Judges considered the case of a father who wanted a red Jaguar for his daughter's wedding and traded in his silver model with a "thoroughly charming" car salesman.
It turned out the salesman, whom Paul Quinn met outside the car showroom where he worked, was a "rogue" and the father ended up with a 14,500 bill after a finance company sued him for not paying instalments on the silver Jag.
Abeed Khan had been employed by the Carcraft showroom but Mr Quinn lost his original case against the dealers because a county court judge ruled the father should have been suspicious about the transaction.
But yesterday the Court of Appeal reversed the ruling, saying there was no reason for Mr Quinn, of Meltham, Holmfirth, West Yorkshire, to be "put on inquiry" by a salesman "apparently very helpful (and plausible) doing everything he could to ensure delivery of the red Jaguar in time for the wedding".
Lord Justice Gross said the issue was which of the two innocent parties, Mr Quinn or the car dealer, "should bear the loss caused by a rogue".
Mr Quinn went to the Carcraft showroom in Leeds where he met Mr Khan and agreed to buy a blue Jaguar with his silver one in part-exchange. It was part of the deal that Carcraft would be responsible for clearing the outstanding debt with Black Horse on his silver Jag. The transaction took place at a service station on the M62.
Mr Quinn cancelled the standing order for payments on the silver Jaguar but he later received a letter from Black Horse telling him the money owed had not been paid. Mr Khan had sold the silver Jaguar without settling the money owed on it.
Carcraft no longer employs Mr Khan.