^}<:^mi(^m^:m^^m^^s. AN EPITOME OF THJE L:AW^ KElJVriNG:'TO BiRE-PuRCBASE Agreements iSOLlciTOR.CHELTENHAM, N E TT. WAT ERI-OW &;s:0 N fj- UM IT E D, iQND N WALL. LON DON. (Jortipll Slam i^riynnl Blibtaty Cornell University Library KD 1759.R96 1898 Hire-purchase system :an epitome of tlie 3 1924 022 447 472 The original of tliis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924022447472 THE HIRE-PURCHASE SYSTEM an epitome of the Law relating to Hire- Purchase Agreements. WILLIAM H. RUSSELL. SOLICITOR, CHELTENHAM. SECOND EDITION. Revised and Enlarged. LONDON : WATERLOW & SONS LIMITED, LONDON WALL, E,C. 1898. WATEELOW ANil SONS LIMITED, DUNSTABLE AKD BDNDON. PREFACE TO THE SECOND EDmON. OIPJCE the publiCatiofi of the First Edition of this book, numerous cases, relating to the Hire-Purchase System, have been decided, and these, with references to the leading Reports, will be found incorporated in the present Edition. W. H. R. Cheltenham, february, 1898. PREFACE TO THE FIRST EDITION. 'T^HE object of the following pages is to give a general statement of the law bearing upon the various points of what is known as the " Hire- Purchase System." No attempt appears to have been hitherto made to collect the numerous decisions and statutes relating to the subject, which are to be found widely scattered in Reports, Acts of Parliament, and Text- Books. The titles, only, of cases cited are given in the body of the book, the references being inserted in the table of cases. The recent decision of the House of Lords in Helby v. Matthews is duly noted. W. H. R. Cheltenham, June, 1895. CONTENTS PAGE Cases cited 6 Statutes cited 12 Chap. I. General Observations . . -13 „ II. Effect of conversion by hirer upon owners' rights against third parties . 22 „ III. The form of a Hire-Purchase Agreement 29 „ IV. Rights and Remedies of owners in respect of adverse claims under the following titles : — A. Execution .... 43 B. Distress .... 46 C. Lien of Innkeeper . . 49 D. Assignment for benefit of Creditors . . . -52 E. Mortgage . . . -53 F. Bankruptcy . . -55 „ V. Criminal proceedings against hirer and third parties and orders of restitution 69 Index 77 CASES CITED. Al-j;XANDER ex parte J re ESLICK, 4 Ch.D. 496 ; 46 L.J. Bank. 30 ; 35 L.T. 914 - 59 Bainbridge re; ex parte FLETCHER: 8 Ch.D. 218; 47 L.J.Bank. 70 ; 38 L.T. 229 r 57 Ball ex parte, 10 Ch.D, 667 ; 48 L.J.Bk. 57 ; 40 L.T. 141 2§ Beckett v. Tower Assets Co. (1891), i Q.B. 638 ; 60 L.J.Q.B. 493 ; 64 L.T. 497 - - 16 Bentley v. Vilmont, 12 App. Cas. 471 ; 57 L.J. Q.B. 18 71 Blanchard re j ex parte HatterslBY, 8 Ch.D. 601 ; 47 L.J.Bank. 113 ; 38 L.T. 619 - 60 Broad WOOD v. Granara, 10 Ex. 417 ; 24 L.J. Ex. i 51 Brooks ex parte ; re Fowler, 23 Ch.D. 261 ; 48 L.T. 453 - 63,67 Brown v. Blaine, i T.L.R. 158 17 Bryant v. Wardell, 2 Exch. 479 22, 45 Callow ex parte ; in re JENSEN, 4 M:B.R. i 62 Cochrane *. Rymill, 27 W.R. 776 ; 40 L.T. 744 - 26 Chapman re; ex parte Whiteley, ii T.L.R. 92 60 Churchward v. Johnson, 54 J.P. 326- 48 epBURN V. Collins, "35 Ch.D. 373; 56 L.J.Ch. 504; 56- L.T. 431 - - - - 36 CoGGS z/. Bernard, I Smith's L.C. aoi ;, . . 13 Cohen ex parte; re S-PARKE, 7 Ch. 30 ; 41 L.J.Bank. 16 ; 25 L.T. 473 . 59 Collins «;i; /ar/« y r« Yarrow, 59 L.J. Q.B. 18 ; 6r L.T. 642 - 18 Colonial Bank v. Whinney, 30 Ch.D. 261 ; u App. Cas. 426 ; 56 L.J.Ch. 43 ; 55 L.T. 362 - 57, 58 CASES cjte;d, PAGE Cooper v. Willomatt, i C.B. 672 ; 14 L.J.C.P. 219 22 CfiAMER V. Giles, i Cab. ^ El.ljs, 151 - 21 Crawcour v. Salter, 18 Ch.D. 30; 51 L.J.Ch. 495; 45 L.T. 62 60 Croft y. Lumley, 5 E. & p. 64? 5 6 H.L.Ca. 67? \ ?7 L.J.Q.B. 321 ' ' r 21 Pavenport v. The Queen, 3 App. Gas. i ? 5 ; 47 L. J.P.C. 8 ; 37 L.T. 727 - - 21 Dean v. Whittaker, i C. & P. 347 43 Delaney v. WaIjLis, 14 L.R,Ir. 31 26 DORMAN ex parte J re Lake, 8 Ch.D. 51 ; 42 L.J. Bank. 20 ; 27 L.T. 528 57 Dyer v. Munday [1895], i Q.B. 742 ; 64 L.J.Q.B. 448 ; 72 L.f . 448 - - - 38 Edmunds ^'. Wallingford, 14 Q.B.D. 811; 54 L.J. Q.B. 305 ; 52 L.T. 720 - 49 Edwick v. Hawkes, 18 Ch.D. igg ; 50 L.J.Ch. 577 \ 45 L.T. 168 ... 38 Elliott ex parte ; 3 Mont. & A. no ; 2 Dea. 179 - 28 Emerson ex parte j Hawkins re, 41 L.J, Bk. 2p ; 20 W.R. no 16,62,67 Evans v. Roberts, 36 Ch.D. 196 ; 56 L.J.Ch. 952 \ 57 L.T. 78 ■ - 36 Exall v. Partridge, 8 T.R. 308 ; 3 Esp. 8 49 Fenn v. Bittleston, 7 Exch. 152 ; -21 L,T-Ex. 41 - .- 22, 45 French v. Bombernard, 60 L.T. 49 17 GOUGI? V. Wood [1894], i Q.B. 713 ; 63 L.J.Q.B. 564 ; 7P L.T. 297 - - - - 53 Groom v. Bluck, 2 M. & Gr. 567 ; 10 L.J.C.P. ips . 49 Helby v. Matthews [1895], A.C. 471 ; 64 L.J.Q.B. 46.5; 72 L.T. 841 25, 3© Hewison v. Ricketts, 63 L.J.Q.B. 711 ; 71 L.T. 191 35 Hill in re, 1 CK Div, SP3 . 62 Hobson v. Gorringe [1897], I Ch. 182 ; 66 L.J.Ch. 114; 75 L.T. 610 .- r H 8 CASES CITED. PAGE Hooper v. Ker, 76 L.T.J. 307 ^ 17 HoRWOOD ni. Smith, 2 T.R. 750 ; 2 Leach C.C. 586 75 Hubbard ex parte ; re Hardwick, 17 Q.B.D. 690; 55 L.J.Q.B. 490 - - 37 Hull Ropes Co. v. Adams, 65 L.J.Q.B. 114; 73 L.T. 446 - 53 Hutton v. Brown, 45 L.T. 343 ; 29 W.R. 928 - 40 Isaacson rej ex parte Maso^ [1895], i Q.B. 333; 64 L.J.Q.B. 191 ; 71 L.T. 812 19 JarviS'Z/. Jarvis, 63 L.J.Ch. 10 ; 69 L.T. 412 ; i Manson 199 21 Jones ^z. Tower Furnishing Co.,6i L.T. 84 ;6 Mor. 193 17 KiTTO V. Bilbie & Co., II T.L.R. 214 ; 2 Manson 122 ; 72 L.T. 266 - '- S3 Lancashire Waggon Co. v. Fitzhugh, 6 H. & N. 502 ; 30 L.J.Ex. 231 43 Lanyon v. Toogood, 13 M. & w. 27 44 Lee v. Butler [1893], 2 Q.B. 318 ; 62 L.J.Q.B. 591 ; 69 L.T. 370 - - 24, 29 Legg v. Evans, 6 M. & W. 36 ; 9 L.J.Ex. 102 43 'LnsiAS, ex parte; 20 Ch.D. 131 ; 51 L.J.Ch. 689; 46 L.T.548 28 Lingard v. Messiter, I B. & C. 308 68 Load v. Green, 15 M. & W. 216 ; 15 L.J.Ex. 313 - 59 Loeschman v. Machin, 2 Stark. 311 22 Longman v. Gallini, Abb. Shipp. 343 13 Lovering ex parte ; re Jones, L.^.. 9 Ch. 621 ; 43 L.J. Bank. 116 ; 30 L.T. 622 63, 67 McEntire v. Crossley — See Peel in re j ex parte Crossley 61 Madell?/. Thomas [1891], i Q.B. 230; 60 L.J.Q.B. 227; 64L.T. 9 - - 16 Mears v. London & South-Western Rail. Co., ii C.B. 850; 31 L.J.C.P. 221 14 Montagu ex parte j i Ch.D. 556; 34 L.T. 197 59 CASES CITED. 9 PAGE Morris v. Delobbel-Flipo [1892], 2 Ch. 352 ; 61 L.J.Ch. 5i8;66 L.T. 320- 37 MOYCE -u. Newington, 4 Q.B.D. 32 ; 48 L.J.Q.B. 125 71, 75 National Guardian Assurance Co. ex parte j re Francis, 10 Ch.D. 408 ; 48 L.J.Ch. 163 ; 40 L.T. 257 59 National Mercantile Bank v. Hampson, 5 Q.B.D. 177 ; 49 L.J.Q.B. 480 26 Nichols ex parte ; re Jones, 22 Ch.D. 782 ; 52 L.J.Ch. 635 20 North Central Waggon Co. v. Manchester, &c., Railway Co., 13 App. Ca. 554 ; 58 L.J.Ch. Div. 219 ; 59 L.T. 730 19, 44 Nottingham Bank ex parte ; ^^Jenkinson, L.R. 15 Q.B.D. 441 ; 54 L.J.Q.B. 601 ; 2 Mor. 131 67,68 Odell ex parte j re Walden, 10 Ch.D. 76 ; 48 L.J.Bk. I ; 39 L.T. 333 17 Parsons ex parte, 16 Q.B.D. 532 ; 55 L.J.Q.B. 137 ; 53 L.T. 897 - 17 Payne -v. Wilson [1895], i Q.B. 653 ; 64 L.J.Q.B. 328 ; 72 L.T. no; on appeal [1895], 2 Q.B. 537; 65 L.J.Q.B. 150 ; 73 L.T. 12 - 72, 73, 74 Peel in re j ex parte Crossley [1895], A.C. 457; 64 L.J.P.C. 129 ; 72 L.T. 731 - . 61 Phillips v. Gibbons, 5 W.R. 527 ; 29 L.T.O.S. 91 17 POPPLETON ex parte; re Lock, 8 Mor. 51 61 Powell ex parte j re Matthews, i Ch.D. 501 ; 45 L.J.Bank. 100 ; 34 L.T. 234 - 60 Prisinall v. Lovegrove, 6 L.T. 229 59 Rawlings ex parte ; 22 Q.B.D. 193 ; 60 L.T. 157 19 Redhead v. Westwood, 59 L.T.J. 293 ; 4 T.L.R. 671 18 Regina v. Justices of Central Criminal Court, 18 Q.B.D. 314; 56 L.J.M.C. 25 75 Regina v. London, L.R. 4 Q.B. 371 75 Regina z/. McDonald, 15 Q.B.D. 323- 69 Regina v. Wynn, 16 Cox. 231 69 JO CASES CJTEP. PAGE Robertson in re j ex parte Lewjn & Co., 9 Ch,D. 419 ; 47 LJ.Bk. 94; 39 L.T. 2 - IS Robins & Co. v. Gray [i?95], 3 Q.B. 501 ; 65 L.J:Q.B. 44; 73L.T. 252 : - - SO; 51 ROLLASON in re; 34 Ch.D. 495 ; 56 L.J.CJj. 76S 45 Rolls v. Millar, 27 Ch-D. 71 ; 53 ly.J.Ch. ^82 ; 50 L.T. 597 - - ' 67 SCATTERGOOP V. SYLVESTER, IJ Q.g, 506 ; I9 L.J. Q.B. 447 - - - 7S Shane expa^rUj re MvCGinity, 29 S.J. 70 1,8 Shenstone-w. Hilton [1894], 2 Q.B.D. 452 ; 63 L.J. Q.B. 584 ; 71 L.T. 339 26 Simpson 7/. Hartopp, i Smith's L.Cases 463 48 Singer Manufacturing Co. v. Clark, 5 Ex.D. 37 ; 49 L.J.Ex. 224 ; 41 L.T. 591 22 Smith v. Topping, 5 B. & Ad. 674 59 Spackman v. Miller, 12 C.B.N. S. 659 ; 31 L.J.C.P, 309 59 STROHMENGER V, 4TTPNPPR0JJPJI, II T.L.R. 7 27, 46 Sully ex parte; re Wallis, 14 Q.B.D. 950 ; 52 L.T. 625 2 Mor. 79 T 67 Taylor v. Caldwell, 3 B. & S. 826 ; 32 L.J. Q.B. 164 ; 8 L.T. 356 - - . 13 Taylor v. M'Keand, 5 C.P.D. 358 ; 49 L.J.C.P. 563 26 Thackrah re; ex pcurfe HUGHES, 5 Mor. 235 60 Thompson v. Veale, 74 L.T. 130 - 25 Threlfall v. Borwick, L.R. 10 Q.B. 210 ; 44 L.J.Q.B. 87; 32 L.T. 32 - . 51 Turquand ex parte; re Parker & Co., 14 Q.B.D. 636 ; 54 LJ,Q.B. 242 ; .53 L.T. 579 6,0 ViCARJIfO V. H0LLING§W0RTH, 20 L.T, 302 57 Victoria Dairy Co. v. West, ii T.L.R. 233 19, 45 Walker v. Clay, 49 L.J.C.P. 560 .- 26 Walker v. Matthews, 8 Q.B.D. 109; 51 L.J.Q.B. 243 ; 46 L.T. 915 .- r 75 CASES CITED. II PAGE Ward ex parte; re COUSTON, 8 Ch.D. 144 ; 42 L.J. Bank. 17; 27 L.T. 502 59 Watkins ex parte; re CouSTON, 8 Ch.D. 520 ; 42 L.J. Bank. 50 ; 28 L.T. 793 - 58 Watson in re ; 25 Q.B.D. 27 ; 59 L.J.Q.B. 394 ; 63 L.T. 269 - - - 16, 17 Watson v. Peache, i Bing. N.C. 327 6§ Wellock v. Constantine, 2 H. & C. 146 ; 32 L.J. Ex. 285 28 Wells v. Abraijams, L.R- 7 Q.B. 554 ; 41 L.J.Q.B. 306; 26 L.T. 326 ... 28 White v. Spettigije, 13 M. & W. 603 ; 14 L.J. Ex. 99 - 28, 75 WiLMOT V Alton [1897], i Q.B. 17 ; 66 L.J.Q.B. 42 ; 75 L.T. 447 - - . '- 20 WiNGFlELD ex parte; re FLORENCE, 10 Ch.D. 59J ; 4Q L.T. IS 57 WOODGATE V. Godfrey, 5 Ex.D. 24 ; 49 L.J.Ex. i ; 42 L.T. 34 - - 45 STATUTES CITED. PAGE 5 Rich. II., Stat, i, c. 8 38 7 Anne, c. 12, sect. 3 47 6 & 7 Vict., c. 40, sect. 18 47 24 & 25 Vict, c. 96 (Larceny Act, 1861) sect. 3 - 69 „ gi 70 „ 100 70, 71 30 & 31 Vict., C.35, sect. 9 70 32 & 33 Vict., c. 71 (Bankruptcy Act, 1869), sect. 15, s.s.5 66 34 & 35 Vict., c. 79 (Lodgers' GoodsProtectionAct, 1871) 47 35 & 36 Vict., c. 50 47 35 & 36 Vict., c. 93, sect. 30, s.s. 2- 71 41 & 42 Vict., c. 31 (Bills of Sale Act, 1878), sect. 4 15, 17 41 & 42 Vict., c. 38 (Innkeepers' Act, 1878) 52 45 & 46 Vict., c. 42 (Bills of Sale Act, 1882), sect. 3 15 „ 9 17 46 & 47 Vict., c. 52 (Bankruptcy Act, 1883), sect. 43 56 sect. 44, s.s. 2 56, 66 46 & 47 Vict., c. 61 (Agricultural Holdings Act, 1883) sect. 45 48, 49 „ 46 49 51 & 52 Vict., c. 21 (Law of Distress Amendment Act, 1888), sect. 4 - - 48 51 & 52 Vict., c. 43 (County Courts Act, 1888) 49 52 & 53 Vict., c. 45 (Factors' Act, 1889), sect. 2, s.s. i 23 „ 9 23, 27, 52 56 & 57 Vict., c. 71 (Sale of Goods Act, 1893), sect. 22 74 „ 24 72 sect. 25, s.s. 2 24 THE HIRE-PURCHASE SYSTEM. CHAPTER I. General Observations. The contract of letting goods on hire forms the species of bailment known as Locatio rei, by which the hirer obtains the temporary use of the goods ; and, under the hire-purchase system, after a certain period of hiring, the absolute property in them. Where goods are let out on hire, the hirer is bound to take ordinary care of them, i.e., such care as every man of common prudence, and capable of governing a family, takes of his own concerns {Jones on Bail- ments, 86, 1 1 8) ; but the hirer is not liable if, through no negligence on his part, it becomes impossible to return the goods, on account of their having perished {Taylor X. Caldwell). Thus the hirer is not answer- able for loss by accidental fire {Longman v. Gallini) ; • or by robbery {Coggs v. Bernard) ; but where the hirer is guilty of fraud, he is liable, although there 14 THE HIRE-PURCHASE SYSTEM. may have been a stipulation to the contrary [Jones on Bailments, 119) ; and, according to the same authority, any special agreement by a hirer to use more care than the law would have required from him is, as a rule, valid. If the goods, whilst in the possession of the hirer, are destroyed or permanently injured by the negli- gence or misconduct of a third pdrsferi, the owner may maintain an action for damages against such wrong- doer {Hears v. London & South Western Railway Co.) . It appears that a person who lets out goods on hire impliedly guarantees that they are fit and suitable for the purpose for which they are hired, and the hirer is entitled to claim damages against the latter if they should turn out otherwise. {Seven dn Nigligente, 5oi.) The hirer must Usfe the goods for the purpose for which they were let to him. {Story oH Bailments, 413.) The hire-purchElse agreement hitherto usually adopted was in form a document in writing, signed by the parties thereto, but not usually under Seal, by which the owner of goods-^such as furniture, pianos, &c. — agreed to let them on hire to another person. Called the " hirer," who agreed to hire the same at a weekly, monthly, or yearly rent, payable on certain fixed days. The agreement provided that When a total sum had been paid by Way of rent, the goods should become the absolute property of the hirer, but until such sum had been paid should continue to be the sole property of the owner, the hirer being simply a bailee thereof. The agreement also usually gave the owner GENERAL OSSERVAflON'S. IS power to retake possession of and remove the goods if the tent was riot puflctua-lly paid, or if the hirer failed to observe afid perform the other tefms and conditions which were inserted for the protefefiofl ©f the owner. A hire-purchase agreement rfiiist not be confused with a simple hiring agreerridftt. Under the latter, goods are merely let out on hire without any inten- tiOti expressed or implied that they shall eventually becottie the property of the hirer. The remarks in this book are not intended to refer to simple hiring agreements, although they may, in many" instances, be applicable to them. By sectioii 4 of the Bills of Sale Act, 1878 (41 and 42 Vict, c. 31), bills of sale, assignments, transfers, declarations of trust without transfer,- and other assurances of personal chattels, and also powers of attornfey, authorities, or licenses to take possession of personal chattels as security for any debt, and also any agreement, whether iriterided or not to be followed by the execution of any other instrument, by which a tight in equity to any pefsoiial chattels, or to any charge or security thereori shall be con- ferred, are included in the expression " Bill of Sale," and as such require to be registered to make them valid. The Bills of Sale Act (1878) Amendment Act, 1882 (45 & 46 Vict, c. 42), only relates to Bills of Sale given by way of security for the payment of money (section 3). A bond fide hire-purchase agreement is not subject to the Bills of Sale Acts, and does not require to be l6 THE HIRE-PURCHASE SYSTEM. registered, inasmuch as such an agreement passes no right of property at law, or in equity, to the hirer {Re Robertson ; ex parte Lewin &■ Co., sometimes cited as ex parte Crawcour). In this case, by a written agreement, Robertson hired furniture of the value of £6^ from Lewin & Co. Robertson was to pay for it by monthly instalments. In the event of non-payment of any instalment, Lewin & Co. might seize and remove the furniture and retake possession of it. On payment of all the instalments the furniture was to become the property of Robertson, but until such payment it was to remain the sole property of Lewin Sz: Co. The furniture having been removed by Lewin & Co., under the terms of the agreement, it was held by the Court of Appeal that the property in the furniture did not pass to Robertson until all the instalments had been paid ; that neither the agreement nor the license to seize the furniture amounted to a Bill of Sale by Robertson, and, therefore, registration was unnecessary. In ex parte Emerson ; re Hawkins, an owner let household furniture to a hirer at a weekly rent, under an agreement in writing which gave the owner power to seize the furniture in case the hirer became bank- rupt, and it was held that the agreement did not require registration under the Bills of Sale Act. If a document which purports to be a hire-purchase agreement is, however, really a device or cloak for securing a loan, then it amounts to a Bill of Sale, and will be void as a security, both against the trustee in bankruptcy of the hirer, and also as against the hirer GENERAL OBSERVATIONS. 