Notes Of Cases
| Date | 01 January 1969 |
| DOI | http://doi.org/10.1111/j.1468-2230.1969.tb02286.x |
| Published date | 01 January 1969 |
NOTES OF
CASES
OWNER
z).
THIRD
PARTY
Astley Industrial Trust
v.
Miller
1
raises a perennial question
:
where, owing to the intervention of a
‘‘
rogue,” two people have
an equally valid moral claim to the ownership of goods, who shall
bear the
loss
?
The rogue in this case was a company by the name
of Droylsden Self-Drive Service Station Ltd., owned by two
brothers, John and Stanley Oakes, and a Mr. Davenport. John
Oakes asked the main Vauxhall distributors in the locality, Lomas
Bros. Ltd., to order for his firm a new Vauxhall Victor, and on
November
25, 1960,
such a car was consigned to Lomas. Title in
the new car passed to Lomas on December
2,
1960,
and on the
same day the car was delivered to Droylsden. Droylsden’s main
business was the hiring out of self-drive cars, and
it
was for this
purpose that the new car was said to be required. They wanted
to pay for
it
on hire-purchase terms and accordingly Lomas
approached Astley Industrial Trust,
a
finance company, and the
plaintiff in this case. On December
9, 1960,
a hire-purchase agree-
ment was signed by Droylsden and witnessed on behalf of Lomas;
a delivery receipt was signed by Droylsden and a dealer’s invoice
by Lomas, both in favour of the plaintiff, on the same day. On
January
4,
1961,
title was assumed to have passed from Lomas to
the plaintiffs. Droylsden subsequently defaulted
in
their payments
under the agreement, and the plaintiff sought to recover the goods.
Unknown to all the parties, however, Droylsden were conduct-
ing another quite separate series of transactions connected with
the same car. As well as their car-hire business, they did some
dealing in second-hand cars, and about two weeks before the Vaux-
hall was delivered to them, Mr. Miller, the defendant, had talked
with Mr. Stanley Oakes about buying such a car from him. On
the day of delivery, December
2,
Oakes offered the car (without
its log book) to Miller, who on December
3
accepted
it
and paid
the purchase price. Between December
6
and
9,
Miller received
the tax disc and log book from Droylsden, registered the change
of ownership from Lomas to himself and effected insurance. When
Droylsden defaulted in the hire-purchase instalments, Astley Indus-
trial Trust found the car to be in Miller’s possession, and demanded
its delivery on May
1, 1962.
On March
24, 1968,
the matter came
before Chapman
J.
at Liverpool Assizes.
The first question to be argued was whether, since Droylsden
were dealers in cars, and since they had been given possession of
the new Vauxhall with the consent of its owners (Lomas), they
1
[l968]
2
All
E.R.
36.
81
82
THE
MODERN
LAW
REVIEW
VOL.
a2
were mercantile agents capable of passing a title they did not
themselves have, under section
2
of the Factors Act
1889.
There
is much authority in the cases (though little in the statute itself)
that more than this is required:
it
has been held from
Oppen-
heimer
v.
Frazer Wyatt
onwards that a mercantile agent must
be given possession
as
a mercantile agent before he can pass title
to bona fide third parties. Droylsden,
it
was argued, had not been
given possession of the car as dealers in motor-cars but as the
owners
of
a fleet of cars let out for hire, and therefore were not
capable of passing title under the Factors Act
1889.
The defendant
countered with
Pacific Motor Auction
v.
Motor Credits (Hire
Finan~e),~ a
case from New South Wales recently decided by the
Privy Council. There a dealer in cars had a stocking agreement
with Motor Credit whereby the company would pay the dealer
90
per cent. of the purchase price of cars bought for resale. Cars
bought by the dealer in this way remained in his possession through-
out, though the property
in
them passed to Motor Credit. Dif-
ferences arose between the dealer and Motor Credit, and the latter
withdrew the dealer’s authority to buy
or
sell
on
their behalf.
Despite this a number of cars subject to the stocking agreement
were subsequently sold
to
Pacific Motor.
For
Pacific Motor is was
successfully argued that the dealer was a seller (to Motor Credit)
in possession under the New South Wales Sale
of
Goods Act
1923,
s.
28 (1),4
and thus able to pass a good title. The Privy Council
thought that
Stags. Motor
v.
British Wagon
and
Eastern Dis-
tributors
v.
Goldring
were wrongly decided
on
this point, since
in
both these cases sellers
in
possession who had become bailees
under hire-purchase agreements (in one case unenforceable) had
been held incapable of passing title.’
In
the present case Chapman
J.
said:
‘‘
On
the Sale of Goods
Act point, the learned judge [MacKinnon
J.
in
Stags. Motor]
has
been overruled, but
I
find nothing in the
Pacific Motor
case to sug-
gest that the learned judge’s point
on
the Factors Act has been in
any way eroded.” Now
it
is true that Droylsden were never
entrusted with the car as mercantile agents, and that they are
2
,[1907]
2
K.B.
50.
This
notion
also
prevailed
under
the earlier Factors Acts-
see
Fuentes
v.
Montis (1868)
L.R.
3
C.P.
268.
Authorities under the present
Act include
Mitchell
v.
Jones
(1905) 24
N.Z.L.R.
932;
Staffs.
Motor
Guaran-
tee
v.
British Wagon
[1934]
2
ILB. 305;
Pearson
v.
Rose
d
Young
[1951]
1
K.B.
275;
Stadium Finance
v.
Robins
[1962]
2
Q.B.
664.
3
1[1965]
2
W.L.R.
881.
4
This section
is
the same
as
8.
25
(1)
of
the English Sale
of
Goods
Act
1893.
6
[1957] 2 Q.B. 600, 614.
7
But if there
has
been
no
clear legal change
in
the nature
of
possession, such
as the making
of
a
contract
of
bailment or hire purchase,
then
the
Staffs.
Motor
principle
may
not
apply anyway: see
Union
Transport
v.
Ballardie
[1937]
1
K.B. 510
and
Pacific
Motor
at
p.
893.
An
unenforceable
contract
may be held
to
have sufficient legal effect
for
the purpose
of
destroying con-
tinuous possession: see
Eastern
Distributors,
supra, at p.
614.
8llpl‘Q.
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