#6821 - Taylor V. Plumer - Restitution of Unjust Enrichment BCL

Taylor v. Plumer

Facts

Walsh was a stock-broker, who had occasionally been employed by the defendant for some time before 181l. In August of that year the defendant, expecting to have occasion for a large sum of money at Michaelmas to pay for an estate which he had contracted to purchase, consulted Walsh on the propriety of selling out stock to provide for such payment, and desired him to inform him when he, Walsh, thought it would be most expedient to do so. In November, the title to the estate not having been then completed, Walsh, thinking the funds likely to fall, recommended to the defendant to sell out stock, being principally in a fund which is regularly shut from the beginning of December till about the 7th of January; and the defendant having considered the matter, on the 28th of November sent Walsh orders to sell. Sales were accordingly effected by Walsh as broker on the 29th to the amount of 21,7741. 5s. sterling, the transfers to be made and the money to be paid on the 4th of *722 December. On the 4th the stock was transferred by the defendant, and the price was received by Walsh, who on the same day paid 21,5001., part of the said price, into the hands of Messrs. Goslings and Co., the defendant's bankers, to the defendant's account, and saw the defendant and informed him of it. The defendant proposed to Walsh to invest the money in Exchequer bills until it should be wanted to pay for the estate, and in the evening desired him to call the following day for a draft in order that he, as broker, might buy Exchequer bills for the defendant.

The defendant him a draft upon Goslings for 22,200l. The defendant did not authorize Walsh, nor was Walsh in any manner authorized to apply the draft or money to be received for it, to any other purpose, nor had the defendant any reason to expect or apprehend that it would be applied to any other purpose.

Walsh went to Goslings, received the amount of the draft from them in 22 Bank of England notes of 10001. each, and one for 2001., but purchased Exchequer bills to the amount of 6500l only.

But the fact was not so; on the contrary, Walsh being ruined in his circumstances, and completely insolvent, had, between the time of the sale of the defendant's stock and the time when he received the price of it, conceived an intention of absconding with the money when it should come to his hands, and with that view, on the 2d of December, had given orders for the purchase of the American shares, stock, and bullion in question, in order to take them with him abroad, having no means of paying for the American shares and stock but out of the money he expected to receive belonging to the defendant, nor any money of his own to pay for the bullion, though he might have acquired money for that, but intending to pay for that also out of the defendant's money.

Accordingly, after receiving the draft at Goslings, he went immediately from thence to the American stock brokers in the city, received the certificates, and paid for them with 11 of the identical Bank of England notes of 1000l. each, which he had just received, taking back from the broker to whom he paid them the difference of 5401. 1s. 6d. The same morning he delivered to his brother-in-law another of the 10001. bank-notes, and received from his brother-in-law in exchange, a draft, of the firm in which he is a partner, on their bankers for 5001., and another draft for 1001., leaving the remainder in his brother-in-law's hands, and with the 5001. draft he paid for the bullion, receiving the difference from the goldsmith who furnished it.

About nine in the morning of the 5th he left his dwelling-house, taking with him cloaths and other necessaries for his journey, intending not to return, but to leave London in the evening by the mail-coach…. He was pursued by the defendant's attorney and a police officer by the defendant's desire, the attorney having a general authority to act for the defendant, but no particular directions, and on the 9th they overtook Walsh whilst he was waiting at Falmouth for the packet's putting to sea, and he then surrendered up the property in question to the attorney for the purpose of being assigned over to the defendant, and in the course of that day executed a deed, which was prepared by the attorney's order, assigning the property to the defendant in trust [566] to sell and pay himself a debt of 15,500l.

The suit here is brought by the administrator’s of Walsh’s bankruptcy on the ground that the money in question belonged to Walsh and therefore they are entiled to it as opposed to the defendant.

Holding

Lord Ellenborough

The plaintiff in this case is not entitled to recover if the defendant has succeeded in maintaining these propositions in point of law, viz. that the property of a principal entrusted by him to his factor for any special purpose belongs to the principal, notwithstanding any change which that property may have undergone in point of form, so long as such property is capable of being identified, and distinguished from all other property.

General Rule – Trust in favour of the Principal

And, indeed, upon a view of the authorities, and consideration of the arguments, it should seem that if the property in its original state and form was covered with a trust in favour of the principal, no change of that state and form can divest it of such trust, or give the factor, or those who represent him in right, any other more valid claim in respect to it, than they respectively had before such change. An abuse of trust can confer no rights on the party abusing it, nor on those who claim in privity with him. The argument which has been advanced in favour of the plaintiffs, that the property of the principal continues only so long as the authority of the principal is pursued in respect to the order and disposition of it, and that it ceases when the property is tortiously converted into another form for the use of the factor himself, is mischievous in principle, andsupported by no authorities of law.

Exception to the Rule – Means of Ascertainment Fail

The contention on the part of the defendant was represented by the plaintiff's counsel as pushed to what he conceived to be anextravagant length, in the defendant's counsel being obliged to contend, that “if A. is trusted by B. with money to purchase a horse for him, and he purchases a carriage with that money, that B. is entitled to the carriage.” And, indeed, if he be not so entitled, the case on the part of the defendant appears to be hardly sustainable in argument. It makes no difference in reason or law into what other form, different from the original, the change may have been made, whether it be into that of promissory...