CAR WRONGFULLY SEIZED

Taranaki Daily News, 22 December 1930, Page 11

CAR WRONGFULLY SEIZED

FINANCE COMPANY MUST PAY PURCHASE AGREEMENT DEFAULT. JUDGE DECIDES FARMERS’ CLAIM. l ■ ■ ■ Ay Telegraph.—Press Association. Hamilton, Dec. 20. A reserved judgment affecting the whole system of motor-car finance was delivered at Hamilton to-day by Mr. "Justice Smith in a case in which Leonard James O’Reilly, farmer, Taumarunui, sued General Motors Acceptance Corporation for. recovery, of the value of a car seized by the corporation which O’Reilly purchased from Bishara Brothers, a . firm whioh went bankrupt, J. M. Bishara, principal of the firm, , subsequently being sent to gaol for fraud. ■. ■ • A hire-purchase agreement provided in effect for the -actual sale and purchase of the car .subject to the usual conditions of a conditional hire purchase' agreement The. total; purchase price was £283, comprising a deposit and balance payable in- 18 instalments of £1 fis 9d. ' Upon: the same- date -Bishara •Brothers signed'a form of assignment assigning the firm’s rights . to the Traders’: Finance Corporation, Limited. O’Reilly'made three instalments which were duly accepted. Although O’Reilly was in' arrest with the. September payment neither the Traders’ Finance Corporation nor Bishara Brothers took any step to determine the agreement. On September 19 the car was seized by- a representative of General Motors Acceptance Corporation. ' i The arrangement between General Motors (N.Z.), Ltd., and their distributing' agents was that the distributor if he ; could pay ' cash paid General Motors direct, and if he could not pay cash he eotild trade through General Motors Acceptance Corporation or some corporation which could arrange finance iii respect of cars sold ■ out of stock. The ‘distributor would in the case of credit sales endeavour to arrange credit for the purchaser through General Motors Acceptance Corporation. His Honour said notwithstanding the . existence of the hire-purchase agreement General .Motors, not 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, Ltd;, was the actual distributor appointed in this case, tyut Bishara Brothers appeared clearly *to have undertaken selling .work, and correspondence written on General Motors Acceptance Corporation’s note paper addressed to Samuel Bisihara was sent to Bishara, Broth- < ers, the-i latter, clearly having, authority from ’Samuel Bishara, Ltd., to sell cars which could have been sold by Samuel Bishara,’Ltd!, if that firm had been actively operating. ' . . His Honour proceeds to review the transaction between Bishara Bros, and O’Reiily, and says; “It is clear that until the salri of ■ the car' to 'General Motors Acceptance Corporation had been effected. General Motors. Acceptance ... Corporation had, no title to the car.”'. . • . ,-• His Honour found on the facts that on May 1, 19'29, Bishara Brothers had authority from-Samuel Bishara, Ltd. to dispose of. the car in the ordinary course of trade, that,O’Reilly acquired a,, valid •interest in .the car. with the right to possession unless the right was determined, by‘default;. and even then he had the right to’ re*delivery within 24 hours. O’Reilly’s interest included the right to . complete the purchase, but, he had no right to return the , car and so cancel his liability for the remaining payments, Bishara’ Brothers also on May 1, 1929, executed a form of assignment of the..rights| in favour of. the Traders’ Finance Corporation, The judge, thriiight' ‘the assignment bound Samuel Bishara Ltd.

Jt was clear that O’Reilly was an ■innocent purchaser, . that his interests upder the hire-pur<?h.ase agreement was valid; and that in eeizing the?car, and selling it for. £175 General Motors. Acceptance Corporation ■ wrongfully. converted’, it. - His Honour’s view was that the car was . worth atl the,' time, of £he seizure £220. . He gave judgment for O’Reilly for this sum with 'costs.. •