NOTES OF CASES
| DOI | http://doi.org/10.1111/j.1468-2230.1944.tb00979.x |
| Published date | 01 July 1944 |
| Date | 01 July 1944 |
I48
MODERN
LAW
REVIEW
July,
1944
the
1943
Act;
if
the
tax
deducted during the year is considerably less
than the tax due on earnings-say, owing to belated payment of remunera-
tion after the end of the year-the Inspector can require immediate
payment
of
the balance of the tax instead of its adjustment in the “Coding”
for
a
subsequent year (Reg.
46).
Reg.
47
provides for direct assessment,
and quarterly payments on account of tax, in respect of casual, and other
special, employments.
The new system has only been working some three months but the
general consensus
of
opinion seems to be that
it
is much fairer than the
old one and that the direct relation of
tax
to current earnings
is
a
real boon
to the employed person. A.
FARNSWORTH.
NOTES OF
CASES
Tort-Death-Survival
of
Causes
of
Action
”
A decision that the Law Reform (Miscellaneous Provisions) Act,
1934.
which was aimed at abolishing the rule
actio personalis moritur cum persona,
does not enable a wife’s claim for secured maintenance under
s.
190
(I)
of
:he Supreme Court of Judicature (Consolidation) Act,
1925,
to survive
the death
of
the respondent husband, may not seem to be
of
general
interest; and that perhaps is why
Dipple
v.
Dipple,
[I9421
P.
65,
has
received little attention. Actually, however, the case is
of
importance
outside the law of divorce, because of the way in which Hodson,
J.,
decided
it. The learned judge held that the wife’s claim for secured maintenance
did not survive because, being a matter for the discretion
of
the Court,
it was not
a
“cause
of
action” within
s.
I
(I)
of the Law Reform Act.
If
correct, the decision seems to mean that
no
discretionary remedy survives
the death of a party under the Law Reform Act. For instance,
a
claim
in
divorce proceedings for the variation of
a
settlement would presumably
not survive, just as
it
did not before the Act (see
Grant
v.
G.
(1862).
2
Sw.
&
Tr.
522;
Tltomson
v.
T.,
[1896]
P.
263,
C.A.). Again, there would
be no claim for costs if a party to litigation were to die before judgment,
just as there was not before the Act (see
Coleman
v.
C.,
[1920]
P.
71;
Schenck
v.
S.
(1908), 24
T.L.R.
739;
cp.
Hodge
v.
Mavsh,
[I9361
I
All
E.R.
848,
P.C.).
Nor would there be
a
claim, in such circumstances, under the
Law Reform (Married Women and Tortfeasors) Act,
1935,
for contribution
or indemnity against a joint or concurrent tortfeasor, nor under the
Maritime Conventions Act,
1911,
for apportioned damages in
a
case of
contributory negligence
;
for
all
these are discretionary remedies.
It
is
possible to put several other cases in which,
if
Dipple
v.
Dipple
is correct,
the Act of
1934
has failed of the remedial effect that was obviously intended
by its draftsman.
With great respect it is submitted that the decision of Hodson,
J.,
is
not correct. In the first place, it puts too narrow
a
meaning
upon
the
phrase
”
cause
of
action
”
as generally used
;
and secondly, it mistakes its
meaning in the special context of
s.
1
(I)
of the Act of
1934.
For the general meaning
of
the phrase “cause of action” Hodson,
J.,
relied upon a dictum
of
Lord Esher in
Read
v.
Brown
(1888),
22,Q.B.D.
128,
where he defined it as “every fact which
it
would be necessary for the
plaintiff to prove,
if
traversed, in order to support his right to the judgment
NOTES
OF
CASES
I
49
of the Court.” The emphasis in Hodson,
J.’s,
mind seems to have
been
on the word “right
”
in this dictum
;
a
married woman cannot
be
said to
have
a
right to secured maintenance. Against this
it
niay be pointed out,
with respect, that this particular question (i.e. whether there can
be
a
“cause of action” for
a
discretionary remedy) was not present to Lord
Esher’s mind when he framed the definition. Lord Esher was concentrating
chiefly upon the adjective “every,”
as
a
reference to the case
in
which the
dictum appears will show. Moreover there are other definitions of “cause
of action” that do not require that the remedy sought should
be
due as
of right. For instance, in
Jackson
v.
Spittall
(1870).
L.R.
5
C.P.
542,
at
551-2,
the same learned judge (then Brett,
3.)
said that the popular
meaning, and for many purposes the legal meaning, of “cause of action”
is “the act on the part of the defendant which gives the plaintiff his
cause
of
complaint”
(italics mine). Finally,
if
“cause of action” really connotes
that the remedy must be as of right,
it
follows that no discretionary remedy
will be statute-barred in those cases (constituting the large majority)
where the Limitation Act makes time run from the accrual of the cause of
action, for
if
there is no cause of action there
is
no starting-point from
which time can run.
It
would follow, for instance, that a claim for contribu-
tion against a joint or concurrent tortfeasor would never be statute-barred
(notwithstanding that the authors of the leading work on the Limitation
Act think that
it
can be: Preston and Newsom,
Limitation
of
Actions,
second edition,
52).
This is too surprising
a
conclusion to be accepted
with equanimity.
Still more serious is the objection to Hodson,
J.’s,
decision
as
an
interpretation of the actual words of
s.
I
(I)
of the Act of
1934.
It
is
submitted that in the special context of that sub-section the phrase “cause
of action” does not bear
its
usual meaning.
Its
usual meaning, and
its
meaning in most
of
the earlier statutes upon which the decided cases turn,
is
“the facts giving rise to an action.” (For these statutes and
cases,
see
Halsbury, Hailsham ed., i,
8-9,
para.
9;
English
and
Empire
Digest.
i,
13-23
;
Words and
Phrases,
i,
403.)
For instance, when it
is
said that time
shall run from the accrual of
a
cause of action, it
is
reasonable to read this
as meaning “from the happening of the
facts
that enable the action to
be
brought.” This, therefore, is the meaning of the phrase “cause
of
action”
in
s.
I
(3)
(b)
of the Act of
1934,
which imposes a period of limitation.
Again, when
it
is said that
a
Court shall have jurisdiction only
if
the cause
of
action arises within a certain locality,
it
is
reasonable to read this as
a
requirement that the
facts
enabling the action to be successfully brought
should have happened in that locality. But this definition of “cause of
action” as “facts” does not always
fit.
Thus when one speaks of the
“joinder of causes of action,” one
is
not speaking of the joinder of facts
:
one is speaking of uniting two claims in one proceeding. Similarly the rule
against splitting causes of action refers not to the splitting of facts, but
to the splitting of claims.
So,
too, with
s.
I
(I)
of the Act of
1934,
which
effects a survival of causes
of
action. It makes nonsense
of
this sub-section
to say that it provides that the facts giving rise to an action shall survive
the death
of
a party. Obviously
it
is not the facts that survive, it
is
the
action.
“Cause of action” here means “action,” that
is
to say, the remedy
or claim.
It
may possibly be objected against me that
it
does not help on the
actual facts of
Dipple
v.
DiHle
to say that an “action” survives although
the relief
is
discretionary, because a divorce proceeding
is
not an “action”
I50
MODERN
LAW
REVIEW
July,
1944
(see
Re
Binstead,
[1893]
I
Q.B.
at
209,
per
Kay, L.J.), and, therefore,
discretionary or not,
it
cannot survive. This seems to be the purport of
a
remark in Underhill’s
Twts,
thirteenth edition,
48
n.
(e).
To this it may
be
replied that “cause of action” in the sub-section refers to any legal
remedy, not merely to actions in the technical sense. That divorce pro-
ceedings are not ruled out as such seems to be shown by the sub-section
itself, which declares that
it
does not apply to claims (i.e. in divorce) for
damages for adultery, thereby implying that
it
does apply to other claims
in
divorce proceedings.
If
the draftsman thought that a claim for damages
for adultery was not
a
cause of action, there was, strictly, no need for him
to
mention
it.
But
it
must
be
admitted that the sub-section speaks with
a
somewhat uncertain voice, for
it
avoids using the phrase “cause of
action”
in
connection
with
such claims. Independently of the sub-section,
there
is
respectable authority for using the phrase “cause of action” to
express
a
claim for damages against an adulterer, notwithstanding that
this
claim
is
not made in an “action”; see
Brydges
v.
B.,
[xgog]
P.
187
at
rgz.
per
Farwell,
L.J.
