#6885 - Bowmakers V. Barnett Instruments - Restitution of Unjust Enrichment BCL

Bowmakers v. Barnett Instruments

Facts

The plaintiffs, Bowmakers, Ld., sued the defendants, Barnet Instruments, Ld., to recover damages for the conversion of certain machine tools which they alleged were their property. The tools in question were the subject of three hiring agreements between the plaintiffs and the defendants.

In each case the machines were originally the property of a man named Smith, who was prepared to sell them to the defendants at prices which they were willing to pay, though not at once. The goods comprised in the first agreement were originally the subject of a contract of sale between Smith and the defendants, but this contract was rescinded. Eventually it was arranged in every case, for the convenience of the defendants, that the defendants should obtain possession of the machines, not by a direct purchase from Smith, but under a hire-purchase agreement from the plaintiffs. In pursuance of this arrangement Smith sold the goods to the plaintiffs, and the plaintiffs entered into the three agreements with the defendants. The contracts between the plaintiffs and the defendants were in a familiar form. Each of them contained a provision for the monthly payment of hire and further provided that "if the hirer shall duly make the said payments and strictly observe and perform all the terms and conditions on his part herein contained then the hirer shall thereupon have the option of purchasing the said chattels for the sum of ten shillings." The defendants after making some, but by no means all the agreed payments, sold for their own advantage, and so converted to their use, all the machines except that one which was the subject of agreement 2, and this latter they also converted to their own use by refusing to deliver it up to the plaintiffs on demand. They maintained however, that the plaintiffs had no remedy against them.

Ministry of Supply Regulations:

On October 4, 1940, the Minister of Supply, in exercise of powers conferred on him by regs. 55 and 98 of the Defence (General) Regulations, 1939, made an order ( St. R. & O., 1940, No. 1784 ), which admittedly applied to them. The material clause of the order was as follows: “No person shall pay or receive any price (except a provisional price subject to any adjustment that may be required upon determination of the maximum price) for any machine tool produced in the United Kingdom and delivered or to be delivered in the United Kingdom after the coming into force of this order under a contract of sale whenever made (a) until a maximum price for that machine tool shall have been provided by a special or general direction issued by the Minister of Supply, or (b) in excess of the maximum price so provided.”

Another order of the Minister of Supply (St. R & O., 1940, No. 1374), which provided that no person should "in the United Kingdom at any time after August 17, 1940, dispose of or agree or offer to dispose of any used machine tool, except under the authority of a licence granted to him by the Minister of Supply." The plaintiffs had no such licence to dispose of the machine tool in question. They had, therefore, infringed the order, if not by buying from Smith, the previous owner of the tool, then certainly by themselves hiring out the chattel to the defendants.

Holding

Nature of the Plaintiff’s Claim

The question, then, is whether in the circumstances the plaintiffs are without a remedy. So far as their claim in conversion is concerned, they are not relying on the hiring agreements at all. On the contrary, they are willing to admit for this purpose that they cannot rely on them. They simply say that the machines were their property, and this, we think, cannot be denied. We understood Mr. Gallop to concede that the property had passed from Smith to the plaintiffs, and still remained in the plaintiffs at the date of the conversion. At any rate, we have no doubt that this is the legal result of the transaction and we find support for this view in the dicta of Parke B. in Scarfe v. Morgan.

Why then should not the plaintiffs have what is their own? No question of the defendants' rights arises. They do not, and cannot, pretend to have had any legal right to possession of the goods at the date of the conversion. Their counsel has to rely, not on any alleged right of theirs, but on the requirements of public policy. He was entitled, and bound, to do so, although, as Lord Mansfield long ago observed, "The objection, that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant." "No court," Lord Mansfield added, "will lend its aid to a man who founds his cause of action upon an immoral or an illegal act:" Holman v. Johnson ² . This principle, long firmly established, has probably even been extended since Lord Mansfield's day. Mr. Gallop is, we think, right in his submission that, if the sale by Smith to the plaintiffs was illegal, then the first and second hiring agreements were tainted with the illegality, since they were brought into being to make that illegal sale possible, but, as we have said, the plaintiffs are not now relying on these agreements or on the third hiring agreement. Prima facie, a man is entitled to his own property, and it is not a general principle of our law (as was suggested) that when one man's goods have got into another's possession in consequence of some unlawful dealings between them, the true owner can never be allowed to recover those goods by an action. The necessity of such a principle to the interests and advancement of public policy is certainly not obvious.

In our opinion, a man's...