² Annual Financial and Commercial Review, 19th October, 1959, p. xi.Google Scholar

³ For a discussion of the nature of hire-purchase as a special form of bailment, see Diamond, , Equitable relief for the purchaser of hire-purchase goods, (1956)Google Scholar, 19 M.L.R. 498, 499, and see Scammell v. Ouston, [1941] I All E.R., at pp. 17 and 27.Google Scholar

⁴ It has been suggested that the owner under a hire-purchase agreement is in an analogous position to a mortgagee of chattels but this does not appear to be the correct view of the relationship of the parties. See McEntire v. Crossley Brothers, Ltd., [1895] A.C., at pp. 465 and 468.

^{page 80 note 1} Wild goes so far as to say that it is rare to find the hire-purchase transaction which has not been carried through with the aid of a finance company. The Law of Hire-Purchase, 30.

^{page 80 note 2} For a discussion of this method, see Modem Light Cars, Ltd. v. Seals, [1933] All E.R. Rep. 539, 542; [1934] 1 K.B. 32, 40.

^{page 80 note 3} For a curious form of transaction, known as “Hire-Hire”, the only purpose of which appears to be to take the hiring out of the provisions of the Act, see Abrahams, , The Legal Mind, (H.F.L. (Publishers) Ltd., 1954), 175.Google Scholar

^{page 80 note 4} Menzies v. United Motor Finance Corporation, Ltd., [1940] 1 All E.R., at p. 554.

^{page 81 note 1} For a description of the steps usually taken to protect the finance company, see Grundy, , Money at Work, (Sweet & Maxwell Ltd., 1958), 124Google Scholar. And see the Guardian for 30th August, 1960, at p. 14, for the economic reasons why certain hirepurchasers are at present finding it worth-while to cease paying their instalments and to invite the finance company to retake the car.

^{page 81 note 2} Technically known as “block discounting”. Grundy, op. cit. 120. Although the transaction is the mortgage of a chose in action and so, at first sight, taken outside the Chattels Transfer Ordinance by section 2, it appears probable that the benefit of the hire-purchase agreements are “book or other debts” within the meaning of section 26 of the Ordinance and thus caught by that section if the mortgage is not registered. See Vol. 7 of the Encyclopaedia of Forms & Precedents (3rd Ed.), 232 and 233. (And see p. 292 for the difficulties that can arise under the Bills of Sale Acts in which there is no provision similar to section 26 of the Chattels Transfer Ordinance.)

^{page 81 note 3} McEntire v. Crossley Brothers, Ltd., [1895] A.C. 457.

^{page 81 note 4} See Karam Singh v. M. R. Ghai & Sons (1936), 3 E.A.C.A. (Pt. II), 55, 59.

^{page 82 note 1} See the Chattels Transfer Ordinance, s. 42 and paragraphs 5 and 7 in the Third Schedule.

^{page 82 note 2} I.e., the Bills of Sale Acts.

^{page 83 note 1} Fisher & Lightwood's Law of Mortgage (7th Ed.), 58 and 59. And see Re Watson (1890), 25 Q..B.D. 27, 37.

^{page 83 note 2} Karam Singh v. M. R. Ghai & Sons, above.

^{page 83 note 3} This phrase, which was the one used by the court, was a misnomer, because the Chattels Transfer Ordinance had been passed six years earlier. Neither counsel nor the court, however, appears at any time to have referred to the Ordinance. Although s. 2 of the Ordinance expressly exempts hire-purchase agreements from the definition of an “instrument” it is thought that this merely gives statutory recognition to the decision of the House of Lords in McEntire v. Crossley Brothers, Ltd., above, and that the exemption is accordingly no wider than it is in England.

^{page 83 note 4} (1915), 84 L.J. K.B. 1276.

^{page 83 note 5} [1891] I Q..B. 638.

^{page 83 note 6} At p. 57

^{page 83 note 7} At p. 59.

^{page 84 note 1} [1933] All E.R. Rep. 46; [1933] 2 K.B. 251.

