C J CADD Vs. EMPEROR

JUDGEMENT

(1.) This is an application in revision to review an order of the Sessions Judge of Allahabad, confirming a conviction by the Magistrate for breach of trust. The charge is one which is only too familiar to lawyers, namely, a charge against the hirer of an article under a hire-purchase agreement for having sold it as his own before he had paid up all the instalments. The case is a perfectly clear one and there is really very little to be said about the very clear and interesting judgment of the Sessions Judge. On one point, with regard to the civil aspect of the matter, I do not quite agree with him, but he guarded himself against giving a confident opinion. When one isconsidering the decisions so well-known in England of Lee v. Butler (1893) 2 Q.B. 318 : 62 L.J.Q.B. 591 : R. 563 : 69 L.T. 370 : 42 W.R. 88 and (sic) V/s. Matthews (1895) A.C. 471 : 64 L.J.Q.B. 465 : 11 R. 232 : 72 L.T. 841 : 43 W.R. 561 : 60 J.P. 20 which latter case (decided by the House of Lords) practically settled all legal controversy about these agreements, one must remember that in those cases the Courts were deciding whether the hirer could confer a good title upon a purchaser. That is a totally different question from the question whether he had any legal right to sell, or any honest belief that he had a legal right to sell. It turns entirely upon Section 9 of the Factors Act in England which, corresponding to Section 43 of the Transfer of Property Act, gives a kind of statutory title to a purchaser in good faith who has bought from a commercial factor who has been left in possession of the goods with the consent of the true owner under the conditions laid down by that section which include a person "who has agreed to buy," and the question in these two cases was whether the agreement made him a person who had agreed to buy, and what the House of Lords held was that a person who has an option to return the goods and not complete the purchase, cannot be held in the eyes of the law to be a person who "has agreed to buy." It was never suggested in either of these, cases that the hirer was in fact the owner. Nor was it doubted that the agreement was a hire- purchase agreement in the colloquial sense of the term. But this question of civil law has no bearing at all upon the relationship between the owner and the hirer and upon the state of mind of the hirer when he sells. Mr. Cadd, when he signed this agreement, knew perfectly well that he was hiring the lorry, and that he could never become the owner unless he paid the whole sum due, and that he had no right to sell it as though it were his. As the learned Sessions Judge says: "the agreement is straightforward and clear." There are four features in it which are conclusive against the honest belief of any commercial man signing this agreement that the car was his to sell: 1. He calls himself the hirer.

(2.) He binds himself by a legal obligation to insure the car, a thing which no owner ever did or could do.

(3.) He agrees not to deal with the car, and to allow the owner to recover possession in case of default.