A car dealer had bought a car to which the seller had no title.
Held: The dealer succeeded in his claim to recover the purchase price on the ground of total failure of consideration. The vendor had gone through the motions of performance of his contract by handing over a car, but in the eyes of the law that was no performance because the car was stolen. In the case of a theft the title acquired by the thief or later possessor is frail, and of likely limited value, but nonetheless remains a title to which the law can afford protection.
Atkin LJ said: ‘It seems to me that in this case there has been a total failure of consideration, that is to say that the buyer has not got any part of that for which he paid the purchase money. He paid the money in order that he might get the property, and he has not got it. It is true that the seller delivered to him the de facto possession, but the seller had not got the right to possession and consequently could not give it to the buyer. . There can be no sale at all of goods which the seller has no right to sell. The whole object of a sale is to transfer property from one person to another . . can it make any difference that the buyer had used the car before he found out that there was a breach of the condition? To my mind it makes no difference at all. The buyer accepted the car in the representation of the seller that he had a right to sell it, and in as much as the seller had no such right he is not entitled to say that the buyer has enjoyed a benefit under the contract. In fact the buyer has not received any part of that which he contracted to receive, namely the property and right to possession – and that being so there has been a total failure of consideration.’
Atkin LJ
[1923] 2 KB 500, [1923] All ER 270, (1923) 129 LT 757
England and Wales
Cited by:
Cited – Costello v Chief Constable of Derbyshire Constabulary CA 22-Mar-2001
The police seized a car from Mr Costello, believing that it was stolen. The seizure was lawful at the time, by virtue of section 19 of PACE. The police never brought any criminal proceedings against Mr Costello, but they refused to return the car to . .
Lists of cited by and citing cases may be incomplete.
Torts – Other, Contract
Updated: 19 January 2022; Ref: scu.194107