BUYING SECONDHAND

Bay of Plenty Times, Volume LXXVI, Issue 14570, 14 January 1948, Page 4

BUYING SECONDHAND

WARNING TO THE CAR PURCHASER

Caveat emptor, let the buyer beware, is a maxim widely current in the legal profession and one that,most people today would do well to bear in mind, particularly in its application to second-hand car transactions. The problems which arise out of this kind of dealing seem to be endless. The hire purchase agreement adds its quota to the steadily growing number.

There have been many cases recently of purchasers being called upon to pay out substantial sums of money in order that they might retain the car they thought they had purchased. In each case the car had originally been subject to a hire purchase agreement and had been sold without that fact being disclosed. The terms and conditions of hiring naturally differ in many respects but generally they have one thing in common, namely, that the ownership in the car is not to pass to the hirer until all the instalments which make up the hire purchase price have been paid. Should the hirer bo tempted by current prices to part with possession of the car a purchaser from him would have no means of ascertaining from the documents of title that would pass to him on the sale whether the car was subject to hire purchase agreement. If the hirer discharges his liability to the owners of the car then, of course, all will be in order, but, as seems to happen quite often these days, the hirer is more likely to pocket the money and disappear. When the owners learn of the transaction, as they will do sooner or later, the unfortunate purchaser will find himself in the unenviable position of having either (a) to return the par, or (b) to pay to the owners damages for the tort of conversion of the car, (c) damages for detention of the car and (d) the inevitable costs incurred by the owners in tracing and suing. Should there have been any intermediate dealings with the car then the person actually having possession of it and liable as such to the owners of the car, has the right of an indemnity from his vendor and so on down the chain to the original hirer who, if he can be traced, is, more often than not, a “person of straw.” The risk is ever present but the means of prevention appear to be none.

The time has come for some form of legislation that will afford a measure, of protection to a prospective purchaser in transactions of this description. The matter could be quite simply dealt with by means of a suitable endorsement on the car’s registration paper noting the interest of the hire purchase company.