Tesco v Constain - Thomson Reuters

[1961] 1 Q.B. 31 Page 131960 WL 18924 (CA), [1960] 3 All E.R. 332, [1960] 3 W.L.R. 504, (1960) 104 S.J. 704(Cite as: [1961] 1 Q.B. 31)The decision in the present case turns solely on whether "Hutchinson" enteredinto a contract which gave him a title to the car which would subsist until itwas avoided on the undoubted fraud being discovered.There was no evidence from the other alleged contracting party, "Hutchinson, "the alleged buyer, for he is apparently unknown and untraced, but the judge foundthe plaintiffs' evidence satisfactory and reliable. [His Lordship then stated thefacts as found by Slade J. and continued:]During the conversation, from which a contract, if any, has to be derived, therogue "Hutchinson" knew he was not the person the plaintiffs believed him to beand to whom alone they made their offer to sell the car and to whom alone theyintended to give possession of it in exchange for his cheque."Hutchinson" knew that the offer to sell the car in exchange for a cheque wasnot made to him as he was, but only to an existing person whom he representedhimself to be. If the plaintiffs are to be regarded as the acceptors of"Hutchinson's" offer to pay by cheque, he knew full well that it was not hischeque they were accepting but the cheque of the man they thought he was byreason of his persuasion and deceit.The judge found that Miss Elsie Ingram intended to part not merely withpossession but with the property in the car, but that she did so believing thatthe person to whom she was selling the car was P. G. M. Hutchinson of StansteadHouse, Stanstead Road, Caterham, with a number in the telephone directory, and hefurther held that, if the entry in the telephone directory had not been confirmedby Miss Hilda Ingram, the two sisters would not have accepted the cheque inpayment or parted with the car.If "Hutchinson" had paid cash for the car, then it seems clear that there wouldhave been a concluded and unimpeachable transaction in which the identity andfinancial stability of the buyer would have been of no moment. This is not a casewhere the plaintiffs wished to withhold their car from any particular person orclass of persons. Their desire, made quite obvious in the negotiations, was toensure that they received payment and, unless cash was paid, the person with whomthey were dealing was of major importance truly only as to his credit worthinessand this fact was equally clear to "Hutchinson " from the course which thenegotiations took.*49 It does not seem to me to matter whether the right view of the facts is, asthe judge has held and as I would agree, that there was no concluded contractbefore the cheque book was produced and before the vital fraudulent statementswere made or that there was a concluded contract which "Hutchinson " at oncerepudiated by refusing to pay cash and that this repudiation was accepted by theplaintiffs and the transaction was then and there at an end. The property wouldnot have passed until cash had been paid and it never was paid or intended to bepaid.Was there a contract of sale subsequently made which led to the plaintiffstaking "Hutchinson's" cheque and in exchange for it handing over the car and itslog book?The judgment held that there never was a concluded contract, applying, as Iunderstand it, the elementary factors required by law to establish a contract.The judge, treating the plaintiffs as the offerors and the rogue "Hutchinson "as the offeree, found that the plaintiffs in making their offer to sell the carnot for cash but for a cheque (which in the circumstances of the Bank Holidayweek-end could not be banked before the following Tuesday, August 6, 1957) wereunder the belief that they were dealing with, and therefore making their offerto, the honest P. G. M. Hutchinson of Caterham, whom they had reason to believewas a man of substance and standing."Hutchinson," the offeree, knew precisely what was in the minds of the twoladies for he had put it there and he knew that their offer was intended for P.G. M. Hutchinson of Caterham and that they were making no offer to and had noCopr. © West 2004 No Claim to Orig. Govt. Works