Motor Credits (Hire Finance) Ltd v Pacific Motor Auctions Pty Ltd [1963] HCA 27; (1963) 109 CLR 87 (8 August 1963)

HIGH COURT OF AUSTRALIA

MOTOR CREDITS (HIRE FINANCE) LTD. v. PACIFIC MOTOR AUCTIONS PTY. LTD. [1963] HCA 27; (1963) 109 CLR 87

Sale of Goods

High Court of Australia
McTiernan(1), Taylor(2) and Owen(3) JJ.

CATCHWORDS

Sale of Goods - Floor plan agreement - Dealer authorized to sell finance company's vehicles without disclosing agency - Revocation by finance company of dealer's authority to sell - Vehicles left in dealer's possession - Vehicles sold outside ordinary business hours for purpose of securing or discharging debt owed by dealer - Purchaser's knowledge of floor plan agreement - No knowledge of prior revocation of authority to sell - Dealer's representation that vehicles its sole property - Ostensible ownership - Ostensible authority - Ordinary course of business - Sale of Goods Act, 1923-1953 (N.S.W.), s. 28.

HEARING

Sydney, 1962, November 23, 27; 1963, August 8. 8:8:1963
APPEAL from the Supreme Court of New South Wales.

DECISION

1963, August 8.
The following written judgments were delivered:-
McTIERNAN J. In this case I agree with the judgment of Walsh J. and the is necessary to add anything to what the learned judge has said. Accordingly, I would dismiss the appeal and cross-appeal. (at p92)

TAYLOR J. In the commercial cause out of which this appeal arises the appellant sued the respondent for the return of twenty second-hand motor vehicles which it alleged had been wrongfully detained by the respondent. At the trial the appellant abandoned its claim with respect to four of the vehicles and, as an alternative to the return of the remaining sixteen, it claimed to recover their value and damages for detention. (at p92)

2. The motor vehicles in question had never been in the possession of the appellant but the points of claim filed by it in the action show briefly how the claim arose. It was alleged that on 2nd November 1960 and at all material times the motor vehicles were the absolute property of the plaintiff and that, on that date, they were in the possession of a company, Motordom Pty. Limited (hereinafter referred to as Motordom) as bailee for the plaintiff and not otherwise. It was further alleged that on that date Motordom had no authority to sell the vehicles but that, nevertheless, it did, without any such authority, purport to sell them to the defendant whereupon the latter took possession of them. Subsequently the appellant made a demand for the return of the vehicles but the demand was not complied with. In answer to the claim the respondent denied the appellant's title to the vehicles and also denied Motordom's alleged lack of authority to make the sale in question. Additionally, the respondent alleged, in effect, that the appellant had held out and represented Motordom as the owner of the vehicles or as a person having full power and authority to sell them to a purchaser and that the respondent dealt with Motordom on the faith of such representation. Other subsidiary matters were raised by way of defence and to these reference will presently be made. (at p92)

