¹ See generally Carey Miller, D., The Acquisition and Protection of Ownership (Cape Town 1986), pp. 117–120;Google Scholar and Lawson, F.H. and Rudden, B., The Law of Property, 2nd ed., (Oxford 1981), ch. 4.Google Scholar

² Lipkin Gorman v. Karpnale Ltd. [1991] 2 A.C. 548. Note also that the liability of the friend to make restitution would be reduced to the extent that he altered his position upon receiving the money. See Lipkin Gorman, ibid., 560 per Lord Templeman, 580 per Lord Goff.

³ (1758) 1 Burr. 452. For applications of the bona fide purchase explanation of currency, see Clarke v. Shee (1774) 1 Cowp. 197; Ilich v. R (1987) 162 C.L.R. 110, 117 per Gibbs C.J., 138–139 per Brennan J.; Lipkin Gorman v. Karpnale Ltd. [1991] 2 A.C. 548, 512 per Lord Goff.

⁴ (1758) 1 Burr. 452, 457.

⁵ For examples see Core's Case (1537) 1 Dyer 20a; Banks v. Whetston (1596) Cro. Eliz. 457*; Draycot v. Piot (1601) Cro. Eliz. 818.

⁶ See Powell, E.T., Evolution of the Money Market (London 1915), pp. 31–35.Google Scholar More adventurous investors could lend their surplus cash through scriveners who brokered loans to merchants. See Judges, A.V., “The Origins of English Banking” (1931) 16 History (N.S.) 138.Google Scholar

⁷ Isaack v. Clark (1615) 2 Bulst. 306, 310 per Dodderidge J., 314 per Coke C.J. See also Davies v. Dyos (1648) Aleyn 91. Bailments of money were an exception to the general rule that a simple failure to return goods on request did not amount to a conversion of them. See generally, Simpson, A.W.B., “The Introduction of the Action on the Case for Conversion” in Legal Theory and Legal History (London 1987), pp. 93–95.Google Scholar

⁸ Isaack v. Clark (1615) 2 Bulst. 306, 314 per Coke C.J., 308, 310 per Dodderidge J.; for similar reasoning see Core's Case (1537) 1 Dyer 20a, 22b; Draycot v. Piot (1601) Cro. Eliz. 818, 819 (in argument); Co. Lit. 285, s. 498; Blackstone, Commentaries, vol. 3, 152.

⁹ Core's Case (1537) 1 Dyer 20a, 22b, which was an action in trover against the exectuors of an agent with whom the plaintiff had deposited a sum of money for him to use in a business transaction. For earlier references to the distinction between money in and out of a bag, see also Pas. 7 Hen. IV, fo. 13, pl. 10 (rejection of argument that the plaintiff could only sue in debt for failure to redeliver money contained in a bag); Hil. 6 Edw. IV, fo. 11, pl. 6 per Littleton (detinue lies for money contained in a bag or a box; otherwise the plaintiff's action was in debt); Mich. 2 Ric. III fo. 15, pl. 39, identified as Wellys v. Robinson, CP 40/890, m. 128 (dispute over concurrence of remedies in detinue and debt). I am grateful to Professor J.H. Baker for referring me to these Year Book authorities.

¹⁰ Isaack v. Clark (1615) 2 Bulst. 306, 308 per Dodderidge J. See also 2 Bulst., 310 per Haughton J. and Anon. (1605) Noy 12.

¹¹ Higgs v. Holiday (1600) Cro. Eliz. 746; Anon. (1605) Noy 12; Kinanston v. Moor (1627) Cro. Car. 89.

¹² Isaack v. Clark (1615) 2 Bulst. 306, 312 per Coke C.J.

¹³ The passing of title in money seems not to have depended entirely on its remaining specifically identifiable. The intention with which the plaintiff transferred the money was also relevant. If the plaintiff deposited money with another, not for safekeeping, but for use in a business transaction, then property would vest in the recipient even if the money remained sealed in a bag: Anon. (1572) 3 Leon. 38. But the property might revert to the plaintiff if the depositee did not fulfil the conditions under which he received it. The plaintiff might then have an action in detinue if the fund remained specifically identifiable: Core's Case (1537) 1 Dyer 20a, 22a–b per Fitzjames C.J.

