Acquiring Title
Cases
King v. Walsh
[1932] I.R. 80
KENNEDY C.J. :
The claim in this action was for the return of a certain motor car, or for its value and damages for its detention. The action was tried by O’Byrne J. without a jury on the 6th February, 1931, when the learned Judge gave judgment for the defendant and dismissed the action with costs. The plaintiff has appealed against the order and judgment given for the defendant, and asks that judgment be entered for him or for a new trial.
The plaintiff, who carries on business under the well known trade name of “R. E. Grady,” deals in motor cars, and last year had for sale a second-hand Armstrong-Siddeley touring car of a recent model. The defendant, a member of the Bar, saw the car and was disposed to buy it. About the 20th of August last, the plaintiff allowed the defendant to take the car for a week’s trial. The defendant extended the trial to the 2nd September, when he returned the car. He explained the delay by illness, and no claim arises in this action on foot of detention upon that occasion. The defendant stated that he was satisfied by the trial and had decided to buy the car. The bargain was made on the 2nd September, when the price was fixed at £220, and an agreement was concluded for the purchase on the terms of:(1), the payment of a deposit of a sum of £100 on the 10th of September; (2), the payment of the balance of the price by six or twelve monthly instalments, as the defendant should decide; (3), the transaction to be carried out by means of a hire purchase agreement. The arrangement was confirmed by letter of the 2nd September, 1930, from the plaintiff to the defendant. On the same day (2nd September, 1930), the defendant signed a proposal form for carrying out the hire purchase agreement, and handed it to the plaintiff.
The proposal signed by the defendant was in the form of an application to a Guarantee Corporation to enter into an agreement on the following lines. The Corporation was to buy the car from the plaintiff at the agreed price of £220, and then to let it on hire to the defendant with an option to purchase by six monthly payments to be made by way of rental on hire.
The arrangement having been confirmed by the plaintiff by letter, and the defendant having signed the proposal form, the plaintiff immediately got the car into order, and on the 6th September the defendant went to the plaintiff’s place of business and, having promised to bring or send the deposit of £100 on the following Wednesday, the 10th September, was permitted by the plaintiff to take the car, in which, on the same day, he drove down to the County Kerry, where he stayed until Sunday, the 14th September, when he drove to Thurles and remained there for a week, and then returned to Dublin, where he arrived late on the evening of the 22nd September.
He failed to perform his promise to pay the deposit of £100 according to his agreement with the plaintiff.
On Saturday, the 13th September, the plaintiff (having ascertained the defendant’s address in Kerry) wrote him at that address a letter expressing surprise that he had not heard from the defendant with reference to the deposit
“at foot of your purchase,” which was to have been paid on the 10th September, and requesting that a cheque for the amount be sent him “without further delay.” This letter did not contain a request for the return of the car. The defendant stated in his evidence that this letter was posted on from Kerry, and he did not get it until his return to Dublin on the 22nd September. On the 15th September, the plaintiff not having received a reply to his letter of the 13th (though he could not have expected a reply on that day) instructed his solicitor, Mr. Lane Joynt, and Mr. Joynt wrote the letter of the 15th September and delivered it by hand at the defendant’s residence in Dublin. In that letter Mr. Joynt called on the defendant to return the car to the plaintiff by noon on the following day, the 16th September, or pay the £100 deposit, and to call at the same time and complete the hire purchase agreement, failing which a writ would be issued. Knowing that the defendant was in the country, the plaintiff and his solicitor must be taken to have known that the requirement of that letter could not be complied with. The defendant said he did not get this letter until his return to Dublin on the evening of the 22nd September, and the trial Judge so found as a fact and the finding has not been questioned.
The originating summons in the action was issued on the 18th September.
On the morning of the 23rd September, the defendant met the plaintiff in the street. The defendant, instead of an apologetic attitude for his default in respect of the deposit, appears to have taken up the attitude of the aggrieved party and complained of the action of the plaintiff in putting the matter in the hands of his solicitor and, without making any offer to pay the deposit or carry out his agreement, brought the car back later in the day and left it at the plaintiff’s place of business. The plaintiff alleges that it had been driven about 2,000 miles and had been somewhat damaged.
On the 24th September Mr. Joynt wrote to the defendant asking him to call at his office for the purpose of being served with the originating summons, which had been issued on the 18th September, and also invited the defendant to make a “reasonable offer of settlement for the detention and depreciation of the car.” On the 25th September the defendant saw the plaintiff and reopened the matter, handing him a post-dated cheque for the deposit which the plaintiff said he would submit to his solicitor. On the following day the cheque was returned to the defendant by Mr. Joynt in a covering letter making certain stipulations as to the basis on which the purchase would now be carried out and asking for settlement of the claim for damages for detention. No compromise was made, and the originating summons was served on the 1st of October.
The learned trial Judge, upon the evidence which I have summarised, found that the letters of the 13th and 15th of September did not reach the defendant until the night of the 22nd of September, and that the defendant returned the car to the plaintiff within about half an hour after the interview on the morning of the 23rd September, findings which have not been questioned, and he held that the defendant removed the car on the 6th of September with the consent and approval of the plaintiff, and that the defendant returned the car at the first reasonable opportunity after the plaintiff’s demand for such return reached him. So finding, he was not satisfied that the defendant had at any time wrongfully detained the car against the will of the plaintiff.
In my opinion, no tenable case has been made against the decision of the learned trial Judge. It is not open to question that when the defendant took the car on the 6th September he did so in pursuance of an agreement with the plaintiff to enter into a hire purchase contract for the ultimate acquisition of the car. He was therefore in lawful possession of the car with the consent of the plaintiff pursuant to the agreement. That lawful possession could have been ended and converted into an unjust detention by termination of the agreement by rescission or otherwise followed by a demand for a return of the car refused by the defendant. It is clear, particularly from the letters of the 2nd and 13th of September, and the oral evidence, that the date named for payment of the deposit, the 10th of September, was not made, either originally or afterwards, of the essence of the contract, nor was it stipulated that, failing payment of the deposit, the car was to be returned on that day. If there had been such a stipulation for the return of the car, I should have invited discussion of the question whether a specific demand and refusal other than the bringing of the action would have been necessary to sustain an action of detinue, a question which I reserve for some future occasion when it arises. See Hern and Stub’s Case (1). But on the facts of the present case, the possession continued lawful after the 10th of September under the still subsisting agreement, until the position should be altered by some effective, lawful act, coupled with a demand for its return: Cullen, Allen & Co. v. Barclay (2).
Assuming that the letter of the 15th of September was, in terms, such a demand as would satisfy the legal requirement for the purpose of making the possession of the car by the defendant an unlawful detention, it has been argued on the authority of the Nisi Prius ruling in Logan v.Houlditch (1), that the demand was well and sufficiently made in law by leaving the letter of the 15th of September at the Dublin residence of the defendant, notwithstanding that the plaintiff and his solicitor knew that he was not in residence there at the time but was travelling in the country. I cannot accept it that such delivery of the letter at the defendant’s flat was as a matter of law the making of a demand upon the defendant, until such date as it is shown that the letter actually reached him. If the case cited decided any such thing (I do not think it did) I should refuse to follow it, as against justice and reason.
In my opinion the originating summons was precipitatedly issued. It raised one specific cause of action which, and no other, has been fought out, and that cause of action was in my opinion unsustainable.
I regret the result because I believe that the plaintiff has a grievance for which there was legal redress if he had sought it. But this appeal must be dismissed with costs.
FITZGIBBON J. :
This action was brought to recover damages for the detention of a motor car, and O’Byrne J., who tried the action, dismissed it, because he “was not satisfied that the defendant had at any time wrongfully detained the car against the will of the plaintiff.”
There is no dispute about the facts. The plaintiff is an agent for the sale of motor cars, carrying on business under the old and well-known name of Robert E. Grady, in Dawson Street. In August, 1930, he had a secondhand Armstrong-Siddley car for sale, and the defendant entered into negotiations for purchasing it. On August 20th or 21st the defendant was permitted to take the car on a week’s free trial, and on August 29th the defendant wrote to the plaintiff from Duncannon, Co. Waterford, where he was then stayingwith the car”I have decided to buy her. I think she is all you represent her to be. I cannot, however, give you £225 for her or anything approaching that figure. However, we can discuss this when I return.” On September 2nd the defendant called at the plaintiff’s establishment, and signed a proposal for the purchase of the car for £220 on the hire purchase system, to be discharged by a deposit of £100 down and the balance by “six months extended payments.” The proposal provided for “immediate delivery.” The plaintiff overhauled the car, insured it, and put on a new tyre, the expenses of which came, with the insurance, during the”week’s free trial,” to about £10. On the 6th of September the defendant was permitted by the plaintiff to remove the car, on an undertakingwhich was not keptto bring or send the deposit of £100 on the following Wednesday, September 10th. The plaintiff, who was anxious about his deposit, called at the defendant’s Dublin address, and learned that the defendant was out of town. On Saturday, September 13th, he wrote to the address in Kerry which had been given to him as that which would find the defendant. In that letter he expressed surprise that the deposit had not been paid by the defendant in accordance with his agreement, and requested a cheque without further delay. No reply was received, and the defendant says that this letter arrived at Waterville after his departure, and that he did not get it until his return to Dublin on September 22nd. On September 15th the plaintiff consulted his solicitor, Mr. Lane Joynt, who wrote on his behalf a formal demand for the return of the car by noon on the following day, or in the alternative payment of the £100 deposit, and intimating that in the event of default a writ would be issued. As no reply was received, the summons was issued on September 18th. The defendant’s story, which O’Byrne J. believed, is that he arrived home late on September 22nd, having driven down to Waterville from Dublin on September 6th, spent the period from September 6th to September 14th at Waterville, and the period from September 14th to September 22nd in meandering home to Dublin via Adare and Thurles. On arrival at his home he says that he found the plaintiff’s letter of September 13th and the solicitor’s letter of the 15th, and that the latter contained the first intimation to him of a demand for the return of the car. On the morning of September 23rd, he met the plaintiff in the street, when he says he was on his way to call upon him. He returned the car that day. He did not pay or offer to pay the deposit. On September 24th plaintiff’s solicitor wrote suggesting that the defendant should call at his office in order to avoid the necessity for public service of the writ, and saying that any reasonable offer of settlement would be placed before the plaintiff. The defendant did not reply to this letter, but for the second time went direct to the plaintiff behind the back of his solicitor, and handed him a post-dated cheque for £110,with an offer to enter into a formal hire purchase agreement. The plaintiff declined to accept the cheque and returned it on the advice of his solicitor, Mr. Lane Joynt, who made a counter offer on behalf of his client which was not accepted, and the action proceeded.