1/ himself {In re Watson) {Madell v. Thomas) (Beckett V. Tower Assets Co.). Moreover, it is impossible to make such an agreement good as a security by registering it as a Bill of Sale, since every Bill of Sale given by way of security for the payment of money is, by section g of the Bills of Sale Act (1878) Amendment Act, 1882, void unless made in accord- ance with the form in the Schedule to that Act ; and the ordinary hire-purchase agreement could not be made to comply with such form. (See ex parte Parsons^ Where a money-lender refused to make an advance upon a Bill of Sale, but purported to purchase the goods, which were transferred to him by registered inventory and receipt, and then let the goods to the borrowers under a hire-purchase agreement, it was held that the transaction amounted to a loan, and that the agreement was void. {Hooper v. Ker) (See also Brown v. Blaine?) For other instances of ficti- tious hire-purchase agreements, which were really securities for money lent, see Phillips v. Gibbons. Ex parte Odell ; re Walden. French v. Bo^nbernard and Jones v. Tower Furnishing Co. In re Watson, the Court of Appeal held that in order to determine whether a document, which pur- ports to be a hire-purchase agreement, is or is not an assurance, or license to take possession of personal chattels as security for a debt, within section 4 of the Bills of Sale Act, 1878, the Court is not bound merely to look at the form of the document itself, but is entitled to go outside it and enquire into the circum- B 1 8 THE HIRE-PURCHASE SYSTEM. stances to see whether or not it represents the real transaction between the parties. The facts of this case furnish a good illustration of the fallacy of attempting to evade the publicity of registration under the Bills of Sale Acts, and secure a loan of money by an apparent hire-purchase agreement. Mrs. Watson was the owner of some furniture, upon the security of which she wished to raise a loan without giving a Bill of Sale. With the view to enabling this to be done she went through the fiction of selling the furniture to a Mr. Love for ;^iSO, and handed a chair over to him in the name of the whole of the furniture. On the same day Love let the furniture to Watson under a hire-purchase agreement, which provided that the furniture should become Watson's when she had paid .^200. Watson having become bankrupt, the Court held that the transaction was void as against the Official Receiver, being, in fact, a loan with security — a mortgage and not a sale with a right of repurchase. Lord Esher, M.R., was of opinion that the agreement was, at the very least, a license to take possession of personal chattels as security for a debt, and was an instrument which came within section 4 of the Bills of Sale Act, 1878. The case of re Watson appears to over-rule the decision of ex parte Collins; re Yarrow and Redhead V. Westwood, which practically decided that such trans- actions as that in the first-mentioned case were valid. It has, however, been held that an absolute Bill of Sale and hire-purchase agreement, if really forming separate and distinct transactions, do not, so far as GENERAL OBSERVATIONS. 1 9 the agreement is concerned, come within the Bills of Sale Acts {ex parte Shane ; re McGinity). For other cases in which hire-purchase agreements, following bond fide sales, have been held valid, as against execution creditors, see North Central Waggon Co. V. Manchester, &c., Railway Co., and Victoria Dairy Co. v. " West. These cases are cited in Chapter IV. A mortgage of the owner's rights under a bond fide hire-purchase agreement, with power to enforce its provisions, but not assigning the goods comprised therein, being merely an assignment of a chose in action, and not a Bill of Sale, does not require registration {ex parte Rawlings). In the case of In re Isaacson ; ex parte Mason, Isaacson, who carried on business as a musical instru- ment dealer, let a piano to a person named Yeomans on the hire-purchase system. Subsequently, Isaacson, by deed, assigned the piano and the hire-purchase agreement, and the full benefit and advantage of the latter, to E. Bishop absolutely, in consideration of the sum of ;^25 paid to Isaacson by Bishop. The deed purported to be an absolute assignment, but it was admitted that it was merely intended to operate as a security for the payment of money. It was not registered under the Bills of Sale Acts. Isaacson having become bankrupt, the trustee in the bank- ruptcy applied to the Court for a declaration that the deed was an assignment of personal chattels, and consequently a Bill of Sale — and that it was void on the ground that it was not in the statutory form and 20 THE HIRE-PURCHASE SYSTEM. had not been registered. The Court of Appeal (affirming the decision of the Divisional Court and County Court Judge) held that the deed was an assignment of the proprietary rights in the piano, and also an assignment of certain contractual rights under the hire-purchase agreement — that the two things were separate and distinct — that the Bills of Sale Acts did not apply to the assignment of the contractual rights under the hire-purchase agreement, and consequently the assignment of the agreement was valid. The above-mentioned cases of ex parte Rawlings and In re Isaacson, were distinguished in Wilmot v. Alton, in which the decision in ex parte Nichols ; re Jones was followed. The effect of the two last- mentioned decisions seems to be that, if an assign- ment, whether absolute or by way of mortgage, is made of the right to receive future instalments under a hiring agreement, and the hiring agreement is executory and not executed on the part of the assignor (so that no part of the consideration can be earned unless the assignor is able to perform his part of the hiring agreement) if the assignor becomes bankrupt, the assignee is not entitled under his assignment to receive the instalments, which become payable under the hiring agreement subsequently to the commencement of the bankruptcy, but such instalments belong to the trustee in the bankruptcy. In such a case the instalments cannot be said to form a debt due payable by instalments. GENERAL OBSERVATIONS. 21 The owner of trade machinery let it out on hire, and then charged his interest in the machinery by way of security, such charge not being registered. It was held that the security was within the Bills of Sale Acts, and gave the lender of the money no claim either to the machinery or the hire instalments {Jarvis v. Jarvis). If default is made in payment of any instalment due under a hire-purchase agreement, the owner is entitled to possession of the goods, and also to retain the instalments actually paid, even though the hirer tenders the instalment in arrear. There is no equity to compel the owner to give up the goods, or to return the instalments {Cramer v. Giles). There does not appear to be any case reported as to the effect of an owner accepting payment of an instalment after he has become entitled to retake possession of the goods through default of the hirer before such acceptance. By analogy to the rule that if a landlord receives, from a tenant, rent which has become due after a forfeiture, he thereby waives the forfeiture (see Davenport v. The Queen ; and Crofi v. Luinley), it would seem that an owner would, in similar circumstances, waive his right to seize the goods. 22 THE HIRE-PURCHASE SYSTEM. CHAPTER II. Effect of Conversion by Hirer upon Owner's Rights against Third Parties. If the hirer of goods wrongfully sell, or otherwise part with them, the hiring is thereby determined {Fenn v. Bittlestori) {Bryant v. Wardell) ; and the law, until recently, was that the original owner of the gpods might, in such a case, sue the purchaser for conversion, even though the purchase was bona fide (Cooper V. Willomatt) (Loeschman v. Machiri), unless the goods had been sold in market overt, and the hirer had not been convicted of larceny as a bailee. Thus, where a person who hired, a sewing machine under a hire-purchase agreement, wrongfully pledged it with a pawnbroker, it was held that the true owner was entitled to recover the machine from the pawn- broker {Singer Manufacturing Co. v. Claris). But, according to the recent decisions referred to below, section 9 of the Factors' Act, 1889, and section 25, sub-section 2, of the Sale of Goods Act, 1893, give a good title to any person who, in good faith and without notice of the owner's rights, under any sale, pledge, or other disposition thereof, obtains from a hirer goods held by the latter under a hire-purchase agreement, which is in such a form that it makes the hirer a person " who has agreed to buy " within EFFECT OF CONVERSION BY HIRER. 23 the meaning of the Act, and, consequently, in such a case the owner cannot retover the goods from the purchaser, or sue him for damages for the conversion. If goods are let on hire under such an agreement as is suggested in Chapter III., and the hirer wrong- fully disposes of them, the old law will apply, and the owner will be entitled to recover the goods from the person who obtains them from the hirer, unless the goods have been sold in market overt, and the hirer has not been convicted of larceny as a bailee. By section 2, sub-section i, of the Factors' Act, 1889 (53 and 53 Vict., c. 45), which came into operation on ist January, 1890, it is provided : — "Where a mercantile agent is, with the consent of the " owner, in possession of goods or of the documents of title " to goods, any sale, pledge, or other disposition of the goods, " made by him when acting in the ordinary course of business " of a mercantile agent, shall, subject to the provisions of this " Act, be as valid as if he were expressly authorized by the " owner of the goods to make the same ; provided that the " person taking under the disposition acts in good faith, and " has not at the time of the disposition notice that the person " making the disposition has not authority to make the " same." By section 9 of the same Act it is provided : — " Where a person, having bought or agreed to buy goods, " obtains, with the consent of the seller, possession of the " goods or the documents of title to the goods, the delivery " or transfer, by that person or by a mercantile agent acting " for him, of the goods or documents of title, under any sale, " pledge, or other disposition thereof, or under any agreement " for sale, pledge, or other disposition thereof, to any person " receiving the same in good faith and without notice of any " lien or other right of the original seller in respect of the 24 THE HIRE-PURCHASE SYSTEM. " goods, shall have the same effect as if the person making " the delivery or transfer were a mercantile agent in possession " of the goods or documents of title with the consent of the " owner." By section 25, sub-section 2, of The Sale of Goods Act, 1893 (56 and 57 Vict., c. 71), which came into operation on the ist January, 1894, it is provided as follows : — " Where a person, having bought or agreed to buy goods, " obtains, with the consent of the seller, possession of the " goods, or the documents of title to the goods, the delivery or " transfer by that person, or by a mercantile agent acting for "him, of the goods or documents of title, under any sale, " pledge, or other disposition thereof, to any person receiving " the same in good faith and without notice of any lien or " other right of the original seller in respect of the goods, " shall have the same effect as if the person making the " delivery or transfer were a mercantile agent in possession " of the goods or documents of title with the consent of the " owner." It will be seen that this sub-section reproduces, with a very slight variation, section 9 of the Factors' Act, 1 889, which is not repealed. In Lee v. Butler certain goods were let out on hire under an agreement in writing, dated 5 th May, 1892, whereby, on payment by the hirer of the sum oi £\ on the date of the agreement, and the further sum of £g6 4s. on the ist August following, the goods were to become the absolute property of the hirer, who also agreed not to remove them from the premises named in the agreement, during the continuance of the hiring, without the consent of the person who let out the goods. Before the whole of the instalments were paid, the hirer sold the goods to the defendant, who purchased them in good faith, and without knowledge EFFECT OF CONVERSION BY HIRER. 