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1927,Present; Fisher C.J. and Garvin J.
WALKER', SONS) & <36. .v. &AMEEO ALLY32&r“b- C. Colombo, 18,684.
Hire-purchase agreement—Option to purchase—Failure to pay installmerits—Action to recover car.
Where a person who obtained a motor car on a hiring agreement,with an option of purchase, was sued for the recovery <Jf the carand the arrears of rent due,*— -*->'d
Held, that it was competent to the* Court to make order for thepayment of the amount due on the judgment by instalments.
Held, further, that the failure of the owner to' exercise his* ‘rightof terminating- the contract, as soon as the hirer* fell into .arrearsdid not affect his right to recover possession of. the car.
HE plaintiffs sued the defendant for the recovery of a motorcar and of rent due for hiring it. The defendant filed no
answer to the claim. . Later he made ^n affidavit in which headmitted the plaintiffs! .claim and offered to pay the claim byinstalments. The agreement upon which the car was hired, datedMay 28; 1925, after reciting that the. defendant, therein called thehirer, had paid Bs. 1,000 on the date :of signature, provides, interalia, (1) tijajb the hirer shall pay a .monthly rent for the motor carlet to h.im by the plaintiffs, therein called the owners, ….
. (4) That if the hirer does not duly perform the agreement andfails to pay rent in any month on its due date, the owners shall beentitled to terminate the agreement and re-take possession of thecar without prejudice to their right to recover arrears of rent anddamages for. breach of the agreement. It was further, providedthat the hirer should have-an option of purchase subject to certainconditions …..»
The learned District Judge held that as* the plaintiffs did dotterminate the agreement and take possession of the car as soonas the defendant fell into arrear, they lost their right to recoverpossession of the car. In pursuance of the judgment a decree wasentered ordering the defendant to pay certain sums to the plaintiffsby instalments.
Garvin, for plaintiffs, appellant.
January 28, 1927. Fisher C.J.—
This case comes before us under somewhat peculiar circum-stances as regards procedure. On December 19, 1925, the plaintiffs-appellants sued the defendant-respondent for the return of a
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motor car and . the payment of ren'v aue for hiring it. Thedefendant-respondent filed no answer to the claim, but on June 14,1926, made an affidavit in whi.ch he admitted the plaintiffs’ claim,and in which, after describing his financial condition, he offeredto pay the plaintiffs’ claim -by instalments. On July 15 an applies?tion was made by the respondent to be allowed to pay by instalmentsand evidence as to his means was given by him. It appears alsofrom the judgment that on a discussion of the matter respondentsCounsel urged that the plaintiffs’ claim went too far.. On July 9,1926, the learned Judge gave what was in form a judgment on thewhole action, and in pursuance of the judgment a .decree was enteredordering the respondent to pay certain sums to the plaintiffs byinstalments. No reference was made to the motor car, whichjPresumably, if this judgment is to be allowed to.-stand, is to remainthe property of the respondent.
I think that strictly speaking, and more especially in view of-the respondent’s admission in his affidavit, it was not open to thelearned Judge to entertain on this application any question otherthan the question whether the respondent should be allowed topay off the judgment debt by instalments, and if so, what theamount and intervals of payments should be.
. As, however, the appeal has been argued on another basis, I thinkit as well under the eircumstances that we should deal with .the-.important point which has been raised, namely,, that the judgmentof the learned Judge ignores the due and proper construction ofthe agreement upon which the action is based and upon which therights of the parties depend.
The agreement dated May28,1925, afterreciting thatthe
respondent, therein called “ the hirer, ” had paid Es. 1,000 on thedate of signature, provides thatthehirer shall,inter alia, (1)pay
a monthly rent for the motorcarlet to himby the appellants,
therein called “the owners”; (2) allow representatives of theowners .at all times to inspect the car; (3) keep the car in his posses-sion and not remove it without the appellants’ consent; (4) thatif the hirer does not duly perform the agreement and fails to payrent in any month on its due date the owners shall be entitled toterminate the agreement and re-take possession of the ear withoutprejudice to their right to recover arrears of rent and damagesfor breach of the agreement.It was furtherprovided thatthe
hirer should have an option of purchase subject to his observingcertain conditions.
It is clear that the agreement was one which" passed no propertyin the car to the hirer. It was simply a hiring agreement withan option of purchase. See in this connection the case of Brooksv. Beirnstein.1
Walker, Sonsda 06. v.
* L. R. (1909) 1 K. B. 98.
Under these circumstances the position of the appellants seemsC.jr; to be clear. It has never been contended that the respondentSon$ e3Cerc'se<*» or was m a position to exercise, the option of purchase.v. There has been nothing which can be construed as an abandonmentAUy by the appellants of any right they have under the contract sofar as this case is concerned. The learned Judge has held thatinasmuch as the appellants did not terminate the hiring and re-take possession of the car as they might have done as soon as therespondent fell into arrear, they lost their right to take possessionof the car, and this, notwithstanding clause “ H ” of the contract,by which it was agreed that if the respondent failed, as he did,to pay regularly, the whole transaction should be treated as onhire without any option of purchase. The car, therefore, remainedthe property of the appellants, and the respondent remained liablefcr the rent.
■It may seem, as it did seem to the learned Judge, hard on therespondent that he should find himself bound by a contract intowhich he has expressly entered the claim in respect of which hehas expressly admitted. But even if that is so, I cannot find anyroom for relieving him from the liability which he took uponhimself, improvident though he may have been.
I think, therefore, that he is liable as the appellants claim. TheJudgment of the learned Judge must be reversed and judgmententered for the appellants for Bs. 3,420.74, and for an order onthe respondent to deliver the motor car to the appellants withintwo months from the date of his judgment or to pay a furthersum of Bs. 2,500.
The order that the respondent should pay the costs of the suit. will stand. He must also pay the costs of this appeal.
We think that all money payments under this judgment should. be payable by monthly instalments of Bs. 250. The first payment. to be made on February 26, 1927,
Garvin J.—I agree.
WALKER SONS & CO. v. HAMEED ALLY