¹⁴ Note that an analogous principle has recently been articulated in the context of trust law. In Westdeutsche Landesbank Girozentrale v. Islington L.B.C. [1996] 2 W.L.R. 802 Lord Browne-Wilkinson explained at pp. 828–829 that a trust could not come into being unless there was an identifiable fund of property to which it could attach. Since a trust was a form of property holding, the claimant could not assert an equitable interest in property which could not be specifically identified. See also Re Goldcorp Exchange Ltd. [1995] 1 A.C. 74, 89–91 per Lord Mustill (logical connection between passing of legal property and ascertaintability in the sale of goods).

¹⁵ (1743) 3 Atk. 44 contains the fullest report of the case.

¹⁶ Ibid., 50–51 (emphasis added). Also relevant is Ford v. Hopkins (1700) 1 Salk. 283, 284 where Holt C.J. drew a broad distinction between the passing of property in chattels with and without earmarks. “If bank-notes, Exchequer-notes, or million-tickets, or the like, are stolen or lost, the owner has such an interest or property in them, as to bring an action into whatsoever hands they are come: money or cash is not to be distinguished, but these notes or bills are distinguishable, and cannot be reckoned as cash, and they have distinct marks and numbers on them.” For a discussion of the case and the subsequent qualifications to it, see p. 561 below.

¹⁷ (1600) Cro. Eliz. 746.

¹⁸ The proper form for Holiday's action would traditionally have been in account, followed by a separate action in debt. However it was accepted by the 17th century that a single action of debt could be brought in the circumstances. Holiday probably sued in trover to avoid the procedural disadvantages of debt, such as wager of law. See Baker, J.H., Introduction to Legal History, 3rd ed., (London 1990), pp. 412–115.Google Scholar

¹⁹ (1600) Cro. Eliz. 746 per Anderson C.J.C.P. (emphasis added). The majority of the court agreed.

²⁰ (1598) Owen 86.

²¹ Ibid. (emphasis added).

²² Presumably the original owner would retain his title to loose coins at least until the finder, thief or bailee mixed them with other money.

²³ On the nature of a proprietor's interest in chattels, see generally Baker, J.H., Introduction to Legal History, 3rd ed., (London 1990), pp. 439–440.Google Scholar

²⁴ E.g. Isaack v. Clark (1615) 2 Bulst. 306, discussed at p. 550 above.

²⁵ See the reasoning quoted from Hartop v. Hoare (1743) 3 Atk. 44, Ford v. Hopkins (1700) 1 Salk. 283 and Bretton v. Barnet (1598) Owen 86 at pp. 551–552 above.

²⁶ (1743) 3 Atk. 44; likewise the owner of a horse lent on bailment kept his property in it: Bretton v. Barnet (1598) Owen 86 per Walmseley J.

²⁷ (1600) Cro. Eliz. 746 per Anderson C.J.C.P. (emphasis added).

²⁸ (1598) Owen 86 per Walmseley J. (emphasis added).

²⁹ Note however that property in earmarked money would still pass if the plaintiff intended that the defendant should take title so that he could trade with the money on the plaintiff's behalf. See Anon. (1572) Leon. 38.Google Scholar

³⁰ On the origins of paper money in England, see generally Bisschop, W.R., The Rise of the London Money Market (London 1910), pp. 38–68;Google ScholarHorsefield, J.K., “The Beginnings of Paper Money in England” (1977) 6 Journal of European Economic History 117;Google ScholarRichards, R.D., “The Evolution of Paper Money in England” (1927) 41 Quarterly Journal of Economics 361,CrossRefGoogle ScholarThe Early History of Banking in England (London 1958), ch. 2.Google Scholar

³¹ See p. 556 below.