Also,
a
claim that can be enforced only by
arbitration
is
nevertheless a “cause of action” within the Limitation Act,
1939;
see
Layen
v.
L.P.T.B.,
[I9441
I
All
E.R.
432;
the point
is
not
expressly covered by
s.
27
of the Limitation Act.
It
may
be
added that there
is
another way in which the phrase
“
cause
of action” in
s.
I
(I)
of the Act of
1943
is capable of giving trouble. The
question may be stated in this way. Suppose that there is what may be
called an incomplete cause of action before the death of one of the parties,
and that facts occur after the death that would, but for the death, give a
complete cause
of
action. Can
it
be
said that there
is
a cause
of
action
that survives the death under the sub-section? On the face of
it
the
answer is no, for at the moment of the death all the vital facts have not
occurred and there is no effective remedy; thus there is no complete
“cause of action” to survive. Fortunately the question is not likely to arise
often in practice, for two reasons.
It
is not likely to arise in contract,
because actions in contract survived
at
common law and the help of the
Act
is
not needed. And it is not likely to arise in tort, because. the most
likely case in tort
is
expressly cared for by
s.
I
(4)
of the Act. This sub-
section provides in effect that where the defendant committed a wrongful
act, not actionable
per
se,
before his death, and the plaintiiTsuffered damage
after the death, there is deemed to be a subsisting cause of action at the
death. The fact that
it
was thought necessary to insert this sub-section
rainforces the conclusion that, apart from it, the Court could not link
together facts, some happening before the death and some after it, that
in the aggregate constitute a cause
of
action. A situation in which the
question may arise is in regard to costs, on the assumption that
Dipple
v.
Dipple
is
wrongly decided. Suppose, for instance, that an action in tort
is
started against a tortfeasor before his death, and is continued to a
successful conclusion after his death
;
can the Court order the tortfeasor’s
representatives to pay the plaintiff’s costs incurred subsequently to the
death? Assuming that the discretionary nature of the award of costs is
not a fatal objection, the question
is
whether
it
can be said that there
was
a
“cause of action” in respect of these costs before the death.
It
may
be
thought not. Clearly no Court will award a plaintiff costs that he has
not incurred, and by hypothesis these costs had not been incurred before
the
death
:
therefore at the moment of the death there was no right to these
particular costs and
no
remedy (not even a discretionary remedy) in respect
NOTES
OF
CASES
151
of them. On the other hand, it may
be
argued that the award of costs
is
an incident to an “action” that is allowed to survive by the Act, and
therefore must be allowed to survive by implication.
Perhaps the upshot of all this
is
that it
is
time that lawyers (and in
particular parliamentary draftsmen) agreed to use the phrase “cause
of
action” in one meaning only, and invented other phrases to express
its
other meanings.
A
tentative step was taken by Goddard, L.
J.,
in
Drapcv
v.
Tvist,
[1939] 3
All E.R. at
525,
and again in
George
Munro,
Lld.
v.
Ammicaw
Cuanamid
Corp.,
[I9441
I
All E.R. at
389.
The learned Lord Justice tried,
as he put it, to analyse in his own mind “what exactly are the cause of
action and the right of action, which are two different things.
.
.
.
In an
action on the case, the cause of action is the wrongful act or default
of
the
defendant. The right
to
bring the action depends on the happening of
damage.” This attempt to separate two different meanings is
a
step in the
right direction, but it must be frankly recognised that it is a departure
from existing usage. For the purpose of the limitation of actions in the
case of torts not actionable
per
se,
it is well settled that the cause
of
action
is
not the wrongful act or default but the happening
of
the damage-in
other words, what Goddard, L.
J.,
calls the right of action.
Also,
as applied
to
s.
I
(I)
of the Act of
1934,
Goddard, L.
J.’s,
idea of the nature of a cause
of
action would make
s.
I
(4)
unnecessary. This is not a criticism
of
Goddard, L.J.’s, suggestion: it
is
simply an indication of the mess we
are in.
GLANVILLE WILLIAMS.
Quasi-contract-Action Against
Third
Hand
Transvaal Investment
Co.
v.
Atkinson,
[I9441
I
All E.R.
579,
raises a
broad point of principle in the law of quasi-contract. If
A
pays money
to
B,
in such circumstances that he can successfully sue
B
in quasi-contract,
and
B
pays the money over to
C.
who takes it in good faith, can
A
success-
fully sue
C
in quasi-contract? The answer on principle would seem to
be
no, unless of course
B
was acting as agent for
A
or
C,
in which case
B
would
be
a mere conduit-pipe and the payment would in law
be
a payment by
A
to
C.
In any other circumstances it seems plain on principle that
A
cannot get a personal judgment against
C
in quasi-contract
;
his proper
remedy against
C
is the proprietary one of “following” the money into
the hands of
C,
assuming that such following is possible on the facts of
the particular case.
The decision of Atkinson,
J.,
in the instant case seems to bear out this
view.
B,
an employee of the
A
Co.,
fraudulently obtained cheques belonging
to and drawn by the
A
Co.,
and paid them into the bank account of his
wife
C.
He told his wife that the cheques represented commission paid
to him by the
A
Co.,
and
C
acted in this belief and with perfect innocence.
In
accordance with
B’s
instructions
C
paid him out half the moneys
so
paid
in
to her account, and spent the other half on herself and on house-
keeping. When the
A Co.
discovered
B’s
fraud there was nothing in
C‘s
account,
so
that there was no question of following. Could the
A
Co.
nevertheless obtain judgment against
C
as for
(I)
money paid under a
mistake of fact, or
(2)
money received to their use? Atkinson, J., held not.
“
It
may
be
difficult,” he said, “to regard the payments as money paid by
the plaintiffs to the defendant, whether under a mistake of fact or at all.
The plaintiffs never consciously paid the defendant anything
;
the defendant
-1
52
MODERN
LAW
REVIEW
July,
1944
never consciously received anything from the plaintiffs. Indeed,
I
doubt whether strictly she received anything from them. What happened
was that her husband stole certain signed cheques, and forged them by
making false alterations, and instructed the bank to receive and deal with
the proceeds. The bank had no authority from the defendant to receive
anything on her behalf, nor had the plaintiffs any authority to pay anything
to the National Provincial Bank for her account or on her behalf.” This
passage may seem at first sight
a
little difficult to understand, for pre-
sumably there was
a-
transfer from the plaintiffs’ bank account to the
credit of the defendant’s bank account, and the transfer was surely with
the defendant’s authority (she knew of it, she knew that the cheques came
from the plaintiffs, and she dealt with the account). What the learned
judge perhaps meant was this, that if the
A Co.
pays coins to B under
a
mistake of fact, and
B
pays them to
C
who takes them in good faith (not
necessarily for value), the
’A Co.
cannot sue
C
in quasi-contract, because
they have made no payment to
C;
and the position is the same where
B
instead of getting coins from the A
Co.
gets
a
cheque. This seems to be
the thought in the later passage in the judgment where, after quoting
Sinclair
v.
Brougham,
[1g14]
A.C.
398,
the learned judge said
:
“If
A
steals
a
55
note from me and gives it to his wife, asking and receiving
d2
10s.
by way
of
change, and instructing her to spend the rest in paying
a
coal
bill, and buying herself a pair of shoes, those she was wearing being full
of holes, even the law could not imply
a
promise by the wife to repay me
my
55
note. There is no privity on which to found such
a
promise.” Those
who dislike the implied-promise theory of quasi-contract may object to
the wording of this passage, but they need not object to the substance of it.
Anxious to please all points
of
view, Atkinson,
J.,
went on “to deal
with the case on the view held by Lord Wright, that the real basis of law
in
such an action as this is that of
an
unjust enrichment
at
the plaintiffs’
expense unintended by them.” He held that, assuming this to be the true
principle, it had no application here, for the reason that “where the money
has been received by an agent for
a
principal he cannot be sued for its
return
if
before notice he has paid it away to his principal or on his prin-
cipal’s instructions.” Even as regards the part of the money spent by the
wife on herself, she was merely acting as her husband’s agent because he
was bound to provide for her (p.
586
B).
With respect, it
is
submitted that this way of deciding the case was not
free from difficulties.
It
is true that where A pays money to
C,
C
acting
expressly as agent for B, and
C
pays it over to B,
C’s
payment to B takes
away any quasi-contractual action that A would otherwise have had against
C.
But this has been held not to apply where the payment by
A
to
C
was
not intended by
A
as a payment to an agent
;
see
Newall
v.