O’Byrne J. found as facts:
“1. That during the entire of the first period (viz., from August 20th or 21st to September 2nd) the defendant had possession of the car with the consent and approval of the plaintiff.
2. That the defendant removed the car on the second occasion with the consent and approval of the plaintiff.
3. That the defendant returned the car on this occasion at the first reasonable opportunity after the plaintiff’s demand for such return reached him.”
The first two findings are based on the express statements of the plaintiff himself, and there is not a shadow of a suggestion to the contrary. The third finding is based upon the evidence of the defendant, which was believed by the learned Judge, and must be accepted by this Court as there is no evidence to contradict it.
I regard it as absolutely settled law, accepted as such for some centuries, that to sustain a claim for damages for the mere detention of a personal chattel which has come lawfully into the possession of the defendant by delivery or bailment, there must have been a demand for it by the plaintiff from the defendant, and a refusal by the defendant to deliver or to redeliver it. Cullen, Allen & Co. v. Barclay (1) in our former Court of Appeal declares this law in the most unmistakable language. “An action of detinue does not lie against a bailee of goods until demand made by the bailor, after the determination of the bailment and before action brought.” That was an action for detinue of 450 sacks. There were alternative claims in contract, but the jury found against one alleged contract, and that damages in respect of another were covered by a sum paid into Court, and the case is reported solely upon the question of the necessity for a demand before action brought. The defendant alleged that no demand had been made upon him until the writ was issued and that he then tendered the sacks to the plaintiff. Dowse B., who tried the case, refused a direction, the jury found that the defendants had detained the sacks, and Dowse B. entered judgment for the plaintiffs, reserving liberty to the defendant to move to have the verdict entered for him on the whole case, if the Court should be of opinion that he should have directed a verdict for the defendant upon the count in detinue. A conditional order was obtained, the cause shown by the plaintiffs was allowed by the Common Pleas Division, whose reasons for doing so were not forthcoming in the Court of Appeal, and the defendant appealed. The Court of Appeal, Sir Edward Sullivan M.R. and Deasy and FitzGibbon LL.JJ., by a unanimous judgment, reversed the order appealed from, and entered verdict and judgment for the defendant upon the ground stated concisely in the head note which I have quoted. “We are of opinion,” said Sir Edward Sullivan (1),”that the defendant is right in his contention, as we think that a demand of the sacks before action was necessary, and that there was no evidence of any such demand. The nature of an action of detinue, as it rests upon the authorities, is clear enough.” “When the defendant failed to perform his contract, it is difficult to see how he at once became a wrongdoer in reference to the detention of the sacks, which he never was asked to send back. Assuming that an action of contract could have been maintained for not delivering the sacks, with or without the potatoes in them, that is no reason in law for making the mere omission to send back the sacks a tortious act, when no request had ever been made for their delivery” (2).Deasy L.J. s.(3):”I do not think there is any evidence in the case of a demand of a return of the bags; and I think such a demand was necessary, in order to sustain the count in detinue.” FitzGibbon L.J. (4):”There being no count in contract, can the count in detinue be supported on the evidence? I think that this question can be tested by ascertaining the mode of pleading in the old action of detinue in cases of special bailments. If a count alleging a special bailment of goods, to be re-delivered on a certain day, would be sufficient as a count in detinue, if it merely alleged that that day had passed, and that the goods had not been redelivered on the appointed day, the count here would be a sufficient statement of the cause of action existing on the facts; but if it was formerly necessary, in such a count, further to allege that, after the day named, a demand of the goods had been made, and if without such a demand there would not have been an unjust detainer of the goods, as distinguished from a breach of the contract to return them, here also a demand was necessary. Now, from the case referred to by the Master of the Rolls, which is to be found in Brownlow’s Entries, p. 186, it appears that a demand after the time fixed by the terms of the bailment is necessary. It is apparent, I think, from that case that though a plaintiff could bring his action for breach of contract without any demand, he could not bring an action of detinue until, by a demand of, and a refusal or neglect to return, the goods, the breach of contract was turned into a wrongful detainer.”
That was no new law, nor was it a fortuitous rediscovery in 1881 of a principle which had lain concealed in Brownlow’s Entries since 1654. Not only in other compilations of Entries, but in the precedents of Declarations in Detinue sur bailment framed by the predecessors of Messrs. Bullen and Leake, Wentworth, “On Pleading,”vol. 7, p. 635, Chitty, “On Pleading” (5th edn.), vol. 2, pp. 593-4, and others, are to be found averments to the effect that: “the defendant hath not as yet delivered the said goods or any of them to the plaintiff although he was afterwards, to wit on, etc., at, etc. [venue] aforesaidrequested by the said plaintiff so to do but hath hithertowholly refused, so to do and hath detained and still doth detain,” etc.; and in the chapter on Forms of Action, (vol. i., chap. 2, § iv., p. 141), Mr. Chitty says: “In the case of a special bailment, it is proper to declare, at least in one count, on the bailment, and to lay a special request.” It was decided by Willes C.J. in Kettle v. Bromsall (1), “A declaration in detinue should state a request on the defendant by the plaintiff to deliver,” etc., and Sergeant Williams in his note to Wilbraham v. Snow (2) says (referring, it is true, to the date at which he wrote), “it is a common learning that when the goods came into the defendant’s possession by delivery or finding, the plaintiff must demand them, and the defendant refuse to deliver them up, in order to constitute a conversion.”
These obsolete technicalities need no longer be observed in pleading, but they are of vital importance, as showing what facts must be proved to sustain the action. See, for instance, the observations of Collins L.J. in Turner v.Stallibrass (3). The modern license which permits claims to be put forward in loose statements in popular language has not altered the essentials necessary to create a legal liability, or abolished the necessity of proving the facts which constitute the cause of action; and there is a note to the declaration in Chitty to which I have already referred, vol. ii., p. 595, which might have proved useful in the present case, if anyone had consulted it. “When a defendant has in his possession personal property, formerly of the plaintiff, and it be doubtful whether a contract by the defendant for the purchase thereof can be proved, it is advisable to insert a count in debt for goods sold, and another count in detinue for the chattel,in order that the plaintiff may recover on one ground or the other; and many other cases may occur, in which this joinder of action may be advisable.”
In 1911 the Court of Appeal in England, in Clayton v.Le Roy (1)an action for detinue of a watchaffirmed the law in terms indistinguishable from those employed thirty years previously by our own Court of Appeal in Cullen, Allen & Co. v. Barclay (2). Fletcher Moulton L.J. (3),after stating that the point “may seem a very technical one,” gives his reasons for holding that it is a point of substance, that there must be “some definite act or deliberate withholding as necessary preliminaries to the arising of this cause of action.” “The plaintiff must establish that at the moment of the issue of the writ he was in a position to bring an action of detinue; in other words, that there had been a wrongful denial of the plaintiff’s title to the watch” (4). “The mere fact that there was evidence pro and con on such a point would not be enough; it is necessary to find as a fact that there was a demand and refusal before the issue of the writ. If there is evidence of a demand and refusal, the tribunal may, of course, conclude that there was one in fact.” Farwell L.J., after declining to interfere with the decision on market overt which Scrutton J. had decided against the defendant, said (5):”The other question is one of considerable interest, and, upon the authorities which have been cited to us, I think that certain propositions are indisputable. Whether an action is one of detinue or trover, proof that the detention is wrongful and amounts to a conversion forms the gist of the action; there must be an element of wrong; the mere fact of possession of the article is not enough to support the action,” and then he quotes Bramwell B. in Burroughes v. Bayne (6): “‘The result is you must in all cases look to see, not whether there has been what may be called a withholding of the property, but a withholding of it in such a way as that it may be said to be a conversion to a man’s own use.'” Vaughan Williams L.J. dissented, not as to any of the “indisputable propositions,” but because he held that the facts proved amounted to a refusal by the defendant to deliver up to the plaintiff a chattel which the plaintiff had demanded of him.
