SALE OF MOTOR‐VEHICLE BY HIRE‐PURCHASER
| Date | 01 May 1954 |
| Published date | 01 May 1954 |
| DOI | http://doi.org/10.1111/j.1468-2230.1954.tb02153.x |
SALE
OF
MOTOR-VEHLCLE
BY
HIRE-PURCHASER
A
LEGISLATIVE
PROPOSAL
THERE
has for too long been very real hardship caused to many per-
sons
of
moderate means where motor-cars on hire-purchase change
hands several times before the hire-purchase company takes any
action. Judges have commented on this hardship with increasing
frequency.
The hirer,
A,
not infrequently sells to B before all the hire-
purchase instalments have been paid, and
B
may resell to
C
and
C
to
D
and
D
to
E.
The hire-purchase company then finds out what has
happened and sues
E
to recover possession of the car and
E
joins
D
as
a
third party claiming under the implied warranty of title, and
D
similarly joins
C
as a fourth party and
C
joins B as a fifth party and
B joins
A
as a sixth party. By that time
A
is usually impecunious,
and some innocent person, usually B
or
C,
has to pay the damages,
and his own costs, and the plaintiff’s costs, and the costs of all
purchasers subsequent to him. This causes grave hardship, and
sometimes ruin, to innocent people and
it
has long been obvious
that the real trouble is that the motor-car registration book, though
not a document of title, is
so
regarded by the public who have no
other way of ascertaining who
is
the owner of the car.
It
is desirable to emphasise two points
:
First, the persons involved in these transactions are not well-to-
do persons who buy motor-vehicles from the ordinary motor-car
dealers. These dealers know, what the ordinary member of the
public does not, that most hire-purchase agreements are registered
with a company called
H.P.
Information Limited, which is
a
trade
organisation formed for that purpose and through whose offices the
dealers protect themselves. The persons involved in the transac-
tions in question are the less well-to-do motorists who buy cars
which they hear from their friends are available fm sale by their
owners.
Secondly, while the hirer is very occasionally an habitual
criminal, in the large majority of cases he is not. The House of
Lords has long since decided that in law
a
hire-purchase agreement
is an agreement of hire with an option to purchase.
To
the ordinary
small man, however,
it
is a purchase on credit terms, which is,
indeed, from a common-sense point of view, its real nature.
To
the
ordinary man, therefore,
it
does not seem dishonest to sell a car,
nine-tenths of which he has already paid for and the balance of the
purchase price of which he intends to pay after the sale.
238
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