Tomlinson
(1871),
L.R.
6
C.P.
405,
which, though unsatisfactory, has not been over-
ruled
;
cp. Keener,
Quasi-Contracts
(1926
reprint),
61
;
Woodward,
Quasi-Contracts
(1913). 43.
In the instant case, if there were any payment
by the
A Co.
to the wife
C,
it was certainly not intended to be
a
payment
to her as her husband’s agent.
It
is therefore submitted that the simpler
ground of the decision was that stated above, that an action in quasi-
contract does not lie against the third hand, at any rate where the third
hand receives in good faith. The proper remedy against the third hand
is the proprietary remedy based upon the legal and equitable doctrines of
“following.” The only difficulty in the instant case was in determinipg
whether or not the wife was
a
third hand. From the point of view of the
NOTES
OF
CASES
I53
cheque, the piece of paper, she was
;
but from the point of view
of
the credit
and money that she obtained from her bank, she was only the second
hand. The decision follows ordinary business notions in regarding the
cheque as representing money, and consequently in regarding the wife
as
the third hand.
A
dictum that seems to attach
a
proprietary effect
to
the action in
quasi-contract is that
of
Lord Sumner in
A.-G.
v.
De Keyser’s Hotel,
‘19201
A.C.
at
556,
which has been given prominence by being repeated in
khalmer’s
Sale
of
Goods.
“If
the servant of
a
company,” said Lord Sumner,
“acting
ultra vires
of the company converts
a
stranger’s chattel, and,
having sold
it,
pays the proceeds into the company’s account
as
its servant,
I
suppose an action for conversion would lie against the servant, and for
money ha.d and received against the company.”
If
this means that both
actions could be brought,
it
is respectfully submitted that it is wrong; for
by
suing the servant in conversion the plaintiff would elect not
to
waive
t.he tort, and in that event he cannot claim the proceeds
of
the sale even
from the servant, much less from the servant’s master
or
from
a
third party.
If.
on the other hand, the dictum means that the plaintiff could, without
:iiing the servant, sue the company for money had and received, it
is
vbmitted that it
is
correct only if the tort were committed in the course
.if
the servant’s eniplo!ment.
so
that the conversion was that of the
company as
well
as
of
the servant. Otherwise the result would be to allow
an action in quasi-contract against the third hand, which, as has already
been submitted, \vould
be
against principle.
It
may he added that in the instant case no claim was made against
tht.
uife
for
con\wsion
of
the cheques. Had the claim been made it might
ha\-e
raised an an-kward problem, for it
is
arguable that the wife, although
!nnocent. \\-as a joint tortfeasor with her husband. This line
of
argument
would
also
be
apt in a case like that envisaged by the learned judge in his
”
pair of shoes” dictum, quoted above.
If
A
steals my
f;5
note the property
in the note remains in me, and if
A
proceeds to give the note to his wife
the propert!.
still
remains
in
me, unless his wife takes the note in good faith
and for value.
If
therefore the wife spends the note while
it
is still my
property, she
seems
to
be liable to me in conversion. But perhaps
if
the
wife gave her husband
A2
10s.
for
the note, this would be sufficient value
to
pass the property in it to her.
It may also
he
added that no claim was made against the wife on
the footing
of
constructive trust. Probably, on the facts,
B
became
a
constructive trustee for the
A
Co. of their cheques and of any money
received by him thereunder (see
John
v.
Dodwell
Cr
Co.,
[1918]
A.C.503).
Rut
his wife was not accountable as
a
constructive trustee, because she
knew nothing of the breach
of
duty committed by
B
in making the transfer
to
her
(ibid.
at
;.
569:
I17illiams-Ashman
v.
Price,
[I9421
Ch.
219).
GLANVILLE WILLIAMS.
Contract-Exceptions
Cl
c.uses-Measure
of
Damages
!-I
exceptions clause in
a
contract. like any other clause, may be
so
vaguely worded
as
to
vitiate the whole contract on the ground of uncer-
tainty. This happened in
Bishop
Cr
Baxter
v.
Anglo-Eastern Trading
6-
Indu.~lvinl
Co.,
i
10441
I
K.B.
12,
C.A.,
whcrc
an agreenicnt for the
sale
of
gords was
expressed
to
be
made
“subject
to
war clause.” There being
no
esta1)lished fnrm
of
war clause, the contract failed altogether.
I54
MODERN LAW REVIEW
July,
1944
Two other decisions on exceptions clauses, already noted in
this
Review,
have now been affirmed by the Court of Appeal and House of Lords
respectively:
Bontex
Knitting Works
v.
St.
John’s Garage (ante,
Vol.
7,
p.
75) (1944).
60
T.L.R.
253, [I9441
I
All E.R.
481;
Egham
&
Staines
Electricity
Co.
v.
Egham
U.D.C.
(ante,
Vol.
6,
p.
I~o),
“9441
I
All E.R.
107.
The difficulties felt with the former decision by the writer of the note were
not shared by the Court of Appeal, which affirmed the decision
in
a
very
brief judgment. The exceptions clause, said Scott,
L.
J.,
was “only effective
while the contract was being carried out according to
its
terms.”
Leavey
v.
Hirst,
[I9441
I
K.B.
24,
is of interest on the measure of
damages in
a
contract of sale of goods. Section
51
(3)
of
the Sale of Goods
Act provides that “where there is an available market for the goods in
question the measure of damages [for non-delivery of the goods] is
prima
facie
to
be ascertained by the difference between the contract price and
the market or current price of the goods
at
the time or times when they
ought to have been delivered, or,
if
no time was fixed, then
at
the time of
the refusal to deliver.” What if there
is
no available market
?
The answer
given by the Court of Appeal in the above case was that, on the facts of
that case, the buyer was entitled to recover
as
damages the loss ‘of the
profit that he could have made by making up the goods (cloth) into over-
coats and selling them, if the contract had been carried out. “In other
cases,” said Lord Greene. M.R.,
“
in other circumstances, this particular
method might not be appropriate
;
but, in my opinion, in this case it was
appropriate,”
([1g43]
2
All E.R.
at
585
H). GLANVILLE WILLIAMS.
The
Innkeeper’s
Lien
Whether an hotel proprietor acquired possession of chattels belonging
to his guest as luggage, in his capacity
as
innkeeper, or
as
pledgee to secure
payment of his bill, proved the determining factor in
Alavslt
v.
Commis-
sioner
of
Police
and
Another
(McGee),
[I9441
I
K.B.
99.
One Nall, having run
up
a bill of over
L66
during five days stay
at
the
Ritz Hotel, handed over
a
valuable diamond ring by way of security.
Nall had obtained possession
of
this ring from the Goldsmith and Silver-
smiths’ Company by means amounting to larceny, of which offence he
had been convicted. The present proceedings arose under the Police
(Property) Act,
1897,
to determine whether Marsh, on behalf
of
the
Company, could recover the ring without paying the sum for which it
had been pledged as claimed by McGee, on behalf of the liitz Hotel.
A
Divisional Court held Marsh was entitled to the ring without any such
paynent,
on
the ground that the pledger can confer
no
better title than he
himself has, i.e. that of a thief, but found
it
necessary to define and dis-
tinguish the scope
of
the Innkeeper’s Lien as this would have operated
even against the true owner. Viscount Caldecote, L.C.J.,
at
p.
101,
stated
the law thus:
“An
innkeeper is given
a
lien
on
the luggage of the guest
which the guest brings with him to the inn and which the innkeeper
receives as such.” This privilege is doubtless the counterpart of the
innkeeper’s common law liability to insure the safety of his guests’ goods,
reviewed recently by the House
of
Lords in
Shacklock
v.
Ethorpe,
[I9391
3
All
E.R.
372.
The lien extends beyond luggage in its ordinary connota-
tion. Thus including
a
piano or motor car brought to the hotel by the
guest.
It
could not cover this ring, the possession of which was transferred
to the hotel expressly by way of security, i.e. as
a
pledge.
NOTES
OF
CASES
I55
Had
this
ring been obtained by false pretences, the result
of
this case
would have been otherwise, since
a
voidable title would have enured to
the protection of the pledgee as was held by the Court of Appeal in
London
Jewellers
v.
Attenborough,
[I9341
z
K.B.
206,
where the swindler’s signature
to a
sale on approval note by way of receipt was held conclusive evidence
that
a
power of disposition over the property had been transferred to such
swindler within the principle of
Kirkham
v.
Attenborough,
“8971
I
Q.B.
201.
