Car scammed, so who owns it.

ScouseMouse

NOT seeking legal advice, not relevant to any case I know of.

I believe there is a scam going around and we are guessing how it could end up. I had a chat with a car dealer earlier and he says its common.

Say I sold a car to you, you paid me with a stolen draft, and then you sold it cash to someone else.

Who owns the car?

I think I would own it. It was scammed/stolen off me. But a third party has it and says its theirs as they bought it (when it was sold the second time.)

Anyone any thoughts on this? I think its a bit complicated.

Myrddin

Surely its classified as stolen goods, regardless of whoever it's passed on to?

NoQuarter

The person its passed onto is known as "equity's darling". give it a google and have a read.

Procrastastudy

This one always makes my head hurt. Am I right in thinking it comes down to the 'scammed' party having done reasonable checks? I always find the cases on point rather amusing in a pencil thin mustache kind of way.

To clarify - if the seller makes sure, as far as he can, he's dealing with the person named on the draft Ingram is followed and they get the car back. If the seller just accepts the draft Lewis is followed and the third party is the owner of the goods?

seamus

I imagine it comes down to the intention of the "scammer" as opposed to any diligence on the behalf of the scammee.

That is, if someone knowingly hands over a forged draft to procure a vehicle, then presumably that would be theft, and the property becomes stolen goods which can be reclaimed by the original owner?

However, if the payment fails for another reason, but the car was being bought on good faith, the the original owner has no recourse. So if, for example, the car was signed over on the promise of payment which eventually is not made, then the seller's only recourse is with the "scammer" who has not paid them, and has no claim to the vehicle.

Actually, looking at the "equity's darling" concept in this regard, it would appear there is some obligation on the final purchaser to be reasonably clear that no-one else has a claim to the property. In the case of a car, the absence of registration documents would be notice to that buyer that someone else may have a claim to that property.

In a simpler example, let's say an iPhone is stolen from a shop, in the box, and sold on adverts.ie, then the buyer would have no reason to believe that the sale is fraudulent. Indeed, the existence of a box and such would be a strong reason to believe that the seller is genuine. So in that case, even if the phone was tracked by the shop/network, they would have no recourse to claim or disable the device. Total armchair stuff here from me

Procrastastudy

seamus wrote: »

I imagine it comes down to the intention of the "scammer" as opposed to any diligence on the behalf of the scammee.

That is, if someone knowingly hands over a forged draft to procure a vehicle, then presumably that would be theft, and the property becomes stolen goods which can be reclaimed by the original owner?

However, if the payment fails for another reason, but the car was being bought on good faith, the the original owner has no recourse. So if, for example, the car was signed over on the promise of payment which eventually is not made, then the seller's only recourse is with the "scammer" who has not paid them, and has no claim to the vehicle.

Actually, looking at the "equity's darling" concept in this regard, it would appear there is some obligation on the final purchaser to be reasonably clear that no-one else has a claim to the property. In the case of a car, the absence of registration documents would be notice to that buyer that someone else may have a claim to that property.

In a simpler example, let's say an iPhone is stolen from a shop, in the box, and sold on adverts.ie, then the buyer would have no reason to believe that the sale is fraudulent. Indeed, the existence of a box and such would be a strong reason to believe that the seller is genuine. So in that case, even if the phone was tracked by the shop/network, they would have no recourse to claim or disable the device. Total armchair stuff here from me

Have a read of Ingram v Little [1961] 1 QB 31, Phillips v Brooks Ltd [1919] 2 KB 243 and Lewis v Avery [1972] 1 QB 198 if at all possible. All cases on Unilateral Mistake - any insight is most welcome but I don't think there is any onus on the final purchaser. I'm very likely wrong but I thought I'd throw that in there.

ScouseMouse

This came about from a conversation I had with a car dealer this very lunchtime. We were talking about scams in general. I am assuming this is "pub talk", so please dont look on this as legal advice as its not.

Apparently, this actually happened to someone, somewhere, - it would not surprise me, new scams are appearing all the time. The story is correct, stolen/forged draft, car sold on, confusion about who owns what.

I think its mad but you only have to read the motors forum and new scams are around all the time.

My uneducated opinion is the car is now stolen property, as mentioned by someone else, but who knows.

Joey the lips

Moral of the story... Dont buy a car thats sold too quick. This can be checked by logging onto the motor tax office and checking if it was taxed recently...

Procrastastudy

superscouse wrote: »

This came about from a conversation I had with a car dealer this very lunchtime. We were talking about scams in general. I am assuming this is "pub talk", so please dont look on this as legal advice as its not.

Apparently, this actually happened to someone, somewhere, - it would not surprise me, new scams are appearing all the time. The story is correct, stolen/forged draft, car sold on, confusion about who owns what.