I have dealt with this question at, I fear, undue length, because there appeared to be some tendency on the part of the plaintiff to challenge what appears to me to be established law of great importanceas shown by Fletcher Moulton L.J. in Clayton v. Le Roy (1)to commercial interests.
Mr. Rearden, admitting the necessity for a demand and refusal to constitute his client’s cause of action, relied upon Mr. Lane Joynt’s letter of September 15th, as a demand. I think that, notwithstanding the alternative which it offered, it was, in form, a sufficient demand. But in my opinion a demand, to be effective, must be brought to the knowledge of the person of whom it is made. I cannot accept Mr. Rearden’s contention that the demand was made when the letter containing it was dropped into the post, or when it was delivered at the defendant’s residence in Dublin when he was in Kerry. Mr. Rearden cited a case of Logan v. Houlditch (2) in support of his argument. That was a nisi prius decision of Lord Kenyon, and it must never be forgotten that such rulings are only upon the admissibility of evidence, and do not amount to decisions as to the effect to be given to the evidence when admitted. In that case a demand for the return of the chattel in respect of which detinue was brought, had been served at the house of the defendants, of whom there were two. There was a dispute whether it had in fact been actually served on one of the defendants in person. Lord Kenyon ruled that service of a written demand at the defendant’s residence was evidence of the making of a demand. He did not decide the fact, but left the evidence to the jury. I see no reason to question the ruling. In the present case, I should have been prepared to tell a jury that proof of delivery of Mr. Lane Joynt’s letter at the defendant’s residence was prima facie evidence, upon which, if uncontradicted, they could find that a demand for the return of the car had been made. But when the defendant swears, and is believed, that he was absent from home without any knowledge of, or intention to avoid, a demand for the return of the car, and that it came to his knowledge for the first time at 10 or 11 p.m. on September 22nd, I think that no demand was in fact made until then. I think that the finding of O’Byrne J. that the defendant returned the car at the first reasonable opportunity after the plaintiff’s demand for such return reached him, is borne out by the evidence, and accordingly that he was right in holding that there was no wrongful detention. There could be no wrongful detention or withholding until the defendant was aware of the demand, and, as the demand was not brought to the knowledge of the defendant until after the issue of the writ, the cause of action was not complete, for want of a refusal by the defendant, when the writ was issued.
No case was made that the defendant was keeping out of the way to avoid service of a notice demanding the return of the car, and there was no application to amend the pleadings by alleging that possession of the car had been obtained by a fraudulent pretence of intention to purchase it. The car was in fact returned and accepted by the plaintiff, and his claim is, not for use or hirage of the car, nor for damages for breach of contract to purchase the car, or to redeliver the car or pay £100 on a named day, September 10th, but solely for wrongful detention after demand made.
In my opinion the evidence does not establish a demand in fact before action brought, and negatives a refusal to redeliver before the writ was issued, and for these reasons I think that the decision of O’Byrne J. was right, and that this appeal should be dismissed.
MURNAGHAN J. :
Mr. Rearden does not dispute the proposition that, in an action of detinue, the plaintiff must prove a demand and a refusal before the issue of the writ. In Clements v.Flight (1) Pollock C.B., speaking of detention, says: “And this is the meaning ascribed to the word in Bulstrode, 308, by Haughton J., who says, that request and refusal,contradixit et adhuc contradicit, is the point in an action of detinue, but not in trover, in which conversion is the point, and request and refusal evidence only.” In conformity with this the Court of Appeal in Ireland in Cullen, Allen & Co. v. Barclay (2) laid down that, where goods were delivered to a bailee, detinue did not lie until after a demand made upon the bailee after the determination of the bailment.
The demand in the present case was made by letter, dated September 15th, addressed to the defendant’s residence in Dublin, although it was known that the defendant was absent, and was, or had been, a few days previously in Kerry. Mr. Justice O’Byrne held that the defendant complied with the demand in a reasonable time by delivering the car on September 23rd, as the letter did not in fact reach him until September 22nd.
The plaintiff’s argument is that the demand was made prior to September 18th, when the summons was issued, and that there was detention after that date. It is sought to support this contention by alleging a rule of law that a demand is sufficient if made by letter at the defendant’s residence, and for this counsel cited Logan v. Houlditch (1).I approach this case bearing in mind the words of Denman C.J. in Small v. Nairne (2). These are his words:”I am tempted to remark, for the benefit of the profession, that Espinasse’s reports, in days nearer their own time, when their want of accuracy was better known than it is now, were never quoted without doubt and hesitation; and a special reason was often given as an apology for citing that particular case. Now they are often cited as if counsel thought them of equal authority with Lord Coke’s reports.” The case, as reported, may be explained as meaning no more than this: that a letter delivered to a person’s residence must be assumed to have reached him in ordinary course unless the contrary is shown. In the present case the Judge expressly accepted the defendant’s evidence that he did not receive the demand until after the summons was issued, and that he complied with the demand within a reasonable time.
In my opinion the appeal must be dismissed.
Roche Ireland Ltd -v- O’Mahoney & Anor
[2010] IEHC 491
Laffoy J
6. Ownership/lawful possession of the material
6.1 As regards the legal principles which govern the issue of entitlement to possession and ownership of the disputed material, that is to say, the subsoil and topsoil from the O’Mahony lands, unfortunately, the relevant principles are identified to a limited extent only in the pleadings and in the submissions made at the hearing, which is understandable because Mr. O’Mahony was not legally represented. While to the lay person the principles may be difficult to understand, having regard to the history of this matter, and, in particular, the conduct of Mr. O’Mahony, which has clearly arisen from a grievance he harbours against the plaintiff, I will endeavour to summarise them in terms from which he will appreciate their implications.
6.2 To recapitulate, the plaintiff’s case is that as a result of the plaintiff having paid TAL and Martins for the works they carried out on the Roche premises and TAL and Martins, in turn, having purchased the material from Milltown, and either having paid for it or accepted liability for payment, the plaintiff, having no knowledge of the provenance of the material or any dispute in relation to it, was a bona fide purchaser for value of the material, lawfully took possession of it and is lawfully in possession of it. As I have recorded, what the plaintiff seeks is a declaration that it is in lawful possession of the material and that it has no liability to Mr. O’Mahony arising from its acquisition. Mr. O’Mahony has pleaded that the defendants are the owner of the O’Mahony lands, that the material was removed from the O’Mahony lands without the defendants’ knowledge or consent, that the plaintiff was at all times aware of the ownership and source of the material, that the defendants are the true and lawful owners of the material and are entitled to its return or to be compensated for its true value. So, the plaintiff is claiming to be in lawful possession of the material and Mr. O’Mahony is claiming ownership and an entitlement to possession. Although the wrong which the defendants allege against the plaintiff is not spelt out in the pleadings, the defendants’ claim must be based in tort for detinue or conversion of the material by the plaintiff.
6.3 The authorities relied on by the plaintiff in its written submission in support of the proposition that the plaintiff was a bona fide purchaser for value without notice of the material and, therefore, was unaffected by the rights of Mr. O’Mahony as owner of the O’Mahony lands all relate to issues concerning land as such (AIB v. Finnegan [1996] 1 ILRM 401; Gannon v. Young [2009] IEHC 511 and Kingsnorth Finance Trust Co. Ltd. v. Tizard [1986] 1 WLR 783). However, as the reference to detinue and conversion in the preceding paragraph indicates, in my view, the legal principles which are applicable to the situation which has arisen here in relation to the material are the legal principles governing possession and ownership of goods. The crucial factor, in my view, is that the material, the topsoil and the subsoil, had been severed from the O’Mahony lands when the plaintiff’s contractors agreed to acquire it. It follows that the relevant legal principles mainly derive from the Sale of Goods Act 1893, as amended by the Sale of Goods and Supply of Services Act 1980 (the Act of 1893). It is with a considerable degree of diffidence that I propose outlining these principles, which were not explored at the hearing. However, the principles, which I will outline and apply, are well established. In circumstances in which the defendants are not legally represented and Mr. O’Mahony has no legal training, having considered the matter carefully, I have come to the conclusion that it is not in his interest to invite further legal argument in this matter, which would merely give rise to further legal costs in circumstances in which the legal position is quite clear.
6.4 Even at common law the material severed from the land would have been regarded as a chattel or goods rather than as land. In Sligo Corporation v. Gilbride [1929] I.R. 351, in which the plaintiff was seeking injunctions to restrain the defendant from removing a wall and to direct the plaintiff to restore it, in the Supreme Court, Kennedy C.J. stated (at p. 362):
“If the ownership of the wall is actually in the plaintiffs, the action is in substance one for damages for trespass and trover and conversion of the stones in the wall, and the injunction is sought as ancillary to that right of property.”
Fitzgibbon J. was of a similar view stating (at p. 366):
“The real cause of action is one of trespass to the plaintiffs’ wall – assuming it to be theirs – and trover and conversion of the materials with which the wall was built”
Moreover, consistent with the decision of Gavan Duffy P. in Scully v. Corboy [1950] I.R. 141, the material comes within the definition of “goods” in s. 62 of the Act of 1893, which defines that term as including “emblements, industrial growing crops and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale”.