^{page 84 note 2} Waldock, , The Law of Mortgages (2nd Ed.) 98Google Scholar. And see Goddard, L.G.J., Polsky v. S. and A. Services, [1951]Google Scholar 1 All E.R. 185, 188, affirmed on appeal, [1 All E.R. 1062 n. See also Diamond, , Hire-purchase agreements as bills of sale, (1960) 23 M.L.R. 399.Google Scholar

^{page 84 note 3} Vol. 10 of the Encyclopaedia of Forms & Precedents (3rd Ed.), 28.

^{page 84 note 4} Re Yarrow; Ex p. Collins (1889), 61 L.T., at p. 643.

^{page 84 note 5} At p. 644.

^{page 84 note 6} See p. 18 above.

^{page 85 note 1} See s. 20 of the Act of 1878. This section was repealed by s. 15 of the Act of 1882 so far only as security bills were concerned, absolute bills being left unaffected. Swift v. Pannell (1883), 24 Ch. D. 210.

^{page 85 note 2} There is the further advantage in Kenya that the requirements of the Ordinance are not as stringent as those of the English Acts. See Hauhriaram v. Hem Singh (1932), 14 K.L.R. 17, where the Court of Appeal held that inaccuracy in describing the consideration did not avoid the instrument and that extrinsic evidence of the identity of the chattels comprised in the instrument might be given to supplement the terms of the instrument. See, too, Santa Singh Pardesi v. Thakar Doss (1935), 16 K.L.R. 85. Contrast ss. 8 and 4 of the Act of 1882.

^{page 85 note 3} See p. 90 below.

^{page 85 note 4} [1954] I All E.R. 847. The case is the only one in which the provisions of the Chattels Transfer Ordinance have been considered by the Privy Council.

^{page 85 note 5} I.e. he assumed the owner was solely beneficially entitled to the vehicle and conducted the sale on that basis. Had he been aware of the chattels mortgage he should have acted under s. 39 of the Chattels Transfer Ordinance which provides, in such a case, instead of the chattels themselves being sold, for the right, title and interest (that is, the equity of redemption), of the mortgagor in the chattels to be sold.

^{page 86 note 1} Cap. 30. The Privy Council held that the section was one of general application and was not limited to cases of bankruptcy, [1954] I All E.R., at p. 849.

^{page 86 note 2} [1950] 2 All E.R. 982, affirming the decision of FINNEMORE, J., at ibid., p. 201. There was also an obiter dictum of McCARDIE, J. See Jones Brothers (Holloway), Ltd. v. Woodhouse, [1923] 2 K.B. 117, 126. FINNEMORE, J., considered this dictum (at p. 203) but decided that it could not help him as the point had not been argued before McCARDIE, J.

^{page 86 note 3} The Bankruptcy & Deeds of Arrangement Act, 1913, s. 15. For material purposes the two sections are identical.

^{page 86 note 4} [1950] 2 All E.R. at p. 986. The learned Lord Justice had drawn attention to this contest the year before.“In the development of our law, two principles have striven for mastery. The first is for the protection of property: no one can give a better title than he himself possesses. The second is for the protection of commercial transactions: the person who takes in good faith and for value without notice should get a good title. The first principle has held sway for a long time, but it has been modified by the common law itself and by statute so as to meet the needs of our own times.” Bishopsgate Motor Finance Corporation, Ltd. v. Transport Brakes, Ltd., [1949] I All E.R. 37, 46; [1949] 1 K.B. 322, 336 and 337.

^{page 87 note 1} Supreme Court Civil Case No. 806 of 1950 (unreported).

^{page 87 note 2} (1955), 22 E.A.C.A. 9.

^{page 87 note 3} [1954] 1 All E.R. 847.

^{page 87 note 4} At p. 850.

