Folkes v King
A buyer from a mercantile agent in possession of goods with the owner's consent obtains good title, even if the agent obtained possession by fraud, as long as the owner consented to his possession as agent.
Facts
Mr Folkes delivered his car to a dealer, Mr Fisher, to sell for him at a minimum price. Mr Fisher, who intended from the start to defraud Mr Folkes, sold it for much less to a buyer who acted in good faith, and kept the proceeds. The car passed to Mr King, another buyer. Mr Folkes sued Mr King to recover the car.
Legal principle
The Court of Appeal held that Mr King had good title. Under section 2(1) of the Factors Act 1889, where a mercantile agent is, with the consent of the owner, in possession of goods, any sale made by him when acting in the ordinary course of business of a mercantile agent is as valid as if he were expressly authorised by the owner, provided that the buyer acts in good faith. Mr Folkes had consented to Mr Fisher's possession of the car as a mercantile agent, and it did not matter that his consent had been obtained by fraud. The buyer had acted in good faith.
Related cases on nemo dat and transfer of title by non owners
- Bishopsgate Motor Finance Corp Ltd v Transport Brakes Ltd [1949] 1 KB 322
- Car and Universal Finance Co Ltd v Caldwell [1965] 1 QB 525
- Central Newbury Car Auctions Ltd v Unity Finance Ltd [1957] 1 QB 371
- Eastern Distributors Ltd v Goldring [1957] 2 QB 600
- Ingram v Little [1961] 1 QB 31
- Lewis v Averay [1972] 1 QB 198
- Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890
- National Employers' Mutual General Insurance Association Ltd v Jones [1990] 1 AC 24
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