3. As its name implies, the appellant is a finance house and it was part of its business to provide accommodation to motor vehicle dealers pursuant to what we were told is called in the trade a "floor plan" or "display agreement". It had entered into such an agreement in writing with a dealer named Webb who, in the course of his business, both bought from and sold to the respondent motor vehicles from time to time. Broadly the purpose of such agreements is to provide dealers with finance to enable them to carry on the business of buying and selling motor vehicles. The agreement which the appellant made with Webb seems to be more or less in a common form and in it the appellant is described as "the company" and the dealer is described as "the agent". It recites that the company, at the request of the agent, had agreed to permit the agent to acquire motor vehicles on its behalf and to sell such vehicles on behalf of the company upon the terms therein set out. The ensuing terms relate both to the purchase of new vehicles and second-hand vehicles but we need make no reference to the provisions of the agreement in so far as they are concerned solely with new vehicles. By cl. 1 the agent was authorized to purchase such types of motor vehicles and cycles and in such quantity as the company might from time to time in writing authorize. The agent was to be at liberty to purchase used goods either in the name of the company or in the name of the agent without disclosing the agency. By cl. 3 the company was bound to pay to the agent ninety per cent of the purchase price or trade-in allowance paid or allowed in respect of any second-hand vehicle but this provision was subject to the company's right in any particular case to have an assessment made of the fair wholesale value of any such vehicles. Pending resale the agent was to keep all such vehicles in good order and condition and upon resale he was bound to account for the sale price in the manner specified by cl. 5. By this clause the agent agreed that as from the date of the acquisition "any goods purchased in pursuance hereof shall be on hire and the possession of the agent shall be as bailee only". Nevertheless he was to be at liberty to sell such goods on behalf of the company. In respect of cash sales and hire purchase transactions not arranged through the company the agent was bound to account to the company immediately thereafter. In the case of hire purchase transactions arranged through and accepted by the company, the agent was bound to account for the deposit received in accordance with the terms of the clause. Clause 6 provided that the agent or the company might at any time respectively return or require the return of any vehicles and the agent undertook on demand forthwith to deliver up possession of the vehicles demanded. Further the company was to be at liberty to take possession of any vehicles subject to the agreement without previous notice. The final clause of the agreement related to what was called rental or hiring and it provided in effect for a stipulated interest charge on the amount paid or allowed by the company in connexion with the purchase or trading-in of any particular vehicle calculated in respect of the period elapsing between its purchase or trade-in and its subsequent resale. (at p94)

4. Prior to the transactions with which we are immediately concerned, Webb had carried on business for some time under the trade name of Motordom. But before the material date the company known as Motordom Pty. Limited was incorporated and it took over Webb's business. He, however, was in control of the company and he continued to manage and control the business. No fresh display agreement was entered into between Motordom and the appellant but there was abundant evidence to show, and the learned trial judge found, that the course of business between them indicated that they assumed a business association more or less on the basis of the arrangement which the earlier written agreement had created between Webb and the appellant. We should, however, mention that the terms of the written agreement seem never to have been strictly adhered to. Indeed, there was one important departure, for Webb, and later Motordom, adopted the practice of purchasing vehicles without any prior authority from the appellant, in writing or otherwise, and according to the learned trial judge, Webb, and Motordom after its incorporation, did not buy on behalf of the appellant but on their own behalf. The course of dealing between the appellant and Motordom was fully discussed by the learned trial judge and it is unnecessary to traverse the same ground in detail. But apparently what happened was that Motordom exercised its own judgment in selecting and purchasing motor vehicles and some of these never became subject to the display agreement. Nevertheless a great many of the vehicles were, subsequently to their purchase, said to be accepted as being subject to the display agreement. What happened was that as vehicles "on display" were sold they would be replaced by other vehicles which Motordom had purchased. Proposals for this purpose were sometimes made by telephone, sometimes in the course of a personal call by Webb at the offices of the appellant and sometimes personally when the appellant's representative visited Motordom's premises. The proposals would be reported to the acceptance manager of the appellant and upon any proposal being accepted a cheque would be made out and forwarded to Motordom accompanied by a list of the accepted vehicles. A number of these lists was tendered in evidence; they refer to the display plan, specify the make and registered numbers of the vehicles accepted and the amounts to be paid in respect of each. After a review of the evidence concerning the numerous dealings between the appellant and Motordom the learned trial judge said that he was satisfied that, at all times prior to 2nd November 1960, "it was clear that the course of business was such that when Motordom bought a vehicle it did so on its own account and not as agent for the plaintiff, so that title to that vehicle thereupon passed to Motordom". Upon a careful examination of the evidence this finding of fact was, we think, inevitable. However, the appellant sought to overcome the difficulty presented by this finding by contending that, upon the evidence, it was clear that when a vehicle was subsequently accepted as subject to the display plan and an advance or payment made in respect of it, the title passed to it. As his Honour said it was the claim of the appellant "that when a request was made to it to put any such vehicle on display plan, this constituted an offer to sell that vehicle to the plaintiff upon the terms with which, by reason of the previous arrangements and the course of dealing, the parties were familiar, and that thereupon, when the plaintiff accepted this offer, the title passed to the plaintiff". Nevertheless his Honour was of the opinion that "assuming that the plaintiff then acquired a valid title to such a vehicle, Motordom had the right to retain it in its possession and had a general authority to re-sell it in its own name and at such price as it should decide, and a right to receive the purchase money and to retain it, subject only to its obligation to account to the plaintiff in the manner specified in the display agreement". His Honour observed that the evidence relating to the terms of the arrangement between the appellant and Motordom was not very clear but, nevertheless, he was prepared to hold that it was "the intention of the parties, when cars were brought into the arrangement, that the general property in those cars should pass to the plaintiff". (at p95)

