Francis H. (Francis Hermann) Bohlen.

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holder for value, the gift was fraudulent as to him, is omitted.

"" Accord: Feathcrsfnnhaugh v. Johnston. 8 Taunton 237 (1818); Kyle v.
Gray, 11 Ala. 233 (1847); Davis v. Hurt, 114 Ala. 146 (1896); Dwight v.
Brewster. 1 Pick. 50 (Mass. 1822) ; Thomas Mfg. Co. v. Huff, 62 Mo. App. 124
(1895) ; Thompkins v. Haile, 3 Wend. 406 (1829) ; Morrill v. Moulton, 40 Vt.
242 (1867). In such case no demand is necessary.



HOLLINS Z\ FOWLER. II5

is not liable after the sale. It is not denied that he would be liable
if he had retained the property, and refused to give it up. Can
the sale make any difference, when he thereby made property of
him, and has the proceeds in his pocket? The sale was an act by
which the plaintiff is wholly deprived of his property; and it was
not the less his property because the defendant was not aware of his
title, and purchased from another. If the defendant is not liable,
the plaintiff is without redress, as the former owners stand on the
same footing. But there is no weight in the objection. If author-
ity were needed to support the position, it may be found in Cooper
V, Chitty, I Burr. 20, where the sheriff levied on the goods of a
bankrupt, after an act of bankruptcy committed, of which he was
ignorant ; in an action by the assignees, he was held guilty of a con-
version. And in Bloxham v. Hubbard, 5 Ea. Rep. 407, it was held
that the sale of a ship, which was afterward lost at sea, by the de-
fendant, who claimed under a defective conveyance from a trader,
before his bankruptcy, was a sufficient conversion to enable the as-
signees of the bankrupt to maintain trover, without demand and
refusal.

The motion for non-suit can not prevail.

Gantt, J. Richardson, J. Harper, Ch. Butler, J. Evans, J.
Johnston, Ch. Johnson, Cii. and DeSaussure, Ch. concurred.

O'Neall, J. absent at the argument.

Motion refused.



HOLLINS V. FOWLER.
House of Lords, 1875. L. R., 7 House of Lords, 7S7.

This was an appeal on a case stated, on which the Court of
Queen's Bench had given judgment for Fowlers, the plaintiffs in
the action, which judgment had been affirmed in the Exchequer
Chamber.

Fowler & Co. were merchants at Liverpool. Hollins & Co. car-
ried on the business of cotton brokers there.

In December, 1869, Fowler & Co. instructed their brokers,
Alessrs. Rew, to sell for them thirteen bales of cotton. A person
named Hill, a clerk to H. K. Bayley, a cotton broker at Liverpool,
proposed to purchase on his master's account. Messrs. Rew refused
to sell unless the name of a responsible person was given as the
purchaser. Hill then said that Bayley was buying as a broker for
Thomas Seddon, of Bolton. The inquiries as to Mr. Seddon being
quite satisfactory, Messrs. Rew forwarded to Fowlers, their prin-
cipals, a sold note, in these terms: "Liverpool, Dec. 18. 1869.
Messrs. Fowler Brothers. We have this day sold on your account
the undermentioned cotton." Then came the description, "Thirteen
bales — American — at 12c?., per Minnesota." and the buyer's name
was given thus : "Thomas Seddon, per H. K. Bayley." The pay-
ment was to be "cash within ten days, less i^ per cent, discount."



Il6 HOLLINS V. FOWLER.

A counterpart of this note was sent to Bayley himself. On the
same day Bayley sent to Messrs. Rew a sampling and delivery order,
and the bales were delivered to him, and removed to his warehouse.
On the same day, also, Messrs. Rew sent to Bayley the following
note : "Mr. Thomas Seddon, per Messrs. H. K. Bayley & Co.
Bought from Fowler Brothers, per Rew & Freeman, brokers, 13
bales American cotton, ex Minnesota, at 12 J per lb., subject to the
rules and regulations of the Liverpool Cotton Brokers' Association.
Payment in cash, within ten days, less i J^ per cent, discount."

