NOTES OF CASES
| DOI | http://doi.org/10.1111/j.1468-2230.1937.tb00009.x |
| Published date | 01 June 1937 |
| Date | 01 June 1937 |
June,
1937
MODERN LAW REVIEW
73
NOTES
OF
CASES
Contract-Illegality-Fric+fixing
Agreements
Berg
v.
Sudler
and
Moore,
[I9371
I
All. E.R.
637,
is
of considerable
interest for both the issues directly raised and those less obviously involved.
The Tobacco Trade Association
is
an organisation of wholesale and retail
vendors of cigarettes, tobacco and snuff, which seeks to prevent “price-
cutting” and maintain
a
system of fixed prices. Traders agree before
receiving supplies not to sell below the maintained prices. If they depart
from this agreement Qr refuse to agree, they are placed
on
a list of “cut-
price” retailers from whom members of the Association have agreed to
withhold supplies. Berg was expelled from the Association and placed upon
this list, and finding himself unable to obtain cigarettes directly, resorted
to the device of obtaining them through an intermediary, Reece. Berg
gave Reece
L72
10s.
and commissioned him to order cigarettes from Sadler
and Moore, to whom Reece paid the money without disclosing that he was
purchasing for Berg. Moore’s suspicions, however, were aroused, and on
ascertaining the true facts he refused to supply the cigarettes or return the
money. Berg then issued this writ for return of the money. Macnaghten,
J.,
held
([1g36]
z
All. E.R.
456)
that Berg’s conduct amounted to an attempt
to obtain goods by false pretences with intent to defraud, that the money
was paid
as
an incident of the commission of the crime, and that therefore
no action could be entertained for its recovery. The Court of Appeal has
affirmed this decision.
For Berg
it
was argued:
(a)
that there were no false pretences;
(b)
that he needed no aid from the illegal transaction in order to establish his
claim
;
(c)
that the money
w&
not to be
used
for
an
illegal purposeit was
paid for the supply of cigarettes;
(d)
that “even assuming there were false
pretences, the defendants cannot retain this money. The Court has never
held that where money has been paid upon
a
consideration which,
so
far as
the payee
is
concerned, is lawful and
is
not in any sense immoral or contrary
to
public policy, the plaintiff is debarred from recovering because some
circumstance in his conduct may
be
questionable. The true principle
behind the decisions
is
not a desire to punish
a
wrongdoer, but a refusal to
assist in the enforcement of
a
wrongful promise.” (Counsel’s argument as
reported at p.
638.)
The Court of Appeal rejected all these arguments.
(a)
There were false
pretences. Clearly, Sadler and Moore would not have supplied Berg, and
Berg knew this.
If
Berg secures Reece’s assistance in the purchase of
supplies it
is
falsely pretended that the purchase is by and for Reece.
(b)
Berg’s claim was for money had and received on the total failure
of
con-
sideration, and in order to establish this claim he must allege and rely upon
the contract under which the money had been paid. In doing
so
he would
have to disclose his crime and the Courts refuse assistance to
a
wrongdoer.
(c)
The money was the instrument of the fraud,
just
as
the lease was in
Alexander
v.
Rayson,
[1g36]
I
K.B.
16g.
(d)
It
does not matter that the
illegality
is
on the part of the plaintiff only.
It
is still true in these circum-
stances that
if
he attempts to recover anything he
has
paid,
potiov
est
conditio
possidentis.
An attempt
was
made to argue that the illegal purpose had been wholly
abandoned before even partial performance,
so
that recovery of the money
To continue reading
Request your trial