However, upon returning, the plaintiff found out that the representative re-registered the ownership of the car to himself, having first ordered the right to order the vehicle to another person, who, acting on behalf of the owner of the car, but without her aknowledgement, sold the car for him worth 5,000 USD to the same representative .
For this reason, the person appealed to the court with a claim on the recognition of the contract of sale invalid and an obligation to return the illegally obtained vehicle with a certificate of ownership of it.
The plaintiff's main argument was the fact that the actions of the defendants were expressly prohibited by Article 238 of the Civil Code of Ukraine, and they testify to the commission of the transaction as a result of the malicious agreement of one party with the other party (Article 232 of the Civil Code of Ukraine).
The court of first instance refused to satisfy the claim, noting that the person, acting on behalf of the plaintiff under the power of attorney by order of re-assignment, had the right to conclude any agreements regarding the disposal of the car at a price and on terms determined at his own discretion, which is in accordance with the law and covered the extent of the powers indicated in the power of attorney.
The court of appeal disagreed with such a decision, declaring the contract of sale of the car invalid and obliging to transfer the car to the plaintiff.
The Supreme Court, in turn, supported the decision of the court of appellate instance.
The Supreme Court recalled that part three of Article 238 of the Civil Code of Ukraine provided that a representative can not act on behalf of the person he represents in his own interests or in the interests of another person, whose representative he is simultaneously, with the exception of the commercial representation, as well as with others persons established by law.
According to the first and second paragraphs of Article 240 of the Civil Code of Ukraine, the representative is obliged to execute the transaction in accordance with the powers granted to him personally. He may transfer his or her authority, in part or in full, to another person, if it is established by agreement or law between the person represented and the representative, or if the representative was compelled to do so in order to protect the interests of the person he represents.
Please note that a representative who has transferred his authority to another person must inform the person he represents and provide him with the necessary information about the person to whom the relevant authority (substitute) has been transferred. Such a notification of an enforceable transfer must be sent to the person being represented immediately, since the person represented, if it deems necessary, is entitled to unilaterally cancel the transfer. Failure to comply with this obligation entails the person who transferred the authority responsible for the actions of the substitute as their own.
Moreover, if the representative has made the transaction not in the interests of the principal, but in his own, then this is the basis for the recognition of such a transaction invalid. The rule provided for in part three of Article 238 of the Civil Code of Ukraine, is intended to guarantee the interests of the person represented, from possible abuses by the representative (the deision from May 16, 2019 in case № 401/2995/16-ts).
