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BARTHOLOMIEW & CO. LTD. v. ADU-GYAMFI


  • appeal
  • 1962-07-20
  • SUPREME COURT
  • 2 GLR 62-67
  • Print

KORSAH, C.J., SARKODEE-ADOO AND ADUMUA-BOSSMAN, JJ.S.C.


Summary

Contract?-Hire-purchase?-Misrepresentation?-Rescission of hire-purchase agreement on ground of misrepresentation by plaintiff's manager?-Unsuitability of goods for the purpose for which they were accepted by the defendant?-Exempting clauses.

Headnotes

Mr. Clover, the plaintiff-company's manager in Tamale, showed to the defendant a brochure issued by the Ford Motor Company of England which contained full information about a new type of lorry called the Ford Thames Trader. The defendant entered into a hire-purchase agreement with the plaintiff-company for one of these lorries in August 1957, i.e. the date of their first arrival in Tamale. Subsequently, in November and December 1957, he entered into two more hire-purchase agreements for another two of the said lorries.In September 1958, by which time the lorries had run a total mileage of 87,000 miles, the defendant returned them to the plaintiff-company. The plaintiff-company thereupon concluded that the agreement had been terminated by the defendant and sued him in the High Court to recover moneys to which they alleged they were entitled under clause 9 of the said agreement, i.e. arrears of instalments, and the cost of repairs, etc.The defendant claimed he was entitled to rescind the contract ab initio on the grounds of alleged misrepresentation by Mr. Clover, and alleged unsuitability of the vehicles for the purpose for which they were accepted by him. He also counterclaimed for recovery of all rents paid and damages for loss of profits. Judgment was given for the plaintiff-company and the defendant appealed.

Judgement

APPEAL from a judgment of Simpson, J., in the High Court, Tamale wherein he upheld the claim of the plaintiff-company for arrears of instalments due under three hire-purchase agreements, and for the cost of work and labour done, materials and fuel supplied to the defendant. [p.63]

The defendant had sought to rescind the agreements ab initio on the grounds of misrepresentation. The facts are sufficiently set out in the judgment of Korsah, C.J.

JUDGMENT OF KORSAH C.J.

This is an appeal from the judgment of Simpson, J. in two consolidated actions instituted by the plaintiffs against the defendant for the total sum of G1,710 12s. 8d. of which G784 is for arrears of instalments due under and by virtue of three hire-purchase agreements with respect to three Thames Trade tipper lorries supplied by the plaintiffs to the defendant, and G926 12s. 8d. is for cost of work and labour done, and materials and fuel supplied to the defendant at his request.

The defendant denied liability to pay the sum claimed or any part thereof, and contended that he was induced by a misrepresentation made by the plaintiffs' agent to enter into the said hire-purchase agreement; that the said repairs for which the sum of G926 12s. 8d. is claimed, became necessary by reason of structural defects in the mechanism of the said lorries; that despite repeated repairs, the plaintiffs could neither correct nor remove the defects; that he, the defendant, therefore returned the said lorries, "and made it clear that he was avoiding the contract ab initio for misrepresentation and total failure of consideration." The defendant further counterclaimed G6,832 7s. 2d. whereof G4,084 17s. is the total rents paid, G277 10s. 2d. money paid by the defendant to the plaintiffs for repairs, and G2,470 represents loss of profits which the defendant alleges he would have made had the lorries been suitable for the purpose for which he had agreed to accept them.

The two main grounds on which the defendant relies to rescind the contracts of hire-purchase ab initio, and to support the counter-claim for the return of all rents paid under the hire-purchase agreement, as well as damages for loss of profits are, (1) alleged misrepresentation by the plaintiffs' manager, Mr. Clover, and (2) alleged unsuitability of the vehicles for the purpose for which they were accepted by the defendant. On both questions the learned trial judge has made definite findings of law and of fact which I now quote for easy reference:

"Much as one may be inclined to sympathise with the defendant, it cannot be said on these facts that he was induced to enter into any of these contracts by misrepresentation by the plaintiffs. Even if he had been so induced, the vehicles having covered at least 87,000 miles, could not be said to be unfit for the purpose for which they were intended. He was not therefore entitled to rescind the contracts and must be taken to have terminated them under clause 9 of the hire-purchase agreements."

Clause 9 reads:

"The hirer shall be at liberty at any time during the continuance of this agreement to return the said motor vehicle to the owners. Upon the same being duly received by the owners the hiring shall be deemed to be terminated and the owners shall be entitled to recover from the hirer (1) any and all arrears of rent and of monthly payments then accrued due (2) any and all sums then accrued due to the owners hereunder and in respect of the said motor vehicle for cost of repairs and/or accessories and/or parts, etc. and (3) the cost of putting the said motor vehicle in good repair and condition."