Though the decision in the instant case is unquestionably well based
in authority,
it
must be accounted amongst the vagaries of our jurispru-
dence that the innkeeper’s economic interest in the protection
of
his bill
by
a
“real security” depends for
its
efficacy
(a)
on an ancient anomaly,
i.e. the common law lien, rather than the expressed intentions of the
parties, and
(b)
on whether
a
stranger (here the Goldsmith and Silversmith
Company’s agent) was tricked into parting with the possession, with or
without any intention of passing the property or right of disposition over
it, an anachronism adversely criticised by Mr. C.
J.
Hamson: “The Effect
of
a
Secret Fraudulent Intent,”
51
L.Q.R,
653.
T.
H.
TYLOR.
An
Alarmins
Extension
of
Nuisance.
Owing to the complexities of modern life
a
vast extension has taken
place
in
the past few decades of liability without fault. This is evidenced
in Criminal Law by the imposition
of
absolute statutory prohibition of
many acts from the mere doing of which
mens Yea
is inferred
:
and in Civil
Law by the extension of strict liability beyond the old rule in
Rylands
v.
Fletcher
to other circumstances creating an abnormal risk, and by an ever-
widening application of vicarious liability. In these circumstances a novel
extension of liability irrespective of fault calls for special consideration and
careful examination.
In the recent case
of
Ware
v.
Garston Haztlage
Co.,
Ltd.,
[1g44]
I
K.B.
30,
the plaintiff’s son collided
on
his motor cycle at night with the rear of
a
trailer and lorry, the rear light
of
which was extinguished. He died two
days later from his injuries. The lorry had broken down
at
10
a.m. that
morning. The driver parked it on the near side of the highway and
a
mechanic came out from Nottingham and removed the back axle of the
lorry for repairs. At
5.35
the lights of lorry and trailer were put
on.
At
7.20
the driver and his mate set off to obtain four hurricane lamps from a
police station three-quarters of
a
mile distant. The rear lamp of the lorry
was alight when they left, but was noticed to be out by several witnesses
between that time and
7.30
when the mechanic returned with the axle,
to
find the plaintiff’s son and motor cycle under the trailer. There was some
evidence that the lighting on the trailer was known to have been faulty.
On the above facts Lewis,
J.,
found negligence
on
the part of the company’s
servants and awarded the plaintiff
k400
under Lord Campbell’s
Fatal
Accidents Act,
1846,
and
k339
8s.
gd.
under the Law Reform (Miscellaneous
Provisions) Act,
1934.
The defendants appealed. The Court
of
Appeal,
consisting of Scott, MacKinnon and Goddard,
L.
J
J.,
dismissed the appeal.
They left open the question of negligence and decided the case on the
simple ground that this unlighted obstruction amounted to a danzerous
nuisance casting an absolute duty on the defendants’ servants to prevent
injury resulting therefrom to users of the highway. Only Scott, L.J.,
delivered
a
judgment and
no
authority was cited. He summed up their
Lordships’ conclusion thus
(at
p.
31)
:
“The plaintiff is entitled
to
liold
I56
MODERN LAW REVIEW
July,
1944
his (her?) judgment on the ground that the facts, as proved, show that
there was
a
nuisance. There was
a
dangerous obstruction in the highway
and consequently an absolute duty
on
the defendants to light it or otherwise
efficiently guard it to prevent accidents.
It
is no answer for the defendants
to say that the light on the trailer had gone out after they had left the
vehicles to go to the police station to procure hurricane lamps.” Earlier
in his judgment the learned Lord Justice said (at p.
31)
:
“If
anything is
placed on the highway which is likely to cause an accident through being
an obstruction to those who are using the highway on their lawful occasions
(such as a vehicle unlighted and unguarded standing there
at
night) and
an accident results, there is an actionable nuisance.” With all respect it
is submitted that to describe this lorry, in the above circumstances, as
“placed” is somewhat misleading, and to hold that the duty to safeguard
the public is “absolute” on these facts, in the absence of any negligence
on the part of the defendants, places an intolerable burden on the users
of the highway, themselves the victims of misfortune.
It
is not suggested
that the decision of Lewis,
J.,
in negligence in the court below could not
have been sustained. The case was pleaded in negligence and there would
seem to have been ample evidence to support this. That the result of such
negligence was a public nuisance causing special damage to the plaintiffs
son is also admitted.
It
is, however, proposed to examine the
ratio
decidendi
of the Court of Appeal on the basis of no fault on the part of the
defendant or their servants, their liability being
“
absolute
”
or
“
strict.”
It
is as though a car collided
at
night with
a
street refuge (through
a
skid
or burst tyre), stunning its occupants and extinguishing its lights.
It
will
be convenient to examine this proposition under three heads:
(a)
an
obstruction;
(b)
an unlighted obstruction; and
(c)
an unlighted and
therefore dangerous obstruction.
(a) An Obstruction.
As
is well established, the highway is dedicated
to the use of the public for the purpose of passing and re-passing and
certain other normal activities, and
a
somewhat special relationship exists
both as between co-users
inter se
and between them and the adjacent
occupiers. This “freedom of the road” has involved a modification in
responsibility. In cases of trespass it is well recognised that adjacent
landowners must protect their property from injury through the normal
use of the highway where no negligence is proved
:
Tillett
v.
Ward
(1882),
10
Q.B.D.
17,
and
Goodwyn
v.
Cheveley
(1859). 4
H.
&
N.
631,
with which
may be compared Lord Blackburn’s judgment in
River Wear Commis-
sioners
v.
Adamson
(1876),
2
App. Cas.
743.
The converse has recently
been illustrated by
Hughes
-7.
Williams,
[I9431
I
K.B.
574
(C.A.).
(See
Mr. Glanville William’s learned but critical note in
MOD.
L.
R.,
Vol.
7,
p.
77.)
The modification of the law of trespass as between co-users of the
highway necessitating proof that the trespasser (to the person) has failed
to exercise the care of
a
reasonable man has been exhaustively treated in
“Trespass and Negligence,” Vol.
49,
Law Quarterly Review,
p.
359.
by
Professors Goodhart and Winfield, their conclusion being that users take
the risk of accidents other than those due to negligence.
It
would be strange if such an amelioration in the strict liability for
trespass had no counterpart in our law of nuisance, and it would seem to
follow
a fortiori
that
a
mere obstruction of our right of way, necessitating
proof of special damage, should involve no higher liability. That this is
so
would seem clear, not only on principle, but also on authority.
As
Salmond’s learned Editor remarks at p.
zgz
of the ninth edition, speaking
NOTES
OF
CASES
I57
of
nuisance
:
“The law relating to the user of highways is in truth the law
of give and take.” Art.
483
of Halsbury’s
Laws
of
England,
Vol.
16,
p.
3 j4,
reads
:
‘‘
It
is
a
nuisance
at
common law either to neglect any legal duty
in respect of
a
highway, or to hinder or prevent the public from passing
freely, safely and conveniently along it, unless such prevention or hindrance
is justifiable as an exercise of rights reserved by the dedicating owner, or
as
an ordinary and reasonable exercise of the rights
of
a
passenger or
frontager thereon, or under statutory powers.” Whether the parking of
the lorry pending repairs was an ordinary and reasonable exercise
of
the
rights
of
a
passenger
is
a
question of fact to which one might anticipate
an affirmative answer. As Sir George Jesse1 suggested
obiter
in
Original
Hartlepool Collieries Co.
v.
Gibb (1877),
j
Ch.D.
at
721:
“It would be
clearly reasonable, for instance,
if
a
wheel came off an omnibus in the
middle of
a
highway, for
a
blacksmith to be sent for
to
put the wheel on
the omnibus if that were the easiest mode of moving
it
out of ‘the way,
and the omnibus might lawfully stop there until the wheel was put
on
in
order to take it out of the way,
if
that were the best mode of taking
it
out of the way, and
a
reasonable and usual mode.”
A
clear statement
of
the principles involved is to be found in
Harper
v.
Haden
6-
Sons,
Ltd..
[I9331
I
Ch.
298,
where scaffolding used in the normal repair of
a
house
caused an obstruction, and Lawrence,
L.
J., at p.
308
said
:
“As
a general
rule such an obstruction is wrongful and constitutes
a
public nuisance,
unless it is negligible in point of time or authorised by Parliament or
occasioned in the reasonable and lawful user
of
the highway as a highway.”
And Romer, L.J.,
at
p.
