Helby v Matthews

Facts

• The owner of a piano let it to Brewster under a written agreement.
• Brewster was to pay a monthly rent by instalments.
• If he punctually paid all the instalments the piano would become his property.
• He was expressly at liberty to terminate the hiring at any time by returning the piano, whereupon he would be under no liability for future instalments.
• After paying some instalments Brewster pledged the piano with the defendant pawnbroker.
• The owner sued the pawnbroker for the return of the piano.

Issue

1. Whether a hirer with an option to return the goods was a person who had "agreed to buy" them, so as to be able to pass a good title to a pledgee taking in good faith.

Held

• The House of Lords held that Brewster had not agreed to buy the piano. He had an option to buy which he might or might not exercise, and a corresponding liberty to return the instrument and walk away. An agreement to buy involves a binding obligation to purchase, which he had never undertaken. He was therefore a mere bailee with no title, the protective provision for a person who had agreed to buy did not apply, and the pawnbroker acquired nothing.

Ratio Decidendi

The protection given to a transferee from a person who has agreed to buy goods rests on that person being under a binding obligation to acquire ownership, so that he appears to the world as a prospective owner. A hirer free to return the goods has made no such commitment, so nemo dat quod non habet applies without qualification.