[p.64]

The learned judge further held that the defendant, not having alleged or proved fraudulent misrepresentation, was not entitled to rescind the contracts and/or claim damages unless he could show that any innocent misrepresentation made, if any, amounted to a breach of warranty. He found as a fact that there is no evidence of any such misrepresentation, but if there had been, the plaintiffs would have been protected by clause 3 of the hire-purchase agreement which reads:

"The hirer before signing hereof shall satisfy himself as to the description conditions and running of the motor vehicle (and the signing hereof shall be sufficient proof thereof) and agree that there is no warranty representation or condition implied or otherwise on the part of the owners as to the description, state, quality, fitness, road-worthiness or otherwise of the said motor vehicle and that any and every kind of warranty representation or condition with regard to the hire and/or purchase of the said motor vehicle hereunder is expressly excluded."

He also found that the plaintiffs were not liable under the printed warranty issued by Ford Motor Company as a cover for all Ford vehicles sold by Ford agents; that there is no evidence that the plaintiffs are such agents as they had not sued as such agents.

The facts have been fully discussed in the judgment from which this appeal has been lodged; there is therefore no need for me to do more than refer briefly to the essential elements of the evidence which directly concern the questions of fact and law raised in the grounds of the appeal, and argued before us.

With regard to the alleged oral misrepresentation, the defendant relies on the evidence of the first witness for the defence, Mr. George Graham Vermont Clover, who was the plaintiffs' manager in August 1957, when the transaction relating to the first tipper lorry was entered into. A summary of his evidence is that he was the plaintiffs' agent at Tamale; that the defendant bought a tipper truck from the company upon description and specification contained in a brochure issued by the Ford Motor Co., exhibit 1; it was a new type of lorry called Ford Thames Trader, it was the first of its kind he had seen, he discussed exhibit 1 with the defendant, he only had exhibit 1 at that time to convince customers; if the defendant was satisfied he thought he would buy because the plaintiff-company had been servicing the defendant's lorries. The defendant had agreed to take the vehicle before it arrived in Tamale, he had no technical information beyond the brochure. There is no evidence that he offered any information beyond what is in exhibit 1, a copy of which the defendant had in his possession. The defendant in his evidence said:

"Before buying the trucks I had discussions with Mr. Clover. He produced exhibit I and told me he was prepared to sell Thames tippers to me. I discussed the qualities of the trucks. He assured me that they would suit my purposes. He knew I was a sand and stone contractor. The trucks had not arrived in Tamale. I had a look at the first truck when it arrived. I did not try it. I took it on the recommendation of Mr. Clover. I had not previously ordered the truck. When it arrived here Mr. Clover told me and asked me if I wanted to buy it.

I took the first truck in August 1957. In November I was offered another one. After the first track had been repaired and modified I thought I would have another one. It was after the three were bought that I discovered they were useless for my purpose,"

Apart from the evidence of the defendant and his witness Mr. Clover, to which I have referred, there is no other evidence on record to support [p.65] the allegation of oral misrepresentation which, it is contended, entitled the defendant to rescind the contract ab initio.

It is obvious from this evidence that the contention that Mr. Clover had made an oral misrepresentation to induce the defendant to purchase the first lorry is without foundation. With regard to the allegation that the vehicles were unsuitable for the purpose for which they were accepted by the defendant, it will be observed that the hire-purchase agreement for the first of the tipper lorries was executed on the 21st August, 1957; the second on the 21st November, 1957, and the third on the 16th December, 1957. Although certain repairs and modification had been made at the expense of the plaintiffs under and by virtue of the printed warranty supplied by the plaintiffs as Ford dealers, the defendant did not declare the vehicles or any of them unsuitable for the purpose for which he bought them until September, 1958, over twelve months after the first agreement and ten months after the third agreement, when he returned them to the plaintiffs. In the meantime, the three vehicles had run a total mileage of 87,000 miles, an average of 3,000 miles per vehicle per month, which according to the defendant's first witness "would be reasonable serviceability."

Counsel for the appellant has in support of his contention referred to certain decided cases in which the legal principles enabling a party to a hire-purchase agreement to rescind the same have been enunciated and applied. The first is Alexander v. Railway Executive,1 where it was held that the Railway Executive were guilty of a breach of an implied term fundamental to their contract of bailment with the plaintiff, with the result that the contract was teminated, and the executive could not rely on the terms and conditions of the contract excluding their liability in relation to the rest of the baggage; apart from any question of bailment, there had been such a breach of a fundamental term of the contract as to give the plaintiff the right to rescind it, and, therefore, the Railway Executive were disentitled from relying on the special conditions of the contract; and even if the Railway Executive were not precluded from relying on the conditions, condition No. 3 was inapplicable because there was no such evidence before the parcels clerk that the tickets had been lost or that C. had authority to receive the baggage as could reasonably be regarded by him as satisfactory; and there had been no misdelivery of the baggage because the term "misdelivery" in condition No. 2 (a) meant a wrong delivery involving some form of mistake or inadvertence, and, therefore, condition No. 2 (a) would not protect the Railway Executive.