317:
“He has merely
a
right to use it subject
to
the reasonable user of others, and if that reasonable user causes him to
be obstructed he has
no
legal cause of complaint.” It followed that the
plaintiff had
no
legal redress.’
(a)
An
Unlighted Obstruction.
A considerable number
of
cases involving
unlighted obstructions are reported, but none would appear authority for
the imposition of
so
strict or absolute a liability as that here imposed by
the
Court
of
Appeal, The clearest exposition is to be found in
Penny
v.
Wimbledon U.D.C., [1899]
z
Q.B.
72,
where the plaintiff fell over an
unlighted heap of earth and the defendant was held liable for the negligence
of their independent contractors in failing to exercise reasonable care in
safeguarding the public.
So
in
The Snark, [rgoo]
P.
Ioj,
a
shipowner was
made liable for the ‘failure of his independent contractor to use reasonable
care in lighting
a
wreck in “that highway The River Thaines,” as his
agents continued occupation, though maritime law would have permitted
its abandonment without further liability. In these and other similar
cases the employer’s duty may be crystalised as Langton,
J.,
neatly
phrased it in
The Pass
of
Ballater, [1942j
P.
at
117,
speaking of the use of
dangerous chattels: “He has not merely
a
duty to take care but
a
duty
to provide that care is taken.” The common feature in all the authorities
is that there must have been negligence proved against the servants or
independent contractors employed where co-users
of
the highway were
involved. Moreover, unlighted lorries are no strangers to our Courts as is
seen from
Tart
v.
Chitty, [1933]
2
K.B.
453, Baker
v.
Longkurst, ib.
461,
and
Tidy
v.
Battman, [I9341
I
K.B.
319,
the two last being decisions of
the Court of Appeal; and it is significant that all three, and cases cited
1
It
is
not without significance that some sixty
odd
acts.
found
to
be
nuisances, arc instanced
on
pp.
355-03
of
the
second edition
of
Halsbury’s
Laws
of
England,
Vol.
16,
none
of
which
would
cover
the
facts
of
the instant case.
I58
MODERN
LAW
REVIEW
July,
1944
therein, were argued (as those
swa)
in negligence. The argument, more-
over,
that
this was to
admit
of the plea of contributory negligence
is
inadmissible as this was also held
a
defence to an action for private injury
due
to
public nuisance in the old
case
of
Butterfield
v.
Forrester
(18og),
11
East.
60,
though
its
precise operation
is
to render the special damage
too remote,
as
was pointed out by Lord Atkin in
Caswell
v.
Powell Duffryn
Associated Collieries,
Ltd.,
[1g3g] 3
All
E.R.
at
p.
730,
i.e. the plaintiff‘s
injury was due to his carelessness rather than to the defendant’s nuisance
in leaving the pole across the highway.
(c) An Unlighted and therefore Dangerous Obstruction.
Does the epithet
“dangerous
”
extend liability beyond seeing that reasonable care is taken
?
Even were the rule in
Rylands
v.
Fletcher
directly in point, it is now settled
law that
a
non-natural use is necessary; see the judgment of Lord Wright
in
Collingwood
v.
Home
&
Colonial Stoves,
[1936] 3
All E.R. at p.
202,
and
“Dangerous Things and the Non-Natural User
of
Land,” by Dr. Stally-
brass,
Cambridge Law Journal,
Vol. 111, p.
376.
The argument that
a
motor van was a
“Rylands
v.
Fletcher
chattel” was rejected in
Phillips
v.
Britannia Hygienic Laundry
Co.,
Ltd.,
[1g23]
2
K.B.
832.
as was the
contention that
a
skidding motor bus was a nuisance for which a passehger
might recover in
Wing
v.
London General Omnibus Co.,
[rgog]
2
K.B.
652
;
see
especially per Fletcher Moulton,
L.J.,
at
p.
666.
It
seems strange
that
a
broken down lorry, even though unlighted, should impose a higher
liability than
a
dangerous chattel. In
Pope
v.
Fraser
and
Southern
Rolling and Wire Mills
(rgsg),
55
T.L.R.
324,
where sulphuric acid spilled
from
a
cracked carboy along the highway without the knowledge of the
defendants’ lorry driver and the plaintiff skidded in
it
and was burned.
Humphreys.
J.,
held the defendant liable because after knowledge
of
this
nuisance had reached his servant, the latter did nothing either to abate
the nuisance or prevent the accident. Were
Ware’s
case to be considered
as
the “continuance”
of
a nuisance within the principle of
Sedleigh-
Denjield
v.
O’Callagan,
[I9401
A.C.
880,
it
would still be necessary to show
that the lorry driver ought to have known that the light was out, a finding
unlikely on the supposed facts and certainly not the
ratio decidendi
of the
Court
of Appeal.
The inescapable conclusion seems to be that a responsibility, trans-
cending that to see that care
is
taken, is imposed on a normal user of the
highway, himself victim
of
misfortune, without any authority, and that
such an extension of the sphere of absolute liability deserved
a
more
elaborate argument and judgments than are reported.
It
is
a matter for
regret that the findings on negligence in the lower court are likely
to
preclude further enlightment. T.
H.
TYLOR.
The Englishman likes to take his culture, in
so
far as he likes to take
it
at all, seriously.
It
can only
be
associated with a small-and supenor-
section
of
the community, and should accordingly
be
very definitely dis-
sociated from any element of entertainment. Some outstanding features
of English life have always been difficult to
fit
into
this
conception, for
example, Shakespeare. However, Shakespeare has been got over in a
typically ingenious, possibly, hypocritical, way. The really cultured people
read Shakespeare, or pretend to do
so;
they do not go to see his works
NOTES
OF
CASES
I
59
acted. In this way they avoid being entertained, and
so
can continue
to
respect themselves.
For many decades the Royal Choral Society provided at a continuous
financial loss choral music for the cultured, and also for some of those
who enjoy music.
As
long as they stuck
to
Bach, Handel, and Beethoven
they were all right, and continued to lose their money
in
a normal, cultural
and satisfactory way. In
1937,
however, they became almost mezzobrow
and produced
Hiawatha
which produced a nice profit.
So
nice that it
attracted the attention of the Inland Revenue who contended that this
profit in turn should attract income tax.
The answer
to
this was that the Society which had been “established
to
form and maintain a choir
in
order to promote the practice and per-
formance of choral works
”
was a charity, and that
“
the whole of its income
was applied solely towards the promotion of the Society’s objects.” The
Special Commissioners found as a fact that the Society
was
not “established
for charitable purposes only.” and that tax must be paid.
When the case
(Royal
Chmal
Society
v.
Commissioners
of
Inland
Revenue,
[1943],
z
All E.R.
101)
eventually reached the Court of Appeal
the main arguments put up by the Solicitor-General in support of the tax
authority were:
(a)
that the question of charity or not is one of fact,
and that the Special Commissioners had decided this point
in
his favour;
and
(b)
that in any event the Society
was
not a charitable institution, since
its work was not educational, having an entertainment value.
With regard to
(a)
there was in
Inland Revenue Commissioners
v.
Yovkshire
Agricultural
Society,
[1928]
I
K.B.
61
I,
an incautious statement
to
that effect by Lord Hanworth, M.R., which Lord Greene,
M.R.,
had no
difficulty in disposing of (p.
103).
With regard to the second point, the
Coiirt
of Appeal took a wide view
of “charity” under its educational head. Education does not necessarily
involve “teaching in the sense of a master teaching a class”
;
its
objects
may be attained
in
indirect ways especially in connection with aesthetic
education, and the fact that people derive pleasure or entertainment
from a work certainly does not mean that it must not be regarded as
educative.
The judgment of Lord Greene, M.R., will well repay study not only
as
a forceful and lucid exposition of the legal position, but for width of
culture
in
its approach to the subject.
He “protested against
that
narrow conception of education” put
forward by the Solicitor-General. In his opinion “a body
of
persons
established for the purpose of raising the artistic taste of the country and
established by an appropriate document which confines them to that
purpose is established for educational purposes, because the education of
artistic feeling is one of the most important things in the development
of a civili!+ed human being.” R.
S.
T.
C.
Wading
with
the
Enemy
The two decisions
of
the Court of Appeal in
Stockholms Enskilda Bank
v.
Schering
Ltd.,
[1g41]
I
K.B.
424,
and
[1g43]
z
All E.R.
486,
involve
several points of both difficulty and importance and therefore deserve
close analysis.
The facts can be summarised shortly. In
1936
a German companJ
I60
MODERN
LAW REVIEW July,
1944
became indebted to the Swedish bank in the sum of
#4,000.