25 of the agreement, and removed them from the premises. In an action to recover the goods from the defendant, it was held that the agreement was an agreement to buy goods within the meaning of section 9 of the Factors' Act, 1889, and that the defendant had a good title to the goods. This case was followed in Thompson v. Veale, a case of pledge by the hirer. In Helby v. Matthews the owner of a piano let it out on hire under an agreement whereby, on payment of the whole of certain monthly instalments, the piano was to becorne the absolute property of the hirer, who had power to terminate the hiring by delivering up the instrument. Before the whole of the instal- ments were paid, the hirer pledged the piano with a pawnbroker, who took it in good faith and without knowledge of the agreement. In an action brought by the owner to recover possession of the piano from the pawnbroker, it was held by the Court of Appeal that the pawnbroker had obtained a good title to the piano under section 9 of the Factors' Act, the hirer being a person who had " agreed to buy " within the meaning of that section. The House of Lords reversed the decision of the Court of Appeal, on the ground that by the terms of the agreement the hirer had not " agreed to buy," and distinguished the case from Lee v. Butler, in which the agreement amounted to a contract to purchase. As a general rule, if an auctioneer receives goods from a person who has no title to them, and sells and 26 THE HIRE-PURCHASE SYSTEM. hands them over to a purchaser, even though he does so innocently, he is liable to the real owner for damages for the conversion of the goods. Thus in Cochrane v. Rymill the plaintiff held a bill of sale on the effects of a man named Peggs. The latter instructed the defendant, who was an auctioneer and had no knowledge of the bill of sale, to sell the effects, which was done and the proceeds handed over to Peggs. The plaintiff having brought an action against the auctioneer to recover the value of the goods on the ground of their conversion by the latter, it was held that he was entitled to succeed inasmuch as the dealing with the property and sale by the auctioneer amounted to a conversion. The auctioneer is not protected under such circumstances, even though he sell in market overt, {Delaney v. Wallis). If goods are sent to an auctioneer in the ordinary and usual course of the business of the person sending them, even if the latter has no title to them, the auctioneer is not liable for conversion {NatioHal Mercantile Bank v. Hampson) (Walker v. Clay) [Taylor V. M'Keand). In Shenstone v. Hilton an action was brought by the plaintiffs against the defendant, an auctioneer, for wrongful conversion of a piano entrusted to him for sale by one Nye. Nye, who was a furniture sales- man, had obtained possession of the piano from the plaintiffs under a hire-purchase agreement, and, after paying only a few instalments, sent it to the auctioneer for sale. The latter, knowing Nye to be a furniture salesman, accepted the piano, sold it EFFECT OF CONVERSION BY HIRER. 27 by auction and paid the purchase money, less com- mission, to Nye. The jury found that the auctioneer had received the piano in good faith and without notice of any lien or other right of the plaintiffs. Held, by Bruce, J., that where any person has agreed to buy and has obtained possession of goods under a hire-purchase agreement, amounting to an agreement for purchase, a delivery of such goods by such person to an auctioneer for sale comes under the words, " a delivery, or transfer, under an agree- " ment for sale, pledge, or other disposition thereof " in section 9 of the Factors' Act, 1889 ; and an auctioneer who sells such goods " in good faith and " without notice of any lien or other rights of the " original seller " is protected from liability for their wrongful conversion. It follows from the last cited case, that if an auctioneer, although innocently, sells goods com- prised in a hire-purchase agreement, which does not. amount to a contract for purchase, he will not be protected from liability to the owner for wrongful conversion. In Strohmenger v. Attenborough (a case of pledge by a person who was not the hirer), the Court held that the question as to whether the pledger was a " Mercantile Agent " was one of fact. The circum- stances of this case were somewhat unusual, but the decision may be usefully referred to when it is desired to decide whether, in any particular case, a person can be regarded as a " Mercantile Agent." 28 THE HIRE-PURCHASE SYSTEM. The owner, whose goods have been wrongfully disposed of by a hirer, can bring an action against the latter to recover arrears of instalments and damages for the conversion of the goods, and, if the person who has taken the goods from the hirer has done so in bad faith and with notice of the hire-purchase agreement, or if the hirer has not, by the agreement, agreed to buy the goods, the owner has also a right of action against such person to recover the goods and damages. But as both the hirer and the third party with knowledge of the agreement would, under such circumstances, be guilty of a felony (see Chapter V.), the owner ought first to prosecute them, or whichever one he intends to sue, before bringing the civil action. {Ex parte Elliott.) ( Wellock v. Constantine) ( Wells v. Abrahams.) {Ex parte Ball) {Ex parte Leslie.) But if it is intended to bring an action only against the person to whom the hirer transferred the goods, it is not necessary for the owner to first prosecute the hirer. ( White v. Spettigue.) As to whether the conviction of the hirer for larceny as a bailee revests the property in the goods in the owner, and enables him to recover them from a third person, see Chapter V. FORM OF A HIRE-PURCHASE AGREEMENT. 29 CHAPTER III. The Form of a Hire-Purchase Agreement. Having regard to the recent decisions mentioned in the last chapter as to the effect of the common form of hire-purchase agreement hitherto generally adopted, it is essentially desirable, in the interests of owners, that the agreement should be drawn in such a form that a hirer, if he attempt to sell or pledge the goods, shall not be able to give a good title to the person to whom they are transferred. The two cases of Lee v. Butler and Helby v. Matthews furnish good illustrations of agreements enabling a hirer to give a good title to a third person, and vice-versd. The agreement in Lee v. Butler was held to give the hirer such power, but that in Helby V. Matthews was not. The provisions of the agreement in Lee v. Butler, so far as material, were as follows : — " First. The said W. E. Hardy agrees to let on hire to the said H. C. Lloyd, hereinafter called the hirer, who agrees to take on hire, upon the terms hereinafter expressed, the furniture, goods, and chattels mentioned and specified in the schedule hereunder written. " "Secondly. The said hirer for herself agrees, subject as herein- after provided, to pay to the said W. E. Hardy, as and by way of rent for the hire and use of the said furniture, goods, and chattels, the respective sums, and at the periods following, that is to say, the sum of ;^l on the 5th day of May, and the next further sum of £96 4s. on the 1st day of August, 1892." 30 , THE HIRE-PURCHASE SYSTEM. [The 3rd, 4th, and sth clauses related to the removal of furniture, payment of rent, &c., of premises, and seizure for default.] "The said W. E. Hardy, for himself, hereby agrees that when and so soon as the said hirer shall have well and truly made all payments of rent hereinbefore reserved, and performed all the stipulations and agreements hereinbefore on her part contained, the rent or payments hereinbefore mentioned and reserved for the said furniture, goods, and chattels shall thereupon cease, and the aforesaid furniture, goods, and chattels shall thenceforth be and become the sole and absolute property of the said hirer. But it is expressly declared and agreed that no property or interest in the said furniture, goods, and chattels, other than as tenant aforesaid, shall vest in the said hirer until the whole of the said payments of rent hereby reserved, amounting to the sum of £<)"] 4s. , shall have been actually made by her as hereinbefore provided." The form which was considered in Helby v. Matthews was as follows : — " This Agreement, made the 23rd day of December, 1892, between Charles Helby, of 22, Baker Street (hereinafter called the ' owner '), of the one part, and Charles Brewster, of 24, Chester Street, Kennington Road, S.E. (hereinafter called the 'hirer'), of the other part, Witnesseth that the owner agrees, at the request of the hirer, to let on hire to the hirer a pianoforte. No. 896, maker, Rass, and in consideration thereof the hirer agrees as follows : — " I. To pay the owner, on the 23rd day of December, 1892, a rent or hire instalment of los. 6d., and los. 6d. on the 23rd of each' succeeding month. " 2. To keep and preserve the said instrument from injury (damage by iire included). " 3. To keep the said instrument in the hirer's own custody at the above-named address, and not to remove the same (or permit or suffer the same to be removed) without the owner's previous consent in writing. " 4. That if the hirer do not duly perform this agreement, the owner may (without prejudice to his rights under this agreement) terminate the hiring and retake possession of the said instrument ; and for that purpose leave and license is hereby given to the owner (or agent and servant, or any other person employed by the owner) to enter any FORM OF A HIRE-PURCHASE AGREEMENT. 3 1 premises occupied by the hirer, or of which the hirer is tenant, to retake possession of the said instrument, without being liable to any suit, action, indictment, or other proceeding by the hirer, or any one claiming under the said hirer. " 5 . That if the hiring be terminated (under clause A below) and the said instrument be returned to the owner, the hirer shall remain liable to the owner for arrears of hire up to the date of such return, and shall not on any ground whatever be entitled to any allowance, credit, return, or set off for payments previously made. " The owner agrees : " A. That the hirer may terminate the hiring by delivering up to the owner the said instrument. " B. If the hirer shall punctually pay the full sum of ;^i8 i8s., by los. 6d. at date of signing, and thirty-six monthly instalments of los. 6d. in advance as aforesaid, the said instrument shall become the sole and absolute property of the hirer. " C. Unless and until the full sum of ;^i8 i8s. be paid, the said instrument shall be and continue to be the sole property of the owner." In the course of his judgment in Helby v. Matthews, Lord Esher, M.R., said that the person who has bought, or agreed to buy, is referred to in section 9 of the Factors' Act, because it is his acts, and not the acts of the owner, which are dealt with. The section has nothing to do with a simple hiring out of goods by the owner to another. It implies a contract of purchase and sale, and that the seller has con- tracted to sell and the purchaser to buy, but that the contract is one under which the property in the goods does not pass to the purchaser. If the owner delivers possession of goods under such a cpntract to the person who has agreed to buy, then the section applies. By the agreement Brewster agreed to pay the owner on the 23rd of December, 1892, a "rent" or " hire instalment." If, it were a mere hiring it 32 THE HIRE-PURCHASE SYSTEM. would only be necessary to call the payment a " rent.'' Brewster agreed to pay the instalments, and he could only terminate the hiring by delivering up the piano. Seeing that, upon payment of the whole of the instal- ments, the piano was to become the sole and absolute property of Brewster, the agreement was a contract for the purchase of the piano. The proper construc- tion of the agreement was that it was a contract by the one party to sell, and by the other to buy, but with an option on the part of the buyer, if he changed his mind, to put an end to the contract. ' The House of Lords overruled the decision of the Court of Appeal in Helby v. Matthews on the ground that the hirer had not, by the terms of the agreement, agreed to buy the pianoforte. The Lord Chancellor, in the course of his judgment, said, " What, then, was the real nature of the transaction .^ The answer to this question is not, I think, involved in any difficulty. Brewster was to obtain possession of the piano and to be entitled to its use so long as he paid the plaintiff the stipulated sum of los. 6d. a month, and he was bound to make these monthly payments so long as he retained possession of the piano. If he continued to make them at the appointed times for the period of three years, the piano was to become his property, but he might at any time return it, and, upon doing so, would no longer be liable to make any further payment beyond the monthly sum then due. I cannot, with all respect, concur in the view of the Court of Appeal that, upon the true construction of the FORM OF A HIRE-PURCHASE AGREEMENT. 33 agreement, Brewster had agreed to buy the piano . . . . . I cannot think that an agreement to buy, ' if he does not change his mind,' is any agreement to buy at all in the eye of the law But for the provision that if the hirer punctually paid the los. 6d. a month for 36 months, the piano should be his property, it could not be doubted that it was a mere agreement for its hire, and I cannot see how the fact that this provision was added made it any the less a contract of hiring until that condition had been fulfilled Reliance was placed on the decision in Lee v. Butler, and it was said that the present case was not, in principle, distinguishable from it. There seems to me to be the broadest distinction between the two cases. There was there an agreement to buy. The purchase money was to be paid in two instalments ; but as soon as the agreement was entered into there was an absolute obligation to pay both of them, which might have been enforced by action. The person who obtained the goods could not insist upon returning them and so absolve himself from any obligation to make further payment. Unless there was a breach of contract by the party who engaged to make the payments the transaction necessarily resulted in a sale. That there was in that case an agreement to buy appears to me, as it did to the Court of Appeal, to be beyond question Lord Watson delivered judgment to a similar effect, and Lord Macnaghten, Lord Morris, and Lord Shand concurred. C 34 THE HIRE-PURCHASE SYSTEM. It is to be observed that the agreement may be prevented from becoming a contract for sale and purchase in two ways — either by not making the hirer bound to pay the instalments, or by giving him an option to return the goods. The latter method has been adopted in the sug- gested form of agreement set out below, as the decision of the House of Lords in Helby v. Matthews has shown it to be perfectly valid, and it is much neater than the alternative method. It is essential that a clause should, be inserted in the agreement giving the owner, after seizure, power to sue for arrears of instalments, as the following case will show. The owners of chattels, which were admitted to be of the value of :£^368, let them out under a hire-purchase agreement, which provided that £\2i^ should be paid in advance, and £2^^ by twenty monthly payments of £\2 each, and one monthly payment oi £'}). If any instalment was not duly paid, the owners had power to seize and remove the chattels, but the agreement did not, in the usual way, give the owners power to sue the hirer, after seizure, for arrears of instalments. The eighth instalment being in arrear, the owners seized the chattels. A third person, on behalf of the hirer, paid this instalment, and guaranteed the payment of future instalments, and in consideration thereof the owners returned the chattels to the hirer. The next two instalments became in arrear, and the owners again seized the chattels, and then sued the guarantor for the amount of the two instalments. It was held FORM OF A HIRE-PURCHASE AGREEMENT. 