Judgment

Horowhenua Chronicle, 27 May 1913, Page 3

Judgment

TILE LAW ON THE IllllE-

PURCHASE .SYSTEM

(Feilding Star)

Reserved judgment has been given by Mr J. "W. Poynton, S.M., in the case W. I-I. Bain aud Co. v. Haswell Bros., of Levin, a claim for £40 or recovery of a motor bicycle sold to 15. Hannan. and £5 damages.

Hannan purchased the bicycle from plaintiffs under a hire-purchase agreement, but later sold the bicycle to defendants. The sum of £1 ( J l-'S was still due to Bain and Co. by Hannan, and on being apprised of this defendants refused to pay this sum; hence the claim. Defendants also refused to return the cycle to plaintiffs. The hire-purchase agreement was not registered, and Haswell Bros., when purchasing the bicycle, were not aware that Hannan was not the true owner.

The defence was that a hire-pur-chase agreement is really an agreement to sell, and as such ga\e Hannan. the bailee, authority to resell ■and the purchaser Irom him had <> good title to the bicycle. Also, if the hire-purchase agreement was no; an agreement to sell, it required to bo registered in order to protect the owner and anyone Inlying in good faith and for valuable consideration from the person in possession under the bailment acquires « go<«J title. The agreement signed in this case was the ordinary bailment lorm. The Courts have repeatedly declared that what on its lace purports to be one thing, to be something ol ian entirely different character. I"- ( stead of regarding the form of agreement, the courts have looked at the whole transaction, and it it were really a safe it has been declared .such, notwithstanding the document said it was not. The law appears to be that there is no compulsion to purchase, but only an option to d<. so with a right to return the artich and terminate tho hiring, it is not an agreement to sell, although a laigo portion of tho price has been paid to the owner. The difference between a contract of sale at a price payable by instalments and a contract of hire-purchase is that in tho torincr the purchaser has no option of terminating the contract and returning the chattel, whereas in the latter the hirer has. Judgment was given for plaintiff for £19 ss. overdue instalments, and £1 damages. Costs (£4 2s) were also allowed.