By
a
contract,
governed by English law, Schering Ltd., an English company, undertook
as principal to pay part of that debt, viz.
&o,400,
by certain instalments
extending ovw
a
period of eight years in consideration whereof the Swedish
bank was to assign to the English company, on the occasion of each
payment of an instalment, a like amount of the Swedi’sh bank’s claim
against the German company.
If
the instalments were duly paid, the total
amount receivable by the Swedish bank from the German company was
to be reduced to
;650,400,
but if default was made by the English company
in acquiring an instalment of the debt
at
the due date, the debt
of
the
German company was to remain
at
such amount
as
was proportionate
to
a
total of
L84,ooo.
In simplified figures (which are not quite in con-
formity with those mentioned in the agreement) this meant that any
payment of
i6050
per annum by the English company would result in the
assignment to it of
a
claim for
a
like amount against the German company,
and in the discharge of that company to the extent of
L10,500,
while in
the event of default the respective instalment due by the German company
in any year would revert to
&10,500.
The English company also provided
a substantial security for the performance of its obligations, which originally
consisted of goods pledged to the Swedish company and was later converted
into cash.
I
In the first action the Swedish bank claimed from the English
compny payment of one instalment which fell due in October,
1939.
The
defence was that payment was prohibited under
s.
I
of the Trading with
the Enemy Act,
1939,
since it would involve
a
dealing and, more particu-
larly, a payment “for the benefit
of
an enemy,” viz. the German company.
Sir Wilfred Greene,
M.R.,
with whom MacKinnon and du Parcq,
L.
J
J.,
concuired, had
no
difficulty iri upholding this plea.
If
the Swedish bank
received payment from the English company, this would enure
to
the
benefit
of
the German company, because, firstly, it would lead to pre-
serving
‘I
for the German company the substantial benefit of the discount,
a benefit which it loses if
no
payment
is
made,” and, secondly, “the German
company, by payment, would be relieved
of
its obligation to the appellants
(i.e. the Swedish bank)
pro
tanto”
(p.
438)
;
in the latter connection the
Master of the Rolls pointed out that, though, on payment to the Swedish
company, the English company would acquire
a
claim for
a
corresponding
amount against the German company, this claim could not
be
enforced
during the war and that, therefore, it was an advantage to the German
company to have an English rather than
a
Swedish creditor.
This reasoning is unanswerable, and the only comment that
is
required
relates to two incidental points touched upon in the judgment of Sir
Wilfred Greene,
M.R.
(a)
The Swedish bank relied upon the decision of Macnaghten,
J.,
in
R.
G.
A.
Kohnstamm Ltd.
.v.
Ludwig
Krumm
(London)
Ltd.,
[I9401
2
K.B.
359.
This was the simple case of
a
British surety who had guarahteed to
a British creditor of
a
German firm the payment of the debt due by the
latter. Although the grounds on which the learned judge gave judgment
against the British surety are perhaps not too easy to follow,
it
is submitted
with respect that the result reached by him was unquestionably right. The
British surety was not asked to discharge an obligation “of ariy enemy”
within the meaning
of
s.
I
of the Trading with the Enemy Act,
1939.
but
his own obligation the performance
of
which did not involve
a
deavng,
or
payment, “for the benefit of an enemy,” since in the absence of special
NOTES
OF
CASES
161
circumstances (such as
a
situation permitting
a
set-off) it makes no differ-
ence to the enemy whether he is indebted to his original British creditor
or to the British surety who, on paying the creditor, acquires the claim by
way of subrogation.
The great reserve with which, in the present case, the learned Master
of the Rolls treated Macnaghten, J.’s, decision, should not be understood
as throwing doubt upon it.
(b)
The Swedish bank also said that even if it was not entitled to
payment, it was
at
any rate entitled to a judgment which would declare
and settle its rights.
It
argued that the only thing prohibited by the Act
was payment and that, provided no payment was made, no offence would
be committed. The Court of Appeal, however, held that “the plea of the
statute was
a
defence to the action and that, once it was established, the
action should be dismissed” (p. 441).
The practical significance of this point extends beyond the realm
of
the Trading with the Enemy Act. Thus the Defence (Finance) Regulations
contain numerous provisions prohibiting payments to non-residents with-
out licence.
It
does not seem to be the practice of non-resident plaintiffs
who bring actions in the English Courts for the recovery
of
money, to
obtain the Bank of England’s licence prior to the institution of proceedings
and to plead affirmatively its existence. Nor has any defendant apparently
pleaded illegality
of
payment under the Defence (Finance) Regulations.
The point has been dealt with somewhat cursorily in
Ginsberg
v.
Canadian
Pacific
Steamship
Co.
Lld.,
66
(1940). L1.L.R.
206,
at
p.
232,
but although
it was referred to in
3
(1g40),
MOD.
L.
R.
211,
not even Mr. Howard’s book
on the Defence (Finance) Regulations seems to allude to it. The decision
of the Court of Appeal in the case of
Sclzering Lid.
(No.
I)
may be under-
stood
as
establishing that in the circumstances indicated above the plea
of illegality would succeed, although no doubt the defect could in many
cases be cured by obtaining
a
licence and, if necessary, amending the
statement of claim.
2.
In the second
Schering
Ltd.
case the English company claimed
a
declaration that on the outbreak
of
war its contract with the Swedish
company had become contrary to public policy and unenforceable. The
substantial point involved, therefore, was to define the circumstances in
which
a
contract between
a
British subject (in the territorial sense) and
a
neutral (in the territorial sense) is void under the common law rules
relating to trading with the enemy. Lord Greene,
M.R.,
Lord Clauson and
du Parcq, L.J., reversing the decision of Simonds,
J.,
held that, though
the operation of such a contract would be suspended, it became abrogated
only if the continued existence of the contractual relations between the
British subject and the neutral tended in fact to increase the resources
of the enemy. In the instant case the Court held that there was
a
mere
possibility or suspicion of a benefit accruing to the enemy from the con-
tinued existence
of
the contract, as opposed to its suspension. The
combined result of the two decisions of the Court of Appeal, therefore,
is that, while payment to the Swedish company was held to be beneficial
to th, enemy and, consequently, illegal, the continued existence of the
contiact was not
so
beneficial to the enemy as to require its abrogation
rather than suspension.
The difference of opinion which arose between the Court of Appeal
and Simonds,
J.,
is one not of principle, but of degree. It is neither possible
nor necessary to embark upon
a
detailed review of the factual circumstances
5-
3
I
62
MODERN LAW REVIEW
July,
1944
which caused Lord Greene
to
conceive that there was no real danger of
the
enemy benefiting from the continued existence of the contract.
It
must
suffice
to say,
with
great respect,
that
the broad view taken by
Simonds,
J.,
has much to commend itseIf, and is perhaps more attractive
than Lord Greene’s reliance upon a close analysis of the facts of the
individual
case
before him. There is a good deal of judicial support for
Sir Arnold
D.
McNair’s suggestion that the test is not whether performance
of
a
particular contract would be mischievous, but whether the contract
belongs
to
a
mischievous category (see
Transactions
of
the Grotius Society.
vol.
27 (1942).
pp.
182
sqq.,
184).
The same learned writer is one of the
few who have given attention to the effect of war upon contracts
with
neutrals (see
ibidem
p.
ZIZ
and
Journal
of
Comparative Legislation,
XXIV
(I942), 20).
The tenor of
his
weighty observations would suggest that the
second judgment of the Court of Appeal will not meet with his approval.
It
must
be
remembered that, as a matter of principle, suspension is only
in
exceptional cases the effect of the outbreak of war upon contracts (see
McNair,
Grotius
Society, Z.C.
p.
196;
56
(1g40), L.Q.R. 197).
As
Lord
Dunedin said in
Metropolitan Water Board
v.
Dick Kerr
&
Co.,
[1918]
A.C.
119,
at p.
128,
“pre-war contracts wbch involve intercourse with the
enemy (whether a party is an enemy or not) are completely destroyed and
not merely suspended. The reason
is
that in the eye of the law the duration
of
a
war
is
permanent.” Moreover, though everybody
will
share Lord
Greene’s reluctance to stigmatise
a
perfectly legitimate pre-war transaction
with a neutral trader as illegal, there
is
perhaps something to be said for
the bold proposition that a neutral trader who in
a
particular case
is
concerned in a transaction “for the benefit” of an enemy, is for the pur-
poses
of such transaction in the same position
as
if
he himself were an
enemy. Such
a
rule would by
no
means be irreconcilable with the tendency
and spirit
of
the available
case
law. Indeed, the rigour of public policy
is
such that remote possibilities,
so
emphatically rejected as
a
test by Lord
Greene, have often been considered by the highest judicial authorities as
material to the formuhtion of the common law
rules
relating
to
contracts
with enemies. When, speaking of such transactions, Lord Dunedin put
their
unlawfulness on the ground that “contract in general might enhance
the resources of the enemy or cripple those of the subjects of the Khg”
(Evtel
Bieber
&
Co.
v.