3,5 by a Divisional Court that, by resuming possession of the chattels, the owners determined the agreement, and extinguished the hirer's liability, and also relieved the surety of his liability under the guarantee. The effect of the agreement was that the owners could not both resume possession, and also sue for the instal- ments. They were put tO' their election as to which course they would pursue {Hewison v. Ricketts). Lord Justice Smith, in the course of his judgment in Helby v. Matthews, remarked with reference to the argument that the plaintiff had merely granted an option to the hirer to purchasfe, " What is a grant of an option to purchase but an agreement in praesenti by the plaintiff to sell to Brewster subject to his right to exercise his option ? " There is no doubt that this is a correct statement, but the question, under the Factors' Act, is not whether the owner has agreed to sell, but whether the hirer has agreed to buy. As the Master of the Rolls pointed out, it is not the owner's acts which are dealt with by section Cf of the Factors' Act, but the acts of the hirer ; and, therefore, even if the owner irrevocably binds himself to sell, but the hirer does not bind himself to purchase, even though he has an option, the hirer cannot possibly be " a person having bought or agreed to buy." The option of purchase given to the hirer does not appear to have the effect of making the agreemei;^ a Bill of Sale as being included in the words " assign- ments, transfers, and other assurances of personal chattels," or " any agreement, whether intended or not to be followed by the execution of any other 36 THE HIRE-PURCHASE SYSTEM. instrument, by which a right in equity to any personal chattels . . . shall be conferred," within the meaning of section 4 of the Bills of Sale Act, 1878. In a case where a business was sold and possession was given to the purchaser, and the agreement pro- vided that the vendor should have a charge upon the chattels sold for the balance of the purchase-money, part only of which was paid, it was held that the agreement was within the words " assignments; transfers, " etc. [Coburn v. Collins). The same words have also been held to apply where at an auction the names of the vendor and purchaser were signed by an auctioneer and his clerk to the conditions of sale in respect of goods which were left in the vendor's possession (Evans v. Roberts). The principle to be derived from these cases seems to be that if an agreement is entered into for the sale of goods, and the goods are left in the vendor's possession, or if the goods are handed over to the purchaser, and it is stipulated that the vendor shall have a charge upon them for the unpaid purchase- money, then the agreement must be registered as a bill of sale. Neither of these conditions would exist in the case of the suggested form of hire-purchase agreement, and therefore such agreement would not come within the words " assignments, transfers, and other assurances of personal chattels," mentioned in section 4 of the Bills of Sale Act, 1878. With reference to the words " any agreement by which a right in equity shall be conferred," it is to be FORM OF A HIRE-PURCHASE AGREEMENT. 37 observed that they do not apply to an agreement which confers a right in law as opposed to a right in equity {Ex parte Hubbard ; re Hardwick). An illustration of an agreement conferring a right in law, as distinguished from a right in equity, is to be found in Morris v. Delobbel-Flipo. In this case there was an agreement that an agent should hold all goods delivered to him, as security for advances made by him on behalf of the principal. The agency having come to an end, the principal sued the agent to obtain the goods in his hands, and argued that the agent was not entitled to detain the goods against advances made by him, as the agreement was one which gave him a right in equity to the goods, and ought to have been registered as a bill of sale. It was held that the agent's right depended upon his being in possession of the goods, and this was not an equitable right, but a legal right, and hence was not within the section. Applying the principle of the last-mentioned case to the suggested form of hire-purchase agreement, it will be seen that the option of purchase given to the hirer is not an agreement by which a right in equity to the goods is conferred upon the hirer, inasmuch as, before the option is exercised, all the prior stipulations of the agreement must have been performed, and if such stipulations have been duly performed, the effect of such performance will be that the goods are in the possession of the hirer when he exercises his option, or, in other words, if the goods are not in the possession of the hirer, he cannot exercise his option, and 38 THE HIRE-PURCHASE SYSTEM. therefore his title depends upon possession, and is consequently a right in law, and not a right in equity. It is sometimes provided by a hire-purchase agreement that the owner may, in order to obtain possession of goods on non-payment of the instalments, break open doors, and otherwise enter by force, but, having regard to the case of Edwick v. Hawkes, such a provision should not be inserted, as the effect of it would probably be to mislead an owner as to his rights. The provision is void, as being a license to commit a crime, the Statute 5, Richard II., stat. i, c. 8, providing " that none from henceforth make any entry into any lands and tenements, but in case where entry is given by the law : and in such case not with strong hand, ,nor with multitude of people, but only with peaceable and easy manner ; and if any man from henceforth do to the contrary, and thereof be duly convict, he shall be punished by imprisonment of his body." A recent case of Dyer v. Munday exemplifies the liability of an employer for forcible seizure by his servant. The defendant Munday carried on business as a furniture dealer, and the other defendant Price was the manager of one of Munday's branch establish- ments. Price, on behalf of his employer, let out a bedstead on the hire-purchase system to a person named Stiles, who lodged with the plaintiffs, Mr. and Mrs. Dyer. By arrangement with Stiles, Price and another man named Simson went to the Dyers' house to remove the bedstead. The plaintiffs objected to the bedstead being taken away, with the result that FORM OF A HIRE-PURCHASE AGREEMENT. 39 Price and Simson forcibly removed it, and, in the course of doing so, assaulted Mrs. Dyer. Price and Simson were summoned before a police magistrate for the assault, and were convicted and fined. Price paid the fine imposed upon him. Munday, the employer, knew nothing of the occurrence until an action was brought against him and Price for damages for trespass and assault. This action resulted in a verdict for the plaintiffs for £2^ damages for the trespass, and ;^I5 damages for the assault, and judgment was given accordingly. Munday appealed against the decision on the grounds that as Price had been convicted for the assault, and had paid the fine, no action could be maintained for the same assault either against Price himself or against Munday, by virtue of the statute 24 and 25 Vict.,c. 100, s. 45 ; and also that there was no evidence that Price in commit- ting "the trespass and assault was acting within the scope of his authority. The Court dismissed the appeal and affirmed the judgment. On the first ground of appeal they were of opinion that it was clear the statute relied upon fell short of saying that where one of two joint tortfeasors was relieved from liability by being punished criminally, the other was thereby also relieved. With reference to the other point the Court considered that Price was acting in the ordinary course of his employment, with the intention of doing what he was employed to do, and not for purposes of his own, and consequently his employer was liable for his acts. The Master of the Rolls remarked that no doubt an act by an agent might be so criminal that 40 THE HIRE-PURCHASE SYSTEM. no jury would say that it could have been done in furtherance of his master's business. But if an agent, who was authorised to do a thing properly, while acting within the scope of his employment, exceeded his authority by doing the thing improperly, the mere fact of the excess of authority involving a criminal act did not take the case out of the rule. Under such circumstances the law of England was that the master was liable. When the word " month " is used in a hire-purchase agreement it is construed to mean "lunar-month," and not " calendar-month," unless the contrary is stated {Hutton v. Brown). SUGGESTED FORM OF HIRE-PURCHASE AGREEMENT. An Agreement made the day of i8g , Between [Name, address, and description of owner^ (hereinafter called " the Owner") of the one part, and [Name, address, and description of hirer\ (hereinafter called "the hirer") of the other part, as follows : — 1. The owner agrees to let on hire to the hirer and the hirer agrees to take on hire from the owner, a pianoforte belonging to the owner, No. , and manufactured by 2. The hirer agrees to pay to the owner, at the owner's address, the sum of every calendar month, by way of rent, such rent to commence from the day of , i8 , and the first payment to be made on the day of , i8 , and each subsequent payment on the day of every succeeding calendar month. 3. The hirer will, during the hiring, keep and preserve the said pianoforte in good and substantial order, and will insure the same against damage by fire to the full value thereof, which is admitted by the hirer to be ;^ FORM OF A HIRE-PURCHASE AGREEMENT. 4I 4. The hirer will, during the hiring, pay to the owner, at the owner's address, the sum oi £1 per annum for tuning the said pianoforte four times yearly. 5. The hirer will, during the hiring, keep the said pianoforte in his own custody, at his above-mentioned address, and will not sell, or offer for sale, or assign, pledge, mortgage, or underlet or otherwise part, or attempt to part, with the possession of the said pianoforte, or remove the same, or cause or permit the same to be removed from the above-mentioned address of the hirer without the previous consent in writing of the owner. 6. The hirer will, during the hiring, punctually pay the rent of the premises occupied by him in which the said pianoforte may from time to time be. 7. The hirer will, during the hiring, permit the owner and his agents, at all reasonable hours, to enter upon the premises in which the said pianoforte may from time to time be, to inspect the condition thereof. 8. If the hirer shall deliver up the said pianoforte to the owner, or shall give notice to the owner of his desire to terminate the hiring, the hiring shall be determined immediately upon the receipt by the owner of the said pianoforte or such notice as the case may be. 9. If the hirer do not punctually pay the rent mentioned in clause 2 hereof, or do not observe and perform the foregoing terms and conditions of this agreement, or if the hirer give to the owner such notice as is mentioned in clause 8 hereof, or if a receiving order in bankruptcy is made against the hirer, or if he shall execute an assignment for the benefit of his creditors, or arrange or compound with the greater part in number or value of them, or if he shall suffer his effects to be distrained upon, or taken in execution, or allow any judgment against him to remain unsatisfied, then and in any of the said cases, the hiring shall immediately determine, and the owner, his agents, servants or others in his employ, may enter upon any premises occupied by the hirer, or of which he is the tenant, and seize and take away the said pianoforte. 10. If the hiring is determined under either clause 8 or 9 of this agreement, the owner may, notwithstanding the return or seizure of the said pianoforte, recover by action from the hirer all rent in arrear at the date of the determination of the hiring and also any sum due 42 THE HIRE-PURCHASE SYSTEM. la) This sum wiU be the total amount td be paid for the Pianoforte less the last instal- ment. (d) This sum should be the amount of the last instalment. up to the date of the determination of the hiring for tuning under clause 4 hereof, and also damages for any injury to the said pianoforte, and any costs, expenses, and payments incurred or made by the owner in connection with obtaining possession of the said pianoforte, and the hirer shall not on any ground whatever be entitled to any allowance, return or set off. II. If the hirer shall punctually pay the rent mentioned in clause 2 hereof, and shall, in the manner described in such clause, pay to the owner rents amounting in the aggregate to the sum <^^ £ {")> ^nd shall also, with the last of such payments, pay to the owner all moneys due under clause 4 hereof (if not previously paid), then the hirer may, upon giving to the owner notice in writing of his desire so to do, purchase the said pianoforte from the owner for the sum of £ (i), and on payment of such sum by the hirer the owner will assign to him all his interest in the said pianoforte, but until such notice shall have been received by the owner, the said pianoforte shall remain the sole property of the owner, and the hirer shall not be deemed to have bought or agreed to buy the same. Signed by the said [owner] [Signature of owner.] ' In the presence of {Signature of hirer.] Signed by the said \_hirer] In the presence of RIGHTS AND REMEDIES OF OWNERS. 