Newtons of Wembley v Williams [1965] 1 QB 560

Facts: P sold a car to X for a cheque that later turned out to be dishonoured. As soon as P found out that the cheque was worthless, he took all available steps to disaffirm the contract but could not find X to communicate this to him. Later, X sold the car to D for cash. P found out that D had the car and sued to recover the possession.

Held: Action failed. Although, at common law, the car had vested in P on disaffirming the contract, X was within the section 9 of the Factors Act defence and was to be treated as a mercantile agent within s. 2(1). Under s.2(2), P’s consent to him to remain the possession must be continued. Accordingly, as defendant was a bona fide purchaser and X was a mercantile agent, he had a good statutory right to the car.

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