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“Hazel purchased a sewing machine from the Easy-So Company under a conditional-sale agreement that required her to make 36 equal monthly payments of $15 each in order to fully pay for the machine. Easy-So Company assigned the conditional-sale agreement to Easy Finance immediately after the agreement was signed by Hazel. Easy Finance registered the agreement in accordance with the provincial legislation pertaining to security instruments of this type, and notified Hazel of the assignment.
“Hazel used the machine for several months, during which time she found that the machine required constant adjustment by the seller. Eventually, Hazel came to realize that the sewing machine was unsuitable for her purpose. She arranged with Easy-So to take back the machine as a trade-in on a different type of sewing machine that the dealer also sold. Hazel paid the cost difference of $100 and took the new machine home.
“Without advising Easy Finance of the change in the transaction, Easy-So Company sold the trade-in model to Henrietta for $350 cash.
“Some time later, Hazel defaulted in her payments to Easy Finance, and the finance company repossessed her sewing machine. When the finance company indicated that it intended to sell the machine to satisfy the debt, Hazel demanded the return of the machine on the basis that it was not the machine described in the conditional-sale agreement. When Easy Finance confirmed the error, it traced the machine covered by the conditional-sale agreement to Henrietta, then seized the proper sewing machine.
“Both Hazel and Henrietta brought a legal action against Easy Finance for a return of their respective sewing machines.
“Advise all parties of their legal position in this case and indicate the possible outcome. What is the legal position of the Easy-So Company?”
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