On the 23d of December, H. K. Bayley, being thus in posses-
sion of the cotton, offered the same to Francis Hollins (one of the
defendants), who consented to purchase the thirteen bales at ii}4d
per pound, and who purchased at the same time twenty-five other
l3ales of cotton from H. K. Bayley on the same terms. Messrs.
Hollins, under the usual form of order, sampled the cotton on the
same day. They had on that morning received a message from
]\Iessrs. Alicholls, cotton spinners at Stockport (for whom they were
in the habit of purchasing cotton), stating that on that day Mr.
Micholls would be in Liverpool to purchase cotton through the
Messrs. Hollins, and those gentlemen had bought the cotton from
H. K. Bayley believing it to be of the sort which Messrs. Micholls
would require. On examining the cotton, ]\Ir. Micholls agreed to
take it. Messrs. Hollins were in the habit of thus buying cotton in
the belief that their customers would take it. If any particular cus-
tomer did not take the cotton thus speculatively purchased for him,
Messrs. Hollins disposed of it to some other customer. In the
latter part of the 23d of December, Bayley received a delivery in
these terms : "Please deliver the bearer. . . . cotton, ex Minnesota,
at ii}id. per lb., bought this day for Micholls & Co., Francis Hol-
lins & Co." The thirteen bales were delivered on the following
morning to IMessrs. Hollins, by whom they were at once forwarded
to Micholls & Co., at Stockport. Bayley received the price of the
cotton from Hollins & Co., which was repaid by Micholls & Co.,
together with a sum for commission and porterage, the defendants,
Messrs. Hollins, not obtaining a profit on the cotton, but merely
receiving a broker's commission on its purchase.

Messrs. Fowler, not having received payment for the cotton at
the stipulated time (ten days), applied to Mr. Seddon, and then
learnt that he had never employed H. K. Bayley to purchase cotton
for him. Application was then made to Messrs. Hollins for the
bales of cotton, when the answer given was, "the cotton was bought
by one of our spinners, Messrs. Micholls & Co., for cash, and has
been made into yarn long ago, and as everything is settled up, we
regret we can not render your client any assistance." The action
for trover was afterwards brought.

The cause was heard before ^Ir. Justice Willes, at the Liver-
pool Springs Assizes, 1870, when the facts above stated having
been proved, the learned judge left two questions to the jury: first,
whether the thirteen bales in question had been bought by the de-
fendants as agents in the course of their business as brokers ; and,



nOLLIXS V. FOWLER.



117



secondly, whether they dealt with the goods as agents for their prin-
cipals. Both questions were answered in the affirmative, and Mr.
Justice WiLLKS then directed the verdict to be entered for the de-
fendants, reserving leave to the plaintiffs to move to enter the ver-
dict for them.

A rule was afterwards obtained for that purpose, and on the
25th of November, 1870, was made absolute. (Dn appeal to the
Exchequer Chamber, the judges were equally divided in opinion,
and so the judgment of the court below stood affirmed.

This appeal was then brought.

The judges were summoned, and ]\Ir. Justice Blackburn, Mr.
Justice Mellor, Mr. Justice Brett, Mr. Baron Cleasby, Mr. Justice
Grove, and Mr. Baron Amphlett, attended.

The Solicitor General (Sir John Holker), and Mr. Herschell,
Q. C, for the plaintiffs in error, defendants in the action.

Mr. Joseph Kay, Q. C, and Mr. Bigham (Mr. C. Russell, Q. C,
with them) for the defendants in error, plaintiff's in the action.

The Lord Chancellor proposed the following question to the
judges : —

Whether, under the circumstances stated in the joint case on
appeal, the respondents (the plaintiff's in the action) were entitled
to have a verdict entered for them for the value of the thirteen bales
of cotton mentioned in the declaration.

Blackburn, J. My Lords, it appears from the statement in
the case that Fowlers, the plaintiffs, had delivered into the actual
custody of Bayley, a broker, thirteen bales of cotton, their prop-
erty, they believing that they had sold these bales to Seddon, through
Bayley, as Seddon's broker, after they had refused to trust Bayley
himself ; and believing that Bayley was the agent of Seddon to re-
ceive delivery ; so that Fowlers thought that they were transferring
the property to Seddon, but were mistaken, as in fact Bayley had
no authority from Seddon either to purchase or to take delivery.

Under such circumstances the property and legal right to the
possession remained in Fowlers, and Bayley could not (except by
a sale in market overt) confer on any one, however innocent, a title
superior to his own. He could not do it under the Factors Acts,
because he was not entrusted by the plaintiffs as their agents ; nor
could he do it as being a person in whom the property had vested,
subject to being divested by the plaintiffs, for no property, even
defeasible, ever passed from the plaintiffs, as there never was any
contract with any one, though they erroneously thought there was
one with Seddon.