³² See Bisschop (1910), pp. 43–44; and Powell, E.T., The Evolution of the Money Market 1385–1915 (London 1915), pp. 57–58.Google Scholar

³³ The transition of the goldsmiths from bailees to debtors is described in Powell (1915), pp. 57–68. For the goldsmiths' use of their customers' deposits to lend at interest, see the anonymous pamphlet “The Mystery of the New Fashioned Goldsmiths” (1676), reprinted as an appendix to Martin, J., “The Grasshopper” in Lombard Street (London 1892).Google Scholar

³⁴ See Fearearyear, A., The Pound Sterling, 2nd ed., by Morgan, E.V., (Oxford 1963), pp. 102–103.Google Scholar

³⁵ See Richards (1958), pp. 23–24; Bisschop (1910), pp. 43–49.

³⁶ See Bisschop (1910), pp. 53–54; Richards (1927), pp. 378–392, (1958), pp. 44ff.

³⁷ This form is adapted from a note issued by Messrs Child & Co. in 1684, reprinted in Bisschop (1910), p. 57.

³⁸ References to this effect appear in the law reports from the late 17th century onwards. See, for example, Tassell & Lee v. Lewis 1 Ld. Raym. 743, 744, where the custom of the merchants was reported in the following terms: “The notes of goldsmiths … are always accounted among merchants as ready cash”; and Popham v. Lady Aylsbury (1748) Amb. 68, 69 per Lord Hardwicke L.C.: “bank notes [are] the same as ready money, otherwise of bonds and other securities; they [are] not cash but only evidence of so much money due”; and Walmsley v. Child (1749) 1 Ves. 341, 342 in argument: “These [goldsmiths'] notes by constant usage are as cash”.

³⁹ See Rogers, J.S., Early History of the Law of Bills and Notes (Cambridge 1995), pp. 109–112. The use of bills as payment media pre-dated the 17th century. Even before the Tudor era it was the practice among merchants to accept “bills obligatory” as means of payment. These instruments were similar to the later bills of exchange, although they were issued under seal.CrossRefGoogle Scholar

⁴⁰ See, for example, Richards (1927), pp. 364–379 for a description of the transferable debentures and payment orders issued by the Exchequer in the 17th century.

⁴¹ The Bank's different kinds of paper credit are described in Bisschop, W.R., The Rise of the London Money Market (London 1910), pp. 84–121.Google Scholar

⁴² Bank of England notes are still issued in the form of promissory notes. The bearer may present the notes at the Bank and receive notes of a lower denomination in exchange: see Currency and Banknotes Act 1954, s. 1(4).

⁴³ See s. 29 of the statute 5 & 6 W. & M., c. 20.

⁴⁴ The owner could even advertise in the newspapers in the hope that an honest person finding the note would return it, e.g. Walmsley v. Child (1749) 1 Ves. 341 The owner could also direct the bank to stop payment on the note and the bank could identify the note if the bearer presented it for payment. This happened in Miller v. Race (1758) 1 Burr. 452.

⁴⁵ At least by the mid-eighteenth century the courts seem to have been aware of these considerations. In Walmsley v. Child (1749) 1 Ves. 341, 344 Lord Hardwicke acknowledged, “[I]t highly concerns the credit017 of [notes] not to refuse payment” when the holder of a lost note sought to cash it. Counsel for the defendant bank submitted thaf “the faith and value of notes” depended on the bank honouring all notes presented for payment: ibid., at p. 342.

⁴⁶ Only two cases were reported before Miller v. Race where the courts directly considered the title of a transferee of a banknote. See Walsmley v. Child (1749) 1 Ves. 341, and Anon. (1699) 3 Salk. 71. The latter is discussed at p. 560 below.

⁴⁷ For traditional accounts of the incorporation of the law merchant governing bills and notes, see Holdsworth, W.S., “The Development of the Law Merchant” in Select Essays in Anglo-American Legal History (Cambridge Mass. 1907), vol. 1, pp. 327–331;Google ScholarStreet, T.A., Foundations of Legal Liability (New York 1906), vol. 2, pp. 348–349.Google Scholar

⁴⁸ See Baker, J.H., “The Law Merchant and the Common Law Before 1700” in The Legal Profession and the Common Law (London 1986);Google Scholar and Rogers, J.S., Early History of Bills and Notes (Cambridge 1995).CrossRefGoogle Scholar

⁴⁹ See Anon. (1697) 1 Comyns 43 and Anon. (1699) 3 Salk. 71, discussed below.