5. With this brief account in mind it is convenient to come to the transaction or transactions which took place on the night of 2nd November 1960. During the previous week three cheques of Motordom which had been given by that company to the respondent in payment for vehicles purchased from it, had been dishonoured. These cheques were for 6,965 pounds, 2,535 pounds and 3,790 pounds respectively. For a few days the respondent appears to have thought that Motordom's difficulties were only of a temporary nature and that the total sum involved, namely 13,290 pounds, would shortly be paid. But by 2nd November 1960 it seemed to have become more or less generally known in the trade that Motordom was in serious financial trouble and on the afternoon of that day Webb was summoned to see the respondent's general manager, Crealey. Upon the evidence which the learned trial judge accepted it is quite clear that at this stage the respondent was intent upon obtaining satisfaction from Motordom that day. For this purpose the proposal was made to Webb that he should sell some of Motordom's stock at its various yards to the respondent and, if the outstanding cheques were met upon re-presentation, the respondent would return the cars to Motordom. Webb agreed and the details of what occurred that evening are set out in the learned trial judge's reasons: "A party from the defendant's office, and Webb, then went to several yards, and cars were selected and listed, and prices put against them by Guest. After some discussion about the prices Webb said that he would definitely be taking the cars back, and Crealey then agreed to adopt the prices which Motordom had paid for the cars when it acquired them. There was an arrangement that the defendant would hold the cars, to re-deliver them to Motordom, if the money was found. The total amount due to the defendant had been calculated at 16,510 pounds. It seems that there was some additional debt, apart from the cheques abovementioned. After-nine cars had been listed, it seems that an upwards adjustment of the price assigned for some of them took place, in order that the total price would come up to 16,510 pounds. For each vehicle declarations were obtained, signed by Webb, reciting a sale of the vehicle at a specified price and stating that the vehicle was the seller's sole property, free from any other interest, and that the seller had good right and title to sell it. A cheque which the defendant's accountant, Skinner, had taken with him, was completed in favour of Motordom, for 16,510 pounds, and was signed for the defendant by Crealey and Skinner. On the back of it was written, 'Please pay to order of Pacific Motor Auctions Ltd.', and this was signed by Webb. The cheque was handed back to the defendant's representatives. The cars were taken away and were subsequently re-sold by the defendant. The dishonoured cheques of Motordom were not met and on each of them is endorsed the words, 'Payment stopped'" (1962) 79 WN (NSW), at p 689 (at p96)

6. The news of Motordom's difficulties had also reached the appellant during the afternoon of 2nd November and thereupon the appellant's manager communicated with Webb by telephone and expressly revoked his authority to deal with cars which were the property of the appellant. This occurred several hours before Webb's nocturnal dealings with the respondent. It should perhaps also be mentioned that the respondent was not the only motor dealer in attendance upon Webb's premises on that night; representatives of another motor-dealing firm were also present and there is evidence which shows that on that night many of the cars which had been in the yards were disposed of, leaving only a relatively small number of less valuable vehicles. Webb, it remains to be said, was not called as a witness at the trial and it was said during the course of argument that at the time of the trial his whereabouts were unknown. (at p97)