6.5 Although as I have stated at the outset, it is not clear in whom the title to the O’Mahony lands is vested, it is not in dispute that Mr. O’Mahony is either alone or jointly with his wife, who was in Court throughout the hearing, or through the medium of the second defendant, the owner of the O’Mahony lands. During the hearing, Mr. O’Mahony indicated that he had evidence of his title in Court. However, he was not asked to produce it. For present purposes, I am assuming that he has good title to the O’Mahony lands either solely or as aforesaid. As such, before the material was severed from the land, he owned it. When the material was severed by Milltown he remained the owner of it, subject to the rights, if any, of Milltown. A fundamental principle of our law of property, whether land or goods, like so many other fundamental rules, is known by its Latin tag: the rule nemo dat quod non habet. What the rule means is that no one can give a better title to property than his own. However, at common law that rule is subject to exceptions. Moreover, while, in the case of goods as defined in the Act of 1893, the rule was repeated in s. 21 of that Act, it is subject to the exceptions set out in succeeding sections thereof, including s. 25(2). Section 25(2) provides:
“Where a person having bought or agreed to buy goods obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title, under any sale, pledge or other disposition thereof, to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods, shall have the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner.”
In s. 62(2) of the Act of 1893 it is provided:
“A thing is deemed to be done ‘in good faith’ within the meaning of this Act when it is in fact done honestly, whether it be done negligently or not.”
6.6 The facts relevant to the application of s. 25(2) to the plaintiff, in my view, are the following. Mr. O’Mahony agreed in principle to sell the lands to Milltown and he allowed Milltown into possession of the lands. Milltown severed the material from the lands while in possession and, accordingly, was in possession of the material, although it remained in the ownership of Mr. O’Mahony until the sale to Milltown would be completed. Milltown sold the material to TAL and Martins, who used it in the landfill capping and landscaping works on the Roche premises in fulfilment of their respective contractual obligations to the plaintiff. TAL paid, or acknowledged the obligation to pay, for the material Milltown sold to it. While it is not clear on the evidence what position Martins has adopted in relation to payment to Milltown, I am assuming it has adopted a position similar to that adopted by TAL. The plaintiff paid TAL and Martins for the works in which they used the material, thereby paying for the material. The plaintiff got actual possession of the material.
6.7 Having regard to those facts, two questions arise in the application of s. 25(2), namely:
(a) Did Milltown get possession of the material with the consent of the plaintiff?
(b) Did the plaintiff receive the material, which was incorporated into the Roche premises, in good faith and without notice of any lien or right of Mr. O’Mahony as the owner of the O’Mahony lands from which the material was severed?
6.8 In relation to the first question, I am satisfied on the evidence that Milltown got possession of the material with the consent of Mr. O’Mahony. It is stated in the letter of 27th November, 2007 from Mr. O’Mahony’s then solicitors and it is pleaded on behalf of Mr. O’Mahony in his counterclaim that Mr. Murphy/Milltown was given possession with a view to doing preliminary works in aid of the development of the O’Mahony lands. It was in the course of that work that the material was severed from the O’Mahony lands. Mr. Murphy’s evidence was that Mr. O’Mahony knew that the topsoil was going to the plaintiff and he was not challenged on that in cross-examination by Mr. O’Mahony, although the thrust of Mr. O’Mahony’s evidence was that he did not know that the material was going off the site. On the basis of the totality of the evidence, I think it is probable that Mr. O’Mahony did know that Milltown was disposing of the material. In any event, I am satisfied that Milltown severed and had possession of the material with the consent of Mr. O’Mahony before the sale to TAL and Martins.
6.9 In relation to the second question, in outlining the factual background earlier, I have referred to the contacts between Mr. O’Mahony and Mr. Liddy, the then managing director of the plaintiff in 2006 and 2007. In April 2007, Mr. O’Mahony notified Mr. Liddy on two separate occasions of his intention to sell the O’Mahony lands. Subsequently, a meeting was held on 4th July, 2007 between Mr. Liddy and Mr. O’Mahony and, on the basis of Mr. Liddy’s evidence, I am satisfied that he agreed to the meeting as a courtesy to a neighbour. At the time, while the proposed development on the O’Mahony lands was of some concern to the plaintiff, the concern was not enough to induce the plaintiff to get involved in the O’Mahony lands. Subsequent to that meeting there were two e-mails from Mr. O’Mahony to Mr. Liddy in July 2007, in the second of which, dated 29th July, 2007, Mr. O’Mahony advised Mr. Liddy that he had “three joint venture proposals for the development of the site and four bids for the outright sale of the site” and that, if he did not hear from Mr. Liddy, there would be little point in keeping him advised of further negotiations with third parties. That was the end of the contact between Mr. Liddy and Mr. O’Mahony until the end of November 2007.
6.10 A meeting arranged at short notice was held between Mr. Liddy and Mr. O’Mahony on 3rd December, 2007. At that stage, Mr. Liddy was not aware of the letter of 27th November, 2007 from Mr. O’Mahony’s solicitors, as the plaintiff’s company secretary was out of the office and it had not been brought to his attention. In any event, Mr. Liddy’s evidence was that Mr. O’Mahony told him that Milltown had been allowed on to the O’Mahony lands on condition that a contract would be signed within three weeks but that on 26th November, 2007 the contract had been returned unsigned. Mr. Liddy’s evidence was that he was completely surprised by Mr. O’Mahony’s statement that Milltown had taken the material illegally. Mr. Liddy’s evidence was that Mr. O’Mahony’s suggestion that the plaintiff return the material came as a real shock to him and was completely unexpected. He passed the problem on to the plaintiff’s legal advisers at that stage.
6.11 A director of TAL, Mr. Martin Hamill, also testified. His evidence was that he was aware that Milltown was doing preparatory work on the O’Mahony lands and was stripping the site. When TAL approached Milltown to purchase the material, he was not aware that Milltown was not the true owner of the soil. On the basis of the evidence of Mr. Hamill, I am satisfied that TAL agreed with Milltown in good faith to purchase the material and received it without any notice of any lien or other right of Mr. O’Mahony in respect thereof.
6.12 Similarly, on the basis of the evidence of Mr. Liddy, I am satisfied that the plaintiff dealt with TAL honestly and in good faith and from the perspective of the plaintiff the material was incorporated into the Roche premises without notice of any lien, right or equity of Mr. O’Mahony in respect thereof. Having regard to what had transpired between the plaintiff and Mr. O’Mahony before September 2007, and the circumstances which prevailed in September 2007, although honesty, as opposed to reasonableness, is the test of good faith under the Act of 1893, in my view, it was reasonable for the plaintiff, acting by Mr. Liddy and other employees of the plaintiff, and for TAL to assume that Milltown had authority to sell the material.
6.13 In summary, having found that Milltown got possession of the material with the consent of the plaintiff and that both TAL and the plaintiff received the material in good faith and without notice of lien or other right of Mr. O’Mahony, by operation of s. 25(2) of the Act of 1893 the plaintiff obtained good title to the material which was incorporated in its premises as against Mr. O’Mahony and is entitled to retain possession thereof. The plaintiff has no liability to the defendants in respect of the material.
6.14 While it is clear that Mr. O’Mahony feels aggrieved that the sale to Milltown fell through after Milltown had sold the material to TAL which was used in fulfilling TAL’s contractual commitments to the plaintiff, he must appreciate that, in the circumstances of the events of September 2007 which I have outlined, the law protects the plaintiff, which acted honestly in its dealings with TAL which, in turn, acted honestly in its dealings with Milltown. It was Mr. O’Mahony who allowed Milltown to go into possession of the O’Mahony lands and to do the pre-development works which created the material and thus facilitated the sale of the material by Milltown to TAL. Whatever, if any, redress Mr. O’Mahony has arising out of the failure of Milltown to complete the acquisition of the O’Mahony lands and from the sale by Milltown of the material can only be pursued against Milltown. It is not a matter for the Court in these proceedings.
7. Mr. O’Mahony’s communications alleging wrongdoing on the part of the plaintiff
7.1 The plaintiff has invoked a plethora of torts in alleging wrongdoing against the defendants and in seeking civil law remedies to redress such wrongdoing. As the plaintiff has decided to forgo its claim for damages, it is unnecessary to consider whether the plaintiff has established liability on the part of the defendants for all or any of the torts alleged. Further, in the light of the findings which have been made as to the ownership and entitlement to possession of the material which was severed from the O’Mahony lands and is now incorporated in the Roche premises, in my view, the only issue which requires to be determined is whether, if the defendants were to continue to make or repeat the type of communications complained of by the plaintiff which alleged that the plaintiff acted wrongfully in acquiring, using and retaining the material, they would be liable in tort to the plaintiff, so as to entitle the plaintiff to the ancillary injunctive relief it seeks. In this context, of the torts invoked by the plaintiff, that which would obviously come into play if the defendants were to continue making or repeating such communications is injurious falsehood encompassing slander of title and slander of goods.
