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Manuofetoa v Fonua [1998] TongaLawRp 12; [1998] Tonga LR 82 (5 June 1998)

IN THE SUPREME COURT OF TONGA
Supreme Court, Nuku’alofa

C 1208/96

Manuofetoa

v

Fonua

Finnigan J
1, 2 June 1998; 5 June 1998

Contract ⎯sale of goods ⎯ unpaid purchase price Sale of goods — bona fide purchaser for value without knowledge

On 11 July 1996, the plaintiffs sold goods to the first defendant for TOP23,620.90. The first defendant paid TOP10,000 and was to pay the balance within a short time. On that same day the first defendant sold the goods to the second defendants for TOP14,268.40. When the balance was not paid, the male plaintiff pressed the first defendant. At the end of July or beginning of August the first defendant took the male plaintiff to the second defendants to ask them to pay the balance. The plaintiff then lodged a complaint against the first defendant with the police. Thereafter he tried, with a degree of success, to have the unsold balance of the goods retained by the second defendants until the matter could be determined in court. There was said to be an agreement by the plaintiffs together with the police and one of the second defendants that the second defendants will keep under safe custody the goods as per an inventory and agreement. The plaintiffs seek the return of the goods or payment of TOP12,620.90 from the second defendants. The claim against the first defendant was not pursued at this hearing. The second defendants claim in the position of bona fide purchaser for value without knowledge of the relationship between the first defendant and the plaintiff. Issues to resolve were: was there any contractual basis on which the second defendants may be found liable to the plaintiffs, and if so, what was that contract, and what was their liability?

Held:

1. The plaintiffs passed title in the goods to the first defendant and thereafter had no security in the goods with which to enforce payment of the balance. They no longer owned the goods, they had only their contract to be paid the balance of their price.

2. The evidence was that there was a valid contract for sale, a price was paid, the goods were delivered and the second defendants had good title. There was no legal principle by which title could be claimed from the second defendants by the plaintiffs, so that the goods (or what remained of them) might be returned to the plaintiffs.

3. There was no legal principle whereby the second defendants, who had good title under a contract with the first defendant, could be required by the court to pay the first defendant’s debts.

4. Judgment was entered for the second defendant.

Cases considered:

Phillips v Brooks Ltd [1919] 2 KB 243; [1918-19] All ER Rep 246

Lewis v Averay [1972] 1 QB 198; [1971] 3 All ER 907 (CA)