As to the variant situation…. This is a classic nemo dat situation (owner (P) – middleman (D) – purchaser (T)). The purchaser does commit conversion (or alternatively trespass). However, the nemo dat exceptions may provide the purchaser with a defence (in the sense that they operate to transfer title greater than that available to the middleman). Depending on the particular circumstances, certain nemo dat exceptions may come into play.

From a US perspective, you could be looking at Uniform Commercial Code 2-403(1) (voidable title) or 2-403(2) entrustment. There is also the possibility of estoppel, but like with English law, that’s usually a desperate shot in the dark. In English law, voidable title (Sale of Goods Act 1979 s23) is probably most likely, but it may be possible to rely on seller in possession or buyer in possession under Factors Act 1889 s8/s9 and Sale of Goods Act 1979 s24/s25. It does depend very much on the particular facts of how the middleman obtains the goods, but with the UCC voidable title and entrustment provisions being very wide, it wouldn’t take much for the purchaser to get protection.

There are quite a lot of US cases covering situations like this from the nemo dat perspective, but I would need to do a bit of a trawl of the PhD and that thought scares me…

Sean.

Dr Sean Thomas

Lecturer in Commercial Law

School of Law

University of Leicester

University Road

Leicester

LE1 7RH

+44 (0) 116 252 2332

From: John Goldberg [mailto:jgoldberg@law.harvard.edu]
Sent: 21 October 2010 16:38
To: obligations@uwo.ca
Subject: Tort v. Equity

Dear ODG Colleagues:

I’m wondering about rules or prevalent practices pertaining to the following question: May a successful tort plaintiff obtain as part of her remedy a court order directing the defendant to return property of which the defendant has tortiously deprived the plaintiff?

For example, suppose D commits fraud against P, thereby inducing P to part with an heirloom that has a market value of $25,000. P would rather have the heirloom itself than its cash value. Having proved her common-law fraud claim against D, can P obtain an order directing D to return the heirloom? On pain of punishment for contempt? (Both seem sensible to me.) Is this a routinely available remedy for torts such as conversion and fraud?

Now consider a familiar variant on this situation, in which the property is subsequently sold by the tortfeasor to an innocent purchaser. For example, imagine the same scenario as above, except that, by the time P sues D, D has sold the heirloom to third party T, who did not know, and had no reason to know, that D had obtained the heirloom illegally. Can one describe T’s purchase as a conversion of P’s property, albeit an innocent one, or does D’s prior dispossession eliminate the basis for a claim of conversion by P against T? If it could be conversion, can P obtain an order for a return of the property as a remedy for the conversion? I think it is the case – though without a great deal of confidence – that, insofar as a U.S. court would every grant relief to P against T, it would do so by imposing a ‘constructive trust’ on T. This probably would not be styled as a tort remedy, but as a remedy in equity that corrects for T’s unjust enrichment at P’s expense. Does this latter description resonate?

Thanks,

From:	Thomas, Sean R. <srt10@leicester.ac.uk>
To:	'John Goldberg' <jgoldberg@law.harvard.edu>
	obligations@uwo.ca
Date:	21/10/2010 15:46:19 UTC
Subject:	RE: Tort v. Equity