7.2 If, notwithstanding the making of the declaration which I intend to make that the material is in the lawful possession of the plaintiff, Mr. O’Mahony or the other defendant were to communicate to third parties the assertion that, in receiving and retaining the material, the plaintiff received and retained stolen goods, in my view, the plaintiff would unquestionably be able to establish the ingredients of the tort of injurious falsehood as outlined in McMahon and Binchy on The Law of Torts, 3rd Ed., at paragraphs 35.26 to 35.30, for the following reasons:
(a) the statement alleging receipt and retention by the plaintiff of stolen goods would be untrue;
(b) such statement would be made maliciously, because there would be no basis on which Mr. O’Mahony or the other defendant could assert some just cause, excuse or proper motivation for making the statement; and
(c) such statement could only be viewed as calculated to cause pecuniary damage to the plaintiff and being published in permanent form in writing or electronically (as, on the basis of the evidence, it is probable would be the case) the plaintiff would, by virtue of s. 20(1) of the Defamation Act 1961, be relieved from the requirement to prove special damage.
7.3 I am satisfied that the defendants’ allegation that the plaintiff has not come to court with clean hands is utterly without foundation. On the other hand, it is a matter of concern that after September 2008, notwithstanding the existence of the order of the Court made with the consent of Mr. O’Mahony, Mr. O’Mahony persisted in communications alleging wrongdoing on the part of the plaintiff. Accordingly, I consider it appropriate to grant the plaintiff injunctive relief in the terms sought by the plaintiff and set out at (C) in paragraph 3.4 above framed to cover communications to the plaintiff and its associated companies, any officer or employee of the plaintiff and its associated companies, and any third party. An injunction in the terms set out at (D) would merely replicate the content of the injunction in the terms set out at (C) in a vague manner and, for that reason, I do not propose to grant it.
7.4 Even if, despite the information furnished to him from December 2007 onwards as to the circumstances in which the material was incorporated in the Roche premises and the steps taken by TAL to ensure that the defendants would not be prejudiced by the payment of the price of the material directly to Milltown after Mr. O’Mahony raised the issue of the ownership of the material with the plaintiff and after his solicitor’s letter of 27th November, 2007, Mr. O’Mahony honestly believed that he had a good claim against the plaintiff, once the Court has decided that he does not have a good claim against the plaintiff he must appreciate that he would be acting wrongly by asserting otherwise and that he must desist from doing so. In relation to what I have referred to as the peripheral issues, having regard to the findings which I have made in paragraphs 5.1 and 5.2 above, Mr. O’Mahony must also appreciate that he must desist from alleging breaches by the plaintiff and its agents of waste management and environmental enforcement legislation in connection with the removal of the material from the O’Mahony lands and its incorporation in the Roche premises.
8. Order
8.1 The Court will make the following orders on the plaintiff’s claim:
(1) declarations in the terms set out at (A) and (B) of paragraph 3.4 above; and
(2) an injunction in the terms set out at (C) in paragraph 3.4 restraining communications to the plaintiff and its associated companies and any officer or employee of the plaintiff and its associated companies and any third party.
8.2 There will also be an order dismissing the defendants’ counterclaim.
Parker v British Airways Board
[1982] QB 1004, [1982] 2 WLR 503, [1982] 1 All ER 834
Donaldson LJ
‘1. The finder of a chattel acquires no rights over it unless (a) it has been abandoned or lost and (b) he takes it into his care and control.
2. The finder of a chattel acquires very limited rights over it if he takes it into his care and control with dishonest intent or in the course of trespassing.
3. Subject to the foregoing and to point 4 below, a finder of a 330 chattel, whilst not acquiring any absolute property or ownership in the chattel, acquires a right to keep it against all but the true owner or those in a position to claim through the true owner or one who can assert a prior right to keep the chattel which was subsisting at the time when the finder took the chattel into his care and control.
4. Unless otherwise agreed, any servant or agent who finds a chattel in the course of his employment or agency and not wholly incidental or collaterally there to and he takes it into his care and control does so on behalf of his employer or principal who acquires a finder’s rights to the exclusion of those of the actual finder.
5. A person having a finder’s rights has an obligation to take such measures as in all the circumstances are reasonable to acquaint the true owner of the finding and present whereabouts of the chattel and to care for it meanwhile.’
United States of Americal and Republic of France v Dollfus MIEG Et CIE and Bank of England
[1952] AC 593
Earl Jowitt
Light is thrown on the present problem by the United States cases. They are precedents on international law which is based on the generally accepted policy of civilized nations; they are evidence of what that is. They should be given special weight because they are derived from the common law: see The Davis31; Long v. The Tampico32 and Compania Espanola de Navigacion Maritima S.A. v. The Navemar.33
On the point of possession and control the law is as follows: (1) Possession is exclusive and individual and cannot exist in two persons at the same time. (2) In the case of a bailment possession is in the bailee because transfer of possession is an essential ingredient in bailment. (3) No element of possession can remain in the bailor; a fortiori he does not retain custody. (4) Control of a chattel cannot exist apart from possession or custody; control is an element in possession. (5) A bailor cannot have control, since he has neither possession nor custody; all he has is a bare right against the bailee only to terminate the bailment and thereby regain control. (6) Delivery of control to the bailee is just an essential element in the delivery of possession. (7) If there were neither possession nor control in the bailee there would be no bailment but the bank would be the mere servant or agent of the three governments. (8) The bailor’s right to sue in trespass is not founded on possession, which he has not got, but on ownership, which he has. (9) This action is not one in which judgment would necessarily result in seizure and detention of the bailed goods. (10) Actions for detinue and conversion, being personal actions, are correctly brought against the person in actual possession (e.g., a bailee); a bailee can always be sued by a third party and the bailor’s title can be tried in the action without any necessity of joining the bailor. (11) Judgment for the plaintiffs in the present case for damages only would not even affect the bailor’s right to possession as against the bailee because the bailee is not estopped from denying his bailor’s title if he elects to challenge it relying on the title of a third party and with that party’s authority.
Even if the bars, or any of them, were held by the bank as bailees for the three governments, neither in fact nor in law were they in the possession or under the control of those governments or any of them. At all material times they were in the possession and under the control of the bank.
Ancona v. Rogers,34 relied on by the appellants, is distinguishable. It turned on the words of the Bills of Sale Act, 1854, and the relevant expression was “apparent possession,” which is different from actual possession. The judgment was not concerned with possession as opposed to property, and the rule in the dicta relied on applies only where the bailor has the property and the bailee has possession. In such a case the bailor can sue by virtue of his right of property, but only the bailee can sue for possession. If it was intended to suggest that the goods were actually in possession of the bailor, the dicta, which were obiter, were wrong. In any event, they are not binding on the House of Lords.
In The Amazone,35 also relied on by the appellants, the key to the decision was that the applicant was the registered owner of the yacht and the claim was in rem, and an order would have had to be made against him to remove his name from the register. That case does not help either party in the present action.
[They also referred to Pollock and Wright on Possession, pp. 20, 27, 131, 145, 163, 166; Halsbury’s Laws of England, 2nd ed., Vol. I, p. 724, para. 1196; p. 773, para. 1265; p. 774, para. 1267; Lincoln Wagon and Engine Co. v. Mumford36; The Winkfield37; Wilson v. Anderton38; Wetherman v. London and Liverpool Bank of Commerce Ld.39; Rogers, Sons & Co. v. Lambert & Co.40 and The Crimdon.41]
To sum up the argument: (1) This was not a contract of bailment. (2) If it was, then (a) no possession or control remained in the bailors; (b) even if some element of possession or control remained in them, it was not the sort of possession or control referred to by Lord Atkin in The Cristina,42 and (c) even if possession or control remained in them, then, if the claim for delivery up is abandoned (as the plaintiff company is willing to abandon it), judgment for the plaintiff company would not involve seizure or detention of the bars within Lord Atkin’s proposition, and so the action must proceed in respect of the claim for damages for conversion. (3) In any event, the action can go on as regards the 13 bars because once they were sold any element of control or possession in the governments disappeared.
Richard Wilberforce following. The question of control is not material if it is held that there was not a bailment or if in the proceeding it is not sought to recover property in the possession or control of the foreign governments. Lord Atkin’s observations in The Cristina42 were made in relation to a ship. To apply them to chattels generally is not a mere gloss on his words but amounts to transferring them to another field where they have no place. That case applies only to an action in rem, and in other cases retention in the hands of the possessor himself is necessary to bring them within its principles. The Cristina43 was a case of requisition, which is not a term of art but usually denotes a temporary possession or control rather than a confiscation: see McNair on The Legal Effects of War, 3rd ed., p. 435n. As to the position of state-owned ships, see per Lord Wright.44 The immunity of ships in the ownership or possession of foreign governments is based on the fundamental characteristic that they are used for public purposes: see The Crimdon45 and The Broadmayne.46 The courts disallow process in regard to requisitioned ships and it is in the light of this situation that “control” is spoken of in The Cristina.47 This conception is not capable of being transplanted on to land and applied to chattels, though a permissible extension of the principle would be to apply it to aircraft.
In a case such as the present it is not a sufficient test to say that the property is in the hands of a person who has no right to deny the title of him from whom he received it and who has to carry out his orders. That does not coincide with what was in the minds of the Lords who decided The Cristina,48 for the question of title did not arise there. But in a case like the present you create difficulties if you eliminate the conception of title. There may be many persons who have to carry out the orders of a foreign sovereign with regard to property, to whom it would be strange to apply the doctrine of sovereign immunity.