^{page 87 note 5} This is not to say, however, that the Privy Council found it easy to explain the provisions of s. 45 (3) of the Bankruptcy Ordinance. The most serious difficulty that exists is in making sense of the proviso at the end of the section. As the purchaser is a “person other than such bailiff” and the true owner of the chattel is a “claimant who may prove that at the time of the sale he had a title to such goods”, it would appear that the proviso is intended to mean that nothing contained in the sub-section is to affect the right of the true owner to recover the goods or their value from the purchaser. Lord REID drew attention to this difficulty but overcame it by saying that a proviso cannot, save in the most exceptional circumstances, nullify the main enactment to which it is a proviso. (P. 851 of the Report.) It is submitted that the only way in which the proviso can be explained at all is by saying that the words “purchaser or” must have been omitted by inadvertence at the end of the proviso, immediately before the word “bailiff”. SOMERVELL, L.J., in Curtis v. Maloney, was prepared, if necessary, to hold that this was the case: [1950] 2 All E.R., at pp. 984 and 985. Dyal Singh's case discloses the further difficulty that, in the case of a sale in execution, the holder of a registered chattels mortgage is put in a worse position than, as a general rule, is the case with a chattels mortgagee whose instrument is unregistered. S. 14 of the Chattels Transfer Ordinance provides that” No unregistered instrument comprising any chattels whatsoever shall, without express notice, be valid and effectual as against any bona fide purchaser or mortgagee for valuable consideration …” It is clear that had the purchaser in Dyal Singh's case had express notice of the existence of the chattels mortgage this would not have affected the decision.

^{page 88 note 1} See (1955). 22 E.A.C.A., at p. 12.

^{page 88 note 2} “It was never intended to protect the sheriff or other officer who acted negligently.” So Lord BEAUCHAMP in the debate on the English Act of 1913: H.L. Deb. Vol. XIV (1913) Col. 1831.

^{page 88 note 3} Jurisprudence, 296. And see p. 413.

^{page 88 note 4} The statement in 16 Halsbury's Laws (3rd Ed.) 58 that, under s. 15 of the Bankruptcy & Deeds of Arrangement Act, 1913, the good title acquired by a purchaser from the sheriff is subject to the right of any person who may prove that at the time of sale he had a good title to the goods “to any remedy to which he may be entitled against the purchaser” appears to be an error for” any person other than the purchaser” [and sheriff]. The position is correctly set out in the footnote, where Curtis v. Maloney and Dyal Singh's case are both cited.

^{page 98 note 1} As part of the same scheme of legislation for enabling farmers to obtain working capital there was passed, at the same time as the Chattels Transfer Ordinance, the Agricultural Advances Ordinance, 1930 and s. 10 of that Ordinance (now Cap. 183, s. 10) contains the following very wide clause relating to notice in the case of land: “Notwithstanding anything in any Ordinance contained, or any provision of law or equity to the contrary, immediately upon the making of the advances authorised by this Ordinance, all persons dealing with the land in respect of which the advance is made or any interest therein shall be deemed to have notice of such advances, and all such dealings shall be and be construed to be subject to the charge and priority created by this Ordinance.”

^{page 89 note 2} See p. 85, note 1, above.

^{page 89 note 3} The material part of the section, which is s. 42 (c) of Cap. 30 and which reproduces s. 38 (c) of the English Bankruptcy Act, 1914, provides that there shall be included in a bankrupt's property, divisible among his creditors, “all goods, being at the commencement of the bankruptcy in the possession, order or disposition of the bankrupt, in his trade or business, by the consent and permission of the true owner, under such circumstances that he is the reputed owner thereof.”

^{page 90 note 1} By the terms of the reputed ownership section being limited to goods used in the bankrupt's trade or business.

^{page 90 note 2} For a long list of examples of such persons, ranging from undertakers hiring funeral hearses on hire-purchase to manufacturing coopers hiring gas engines, see 2 Halsbury's Laws (3rd Ed.) 445 note (h).

^{page 90 note 3} Gorton v. Falkner (1792), 4 T.R. 565, 567. Gilman v. Elton (1821), 3 Brod. & Bing. 75, per DALLAS, C.J., at p. 79: “The rule grows out of the relation of landlord and tenant, and out of the nature of the thing itself.”