43 CHAPTER IV. Rights and Remedies of Owners in Respect OF Adverse Claims under Execution, Dis- tress, Lien of Innkeepers, Assignment for Benefit of Creditors, Mortgage and Bankruptcy. A. Execution. If execution is issued upon a judgment obtained against a debtor, the goods of a stranger must not be seized, but only the goods belonging to the debtor himself. Thus goods in a defendant's possession upon which he has a mere lien cannot be seized (Legg V. Evans). But if goods are let to a defendant for a term his interest in them may be seized and sold [Legg v. Evans). In The Lancashire Waggon Co. v. Fitzhugh, the Court expressly refrained from deciding the question whether the interest of a bailee or lessee of chattels can be taken in execution, but there seems no doubt that goods held under a hire-purchase agreement cannot be seized under an executi on against the hirer {Dean v. Whittaker). So where the furniture of a house occupied by a defendant was seized under 3.fi-fa against him, and it appeared that both house and furniture had been let 44 THE HIRE-PURCHASE SYSTEM. to him as a tenant, but that afterwards the landlord agreed to sell the house and furniture to him for £goo, the purchase money to be paid on completion of a good title, and before a good title was made out, or the purchase money paid, the sheriff seized the furniture under ^fi-fa against the tenant, shortly after which the agreement for the sale was rescinded by both parties, the Court held that the contract for the sale of the house and furniture waS entire, and that the purchase of the former not being completed no property in the furniture passed to the tenant, and that the sheriff therefore had no right to seize it under t\\e.fi-fa {Lanyon v. Toogood). Where goods were bona fide sold to purchasers, upon terms that the original owners should be at liberty to repurchase them upon the hire-purchase system, the original transaction being a genuine sale, and the hire-purchase agreement not a device for securing money, it was held that there was no necessity for the registration of the hire-purchase agreement to make it valid as against execution creditors [North Central Waggon Co. v. Manchester, &c., Railway Co.). And where a tenant was indebted to his landlords, under a lease of a house, for rent, which he was unable to pay, and he agreed to sell his furniture to them and take a fresh lease at a reduced rent, the fresh lease being of the house and furniture and containing a proviso for repurchase of the furniture by the tenant at the price given for it by the landlords, but this fresh lease was not registered, it was held RIGHTS AND REMEDIES OF OWNERS. 45 that there was a bont fide sale of the furniture anterior to and independent of the lease, that the lease did not require to be registered, and that the landlords were entitled to the furniture as against execution creditors of the tenant ( Victoria Dairy Co. v. West). Where goods were seized under an execution against a defendant and were purchased, by a claimant, from the sheriff, who gave the purchaser a receipt for the purchase money, which also com- prised an inventory of the goods, and the purchaser on the same day, by an agreement in writing, let to the defendant on a quarterly tenancy the goods and also the house in which they were seized, and the defendant remained in possession, it was held that the inventory and receipt were not within the Bills of Sale Acts ( Woodgate v. Godfrey). In levying execution upon a pawnbroker, the sheriff is entitled to seize articles deposited in pledge with him in the course of his business, in respect of the pawnbroker's qualified property in them, whether the same are still redeemable or not, and to receive redemption moneys, and to sell when the period of redemption has expired {In Re Rollason ; Rollason v. Rollason). This case is of importance to owners letting out goods on the hire-purchase system, having regard to Lee v. Butler. If during the continuance of the hiring the goods are taken in execution for a debt due from the hirer, this puts an end to the hiring, and the owner might, under the old law, sue as for a conversion of the goods {Bryant v. Wardell ; Fenn v. Bittleston). 46 THE HIRE-PURCHASE SYSTEM. Whether the last paragraph is a correct statement of the present law depends upon whether a purchaser from the sheriff would be protected under section 9 of the Factors' Act, 1889, or section 25 of the Sale of Goods Act, 1893, cited in Chapter II. At present there seems to be no decision upon the point. It would appear that a purchaser could not be protected under such circumstances, as the goods would not be delivered or transferred to the purchaser by the hirer, but by the sheriff or bailiff, and neither of the latter could, it is submitted, possibly be considered " a mercantile agent " acting for the hirer, but upon this point see Strohmenger v. A ttenborough. The above remarks as to the position of a purchaser under an execution against goods held under a hire- purchase agreement apply only to a case where the agreement amounts to a contract to purchase, as in Lee V. Butler. Where the agreement does not amount to such a contract the old law will still apply. Where goods included in a hire-purchase agree- ment are seized under an execution against the hirer, the owner should give notice of his claim to the sheriff or high-bailiff, who, if the execution creditor does not admit the claim, will issue an Interpleader summons in the usual way. B. Distress. When a landlord is entitled to levy a distress for rent he may, as a rule, seize and sell all goods found upon the premises in respect of which the rent is due, even though they do not belong to the tenant but to RIGHTS AND REMEDIES OF OWNERS. 47 some other person, or are only let on hire to the tenant. Under these circumstances all goods in- cluded in a hire-purchase agreement are in general liable to be distrained upon for rent by the hirer's landlord. By common law, and under various statutes, how- ever, certain goods are privileged from distress, and as the question of privilege may frequently arise in connection with hire-purchase agreements, the cases in which it will probably most frequently do so are shortly referred to below. The summary is by no means exhaustive, and is only intended to call attention to the special cases of privilege. A work on Landlord and Tenant should be referred to for further details. A. Goods of ambassadors and other public ministers of any foreign state, and of their servants, are privileged under 7 Anne, c. 12, sec. 3. B. Frames, looms, or machines, &c., hired to be used in woollen, worsted, linen, cotton, flax, mohair, and silk manufactures, are privileged under 6 and 7 Vict, c. 40, sec. 18. C. Lodgers' goods are protected from distress, levied by the superior landlord, if the require- ments of the statute 34 and 35 Vict, c. yg, are complied with. D. Certain railway rolling stock, if let on hire to the tenant, and the owner's mark is placed upon it, is privileged under 35 and 36 Vict, c. 50. 48 THE HIRE-PURCHASE SYSTEM. E. Agricultural or other machinery which is the bond fide property of a person other than the tenant, and is on the premises of the tenant under a bontfide agreement with him, for the hire or use thereof in the conduct of his business, is privileged under the Agricultural Holdings Act, 1883 (46 and 47 Vict, c. 61, sec. 45). F. The wearing apparel and bedding of a tenant or his family and the tools and implements of his trade, to the value of £'^, are privileged from distress under the Law of Distress Amendment Act, 1888 (51 and 52 Vict, c. 21, sec. 4). It has been held that an article hired by a tenant for the support of himself and his , family is privileged under the above section {Churchward v. Johnson). G. Goods which could not be restored in the same condition as when seized are privileged by the common law. H. Goods in actual use are privileged {^Simpson v. Hartopp). I. In addition to their privilege under F and H above, tools and implements of trade are privileged when there is other sufficient dis- tress on the premises {Simpson v. Hartopp). If goods let out on hire are lawfully distrained for rent of premises tenanted by the hirer, and such goods are not privileged from distress (in which case the owner is entitled to replevy them — see infra), the RIGHTS AND REMEDIES OF OWNERS. 49 owner is entitled to redeem them and recover from the hirer the amount paid for such redemption {Groom v. Bluck). If the goods are sold under the distress, the owner may recover their value from the hirer {Exall Y. Partridge ; Edmunds v. Wallingford). It is frequently supposed by owners of goods let out on hire that when a distress is levied by the landlord of the hirer the owners are entitled, if the goods are privileged, to seize and take them away. If the owner adopts such a course he runs great risk of committing a breach of the peace, and also of being mulcted in damages for rescue or pound-breach. Although rescue — i.e., forcibly taking away the goods after they are distrained, but before they are im- pounded — may be justified if the goods are privileged from distress, it is very unwise to attempt to obtain possession of goods even in this case. The proper remedy, where goods are privileged, is to take pro- ceedings under the County Courts Act, 1888 (51 and 52 Vict, c. 43) to replevy them, if the landlord will not give them up voluntarily ; or where machinery, which is subject to section 45 of the Agricultural Holdings Act, 1883 (46 and 47 Vict, c. 61), has been distrained, an application may be made to the County Court or a Court of Summary Jurisdiction under section 46 of that Act C. Lien of Innkeepers, If a traveller comes to an inn bringing luggage with him, the innkeeper is bound to take him in with his D so THE HIRE-PURCHASE SYSTEM. luggage. If a man were to bring with him to an inn a wild animal such as a tiger, or a quantity of dynamite, the innkeeper would not be bound to receive either the man, or the tiger, or the dynamite. But, except in such cases as these, the custom of the realm is that the innkeeper must receive a traveller and his goods and is not bound to enquire whether or not the goods belong to his guest. But, supposing he does enquire and the guest says that the goods are not his but nevertheless insists that the innkeeper should receive them, there is no doubt that the latter would be bound to do so {Robins & Co. v. Gray). An innkeeper has a general lien upon all goods brought to the inn by a guest as his goods, or sent to the guest whilst staying at the inn and received by the innkeeper as the goods of the guest. And it makes no -difference whether the goods do or do not belong to the guest, or whether the innkeeper knew to whom they belonged. The law rests simply on the custom of the realm, and the question of the property in the goods is wholly immaterial. The innkeeper has also a general lien upon goods which he is not bound to receive, if he takes them in as the goods of the guest at the request of the latter (Robins & Co. v. Gray). If the guest leaves the inn without paying his bill, the innkeeper is entitled to detain! the goods and exercise his lien upon them. Where a person hired a piano for six months, or longer if he liked, at 15 s. per RIGHTS AND REMEDIES OF OWNERS. 51 month, and took it with other effects to an hotel, where it was placed and used in a room occupied by the hirer and his family, and the hirer left the hotel in debt to the hotel keeper, it was held that the latter, who had no knowledge that the piano did not belong to the guest, was entitled to detain it, and maintain his lien upon it, as against the person from whom it was hired ( Threlfall v. Borwick). But where a pianoforte was lent to a professional artist whilst staying as a guest at an inn, and the innkeeper knew to whom the pianoforte belonged, it was held that the innkeeper had no right to detain the pianoforte or exercise a lien upon it {Broadwood V. Granard). In this case the Judges pointed out that the piano was not sent in as the guest's luggage at all, but only to be used by him while he stayed at the inn. It was not offered to the innkeeper under the custom of the realm, and was not taken in by him in his character of innkeeper. The decision went upon the ground that the law relating to innkeepers did not apply. In Robins & Co. v. Gray a commercial traveller stayed at an inn, and incurred liability for board and lodging, which liability he did not discharge. Whilst he was at the inn his firm sent him several lots of sewing machines for sale. Before the liability was- incurred the firm gave express notice to the innkeeper that the machines belonged to them and not to the traveller. It was held, on these facts, that the inn- keeper had a lien upon the machines. 52 THE HIRE-PURCHASE SYSTEM. By the Innkeepers' Act, 1878 (41 & 42 Vict, c. 38), an innkeeper has, in addition to his hen, power to sell by public auction any goods left with him by a guest indebted to . him for board, lodging, &c., after the goods have been in his possession for six weeks without the debt having been paid ; but one month's notice of the sale must be given by advertisement, containing a description of the goods, and the name of the owner where known. D. Assignment for Benefit of Creditors. In a recent case, a person having in his possession a gas engine, under a hire-purchase agreement, in respect of which payments were in arrear, executed an assignment of his stock-in-trade, plant, machinery, goods, and all other his real and personal estate, to a trustee for the benefit of his creditors. The trustee took possession of the debtor's effects, including the gas engine ; but the owners, who had let the engine on hire, broke into the premises where it was and took it away. The trustee then brought an action against the owners to recover the gas engine and damages for the trespass. It was not proved that, at the time of the execution of the assignment, the trustee had notice that the engine was on hire. Judgment was given for the defendants ; Mr. Justice Vaughan Williams holding that the assignment did not cover the engine, as it did not belong to the debtor ; and that the trustee did not obtain a title under section 9 of the Factors' Act, 1889. The RIGHTS AND REMEDIES OF OWNERS. 