buckley, but was...

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