Hudson Vs Shogun

Essay by rakeshcaltonA-, January 2006

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Following is the summary of the opinions of the Lords of Appeal for judgement in the case Shogun Finance Limited (Respondents) vs. Hudson (FC) Appellant, Delivered on Wednesday 19th November 2003

This case deliberates on the situation where an impostor dupes a party then passes on the goods thus acquired to a third party. Five Learned Lords deliberate on various pros and cons of the issue and reject the appeal in favour of Respondents 3: 2.

The case is summarised as follows:

A rogue presents himself to a motor dealer and identifies himself as Mr Patel residing at 45 Mayflower Road in Leicester, producing a false driving licence. The Rogue negotiates a price and enters into a hire purchase agreement with the finance company shogun signing as Mr Patel. The showroom contacts the finance company and passes on the available information to the finance company for verification. The finance company based on the information provided does a credit check on Mr Patel and finds him to be credit worthy.

They also compare the signature on the driving licence and the agreement form and found them matching and thus approve the loan. Rogue pays the company 10 % advance part cash and part as a bogus check and parts with the car along with complete documentation. The rogue subsequently sold the car to Mr Hudson who bought the car in good faith. The question is if the title passed on to Mr Hudson good?

Lord Nichollis of Birkenhead discusses the importance of creditworthiness of a buyer and emphasises that a seller will only sell the goods if the buyer is creditworthy. In this case the rogue had cheated the seller by making him believe that he was indeed Mr Patel by producing false identification and thus inducing the seller into...