53 Judge further stated that there was great doubt whether an assignment for the benefit of creditors could be within either section 2 or section 9 of the Act {Kitto V. Bilbie & Co.). E. Mortgage. A firm of contractors, at the request of a nursery- man who was mortgagor in possession of certain hothouses, fixed thereto a boiler and pipes under a hire-purchase agreement, which provided that until payment the apparatus should remain the property of the contractors, and should be removable by them on default being made of any instalment. Default having been made, the contractors removed the apparatus whilst the mortgagor was still in pos- session. Held, that the mortgagee must be taken to have given implied authority to the mortgagor to agree to the removal of the apparatus by the contractors, and could not maintain an action against the contractors for such removal {Gougk v. Wood). In Hull Ropes Co. v. Adams, the owner of a trawling smack mortgaged it under the Merchant Shipping Act, and, subsequently to such mortgage, obtained from a person named Adams a trawl warp, under a hire-purchase agreement which amounted to a contract for purchase according to the case of Lee v. Butler. The warp was put on board the smack. A few months afterwards the mortgagees, in exercise of their powers, took possession of the smack, in- cluding the warp. The instalments due under the S4 THE HIRE-PURCHASE SYSTEM. hire-purchase agreement being in arrear, Adams demanded the warp from the mortgagees, but such demand was refused. Adams then boarded the smack and took away the warp. In an action by the mortgagees against Adams for damages for trespass and removal of the warp : — Held, that the mortgagees were entitled to recover the warp or its value and also damages for the trespass. Held, also, that the addition of the warp to the mortgaged smack, by the owner of the smack, was a " transfer under a disposition" to the mortgagees within section 9 of the Factors' Act, 1889, or, at any rate, became so when the mortgagees took possession under the power in their mortgage. In Hobson v. Gorringe a gas engine was let by the plaintiff under a hire-purchase agreement by which no property passed to the hirer until the stipulated payments were made. The hirer erected the engine on his land in such a wgiy that, in the opinion of the Court of Appeal, it became part of the freehold, The hirer shortly afterwards mortgaged the freehold property to the defendant, who had no notice of the agreement, and the former in a short time became bankrupt. The hirer had not kept up the payments due under the hire-purchase agreement. After the hirer had become bankrupt, the defendant lawfully entered and took possession of the mortgaged premises, together with the gas engine which be found there. The plaintiff then brought an action against the defendant, to recover the engine, and it RIGHTS AND REMEDIES OF OWNERS. 55 was held by the Court of Appeal (affirming Kekewich, J.) that if there had been nothing but the visible degree of annexation of the engine to the freehold, and the known object for which such annexation had taken place, the authorities conclusively established that the engine had ceased to be a chattel, and had become part of the freehold ; that the true view of the hire-purchase agreement, coupled with the annexation of the engine to the soil, was that the engine became a fixture when it was annexed to the soil, subject, as between the plaintiff and the hirer, to the plaintiff's right to unfix it if the hirer failed to pay, which right, however, imposed no legal obligation on any grantee of the land from the hirer, nor could it be enforced in equity against any purchaser of the land without notice of the right (the defendant being such a purchaser) and, therefore, that the plaintiff's remedy for the price, or for damages for the loss of the engine, was by proof against the hirer's estate. The decision in Gough v. Wood, and the other authorities cited on behalf of the plaintiff, were distinguished. F. Bankruptcy of Hirer. Cases in which unregistered hire-purchase agree- ments have been held good, or invalid, as against trustees in bankruptcy, have been already cited in Chapter I., and the object of this portion of the present chapter is to show in what cases goods, which are in the possession of a bankrupt under a hire-purchase agreement, are deemed to be in his 56 THE HIRE-PURCHASE SYSTEM. possession, order, or disposition, within the meaning of section 44, sub-section 2, of the Bankruptcy Act, 1883 (46 & 47 Vict., c. 52), and consequently pass to the trustee, and also under what circumstances such goods do not so pass. By the section of the Bankruptcy Act above referred to, the property of a bankrupt, divisible amongst his creditors, shall comprise all goods being, at the commencement of the bankruptcy, in the possession, order, or disposition of the bankrupt, in his trade or business, by the consent and permission of the true owner, under such circumstances that the bankrupt is the reputed owner thereof; provided that things in action, other than debts due or growing due to the bankrupt in the course of his trade or business, shall not be deemed goods within the meaning of this section. By section 43 of the Act the bankruptcy shall be deemed to have relation back to, and to commence at, the time of the act of bank- ruptcy being committed on which a receiving order is made, or if the bankrupt is proved to have committed more acts of bankruptcy than one, to have relation back to, and to commence at, the time of the first of the acts of bankruptcy proved to have been committed by the bankrupt within three months next preceding the date of the presentation of the bankruptcy petition. It is to be observed that in order that goods in the hands of a bankrupt shall pass to the trustee in the bankruptcy they must be in his possession, order, or disposition, " in his trade or business^' and the Court RIGHTS AND REMEDIES OF OWNERS. 57 of Appeal has defined these words to mean " for the purposes of, or purposes connected with his trade or business ; not merely visibly employed in his trade or business, but acquired for the purposes of the business and used for these purposes '' {Colonial Bank v. Whinney). This case was reversed by the House of Lords, but the above interpretation was not affected. To bring the goods within the section they must be in the sole possession of the bankrupt, and not in the joint possession of the bankrupt and some other person. [Ex parte Dorman ; re Lake') (re Bainbridge ; ex parte Fletcher) ( Vicarino v. Hollingsworth) Further, the goods must be in the possession of the bankrupt, by the consent and permission of the true owner, under such circumstances that the bankrupt is the reputed owner thereof The section means that if goods are in a man's possession, order, or disposition, under such circum- stances as to enable him by means of them to obtain false credit, then the owner of the goods, who has permitted him to obtain that false credit, is to suffer the penalty of losing his goods for the benefit of those who have given the credit. (Ex parte Wingfield ; re Florence!) The doctrine of reputed ownership does not require any investigation into the actual state of knowledge or belief, either of all creditors, or of particular creditors ; and still less of the outside world, who are no creditors at all, as to the position of the particular goods. It is enough for the doctrine if those goods are in such a situation as to convey to the minds of S8 THE HIRE-PURCHASE SYSTEM. those who know their situation the reputation of ownership ; that reputation arising by the legitimate exercise of reason and judgment on the knowledge of those facts which are capable of being generally known to those who choose to make inquiry on the subject. It is not at all necessary to examine into the degree of actual knowledge which is possessed ; but the Court must judge from the situation of the goods what inference as to the ownership might be legitimately drawn by those who knew the facts — not the facts that are only known to the parties dealing with the goods, but such facts as are capable of being, and naturally would be, the subject of general knowledge to those who took any means to inform themselves on the subject. So, on the other hand, it is not at all necessary, in order to exclude the doctrine of reputed ownership, to show that every creditor, or any particular creditor, or the outside world who are not creditors, knew anything whatever about the particular goods one way or the other. It is quite enough if the situation of the goods is such as to exclude all legitimate ground from which those who know anything about the situation could infer the ownership to be in the person having actual possession. (Ex parte Watkins; re Cousion.) (See also Colonial Bank v. Whinney.) The person who is entitled to put an end to the apparent possession is the true owner within the meaning of the section. Thus, in the case of the bankruptcy of a hirer of goods, the true owner is the person by whom the goods were let to the hirer. RIGHTS AND REMEDIES OF OWNERS. 59 The question whether goods are in the possession, order, or disposition of the bankrupt, in his trade or business, by the consent and permission of the true owner, is one of fact to be determined by the particular circumstances of each case. (Loadv. Green) {Prisinall v. Lovegrove.) The onus of proving the consent of the true owner is on the trustee in the bankruptcy. {Ex parte Alexander ; re E slick.) If before the Act of Bankruptcy, or after it, but without notice of it, and before the making of the receiving order, the true owner does some act to determine his consent to the bankrupt's possession of the goods, as by seizing them, or bond fide demanding them, whether the demand be successful or not, or instructing an agent to take possession of the goods — this will prevent the goods passing to the trustee in the bankruptcy. (See ex parte Montagu ; Spackman V. Miller ; ex parte National Guardian Assurance Co., re Francis ; ex parte Ward, re Couston ; Smith V. Topping ; ex parte Cohen, re Sparke ; ex parte Alexander, re Eslick.) But where it can be shown, either by evidence or reported decisions, that a custom exists for persons in the bankrupt's position to have goods on the hire- purchase system, the presumption that such goods are in his possession, order, or disposition in his trade or business, by the consent and permission of the true owner, will be rebutted, and in such cases the goods will not pass to the trustee in bankruptcy. The custom of hiring has already been successfully 6o THE HIRE-PURCHASE SYSTEM. pleaded with reference to pianos, hotel furniture, residential hotel and boarding-house furniture, print- ing machinery, gas engines, iron safes, and general household furniture. In re Blanchard ; ex parte Hatter sky, the Court said there was overwhelming evidence of the existence of the custom of letting out pianos on the hire system. In Crawcour v. Salter it was held that the custom of hiring furniture for hotels was so well known that no person giving credit to an hotel-keeper is entitled to rely upon the hotel-keeper's apparent possession of the furniture, and therefore, upon the bankruptcy of an hotel-keeper, furniture held by him under a hire-purchase agreement was held not to be in the order and disposition of the bankrupt. See also ex parte Powell ; re Matthews. \x\. ex parte Turquand ; re Parker & Co., it was held that the existence of the general habit among hotel-keepers of hiring the hotel furniture excludes the idea of reputed ownership altogether in regard to such furniture, and not merely when the true owner is the lender of the furniture. The custom has been held to apply in the case of the keeper of a residential hotel and boarding-house. {In re Chapman ; ex parte Whiteley.) The custom for a printer to hire machinery was recognized in re Thackrah ; ex parte Hughes, hnt such custom does not extend to the hiring of type {ibid). A gas engine was in the possession of a manu- facturing cooper under a hire-purchase agreement, RIGHTS AND REMEDIES OF OWNERS. 6l which provided that until all instalments were paid the engine should remain the property of the owners, and that if, during the continuance of the agreement, the hirer should be adjudged a bankrupt, the full balance should be at once payable, but that instead of seeking to recover such balance the owners might seize and sell the engine, and out of the proceeds pay the balance of the instalments, costs, and expenses, and pay over any surplus to the hirer. The hirer was adjudicated a bankrupt, and several instalments due under the agreement were in arrear. The owners applied in the bankruptcy proceedings to have the engine delivered up ,to them, and expressed their willingness to waive any right of proof they might have for loss under the agreement. The Court was satisfied that, upon the evidence, there was a notorious custom of hiring such engines to persons in the trade of the bankrupt, and held, upon the construction of the agreement, that the property in the engine had not passed to the bankrupt. {In re Peel ; ex parte Cross lej/?) It was further held, in the last mentioned case, that, in construing hire-purchase agreements, and applying to them the notoriety of trade custom in excluding reputation of ownership, there is no distinction between agreements relating to articles of luxury and articles of commerce. The custom of dealers in iron safes letting out the same on hire was successfully set up in ex parte Poppleton ; re Lock. 62 THE HIRE-PURCHASE SYSTEM. An alleged custom for coachbuilders to supply cab-owners with cabs, on the system of their paying a rent for them with the option of purchasing, was held, in re Hill, not to be sufficiently proved. No custom has been proved of vans being let to grocers and provision merchants for use in their business (ex parte Callow ; in re Jensen). As regards the custom of letting household furni- ture on hire, the opinions of writers who have dealt with the subject appear to be somewhat hazy and, to a certain extent, erroneous. With a view to eluci- dating the matter, and pointing out the exact state of the law, an epitome of the chief cases bearing upon the subject is given below. In ex parte Emerson ; re Hawkins (1871), Hawkins (the bankrupt) was a builder who, in 1 869, took a house on a yearly tenancy, and, in order to furnish it, hired furniture under the usual hire-purchase agreement from a Mr. Isaac Barnett, who carried on business as a furniture dealer. In July, 1 87 1, Hawkins was made a bankrupt, and his trustee claimed the furniture as being in the order and disposition of the bankrupt under the Bankruptcy Act, 1869. Barnett, the true owner, having claimed the furniture as against the trustee in the hirer's bankruptcy, it was held, by Bacon, J., that the owner was entitled to the furniture as against the trustee. In the course of his judgment, the judge said that the effect of the order and disposition clauses was not to be strained ; that the question was one of fact only ; that in cases where the property in question had RIGHTS AND REMEDIES OF OWNERS. 