These points were decided, as I think rightly, in the case of
Hardman v. Booth, i H. & C. 803.

From the terms of the reservation (set out in the note to the
report of the present case, L. R. 7 O. B. 620), it appears the de-
fendant had an opportunity to have that case reviewed in a Court
of Appeal, if so advised, for it is said that. "The defendants be at
liberty to argue, if necessary, that the sale by Bayley under the



Il8 HOLLINS V. FOWLER.

circumstances gave a good title to a bona fide purchaser for value
without notice." The Court of Queen's Bench, being bound by the
decision of a court or co-ordinate jurisdiction, could not so hold;
and the defendants have not raised the point for a Court of Appeal.

I proceed to state the farther facts.

Hollins, the defendants, as brokers, acting for Messrs. Micholls,
and Messrs. Micholls, as customers, acting through the defendants
as brokers, dealt with Bayley in a manner which would have been
quite right, if Bayley had been an honest man, or, even a dishonest
man, if intrusted by the plaintiffs with the possession of the goods,
as an agent, for sale.

And the defendants and Micholls were both innocent of any
knowledge of any infirmity in Bayley's title, and not only were they
innocent, but I think there is nothing amounting even to the evi-
dence of negligence on the part of the defendants in dealing with
Bayley without further inquiry, nor, a fortiori, in Micholls who
trusted the defendants to act for him, and deal with Bayley because
the defendants selected him.

Under those circumstances, your Lordships ask the question,
whether the plaintiffs were entitled to have a verdict entered for
them for the value of the thirteen bales of cotton.

And I answer that question in the affirmative. However hard
it may be on those who deal innocently and in the ordinary course
of business with a person in possession of goods, yet, as long as
the law, as laid down in Hardman v. Booth, i H. & C. 803, is unim-
peached, I think it is clear law, that if there has been what amounts
in law to a conversion of the plaintiff's goods, by any one, however
innocent, that person must pay the value of the goods to the real
owners, the plaintiffs. See Stephens v. Elwell, i H. & C. 803, and
Garland v. Carlisle, 4 CI. & F. 693.

And, accordingly, I think it has not been disputed by any one,
that if the plaintiffs had sued Micholls, who has worked this cotton
up into yarn, Micholls must have had judgment against him for the
value of the cotton, and would be liable to pay the price over again,
though he honestly transmitted the price to the defendants, Hollins,
who honestly handed it to Bayley.

And I take it that if the defendants have done what arnounts
in law to a conversion, they also must be liable to pay the plaintiffs.

It is hard on them, I agree, but I do not think that it is harder
than it would have been on Micholls. Indeed, I think, that if the
plaintiffs were told that they had recourse, at their option, against
either the broker or spinner, they might, without any obvious in-
justice, have said: Then make the broker pay, for he went to Bay-
ley's so that if there is any fault it is his.

But we can not act on any notions of hardship.

When a loss has happened through the roguery of an insolvent,
it must always fall on some innocent party ; and that must be a hard-
ship. Had the Legislature thought fit to make a sale in the cotton
market at Liverpool equivalent to a sale in market overt, the \o.^5



IIOLLIXS Z'. FOWLER. 1 19

would have fallen on the plaintiffs.^ As it is, it falls on any one
who has done what the law esteems a conversion.

We must, I apprehend, in such cases look only to the question,
whether on the established principles of law the complaining party
makes out that the loss should fall on the innocent defendant rather
than on himself, the equally innocent plaintiff.

If, as is quite possible, the changes in the course of business
since the principles of law were established make them cause great
hardships or inconvenience, it is the province of the Legislature to
alter the law. That has been done to a considerable extent by the
Factors Acts, and it may be expedient to extend that alteration far-
ther, but those Acts have not as yet been extended so far as to em-
brace the case of any one, whether as a broker or otherwise, dealing
with a person in the position of Bayley in this case. And I appre-
hend your Lordships will not, in your judicial capacity, depart from
the established principles of law to meet the hardship of a particu-
lar case, even if you were so convinced of that hardship as to be
willing in your legislative capacity to concur in a change of the law
in future. But this leaves open what I take it is the real question
in this case, viz., whether what the defendants did amounts on the
established principles of law to a conversion.