7. In the result the learned trial judge dealt with the case on the assumption, which I think he rightly made, that the appellant had established its title to the subject vehicles and that it had, in the circumstances disclosed by the evidence, an immediate right to possession upon which to found its claim. However, he held that in the circumstances as they appeared to him the appellant was estopped from denying that Motordom had authority to sell the vehicles to the respondent. In so deciding his Honour appears to have felt constrained by the decision in Eastern Distributors Ltd. v. Goldring (Murphy, Third Party) (1957) 2 Q.B. 600 and he concluded, upon the authority of that case, that it was an immaterial consideration that the transaction of 2nd November 1960 was not in the ordinary course of Motordom's business and that its only purpose was to secure and ultimately to discharge Motordom's outstanding indebtedness to the respondent. But, with respect to the learned judge, I do not regard the Eastern Distributors' Case (1957) 2 QB 600 as requiring or leading to any such conclusion. In the first place there was not in that case any suggestion that the transaction there in question was not in the ordinary course of the dealer's business. But, secondly, it is of vital importance to notice that case was essentially one of ostensible ownership; it was a case where, in the language of Devlin L.J. (as he then was) "Coker (the dealer) represented that the car was his, and Murphy (the owner) was privy to that representation being made; so neither can be heard to say that Coker had not a good title to transfer to the plaintiffs" (1957) 2 QB, at p 606 The italics are mine and serve to emphasize the fact that the case was primarily one of ostensible ownership and not one of ostensible agency. There has been, as is pointed out in Ewart on Estoppel (1900) p. 238 et seq. considerable confusion between these two subject matters of estoppel and it is of importance to observe that if a person deals with an ostensible owner no question can arise concerning the extent of that person's authority to deal on behalf of a principal. On the contrary, if he deals with an ostensible agent the question of the extent of the latter's apparent authority is a very material matter. As Ewart puts it, in the former case "some person has appeared to be the owner of property when in reality he was not", whilst in the latter type of case "some person has appeared to have authority to do something, when in reality he has not". Accordingly, in the latter case, it is essential to determine what apparent authority an ostensible agent has. (at p98)

8. His Honour also felt some difficulty in reconciling the decisions in Commonwealth Trust Ltd. v. Akotey (1926) AC 72 and Mercantile Bank of India Ltd. v. Central Bank of India Ltd. (1938) AC 287 I do not myself see any difference in principle between the two cases. The question in such cases must always be whether the circumstances disclosed by the evidence are such as to lead a person dealing with someone who is in possession of goods and of all the indicia of title to suppose that the latter is the owner. In the earlier case the Judicial Committee took the view that in the circumstances of that case that question should be answered in the affirmative whilst in the latter case it was answered in the negative. In the latter case "All that the respondents did was . . . to deal with their own property, as pledges, in the usual course of business which was well known to and had been followed both by the appellants and the respondents". Accordingly, possession by the firm of merchants of the goods and documents of title in question did not, in view of the practice followed by both banks, provide any foundation for a finding that the appellants had been lead by the respondents to suppose that the merchant was the owner of the goods in question. (at p98)