63 once belonged to the bankrupt, and had been transferred to another person, but was allowed to remain in the ostensible ownership of the bankrupt, the statute applied, but there was another class of cases in which property in the apparent possession of the bankrupt was considered not to be in his order and disposition, and this was the law where there was a custom of trade under which the goods of one man were notoriously allowed to continue in the possession of another. The custom of letting and hiring furniture was a custom of this kind. The Court must take notice of a custom which was so prevalent as that of hiring furniture. In ex parte Lovering ; re Jones (1874), the bankrupt Jones was a draper, and on the 30th July, 1869, entered into an agreement with G. J. Rook, a house agent, by which Jones agreed to sell and Rook agreed to purchase all the house- hold furniture on Jones' premises, and also some furniture of the shop for £\g2. 12s. 6d., and it was further agreed that Rook was to allow Jones to hold possession of the furniture, and for keeping possession of the same Jones agreed to allow Rook the sum of 12s. 6d. per week, to be paid every four weeks, commencing from the date of the agreement. And in default of any one payment Jones authorized Rook to remove the furniture without any notice. Jones agreed not to part with any portion of the furniture without the consent of Rook. The purchase money was paid by Rook and the furniture remained in the possession of Jones 64 THE HIRE-PURCHASE SYSTEM. under the agreement, and on the 27th November, ^^73> Jones filed a liquidation, petition under the Bankruptcy Act, 1869. The trustee claimed the furniture as being in the order or disposition of the debtor, as reputed owner, with the consent of the true owner. It was held by Lord Justice James that the debtor was the reputed owner of the furniture, and that, under the circumstances, it belonged to the trustee under the liquidation ; inasmuch as it was not shown, and probably could not be shown, that there was a practice i'n London or anywhere else that drapers or other persons, w/io where the owners of furniture in the rooms of the house in which they lived, should sell their furniture to a dealer, and then take it back again upon the terms of paying a weekly rent for the use of it. In ex parte Brooks ; re Fowler (January 15, 1883), the bankrupt, William Fowler, was an engineer and boiler maker. Execution having been levied by certain creditors upon the household furniture at Fowler's residence, Robert Lawrence Brooks, who carried on the business of a hosier, and was a friend of the bankrupt, purchased the furniture from the sheriff on the 12th April, 1877, and agreed to allow Fowler to remain in possession of it, and gave him an option to re-purchase it for the same sum that Brooks paid to the sheriff, and in the meantime Fowler agreed to pay interest upon that sum at the rate of £s per cent. On the iSth April, 1879, Fowler filed a petition for liquidation under the Bankruptcy Act, 1 869. The trustee in the bankruptcy RIGHTS AND REMEDIES OF OWNERS. 65 having claimed the furniture, it was held that he was entitled to it as being in the order and disposition of the bankrupt as the reputed owner. The judgment of the Chief Judge in Bankruptcy in this case, as reported in 48, L.T.R., page 33, is instructive, as clearly showing the grounds of the decision : — " The question is whether the goods, which are the subject in dispute in this case, were in the order or disposition of the bankrupt by the consent or permission of the true owner. Not only ex parte Levering ; re Jones but other cases also have established that, if a debtor is allowed to remain in possession of goods as the ostensible owner of them, in the event of his bankruptcy they pass to the trustee, and there is no case at variance with those decisions. What has been argued before me is, that some change has come over the law in recent times. Assuming that there has been a change, the change is this : that there are a certain class of brokers who get' their living by letting or hiring out furniture to other persons, and that in such cases the persons who hire the furniture are not to be deemed to be the real owners of it. That is well established. Nobody can doubt that when that particular custom is established in a case and is clearly proved, then the order and disposition clause of the Bankruptcy Act does not apply. But that is not in the least like the present case .... The debtor, who had been the absolute owner of the furniture before the sale, continued to retain the posses- sion as ostensible owner afterwards, with the consent of the purchaser as the true owner. Therefore, when the E 66 THE HIRE-PURCHASE SYSTEM. debtor became bankrupt, these goods, whatever they were at the time, belonged to the trustee in bankruptcy, and they belong to him now." The case of ex parte Brooks has been referred to by eminent writers as deciding that there is no general custom of letting furniture on hire which will exclude the doctrine of reputed ownership. It is submitted, however, that the decision in question emphatically recognizes such a custom, where furniture dealers let on hire their own furniture, which they have not purchased previously from the hirer, and that it simply decides that there is no custom for the owner of furniture to sell it and then hire it back again from the purchaser. It is important to observe that the cases above- mentioned as to the general custom of letting on hire of household furniture were all decided upon section 15, sub-section 5, of the Bankruptcy Act, 1869 (32 and 33 Vict. c. 71), which differs materially from the corresponding section 44 (2), iii., of the Bankruptcy Act, 1883 (46 & 47 Vict, c. 52). Under section 15, sub-section 5, of the Act of 1869, the property divisible amongst a bankrupt's creditors included all goods and chattels being, at the commencement of the bankruptcy, in the possession, order, or disposition of the bankrupt, being a trader, by the consent and permis- sion of the true owner, of which goods and chattels the bankrupt was the reputed owner. But under the corresponding order and disposition clause of the Act of 1883, the goods must be in the posses.sion, order, or disposition of the bankrupt (who need not RIGHTS AND REMEDIES OF OWNERS. 67 necessarily be a trader) , in his trade or business. The distinction is important, inasmuch as no hired goods or household furniture can pass to the trustee in bankruptcy under the order and disposition clause of the Act of 1883, if the bankrupt does not carry on a trade or business ; nor where he does so, unless they are in his possession, order, or disposition, for the purpose of, or in connection with, his trade or business. (Ex parte Nottingham Bank ; re Jenkinson.) The question as to what is a trade or business seems to depend upon the circumstances of each particular case. {Rolls v. Miller) [Ex parte Sully ; re Wallis) The result of the above decisions, as to the effect of the order and disposition clause of the Bankruptcy Act, 1883, upon the rights of owners of household furniture, let out on the hire-purchase system, appears to be correctly summarised as follows : — A. If the furniture originally belonged to a furniture dealer, and was let on hire by him to the person who becomes bankrupt, it does not pass to the trustee in bankruptcy. {Ex parte Emerson.) {Ex parte Brooks^ B. If the furniture originally belonged to the person who becomes bankrupt, and was sold by him to a purchaser who relet it to the bankrupt, then, unless section D infra applies, the furniture passes to the trustee in bankruptcy, whether the purchaser from the person becoming bankrupt was a furniture dealer or not. {Ex parte Levering) {Ex parte Brooks) 68 THE HIRE-PURCHASE SYSTEM. C. If the furniture originally belonged to the person who becomes bankrupt, and was sold under an execution against him, to a purchaser who relets it to the bankrupt, the result is the same as in case B supra. {Ex parte Brooks^ D. If the furniture was let on hire to a person who did not carry on a trade or business ; or if, though such person did carry on a trade or business, the furniture is not at the commence- ment of the bankruptcy in his possession, order, or disposition, for the purposes of, or in connection with, his trade or business, the furniture does not pass to the trustee in Bankruptcy. [Ex parte Nottingham Bank ; R,e Jenkinson.) The mere fact that the names or initials of the bankrupt, or the true owner, are placed on the goods is not conclusive evidence that the goods are, or are not, within the operation of the order and disposition clause. {Lingard v. Messiter) ( Watson v. Peache.) CRIMINAL PROCEEDINGS. 69 CHAPTER V. Criminal Proceedings against Hirer and Third Parties, and Orders of Restitution. If the hirer sells, or pawns, the chattels comprised in a hiring agreement before he has completed all the payments stipulated for by the agreement, he is guilty of larceny as a bailee under section 3 of the Larceny Act, 1861 (24 and 25 Vict., c. 96), which provides as follows : — " Whosoever, being a bailee of any chattel, money, or " valuable security, shall fraudulently take or convert the " same to his own use, or the use of any person other than the " owner thereof, although he shall not break bulk or otherwise " determine the bailment, shall be guilty of larceny, and may " be convicted thereof upon an indictment for larceny ; but " this section shall not extend to any offence punishable on " summary conviction.'' It was held that an infant was properly convicted of larceny under this section for having fraudulently converted to his own use goods which had been delivered to him by the owner, under an agreement for their hire {Regina v. McDonald). In order to convict a bailee under the section, he must have converted the goods with the intention of depriving the owner permanently of them. If he wrongfully pledges the goods, but intends to redeem them and restore them to the owner, he cannot be convicted under the section {Regina v. Wynn). JO THE HIRE-PURCHASE SYSTEM. By section 91 of the Larceny Act, 1861, it is enacted : — " Whosoever shall receive any chattel, money, valuable " security, or other property whatsoever, the steahng, taking, "extorting, obtaining, embezzling, or otherwise disposing " whereof shall amount to a felony, either at common law or . "by virtue of this Act, knowing the same to have been "feloniously stolen, taken, extorted, obtained, embezzled, or " disposed of, shall be guilty of felony, and may be indicted " and convicted, either as an accessory after the fact or for a " substantive felony, and, in the latter case, whether the "principal felon shall or shall not have been previously " convicted, or shall or shall not be amenable to justice. . . " Under the last-mentioned section a person who takes from a hirer goods included in a hire-purchase agreement which have not been paid for, if he is aware of the circumstances, may be convicted as a receiver of stolen goods. By section 100 of the Larceny Act, 1861, it is provided : — " If any person guilty of stealing, taking, converting, or "disposing of any chattel, or other property whatsoever, " shall be indicted by the owner of the property and con- " victed thereof, the property shall be restored to the owner, " and the Court shall have power to award writs of restitution "for the said property, or order restitution thereof in a " summary manner." Section 9 of 30 and 31 Vict., c. 35, provides : — " Where any prisoner shall be convicted, either summarily " or otherwise, of larceny or other offence, which includes the " stealing of any property, and it shall appear to the Court by " the evidence that the prisoner has sold the stolen property " to any person, and that such person has had no knowledge " that the same was stolen, and that any moneys have been CRIMINAL PROCEEDINGS. 7 1 "taken from the prisoner on his apprehension, it shall be " lawful for the Court, on the application of such purchaser, " and on the restitution of the stolen property to the " prosecutor, to order that out of such moneys a sum not " exceeding the amount of the proceeds of the said sale be " delivered to the said purchaser." Section 30, sub-section 2, of 35 and 36 Vict, c. 93, enacts : — " If any person is convicted in any Court of feloniously " taking, or fraudulently obtaining any goods and chattels, and " it appears to the Court that the same have been pawned " with a pawnbroker, the Court, on proof of the ownership of " the goods and chattels, may, if it thinks fit, order the delivery " thereof to the owner, either on payment to the pawnbroker " of the amount of the loan, or of any part thereof, or without "payment thereof or any part thereof, as to the Court, " according to the conduct of the owner and the other " circumstances of the case, seems just and fitting.'' It was held in Moyce v. Newington that section 100 of the Larceny Act, 1861, appHed only to cases in which possession of goods had been obtained from the original owner without the property therein passing. Consequently the section would apply to a case where goods included in a hire-purchase agreement were feloniously sold by the hirer, as the property in such goods does riot pass to the hirer until all the payments, stipulated for by the agreement, have been made. In Bentley v. Vilmont, however, it was held that the section applied to all cases mentioned in the Larceny Act, and therefore included the case of obtaining goods by false pretences, where both the possession and the property pass. This was the state of the law until the passing of the Sale of Goods Act, 72 THE HIKE-PURCHASE SYSTEM. 1893, which, by section 24, modifies, but does not repeal, section 100 of the Larceny Act, 1861. Section 24 of the Sale of Goods Act, 1893, is as follows : — "(i) Where goods have been stolen and the offender is " prosecuted to conviction, the property in the goods so stolen " revests in the person who was the owner of the goods, or " his personal representative, notwithstanding any intermediate " dealing with them, whether by sale in market overt, or " otherwise. (2) Notwithstanding any enactment to the " contrary, where goods have been obtained by fraud or other " wrongful means not amounting to larceny, the property in " such goods shall not revest in the person who was the owner " of the goods, or his personal representative, by reason only " of the conviction of the offender." Judge Chalmers (the draftsman of the Sale of Goods Act, 1893), in his excellent book upon the Act, states that the object and effect of the last-mentioned section was to restore the law as laid down in Moyce v. Newington, and consequently it would seem that upon the conviction of a hirer for larceny as a bailee, whatever the form of the agreement might be, the property in the goods would revest in the original owner, who would be entitled to claim them from any person in whose possession they might be, even though such person purchased them innocently. But it was held by a Divisional Court in Payne v. Wilson that inasmuch as, according to Lee v. Butler and the decision of the Court of Appeal in Helby v. Matthews, a person who, under any sale, pledge, or other disposition, in good faith, and without notice of any lien or other right of the original owner, obtains CRIMINAL PROCEEDINGS. 