I own that it is not always easy to say what does and what
does not amount to a conversion. I agree with w^iat is said by my
Brother Brett in his judgment below, that in all cases where we
have to apply legal principles to facts, there are found many cases
about which there can be no doubt, some being clear for the plain-
tiff*, and some clear for the defendant, and that the difficulties arise
in doubtful cases on the border line between the two.

I think many cases which at first seem difficult are solved if the
nature of the action is remembered.

Lord jMansfield says, in Cooper v. Chitty, i Burr. 20; i Sm.
L. C. 417 : "The bare defining of this kind of action and the grounds
upon which a plaintiff is entitled to recover in it, will go a great
way towards the understanding, and consequently the solution, ol
the question in this particular case. In form it is a fiction, in sub-
stance a remedy to recover the value of personal chattels wrongfully
converted by another to his own use. The form supposes the de-
fendant may have come lawfully by the possession of the goods.
This action lies, and has been brought in many cases where in truth
the defendant has got the possession lawfully. When the defendant
takes them wrongfully, and by trespass, the plaintiff, if he thinks
fit to bring this action, waives the trespass, and admits the possession
to have been lawfully gotten."

It is generally laid down that any act which is an interference



^Though a sale in market overt conveys a good title to the purchaser and
protects him in dealing with them, at least until after the thief has been prose-
cuted at the true owner's suit and so title revested in him and demand made
upon such purchaser, so that neither the purchaser of the goods nor any deal-
ings with them prior to such demand is a conversion, yet the market overt
affords no protection to the vendor or his agents in selling, and the sale is a



I20 HOLLINS Z'. FOWLER.

with the dominion and right of property of the plaintiff is a con-
version, but this requires some quahfication.

From the nature of the action, as explained by Lord Mans-
field, it follows that it must be an interference with the property
which would not, as against the true owner, be justified, or at least
excused, in one who came lawfully into the possession of the goods. ^

And in considering whether the act is excused against the true
owner it often becomes important to know whether the person, doing
what is charged as a conversion, had notice of the plaintiff's title.

There are some acts which from their nature are necessarily
a conversion, whether there was notice of the plaintiff's title or not.
There are others which if done in a bona fide ignorance of the
plaintiff's title are excused, though if done in disregard of the title
of which there was notice they would be a conversion. And this,
I think, is borne out by the decided cases. Thus a demand and
refusal is always evidence of a conversion. If the refusal is in dis-
regard of the plaintiff's title, and for the purpose of claiming the
goods either for the defendant or for a third person, it is a con-
version. If the refusal is by a person who does not know the plain-
tiff's title, and having a bona Ude doubt as to the title to the goods,
detains them for a reasonable time, for clearing up that doubt, it is
not a conversion; see Issue v. Clarke, i Buls. 306, see p. 312; and
Vaughan v. Watt. The principle being, as I apprehend, that the
detention, which is an interference with the dominion of the true
owner, is, under such circumstances excused, if not justified.

So the finder of goods is justified in taking steps for their pro-
tection and safe custody till he finds the true owner. And there-
fore it is no conversion if he bona Ude removes them to a place of
security. And so far the general statement that an asportation is a
conversion must be qualified.

I can not find it anywhere distinctly laid down, but I submit to
your Lordships that on principle, one who deals with g;oods at the
request of the person who has the actual custody of them, fn the
bona fide belief that the custodier is the true owner, or has the au-
thority of the true owner, should be excused for what he does if the
act is of such a nature as would be excused if done by the authority
of the person in possession, if he was a finder of the goods, or in-
trusted with their custody. \

I do not mean to say that this is the extreme limit of the excuse,
but it is a principle that will embrace most of the cases which have
been suggested as difficulties.

Thus a warehouseman with whom goods have been deposited
is guilty of no conversion by keeping them, 01 restoring them to the
person who deposited them with him, though that person turns out
to have had no authority from the true owner ; see Heald v. Carey,
II C. B. 977, and Alexander v. Southey.



conversion in both the vendor ordering it and the auctioneer making it. Ganly
V. Ledwidge, Irish R. 10 C. L. 2>Z (1876), especially per Bany, J., pp. 35-36.

' The mere custody of goods for one who has tortiously obtained them is
not a conversion, Boiling v. Kirby, 90 Ala. 215 (1889).