Rio
Tinto,
[1918] A.C.
260,
273).
was
he
envisaging
only likely,
as
opposed to possible, consequences
?
The rule
that
an enemy
cannot sue during war-time
in
British
Courts,
is no less derived from public
policy
(see
Lord Wright in
Soufracht
v.
Van
UdPns,
[1943] A.C. 203,
233,
234).
When the House of Lords applied that rule to a person in enemy-
occupied temtory, no effect
was
given to the argument that the plaintif€
could have
no
benefit from
the
judgment since the
sum
recoveied could
not be remitted abroad. “The asset would
he
created, though it necessarily
remained here
till
the end of the war. Such an asset might well operate
as
security for an advantage to the enemy from a neutral lender”
@ev
Viscount Simon
L.C.
at p.
212).
Was
this not merely one of those matters
of pure speculation, of suspicion and vague possibility which Lord Greene
refused to take into account
?
3.
The English company’s alternative argument in the second case
of
Scheving
Ltd.,
was that, since payments were indeiinitely “suspended,”
postponement of performance would make the contract
as
performed
something radically different
from
the contract
as
expressed and that,
consequently, under an implied
term
it
had to be considered
as
impossible
NOTES
OF
CASES
I63
of
performance, discharged or
“
frustrated.” The English company, there-
fore, invoked the doctrine of
Geipel
v.
Smith
(1872),
L.R.
7
Q.B.
404,
and
Bank Line
v.
Arthur Capel
&
Co.,
[191g]
A.C.
435,
rather than of
Metro-
politan Water Board
v.
Dick Kerr
&
Co.,
[1918]
A.C.
119.
Lord Greene said that
all
that was
ih
question was the payment of
money and the assignment of that part of the debt which remained
unassigned, and found
it
impossible to suggest that the parties,
if
they
had thought of the events which happened, would have agreed that the
contract should be
at
an end. This conclusion
is
indeed appropriate to the
peculiar character of monetary obligations in connection with which
suspension rather than discharge should be more widely recognised than
has been done in the past; see Mann,
The Legal Aspect
of
Money
(1938).
The English company’s argument assumed that payments were in fact
“suspended.”
It
would be deprived of
its
basis, if it should appear that
this was not
so.
4.
This brings
us
to the question why, in the second case, the English
company raised the issue of the abrogation of the contract.
One reason
is
obvious.
If
the English company had succeeded,
as
it
did before Simonds,
J.,
the security put up by
it
under the contract for
the performance of its obligations would have been released. But would
the company also have been relieved of the liability to pay the further
instalments due under the contract
?
S.
I
(i) of the Trading with the Enemy (Custodian) Order,
1939.
provides
that “any money which would, but for the existence of a state of war, be
payable to or for the benefit of a person who
is
an enemy” shall be paid
to the Custodian whose receipt, under
s.
3
(iv), is a good discharge. Does
this provision apply to payments due under
a
contract which comes to an
end owing to supervenient illegality or which is discharged owing to
impossibility of performance or frustration?
If
the answer is in the
affirmative, the practical effects of the common law rules of abrogation
would to
a
large extent be excluded by statutory provisions. Mr. Howard
in his book on
Trading zoith
the
Enemy
(Butterworth,
1943,
p.
68)
thinks
that “some clearer words than these are necessary to revoke
a
well-
established rule of the common law,” and that the enumeration of various
kinds of debts in
s.
I
(ii) none of which seem to be payments under executory
contracts of the kind that are abrogated, suggests a restrictive interpreta-
tion. This argument overlooks that
s.
I
(ii) is introduced by the words
“
without prejudice
to
the generality of the foregoing paragraph,” the
wording of which as reproduced above is as clear and wide as possible.
In fact it is such as to suggest the conclusion, strange though it may be,
that moneys payable under
a
contract which upon the outbreak of war
became void or was discharged, remain payable to the Custodian.
An
authoritative pronouncement on this important point would be
highly desirable, and would have been necessary in the second decision
of the Court of Appeal in the case of
Schering
Ltd.
As has been mentioned
above, the English company’s alternative argument was based on the
assumption that payments were suspended and postponed during the war.
If, whatever the fate of the contract as a whole was, payments had to be
made to the Custodian, they would have operated as a full discharge as
against the Swedish company, since the contract between that company
and the English company was expressly stated to be subject
to
English
law. On the other hand,
if
the English company paid to the Custodian,
PP.
271,
272.
I
64
MODERN LAW REVIEW
July,
1944
it
became entitled to call for the assignment of
a
due proportion of the
Swedish company’s claim against the German company.
The above submissions, however, are perhaps
at
variance with an
inference which may be drawn from the judgment of Simonds, J., in
Re
Gourju,
[1g43]
Ch.
24.
By his will the testator directed his trustees to hold
the income of his residuary estate upon the statutory protective trusts for
his
widow who,
on
the 10th July,
1940.
resided
at
Nice. On that date,
by an Order made under the Trading with the Enemy Act, the whole of
metropolitan France became enemy territory
so
that the widow became
an enemy. The question before the Court was whether the coming into
force of the Order was an event whereby the widow was deprived of the
right to receive the income. The
Court’s
answer was in the affirmative,
and it was decided that
as
from 10th July,
1940.
the income was held on
certain discretionary trusts the objects of which were the widow, her
surviving
son
and the children of
a
deceased
son.
In view of the peremptory
wording of
s.
I
(i)
of the Trading with the Enemy (Custodian) Order
it
would have been possible to argue that, although
under the
will
the widow’s
interest determined, because the income was money which would, but for
the existence of
a
state of war, be payable to an enemy, and was therefore
payable to the Custodian, yet
under the
Act
and the Order
such money
was payable to the Custodian and would not fall into the discretionary
trust. The Solicitor-General who appeared for the Custodian, argued that
the widow’s interest had not determined. But there was no discussion of
the question whether, even
if
the widow’s interest came to an end, the
overriding effect of the Order was not such
as
to require payment
to
the
Custodian of what would have been paid to the widow had she not been
an enemy.
If
the Act and the Order said
:
“Any money which is payable
to
. . .
an enemy,”
no
problem could arise, and
it
would be clear that
the Custodian could never be entitled to more than the enemy himself.
But the legislature’s words are: “Any money which would, but for the
existence of
a
state of war, be payable to
. . .
an enemy”; they seem to
confer upon the Custodian greater statutory rights than the enemy would
have under the general law.
In conclusion
it
may be mentioned that Vaisey, J., held in
Re Wittke,
[1g44]
I
All
E.R.
383,
that
if
enemies are the objects of the discretionary
trust arising
on
the determination of
a
protective trust within the meaning
of
s.
33
of the Trustee Act,
1925,
money applicable for their benefit is to
be considered
as
money which, but for the war, would be payable to them
and must therefore be paid to the Custodian.
F.
A.
MANN.
Patent
Application
-
Manner
of
New
Manufacture
-
A.R.P.
Measures
The decision of the Patents Appeal Tribunal (Mr. Justice
Morton)
“in
the matter of an application for
a
Patent by G.
E.
C.”
(Refiorts
of
Patent
Cases,
Vol.
60
(rg43),
p.
I),
deals with an application for
a
patent covering
a
fire extinguishing medium and
a
method for extinguishing incendiary
bombs. The application filed on 5th July,
1940,
originally contained ten
claims. The first five claims were allowed by the Patent Office and are
contained in British Patent
543,142
granted to the applicant in February,
1942
;
of these claims
I
and V are of interest
;
they read as follows-
An extinguisher for application on incendiary bombs and the
“I.
NOTES OF
CASES
I65
like, comprising solid zinc chloride in
a
container which will resist
the corrosive action of the zinc chloride and protect it from the
effect of atmospheric moisture and which is adapted when placed
on the seat of the fire to deposit such zinc chloride on the burning
metal in
a
substantially undissipated form to produce a smothering
flux and thereby extinguish such metal.”
“V.