On the appellants’ argument it would apply to a purely contractual right arising out of a contract for the manufacture and delivery of shells by order of a foreign sovereign. Yet it could not apply there, for example, if the manufacturer went bankrupt and his creditors claimed his assets. Other examples might be found in the case of a company controlled by a foreign government; there again the doctrine would not apply. Yet if the principle rested on an unconditional obligation to carry out the orders of a foreign sovereign it would be hard to find any bounds to its application.
Both in civil and criminal matters the courts are accustomed to dealing with elaborate cases of possession: see, for example, The Jupiter (No. 3).49 To deal with this case on the basis of possession is not strange or artificial. Possession is transferred when an object is given to a bailee to hold on bailment: see Pollock and Wright on Possession, pp. 58, 131. The article in the Law Quarterly Review cited on behalf of the appellants did not take account of that. The possession by the bank is distinct from possession by the governments.
Sir Hartley Shawcross K.C. in reply. The case for the appellants rests mainly on control. But on the question of impleading a foreign sovereign one may find an indirect impleading in respect of property of which the sovereign has neither possession nor control at the time of the suit: see The Cristina.50 Indirect impleading covers any case where the sovereign is a necessary or proper party to the action and is put in the dilemma that he must either intervene (if need be by leave of the court) or risk some prejudice to his interest in the subject-matter of the suit. In the present case the appellants would have been proper parties and but for the doctrine of sovereign immunity would in the normal course have been brought in by interpleader. It would be strange if the parties most interested in the subject-matter were not proper parties to the action. But their interest is sufficient: see Dollfus Mieg et Compagnie S.A. v. Bank of England.51 It is an instance of indirect impleading which has scope beyond an action in rem.
As to the question of bailment, the bank was the custodian of the bars for its customers, although a possible view is that though it was not the bailee in the sense of being bound to return specific bars to specific customers it was bailee for the pool of gold for all its customers.
The American cases relied on by the company are not binding on the House of Lords and, in any event, turn on their own facts. Perhaps they exemplify a more liberal view from the subject’s standpoint so that actions which would have been stayed here have not been stayed in the United States. The key to those cases lies in the degree of control left in the bailor. There is nothing in the doctrine of sovereign immunity in English law to suggest that the sovereign’s interest must be exclusive.
As to possession, although it is true that possession cannot reside in two persons who have adverse claims, the argument for the company involves too strict an interpretation of the peculiar English doctrine of possession based on the old forms of action. It is an over-refinement to say that a person who has had possession loses it the moment he places it in the temporary custody of some person, not his servant, to hold it safe. This is not supported by English authority and is contrary to the rule of international law. Roman law has had a great influence on the law of bailment: see Halsbury’s Laws of England, 2nd ed., Vol. I, p. 725, para. 1196. Considering possession broadly one can have regard to the principles of Roman law. A bailee did not have the animus to hold as owner and so he had not got possession although he held the corpus: see Buckland’s Textbook of Roman Law, 2nd ed., pp. 196, 467, 500. The true view is that a bailor with an immediate right to possession has possession. Although the trover and detinue cases are not conclusive on this matter a bailor can sue in trover and detinue when he has an immediate right to possession and the bailee is his delegate. [He referred to The Arantzazu Mendi52; Government of the Republic of Spain v. The Arantzazu Mendi53; Ancona v. Rogers54; Lincoln Wagon and Engine Co. v. Mumford55 and Holmes on The Common Law, p. 235.]
As to control by the foreign sovereign, the shipping authorities are not inapplicable to the present case and the second limb of Lord Atkin’s observations in The Cristina56 does not apply to ships only. One can have control of a chattel apart from possession. In the user of bars of gold the significant thing is how they shall be employed, whether as security or as a medium of exchange or as a symbol of value. In this respect the appellants controlled the gold and it does not matter how it was kept. It is an offence to common sense to say that a foreign sovereign who
in the ordinary course of dealing with such things as gold puts them into the custody of some other person loses his right of immunity. For example, while he is staying at an hotel he may deposit jewellery in the hotel keeper’s safe. There has never been a case in which an argument such as the company’s has succeeded.
If it is claimed that damages is merely an alternative remedy the court should not allow this. If it were allowed it would drive a horse and cart through the doctrine of sovereign immunity. In the present case the claims for delivery up and for damages are alternative remedies in the same cause of action. To order the bank to pay damages because it will not deliver up something which it holds for the foreign sovereigns is an interference with the rights of the foreign sovereigns. If it paid damages it could assert a title to the gold against the governments. The effect of the company’s argument is that at some stage or other the governments must prove their title and that is just what they are not to be forced to do. Such a proceeding has the indirect result of putting pressure on the bailee to deliver up the goods, and this device would largely destroy the possession and control of property which a sovereign can exercise through a bailee. The court can neither award damages nor order delivery up.
Only in the case of the 13 bars which have been disposed of, thereby destroying the possession and control of the governments, may damages perhaps be awarded. But if the respondents were right in their main contention, no bailee in the position of the bank would be safe from an action for damages whether he dealt with the goods in accordance with the bailment or not.
Their Lordships took time for consideration.
1952. Feb. 25. EARL JOWITT. My Lords, Dollfus Mieg et Cie., the respondents to this appeal, are a French company who before the outbreak of war in 1939 had acquired as their property 64 bars of gold. These bars of gold were stored in a bank at Limoges in a special vault which the respondents had hired. When the German armies overran Limoges they captured the 64 bars in question and carried them off to Germany; and when the American armies occupied that part of Germany at which the bars had been stored by the Germans they were taken possession of by the Americans and brought to Frankfurt, where they remained for some time in American custody. Negotiations followed between the various allied governments as to the course to be followed with gold captured by the allied armies in Germany and finally a treaty was signed between 18 allied governments. Nothing, I think, turns for present purposes on the precise terms of that treaty – it is sufficient to say that the 64 gold bars in question, together with other gold bars, passed into the possession of the American, British and French Governments. These governments established a “Tripartite Commission for the Restitution of Monetary Gold” to deal with gold taken from Germany on their behalf.
In March, 1948, a “gold set-aside account” was opened at the Bank of England in accordance with the terms of a letter from H.M. Treasury dated March 9, 1948, and the bank’s reply dated March 11, 1948. The trial judge set out the terms of these letters in his judgment and came to the conclusion that the effect of the letters was to create a contract between the Bank of England and the American, British and French Governments. He regarded the Treasury as a mere intermediary acting on behalf of the governments who were to operate the account. I think he was amply justified in reaching this conclusion.
The terms of the contract must be construed in the light of the course of business which was well known to all the contracting parties. Ever since 1940 the Bank of England in operating a gold set-aside account had not kept separate the gold belonging to one customer from the gold belonging to another customer, though the customers’ gold, considered globally, was kept separate from gold belonging to the bank itself. Under the “gold set-aside” account as managed in 1948 the bank on receiving gold in whatever form from a customer would weigh the gold and assay it and, if necessary, bring it up to the standard of fineness for good delivery in the London Bullion Market. Until the completion of weighing and assay the particular gold would be kept separate in the name of the depositor, but once these operations were completed there would be recorded in the books of the bank the number of ounces of fine gold comprised in the deposit, and the depositor would be entitled to receive from the bank the number of ounces of fine gold so ascertained, less charges. The customer would, however, no longer be entitled to receive any particular bars of gold in satisfaction of his contract. The contract, in short, once weighing and assaying had been completed, created a relationship between the depositor and the bank closely resembling that of debtor and creditor, except that the bank’s obligation was to be discharged by the handing over of the requisite number of ounces of fine gold.
During the hearing in your Lordships’ House we had produced for our inspection the bank’s account. This is headed “Bar Gold set aside o/a His Majesty’s Treasury o/a the Governments of the United States, the United Kingdom and France.” The account opens under date May 20/April 19-23, 1948, with an item imported from B.N. Suisse Berne,” and this is entered as 578700 oz. fine.”
The 64 bars, the subject-matter of these proceedings, were dealt with on a different basis. By a letter of July 10, 1948, a Monsieur Rueff, who was acting on behalf of the French delegation of the Inter-Allied Reparations Agency, wrote to the Secretary-General of the Tripartite Commission asking that the 64 bars should be preserved in their present form, and, as a result of this request, the Secretary-General of the Tripartite Commission, in a letter dated July 16 addressed to the Bank of England, asked if the bank would be able and willing to “have these bars set aside intact on arrival, if they can be identified, pending receipt of a further communication from the Commission.” By a letter of July 19, 1948, the Bank of England answered as follows: “The proposal which you make is acceptable to the Bank of England provided that at the time we receive the authority of the Commission to hold the gold at the disposal of the Bank of France we also receive instructions from them to ship the gold from London.”
Shortly after these letters the bank received the 64 bars and, as requested, set them aside. The weighing and assaying of the 64 bars was not completed until shortly before October 25, 1948, and their gold content was on that day entered in the “gold set-aside account” as 25,679.605 fine ounces. This entry was, however, plainly not intended to terminate the bank’s obligation to hold the specific 64 bars, for the letter of October 25, 1948, from the bank to the Tripartite Commission recording the above facts concludes with this sentence: “I would mention that in view of the circumstances outlined in your letter under reference these bars have been temporarily segregated pending the receipt of instructions as to their disposal.”
