Charlesworth v Mills
| Jurisdiction | England & Wales |
| Year | 1892 |
| Date | 1892 |
| Court | House of Lords |
Bill of Sale - Pledge of Goods with Possession - Licence to take Possession - Authority to sell Goods - Document containing Authority to Sell - Possession of Auctioneer -
The owner of household goods which had been seized under a fi. fa. agreed verbally with an auctioneer that in consideration of his paying out the sheriff the auctioneer should hold possession of the goods, sell them by auction and pay over the balance (if any) to the owner. This agreement was reduced into writing and the sheriff was paid out, the man in possession remaining in possession for the auctioneer:—
Held, reversing the decision of the Court of Appeal (
APPEAL from an order of the Court of AppealF1 affirming a judgment of Day J.
In December 1887 the household furniture of Wilson was seized by the sheriff's officer under an execution at the suit of Townsend, and a man placed in possession. On the 9th of December Wilson asked the appellant Charlesworth, an auctioneer, to pay the sheriff out. Charlesworth after seeing the goods agreed to do this and the following arrangement was verbally made. The man in possession was to remain in possession for Charlesworth, who was to sell the goods by auction, repay himself the advance and hand over any balance to Wilson. This arrangement was carried out. Charlesworth paid out the sheriff, the sheriff's officer giving the following receipt:—
“9th December, 1887.
Memo. — That I have received from Mr. Charlesworth, auctioneer, cheque for £62 15s. 1d., being the amount of levy and costs herein.”
Wilson gave Charlesworth a letter as follows:—
Hull, 9th December, 1887.
Mr. Charlesworth, Auctioneer,
Hull.
Sir, — In consideration of your paying to Mr. C. F. Wells, the sheriff's officer, the amount of Townsend's writ and expenses, viz., £62 15s. 1d., I hereby authorize and request you to hold possession of all my furniture and effects now on the premises No. 2, Pendrill Street, Hull, and to sell the whole by auction as soon as convenient, and after deducting the above amount and your charges, pay over the balance (if any) to me.
Yours truly,
A. P. Wilson.”
The man in possession remained in possession for Charlesworth. On the next day, the 10th, Wilson gave a bill of sale of the same goods to the respondent Mills, who registered it. Wilson absconded and Charlesworth removed the goods to his auction rooms and sold them for about £55. Mills having brought an action against Charlesworth claiming damages for the detention and conversion of his goods, Day J. who tried the action without a jury held that the above letter was a bill of sale and not being in the form required by the Act was void, and gave judgment for the plaintiff' for £112, the amount of his loss, and costs. The Court of Appeal (Lindley and Lopes L.JJ., Lord Esher M.R. dissenting) affirmed this judgmentF2. From these decisions the defendant brought the present appeal.
1892. April 1, 4. Witt Q.C. and Montague Lush for the appellant:—
The letter which the Court of Appeal held was a bill of sale was nothing more than a mandate, an authority, from the owner of the goods, Wilson, to Charlesworth the auctioneer, to hold possession of the goods and to sell them and repay himself the advance out of them, and hand the balance to the owner. It was an ordinary auctioneer's transaction, with some of the elements of a pledge. No doubt until repayment Charlesworth was entitled to keep possession of the goods as a security. But that does not make the letter a bill of sale. The Court of Appeal seem to have been misled by the old fallacy that because the claimant “relies on” a document or “must look at it” to prove his claim the document is within the Bills of Sale Act. This document does not fall under any of the definitions of a bill of sale given in the Act of 1878: the only colourable one is a “licence to take possession,” and that it was not, for possession was taken simultaneously with the advance and the creation of the document. The whole thing was one transaction, and no act remained to be done before possession was perfected. The sheriffs man at the moment he ceased to be in possession on behalf of the sheriff was in possession on behalf of Charlesworth. Wilson could not have maintained an action of detinue or conversion against Charlesworth for selling the goods the instant after the money was paid; therefore neither can Mills. It would perhaps have been better if no letter or document had been given, for then no one could have mistaken the transaction for a bill of sale. The Court of Appeal has itself pointed out the distinction in Ex parte HubbardF3, where as here the possession was changed before or simultaneously with the calling into existence of the document. Ex parte ParsonsF4 was a case of licence to take possession and has no bearing here.
Arnold Statham and Dyer for the respondent:—
The appellant looked to the letter as the basis on which he lent his money — as his security. There was no change of possession till after the sheriff had been paid out. The appellant would not advance the money till the document was signed, and then he paid not Wilson but the sheriff. Possession was therefore taken under and by virtue of the document. After the sheriff was paid out possession for a moment at least vested in Wilson, and the document is therefore a bill of sale. “Hold possession” in the document means become the holder. More than what had been done was required to perfect possession, and it was clearly under the authority of the document that the goods were removed to the auction rooms. If a document constitutes the authority to take possession of goods as a security for a loan it is within the Act though possession be given at the same time. If the document contemplates the possibility of an interval between the intended immediate taking of possession and the taking it is a bill of sale. “Possession is an equivocal term: it may mean either actual manual possession or the mere right of possession”: Martin v. ReidF5, per Erle C.J. When the terms of an agreement are reduced to writing you must look at the document only, as Lord Esher M.R. said in Ex parte ParsonsF6, and where you must look at the document to prove your title it is a bill of sale. It was clearly a bill of sale within the Act of 1878 because the goods were in the apparent possession of the debtor. The letter was either a “licence to take possession of personal chattels as security for a debt” — see per Bowen L.J. in Ex parte HubbardF7 — or “an assurance of personal chattels” within the Act of 1878. If this decision be reversed auctioneers will be in a very favourable position for lending money and defeating the Bills of Sale Act of 1882.
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