Dear ODGers,

I was hoping to solicit expert opinion as to the common law approach to this question of unjust enrichment/property law.

P (principal) bails res with fiduciary (F). The res is then stolen from under F’s possession, and instead of litigating, F voluntarily pays (P) fair market value for the stolen res. The thief is then found, but the res has increased in value. Who gets the more valuable res? Assume no contract. Further, would it make a difference whether F was in breach of his duty of care or not?

I assume that in a more standard case, where the res was of equal value, F has a straightforward UJER/subrogation claim against P  (if the res was returned directly to P), and we probably don’t care much about who “owns” the res. But when the res increases in value, we want to know whether in paying P, F acquired an interest in the res or not.

This issue (and variations of it) are debated in the Talmud. Under Jewish law a gratuitous F would have to take an oath that he has not breached his duty of care to be exempt. However, given the drastic theological consequences of taking oaths, many F’s are reluctant to do so, so that they pay P without a determination of liability. The question is who gets the res or the uptick in value?

The issue has increased salience in Jewish law since (at least in theory) a thief is required to pay a 100% fine to the Owner in addition to returning the res.  Consistent with UJER law, the Talmud is clear that if he pays, F gets the (at least value of) the res, but in the absence of contractual language, the Talmud debates who is entitled to the fine.   The Talmud’s medieval commentators then expand this debate to a case where the res increased in value. 

But of course in this venue, I am asking for thoughts (and citations) in the common law dimension.

Thanks

Chaim

Chaim Saiman

Associate Professor

Villanova Law School

610.519.3296

saiman@law.villanova.edu

http://ssrn.com/author=549545