The second is Karsales (Harrow) Ltd. v. Wallis.2 The facts briefly stated are that the defendant had inspected a Buick car which a Mr. Stinton wished to sell, and found it to be in excellent condition; he agreed to buy it, if Mr. Stinton made arrangements for hire-purchase by the defendants. The transaction was eventually completed through an intermediary, Karsales (Harrow) Ltd., who got Mutual Finance Ltd. a hire-purchase finance company to accept the application. Mutual Finance Ltd. let the car out on hire-purchase to the defendant. After several months the car was left late at night outside the defendant's garage, it was examined by the defendant the next morning and he found it had been badly damaged. It had apparently been towed in. It was, as the [p.66] judge found, "in a deplorable state." The defendant refused to accept the car which was towed away and the plaintiffs sued. The court held: (1) the car delivered was not the thing contracted to be taken on hire-purchase and there was a fundamental breach of the contract which disentitled the plaintiffs from relying on the exempting clause, and (2) (per Denning and Parker, L.JJ.) the instalments could not be recovered by the plaintiffs for the further reason that delivery of the car had not been accepted.

In such circumstances it is now settled that exempting clauses in the hire-purchase agreement no matter how widely they are expressed, only avail the party when he is carrying out his contract in its essential respect. He is not allowed to use them as a cover for misconduct or indifference or to enable him to turn a blind eye to his obligations. If the breach goes to the root of the contract it may be rescinded by the party aggrieved. In other words if there is a fundamental breach of terms, express or implied, he cannot rely on the exempting clause. On the other hand, if there has been no fundamental breach of warranty express or implied, the terms of the hire-purchase agreement are binding on the parties.

It is again settled law that there are certain terms implied in hire-purchase agreements such as (a) implied condition of title, (b) implied warranties of quiet possession and freedom from encumbrance, and (c) implied condition of warranty of fitness for the purpose for which the goods are expressly hired or for which from their character the owner must be aware they are intended to be used.

All the implied terms however are subject to the express terms of the agreement and within limits they may therefore be excluded or modified if apt words are used provided the party relying on such exempting clause carries out his contract in its essential respect, in other words he does not commit a breach fundamental to the terms of the contract.

Applying all these principles to this appeal and after careful examination of the evidence on record I am unable to discover in what way the plaintiffs could be said to have been guilty of any breach of their contract or of any express or implied terms which go to the root of the contract. I am clearly of the opinion that the learned trial judge was justified in his conclusion that the defendant-appellant is not entitled to rescind the contract and must be taken to have terminated it under clause 9 of the hire-purchase agreements.

On the question of the alleged unsuitability of the vehicles for the purpose for which they were purchased, I must again refer to the learned trial judge's conclusion, with which I agree, thus:

"The vehicles having covered at least 87,000 miles, could not be said to be unfit for the purpose for which they were intended. He was therefore not entitled to rescind the contracts and must be taken to have terminated them under clause 9 of the hire-purchase agreement."

As regards the printed warranty given by Ford Motor Company to all purchasers of Ford motor cars and lorries, I am unable to agree with the view expressed by the learned judge that any breach of that warranty cannot be a defence to a claim by the plaintiffs who at all times material to the transactions in question were authorised Ford dealers and in that capacity passed on the said vehicles to the defendant together with a printed Ford warranty for each vehicle endorsed by the plaintiffs. The claim against the defendant, being one in respect of the said transactions, it cannot be denied that the plaintiffs acted as agents of the Ford Motor Company of Daganham in England. Counsel for the respondents having [p.67] in the course of this appeal conceded this point, I need not labour this question any further, except to say that, had a breach of the warranty been proved, the defendant would have been entitled to the benefit of any rights which could have accrued therefrom,.

For these reasons I would dismiss this appeal with costs.

JUDGMENT OF SARKODEE-ADDO J.S.C.

I agree.

JUDGMENT OF ADUMUA-BOSSMAN J.S.C.

I also agree.

Decision

<P>Appeal dismissed.</P>

Plaintiff / Appellant

E. Akufo-Addo

Defendant / Respondent

E.N. P. Sowah

Referals

(1) Alexander v. Railway Executive [1951] 2 K.B. 882; [1951] 2 All E. R. 442

(2) Karsales (Harrow) Ltd. v. Wallis [1956] 1 W.L.R. 936; [1956] 2 All E.R. 866

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