#6756 - Re Jones V. Waring And Gillow - Restitution of Unjust Enrichment BCL

R. E. Jones v. Waring and Gillow

Facts

A man named Bodenham obtained from the respondents, Messrs. Waring & Gillow, Ld., furniture and other goods of the value of about 13,800l. upon the terms of a hire-purchase agreement dated November 29, 1919, by which he agreed to pay 5000l. down and afterwards a monthly sum until the whole purchase money was paid. He gave his cheque for the 5000l., but it was dishonoured; and the respondents sued him upon the cheque and retook possession of the furniture.

Bodenham, being without means, called at the London office of the appellants, Messrs. R. E. Jones, Ld., and told them that he represented a firm of motor manufacturers bearing the name of International Motors who had the control of a car called the "Roma" car; he produced an illustrated prospectus and specification of the car, and offered on behalf of International Motors to appoint the appellants agents for the sale of the car in South Wales and the south-west of England. There was at that time a large demand for cars, and after a short negotiation the appellants accepted the proposal. Bodenham then put before the appellants a form of agency agreement to be signed by International Motors and the appellants, one term of the agreement being that the appellants should purchase not less than 500 "Roma" cars and should upon the execution of the agreement deposit with International Motors the sum of 5000l., being 10l. per car upon the 500 cars.

The appellants demurred to paying this large sum to Bodenham or to International Motors (whom they did not know), and Bodenham then told them (to quote the statement of counsel for the plaintiffs at the trial, which was accepted by the defendants as correct) "that the people who were financing the thing and who were the principals behind him in the matter were Messrs. Waring & Gillow, the well known Oxford Street firm," and that if the agency agreement were signed the deposit of 5000l. might be paid to them. This statement satisfied the appellants, who knew Messrs. Waring & Gillow as a firm of high standing; and they signed the agreement (which was dated December 31, 1919) and handed to Bodenham two cheques payable to the order of the respondents, one being a cheque for 2000l. dated December 31, 1919, and the other a cheque for 3000l. post-dated January 14, 1920. Bodenham then called on the respondents, to whom he had previously stated that he expected large payments under some valuable contracts, and handed the two cheques to them as a payment of his deposit of 5000l. under the hire-purchase agreement.

Later it was realized that both they check were improperly executed on which they were replaced by a single cheque of 5000L by the appellants.

On March 26, 1920, the appellants commenced this action against the respondents, claiming repayment of the 5000l. as money had and received by the defendants for the use of the plaintiffs, or alternatively as money paid for a consideration which had failed or as money paid under a mistake of fact.

Holding

Viscount Cave LC

The plaintiffs were told by Bodenham that he represented a firm called International Motors which was about to be formed into a company, that the firm had control of a car called the "Roma" car which he described as an existing car, and that the defendants were financing the firm and were the principals behind him and behind International Motors in the matter. Believing these statements to be true, the plaintiffs entered into an agreement which bound them to pay a deposit of 5000l. on 500 Roma cars; and still believing them to be true, and that the respondents as the nominees of International Motors could give a good receipt for the 5000l., they paid that sum to the respondents. In fact the statements were untrue from beginning to end; and the money was, therefore, paid under a mistake of fact induced by the false statements of a third party and, apart from special circumstances, could be recovered. As to the general principle, it is sufficient to refer to the well known case of Kelly v. Solari(1), and to the more recent decisions in Colonial Bank v. Exchange Bank...