^{page 90 note 4} The person claiming the benefit of the section must serve the landlord or the distraining bailiff with a declaration in writing that the tenant has no interest in the goods in question. Particulars of the goods should be set out in an inventory annexed to the declaration.

^{page 91 note 1} Cap. 154. The chattels that are exempt from distress are listed in s. 16 (1).

^{page 91 note 2} See p. 90, note 4, above.

^{page 91 note 3} The wording is wider than that contained in s. 42 (c) of the Bankruptcy Ordinance, because it is not limited to goods used for the purposes of trade or business.

^{page 91 note 4} Times Furnishing Co., Ltd. v. Hutchings, [1938] 1 All E.R. 422.

^{page 91 note 5} See p. 90, note 2, above.

^{page 92 note 1} In 1937.

^{page 92 note 2} As the landlord already has statutory notice of the chattels mortgage it should logically not be necessary for the mortgagee to serve a declaration on him and goods included in a registered chattels mortgage should alternatively be included in the list of articles that are exempt from distress in s. 16 (1) of the Distress for Rent Ordinance.

^{page 92 note 3} Cap. 290. This section is in similar terms to s. 25 (2) of the English Sale of Goods Act, 1893.

^{page 92 note 4} The common law doctrine is preserved by s. 23 (1) of the Sale of Goods Ordinance, which reproduces s. 21 (1) of the English Act.

^{page 93 note 1} Helby v. Mathews, [1895] A.C. 471, followed in Mubarak AH v. Wali Mohamed & Co. (1938), 18 K.L.R. 23.

^{page 93 note 2} Except in the case, in England, of a sale in market overt. Bishopsgate Motor Finance Corporation, Ltd. v. Transport Brakes, Ltd., [1949] 1 All E.R. 37; [1949] 1 K.B. 322. This exception does not apply in Kenya where sales in market overt do not form part of the law. The Sale of Goods Ordinance is in most respects a reproduction of the Act of 1893 but s. 22 of the Act, which gives a good title to a purchaser in market overt, has no counterpart in the Ordinance.

^{page 93 note 4} In order to put the matter beyond doubt it is usual also to provide that the hirer's option to buy the chattel shall be exercisable on his paying a nominal sum in addition to the total of the instalments due under the agreement. For the position of the hirer who has such an option but who permits execution to be levied on the chattel by a judgment creditor and has the chattel retaken by the owner, see Kelly v. Lombard Banking Co. Ltd., [1958] 3 All E.R. 713.

^{page 93 note 5} Why he should have taken this gratuitous action does not appear from the report.

^{page 93 note 6} This, though a real one, is not the only risk that faces the owner of a motor vehicle in Kenya who lets it out on hire-purchase. For a case where a one-eyed undischarged bankrupt, who concealed the first of these disabilities by wearing dark glasses, purported to enter into a hire-purchase agreement on behalf of a limited company that did not exist and gave a cheque for the initial deposit which was subsequently dishonoured, see Pandya v. The Oriental Fire & General Insurance Co. Ltd., [1957] E.A. 21.

^{page 94 note 1} Duder v. Baillie (1952), 25 K.L.R. 27.

^{page 94 note 2} Shortt v. Searle (1953), 26 K.L.R. 4.

^{page 94 note 3} It has been suggested that s. 25 of the Sale of Goods Act, 1893, should be amended so as to provide that where a hirer is in possession of a motor car widi the consent of the owner, a purchase from the hirer by a person buying in good faith and without notice that the seller is not the owner shall convey a good title unless the hire-purchase agreement is registered in accordance with amended regulations which it is suggested should be made. See Sale of motor vehicle hire-purchaser: a legislative proposal (1954), 17 M.L.R. 238. In the case of a chattel which it is unusual separately to insure and for which no document of title is available, such as a refrigerator, questions of estoppel may be less easy to decide.

