Duder v Baillie (Civil Case No. 339 of 1951) [1952] EACA 281 (1 January 1952)

## **ORIGINAL CIVIL**

### Before THACKER, J.

#### A. H. DUDER, Plaintiff

ν.

# W. C. A. BAILLIE, Defendant

# Civil Case No. 339 of 1951

Hire purchase—Motor car—Transfer of third party risk by owner to hirer— Subsequent purchaser's title.

The owner of a motor car, having entered into a hire purchase agreement, notified the Registrar of Motor Vehicles that he had transferred the ownership of the car to the hirer and also notified his insurance company that he was transferring his third party risk to the hirer. The hirer obtaining possession sold the vehicle to the defendant without disclosing the hire purchase agreement and without paying the full instalments.

The defendant was unaware of the plaintiff-owner's letter to the Registrar of Motor Vehicles but was aware of the plaintiff's instructions to the insurance company to transfer the third party risk to the hirer.

Held (16-6-52).-(1) The letter to the insurance company raised as presumption of change of ownership and did not amount to notice of any change of ownership.

(2) The hirer having no right to pass ownership of the car was not able to give the defendant any better title than he had.

(3) No estoppel arose in respect of the plaintiff's letter to the Registrar of Motor Vehicles because the defendant was unaware of it at the time when he bought the car. Judgment for plaintiff in the amount of the unpaid instalments or alternatively the return of the car.

### Gledhill for plaintiff.

#### Holland for defendant.

JUDGMENT.—This action raises an interesting question of law. The plaintiff, the owner of a motor car, entered into a hire purchase agreement on 10th August, 1950, with a Mr. Lawrie, by which Mr. Lawrie was to become the owner of the vehicle after payment by instalments of the purchase price, Sh. 4,000. Mr. Lawrie was given the possession of the car. Notwithstanding this agreement under which the plaintiff remained the owner of the car until payment of the final instalment, the plaintiff appears gratuitously to have notified the Registrar of Motor Vehicles that he had transferred the ownership of the car to Mr. Lawrie and also to have notified his insurance company that he was transferring his third party "risk" to Mr. Lawrie in a letter dated 18th August, 1950. Mr. Lawrie did not complete the instalments on the car but sold it to defendant who admittedly bought it in good faith knowing nothing of the facts that the car was the subject of a hire purchase agreement, or that Mr. Lawrie was not the owner of the car. The defendant paid Mr. Lawrie Sh. 2,800 for the car. Mr. Lawrie has, I am told, left the Colony.

The plaintiff now sues the defendant for the return of the car or the amount of the outstanding instalments, Sh. 1,800. The question is therefore, which of these two innocent parties is to suffer? The plaintiff has received only £110 for the car which he sold for £200 and the defendant has paid £140 for it to

Mr. Lawrie. It is important to appreciate that when the defendant bought the car from Mr. Lawrie he was unaware of the fact that the plaintiff notified the Registrar of Motor Vehicles that he had transferred his ownership to Mr. Lawrie. The plaintiff says he sent in his form because it would enable Mr. Lawrie to get a licence to drive the car and also to insure it in his own name. It is also important to appreciate that when the defendant bought the car from Mr. Lawrie he was aware that the plaintiff had instructed the Alliance Assurance Companyto transfer the third party risk to Lawrie from himself. Estoppel cannot arise on the notification by the plaintiff to the Registrar of Motor Vehicles because the defendant was not aware of that fact when he bought the car. He came toknow of it only after he had bought the car. It is said, however, by the defendant. that the plaintiff is estopped from setting up his title to the car because of the transfer of the third party risk to Mr. Lawrie.

I have carefully considered this question of estoppel and the letter referred to and perused some 20 or more cases referred to in Halsbury's Laws of England but I cannot come to the conclusion that the letter raises any presumption of change of ownership. I do not regard the letter as amounting to the giving of notice of any change of ownership in the car and I do not think such a presumption can fairly be said to arise from the contents of the letter.

To sum up, Mr. Lawrie had no right to pass the ownership of the carhe was merely in possession of the car as a bailee until he had paid in full for it, which he never did. Although the defendant bought the car in perfectly good faith and for value he could derive no better title to it than Mr. Lawriehad. Nor, as I have indicated, do I think that the plaintiff ought to be estopped from saying that he was and still is the owner of the car by reason of the letter which he sent to the insurance company. I do not think that he can be said to have made any representation of any facts by reason of which he should be estopped from saying that he was and is the owner of the car.

It is regrettable for the defendant but, as I have said, one of these two innocent parties must bear the loss caused by the action of Mr. Lawrie.

There will therefore be judgment for the plaintiff as claimed, namely in the sum of Sh. 1,800 being the amount of unpaid instalments, or alternatively the return of the car, and costs and interest.