In these circumstances, I think that the correct view is that the letters of July coupled with the sending of the 64 bars to the bank constituted a bailment of the 64 bars “pending receipt of a further communication from the Commission,” and that the contract of bailment continued, notwithstanding the entry of October 25. If there had been no special arrangement constituted
by the July letters I should have been of opinion that the bailment of the individual bars had been terminated when the account was credited with the fine gold content.
The writ in the action in which Dollfus Mieg were plaintiffs and the Bank of England were defendants was issued on October 18, 1948, and claimed delivery of the 64 bars and an injunction restraining the defendants from parting with the bars; and on November 2 the plaintiffs asked for an injunction restraining the defendant bank from selling or parting with the possession of the 64 bars. On the same day the bank served notice of motion asking the court to set aside the writ on the ground that the 64 bars were in the possession or control of the Governments of the United States of America, the Republic of France and the United Kingdom, and upon the further ground that the two foreign governments who declined to submit to the jurisdiction were directly or indirectly impleaded. On March 8, 1949, the writ was amended by the insertion of a claim for damages for detention and conversion of the 64 bars.
The respondents Dollfus Mieg by an affidavit sworn on their behalf by Frederic Engel on October 16, 1948, asserted that the 64 gold bars in question had been purchased by them and remained their property at all material times; and an affidavit sworn by Mr. Rootham, an assistant chief cashier in the employment of the Bank of England, set out the terms of the letters of March 9 and 11, 1948, and was relied upon by the bank in support of their application to stay all further proceedings. It is the fact that this latter affidavit made no reference to the July correspondence. Further affidavits were put in establishing the fact that the Governments of the United States of America and of the Republic of France were not willing to submit to the jurisdiction. Mr. Engel made a further affidavit dated December 17, 1948, referring to and exhibiting the letter from Mr. Rueff of July 10, 1948, and this produced a further affidavit by Mr. Rootham exhibiting the two letters of July 16 and 19, 1948, respectively.
I have briefly referred to all the evidence that was available to Jenkins J. when the case was heard before him in March, 1949. Unfortunately the fact that by some mistake 13 of the 64 bars had been delivered to purchasers outside the bank between December 30, 1948, and January 26, 1949, had not then been discovered, so that the case before the trial judge proceeded on the basis, which everyone believed to be the fact, that the 64 bars were still intact in the bank’s possession. If discovery had been ordered it is possible that this fact would have been brought to light; but, whether this would have been so or not, it seems to me desirable that in a case of this sort an order should be made for full disclosure of documents before the hearing. In the present case, as is apparent from the judgment of the Master of the Rolls, documents were produced before the Court of Appeal which had not been produced before the trial judge, and in your Lordships’ House still further documents were produced which had not been available to either of the courts below. This would have been avoided if full discovery had been given.
Jenkins J. delivered his reserved judgment on April 6, 1949, setting aside the writ.57 He regarded the three governments as being in possession or control of the 64 bars of gold, which were held for their public purposes, and regarded the action against the Bank of England as being an attempt to sue indirectly the three governments, two of whom he treated as foreign sovereign States. He decided that so long as property is in the possession or control of a foreign sovereign State no court in this country can entertain proceedings which, if successful, would result in any interference with the foreign sovereign State’s exercise of such possession or control, whether directly (as by removing the property from the custody of an agent to whom the foreign sovereign State has entrusted it), or indirectly (as by casting in damages for wrongful possession an agent through whom the foreign sovereign State is exercising its possession or control).
Dollfus Mieg appealed to the Court of Appeal, and before the conclusion of the hearing in that court the fact that by some error 13 of the 64 bars had been delivered on the market was revealed. I have not overlooked the fact that the disposal of the 13 bars did not take place until after the issue of the writ. This difficulty could have been surmounted by the issue of a further writ after January 26, 1949, and all the parties have asked us to treat the case as though the writ had been issued on the later date. My Lords, it is, I think, clear that so treating the date of the writ the action in regard to these 13 bars must be allowed to proceed, for in regard to them it may well be argued that no question any longer arises of interfering with the possession or control of a foreign sovereign State. I do not think it would be proper for us to come to any final conclusion as to this matter. It is not for us to try the case. We have merely to decide at this stage whether the action should or should not be allowed to go for trial, and in so far as the 13 bars are concerned I certainly think that
the action should be allowed to go on. All the members of the Court of Appeal thought, however, that the disposal of the 13 bars made it inevitable that the action should be allowed to proceed as to the entire 64 bars. The Master of the Rolls58 thought that the disposal of the 13 bars had “destroyed at a single blow the whole premiss on which the judgment below proceeded.” Somervell L.J. would have agreed with the judgment of Jenkins J. but for the disposal of the 13 bars. He states his view as follows59: “The 64 bars for all relevant purposes at all material times were in the pool. Thirteen of them were disposed of, and the whole 64 might have been disposed of without instructions from or reference to the Tripartite Commission. In these circumstances it seems to me impossible to hold that these 64 bars were in the possession or control of the three governments.” Cohen L.J. agreed with Somervell L.J. My Lords, I cannot agree with this reasoning. If the bars were in the possession or control of the governments I cannot think that the fact that by some error of internal management 13 bars were disposed of alters the position except as to those 13 bars. For the question of possession or control must depend on the terms of the contract under which the bars in question came to the bank; if possession or control was retained by the governments that position is not altered by the fact that through an error 13 bars were disposed of in breach of the contract. Unless the disposal of the 13 bars throws some light upon the terms of the contract it seems to me to be irrelevant in regard to the remaining 51 bars. I have already stated my view that in regard to the 64 bars there was a contract of bailment and an obligation was thereby imposed on the bank to keep these bars separate and intact and not to allow them to become merged in the general pool of customers’ gold pending the receipt of further instructions. The Master of the Rolls, differing in this respect from the other judges in the Court of Appeal, thought that Jenkins J. had come to an erroneous conclusion on the facts as presented to him. He thought that from and after the time at which the 64 bars were delivered to the bank the governments no longer had such a degree of possession or control as would justify them in asking to have the action stayed.
Lord Porter
The facts have been set out by Jenkins J. in the court of first instance, by Cohen L.J. in the Court of Appeal, and by the noble Earl on the woolsack in your Lordships’ House. I need not repeat them.
Jenkins J. stayed the action, but when he gave his judgment he was unaware that after action brought the bank had delivered 13 of the 64 bars to third parties. The majority of the Court of Appeal, as I understand them, would have reached the same conclusion as the learned judge if they had had to depend on the same material, but thought that the disposal by the bank of the 13 bars destroyed the argument for staying the proceedings in respect of the whole of the 64; Somervell L.J.’s view being that the bank had ceased to keep them separate because, thoughit had stacked them in two special trucks and placed a notice that they were not for disposal, it had failed to enter a warning note on the cards relating to the consignment in question and that the entry of the note was a precaution which must be observed if the bars are to be regarded as separated from the pool. The Master of the Rolls went further and thought that even without the additional evidence a case had been made for allowing the action to proceed against the bank. In his view it was not established that the bank were ever under a duty to keep the bars separate and, even if they were, he agreed with the other members of the court in thinking that they had not done so.
This portion of the case involves a question of fact or inference from fact and, in my view, the inference drawn by the Court of Appeal is not justified. The correspondence and affidavit evidence show that though since 1940 it has not been the practice of the bank, except as the consequence of a special arrangement, to keep a customer’s gold separate from that of other customers, yet in this special case they agreed to do so and took steps to carry out their agreement. I cannot read the letter dated October 25, 1948, from the bank to the Tripartite Commission as bearing any other meaning. The suggestion that it means “We have in fact but without obligation held the bars separate but that separation ceased once we had assayed,” is inconsistent with that letter, and indeed with the general import of the correspondence. The entry in the account crediting it with the value of the bars and the charges made for assaying do not conflict with this view. It is but an account-keeping device and it would be odd if the bank, knowing that an action had been brought against it and, indeed, as a result of that fact, were to change the whole relationship between itself and its customer.
But it is said H.M. Treasury was the customer and the Tripartite Commission was merely empowered to draw on the account through certain specified persons nominated by the Treasury. I cannot take that view. The Treasury was no doubt the instrument by means of which the relationship between the bank and the Tripartite Commission was brought about; the Commission, however, were the only body entitled to deal with it and, in fact, through their secretary, gave instructions to the bank and were informed by its officials of the action taken. It is true that instructions as to the operation of the account are, in the words of Sir Edward Rowe Dutton, in his letter of March 9, 1948, entrusted to certain named representatives, but this arrangement is limited to instructions for the operation of the account and leaves the Commission to make arrangements through its secretary as to the disposal of the bars. In fact, the Commission gave such instructions and the bank accepted them.
Had, then, the 64 bars remained intact, I find myself in agreement with the original judgment of Jenkins J.
