Some introductory remarks are made about how possession is central to the idea of property and how even though the backbone of the law has been unchanged it has been incrementally developed by common law and in the UK been subject to sweeping legislative changes.

Holmes, in The Common Law (1881) speaks of the concept of possession using two examples:

A bankrupt person does not lose possession of goods coming to him – this would be an invitation to all the world to scramble for possession of them (Webb v Fox); a rule which was justified on policy and convenience
The idea of someone hooking a fish or a whale which has developed through custom rather than any cogent and linear concept of property law
- He concludes saying that the law is a practical thing that should give effect to the primal instinct of one who attempts to take back what was dispossessed from him

There exists a distinction between real property and personal property

Leases are considered as real property
Personal Property that are either
1. Choses in Possession (capable of being held in physical possession – jewellery etc.)
2. Choses in Action (intangible property like debt, shares etc.)
Three actions lie against one for wrongful interference with possession:
1. Trespass – interference with actual possession
2. Conversion – A suit lies where a positive wrongful act of dealing with goods in a manner inconsistent with the rights of the owner, who has rightful possession, or an immediate right to it and not necessarily absolute ownership, is made
3. Detinue – A suit lies where a plaintiff in actual possession or an immediate right to it where a defendant wrongly retains the goods following a lawful demand for them
  - Compensation for both can be return of the goods or the market value of the goods. Return may be ordered if the goods have some special value to the plaintiff; this can be adjusted for improvements (McKeown v Cavalier Yachts (1988))
The requirements of detinue and conversion are:
1. Actual or immediate right to posession at the date of interference/demand
  - A future right is insufficient – if ownership is transferred the agreement decides this
  - In the case of bailed goods the bailor may recall the goods at any time; meaning if a third party interferes both bailor and bailee has action against them

Jeffries v The Great Western Railway Co (1856) 119 ER 680

Facts: P (GWRC) brings an action of trover (conversion) against D (J). P proves the defendant seized trucks from their possession; claiming they were assigned to P by O. D claims that O has been declared a bankrupt and thus ownership was not to P but to those given title to the goods by the Court of Bankruptcy.

Ratio (Lord Campbell CJ):

A person possessed of goods as his property has good title against every stranger; one who takes them having no title is a wrongdoer and cannot defending himself by saying that a third person has title
The presumption that a person in possession has property may not be rebutted by evidence of property in a third person

Wightman J delivers to much the same respect

This case is also authority for the proposition that despite the chance of steps taken by the rightful owner; the wrongdoer must pay the full market value of the chattel taken and is still vulnerable to action from the rightful owner.

Questions
2.10

The defendants were considered wrongdoers by Campbell CJ because they took the goods from the plaintiffs possession having no title themselves
The policy underlying this case is the same underlying Webb v Fox – it would be an invitation for all the world to scramble for the possession of the goods of bankrupts

2.11

Presumably a relationship of principal-agent between the two would have sufficed; at the very least proof that the defendants were ordered by those with title to repossess the goods – a court order would have been sufficient.
It should not be because detinue/conversion relies on possession or a right to possession at the date of interference or demand for return.

2.12

Yes they should be relieved from this risk in consideration of justice/fairness. The desired result may be achieved by requiring return of the good to the possessor subject to financial compensation.

A contractual right to possession without actual possession isn’t sufficient for detinue (Jarvis v Williams) – interesting example of one who buys goods from one not the owner but does not enter possession; his claim may be defeated by the wrongdoer asserting ownership of B. Jus tertii is used to deny the cause of action
In Costello v Chief Constable of Derbyshire Constabulary, Lightman J ruled that possession, even if by theft (in which case the title is frail), vests possessory title which is good against all but one who can claim better title.
- Battersby (Acquiring Title by Theft) comments on the idea of relative title – however acquired title prevails against all who subsequently possess without better title.
- The same point is made in R v McKiernan [2003] in a case regarding a church bell

The Winkfield (1902) All ER Rep 346

Facts: The case concerns a claim of the Postmaster-General in the case of The Winkfield. Having crashed with the Mexican the owners of the Winkfield paid the amount they were liable for to the court. The PMG claimed to recover from the sum given the value of letters, parcels etc. In his custody as a bailee and lost on board the mexican

Ratio (Collins MR):

Cited the principles from Jeffries v Great Western Railway Co to make a logical extension from the principle that a possessor may recover from a wrongdoer the whole value of goods in an action in trespass:

It is not open to the defendant, being a wrongdoer, to inquire into the nature of the limitation of the possessor’s right unless it is competent for him to do so. The question of the possessor’s liability does not come into the discussion at all.

His honour then reviewed the authorities to overturn Cladridge’s Case

Cited authorities, including lectures on the Common Law by Holmes J, the old yearbook case of Heydon and Smith to conclude that in many cases a bailee could recover against a wrongdoer despite having a complete action to bailees. The authorities were held to suggest that possession is title and the chattel damaged is that of the possessor and no other. But in repaying the bailee, the wrongdoer has a complete answer to any action by the bailor – but this ONLY applies to bailees and none-else (as noted above).

Questions
2.18

There is no material difference. Both simply apply the rule that the possessor has good title to the goods and an intermediate wrongdoer is completely answerable to the possessor.

2.19

Not necessarily; the Postmaster-General is completely answerable to his bailees; custody is not an unacceptable extension
It does not seem the case would have been decided any differently the focus is on possession not ownership

2.20

It is closer in the chain of accountability for the bailee to be answerable to any bailees who may claim and for the wrongdoer to be accordingly answerable to the bailee.
Yes the fact that the bailor may call upon the bailee for compensation at any time should be sufficient.
It may be difficult for the bailor to enforce a claim to the money (deep pockets)

The rule that a bailee can recover against a wrongdoer absent by a claim by a bailee is an exception to the general rule that damages are rewarded on a compensatory basis
In general if jus tertii arises in a claim by the bailor against the bailee; the bailor is estopped from disputing the title of the bailee unless they can show a higher title (Biddle v Bond)
The Anderson Group Pty Ltd v Tynan Motors – Anderson (A) has a hire purchase agreement with Esanda and he left the car with the respondent (T) to sell without Esanda’s consent. The car is stolen from T. Esanda issues a notice for repossession, the respondent disputes A’s title to sue since its breach of the HPA meant that at the time of the theft only E could obtain immediate possession
- Held (NSWCA): The respondent, as a bailee from the appellant, couldn’t deny the appellant’s title to sue. Even if a person breaks bailment, if that person continues in possession of personal property then that person has a title to sue to defend his or her possession
- But if the breach of bailment is so serious as to amount to a disclaimer of bailment, it could determinate the contract of bailment and give the bailor an immediate right to possession.
  - Here there was no such breach amounting to a disclaimer – the appellant had title to sue
Esanda v Gibbons – Austin J draws a comparison between estoppel and the jus tertii plea and how they both arise in response to similar conduct. He outlines that the defendant in an action to conversion is precluded from relying on the title of a third party when:
- Their conduct has contributed to the plaintiff’s belief that its right to immediate possession exists
- The defendant does not act with the authority of the true owner
City Motors v Southern Aerial Super Service – plaintiff (SASS) agrees to purchase a new truck from the defendant and trade an old truck as part payment towards it. They applied to X, a finance company associated with CM to cover the balance of the money. On being told finance was available, SASS signed and offer addressed to X to hire a new truck. CM took possession and delivered the new truck – the old later broke down and the CM told SASS that X refused the offer to hire the truck – defusing an offer to pay cash for it and then...

#7348 - Goods - Property, Equity and Trusts 1

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