9. In my view the present case is not one of ostensible ownership. It is, of course, true that Webb, on behalf of Motordom, falsely represented that the vehicles which he purported to sell to the respondent were Motordom's sole and absolute and unencumbered property and free from any charge or other adverse interest whatsoever and that no person or corporation had any right title or interest therein. But this was Webb's representation and there is not the slightest evidence to suggest that he was authorized by the appellant to make the representation or to show that it was made with the latter's knowledge or consent. It is again true that the respondent was not informed of the revocation of Motordom's authority and that the appellant's vehicles still remained in the possession of that company. But, as the learned trial judge found, the respondent knew that Motordom had obtained "floor plan accommodation" from the appellant and that the limit of such accommodation had in October 1960 been increased by 5,000 pounds. With its knowledge of the manner in which business was conducted in the trade this was the clearest intimation to the respondent that Motordom was dealing in cars which, although in its possession, were not its property and, that being so, we can see no grounds upon which it can be asserted that Motordom's possession of the vehicles in question gave rise to a case of ostensible ownership. The mere fact that the goods of one person are seen to be in the possession of another does not, of itself, create a situation of ostensible ownership. If it were otherwise the owner of a vehicle who had lent it to another might find himself estopped from asserting his title against an innocent purchaser from the latter. The same situation would also arise where the hirer of goods under a hiring agreement had fraudulently disposed of the goods to an innocent purchaser. Many other illustrations might be given but, nevertheless, possession may be given in such circumstances as to make it appear that the person in possession is the owner. For instance, if a vehicle were delivered to a person who happened to be a dealer in motor vehicles in order that he might place it among his stock for sale he would appear to be the owner to any person not knowing the true facts. In the present case, however, it was about as clear as it could be to the respondent that Motordom was dealing in vehicles of which it had possession but which were not its property. Accordingly, the circumstances of its possession were not such as to lead the respondent to suppose that the vehicles in question were the property of Motordom. (at p99)

10. Subject to one matter which I shall presently mention, the case therefore comes back to one of ostensible authority. As was found below there is every reason for thinking that notwithstanding the revocation of its authority to deal with the appellant's cars, circumstances continued to exist at the relevant time which would have made it appear to any person dealing with Webb in the ordinary course of business that he continued to have authority to sell the vehicles which remained in his possession. But the transaction in this case was of a very special character and it is that transaction with which we are immediately concerned. As already appears it was not a transaction in the ordinary course of business; it was in effect a forced sale of a substantial part of Motordom's stock which, it seems, secured a limited right of redemption to Motordom and it was entered into purely for the purpose of providing security or ultimately discharging Motordom's debt to the respondent. To me it seems quite clear that if Webb's authority had not been revoked it would not have extended to authorize this present transaction and I can see no reason for supposing that, in the circumstances as they existed on the night of 2nd November 1960, he appeared to have a wider authority than that which he would actually have possessed if his authority had not been revoked. This being so I am of the opinion that this issue should have been decided in favour of the appellant. (at p99)

11. Three subsidiary arguments were, however, raised on behalf of the respondent. The first was that the purported revocation of Motordom's authority was not effective. In my view there is no substance in this argument but even if it were accepted it would not advance the respondent's case for as I have already said Motordom's actual authority, before revocation, would not have extended to a transaction of the character under consideration. (at p100)

12. The next matter was concerned with s. 28 of the Sale of Goods Act, the respondent contending that this was a case where Motordom having sold to the appellant the vehicles which were "accepted" for the purposes of the display plan continued in possession of them and that pursuant to that section the transaction of 2nd November 1960 was effective to transfer the title to the vehicles to the respondent. There is, however, substantial authority for the proposition that this section has no application where the character of a seller's possession has changed and he does not remain in possession merely as seller but by virtue of his rights as a bailee (Staffs Motor Guarantee Ltd. v. British Wagon Co. Ltd. (1934) 2 KB 305 and Eastern Distributors Ltd. v. Goldring (Murphy, Third Party) (1957) 2 QB, at pp 613, 614) I see no reason to dissent from the statement of the principle in those cases and this contention of the respondent must therefore be rejected. (at p100)

13. The final matter to be mentioned is the matter of the respondent's cross-action which was concerned with moneys owing to the respondent for vehicles purchased from it by Motordom. In my view the cross-action must fail for the evidence clearly shows, as I have already said, that the practice followed by Motordom was to purchase vehicles on its own behalf and not on behalf of the appellant. (at p100)