73 chattels from a hirer, gets a good title under section 9 of the Factors' Act, 1889, the original owner cannot sue such person to recover the chattels, therefore neither section 100 of the Larceny Act, 1861, nor section 24 of the Sale of Goods Act, 1893, applies, even though the hirer is convicted of larceny as a bailee. After the decision of the House of Lords in Helbyy. Matthews, the case of Payne v. Wilson came before the Court of Appeal. It was admitted that the form of the agreement in both cases was identical, and, therefore, on the decision of the Divisional Court in Payne v. Wilson coming before the Court of Appeal, Counsel for the respondent (the defendant) intimated that, in consequence of the ruling of the House of Lords in Helby v. Matthews, he could not dispute the right of the appellant (the plaintiff) to succeed, and the appeal was consequently allowed. The law, therefore, appears to be now settled that, when the agreement does not amount to a contract to purchase, the conviction of a hirer for larceny as a bailee, revests the property in the goods in the original owner, notwithstanding the fact that the purchaser obtained them bond fide and without notice. The contrary is, however, the law if the agreement does amount to a contract to purchase, so long as the decision of the Divisional Court in Payne v. Wilson on this point stands. It is submitted, however, that, even if the agreement does amount to a contract to purchase, this decision is wrong, and that the word " stolen," in section 24 of the Sale of 74 THE HIRE-PURCHASE SYSTEM. Goods Act, clearly includes thie crime of larceny by a bailee ; and that the words " by fraud or other wrongful means not amounting to larceny," used in sub-section 2 of section 24, simply refer to a case where goods have been obtained by fraud or other wrongful means, under a de facto contract, that is to say, a contract which has purported to pass the property in the goods from the original owner to the person so obtaining them by fraud, as in the case of obtaining goods by false pretences. By section 22 of the Sale of Goods Act, 1893, where goods are sold in market overt, according to the usage of the market, the buyer acquires a good title to the goods, provided he buys them in good faith, and without notice of any defect or want of title on the part of the seller. The effect of this section is that if goods are let on hire under an agreement, which does or does not amount to a contract to purchase, yet if they are sold in market overt, the property in the. goods passes to the buyer. But, as a general rule, although goods may have been sold in market overt, the conviction of the thief under section 100 of the Larceny Act, revests the property in the original owner, and section 24 of the Sale of Goods Act, 1893, does not seem to have altered the law on this point. Payne v. Wilson has, however, decided the con- trary, when the hire agreement amounts to a contract to purchase, and, if this decision is good law, an CRIMINAL PROCEEDINGS. 75 owner of goods, let on hire under such an agreement, and which goods have been sold in market overt, will not be able to recover them, even if the hirer is convicted, as such conviction does not revest the property in the goods in the original owner. In cases to which section lOO of the Larceny Act applies, the owner may, upon conviction of the thief, maintain an action of trover without waiting for any writ of restitution [Scattergood v. Sylvester) {Regina V. London). As to the persons against whom an order of restitution may be made under section lOO of the Larceny Act, see the following cases : — Moyce v. Newington ; Norwood v. Smith; Scattergood v. Sylvester ; White v. Spettigue ; and Walker v. Matthews. The power to award restitution of the property, under section lOO of the Larceny Act, extends to the proceeds of the property as well as the property itself (Regina v. Justices of Central Criminal Court). GUIDE to the LAW of DISTRESS for RENT. A Handbook for Landlords, Land Agents, Certified Bailiffs and others. By R. T. Hunter, Chief Clerk, County Court, Stockton-on-Tees. Seventh Edition. In Cloth 3s. 6d. net. INDEX. AGREEMENT Giving right in law to goods ... ... ... ... ... 37 Giving right in equity to goods ... ... 35 Hirer liable for loss under special ... ... 13 Hire-purchase agreement, not a Bill of Sale ... ... 15 Suggested form of ... ... ... . ... ... 40 ASSIGNMENT FOR BENEFIT OF CREDITORS Hired goods cannot be transferred by hirer under ... 52 AUCTIONEER Protected by Factors' Act in certain cases ... ... ... 25. BAILEE Hirer guilty of larceny as ... ... ... 69 Infant may be guilty of larceny as ... 69. BANKRUPT See Order and disposition of Bankrupt. BANKRUPTCY Commencement of ;.. ... ... ... ... ... 56- Hire-purchase agreement, if a security, is void against trustee in ... ... ... ... ... .• •.■ 16 Property divisible amongst creditors 56 BILL OF SALE Absolute, followed by hire-purchase agreement 18 .5oK(2 /fflfe hire-purchase agreement is not 15 Definition of ■ IS Hire-purchase agreement given as a security is i6- COMMENCEMENT Of Bankruptcy , S^ 78 INDEX. CONVERSION Owner may recover damages against hirer for ... ... 28 Owner may recover damages against third person not protected by Factors' Act ... 22,28 CRIMINAL OFFENCE Owner should prosecute guilty party before suing him ... 28 CUSTOM See Order and disposition. DAMAGES Owner may recover against wrong-doer ... ... ... 14 DEFAULT Waiver 6f 21 DISTRESS Goods privileged from ... ... ... ... ... ... 47 Goods subject to ... ... ... ... ... ... 47 Owner may recover value from hirer, if goods sold ... ... 49 Owner may redeem goods and recover from hirer amount paid 49 Owner should not attempt to take forcible possession ... 49 EXECUTION Furniture let with house cannot be seized 44 Goods held under hire-purchase agreement cannot be seized 43 Goods let to debtor for a term may be seized 43 Goods on which debtor has mere lien cannot be seized ... 43 Owner should give notice to sheriff or high-bailiff if goods seized ... ... ... ... ... ... 46 Pawnbroker's interest in goods pledged may be seized ... 45 Sale with right of re-purchase valid against execution creditors... 44 Seizure of goods hired determines hiring ... ... ... 45 Stranger's goods cannot be seized ... ... 43 FIRE Hirer not liable for accidental ... ... ... 13 FIXTURE Owner's right against mortgagee ... ... ... ... 53 FORCIBLE SEIZURE Agreement giving power of, void 38 Owner liable for, by servant ... ... ... 38 INDEX. 79 PAGE FORM Of hire-purchase agreements in Lee v Butler and Helby V. Matthews ... ... ... ... ... 29 Suggested form of agreement ... ... ... ... 40 FRAUD Hirer liable for loss in case of ... ... 13 GUARANTEE Owner guarantees goods suitable for purpose hired ... 14 HIGH-BAILIFF Notice should be given to, by owner if goods seized 46 HIRER Agreement if a security is void against ... ... ... 16 Bound to take ordinary care of goods ... .. ... ... 13 Can give good title to purchaser or pledgee if agreement contract for purchase ... 22,73 Cannot recover instalments paid if owner seize ... ... 21 Larceny by, as bailee .. ... ... 69 Liable for loss under special agreement ... ... ... 13 Liable in case of fraud 13 May recover damages against owner if goods unsuitable... 14 Must use goods for purpose hired ... ... ... ... 14 Not liable for accidental fire ... ... 13 Nor in case of impossibility to return goods ... 13 Nor in case of robbery ... ... .. 13 HIRE-PURCHASE AGREEMENT Assignment by owner of rights under, not a Bill of Sale ... 19 Cannot be registered as a security .. 16 Charge on goods comprised in, invalid unless registered ... 20 Construction of word " month" in... 40 Court will enquire into facts to ascertain if i5(i»(Syfrf« 17 Determined by hirer selling or parting with goods ... 22 Distinguished from hiring agreement 15 Does not require registration 15 Form of agreement in Zee v. Butler and Helby v. Matthews and remarks thereon 29 If a security is a Bill of Sale 16 If following, but distinct transaction from bona fide sale valid 18 Instances of fictitious 17 Mortgage of owner's rights under, valid 19 Not a Bill of Sale 15 Of fixtures on mortgaged premises S3 Old form is a contract for sale and purchase 29, 73 Option of purchase under ... .., ...•• 35 8o INDEX. HIRE-PURCHASE AGREEMENT— {continued) Passes no property to hirer 15 Pledge by hirer of goods included in ... ... ... 22,25 Sale by hirer of goods included in ... ... ... 22,24 Should give power to sue for arrears after seizure ... 34 Suggested form of ... ... ... ... ... ... 40 True nature of transaction enquired into ... ... ... 17 When aot dondjide ... ... ... ... ... ... 16 HIRING AGREEMENT Distinguished from hire-purchase agreement ... ... 15 INDEPENDENT TITLE Apart from hire-purchase agreement ... ... ... ... 18 INFANT May be guilty of larceny as a bailee ... ... ... 69 INNKEEPER Has general lien upon goods brought to inn ... 50 May sell goods after advertisement . . ... ... ... 52 May sell goods hired by guest ... ... ... ... ... 50 Otherwise if the law of innkeepers does not apply ... 51 INSTALMENTS Agreement should give power to sue for after seizure ... 34 Cannot be recovered by hirer if owner seize 21 LANDLORD Goods privileged from distress ... ... ... ... ... 47 Goods subject to distress ... ... ... ... ... aj May distrain on goods comprised in hire-purchase agreement 47 LARCENY Hirer guilty of, as bailee .. ... ... fig Hirer must intend to deprive owner permanently ... 69 Infant may be guilty of, as bailee -. 69 MACHINERY Owner may apply to Court in respect of Agricultural Machinery distrained upon 40 MARKET OVERT E Fleet of sale of hired goods in 22,23,26,74 MERCANTILE AGENT Definition of 27, 46, 52 INDEX. 8 1 _ PAGE MISCONDUCT Owner may maintain action against third party for ... 14 . MONTH Means " lunar month " in hire-purchase agreement 40 MORTGAGE Of owner's rights under hire-purchase agreement valid 19 MORTGAGEE Owner's rights as against mortgagee of premises 53 NEGLIGENCE Owner may sue third party for ... ... ... 14 OPTION OF PURCHASE Does not create right in equity ... ... .. ... 36 Does not make agreement a Bill of Sale ... ... ... 35 Does not make hirer a person who has agreed to buy ... 34 ORDER AND DISPOSITION OF BANKRUPT Consent of true owner ... ... ... ... ... ... 56 Construction of clause ... ... ... ... ... 57 Custom excludes... ... ... ... ... ... ... 59 Definition of " trade or business " ... ... 57 Definition of " true owner " ... ... 58 Determination of consent ... . . ... ... ... 59 Goods must be in sole possession of bankrupt ... ... 57 Goods subject to clause ... 56 Household furniture, cases and rules as to ... . ... 62 Names on goods not conclusive evidence ... 68 Object of clause .. ... ... ... .-- ... ... 57 Onus of proving consent is on trustee in bankruptcy ... 59 Presumption may be rebutted 59 Presumption rebutted as to gas engines 60 „ ,, ,, hotel furniture ... 60 „ ,, ,, iron safes ... ... ... 61 ,, „ ,, pianos ... .. ... ... 60 ,j „ ,, printer's machinery but not as to type ... ... ... 60 j^ ,, ,, residential hotel and boarding house furniture ... ... 60 Presumption not rebutted as to cabs, or grocers' vans ... 62 Question is one of fact 59 What is determination of consent 59 ORDINARY CARE Definition of ... ... ■•• •■• ••• 13 82" INDEX. -* , PAGE •*.-, OWNER f* Cannot recover goods &om person protected by Factors Act 22, 29, 73 Entitled to retain instalments received if goods seized for default •.-. 21 ' Guarantees goods suitable for purposes hired .. . 14 May recover damages against hirer for conversion ... 28 May recover goods and damages against person not protected by Factors' Act ... ... 28,73 May sue hirer after conversion for arrears... ... ... 28 Should prosecute person guilty of criminal offence before suing him ... ... ... ... ... ... ... 28 Waives right to seize by accepting payment of arrears ... 21 PAWNBROKER His interest in goods pledged may be taken in execution ... 45 Right of owner to recover goods from ... ... ... 22,28 PLEDGEE Can obtain good title from hirer under old form of agreement ... . 22, 25, 73 Not protected if agreement in suggested form ... 22, 25, 73 POSSESSION Hirer's right under option of purchase depends upon ... 37 PRIVILEGE FROM DISTRESS List of goods ... ... ... ... ... ... .. 47 PURCHASER Can obtain good title from hirer under old form of agreement 22, 23 Otherwise under suggested form ,. 22,23 RECEIVER OF STOLEN GOODS Conviction of transferee of hirer as ... ... 70 REGISTRATION Hire-purchase agreement does not require 15 REPLEVIN Owner may replevy privileged goods 49 RE-PURCHASE Agreement with right of ... ... .. ... .. 44 REPUTED OWNERSHIP See Order and disposition. TS'? INDEX. 1937 RESTITUTION OF GOODS Effect of the Sale of Goods' Act upon the Larceny Act' Innocent purchaser may obtain order for payment of money found on prisoner Order for against holder of goods Pawnbroker may be ordered to deliver up goods on conviction ofpawner Persons against whom order may be made ROBBERY Hirer not liable for loss by ... SALE Hire-purchase agreement following Title of purchaser from hirer With right of re-purchase valid... SECURITY Hire-purchase agreement given as, is a Bill of Sale SHERIFF Hire-purchase agreement following sale by ... Notice of claim should be given to, by owner TIME Meaning of " month " in hire-purchase agreement 70 70 71 75 13 22, 72 .. 44 .. 16 45 46 40 TRADE MACHINERY Hire of, under Agricultural Holdings Act 48, 49 TROVER Owner may maintain action for, without waiting for writ of restitution ... ... ... 75 TRUE OWNER Definition of 5^ WAIVER Of right to seize 21 EIGHTH EDITION, GREATLY ENLARGED. 240 pages, Crown 8vo., in Cloth, 3s. 6d. net. A GUIDE TO THE LAW OF DISTRESS FOR RENT, INCLUDING THE STATUTES THEREON, FROM 1266 TO 1888. WITH NOTES AND REFERENCES, AND THE RULES, TABLE OF FEES AND FORMS UNDER THE NEW ACT, TABLES OF STEPS IN A DISTRESS, ALSO REPLEVIN, RECOVERY OF POSSESSION OF TENEMENTS, THE APPRAISERS & AUCTIONEERS' ACTS, &C. AND A TABLE OF FEES UNDER THE SHERIFFS' ACT, 1887. BY R. T. HUNTER. Chief Clerk, County Court, Stockton-on-Tees. WATERLOW & SONS LIMITED, LONDON WALL, E.G.