⁵⁰ (1697) 1 Comyns 43.

⁵¹ It seems likely that the bill was payable to order because otherwise it could not have been validly transferred. The common law did not recognise at that stage the right of a transferee to sue on a bill payable to bearer: Hodges v. Steward (1691) 1 Salk. 125.

⁵² (1697) 1 Comyns 43. For similar language, see Hussey v. Jacob (1696) 1 Comyns 4 where a bill given as security to pay a gambling debt was held to be void for infringing s. 3 of the statute 16 Car. 2, c. 7. Holt C.J. suggested obiter that the bill could still have been enforced by a third person if the payee endorsed it to him “for the satisfaction of a just debt”.

⁵³ The most comprehensive report is (1699) 3 Salk. 71.

⁵⁴ The case has one puzzling feature. The plaintiff was not the person who actually lost the bill. The original payee of the bill brought the trover action. The reports say only that the plaintiff “gave” the bill to person who lost it. Perhaps he did not transfer the property in the bill to this other person but only deposited it in his possession.

⁵⁵ (1699) 3 Salk. 71.

⁵⁶ (1700) 1 Salk. 283.

⁵⁷ Ibid, at p. 284 (emphasis added).

⁵⁸ (1699) 3 Salk. 71.

⁵⁹ See for example Clerke v. Martin (1702) 2 Ld. Raym. 757, 758; Buller v. Cripps (1703) 6 Mod. 29, 30. For differing interpretations of Lord Holt's reluctance to make promissory notes negotiable, see Cranch, W., “Promissory Notes Before and After Lord Holt” an essay first published in 1804 and reprinted in Select Essays in Anglo-American Legal History (Cambridge, Mass. 1907), vol. 3, p. 72ff.;Google Scholar and Rogers, J.S., Early History of the Law of Bills and Notes (Cambridge 1995), pp. 177–186.CrossRefGoogle Scholar

⁶⁰ (1702) 2 Ld. Raym. 757.

⁶¹ Horton v. Coggs (1689) 3 Lev. 299 (transferee for valuable consideration of a goldsmith's note payable to bearer could not sue the maker on it). See also Nicholson v. Sedgwick (1698) 1 Ld. Raym. 180.

⁶² (1743) 3 Atk. 44, 50–51. See also Walmsley v. Child (1749) 1 Ves. 341, 344 per Lord Hardwicke L.C.: a person who received lost banknotes “for a valuable consideration” could claim on them against the issuing bank.

⁶³ (1699)3Salk. 71.

⁶⁴ 3 & 4 Anne, c. 9.

⁶⁵ (1702) 2 Ld. Raym. 758.

⁶⁶ 3 & 4 Anne c. 9, s. 1.

⁶⁷ Hence Anon. (1699) 3 Salk. 71 also become authority for the rights of the bona fide purchaser of a lost or stolen bank note. Also relevant was the obiter dictum in Hussey v. Jacob (1696) 1 Comyns 4, 6. According to Holt C.J., the transferee to whom a void bill of exchange was endorsed in payment of “a just debt” could sue the acceptor upon it. The transferee was not affected by the invalidity of the original transaction which the bill evidenced.

⁶⁸ (1758) 1 Burr. 452.

⁶⁹ Ibid., at p. 457.

⁷⁰ Ibid.

⁷¹ Ibid., at pp. 456–457.

⁷² Ibid., at p. 457.

⁷³ Ibid.

⁷⁴ See for example Manchester Trust v. Furness [1895] 2 Q.B. 539, 545 per Lindley L.J.: “In dealing with estates in land title is everything, and can be leisurely investigated; in commerieal transactions possession is everything, and there is no time to investigate title.”

⁷⁵ Ashburner's Principles of Equity, 2nd ed., by Browne, D. (London 1933), pp. 38–39, 50.Google Scholar

⁷⁶ Section 29 of the Bills of Exchange Act 1882 defines the holder in due course as one who takes a bill (a) before it is due and (b) in good faith and for value without notice of any defect in the title of the person who negotiated it. By s. 89(1) the same definition applies to promissory notes.