14. For the reasons given the appeal should be allowed and a new trial ordered for the assessment of damages. (at p100)

OWEN J. This action arose out of a transaction of an unusual kind which took place during the evening of 2nd November 1960 between a company called Motordom Pty. Ltd. and the defendant whereby the former purported to sell to the latter twenty-nine motor cars which had been displayed for sale by Motordom on its business premises. Motordom, the affairs of which were conducted by a man named Webb, carried on business as a dealer in cars, buying and selling them in its own name. In order to finance its operations it had entered into what was described as a "floor plan" or "display plan" arrangement with the plaintiff of a kind well known in the motor trade. The evidence as to the terms of this "display plan" arrangement was somewhat confused but, as found by the learned trial judge, the arrangement was to the following effect. Motordom bought cars in its own name as a principal and, when it wished to avail itself of the "display plan" arrangement in respect of cars purchased by it, it sought the plaintiff's approval to bring them under that arrangement. If the plaintiff approved, it would then pay Motordom ninety per cent of the purchase price which had been paid by Motordom for whatever cars were so approved. The learned trial judge took the view - and I think rightly so - that the effect of the arrangement was that Motordom purchased all cars on its own account and that when any of them was approved by the plaintiff for the purposes of the "floor plan" arrangement and ninety per cent of the original purchase price was paid over to Motordom the title to the car passed to the plaintiff and it was thereafter held by Motordom as a bailee from the plaintiff for the purpose of reselling it in accordance with the terms of the "display plan" arrangement. When a resale was effected, Motordom would repay to the plaintiff the amount earlier paid to it by the latter, together with what was called a "rental charge" for the period during which Motordom had held the car under the "plan". All resales of "display plan" cars were made by Motordom in its own name and at such prices as it thought fit and, when a resale was made, it was the practice of Motordom, as known to the plaintiff, to give the buyer an assurance that it was the owner of the car. This, it appears from the evidence, is the usual practice of dealers in the trade. In the course of its business Motordom frequently bought cars from the defendant which was aware at all material times that some of the cars displayed for sale on Motordom's premises were held under "display plan" arrangements with the plaintiff although at no time did it know which of the cars were so held. (at p101)

2. Early in November 1960 Motordom found itself in financial straits and this soon became known to the trade. One result was that during the afternoon of 2nd November, the plaintiff revoked Motordom's authority to deal with any cars held by it under the "display plan" arrangement. Some hours later there occurred the transaction between the defendant and Motordom to which I have earlier referred. Motordom owed the defendant 16,510 pounds for cars which it had bought from the latter and, on that day, three of its cheques totalling 13,290 pounds given in part payment of the debt were dishonoured. Webb, on behalf of Motordom, assured the defendant that the cheques would be met on re-presentation on the following day but the defendant required immediate security for the payment of the debt. It was thereupon agreed between them that Motordom would sell to the defendant twenty-nine cars out of the stock held by it for a total price of 16,510 pounds and a cheque drawn by the defendant for that amount in favour of Motordom was handed to the latter. On the back of it was written "Please pay to the order of Pacific Motor Auctions Ltd.". This was signed by Webb on behalf of Motordom and the cheque was handed back to the defendant which undertook to return the cars if the dishonoured cheques were met on the following day. The cars were at once removed by the defendant and were later sold by it, the dishonoured cheques having again been dishonoured. In respect of each of the twenty-nine cars the defendant obtained from Motordom a statutory declaration, signed by Webb on its behalf, to the effect that the car was Motordom's sole property and that it had good right and title to sell it. The sixteen cars which are the subject of dispute in these proceedings were among the twenty-nine cars covered by the above transaction. (at p102)