The manufacture of
a
fire extinguishing medium for incendiary
bombs and the like by forming an aqueous solution of zinc
chloride and ammonium chloride adapted for use in an ordinary
stirrup pump, the proportions being such as result from adding
up to as much ammonium chloride as possible to an aqueous
solution of zinc chloride containing upwards of 50 per cent by
weight of zinc chloride.”
The remaining five claims were refused by the Patent Office and, on
appeal, by the Patents Appeal Tribunal; of these claims VI and
X
are
of interest
;
they read as follows-
“VI. The manufacture of
a
fire extinguishing medium for incendiary
bombs and the like by forming an aqueous solution of zinc
chloride adapted for use in an ordinary stirrup pump, the concen-
tration of which lies between 55 per cent by weight of zinc
chloride to 45 per cent of water and 75 per cent of zinc chloride
to 25 per cent of water.”
“
X.
The method of extinguishing incendiary bombs and the like by
applying thereto
a
highly concentrated aqueous solution of zinc
and ammonium chlorides
so
as to form a smothering
flux
on the
burning metal and thereby extinguish such metal.”
The solutions of zinc and ammonium chloride referred to in the claims
had been published in the
International Critical Tables
before 5th July,
1940;
on that date, however, it was not known that these solutions had
properties rendering them useful for the purpose of fire fighting.
On behalf of the applicant it was argued that claim VI should be
allowed in view of the particularisation of the novel effect of the solution;
this argument was rejected by the Patent Office and the Appeal Tribunal
on the strength of
a
decision by Lord Maugham in
I.G.
Farbenindustrie’s
Patent (47 R.P.C., p.
322),
and
a
series of earlier authorities in which it
was definitely decided that “no man can have a patent merely for ascer-
taining the properties of
a
known substance.” The decision on claim
VI
does not call for comment.
The decision regarding claim
X
settles a point of patent law on which
there had been several earlier conflicting judgments. The Statute
of
Monopolies of
1623
authorises the grant of patents to the true and first
inventor of “any manner of new manufacture,” and according to Sections
I
and
93
of
the Patents and Designs Act,
1907
to
1942,
a
patent can be
granted only for an invention which constitutes
a
manner of new
“
manufacture.” There are numerous decisions refusing patent applications
on
the ground that the invention did not constitute
a
manner of new
manufacture, for example an application covering
a
new indexing system,
an application covering
a
new system of musical notation, an application
covering
a
new arrangement of
buoys
having difierent colours and emitting
166
MODERN LAW REVIEW
July,
1944
different sounds for navigation purposes, an application covering
a
new
system for colouring chemicals for identification purposes, and an applica-
tion covering
a
new method for extracting lead from the human body.
From these decisions the Patent
Office
drew the conclusion that
a
method
or
system
is
not patentable “unless it results in some tangible vendible
product,” and accordingly refused claim
X.
This view was attacked by
counsel for the applicant, who quoted decisions allowing
a
patent for
preventing corrosion
in
steam boilers by introduction
of
metallic zinc,
a
patent for chemically cleaning dirty linen and other borderline cases. In
endeavouring to reconcile the authorities Mr. Justice Morton formulated
the following rule: “A method or process is
a
manner of manufacture if
it
(a)
results in the production of some vendible product or
(b)
improves
or
restores to its former condition
a
vendible product or
(c)
has the effect
of preserving from deterioration some vendible product to which it is
applied.” Mr. Justice Morton explained that he was not attempting to
lay down a hard and fast rule or to exclude the possibility that methods
not covered by the rule, brought to his attention hereafter, might constitute
a
manner of new manufacture. Applying this rule to claim
X
the Tribunal
held that the invention claimed therein did not constitute a manner of new
manufacture and confirmed the decision of the Patent Office. Since the
applicant merely suggested the use of a known substance for the purpose
of extinguishing incendiary bombs
at
a
time when the need for dealing
With such bombs first arose in July,
1940,
the decision appears not only
consistent with the precedents but also equitable.
It
is, however, gratifying
to
note that Mr. Justice Morton does not exclude the possibility that
methods not falling strictly within the three categories of
his
rule might
in
future be held to constitute
a
patentable manner of new manufacture.
Certainly it is not the function of the patent system to protect principles,
ideas, systems or methods in general; however, if an inventor devises
a
new method of carrying out a process of a truly technical nature, such as
for example quickly and safely demolishing an old building, he may well
deserve patent protection, even if there remains no vendible product.
The decision refusing a monopoly for the fire extinguishing medium
covered by claim VI or the method of extinguishing incendiary bombs
covered by claim
X.
appears right because it is against the public interest
that any person should have
a
monopoly for
a
product or method applicable
to fire fighting or A.R.P. measures. This point, however, was not in issue
in the case decided by the Tribunal and-as the law stands--it would
not have been a ground for refusing the patent or restricting the monopoly
if the applicant had been able to show that his claims covered
a
manner
of new manufacture.
On
the contrary, claim
I
covering
a
fire extinguisher,
and claim
V
covering the manufacture of a fire extinguishing medium, were
accepted by the Patent Office and are contained in the grant of British
patent
543,142
so
that the patentee has a monopoly for them. Under
Section
29
of the Patent Act a Government department or any contractor
authorised in writing by a Government department may use the invention
covered
by
patent
543.142
for the services of the Crown, subject to
compensation payable to the patentee. Under the existing law,
a
manu-
facturer who has not secured an order or an authority from
a
Government
department is, however, not entitled to manufacture and sell to the public
an extinguisher or an extinguishing medium covered by claims
I
and
V.
It
is
submitted that the British patent law needs altering in this respect
;
while the grant of patent
543,142
provides
no
argument for
a
comprehensive
NOTES OF
CASES
I
67
system of compulsory licences embracing all kinds of patents,
it
shows
that, in the public interest, anybody should be entitled to use, against
payment of
a
reasonable royalty, patents affecting national defence, public
safety or public health. Recommendations for changing the U.S.A. patent
law
in
this
way are contained in the report of the U.S.A. National Patent
Planning Commission
of
18th June,
1943.
P.
MEINHARDT.
REVIEWS
HOW
TO
REFORM
P-.
By ROBERT
S.
W.
POLLARD.
The
That political coma was characteristic of the inter-war period is now
almost
a
commonplace.
To
utter such
a
suggestion ten years ago was to
invite derision. Fashions in political outlook, as in other things, change,
and it may be hoped that the moment has arrived for indicating once more
what is needed to make Parliament into an efficient machine of govern-
ment. Mr. Pollard does this in short compass and with admirable clarity.
It
is
to be hoped that a public increasingly conscious that the working
of
the machinery
of
government needs radical overhaul will take advantage
of the useful summary of what is required,
so
far as the internal organisa-
tion of Parliament is concerned, which Mr. Pollard provides.
At the end of the last war there was this awareness.
It
was expressed
in the Conference on Devolution Report, in the classic but unimplemented
Machinery of Government Report produced by the Haldane Committee,
and elsewhere. Debate continued in the 'twenties. Ten year ago Dr.
Jennings published his study of Parliamentary Reform. Nothing has
happened in this generation of inaction if not reaction. Now is the time
to show what does need to be done, and if this means inevitably
a
recapitu-
lation of arguments and recommendations often made before, that is the
fault
of the reactionary and not of the reformer.
Undoubtedly the most important of the improvements urged
is
that
specialisation of the House of Commons into committees for the several
functions of the modern state of which Mr. Pollard too
is
in favour, as
have been most commentators on the Constitution since the Haldane
Committee made the recommendation in
1918.
A
Defence Committee
and
a
Foreign Affairs Committee might have done much to secure
a
greater unity behind a more consistent policy, to educate the House, to
keep the Government in harmony with opinion and opinion in harmony
with facts rather than wishful interpretations.
A
Colonial Empire Com-
mittee should not have been incapable of awakening both Commons and
Ministry to the needs and potentialities of our territories
as
these begin
to be seen now under the stress
of
war.
It
is certain that the real urgency of the need for such reforms of
Parliamentary organisation and procedure has not yet been understood.
At such a time as this, when much is likely to be in the melting-pot, Mr.
Pollard makes an opportune contribution. True, the reforms are of detail
rather than at the roots of our institutions,
but
they are many; and added
together they would present to
us
a very much more efficient Parliamentary
system. Anyone truly anxious for that objective can be recommended
to investigate the means
of
achieving it in the pages of this essay and in
the bibliography with which it concludes. Nor need it be forgotten that
Forum Press.
2s.
pp.
48.
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