SEIZURE OF MOTOR CAR

Hokitika Guardian, 23 December 1930, Page 2

SEIZURE OF MOTOR CAR

farmer wins case.

AN IMPORTANT JUDGMENT,

HAMILTON, December 20,

An important reserved judgment affecting the whole system of motor-car finance was delivered at Hamilton today by Mr Justice Smith. The case was one in which Leonard James O’Reilly, a farmer, Taumarunui, sued the General. Motors Acceptance Corporation for recovery of the value of a cur seized by the defendant corporation which plaintiff had purchased from Bishara Brothers, who went bankrupt, J. M. Bishara (principal of the firm) subsequently being sent to gaol for fraud. A lure-purchase agreement provided, in effect, for the actual sale and purchase of the car, subject to the usual conditions of a conditional hire-pur-chase . agreement. The total purchase price was £283, comprising a deposit and balance payable in eighteen instalments of £1 5s 9d, Upon the same date Bishara Brothers signed a form of assignment, assigning thei'r rights to the Traders’ Finance Corporation, Limited; Plaintiff made three instalments, which were duly accepted. s Although plaintiff was in arrenr with the September payment, neither the Traders’ Finance Corporation nor Bishara Brothers took any step to determine the agreement. On September 19th the car was seized by n representative of the General Motors Acceptance Corporation. : : METHOD OF PAYMENT, The arrangement between General Motors (jf.Z.), Ltd., and their distributing agents was. that the distributor, if he could pay cash, paid General Motors direct. If ho could not pay cash he could -trade through the General Motors . Acceptance Corporation or sonic corporation which could arrange finance in respect of cars sold out of stock. The distributor would in the case of credit sales endeavour to .arrange credit for a purchaser through the General Motors, not the General Motors Acceptance Corporation. His Honour said that notwithstanding the existence of a hirc-purchafee agreement General Motors and not the General Motors Acceptance Corporation appeared to have exercised the sole right to vary the price at which a new car would ultimately be sold. Samuel'Bishara, from his father, J. M. BiSharaj was the actual distributor appointed; in this ease, but Bishara Brothers appeared clearly to have undertaken selling work, and correspondence, written on the defendant corporation’s note-paper, addressed to Samuel Bishara; was sent to Bishara Brothers, tb® latter clearly having authority from Samuel Bishara, Limited/ to sell ears which could have been sold by Samuel Bishara, Limited, if that firm had been actively operating, His Honour proceeded to review the transaction between Bishara Brothers and O'Reillv, and said: “It is clear that until the sale-of a Chrysler to the General Motors-> Acceptance Corporation had bpen effected the General Motors Acceptance Corporation had po title to the car.” FINDING ON FACTS. His Honour found on the facts that on May Ist, 1929, Bishara Brothers had authority from Samuel Bishara,, Ltd., to dispose of a car in the ordinary’ course of trade; that the plaintiff acquired a valid interest in the car, with a right to possession,- unless the right was determined hy default; even then he. had right to re’elivery within twenty-four hours, Plaintiff's interest included the right to complete the purchase. He had no right to return ft and so cancel the liability for the remaining payments. Bishnra Brothers 'also on May Ist, 19?9, executed a form of assignment of their rights in favour of tho Traders' Finance Corporation. He thought the assignment bound Samuel Bishara, Ltd. It was clear that the plaintiff was on innocent purchaser.; that his interest under the hirepurchase agreement was valid; that- in seizing the ear and selling it for £175 the General Motors Acceptance Corporation wrongfully converted it. His Honour’s view was that the car wa§ worth at the time of seizure £220. He gave judgment for plaintiff for this sum, with costs.