I think its mad but you only have to read the motors forum and new scams are around all the time.

My uneducated opinion is the car is now stolen property, as mentioned by someone else, but who knows.

AFAIK these type of legal discussions are exactly what this forum is for nice to have a nice hypothetical for a change. As for this being a new scam 2 of the cases I mentioned are about cars... look at the dates

ResearchWill

superscouse wrote: »

This came about from a conversation I had with a car dealer this very lunchtime. We were talking about scams in general. I am assuming this is "pub talk", so please dont look on this as legal advice as its not.

Apparently, this actually happened to someone, somewhere, - it would not surprise me, new scams are appearing all the time. The story is correct, stolen/forged draft, car sold on, confusion about who owns what.

I think its mad but you only have to read the motors forum and new scams are around all the time.

My uneducated opinion is the car is now stolen property, as mentioned by someone else, but who knows.

Yes more than likely stolen property, but the correct question is can a person who buys that car get good title. That is where bona fida purchaser for value comes in. If the court finds he was then he has good title.

If I remember correctly to purchase property at a market overt will also give good title even as against a person who had the property stolen from him.

Milk & Honey

The scammer gets a voidable title to the car. When the vendor discovers the scam he can avoid the contract. If the car has been sold on before the contract is avoided the purchaser gets a good title. The key test is when the purchaser acquired title and when the vendor attempted to avoid the contract. If the purchaser got title first the purchaser keeps the car. If the vendor took steps to avoid before the purchaser acquired title the vendor gets the car back.

ResearchWill

An Irish case on voidable title


JOHN ANDERSON , Plaintiff  v. MATTHEW RYAN, Defendant.
11,18 July 1967  
Contract - Exchange of goods - Fraud - Voidable contract - Sale of goods by fraudulent possessor to defendant - Resale by defendant to plaintiff - Whether plaintiff had a good title to the goods - Sale of Goods Act, 1893 (56 & 57Vict. c. 71), ss. 1, 12, 21, 23.
The owner, D., of a Mini motor-car answered an advertisement which offered a Sprite motor-car for sale. The Sprite car was brought by X. to D. so that he might inspect it and D. and X. agreed to exchange cars. The exchange was effected and X. departed with the Mini car; X. was not tho owner of tho Sprite car, which had been stolen, and he ultimately pleaded guilty to a charge of obtaining the Mini car from D. by false pretences. X., or his agent, represented himself as being D. and sold the Mini car to the defendant, who bought in good faith and without notice of the defect in X's title. On the 15th January, 1965, the defendant agreed with the plaintiff to sell him the Mini car for £225 and to effect certain repairs on the car for a further sum of £22, and the plaintiff immediately paid the sum of £225 to the defendant; later on the same day the defendant paid X., or his agent, for the car. A few days later, when the repairs had been completed, the plaintiff paid the sum of £22 to the defendant who then delivered the Mini car to the plaintiff. The police took possession of the car from the plaintiff, who thereupon sued the defendant in the Circuit Court for £247 damages and recovered judgment against him for that sum. The defendant appealed to the High Court and, at the hearing of the appeal, the plaintiff submitted (a) that the sale to him was complete when he paid the defendant the sum of £225; (b) that he had paid the sum of £247 for a consideration which had wholly failed by reason of the provisions of s. 21, sub-s. 1, of the Sale of Goods Act, 1893; and (c) that he was entitled to the sum of £247 as damages for breach of an implied condition relating to good title or as damages for breach of an implied warranty for quiet enjoyment pursuant to s. 12 of the Act of 1893.
Held by Henchy J. (allowing the appeal) 1, that X. had acquired a voidable title to the Mini car as a result of the exchange, which title had not been avoided by D. at tho time when the sale by X. to the defendant was completed by the payment of the price by the defendant.
2. That the defendant had acquired at such time a good title to the Mini car pursuant to the provisions of s. 23 of the Sale of Goods Act, 1893, as he had bought in good faith and without notice of the defect in X's title.
3. That although the defendant's transaction with the plaintiff on the 15th January, 1965, occurred before the defendant had completed his purchase of the car from X., the defendant had not "sold" goods when he was not the owner thereof so as to attract the operation of s. 21, sub-s. 1, of the Act of 1893 as the defendant's transaction with the plaintiff on the said date only constituted an "agreement to sell" (as defined in s. 1, sub-s. 3 of that Act) and that the "sale" by the defendant to the plaintiff took place after the defendant had acquired his title and when the repairs had been completed and the sum of £22 had been paid.
4. That, accordingly, the plaintiff had acquired a good title to the car from the defendant.
Appeal to the High Court.


In the UK it has been held as enough notice in such a case to inform the police and the AA.