^{page 95 note 1} This rather unlovely phrase appears to be hallowed by usage. For the English equivalent see Maitland, Equity (2nd Ed.), 193. The intention of the proposed amendment is to make it possible for any chattel, however cumbersome, to be available as security for a loan and to do away with the necessity for it to be transferable by delivery. It may well be that the more bulky a chattel is, the more suitable it is as security for a loan.

^{page 95 note 2} I.e. movable or immovable.

^{page 95 note 3} The alternative form of words to cover choses in action is used so as to adopt the statutory form in s. 130 of the Indian Transfer of Property Act, 1882, but to avoid any argument that, by reason of s. 137 of the same Act, stocks and shares are not exempted from the proposed definition of a chattel for the purposes of the Chattels Transfer Ordinance. If the suggested definition were adopted it would be desirable to make consequential amendments to the definition of the word “instrument” in the Ordinance and it is submitted that that definition needs amendment in any event so as to make clear the position of fixtures.

^{page 95 note 4} This amendment has been made once already but, for rather obscure reasons, the Secretary of State directed that the amending Ordinance be repealed and the original position be restored. See the Chattels Transfer (Amendment) Ordinance, 1932, the Chattels Transfer (Amendment) Ordinance, 1934 and Kenya Legislative Council Debates (1934), Vol. I, p. 19.

^{page 96 note 1} Companies seem to have been regarded as capitalist villains in the ‘thirties. “The original Ordinance was a poor man's Ordinance and carefully excluded companies from the preferential treatment which the poor farmer was getting under it, and now we are gradually shifting back to allow the rich man as represented by companies to be better off than individual farmers. And there are many other companies besides farming companies which we have to consider. If we allow them we shall have to open the Ordinance to everybody; if companies are allowed to benefit under this poor man's Ordinance I do not know whom we can exclude. “—The Attorney-General, speaking on the Chattels Transfer (Amendment) Bill, 1934. Debates (1934), Vol. I, p. 20. And so the East African Standard's leading article on Agricultural Credits: “We believe it ought to be accepted as a guiding principle by the enquiring bodies that ‘no companies need apply’.” 31st May, 1930, 12.

^{page 96 note 2} Sainsbury in (1924), 40 L.Q.R. at p. 465.

^{page 97 note 1} Sainsbury, at p. 470. This sombre warning is underlined when one thinks of the care taken in drafting the Act of 1882. “The Bill which eventuated in the Act of 1882 received the most critical consideration from the most capable men of the day, both in 1881 in the House of Commons and in 1882 in select committees of both Houses of Parliament, aided by the answers to a circular sent to judges and registrars as to the operation of and defects, if any, [!] in the Act of 1878. It was apparendy intended to put an end to the almost interminable legal controversies which had arisen on the previous Acts. My Lords, the Act of 1882 has not had in the latter respect the effect which the legislature intended.” Thomas v. Kelly & Baker (1888), 13 App. Cas. 506, at p. 515, per LORD FITZGERALD.

It was not long before the defects in the Act of 1882 became apparent. Within five years of the Act becoming law a critical article discussing its working was published in the Law Quarterly Review, of which the following extract from the first paragraph is fairly representative. “If it is true that all legislation is for the furtherance of litigation, it [the Act of 1882] was an undoubted success; if not, it was, I think with all respect for its authors, a failure. The intention of the Act was paternal. Under the Statute [of] … 1878 the number of bills of sale executed by exigent borrowers had multiplied exceedingly; money-lenders had a time of rejoicing; and outside creditors shivered pecuniarily when, even after bankruptcy proceedings were taken against their debtors, it was found that the property to which they looked for dividends was ‘a’ wede awa’.” Therefore did the Philistines stretch forth their hands against that Samson of iniquity, the Bills of Sale Act, 1878, and proceed to put out its eyes. And verily it has had its revenge. E. Cooper Willis, Observations on the working of the Bills of Sale Act 1878, Amendment Act 1882, (1887), 3 L.Q.R. 300.