3. As stated above, the learned trial judge proceeded upon the basis that the effect of the "display plan" arrangement between the plaintiff and Motordom was to vest in the plaintiff as purchaser from Motordom the title to cars originally bought by Motordom on its own behalf and subsequently accepted by the plaintiff for inclusion in the "display plan" arrangement, such cars thereafter being held by Motordom as a bailee from the plaintiff for the purposes of resale on the terms of that arrangement. That being so, the question is whether the plaintiff, to adopt the words of s. 26(1) of the Sale of Goods Act, "is by its conduct precluded from denying" Motordom's authority to deal with the sixteen cars in question in the way in which it did. There can be no doubt that had Motordom sold the cars in the ordinary course of its business, the defendant would have got a good title to them notwithstanding the fact that the plaintiff had revoked Motordom's authority to sell. The case would then have fallen within the terms of s. 5 of the Factors Act. But the transaction between Motordom and the defendant was not one in the ordinary course of Motordom's business as a dealer in cars and that section cannot therefore operate. Nor can the defendant rely upon s. 28(1) of the Sale of Goods Act since Motordom was not in possession of the goods merely as the seller of them to the plaintiff but as a bailee under the "display plan" arrangement: Staffs Motor Guarantee Ltd. v. British Wagon Co. Ltd. (1934) 2 KB 305; Eastern Distributors Ltd v Goldring (Murphy, Third Party) (1957) 2 Q.B. 600. It was necessary, therefore, for the defendant to show that it had been induced by the plaintiff's conduct to believe that Motordom was entitled to deal with the cars in a manner which was outside the ordinary course of a dealer's business. Motordom professed to sell the cars as the owner of them but there is nothing in the evidence which would justify the conclusion that in the particular transaction with which this case is concerned the plaintiff was privy to that representation. In that respect the facts differ from those in the Eastern Distributors' Case (1957) 2 QB 600 There Murphy, the owner of the vehicle, agreed that another person, Coker, should pretend to the plaintiff, a hire purchase company, that he, Coker, owned the vehicle in order to induce the plaintiff to buy it from Coker and the plaintiff, in reliance upon the representation that Coker was the owner, bought the vehicle. But that is not this case. By allowing the cars which it owned to be in the possession of Motordom the plaintiff unquestionably held that company out as having authority to sell them in the ordinary course of its business as a dealer and, for the purposes of such sales, to represent that it was the owner of cars sold. And any such sale would have been effective to pass title to an innocent purchaser notwithstanding the revocation of Motordom's authority since a purchaser of goods from one whose business it is to buy and sell goods of that description is entitled to assume that the seller has authority to sell, in the ordinary course of his business, goods of that description which are in his possession. But a purchaser is not entitled to assume that the seller has authority to deal with such goods otherwise than in the ordinary course of business unless there be some further act by the true owner leading the purchaser to believe that the seller is clothed with authority to enter into such a transaction. (at p103)

4. In the present case I can see nothing to support such a conclusion and thus preclude the plaintiff from denying Motordom's authority to deal with the cars in the way in which it did. In other words, the plaintiff did no more than hold out Motordom as having authority to dispose of its cars in the ordinary course of its business as a dealer. (at p103)

5. It should be added that counsel for the defendant submitted that under the terms of the "display plan" arrangement, the purported revocation by the defendant of Motordom's authority was ineffective. I am unable to agree with the submission but, even if it were so, the defendant's position would not be thereby bettered since the actual authority conferred upon Motordom was, in my opinion, one which did no more than authorize sales in the ordinary course of Motordom's business as a dealer. (at p103)

6. The cross-action pleaded by the defendant related to the price of a number of cars which Motordom had purchased from the defendant and brought under the "display plan" arrangement before 2nd November. The defendant claimed that payment for these cars had not been made by Motordom and that the plaintiff was liable for the price. But liability could attach to the plaintiff only if the cars in question had been bought by Motordom as agent for the plaintiff and not on its own account and, since Motordom's purchases were all made on its own account and not as an agent for the plaintiff, the cross-action cannot succeed. (at p104)

7. The appeal should be allowed and the cross-appeal dismissed. (at p104)

ORDER

Appeal allowed with costs. Verdict and judgment in favour of defendant on plaintiff's claim set aside and action remitted to Supreme Court for assessment of damages on that claim.

Cross appeal dismissed with costs.