Does it, then, make a difference that in error 13 bars were treated as if they were part of the pool from which gold could be drawn for customers generally instead of being treated as confined in use to one particular customer? The reason for the decision of the majority in the Court of Appeal is perhaps most clearly exemplified in the words of Somervell L.J. He says68: “The authorities of the bank responsible for the correspondence with the Tripartite Commission intended that these bars should be kept apart from the pool and held as individual bars for the three governments. Some steps were taken to this end, but, as the facts show and as is admitted, one necessary step was not taken. The 64 bars for all relevant purposes at all material dates were in the pool.” My Lords, with all due respect, I am unable to concur with this view. In fact, the bars were kept separate in two trucks and a notice was placed on them to indicate that they were to be used only for a particular purpose. It is true that one precaution, viz., an entry on the cards, which would have been helpful in avoiding a misuse of the bars and might have prevented it, was not taken, but that neglect did not cancel the instructions of the Tripartite Commission or the bank’s acceptance of them. So long as the bars remained in the possession of the bank, a failure to take all possible precautions or indeed even a failure to take all reasonable precautions to prevent the bars being dealt with in the ordinary course, is not effective to destroy the conditions on which the bank were instructed to hold the bars and on which they agreed that the bars should be held. Misdelivery may in certain cases put an end to a claim to possession, though it will not in the normal case destroy a right of property. On the other hand, negligence in failing to take all possible steps to see that an arrangement which had been made is carried out does not alter the fact that all bars in the possession of the bank remained in their possession subject to the terms upon which they were deposited. In such a case, however, misdelivery does, in my view, affect the position, since, as regards the 13 bars, it can no longer be asserted that they are in the possession of the three governments through their bailees, the bank.
That the bank are bailees is, I think, not open to doubt, but that fact leaves undecided the difficult and interesting question: Can those who assert a possessory title to goods but make no claim to the property in them be said still to retain possession after they have entrusted those goods to a bailee to hold on their behalf? There is no direct English authority which decides the point, much less one binding on your Lordships. The nearest, I suppose, is Ancona v. Rogers,69 a decision on the words “apparent possession” contained in section 1 of the Bills of Sale Act, 1854 (17 & 18 Vict. c. 36). In delivering the judgment of the court in that case Mellish L.J. said70: “There is no doubt that a bailor, who has delivered goods to a bailee to keep them on account of the bailor, may still treat the goods as being in his own possession, and can maintain trespass against a wrongdoer who interferes with them. It was argued, however, that this was a mere legal or constructive possession of the goods and that in the Bills of Sale Act the word ‘possession’ was used in a popular sense and meant actual or manual possession. We do not agree with this argument. It seems to us that goods which have been delivered to a bailee to keep for the bailor, such as a gentleman’s plate delivered to his banker, or his furniture warehoused at the pantechnicon, would, in a popular sense, as well as in a legal sense, be said to be still in his possession.” It is urged, however, that these “dicta” are “obiter,” and wrong; that, in any case, the judgment was not concerned with “possession” as opposed to property and that the true view is that the rule applies only in a case where the bailor has the property and the bailee has the possession. In such a case it is maintained that the bailor can sue in right of his property but that an action in right of possession belongs to the bailee only. This contention may be true where the bailor has no right to demand an immediate return of the article at his will, but the better opinion is, I think, that where the bailor can at any moment demand the return of the object bailed, he still has possession. See Pollock and Wright on Possession (1888), p. 166; Beal on Bailments (1900), p. 40; and Halsbury’s Laws of England, 2nd ed., Vol. I, p. 775, sub tit. Bailment. In each of the authorities referred to the right of the bailor is limited to a case of gratuitous bailment, a requisite which, in my opinion, is fulfilled in the present case. The bank held the bars, without any right of lien, at the will of the Commission.
The Commission being, in my opinion, as I have indicated, still in possession of 51 of the bars, it has to be determined whether they or the bank are entitled to immunity from suit instituted by the respondents. Such an action, it is argued on behalf of the latter, can be brought and determined without in any way impleading the two governments or affecting their rights. It is accepted by both parties that the principles to be considered are those laid down by Lord Atkin in Compania Naviera Vascongado v. The Cristina.71 In the relevant passage he says, in regard to those principles: “The first is that the courts of a country will not implead a foreign sovereign, that is, they will not by their process make him against his will a party to legal proceedings whether the proceedings involve process against his person or seek to recover from him specific property or damages. The second is that they will not by their process, whether the sovereign is a party to proceedings or not, seize or detain property which is his or of which he is in possession or control.” As, in the view which I have expressed, the three governments are in possession of the 51 bars, it is not necessary to inquire what is the exact meaning to be attributed to the word “control.” It is enough that they are in possession and an attempt is being made to interfere with that possession.
But it is said that the decision in The Cristina72 is not of universal application but applies only to an action in rem and that, in other cases, retention in the hands of the possessor himself is required to bring its principles into force. It is true that the matter then under consideration was a ship and that a decision in respect of a ship is an action in rem and would therefore bind all the world and not the parties only, but the observations of those members of your Lordships’ House who sat to decide the case were by no means confined to actions in rem. They extended to the case of all chattels: see, in particular, the observations of Lords Maugham and Wright. The principle, in my opinion, is a wider one and embraces any chattel, whether the subject of an action in rem or not. No doubt the doctrine should, as Lord Maugham said in The Cristina,73 be narrowly watched, but it has always to be remembered that governments must act through servants or agents and often through bailees, and it would destroy the efficacy of the doctrine if it were strictly confined to personal possession.
I do not myself find any great enlightenment in the American cases on the subject under discussion. They all, I think, turn on who was in possession at a particular time and depend on their own facts.
So far I have dealt with the claim of the respondents to recover the gold bars themselves and with their claim to an injunction. Sir Andrew Clark, however, on their behalf, expressed himself as willing to give up that claim and rest on his right to recover damages for conversion. Such a claim, he maintained, neither impleaded the sovereigns nor involved a seizure of their property. It was merely a claim for damages against the bank. But if the bank were ordered to pay damages to the respondents, Messrs. Dollfus Mieg et Cie.’s right of property would in law be transferred to them on their paying the damages awarded, and it would follow that, if the Tripartite Commission required the bank to return the bars, the bank could refuse to do so, relying on the title acquired by the payment of the damages, and thereby compel the governments either to bring an action or forgo their rights. The object of the rule, it has been said, is that a sovereign may not be compelled either to submit to a foreign jurisdiction or be compelled to go to law to obtain or preserve his right. Such an object might be defeated if this action were permitted to proceed since the bank is in possession and could refuse to surrender the bars and so compel the governments, if so minded, to take action in an endeavour to recover them.
In re M’Wey; Ryan v. Cashin and Costello.
[1928] IR 492
Meredith J.
The defendant, Margaret Cashin, claims that she is entitled to £300 India 51/2 per cent. Stock and £400 3 per cent. Local Loans Stock, on the ground that what, in the indorsement of claim in the originating summons, are described as receipts for the said stock were delivered to her by the deceased shortly before his death as a donatio mortis causa of the said stock.
It is not unimportant to observe that the receipts are not, strictly speaking, receipts for the stock, but only receipts for the consideration paid for the stock. Thus the so-called receipt for the £400 3 per cent. Local Loans Stock is a receipt for the sum of £252 10s., which was the consideration for the purchase at 631/8 of £400 interest or share in the said stock. It appears from the receipt that the stock had been transferred on the date therein mentioned to the deceased. Consequently, quoad the property in respect of which the donatio mortis causa is claimed, the document is simply a memorandum or statement of particulars of the “interest or share” in the stock that was transferred to the deceased on the date mentioned.
The defendant, Margaret Cashin, was cross-examined on her affidavit, and I had some doubt in my own mind if, on her evidence in the box, the intention to make a donatio was quite clear. However, that point was not contested, and the only point raised on the facts was that the gift was intended to take effect immediately and unconditionally. But the point seems to me to be disposed of by the directions of the deceased not to sell until after his death. I therefore hold that the deceased gave Margaret Cashin the receipts intending to make a donatio mortis causa.
The question accordingly is whether, or not, that intention alone was sufficient notwithstanding the nature of the property in each case a share or interest in certain stock made transferable in a specified Bankand notwithstanding the nature of the actual thing delivered, which was in each case a mere memorandum. To hold that it is sufficient would, in my opinion, be to hold that the case of Ward v. Turner (1) is no longer good law. But the authority of that case was recognised by the House of Lords in Duffield v. Elwes (2), and was followed in Moore v. Moore (3), and, as was held in the last-mentioned case, so I hold in this, that the receipts in question here do not differ substantially from the receipts for the South Sea Annuities, which were the subject matter in Ward v. Turner (1). In re Andrews (4) belongs to the same line of authorities.
If the executors of the donor are to be held trustees for the donee for the purpose of giving effect to the gift simply because a document is handed to the donee giving particulars of a share or interest in stock that had been purchased, the intention being clear, much of the learning and of the subtle distinctions in the cases on donationes mortis causa must be regarded as obsolete. Where the executors have been held to be trustees, it is not because the donor himself had made himself a trustee, but because he had made an incomplete gift and because the doctrine, that equity will not assist a volunteer by completing an incomplete gift, does not apply to a donatio mortis causa. But there must in the first instance be something which merely requires to be completed in order to perfect the legal title.
I have only to add that in Duckworth v. Lee (5) all the members of the Court of Appeal in Ireland were agreed that the doctrine of donatio mortis causa was not to be extended. There has always been a distinction between the English law on this subject and the Roman law as it existed in the time of Justinian, and if Ward v. Turner (1) were not to be held to govern this case then it seems to me that the law would be extended so as to efface the distinction.