Staffordshire Motor Guarantee v British Wagon [1934] 2 KB 305

Facts: A dealer sold a lorry to a finance company who hired the lorry back to him under hire purchase agreement. The dealer then, in breach of the hire purchase agreement, sold the lorry to another buyer.

 

Held: The rights of the first buyer (the finance company) prevailed over those of the second buyer on the basis that for s.24 to apply, the seller must continue in possession ‘as a seller’. However, this view was later rejected by the Privy Council on appeal from Australia in Pacific Motor Auctions v Motor Credits and by CoA in Worcester Works Finance v Cooden Engineering. In these cases, it was said that the crucial question was whether the seller’s possession was physically continuous.

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