HOLLINS Z'. FOWLER. 121

And the same principle would apply to the cases alluded to by
my r)rother Ilannen in his ju(lj:;^ment in the court below, of persons
"acting in a subsidiary character, like that of a person who has the
goods of a person employing him to carry them, or a care-taker,
such as a wharfinger." It will enable us also to answer a question
put during the argument at your Lordships' bar. It was said : "Sup-
pose that the defendant had sent the delivery order to Micholls,
who had handed it to the railway company, requesting them by
means of it to procure the goods in Liverpool and carry them to
Stockport, and the railway company had done so, would the railway
company have been guilty of a conversion ?"

I apprehend the company would not, for merely to transfer the
custody of goods from a warehouse at Liverpool to one at Stock-
port, is prima facie an act justifiable in any one who has the lawful
custody of the goods as a finder, or bailee, and the railway com-
pany, in the case supposed, would be in complete ignorance that
more was done. But if the railway company, in the case supposed,
could have been fixed w'ith knowledge that more was done than
merely changing the custody, and knew that the company's servants
were transferring the property from one who had it in fact to an-
other who was going to use it up, the question would be nearly the
same as that in the present case. It would, however, be very dif-
ficult, if not impossible, to fix a railway company with such knowl-
edge.

And on the same principle I take it the ruling of Lord Tenter-
den in Greenzvay v. Fisher may be supported ; for the packer was
merely giving facilities for the transport of the goods from one
place to another, and was ignorant of the circumstances which made
it wrong against the true owner to remove the goods, though I admit
that his decision is not put by Lord Tenterden on this ground, but
on that of the packer's being a public employment, which I think
my Brother Brett, in his judgment below, correctly shows to be a
mistaken ground ; I think the public nature of his employment was
strong evidence that he was doing no more than assist in the change
of custody, which was, on the principle suggested, excused in one
ignorant of all that made the change of custody wrongful, but I
do not see how in itself it made any difference. A packer is not,
like a carrier or inn-keeper, bound to receive all goods brought to
him.

I think, however, it is but candid to admit that the principle I
have submitted to your Lordships, though it will solve a great many
difficulties, will not solve all.

In Comyns' Digest it is said, "If a man deliver the oats of an-
other to B. to be made oatmeal, and the owner afterwards prohibits
him, yet B. makes the oatmeal, this is a conversion.'' Per Berkly,
1638.

To this every one w'ould agree ; but suppose the miller had
honestly ground the oats and delivered the meal to the person who
brought the oats to him before he even heard of the true owner.
How would the law be then? Or, suppose the plaintiffs in the case



122 HOLLINS V. FOWLER.

at your Lordships' bar had, for some reason, brought the action
against Micholls' men who assisted in turning this cotton into twist?
Tlie principle I have suggested would hardly excuse such conver-
sions ; and yet I feel that it would be hard on them to hold them
liable.' If ever such a question comes before me, I will endeavor to
answer if. I think it is not necessary now to do so ; for I think that
what the defendants are found to have done in the present case
amounts to a conversion, and is not in any way excused.

I do not rely on the ground, taken in the earlier part of my
Brother Cleasby's judgment below, that the defendants themselves
were the purchasers from Bayley, for though, if it were left to rne
to draw inferences of fact, I should draw that inference, I doubt if
it is open to me so to do after the finding of the jury affirmmg that
the defendants were agents. But though it is to be taken in favor
of the defendants that they acted throughout as brokers, and only
as brokers, for ^licholls, I still think them guilty of a conversion.

The case against them does not rest on their having merely
entered into a contract with Bayley, or merely having assisted in
changing the custody of the goods, but on their having_ done both.
They knowingly and intentionally assisted in transferring the do-
minion and property in the goods to Micholls, that Micholls might
dispose of them as their own, and the plaintiffs never got them
back. It is true that they did it as brokers for Micholls, and not
for any benefit for themselves ; but that is not material ; see Parker
V. Godin. There, "the jury (considering the defendant acted only
as a friend, and that it would be hard to punish him) found a verdict
for the defendant. But upon application to the court, a new trial
was granted, upon the fact of its being an actual conversion in the
defendant, notwithstanding that he did not apply the money to his

own use."

No doubt in that case the friend, it may be inferred, knew of
the bankruptcy, and was therefore not an innocent party. But that
remark will not apply to Stephens v. Elwall, where Lord Ellen-
borough says: "The clerk acted under an unavoidable ignorance
and for his master's benefit when he sent the goods to his master,
but nevertheless his acts may amount to a conversion ; for a person is
guilty of a conversion who intermeddles with my property and
disposes of it, and it is no answer that he acted under authority
from another, who had himself no authority to dispose of it." No