THE TRANSFER OF PROPERTY UNDER ILLEGAL TRANSACTIONS1
| Published date | 01 March 1962 |
| Date | 01 March 1962 |
| Author | M. J. Higgins |
| DOI | http://doi.org/10.1111/j.1468-2230.1962.tb02198.x |
THE
TRANSFER OF PROPERTY
UNDER
ILLEGAL TRANSACTIONS
IT
is often stated to be
a
well-established rule that where property
has been transferred under an illegal contract, and the parties have
in addition observed all the formalities necessary for conveying
title to the particular property concerned, then title to that
property will pass, regardless of the illegality of the transaction.’
It
is therefore said, for instance, that a deed will transfer an estate
in land, or delivery the property in chattels, although the bargain
in
pursuance of which the deed or delivery
was
made be illegal.
Recently the principle was confirmed by the Privy Council in
Sajan
Singh
v.
Sardara
Ali,
an appeal from Malaya.*
However,
it
is suggested that the rule that property can pass
under an illegal contract is open to considerable doubt. The
principle has been described as
‘(
no
mean technicality,”
‘
and
also termed
“
illogical,”
5
while one writer, in referring to the
matter in the course of
a
comparative study, assumes that, at
least as regards real property, the rule in Anglo-American law is
that title does not pass under such transactions.s The Privy Coun-
cil’s opinion provides an opportunity to re-examine the situation,
and this article will attempt to show that the cases are not in fact
inconsistent with the view that transfer under an illegal contract
is ineffective to pass title. Some references will also be made to
American decisions in this area.‘
If
one of the effects of an illegal contract
is
to prevent the
passing
of
title to property transferred under
it,
then
it
is impor-
tant that the term
‘(
illegal contract
”
be defined more clearly.
In
1
See in general,
W.
W.
Cook.
“
Rescissio?,
of
bargains made
on
a
Sunday
”
(1934)
13
N.
Clrrolina L.R.
166:,,W.de,
Legal Statun of Propert?&
Trans-
ferred under Illegal Transactions
(1946)
41
1II.L.R.
487:
Sabbath,
Deniq!
of Restitution in Unlawful Transactionn-A Study in Comparative Law
(1959)
8
Int.
&
C0mp.L.Q.
486;
689
at
699-700.
2
Scarf
v.
Morgan
(1838)
4
M.
&
W.
270;
Taylor
v.
Chester
(1869)
L.R.
4
Q.B.
309;
Bowmaker,
Ltd.
v.
Barnet
Instruments
[1946]
1
K.B;
65
(C.A.).
And see Hamson, Illegal Contracta and Limited Ifterestr
(1949) 10
Camb.L.J.
249,
where the
fact
is
described,
at
261,
as
8
[1960] 2
W.L.R.
180; [1960]
1
All
E.R.
269
(P.C.).
The opinion of the
Board was read by Lord Denning.
A
wished
to
purchase
a
lorry
in order to
enter the haulage trade, but was unable to do
80
under the terms
of
8
government regulaticn.
B
therefore bought
it
on
his behalf, A supplying the
pUrCh86e price. Possession was delivered to
the
latter, but later
B
retook.
A was successful in an action to recover,
on
the basis that the property in
the
vehicle
had
passed to him.
4
Hamson,
op.
cat.
259.
5
D.
Lloyd,
Public Policy
(1963) 102.
0
Sabbath,
cp.
cit.
699.
And see
Cook,
op.
cit.,
who argues that
no
pro erty
passes under
an
illegal Sunday contract. His reasoning is
also
applicab!e to
other types of illegal contract.
T
The
rule
ado ted
in
the
majority
of
American jurisdictions is that an illegal
contract is efPective to pass title:
12
Am.Jur.,
Contracts,
8.
209.
But there are
decisions
to
the contrary, see
infra.
trite law.”
149
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